Document:

Exhibit 10.6

 

ATLANTIC POWER HOLDINGS, INC.
 FOURTH AMENDED AND RESTATED 
 LONG-TERM INCENTIVE PLAN

RECITALS

 

A.                                    The Board initially adopted the Plan on May 10, 2006, which Plan was then approved by the shareholders of the Issuer on June 7, 2006 and implemented by Atlantic Power Holdings, LLC, the predecessor of Atlantic Holdings.

 

B.                                    The Board approved an amended and restated Plan effective April 24, 2007 to reflect certain amendments of an administrative, non-material nature.

 

C.                                    The independent directors of the Board approved the terms of the second amended and restated Plan on April 24, 2008, which amended and restated Plan was then approved by the shareholders of the Issuer on June 4, 2008 and implemented by Atlantic Power Holdings, LLC.

 

D.                                    The Board approved the terms of the third amended and restated Plan on January 29, 2010 for use beginning in the Issuer’s 2010 fiscal year.

 

E.                                    The Board approved the terms of this fourth amended and restated long-term incentive plan effective as of November 5, 2011 to reflect certain amendments necessary or desirable in connection with the completion of the direct and indirect acquisition by the Issuer of all of the limited partnership units of Capital Power Income L.P.

 

F.                                     The first Financial Statement Approval Date for the purposes of this Plan was March 29, 2010.

 

1.                                      PURPOSE

 

The purpose of the Plan is to align the interests of Eligible Persons with those of the holders of common shares (“Common Shares”) of Atlantic Power Corporation (the “Issuer”), to assist in attracting, retaining and motivating key employees of the Issuer and its subsidiaries by making a significant portion of the incentive compensation of key employees directly dependent upon the achievement of key strategic, financial and operational objectives that are critical to ongoing growth and profitability of the Issuer.

 

2.                                      DEFINITIONS

 

In this Plan:

 

“2010 Performance Period” has the meaning set forth in Section 12(a) hereof;

 

“2011 Performance Period” has the meaning set forth in Section 12(a) hereof;

 

“2010 Transition Award” has the meaning set forth in Section 12(a)(i) hereof;

 

“2011 Transition Award” has the meaning set forth in Section 12(a)(ii) hereof;

 

 

“Administrators” refers to the Compensation Committee of the Board or Person(s) to whom the Independent Directors delegate their powers hereunder;

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise;

 

“Associate” has the meaning ascribed by the Securities Act (Ontario);

 

“Atlantic Holdings”  means Atlantic Power Holdings, Inc., a U.S. “C” corporation under the laws of the State of Delaware;

 

“Base Salary” means the base salary paid by the Issuer or any of its subsidiaries to a Participant for his or her services, as the same may be amended from time to time;

 

“Board” the board of directors of the Issuer;

 

“Budget  Date” means the date on which the Board approves the Issuer’s projection of project distributions and the management and administrative budget for its upcoming fiscal year;

 

“Business  Day” means any day, other than a Saturday, Sunday, or a day on which the principal chartered banks located in the Province of Ontario or British Columbia or the State of Massachusetts are not open for business during normal business hours;

 

“Cause” means any conduct by an Eligible Person which would constitute just cause for dismissal as recognized by law in the province or state in which the Eligible Person is employed or, where cause is defined in the employment agreement of an Eligible Person, as defined therein;

 

“CEO” means the Chief Executive Officer of the Issuer;

 

“Change of Control” means the occurrence of any of the following:

 

(a)                                 the sale, lease or transfer to any person or group, in one or a series of related transactions, of the assets of the Issuer or Atlantic Holdings which assets generated more than 50% of Atlantic Holdings’ total cash distributions received from the assets owned, directly or indirectly, by the Issuer in a 12-month period ended on the last day of the most recent fiscal quarter to any person or group;

 

(b)                                 the adoption of a plan related to the liquidation or dissolution of the Issuer or Atlantic Holdings;

 

(c)                                  the acquisition by any person or group of a direct or indirect interest in more than 50% of (i) the Common Shares or the common shares of Atlantic Holdings; or (ii)

 

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the voting power of the Issuer or Atlantic Holdings; by way of purchase, merger, or consolidation or otherwise (other than a creation of a holding company that does not involve a change in the beneficial ownership of Atlantic Holdings  as a result of such transaction);

 

(d)                                 the merger or consolidation of the Issuer or Atlantic Holdings with or into another person or the merger of another person into the Issuer or Atlantic Holdings with the effect that immediately after such transaction the shareholders of the Issuer or the holders of common  shares of Atlantic Holdings immediately prior to such transaction hold, directly or indirectly, less than 50% of the voting control over the person surviving such merger or consolidation, in each case other than the creation of a holding company that does not involve a change in the beneficial ownership of the Issuer or Atlantic Holdings as a result as such transaction; or

 

(e)                                  the Issuer or Atlantic Holdings or any of their shareholders enters into any agreement providing for any of the foregoing, or the date which is 90 days prior to a definitive announcement by the Issuer or Atlantic Holdings of any of the foregoing, whichever is earlier, and the transaction contemplated thereby is ultimately consummated;

 

provided, however, that for the purposes of this Plan, the sale of any Common Shares (or equivalent thereof) of the Issuer (or any successor Person thereto) pursuant to a public offering shall not constitute a Change of Control;

 

“Code” has the meaning set forth in Section 13(i) hereof;

 

“Common Share” means a common share of the Issuer;

 

“Common Share Compensation Arrangement” means a Common Share option, Common Share option plan, employee Common Share purchase plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares to directors, managers, officers and employees of the Issuer or its subsidiaries including a Common Share purchase from treasury which is financially assisted by the Issuer by way of a loan, guarantee or otherwise;

 

“Common Share Ineligible Participant”  means a Participant that does not qualify under applicable exemptions from the requirement to file a prospectus or registration statement in order to issue Common Shares to the Participant on a redemption of Notional Shares under this Plan;

 

“Disability” means an illness, disease, injury, mental or physical disability or similar mental or physical state of a Participant that causes the Participant to be unable to fulfil his or her obligations as an officer or other employee of the Issuer or any of its subsidiaries for a period of 90 consecutive days, or for an aggregate of 180 days in any 365 day period;

 

“Eligible Person” means an officer or other employee of the Issuer or any of its subsidiaries;

 

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“Financial Statement Approval  Date” means for a given fiscal year the date that the Board approves the audited financial statements of the Issuer for such fiscal year of the Issuer, but in no event shall a Financial Statement Approval Date for a given fiscal year be later than the last Business Day of the immediately following fiscal year of the Issuer;

 

“Good Reason” means the occurrence of any one or more of the following events:

 

(a)                                 the assignment to the Participant of any duties inconsistent in any material respect with the Participant’s then position of employment (including status, offices, titles and reporting relationships), authority, duties or responsibilities, or any other action that when taken as a whole results in a diminution in the Participant’s position, authority, duties or responsibilities, excluding for this purpose any isolated, immaterial and inadvertent action not taken in bad faith and which is remedied within seven Business Days after receipt of notice thereof given by the Participant,

 

(b)                                 a reduction in the Participant’s Base Salary without the consent of such Participant or the failure to continue in effect any material benefit or compensation plan, life insurance plan, health and accident plan or disability plan in existence as of the date of this Plan (or a replacement or substitute plan providing the Participant with substantially similar benefits) in which the Participant is participating or the material reduction of the Participant’s benefits under any of such plans (or replacement or substitute plans), or

 

(c)                                  requiring the Participant to be based at any location more than 35 miles from his or her place of employment with the Issuer or any of its subsidiaries on the date immediately prior to the occurrence of the related Change of Control, except for requirements of travel in the ordinary course of the Participant’s duties;

 

“Independent Directors” means those members of the Board who are not members of the management of the Issuer;

 

“Individual  Non-Officer  Pool  Award” has the meaning set forth in Section 9(a) hereof;

 

“Insider Participant” means a Participant who is a “reporting insider” as defined in National Instrument 55-104 — Insider Reporting Requirements and Exemptions, and also includes Associates and Affiliates of the Insider Participant;

 

“Issuer” means Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia;

 

“Market Price per Common Share” means the weighted average Canadian dollar closing price of Common Shares on the TSX for the five days immediately preceding the applicable day;

 

“Net Cash Flow Multiplier” means the percentage multiplier, determined in accordance with Section 8(c) hereof, that is used to calculate the adjustment, if any, to the Non-Officer LTI Pool pursuant to Section 8(b) hereof;

 

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“Net Project Cash Flow” means, for a fiscal year of the Issuer, an amount equal to the total cash distributions received from the assets owned, directly or indirectly, by the Issuer, less management and administrative expenses;

 

“Non-Officer Group” means, collectively, Participants who are not members of the Officer Group;

 

“Non-Officer  LTI Pool” means an amount determined in accordance with Section 8(a) hereof to be available for allocation among the Non-Officer Group for awards hereunder;

 

“Notional  Base  Award” has the meaning set forth in Section 6(a) hereof;

 

“Notional Shares” means notional shares to be issued under the Plan, with each Notional Share notionally representing one Common Share;

 

“Notional Share Account” means an account that shall be maintained by Atlantic  Holdings for each Participant that will show the Notional Shares credited to a Participant from time to time;

 

