Document:

fmbi_ex10_1

		
			Exhibit 10.1
		

		
			
		

		
			2018 STOCK AND INCENTIVE PLAN
		

		
			(As approved by the stockholders May 16, 2018)
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

		

			 

		

 

		

		
			TABLE OF CONTENTS
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Page

				
	
					
						SECTION 1

					
					
						ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN

					
1
				
	
					
						1.1

					
					
						Establishment

					
1
				
	
					
						1.2

					
					
						Purpose

					
1
				
	
					
						1.3

					
					
						Effective Date

					
1
				
	
					
						SECTION 2

					
					
						DEFINITIONS

					
1
				
	
					
						2.1

					
					
						Definitions

					
1
				
	
					
						2.2

					
					
						Gender and Number

					
4
				
	
					
						SECTION 3

					
					
						ELIGIBILITY AND PARTICIPATION

					
4
				
	
					
						3.1

					
					
						Eligibility and Participation

					
4
				
	
					
						SECTION 4

					
					
						ADMINISTRATION

					
4
				
	
					
						4.1

					
					
						Administration

					
4
				
	
					
						4.2

					
					
						Delegation of Authority

					
4
				
	
					
						4.3

					
					
						Award Agreements

					
4
				
	
					
						SECTION 5

					
					
						STOCK SUBJECT TO PLAN

					
4
				
	
					
						5.1

					
					
						Number of Shares Available for Awards

					
4
				
	
					
						5.2

					
					
						Reuse of Shares

					
5
				
	
					
						5.3

					
					
						Minimum Vesting Period

					
5
				
	
					
						5.4

					
					
						Adjustment in Authorized Shares and Limitations

					
5
				
	
					
						5.5

					
					
						No Repricing Without Stockholder Approval

					
5
				
	
					
						SECTION 6

					
					
						DURATION OF PLAN

					
6
				
	
					
						6.1

					
					
						Duration of Plan

					
6
				
	
					
						SECTION 7

					
					
						STOCK OPTIONS

					
6
				
	
					
						7.1

					
					
						Grant of Options

					
6
				
	
					
						7.2

					
					
						Option Price

					
6
				
	
					
						7.3

					
					
						Exercise of Options

					
6
				
	
					
						7.4

					
					
						Payment

					
6
				
	
					
						7.5

					
					
						Limitations on ISOs

					
6
				
	
					
						7.6

					
					
						Restrictions on Stock Transferability

					
7
				
	
					
						7.7

					
					
						Effect of Termination of Employment

					
7
				
	
					
						7.8

					
					
						Termination of Employment Due to Death, Disability or Retirement

					
7
				
	
					
						7.9

					
					
						Termination of Employment other than Due to Death, Disability or Retirement

					
7
				
	
					
						7.10

					
					
						Nontransferability of Options

					
7
				
	
					
						SECTION 8

					
					
						STOCK APPRECIATION RIGHTS

					
7
				
	
					
						8.1

					
					
						Grant of SARs

					
7
				

		
			 
		

		
			
		

		
			

		 

		

			i

		

 

		

		
			TABLE OF CONTENTS
		

		
			(continued)
		

			
					
						 

					
					
						 

					
					
						Page

				
	
					
						8.2

					
					
						Exercise of SARs

					
7
				
	
					
						8.3

					
					
						Payment of SAR Amount

					
8
				
	
					
						8.4

					
					
						Form and Timing of Payment

					
8
				
	
					
						8.5

					
					
						Term of SAR

					
8
				
	
					
						8.6

					
					
						Effect of Termination of Employment

					
8
				
	
					
						8.7

					
					
						Nontransferability of SARs

					
8
				
	
					
						SECTION 9

					
					
						RESTRICTED STOCK AND RESTRICTED STOCK UNITS

					
8
				
	
					
						9.1

					
					
						Grant of Restricted Stock or Restricted Stock Units

					
8
				
	
					
						9.2

					
					
						Transferability

					
8
				
	
					
						9.3

					
					
						Other Restrictions

					
8
				
	
					
						9.4

					
					
						Voting Rights

					
8
				
	
					
						9.5

					
					
						Dividends and Other Distributions

					
8
				
	
					
						9.6

					
					
						Effect of Termination of Employment

					
9
				
	
					
						9.7

					
					
						Termination of Employment Due to Retirement

					
9
				
	
					
						9.8

					
					
						Termination of Employment Due to Death or Disability

					
9
				
	
					
						9.9

					
					
						Termination of Employment for Reasons other than Death, Disability or Retirement

					
9
				
	
					
						9.10

					
					
						Nontransferability

					
9
				
	
					
						SECTION 10

					
					
						PERFORMANCE UNITS AND PERFORMANCE SHARES

					
9
				
	
					
						10.1

					
					
						Grant of Performance Units or Performance Shares

					
9
				
	
					
						10.2

					
					
						Value of Performance Units and Performance Shares

					
9
				
	
					
						10.3

					
					
						Payment of Performance Units and Performance Shares

					
10
				
	
					
						10.4

					
					
						Form and Timing of Payment

					
10
				
	
					
						10.5

					
					
						Effect of Termination of Employment

					
10
				
	
					
						10.6

					
					
						Termination of Employment Due to Death, Disability or Retirement

					
10
				
	
					
						10.7

					
					
						Termination of Employment for Other Reasons

					
10
				
	
					
						10.8

					
					
						Nontransferability

					
10
				
	
					
						10.9

					
					
						Performance-Based Awards

					
10
				
	
					
						SECTION 11

					
					
						OTHER AWARDS

					
10
				
	
					
						11.1

					
					
						Grant of Other Awards

					
10
				
	
					
						11.2

					
					
						Terms of Other Awards

					
10
				
	
					
						SECTION 12

					
					
						BENEFICIARY DESIGNATION

					
11
				
	
					
						12.1

					
					
						Beneficiary Designation

					
11
				
	
					
						SECTION 13

					
					
						RIGHTS OF EMPLOYEES

					
11
				
	
					
						13.1

					
					
						Employment

					
11
				
	
					
						13.2

					
					
						Participation

					
11
				

		
			 
		

		
			
		

		
			

		 

		

			ii

		

 

		

		
			TABLE OF CONTENTS
		

		
			(continued)
		

			
					
						 

					
					
						 

					
					
						Page

				
	
					
						SECTION 14

					
					
						EFFECT OF CHANGE IN CONTROL; DOUBLE-TRIGGER VESTING

					
11
				
	
					
						14.1

					
					
						In General

					
11
				
	
					
						14.2

					
					
						Definition

					
11
				
	
					
						14.3

					
					
						Vesting if No Substitute Award

					
12
				
	
					
						14.4

					
					
						Substitute Awards

					
12
				
	
					
						14.5

					
					
						Double-Trigger Vesting of Substitute Awards Upon Qualifying Termination

					
13
				
	
					
						SECTION 15

					
					
						AMENDMENT, MODIFICATION AND TERMINATION OF PLAN

					
13
				
	
					
						15.1

					
					
						Amendment, Modification, Suspension and Termination of Plan

					
13
				
	
					
						15.2

					
					
						Amendment or Modification of Awards

					
13
				
	
					
						15.3

					
					
						Effect on Outstanding Awards

					
13
				
	
					
						SECTION 16

					
					
						TAX WITHHOLDING

					
13
				
	
					
						16.1

					
					
						Tax Withholding

					
13
				
	
					
						16.2

					
					
						Share Withholding

					
14
				
	
					
						SECTION 17

					
					
						INDEMNIFICATION

					
14
				
	
					
						17.1

					
					
						Indemnification

					
14
				
	
					
						SECTION 18

					
					
						ADDITIONAL PROVISIONS

					
14
				
	
					
						18.1

					
					
						Requirements of Law

					
14
				
	
					
						18.2

					
					
						Governing Law

					
14
				
	
					
						18.3

					
					
						Other Restrictions, Limitations and Recoupment (Clawback)

					
14
				
	
					
						18.4

					
					
						Election to Defer

					
15
				
	
					
						18.5

					
					
						Code Section 409A

					
15
				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			iii

		

 

		

			 

		

		

		
			Section 1             Establishment, Purpose, and Effective Date of Plan
		

		
			1.1         Establishment.  First Midwest Bancorp, Inc., a Delaware corporation, hereby establishes this “First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan.”
		

		
			1.2         Purpose.  The purpose of the Plan is to advance the interests of the Company by providing to employees additional incentives and motivation toward superior performance of the Company and its Subsidiaries, and by enabling the Company and its Subsidiaries to attract and retain the services of employees upon whose judgment, interest and effort the successful conduct of its operations is largely dependent.
		

		
			1.3         Effective Date.  The Plan shall become effective immediately upon the approval of the stockholders at the Company’s 2018 Annual Meeting of Stockholders.
		

		
			Section 2             Definitions
		

		
			2.1         Definitions.  Whenever used herein, the following terms shall have their respective meanings set forth below:
		

		
			(a)          “Award” means any Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Unit, Performance Share or Other Award granted under this Plan.
		

