Document:

exhibit10.2(d)hhwarrant

Execution Copy

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAWS OR (II) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAWS, AND IF THE  COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
WARRANT
Original Issuance Date:  April 17, 2015    Warrant No. [SWK-1]
FOR VALUE RECEIVED, Hooper Holmes, Inc., a New York corporation (the “Company”), hereby grants to SWK Funding LLC, a Delaware limited liability company (“SWK”), or its registered assigns (the “Registered Holder”), the right to purchase up to EIGHT MILLION ONE HUNDRED FIFTY TWO THOUSAND ONE HUNDRED SEVENTY FOUR (8,152,174) duly authorized, validly issued, fully paid and nonassessable shares of the Company’s Common Stock (as further adjusted from time to time, the “Exercise Shares”) at a price of $0.46 per share (as adjusted from time to time hereunder, the “Exercise Price”).  This Warrant is one of one or more Warrants issued by the Company (collectively, the “Warrants”) pursuant to Section 4.4 of the Credit Agreement.  Certain capitalized terms used herein are defined in Section 14 hereof.  The amount and kind of securities purchasable pursuant to the rights granted hereunder and the Exercise Price for such securities are subject to adjustment pursuant to the provisions contained in this Warrant.
This Warrant is subject to the following provisions: 
Section 1.Exercise of Warrant.
            A    Exercise Period and Amount.  The Registered Holder may exercise, in whole or in part, the purchase rights represented by this Warrant for the Exercise Shares at any time and from time to time after October 17, 2015 and up to and including the Expiration Date (the “Exercise Period”). 
(i)    Exercise Procedure. This Warrant will be deemed to have been exercised when the Company has received all of the following items or such later time as may be specified by the Registered Holder in the Exercise Agreement but in no event after the Expiration Date (the “Exercise Time”):
(a)    a completed Exercise Agreement, as described in Section 1B hereof, executed by the Person exercising all or part of the purchase rights represented by this Warrant (the “Purchaser”);

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(b)    this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction);
(c)    if this Warrant is not registered in the name of the Purchaser, an Assignment or Assignments in the form set forth in Exhibit II hereto (an “Assignment”) properly executed evidencing the assignment of this Warrant to the Purchaser, in compliance with the provisions set forth in Section 5 hereof; and
(d)    a payment to the Company in an amount equal to the product of the Exercise Price multiplied by the number of Exercise Shares being purchased upon such exercise (the “Aggregate Exercise Price”) in the form of, at the Registered Holder’s option, (1) a certified or official bank check payable to the Company or (2) a wire transfer of immediately available funds to an account designated by the Company; provided, however, the Registered Holder may exercise this Warrant in whole or in part by the surrender of this Warrant to the Company, with a duly executed Exercise Agreement marked to reflect “Net Issue Exercise” and specifying the number of Exercise Shares to be purchased, and upon such Net Issue Exercise, the Registered Holder shall be entitled to receive that number of Exercise Shares determined in accordance with the following equation:
X    =    (A - B) x C
        A
where
		
	X
	=    the number of shares of Exercise Shares purchasable upon a Net Issue Exercise of the Warrant pursuant to the provisions of this Section 1A;

		
	A
	=    the Fair Market Value of one Exercise Share on the date of the Net Issue Exercise;

		
	B
	=    the Exercise Price for one Exercise Share under this Warrant; and

		
	C
	=    the number of Exercise Shares as to which this Warrant is being exercised pursuant to the provisions of this Section 1A.

If the foregoing calculation results in a negative number, then no Exercise Shares shall be issued upon a Net Issue Exercise pursuant to this Section 1A.  In the event of any withholding of Exercise Shares or surrender of other equity securities where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares withheld by or surrendered to the Company shall be rounded up to the nearest whole share and the Company shall make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a share being so withheld by or surrendered to the Company in an amount equal to the product of (x) such incremental fraction of 

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a share being so withheld or surrendered multiplied by (y) the Fair Market Value per Exercise Share as of the Exercise Date.

(i)    Delivery of Stock Certificates and New Warrants.  Duly executed certificates for Exercise Shares purchased upon exercise of this Warrant will be delivered by the Company to the Purchaser within five (5) Business Days after the date of the Exercise Time.  The issuance of certificates for Exercise Shares will be made without charge to the Registered Holder or the Purchaser for any issuance tax in respect thereof or other cost incurred by the Company in connection with such exercise and the related issuance of shares of Common Stock.  Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company will prepare a new Warrant, substantially identical hereto, representing the rights formerly represented by this Warrant which have not expired or been exercised and will, within such five (5) Business Day period, deliver such new Warrant to the Person designated for delivery in the Exercise Agreement.
(ii)    Deemed Timing of Certain Events.  The Exercise Shares will be deemed to have been issued to the Purchaser at the Exercise Time, and the Purchaser will be deemed for all purposes to have become the record holder of such Exercise Shares at the Exercise Time.
(iii)    Valid Issuance of Exercise Shares.  Each Exercise Share issuable upon exercise of this Warrant will, upon exercise of this Warrant in accordance with the terms hereof and payment of the Aggregate Exercise Price therefor in accordance with Section 1A(i)(d), be fully paid and nonassessable and free from all liens and charges with respect to the issuance thereof, other than those arising by virtue of any action taken by the Registered Holder or the failure of the Registered Holder to take any action required to be taken by it.
(iv)    Compliance with the Securities Act.
(a)    Agreement to Comply with the Securities Act; Legend. The Registered Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 1A(v) and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Registered Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”); provided, however, that notwithstanding anything to the contrary contained herein or in any legend placed on the Warrant or any certificates representing the Exercise Shares, in no event shall the Registered Holder be required to provide an opinion of counsel in connection with a Permitted Transfer.
(b)    This Warrant and Exercise Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

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“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
(c)    Representations of the Registered Holder. In connection with the issuance of this Warrant, the Registered Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:
(i)The Registered Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Registered Holder is acquiring this Warrant and the Exercise Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Exercise Shares, except pursuant to sales registered or exempted under the Securities Act. 
(i)    The Registered Holder understands and acknowledges that this Warrant and the Exercise Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Registered Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
(ii)    The Registered Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Exercise Shares. The Registered Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the 

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offering of the Warrant and the business, properties, prospects and financial condition of the Company.
(i)    Books; Par Value.  The Company will maintain at its principal office, books for the registration of the Warrants and any transfer or assignment thereof.  Except as otherwise provided herein, the Company will not close its books against the transfer of this Warrant or of any Exercise Share in any manner which interferes with the timely exercise of this Warrant.  The Company will from time to time take all such action as may be necessary to assure that the par value per share, if any, of the unissued Exercise Shares is at all times equal to or less than the Exercise Price then in effect.

(i)    Company Cooperation and Government Filings.  If the Registered Holder is required to make any governmental filings or obtain any governmental approvals prior to or in connection with any exercise of this Warrant (including, without limitation, making any filings reasonably required to be made by the Company), then the Company shall, at the Registered Holder’s expense, provide reasonable assistance, as reasonably requested by the Registered Holder, in connection with such filings or approvals; provided, however, that nothing in this Section 1(b)(vii) shall require the Company to register the Exercise Shares, except as expressly provided in this Warrant.
(ii)    Effective Time of Exercise in Connection with Public Offering or Sale.  Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a Public Offering or Sale of the Company Transaction, the exercise of any portion of this Warrant may, at the election of the Registered Holder, be conditioned upon the consummation of the Public Offering or Sale of the Company Transaction in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
(iii)    Sufficient Shares; No Violation; Listing in Certain Instances.  The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of issuance upon the exercise of the Warrants, such number of shares of Common Stock issuable upon the exercise of all outstanding Warrants.  All shares of Common Stock that are issuable shall, when issued in accordance with the terms of this Warrant, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges, other than those arising by virtue of any action taken by the Registered Holder or the failure of the Registered Holder to take any action required to be taken by it.  The Company shall take all such actions as may be reasonably necessary to assure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).  The Company will use its commercially reasonable efforts to cause the Exercise Shares, immediately upon any exercise of this Warrant, to be listed on any domestic securities exchange 

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upon which shares of Common Stock, or other securities constituting Exercise Shares, are listed at the time of such exercise, if any.
1B.    Exercise Agreement.  Upon any exercise of this Warrant, the Exercise Agreement will be substantially in the form set forth in Exhibit I hereto (the “Exercise Agreement”), except that if the Exercise Shares are not to be issued in the name of the Person in whose name this Warrant is registered, the Exercise Agreement will also state the name of the Person to whom the certificates for the Exercise Shares are to be issued and will be accompanied by a properly executed Assignment (as required by Section 5 hereof), and if the number of Exercise Shares to be issued does not include all the shares of Common Stock purchasable hereunder, it will also state the name of the Person to whom a new Warrant for the unexercised portion of the rights hereunder is to be delivered (and if such Person is other than the Person in whose name this Warrant is then registered, will be accompanied by a properly executed Assignment (as required by Section 5 hereof)).  Such Exercise Agreement will be dated the actual date of execution thereof.
1C.    Payment of Expenses and Taxes.  The Company shall pay all expenses and taxes imposed by law or any governmental agency, including any documentary stamp taxes, attributable to the issuance of Exercise Shares upon the exercise of the Warrant; provided, that nothing in this Section 1C shall make the Company liable for any income taxes payable by the Registered Holder and associated with the issuance of the Warrant or the exercise thereof; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Exercise Shares to any Person other than the Registered Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
Section 2.    Adjustment of Number of Exercise Shares.  The number of Exercise Shares in effect shall be subject to adjustment from time to time as provided in this Section 2.
2A.    Subdivision or Combination of Common Stock.  If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the number of Exercise Shares in effect immediately prior to such subdivision will be proportionately increased and the Exercise Price proportionately decreased (but not to less than the par value, if any, of such shares).  If the Company at any time combines (by reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the number of Exercise Shares in effect immediately prior to such combination will be proportionately decreased and the Exercise Price proportionately increased.
2B.    Reorganization, Reclassification, Consolidation, Merger or Sale.  Any (i) recapitalization or reorganization of the Company, (ii) reclassification of the stock of the Company, (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other transaction, which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities, assets or other property with respect to or in exchange for Common Stock is referred to herein as an “Organic Change”.  Prior to the consummation of any 

