Document:

Exhibit 10.4

 

 

August 8, 2019

 

Declan Grant

 

Re: Transaction Bonus Opportunity and Severance Agreement Amendment

 

Dear Declan,

 

As you may know, Wesco Aircraft Holdings, Inc.  (the “Company”), expects to commence a sale process (the “Sale Process”) that may result in a sale of all or substantially all of the assets or equity interests of the Company (a “Company Sale”).

 

The Company considers it essential to the operation of the Company and the success of the Sale Process to retain you through and following the closing of a Company Sale (the “Closing” and such date the Closing occurs, the “Closing Date”) and desires to reward you for your contributions to the Company through the Closing and thereafter. Therefore, the Company is pleased to offer you the opportunity to receive a transaction bonus in the amount of $512,250.18 (the “Transaction Bonus”), subject to the terms and conditions of this letter.  Provided the Closing of a Company Sale occurs, fifty percent (50%) of the Transaction Bonus will be paid to you in cash within 3 business days following the Closing and the remaining fifty percent (50%) of the Transaction Bonus will be paid to you in cash on the six month anniversary of the Closing Date, in each case, less applicable taxes and withholdings and subject to your continued employment with the Company through the applicable payment date. If, on or following the Closing Date, your employment with the Company is terminated by the Company without Cause or by you for Good Reason, and all or a portion of your Transaction Bonus remains unpaid as of such date, then upon such termination you will be paid your Transaction Bonus to the extent not already paid to you prior to such termination.  For purposes of this letter “Cause” and “Good Reason” will have the meaning given to such terms under the Executive Severance Agreement the (“Severance Agreement”) previously entered into between you and Wesco Aircraft Hardware Corp. (“Hardware”), as modified below.

 

In addition, in connection with the Sale Process, the Company has determined that it is appropriate to modify certain provisions of the Severance Agreement as set forth herein.  In the event the Sale Process results in a Company Sale, the Company and Hardware each agree as follows, effective as of the Closing Date:

 

1.                                      “Good Reason” for purposes of the Severance Agreement (and this letter agreement) shall mean the occurrence of any of the following events or conditions without Executive’s written consent:

 

(i)                                     a material diminution in Executive’s authority, duties or responsibilities;

 

(ii)                                  a material diminution in Executive’s base salary or target annual bonus level;

 

(iii)                               a material change in the geographic location at which Executive must perform his or her duties, which shall not include a relocation of Executive’s principal place of

 

 

employment to any location within a fifty (50) mile radius of the location from which Executive served the Company immediately prior to the relocation; or

 

(iv)                              the failure of the Company to obtain an agreement from any successor to the Company or the Parent to assume and agree to perform the Severance Agreement, as contemplated in Section 12(a) of the Severance Agreement.

 

Executive must provide written notice to the Company of the occurrence of any of the foregoing events or conditions within ninety (90) days of the occurrence of such event or the date upon which Executive reasonably became aware that such an event or condition had occurred.  The Company or any successor or affiliate shall have a period of thirty (30) days to cure such event or condition after receipt of written notice of such event from Executive.  Any voluntary termination for “Good Reason” following such thirty (30) day cure period must occur no later than the date that is six (6) months following the date notice was provided by Executive.  Executive’s voluntary Separation from Service by reason of resignation from employment with the Company for Good Reason shall be treated as involuntary.

 

2.                                      If you incur a Qualifying Termination (as defined in the Severance Agreement) at any time on or within 3 years following the Closing Date, you will be entitled to receive the enhanced severance payments and benefits set forth in Section 3(b) of the Severance Agreement (i.e., the requirement that such termination occur within 2 years following a Change in Control shall be increased to 3 years).

 

3.                                      The Company’s right to not extend the Term of the Severance Agreement by delivering a written notice of non-renewal shall no longer apply, such that the Severance Agreement shall remain in effect indefinitely following the Closing Date.

 

Whether a particular transaction constitutes a Company Sale and any other determinations required to be made pursuant to this letter will be made by the board of directors of the Company (the “Board”) as constituted prior to the Company Sale. Additionally, in the event that the Sale Process does not ultimately result in a Company Sale, the Board may, in its sole discretion, determine that you may still receive all or a portion of your Transaction Bonus.