“Non-Officer TSR Percentage” means the percentage multiplier, determined in accordance with Section 8(c) hereof, that is used to calculate the adjustment, if any, to the Non-Officer LTI Pool pursuant to Section 8(b) hereof;

 

“NYSE” means the New York Stock Exchange;

 

“Officer Adjusted  Award” has the meaning set forth in Section 7(a) hereof;

 

“Officer  Base  Incentive Amount” means the amount that is 100% of an Officer Group member’s Base Salary for a TSR Evaluation Period at the time of the Notional Base Award granted  pursuant to Section 6(a) hereof converted into Canadian dollars based on the closing rate of exchange published by the Bank of Canada on the date of calculation of the Officer Base Incentive Amount;

 

“Officer Group”  means, collectively, the CEO, Chief Financial Officer and the Managing  Director, Asset Management and Acquisitions of the Issuer, and any other senior executive officers of the Issuer that the Administrators may designate as belonging to the Officer Group from time to time;

 

“Officer TSR Percentage” means the percentage multiplier that is applied to the Officer Base Incentive Amount for the purpose of adjusting, if required, the amount of Notional Shares that will vest pursuant to Section 10 hereof, which shall be calculated in accordance with Section 7(b) hereof;

 

“Participant” means an Eligible Person who receives a grant of Notional Shares in accordance with this Plan;

 

“Peer  Group” has the meaning set forth in Section 5(a) hereof;

 

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“Person” means any individual, issuer, partnership, business trust, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity;

 

“Plan” means this Long-Term Incentive Plan, as amended and/or amended and restated from time to time;

 

“Pro Rata Portion” means, in respect of each individual grant of Notional Shares for a certain TSR Evaluation Period, the percentage of Notional Shares deemed to be earned by an Officer Group Participant to the date of the calculation of the Pro Rata Portion, calculated as follows:

 

	
Year of a given TSR   Evaluation Period
    
	
(e.g. 1, 2 or 3) in which   termination of employment occurs*
    
	
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*    For greater certainty, regardless of the month in which termination of employment occurs during a year of a TSR Evaluation Period, the numerator shall be rounded up to that year (e.g. if termination of employment occurs three months into the first year of a TSR Evaluation Period, the numerator shall be 1).

 

“Retirement” means the retirement or resignation of an officer or other employee of the Issuer or a subsidiary of the Issuer from that capacity upon attaining 65 years of age;

 

“Target” has the meaning set forth in Section 8(c) hereof;

 

“TSR” means total shareholder return, which refers to the change in the total value of a Common Share investment in the Issuer over a given period, calculated by comparing the change in the Market Price per Common Share from the first Business Day of the period to the last Business Day of the period, taking into account reinvested dividends on the Common Shares during such period, as may be calculated more particularly by the Administrators from time to time;

 

“TSR  Evaluation  Period” means the period that begins on the first Business Day of each fiscal year of the Issuer and ends on the last Business Day of the 36th month following such date, or such shorter period as may otherwise be provided in this Plan;

 

“TSR Performance List” has the meaning set forth in Section 7(b)(i) hereof;

 

“TSX” means the Toronto Stock Exchange; and

 

“Vesting Date” means the date upon which Notional Shares vest to an Officer Group Participant or Non-Officer Group Participant, as the case may be, pursuant to Sections 10, 11 or 12(c) hereof, as applicable.

 

3.                                      ADMINISTRATION

 

The Plan shall be administered by the Administrators, who will have, except as otherwise provided herein, the sole and complete authority to make all determinations and to take all actions necessary or advisable for the implementation and administration of the Plan,

 

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subject to Sections 17(a) and 24 and, in the case of Participants who are members of the Officer Group, subject to the terms of such Participants’ employment agreements. Subject to Section 15 and other limitations of the Plan, the Administrators shall have the power and authority to:

 

(a)                                 adopt rules and regulations for implementing the Plan;

 

(b)                                 determine when Notional Shares shall be granted to Eligible Persons, the vesting period for each grant of Notional Shares and whether any adjustment(s) (performance-related or otherwise) shall apply prior to vesting of any Notional Shares granted;

 

(c)                                  adjust the size of any previously-approved Non-Officer LTI Pool and the membership in the Non-Officer Group;

 

(d)           interpret and construe the provisions of the Plan;

 

(e)                                  alter or adjust any provision that is expressly provided herein in circumstances so as to operate the Plan as objectively as possible;

 

(f)                                   subject to regulatory requirements, make exceptions to the Plan in circumstances which they determine to be exceptional;

 

(g)                                  impose certain conditions at the date of grant for any Notional Shares, which would have to be met for a Participant to be entitled to redeem Notional Shares granted; and

 

(h)                                 make amendments to the Plan in accordance with Section 17 hereof.

 

All decisions and determinations of the Administrators respecting the Plan shall be binding and conclusive on the Plan and the Participants.

 

4.                                      PARTICIPATION IN THE PLAN

 

(a)                                 Participation Right

 

No person shall be entitled as of right to participate in the Plan and the decision as to who will have the opportunity to participate in the Plan and the extent of such participation shall be made by the Administrators in the case of the Officer Group, and the CEO in the case of the Non-Officer Group, in their sole and absolute discretion.

 

(b)                                 Participation Agreement and Confirmation

 

Participation in the Plan by each Participant is conditional on the Participant signing a Participation Agreement and Confirmation in the form attached hereto as Schedule “A”.

 

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5.                                      GENERAL PERFORMANCE METRICS

 

(a)                                 Peer Group

 

The Peer Group shall be comprised of the entities determined by the Administrators from time to time in their sole discretion (the “Peer  Group”).

 

(b)                                 Net Project Cash Flow

 

On the Budget Date, the  Administrators shall establish the budgeted Net Project Cash Flow for the upcoming fiscal year of the Issuer.

 

6.                                      GRANT OF NOTIONAL BASE AWARD TO OFFICER GROUP PARTICIPANTS

 

(a)                                 Grant of Notional Shares

 

On the first Financial Statement Approval Date that falls within a given TSR Evaluation Period, each Participant who is a member of the Officer Group shall have credited to their Notional Share Account the number of Notional Shares (the “Notional  Base  Award”) that is determined by dividing the Officer Base Incentive Amount (or such other amount as the Administrators may deem appropriate within the scope of their discretion pursuant to Section 3 hereof) by the Market Price per Common Share on such Financial Statement Approval Date.

 

(b)                                 Entitlement to Dividends on Notional Shares

 

Each Notional Share credited to an Officer Group Participant’s Notional Share Account shall receive a distribution equal to the amount of dividends paid per Common Share. Such distributions shall be credited to an Officer Group Participant’s Notional Share Account in the form of additional Notional Shares immediately following any dividend on the Common Shares. The number of Notional Shares to be credited for each dividend will be equal to the amount of the dividend divided by the Market Price per Common Share determined on the payment date for the dividend.  For the purposes of the Plan, any references to an Officer Group Participant’s Notional Shares for a specific TSR Evaluation Period and Notional Base Award shall include Notional Shares credited to such Officer Group Participant’s Notional Share Account in lieu of Common Share dividends pursuant to this Section 6(b).

 

7.                                      CALCULATION OF OFFICER ADJUSTED AWARD

 

(a)                                 Performance Adjustment of Notional Base Award

 

On the Financial Statement Approval Date immediately following each TSR Evaluation Period and prior to the vesting of each Officer Group Participant’s Notional Shares for such TSR Evaluation Period in accordance with Section 10(a) hereof, an adjusted award

 

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of Notional Shares (the “Officer Adjusted Award”) shall be calculated as follows:

 

	
Officer Adjusted   Award
    	
=
    	
Notional Base Award*
    	
X
    	
Officer TSR Percentage**
    

 

*    Includes, for greater certainty, any Notional Shares credited pursuant to Section 6(b) hereof on or after          the date on which the Notional Base Award is initially granted.

 

**    Calculated in accordance with Section 7(b) below.

 

and the Notional Shares in each Officer Group Participant’s Notional Share Account shall be adjusted accordingly to correspond to the Officer Adjusted Award.

 

(b)                                 Calculation of Officer TSR Percentage

 

The Administrators shall calculate the Officer TSR Percentage as follows:

 

(i)                  calculate the TSR in respect of the applicable TSR Evaluation Period, for the Issuer and each member of the Peer Group and list such entities in descending order, beginning with the entity with the highest TSR to the entity with the lowest TSR (the “TSR Performance List”);

 

(ii)               assign to each entity on the TSR Performance List a percentile ranking reflecting its position on such list, where the entity with the highest TSR over the applicable TSR Evaluation Period is given a percentile rank of 100 and each subsequent entity is given a percentile rank decreasing in equal percentile intervals to a percentile rank of 0 for the entity with the lowest TSR over such TSR Evaluation Period; and

 

(iii)            assign an Officer TSR Percentage with the Officer TSR Percentage adjusted on a pro rata basis if the Issuer’s percentile ranking falls between the 25th percentile and the 75th percentile as follows:

 

	
Issuer’s Percentile Rank on
   TSR Performance List
    	
 
    	
Officer
   TSR Percentage
    	
 
    
	
75th percentile or   higher
    	
 
    	
150
    	
%
    
	
50th percentile
    	
 
    	
100
    	
%
    
	
25th percentile
    	
 
    	
50
    	
%
    
	
Below 25th percentile
    	
 
    	
0
    	
%
    

 

8.                                      CALCULATION AND ADJUSTMENT OF NON-OFFICER LTI POOL

 

(a)                                 Initial Determination of Non-Officer LTI Pool

 

On the Financial Statement Approval Date of each fiscal year of the Issuer, the Non-Officer LTI Pool in respect of such fiscal year shall be proposed by the CEO based on the salaries and target long-term incentives of then-current members of the Non-Officer Group and approved by the Administrators.