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Organic Change, the Company will make appropriate provision to ensure that each Registered Holder of a Warrant will thereafter have the right to acquire and receive in lieu of or addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of such holder’s Warrant, such shares of stock, securities, assets or other property (“Exchangeable Property”) as may be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon exercise of such holder’s Warrant had such Organic Change not taken place.  In any such case, the Company will make appropriate provision (in form and substance reasonably satisfactory to Registered Holders of Warrants representing a majority of the Exercise Shares obtainable upon exercise of all Warrants then outstanding) with respect to such Registered Holders’ rights and interests to ensure that the provisions of this Warrant will thereafter be applicable to the Warrants (including, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Company, an immediate adjustment of the Exercise Price in proportion to the Exchangeable Property receivable for each share of Common Stock reflected by the terms of such consolidation, merger or sale, and a corresponding immediate adjustment in the number of Exercise Shares).  Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 2B, each Registered Holder shall have the right to elect, prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 1 hereof instead of giving effect to the provisions contained in this Section 2B with respect to this Warrant.
2C.    Legal Impediments to Exercise Price Adjustments.  If any adjustment to the Exercise Price required hereunder is not permitted by applicable law (including without limitation, by reducing the Exercise Price below the par value, if any, of the shares of Common Stock), then, unless the adjustment necessary shall be agreed upon by the Company and the Registered Holder, the Board shall appoint a firm of independent certified public accountants of recognized standing, acceptable to the Registered Holder, which, at the Company’s expense, shall render its written opinion on the necessary adjustment in the number of Exercise Shares purchasable upon exercise of this Warrant, so as to preserve, without dilution, the exercise rights of the Registered Holder consistent with the standards in this Section 2.  Upon receipt of such opinion, the Board shall forthwith make the adjustments described therein.
2D.    Certain Other Actions Prohibited.  The Company shall not by amendment of the Charter or its bylaws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the provisions of this Warrant, but shall at all times in good faith assist in the carrying out of all of the provisions of this Warrant and shall take all such action as the Registered Holder may reasonably request to protect the exercise privilege of the Registered Holder against dilution.  Without limiting the generality of the foregoing, the Company (i) shall take all such actions as may be necessary or appropriate under state law in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of all of the Warrants from time to time outstanding and (ii) shall not take any action which results in (1) any adjustment of the total number of shares of Common Stock or other securities issuable after the action upon the exercise of all of the Warrants would exceed the total number of shares of Common Stock then authorized by the Charter and available for the purpose of issuance 

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upon such exercise or (2) any adjustment of the Exercise Price to be less than the par value of the Common Stock.
2E.    Notices.
(i)    Adjustment Notice and Certificate.  As soon as practicable following any adjustment of the number of Exercise Shares, but in any event not later than ten (10) Business Days thereafter, the Company will give written notice thereof to the Registered Holder, setting forth in reasonable detail, and certifying the calculation of, such adjustment.  Each such certification shall be signed by the chief executive officer or chief financial officer of the Company and by the secretary or any assistant secretary of the Company.
(ii)    Exercise Shares Notice and Certificate.  As soon as practicable following the receipt by the Company of a written request by the Registered Holder, but in any event not later than ten (10) Business Days thereafter, the Company will provide to the Registered Holder written notice certifying the number of Exercise Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.  Each such certification shall be signed by the chief executive officer or chief financial officer of the Company and by the secretary or any assistant secretary of the Company.
(iii)    Notices Regarding Books Closure, Dividends, Subscription Offers and Certain Voting Rights.  The Company will give written notice to the Registered Holder at least ten (10) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock (including, without limitation with respect to any regular dividends or liquidating distributions), (B) with respect to any issuance of Common Stock, preferred stock or Stock Equivalents covered by Section 5, or (C) for determining rights to vote with respect to any Organic Change, dissolution or liquidation.
(iv)    Notice of Organic Change.  The Company will give written notice to the Registered Holder at least ten (10) days prior to the date on which any Organic Change, dissolution or liquidation will take place.  Such written notice shall include a reasonable description of such Organic Change, the expected date of the consummation of such Organic Change, and the Fair Market Value payable, as well as the number of Exercise Shares issuable upon exercise of the Warrant if issued upon a Net Issue Exercise pursuant to Section 1A in connection with such Organic Change.
(v)    Notice of Certain Corporate Action.  Without prejudice to the foregoing, the Registered Holder shall be entitled to the same rights to receive notice of all other corporate action as any holder of Common Stock.
2F.    Record Date.  If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, preferred stock or Stock Equivalents or (B) to subscribe for or purchase Common Stock, preferred stock or Stock Equivalents, then such record date will be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the 

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declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.
Section 3.    Dividends.
3A.    Dilution Fee.  Subject to the provisions of this Section 3A, if the Company shall, at any time or from time to time after the Date of Issuance, make or declare, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend in cash, then provision shall be made so that the Exercise Price of the Warrant shall be reduced by the amount of cash which the Registered Holder would have been entitled to receive per share had the Warrant been exercised in full into Exercise Shares on the date of such event; provided, that in the event such adjustment would have the effect of reducing the Exercise Price below zero, the Exercise Price shall be reduced to zero and any additional amount shall be distributed to the Registered Holder; provided further, that no such provision shall be made if the Registered Holder receives, simultaneously with the distribution to the holders of Common Stock, a dividend of cash in an amount equal to the amount of such cash as the Registered Holder would have received if the Warrant had been exercised in full into Exercise Shares on the date of such event. 
Section 4.    No Voting Rights; Limitations of Liability.  This Warrant shall not entitle the holder thereof to any voting rights or other rights of a stockholder of the Company, except as otherwise set forth herein.  No provision hereof, in the absence of affirmative action by the Registered Holder to purchase Common Stock, and no enumeration herein of the rights or privileges of the Registered Holder shall give rise to any liability of such Registered Holder for the Exercise Price of the Exercise Shares acquirable by exercise hereof or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Section 5.    Purchase Rights.  If at any time after the Date of Issuance the Company grants, issues or sells any shares of Common Stock or other Stock Equivalents pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Registered Holder shall be entitled to acquire, upon the same terms applicable to such Purchase Rights, the aggregate pro-rata Purchase Rights which such Holder could have acquired if such Holder had held the number of Exercise Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the Common Stock or Stock Equivalents are granted, issued or sold.  In the event of any such offering, the Company shall give notice (the “Offer Notice”) to each Registered Holder, stating (i) its bona fide intention to offer such Common Stock or other Stock Equivalents, (ii) the number of such securities to be offered, and (iii) the price and terms upon which it proposes to offer such securities.  By notification to the Company within fifteen (15) days after the Offer Notice is given, each Registered Holder may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to the aggregate pro-rata Purchase Rights as described above.
Section 6.    Warrant Transferable.  Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder (including the Exercise Shares) are transferable, in whole or in part, without charge to the Registered Holder, upon surrender of this Warrant (or certificate for Exercise Shares) with a properly completed and duly executed Assignment 

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at the principal office of the Company together with funds sufficient to pay any transfer taxes as described in Section 1C.  Upon such compliance, surrender and delivery, the Company shall execute and deliver a new Warrant or Warrants (or shares) in the name of the assignee or assignees and in denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant (or shares) to evidence the portion of this Warrant (or shares), if any, not so assigned, and this Warrant (or shares) shall promptly be cancelled.  Without limiting the generality of the foregoing, upon a Sale of the Company Transaction structured as a sale of the capital stock of the Company (whether by direct sale, merger or otherwise), in lieu of any exercise hereof and sale of the underlying Exercise Shares, the Registered Holder shall have the right to transfer and sell this Warrant to one or more third party purchasers for the purchase price otherwise payable by such Persons for Common Stock in such transaction less the Aggregate Exercise Price.  The Registered Holder agrees that until such time as any transfer pursuant to this Section 6 is recorded on the books of the Company, the Company may treat the Registered Holder on the books of the Company as the absolute owner; provided, that nothing in this Warrant affects any requirement that transfer of any Warrant or share of Common Stock is issued or issuable upon the exercise of such Warrant be subject to compliance with the Securities Act and all applicable state and foreign securities laws.
Section 7.    Warrant Exchangeable for Different Denominations.  This Warrant is exchangeable, upon the surrender hereof by the Registered Holder at the principal office of the Company, for new Warrants of like tenor representing in the aggregate the purchase rights hereunder, and each of such new Warrants will represent such portion of such rights as is designated by the Registered Holder at the time of such surrender.  The date the Company initially issues this Warrant will be deemed to be the “Date of Issuance” hereof regardless of the number of times new certificates representing the unexpired and unexercised rights formerly represented by this Warrant shall be issued.  All Warrants representing portions of the rights hereunder are referred to herein as the “Warrants.”
Section 8.    Replacement.  Upon receipt of evidence reasonably satisfactory to the Company (including at the request of the Company an affidavit of the Registered Holder) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing this Warrant and upon delivery of an indemnity reasonably satisfactory to the Company or, in the case of any such mutilation upon surrender of such certificate to the Company, the Company will (at the Registered Holder’s expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the same rights represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.
Section 9.    Registration Rights.  In the event the Company, at any time prior to the Expiration Date, proposes to file on behalf of any shareholder a registration statement under the Securities Act on any form (other than a registration statement on Form S-4 or S-8) for shares held by any such shareholder, the Company shall offer to include in such registration statement the Exercise Shares of each Registered Holder (whether issued or issuable under the Warrants) at the Company’s expense.  Such Exercise Shares shall be registered, along with such other shares, on a pro rata basis on terms customary for a transaction of this type and nature.  The registration rights 