 

You acknowledge that pursuant to your Severance Agreement and other agreements previously entered into between you and the Company or its subsidiaries, you are subject to certain restrictive covenants, including confidentiality, non-solicitation, non-competition and non-disparagement provisions. In consideration for the Transaction Bonus and modifications to the Severance Agreement as described in this letter, you hereby re-affirm and agree to comply with the restrictive covenants, which are restated in Exhibit A hereto (the “Restrictive Covenants”), provided, that the provisions of this letter shall not limit or reduce the scope of any other restrictive covenant set forth in any other agreement between you and the Company or its subsidiaries.

 

This letter represents the entire agreement between you and the Company with respect to a bonus arrangement payable in connection with a Company Sale or any transaction bonus arrangement and it supersedes any other promises, warranties or representations with regard to this subject matter. This letter and your right to receive the Transaction Bonus will expire and terminate, and be of no further force or effect, if the Closing Date of a Company Sale does not occur before the one year anniversary of the date of this letter, or earlier if the Sale Process is discontinued or if the Board determines for any reason not to pursue a Company Sale at any time.  The Transaction Bonus is a special payment to you and will not be taken into account in computing the amount of salary or compensation for purposes of determining any

 

 

bonus, incentive, severance, notice, redundancy, pension, retirement, death or other benefit under any benefit plan or compensation arrangement of the Company.

 

Additionally, subject to the Severance Agreement and except as may otherwise be set forth in a separate written agreement between you and the Company, your employment relationship with the Company remains at will, meaning that either you or the Company may terminate your employment at any time, with or without cause or advance notice.  Nothing in this letter is intended to or should be construed to contradict, modify or alter your employment or other service relationship with the Company.  By accepting this letter, you hereby agree that this letter may only be amended or modified by a written instrument signed by a duly authorized representative of the Company.

 

Thank you for your hard work and contributions to the Company.

 

	
 
    	
 
    	
Sincerely,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ John Holland
    
	
 
    	
 
    	
Name: John Holland
    
	
 
    	
 
    	
Title: Executive Vice President, Chief Legal and   Human Resources Officer
    
	
 
    	
 
    	
 
    
	
Accepted
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Declan Grant
    	
 
    	
 
    
	
Name: Declan Grant
    	
 
    	
 
    

 

 

Exhibit A

Restrictive Covenants

 

Declan Grant (“Executive”) and Wesco Aircraft Holdings, Inc.  (the “Company”) agree as set forth below. Any defined terms used in this Exhibit A not otherwise defined herein shall have the meaning set forth in the Executive Severance Agreement the (“Severance Agreement”) previously entered into between Executive and Wesco Aircraft Hardware Corp.

 

1.                                      Restrictive Covenants.

 

(a)                                 Executive recognizes and agrees that in order to assure that Executive devotes all of Executive’s professional time and energy to the operations of the Company while employed by the Company, and that during and after such employment in order to adequately protect the Company’s investment in its proprietary information and trade secrets and to protect such information and secrets and all other confidential information from disclosures to competitors and to protect the Company from unfair competition, certain restrictive covenants as set forth below, are necessary, reasonable and desirable.  Executive understands and agrees that the restrictions imposed in these covenants represent a fair balance of the Company’s rights to protect its business and Executive’s right to pursue employment.

 

(b)                                 During the period of Executive’s service with the Company and for a period of 2 years thereafter, the Executive will not, directly or indirectly, (I) solicit for employment or employ (or attempt to solicit for employment or employ), for Executive or on behalf of any sole proprietorship, partnership, corporation, limited liability company or business or any other person (other than the Company or any of its subsidiaries or Affiliates), any Executive of the Company or any of its subsidiaries or Affiliates or any person who was such an Executive during the one-year period preceding the date of such solicitation, employment or attempted solicitation or employment, or (II) encourage any such Executive to leave his or her employment with the Company or any of its Subsidiaries or Affiliates.

 

(c)          Executive shall not, during the period of Executive’s service with the Company and for a period of one year thereafter (the “Non-Compete Period”), directly or indirectly engage in, have any equity interest in, or manage or operate any person, firm, corporation, partnership or business (whether as a director, officer, Executive, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any Business (as defined below) of Wesco anywhere in the world where Wesco conducts Business during the Non-Compete Period or has plans to conduct Business within twelve (12) months after the date thereof; provided, however, that Executive shall be permitted to acquire a passive debt or equity interest in such a business provided such business has a class of publicly-traded securities and the securities directly or indirectly beneficially owned by Executive do not represent more than two percent (2%) of the outstanding interest in such business.

