Document:

ex10_1.htm

                                                                                                                  

Exhibit 10.1

 

 

Lexmark International, Inc.

Stock Incentive Plan

2013 Restricted Stock Unit Award Notice

This Award Notice evidences the award of restricted stock units (each, an “RSU” or collectively, the “RSUs”) that have been granted to you, «Award_Recipient», by Lexmark International, Inc., a Delaware corporation (the “Company”), subject to and conditioned upon your agreement to the terms of the attached Restricted Stock Unit Award Agreement (the “Agreement”).  The RSUs, including associated dividend equivalent units (“DEUs”) are granted under the Lexmark International, Inc. Stock Incentive Plan (the “Plan”), and represent the Company’s unfunded and unsecured promise to issue shares of the Company’s Common Stock at a future date, subject to the terms of this Award Notice, the Agreement and the Plan.

The number of RSUs awarded to you and vesting schedule are specified below.  This Award Notice constitutes part of, and is subject to the terms and provisions of, the Agreement and the Plan, which are incorporated by reference herein.  Capitalized terms used but not defined in this Award Notice shall have the meanings set forth in the Agreement or in the Plan.

	
Grant Date:

 

	
February 20, 2013

	
Number of RSUs:

 

	
«TimeBased_RSUs», subject to adjustment as provided under Section 5.4 of the Plan.

	
Vesting Schedule:

	
Subject to the provisions of the Agreement and the Plan and provided that you remain continuously employed by the Company or one of its Subsidiaries through the respective vesting dates, set forth below, the RSUs, including associated DEUs, shall become vested as follows:

 

	  	
Vesting Dates

 

	
% of RSUs

	  	
February 24, 2014

	
34%

	  	
February 24, 2015

	
33%

	  	
February 24, 2016

 

	
33%

	
Settlement Date:

 

	
For each RSU, including associated DEU, settlement (i.e., one share of the Company’s Common Stock will be issued for each vested RSU and DEU) will occur on (i) the date on which such RSU, including associated DEU, becomes vested in accordance with the Vesting Schedule, set forth above, or (ii) on such other date as set forth in this Award Notice, the Agreement, or the Plan.

	
Acceleration Events:

	
The RSUs, including associated DEUs, shall become 100% vested upon the earliest to occur of: (i) your termination of employment with the Company or one of its Subsidiaries as a result of your death or Disability, or (ii) in accordance with Section 10 of the Plan, upon a Change in Control of the Company prior to your termination of employment with the Company or one of its Subsidiaries.  If, at the time of your termination of employment, you are eligible for Retirement (as defined in the Agreement), the RSUs, including associated DEUs, shall continue to become vested on the Vesting Dates set forth in the Table above.

	
Forfeiture of Award:

	
By accepting the award of RSUs, you acknowledge that this award has been granted to you as an incentive to remain employed by the Company or one of its Subsidiaries, and that if you violate the provisions set forth in Section 1(d) of the Agreement or the Executive Compensation Recovery Policy, you (i) shall forfeit any unvested RSUs, including associated DEUs, and (ii) shall be required to immediately repay to the Company, an amount 

 

 

  

  

  

 

	 	equal to the value realized from the settlement of any vested RSUs, including associated DEUs, during the period set forth in Section 1(d) of the Agreement or the Recovery Period set forth in the Executive Compensation Recover Policy, as applicable. 

 

 

  

  

  

RESTRICTED STOCK UNIT AWARD AGREEMENT

pursuant to

LEXMARK INTERNATIONAL, INC.

STOCK INCENTIVE PLAN

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the "Agreement") between Lexmark International, Inc., a Delaware corporation (the "Company"), and the person specified on the signature page hereof (the "Grantee") is entered into as of the Grant Date specified on the attached Restricted Stock Unit Award Notice (the “Award Notice”) pursuant to the Lexmark International, Inc. Stock Incentive Plan, as the same may be amended from time to time (the "Plan").  Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Plan.

WHEREAS, the Committee has determined that it would be to the advantage and in the interest of the Company to grant restricted stock units to the Grantee as an inducement to the Grantee to remain in the service of the Company and the Subsidiaries and as an incentive to the Grantee to devote his or her best efforts and dedication to the performance of such services and to maximize shareholder value; and

WHEREAS, the Grantee desires to accept from the Company the grant of the restricted stock units, as set forth in the Award Notice, subject to the terms and conditions of this Agreement, the Award Notice and the Plan.