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granted under this Section 9 shall not be effective at any time when Rule 144 under the Securities Act is available for resale of all the Exercise Shares issuable pursuant to the Net Issue Exercise provision of Section 1A without limitation during a three month period and without registration.
Section 10.    Notices.  Except as otherwise expressly provided herein, all notices, demands or other communications to be given or delivered under or by reason of the provisions of this Warrant shall be in writing and shall be deemed to have been received:  (a) when delivered personally to the recipient, (b) one (1) day after sent to the recipient by reputable overnight courier service (charges prepaid), (c) three (3) days after mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, or (d) upon confirmation of transmittal by facsimile.  Such notices, demands and other communications shall be addressed (x) in the case of the Registered Holder, to its address as set forth in the books and records of the Company or, if different, as is designated in writing from time to time by such Registered Holder, (y) in the case of the Company, to its principal office, and (z) in the case of any registered assignee of this Warrant or its registered assignee, to such assignee at its address as designated in writing by such assignee to the Company from time to time.  
Section 11.    Amendment and Waiver.  Except as otherwise provided herein, the provisions of this Warrant may not be amended or waived and the Company may not take any action herein prohibited, or omit to perform any act herein required to be performed by it, unless the Company has obtained the written consent of the Registered Holders of Warrants representing a majority of the Exercise Shares issuable upon exercise of the Warrants; provided that (except as otherwise provided herein) no such action may change the Exercise Price of any Warrants or the number of shares or class of stock obtainable upon exercise of any Warrant without the written consent of the Registered Holder of such Warrant.  No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, and no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
Section 12.    Survival of Warrant Terms.  The provisions contained in Section 9 through Section 14, inclusive, shall all survive the exercise of the Warrant for so long as any of the Warrants or the Exercise Shares are outstanding; provided, however, that in no event shall such terms survive longer than the last to occur of (i) the expiration of the Exercise Period, and (ii) the two year anniversary of the last exercise of the Warrant.
Section 13.    Descriptive Headings; Governing Law.  The descriptive headings of the several Sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.  The construction, validity and interpretation of this Warrant will be governed by the internal law, and not the conflicts law, of the State of New York.
Section 14.    Definitions.  The following terms have meanings set forth below:
“Affiliates” shall have the meaning ascribed to such term in the Credit Agreement.

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“Aggregate Exercise Price” shall have the meaning set forth in Section 1A(i)(d) hereof.
“Appraised Value” means, with respect to a share of Common Stock and any other property, the fair value of such other property, as determined by an appraisal performed at the expense of the Company by an Approved Appraiser, and whose determination will be final and binding on the Company and the Registered Holder; provided, that such Approved Appraiser shall be directed to determine the value of such securities or other property as soon as practicable, but in no event later than thirty (30) days from the date of its selection, and for such purposes, such valuation shall be without discount for limitations on voting rights, minority interests, illiquidity or restrictions on transfer and all rights, options and warrants to subscribe for or purchase, and other securities convertible into or exchangeable for, Common Stock shall be deemed to be exercised, exchanged.
“Approved Appraiser” shall mean a mutually acceptable investment banking or valuation firm, as determined by the Company and the Registered Holders holding Warrants exercisable for at least a majority of the Exercise Shares issuable upon the exercise of all then outstanding Warrants.
“Assignment” shall have the meaning set forth in Section 1A(i)(c) hereof.
“Board” shall mean the Company’s Board of Directors.
“Business Day” shall have the meaning ascribed to such term in the Credit Agreement.
“Charter” shall mean the Company’s Certificate of Incorporation as filed with the Secretary of State of the State of New York, as the same may be from time to time amended.
“Closing Date” shall have the meaning ascribed to such term in the Credit Agreement.
“Common Stock” shall mean the common voting stock described in Article Fourth of the Charter, together with any capital stock into which such common voting stock shall have been converted, exchanged or reclassified following the date hereof.
“Company” shall have the meaning set forth in the preamble to this Warrant.
“Credit Agreement” shall mean the Credit Agreement dated as of April 17, 2015, among the Company, as Borrower, SWK, as Agent, Sole Lead Arranger and Sole Bookrunner, and the financial institutions party hereto from time to time, as Lenders.
“Date of Issuance” shall have the meaning set forth in Section 7 hereof.
“Dilution Fee” shall have the meaning set forth in Section 3A hereof.
“Exchangeable Property” shall have the meaning set forth in Section 2B hereof.
“Exercise Agreement” shall have the meaning set forth in Section 1B hereof.
“Exercise Period” shall have the meaning set forth in Section 1A hereof.

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#35183997_v6

“Exercise Price” shall have the meaning set forth in the preamble to this Warrant.
“Exercise Shares” shall have the meaning set forth in the preamble to this Warrant.
“Exercise Time” shall have the meaning set forth in Section 1A(i) hereof.
“Expiration Date” means April 17, 2022.
“Fair Market Value” means, (a) with respect to a share of Common Stock, (i) if determined in connection with a Sale of the Company Transaction, the amount payable in respect of one share of Common Stock upon consummation thereof, (ii) otherwise, if available, the Market Price thereof, and (iii) otherwise, if Market Price is not available, the Appraised Value thereof and (b) with respect to any other property, (i) the fair value thereof determined jointly by the Company and the Registered Holder, and (ii) if such parties are unable to reach agreement within ten (10) days, the Appraised Value thereof.  
“Market Price” means (A) if at any time the Common Stock is listed on any securities exchange or quoted in the NYSE MKT or the over-the-counter market, the average of the closing prices of such security’s sales on all securities exchanges on which such security may at the time be listed, or, if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of each day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the NYSE MKT as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the NYSE MKT, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of thirty (30) days consisting of the day as of which “Market Price” is being determined and the twenty-nine (29) consecutive Business Days prior to such day, or (B) if at any time such security is not listed on any securities exchange or quoted in the NYSE MKT or the over-the-counter market, the fair value thereof determined jointly by the Company and the Registered Holder (and if such parties are unable to reach agreement within ten (10) days, then the Market Price shall be deemed not to be available).  
“Net Issue Exercise” shall have the meaning set forth in Section 1A(i)(d) hereof.
“Offer Notice” shall have the meaning set forth in Section 5 hereof.
“Organic Change” shall have the meaning set forth in Section 2B hereof.
“Permitted Transfer” shall mean a transfer (i) to an Affiliate of such Registered Holder, or (ii) in connection with the transfer of any portion of the Obligations (as defined in the Credit Agreement) or any participation therein, in either case in compliance with the Credit Agreement; provided, however, that such transfer does not result in a violation of the Securities Act.
“Person” shall have the meaning ascribed to such term in the Credit Agreement.
“Public Offering” shall mean a registered “public offering” of the Company’s Common Stock or other equity under the Securities Act.

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“Purchaser” shall have the meaning set forth in Section 1A(i)(a) hereof.
“Purchase Rights” shall have the meaning set forth in Section 5 hereof.
“Registered Holder” shall have the meaning set forth in the preamble to this Warrant.
“Sale of the Company Transaction” shall mean any transaction in which the Company’s shareholders immediately prior to such transaction (or series of related transactions) no longer hold at least a majority of the Company’s Common Stock after the consummation of such transaction.
“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations promulgated thereunder as in effect at the relevant time.
“Stock Equivalent” means any security, option, warrant, right or claim exercisable into, exchangeable for, convertible to or redeemable for shares of Common Stock or the economic equivalent value of shares of Common Stock (including, by way of illustration, preferred stock and stock appreciation rights).
“SWK” shall have the meaning set forth in the preamble to this Warrant.
“Warrants” shall mean this Warrant and all warrants issued upon replacement or transfer of this Warrant in accordance with the terms of this Warrant and all warrants issued upon exchange for different denominations hereof in accordance with the terms of this Warrant.
*          *          *          *          *

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by its duly authorized officer under its corporate seal and to be dated the Date of Issuance hereof.
HOOPER HOLMES, INC.

By: /s/ Henry E. Dubois
Name:    Henry E. Dubois
Title:    Chief Executive Officer and President

Acknowledged, accepted and agreed,

SWK FUNDING LLC
By: SWK Holdings Corporation,
its sole Manager

By:    /s/ Brett Pope
Name:     Brett Pope
Title:    Chief Executive Officer

Date: April 17, 2015
EXHIBIT I
EXERCISE AGREEMENT

To:

Dated:  

The undersigned, pursuant to the provisions set forth in the attached Warrant (Certificate No. ____), hereby agrees to subscribe for the purchase of            shares of the Common Stock covered by such Warrant and makes payment herewith in full therefor at the price per share provided by such Warrant.  This subscription shall be effective on the date the Company has received this Exercise Agreement and the other items required under Section 1A(i) of the Warrant.

Check Box for Net Issue Exercise

Signature    

Address    

EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, ____________________ hereby sells, assigns, and transfers all of the rights of the undersigned under the attached Warrant (Certificate No. ____) with respect to the number of shares of the Common Stock covered thereby set forth below, unto:

	
			
	Names of Assignee
	Address
	No. of Shares

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

Signature    
Name: 
Title:

14
#35183997_v6Exhibit 10.1

 

EXECUTION VERSION

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the 20th day of April 2015, by and between Clayton G. Wilson (the “Executive”), a Florida resident, and Alico, Inc., a Florida corporation (the “Company”).

 

Recitals

 

WHEREAS, the Company desires to employ the Executive to serve as the Chief Executive Officer of the Company, effective as of November 22, 2013 (the “Effective Date”) and the Executive desires to accept such positions with the Company.