		
			(b)          “Award Agreement” means the agreement or other writing (which may be framed as a plan, program or notification, and which may be in electronic format) that sets forth the terms and conditions of each Award under the Plan, including any amendment or modification thereof.
		

		
			(c)           “Board” means the Board of Directors of the Company.
		

		
			(d)          “Cause” shall mean any one of the following:
		

		
			(i)           gross misconduct in, or the continued and willful refusal by the Participant (other than as a result of physical or mental incapacity) after written notice by the Company to perform the Participant’s duties for the Company or a Subsidiary; or
		

		
			(ii)           conviction for a felony for a matter related to the Company or a Subsidiary; or
		

		
			(iii)          suspension due to the direction of any authorized bank regulatory agency that the Participant be relieved of his or her duties and responsibilities to the Company or a Subsidiary.
		

		
			(e)          “Code” means the Internal Revenue Code of 1986, as amended from time to time.
		

		
			(f)           “Committee” means the Compensation Committee of the Board of Directors or such other committee appointed from time to time by the Board of Directors to administer this Plan.  The Committee shall consist of three or more independent members of the Board, and shall be qualified to administer the Plan as contemplated by (i) Rule 16b-3 of the Securities Exchange Act of 1934 (or any successor rule), (ii) any rules and regulations of the NASDAQ Global Select Market (or such other stock exchange on which the Stock is traded), and (iii) to the extent applicable, Section 162(m) of the Code, as amended, and the regulations thereunder (or any successor Section and regulations).  Any member of the Committee who does not satisfy the qualifications set out in the preceding sentence may recuse himself or herself from any vote or other action taken by the Committee.
		

		
			(g)          “Company” means First Midwest Bancorp, Inc., a Delaware corporation.
		

		
			(h)          “Director” means a director of the Company or a Subsidiary.
		

		
			(i)           “Disability” means totally and permanently disabled as defined in the First Midwest Bancorp, Inc. Consolidated Pension Plan as in effect on the Effective Date.
		

		
			

		 

		

			1

		

 

		

			 

		

		

		
			(j)           “Effective Date” means the date this Plan is approved by the Company’s stockholders.
		

		
			(k)          “Employee” means an employee of the Company or any of its Subsidiaries, including an employee who is an officer or a Director.
		

		
			(l)           “Fair Market Value” means the average of the highest and lowest prices of the Stock as reported by the Nasdaq Global Select Market on a particular date.  In the event that there are no Stock transactions on such date, the Fair Market Value shall be determined as of the immediately preceding date on which there were Stock transactions.
		

		
			(m)         “Full Value Award” means any Award under the Plan pursuant to which shares may be issued, other than Options and SARs.
		

		
			(n)          “Minimum Vesting Period” means a vesting period of not less than one year.
		

		
			(o)          “Option” means the right to purchase Stock at a stated price for a specified period of time.  For purposes of the Plan, an Option may be either (i) an “Incentive Stock Option,” or “ISO,” within the meaning of Section 422 of the Code, (ii) a “Nonstatutory (Nonqualified) Stock Option,” or “NSO,” or (iii) any other type of option encompassed by the Code.
		

		
			(p)          “Other Award” means an Award, other than a Stock Option, a Stock Appreciation Right, Restricted Stock, a Restricted Stock Unit, a Performance Unit or a Performance Share granted under this Plan, including the right to receive cash bonuses or other cash incentive compensation or Stock or a fixed or variable share denominated unit granted under this Plan or any deferred compensation plan established from time to time by the Company.
		

		
			(q)          “Participant” means any Employee designated by the Committee to participate in the Plan.
		

		
			(r)           “Performance-Based Award” means an Award that is subject to Performance Goals.
		

		
			(s)           “Performance Criteria” means criteria or objectives selected by the Committee, which are to be satisfied or met during the applicable Period of Restriction or performance period, as the case may be, as a condition to or with respect to the determination of the amount of shares of Stock or cash to be paid with respect to Award(s) subject to Performance Criteria.  Performance Goals may, but need not be, based on one or more of the following Performance Criteria:  (i) return measures (including, but not limited to, total stockholder return, return on assets and return on equity), (ii) income or earnings measures (including, but not limited to, earnings per share, net income, net interest income, net interest margin, and non-interest income), (iii) revenue measures, (iv) expense measures (including, but not limited to, expenses, operating efficiencies, efficiency ratios, and non-interest expense), (v) balance sheet measures (including, but not limited to, assets, loans, charge-offs, loan loss reserves, non-performing assets, deposits, asset quality, and investments), (vi) wealth management measures (including, but not limited to, assets under management, held in trust or in custody, client growth, client retention and wealth management fees), (vii) enterprise risk management measures (including, but not limited to, interest-sensitivity gap levels, regulatory compliance, satisfactory internal or external audits and financial ratings), (viii) the Fair Market Value of shares of Stock, (ix) employee, customer or market-related objectives (including, but not limited to, employee satisfaction, customer growth, customer retention, customer satisfaction, number or type of customer relationships, and market share), (x) achievement of balance sheet or income statement objectives, (xi) individual Participant or team performance objectives (including, but not limited to, key performance indicators, strategic or operational objectives, or project or personnel management), or (xii) other financial, accounting or quantitative objectives established by the Committee.
		

		
			(t)           “Performance Goals” means the goals established by the Committee for a Period of Restriction or performance period based upon the Performance Criteria selected by the Committee.  The Performance Criteria and objectives constituting Performance Goals may include adjustments to include or exclude the effects of certain events as may be determined by the Committee, including, but not limited to:  changes in accounting standards or principles, tax law, or other such laws or provisions affecting reported results; an acquisition or divestiture; discontinued operations; claims, judgments or settlements; or other unusual, infrequently occurring or unplanned items, such as restructuring expenses, acquisition expenses, including writedowns or expenses related 

		 

		

			2

		

 

		

			 

		

to goodwill and other intangible assets, stock offerings, and stock repurchases and loan loss provisions.  The Performance Goals may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated or other external or internal measures and may be based on or adjusted for any other objective goals, events, or occurrences established by the Committee.  The Performance Criteria and objectives constituting Performance Goals may be particular to a line of business, Subsidiary, division or other unit or the Company generally.
		

		
			(u)          “Performance Share” means a right to receive a payment in cash or shares of Stock equal to the value of a Performance Share as determined by the Committee based on performance and pursuant to Section 10 of the Plan.
		

		
			(v)           “Performance Unit” means a right to receive a payment equal to the value of a Performance Unit as determined by the Committee based upon performance and pursuant to Section 10 of the Plan.
		

		
			(w)          “Period of Restriction” means the period during which the transfer of shares of Restricted Stock is restricted pursuant to Section 9.2 of the Plan.
		

		
			(x)           “Plan” means the First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan, as set forth herein and any amendments hereto.
		

		
			(y)           “Predecessor Plan” means the First Midwest Bancorp, Inc. Omnibus Stock and Incentive Plan, as from time to time amended.
		

		
			(z)           “Predecessor Plan Award” means an award outstanding under the Predecessor Plan as of the Effective Date.
		

		
			(aa)        “Qualifying Termination” means termination of a Participant’s employment with the Company and all Subsidiaries upon a Change in Control or within the 24 months after a Change in Control, which termination of employment is either by the Company or Subsidiary without cause or by the Participant for good reason.  Whether a termination of employment is without cause or for good reason shall be determined under the terms of the employment agreement to which the Participant is a party or of a severance plan applicable to the Participant.  If the Participant is not a party to an employment agreement or covered by a severance plan, cause shall be determined under the definition of “Cause” set forth in this Plan and good reason shall be determined under the definition, if any, set forth in the Award Agreement.
		

		
			(bb)        “Restricted Stock” means Stock granted to a Participant pursuant to Section 9 of the Plan.
		

		
			(cc)         “Restricted Stock Unit” means a right to receive a payment equal to the value of a share of Stock pursuant to Section 9 of the Plan.
		

		
			(dd)        “Retirement” means termination of employment as an Employee for any reason (other than death or under circumstances determined by the Company or a Subsidiary to be Cause) on or after attaining the age and/or a combination of age and years of service with the Company and/or Subsidiary, if any, provided by the Committee in the applicable Award Agreement, or any amendment or modification thereof, as constituting “Retirement” for purposes of such Award.
		

		
			(ee)        “Rule 16b-3” means Rule 16b-3 or any successor or comparable rule or rules applicable to Awards granted under the Plan promulgated by the Securities and Exchange Commission under Section 16(b) of the Securities Exchange Act of 1934, as amended.
		

		
			(ff)          “SAR” or “Stock Appreciation Right” means the right to receive a payment from the Company equal to the excess of the Fair Market Value of a share of stock at the date of exercise over a specified price fixed by the Committee, which shall not be less than 100% of the Fair Market Value of the Stock on the date of grant.
		

		
			(gg)        “Stock” means the Common Stock, par value $0.01 per share, of the Company.
		