NOW, THEREFORE, in consideration of the premises and subject to the terms and conditions set forth in this Agreement, the Award Notice, and in the Plan, the parties hereto hereby covenant and agree as follows:

	
1.  

	
Restricted Stock Unit Award.

	
(a)  

	
Restricted Stock Unit Award.  The Company hereby grants to the Grantee, effective as of the Grant Date, the number of restricted stock units, as set forth in the Award Notice, each representing the Grantee's right to receive one share of Common Stock at the time or times provided for in the Award Notice, and subject to the terms and conditions set forth in this Agreement, the Award Notice and the Plan (the "Restricted Stock Units" or "Units").

	
(b)  

	
Stock Incentive Plan.  This Agreement is subject in all respects to the terms of the Plan, all of which terms are made a part of and incorporated in this Agreement by reference.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.  The Grantee hereby acknowledges receipt of a copy of the Plan, either with this Agreement or a prior Incentive Award made under the Plan, and agrees to comply with and be bound by all of the terms and conditions thereof.  Copies of the Plan may also be obtained from the Vice President of Human Resources at any time.

	
(c)  

	
Establishment of Account.  No shares of Common Stock will be issued on the Grant Date of the Restricted Stock Units and the Company shall not be required to set aside a fund for the settlement of any such Units.  The Company will establish a separate bookkeeping account for the Grantee and will record in such account the number of Restricted Stock Units awarded to the Grantee and, to the extent applicable, the Dividend Equivalent Units provided for in Section 3(b) hereof.

  

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(d)  

	
Forfeiture.  In accepting this grant of Restricted Stock Units, the Grantee acknowledges that the Restricted Stock Units have been granted as an incentive to the Grantee to remain employed by the Company or any Subsidiary and to exert his or her best efforts to enhance the value of the Company or any Subsidiary over the long-term.  Accordingly, the Grantee agrees that if he or she (i) within 12 months following termination of employment with the Company or any Subsidiary, accepts employment with a competitor of the Company or any Subsidiary or otherwise engages in competition with the Company or any Subsidiary, (ii) within 36 months following termination of employment with the Company or any Subsidiary, directly or indirectly, disrupts, damages, interferes or otherwise acts against the interests of the Company or any Subsidiary, including, but not limited to, recruiting, soliciting or employing, or encouraging or assisting his or her new employer or any other person or entity to recruit, solicit or employ, any employee of the Company or any Subsidiary without the Company’s prior written consent, which may be withheld in its sole discretion, (iii) within 36 months following termination of employment with the Company, or any Subsidiary, disparages, criticizes, or otherwise makes any derogatory statements regarding the Company or any Subsidiary or their directors, officers or employees, or (iv) discloses or otherwise misuses confidential information or material of the Company or any Subsidiary, each of these constituting a harmful action, then any unvested portion of this grant of Restricted Stock Units (including associated Dividend Equivalent Units) shall be canceled immediately (unless canceled earlier by operation of another term of this Agreement) and the Grantee shall immediately repay to the Company an amount equal to the value of the Restricted Stock Units, including associated Dividend Equivalent Units (represented by the closing market price on the applicable Vesting Dates (as defined below) multiplied by the number of Restricted Stock Units, including associated Dividend Equivalent Units, vested on such Vesting Dates, without regard to any subsequent market price decrease or increase) realized by Grantee from the vesting of any Restricted Stock Units, including associated Dividend Equivalent Units, within 18 months preceding the earlier of (w) the commitment of any such harmful action and (x) the Grantee's termination of employment with the Company and its Subsidiaries; and through the later of (y) 18 months following the commitment of any such harmful action and (z) such period as it takes the Company to discover such harmful action.  In addition, the Grantee acknowledges that, if he or she is a “Covered Employee” subject to the Company’s Executive Compensation Recovery Policy (the “Recovery Policy”) and engages in “Prohibited Activity,” that the unvested Restricted Stock Units, including associated Dividend Equivalent Units, shall be canceled immediately and the Grantee shall immediately repay the “Equity Gains” realized by the Grantee during the “Recovery Period,” as such terms are defined in the Recovery Policy. The Grantee agrees that the Company or any of its Subsidiaries has the right to deduct from any amounts the Company or any of its Subsidiaries may owe the Grantee from time to time (including amounts owed to the Grantee as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to the Grantee by the Company or any of its Subsidiaries), the amounts the Grantee owes the Company or any of its Subsidiaries.  The Committee shall have the right, in its sole discretion, not to enforce the provisions of this paragraph with respect to the Grantee.