 

Agreement

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.  Employment.  The Company hereby employs the Executive as its Chief Executive Officer of the Company, and the Executive hereby accepts such employment, effective as of the Effective Date, upon the terms and conditions set forth herein.  Except as otherwise expressly provided herein and in the Indemnification Agreement previously executed by the Company and the Executive, this Agreement (including the exhibits that are an integral part of it) sets forth the terms and conditions of the Executive’s employment by the Company, represents the entire agreement of the parties with respect to that subject, and supersedes all prior understandings and agreements with respect to that subject.  Every reference in this Agreement to an Exhibit is to an exhibit to this Agreement.  As used in this Agreement, the capitalized terms that are defined on Exhibit A have the respective definitions attributed to them on Exhibit A, and those definitions are incorporated by reference in this Agreement.

 

2.  Position and Duties.

 

(a)                                 Duties.  The Executive shall be employed by the Company as Chief Executive Officer, and shall be appointed, effective as of the Effective Date, to serve as a member of the Company’s Board of Directors (the “Board”) and thereafter shall be nominated by the Company for reelection as a member of the Board as the Executive’s term as a director expires.  The Executive shall be responsible for the general management of the affairs of the Company, taking into account duties to be performed by any Chairman of the Board, and shall perform all duties incidental to such positions which may be required by law and all such other duties as may be reasonably assigned by the Board and are consistent with the duties normally associated with a chief executive officer of a public corporation.  The Executive is not required, however, to serve on behalf of the Company or a subsidiary of the Company as an agent, officer, director, manager, partner, trustee, employee or contractor for any benefit plan or any welfare plan of the Company without his express approval, which he may withhold in his sole discretion.  The Executive shall report directly to the Board.  For administrative purposes, the Company may designate the Executive as being employed by one or more of its affiliates pursuant to the terms of this Agreement, but the designation will not relieve the Company from any of its obligations under this Agreement, except to the extent that they are fully performed by the designated subsidiary.

 

 

(b)                                 Engaging in Other Employment.  While employed by the Company, except as otherwise approved by the Board or as provided by any contract to which the Company or any of its subsidiaries is a party, the Executive shall devote substantially all of his working time and attention to the Company and its affiliates and shall not be employed by any other person or entity.  Notwithstanding the foregoing or the provisions of Section 10(b) of this Agreement, the Executive is permitted to do any of the following while he is employed by the Company or any of its subsidiaries:  (i) serve as an owner, manager, officer, director or trustee of any entity that directly or indirectly owns any interest in the Company; (ii) if approved in advance by resolution of the Board, serve as an owner, officer, director or manager of any other for-profit business entity, so long as it is not engaged in a business that competes with the Company; (iii) serve as an owner, manager, officer, director, and employee of any of the business entities listed on Exhibit C to this Agreement, whether or not any of them engages in a business that competes with the Company; (iv) make a passive investment in less than 1% of the outstanding equity of any business entity that is traded on any national, regional or international stock exchange or in the over-the-counter market, whether or not the business entity is engaged in a business that competes with the Company; and (v) participate in a reasonable number of civic, industry, charitable, community, educational, professional and  similar organizations, including serving as an officer or member of a board of directors of any nonprofit organization; provided in each case that the activity or service does not materially interfere with the regular performance of the Executive’s duties and responsibilities under this Agreement.

 

(c)                                  Loyal and Conscientious Performance.  The Executive shall act at all times in compliance with the written policies, rules and decisions adopted from time to time by the Company, its Board and any employing affiliates and perform all of the duties and obligations required of him by this Agreement in a loyal and conscientious manner.

 

(d)                                 Location.  The Executive’s principal place of business shall be at the principal executive offices of the Company in Fort Myers, Florida.  Except for required business travel, the Executive will not be required to relocate to a new principal place of business that is more than 50 miles from any material property of the Company or its subsidiaries.

 

3.  Term of Employment.  The term of the Executive’s employment pursuant to this Agreement shall commence on the Effective Date and end on the second anniversary of the Effective Date, subject to extension and termination pursuant to the provisions of this Agreement (the “Term”).  The Term will be automatically extended for a one-year period on the second and each ensuing anniversary of the Effective Date unless either the Company or the Executive provides written notice to the other party no later than 60 days in advance of the expiration of then-current Term that the period of the Executive’s employment pursuant to this Agreement shall not be extended.  As used in this Agreement, the word “Term” means the initial two-year period of employment specified in this Agreement and includes any and every one-year extension of the period of employment under this Agreement.

 

4.  Annual Cash Compensation.

 

(a)                                 Annual Base Salary.  During the Term and retroactive to January 1, 2014, the Company shall pay to the Executive in installments an annual base salary, not less often than monthly, at an annual rate of not less than $350,000 (“Annual Base Salary”).  The Company and

 

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the Executive acknowledge that, before their execution of this Agreement, the Company paid the Executive a base salary at the annual rate of $150,000 for his services as Chief Executive Officer of the Company.  Accordingly, the Company shall pay to the Executive within 20 days after their execution of this Agreement the additional amount of base salary that is owed to the Executive for the retroactive period (that is, the cumulative amount of Annual Base Salary payable to the Executive for the period beginning on January 1, 2014 and ending on the execution date of this Agreement, minus the cumulative amount of base salary actually paid to the Executive for that period).  The Annual Base Salary shall be reviewed by the Board or the Compensation Committee of the Board (the “Committee”) at least annually for increase, and the Annual Base Salary as so adjusted shall be the “Annual Base Salary” for all purposes of this Agreement.  The Company shall not reduce the Annual Base Salary during the Term of this Agreement without the advance written approval of the Executive.

 

(b)                                 Short-Term Incentive Plan.  For each fiscal year of the Company during the Term, the Executive shall be eligible for an annual incentive compensation award with an annual target opportunity in an amount equal to 75% of the Annual Base Salary (the “Target Bonus Opportunity”) and with the amount of the award for each fiscal year to be determined by the Board or the Committee from time to time.  The short-term incentive compensation earned by the Executive with respect to any fiscal year (the “Annual Bonus”) shall be paid to the Executive within two and a half months following the fiscal year for which it was earned, subject to the Executive’s continued employment through the payment date.  The Company shall not reduce the Target Bonus Opportunity during the Term of this Agreement without the advance written approval of the Executive.

 

5.  Equity Awards.

 

(a)                                 Restricted Stock Awards.  In the third quarter of fiscal year 2015, the Company shall award the Executive an initial equity grant (the “Sign-On Grant”) of 4,500 restricted shares of the Company’s common stock (the “Restricted Shares”) without any obligation to pay any purchase price for the shares.  Subject to the Executive’s continued employment through the applicable vesting date and to the achievement of performance goals to be established by the Committee on or before the date of grant, the Restricted Shares shall vest at the rate of 20 percent per year on each of the first five anniversaries of the date of grant and shall vest fully and immediately upon a Change in Control (as defined in Exhibit A) of the Company or a termination of the Executive’s employment under this Agreement by the Executive with Good Reason (as defined on Exhibit A) or by the Company without Cause (as defined in Exhibit A).  The Company shall deliver to the Executive, at least 10 days before the date when it must be accepted by the Executive to prevent the award of the Restricted Shares from becoming void or invalid, any restricted stock agreement or other document that is required to be executed by him to accept the award of the Restricted Shares.

 

(b)                                 Other Equity Grants.  For each fiscal year during the Term commencing with the 2015 fiscal year, and in addition to the restricted stock awards to be granted pursuant to the preceding Section 5(a), the Executive shall be eligible to participate in the Company’s Stock Incentive Plan of 2015, or its successor, on terms and conditions that are substantially similar to the terms and conditions of the long-term incentive awards granted to other executive officers of the Company, as determined by the Committee from time to time.

 

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6.  Employee Benefits.  During the Term, the Executive shall be eligible to participate in all employee benefit plans, policies, programs, practices and arrangements that the Company provides to its employees and senior executives from time to time (each, an “Employee Benefit Plan” and, collectively, the “Employee Benefit Plans”) on terms that are no less favorable to the Executive than are provided by the Company to any other senior executive of the Company.  The Executive will be entitled to 20 paid vacation days every fiscal year of the Company, which will be credited on the first day of each fiscal year during the Term.  In addition to the foregoing paid vacation time, the Executive will be allowed additional days of paid holidays or other personal absent time as determined in accordance with Company policy or as approved by the Board.  Any unused vacation time during a fiscal year will accumulate in accordance with the Company’s vacation policy.

 

7.  Perquisites.  During the Term, the Executive shall be eligible to receive perquisites on a basis no less favorable than as are provided by the Company from time to time to other executive officers of the Company.  In addition, the Company shall make available to the Executive for use in connection with the performance of his duties hereunder a 2013 Ford Expedition Limited with four-wheel drive or a comparable sport utility vehicle with four-wheel drive.  The Company shall pay all fuel, repair, insurance, maintenance and other costs and expenses associated with the motor vehicle.

 

8.  Expense Reimbursement.  The Executive shall be reimbursed for ordinary and reasonable travel, business, promotional, entertainment and other expenses that are paid or incurred by him during the Term in connection with the performance of his services for and on behalf of the Company under this Agreement (specifically including, but not limited to, business class airfare), subject to the Company’s expense reimbursement policies and procedures.

 

9.  Withholding.  The Company may withhold from the payments due to the Executive for the payment of taxes and other lawful withholdings or required Executive contributions, in accordance with applicable law.  If circumstances arise in which such withholding or contributions are required on account of any compensation or benefits (including, without limitation, upon the payment or provision of any compensation or benefits pursuant to Sections 6 or 7), at a time when there are not cash payments being made to the Executive from which such withholding obligations can be satisfied, the Executive will deliver to the Company amounts sufficient to fund such withholding or contribution obligations.

 

10.  Executive’s Covenants.

 

(a)                                 Confidentiality.