		
			

		 

		

			3

		

 

		

			 

		

		

		
			(hh)        “Subsidiary” means First Midwest Bank and any entity that is a subsidiary corporation of the Company, as that term is defined in Section 424(f) of the Code.
		

		
			2.2         Gender and Number.  Except when otherwise indicated by the context, words in the masculine gender when used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.
		

		
			Section 3             Eligibility and Participation
		

		
			3.1         Eligibility and Participation.  Persons eligible to participate in this Plan include all Employees.  The Committee may from time to time select those Employees to whom Awards shall be granted and shall determine the nature and amount of each Award.  No Employee shall have any right to be granted an Award, or if previously granted an Award, to be granted a subsequent Award under this Plan.
		

		
			Section 4             Administration
		

		
			4.1         Administration.  The Committee shall be responsible for the administration of the Plan.  The Committee, by majority action thereof (whether taken during a meeting or by written consent), shall determine the type or types of Awards to be made under the Plan and shall designate from time to time the Employees who are to be recipients of such Awards.  The Committee is authorized to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan.  Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final and binding and conclusive for all purposes and upon all persons whomsoever.  To the extent deemed necessary or advisable for purposes of Rule 16b-3 or otherwise, the Board may act as the Committee hereunder.
		

		
			4.2         Delegation of Authority.  The Committee may authorize the Chief Executive Officer of the Corporation and other senior officers of the Company to designate Employees to be recipients of Awards, to determine the terms, conditions, form and amount of any such Awards, and to take such other actions that the Committee is authorized to take under this Plan, provided that the Committee may not delegate to any person the authority to grant Awards to, or take other action with respect to, Participants who at the time of such Awards or action are subject to Section 16 of the Exchange Act.  Authority delegated by the Committee under this Section 4.2 shall be exercised in accordance with the provisions of the Plan and any guidelines for the exercise of such authority that may from time to time be established by the Committee.
		

		
			4.3         Award Agreements.  Each Award shall be evidenced by an Award Agreement that shall be signed by an authorized officer of the Company and, if required, by the Participant.  The Award Agreement shall contain such terms and conditions as may be authorized or approved by the Committee.  An Award Agreement and any required signatures thereon or authorization or acceptance thereof may be in electronic format.
		

		
			Section 5             Stock Subject to Plan
		

		
			5.1         Number of Shares Available for Awards.  The total number of shares of Stock that may be issued pursuant to Awards under the Plan may not exceed the sum of (a) 2,000,000 and (b) the number of shares of Stock that are authorized, but not issued (including such shares of Stock subject to outstanding awards), under the Predecessor Plan as of the Effective Date.  The aggregate number of shares of Stock available with respect to Awards under the Plan shall be reduced by one share for each share to which an Award relates.  The exercise or settlement of an Option or SAR reduces the Shares available under the Plan by the total number of Shares to which the exercise or settlement of the Option or SAR relates, not just the net amount of shares of Stock actually issued upon exercise or settlement.  Awards payable or settled solely in cash shall not reduce the number of shares available for issuance under the Plan.  Shares of Stock issued in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its Subsidiaries shall not reduce the number of Shares available for issuance under this Plan.  The number of shares shall be subject to adjustment upon occurrence of any of the events indicated in Section 5.4.  The shares to be delivered under the Plan may consist, in whole or in part, of authorized but unissued Stock or treasury Stock, not reserved for any other purpose.
		

		
			

		 

		

			4

		

 

		

			 

		

		

		
			5.2         Reuse of Shares.  If shares of Stock subject to an outstanding Award under this Plan or a Predecessor Plan Award are not issued, or are cancelled by reason of the failure to earn the shares issuable under, or the forfeiture, termination, surrender, cancellation or expiration of, such Award or Predecessor Plan Award, then the shares of Stock subject to such Award or Predecessor Plan Award shall, to the extent of such non-issuance, forfeiture, termination, surrender, cancellation or expiration, be available for Awards under the Plan.  All Predecessor Plan Awards outstanding on the Effective Date shall continue in full force and effect in accordance with their terms and the Predecessor Plan, and no provision of this Plan shall be deemed to amend or otherwise modify the rights or obligations of the holders of those Predecessor Plan Awards.  In no event shall the following shares of Stock become available for issuance under this Section 5.2:
		

		
			(a)          Shares of Stock tendered or attested as payment of the exercise price of an Option or a Predecessor Plan Award;
		

		
			(b)          Shares of Stock tendered or withheld as payment of withholding taxes with respect to an Award or a Predecessor Plan Award;
		

		
			(c)           Shares of Stock reacquired by the Company using amounts received upon the exercise of an Option; and
		

		
			(d)          Shares of Stock not issued in connection with the exercise or settlement of a SAR.
		

		
			5.3         Minimum Vesting Period.  The Committee shall not grant any Award unless such Award upon grant satisfies the Minimum Vesting Period; provided, however, the Committee may permit vesting prior to the expiration of the Minimum Vesting Period in the event of a Participant’s death or Disability, or the occurrence of a Change in Control, and, provided further, that the Committee may grant Awards that do not satisfy the Minimum Vesting Period relating to an aggregate of five percent (5%) or fewer of the aggregate number of shares of Stock  authorized for issuance under the Plan (which limitation shall be subject to adjustment as provided in Section 5.4 hereof).
		

		
			5.4         Adjustment in Authorized Shares and Limitations.  In the event of any change in the outstanding shares of Stock that occurs after the Effective Date by reason of a Stock dividend or split, recapitalization, merger, consolidation, combination, exchange of shares or other similar corporate change, the aggregate number of shares of Stock available for issuance under Section 5.1, the number of Shares subject to each outstanding Award and the other terms thereof, and the limitations set forth in Section 5.3, shall be adjusted appropriately by the Committee, whose determination shall be conclusive; provided, however, that fractional shares shall be rounded to the nearest whole share.  The Committee, in its sole discretion, may also make appropriate adjustments in the terms of any Awards under the Plan to reflect or related to such changes or distributions and to modify any other terms of outstanding Awards, including modifications of Performance Goals and changes in the length of performance periods.  Any adjustment of any Options or SARs under this Section 5.4 shall be made in a manner so as not to constitute a modification within the meaning of Section 424(h)(3) of the Code and Section 1.409A-1(b)(5)(D) of the regulations promulgated under Section 409A of the Code.  The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under the Plan.  Subject to the provisions of Section 14, without affecting the number of Shares reserved or available hereunder, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with the rules under Section 424 of the Code, where applicable.
		

		
			5.5         No Repricing Without Stockholder Approval.  Notwithstanding anything in the Plan to the contrary, the Committee may not reprice Options or SARs granted under the Plan, nor may any Option or SAR under the Plan be surrendered to the Company as consideration for the grant of a new Option or SAR with a lower exercise price or exchanged for cash or another Award, nor may the Board amend the Plan to permit such repricing or exchange of Options or SARs granted under the Plan, unless the stockholders of the Company provide prior approval for such repricing, surrender, exchange or amendment.  Adjustments pursuant to Section 5.4 shall not be considered a repricing.
		

		
			

		 

		

			5

		

 

		

			 

		

		

		
			Section 6             Duration of Plan
		

		
			6.1         Duration of Plan.  This Plan shall remain in effect, subject to the Board’s right to earlier terminate the Plan pursuant to Section 15 hereof, until all shares of Stock subject to it shall have been issued or acquired pursuant to the provisions hereof.  Notwithstanding the foregoing, no Award may be granted under the Plan on or after the tenth anniversary of the Effective Date.
		

		
			Section 7             Stock Options
		

		
			7.1         Grant of Options.  Subject to the terms and conditions of the Plan, Options may be granted to Participants at any time and from time to time as shall be determined by the Committee.  The Committee shall have complete discretion in determining the number of Options granted to each Participant.  The Committee may grant any type of Option to purchase Stock that is permitted by law at the time of grant.
		

		
			7.2         Option Price.  No Option granted pursuant to the Plan shall have an Option price that is less than the Fair Market Value of the Stock on the date the Option is granted.
		

		
			7.3         Exercise of Options.  Options awarded under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall approve, either at the time of grant of such Options or pursuant to a general determination, and which need not be the same for all Participants.  Each Option that is intended to qualify as an Incentive Stock Option pursuant to Section 422 of the Code, and each Option that is intended to qualify as another type of ISO that may subsequently be authorized by law, shall comply with the applicable provisions of the Code pertaining to such Options.
		

		
			7.4         Payment.  Options shall be exercised by the delivery of a written notice of exercise to the Company, setting forth the number of shares of Stock with respect to which the Option is to be exercised, accompanied by full payment for the Stock.  The Option price upon exercise of any Option shall be payable to the Company in full either:
		

		
			(a)          in cash or its equivalent (including, for this purpose, the proceeds from a broker-assisted, cashless exercise),
		

		
			(b)          by tendering shares of Stock having an aggregate Fair Market Value at the time of exercise equal to the total Option price (including, for this purpose, Stock deemed tendered by attestation of ownership),
		

		
			(c)           by any other means that the Committee determines to be consistent with the Plan’s purpose and applicable law, or
		

		
			(d)          by a combination of (a), (b), and (c).
		