 

(d)         As used in Section 1(c), (A) the term “Wesco” shall include the Company and its direct or indirect parents, if any, and its subsidiaries, and (B) the term “Business” shall mean the business of Wesco, as such business may be expanded or altered during the period of Executive’s employment with Wesco, including, without limitation, the business of (i) procuring, delivering and otherwise managing the inventory of chemicals for or on behalf of any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or governmental entity (or any department, agency or political subdivision thereof), training and managing the waste produced by such individuals and entities or providing services ancillary thereto, including process improvement, consultation, environmental health and safety compliance or waste handling services, or (ii) providing inventory management services or purchasing and distributing aerospace parts, machined parts, electrical components, bearings, and fastener installation tooling for or on behalf of any individual, partnership, corporation, limited liability company, association, joint stock company, trust,

 

 

joint venture, unincorporated organization or governmental entity (or any department, agency or political subdivision thereof).

 

(e)                                  In the event the terms of this Section 1 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to apply only for the maximum period of time for which it may be enforceable, in the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.

 

2.              Non-disclosure of Proprietary Information

 

(a)                                 Except in connection with the faithful performance of Executive’s duties or pursuant to Section 2(b), Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets of or relating to the Company or any of its subsidiaries or Affiliates (including, without limitation, intellectual property in the form of patents, trademarks and copyrights and applications therefor, ideas, inventions, works, discoveries, improvements, information, documents, formulae, practices, processes, methods, developments, source code, modifications, technology, techniques, data, programs, other know-how or materials, owned, developed or possessed by the Company or any of its subsidiaries or Affiliates, whether in tangible or intangible form, information with respect to the Company’s or its subsidiaries’ or Affiliates’ operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, prospects and compensation paid to employees or other terms of employment), or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets.  The parties hereby stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company and its subsidiaries and Affiliates (and any successors or assignees thereof).

 

(b)                                 Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest practicable notice thereof, shall, as much in advance of the return date as practicable, make available to the Company and its counsel the documents and other information sought and shall reasonably assist such counsel at the Company’s expense in resisting or otherwise responding to such process.

 

(c)                                  Nothing in this letter shall prohibit Executive from (i) disclosing information and documents when required by law, subpoena or court order (subject to the requirements of Section 2(b) above), (ii) disclosing information and documents to his professional adviser(s), (iii) disclosing the post-employment restrictions in this letter in confidence to any potential new employer, or (iv) disclosing information that has been or is hereafter disclosed and made public through no act or omission of Executive in violation of this letter, any other confidentiality obligation or duty owed to the Company or any act or omission of any person which to the knowledge of Executive has any legally binding confidentiality obligation or duty to the Company, or is otherwise ascertainable from public or trade sources or otherwise generally known in the trade.

 

3.              Non-Disparagement.  Each party to this letter (which, in the case of the Company, shall mean its officers and the members of the Board) agrees, during the period of Executive’s service with the Company and thereafter, to refrain from Disparaging (as defined below) the other party and its Affiliates, including, in the case of the Company, any of its services, technologies or practices, or any of its

 

 

directors, officers, employees, agents, representatives or stockholders, either orally or in writing.  Nothing in this paragraph shall preclude any party from making truthful statements that are reasonably necessary to comply with applicable law, regulation or legal process, or to defend or enforce a party’s rights under this letter.  For purposes of this letter, “Disparaging” means making remarks, comments or statements, whether written or oral, that impugn the character, integrity, reputation or abilities of the person being disparaged.

 

4.              Inventions.  All rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the business of the Company and its subsidiaries and Affiliates, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that Executive may discover, invent or originate during the period of his service with the Company, either alone or with others and whether or not during working hours or by the use of the facilities of the Company (“Inventions”), shall be the exclusive property of the Company.  Executive shall promptly disclose all Inventions to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem reasonably necessary to protect or perfect its rights therein, and shall assist the Company, upon reasonable request and at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. Executive hereby appoints the Company as Executive’s attorney-in-fact to execute on Executive’s behalf any assignments or other documents reasonably deemed necessary by the Company to protect or perfect its rights to any Inventions.

 

5.              Injunctive Relief.  It is recognized and acknowledged by Executive that a breach of the covenants contained in Sections 1, 2, 3 and 4 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate.  Accordingly, Executive agrees that in the event of a breach of any of the covenants contained in Sections 1, 2, 3 and 4, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief without the requirement to post bond.