 

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(b)                                 Performance Adjustment of Non-Officer LTI Pool

 

On the Financial Statement Approval Date immediately following each fiscal year of the Issuer, the Non-Officer LTI Pool shall be adjusted as follows:

 

	
Non-Officer LTI Pool
    	
X
    	
[
    	
2/3 Net Cash Flow 
   Multiplier*
    	
+
    	
1/3 Non-Officer TSR 
   Percentage**
    	
]
    

 

   * Calculated in accordance with Section 8(c) below.

** Calculated in accordance with Section 8(d) below.

 

provided that, subject to Section 8(e) hereof, the Non-Officer LTI Pool shall not be increased pursuant to this Section 8(b) beyond the amount determined by the Administrators pursuant to Section 8(a) hereof.

 

(c)                                  Calculation of Net Cash Flow Multiplier

 

Subject to the transitional provisions in Section 12(d), the CEO shall calculate the Net Cash Flow Multiplier in accordance with the following scale, with the Net Cash Flow Multiplier adjusted on a pro rata basis if the Issuer’s Net Project Cash Flow falls between the budgeted amount set on the applicable Budget Date (the “Target”) and 25% below the Target:

 

	
Net Project Cash Flow
    	
 
    	
Net Cash Flow Multiplier
    	
 
    
	
At or above the Target
    	
 
    	
100
    	
%
    
	
25% below the Target
    	
 
    	
50
    	
%
    
	
More than 25% below the Target
    	
 
    	
0
    	
%
    

 

(d)                                 Calculation of Non-Officer TSR Percentage

 

Subject to the transitional provisions in Section 12(d), the CEO shall calculate the Non-Officer TSR Percentage in accordance with Section 7(b) hereof, except that the following scale shall be used with the Non-Officer TSR Percentage adjusted on a pro rata basis if the Issuer’s percentile ranking falls between the 25th percentile and the 50th percentile:

 

	
Issuer’s Percentile Rank on
   TSR Performance List
    	
 
    	
Non-Officer
   TSR Percentage
    	
 
    
	
50th percentile or   higher
    	
 
    	
100
    	
%
    
	
25th percentile
    	
 
    	
50
    	
%
    
	
Below 25th percentile
    	
 
    	
0
    	
%
    

 

(e)                                  Subsequent Adjustment of Non-Officer LTI Pool

 

Notwithstanding Section 8(b) or anything else contained in this Plan, if the Issuer’s performance during a fiscal year results in it significantly exceeding either the 50th percentile on the TSR Performance List and/or 100% of the Target, then the CEO may request that the Administrators increase the Non-Officer LTI Pool for such fiscal year,

 

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and the Administrators shall have the discretion (as set out in Section 3 hereof) to increase the size of the Non-Officer LTI Pool for such fiscal year.

 

(f)                                   References to Adjusted Non-Officer LTI Pool

 

For greater certainty, for the purposes of the Plan, any references to the Non-Officer LTI Pool for a given fiscal year of the Issuer shall include adjustments thereto made pursuant to Sections 8(b) and 8(e) hereof.

 

9.                                      ALLOCATION OF NON-OFFICER AWARDS

 

(a)                                 Allocation of Non-Officer Awards from Non-Officer LTI Pool

 

Following the Financial Statement Approval Date for a given fiscal year of the Issuer, the CEO, in consultation with the Issuer’s other senior officers, shall have the discretion to allocate to each Participant who is a member of the Non-Officer Group a percentage of the Non-Officer LTI Pool based on such Participant’s performance during such fiscal year (the “Individual  Non-Officer  Pool  Award”).

 

(b)                                 Grant of Notional Shares

 

As soon as possible following the determination of Individual Non-Officer Pool Awards pursuant to Section 9(a) hereof, each Participant that is a member of the Non-Officer Group who receives an Individual Non-Officer Pool Award shall have credited to their Notional Share Account a number of Notional Shares determined by dividing the dollar amount of the Individual Non-Officer LTI Pool Award by the Market Price per Common Share on the day of the award.

 

(c)                                  Entitlement to Dividends on Notional Shares

 

Each Notional Share credited to a Non-Officer Group Participant’s Notional Share Account pursuant to Section 9(b) hereof shall receive dividends equal to the amount of dividends paid per Common Share. Such distributions shall be credited to a Non-Officer Group Participant’s Notional Share Account in the form of additional Notional Shares immediately following any dividend on the Common Shares. The number of Notional Shares to be credited for each dividend will be equal to the amount of the dividend divided by the Market Price per Common Share determined on the payment date for the dividend. For the purposes of the Plan, any references to an Non-Officer Group Participant’s Notional Shares for a specific TSR Evaluation Period shall include Notional Shares issued on such Notional Shares pursuant to this Section 9(c).

 

10.                               VESTING OF NOTIONAL SHARES — OFFICER GROUP

 

(a)                                 Timing

 

Except as otherwise specified herein, an Officer Group Participant’s Officer Adjusted Award shall vest on the last Business Day of the month in which the Financial Statement Approval Date  falls  for the applicable TSR Evaluation Period.

 

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(b)                                 Termination of Employment — Death or Retirement

 

If the employment of an Officer Group Participant is terminated by the death or Retirement of such Participant, the Pro Rata Portion of the Notional Shares credited to such Participant’s Notional Share Account, calculated for each respective TSR Evaluation Period for which Notional Shares have been credited to such Notional Share Account (including, for greater certainty, the 2010 Transition Award and the 2011 Transition Award), shall vest or be deemed to have vested effective the date immediately prior to the date of such Participant’s death or Retirement and the remainder of the Notional Shares in such Participant’s Notional Share Account shall immediately be cancelled and such Participant or, in the event of death, his or her legal representative(s), shall forfeit all rights, title and interest with respect to such Notional Shares.

 

(c)                                  Termination of Employment — Disability

 

If the employment of an Officer Group Participant is terminated due to the Disability of such Participant, the Pro Rata Portion of the Notional Shares credited to such Participant’s Notional Share Account, calculated for each respective TSR Evaluation Period for which Notional Shares have been credited to such Notional Share Account (including, for greater certainty, the 2010 Transition Award and the 2011 Transition Award), shall vest or be deemed to have vested effective the date immediately prior to the date of termination of such Participant’s employment and the remainder of the Notional Shares in such Participant’s Notional Share Account shall immediately be cancelled and such Participant and, if applicable, his or her legal representative(s), shall forfeit all rights, title and interest with respect to such Notional Shares.

 

(d)                                 Termination of Employment — Change of Control

 

If the employment of an Officer Group Participant is terminated following a Change of Control by such Participant for Good Reason or by the Issuer or any of its subsidiaries without Cause, the Pro Rata Portion of the Notional Shares credited to such Participant’s Notional Share Account, calculated for each respective TSR Evaluation Period for which Notional Shares have been credited to such Notional Share Account (including, for greater certainty, the 2010 Transition Award and the 2011 Transition Award), shall vest effective the date immediately prior to the date of such termination of such Participant’s employment and the remainder of the Notional Shares in such Participant’s Notional Share Account shall immediately be cancelled and such Participant shall forfeit all rights, title and interest with respect to such Notional Shares.

 

(e)                                  Termination of Employment for Cause

 

If the employment of an Officer Group Participant is terminated for Cause, such Participant shall, unless otherwise expressly determined by the Administrators in writing, forfeit all rights, title and interest with respect to Notional Shares which have not vested on or prior to such Participant’s termination date. An Officer Group Participant’s termination date shall be such Participant’s last day at work and shall not include any period of statutory or common law notice of termination of employment or period of

 

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salary continuation following such Participant’s termination date for vesting or any other purpose under this Plan.

 

(f)                                   Termination of Employment — Employment Agreement

 

Notwithstanding any provision to the contrary herein, if an Officer Group Participant has entered into an employment agreement with the Issuer or any of its subsidiaries, all Notional Shares credited to such Participant’s Notional Share Account shall vest subject to any vesting provisions set forth in such employment agreement.  For certainty, to the extent there is any conflict or inconsistency between the vesting provisions set out in such Participant’s employment agreement and the vesting provisions set out in this Plan, the vesting provisions of such Participant’s employment agreement shall govern.

 

11.                               VESTING OF NOTIONAL SHARES — NON-OFFICER GROUP

 

(a)                                 Timing

 

Except as otherwise specified herein or as otherwise determined by the Administrators, a Non-Officer Group Participant’s Notional Shares credited to such Non-Officer Group Participant’s Notional Share Account for a given fiscal year of the Issuer shall vest in respect of one-third of such Notional Shares after each of the first three anniversaries of the Financial Statement Approval Date for such fiscal year of the Issuer.

