Document:

Exhibit

Exhibit 4.1
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
The following description of the common stock, par value $0.01 per share (the “Common Stock”) of CIRCOR International, Inc. (“us,” “our,” “we” or the “Company”), which is the only security of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), summarizes certain information regarding the Common Stock in our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), our Amended and Restated By-Laws (the “Bylaws”) and applicable provisions of Delaware General Corporation Law (the “DGCL”), and is qualified by reference to the Certificate of Incorporation and the Bylaws, which are incorporated by reference as Exhibit 3.1 and Exhibit 3.2, respectively, to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part.
Authorized Capital Stock
Our authorized capital stock consists of 29,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”). 
Common Stock
Voting Rights. Each holder of Common Stock is entitled to one vote for each share held of record on all matters to be voted upon by stockholders, unless otherwise provided by law or by our Certificate of Incorporation. All elections of directors are decided by a plurality, and all other questions are decided by a majority of the votes cast on such matter at a duly held meeting of stockholders at which a quorum is present, unless a larger vote is required by law, our Certificate of Incorporation or our Bylaws.
Dividends. Subject to the rights, powers and preferences of any outstanding Preferred Stock, and except as provided by law or in our Certificate of Incorporation, dividends may be declared and paid or set apart for payment upon the Common Stock out of legally available assets or funds when and as declared by the board of directors.
Liquidation, Dissolution or Winding Up. Subject to the rights, powers and preferences of any outstanding Preferred Stock, in the event of our liquidation, dissolution or winding up, our net assets will be distributed pro rata to the holders of Common Stock.
Other Rights. Holders of the Common Stock have no right to:
		
	•
	convert the stock into any other security;

		
	•
	have the stock redeemed;

		
	•
	purchase additional stock; or

		
	•
	maintain their proportionate ownership interest.

The Common Stock does not have cumulative voting rights. Holders of shares of the Common Stock are not required to make additional capital contributions.

ActiveUS 178335185v.4

Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law That May Have Anti-Takeover Effects
Board of Directors. Our Certificate of Incorporation and Bylaws provide for a board of directors divided as nearly equally as possible into three classes. Each class is elected to a term expiring at the annual meeting of stockholders held in the third year following the year of such election. The number of directors comprising our board of directors is fixed from time to time by the board of directors.
 
Removal of Directors by Stockholders. Our Certificate of Incorporation provides that, subject to the rights, if any, of any series of Preferred Stock, any member of our board of directors may be removed from office (i) only with cause and (ii) only by the affirmative vote of the holders of two-thirds of the shares then entitled to vote at an election of directors.
Advance Notice Provisions. Our Bylaws provide that a stockholder must notify us in writing, within timeframe specified in the Bylaws, of any stockholder nomination of a director and of any other business that the stockholder intends to bring at a meeting of stockholders.  
No Action By Written Consent. Our Certificate of Incorporation provides that our stockholders may not act by written consent and may only act at duly called meetings of stockholders.
Special Meetings of Stockholders. Except as otherwise required by law and subject to the rights, if any, of the holders of any series of Preferred Stock, special meetings of stockholders may be called only by the board of directors.
Preferred Stock.  We are authorized to issue up to 1,000,000 shares of “blank check” Preferred Stock, which may be issued in one or more series upon authorization of our board of directors. Our board of directors is authorized to fix the designations, powers, preferences and the relative, participating, optional or other special rights, and any qualifications, limitations and restrictions of the shares of each series of Preferred Stock. A series of our Preferred Stock could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt. Our board of directors will make any determination to issue shares of Preferred Stock based upon its judgment as to the best interests of our stockholders. Our directors, in so acting, could issue Preferred Stock having terms that could discourage an acquisition attempt through which an acquirer may be able to change the composition of our board of directors, including a tender offer or other transaction that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then-current market price of the stock.
Delaware Business Combination Statute. Section 203 of the DGCL is applicable to us. Section 203 of the DGCL restricts some types of transactions and business combinations between a corporation and a 15% stockholder. A 15% stockholder is generally considered by Section 203 to be a person owning 15% or more of the corporation’s outstanding voting stock. Section 203 refers to a 15% stockholder as an “interested stockholder.” Section 203 restricts these transactions for a period of three years from the date the stockholder acquires 15% or more of our outstanding voting 

ActiveUS 178335185v.4

stock. With some exceptions, unless the transaction is approved by the board of directors and the holders of at least two-thirds of the outstanding voting stock of the corporation, Section 203 prohibits significant business transactions such as:
		
	•
	a merger with, disposition of significant assets to or receipt of disproportionate financial benefits by the interested stockholder, and

		
	•
	any other transaction that would increase the interested stockholder’s proportionate ownership of any class or series of our capital stock.

