Document:

MORGAN STANLEY & CO. LLC

        1585 BROADWAY

        NEW YORK, NY 10036-8293

        (212) 761-4000

 

May 7, 2019

 

Fixed Dollar Accelerated Share Repurchase Transaction

 

 

Anika Therapeutics, Inc.

32 Wiggins Avenue

Bedford, MA 01730

United States

 

 

Dear Sir/Madam:

 

The purpose of this letter agreement (this “Confirmation”) is to confirm
the terms and conditions of the Transaction entered into between Morgan Stanley & Co. LLC (“MSCO”) and Anika
Therapeutics, Inc. (“Issuer”) on the Trade Date specified below (the “Transaction”). This
confirmation constitutes a “Confirmation” as referred to in the Agreement specified below.

 

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions
(as published by the International Swaps and Derivatives Association, Inc. (“ISDA”)) (the “Equity Definitions”)
are incorporated into this Confirmation. The Transaction is a Share Forward Transaction for purposes of the Equity Definitions.
Any reference to a currency shall have the meaning contained in Section 1.7 of the 2006 ISDA Definitions, as published by ISDA.

 

1. This Confirmation evidences a complete and binding agreement between MSCO and Issuer as
to the terms of the Transaction to which this Confirmation relates and shall supersede all prior or contemporaneous written or
oral communications with respect thereto. This Confirmation shall be subject to an agreement (the “Agreement”)
in the form of the 2002 ISDA Master Agreement as if MSCO and Issuer had executed an agreement in such form without any Schedule
but with the elections set forth in this Confirmation (and the election of USD as the Termination Currency).

 

The Transaction shall be the only transaction under the Agreement. If there exists any ISDA
Master Agreement between MSCO and Issuer or any confirmation or other agreement between MSCO and Issuer pursuant to which an ISDA
Master Agreement is deemed to exist between MSCO and Issuer, then, notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which MSCO and Issuer are parties, the Transaction shall not
be considered a transaction under, or otherwise governed by, such existing or deemed to be existing ISDA Master Agreement.

 

If there is any inconsistency between the Agreement, this Confirmation and the Equity Definitions,
the following will prevail for purposes of the Transaction in the order of precedence indicated: (i) this Confirmation; (ii) the
Equity Definitions; and (iii) the Agreement.

 

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

 

GENERAL TERMS:

 

	Trade Date:	As specified in Schedule I

 

	Buyer:	Issuer

 

	Seller:	MSCO

 

     

     

    

	Shares:	Common Stock, par value USD 0.01 per share, of Issuer (Ticker: ANIK)

 

	Forward Price:	A price per Share (as determined by the Calculation Agent) equal to (i) the arithmetic mean (not a weighted average) of the 10b-18 VWAP on each Trading Day during the Calculation Period minus (ii) the Discount.
	 	 
	Discount:	As specified in Schedule I
	 	 
	10b-18 VWAP:	On any Trading Day, a price per Share equal to the volume-weighted average price of the Rule 10b-18 eligible trades in the Shares for the entirety of such Trading Day as determined by the Calculation Agent by reference to the screen entitled “ANIK  <Equity> AQR SEC” or any successor page as reported by Bloomberg L.P. or any successor (without regard to pre-open or after-hours trading outside of any regular trading session for such Trading Day or block trades (as defined in Rule 10b-18(b)(5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) on such Trading Day) or, if the price displayed on such screen is clearly erroneous, as determined by the Calculation Agent in good faith and in a commercially reasonable manner.

 

	Calculation Period: 	The period from, and including, the first Trading Day that occurs on the Prepayment Date to, and including, the relevant Valuation Date.

 

	Trading Day: 	Any Exchange Business Day that is not a Disrupted Day in whole.

 

	Initial Shares: 	As specified in Schedule I
	 	 
	Initial Share Delivery Date: 	One Exchange Business Day following the Trade Date.  On the Initial Share Delivery Date, Seller shall deliver to Buyer a number of Shares equal to the Initial Shares in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date being deemed to be a “Settlement Date” for purposes of such Section 9.4.

 

	Prepayment: 	Applicable

 

	Prepayment Amount: 	As specified in Schedule I

 

     

     

    

	Prepayment Date:	One Exchange Business Day following the Trade Date.  On the Prepayment Date, Buyer shall pay to Seller the Prepayment Amount.

 

	Exchange:	Nasdaq Global Select Market

 

	Related Exchange:	All Exchanges on which options or futures on the Shares are traded.

 

	Market Disruption Event:	
        The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions
        is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time,
        Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” starting in the third line
        thereof.

         

        Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the
        provision following the term “Scheduled Closing Time” in the fourth line thereof.

         

        Notwithstanding anything to the contrary in the Equity Definitions, if any Exchange Business
        Day in the Calculation Period is a Disrupted Day, the Calculation Agent shall have the option in its sole discretion to take one
        or more of the following actions: (i) determine that such Exchange Business Day is a Disrupted Day in part, in which case the Calculation
        Agent shall (x) determine the 10b-18 VWAP on such Exchange Business Day based on Rule 10b-18 eligible trades in the Shares on such
        day taking into account the nature and duration of the relevant Market Disruption Event and (y) determine the Forward Price using
        an appropriately weighted average of 10b-18 VWAPs instead of an arithmetic mean, and/or (ii) elect to postpone the Scheduled Valuation
        Date by up to one Scheduled Trading Day for every Trading Day that is a Disrupted Day during the Calculation Period. For the avoidance
        of doubt, if the Calculation Agent takes the action described in clause (i) above, then such Disrupted Day shall be a Trading Day
        for purposes of calculating the Forward Price.

         

        Any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close
        prior to its normal close of trading shall be deemed not to be an Exchange Business Day; if a closure of the Exchange prior to
        its normal close of trading on any Exchange Business Day is scheduled following the date hereof, then such Exchange Business Day
        shall be deemed to be a Disrupted Day in full.

         

        If a Disrupted Day occurs during the Calculation Period and each of the nine immediately
        following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent may, in its good faith and commercially reasonable
        discretion, deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the
        10b-18 VWAP Price for such ninth Scheduled Trading Day using its good faith and commercially reasonable estimate of the value of
        the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such
        other factors as it deems appropriate.

 

     

     

    

VALUATION:

 

	Valuation Date:	
        The earlier of (i) the Scheduled Valuation Date and (ii) any earlier accelerated Valuation
        Date as a result of MSCO’s election in accordance with the immediately succeeding paragraph.

         

        MSCO shall have the right, in its absolute discretion but subject to the limitation set forth
        in the immediately succeeding paragraph, to accelerate the Valuation Date, in whole or in part, to any Exchange Business Day that
        is on or after the Lock-Out Date and prior to the Scheduled Valuation Date by notice (each such notice, an “Acceleration
        Notice”) to Issuer by 9:00 p.m., New York City time, on the Exchange Business Day immediately following the accelerated
        Valuation Date (the “Acceleration Date”).

        

         

        On each Valuation Date, the Calculation Agent shall calculate the Settlement Amount.

	 	 
	Scheduled Valuation Date:	As specified in Schedule I, subject to postponement in accordance with “Market Disruption Event” above.
	 	 
	Lock-Out Date:	As specified in Schedule I
	 	 

SETTLEMENT TERMS:

 

	
        Physical Settlement:

         

         

         
	
        Applicable.

         

        On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal to (a) (i)
        the Prepayment Amount divided by (ii) the Forward Price, minus (b) the Initial Shares (such number of Shares, the
        “Settlement Amount”), rounded to the nearest whole number of Shares; provided, however, that if
        the Settlement Amount is less than zero, then Buyer shall deliver to Seller a number of Shares which shares shall be delivered
        to Seller by means of a private placement equal to 101% of the absolute value of the Settlement Amount (such number of Shares,
        the “Payment Shares”).

         

        Notwithstanding the proviso in the immediately preceding paragraph, if the Settlement Amount
        is less than zero, Buyer may cash settle its obligation to deliver the Payment Shares by delivering to Seller a notice by no later
        than the Valuation Date (or, if later, the date on which MSCO delivers an Acceleration Notice) electing to cash settle its obligation
        to deliver the Payment Shares. Any such cash settlement shall be effected in accordance with “Cash Settlement of Payment
        Shares” below.

         

        For the avoidance of doubt, upon the date that (i) Issuer satisfies its obligation to deliver
        the Payment Shares to MSCO in accordance with the terms of this paragraph or (ii) the Settlement Balance (as defined below) is
        reduced to zero in connection with the cash settlement of the Issuer’s obligation to deliver Payment Shares (as described
        under “Cash Settlement of Payment Shares” below), Issuer shall have no further delivery or payment obligations under
        the terms of the Transaction and the Transaction shall be deemed to have been settled as of such date.

 

     

     

    

	Settlement Currency:	USD
	 	 
	Settlement Date:	The date that falls one Settlement Cycle after the relevant Valuation Date; provided that with respect to any accelerated Valuation Date, the date shall be the date that falls one Settlement Cycle following the Acceleration Date.
	 	 
	Cash Settlement of Payment Shares:	If Buyer elects to cash settle its obligation to deliver Payment Shares, then on the Valuation Date a notional Share balance (the “Settlement Balance”) shall be created with an initial balance equal to the absolute value of the Settlement Amount.  On the Settlement Date, Buyer shall deliver to Seller an amount in USD equal to the Payment Shares multiplied by a price per Share as reasonably determined by the Calculation Agent (such cash amount, the “Initial Cash Settlement Amount”).  On the Exchange Business Day immediately following the Valuation Date, Seller may begin purchasing Shares in a commercially reasonable manner (all such Shares purchased, “Cash Settlement Shares”) and a notional cash balance (the “Cash Balance”) shall be created with an initial balance equal to the Initial Cash Settlement Amount.  At the end of each Exchange Business Day on which Seller purchases Cash Settlement Shares, Seller shall reduce (i) the Settlement Balance by the number of Cash Settlement Shares purchased on such Exchange Business Day and (ii) the Cash Balance by the aggregate purchase price (including commissions) of the Cash Settlement Shares purchased on such Exchange Business Day.  If, on any Exchange Business Day, the Cash Balance is reduced to or below zero but the Settlement Balance is greater than zero, the Buyer shall (i) deliver to Seller or as directed by Seller on the next Currency Business Day after such Exchange Business Day an additional amount in USD (an “Additional Cash Settlement Amount”) equal to the Settlement Balance as of such Exchange Business Day multiplied by a price per Share as reasonably determined by the Calculation Agent, and the Cash Balance shall be increased by such amount.  This provision shall be applied successively until the Settlement Balance is reduced to zero.  On the Currency Business Day immediately following the Exchange Business Day that the Settlement Balance is reduced to zero, Seller shall return to Buyer an amount in USD equal to the remaining Cash Balance, if any, as of such Exchange Business Day.  In making any purchases of Cash Settlement Shares contemplated by this paragraph, MSCO shall use commercially reasonable efforts to purchase such Shares in a manner that would qualify for the safe harbor provided by Rule 10b-18 under the Exchange Act (“Rule 10b-18”) if such purchases were made by or on behalf of Issuer and subject to Rule 10b-18.  The period until the Settlement Balance is reduced to zero shall be considered to be part of the Calculation Period for purposes of the representations, warranties and covenants and other provisions herein as the context requires (but, for the avoidance of doubt, not for purposes of determining the Forward Price).

         

	

     

     

    

	 	 
	Other Applicable Provisions:	The last sentence of Section 9.2, Sections 9.8, 9.9, 9.10 and 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Buyer is the issuer of the Shares) and Section 9.12 of the Equity Definitions will be applicable to the Transaction.

 

SHARE ADJUSTMENTS:

 

	Potential Adjustment Event:	
        Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an
        Extraordinary Dividend shall not constitute a Potential Adjustment Event.

         

        It shall constitute a Potential Adjustment Event if a Disrupted Day occurs or, pursuant to
        Section 11 below, is deemed to occur (in whole or in part) on any Trading Day on or prior to the Valuation Date.

	 	 
	Extraordinary Dividend:	Any dividend or distribution on the Shares with an ex-dividend date occurring during the period from, and including, the Trade Date to, and including, the later of (i) the last day of the Calculation Period or (ii) the day upon which the transactions contemplated under “Cash Settlement of Payment Shares” are complete.