 

(b)                                 Termination of Employment — Death or Retirement

 

If the employment of a Non-Officer Group Participant is terminated by the death or Retirement of such Participant, all Notional Shares credited to such Participant’s Notional Share Account shall vest or be deemed to have vested effective the date immediately prior to the date of such Participant’s death or Retirement.

 

(c)                                  Termination of Employment — Disability

 

If the employment of a Non-Officer Group Participant is terminated due to the Disability of such Participant, all Notional Shares credited to such Participant’s Notional Share Account shall vest on the Vesting Date as if such Participant continued to be actively employed until the Vesting Date.

 

(d)                                 Termination of Employment — Change of Control

 

If the employment of a Non-Officer Group Participant is terminated following a Change of Control, by such Participant for Good Reason or by the Issuer of any of its subsidiaries without Cause prior to the Vesting Date, all Notional Shares credited to such Participant’s Notional Share Account shall vest effective the date immediately prior to the date of such termination of such Participant’s employment.

 

(e)                                  Termination of Employment for Cause

 

If the employment of a Non-Officer Group Participant is terminated for Cause, such Participant shall, unless otherwise expressly determined by the Administrators in writing,

 

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forfeit all rights, title and interest with respect to Notional Shares which have not vested on or prior to such Participant’s termination date. A Non-Officer Group Participant’s termination date shall be such Participant’s last day at work and shall not include any period of statutory or common law notice of termination of employment or period of salary continuation following such Participant’s termination date for vesting or any other purpose under this Plan.

 

(f)                                   Termination of Employment — Employment Agreement

 

Notwithstanding any provision to the contrary herein, if a Non-Officer Group Participant has entered into an employment agreement with the Issuer or any of its subsidiaries, all Notional Shares credited to such Participant’s Notional Share Account shall vest subject to any vesting provisions set forth in such employment agreement. For certainty, to the extent there is any conflict or inconsistency between the vesting provisions set out in such Participant’s employment agreement and the vesting provisions set out in this Plan, the vesting provisions of such Participant’s employment agreement shall govern.

 

12.                               TRANSITIONAL PROVISIONS

 

(a)                                 Transitional Grants to Officer Group

 

In addition to the grant of Notional Shares to Officer Group Participants pursuant to Section 6(a) hereof, on or about the Financial Statement Approval Date for the Issuer’s 2009 fiscal year (March 29, 2010), the following separate special transition awards of Notional Shares shall be granted in respect of the year ended December 31, 2010 (the “2010 Performance Period”) and the year ended December 31, 2011 (the “2011 Performance Period”) to each Officer Group Participant and credited to each Officer Group Participant’s Notional Share Account:

 

(i)      an amount of Notional Shares (including fractional Notional Shares) equal to one-third of the amount that is calculated by dividing the dollar amount of the Officer Base Incentive Amount by the Market Price per Common Share as at the Financial Statement Approval Date for the 2009 fiscal year of the Issuer (the “2010  Transition  Award”); and

 

(ii)     an amount of Notional Shares (including fractional Notional Shares) equal to two-thirds of the amount that is calculated by dividing the dollar amount of the Officer Base Incentive Amount by the Market Price per Common Share as at the Financial Statement Approval Date for the 2009 fiscal year of the Issuer (the “2011  Transition  Award”).

 

(b)                                 Adjustment of 2010 and 2011 Transitional Awards

 

Immediately prior to the vesting of the 2010 Transition Award and 2011 Transition Award, in accordance with Section 12(c) below, the Administrators shall:

 

(i)      multiply the number of Notional Shares in an Officer Group Participant’s Notional Share Account comprising the 2010 Transition Award and the

 

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2011 Transition Award, as applicable, by the Officer TSR Percentage determined in accordance with Section 7(b) hereof, except that:

 

(A)                               for the 2010 Transition Award, the applicable TSR Evaluation Period for the purpose of the determinations required by Section 7(b) hereof shall be the period that begins on January 1, 2010 and ends on December 31, 2010, and

 

(B)                               for the 2011 Transition Award, the applicable TSR Evaluation Period for the purpose of the determinations required by Section 7(b) hereof shall be the period that begins on January 1, 2010 and ends on December 31, 2011; and

 

(ii)     adjust such number of Notional Shares representing the 2010 Transition Award and the 2011 Transition Award, respectively, as set out in Section 7(a) hereof.

 

(c)                                  Transitional Vesting Provisions for Officer Group

 

The Notional Shares comprising the 2010 Transition Award, after the adjustment provided for in Section 12(b) above and including, for greater certainty, any Notional Shares issued pursuant to 6(b) hereof, shall vest on the last Business Day of the month in which the Financial Statement Approval Date falls for the Issuer’s fiscal year ended December 31, 2010, subject to earlier vesting pursuant to Section 10 hereof. The Notional Shares comprising the 2011 Transition Award, after the adjustment provided for in Section 12(b) above and including, for greater certainty, any Notional Shares issued pursuant to 6(b) hereof, shall vest on the last Business Day of the month in which the Financial Statement Approval Date falls for the Issuer’s fiscal year ended December 31, 2011, subject to earlier vesting pursuant to Section 10 hereof.

 

(d)                                 Transitional Calculation of Non-Officer LTI Pool

 

For the years ended December 31, 2010 and 2011 of the Issuer, for the purposes of the calculation of the Non-Officer TSR Percentage pursuant to Section 8(d), the TSR Evaluation Periods set out in Sections 12(b)(i)(A) and (B) above shall apply.

 

13.                               REDEMPTION OF VESTED NOTIONAL SHARES

 

(a)                                 General

 

Effective as of the Vesting Date, Atlantic Holdings shall, subject to Section 13(b) below, forthwith following the applicable Vesting Date, redeem the vested portion of each Participant’s Notional Shares (including fractional Notional Shares) by:

 

(i)      making a lump sum cash payment (net of any applicable withholdings) to each Participant or the Participant’s legal representative, if applicable, in respect of one-third of the Notional Shares to be redeemed; and

 

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(ii)     exchanging two-thirds of the Notional Shares to be redeemed for Common Shares pursuant to Section 13(e) below.

 

(b)                                 Payment of 100% Cash

 

Notwithstanding Section 13(a) above and Section 13(c) below, effective as of the Vesting Date, acting within the scope of their discretion pursuant to Section 3 hereof, the Administrators may elect to cause Atlantic Holdings to redeem the vested portion of each Participant’s Notional Shares (including fractional Notional Shares) by making a lump sum cash payment (net of any applicable withholdings) to each Participant or the Participant’s legal representative, if applicable, in respect of the Notional Shares to be redeemed.

 

(c)                                  Election for 100% of Common Shares

 

Notwithstanding Section 13(a) above and subject to Section 13(b), each Participant that is a member of the Officer Group may elect to redeem vested Notional Shares for 100% Common Shares, provided that the Participant provides written notice of such election at least 30 days prior to the date of such redemption.

 

(d)                                 Redemption from Common Share Ineligible Participants

 

Notwithstanding Sections 13(a) and 13(c) above, effective as of the Vesting Date, acting within the scope of their discretion pursuant to Section 3 hereof, the Administrators shall cause Atlantic Holdings to redeem the vested portion of each Common Share Ineligible Participant’s Notional Shares (including fractional Notional Shares) by making a lump sum cash payment (net of any applicable withholdings) to each Common Share Ineligible Participant or the Participant’s legal representative, if applicable, in respect of 100% of the Notional Shares to be redeemed.

 

(e)                                  Delivery of Common Shares on a Redemption

 

To satisfy its obligation to deliver Common Shares on a redemption of vested Notional Shares, Atlantic Holdings shall, at its option, elect to acquire Common Shares either:

 

(i)      from the Issuer at the Market Price per Common Share; or

 

(ii)     on the TSX or NYSE.

 

(f)                                   Acquisition of Common Shares from the Issuer

 

If Atlantic Holdings elects to acquire Common Shares from the Issuer under Section 13(e)(i) above, the following provisions shall apply:

 

(i)      Upon actual receipt by the Issuer of written notice and payment for the aggregate purchase price for the Common Shares from Atlantic  Holdings, subject to payment of all applicable security transfer, income, withholding or other taxes or other governmental charges and compliance with all applicable securities laws, the Issuer shall issue to Atlantic  Holdings the

 

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applicable number of Common Shares and Atlantic Holdings will use such Common Shares to satisfy the redemption.

 

(ii)               The Issuer shall not be required to issue, and Atlantic Holdings shall not be required to cause the issuance of, fractional Common Shares upon the acquisition of Common Shares pursuant to Section 13(e)(i) above. If any fractional interest in an Common Share would be deliverable upon the acquisition of Common Shares pursuant to Section 13(e)(i) above, Atlantic  Holdings shall, in lieu of delivering, or causing the delivery of, any certificate representing such fractional interest, make a cash payment to the Participant of an amount equal to the fractional interest which would have been issuable multiplied by the Market Price per Common Share, less applicable withholding taxes, if any.

 

(iii)            The Issuer covenants with Atlantic Holdings that it will at all times reserve and keep available out of its authorized Common Shares (if the number thereof is or becomes limited), solely for the purpose of issuing such Common Shares to Atlantic  Holdings in connection with a redemption under this Plan, such number of Common Shares as shall then be deliverable by Atlantic  Holdings under the Plan, to enable and permit Atlantic  Holdings to perform its obligation hereunder to deliver the requisite number of Common Shares to Participants. The Issuer covenants with Atlantic  Holdings that all Common Shares, which shall be so issuable, shall be duly and validly issued as fully-paid and non-assessable upon receipt by the Issuer of fair value consideration for such Common Shares from Atlantic  Holdings in the form of a cash payment.  The Issuer further covenants with Atlantic  Holdings that it shall take all actions and do all things necessary or desirable to enable and permit Atlantic  Holdings, in accordance with applicable law, to perform all of its obligations hereunder.

