Document:

rdnt_10k-ex1008.htm

EXHIBIT 10.8

JOINDER AGREEMENT

THIS JOINDER AGREEMENT, dated as of November 8, 2011 (this “Agreement”), by and among the parties listed on the signature page hereto as a Lender (each an “Incremental Revolving Loan Lender” and collectively the “Incremental Revolving Loan Lenders”), RADNET MANAGEMENT, INC., a California corporation (the “Borrower”), RADNET, INC., a Delaware corporation (“Holdings”), CERTAIN SUBSIDIARIES AND AFFILIATES OF THE BORROWER, as Guarantors (the “Guarantors”), and BARCLAYS BANK PLC (“Barclays Bank”), as Administrative Agent and Collateral Agent.

RECITALS:

WHEREAS, reference is hereby made to the Credit and Guaranty Agreement, dated as of April 6, 2010 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among the Borrower, Holdings, the Guarantors, Barclays Bank, as Administrative Agent and Collateral Agent, the Lenders party thereto from time to time, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Co-Syndication Agents, and RBC Capital Markets1, as Documentation Agent;

WHEREAS, the Borrower has informed the Administrative Agent and the Incremental Revolving Loan Lenders that it intends to acquire (the “CML Acquisition”) all of the issued and outstanding equity interests of Raven Holdings U.S., Inc., a Delaware corporation, from CML Healthcare Inc., a corporation organized under the laws of the Province of Ontario (“CML”), pursuant to a stock purchase agreement (the “Stock Purchase Agreement”), dated as of November 8, 2011, by and between the Borrower and CML; and

WHEREAS, subject to the terms and conditions of the Credit Agreement, Borrower may increase the existing Revolving Commitments by entering into one or more Joinder Agreements with the Incremental Revolving Loan Lenders.

NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:

Each Incremental Revolving Loan Lender party hereto hereby agrees to commit to provide its respective Commitment as set forth on Schedule A annexed hereto, on the terms and subject to the conditions set forth below:

Each Incremental Revolving Loan Lender (i) confirms that it has received a copy of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Joinder Agreement (this “Agreement”); (ii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender or Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes Administrative Agent and Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to Administrative Agent and Collateral Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto; and (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

  

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Each Incremental Revolving Loan Lender hereby agrees to make its Commitment on the following terms and conditions:

	
  

	
1.

	
Incremental Revolving Commitment Termination Date.  The maturity date for the Incremental Revolving Loans shall be the earliest to occur of (i) the fifth anniversary of the Closing Date, (ii) the date the Revolving Commitments are permanently reduced to zero pursuant to Section 2.13(b) of the Credit Agreement and (iii) the date of the termination of the Revolving Commitments pursuant to Section 8.01 of the Credit Agreement.

	
  

	
2.

	
Applicable Margin.

	
  

	
i.

	
Base Rate Loans: The Applicable Margin for each Incremental Revolving Loan that is a Base Rate Loan shall mean, as of any date of determination, 3.25% per annum.

	
  

	
ii.

	
Eurodollar Rate Loans: The Applicable Margin for each Incremental Revolving Loan that is a Eurodollar Rate Loan shall mean, as of any date of determination, 4.25% per annum.

	
  

	
3.

	
Other Fees.  Borrower agrees to pay each Incremental Revolving Loan Lender its Pro Rata Share of an aggregate fee equal to 2.0% of such Incremental Revolving Loan Lender’s Commitment under this Agreement on November 8, 2011.

	
  

	
4.

	
Credit Agreement Governs. Except as set forth in this Agreement, Incremental Revolving Commitments and Incremental Revolving Loans shall otherwise be subject to the provisions of the Credit Agreement and the other Loan Documents.

	
  

	
5.

	
Conditions Precedent.  The effectiveness of this Agreement and the commitments of each Incremental Revolving Loan Lender hereunder are subject to the satisfaction of the following conditions on or prior to November 8, 2011 (the “Effective Date”):

 

  

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i.

	
The Agents and the Incremental Revolving Loan Lenders shall have received the legal opinions of: Sheppard Mullin Richter & Hampton LLP and of Jeff Linden, general counsel to the Borrower, and other documents reasonably requested by Administrative Agent in connection with this Agreement (such opinions to be with respect to the Borrower only and not to any Guarantor and to be in form and substance reasonably satisfactory to the Administrative Agent);

	
  

	
ii.

	
The Administrative Agent shall have received an amendment to the Credit Agreement that will become effective simultaneously with this Agreement that will increase the Applicable Margin with respect to Revolving Loans thereunder to 3.25% with respect to Base Rate Loans and 4.25% with respect to Eurodollar Rate Loans;

	
  

	
iii.