Grantee agrees to be fully liable for any breach of this above described covenant, promise and agreement.  Grantee agrees to reimburse the Company for all costs and expenses, including attorneys’ fees, incurred by the Company in enforcing the obligations of Grantee.  This entire provision shall survive the termination of the Agreement and, in no manner, shall the remedies described herein be considered as the Company’s exclusive or entire remedy for Grantee’s breach,

  

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non-compliance or violation of any other agreement that Grantee may have entered into with the Company.

	
2.  

	
Vesting of Restricted Stock Units.

	
(a)  

	
Vesting.  The Restricted Stock Units, including associated Dividend Equivalent Units, shall become vested in such amounts and on such Vesting Dates as set forth in the Award Notice, subject to the Grantee’s continuous employment with the Company or a Subsidiary from the Grant Date to the applicable Vesting Date.  To the extent vesting would result in the settlement of a fractional number of Units, the number shall be rounded to a whole Unit, but shall not exceed the total number Restricted Stock Units set forth in the Award Notice.

	
(b)  

	
Acceleration.  The Committee may, in its discretion, accelerate the vesting of all or any portion of the Restricted Stock Units or waive any conditions to the vesting of such Restricted Stock Units.

	
(c)  

	
Termination of Employment.  In the event of the Grantee's termination of employment with the Company and its Subsidiaries for any reason, other than death, Disability, or Retirement, the Grantee shall immediately forfeit all rights with respect to any Restricted Stock Units, including associated Dividend Equivalent Units, which have not yet vested in accordance with the terms of the Award Notice, this Agreement, or the Plan.  The Restricted Stock Units, including associated Dividend Equivalent Units, shall become 100% vested upon the the Grantee’s termination of employment with the Company and its Subsidiaries as a result of the Grantee’s death or Disability. If, at the time of the Grantee’s termination of employment with the Company and its Subsidiaries, the Grantee is eligible for Retirement, the Restricted Stock Units, including associated Dividend Equivalent Units, shall continue to become vested on the Vesting Dates as set forth in the Award Notice.  For purposes of this Agreement, Retirement means termination of employment on or after the date the Grantee attains (i) age 65 or (ii) age 55, provided the Grantee has 15 years of continuous service with the Company and its Subsidiaries on such date.

	
3.  

	
Settlement of Restricted Stock Unit Award.

	
(a)  

	
Settlement.  On, or as soon as reasonably practicable after, a Vesting Date, subject to Section 4 hereof, the Company shall direct its stock transfer agent to make (or to cause to be made) an appropriate book entry in the Company's stock transfer books and records reflecting the transfer to the Grantee, and the Grantee's ownership, of one share of Common Stock for each Restricted Stock Unit and Dividend Equivalent Unit that shall have become vested on such Vesting Date.  Upon the Grantee's request, subject to Section 4 hereof, the Company shall deliver to the Grantee a stock certificate registered in the Grantee's name and representing such number of shares of Common Stock free and clear of all restrictions except any that may be imposed by law.   No payment will be required to be made by the Grantee upon the delivery of such shares of Common Stock, except as otherwise provided in Section 4 of the Agreement.

	
(b)  

	
Dividend Equivalent Units.  Unless otherwise determined by the Committee, during the period prior to a Vesting Date, the Company will credit to the bookkeeping account of the Grantee a number of units in an amount equal to (i) the dividend amount per share of Common Stock multiplied by the number of Restricted Stock Units outstanding under this Agreement as of the dividend

  

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record date, divided by (ii) the closing price of Common Stock on the dividend payment date, rounded down to the nearest whole share ("Dividend Equivalent Units").  Dividend Equivalent Units in respect of Restricted Stock Units that shall have become vested on the applicable Vesting Date shall be payable to the Grantee on such Vesting Date.

	
(c)  

	
Restrictions on Sale upon Public Offering.  The Grantee hereby agrees that, notwithstanding the vesting of the Restricted Stock Units pursuant to Section 2(a) of this Agreement or the transfer of the shares of Common Stock covered thereby to the Grantee pursuant to Section 3(a) hereof, the Grantee will not effect any public sale or distribution of any of such shares of Common Stock during the 20 day period prior to and the 180 days following the effective date of any registration statement hereinafter filed by the Company under the Securities Act of 1933, as amended, with respect to any underwritten public offering of any shares of the Company's capital stock (other than as part of such underwritten public offering).

	
4.  