 

6.              General Provisions.

 

(a)                              Governing Law and Venue.  This letter will be governed by and construed in accordance with the laws of the United States and the State of Pennsylvania applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof.  Any suit brought hereon shall be brought in the state or federal courts sitting in Pittsburgh, Pennsylvania, the parties hereby waiving any claim or defense that such forum is not convenient or proper.  Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by Pennsylvania law.

 

(b)                                 Notices.  Any notice required or permitted by this letter shall be in writing and shall be delivered as follows with notice deemed given as indicated:  (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt.  Notice shall be sent to Executive at the address set forth below and to the Company at its principal place of business, or such other address as either party may specify in writing.

 

(c)                               Survival.  The terms of this Exhibit A shall survive termination of Executive’s employment with the Company.PRTS_EX-10-1

		

			 

		

		
			U.S. Auto Parts Network, Inc.
2016 Equity Incentive Plan
		

		
			Form of Performance Cash Bonus Award Grant Notice

		

		
			U.S. Auto Parts Network, Inc. (the “Company”) hereby grants to Participant a Performance Cash Bonus Award (the “Award”) under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (the “Plan”) as further specified on Exhibit A hereto.  This Award is subject to all of the terms and conditions set forth in this Performance Cash Bonus Award Grant Notice (the “Grant Notice”) and in the Performance Cash Bonus Award Agreement (the “Agreement”) and the Plan, both of which are attached hereto and incorporated herein in their entirety.  Capitalized terms not explicitly defined in this Grant Notice but defined in the Plan or the Agreement will have the same definitions as in the Plan or the Agreement. 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Participant:

					
					
						 

					
					
						 

				
	
					
						Date of Grant:

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			Performance Objectives:  The Award represents the right to receive a cash bonus only when the performance objectives set forth on Exhibit A have been achieved during the performance period ended December 28, 2019.  The Award is subject to the terms and conditions set forth in the Agreement and in the Plan.      
		

		
			 
		

		
			Subject to the terms and conditions of the Agreement and the Plan, the Award shall vest and become payable in cash as follows:
		

		
			 
		

		
			As soon as practicable following the completion of such performance period, and in any event no later than March 15, 2020, the Compensation Committee of the Company’s Board of Directors (the “Committee”) shall determine whether the performance objectives set forth on Exhibit A have been satisfied (the “Determination Date”).  The amount of cash bonus payable under this Award shall be determined by the Committee based upon the extent to which the performance objectives set forth on Exhibit A have been satisfied.  If the minimum performance objectives are not met, no cash bonus shall be payable to Participant.    
		

		
			 
		

		
			Additional Terms/Acknowledgements:  Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Agreement, the Plan and the stock plan prospectus for the Plan.  Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Agreement and the Plan set forth the entire understanding between Participant and the Company regarding this Award and supersede all prior oral and written agreements, promises and/or representations regarding this Award, with the exception, if applicable, of (i) any written employment, offer letter or severance agreement, or any written severance plan or policy specifying the terms that should govern this Award, (ii) the Company’s stock ownership guidelines, and (iii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law.  By accepting this Award, Participant consents to receive this Grant Notice, the Agreement, the Plan, the stock plan prospectus for the Plan and any other Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
		

		
			 
		

		

		 

		

			 

		

		

			 

		

	
					
						

					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						U.S. Auto Parts Network, Inc.

					
					
						 

					
					
						Participant:

				
	
					
						By:

					
					
						 

					
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Signature

					
					
						 

					
					
						 

					
					
						Signature

				
	
					
						Title:

					
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				
	
					
						Date:

					
					
						 

					
					
						 

					
					
						Date:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			Attachments:    Performance Cash Bonus Award Agreement, 2016 Equity Incentive Plan, Prospectus
		

		
			 
		

		
			

		 

		

			 

		

		

			 

		

		

		
			Exhibit A
		

		
			The Award vests contingent upon the Company’s achievement of the applicable Adjusted EBITDA target in the chart below (the “Performance Objective”). For purposes hereof, “Adjusted EBITDA” shall be defined as income before interest expense, net, income tax provision, depreciation and amortization expense, detention and demurrage costs, amortization of intangible assets, plus share-based compensation expense, provided that the Committee may take into account additional one-time adjustments in its sole discretion on the Determination Date.
		