		
			As soon as practicable after receipt of each notice and full payment, the Company shall deliver to the Participant a certificate or certificates (or book-entries) representing the acquired shares of Stock.  For purposes of the foregoing, Fair Market Value shall be determined on the date of Option exercise.  No dividends or dividend equivalent amounts shall be paid with respect to any Options.
		

		
			7.5         Limitations on ISOs.  Not more than 2,000,000 shares of Stock authorized for issuance under this Plan may be issued pursuant to Incentive Stock Options.  The foregoing limitation shall be subject to adjustment under Section 5.4.  Notwithstanding anything in the Plan to the contrary, to the extent required from time to time by the Code, the following additional provisions shall apply to the grant of Options that are intended to qualify as Incentive Stock Options (as such term is defined in Section 422 of the Code):
		

		
			(a)          The aggregate Fair Market Value (determined as of the date the Option is granted) of the shares of Stock with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) shall not exceed $100,000 or such other amount as may subsequently be specified by the Code; provided that, to the extent that such limitation is exceeded, any excess Options (as determined under the Code) shall be deemed to be Nonstatutory (Nonqualified) Stock Options.
		

		
			

		 

		

			6

		

 

		

			 

		

		

		
			(b)          Any Incentive Stock Option authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain or be deemed to contain all provisions required in order to qualify the Options as Incentive Stock Options.
		

		
			(c)           All Incentive Stock Options must be granted prior to March 20, 2028, the tenth anniversary of the date on which this Plan was adopted by the Board.
		

		
			(d)          Unless exercised, terminated, or cancelled sooner, all Incentive Stock Options shall expire no later than ten years after the date of grant.
		

		
			7.6         Restrictions on Stock Transferability.  The Committee shall impose such restrictions on any shares of Stock acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws, under the requirements of any stock exchange upon which such shares of Stock are then listed and under any blue sky or state securities laws applicable to such shares.
		

		
			7.7         Effect of Termination of Employment.  The disposition of each Option held by a Participant in the event of termination of employment as an Employee shall be determined by the Committee and set forth in the applicable Award Agreement or any amendment or modification thereof.  To the extent the applicable Award Agreement or amendment or modification thereof does not expressly provide for such disposition, the disposition of the Option shall be determined in accordance with Sections 7.8 and 7.9 below.
		

		
			7.8         Termination of Employment Due to Death, Disability or Retirement.  In the event the employment of a Participant is terminated by reason of death, Disability or Retirement, any outstanding Options then exercisable may be exercised at any time prior to the expiration date of the Options or within three (3) years after such date of termination of employment, whichever period is shorter.  For purposes of the preceding sentence, in the event such termination is due to death or Disability, then any outstanding Options shall vest 100% and be deemed exercisable in full as of such termination.  However, in the case of Incentive Stock Options, the favorable tax treatment prescribed under Section 422 of the Code shall not be available if such Options are not exercised within three (3) months after the date of termination, or twelve (12) months in the case of death or Disability, provided such Disability constitutes total and permanent disability as defined in Section 22(e)(3) of the Code.
		

		
			7.9         Termination of Employment other than Due to Death, Disability or Retirement.  If the employment of the Participant shall terminate for any reason other than death, Disability or Retirement, the rights under any then outstanding Option granted pursuant to the Plan shall terminate upon the expiration date of the Option or one month after such date of termination of employment, whichever first occurs; provided, however, that in the event such termination of employment occurs after a Change-in-Control (as defined in Section 14.2 of the Plan), the rights under any then outstanding Option granted pursuant to the Plan shall terminate upon the expiration date of the Option or three (3) years after such date of termination of employment, whichever first occurs.  Notwithstanding the foregoing, where termination of employment is involuntarily for Cause, rights under all Options shall terminate immediately upon termination of employment.
		

		
			7.10       Nontransferability of Options.  No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution.  Further, all Options granted to a Participant under the Plan shall be exercisable during his or her lifetime only by such Participant.
		

		
			Section 8             Stock Appreciation Rights
		

		
			8.1         Grant of SARs.  Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee.
		

		
			8.2         Exercise of SARs.  To the extent exercisable and not expired, forfeited, cancelled or otherwise terminated, SARs granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as provided in the applicable Award Agreement, which need not be the same for all Participants.  SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes upon the SARs, which may include, but are not limited to, a corresponding proportional reduction in Options or other Awards granted in tandem with such SARs.
		

		
			

		 

		

			7

		

 

		

			 

		

		

		
			8.3         Payment of SAR Amount.  Upon exercise of the SAR, the holder shall be entitled to receive payment of an amount determined by multiplying:
		

		
			(a)          The difference between the Fair Market Value of a share of Stock at the date of exercise over the price fixed by the Committee at the date of grant (which price shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant), by
		

		
			(b)          The number of shares with respect to which the SAR is exercised.
		

		
			No dividends or dividend equivalent amounts shall be paid with respect to any SARs.
		

		
			8.4         Form and Timing of Payment.  Payment to a Participant of the amount due upon SAR exercise will be made in shares of Stock having a Fair Market Value as of the date of exercise equal to the amount determined under Section 8.3 above, except as the Committee may otherwise provide for the payment in cash in the applicable Award Agreement or any amendment or modification thereof.
		

		
			8.5         Term of SAR.  The term of a SAR granted under the Plan shall not exceed ten years and one day.
		

		
			8.6         Effect of Termination of Employment.  The disposition of each SAR held by a Participant in the event of termination of employment as an Employee shall be determined by the Committee and set forth in the applicable Award Agreement or any amendment or modification thereof.  To the extent the applicable Award Agreement or amendment or modification thereof does not expressly provide for such disposition, the disposition of the SAR shall be determined in the same manner as applicable to Options set forth in Sections 7.8 and 7.9 above.
		

		
			8.7         Nontransferability of SARs.  No SAR granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  Further, all SARs granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
		

		
			Section 9             Restricted Stock and Restricted Stock Units
		

		
			9.1         Grant of Restricted Stock or Restricted Stock Units.  Subject to the terms and conditions of the Plan, the Committee, at any time and from time to time, may grant shares of Restricted Stock or Restricted Stock Units under the Plan to such Participants and in such amounts as it shall determine.  Except as otherwise provided in this Section 9, after the last day of the Period of Restriction (a) Shares of Restricted Stock covered by each Restricted Stock Award made under the Plan shall become freely transferable by the Participant, and (b) the Participant shall be entitled to receive one share of Stock with respect to each Restricted Stock Unit.
		

		
			9.2         Transferability.  Except as provided in Section 9.10 hereof, the shares of Restricted Stock and Restricted Stock Units granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated for such period of time as shall be determined by the Committee and shall be specified in the applicable Award Agreement, or upon earlier satisfaction of other conditions (which may include the attainment of Performance Goals), as specified by the Committee, in its sole discretion, and set forth in the applicable Award Agreement.
		

		
			9.3         Other Restrictions.  The Committee shall impose such other restrictions on any shares of Restricted Stock or Restricted Stock Units granted pursuant to the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal or state securities laws, and may legend the certificates or book-entries representing Restricted Stock to give appropriate notice of such restrictions.
		

		
			9.4         Voting Rights.  Participants holding shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those shares during the Period of Restriction.  A Participant will have no voting rights with respect to Restricted Stock Units.
		

		
			9.5         Dividends and Other Distributions.  Except as otherwise provided in the applicable Award Agreement, during the Period of Restriction, Participants holding shares of Restricted Stock or Restricted Stock Units granted hereunder shall be credited with dividend equivalent amounts equal to all dividends and other distributions 

		 

		

			8

		

 

		

			 

		

paid with respect to those shares of Restricted Stock or the number of shares covered by such Restricted Stock Units while they are so held, and shall be entitled to receive any such dividend equivalent amounts when the Period of Restriction has lapsed.  If any such dividends or distributions are paid in shares of Stock, the shares shall be subject to the same restrictions on transferability as the shares of Restricted Stock or Restricted Stock Units with respect to which they were paid.
		

		
			9.6         Effect of Termination of Employment.  The disposition of each Restricted Stock or Restricted Stock Unit Award held by a Participant in the event of termination of employment as an Employee shall be determined by the Committee and set forth in the applicable Award Agreement or any amendment or modification thereof.  To the extent the applicable Award Agreement or amendment or modification thereof does not expressly provide for such disposition, the disposition of the Restricted Stock or Restricted Stock Unit Award shall be determined in accordance with Sections 9.7, 9.8 and 9.9 below.
		