	
Tax Withholding.  The delivery of any directions to the Company's stock transfer agent or any certificates for shares of Common Stock pursuant to Section 3 shall not be made unless and until the Grantee, or, if applicable, the Grantee's beneficiary or estate, has made appropriate arrangements for the payment to the Company of an amount sufficient to satisfy any applicable U.S. federal, state and local and non-U.S. tax withholding or other tax requirements, as determined by the Company.  To satisfy the Grantee's applicable withholding and other tax requirements, the Company may, in its sole discretion, (i) withhold a number of shares of Common Stock having an aggregate Fair Market Value on the Vesting Date equal to the applicable amount of such withholding and other tax requirements or (ii) require the Grantee to sell a number of shares of Common Stock having at least a value sufficient to meet the applicable amount of such withholding and other tax requirements to account for rounding and market fluctuations, subject to any rules adopted by the Committee or required to ensure compliance with applicable law, including, but not limited to, Section 16 of the Securities Exchange Act of 1934, as amended.  Shares required to be sold to satisfy the Grantee’s applicable withholding and other tax requirements may be sold as part of a block trade with the Grantee receiving an average price.  Any cash payment made pursuant to Section 3 shall be made net of any amounts required to be withheld or paid with respect thereto (and with respect to any shares of Common Stock delivered contemporaneously therewith) under any applicable U.S. federal, state and local and non-U.S. tax withholding and other tax requirements.

	
5.  

	
Transferability.  Unless otherwise provided in accordance with the provisions of the Plan, the Restricted Stock Units, including associated Dividend Equivalent Units, may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the Grantee, other than by will or the laws of descent and distribution.  The term "Grantee" as used in this Agreement shall include any permitted transferee of the Restricted Stock Units.

	
6.  

	
Adjustment in Capitalization.

	
(a)  

	
The aggregate number of shares of Common Stock covered by the Restricted Stock Units, including associated Dividend Equivalent Units, granted hereunder shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, an Adjustment Event.

	
(b)  

	
Any shares of stock (whether Common Stock, shares of stock into which shares of Common Stock are converted or for which shares of Common Stock are exchanged or shares of stock distributed with respect to Common Stock) or cash or other property received or credited to the account of the Grantee with respect

  

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to the Restricted Stock Units, including associated Dividend Equivalent Units, as a result of any Adjustment Event, any distribution of property or any merger, consolidation, reorganization, liquidation, dissolution or other similar transaction shall, except as otherwise provided by the Committee, be subject to the same terms and conditions, including restrictions on transfer, as are applicable to the Restricted Stock Units with respect to which such shares, cash or other property is received or so credited and stock certificate(s), if any, representing or evidencing any shares of stock or other property so received shall be legended as appropriate.

	
7.  

	
Preemption by Applicable Laws and Regulations.  Notwithstanding anything in the Plan or this Agreement to the contrary, the issuance of shares of Common Stock hereunder shall be subject to compliance with all applicable U.S. federal, state and non-U.S. securities laws.  Without limiting the foregoing, if any law, regulation or requirement of any governmental authority having jurisdiction shall require either the Company or the Grantee (or the Grantee's beneficiary or estate) to take any action in connection with the issuance of any shares of Common Stock hereunder, the issuance of such shares shall be deferred until such action shall have been taken to the satisfaction of the Company.

	
8.  

	
Interpretation; Construction.  All of the powers and authority conferred upon the Committee pursuant to any term of the Plan or the Agreement shall be exercised by the Committee, in its sole discretion.  All determinations, interpretations or other actions made or taken by the Committee pursuant to the provisions of the Plan or the Agreement shall be final, binding and conclusive for all purposes and upon all persons and, in the event of any judicial review thereof, shall be overturned only if arbitrary and capricious.  The Committee may consult with legal counsel, who may be counsel to the Company or any Subsidiary, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

	
9.  

	
Amendment.  The Committee shall have the right, in its sole discretion, to alter or amend this Agreement, from time to time, as provided in the Plan in any manner for the purpose of promoting the objectives of the Plan, provided that no such amendment shall impair the Grantee's rights under this Agreement without the Grantee's consent.  Subject to the preceding sentence, any alteration or amendment of this Agreement by the Committee shall, upon adoption thereof by the Committee, become and be binding and conclusive on all persons affected thereby without requirement for consent or other action with respect thereto by any such person.  Notwithstanding any other provision of this Agreement or the Plan to the contrary, the Committee may, in its sole and absolute discretion and without the consent of the Grantee, amend this Agreement, to take effect retroactively or otherwise, as it may deem necessary or advisable for the purpose of conforming the Agreement to any present or future law, regulation or rule applicable to this Agreement or the Plan.  The Company shall give written notice to the Grantee of any such alteration or amendment of this Agreement as promptly as practicable after the adoption thereof.  This Agreement may also be amended by a writing signed by both the Company and the Grantee.