		
			The Performance Objective must be achieved in order for the applicable cash bonus to vest.  If the minimum Performance Objective is not met (i.e. in excess of $______in Adjusted EBITDA), no cash bonus will be payable to the Participant.
		

		
			The actual amount of the cash bonus to be earned will be assessed on a linear basis and the degree to which the Company achieves the Performance Objective (rounded down), as determined by the Committee on the Determination Date, will determine the actual amount of cash bonus to be earned.
		

		
			 
		

		
			[Chart]
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			

		

		

			  

		

		

			 

		

		

		
			 
		

		
			 
		

		
			Attachment I
		

		
			 
		

		
			U.S. Auto Parts Network, Inc.
		

		
			2016 Equity Incentive Plan
		

		
			Form of Performance Cash Bonus Award Agreement
		

		
			Pursuant to the accompanying Performance Cash Bonus Grant Notice (the “Grant Notice”) and this Performance Cash Bonus Award Agreement (the “Agreement”), U.S. Auto Parts Network, Inc. (the “Company”) has granted you a Performance Cash Bonus Award (the “Award”) under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (the “Plan”) (the “Performance Cash Bonus”) set forth in the Grant Notice.  This Award is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”).  Capitalized terms not explicitly defined in this Agreement but defined in the Plan or the Grant Notice will have the same definitions as in the Plan or the Grant Notice.  
		

			
	
			
				 1.
			Grant of the Award.    This Agreement represents the Company’s unfunded and unsecured promise to pay cash, at a future date, subject to the terms of this Agreement and the Plan.    This Award was granted in consideration of your services to the Company or an Affiliate.

			
	
			
				 2.
			Vesting.    This Award will vest, if at all, and become payable as set forth in the Grant Notice.  Subject to the terms of the Grant Notice, vesting will cease upon the termination of your Continuous Service.  Subject to the terms of the Grant Notice, upon such termination of your Continuous Service, you will forfeit (at no cost to the Company) any Performance Cash Bonus subject to this Award that has not vested as of the date of such termination and you will have no further right, title or interest in such Performance Cash Bonus.

			
	
			
				 3.
			Transferability.  Except as otherwise provided in this Section 3,  this Award is not transferable, except by will or by the laws of descent and distribution and prior to the time that the Performance Cash Bonus becomes payable in respect of this Award, you may not transfer, pledge, sell or otherwise dispose of any portion of the Performance Cash Bonus in respect of this Award.  For example, you may not use any portion of the Performance Cash Bonus in respect of this Award as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such Award.  This restriction on transfer will lapse upon issuance to you of the Performance Cash Bonus in respect of this Award.  

			
	
			
				 (a)
			Beneficiary Designation.    Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company to effect transactions under the Plan, designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of cash or other consideration to which you were entitled at the time of your death pursuant to this Agreement.  In the absence of such a designation, in the event of your death, the executor or 

		 

		

			

		

		

			  

		

		

			 

		

	administrator of your estate will be entitled to receive, on behalf of your estate, such cash or other consideration.  

			
	
			
				 (b)
			Domestic Relations Orders.  Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive any distribution of cash or other consideration under this Award, pursuant to the terms of a domestic relations order,  official marital settlement agreement or other divorce or separation instrument as permitted by applicable law that contains the information required by the Company to effectuate the transfer.  You are encouraged to discuss with the Company’s General Counsel the proposed terms of any such transfer prior to finalizing such domestic relations order, marital settlement agreement or other divorce or separation instrument to help ensure the required information is contained within the domestic relations order, marital settlement agreement or other divorce or separation instrument.

			
	
			
				 4.
			Award Not a Service Contract.  Your Continuous Service is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice.  This Award is not an employment or service contract, and nothing in this Award (including, but not limited to, the vesting of the Performance Cash Bonus subject to this Award or the issuance of a cash bonus in respect of this Award), this Agreement, the Plan or any covenant of good faith and fair dealing that may be found implicit in this Award or Agreement or the Plan will: (i) create or confer upon you any right or obligation to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment, service or affiliation; (iii) create or confer upon you any right or benefit under this Award unless such right or benefit has specifically accrued under the terms of this Agreement or the Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have, subject to the terms of the Grant Notice.    In addition, nothing in this Award will obligate the Company or an Affiliate, their respective stockholders, boards of directors, Officers or Employees to continue any relationship that you might have as an Employee, Director or Consultant for the Company or an Affiliate.