	
The CML Acquisition shall have been consummated in accordance with the terms and conditions of the Stock Purchase Agreement;

	
  

	
iv.

	
Borrower shall have made any payments required pursuant to Section 2.18(c) of the Credit Agreement in connection with the Incremental Revolving Commitments;

	
  

	
v.

	
The representations and warranties contained in the Credit Agreement and in the other Loan Documents shall be true and correct in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all material respects on and as of such earlier date; provided, that to the extent any such representation or warranty is already qualified by materiality or material adverse effect, such representation or warranty shall be true and correct in all respects;

	
  

	
vi.

	
The certifications set forth in Section 6 hereof shall be true and correct as of the Effective Date; and

	
  

	
vii.

	
As of the Effective Date, the ratio of (i) Consolidated Total Secured Debt after giving effect to the Incremental Revolving Commitments to (ii) pro forma Consolidated Adjusted EBITDA for the latest twelve-month period for which financial statements are available as of the Effective Date shall be less than or equal to 3.25:1.00.

	
  

	
6.

	
Borrower’s Certifications.  By its execution of this Agreement, the undersigned officer, to the best of his or her knowledge, and Borrower hereby certify that:

 

  

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i.

	
No event has occurred and is continuing or would result from giving effect to the Incremental Revolving Commitments contemplated hereby that would constitute a Default or an Event of Default;

	
  

	
ii.

	
Holdings is in pro forma compliance with the financial tests described in Section 6.07 of the Credit Agreement as of the last day of the most recently ended Fiscal Quarter for which a Compliance Certificate has been delivered to the Administrative Agent pursuant to Section 5.01(c) of the Credit Agreement, after giving effect to the Incremental Revolving Commitments, including any acquisitions consummated with the proceeds of any Incremental Revolving Loans or dispositions after the beginning of the determination period but prior to or simultaneous with the borrowing of such Incremental Revolving Loans; and

	
  

	
iii.

	
Borrower has performed in all material respects all agreements and satisfied all conditions which the Credit Agreement provides shall be performed or satisfied by it on or before the date hereof.

	
  

	
7.

	
Eligible Assignee.  By its execution of this Agreement, each Incremental Revolving Loan Lender represents and warrants that it is an Eligible Assignee.

	
  

	
8.

	
Notice.  For purposes of the Credit Agreement, the initial notice address of each Incremental Revolving Loan Lender shall be as set forth below its signature below.

	
  

	
9.

	
Non-US Lenders.  For each Incremental Revolving Loan Lender that is a Non-US Lender, delivered herewith to Administrative Agent are such forms, certificates or other evidence with respect to United States federal income tax withholding matters as such Incremental Revolving Loan Lender may be required to deliver to Administrative Agent pursuant to subsection 2.20(c) of the Credit Agreement.

	
  

	
10.

	
Recordation of the Incremental Revolving Loans.  Upon execution and delivery hereof, Administrative Agent will record the Incremental Revolving Loans made by Incremental Revolving Loan Lenders in the Register.

	
  

	
11.

	
Amendment, Modification and Waiver.  This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto.

	
  

	
12.

	
Entire Agreement.  This Agreement, the Credit Agreement and the other Loan Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof.

 

  

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13.

	
GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

	
  

	
14.

	
Severability.  Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable.

	
  

	
15.

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

 

 

[Remainder of page intentionally left blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

	
  

	
1 RBC Capital Markets is the brand name for the capital markets activities of Royal Bank of Canada and its affiliates.

 

  

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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Joinder Agreement as of the date first written above.

 

 

BARCLAYS BANK PLC

By:__/s/ Diane Rolfe________________________

Name: Diane Rolfe

Title:  Director

Notice Address:

 

 

Attention:

Telephone:

Facsimile:

  

[Radnet – Joinder Agreement Signature Page]

  

 

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Joinder Agreement as of the date first written above.

 

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

By:__/s/ Carin Keegan_______________________

Name: Carin Keegan

Title:  Director

By:__/s/ Erin Morrissey______________________

Name: Erin Morrissey

Title:  Director

Notice Address:

 

 

Attention:

Telephone:

Facsimile:

  

[Radnet – Joinder Agreement Signature Page]

  

 

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Joinder Agreement as of the date first written above.

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

By:__/s/ Andrew D. Moore___________________

Name: Andrew D. Moore

Title:  Duly Authorized Signatory

Notice Address:

 

 

Attention:

Telephone:

Facsimile:

 

  

[Radnet – Joinder Agreement Signature Page]

  

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Joinder Agreement as of the date first written above.