		
			9.7         Termination of Employment Due to Retirement.  In the event a Participant’s employment terminates due to Retirement, the Period of Restriction applicable to the Restricted Stock or the Restricted Stock Units shall automatically terminate and, except as otherwise provided in Section 9.3, the shares of Restricted Stock shall thereby be free of restrictions and freely transferable; provided, however, that the Committee, in its sole discretion, may waive the restrictions remaining on any or all shares of Restricted Stock or any and all Restricted Stock Units, or add such new restrictions to those shares of Restricted Stock or Restricted Stock Units as it deems appropriate.
		

		
			9.8         Termination of Employment Due to Death or Disability.  In the event a Participant terminates his employment with the Company because of death or Disability during the Period of Restriction, the restrictions applicable to the shares of Restricted Stock or to the Restricted Stock Units pursuant to Section 9.2 hereof shall automatically terminate and, except as otherwise provided in Section 9.3, the shares of Restricted Stock shall thereby be free of restrictions and freely transferable.
		

		
			9.9         Termination of Employment for Reasons other than Death, Disability or Retirement.  In the event that a Participant terminates his employment with the Company for any reason other than those set forth in Sections 9.7 and 9.8 hereof during the Period of Restriction, then any shares of Restricted Stock and any Restricted Stock Units still subject to restrictions at the date of such termination automatically shall be forfeited and returned to the Company; provided, however, that, in the event of an involuntary termination of the employment of a Participant by the Company other than for Cause, the Committee in its sole discretion may waive the automatic forfeiture of any or all such shares or units, and/or may add such new restrictions to such shares of Restricted Stock or Restricted Stock Units as it deems appropriate.
		

		
			9.10       Nontransferability.  No shares of Restricted Stock or Restricted Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution until the termination of the applicable Period of Restriction.  All rights with respect to Restricted Stock or Restricted Stock Units granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
		

		
			Section 10             Performance Units and Performance Shares
		

		
			10.1       Grant of Performance Units or Performance Shares.  Subject to the terms and conditions of the Plan, Performance Units or Performance Shares may be granted to Participants at any time and from time to time as shall be determined by the Committee.  The Committee shall have complete discretion in determining the number of Performance Units or Performance Shares granted to each Participant.
		

		
			10.2       Value of Performance Units and Performance Shares.  Each Performance Unit shall have the initial value set forth in the Award Agreement and each Performance Share initially shall represent one share of Stock.  The Committee shall establish Performance Goals in its discretion, which, depending on the extent to which they are met, will determine the ultimate value of the Performance Unit or number of shares of Stock payable to the Participant.  The time period during which the Performance Goals must be met shall be called a performance period and also is to be determined by the Committee.
		

		
			

		 

		

			9

		

 

		

			 

		

		

		
			10.3       Payment of Performance Units and Performance Shares.  After a performance period has ended, the holder of a Performance Unit or Performance Share shall be entitled to receive the value thereof as determined in accordance with Section 10.2.
		

		
			10.4       Form and Timing of Payment.  Payment in Section 10.3 above shall be made in cash, stock, or a combination thereof as determined by the Committee.  Payment may be made in a lump sum or installments as prescribed by the Committee.  To the extent that dividends or dividend equivalents are credited to Performance Units or Performance Shares, such amounts shall not be paid until the holder of such Performance Units or Performance Shares is entitled to receive the value thereof in accordance with Section 10.3  If any payment is to be made on a deferred basis, the Committee may provide for the payment of dividend equivalents or interest during the deferral period.
		

		
			10.5       Effect of Termination of Employment.  The disposition of each Performance Unit or Performance Share held by a Participant in the event of termination of employment as an Employee, shall be determined by the Committee and set forth in the applicable Award Agreement or any amendment or modification thereof.  To the extent the applicable Award Agreement or amendment or modification thereof does not expressly provide for such disposition, the disposition of the Performance Units or Performance Shares shall be determined in accordance with Sections 10.6 and 10.7 below.
		

		
			10.6       Termination of Employment Due to Death, Disability or Retirement.  In the case of death, Disability or Retirement, the holder of a Performance Unit or Performance Share shall receive pro rata payment based on the number of months’ service during the performance period but based on the achievement of Performance Goals during the entire performance period.  Payment shall be made at the time payments are made to Participants who did not terminate service during the performance period.
		

		
			10.7       Termination of Employment for Other Reasons.  In the event that a Participant terminates employment with the Company for any reason other than death, Disability or Retirement, all Performance Units and Performance Shares shall be forfeited; provided, however, that in the event of an involuntary termination of the employment of the Participant by the Company other than for Cause, the Committee, in its sole discretion, may waive the automatic forfeiture provisions and pay out on a pro rata basis.
		

		
			10.8       Nontransferability.  No Performance Units or Performance Shares granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution until the termination of the applicable performance period.  All rights with respect to Performance Units and Performance Shares granted to a Participant under the Plan shall be exercisable during his or her lifetime only by such Participant.
		

		
			10.9       Performance-Based Awards.  If the Committee determines to grant Performance Units or Performance Shares under this Section 10, or the Committee determines to provide that an Award under Section 7, 8, 9 or 11 shall be a Performance-Based Award, the Committee shall establish the Performance Goal or Performance Goals, the performance period or Period of Restriction and the amount that may be earned under the Award with respect to the achievement of the Performance Goals.  Upon completion of the performance period or Period of Restriction, the Committee shall determine the level of the Performance Goals achieved and the amount of the Award payable as a result thereof.  In making such determination, the Committee may adjust or eliminate the amount payable under the Award to take into account additional factors as the Committee may deem appropriate to the assessment of performance for the performance period.
		

		
			Section 11             Other Awards
		

		
			11.1       Grant of Other Awards.  Subject to the terms and conditions of the Plan, Other Awards (including, but not limited to, cash bonuses and other cash incentive compensation awards) may be granted to Participants at any time and from time to time as shall be determined by the Committee.
		

		
			11.2       Terms of Other Awards.  Other Awards (including, but not limited to, cash bonuses and other cash incentive compensation awards) may be made free-standing or in tandem with, in replacement of, or as alternatives to Awards under Sections 7, 8, 9 or 10 of this Plan or of any other incentive or employee benefit plan of the Company.  An Other Award may provide for payment in cash or in Stock or a combination thereof.  Any cash bonus or other cash 

		 

		

			10

		

 

		

			 

		

incentive compensation awards shall be on such terms and conditions and may have such performance goals as may be determined by the Committee in its discretion.  To the extent that dividends or dividend equivalents are credited under such Other Awards, such amounts shall not be paid until the underlying Other Award is paid.
		

		
			Section 12             Beneficiary Designation
		

		
			12.1       Beneficiary Designation.  Each Participant under the Plan may name, from time to time, any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit.  Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime.  In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
		

		
			Section 13             Rights of Employees
		

		
			13.1       Employment.  Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.
		

		
			13.2       Participation.  No employee shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant.
		

		
			Section 14             Effect of Change in Control; Double-Trigger Vesting
		

		
			14.1       In General.  Notwithstanding any other provision of this Plan to the contrary and except as provided by the Committee in the applicable Award Agreement, the provisions of this Section 14 shall apply in the event of a Change in Control.
		

		
			14.2       Definition.  For purposes of the Plan, a “Change in Control” shall mean any of the following events:
		

		
			(a)          Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a Subsidiary, or (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 25% or more of the total voting power of the then outstanding shares of capital stock of the Company entitled to vote generally in the election of directors (the “Voting Stock”); provided, however, that the following shall not constitute a Change-in-Control:  (A) such person becomes a beneficial owner of 25% of more of the Voting Stock as the result of an acquisition of such stock directly from the Company, or (B) such person becomes a beneficial owner of 25% or more of the Voting Stock as a result of the decrease in the number of outstanding shares caused by the repurchase of shares by the Company, or (C) such person becomes a beneficial owner of 25% or more of the Voting Stock without any plan or intention to seek or affect control of the Company, if such person promptly enters into an irrevocable commitment promptly to divest, and thereafter promptly divests, such shares of Voting Stock so that such person ceases to beneficially own 25% or more of the Voting Stock; provided, further, that in the event a person described in clause (A) or (B) shall thereafter increase (other than in circumstances described in clause (A) or (B)) beneficial ownership of stock representing more than 1% of the Voting Stock, such person shall then be deemed to become a beneficial owner of 25% or more of the Voting Stock for purposes of this paragraph (a), provided such person continues to beneficially own 25% or more of the Voting Stock after such subsequent increase in beneficial ownership; or
		

		
			(b)          During any period of two (2) consecutive years, individuals, who at the beginning of such period constitute the Board of Directors of the Company, and any new director, whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3rds) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or
		

		
			

		 

		

			11

		

 

		

			 

		

		

		
			(c)           The consummation of, a reorganization, merger or consolidation, the sale or other disposition of all or substantially all of the assets, or a similar transaction or series of transactions involving the Company (a “Business Combination”) in each case, unless (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the total voting power represented by the voting securities entitled to vote generally in the election of directors of the Company or the corporation resulting from the Business Combination (including, without limitation, a corporation that as a result of the Business Combination owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), in substantially the same proportions as their ownership immediately prior to the Business Combination of the Voting Stock of the Company, and (2) at least a majority of the members of the board of directors of the Company or such corporation resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or action of the Incumbent Board, providing for such Business Combination; or
		

		
			(d)          The stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.
		