 

(i)  The Executive shall not, at any time use, divulge or otherwise disclose, directly or indirectly, any confidential and proprietary information (including, without limitation, any customer or prospect list, supplier list, acquisition or merger target, business plan or strategy, data, records, financial information or other trade secrets) concerning the business, policies or operations of the Company or its affiliates (or any predecessors thereof) that the Executive may have learned or become aware of at any time on or prior to the date hereof or during the Term of the Executive’s employment by the Company.  The confidential and proprietary information shall not include any information that: (A) was independently developed by the Executive before

 

4

 

the commencement of his employment with the Company; (B) is or has been publicly disclosed by the Company or any subsidiary of the Company; and (C) is or becomes publicly available, other than as a result of a disclosure in contravention of this confidentiality restriction by the Executive or any person to whom the Executive disclosed the information.  Notwithstanding the foregoing, the Executive is permitted to disclose confidential and proprietary information of the Company and/or its affiliates (x) to third parties and other officers, directors and employees of the Company or its affiliates in the performance of his duties as Chief Executive Officer of the Company, (y) to legal counsel for the Executive, the Company or an affiliate of the Company to the extent necessary to obtain legal advice so long as the Executive advises such legal counsel of the confidential and/or proprietary nature of such information and (z) to the extent required by law or a request by a court or governmental authority (pursuant to a subpoena or otherwise) or as required to respond to a law suit against the Executive.

 

(ii)  The Executive further acknowledges and agrees that all Company Materials (as defined below) are the exclusive property of the Company and that, at request of the Company upon the termination of his employment with the Company pursuant to this Agreement (or, in the event that he continues as a director of the Company, upon his ceasing to be a director of the Company), he shall return to the Company all Company Materials (including all copies thereof) that are in printed form and then in his control or possession and permanently delete from all accessible files, folders, and document libraries all Company Materials in digital form that are then stored on computers or other electronic devices in his control or possession.  For purposes of this Section 10, “Company Materials” means all models, samples, products, prototypes, computers, computer software, computer disks, tapes, printouts, source, HTML and other code, flowcharts, schematics, designs, graphics, drawings, photographs, charts, graphs, notebooks, customer lists, sound recordings, other tangible or intangible manifestation of content, and all other documents concerning the Company, any affiliate of the Company or any predecessor of the Company or any affiliate of the Company, whether printed, typewritten, handwritten, electronic, or stored on computer disks, tapes, hard drives, or any other tangible medium.

 

(iii)  The Executive acknowledges that Company Materials may contain information that is confidential and subject to the attorney-client privilege of the Company or its affiliates or otherwise protected by attorney work product immunity.  Except as required by law, the Executive agrees not to disclose to any person (other than in-house or outside counsel for the Company and its affiliates) the content or substance of (A) any such Company Materials that the Executive knows or has notice is protected by an attorney-client privilege or attorney work product immunity of the Company or any affiliate of the Company or (B) any communication that the Executive may have or may have had at any time with in-house or outside counsel for the Company and its affiliates, whether during his employment hereunder or otherwise, regarding such Company Materials.  Notwithstanding the foregoing, the Executive is permitted to waive any attorney-client privilege or attorney work product privilege of the Company or any affiliate of the Company with respect to any particular information or communication, whether affirmatively or through the disclosure of information or communication to a person that results in waiver of the privilege, if the waiver or disclosure is (A) necessary to establish a legal defense for the Executive, (B) made in reliance on, and consistent with, the advice of legal counsel, (C) directed or authorized by the Board or legal counsel for the Company in connection with a governmental investigation or otherwise, or (D) required by law or to comply in good faith with an order of a court or governmental authority, after providing the Company or its subsidiary a

 

5

 

reasonable opportunity to obtain a protective order to prevent or protect the disclosure of the applicable information or communication..

 

(b)                                 Noncompetition/Nonsolicitation.

 

(i)  During the Restricted Period (as defined below), and except as otherwise authorized by Section 2(b) of this Agreement, the Executive agrees that he shall not, without the prior authorization by resolution of the Board, directly or indirectly, either as principal, agent, manager, employee, partner, shareholder, director, officer, consultant or otherwise (A) become engaged in, involved with or employed in any business (other than as a less-than one percent (1%) equity owner of any corporation traded on any national, international or regional stock exchange or in the over-the-counter market) that competes with the Company or any of its affiliates; or (B) induce or attempt to induce any customer, client, supplier, employee, agent or independent contractor of the Company or any of its affiliates to reduce, terminate, restrict or otherwise alter its business relationship with the Company or its affiliates; provided that the foregoing shall not prohibit the Executive, individually or in association with others, (x) from engaging in public advertisement and other forms of broad solicitation not intended to target Company employees to fulfill hiring needs and (y) from hiring any individual who is a former employee of the Company or any subsidiary of the Company who has been separated from employment with the Company or the subsidiary of the Company for more than six months.  The provisions of this Section 10(b)(i) shall be effective only within any state within the United States or any country outside the United States where the Company or any of its subsidiaries conducted its business during any part of the Executive’s employment with the Company.  The parties intend the above geographical areas to be completely severable and independent, and any invalidity or unenforceability of this Agreement with respect to any one area shall not render this Agreement unenforceable as applied to any one or more of the other areas.

 

(ii)  For purposes of this Section 10(b), “Restricted Period” shall mean the period of the Executive’s employment by the Company during the Term and the 12-month period following the Date of Termination (as defined in Exhibit A); provided that the Company may elect, by providing the Executive with written notice no later than 30 days prior to the one-year anniversary of the Date of Termination, to extend the Restricted Period for 12 months until the two-year anniversary of the Date of Termination, in which case the Company shall, in addition to the Severance Amount described in Section 11(b)(ii) paid with respect to the first 12-month period following the Executive’s Date of Termination in the case of a termination by the Company without Cause or resignation for Good Reason, and subject to the Executive’s continued compliance with the covenants set forth in Section 10 hereof, pay to the Executive an additional amount equal to the Severance Amount in equal installments for the 12-month period from the one-year anniversary of the Executive’s Date of Termination until the two-year anniversary of the Executive’s Date of Termination in accordance with the Company’s regular payroll practices.

 

(c)                                  Forfeiture and Repayments.  The Executive agrees that, in the event that he violates the provisions of Section 10(a) and 10(b), and except for the payment of Accrued Obligations, (i) he will forfeit and not be entitled to any further payments or benefits under this Agreement, (ii) any stock options (“Options”) then-outstanding shall expire immediately, and (iii) if such violation is after the termination of his employment, he will be obligated to repay to

 

6

 

the Company the sum of (x) any amounts paid (determined as of the date of payment) after the termination of employment pursuant to Section 11 hereof and (y) the amount of any gains realized by the Executive upon the exercise of Options (measured by the difference between the aggregate fair market value on the date of exercise of shares underlying the Options and the aggregate exercise price of the Options) within the one-year period prior to the first date of the violation.  Such amount shall be paid to the Company in cash in a single sum within ten business days after the first date of the violation, whether or not the Company has knowledge of the violation or has made a written demand for payment.  Any such payment made following such date shall bear interest at a rate equal to the prime lending rate of Citibank, N.A. (as periodically set) plus 1%.  The forfeiture and clawback provisions of this Section 10(c) will terminate on the date that is 18 months following the expiration of the Restricted Period with respect to a violation of the provisions of Section 10(b) or 60 months following the Termination Date with respect to a violation of the provisions of Section 10(a).

 

(d)                                 Nondisparagement.  The Executive shall not disparage the Company or any of its affiliates or their respective directors, officers, employees as a group, agents, stockholders, successors and assigns (both individually and in their official capacities with the Company) (the “Company Parties”) or any Company Parties’ goods, services, employees as a group, customers, business relationships, reputation or financial condition.  The Company shall provide to the Executive, within ten days following the date when it files with the United States Securities and Exchange Commission its Quarterly Report on Form 10-Q, a list of the names of the stockholders of the Company, to enable him to know the identity of the persons who he is prohibited from disparaging pursuant to this Section 10(d).

 

(e)                                  Cooperation.  During the Term and thereafter, the Executive shall cooperate with the Company and its affiliates as reasonably requested by the Company, without additional consideration, in any internal investigation or administrative, regulatory, or judicial proceeding involving the Company or any of its subsidiaries that pertains to any matter that occurred, or with which the Executive was involved or had knowledge, while he was employed by the Company, including, without limitation, the Executive being available to the Company or its affiliates upon reasonable notice for interviews and factual investigations, appearing at the Company’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information, and turning over to the Company all relevant documents that are or may come into the Executive’s possession, all at times and on schedules that are reasonably consistent with the Executive’s other permitted activities and commitments if the Executive is then employed by the Company and otherwise taking into account the Executive’s reasonable business obligations.  The Company promptly shall reimburse the Executive for all reasonable out-of-pocket costs and expenses that he incurs in providing any assistance requested by the Company under this Section 10(e), including the reasonable fees and expenses of an attorney selected by the Executive and reasonably acceptable to the Company to represent the Executive’s interests in connection with any investigation or judicial, regulatory, arbitration or administrative proceeding for which he is requested to provide any assistance or required to testify in a deposition or otherwise.  In addition, following the termination of the Term for any reason, the Executive shall cooperate to the extent requested by the Company to find a suitable replacement for the Executive under any contract between the Company or any of its subsidiaries, on the one hand, and any of the Company’s or any of its subsidiaries’ vendors, on the other hand; provided that the Company shall, in consideration for

 

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the services to be provided to the Company by the Executive under the final sentence of this Section 10(e), pay to the Executive a per diem rate commensurate with his Annual Base Salary.