 

	Method of Adjustment:	Calculation Agent Adjustment

 

Extraordinary Events:

 

Consequences of Merger Events:

 

	Share-for-Share:	Modified Calculation Agent Adjustment

 

	Share-for-Other:	Cancellation and Payment on that portion of the Other Consideration that consists of cash; Modified Calculation Agent Adjustment on the remainder of the Other Consideration

 

	Share-for-Combined:	Component Adjustment

                            

	

     

     

    

	 

        
	 
	Tender Offer:	Applicable

 

Consequences of Tender Offers:

 

	Share-for-Share:	Modified Calculation Agent Adjustment

 

	Share-for-Other:	Modified Calculation Agent Adjustment

 

	Share-for-Combined:	Modified Calculation Agent Adjustment
	 	 
	New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety (including the word “and” following such clause (i)) and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.

 

For purposes of the Transaction,

 

		(i)	the definition of Merger Date in Section 12.1(c) of the Equity Definitions shall be amended to read, “Merger Date shall
mean the Announcement Date.”;

 

		(ii)	the definition of Tender Offer Date in Section 12.1(e) of the Equity Definitions shall be amended to read, “Tender Offer
Date shall mean the Announcement Date.”;

 

		(iii)	the definition of “Announcement Date” in Section 12.1(l) of the Equity Definitions is hereby amended by (a) replacing
the words “a firm” with the word “any” in the second and fourth lines thereof, (b) replacing the word “leads
to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (c) replacing
the words “voting shares” with the word “Shares” in the fifth line thereof, (d) inserting the words “by
any entity” after the word “announcement” in the second and the fourth lines thereof, (e) inserting the words
“or to explore the possibility of engaging in” after the words “engage in” in the second line thereof and
(f) inserting the words “or to explore the possibility of purchasing or otherwise obtaining” after the word “obtain”
in the fourth line thereof; and

 

		(iv)	Section 12.2 of the Equity Definitions is hereby amended by inserting the words “Announcement Date in respect of any
Merger Event or any potential” before the words “Merger Event” in the final line thereof.

 

	Composition of Combined Consideration:	Not Applicable

 

	Nationalization, Insolvency or Delisting:	Cancellation
and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall constitute
a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted
on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors);
if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation
system shall thereafter be deemed to be the Exchange.

 

     

     

    

ADDITIONAL DISRUPTION EVENTS:

 

	Change in Law:	Applicable; provided that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

 

	Failure to Deliver:	Applicable

 

	Insolvency Filing:	Applicable

 

	Hedging Disruption:	Applicable

 

	Increased Cost of Hedging:	Applicable
	 	 
	Loss of Stock Borrow:	Applicable
	 	 
	Maximum Stock Loan Rate:	100 bps

 

	Increased Cost of Stock Borrow:	Applicable
	 	 
	Initial Stock Loan Rate:	25 bps

 

	Determining Party:	For all applicable events, MSCO

 

	Hedging Party:	For all applicable events, MSCO

 

	Additional Termination Event(s):	The declaration by the Issuer
of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period,
will constitute an Additional Termination Event, with Issuer as the sole Affected Party and all Transactions hereunder as the Affected
Transactions.

 

	Relevant Dividend Period:	The period from, and including, the
Trade Date for the Transaction to, and including, the third Scheduled Trading Day following the Scheduled Valuation Date for the
Transaction.

 

	Non-Reliance:	Applicable

 

     

     

    

	Agreements and Acknowledgements Regarding Hedging Activities:	Applicable

 

	Additional Acknowledgments:	Applicable

 

	3.  Calculation Agent:	MSCO

 

4. Account Details and Notices:

 

(a)       Account for delivery of
Shares to Issuer:

 

Company: 12629

Anika Therapeutics, Inc.

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

 

(b)        Account for payments to
Issuer:

 

Bank of America, NY

ABA#: 026009593

Anika Therapeutics, Inc.

Account#: 9363574995

 

(c)        Account for payments to
MSCO:

 

Citibank, NY

ABA #: 021000089

Morgan Stanley & Co.

Account #: 38890774

Anika Therapeutics, Inc.

# 023-05370

 

(d)       For purposes of this Confirmation:

 

(i)       Address for notices or communications
to Issuer:

 

Anika Therapeutics, Inc.

32 Wiggins Avenue

Bedford, MA 01730

Attention: Sylvia Cheung

Telephone: 781-457-9214

Facsimile: 781-305-9720

Email Address: scheung@anikatherapeutics.com

 

With a copy to:

Anika Therapeutics, Inc.

32 Wiggins Avenue

Bedford, MA 01730

Attention: Charles Sherwood III

Telephone: 781-457-9261

Facsimile: 781-305-9720

Email: chsherwoodiii@anikatherapeutics.com

 

     

     

    

(ii)       Address for notices or communications
to MSCO:

 

Morgan Stanley & Co. LLC

1585 Broadway

New York, NY 10036-8293

Attention: Usman Khan

Telephone: 212-761-0955

Facsimile: 212-507-4261

Email Address: usman.s.khan@morganstanley.com

 

With a copy to:

Morgan Stanley & Co. LLC

1585 Broadway

New York, NY 10036-8293

Attention: Steven Seltzer

Telephone: 212-761-1719

Email: Steven.Seltzer1@morganstanley.com

 

5. Amendments to the Equity Definitions.

 

(a)        Section 9.2(a)(iii) of
the Equity Definitions is hereby amended by deleting the words “the Excess Dividend Amount, if any, and”.

 

(b)       Section 11.2(a) of the Equity
Definitions is hereby amended by deleting the words “a diluting or concentrative effect on the theoretical value of the relevant
Shares” and replacing them with the words “a material economic effect on the relevant Transaction”.

 

(c)       The first sentence of Section
11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation
Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction or Share
Forward Transaction, then, following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will
determine whether such Potential Adjustment Event has a material economic effect on the Transaction and, if so, will (i) make appropriate
adjustment(s), if any, to any one or more of:’ and the portion of such sentence immediately preceding clause (ii)
thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no
adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Share)” and replacing such latter phrase with the words “(including adjustments to account for changes
in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction)”.

 

(d)       Section 11.2(e)(vii) of
the Equity Definitions is hereby amended by deleting the words “diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “material economic effect on the relevant Transaction”.

 

(e)       Section 12.6(c)(ii) of the
Equity Definitions is hereby amended by replacing the words “the Transaction will be cancelled,” in the first line
with the words “MSCO will have the right to cancel the Transaction,”.

 

(f)       Section 12.9(b)(iv) of the
Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following
subsection (A) and (3) the phrase “in each case” in subsection (B); and (B) deleting the phrase “neither the
Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence.

 

     

     

    

(g)       Section 12.9(b)(v) of the
Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)” and
deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the word “or”
immediately preceding subsection (C) and (3) replacing in the penultimate sentence the words “either party” with “the
Hedging Party” and (4) deleting clause (X) in the final sentence.

 

6. Certain Payments and Deliveries by MSCO.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if
at any time (i) an Early Termination Date occurs and MSCO would be required to make a payment pursuant to Section 6 of the Agreement
or (ii) an Extraordinary Event occurs and MSCO would be required to make a payment pursuant to Article 12 of the Equity Definitions
(the amount of any such payment obligation described in Section 6(i) or (ii) above, an “MSCO Payment Amount”),
then Issuer shall have the right, by prior written notice to MSCO, to require MSCO to settle such payment obligation in Shares
in lieu of cash; provided, however, that Issuer shall not have the right to so elect in the event of (i) an Insolvency,
a Nationalization, a Merger Event or a Tender Offer, in each case, in which the consideration or proceeds to be paid to holders
of Shares consists solely of cash or (ii) an Event of Default in which Issuer is the Defaulting Party or a Termination Event in
which Issuer is an Affected Party, which Event of Default or Termination Event resulted from an event or events within Issuer’s
control. If Issuer does not so elect for MSCO to settle an MSCO Payment Amount in Shares, then MSCO shall have the right, in its
sole discretion, to elect to settle such MSCO Payment Amount in Shares. If either Issuer or MSCO so elects, then MSCO shall deliver
to Issuer, on or within a commercially reasonable time following the date on which such MSCO Payment Amount would have been due,
a number of Shares with a market value, as determined by the Calculation Agent, equal to all or a portion (which portion may be
zero) of the MSCO Payment Amount. If the market value of such Shares equals a portion, but not all, of the MSCO Payment Amount,
then, on the date such MSCO Payment Amount is due, a notional balance (the “Settlement Balance”) shall be established
equal to the remaining portion of the MSCO Payment Amount, and MSCO shall commence purchasing Shares for delivery to Issuer. At
the end of each Trading Day on which MSCO purchases Shares pursuant to this Section 6, MSCO shall reduce the Settlement Balance
by the amount paid by MSCO to purchase the Shares purchased on such Trading Day. MSCO shall deliver any Shares purchased on a Trading
Day pursuant to this Section 6 to Issuer on the third Exchange Business Day following such Trading Day. MSCO shall continue so
purchasing and delivering Shares until the Settlement Balance has been reduced to zero. In making any purchases of Shares contemplated
by this Section 6, MSCO shall use commercially reasonable efforts to purchase such Shares in a manner that would qualify for the
safe harbor provided by Rule 10b-18 if such purchases were made by or on behalf of Issuer and subject to Rule 10b-18. The period
until the Settlement Balance is reduced to zero shall be considered to be part of the Calculation Period for purposes of the representations,
warranties and covenants and other provisions herein as the context requires.

 

7. Certain Payments and Deliveries by Issuer.

 

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any
time (i) an Early Termination Date occurs and Issuer would be required to make a payment pursuant to Section 6 of the Agreement
or (ii) an Extraordinary Event occurs and Issuer would be required to make a payment pursuant to Article 12 of the Equity Definitions
(any such payment described in (i) or (ii) above, an “Early Settlement Payment”), then Issuer shall have the
right, by prior written notice to MSCO, in lieu of making such cash payment, to settle such payment obligation in Shares (such
Shares, “Early Settlement Shares”); provided, however, that Issuer shall not have the right to
so elect in the event of (i) an Insolvency, a Nationalization, a Merger Event or a Tender Offer, in each case, in which the consideration
or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Issuer is the Defaulting
Party or a Termination Event in which Issuer is an Affected Party, which Event of Default or Termination Event resulted from an
event or events within Issuer’s control. In order to elect to deliver Early Settlement Shares, (i) Issuer must notify MSCO
of its election by no later than 4:00 p.m., New York City time, on the date that is three Exchange Business Days before the date
that the Early Settlement Payment is due, (ii) Issuer must specify whether such Early Settlement Shares are to be sold by means
of a registered offering or by means of a private placement and (iii) Issuer must comply with Section 8 below.

 

     

     

    

8. Provisions Relating to Delivery of Early Settlement Shares.

 

(a)       Issuer may deliver Early
Settlement Shares and Make-Whole Shares (as defined below) by means of a registered offering only if the following conditions are
satisfied:

 

(i)        On the later
of (A) the Trading Day following Issuer’s election to deliver Early Settlement Shares and any Make-Whole Shares by means
of a registered offering (the “Registration Notice Date”), and (B) the date on which the Registration Statement
is declared effective by the SEC or becomes effective, but in no event later than the date the Early Settlement Payment is due,
Issuer shall deliver to MSCO a number of Early Settlement Shares equal to the quotient of (I) the relevant Early Settlement Payment
divided by (II) a price per Share as reasonably determined by the Calculation Agent (the date of such delivery, the “Registered
Share Delivery Date”).

 

(ii)        Promptly following
the Registration Notice Date, Issuer shall file with the SEC a registration statement (“Registration Statement”)
covering the public sale by MSCO of the Early Settlement Shares and any Make-Whole Shares (collectively, the “Registered
Securities”) on a continuous or delayed basis pursuant to Rule 415 (or any similar or successor rule), if available,
under the Securities Act of 1933, as amended (the “Securities Act”); provided that no such filing shall
be required pursuant to this paragraph (ii) if Issuer shall have filed a similar registration statement with unused capacity at
least equal to the relevant Early Settlement Payment and such registration statement has become effective or been declared effective
by the SEC on or prior to the Registration Notice Date and no stop order is in effect with respect to such registration statement
as of the Registration Notice Date, in which case such registration statement shall be the Registration Statement.  Issuer
shall use its commercially reasonable efforts to file the Registration Statement as an automatic shelf registration statement or
have the Registration Statement declared effective by the SEC as promptly as possible. The Registration Statement shall be effective
and subject to no stop order as of the Registered Share Delivery Date.