	
10.  

	
No Rights as a Stockholder.  The Grantee shall have no rights as a stockholder with respect to the Restricted Stock Units and Dividend Equivalent Units prior to the date as of which the shares of Common Stock covered thereby are transferred to the Grantee in accordance with Section 3(a) hereof.

	
11.  

	
No Guarantee of Employment or Future Incentive Awards. Nothing in the Plan or this Agreement shall be deemed to:

  

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(a)  

	
interfere with or limit in any way the right of the Company or any Subsidiary to terminate Grantee’s employment at any time and for any reason, with or without cause;

	
(b)  

	
confer upon Grantee any right to continue in the employ of the Company or any Subsidiary; and

	
(c)  

	
provide Grantee the right to receive any Incentive Awards under the Plan in the future or any other benefits the Company may provide to some or all of its employees.

	
12.  

	
Miscellaneous.

	
(a)  

	
Notices.  All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by certified or express mail, return receipt requested, postage prepaid, or by any recognized international equivalent of such delivery, to the Company or the Grantee, as the case may be, at the following addresses or to such other address as the Company or the Grantee, as the case may be, shall specify by notice to the others delivered in accordance with this Section 12(a):

	
(i)  

	
if to the Company, to it at:

One Lexmark Centre Drive

740 West New Circle Road

Lexington, KY  40550

Attention:  Secretary

	
(ii)  

	
if to the Grantee, to the Grantee at the address set forth on the signature page hereof.

All such notices and communications shall be deemed to have been received on the date of delivery or on the third business day after the mailing thereof.

	
(b)  

	
Binding Effect; Benefits.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns.  Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

	
(c)  

	
Waiver.  Any party hereto may by written notice to the other party (i) extend the time for the performance of any of the obligations or other actions of the other party under this Agreement, (ii) waive compliance with any of the conditions or covenants of the other party contained in this Agreement and (iii) waive or modify performance of any of the obligations of the other party under this Agreement.  Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein.  The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by a party to exercise any right or privilege hereunder shall be deemed a waiver of such party's rights or privileges 

 

 

 

 

 

  

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(d)  

	
hereunder or shall be deemed a waiver of such party's rights to exercise the same at any subsequent time or times hereunder. 

 

Assignability.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Grantee without the prior written consent of the other party.

	
(e)  

	
Applicable Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the law that might be applied under principles of conflict of laws and excluding any conflict or choice of law rule or principle that may otherwise refer construction or interpretation of the Plan or this Agreement to the substantive law of another jurisdiction.

	
(f)  

	
Jurisdiction.  The Grantee hereby irrevocably and unconditionally submits to the jurisdiction and venue of the state courts of the Commonwealth of Kentucky and of the United States District Court of the Eastern District of Kentucky located in Fayette County, Kentucky, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereby irrevocably agree that all claims in respect of any such action or proceeding may be heard and determined in such Kentucky state or United States federal courts located in such jurisdiction.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  Grantee further agrees that any action related to, or arising out of, this Agreement shall only be brought by Grantee exclusively in the federal and state courts located in Fayette County, Kentucky.  Nothing in this Agreement shall affect any right that the Company may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.

	
(g)  

	
Severability.  If any provision of this Agreement or the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions of this Agreement or the Plan, and the Agreement and the Plan shall be construed and enforced as if such provision had not been included.

	
(h)  

	
Survival.  Any provision of this Agreement which contemplates performance or observance subsequent to any termination or expiration of this Agreement shall survive any termination or expiration of this Agreement and continue in full force and effect.

	
(i)  

	
Internal Revenue Code Section 409A.  It is intended that the settlement of the Restricted Stock Units shall constitute a “short-term deferral” for purposes of Section 409A of the Code and the Treasury Department regulations and other interpretive guidance issued thereunder, or as otherwise exempt from the provisions of Section 409A of the Code. To the extent any portion of the settlement of the Restricted Stock Units cannot be so characterized, this Agreement shall be interpreted and construed in compliance with Section 409A of the Code and the Treasury Department regulations and other interpretive guidance issued thereunder, including the restriction that payments made to a “specified employee” (within the meaning of Section 409A of the Code) on 

 

 

 

  

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(j)  

 

 

(k)  

  

	
account of a termination of employment shall be delayed for six months and one day from the date of termination.  