 

(iv)           Immediately following the acquisition of Common Shares from the Issuer by Atlantic  Holdings to satisfy a redemption of Notional Shares pursuant to Section 13(e)(i) above, the Issuer shall, at its option, using the proceeds of the issuance of Common Shares, either: (A) acquire from Atlantic Holdings common shares or (B) acquire Common Shares on the TSX, such acquisition in (A) or (B) shall be equivalent in number to the number of Common Shares acquired by Atlantic Holdings pursuant to this Section 13(f). Atlantic Holdings covenants with the Issuer that it will at all times reserve and keep available out of its authorized capital a sufficient number of common shares to be issued from treasury to satisfy the acquisition by the Issuer pursuant to this Section 13(f)(iv).

 

(g)                                  Effect of Redemption of Notional Shares

 

A Participant shall have no further rights respecting any Notional Share, which has been redeemed.

 

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(h)                                 Calculation of Cash Payments

 

Lump sum cash payments made under this Section 13 by Atlantic  Holdings to a Participant or a Participant’s legal representative, if applicable, in respect of Notional Shares to be redeemed shall be calculated by multiplying the number of Notional Shares to be redeemed by the Market Price per Common Share as at the Vesting Date, converted into United States dollars based on the closing rate of exchange published by the Bank of Canada on the Vesting Date.

 

(i)                                     Section 409A

 

To the extent that the Plan is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the Plan shall be administered in accordance with Section 409A.  In this regard, to the extent any provision of the Plan is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  Further, if any amount payable hereunder is payable upon a “separation from service” (within the meaning of Section 409A) to a Participant who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service, or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A.

 

14.                               COMMON SHARES SUBJECT TO ISSUANCE UNDER THE PLAN

 

The aggregate number of Common Shares that may be issued under the Plan upon the redemption of Notional Shares is 1,000,000 Common Shares subject to increase or decrease by reason of amalgamation, rights offerings, reclassifications, consolidations or subdivisions, or as may otherwise be permitted by applicable law and the TSX.

 

15.                               LIMIT ON ISSUANCE OF COMMON SHARES

 

Except with the approval of the shareholders of the Issuer given by the affirmative vote of a majority of the votes cast at a meeting of the shareholders of the Issuer, excluding the votes attaching to Common Shares beneficially owned by Insider Participants to whom Common Shares may be issued pursuant to this Plan and their Associates, no Notional Shares shall be credited to any Participant if such credit could result, at any time, in:

 

(a)                                 the number of Common Shares reserved for issuance to Participants pursuant to the redemption of Notional Shares together with any other Common Share Compensation Arrangement exceeding 10% of Common Shares then issued and outstanding;

 

(b)                                 the number of Common Shares issuable to Insider Participants, at any time under this Plan pursuant to the redemption of Notional Shares and any other Common

 

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Share Compensation Arrangements, exceeding 10% of Common Shares then issued and outstanding; or

 

(c)                                  the number of Common Shares issued to Insider Participants, within any one-year period, under this Plan pursuant to the redemption of Notional Shares and any other Common Share Compensation Arrangements, exceeding 10% of Common Shares then issued and outstanding.

 

In the event that the Issuer or any of its subsidiaries purchases Common Shares for cancellation or if Common Shares are separated pursuant to their terms, the Issuer shall be deemed to be in compliance with the foregoing maximum limits, if immediately prior to such purchase, expiration, separation or other extinguishment, the Issuer  was in compliance with such limit.

 

16.                               UNFUNDED PLAN

 

Unless otherwise determined by the Administrators, the Plan shall be unfunded. To the extent a Participant holds any rights by virtue of participation in the Plan, such rights (unless otherwise determined by the Administrators) shall be no greater than the rights of an unsecured general creditor of Atlantic  Holdings.

 

17.                               AMENDMENT

 

(a)                                 The Administrators may amend the Plan or any grant of Notional Shares at any time without the consent of Participants provided that such amendment shall:

 

(i)                                     not operate to materially affect any rights already acquired by a Participant under the Plan, including the vesting terms of any award previously made under the Plan;

 

(ii)                                  be subject to any regulatory approvals including, where required, the approval of the TSX; and

 

(iii)                               not be subject to approval of the Issuer’s shareholders unless such amendment involves:

 

(A)                               any increase in the number of Common Shares reserved for issuance under the Plan;

 

(B)                               any reduction in the pricing of Notional Shares issuable under the Plan or cancellation and reissue of entitlements under the Plan;

 

(C)                               any amendment that extends the term of a TSR Evaluation Period beyond the period contemplated in the Plan;

 

(D)                               amendments to the Eligible Persons under the Plan that may permit the introduction of non-employee directors on a discretionary basis;

 

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(E)                                an amendment which would permit Notional Shares granted under the Plan to be transferable or assignable other than for normal estate settlement purposes; or

 

(F)                                 an amendment to the plan amendment provisions contained in this Section 17.

 

(b)                                 For greater certainty, any amendment to the Plan shall not affect the rights already acquired by a Participant under a previous version of the Plan, and any awards granted under a previous version of the Plan shall continue to be governed by their terms and the terms of the Plan in place at the time of their award.

 

(c)                                  Without amending the Plan, the Administrators may, with the consent of the Participant, approve any variation in terms, including the acceleration of the redemption of Notional Shares held in the Notional Share Accounts of Participants which have not vested.

 

18.                               OPERATION OF PLAN

 

The cost of the operation of the Plan shall be borne by Atlantic  Holdings.

 

19.                               NOTICES

 

All notices under the Plan shall be in writing and if to Atlantic  Holdings shall be delivered to Atlantic  Holdings by first class post to its head office, and if to a Participant, shall be delivered personally or sent by first class post to the Participant at the address which the Participant shall give for the purpose, or failing any such address to the Participant’s last known place of residence.  If a notice is sent by post, service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the same to such address and shall be deemed to be served 48 hours after such posting.

 

20.                               WITHHOLDING

 

The Administrators may adopt and apply rules that will ensure that Atlantic  Holdings and any other person complies with all federal, provincial, foreign, state or local laws relating to the withholding of tax or other levies on employment compensation in relation to payments and distributions contemplated in this Plan. Such parties may withhold the minimum required tax withholding obligation from amounts payable to a Participant, under the Plan or otherwise, and shall have the absolute right to satisfy such minimum required withholding obligation by retaining and selling a number of Common Shares that would otherwise have been issued to a Participant upon a redemption having an aggregate fair market value (as of the date of withholding) that would satisfy the minimum required withholding amount due, or by accepting a sum sufficient from a Participant to indemnify Atlantic  Holdings and any other person for any liability to withhold hereunder.

 

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21.                               INTERPRETATION

 

In this Plan, unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

 

22.                               NO RIGHT OF EMPLOYMENT

 

Neither participation in the Plan nor any action under the Plan shall be construed so as to give any Participant a right to continue as a manager, officer or senior management employee of the Issuer or any of its subsidiaries.

 

23.                               NON-TRANSFERABILITY

 

A Participant shall not be entitled to transfer, assign, charge, pledge or hypothecate, or otherwise alienate, whether by operation of law or otherwise, the Participant’s Notional Shares or any rights the Participant has in the Plan.

 

24.                               TERMINATION

 

The Administrators may at any time terminate the Plan provided that such termination shall not affect any rights of Participants to receive Notional Shares for any Performance Period or partial Performance Period prior to the effective date of such termination.

 

25.                               CHOICE OF LAWS

 

This Plan shall be governed by the laws of the State of Delaware.

 

26.                               ADOPTION AND AMENDMENT AND RESTATEMENT OF THE PLAN

 

This Plan was originally adopted on the 10th day of May, 2006 and approved by the Issuer’s shareholders on the 7th day of June, 2006. The Plan has been amended and restated on the 24th day of April, 2007, the 4th day of June, 2008, the 29th day of January, 2010 and effective as of the 5th of November, 2011.

 

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SCHEDULE “A”

 

FOURTH AMENDED AND RESTATED 
 LONG-TERM INCENTIVE PLAN

 

PARTICIPATION AGREEMENT AND CONFIRMATION

 

[Name of Employee] (“Participant”)

 

Pursuant to the Fourth Amended and Restated Long-Term Incentive Plan (the “Plan”) of Atlantic  Power Holdings, Inc.  (“Atlantic Holdings”) dated as of November 5, 2011 and in consideration of services provided to the Issuer and/or any of its subsidiaries by the Participant in respect of the 20     year, Atlantic  Holdings hereby grants to the Participant                Notional Shares under the Plan.

 

Capitalized terms not defined in this agreement have the meanings given in the Plan.

 

Atlantic  Holdings and the Participant understand and agree that these Notional Shares are subject to the terms and conditions of the Plan (as they exist on the date hereof), all of which are incorporated into and form a part of this agreement.

 

DATED                              , 20       .