 

(iii)        Promptly following
the Registration Notice Date, Issuer shall afford MSCO a reasonable opportunity to conduct a due diligence investigation with respect
to Issuer customary in scope for underwritten offerings of equity securities for companies of comparable size, maturity and line
of business (including, without limitation, the availability of senior management to respond to questions regarding the business
and financial condition of Issuer and the right to have made available to MSCO for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested in connection with underwritten offerings of this type
by MSCO), and MSCO shall be satisfied in all material respects with the results of such due diligence investigation of Issuer.
For the avoidance of doubt, Issuer shall not have the right to deliver Shares pursuant to this Section 8(a) (and the conditions
to delivery of Early Settlement Shares specified in this Section 8(a) shall not be satisfied) unless and until MSCO is satisfied
in all material respects with the results of such due diligence investigation of Issuer.

 

(iv)        From the effectiveness
of the Registration Statement until all Registered Securities have been sold by MSCO, Issuer shall, at the request of MSCO, make
available to MSCO a printed prospectus relating to the Registered Securities in form and substance (including, without limitation,
any sections describing the plan of distribution) reasonably satisfactory to MSCO (a “Prospectus”, which term
shall include any prospectus supplement thereto), in such quantities as MSCO shall reasonably request.

 

(v)        Issuer shall
use its commercially reasonable efforts to avoid or prevent the issuance of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any Prospectus and, if any such order is issued, to
obtain the lifting thereof as soon thereafter as is possible.  If the Registration Statement, the Prospectus or any document
incorporated therein by reference contains a misstatement of a material fact or omits to state a material fact required to be stated
therein or necessary to make any statement therein not misleading, Issuer shall as promptly as practicable file any required document
and prepare and furnish to MSCO a reasonable number of copies of such supplement or amendment thereto as may be necessary so that
the Prospectus, as thereafter delivered to the purchasers of the Registered Securities, will not contain a misstatement of a material
fact or omit to state a material fact required to be stated therein or necessary to make any statement therein not misleading.

 

     

     

    

(vi)        On or prior
to the Registered Share Delivery Date, Issuer shall enter into an agreement (a “Transfer Agreement”) with MSCO
(or any affiliate of MSCO designated by MSCO) relating to the public sale of the Registered Securities and substantially similar
to underwriting agreements customary for underwritten offerings of equity securities for companies of comparable size, maturity
and line of business, in form and substance reasonably satisfactory to MSCO (or such affiliate), which Transfer Agreement shall
(without limiting the foregoing) contain provisions substantially similar to those contained in such underwriting agreements relating
to:

 

(A)        the indemnification
of, and contribution in connection with the liability of, MSCO and its affiliates,

 

(B)        the delivery to
MSCO (or such affiliate) of customary letters and opinions (including, without limitation, accountants’ comfort letters,
opinions relating to the due authorization, valid issuance and fully paid and non-assessable nature of the Registered Securities
and letters of counsel relating to the lack of material misstatements and omissions in the Registration Statement and the Prospectus);
and

 

(C)        the payment by
Issuer of all fees and expenses in connection with such resale, including all registration costs and all reasonable fees and expenses
of one counsel for MSCO (or such affiliate).

 

(vii)        On the Registered
Share Delivery Date, a notional balance (the “Early Settlement Balance”) shall be established with an initial
balance equal to the amount of the Early Settlement Payment.  Following the delivery of Early Settlement Shares or any Make-Whole
Shares, MSCO shall sell all such Early Settlement Shares or Make-Whole Shares in a commercially reasonable manner.

 

(viii)        At the end
of each day on which sales have been made pursuant to paragraph 8(a)(vii) above, the Early Settlement Balance shall be (A) reduced
by an amount equal to the net proceeds to be received by MSCO upon settlement of such sales, and (B) increased by an amount (as
reasonably determined by the Calculation Agent) equal to MSCO’s funding cost with respect to the Early Settlement Balance
as of the close of business on the day one Settlement Cycle prior to such day.

 

(ix)        If, on any date,
the Settlement Balance has been reduced to zero but not all of the Early Settlement Shares have been sold, no additional Early
Settlement Shares shall be sold and MSCO shall promptly deliver to Issuer (A) any remaining Early Settlement Shares and (B) if
the Early Settlement Balance has been reduced to an amount less than zero, an amount in cash equal to the absolute value of the
then-current Early Settlement Balance.

 

(x)        If, on any date,
all of the Early Settlement Shares have been sold and the Settlement Balance has not been reduced to zero, Issuer shall, at its
election, either pay the remaining Early Settlement Balance to MSCO in cash or promptly deliver to MSCO an additional number of
Shares (“Make-Whole Shares”) equal to (A) the Settlement Balance as of such date divided by (B) a price
per Share as reasonably determined by the Calculation Agent. This clause (x) shall be applied successively until the Settlement
Balance is reduced to zero.

 

(xi)        If at any time
the number of Shares covered by the Registration Statement is less than the number of Registered Securities required to be delivered
pursuant to this Section 8(a), Issuer shall, at the request of MSCO, file additional registration statement(s) to register the
sale of all Registered Securities required to be delivered to MSCO.

 

(xii)        Issuer shall
cooperate with MSCO and use its commercially reasonable efforts to take any other action necessary to effect the intent of the
provisions set forth in this Section 8(a).

 

     

     

    

(xiii)       The provisions
of Section 8(b) shall apply to any then-current Early Settlement Balance if (i) on any given day, Issuer cannot satisfy any of
the conditions set forth in this Section 8(a) or (ii) for a period of at least 10 consecutive Exchange Business Days, MSCO has
determined that it is inadvisable to effect sales of Registered Securities, unless in either case Issuer pays such then-current
Early Settlement Balance to MSCO in cash pursuant to the Registration Statement.

 

(b)        If Issuer timely elects
to deliver Early Settlement Shares and Make-Whole Shares by means of a private placement, the following provisions shall apply:

 

(i)       All Early Settlement
Shares and Make-Whole Shares shall be delivered to MSCO (or any affiliate of MSCO designated by MSCO) pursuant to the exemption
from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof.

 

(ii)        Issuer shall
afford MSCO and any potential purchaser of any such Shares from MSCO (or any affiliate of MSCO designated by MSCO) identified by
MSCO a commercially reasonable opportunity to conduct a due diligence investigation with respect to Issuer customary in scope for
private placements of equity securities for companies of comparable size, maturity and line of business (including, without limitation,
the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other
information reasonably requested by them in connection with underwritten offerings of this type) and Issuer shall not disclose
material non-public information in connection with such due diligence investigation.

 

(iii)        Issuer shall
enter into an agreement (a “Private Placement Agreement”) with MSCO (or any affiliate of MSCO designated by
MSCO) in connection with the private placement of such Shares by Issuer to MSCO (or any such affiliate) and the private resale
of such Shares by MSCO (or any such affiliate), substantially similar to private placement purchase agreements customary for private
placements of equity securities for companies of comparable size, maturity and line of business, in form and substance commercially
reasonably satisfactory to MSCO and Issuer, which Private Placement Agreement shall include, without limitation, provisions substantially
similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in
connection with the liability of, MSCO and its affiliates, and shall provide for the payment by Issuer of all fees and expenses
in connection with such resale, including all reasonable fees and expenses of one counsel for MSCO but not including any underwriter
or broker discounts and commissions, and shall contain representations, warranties and agreements of Issuer and MSCO reasonably
necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities
Act for such resales.

 

(iv)        Issuer shall
not take or cause to be taken any action that would make unavailable either (A) the exemption set forth in Section 4(a)(2) of
the Securities Act for the sale of any Early Settlement Shares or Make-Whole Shares by Issuer to MSCO or (B) an exemption
from the registration requirements of the Securities Act reasonably acceptable to MSCO for resales of Early Settlement Shares and
Make-Whole Shares by MSCO.

 

(v)        On the date requested
by MSCO, Issuer shall deliver a number of Early Settlement Shares equal to the quotient of (A) the amount of the Early Settlement
Payment divided by (B) a per Share value, determined by MSCO in a commercially reasonable manner, which value shall take
into account transfer restrictions applicable to such Shares and may be based on indicative bids from institutional “accredited
investors” (as defined in Rule 501 under the Securities Act), and the provisions of Section 8(a)(vii) through (x) shall apply
to the Early Settlement Shares delivered pursuant to this Section 8(b)(v). For purposes of applying the foregoing, the Registered
Share Delivery Date referred to in Section 8(a)(vii) shall be the date on which Issuer delivers the Early Settlement Shares.

 

(c)        If Issuer elects to deliver
Early Settlement Shares to settle its obligation to make an Early Settlement Payment, then, if necessary, Issuer shall use its
commercially reasonable efforts to cause the number of authorized but unissued Shares of Common Stock to be increased to an amount
sufficient to permit Issuer to fulfill its obligations under Sections 8(a) and/or 8(b) above.

 

     

     

    

9. Special Provisions for Merger Transactions.

 

Notwithstanding anything to the contrary herein or in the Equity Definitions:

 

(a)       Issuer agrees that:

 

(i)       It will not during
the term of the Transaction make, or, to the extent within its control, permit to be made, any public announcement (as defined
in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement
is made prior to the open or after the close of the regular trading session on the Exchange for the Shares.

 

(ii)       To the extent
that an announcement of a potential Merger Transaction occurs during the term of the Transaction and such announcement does not
cause the Transaction to be cancelled or terminated in whole pursuant to “Extraordinary Events” in Section 2 above,
then as soon as practicable following such announcement (but in any event prior to the next opening of the regular trading session
on the Exchange), Issuer shall provide MSCO with written notice of such announcement; promptly (but in any event prior to the next
opening of the regular trading session on the Exchange), Issuer shall provide MSCO with written notice specifying (x) Issuer’s
average daily “Rule 10b-18 purchases” (as defined in Rule 10b-18) during the three full calendar months immediately
preceding the Announcement Date that were not effected through MSCO or its affiliates and (y) the number of Shares purchased pursuant
to the block purchase proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the Announcement
Date. Such written notice shall be deemed to be a certification by Issuer to MSCO that such information is true and correct. Issuer
understands that MSCO will use this information in calculating the trading volume for purposes of Rule 10b-18. In addition, Issuer
shall promptly notify MSCO of the earlier to occur of the completion of such transaction and the completion of the vote by target
shareholders. Issuer acknowledges that any such public announcement may trigger the provision set forth in Section 11 below. Accordingly,
Issuer acknowledges that its actions in relation to any such announcement or transaction must comply with the standards set forth
in Section 13(b) below.

 

(b)        Upon the occurrence of
any public announcement of a Merger Transaction, MSCO in its sole discretion may (i) apply the provisions of Section 11 below and/or
(ii) treat the occurrence of such announcement as an Additional Termination Event with respect to which the Transaction shall be
the sole Affected Transaction, Issuer shall be the sole Affected Party and MSCO shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement.

 

“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

 

10. Special Provisions for Acquisition Transaction Announcements.

 

(a)        If an Acquisition Transaction
Announcement occurs on or prior to the final Valuation Date, then the Forward Price shall be determined as if the words “minus
(ii) the Discount” were deleted from the definition thereof. If an Acquisition Transaction Announcement occurs after the
Trade Date but prior to the Lock-Out Date, the Lock-Out Date shall be deemed to be the date of such Acquisition Transaction Announcement.

 

(b)        “Acquisition Transaction
Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Issuer or any of its
subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction,
(iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking
that may include, an Acquisition Transaction or (iv) any announcement subsequent to an Acquisition Transaction Announcement relating
to a material amendment, extension, withdrawal or other material change to the subject matter of the previous Acquisition Transaction
Announcement. For the avoidance of doubt, the term “announcement” as used in the definition of Acquisition Transaction
Announcement refers to any public announcement whether made by Issuer or by a third party that is reasonably likely to be a party
to the Acquisition Transaction.

 

     

     

    

(c)       “Acquisition Transaction”
means (i) any Merger Event (for purposes of this definition, the definition of Merger Event shall be read with the references therein
to “100%” being replaced by “25%” and to “50%” by “75%” and without reference to
the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer
or Merger Transaction or any other transaction involving the merger of Issuer with or into any third party, (ii) the sale or transfer
of all or substantially all of the assets or liabilities of Issuer, (iii) a recapitalization, reclassification, binding share exchange
or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution)
of assets or liabilities (including any capital stock or other ownership interests in subsidiaries) or other similar event by Issuer
or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Issuer or its subsidiaries exceeds
25% of the market capitalization of Issuer and (v) any transaction with respect to which Issuer or its board of directors has a
legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under
the Exchange Act or otherwise).