 

Section and Other Headings, Etc.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

 

 

 

 

 

 

*           *           *           *           *

IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of the date first above written.

LEXMARK INTERNATIONAL, INC.

By: ________________________________________________________                                                               

«Company_Signer»

«Signers_Title»

 

 

GRANTEE:

By: ________________________________________________________                                                               

«Award_Recipient»

Address of the Grantee:

«Address_Line_1»

«Address_Line_2»

Designation of Beneficiary

In the event of my death, I hereby designate the following person(s), as my beneficiary, to receive any unsettled Units that become vested upon my death pursuant to this Agreement.  I acknowledge that if I fail to designate a beneficiary, below, that any unsettled Units that become vested upon my death shall be paid to my estate.

 

 

 

 

 

                          

 

 

                         _____________________________________________________________

                         Beneficiary Name

 

 

                                                                                                              8ex41.htm

 

	SVFC	 	 Exhibit 4.1

 

 

	
                                                           $500,000 PROMISSORY NOTE

 

	
Interest free if paid in full 

within 3 months

 

FOR  VALUE RECEIVED,  IntelliCell BioSciences, Inc.,  a Nevada corporation  (the "Borrower") with at least 40,000,000  common shares  issued and outstanding,  promises  to pay  to JMJ Financial  or its Assignees  (the "Lender") the Principal  Sum along  with  the Interest Rate and any other fees according  to the terms herein.  This Note will become effective  only upon execution by both parties and delivery of the first payment of Consideration  by the Lender (the "Effective  Date").

 

The Principal  Sum is $500,000  (five hundred  thousand)  plus accrued  and unpaid  interest and any other fees.   The Consideration  is $450,000 (four hundred fifty thousand) payable by wire (there exists a $50,000 original issue discount (the "OlD")). The Lender shall pay $100,000  of Consideration  upon  closing  of this Note.   The Lender may pay additional  Consideration  to  1e  Borrowe1 in such amounts and at such dates as Lender may choose in its sole discretion.   THE  PRINCIPAL SUM  DUE TO  LENDER SHALL BE PRORATED BASED ON THE  CONSIDERATION ACTUALLY PAID  BY LENDER (PLUS AN APPROXIMATE 10% ORIGINAL ISSUE  DISCOUNT THAT IS PRORATED BASED ON THE  CONSIDERATION ACTUALLY PAID  BY THE LENDER AS WELL  AS ANY OTHER INTEREST OR FEES) SUCH  THAT THE  BORROWER IS ONLY  REQUIRED TO REPAY THE  AMOUNT FUNDED AND THE  BORROWER IS NOT REQUIRED TO  REPAY ANY UNFUNDED PORTION OF THIS  NOTE.  The Maturity  Date is one year from the Effective Date of each payment (the "Maturity Date") and is the date upon which the Principal Sum of this Note, as well as any unpaid interest and other fees, shall be due and payable.  The Conversion Price is the lesser of $0.16 or 60% of the lowest  trade price in the 25 trading  days previous  to the conversion  (In  the case that conversion shares are not deliverable by DWAC an additiona!IO"Io discount  will apply; and if the shares re neligible  for deposit into the OTC system and only eligible for Xclearing  deposit  an additional  5% discount  shall apply;   in the case of both an additional  cumulative 15% discount shall apply).   Unless otherwise  agreed in writing by both parties, at no time will the Lender convert any amount of the Note into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding.

 

l.  ZERO Percent Interest for the First Three Months.   The Borrower  may repay this Note at any time on or before 90 days from the Effective Date, after which the Borrower  may not make further payments  on this Note prior to the Maturity  Date without written approval from Lender.  If the Borrower repays the Note on or  before  90 days from  the Effective Date, the Interest Rate  shall  be ZERO PERCENT (0%).  If Borrower  does not repay the Note on or before 90 days from  the Effective  Date, a one-time  Interest charge of 12% shall be applied to the Principal Sum.  Any interest payable is in addition to the OlD, and that OlD (or prorated OlD, if applicable) remains payable regardless of time and manner of payment by Borrower.