			
	
			
				 5.
			Tax Withholding Obligations.

			
	
			
				 (a)
			On or before the time you receive a distribution of any Performance Cash Bonus in respect of this Award,  and at any other time as reasonably requested by the Company in accordance with applicable tax laws, you agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate that arise in connection with this Award (the “Withholding Taxes”).  Specifically, the Company or an Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Taxes relating to this Award by any means it deems appropriate.   

			
	
			
				 (b)
			Unless the Withholding Taxes of the Company and/or any Affiliate are satisfied, the Company will have no obligation to issue to you any Performance Cash Bonus in respect of the Award.

		
			

		 

		

			

		

		

			  

		

		

			 

		

		

			
	
			
				 (c)
			In the event the Company’s obligation to withhold arises prior to the issuance to you of a  Performance Cash Bonus or it is determined after the issuance of a  Performance Cash Bonus to you that the amount of the Company’s withholding obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

			
	
			
				 6.
			Tax Consequences.  The Company has no duty or obligation to minimize the tax consequences to you of this Award and will not be liable to you for any adverse tax consequences to you arising in connection with this Award.  You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by accepting this Award, you have agreed that you have done so or knowingly and voluntarily declined to do so.

			
	
			
				 7.
			Notices.  Any notices provided for in this Agreement or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.  The Company may, in its sole discretion, decide to deliver any documents related to this Award or participation in the Plan by electronic means or to request your consent to participate in the Plan by electronic means.  By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

			
	
			
				 8.
			Governing Plan Document.    This Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of this Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan.  Except as otherwise expressly provided in the Grant Notice or this Agreement, in the event of any conflict between the terms in the Grant Notice or this Agreement and the terms of the Plan, the terms of the Plan will control.

			
	
			
				 9.
			Effect on Other Employee Benefit Plans.  The value of this Award will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides.  The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

			
	
			
				 10.
			Severability.  If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid.  Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

			
	
			
				 11.
			Amendment.    Any amendment to this Agreement must be in writing, signed by a duly authorized representative of the Company.  Notwithstanding anything in the Plan to the contrary, the Board reserves the right to amend this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in 

		 

		

			

		

		

			  

		

		

			 

		

	applicable laws or regulations or any future law, regulation, interpretation, ruling, or judicial decision.

			
	
			
				 12.
			Clawback/Recovery.    This Award (and any compensation paid under this Award) may be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.  No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company.

			
	
			
				 13.
			Unsecured Obligation.  This Award is unfunded, and as a holder of a  vested Performance Cash Bonus, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to pay cash or other property pursuant to this Agreement.

			
	
			
				 14.
			Compliance with Section 409A of the Code.    This Award is intended to comply with the “short-term deferral” rule set forth in Treasury Regulations Section 1.409A-1(b)(4).  However, if (i) this Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and therefore deemed to be deferred compensation subject to, Section 409A of the Code, (ii) you are deemed by the Company at the time of your “separation from service” (as such term is defined in Treasury Regulations Section 1.409A-1(h) without regard to any alternative definition thereunder) to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and (iii) any of the payments set forth herein are issuable upon such separation from service, then to the extent delayed commencement of any portion of such payments is required to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A of the Code, such payments will not be provided to you prior to the earliest of (a) the date that is six months and one day after the date of such separation from service, (b) the date of your death, or (c) such earlier date as permitted under Section 409A of the Code without the imposition of adverse taxation.  Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 14 will be paid in a lump sum to you, and any remaining payments due will be paid as otherwise provided herein.  Each installment of Performance Cash Bonus that vests under this Award is a “separate payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2). 

			
	
			
				 15.
			Miscellaneous.

			
	
			
				 (a)
			The rights and obligations of the Company under this Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. 

			
	
			
				 (b)
			You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of this Award.

		
			

		 

		

			

		

		

			  

		

		

			 

		

		

			
	
			
				 (c)
			You acknowledge and agree that you have reviewed this Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting this Award, and fully understand all provisions of this Award.

			
	
			
				 (d)
			This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

			
	
			
				 (e)
			All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

		
			***
		

		
			This Performance Cash Bonus Award Agreement will be deemed to be signed by you upon the signing by you of the Performance Cash Bonus Award Grant Notice to which it is attached.

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