 

11. MSCO Adjustments.

 

In the event that MSCO reasonably determines, based on advice of counsel, that it is appropriate
with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by MSCO, and including, without limitation, Rule 10b-18,
Rule 10b-5, Regulations 13D-G and Regulations 14 D-E under the Exchange Act, provided that such requirements, policies and
procedures are generally applicable in similar situations and applied in a consistent manner in similar transactions), for MSCO
to refrain from purchasing Shares or engaging in other market activity or to purchase fewer than the number of Shares or to engage
in fewer or smaller other market transactions MSCO would otherwise purchase or engage in on any Trading Day on or prior to the
last day of the Calculation Period, then MSCO may, in its reasonable discretion, elect that a Market Disruption shall be deemed
to have occurred on such Trading Day. Such Trading Day shall be treated as a Disrupted Day in full. MSCO shall notify Issuer upon
the exercise of MSCO’s rights pursuant to this Section 11 and shall subsequently notify Issuer on the day MSCO believes that
the circumstances giving rise to such exercise have changed.

 

12. Covenants.

 

Issuer covenants and agrees that:

 

(a)        Until the end of the Potential
Purchase Period (as defined below), neither it nor any of its affiliated purchasers (as defined in Rule 10b-18 under the Exchange
Act) shall directly or indirectly (which shall be deemed to include the writing or purchase of any cash-settled or other derivative
or structured Share repurchase transaction with a hedging period, calculation period or settlement valuation period or similar
period that overlaps with the Transaction) purchase, offer to purchase, place any bid or limit order relating to a purchase of
or commence any tender offer relating to Shares (or any security convertible into or exchangeable for Shares) without the prior
written approval of MSCO or take any other action that would cause the purchase by MSCO of any Shares in connection with this Agreement
not to qualify for the safe harbor provided in Rule 10b-18 under the Exchange Act (assuming for the purposes of this paragraph
that such safe harbor were otherwise available for such purchases).

 

Notwithstanding the immediately preceding paragraph or anything herein
to the contrary (i) an agent independent of Issuer may purchase Shares on behalf of an issuer plan sponsored by Issuer or any affiliate
in accordance with the requirements of Section 10b-18(a)(13)(ii) under the Exchange Act (with “issuer plan” and “agent
independent of Issuer” each being used herein as defined in Rule 10b-18), (ii) Issuer or any “affiliated purchaser”
may purchase Shares in (x) unsolicited transactions or (y) privately negotiated (off-market) transactions, in each case, that are
not and are not reasonably likely to result in “Rule 10b-18 purchases” (as defined in Rule 10b-18), in each case, without
MSCO’s consent, (iii) Issuer may repurchase Shares from holders of awards granted under Issuer’s equity incentive plans
for the purpose of paying the tax withholding obligations arising from the vesting of, or paying the exercise price in connection
with the exercise of, or reacquiring Shares as a result of the forfeiture of, any such awards, and (iv) Issuer may repurchase Shares
on any Exchange Business Day pursuant to any Rule 10b5-1 or Rule 10b-18 repurchase plan entered into with MSCO or an Affiliate
of MSCO, so long as, on any such Exchange Business Day, such purchases do not in the aggregate exceed Specified ADTV Percentage
(as specified in Schedule I) of the Share’s ADTV (as such term is defined in Rule 10b-18(a)(1)) on such Exchange Business
Day (collectively, (i) through (iv) referred to herein as the “Permitted Purchases”).

 

     

     

    

“Potential Purchase Period” means the period from,
and including, the Trade Date to, and including, the latest of (i) the last day of the Calculation Period, (ii) the earlier of
(A) the date ten Exchange Business Days immediately following the last day of the Calculation Period and (B) the Scheduled Valuation
Date and (iii) if an Early Termination Date occurs or the Transaction is cancelled pursuant to Article 12 of the Equity Definitions,
a date determined by MSCO in its commercially reasonable discretion and communicated to Issuer no later than the Exchange Business
Day immediately following such date.

 

(b)        It will comply with all
laws, rules and regulations applicable to it (including, without limitation, the Securities Act and the Exchange Act) in connection
with the transactions contemplated by this Confirmation.

 

(c)        Without limiting the generality
of Section 13.1 of the Equity Definitions, it is not relying, and has not relied, upon MSCO or any of its representatives or advisors
with respect to the legal, accounting, tax or other implications of this Agreement and that it has conducted its own analyses of
the legal, accounting, tax and other implications of this Agreement, and that MSCO and its affiliates may from time to time effect
transactions for their own account or the account of customers and hold positions in securities or options on securities of Issuer
and that MSCO and its affiliates may continue to conduct such transactions during the term of this Agreement. Without limiting
the generality of the foregoing, Issuer acknowledges that MSCO is not making any representations or warranties or taking any position
or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260,
Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from
Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue
statements) or under FASB’s Liabilities & Equity Project.

 

(d)       Neither it nor any affiliates
shall take any action that would cause a restricted period (as defined in Regulation M under the Exchange Act (“Regulation
M”)) to be applicable to any purchases of Shares, or of any security for which Shares is a reference security (as defined
in Regulation M), by Issuer or any affiliated purchasers (as defined in Regulation M) of Issuer during the Potential Purchase Period.

 

(e)       It will not make any election
or take any other action in connection with the Transaction while aware of any material nonpublic information regarding Issuer
or the Shares.

 

13. Representations, Warranties and Acknowledgments.

 

(a)        Issuer hereby represents
and warrants to MSCO on the date hereof and on and as of the Initial Share Delivery Date that:

 

(i)       (A) None of Issuer
and its officers and directors is aware of any material nonpublic information regarding Issuer or the Shares, and Issuer is entering
into the Transaction in good faith and not as part of a plan or scheme to evade the prohibitions of federal securities laws, including,
without limitation, Rule 10b-5 under the Exchange Act and (B) Issuer agrees not to alter or deviate from the terms of the Agreement
or enter into or alter a corresponding or hedging transaction or position with respect to the Shares (including, without limitation,
with respect to any securities convertible or exchangeable into the Shares) during the term of the Agreement. Without limiting
the generality of the foregoing, all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant
to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements
contained in any earlier such reports and documents) do not contain any untrue statement of a material fact or any omission of
a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading.

 

     

     

    

(ii)       The transactions
contemplated by this Confirmation have been authorized under Issuer’s publicly announced program to repurchase Shares.

 

(iii)        Issuer is not
entering into this Agreement to facilitate a distribution of the Shares (or any security convertible into or exchangeable for Shares)
or in connection with a future issuance of securities.

 

(iv)        Issuer is not
entering into this Agreement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to raise or depress the price of the Shares (or any security convertible into or exchangeable for Shares) in violation
of the federal securities laws.

 

(v)        There have been
no purchases of Shares in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4)
by or for Issuer or any of its affiliated purchasers during each of the four calendar weeks preceding the Trade Date and during
the calendar week in which the Trade Date occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated
purchaser” each being used as defined in Rule 10b-18).

 

(vi)       Issuer is as
of the date hereof, and after giving effect to the transactions contemplated hereby will be, Solvent. As used in this paragraph,
the term “Solvent” means, with respect to a particular date, that on such date (A) the present fair market value
(or present fair saleable value) of the assets of Issuer is not less than the total amount required to pay the liabilities of Issuer
on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (B) Issuer
is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature
and become due in the normal course of business, (C) assuming consummation of the transactions as contemplated by this Agreement,
Issuer is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature, (D) Issuer is not
engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which Issuer
is engaged, (E) Issuer is not a defendant in any civil action that could reasonably be expected to result in a judgment that Issuer
is or would become unable to satisfy, (F) Issuer is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and (G) Issuer would
be able to purchase Shares with an aggregate purchase price equal to the Prepayment Amount in compliance with the corporate laws
of the jurisdiction of its incorporation.

 

(vii)        Issuer is not,
and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended.

 

(viii)        No state or
local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval
from any person or entity) as a result of MSCO or its affiliates owning or holding (however defined) Shares other than any such
law, rule, regulation or regulatory order that applies solely as a result of the business, identity, place of business or jurisdiction
of organization of MSCO or any such affiliate.

 

     

     

    

(b)       Issuer acknowledges and
agrees that the Initial Shares may be sold short to Issuer. Issuer further acknowledges and agrees that MSCO may purchase Shares
in connection with the Transaction, which Shares may be used to cover all or a portion of such short sale or may be delivered to
Issuer. Such purchases and any other market activity by MSCO will be conducted independently of Issuer by MSCO as principal for
its own account. All of the actions to be taken by MSCO in connection with the Transaction shall be taken by MSCO independently
and without any advance or subsequent consultation with Issuer. It is the intent of the parties that the Transaction comply with
the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that this Confirmation shall be interpreted
to comply with the requirements of such Rule, and Issuer shall not take any action that results in the Transaction not so complying
with such requirements. Without limiting the generality of the preceding sentence, Issuer acknowledges and agrees that (A) Issuer
does not have, and shall not attempt to exercise, any influence over how, when or whether MSCO effects any market transactions
in connection with the Transaction and (B) neither Issuer nor its officers or employees shall, directly or indirectly, communicate
any information regarding Issuer or the Shares to any employee of MSCO or its Affiliates that have been identified by MSCO to Issuer
in writing as employees responsible for executing market transactions in connection with the Transaction. Issuer also acknowledges
and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the
requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without
limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and
not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such amendment, modification
or waiver shall be made at any time at which Issuer or any officer or director of Issuer is aware of any material nonpublic information
regarding Issuer or the Shares.

 

(c)       Each of Issuer and MSCO
represents and warrants to the other that it is an “eligible contract participant” as defined in Section 1a(12) of
the U.S. Commodity Exchange Act, as amended.

 

(d)        Each of Issuer and MSCO
acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act
by virtue of Section 4(2) thereof. Accordingly, it represents and warrants to the other party that (i) it has the financial ability
to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account and without a view to the distribution or resale thereof and (iv) the assignment,
transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act.

 

14. Acknowledgements of Issuer Regarding Hedging and Market Activity.

 

Issuer agrees, understands and acknowledges that:

 

(a)       during the period from (and
including) the Trade Date to (and including) the Settlement Date, MSCO and its Affiliates may buy or sell Shares or other securities
or buy or sell options or futures contracts or enter into swaps or other derivative transactions in order to adjust its Hedge Position
with respect to the Transaction;

 

(b)       MSCO and its Affiliates also
may be active in the market for the Shares or options, futures contracts, swaps or other derivative transactions relating to the
Shares other than in connection with hedging activities in relation to the Transaction;

 

(c)       MSCO shall make its own determination
as to whether, when and in what manner any hedging or market activities in Issuer’s securities or other securities or transactions
shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the
Transaction; and

 

(d)       any such market activities
of MSCO and its Affiliates may affect the market price and volatility of the Shares, including the 10b-18 VWAP and the Forward
Price, each in a manner that may be adverse to Issuer.

 

     

     

    

15. Indemnification.

 

In the event that MSCO becomes involved in any capacity in any third-party
action, proceeding or investigation brought by or against any person in connection with any matter referred to in this Agreement,
Issuer will reimburse MSCO for its reasonable legal and other expenses (including the cost of any investigation and preparation)
incurred in connection therewith. Issuer also will indemnify and hold MSCO harmless against any losses, claims, damages or liabilities
to which it may become subject in connection with any matter referred to in this Confirmation. If for any reason the foregoing
indemnification is unavailable to MSCO or insufficient to hold it harmless, then Issuer shall contribute to the amount paid or
payable by MSCO as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative
fault of Issuer on one hand and MSCO on the other hand with respect to such loss, claim, damage, or liability and any other relevant
equitable considerations. The reimbursement, indemnity and contribution obligations of Issuer under this Section 15 shall be in
addition to any liability that Issuer may otherwise have, shall extend upon the same terms and conditions to any Affiliate of MSCO
and the partners, directors, officers, agents, employees and controlling persons (if any), as the case may be, of MSCO and any
such Affiliate and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives
of Issuer, MSCO, any such Affiliate and any such person. Issuer also agrees that neither MSCO nor any of such Affiliates, partners,
directors, officers, agents, employees or controlling persons shall have any liability to Issuer for or in connection with any
matter referred to in this Confirmation. Notwithstanding the foregoing, the reimbursement, indemnity, contribution and exculpation
obligations of Issuer under this Section 15 shall not apply for the benefit of any person to the extent that any losses, claims,
damages, liabilities or expenses result from the negligence or bad faith of such person in effecting the Transaction. The foregoing
provisions shall survive any termination or completion of the Transaction. The foregoing reimbursement, indemnity and contribution
obligations of Issuer shall be paid promptly in cash.