 

(f)                                   Scope of Restrictions.  The Executive acknowledges that the restrictions set forth in this Section 10 are reasonable and necessary to protect the Company’s business and goodwill, and that the obligations under this Section 10 shall survive any termination of his employment for the periods indicated.  The Executive acknowledges that if any of these restrictions or obligations is found by a court having jurisdiction to be unreasonable or overly broad or otherwise unenforceable, he and the Company agree that the restrictions or obligations shall be modified by the court so as to be reasonable and enforceable and, if so modified, shall be fully enforced.

 

(g)                                  Consideration; Survival.  The Executive acknowledges and agrees that the compensation and benefits provided in this Agreement constitute adequate and sufficient consideration for the covenants made by the Executive in this Section 10.  As further consideration for the covenants made by the Executive in this Section 10, the Company has provided and will provide the Executive certain proprietary and other confidential information about the Company, including, but not limited to, business plans and strategies, budgets and budgetary projections, income and earnings projections and statements, cost analyses and assessments, and/or business assessments of legal and regulatory issues.

 

11.  Termination of Employment.

 

(a)                                 In General.  Notwithstanding anything to the contrary contained herein, the Executive’s employment with the Company pursuant to this Agreement may be terminated at any time prior to the end of the Term (i) by the Executive by delivering to the Company a Notice of Termination (as defined on Exhibit A); (ii) by the Company by delivering to the Executive a Notice of Termination; or (iii) upon the death or due to the Disability (as defined on Exhibit A) of the Executive.

 

(b)                                 Termination without Cause or Resignation for Good Reason.  If, during the Term, the Executive’s employment is terminated (x) by the Company other than for Cause (as defined in Exhibit A), death or Disability or (y) by the Executive for Good Reason (as defined in Exhibit A), the Executive shall be entitled to the compensation and benefits set forth in Section 11(b)(i) and 11(b)(ii) (the “Severance Payments”):

 

(i)  Compensation Other Than Severance Payments.  The Company shall pay to the Executive (A) the Accrued Obligations (as defined in Exhibit A) in a cash lump sum within 30 days after the Date of Termination, (B) any rights or payments, except for any severance benefits, that are vested benefits or that the Executive is otherwise entitled to receive at or subsequent to the Date of Termination under any Employee Benefit Plan or any other contract or agreement with the Company or any of its subsidiaries, which shall be payable in accordance with the terms of such contract or agreement or Employee Benefit Plan, except as explicitly modified by this Agreement (collectively, the “Vested Benefits”), and (C) any Annual Bonus that has been earned but not paid as of the Date of Termination, which the Company shall pay at the time provided in Section 4(b) even though the Executive is no longer employed by the Company at that time.

 

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(ii)  Severance Benefits.  Subject to the Executive’s execution of a release substantially in the form attached hereto as Exhibit B (the “Release”) and the Release becoming effective and irrevocable in accordance with its terms by no later than the 55th day immediately following the date that the Executive incurs a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (the “Release Deadline”) and the Executive’s continued compliance with the covenants set forth in Section 10 hereof, the Company shall pay to the Executive an amount equal to the sum of (i) the Executive’s Annual Base Salary and (ii) the amount of Annual Bonus earned by the Executive for the most recently completed fiscal year (whether or not it has been paid as of the Date of Termination) or, if the Date of Termination occurs prior to the time that the Executive was eligible to earn such a bonus, the Executive’s Target Bonus Opportunity (the “Severance Amount”).  The Severance Amount shall be paid to the Executive in equal installments for the one-year period following the Executive’s Date of Termination in accordance with the Company’s regular payroll practices.

 

(c)                                  Termination of Employment for Death or Disability.  The Executive’s employment with the Company will terminate automatically on the date of his death.  The Company may terminate the employment of Executive upon his Disability by delivering to the Executive or his guardian a Notice of Termination.  If the Executive dies or his employment is terminated by the Company for Disability, any and all outstanding stock options and stock appreciation rights that have been granted to the Executive by the Company and have vested as of the Date of Termination shall remain exercisable for the longer of their stated term or 90 days following the Date of Termination, and the Company shall pay to the Executive or the guardian or personal representative of his estate (as applicable) (i) the Accrued Obligations in a cash lump sum within 30 days after the Date of Termination, (ii) the Vested Benefits, which shall be payable in accordance with the terms of the contracts, agreements or Employee Benefit Plans under which the Vested Benefits are provided, except as explicitly modified by this Agreement, and (iii) any Annual Bonus that has been earned but not paid as of the Date of Termination, which the Company shall pay at the time provided in Section 4(b) even though the Executive is no longer employed by the Company at that time.

 

(d)                                 Resignation by the Executive without Good Reason.  If the Executive’s employment is terminated by the Executive other than with Good Reason (and not due to Disability), any and all outstanding stock options and stock appreciation rights that have been granted to the Executive by the Company and have vested as of the Date of Termination shall remain exercisable for the longer of their stated term or 90 days following the Date of Termination, and the Company shall pay to the Executive (i) within 30 days of the Date of Termination, to the extent not theretofore paid, (A) any earned but unpaid Annual Base Salary through the Date of Termination, (B) any of the Executive’s business expenses that are reimbursable, but have not been reimbursed as of the Date of Termination and (C) any accrued vacation pay and (ii) the Vested Benefits, which shall be payable in accordance with the terms of the contracts, agreements or Employee Benefit Plans under which the Vested Benefits are provided, except as explicitly modified by this Agreement.

 

(e)                                  Termination for Cause.  If the Executive’s employment is terminated by the Company for Cause, any and all outstanding stock options, restricted stock awards and stock appreciation rights that have been granted to the Executive by the Company and are not vested on the Termination Date shall be automatically forfeited and cancelled without any consideration

 

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as of the Date of Termination, and the Company shall pay to the Executive (i) within 30 days of the Date of Termination, to the extent not theretofore paid, (A) any earned but unpaid Annual Base Salary through the Date of Termination, (B) any of the Executive’s business expenses that are reimbursable, but have not been reimbursed as of the Date of Termination and (C) any accrued vacation pay and (ii) the Vested Benefits, which shall be payable in accordance with the terms of the contracts, agreements or Employee Benefit Plans under which the Vested Benefits are provided, except as explicitly modified by this Agreement.

 

(f)                                   Effect of Termination on Other Positions.  If, on the Date of Termination, the Executive is a member of the Board or the board of directors of any of the Company’s affiliates, or holds any other position with the Company or its affiliates, the Executive shall be deemed to have resigned from all such positions as of the Date of Termination.  The Executive agrees to execute a letter of resignation and take such other reasonable actions as the Company may request to effect such resignation.

 

(g)                                  No Mitigation Duty.  The amounts payable to the Executive pursuant to this Sections 11 will not be reduced by the amount of any income that the Executive earns or could earn from alternative employment following the Date of Termination.  The Company waives any duty that the Executive might have under law to mitigate his damages by seeking alternative employment.

 

12.  Administration.  Subject to Section 21, no right or benefit under this Agreement shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such rights or benefits shall be void.

 

13.  Notice.  Any notice to be given hereunder by either party to the other must be in writing and be effectuated either by personal delivery in writing or by mail, registered or certified, postage prepaid, with return receipt requested.  Mailed notices shall be addressed to the parties at the following addresses:

 

If to the Company:

 

Chairman, Compensation Committee
 c/o Alico, Inc.
 10070 Daniels Interstate Court
 Suite 100
 Fort Myers, Florida 33913

 

If to the Executive:

 

At the most recent contact information on file in the payroll records of the Company.

 

A validly given notice will be effective on the earlier of its receipt, if it is personally delivered in writing, or on the fifth day after it is postmarked by the United States Postal Service, if it is delivered by certified or registered, postage-prepaid, United States mail.

 

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14.  Waiver of Breach.  The waiver by any party to a breach of any provision in this Agreement cannot operate or be construed as a waiver of any subsequent breach by a party.

 

15.  Severability.  The invalidity or unenforceability of any particular provision in this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if the invalid or unenforceable provision were omitted.

 

16.  Amendment.  No modifications or amendments of the terms and conditions herein shall be effective unless in writing and signed by the parties or their respective duly authorized agents.

 

17.  Authorization.  The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all requisite corporate action of the Company.  This Agreement has been properly executed on behalf of the Company by a duly authorized representative.

 

18.  Counterparts.  The parties may execute this Agreement in counterparts and by manual or facsimile signature.  Each executed counterpart of this Agreement will constitute an original document, and all executed counterparts, together, will constitute the same agreement.  This Agreement will become effective as of the Effective Date when it has been signed by both the Company and the Executive and will survive the termination of the Executive’s employment with the Company pursuant to this Agreement.

 

19.  Recurring Words.  As used in this Agreement: (i) the word “days” refers to calendar days, including Saturdays, Sundays and holidays; (ii) the term “fiscal year” means the fiscal year of the Company beginning on October 1 of each calendar year and ending on September 30 of the ensuing calendar year; (iii) the word “law” includes a code, rule, statute, ordinance or regulation and the common law arising from final, nonappealable decisions of state and federal courts in the United States of America; (iv) the word “person” includes, in addition to a natural person, a trust, group, syndicate, corporation, cooperative, association, partnership, business trust, joint venture, limited liability company, unincorporated organization, and a governmental authority; (v) the term “governmental authority” includes a government, a central bank, a public body or authority, and any governmental body, agency, authority, department, or subdivision, whether domestic or foreign or local, state, regional, or national; and (vi) the word “affiliate,” when used in reference to any specified person, means any other person that directly or indirectly controls, is controlled by, or is under common control with the specified person pursuant to direct or indirect possession of the power to direct or cause the direction of the management and policies of the specified person, whether by contract, through the ownership of voting securities or otherwise, but, for all purposes of this Agreement, none of the following persons will be treated as an affiliate of the Company, unless the person becomes controlled by the Company:  734 Agriculture, LLC; 734 Citrus Holdings, LLC; 734 Investors, LLC; any member of 734 Agriculture, LLC or 734 Investors, LLC; and any person (other than the Company and its consolidated subsidiaries) that is controlled by 734 Agriculture, LLC, 734 Investors, LLC, or any of their respective members or subsidiaries.