The shares held by the interested stockholder are not counted as outstanding when calculating the two-thirds of the outstanding voting stock needed for approval.
The prohibition against these transactions does not apply if:
		
	•
	prior to the time that any stockholder became an interested stockholder, the board of directors approved either the business combination or the transaction in which such stockholder acquired 15% or more of our outstanding voting stock, or

		
	•
	the interested stockholder owns at least 85% of our outstanding voting stock as a result of a transaction in which such stockholder acquired 15% or more of our outstanding voting stock. Shares held by persons who are both directors and officers or by some types of employee stock plans are not counted as outstanding when making this calculation.

ActiveUS 178335185v.4Exhibit

CIRCOR Energy Products, LLC 
Confidential
November 14, 2019
Lane Walker
Incentive Compensation Agreement
Dear Lane, 
This incentive compensation agreement (“Agreement’”) describes the incentives CIRCOR Energy Products, LLC. (“Employer”) is offering you in connection with the potential divestiture by CIRCOR International, Inc. (“CIRCOR”) of Employer and its other subsidiaries that collectively comprise its Distributed Valves business (the “Business”).
		
	1.
	Purpose.  You will play a vital role as the leader of the Distributed Valves Business in supporting CIRCOR’s efforts to sell the Business.  You will be responsible for optimizing business results for Distributed Valves’ business until such time as CIRCOR sells the Business.  This Agreement provides you incentives for you to assist CIRCOR in accomplishing these objectives as described below.  For purposes of this Agreement, “Sale of the Business” means the closing of a sale of the equity or at least substantially all of the assets of the Business to one or more persons who are not, directly or indirectly, controlled, directly or indirectly, by CIRCOR.

		
	2.
	Term.  The term of this Agreement (the “Term”) shall commence on the date you sign this Agreement and end on September 30, 2020.  During the Term, your title will remain Group President, Energy Division. Your reporting line and your base salary, bonus, long term incentive awards and other compensation will be unchanged. If your employment with the Employer ceases during the Term, you shall not be required to pay back the Signing Bonus and Relocation Expenses as provided in your Offer Letter dated May 15, 2018.

		
	3.
	Additional Executive Responsibilities.  In addition to fulfilling current job responsibilities and any duties materially consistent with your position with Employer through the Sale of the Business, you agree to cooperate fully with CIRCOR and its investment bankers, attorneys, accountants and advisors in connection with its efforts to sell the Business to any prospective buyer, regardless of its investment interest.  You further agree to participate in making management presentations to prospective buyers, work with CIRCOR in creating a data room for the potential divestiture of the Business, collaborate with CIRCOR to satisfy potential buyers’ due diligence requirements, and play an active and positive role in connection with the potential sale of the Business.  You shall also comply with CIRCOR’s Code of Conduct and other policies of CIRCOR.

		
	4. 
	Incentives 

		
	(a)
	You will be eligible for a special cash bonus if (i) you remain employed by the Employer or one of Employer’s subsidiaries until the closing of the Sale of the Business,  (ii) a Sale of the Business occurs during the Term, and (iii) you comply with Section 3 above (“Transaction Bonus”).  The amount of the Transaction Bonus shall be determined by the Employer based on its performance against both quantitative and qualitative metrics that are outlined in Exhibit A to this Agreement.

		
	 (b)
	If CIRCOR offers you a position to continue providing full time services at CIRCOR or its subsidiaries following the Sale of the Business during the Term, the Transaction Bonus amount at target will be $170,000.  Whether or not you decide to accept any such offer shall not affect your eligibility to receive a Transaction Bonus as described in this Section 4(b).  The Transaction Bonus shall be in addition to your regular annual bonus opportunity for the then current fiscal year on the terms and conditions applicable to other CIRCOR management 

Page 1 of 1

level employees.  You will also continue to be eligible to earn vested rights under your outstanding equity awards if you continue employment with CIRCOR and its subsidiaries.
		