		
			The Board has final authority to determine the exact date on which a Change in Control has been deemed to have occurred under (a), (b), (c) and (d) above.
		

		
			Notwithstanding the foregoing, if the payment of an amount under an Award constitutes the payment of deferred compensation subject to Section 409A of the Code and the time or form of such payment is changed due to a Change in Control, such change in the time or form of payment shall not occur unless the event constituting the Change in Control is also a “change in control event” within the meaning of Code Section 409A and the regulations promulgated thereunder.
		

		
			14.3       Vesting if No Substitute Award.  Upon a Change in Control, except to the extent that another Award meeting the requirements of Section 14.4 (a “Substitute Award”) is provided to the Participant pursuant to Section 5.4 to replace an outstanding Award (the “Substituted Award”):
		

		
			(a)          Each SAR and Option then outstanding shall become fully vested and exercisable;
		

		
			(b)          Any remaining Period of Restriction applicable to Restricted Stock or Restricted Stock Units herein shall automatically terminate and the shares of Restricted Stock shall thereby be free of restrictions and be fully transferable, and distribution of shares of Stock with respect to Restricted Stock Units shall occur pursuant to Section 9.1 above;
		

		
			(c)           Each Award subject to Performance Goals held by the Participant shall be deemed earned and shall be paid to the extent of the greater of (i) the extent, as determined by the Committee, to which the Performance Goals applicable to such performance-based Award have been met during the applicable performance period up through and including the date of the Change in Control or (ii) the target number of shares of stock or target value of such Award established at the date of grant multiplied by the percentage of the performance period that has elapsed as of the date of the Change in Control; and
		

		
			(d)          The treatment of any Other Award shall be as determined by the Committee and reflected in the applicable Award Agreement.
		

		
			14.4       Substitute Awards.  An Award shall meet the conditions of this Section 14.4 (and qualify as a Substitute Award) if:
		

		
			(a)          it has a value at least equal to the value of the Substituted Award;
		

		
			(b)          it relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control; and
		

		
			(c)           its other terms and conditions are not less favorable to the Participant than the terms and conditions of the Substituted Award (including the double-trigger vesting provisions that would apply in the event of a subsequent Change in Control and the provisions of Section 14.5).
		

		
			

		 

		

			12

		

 

		

			 

		

		

		
			Without limiting the generality of the foregoing, the Substitute Award may take the form of a continuation of the Substituted Award if the requirements of the preceding sentence are satisfied.  The determination of whether the conditions of this Section 14.4 are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
		

		
			14.5       Double-Trigger Vesting of Substitute Awards Upon Qualifying Termination.  In the event the Participant has a Qualifying Termination  in connection with or during the period of two (2) years after a Change in Control, all Substitute Awards held by the Participant to the extent not vested as of such Qualifying Termination, shall become fully vested, and if applicable, exercisable and free of restrictions.
		

		
			Section 15             Amendment, Modification and Termination of Plan
		

		
			15.1       Amendment, Modification, Suspension and Termination of Plan.  The Board may terminate the Plan or any portion thereof at any time, and may amend or modify the Plan from time to time in such respects as the Board may deem advisable in order that any Awards thereunder shall conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendment or modification shall, without stockholder approval:
		

		
			(a)          except as provided in Section 5.4, increase the number of shares of Stock which may be issued under the Plan;
		

		
			(b)          expand the types of Awards available to Participants under the Plan;
		

		
			(c)           materially expand the class of persons eligible to participate in the Plan;
		

		
			(d)          delete or limit the provisions in Sections 5.5, 7.2 and 8.3 prohibiting the repricing of Options and SARs, as applicable, or, except as provided under Section 5.4, reduce the price at which shares of Stock may be offered under Options or the grant date price applicable to a SAR; 
		

		
			(e)          extend the termination date for making Awards under the Plan;
		

		
			(f)           amend Section 5.5; or
		

		
			(g)          if such approval is required under (i) the rules and regulations of the NASDAQ Global Select Market or another national exchange on which the Stock is then listed, or (ii) other applicable law, rules or regulations.
		

		
			15.2       Amendment or Modification of Awards.  The Committee may amend or modify any outstanding Awards in any manner to the extent that the Committee would have had the authority under the Plan initially to make such Awards as so modified or amended, including without limitation, to change the date or dates as of which Awards may be exercised, to remove the restrictions on Awards, or to modify the manner in which Awards are determined and paid.  The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 5.4 hereof) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.  The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under the Plan.
		

		
			15.3       Effect on Outstanding Awards.  No such amendment, modification or termination of the Plan pursuant to Section 15.1 above, or amendment or modification of an Award pursuant to Section 15.2 above, shall materially adversely alter or impair any outstanding Awards without the consent of the Participant affected thereby.
		

		
			Section 16             Tax Withholding
		

		
			16.1       Tax Withholding.  The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan.
		

		
			

		 

		

			13

		

 

		

			 

		

		

		
			16.2       Share Withholding.  With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event arising as a result of awards granted hereunder, Participants may elect to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares of Stock having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that would be imposed on the transaction; provided, however, that in the event a deferral election is in effect with respect to the shares deliverable upon exercise of an Option, then the Participant may only elect to have such withholding made from the Stock tendered to exercise such Option.  All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
		

		
			Section 17             Indemnification
		

		
			17.1       Indemnification.  Each person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or By-laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
		

		
			Section 18             Additional Provisions
		

		
			18.1       Requirements of Law.  The granting of Awards and the issuance of shares of Stock upon the exercise of an Option shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
		

		
			18.2       Governing Law.  The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.
		

		
			18.3       Other Restrictions, Limitations and Recoupment (Clawback).  A Participant’s rights, payments, and benefits with respect to any Award shall be subject to reduction, cancellation, forfeiture, or recoupment (clawback), delayed or deferred payment or holding period requirements:
		

		
			(a)          Upon the occurrence of certain events or circumstances specified by the Committee in the applicable Award Agreement, in addition to any otherwise applicable vesting or performance conditions of an Award.  Such events may include, but shall not be limited to, (i) termination of employment for cause, (ii) fraud, illegality or misconduct, (iii) violation of any Company and/or Subsidiary code of ethics, conflict of interest, insider trading or similar policy or code of conduct applicable to the Participant, (iv) breach of any non-competition, non-solicitation, confidentiality, or other restrictive covenant that may apply to the Participant, (v) other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Subsidiaries, (vi) failure to comply with or satisfy risk management requirements or objectives or (vii) requirements of applicable laws, rules or regulations.
		

		
			(b)          In accordance with the forfeiture or repayment provisions of any recoupment (clawback) policy of the Company or any Subsidiary as now in effect or as may be adopted by the Company or any Subsidiary from time to time, or forfeiture or repayment requirements imposed under applicable laws, rules or regulations or any applicable securities exchange listing standards, including, but not limited to, as required by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or as otherwise required under applicable laws, rules or regulations.
		

		
			(c)           If (i) events or circumstances described in such forfeiture or payment provisions or requirements occur, (ii) the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and the Participant knowingly or grossly negligently engaged in the misconduct, knowingly or grossly 

		 

		

			14

		

 

		

			 

		

negligently failed to prevent the misconduct, or is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 (and not otherwise exempted), or (iii) other circumstances subjecting the Participant to the obligation to repay occur.
		

		
			18.4       Election to Defer.  To the extent provided by the Committee under this Plan or an applicable deferral plan established by the Company or a Subsidiary, the receipt of payment of cash or delivery of shares of Stock that would otherwise be due to a Participant pursuant to an Award hereunder, other than Options and SARs, may be deferred at the election of the Participant.  Any such deferral elections and the payment of any amounts so deferred shall be made in accordance with such rules and procedures as the Committee may establish under this Plan or the applicable deferral plan, which rules and procedures shall comply with Section 409A of the Code.
		

		
			18.5       Code Section 409A.  This Plan is intended to comply and shall be administered in a manner that is intended to comply with Code Section 409A and shall be construed and interpreted in accordance with such intent.  To the extent that an Award or the payment, settlement or deferral thereof is subject to Code Section 409A, the Award shall be granted, paid, settled or deferred in a manner that will comply with Section 409A, including regulations or other guidance issued with respect thereto (collectively, “Section 409A”), except as otherwise determined by the Committee.  Any provision of this Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to fail to satisfy Section 409A shall be amended to comply with Section 409A on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A.  In the case of amounts not intended to be deferrals of compensation subject to Section 409A, payment or settlement of amounts under such Awards shall occur not later than March 15 of the year following the year in which the Participant has a legally-binding right to payment or settlement.  In the case of amounts intended to be deferrals of compensation subject to Section 409A, the initial deferral election shall be made and become irrevocable not later than December 31 of the year immediately preceding the year in which the Participant first performs services related to such compensation, provided that the timing of such initial deferral election may be later as provided in Section 409A with respect to initial participation in the Plan and for “performance-based compensation” as defined under Section 409A.  If an amount payable under an Award as a result of the separation from service (other than due to death) occurring while the Participant is a “specified employee” constitutes a deferral of compensation subject to Section 409A, then payment of such amount shall not occur until six (6) months and a day after the date of Participant’s “separation from service” except as permitted under Section 409A.
		