 

16. Other Provisions.

 

(a)       Issuer agrees and acknowledges
that MSCO is a “financial institution” and “financial participant” within the meaning of Sections 101(22)
and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge that it is the intent of the parties that
(A) this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement
payment,” within the meaning of Section 546 of the Bankruptcy Code, and (B) MSCO is entitled to the protections afforded
by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 555 and 561 of the Bankruptcy Code.

 

(b)       MSCO and Issuer hereby agree
and acknowledge that MSCO has authorized Issuer to disclose the Transaction to any and all persons, and there are no express or
implied agreements, arrangements or understandings to the contrary, and authorizes Issuer to use any information that Issuer receives
or has received with respect to the Transaction in any manner.

 

(c)       In the event Issuer becomes
the subject of proceedings (“Bankruptcy Proceedings”) under the Bankruptcy Code or any other applicable bankruptcy
or insolvency statute, any rights or claims of MSCO hereunder in respect of the Transaction shall rank for all purposes no higher
than, but on a parity with, the rights or claims of holders of Shares, and MSCO hereby agrees that its rights and claims hereunder
shall be subordinated to those of all parties with claims or rights against Issuer (other than common stockholders) to the extent
necessary to assure such ranking. Without limiting the generality of the foregoing, after the commencement of Bankruptcy Proceedings,
the claims of MSCO hereunder shall for all purposes have rights equivalent to the rights of a holder of a percentage of the Shares
equal to the aggregate amount of such claims (the “Claim Amount”) taken as a percentage of the sum of (i) the
Claim Amount and (ii) the aggregate fair market value of all outstanding Shares on the record date for distributions made to the
holders of such Shares in the related Bankruptcy Proceedings. Notwithstanding any right it might otherwise have to assert a higher
priority claim in any such Bankruptcy Proceedings, MSCO shall be entitled to receive a distribution solely to the extent and only
in the form that a holder of such percentage of the Shares would be entitled to receive in such Bankruptcy Proceedings, and, from
and after the commencement of such Bankruptcy Proceedings, MSCO expressly waives (i) any other rights or distributions to which
it might otherwise be entitled in such Bankruptcy Proceedings in respect of its rights and claims hereunder and (ii) any rights
of setoff it might otherwise be entitled to assert in respect of such rights and claims.

 

     

     

    

(d)       Notwithstanding any provision
of this Confirmation or any other agreement between the parties to the contrary, neither the obligations of Issuer nor the obligations
of MSCO hereunder are secured by any collateral, security interest, pledge or lien.

 

(e)       Each party waives any and
all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between
the parties, whether arising under any other agreement, applicable law or otherwise.

 

(f)       Notwithstanding anything
to the contrary herein, MSCO may, by prior notice to Issuer, satisfy its obligation to deliver any Shares or other securities on
any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the
case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other
securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original
Delivery Date.

 

(g)       It shall constitute an Additional
Termination Event with respect to which the Transaction is the sole Affected Transaction and Issuer is the sole Affected Party
and MSCO shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement if, at any
time on or prior to the Valuation Date, the price per Share on the Exchange, as determined by the Calculation Agent, is at or below
the Threshold Price (as specified in Schedule I).

 

17. Share Cap.

 

Notwithstanding any other provision of this Confirmation or the Agreement
to the contrary, in no event shall Issuer be required to deliver to MSCO in the aggregate a number of Shares that exceeds the Share
Cap as of the date of delivery (as specified in Schedule I), subject to reduction by the number of Shares delivered hereunder by
Issuer on any prior date.

 

18. Transfer and Assignment.

 

MSCO may transfer or assign its rights and obligations hereunder and under
the Agreement, in whole or in part, to any of its Affiliates of equivalent credit quality (or whose obligations are guaranteed
by an entity of equivalent credit quality) without the consent of Issuer. MSCO will provide prompt written notice of any such transfer
to Issuer.

 

19. 2018 ISDA U.S. Resolution Stay Protocol Incorporation by Reference

 

The parties agree that (i) to the extent that prior to the date hereof both parties
have adhered to the 2018 ISDA U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol are incorporated
into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a Protocol Covered Agreement and each
party shall be deemed to have the same status as Regulated Entity and/or Adhering Party as applicable to it under the Protocol;
(ii) to the extent that prior to the date hereof the parties have executed a separate agreement the effect of which is to amend
the qualified financial contracts between them to conform with the requirements of the QFC Stay Rules (the “Bilateral Agreement”),
the terms of the Bilateral Agreement are incorporated into and form a part of this Agreement and each party shall be deemed to
have the status of “Covered Entity” or “Counterparty Entity” (or other similar term)  as applicable
to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply, the terms of Section 1 and Section 2
and the related defined terms (together, the “Bilateral Terms”) of the form of bilateral template entitled “Full-Length
Omnibus (for use between U.S. G-SIBs and Corporate Groups)” published by ISDA on November 2, 2018 (currently available on
the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of which is available upon request),  the effect
of which is to amend the qualified financial contracts between the parties thereto to conform with the requirements of the QFC
Stay Rules, are hereby incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed
a “Covered Agreement,” MSCO  shall be deemed a “Covered Entity” and Issuer shall be deemed a “Counterparty
Entity.” In the event that, after the date of this Agreement, both parties hereto become adhering parties to the Protocol,
the terms of the Protocol will replace the terms of this paragraph. In the event of any inconsistencies between this Agreement
and the terms of the Protocol, the Bilateral Agreement or the Bilateral Terms (each, the “QFC Stay Terms”), as applicable,
the QFC Stay Terms will govern. Terms used in this paragraph without definition shall have the meanings assigned to them under
the QFC Stay Rules. For purposes of this paragraph, references to “this Agreement” include any related credit enhancements
entered into between the parties or provided by one to the other.

     

     

    

“QFC Stay Rules” means the regulations codified at 12 C.F.R. 252.2, 252.81–8,
12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited exceptions, require an express recognition of the stay-and-transfer
powers of the FDIC under the Federal Deposit Insurance Act and the Orderly Liquidation Authority under Title II of the Dodd Frank
Wall Street Reform and Consumer Protection Act and the override of default rights related directly or indirectly to the entry
of an affiliate into certain insolvency proceedings and any restrictions on the transfer of any covered affiliate credit enhancements.

 

20. Governing Law; Jurisdiction; Waiver.

 

THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER
OR RELATED TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT
FORUM WITH RESPECT TO, THESE COURTS.

 

Each PARTY hereby irrevocably
waives (on its own behalf and, to the extent permitted by applicable law, on behalf of its stockholders) all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to the
Transaction or the actions of ISSUER or its affiliates in the negotiation, performance or enforcement hereof.

 

 

Remainder of Page Intentionally Blank

 

 

 

 

 

 

 

     

     

    

 

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to us by facsimile to the number provided on the attached facsimile cover page.

 

Confirmed as of the date first written above:

 

	
        ANIKA THERAPEUTICS, INC.

         
	
        MORGAN STANLEY & CO. LLC

         

         

	
        By: /s/Joseph Darling________________

        Name: Joseph Darling

        Title: President and Chief Executive Officer
	
        By: /s/Darren McCarley_________________

        Name: Darren McCarley

        Title: Managing DirectorExhibit

Exhibit 10.1

 UNITED TECHNOLOGIES CORPORATION
MERGER SEVERANCE FOR CORPORATE OFFICE EXECUTIVES 
AND OTHER KEY EMPLOYEES

SECTION 1
PURPOSE OF THE PLAN

The Compensation Committee of the Board of Directors (the “Compensation Committee”) of United Technologies Corporation (the “Company”) recognizes that the proposed merger (the “Merger”) of a subsidiary of the Company with Raytheon Company (“Raytheon”) creates uncertainty that may result in the loss or distraction of employees of the Company to the detriment of the Company and its shareholders. 
The Compensation Committee considers the avoidance of such loss and distraction to be essential to protecting and enhancing the best interests of the Company and its shareholders.  The Compensation Committee also believes that when the Merger is imminent, or is occurring, the Board of Directors of the Company should be able to receive and rely on disinterested service from employees in the best interests of the Company and its shareholders without concern that employees might be distracted or influenced by the personal uncertainties and risks created by the Merger. 
Therefore, in order to fulfill the above purposes, this United Technologies Corporation Merger Severance Plan for Corporate Office Executives and Other Key Employees (this “Plan”) has been developed and is hereby adopted to become effective as of the date on which the Merger closes (the “Effective Date”).  If the Agreement and Plan of Merger between the Company and Raytheon relating to the Merger is terminated for any reason without the occurrence of the Merger, then this Plan shall be null and void ab initio. 
SECTION 2
DEFINITIONS

Certain terms used herein have the definitions given to them in the first place in which they are used.  As used herein, the following words and phrases shall have the following respective meanings:
2.1    “Affiliated Entity” shall mean any entity controlled by, controlling or under common control with the Company.

2.2    “Annual Base Salary” shall mean the annual base salary paid or payable, including any base salary that is subject to deferral, to the Participant by the Company or any of the Affiliated Entities at the rate in effect immediately prior to the Effective Date, or, if higher, immediately prior to the Date of Termination (disregarding any reduction thereto that is a basis for the Participant’s termination for Good Reason).

2.3    “Benefit Continuation Period” shall mean the period of twelve (12) months from the Date of Termination.

2.4    “Carrier” shall mean Carrier Solutions Corporation.

2.5    “Cause” shall mean any of the events specified in clauses (i) through (v) of the “Cause” definition in the Company’s 2018 Long-Term Incentive Plan, as in effect on the Effective Date.

2.6    “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

2.7    “Corporate Office Executive” shall mean an executive (i.e., job grades E5 (including Executive Leadership Group (“ELG”) members), E4, E3, E2 and E1) of the Company or an Affiliated Entity (other than Otis and Carrier and their respective subsidiaries) who is (a) on U.S. payroll and primarily provides services in the United States and (b) in a position (i) designated as a “corporate office” position by the Company or (ii) assigned to the UTC Research Center, in  each case, as of immediately prior to the Effective Date.   

2.8    “Date of Termination” shall mean the date of receipt of a Notice of Termination from the Company or the Participant, as applicable, or any later date specified in the Notice of Termination (subject to the notice and cure periods specified in the definition of “Good Reason”).

2.9    “Disability” shall have the meaning given to such term in the Company’s 2018 Long-Term Incentive Plan, as in effect on the Effective Date.

2.10    “Good Reason” shall mean the occurrence of any of the following without the Participant’s prior written consent during the two-year period following the Effective Date:

(a)a material diminution in the Participant’s duties, authority, or responsibilities from those in effect immediately prior to the Effective Date, as determined by the Plan Administrator in good faith and in its sole discretion (excluding any such diminution that is made in connection with, or otherwise results from, the distribution by the Company to its shareholders of all of the outstanding shares of Otis or Carrier, including any internal restructuring in anticipation thereof);

(b)a reduction of the Participant’s annual rate of base salary from that in effect immediately prior to the Effective Date (or, if higher, that in effect any time thereafter); 

(c)a reduction in the Participant’s target annual bonus opportunity (expressed as a dollar amount equal to target bonus percentage multiplied by base salary) of 15% or greater from that in effect immediately prior to the Effective Date (or, if higher, that in effect at any time thereafter); 

(d)a material diminution in the Participant’s annual long-term incentive compensation opportunity, based on the Company’s established practices and procedures for granting long-term incentive awards as in effect prior to the Effective Date, as determined by rules established by the Plan Administrator prior to the Effective Date for the purpose of assessing a claim of material diminution;

(e)in the case of each Tier 2 Participant and, solely to the extent provided by the applicable Participation Notice, a Tier 3 Participant, a change in the Participant’s principal place of employment to a location that (i) is more than fifty (50) miles from the location in effect immediately prior to the Effective Date and (ii) results in an increase in the Participant’s commute from his or her principal personal residence as of immediately prior to the Effective Date by more than twenty-five (25) miles; or

(f)any other action or event specified in the Participant’s Participation Notice.