	(c)
	If the acquirer of the Business offers you a full-time position effective on or about the Sale of the Business during the Term and you accept it prior to the Sale of the Business:

(i)    the Transaction Bonus amount at target will be $170,000,
            (ii)    you shall be entitled to a pro-rata annual cash bonus for the then current fiscal year of the Sale of the Business based on the number of days you are employed by the Employer during such year prior to Sale of the Business, with payment to be made at the same time as to other CIRCOR employees,
           (iii)    CIRCOR and Employer shall arrange for the Severance Agreement to continue to apply to your employment with the acquirer and its subsidiaries such that you have severance protection if such employment is terminated by the acquirer or its affiliates without Cause within 12 months following the Sale of the Business or you terminate employment not later than sixty (60) days immediately following the Sale of the Business after having continued employment with the acquirer or its affiliates for thirty (30) days after the Sale of the Business.
            (iv)    you shall be entitled to accelerated vesting of your equity compensation awards as set forth in the Appendix to the Agreement upon Sale of the Business.  
Unvested Options you have been granted will accelerate in full on the Sale of the Business, and you will be permitted to exercise your Options until the earlier of (A) the first anniversary of the Sale of the Business or (B) the Expiration Date specified in your Stock Option Agreement, any other provision of the Plan or your Stock Option Agreement notwithstanding. 
		
	 (d) 
	If CIRCOR decides to dissolve or liquidate the Business during the Term and you have complied with Section 3 above, you shall be entitled to a cash retention bonus payment of up to fifty percent (50%) of the Transaction Bonus (the “Retention Bonus”), as determined in the Employer’s discretion after taking into account its performance against both the quantitative and qualitative metrics that are outlined in Exhibit A to this Agreement.  For avoidance of doubt, you may not become eligible to receive both a Transaction Bonus and a Retention Bonus.

		
	 (e)
	If your employment with Employer is terminated without Cause (as defined in your severance agreement dated October 10, 2018 (the “Severance Agreement”)) as of the Sale of the Business during the Term and you do not accept employment with the acquirer of the Business or its subsidiaries, then the Transaction Bonus amount at target will be $170,000.  The Transaction Bonus will be in addition to any other amounts you may become entitled to under the Severance Agreement.  There shall be no accelerated vesting of any of your outstanding equity awards upon any such termination of employment, and you shall forfeit the unvested balance of any such awards upon a Sale of the Business.  For purposes of this Section 4 and the Severance Agreement, a termination of your employment as of the Sale of the Business shall be considered to be without Cause if: (i) either you do not receive an offer to continue employment with CIRCOR prior to the Sale of the Business or receive an offer from CIRCOR in connection with the Sale that you determine, in good faith, represents a material and adverse change to the terms and conditions of your employment and (ii) either you do not receive an offer from the acquirer of the Business or you elect to not accept it prior to the Sale of the Business.

		
	(f)
	In no event shall you be entitled to compensation and benefits under more than one subsection of this Section 4.  For example, if you elect not to accept an offer of employment from 

Page 2 of 2

CIRCOR as described in Section 4(b) and continue employment with the acquirer of the Business as described in Section 4(c), you shall be eligible to receive a single Transaction Bonus of $170,000 for performance at target and any other benefits under this Agreement shall be payable under Section 4(c).  Also, if you terminate employment without Cause on the Sale of the Business, you shall only be entitled to receive the benefits described in Section 4(e).
		
	(g)
	Neither the Transaction Bonus nor the Retention Bonus shall not under any circumstances be treated as eligible compensation for purposes of determining the amount payable under any employee benefit plan or arrangement maintained by CIRCOR or its subsidiaries, including CIRCOR’s Section 401(k) plan.