 

	
 
    	
ATLANTIC POWER   HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
Name:
   Title:
    

 

 

I agree to the terms and conditions set out herein and confirm and acknowledge that I have not been induced to enter into this agreement or acquire any Notional Shares or any other interest in the Plan or the Issuer by expectation of employment or continued employment with the Issuer or any of its subsidiaries.

 

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    

 

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name (please print)
    

 

22Exhibit 10.4

 

FORM OF [AMENDED AND RESTATED](1)

INDEMNIFICATION AGREEMENT

 

This [Amended and Restated] Indemnification Agreement, effective as of the          day of                   , 20    , by and between Axcelis Technologies, Inc., a Delaware corporation (the “Company”), and                             , the {Title} of the Company (“Indemnitee”) [amends and restates the Indemnification Agreement dated as of                         , 20     by and between the Company and Indemnitee, as previously amended];

 

WHEREAS, the Company and Indemnitee are each aware of the exposure to litigation of officers, directors and representatives of the Company as such persons exercise their duties to the Company;

 

WHEREAS, the Company and Indemnitee are also aware of conditions in the insurance industry that have affected and may affect in the future the Company’s ability to obtain appropriate directors’ and officers’ liability insurance on an economically acceptable basis;

 

WHEREAS, the Company desires to provide adequate protection to its directors and officers against inordinate risks of claims and actions against them arising out of their services on the Company’s behalf so as to continue to benefit from the services of highly qualified, experienced and otherwise competent persons such as Indemnitee;

 

WHEREAS, Indemnitee desires to serve or to continue to serve the Company as an officer and/or director of the Company, or, if requested to do so by the Company, as a director, officer, trustee, employee, representative or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, for so long as the Company continues to provide on an acceptable basis adequate and reliable indemnification against certain liabilities and expenses which may be incurred by Indemnitee; and

 

WHEREAS, Indemnitee may be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”), and the certificate of incorporation and the bylaws of the Company (a) require indemnification of the officers and directors of the Company and (b) expressly provide that the indemnification provisions thereof are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

 

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

 

(1)  Amended and Restated language in brackets was used in agreements with indemnitees who had entered into Indemnification Agreements prior to February 9, 2012 that were subsequently amended and restated to conform to this form.  All Indemnification Agreements entered into after that date do not include the bracketed language.

 

 

1.     INDEMNIFICATION

 

(a)       The Company shall indemnify Indemnitee to the fullest extent permitted by law with respect to Indemnitee’s status or activities (i) as an officer and/or director of the Company and (ii) as a person who is or was serving or has agreed to serve at the request of, for the convenience of, or to represent the interests of, the Company as a director, officer, trustee, employee, fiduciary or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, domestic or foreign, against all judgments, fines and amounts paid in settlement and all Expenses (as hereinafter defined) reasonably incurred by or on behalf of Indemnitee (including all interest, assessments and other charges paid or payable in connection with or in respect of such judgments, fines, amounts paid in settlement and Expenses) in connection with any claim against Indemnitee in or arising out of a Proceeding (as hereinafter defined). The Company shall also indemnify Indemnitee to the fullest extent permitted by applicable law for all Expenses incurred by or on behalf of Indemnitee in connection with the enforcement of Indemnitee’s rights under this Agreement by legal action, arbitration or otherwise. .

 

(b)       As used in this Agreement:

 

(i)    “Expenses” shall mean all attorneys’ fees, retainers, court costs, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, premiums, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, appealing, investigating, being or preparing to be a witness in, or otherwise participating in, any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, including any appeal therefrom.  Expenses also shall include (other than in a Proceeding by or in the right of the Company to procure a judgment in its favor) any deductibles required to be paid by Indemnitee under any director and officer or similar insurance policy maintained by the Company.  Expenses shall not include amounts paid in settlement by Indemnitee or the amount of any judgments or fines against or imposed on Indemnitee.

 

(ii)   “Proceeding” shall mean any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a serving in any of the capacities described in Paragraph 1(a), by reason of any action taken by him (or a failure to take action by him) or of any action (or failure to act) on his part while acting in any such capacity, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement.  If Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding for purposes of this Agreement.

 

(c)        The parties hereto intend that Indemnitee shall be entitled to receive, as determined by Indemnitee, payment to the maximum extent permitted by one or any combination of the following:

 

(i)     the payments provided by the Company’s certificate of incorporation and bylaws as in effect on the date hereof, a copy of the relevant portions of which are attached hereto as

 

 

Exhibit I;

 

(ii)     the payments provided by the Company’s certificate of incorporation and bylaws in effect at the time Expenses are incurred by Indemnitee;

 

(iii)     the payments allowable under Delaware law in effect at the date hereof (or, if Delaware law is hereafter amended to be more favorable to Indemnitee, under Delaware law as hereafter amended);

 

(iv)    the payments allowable under the law of the jurisdiction under which the Company is incorporated at the time Expenses are incurred by Indemnitee;

 

(v)     the payments available under liability insurance obtained by the Company; and

 

(vi)     such other payments as are or may be otherwise available to Indemnitee (including pursuant to this Agreement);

 

provided that, no right to indemnification or to advancement of Expenses arising under a provision of the Company’s certificate of incorporation or bylaws shall be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the Proceeding for which indemnification or advancement of Expenses is sought.

 

Combination of two or more of the payments provided by clauses (i) through (vi) above shall be available to the extent that the Applicable Document, as hereafter defined, does not require that the payments provided therein be exclusive of other payments.  The document or law providing for any of the payments listed in items (i) through (vi) above is referred to in this Agreement as the “Applicable Document.”  The Company hereby undertakes, upon an appropriate determination that Indemnitee is entitled thereto, to use its best efforts to assist Indemnitee, in all proper and legal ways, to obtain the payments selected by Indemnitee under clauses (i) through (vi) above.

 

(d)       For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans for employees of the Company or of any of its subsidiaries without regard to ownership of such plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, trustee, employee, representative or agent of the Company which imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries; references to the masculine shall include the feminine; references to the singular shall include the plural and vice versa; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner consistent with the standards required for indemnification by the Company under the Applicable Documents.

 

2.     INSURANCE

 

The Company shall maintain directors’ and officers’ liability insurance which is at least as favorable to Indemnitee as the policy in effect on the date hereof and for so long as Indemnitee’s services are covered hereunder, provided and to the extent that such insurance is available on a reasonable commercial basis.  However, Indemnitee shall continue to be entitled to the indemnification rights provided hereunder regardless of whether liability or other insurance coverage is at any time obtained or retained by the Company.  Any payments in fact made to Indemnitee under an insurance policy obtained or retained by the Company shall reduce the obligation of the Company to make payments hereunder by the amount of the payments made under any such insurance policy.  In the event

 

 

that insurance becomes unavailable in the amount or scope of coverage of the policy in effect on the date hereof on a reasonable commercial basis and the Company foregoes maintenance of all or a portion of such insurance coverage, the Company shall stand as a self-insurer with respect to the coverage, or portion thereof, not retained, and shall indemnify Indemnitee against any loss arising out of the reduction or cancellation of such insurance coverage.

 

3.     ADVANCEMENT AND PAYMENT OF EXPENSES

 

At Indemnitee’s request, the Company shall advance (or, to the extent previously paid, reimburse) Expenses as and when incurred by or on behalf of Indemnitee after receipt of written notice pursuant to Paragraph 6 hereof and an undertaking in the form of Exhibit II attached hereto by or on behalf of Indemnitee (i) to repay such amounts so paid to or on behalf of Indemnitee if it shall ultimately be determined under the Applicable Document that Indemnitee is required to repay such Expenses and (ii) to reasonably cooperate with the Company concerning the Proceeding.  Expenses shall be advanced or paid by the Company, as applicable, within 15 days of its receipt of such notice, together with reasonable documentation evidencing the amount and nature of such Expenses.  Any advancements or repayments of Expenses and undertakings to repay shall be unsecured and interest free.

 

4.     [Intentionally Omitted]

 

5.     ADDITIONAL RIGHTS

 

(a)       The indemnification provided in this Agreement shall not be exclusive of any other indemnification or right to which Indemnitee may be entitled and shall continue after Indemnitee has ceased to occupy a position as an officer, director or representative as described in Paragraph 1 above with respect to Proceedings relating to or arising out of Indemnitee’s acts or omissions during Indemnitee’s service in such position.

 

(b)       To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

6.     NOTICE AND PROCEDURE FOR INDEMNIFICATION

 

(a)       Indemnitee shall provide to the Company prompt written notice of any Proceeding brought, threatened, asserted or commenced against Indemnitee with respect to which Indemnitee may assert a right to indemnification hereunder; provided that failure to provide such notice shall not in any way limit Indemnitee’s rights under this Agreement.

 

(b)       To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information related thereto as is reasonably available to Indemnitee.