 

ROYAL BANK OF CANADA

By:__/s/ Dean Sas________________________

Name: Dean Sas

Title:  Authorized Signatory

Notice Address:

 

 

Attention:

Telephone:

Facsimile:

 

  

[Radnet – Joinder Agreement Signature Page]

  

 

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Joinder Agreement as of the date first written above.

 

 

Jefferies Finance LLC

By:__/s/ E. Joseph Hess______________________

Name: E. Joseph Hess

Title:  Managing Director

Notice Address:

 

 

Attention:

Telephone:

Facsimile:

 

 

  

[Radnet – Joinder Agreement Signature Page]

  

RADNET MANAGEMENT, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

RADNET, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

BEVERLY RADIOLOGY MEDICAL GROUP III

By: Beverly Radiology Medical Group, Inc., its general partner

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

By: Breastlink Medical Group, Inc., its general partner

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

By: ProNet Imaging Medical Group, Inc., its general partner

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

ADVANCED IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

BEVERLY RADIOLOGY MEDICAL GROUP, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

  

[Radnet – Joinder Agreement Signature Page]

  

 

 

BREASTLINK MEDICAL GROUP, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

COMMUNITY IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

DELAWARE IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

DIAGNOSTICS IMAGING SERVICES, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

FRI, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

FRI II, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

IDE IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

  

[Radnet – Joinder Agreement Signature Page]

  

MID ROCKLAND IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

NEW JERSEY IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

PACIFIC IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

PRONET IMAGING MEDICAL GROUP, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

QUESTAR IMAGING, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

QUESTAR LOS ALAMITOS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

 

QUESTAR VICTORILLE, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

  

[Radnet – Joinder Agreement Signature Page]

  

RADIOLOGIX, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

RADIOLOGY AND NUCLEAR MEDICINE IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

RADNET MANAGED IMAGING SERVICES, INC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

RADNET MANAGEMENT I, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

RADNET MANAGEMENT II, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

 

RADNET SUB, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

 

ROLLING OAKS IMAGING CORPORATION

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

  

[Radnet – Joinder Agreement Signature Page]

  

ROLLING OAKS RADIOLOGY, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

SO CAL MR SITE MANAGEMENT, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

TREASURE COAST IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

VALLEY IMAGING PARTNERS, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

HEALTH DIAGNOSTICS OF NEW JERSEY, L.L.C.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

IMAGE MEDICAL CORPORATION

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

ERAD, INC.

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

  

[Radnet – Joinder Agreement Signature Page]

  

EAST BERGEN IMAGING, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

 

 

PROGRESSIVE X-RAY OF ENGLEWOOD, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

PROGRESSIVE X-RAY OF KEARNEY, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

PROGRESSIVE MEDICAL IMAGING OF BLOOMFIELD, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

PROGRESSIVE MEDICAL IMAGING OF HACKENSACK, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

PROGRESSIVE MEDICAL IMAGING OF UNION CITY, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

  

[Radnet – Joinder Agreement Signature Page]

  

 

IMAGING ON CALL, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

ADVANCED NA, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

ADVANCED RADIOLOGY, LLC

By: __/s/ Howard G. Berger, M.D._____________

Howard G. Berger, M.D., President

  

[Radnet – Joinder Agreement Signature Page]

  

Consented to by:

BARCLAYS BANK PLC

as Administrative Agent and Collateral Agent

By: __/s/ David Barton___________________________

Name: David Barton

Title: Director

  

[Radnet – Joinder Agreement Signature Page]

  

 

SCHEDULE A

TO JOINDER AGREEMENT

	
Name of Incremental Revolving Loan Lender

	
Type of Commitment

	Amount
	
 

Barclays Bank PLC

	
 

Incremental Revolving Commitment

	 	
 

$5,000,000

	 
	
Deutsche Bank Trust Company Americas

	
Incremental Revolving Commitment

	 	
$5,000,000

	 
	
General Electric Capital Corporation

	
Incremental Revolving Commitment

	 	
$5,000,000

	 
	
Royal Bank of Canada

	
Incremental Revolving Commitment

	 	
$5,000,000

	 
	