		
	5.
	Payment Timing.  Employer will pay to you the applicable amount of the Transaction Bonus, if any, that may become payable as provided for under Section 4 above in a single lump sum within sixty (60) days following the closing of the Sale of the Business.    Employer will pay to you the applicable amount of the Retention Bonus, if any, that may become payable as provided for under Section 4 in a single lump sum in 2020 before the end of the Term.

		
	6.
	Confidentiality.  You understand and agree that, as a further condition of the Transaction Bonus, you are to keep confidential the terms and existence of this Agreement and not disclose to anyone either the terms or the existence of this Agreement; provided, however, that you may make disclosure of this Agreement to your financial and legal advisers and your spouse if they first agree to be bound by this confidentiality provision

		
	7.
	Amendment.  The provisions of this Agreement may be amended or waived only by a written agreement executed and delivered by both parties.  A waiver of any term, covenant or condition contained in this Agreement shall not be deemed a waiver of any other term, covenant or condition, and any waiver of any default in any such term, covenant or condition shall not be deemed a waiver of any later default thereof.

		
	8.
	Withholding; Section 409A.  All payments and benefits hereunder will be subject to reduction for customary withholding, including, without limitation, for federal and state taxes and social security taxes.  Payments under this Agreement are intended to either be exempt from or comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A” of the “Code”) and this Agreement shall, to the extent possible, be construed in accordance therewith.  In any event, neither Employer nor CIRCOR makes any representation or warranty and will have no liability to you or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of that section.

		
	9.
	Severability.  Each provision of this Agreement must be considered severable such that if any one provision or clause conflicts with existing or future applicable law or may not be given full effect because of such law, this will not affect any other provision of the Agreement, which, consistent with such law, will remain in full force and effect.  All surviving clauses must be construed so as to effectuate the purpose and intent of the parties.

		
	10.
	Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be an original and all of which together will constitute one and the same instrument.

		
	11.
	Governing Law; Jury Trial Waiver.  This Agreement will be governed by the laws of the State of Delaware without regard to its conflicts of laws principles.  Any action, suit or other legal proceeding arising under or relating to any provision of this Agreement must be commenced only in a court of the State of Delaware (or, if appropriate, a federal court located within the State of Delaware), and each of you and Employer consents to the jurisdiction of such a court.  IF AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF YOU AND EMPLOYER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR 

Page 3 of 3

OTHER LEGAL PROCEEDING ARISING UNDER OR RELATING TO ANY PROVISION OF THIS AGREEMENT OR THE RELEASE IT CONTEMPLATES.
		
	12.
	No Restriction on Sale or Other Disposition of the Business.  CIRCOR shall have the right in its sole and absolute discretion to sell or dispose of the Business, in whole or in part, at any time. 

		
	13.
	Coordination with Other Agreements.  This Agreement is in addition to the Severance Agreement and the Change in Control Agreement that you have already signed.  By signing this Agreement, you acknowledge that no benefits shall be payable under your Change in Control Severance Agreement on account of the Sale of the Business or any termination of your employment that may occur in connection with the Sale of the Business.

		
	14. 
	Prior Discussions.  This Agreement supersedes any written or oral communications between CIRCOR or Employer and you with respect to transaction or retention bonuses.

If you have any questions about the matters covered in this Agreement, please call Andrew Farnsworth, Chief Human Resources Officer of CIRCOR at (781) 270-1203.
Very truly yours,
	
	
	/s/ Scott A. Buckhout

	Scott A. Buckhout

	President and Chief Executive Officer

Intending to be legally bound, I have signed this Agreement as of the date set forth below.
	
		
	 
	 

	/s/ Lane Walker 
	November 18, 2019

	Lane Walker
	 

	 
	 

Page 4 of 4

Exhibit A – Metrics Governing Payout of Transaction Bonus
50% of the bonus payout to be based on achievement of the following quantitative targets:
		
	•
	AOI

		
	•
	Cash

		
	•
	Net Sales

		
	•
	Targets to be set based on Q4 2019 Forecast and quarterly budgets for 2020 

50% of the bonus payout to be based on achieving qualitative targets tied to supporting the Sale of the Business and completing the Sale of the Business
Final achievement/payout to be based on CEO assessment.
Payout capped at 100% of target.

 

Page 5 of 5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00307-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00307-of-00352.parquet"}]]