 

(c)        Upon written request by Indemnitee for indemnification pursuant to Paragraph 

 

 

6(b), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel (as hereinafter defined) in a written opinion to the board of directors of the Company (the “Board”), a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within 10 days after such determination.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

 

(d)       In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Paragraph 6(c) hereof, the Independent Counsel shall be selected as provided in this Paragraph 6(d).  If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected.  If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected.  In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined below, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court having jurisdiction or an arbitrator chosen pursuant to Paragraph 10 of this Agreement has determined that such objection is without merit.  Upon the commencement of any legal action or arbitration pursuant to Paragraph 10, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).  The Company shall pay the reasonable fees and Expenses of the Independent Counsel referred to above and shall fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(e)                As used in this Agreement:

 

(i)    “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee, and

 

(ii)   “Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past 5 years 

 

 

preceding the commencement of the Proceeding has been, retained to represent: (A) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (B) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

7.     PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.

 

(a)       In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Paragraph 6(b), and, in connection with the making by any person, persons or entity of any determination contrary to that presumption, the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination before the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)       Subject to Paragraph 10(e), if the person, persons or entity empowered or selected under Paragraph 6 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Paragraph 7(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Paragraph 6(c) hereof and if (A) within 15 days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within 75 days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within 15 days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 60 days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Paragraph 6(c).

 

(c)        The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in accordance with the standards for indemnification set forth in the DGCL.

 

(d)       For purposes of any determination of good faith, Indemnitee shall be deemed 

 

 

to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Company in the course of their duties, or on the advice of legal counsel for the Company or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Company.  The provisions of this Paragraph 7(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(e)        The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

8.     COOPERATION IN DEFENSE AND SETTLEMENT

 

Indemnitee shall not make any admission or effect any settlement with respect to a Proceeding without the Company’s written consent unless Indemnitee shall have determined to undertake Indemnitee’s own defense in such matter and has waived the benefits of this Agreement in writing delivered to the Company.  The Company shall not settle any Proceeding to which Indemnitee is a party in any manner which would impose an Expense on Indemnitee without Indemnitee’s written consent.  Neither Indemnitee nor the Company will unreasonably withhold consent to any proposed settlement.  Indemnitee and the Company shall cooperate to the extent reasonably possible with each other and with the Company’s insurers, in attempts to defend or settle such Proceeding. Nothing in this paragraph shall be construed to limit Indemnitee’s ability in any criminal or civil proceeding to exercise Indemnitee’s constitutional rights or to impose any obligation on Indemnitee to act in any manner contrary to law.

 

9.     ASSUMPTION OF DEFENSE

 

Except as otherwise provided below, to the extent that it may wish, the Company jointly with any other indemnifying party similarly notified will be entitled to assume Indemnitee’s defense in any Proceeding, with counsel mutually satisfactory to Indemnitee and the Company.  After notice from the Company to Indemnitee of the Company’s election so to assume such defense, the Company will not be liable to Indemnitee under this Agreement for Expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ counsel in such Proceeding, but the fees and Expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at Indemnitee’s expense unless:

 

(a)       the employment of counsel by Indemnitee has been authorized by the Company;

 

(b)       counsel employed by the Company initially is unacceptable or later becomes unacceptable to Indemnitee and such unacceptability is reasonable under then existing circumstances;

 

(c)        Indemnitee shall have reasonably concluded that there may be a conflict of interest between Indemnitee and the Company in the conduct of the defense of such Proceeding; or

 

(d)       the Company shall not have employed counsel promptly to assume the defense of such Proceeding.

 

In each of the cases set forth in clauses (a) through (d) above, the fees and Expenses of counsel shall be at the expense of the Company and subject to payment pursuant to this Agreement.  The Company shall not be entitled to assume the defense of Indemnitee in any Proceeding 

 

 

brought by or on behalf of the Company or as to which Indemnitee shall have reached either of the conclusions provided for in clauses (b) or (c) above.

 

10.     ENFORCEMENT

 

(a)       In the event that any dispute or controversy shall arise under this Agreement between Indemnitee and the Company with respect to whether Indemnitee is entitled to indemnification in connection with any Proceeding or with respect to the amount of Expenses incurred, then with respect to each such dispute or controversy Indemnitee may seek to enforce this Agreement exclusively through binding arbitration.  If arbitration is requested, it shall occur in the City of Boston, Commonwealth of Massachusetts, before a single arbitrator agreeable to both parties who shall be an attorney other than an attorney who has, or who is associated with a firm having associated with it an attorney who has, been retained by or performed services for the Company or Indemnitee at any time during the five years preceding the commencement of arbitration.  The arbitration shall be governed by, although not necessarily subject to unless requested by both of the parties or as otherwise provided below, the procedures set forth in the Commercial Rules of the American Arbitration Association.  If the parties cannot agree on a designated arbitrator within 15 days after arbitration is requested in writing by either of them, the arbitration shall proceed in the City of Boston, Commonwealth of Massachusetts, before an arbitrator appointed by the American Arbitration Association.  In either case, the arbitration proceeding shall commence promptly.  The award shall be rendered in such form that judgment may be entered thereon in any court having jurisdiction thereof.  The prevailing party shall be entitled to prompt reimbursement of any costs and Expenses (including, without limitation, reasonable attorney’s fees) incurred in connection with such legal action or arbitration provided that Indemnitee shall not be obligated to reimburse the Company unless the arbitrator or court which resolves the dispute determines that Indemnitee acted in bad faith in bringing such action or arbitration.

 

(b)       The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company. It is the Company’s intent that Indemnitee not be required to incur the Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by legal action, arbitration or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder.  Accordingly, and notwithstanding any other provision of this Agreement, the Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within 15 days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, that are incurred by Indemnitee in connection with any action, suit, investigation, arbitration or other proceeding brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policy(ies) maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims.  If Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

 

(c)        In the event that a determination shall have been made pursuant to Paragraph 6 of this Agreement that Indemnitee is not entitled to indemnification, any legal action or arbitration commenced pursuant to this Paragraph 10 shall be conducted in all respects as a de novo trial or arbitration on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any legal action or arbitration commenced pursuant to this Paragraph 10, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

(d)       If a determination shall have been made pursuant to Paragraph 6 of this 

 

 

Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any legal action or arbitration commenced pursuant to this Paragraph 10, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(e)        Notwithstanding anything in this Agreement to the contrary, no determination as to Indemnitee’s entitlement to indemnification under this Agreement shall be required to be made before the final disposition of the respective Proceeding.

 

8.     EXCLUSIONS

 

Notwithstanding the scope of indemnification which may be available to Indemnitee from time to time under an Applicable Document, no indemnification, reimbursement or payment shall be required of the Company hereunder with respect to:

 

(a)       any claim or any part thereof as to which Indemnitee shall have been adjudged by a court of competent jurisdiction from which no appeal is or can be taken, by clear and convincing evidence, to have acted or failed to act with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company;

 

(b)       any claim or any part thereof arising under Section 16(b) of the Exchange Act pursuant to which Indemnitee shall be obligated to pay any penalty, fine, settlement or judgment; or

 

(c)        any Proceeding initiated by Indemnitee without the consent or authorization of the Board of Directors of the Company, provided that this exclusion shall not apply with respect to any claims brought by Indemnitee (i) to enforce Indemnitee’s rights under this Agreement,(ii) in any Proceeding initiated by another person or entity whether or not such claims were brought by Indemnitee against a person or entity who was otherwise a party to such Proceeding, or (iii) in response to any counterclaims brought by the Company or its affiliates in a proceeding initiated by Indemnitee.

 

Nothing in this Paragraph 11 shall eliminate or diminish the Company’s obligations to advance that portion of Indemnitee’s Expenses which represent attorneys’ fees and other costs incurred in defending any Proceeding pursuant to Paragraph 3 of this Agreement.

 

92.     EXTRAORDINARY TRANSACTIONS

 

The Company covenants and agrees that, in the event of any merger, consolidation or reorganization in which the Company is not the surviving entity, any sale of all or substantially all of the assets of the Company or any liquidation of the Company (each such event is hereinafter referred to as an “extraordinary transaction”), the Company shall:

 

(a)       have the obligations of the Company under this Agreement expressly assumed by the survivor, purchaser or successor, as the case may be, in such extraordinary transaction; or

 

(b)       otherwise adequately provide for the satisfaction of the Company’s obligations under this Agreement, in a manner acceptable to Indemnitee.

 

13.     NO PERSONAL LIABILITY

 

Indemnitee agrees that neither the directors nor any officer, employee, representative or agent of the Company shall be personally liable for the satisfaction of the Company’s

 

 

obligations under this Agreement, and Indemnitee shall look solely to the assets of the Company for satisfaction of any claims hereunder.

 

104.                        PERIOD OF LIMITATIONS

 

No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.

 

15.                    SEVERABILITY

 

If any provision, phrase, or other portion of this Agreement should be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, and such determination should become final, such provision, phrase or other portion shall be deemed to be reformed to the extent necessary to conform to applicable law , but only to the extent required to render such provision and the remaining provisions and portions of this Agreement enforceable, and this Agreement as thus amended shall be enforced to give effect to the intention of the parties insofar as that is possible.

 

16.                    SUBROGATION

 

In the event of any payment under this Agreement, the Company shall be subrogated to the extent thereof to all rights to indemnification or reimbursement against any insurer or other entity or person vested in Indemnitee, who shall execute all instruments and take all other action as shall be reasonably necessary for the Company to enforce such rights.

 

17.                    GOVERNING LAW

 

The parties hereto agree that this Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware.

 

18.                    NOTICES

 

All notices, requests, demands and other communications hereunder shall be in writing and shall be considered to have been duly given if delivered by hand and receipted for by the party to whom the notice, request, demand or other communication shall have been directed, or mailed by certified mail, return receipt requested, with postage prepaid:

 

	
(a)  If to the Company, to:
    	
Axcelis   Technologies, Inc.
    