		
			 
		

		 

		

			15ex_114764.htm

Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (“Agreement”) is made as of the 11th day of May, 2018 (the “Effective Date”), between Viveve Medical, Inc., a Delaware corporation (the “Company”), and Scott C. Durbin (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to an employment agreement, dated February 27, 2018 (the “Prior Agreement”), which the Company and the Executive intend to replace with this Agreement; and

 

WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to be employed by the Company on the new terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.        Employment.

 

(a)     Term. The term of this Agreement shall commence on the Effective Date and continue until terminated in accordance with the provisions hereof (the “Term”).

 

(b)     Position and Duties. During the Term, the Executive shall serve as the Chief Executive Officer of the Company, and shall have supervision and control over and responsibility for the day-to-day business and affairs of the Company as may from time to time be prescribed by the Board of Directors of the Company (the “Board”), provided that such duties are consistent with the Executive’s position or other positions that the Executive may hold from time to time. The Executive shall devote substantially all of the Executive’s full working time and efforts to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may serve on other boards of directors, and may receive compensation from such other boards, with the approval of the Board, which shall not be unreasonably withheld and so long as such service does not materially interfere with the Executive’s performance of the Executive’s duties to the Company as provided in this Agreement.

 

2.        Compensation and Related Matters.

 

(a)     Base Salary. The Executive’s initial annual base salary shall be $415,000. The Executive’s base salary shall be reviewed annually by the Board or the Compensation Committee of the Board (the “Compensation Committee”). The base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for executive officers, but no less frequently than semi-monthly. The Executive shall not be required to defer any portion of Base Salary.

 

 

 

 

(b)     Cash Incentive Compensation. During the Term, the Executive shall be eligible to receive annual cash incentive compensation as determined by the Board or the Compensation Committee from time to time. The Executive’s initial target annual cash incentive compensation shall be fifty (50) percent of the Executive’s Base Salary, and shall be subject to such thresholds as set forth in the Company’s then current compensation policy and guidelines applicable to executives. The target annual cash incentive compensation in effect at any given time is referred to herein as the “Target Annual Cash Incentive Compensation.” Except as otherwise provided herein, to earn cash incentive compensation, the Executive must be employed by the Company on the day such cash incentive compensation is paid. Payment of the annual cash incentive compensation shall be made by the Company consistent with the Company’s then current compensation policy and guidelines applicable to executives. The Executive shall be entitled to participate in any other bonus plan established by the Board or the Compensation Committee for executives that is in addition to the Target Annual Cash Incentive Compensation.

 

(c)     Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable and documented expenses incurred by the Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its executive officers.

 

(d)     Equity Grants. Upon the Effective Date, the Company will recommend at the Board’s first regularly scheduled meeting subsequent to the Effective Date that the Board grant the Executive an option to purchase 300,000 shares of the Company’s Common Stock (the “Option”), as of the Effective Date. The exercise price per share of the Option will be determined by the Board based on the fair market value of the Common Stock of the Company on the date the Option is granted. The Option will be subject to the terms and conditions applicable to options granted under the Company’s 2013 Stock Option and Incentive Plan, as amended (the “Plan”), as described in the Plan and the applicable Stock Option Agreement. The Option will be granted as an incentive stock option to the maximum extent possible. The Option shall be subject to the following vesting schedule: 25% of the shares subject to the Option shall vest on the one-year anniversary of the Effective Date, and 1/48th of the shares subject to the Option shall vest monthly thereafter, provided the Executive remains a Service Provider (as defined in the Plan) on all such vesting dates. Each year during the Term, the Board shall review Executive’s equity eligibility.

 

(e)     Other Benefits. During the Term, the Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time, subject to the terms of such plans.

 

(f)     Vacations. During the Term, the Executive shall be entitled to paid vacation in accordance with the Company’s policies and procedures in effect from time to time. The Executive shall also be entitled to all paid holidays given by the Company to its executive officers.

 

3.        Termination. During the Term, the Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

 

(a)     Death. The Executive’s employment hereunder shall terminate upon the Executive’s death, except that such termination shall not affect any vested rights which Executive may have at the time of death pursuant to any insurance or other death benefit plans or agreements of the Company, which shall continue to be governed by the provision of such plans and agreements.

 

2

 

 

(b)     Disability. The Company may terminate the Executive’s employment if the Executive is disabled and unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period. Such termination shall not affect any vested rights which Executive may have at the time of such disability pursuant to any insurance or other disability plans or agreements of the Company, which shall continue to be governed by the provision of such plans and agreements. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Notwithstanding anything to the contrary set forth in this Section 3(b), nothing in this Section 3(b) shall be construed to limit or waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

(c)     Termination by Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean: (i) Executive’s unauthorized use or disclosure of the Company’s Confidential Information (as defined in the Restrictive Covenants Agreement that is defined below), which use or disclosure causes material harm to the Company, (ii) Executive’s material breach of any agreement between Executive and the Company, (iii) Executive’s material failure to comply with the Company’s written policies or rules, (iv) Executive’s conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State, (v) Executive’s gross negligence or willful misconduct, (vi) Executive’s continuing failure to perform assigned duties after receiving written notification of the failure from the Company’s Board of Directors, or (vii) Executive’s failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested Executive’s cooperation. Where the alleged Cause is susceptible of cure, the Company shall provide the Executive with written and reasonable notice specifying the facts constituting the alleged Cause and thirty (30) days opportunity to cure. Should the Company contend that the alleged Cause has not been cured, the Company shall so advise the Executive in writing and shall provide Executive with an opportunity to be heard by the Board before the Board determines whether Cause exists to terminate Executive’s employment pursuant to this subparagraph. Where the alleged Cause is not susceptible of cure, similarly the Company shall provide the Executive with written and reasonable notice specifying the facts constituting the alleged Cause and an opportunity to be heard by the Board before the Board determines whether Cause exists to determine Executive’s employment pursuant to this subparagraph.

 

3

 

 

(d)     Termination Without Cause. The Company may terminate the Executive’s employment hereunder at any time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.

 

(e)     Termination by the Executive. The Executive may terminate the Executive’s employment hereunder at any time for any reason, including but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Executive has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events without the Executive’s consent: (i) a material diminution in the Executive’s responsibilities, authority or duties; (ii) a material diminution from the then-current levels of the Executive’s Base Salary or Target Annual Cash Incentive Compensation, except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all senior management employees of the Company; (iii) a change in the geographic location at which the Executive provides services to the Company to a location that is more than fifty (50) miles from where Executive provides services to the Company on the Effective Date (which for the avoidance of doubt does not include a change of location if the Executive telecommutes and voluntarily relocates or decides to start commuting into the office); or (iv) the material breach of this Agreement by the Company. “Good Reason Process” shall mean that (i) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 90 days after such condition is known to the Executive; (iii) the Executive cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist, or while cured temporarily, recurs; and (v) the Executive terminates the Executive’s employment within twelve (12) months after a Good Reason condition exists. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred solely for that occurrence of that condition and shall not preclude any other future occurrences of any condition from constituting “Good Reason”.

 

(f)     Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

 

(g)     Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b), by the Company for Cause under Section 3(c) or by the Company without Cause under Section 3(d), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Executive under Section 3(e) without Good Reason, 60 days after the date on which a Notice of Termination is given, and (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) with Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

4

 

 

4.        Compensation Upon Termination.

 

(a)      Termination Generally. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement) and unused vacation that accrued through the Date of Termination on or before the time required by law but in no event more than 30 days after the Executive’s Date of Termination; and (ii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Benefit”).

 

(b)      Termination by the Company Without Cause or by the Executive with Good Reason. During the Term, if the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates the Executive’s employment for Good Reason as provided in Section 3(e), then the Company shall pay the Executive the Accrued Benefit. In addition, subject to the Executive resigning as a member of the Board, as applicable, and signing a separation agreement containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement, in a form and manner satisfactory to the Company (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming fully effective no later than sixty (60) days following the Termination Date:

 

(i)       the Company shall pay the Executive an amount equal to twelve (12) months of the Executive’s Base Salary, (prior to any reduction in Base Salary triggering a resignation for Good Reason, if applicable) plus any incentive compensation earned with respect to any completed calendar year period but unpaid as of the Date of Termination (the “Severance Amount”); and

 

(ii)      upon the Date of Termination, notwithstanding any other provision contained in any applicable option agreement or other stock-based award agreement, all stock options and other stock-based awards held by the Executive in which the Executive would have vested if he had remained employed for an additional six (6) months following the Date of Termination shall vest and become exercisable or nonforfeitable as of the Date of Termination; and

 

(iii)     if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment until the earlier of (a) 12 months following the Date of Termination, (b) the end of the Executive’s COBRA health continuation period, or (c) the date the Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (and the Executive’s eligibility for any such benefits shall be promptly reported by the Executive to the Company), in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; and

 

5

 

 

(c)     the amounts payable under Section 4(b)(i) and (iv) shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over 12 months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

5.       Change in Control Payment. The provisions of this Section 5 set forth certain terms of an agreement reached between the Executive and the Company regarding the Executive’s rights and obligations upon the occurrence of a Change in Control (as defined below). These provisions are intended to assure and encourage in advance the Executive’s continued attention and dedication to the Executive’s assigned duties and the Executive’s objectivity during the pendency and after the occurrence of any such event. These provisions shall apply in lieu of, and expressly supersede, the provisions of Section 4(b) regarding severance pay and benefits upon a termination of employment, if such termination of employment occurs within 12 months after the occurrence of any event constituting a Change in Control.