 

2. Conversion. The Lender bathe right, at any time after the Effective Date, at its election,  to convert all or part of the outstanding and unpaid Principal Sum and accrued  interest (and any other fees) into shares of fully paid and non-assessable  shares of common stock of the Borrower as per this conversion  formula:   Number  of shares  receivable  upon  conversion  equals  the dollar conversion amount divided by the Conversion Price.  Conversions may be delivered  to Borrower by method of Lender's choice (including but not limited to email, facsimile, mail,overnight  courier, or personal delivery), and all conversions shall be cash1ess and not require further payment  from  the  Lender.  If  no  objection  is  delivered  from  Borrower  to  Lender  regarding  any  variable  or  calculation 

of  the conversion  notice  within  24 hours  of  delivery  of  the conversion  notice,  the Borrower shall  have  been thereafter  deemed  to have irrevocably  confirmed  and  irrevocably  ratified  such  notice of  conversion  and  waived  any  objection  thereto. The 

Borrower  shall deliver the shares from any conversion  to Lender (in any name directed by Lender) within 3 (three) business days of conversion notice delivery.

 

3. Conversion Delays. If Borrower fails to deliver shares in accordance with the timeframe stated in Section 2, Lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular converslon attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned to the Borrower (under Lender's and Borrower's expectations that any returned conversion amounts will tack back to the original date of 

the Note).  In addition, for each conversion,  in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion),  a penalty  of $2,000  per day  will  be assessed  for  each  day  after  the third  business  day  (inclusive  of the day  of  the conversion)  Lmtil share  delivery  is made;  and  such  penalty  will  be added  to  the Principal  Sum  of  the Note  (under  Lender's and Borrower's expectations that any penalty amounts will tack back to the original date of the Note).

 

4. Reservation of Shares. At all times  during  which  this Note is convertible,  the Borrower  will reserve  from  its authorized  and unissued Common Stock to provide for the issuance of Common Stock upon the fuU conve1sion of this Note.  The Borrower will at all times reserve at least 15,000,000 shares of Common Stock for conversion.

 

5.Piggyback Registration Rights.  The Borrower shall include on the next registration statement  the Borrower files with SEC (or on the subsequent  registration  statement  if such  registration  statement  is withdrawn)  all shares  issuable  upon conversion of this Note. Failure to do so will result in liquidated drunages of 25% of the outstanding  principal balance of this Note, but not less than $25,000, being immediately due and payable to the Lender at its election in the form of cash payment or addition to the balance of this Note.

 

6.Tenns of Future Financings.  So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries  of any security with any term more favorable  to the holder of such security or with a term in favor of the bolder of such security that was not similarly provided to the Lender in this Note, then the Borrower shall notify the Lender of such additional or more favorable term and such term, at  Lender's uplion, shall become a part  of the  transaction documents with the Lender.   The types oftcnns contained in another security that may be more favorable to the holder of such security  include, but arc not limited to, tenns addressing  conversion discounts, conversion lookback periods, interest rates, original issue discounts, stock sale price, private placement price per share, and warrant coverage.

  

  

  

 

7. Default.  The following are events of default under this Note: (i) the Borrower shall fail to pay any principal  under the Note when due and payable (or payable by conversion) thereunder;  or (ii) the Borrower  shall fail to pay any interest or any other amount  under the Note when due and payable (or payable by conversion) thereunder; or (iii)  a receiver, trustee or other similar official shaH be appointed  over the Borrower  or a material  part of its assets and such appointment  shall remain  uncontested  for twenty (20) days or shall not be dismissed or discharged  within sixty (60) days; or (iv) the Borrower shall become insolvent  or generally  fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (v) the Borrower shall make  a general assignment  for  the  benefit  of creditors;  or  (vi) the  Borrower  shall  file a petition  for relief  under  any  bankruptcy, insolvency or similar law (domestic or foreign);  or (vii) an involuntary  proceeding shall be commenced  or filed against the Borrower; or (viii) the Borrower shall lose its status  as "DTC  Eligible"  or the borrower's shareholders  shall  lose the ability  to deposit  (either electronically  or by physical  certificates,  or otherwise)  shares into the DTC System; or (ix) the Borrower  shall become delinquent  in its filing requirements as a fully-reporting  issuer registered with the SEC.