 

20.  Governing Law and Forum Selection.  This Agreement shall be interpreted, construed and governed according to the laws of the State of Florida, without reference to conflicts of law principles thereof.  The parties agree that any dispute, claim, or controversy

 

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based on common law, equity, or any federal, state, or local statute, ordinance, or regulation (other than workers’ compensation claims) arising out of or relating in any way to the Executive’s employment, the terms, benefits, and conditions of employment, or concerning this Agreement or its termination and any resulting termination of employment, including whether such a dispute is arbitrable, shall be settled by arbitration.  Notwithstanding the foregoing, any party to this Agreement may commence a proceeding in any court of competent jurisdiction to enter a judgment of any award rendered in the arbitration or to enforce any arbitration award or a settlement resulting from mediation or negotiation of the parties.  This agreement to arbitrate includes but is not limited to all claims for any form of illegal discrimination, improper or unfair treatment or dismissal, and all tort claims.  The Executive will still have a right to file a discrimination charge with a federal or state agency, but the final resolution of any discrimination claim will be submitted to arbitration instead of a court or jury. The arbitration proceeding will be conducted under the employment dispute resolution arbitration rules of the American Arbitration Association in effect at the time that a demand for arbitration under the rules is made, and such proceeding will be conducted in the English language by a sole arbitrator in Polk County, Florida, and governed by the Florida Arbitration Act and the substantive laws of the State of Florida, without regard to any applicable state’s choice of law provisions. The decision of the arbitrator(s), including determination of the amount of any damages suffered, will be exclusive, final, and binding on all parties, their heirs, executors, administrators, successors and assigns and will not be subject to appeal, review, or re-examination by a court or the arbitrator, except for  fraud, perjury, manifest clerical error, or evident partiality or misconduct by the arbitrator that (in each case) prejudices the rights of a party to the arbitration. Each party will bear its own expenses in the arbitration for arbitrators’ fees and attorneys’ fees, for its witnesses, and for other expenses of presenting its case.  Other arbitration costs, including administrative fees and fees for records or transcripts, will be borne equally by the parties.

 

21.  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their permitted successors, assigns, legal representatives and heirs, but neither this Agreement nor any rights hereunder shall be assignable by the Executive. This Agreement is not assignable by the Company without the advance written consent of the Executive, which he may withhold in his sole discretion, except that the Company any assign this Agreement without the consent of the Executive to any direct or indirect successor in interest to all or substantially all its assets or business (whether pursuant to a sale, merger, exchange, consolidation or reorganization transaction) that, at the closing of the transaction, expressly assumes in writing this Agreement and agrees to perform all the obligations of the Company under it.  The Company will require any successor in interest to all or substantially all its assets or business to assume expressly and agree in writing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession had taken place.

 

22.  Code Section 409A.  It is the intention of the Company and the Executive that this Agreement will not result in unfavorable tax consequences to the Executive under Section 409A. To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A.  This Agreement will be administered and interpreted in a manner consistent with this intent, and any provision that would cause this Agreement to fail to satisfy Section 409A will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by Section 409A).  The Company and the Executive agree to

 

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work together in good faith in an effort to comply with Section 409A including, if necessary, amending this Agreement based on further guidance issued by the Internal Revenue Service from time to time, provided that the Company shall not be required to assume any increased economic burden.  Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, the Executive shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payments shall be due to him under this Agreement which are payable upon his termination of employment until he would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A.  To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid in a lump sum on the first day of the seventh month following his termination of employment (or upon his death, if earlier).  In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided to the Executive pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A.  With respect to expenses eligible for reimbursement or in-kind benefits provided under the terms of this Agreement, (i) the amount of such expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits provided in another taxable year, (ii) any reimbursements of such expenses and the provision of any in-kind benefits shall be made no later than the end of the fiscal year following the fiscal year in which the related expenses were incurred, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409A, provided that with respect to any reimbursements for any taxes to which the Executive becomes entitled under the terms of this Agreement, the payment of such reimbursements shall be made by the Company no later than the end of the fiscal year following the fiscal year in which the Executive remits the related taxes, and (iii) the right to reimbursement or in-kind benefit shall not be subject to liquidation or exchange for another benefit.

 

23.  Limitations on Payments under Certain Circumstances.

 

(a)                                 Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a change in control or the termination of the Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the “Total Payments”) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code that would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, arrangement or agreement, the Severance Payments shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phaseout of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments

 

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without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phaseout of itemized deductions and personal exemptions attributable to such unreduced Total Payments). If a reduction in the Severance Payments is necessary pursuant to this Section 23(a), then the reduction shall occur by first reducing the Severance Amount payable pursuant to Section 11(b)(ii) and then by reducing accelerated vesting of performance-based equity awards (based on the reverse order of the date of grant), and finally by reducing the accelerated vesting of other equity awards (based on the reverse order of the date of grant).

 

(b)                                 For purposes of determining whether and the extent to which the Total Payments shall be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, based on the determination of a nationally recognized certified public accounting firm that is selected by the Company, and reasonably acceptable to the Executive, for purposes of making the applicable determinations under this Section 23 (the “Accounting Firm”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, based on the determination of the Accounting Firm, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” within the meaning of Section 280G(b)(3) of the Code allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Accounting Firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

 

(c)                                  At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from the Accounting Firm or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).

 

(d)                                 For purposes of clarity, the Executive shall not be entitled to any form of tax gross-up in connection with Section 280G of the Code or Section 4999 of the Code under any circumstances

 

24.  Payments After Default.  Notwithstanding anything to the contrary in this Agreement, and without limiting the Executive’s rights at law or in equity, if the Company fails or refuses to pay or provide to the Executive on a timely basis any payment or benefit due under Section 11 of this Agreement in accordance with its terms, the severance benefits payable to the Executive under Section 11(b)(ii) will be increased, extended and continued, in each case, by one additional day for each day that the Company fails or refuses to pay them.  In addition, if the Company fails to pay to the Executive when due any compensation, Accrued Obligations, severance payments or other cash sum payable to the Executive pursuant to any provision of this

 

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Agreement, the Company shall pay to the Executive, on demand, interest on the unpaid amount, from the date when due until paid in full, at a simple annual rate equal to the prime lending rate of Citibank, N.A. (as periodically set) plus 1%.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
ALICO, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory Eisner
    
	
 
    	
 
    	
Name:
    	
Gregory   Eisner
    
	
 
    	
 
    	
Title:
    	
Chair,   Compensation Committee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Clayton G. Wilson
    
	
 
    	
Clayton   G. Wilson
    

 

[Signature Page to Wilson Employment Agreement]

 

 

EXHIBIT A

 

For purposes of this Agreement, the following terms shall have the following meanings:

 

“Accrued Obligations” shall mean the sum of (w) any earned but unpaid Annual Base Salary through the Date of Termination, (x) any of the Executive’s business expenses that are reimbursable, but have not been reimbursed as of the Date of Termination, (y) the Executive’s Annual Bonus earned for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs, if such annual cash bonus has not been paid as of the Date of Termination, and (z) any accrued vacation pay, in each case, to the extent not theretofore paid.

 

“Cause” shall mean (i) a material failure by the Executive to carry out, or malfeasance or gross insubordination in carrying out, any of his material duties under this Agreement, (ii) the final conviction of the Executive of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Executive (including, without limitation, theft or embezzlement) in connection with his employment by the Company, or a malicious action by the Executive toward the customers or employees of the Company or any affiliate of the Company, (iv) a material breach by the Executive of the Company’s Code of Business Ethics or Section 10 of the Agreement, or (v) the failure of the Executive to cooperate fully with governmental investigations involving the Company or any affiliate of the Company unless the Executive is a subject of the investigation or is acting in reliance on the advice of counsel or in accordance with directions from the Board or legal counsel for the Company; provided, however, that each act or omission described in the preceding clauses (i), (iii), (iv) and (v) will not constitute a basis for the Company to terminate the Executive’s employment for Cause pursuant to this Agreement unless the Executive receives written notice from the Company identifying each act or omission that the Board views to constitute Cause and any identified act or omission recurs or, if curable, the identified act or omission is not reasonably cured within 30 days after the date when the Executive received the written notice from the Company.

 

“Change in Control” shall mean any of the following:

 

(a)                                 The acquisition by any person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Group”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (i) the then outstanding common stock of the Company (the “Outstanding Company Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control:  (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, (D) any acquisition by any Investor, or (E) any acquisition by any entity pursuant to a transaction that complies with clauses (i), (ii), and (iii) of subsection (c) of this definition;

 

(b)                                 Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or

 

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nomination for election by the Company’s stockholders, was approved by (i) a vote of at least a majority of the directors then comprising the Incumbent Board or (ii) the holders of at least a majority of the Outstanding Company Voting Securities, including any Investor, shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;

 

(c)                                  Consummation of a reorganization, merger, statutory share exchange, or consolidation or similar transaction involving the Company or any of its subsidiaries with a third party other than any Investor, or a sale or other disposition of all or substantially all of the assets of the Company to a third party other than any Investor, or a sale or other disposition to a third party other than any Investor of all or substantially all of the assets of one or more subsidiaries of the Company that constitute all or substantially all the assets of the Company and its subsidiaries on a consolidated basis (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding ordinary shares (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent securities), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (ii) no person or Group (excluding any entity resulting from such Business Combination or any parent of such entity,  any employee benefit plan (or related trust) of the Company, such entity resulting from such Business Combination or such parent, and any Investor) beneficially owns, directly or indirectly, more than 50%, respectively, the then outstanding ordinary shares (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were either (A) members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination or (B) have been appointed or elected to the Board by an Investor;

 

(d)                                 The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, unless the transaction is subsequently abandoned or otherwise fails to occur; or

 

(e)                                  The Investors cease to have, in the aggregate, beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 5% or more of the Outstanding Company Stock and 5% or more of the Outstanding Company Voting Securities.