Jefferies Finance LLC

	
Incremental Revolving Commitment

	 	
$1,250,000

	 
	  	  	Total:   	
      $21,250,000exhibit10-1.htm

LUMINEX CORPORATION

2012 LONG TERM INCENTIVE PLAN

Purpose and Administration of the Plan

The 2012 Long-Term Incentive Plan (the “LTIP”) has been established by Luminex Corporation (the “Company”) to encourage and reward superior long-term performance from specified key executive officers. Awards under the LTIP shall be treated as Performance Awards under the Luminex Corporation Amended and Restated 2006 Equity Incentive Plan (as the same may be amended from time to time, the “Plan”).  Subject to applicable law, all designations, determinations, interpretations, and other decisions under or with respect to the LTIP or any award shall be within the sole discretion of the Compensation Committee (the “Committee”), may be made at any time and shall be final, conclusive and binding upon all persons. Designations, determinations, interpretations, and other decisions made by the Committee with respect to the LTIP or any award hereunder need not be uniform and may be made selectively among Participants (as defined below), whether or not such Participants are similarly situated. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Participation

The Committee shall have the sole and absolute discretion to determine those officers of the Company who shall be eligible to receive an award pursuant to the LTIP (each, a “Participant”).

Incentive Calculation and Payment of Awards

The Committee will make awards pursuant to the LTIP as set forth on Schedule A hereto, on such terms as the Committee may prescribe based on the performance criteria set forth on Schedule A hereto and such other factors as it may deem appropriate.  The period over which the performance shall be evaluated is the period beginning January 1, 2012 and ending on December 31, 2014 (the “Performance Period”).  The Committee shall determine whether and to what extent each performance goal has been met at the end of the Performance Period.

Awards pursuant to the LTIP will be paid in Restricted Share Units issued as follows:  (a) upon the Effective Date (or such later date as determined by the Committee and/or required by the Company’s equity award policies), a number of Restricted Share Units shall be issued to each Participant equal to the number of Shares such Participant would earn if “Maximum Performance” in accordance with Schedule A were achieved with respect to each performance goal (calculated in the manner specified on Schedule A), and (b) following the close of the Performance Period, only the number of Restricted Share Units that equate to the actual performance, as determined by the Committee pursuant to Schedule A, shall be eligible to vest (the “Eligible Units”) and settle as Shares as further set forth in the applicable Award Agreement for such Performance Award.  The Committee shall make its determination, and the resulting compensation shall be paid, under the LTIP after the close of the Performance Period by March 15 of the year following the close of the Performance Period.  The form of Restricted Share Unit Award Agreement is attached hereto as Schedule B.  Except as set forth in the applicable Award Agreement or as the Committee may otherwise determine in its sole and absolute discretion, termination of a Participant’s employment prior to the end of the Performance Period will result in the forfeiture of the Performance Award by the Participant, and no payments shall be made with respect thereto.

  

  

  

This LTIP is not a “qualified” plan for federal income tax purposes, and any payments are subject to applicable tax withholding requirements.

Adjustments for Unusual or Nonrecurring Events

In addition to any adjustments enumerated in the definition of the performance goals set forth on Schedule A hereto, the Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, awards in recognition of unusual or nonrecurring events affecting any Participant, the Company, or any subsidiary or affiliate, or the financial statements of the Company or of any subsidiary or affiliate; in the event of changes in applicable laws, regulations or accounting principles; or in the event the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the LTIP.  The Committee is also authorized to adjust performance targets or awards to avoid unwarranted penalties or windfalls.  Notwithstanding the foregoing, the Committee shall not have the discretion to increase any Award payable to any Covered Officer in excess of that provided by the application of the terms and conditions of Schedule A attached hereto.

Miscellaneous

No Right to Employment

The grant of an award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any subsidiary.

No Rights to Awards; No Trust or Fund Created

No person shall have any claim to be granted any award and there is no obligation for uniformity of treatment among Participants.  The terms and conditions of awards, if any, need not be the same with respect to each Participant.  The Company reserves the right to terminate the LTIP at any time in the Company’s sole discretion.  Neither the LTIP nor any award hereunder shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any subsidiary or affiliate and a Participant or any other person.

Interpretation and Governing Law

This LTIP shall be governed by and interpreted and construed in accordance with the internal laws of the State of Delaware, without reference to principles of conflicts or choices of laws.