	
 
    	
 
    	
108   Cherry Hill Drive
    
	
 
    	
 
    	
Beverly,   Massachusetts  01915
    
	
 
    	
 
    	
Attention:   Secretary
    
	
 
    	
 
    	
 
    
	
(b)  If to Indemnitee, to:
    	
 
    
	
 
    	
 
    	
Axcelis   Technologies, Inc.
    
	
 
    	
 
    	
108   Cherry Hill Drive
    
	
 
    	
 
    	
Beverly,   MA  01915
    

 

Or to such other or further address as shall be designated from time to time by Indemnitee or the 

 

 

Company to the other.

 

19.                    TERMINATION

 

This Agreement may be terminated by either party upon not less than 60 days’ prior written notice delivered to the other party, but such termination shall not in any way diminish the obligations of the Company hereunder with respect to Indemnitee’s status or any act or omission of Indemnitee before the effective date of the termination, which shall survive termination.

 

20.                    AMENDMENTS

 

This Agreement and the rights and duties of Indemnitee and the Company hereunder may not be amended, modified or terminated except by written instrument signed and delivered by the parties hereto.

 

21.                    BINDING EFFECT

 

This Agreement is and shall be binding upon and shall inure to the benefit of the parties thereto (notwithstanding that Indemnitee may have ceased to serve in any of the capacities described in Paragraph 1(a)) and their respective heirs, executors, administrators, successors and assigns.

 

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

 

	
 
    	
AXCELIS   TECHNOLOGIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[Name]
    

 

 

EXHIBIT I

 

SECTION 10.2 OF THE AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

 

AXCELIS TECHNOLOGIES, INC.

 

(as amended May 6, 2009)

 

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that such person, or a person for whom he or she is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The Corporation shall be required to indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the Corporation. The rights to indemnification and advancement of expenses conferred by this Article shall be presumed to have been relied upon by directors and officers of the Corporation in serving or continuing to serve the Corporation and shall be enforceable as contract rights. Said rights shall not be exclusive of any other rights to which those seeking indemnification may otherwise be entitled. The Corporation may enter into contracts to provide such persons with specific rights to indemnification, which contracts may confer rights and protections to the maximum extent permitted by the DGCL. The Corporation may create trust funds, grant security interests, obtain letters of credit, or use other means to ensure payment of such amounts as may be necessary to perform the obligations provided for in this Article or in any such contract. Any repeal or modification of this Article 10 by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring before such repeal or modification.

 

ARTICLE V OF THE BYLAWS OF

 

AXCELIS TECHNOLOGIES, INC.

(as amended August 8, 2007)

 

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

The corporation shall, to the extent legally permissible, indemnify each person who may serve or who has served at any time as a director or officer of the corporation or of any of its subsidiaries, or who at the request of the corporation may serve or at any time has served as a director, officer or trustee of, or in a similar capacity with, another organization or an employee benefit plan, against all expenses and liabilities (including counsel fees, judgments, fines, excise taxes, penalties and amounts payable in settlements) reasonably incurred by or imposed upon such person in connection with any threatened, pending or completed action, suit or other proceeding, whether civil, criminal, administrative or investigative, in which he may become involved by reason of his serving or having served in such capacity (other than a proceeding voluntarily initiated by such person unless he is successful on the merits, the proceeding was authorized by the corporation or the proceeding seeks a declaratory judgment regarding his own conduct); provided that no indemnification shall be provided for any such person with

 

 

respect to any matter as to which he shall have been finally adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation and, with respect to any criminal action or proceeding, he had reasonable cause to believe his conduct was unlawful or, to the extent such matter relates to service with respect to any employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan; and provided, further, that as to any matter disposed of by a compromise payment by such person, pursuant to a consent decree or otherwise, the payment and indemnification thereof have been approved by the corporation, which approval shall not unreasonably be withheld, or by a court of competent jurisdiction.  Such indemnification shall include payment by the corporation of expenses incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding, upon receipt of an undertaking by the person indemnified to repay such payment if he shall be adjudicated to be not entitled to indemnification under this article, which undertaking may be accepted without regard to the financial ability of such person to make repayment.

 

A person entitled to indemnification hereunder whose duties include service or responsibilities as a fiduciary with respect to a subsidiary or other organization shall be deemed to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation if he acted in good faith in the reasonable belief that his action was in the best interests of such subsidiary or organization or of the participants or beneficiaries of, or other persons with interests in, such subsidiary or organization to whom he had a fiduciary duty.

 

For purposes of determining whether a person is entitled to indemnification hereunder, the termination of any action, suit or other proceeding by judgment, order, settlement (with or without court approval), conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

 

Where indemnification hereunder requires authorization or approval by the corporation, such authorization or approval shall be conclusively deemed to have been obtained, and in any case where a director of the corporation approves the payment of indemnification, such director shall be wholly protected, if:

 

(i)  the payment has been approved or ratified (l) by a majority vote of a quorum of the directors consisting of persons who are not at that time parties to the proceeding, (2) by a majority vote of a committee of two or more directors who are not at that time parties to the proceeding and are selected for this purpose by the full board (in which selection directors who are parties may participate), or (3) by a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote for directors, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the proceeding; or

 

(ii)  the action is taken in reliance upon the opinion of independent legal counsel (who may be counsel to the corporation) appointed for the purpose by vote of the directors or in the manner specified in clauses (l), (2) or (3) of subparagraph (i); or

 

(iii) the payment is approved by a court of competent jurisdiction; or

 

(iv) the directors have otherwise acted in accordance with the standard of conduct set forth in the Delaware General Corporation Law.

 

Any indemnification or advance of expenses under this article shall be paid promptly,

 

 

and in any event within 30 days, after the receipt by the corporation of a written request therefor from the person to be indemnified, unless with respect to a claim for indemnification the corporation shall have determined that the person is not entitled to indemnification.  If the corporation denies the request or if payment is not made within such 30 day period, the person seeking to be indemnified may at any time thereafter seek to enforce his rights hereunder in a court of competent jurisdiction and, if successful in whole or in part, he shall be entitled also to indemnification for the expenses of prosecuting such action.  Unless otherwise provided by law, the burden of proving that the person is not entitled to indemnification shall be on the corporation.

 

The right of indemnification under this article shall be a contract right inuring to the benefit of the directors, officers and other persons entitled to be indemnified hereunder and no amendment or repeal of this article shall adversely affect any right of such director, officer or other person existing at the time of such amendment or repeal.

 

The indemnification provided hereunder shall inure to the benefit of the heirs, executors and administrators of a director, officer or other person entitled to indemnification hereunder.  The indemnification provided hereunder may, to the extent authorized by the corporation, apply to the directors, officers and other persons associated with constituent corporations that have been merged into or consolidated with the corporation who would have been entitled to indemnification hereunder had they served in such capacity with or at the request of the corporation.

 

The right of indemnification under this article shall be in addition to and not exclusive of all other rights to which such director or officer or other persons may be entitled.  Nothing contained in this article shall affect any rights to indemnification to which corporation employees or agents other than directors and officers and other persons entitled to indemnification hereunder may be entitled by contract or otherwise under law.

 

The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, trustee, employee or agent of another corporation, partnership, joint venture, trust, other enterprise or employee benefit plan against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of the General Corporation Law of the State of Delaware.

 

 

EXHIBIT II

 

UNDERTAKING

 

The undersigned (the “Indemnitee”) hereby agrees (i)  to repay any amounts paid to Indemnitee or on Indemnitee’s behalf pursuant to that Indemnification Agreement (the “Indemnification Agreement”) dated as of                                         , by and between Indemnitee and Axcelis Technologies, Inc. (the “Company”) if it shall ultimately be determined in accordance with the Indemnification Agreement that Indemnitee is required to repay Expenses (as defined in the Indemnification Agreement), and (ii) to reasonably cooperate with the Company concerning the Proceeding (as defined in the Indemnification Agreement).

 

	
 
    	
 
    	
INDEMNITEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
							

 

 

List of Current Directors and Executive Officers of Axcelis Technologies, Inc.

to be offered Indemnification Agreements in the form approved by the Board of Directors

on February 9, 2012, to be dated as of February 28, 2012

 

	
Name
    	
 
    	
Title
    
	
Edward   H. Braun
    	
 
    	
Director
    
	
R.   John Fletcher
    	
 
    	
Director
    
	
Stephen   R. Hardis
    	
 
    	
Lead Director
    
	
William   C. Jennings
    	
 
    	
Director
    
	
Joseph   P. Keithley
    	
 
    	
Director
    
	
Patrick   H. Nettles
    	
 
    	
Director
    
	
Mary   G. Puma
    	
 
    	
Chairman, CEO and President
    
	
H.   Brian Thompson
    	
 
    	
Director
    
	
Jay   Zager
    	
 
    	
EVP and Chief Financial Officer
    
	
Kevin   Brewer
    	
 
    	
EVP, Operations
    
	
William   Bintz
    	
 
    	
EVP, Product Development, Engineering and   Marketing
    
	
Lynnette   C. Fallon
    	
 
    	
EVP Legal/HR and General Counsel

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