In order to invoke a termination for Good Reason, the Participant must provide a Notice of Termination to the Company within ninety (90) days following the initial existence of an event or condition that the Participant believes constitutes Good Reason, describing such event or circumstance in reasonable detail, and, if the Company does not cure such event or condition within ninety (90) days following its receipt of such Notice of Termination (the “Cure Period”), the Participant’s termination of employment must occur, if at all, within thirty (30) days from the earlier of (i) the end of the Cure Period, or (ii) the date the Company provides notice to the Participant that it does not intend to cure such event or condition.  The Participant’s mental or physical incapacity following the occurrence of a condition or event described above in clauses (a) through (f) shall not affect the Participant’s ability to terminate employment for Good Reason and the Participant’s death following delivery of a Notice of Termination for Good Reason shall not affect the Participant’s estate’s entitlement to the severance payments and benefits provided hereunder upon a termination of employment for Good Reason.  
2.11    “Multiple” shall mean: 

(a)    for Tier 1 Participants, two (2) (or, if such Tier 1 Participant was party to a Senior Executive Severance Agreement that is superseded by this Plan, three (3));

(b)    for Tier 2 Participants, one and one-half (1.5); or

(c)    for Tier 3 Participants, a multiple greater than, or equal to, one (1) and less than, or equal to, two (2) that is determined by the Plan Administrator or the Company’s Chief Executive Officer and set forth in the Tier 3 Participant’s Participation Notice.

2.12    “Notice of Termination” shall mean a notice in writing (including an email communication) delivered to the other party during the two (2)-year period immediately following the Effective Date that (a)  indicates the specific termination provision in this Plan relied upon, (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated, and (c) if the Date of Termination (as defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination shall be not more than one hundred and twenty (120) days after the date of the written notice, in the case of a termination by the Participant; it being understood that the Company may, at its election, designate an earlier Date of Termination).  The failure by the Participant 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 Participant or the Company, respectively, hereunder or preclude the Participant or the Company, respectively, from asserting such fact or circumstance in enforcing the Participant’s or the Company’s respective rights hereunder.

2.13     “Other Key Employee” each employee of the Company or an Affiliated Entity who has been designated by the Chief Executive Officer of the Company as an “Other Key Employee” eligible to participate in this Plan, which designation has been documented in a Participation Notice setting forth the employee’s Multiple for purposes of this Plan.

2.14    “Otis” shall mean Otis Worldwide Corporation.

2.15    “Participant” shall mean each Corporate Office Executive and each Other Key Employee, excluding:

(a)    except as otherwise provided in a Participation Notice, any individual who, prior to the Effective Date, was offered, through a written offer letter, a position with Otis or Carrier, or a subsidiary thereof, the terms of which offer did not meet the definition of “Good Reason”;

(b)     any individual who has received a formal communication (whether before or after the Effective Date), consistent with the Company’s usual practice for employee transfers, of such individual’s transfer to a position in a jurisdiction outside of the United States, the terms of which position do not meet the definition of “Good Reason”; and

(c)     any individual who has received a formal communication (whether before or after the Effective Date), consistent with the Company’s usual practice for employee transfers, of such individual’s transfer to a position at a Company business unit that is not designated as a “corporate office” position and that is not assigned to the UTC Research Center, the terms of which position do not meet the definition of “Good Reason”; and

(d)    the Company’s Chief Executive Officer as of immediately prior to the Effective Date.  

2.16    “Participation Notice” shall mean a notice substantially in the form attached hereto as Exhibit A delivered by the Company to a Participant.

2.17    “Plan Administrator” shall mean the Company’s Chief Executive Officer or his or her duly authorized designee or designees; provided that with respect to each Participant who is an executive officer or ELG member of the Company as of immediately prior to the Effective Date, the Plan Administrator shall be the Compensation Committee of the Board.

2.18    “Qualifying Termination” shall mean any termination of a Participant’s employment during the two (2)-year period beginning on the Effective Date, by the Participant for Good Reason or by the Company other than for Cause, death or Disability; it being understood that to constitute a Qualifying Termination, the Notice of Termination must be provided prior to the expiration of such period and the Date of Termination may occur outside of such period.    

2.19    “Target Annual Bonus” shall mean the Participant’s target annual bonus opportunity pursuant to the Company’s applicable annual bonus plan in effect immediately prior to the Effective Date, or, if higher, immediately prior to the Date of Termination (disregarding any reduction thereto that is a basis of the Participant’s termination for Good Reason).

2.20    “Tier 1 Participant” shall mean each Participant who holds a position in job grade E5 (including ELG members), E4 or E3, as of immediately prior to the Date of Termination (or immediately prior to a reduction in job grade that is a basis for the Participant’s termination for Good Reason).

2.21    “Tier 2 Participant” shall mean each Participant who holds a position in job grade E2 or E1 as of immediately prior to the Date of Termination (or immediately prior to a reduction in job grade that is a basis for the Participant’s termination for Good Reason).

2.23    “Tier 3 Participant” shall mean each Participant who is an Other Key Employee. 

SECTION 3
SEPARATION BENEFITS

3.1    Qualifying Termination.  If a Participant experiences a Qualifying Termination, the Company shall pay or provide to the Participant the following payments and benefits at the time or times set forth below, subject to Section 8: 

(a)    a lump sum payment in cash, subject to (other than in the case of the Accrued Obligations and Other Benefits) the Participant’s execution and nonrevocation of a General Release of Claims and Restrictive Covenant Agreement substantially in the form attached hereto as Exhibit B, payable as soon as practicable following the date on which such agreement becomes effective and irrevocable and in any event no later than the seventieth (70th) following the Date of Termination, equal to the aggregate of the following amounts: 

(i)    the sum of (A) the Participant’s accrued Annual Base Salary through the Date of Termination, (B) any annual incentive payment earned by the Participant for a performance period that was completed prior to the Date of Termination, and (C) any business expenses incurred by the Participant that are unreimbursed as of the Date of Termination, in each case, to the extent not theretofore paid (the sum of the amounts described in clauses (A), (B), and (C) shall be hereinafter referred to as the “Accrued Obligations”); provided that, notwithstanding the foregoing, in the case of clauses (A) and (B), if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A of the Code to defer any portion of the Annual Base Salary or annual incentive payment described in clause (A) or (B) above, then for all purposes of this Section 3 (including, without limitation, Section 3.1(a)(ii)), such deferral election, and the terms of the applicable arrangement, shall apply to the same portion of the amount described in such clauses (A) or (B), and such portion shall not be considered as part of the “Accrued Obligations” but shall instead be an “Other Benefit” (as defined below); 
(ii)    the product of (A) the Target Annual Bonus and (B) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs from the first (1st) day of such fiscal year to and including the Date of Termination, and the denominator of which is the total number of days in such fiscal year, reduced by any annual bonus payment to which the Participant has been paid or is otherwise entitled, in each case, for the same period of service, and subject to any applicable deferral election on the same basis as set forth in the proviso to Section 3.1(a)(i); and

(iii)    the amount equal to the product of (A) the Multiple and (B) the sum of (1) the Participant’s Annual Base Salary and (2) the Participant’s Target Annual Bonus.

(b)    Healthcare Benefits.  For the Benefit Continuation Period, the Company shall continue to provide to the Participant (and the Participant’s dependents who were covered by healthcare benefit coverage pursuant to a plan sponsored by the Company or an Affiliated Entity as of immediately prior to the Date of Termination, if any (the “eligible dependents”)), without any requirement for the Participant (or the eligible dependents) to pay a monthly premium, healthcare benefit coverage (including medical, prescription, dental, vision, basic life, and employee assistance program coverage and, for Participants who are ELG members, annual executive 

physicals) at least equal to the coverage that would have been provided to the Participant (and the Participant’s eligible dependents, if any) if the Participant had continued employment with the Company during the Benefit Continuation Period; provided, however, that if the Participant becomes reemployed with another employer and is eligible to receive any of the types of healthcare benefits under another employer-provided plan, the healthcare benefit coverage that is duplicative of the type of coverage provided hereunder shall cease.  The Participant shall promptly notify the Company that the Participant has become eligible to receive healthcare benefits under another employer-provided plan.  The period for providing continuation coverage under the group health plans of the Company and the Affiliated Entities as described in Section 4980B of the Code (i.e., “COBRA” continuation benefits), if applicable, shall commence upon the expiration of the Benefits Continuation Period (or, if earlier, upon the cessation of the healthcare benefits coverage provided hereunder).  For purposes of determining eligibility (but not the time of commencement of benefits) of the Participant for retiree benefits pursuant to any applicable plans, practices, programs and policies, the Participant shall be considered to have remained employed during the Benefit Continuation Period and to have retired on the last day of such period.  

(c)    Outplacement Services.  The Company shall, at its expense, provide the Participant with outplacement services for a period of twelve (12) months following the Date of Termination, the scope and provider of which shall be determined by the Company.

(d)    Financial Planning Services.  The Company shall, at its expense as incurred, provide the Participant with continuation of financial planning services for a period of twelve (12) months following the Date of Termination, if the Participant is eligible for this benefit immediately prior to the Effective Date, the scope and provider of which shall be determined by the Participant in the Participant’s discretion, provided that the aggregate cost of such services shall not exceed the maximum cost of such services available to the Participant as of immediately prior to the Effective Date (i.e., $16,000 for Participants who are ELG members and $14,000 for Participants who are other E5 executives). 

(e)    Accelerated Vesting of Equity Awards.  Unvested Company equity awards held by the Participant shall become fully vested as of the Date of Termination, provided, however,  that the vesting of performance-based awards such as performance share units will remain subject to the achievement of the applicable performance goals, determined in the ordinary course following the applicable performance period.  Each vested Company equity award held by the Participant as of the Date of Termination that is in the form of a stock option or stock appreciation right (including any such award that became vested pursuant to the preceding sentence) shall remain exercisable until the expiration of its full original term, and each other vested award shall be settled at the earliest time that settlement may occur without causing the imposition of an accelerated or additional tax or penalties under Section 409A of the Code (and, in the case of any award that was subject to a performance-based vesting condition as of the Date of Termination, no earlier than the date on which the actual level of achievement of the applicable performance goals is determined after the end of the applicable performance period).

(f)    Other Benefits.  To the extent not theretofore paid or provided, the Company shall timely pay or provide to the Participant any other amounts or benefits required to be paid or provided or which the Participant is eligible to receive under any plan, program, policy or practice, or contract or agreement of the Company and the Affiliated Entities, including amounts credited to the Participant’s account under the Company Deferred Compensation Plan, as amended, or any successor plan, and, if the Participant participates in the Employee Scholar Program as of 

immediately prior to the Date of Termination, up to 12 months of continued participation in such program in accordance with its terms (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).  

SECTION 4
NONDUPLICATION; NO OFFSET; ENTIRE UNDERSTANDING

4.1    Nonduplication of Payments and Benefits.  The amount of the payment under Section 3.1(a)(iii) of this Plan will be offset and reduced by the full amount and/or value, as determined by the Plan Administrator in its sole discretion, of any severance benefits, compensation and benefits provided during any notice period, pay in lieu of notice, mandated termination indemnities, or similar benefits that the Participant may separately be entitled to receive from the Company or any Affiliated Entity based on any employment agreement or other contractual obligation (whether individual or union/works council) or statutory scheme.  If a Participant’s employment is terminated because of a plant shut-down or mass layoff or other event to which the Worker Adjustment and Retraining Notification Act of 1988 or similar state law (collectively, “WARN”) applies, then the amount of the severance payment under Section 3.1(a)(iii) of this Plan to which the Participant is entitled shall be reduced, dollar for dollar, by the amount of any pay provided to the Participant in lieu of the notice required by WARN, and the Benefits Continuation Period shall be reduced for any period of benefits continuation or pay in lieu thereof provided to Participant due to the application of WARN. 

4.2    No Offset or Mitigation.  Except as otherwise expressly provided in Section 4.1 or as specifically provided in the General Release of Claims and Restrictive Covenant Agreement, the Company’s obligation to provide the payments and benefits under this Plan and otherwise to perform its obligations hereunder shall be absolute and unconditional and shall not be affected by any setoff, counterclaim, recoupment, defense or other claim, right or action which the Company may have against a Participant or others.  In no event shall a Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to such Participant under any of the provisions of this Plan and, except as provided in Section 3.1(b) regarding healthcare benefits, no payments or benefits received from other employment shall serve to mitigate the payments and benefits hereunder.  