8. Remedies.  In the event of any default, the outstanding  principal amount of this Note, plus accrued  but unpaid interest, liquidated damages, fees and other amounts owing in respect thereof through the date of acceleration, shall become, at the Lender's election, immediately due and payable in cash at the Mandatory  Default Amount.   The Mandatory  Default Amount means the greater of (i) the outstanding principal amount of this Note, plus all accrued and unpaid interest, liquidated damages, fees and other amounts 

hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either demanded or paid in full, whichever has  a  higher  VWAP, or  (ii)  150%  of  the outstanding  principal  amount  of This  Note,  plus  100% of accrued  and  unpaid  interest, liquidated damages, fees and other amounts hereon.  Commencing five (5) days after the occurrence of any event of

default that results in the eventual acceleration  of this Note, the interest rate on this Note shall accrue at an interest rate equal to the Jesser of 18% per annum or the maximum  rate permitted  under applicable law. In connection  with such acceleration  described  herein, the Lender need not provide, and the Borrower hereby waives, any presentment,  demand, protest or other notice of any kind, and the Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available  to it under  applicable  law. Such  acceleration  may be rescinded  and  annulled  by Lender  at any  time prior  to payment hereunder  and the Lender shall have  all rights as a holder  of the note until such  time, if any, as the Lender  receives  full payment pursuant  to  this  Section  8.  No  such  rescission  or  annulment  shall  affect  any  subsequent  event  of  default  or  impair  any  right consequent  thereon. Nothing  herein  shall  limit  Lender's right  to  pursue

any  other  remedies  available  to it  at  law  or  in  equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Borrower's failure to timely deliver certificates representing shares of Common Stock upon conversion of the Note as required pursuant to the terms hereof.

 

9. No Shorting.  Lender agrees that so long as this Note from Borrower  to Lender remains outstanding,  Lender will not enter into or effect "'short sales" of the Common  Stock or hedging transaction  which establishes  a net short position  with respect to the Common Stock of Borrower. Borrower  acknowledges  and agrees  that upon delivery  of a conversion  notice by Lender,  Lender  immediately owns  the shares of Common  Stock  described  in the conversion  notice and any sale of those shares  issuable  under such conversion notice would not be considered short sales.

 

10.Assignability.   The Borrower may not assign this Note.  This Note will be binding upon the Borrower and its successors  and will inure to the benefit of the Lender and its successors  and assigns and may be assigned by the Lender to anyone of its choosing without Borrower's approval.

 

11.Governing Law.  This Note will be governed  by, and construed and enforced in accordance  with, the Jaws of the State of Florida, without  regard  to  the  conflict  of  laws  principles  thereof.    Any  action  brought  by  either  party  against  the  other  conceruing  the transactions  contemplated  by this Agreement  shall  be brought  only in the state courts of Florida  or in the federal  courts located  in Miami-Dade  County,  in the  State  of  Florida.    Both  parties  and  the  individuals  signing  this  Agreement agree  to  submit  to  the jurisdiction of such courts.

 

12. Delivery of Process by Lender to Borrower.   In the event of any action or proceeding  by Lender against  Bon·ower, and only by Lender against Borrower, service of copies of summons  and/or complaint and/or any other process  which may be served ln any such action or proceeding may be made by Lender  via U.S. Mail, overnight delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise  delivering  a copy of such process to the Borrower at its last known attorney as set forth in its most recent SEC filing.

 

13. Attorney  Fees. In the event any attorney  is employed  by either party  to this Note with regard  to any legal or equitable  action, arbitration or other proceeding  brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation  in connection  with any of the provisions  of this Note, the prevailing  party in such proceeding  will be entitled to recover from the other party reasonable  attorneys' fees and other costs and expenses  incurred, in addition  to any other relief to which the prevailing party may be entitled.

 

14. Opinion of Counsel In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any such opinion provided by its counseL  Lender also has the right to have any such opinion provided by Borrower's counsel.

 

15. Notices.  Any notice required  or permitted  hereunder  (including  Conversion  Notices)  must be in writing and either  personally served, sent by facsimile or email transmission, or sent by overnight courier.  Notices will be deemed effectively delivered at the time of transmission  if by facsimile  or email,  and if by overnight  courier  the business day after such notice is deposited  with the courier service for delivery.

 

 

  

  

  

 

 

 

 

	 Borrower:	 	Lender:	 
	 	 	 	 
	 	 	 	 
	Dr. Steven Victor	 	 JMJ Finacial   	 
	IntelliCell BioScicnces, Inc. 	 	Its Principal   	 
	Chief Executive Officer	 	 	 
	 	 	 	 
	Date: 2/20/13	 	 	Date: 2/20/2013	 	 

 

                                                              

 

 

 

 

 

 

 

 

[Signature Page to $500,000 Promissory Note]

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