 

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“Date of Termination” shall mean the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than 30 days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than 15 days nor (without the consent of the Company) more than 60 days, respectively, from the date such Notice of Termination is given); provided, however, that if the Executive’s employment is terminated for Disability, the Date of Termination shall be 30 days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such 30-day period). The Company and the Executive shall take all steps necessary (including with regard to any post-termination services by the Executive) to ensure that any termination under this Agreement constitutes a “separation from service” within the meaning of Section 409A of the Code, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the “Date of Termination.”

 

“Disability” shall mean a termination of employment as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Company under this Agreement for a period of six consecutive months, the Company shall have given the Executive a Notice of Termination for Disability, and, within 30 days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive’s duties under this Agreement.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Good Reason” shall mean the occurrence (without the Executive’s written consent, which he may withhold in his sole discretion) of any one of the following material adverse changes to the Executive’s employment relationship with the Company: (i) a  reduction in the amount of the Executive’s Annual Base Salary, (ii) a reduction in the amount of the Executive’s Target Bonus Opportunity, (iii) a material diminution in the Executive’s duties or responsibilities, (iv) the Executive is required by the Board to report to anyone other than the Board, (v) any failure by the Board to nominate the Executive for reelection as a member of the Board, (vi) the Executive is removed or not appointed or reappointed by the Board as the Chief Executive Officer of the Company, except pursuant to a termination of the Executive’s employment under this Agreement, (vii) the Executive is required by the Board to relocate to a principal place of work that is more than 50 miles from any material property of the Company or any of its subsidiaries, (viii) the Board elects or appoints an equal or higher ranking officer to the Executive (including a co-chief executive officer) to perform any material part of the Executive’s duties under this Agreement (other than a Chairman), (ix) the Executive’s title is diminished from that as Chief Executive Officer, (x) the Company fails to pay or provide to the Executive when due any material amount owed to him under this Agreement or any material employee benefits that are required to be provided to him pursuant to this Agreement, or (xi) any successor in interest to all or substantially all the assets or business of the Company (whether pursuant to a sale, merger, exchange, consolidation, or reorganization transaction) fails or refuses, at the closing of the transaction, to assume in writing this Agreement and agree to perform all the obligations of the Company under it, unless such assumption occurs by operation of law.  The Executive’s continued employment shall not constitute consent to, or a

 

A-3

 

waiver of rights with respect to, any act or failure to act constituting Good Reason under this Agreement, provided, however, that the Executive shall not have reason to terminate his employment with the Company for Good Reason pursuant to this Agreement unless, (A) the Executive shall have provided the Company with written notice of the occurrence of the event constituting Good Reason within 90 days after the occurrence of such event and, if the event is curable, the Company shall have failed to cure such event within 30 days following receipt of such written notice and (B) if the event is not cured by the Company within the prescribed cure period, the Executive provides Notice of Termination to the Company within 180 days after the date on which the event giving rise to such Good Reason occurred.

 

“Investor” means any of 734 Agriculture, LLC; 734 Citrus Holdings, LLC; 734 Investors, LLC; any member of 734 Agriculture, LLC or 734 Investors, LLC; and any person (other than the Company and its consolidated subsidiaries) that is controlled by 734 Agriculture, LLC, 734 Investors, LLC, or any of their respective members or subsidiaries (or by any Group controlled by one or more of the foregoing persons, whether acting individually or in concert).

 

“Notice of Termination” shall mean written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the Date of Termination. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s respective rights hereunder.

 

A-4

 

EXHIBIT B

 

RELEASE OF CLAIMS

 

THIS RELEASE OF CLAIMS (this “Release”) is executed and delivered by Clayton G. Wilson (the “Executive”) to Alico, Inc., a Florida corporation (together with its successors, the “Company”).

 

In consideration of the agreement by the Company to provide the Executive with the rights, payments and benefits under the Employment Agreement between the Executive and the Company dated April 20, 2015 (the “Employment Agreement”), the Executive hereby agrees as follows:

 

Section 1. Release and Covenant.  The Executive, of his own free will, voluntarily and unconditionally releases and forever discharges the Company, its subsidiaries, parents, affiliates, their directors, officers, employees, agents, stockholders, successors and assigns (both individually and in their official capacities with the Company) (the “Company Releasees”) from, any and all past or present causes of action, suits, agreements or other claims which the Executive, and his dependents, relatives, heirs, executors, administrators, successors and assigns who are claiming through him, has or may hereafter have from the beginning of time to the date hereof against the Company or the Company Releasees upon or by reason of any matter, cause or thing whatsoever arising out of his employment by the Company and the cessation of said employment or any claim for compensation, and including, but not limited to, any alleged violation of the Civil Rights Acts of 1964 and 1991, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the Employee Retirement Income Security Act of 1974, the Older Workers Benefit Protection Act of 1990, the Americans with Disabilities Act of 1990, and any other federal, state or local law, regulation or ordinance, or public policy, contract or tort law having any bearing whatsoever on the terms and conditions of employment or termination of employment.  Notwithstanding the foregoing, this Release shall not, and is not intended to, waive or release any claim the Executive or any of his heirs, relatives, dependents, executors, administrators, successors or assigns has (a) under any directors or officers insurance policy under which the Executive is covered; (b) for payment of vested benefits under any employee benefit or welfare plan of the Company or its affiliates in which the Executive was a participant on the effective date of the termination of his employment by the Company, (c) for indemnification under statutory corporate law, the Bylaws and Articles of Incorporation of the Company or any of its subsidiaries, and the Indemnification Agreement executed by the Executive and the Company, and (d) for payment of the benefits, compensation, and reimbursable expenses set forth under Section 11 of the Employment Agreement or under the Indemnification Agreement.

 

Section 2. Due Care.  The Executive acknowledges that he has received a copy of this Release prior to its execution and has been advised hereby of his opportunity to review and consider this Release for 21 days prior to its execution. The Executive further acknowledges that he has been advised hereby to consult with an attorney prior to executing this Release. The Executive enters into this Release having freely and knowingly elected, after due consideration, to execute this Release and to fulfill the promises set forth herein. This Release shall be revocable by the Executive during the 7-day period following its execution, and shall not become

 

B-1

 

effective or enforceable until the expiration of such 7-day period. In the event of such a revocation, the Executive shall not be entitled to the consideration for this Release set forth above.

 

Section 3. Nonassignment of Claims; Proceedings.  The Executive represents and warrants that there has been no assignment or other transfer of any interest in any claim which the Executive may have against the Company or any of the Company Releasees. The Executive represents that he has not commenced or joined in any claim, charge, action or proceeding whatsoever against the Company or any of the Company Releasees arising out of or relating to any of the matters set forth in this Release. The Executive further agrees that he will not seek or be entitled to any personal recovery in any claim, charge, action or proceeding whatsoever against the Company or any of the Company Releasees for any of the matters set forth in this Release.

 

Section 4. Reliance by Executive.  The Executive acknowledges that, in his decision to enter into this Release, he has not relied on any representations, promises or agreements of any kind, including oral statements by representatives of the Company or any of the Company Releasees, except as set forth in this Release and the Employment Agreement.

 

Section 5. Nonadmission.  Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Company or any of the Company Releasees.

 

Section 6. Communication of Safety Concerns.  Notwithstanding any other provision of this Release, the Executive remains free to report or otherwise communicate any nuclear safety concern, any workplace safety concern, or any public safety concern to the Nuclear Regulatory Commission, United States Department of Labor, or any other appropriate federal or state governmental agency, and the Executive remains free to participate in any federal or state administrative, judicial, or legislative proceeding or investigation with respect to any claims and matters not resolved and terminated pursuant to this Release.  With respect to any claims and matters resolved and terminated pursuant to this Release, the Executive is free to participate in any federal or state administrative, judicial, or legislative proceeding or investigation if subpoenaed.  The Executive shall give the Company, through its legal counsel, notice, including a copy of the subpoena, within 24 hours of receipt thereof.

 

Section 7. Governing Law.  This Release shall be interpreted, construed and governed according to the laws of the State of Florida, without reference to conflicts of law principles thereof.

 

THIS RELEASE OF CLAIMS is executed by the Executive and delivered to the Company on                                                          .

 

	
 
    	
 
    	
 
    
	
EXECUTIVE
    	
 
    	
 
    

 

B-2

 

EXHIBIT C

 

AFFILIATES OF CLAYTON G. WILSON

 

	
734 Investors, LLC
    
	
Bonnet   Lake Partnership
    
	
Citizens   Bank and Trust
    
	
Citrus   Marketing Services, Inc.
    
	
CGW   Holdings, LLC
    
	
Cooperative   Producers, Inc.
    
	
Flying   W, LLC
    
	
Gran   Cosecha, LLC
    
	
Great   Harvest Corporation
    
	
Gulf   Harvesting, Inc.
    
	
Highlands   County Citrus Growers Association
    
	
Latt   Maxcy Harvesting, Inc.
    
	
LMC   Citizens Branch, Inc.
    
	
LMC   Lakeland Development, Inc.
    
	
LMC   Lakeland Highlands, Inc.
    
	
LMC   Leasing, LLC
    
	
LMC   Rainbow Resort, Inc.
    
	
LMC   Williams Road, Inc.
    
	
LMC   Winter Haven, Inc.
    
	
Maximo   Air, LLC
    
	
Medial   Luna, LLC
    
	
Pat   Wilson, Inc.
    
	
Ranch   One Cooperative, Inc.
    
	
Rio   Verde Ventures, LLC
    
	
Riverview   Towncentre, Inc.
    
	
The   Latt Maxcy Corporation
    

 

C-1

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