4.3    Entire Understanding.  

(a)    This Plan constitutes the entire understanding between the Company and each Participant as of the Effective Date relating to the severance payments or benefits to be paid or provided to the Participant by the Company upon a termination of employment that occurs on, or within two years after, the Effective Date, and supersedes all prior agreements and understandings with respect to the subject matter of this Plan during such period, except that the terms and conditions of Company equity awards shall continue in full force and effect and shall be supplemented by the additional benefits provided by Section 3.1(e).  Each Participant’s eligibility to receive severance payments or benefits under this Plan during the two-year period following the Effective Date shall preclude the Participant from claiming severance benefits under any other contractual arrangement with the Company or any Affiliated Entity during such period, including without limitation any ELG agreement.  

(b)    Amounts that are vested benefits or that a Participant and/or a Participant’s dependents are otherwise entitled to receive under any plan, policy, practice, program, agreement or arrangement of the Company or any of the Affiliated Entities shall be payable in accordance with such plan, policy, practice, program, agreement or arrangement.  Without limiting the 

generality of the foregoing, the Participant’s resignation under this Plan, with or without Good Reason, shall in no way affect the Participant’s ability to terminate employment by reason of the Participant’s “retirement” under, or to be eligible to receive benefits under, any compensation and benefits plans, programs or arrangements of the Company or the Affiliated Entities, including, without limitation, any retirement or pension plans or arrangements or substitute plans adopted by the Company, the Affiliated Entities or their respective successors, and any termination which otherwise qualifies as Good Reason shall be treated as such even if it is also a “retirement” for purposes of any such plan. 

SECTION 5
AMENDMENT AND TERMINATION

This Plan may be terminated or amended in any respect by resolution adopted by the Compensation Committee; provided that this Plan may not be terminated or amended after the Effective Date in any manner that would adversely affect the rights of any Participant hereunder without such Participant’s prior written consent.
SECTION 6
PLAN ADMINISTRATION

6.1    General.  The Plan Administrator is responsible for the general administration and management of this Plan and shall have all powers and duties necessary to fulfill its responsibilities, including, but not limited to, the discretion to interpret and apply the provisions of this Plan, to modify the provisions of this Plan, or the General Release of Claims and Restrictive Covenant Agreement, as applied to any Participant providing services outside of the United States to the extent necessary or appropriate in order to comply with any applicable legal or regulatory provisions and otherwise to carry out the intent and purpose of this Plan, and to determine all questions relating to eligibility for benefits under this Plan, to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to be appropriate, and to make any findings of fact needed in the administration of this Plan.  All decisions, interpretations and other actions of the Plan Administrator shall be final, conclusive and binding on all parties who have an interest in this Plan.  In the event of a civil action challenging any Plan Administrator decision, the standard of review shall be deferential rather than de novo and the Plan Administrator’s decisions may be overturned only if deemed unreasonable, arbitrary or capricious.  

6.2    ERISA.  This Plan (a) shall be considered to be an unfunded plan maintained by the Company primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees (a “top-hat plan”), and (b) shall be administered in a manner that complies with the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that are applicable to top-hat plans.  

6.3    Claims Procedure.  

(a)    Initial Claims.  A Participant who believes that such Participant is entitled to a payment under this Plan that has not been received may submit a written claim for benefits under this Plan within sixty (60) days after the Participant’s Date of Termination. If the Participant’s claim is denied, in whole or in part, such Participant will be furnished with written notice of the denial within ninety (90) days after the Plan Administrator’s receipt of the Participant’s written claim, unless special circumstances require an extension of time for processing the claim, in which case the decision period may be extended by up to an additional ninety (90) days.  If such an 

extension of time is necessary, written notice of the extension will be furnished to the Participant before the termination of the initial ninety (90)-day period and will describe the circumstances requiring the extension and the date by which a decision is expected to be rendered. Written notice of the denial of the Participant’s claim will contain the following information:

(i)the reason or reasons for the denial of the Participant’s claim;

(ii)references to the Plan provisions on which the denial of the Participant’s claim was based;

(iii)a description of any additional information or material required by the Plan Administrator to reconsider the Participant’s claim (to the extent applicable) and an explanation of why such material or information is necessary; and

(iv)a description of this Plan’s review procedures and time limits applicable to such procedures, including a statement of the Participant’s right to bring a civil action under Section 502(a) of ERISA following a benefit claim denial on review.  

(b)    Appeal of Denied Claims.  If the Participant’s claim is denied, the Participant (or the Participant’s authorized representative) may file a request for review of the claim in writing with the Plan Administrator.  This request for review must be filed no later than sixty (60) days after the Participant has received written notification of the denial.

(i)    Such request for review may include any comments, documents, records and other information relating to the Participant’s claim for benefits.

(ii)    The Participant has the right to be provided with, upon request and free of charge, reasonable access to and copies of all pertinent documents, records and other information that is relevant to the Participant’s claim for benefits.

(iii)    The review of the denied claim will take into account all comments, documents, records and other information that the Participant submitted relating to the Participant’s claim, without regard to whether such information was submitted or considered in the initial denial of the Participant’s claim.

(c)    Plan Administrator’s Response to Appeal.  The Plan Administrator will notify the Participant of its decision within sixty (60) days after the Plan Administrator’s receipt of the Participant’s written claim for review; provided that the Plan Administrator may extend the review period by up to sixty (60) additional days, if the Plan Administrator notifies the Participant in writing of the need for an extension (and the reason therefor) before the end of the initial sixty (60)-day period.  If the Plan Administrator makes an adverse decision on appeal, the Plan Administrator shall communicate its decision in a writing that includes:

(i)    the reason or reasons for the denial of the Participant’s appeal;

(ii)    reference to the Plan provisions on which the denial of the Participant’s appeal is based;

(iii)    a statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, this Plan and all documents, records and other information relevant to the Participant’s claim for benefits; and

(iv)    a statement describing the Participant’s right to bring an action under Section 502(a) of ERISA.

(d)    Exhaustion of Administrative Remedies.  The exhaustion of these claims procedures is mandatory for resolving every claim and dispute arising under this Plan.  As to such claims and disputes:

(i)    no claimant shall be permitted to commence any arbitration or legal action to recover benefits or to enforce or clarify rights under this Plan or under any provision of law until these claims procedures have been exhausted in their entirety;

(ii)    failure to submit a claim, appeal or any required information by the applicable deadline under these claims procedures shall result in forfeiture of the benefits being claimed;
(iii)    in any civil action, arbitration or other agreed upon dispute resolution procedure, all explicit and implicit determinations by the Plan Administrator (including, but not limited to, interpretation of disputed plan terms, factual findings, and determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law and shall be overturned only if deemed unreasonable, arbitrary or capricious; and

(iv)    no legal action or arbitration may be commenced by the Participant later than one hundred eighty (180) days subsequent to the date of the written response of the Plan Administrator to a Participant’s request for review pursuant to Section 6.3(c).

6.4    Indemnification.  To the extent permitted by law, the Company shall indemnify the Plan Administrator from all claims for liability, loss or damage (including the payment of expenses in connection with defense against such claims) arising from any good faith action, or failure to act, by the Plan Administrator in connection with this Plan.

SECTION 7
SUCCESSORS; ASSIGNMENTS

7.1    Successors.  The Company shall require any corporation, entity, individual or other person who is the successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all the business and/or assets of the Company to expressly assume and agree to perform, by a written agreement in form and in substance satisfactory to the Company, all of the obligations of the Company under this Plan.  As used in this Plan, the term “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Plan by operation of law, written agreement or otherwise.  

7.2    Assignment of Rights.  It is a condition of this Plan, and of all rights of each person eligible to receive benefits under this Plan, that no right or interest of any such person in this Plan shall be assignable or transferable in whole or in part, except by will or the laws of descent and distribution or 

other operation of law, including, but not by way of limitation, lawful execution, levy, garnishment, attachment, pledge, bankruptcy, alimony, child support or qualified domestic relations order.

SECTION 8
SECTION 409A OF THE CODE

8.1    General.  The obligations under this Plan are intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and shall in all respects be administered in accordance with Section 409A of the Code.  Any payments that qualify for the “short-term deferral” exception, the separation pay exception or another exception under Section 409A of the Code shall be paid under the applicable exception to the maximum extent possible.  For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Plan shall be treated as a separate payment of compensation for purposes of applying the exclusion under Section 409A of the Code for short-term deferral amounts, the separation pay exception or any other exception or exclusion under Section 409A of the Code.  All payments to be made upon a termination of employment under this Plan may only be made upon a “separation from service” under Section 409A of the Code to the extent necessary in order to avoid the imposition of penalty taxes on a Participant pursuant to Section 409A of the Code.  In no event may a Participant, directly or indirectly, designate the calendar year of any payment under this Plan.  

8.2    Reimbursements and In-Kind Benefits.  Notwithstanding anything to the contrary in this Plan, all reimbursements and in-kind benefits provided under this Plan that are subject to Section 409A of the Code shall be made in accordance with the requirements of Section 409A of the Code, including without limitation, where applicable, the requirement that (a) in no event shall the Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later than the Participant’s remaining lifetime (or if longer, through the twentieth (20th) anniversary of the Effective Date); (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (c) the reimbursement of eligible fees and expenses shall be made no later than the last day of the calendar year following the year in which the applicable fees and expenses were incurred; provided that the Participant shall have submitted an invoice for such fees and expenses at least thirty (30) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; and (d) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.  

8.3    Delay of Payments.  Notwithstanding any other provision of this Plan to the contrary, if a Participant is considered a “specified employee” for purposes of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination), any payment or benefit that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code that is otherwise due to be paid to such Participant under this Agreement during the six (6)-month period immediately following such Participant’s separation from service (as determined in accordance with Section 409A of the Code) because of such Participant’s separation from service shall be accumulated and paid to such Participant on the first (1st) business day of the seventh (7th) month following the Participant’s separation from service (the “Delayed Payment Date”), to the extent necessary to avoid penalty taxes or accelerated taxation pursuant to Section 409A of the Code.  If such Participant dies during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of his or her estate on the Delayed Payment Date.  

SECTION 9
MISCELLANEOUS

9.1    Controlling Law.  To the extent not preempted by ERISA, this Plan shall be governed by and construed in accordance with the laws of the State of Connecticut, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Connecticut or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Connecticut to be applied.  In furtherance of the foregoing, the internal laws of the State of Connecticut will control the interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. 

9.2    Withholding.  The Company may withhold from any amount payable or benefit provided under this Plan such federal, state, local, foreign and other taxes as are required to be withheld pursuant to any applicable law or regulation.

9.3    Gender and Plurals.  Wherever used in this Plan document, words in the masculine gender shall include masculine or feminine gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include the singular.

9.4    Plan Controls.  In the event of any inconsistency between this Plan document and any other communication regarding this Plan, this Plan document controls.  The captions in this Plan are not part of the provisions hereof and shall have no force or effect.

9.5    Not an Employment Contract.  Neither this Plan nor any action taken with respect to it shall confer upon any person the right to continued employment with the Company.  

9.6    Notices.  Any notice or other communication required to be delivered to the Company by a Participant hereunder (including, without limitation, any claim submitted by a Participant pursuant to Section 6 and the Plan Administrator’s response thereto) shall be properly delivered to the Company when delivered by electronic mail to the United Technologies Corporation Total Rewards Department:

Attention:  Corporate Vice President, Total Rewards
Email Address:  utccompben@utc.com
Any notice required to be delivered to the Participant by the Company hereunder shall be properly delivered to the Participant when the Company delivers such notice personally, by placing said notice in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid to that person’s last known address as reflected on the books and records of the Company, or by sending said notice to the Participant’s Company email address prior to the Date of Termination and thereafter to the email address provided by the Participant to the Company.
9.7    Severability.  If any provision of this Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of this Plan, and this Plan shall be construed and enforced as if such provision had not been included in this Plan.  

Exhibit A 

FORM OF PARTICIPATION NOTICE
Designation of Merger Severance Plan Participation

Name of Participant:  ____________________________    
Date:  __________________________
The Company recently adopted the United Technologies Corporation Merger Severance Plan for Corporate Office Executives and Other Key Employees (the “Plan”).   [You have been designated as an Other Key Employee eligible to participate in the Plan.]
Capitalized terms used and not otherwise defined in this notice shall have the meanings given to such terms in the Plan.
Your eligibility to receive severance payments and benefits under the Plan during the two-year period following the Effective Date shall preclude you from claiming severance payments or benefits under any other contractual arrangement with the Company or any Affiliated Entity during such period, including without limitation any ELG agreement.
[You are hereby designated as a Tier 3 Participant with a Multiple of [•].]
[For purposes of your participation in the Plan, the definition of “Good Reason” shall include the occurrence of the following without your prior consent:  a change in your principal place of employment to a location that (a) is more than fifty (50) miles from the location in effect immediately prior to the Effective Date and (b) results in an increase in your commute from your principal personal residence as of immediately prior to the Effective Date by more than twenty-five (25) miles.]