Recoupment Policy

The Company can terminate, rescind and/or recover any Restricted Share Units that vested pursuant to this LTIP based on (i) achievement of financial results that were subsequently the subject of a restatement, other than as a result of changes to accounting rules and regulations, or (ii) financial information or performance metrics subsequently found to be materially inaccurate, in each case regardless of individual fault. The recovery policy applies to any Restricted Share Units vested pursuant to this LTIP at a time when a Participant is an employee after the effective date of the LTIP.  Subsequent changes in status (including, without limitation, change of title or responsibilities, retirement or termination of employment) do not affect the Company’s rights to recover awards under the policy.  The Committee will administer this policy and exercise its discretion and business judgment in the fair application of this policy based on the facts and circumstances as it deems relevant in its sole

  

  

  

discretion.  More specifically, the Committee shall determine in its discretion any appropriate amounts to recoup, and the timing and form of recoupment; provided that any recoupment shall not exceed that number of Restricted Share Units equal to the difference between the number of Restricted Share Units that originally were deemed vested over the amount that would have vested based on the actual, restated financial statements or actual level of the applicable financial or performance metrics as determined by the Committee in its sole discretion.  If Executive no longer holds the vested Restricted Share Units subject to recoupment hereunder, Executive shall pay to the Company the fair market value of the Common Stock underlying the Restricted Share Units that would have otherwise been recouped.

For avoidance of doubt, the Company may offset the amounts of any such required recoupment against any amounts otherwise owed by a Participant to the Company, including by the cancellation of unvested equity awards, in each case as determined by the Committee in its sole discretion.

If any restatement of the Company’s financial results indicates that the Company should have confirmed higher performance-based vesting than that actually made under the LTIP for a period affected by the restatement, then the Committee shall have the discretion to cause the Company to make appropriate incremental vesting to the applicable awards hereunder for effected Participants then-currently employed by the Company.  The Committee will determine, in its sole discretion, the amount, form and timing of any such incremental vesting, which shall be no more than that number of Restricted Share Units equal to the difference between the amount of Restricted Share Units that originally were deemed vested and the amount of Restricted Share Units that would have been vested based on the actual, restated financial statements.

Effective Date

This LTIP shall be effective as of March 7, 2012 (the “Effective Date”).

  

  

  

Schedule A

2012 LTIP Performance Goal Weighting:

	
Participant

	
Share Price

	
Operating Profit

	
CEO

	
50%

	
50%

	
CFO

	
50%

	
50%

	
Metric

	 	
Threshold Performance

	 	 	
Target Performance

	 	 	
Maximum Performance

	 
	
Share Price1

	 	$	29.29	 	 	$	32.54	 	 	$	39.75	 
	
Operating Profit2

	 	$	58,663,000	 	 	$	67,286,000	 	 	$	85,831,000	 

2012 LTIP Performance Targets:

 

1 For purposes of calculating performance, Share Price means the average of the Fair Market Value of a Company Share for the 20 trading days immediately preceding the end of the Performance Period (which 20 trading days shall include the last day of the Performance Period if the same is a trading day). In determining whether the Share Price targets have been met, the Committee shall adjust the targets to appropriately take into account any dividend or other distribution (whether in the form of cash, Shares, other securities or other property, and other than a normal cash dividend), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of securities or warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event that affects the Shares.

 

2 For purposes of calculating performance, Operating Profit means the total income from operations as reflected on the Company’s Consolidated Statement of Operations for the year ended December 31, 2014 included in its Annual Report on Form 10-K for the period ended December 31, 2014.  In computing total income from operations, the effects of the following shall be excluded: (a) losses and gains related to litigation (or claim) judgments or settlements that are included in income from operations, (b) acquisition costs required to be expensed currently per FAS 141(R), (c) securitizing of accounts receivable, and (d) losses and expenses from any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year, all as reasonably determined in good faith by the Committee.  In the event of a significant acquisition or disposition by the Company during the Performance Period, Operating Profit targets for various levels of performance shall be proportionately adjusted by the Committee.

  

  

  

2012 LTIP Participant Opportunities:

Each Participant in the LTIP is assigned a target award amount expressed in dollars (the “Target Amount”).  The potential payout amounts are based on Threshold, Target and Maximum levels of payout based on the aggregate weighted achievement of the corresponding performance targets for the LTIP Participants as follows:

	
Participant

	 	
Target Amount

	 	 	
Threshold

	 	 	
Target

	 	 	
Maximum

	 
	
CEO

	 	$	800,000	 	 	 	60	%	 	 	100	%	 	 	275	%
	
CFO

	 	$	200,000	 	 	 	60	%	 	 	100	%	 	 	275	%

The potential payout amounts are expressed above as a percentage of the applicable Target Amount and the number of shares eligible to be vested will be determined by dividing the specified amount of the Target Amount by the closing price of the Company’s common stock as reported by the NASDAQ Global Select Market on the grant date, in each case at the applicable weighted aggregate performance level.  Payouts between Threshold and Maximum for Participants shall be calculated by the Committee in its sole discretion using straight-line interpolation.  The finally determined weighted aggregate share payouts shall be deemed to be the Eligible Units under the LTIP.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]