 

(a)      Change in Control. During the Term, if within 12 months after a Change in Control, the Executive’s employment is terminated by the Company (or its successors or assigns) without Cause as provided in Section 3(d) or the Executive terminates the Executive’s employment for Good Reason as provided in Section 3(e), then, subject to the Executive resigning as a member of the Board, as applicable, and signing the Separation Agreement and Release and the Separation Agreement and Release becoming fully effective no later than sixty (60) days following the Termination Date:

 

(i)       the Company shall pay the Executive a lump sum in cash in an amount equal to 1.5 times the sum of (A) the Executive’s then current Base Salary (prior to any reduction in Base Salary triggering a resignation for Good Reason, if applicable or the Executive’s Base Salary in effect immediately prior to the Change in Control, if higher) plus (B) the Executive’s Target Annual Cash Incentive Compensation for the then-current year; and

 

(ii)       except as otherwise expressly provided in any applicable option agreement or other stock-based award agreement, all stock options and other stock-based awards held by the Executive that are subject to time-based vesting shall immediately accelerate and become fully exercisable and/or nonforfeitable as of the Date of Termination; and

 

6

 

 

(iii)     if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment until the earlier of (a) 18 months following the Date of Termination, (b) the end of the Executive’s COBRA health continuation period or (c) the date the Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (and the Executive’s eligibility for any such benefits shall be promptly reported by the Executive to the Company), in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; and

 

(iv)     The amounts payable under this Section 5(a) shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.

 

(b)       Additional Limitation.

 

(i)     Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

 

(ii)     For purposes of this Section 5(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

7

 

 

(iii)     The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 5(b)(i) shall be made, at the expense of the Company, by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

 

(c)      Definitions. For purposes of this Section 5, the following terms shall have the following meanings:

 

“Change in Control” shall mean any of the following:

 

(i)       any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”), any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50 percent or more of the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Board (“Voting Securities”) (in such case other than as a result of an acquisition of securities directly from the Company); or

 

(ii)      the date a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or

 

(iii)     the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than 50 percent of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company.

 

8

 

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of the combined voting power of all of the then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or more of the combined voting power of all of the then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred for purposes of the foregoing clause (i).

 

6.        Section 409A.

 

(a)     Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

 

(b)     All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(c)     To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

9

 

 

(d)     The parties intend that this Agreement will be administered either to comply with the applicable requirements of Section 409A of the Code or satisfy the requirements of an applicable exception thereto. To the extent that any provision of this Agreement is ambiguous as to its compliance with the preceding sentence the provision shall be construed in such a manner so that all payments under such provision either comply with the applicable requirements of Section 409A of the Code or satisfy the requirements of an applicable exception thereto. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). Whenever a payment under this Agreement specifies a payment period, the actual date of payment within such specified period shall be within the sole discretion of the Company, and the Executive shall have no right (directly or indirectly) to determine the year in which such payment is made. With regard to any payments to be made in accordance with the payroll schedule of the Company, in the event of any change in the payroll schedule of the Company, each installment or payment to be made under this Agreement shall be made (according to such new payroll schedule) within thirty (30) days of the payroll date that would apply pursuant to the payroll schedule in effect on the Effective Date.

 

(e)     The parties agree that this Agreement shall be amended, as reasonably requested by either party, and as necessary to fully comply with the applicable provisions of Section 409A of the Code and all related rules and regulations or to satisfy the requirements of an applicable exception thereto in order to preserve the intended economics of the payments and benefits provided to the Executive hereunder.

 

(f)     The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

7.        Confidential Information and Cooperation. 

 

(a)     Restrictive Covenants Agreement. The terms of the Confidential Information and Invention Assignment Agreement, dated February 27, 2018 (the “Restrictive Covenants Agreement”), between the Company and the Executive, attached hereto as Exhibit A, continue to be in full force and effect and are incorporated by reference in this Agreement. The Executive hereby reaffirms the terms of the Restrictive Covenants Agreement as material terms of this Agreement.

 

(b)     Third-Party Agreements and Rights. The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information or the Executive’s engagement in any business. The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party. In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

 

10

 

 

(c)     Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company, excluding any such claims or actions brought or asserted by the Company against Executive. The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 7(c) including reasonable attorney fees for the services of a lawyer of Executive’s choice, as approved by the Board, which approval shall not be unreasonably delayed or withheld. In addition, the Company shall pay Executive a per diem fee equal to Executive’s daily rate of compensation at the time of the cessation of Executive’s employment with the Company hereunder (based on the Base Salary then in effect), for each day that Executive is required to provide assistance to the Company.

 

(d)     Relief. The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in the Restrictive Covenants Agreement or this Section 7, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company. In addition, in the event the Executive breaches the Restrictive Covenants Agreement of this Section 7 during a period when the Executive is receiving severance payments pursuant to Section 4 or Section 5, the Company shall have the right to suspend or terminate such severance payments. Such suspension or termination shall not limit the Company’s other options with respect to relief for such breach and shall not relieve the Executive of the Executive’s duties under this Agreement.

 

(e)     Protected Disclosures and Other Protected Action. Nothing contained in this Agreement limits the Executive’s ability to file a charge or complaint with any federal, state or local governmental agency or commission (a “Government Agency”). In addition, nothing contained in this Agreement limits the Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including the Executive’s ability to provide documents or other information, without notice to the Company, nor do any of the provisions of the Restrictive Covenants Agreement apply to truthful testimony in litigation. If the Executive has executed the Separation Agreement and if (i) Executive files any charge or complaint with any Government Agency and if the Government Agency pursues any claim on the Executive’s behalf, or (ii) any other third party pursues any claim on the Executive’s behalf, the Executive waives any right to monetary or other individualized relief (either individually, or as part of any collective or class action); provided that nothing in this Agreement limits any right the Executive may have to receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission.

 

11

 

 

(f)     Conflict. If there is a conflict between the Restrictive Covenants Agreement and this Agreement, this Agreement controls, provided that the Executive’s obligations under the Restrictive Covenant agreement should be read in conjunction with Executive’s obligations hereunder to effect the greatest restriction possible.

 

8.      Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the state and federal courts of the State of California. Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

9.      Integration. Subject to paragraph 7(f), this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter, including the Prior Agreement, provided that the Restrictive Covenants Agreement remains in full force and effect.

 

10.     Withholding. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

 

11.     Successor to the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees. In the event of the Executive’s death after the Executive’s termination of employment but prior to the completion by the Company of all payments due the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to the Executive’s death (or to the Executive’s estate, if the Executive fails to make such designation).

 

12.     Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

13.     Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

 

12

 

 

14.     Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

15.     Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

 

16.     Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

17.     Governing Law. This Agreement shall be construed under and be governed in all respects by the laws of the State of California, without giving effect to the conflict of laws principles thereof.

 

18.     Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

19.     Successor to Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place. Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.

 

20.     Gender Neutral. Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

 

21.     Legal Counsel. The Executive hereby acknowledges that the Executive has been advised prior to execution of this Agreement, to seek the advice of legal counsel and has retained and sought the advice of legal counsel in connection with this Agreement. Subject to execution of this Agreement and related documentation by the parties, the Company shall reimburse the Executive for legal fees paid by the Executive, but only up to $10,000, for such legal counsel’s review and advice in respect hereof; provided, that the Executive shall provide reasonable documentation in support thereof. The Executive hereby acknowledges that the Executive has carefully reviewed this Agreement, that the Executive knows and understand the terms of the Agreement, that the Executive has been given adequate time to consider whether to execute the Agreement, that the Executive executed this Agreement knowingly and voluntarily as the Executive’s own free act and deed, and that this Agreement was entered into without fraud, duress or economic or other coercion.

 

[Signature Page Follows]

 

13

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

 

	 	Viveve Medical, Inc.
	 	 	 
	 	 	 
	 	By:	 
	 	Its:	 
	 	 	 
	 	Executive
	 	 	 
	 	 	 
	 	/s/ Scott C. Durbin
	 	Scott C. Durbin

 

 

 

 

Exhibit A

 

Restrictive Covenants Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}]]