United Technologies Corporation 
By:________________________
      Name:
      Title:

Exhibit B
GENERAL RELEASE OF CLAIMS AND
RESTRICTIVE COVENANT AGREEMENT

THIS GENERAL RELEASE OF CLAIMS AND RESTRICTIVE COVENANT AGREEMENT (this “Agreement”) is entered into between [•] (“Employee”) and United Technologies Corporation (the “Company”) as of [•].  Capitalized terms used and not defined herein shall have the meanings provided in the United Technologies Corporation Merger Severance Plan for the Corporate Office Executives and Other Key Employees (the “Plan”).  The entering into and non-revocation of this Agreement is a condition to Employee’s right to receive the severance payments and benefits under Section 3.1 of the Plan (other than the Accrued Obligations and Other Benefits).
Accordingly, Employee and the Company agree as follows:
		
	1.
	Release of Claims.

(a)Employee Release of Claims.  Employee, for Employee, Employee’s heirs, administrators, representatives, executors, successors and assigns, hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue the Company or any of its Affiliated Entities and their respective current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, successors and assigns, and all persons acting by, through or under or in concert with any of them, from all actions, damages, losses, costs and claims of any and every kind and nature whatsoever, at law or in equity, whether absolute or contingent, up to and including the date of this Agreement, arising from or relating to Employee’s employment with, or termination of employment from, the Company and its Affiliated Entities, and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”); Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990, as amended; the Employee Retirement Income Security Act of 1974, as amended; and any other federal, state or local laws or regulations prohibiting employment discrimination.  This Agreement specifically excludes (i) Employee’s right to receive the amounts and benefits under the Plan and to enforce the terms of this Agreement, (ii) Employee’s rights to vested amounts and benefits under any employee benefit plan of the Company or its Affiliated Entities, (iii) any claims arising after the date hereof, and (iv) any claim or right Employee may have to indemnification or coverage under the Company’s or any of its Affiliated Entities’ respective bylaws or directors’ and officers’ insurance policies or any agreement to which Employee is a party or a third-party beneficiary.  To the maximum extent permitted by law, Employee agrees that Employee has not filed, nor will Employee ever file, a lawsuit asserting any claims that are released by this Agreement, or to accept any benefit from any lawsuit that might be filed by another person or governmental entity based in whole or in part on any event, act, or omission that is the subject of the release contained in this Agreement.

(b)EEOC.  The parties agree that this Agreement shall not affect the rights and responsibilities of the U.S. Equal Employment Opportunity Commission to enforce ADEA and other laws.  Employee agrees, however, to waive the right to recover monetary damages in any charge, complaint or lawsuit filed by Employee or on Employee’s behalf with respect to any claims released in this Agreement.

(c)Section 1542 of the California Civil Code.  The parties hereto expressly acknowledge and agree that all rights under Section 1542 of the California Civil Code are expressly waived.  That section provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
(d)      Employee Acknowledgment.  Employee shall take any action requested by the Company to ensure Employee’s removal and termination, with effect from the Date of Termination, from all offices, directorships, board or committee memberships and fiduciary capacities in which Employee served at the Company and its Affiliated Entities.

		
	2.
	Restrictive Covenants.

(a)    Confidential Information.  Employee shall hold in a fiduciary capacity for the benefit of the Company and its Affiliated Entities all secret or confidential information, knowledge, or data relating to the Company and its Affiliated Entities and businesses, which information, knowledge or data shall have been obtained by Employee during Employee’s employment by the Company or its Affiliated Entities and which information, knowledge or data shall not be or become public knowledge (other than by acts by Employee or representatives of Employee in violation of this Agreement) (collectively, “Confidential Information”), and Employee agrees not to provide such Confidential Information, directly or indirectly, to any third party; provided that any information that:  (i) is lawfully received by Employee from any third party without restriction on disclosure or use, or (ii) is required to be disclosed by law, shall not be deemed to be Confidential Information for purposes of this Section 2(a).   Employee shall not, without the prior written consent of the Company or as may otherwise be required by law, use, communicate or divulge any such Confidential Information.  Notwithstanding any other provisions of this Section 2(a), pursuant to 18 USC Section 1833(b), Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made:  (A) confidentially to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (B) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  If Employee files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Employee may disclose such trade secret to Employee’s attorney and use the trade secret information in related court proceedings, provided that Employee files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order.  Notwithstanding any provision of this Agreement to the contrary, the provisions of this Agreement are not intended to, and shall be interpreted in a manner that does not, limit or restrict Employee from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the Securities Exchange Act of 1934).

(b)    Noncompetition.  To further ensure the protection of the Company’s confidential information, Employee agrees that for a period of one (1) year after Employee’s Date of Termination, Employee will not accept employment with or provide services in any form to (including serving as a director, partner or founder, or entering into a consulting relationship or similar arrangements) a business that (i) competes, directly or indirectly, with any of the Company’s principal business units as of the Date of Termination; or (ii) is a material customer of or a material supplier to any of the Company’s businesses as of the Date of Termination (a “Competitive Business”); provided that, it shall not be considered a breach of this Agreement for Employee to be a passive owner of not more than 5% of the outstanding stock or other securities or interests of a corporation or other entity that is a Competitive Business, so long as Employee has no direct or indirect active participation in the business or management of such corporation or entity.

(c)    Employee and Customer Nonsolicitation.  Employee agrees that for a period of two (2) years after Employee’s Date of Termination, Employee shall not, directly or indirectly:  (i) solicit any individual who is, at the time of such solicitation (or was during the three (3)-month period prior to the date of such solicitation), employed by the Company or one of its Affiliated Entities with whom Employee had direct contact (other than incidental) during the two (2)‐year period prior to the Date of Termination to terminate or refrain from rendering services to the Company or its Affiliated Entities for the purpose of becoming employed by, or becoming a consultant to, any individual or entity other than the Company or its Affiliated Entities, or (ii) induce or attempt to induce any current customer, investor, supplier, licensee or other business relation of the Company or any of its Affiliated Entities with whom or which Employee had direct contact (other than incidental) during the two (2)-year period prior to the Date of Termination (“Customer”) to cease doing business with the Company or its Affiliated Entities, or in any way interfere with the relationship between any such Customer, on the one hand, and the Company or any of its Affiliated Entities, on the other hand. 

(d)     Non-disparagement.  Employee agrees not to disparage or defame, through any public medium (including social media) the business reputation, technology, products, practices or conduct of the Company or its Affiliated Entities or any member of the board of directors or any executive officer of the Company in their capacity as such.  Nothing in this Agreement or elsewhere shall prevent Employee from making statements in confidence to an immediate family member or to an attorney for the purpose of seeking legal advice, or from making truthful statements when required by law, subpoena or the like, or in arbitration or other proceeding permitted under this Agreement and/or the Plan, as applicable.

(e)    Employee Acknowledgment.  Employee acknowledges that Employee’s agreement to comply with the covenants in this Section 2 is in consideration for the payments and benefits to be received by Employee under Section 3.1 of the Plan.  Employee understands that the covenants in this Section 2 may limit Employee’s ability to work in a business similar to the business of the Company and its Affiliated Entities; provided, however, Employee agrees that, in light of Employee’s education, skills, abilities and financial resources, Employee shall not assert, and it shall not be relevant nor admissible as evidence in any dispute arising in respect of the covenants in this Section 2, that any provisions of such covenants prevent Employee from earning a living.  Employee acknowledges that the Intellectual Property Agreement between Employee and the Company, and all restrictive covenants applicable to the Participant pursuant to the Company’s 2018 Long-Term Incentive Plan or Long-Term Incentive Plan, or any schedule of terms thereunder, including any related forfeiture and recoupment provisions, will continue in full force 

and effect following the Date of Termination and are in addition to Employee’s obligations hereunder.

(f)    Remedies.  Employee acknowledges that the Company and its Affiliated Entities would be irreparably injured by a violation of Section 2(a), (b), (c) or (d), and Employee agrees that the Company and such Affiliated Entities, in addition to any other remedies available, shall be entitled to (i) a preliminary injunction, temporary restraining order or other equivalent relief, restraining Employee from any actual or threatened material breach of any of Sections 2(a), (b), (c) or (d), or (ii) to cause the Employee to forfeit any remaining unvested Company equity awards or remaining unpaid severance payments or benefits upon any material breach of any of Sections 2(a), (b), (c) or (d).  

(g)    Severability; Blue Pencil.  Employee acknowledges and agrees that Employee has had the opportunity to seek advice of counsel in connection with this Agreement, and the restrictive covenants contained herein are reasonable in geographic scope, temporal duration, and in all other respects.  If it is determined that any provision of this Section 2 is invalid or unenforceable, the remainder of the provisions of this Section 2 shall not thereby be affected and shall be given full effect, without regard to the invalid portions.  If any court or other decision-maker of competent jurisdiction determines that any covenant in this Section 2 is unenforceable because of the duration or geographic scope of such covenant, then, after such determination becomes final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable, and that, in its reduced form, such covenant shall be enforced.

		
	3.
	Timing for Consideration.

Employee acknowledges that the Company has specifically advised Employee of the right to seek the advice of an attorney concerning the terms and conditions of this Agreement.  Employee further acknowledges that Employee has been furnished with a copy of this Agreement, and Employee has been afforded [twenty-one (21)][OR][forty-five (45)] calendar days in which to consider the terms and conditions of this Agreement.  By executing this Agreement, Employee affirmatively states that Employee has had sufficient and reasonable time to review this Agreement and to consult with an attorney concerning his legal rights prior to the final execution of this Agreement.  Employee further agrees that Employee has carefully read this Agreement and fully understands its terms.  Employee acknowledges that Employee has entered into this Agreement, knowingly, freely and voluntarily.  Employee understands that Employee may revoke this Agreement within seven (7) calendar days after signing this Agreement.  Revocation of this Agreement must be made in writing and must be received by the Corporate Vice President, Total Rewards of the Company, at utccompben@utc.com, within the time period set forth above.
		
	4.
	Effectiveness of Agreement.

This Agreement shall become effective and enforceable on the eighth (8th) day following Employee’s delivery of a copy of this executed Agreement to the Company; provided Employee does not timely exercise Employee’s right of revocation as described in Section 3 above.  If Employee fails to timely sign and deliver this Agreement or timely revokes this Agreement, this Agreement will be without force or effect, and Employee shall not be entitled to the payments or benefits described in Section 3.1 of the Plan (other than the Accrued Obligations and Other Benefits).

		
	5.
	Miscellaneous.

(a)    Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of Connecticut, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Connecticut or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Connecticut to be applied.  In furtherance of the foregoing, the internal laws of the State of Connecticut will control the interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

(b)    Severability.  The provisions of this Agreement and obligations of the parties are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable.

(c)    Entire Agreement; Amendment.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement.  No amendment to this Agreement shall be binding upon either party unless in writing and signed by or on behalf of such party.

(d)    Dispute Resolution.  Except with respect to claims for breach of the obligations under Section 2 of this Agreement, for which the Company may seek enforcement in any court having competent jurisdiction at its election, any dispute arising between the Company and Employee with respect to the validity, performance or interpretation of this Agreement shall be submitted to and determined in binding arbitration in Hartford, Connecticut, for resolution in accordance with the rules of the American Arbitration Association, modified to provide that the decision of the arbitrator shall be binding on the parties; shall be furnished in writing, separately and specifically stating the findings of fact and conclusions of law on which the decision is based; shall be kept confidential by the arbitrator and the parties; and shall be rendered within sixty (60) days following the arbitrator being impaneled.  Costs and expenses of the arbitration shall be borne by the Company regardless of the outcome, and each party shall be responsible for its own attorneys’ fees and expenses.  The arbitrator shall be selected in accordance with the rules of the American Arbitration Association.

(e)    Assignment.  Without the prior written consent of Employee, this Agreement shall not be assignable by the Company.  This Agreement shall inure to the benefit of and be enforceable by Employee’s heirs and legal representatives.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.  

[Signature Page Follows.]

ACKNOWLEDGED AND AGREED BY:

Date: _______________________        ____________________________________________        
[Employee Name]

UNITED TECHNOLOGIES CORPORATION

By:  ________________________________    
Name:
Title:

[Signature Page]

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