Document:

EX-10.2

  Exhibit 10.2

  Execution Version

  FIRST AMENDMENT TO CREDIT AGREEMENT

  THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of May 2, 2022 by and between Apartment Income REIT, l.p. (f/k/a AIMCO Properties, L.P.), a Delaware limited partnership, as borrower (“Borrower”), the Guarantors (the “Guarantors” and together with the Borrower, each, individually, a “Loan Party” and collectively, the “Loan Parties”), the lenders party hereto (the “Lenders”) and PNC BANK, NATIONAL ASSOCIATION as administrative agent (“Administrative Agent ”). 

  RECITALS:

  A.	The Loan Parties, the Lenders and Administrative Agent are parties to that certain Credit Agreement by and between them, dated April 14, 2021 (as the same now exists and may be amended, modified, supplemented, extended, renewed, restated, or replaced from time to time, and as amended by this Amendment, the “Credit Agreement”); 

  B.	The Loan Parties have requested a $400,000,000 increase in the aggregate Revolving Credit Commitments in accordance with Section 2.11 of the Credit Agreement (the “Commitment Increase”), along with certain other modifications to the Credit Agreement; and

  C.	Administrative Agent and Lenders have agreed to the Commitment Increase and to make certain modifications to the Credit Agreement upon the terms and subject to the conditions set forth in this Amendment. 

  NOW, THEREFORE, in consideration of the mutual promises herein contained and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

  1.Credit Agreement Definitions.  Unless otherwise expressly defined herein, capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Credit Agreement.

  2.AMENDMENTS TO CREDIT AGREEMENT.  Effective as of the First Amendment Effective Date (as defined below), the Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and by adding the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the Credit Agreement attached as Annex A hereto.

  3.REPRESENTATIONS AND WARRANTIES.  Each Loan Party hereby represents and warrants to the Administrative Agent and the Lenders that, as of the date hereof and after giving effect to the transactions contemplated by this Amendment:

  a.The representations and warranties of Borrower and each other Loan Party contained in Article 6 of the Credit Agreement or in any other Loan Document are true and correct in all material respects (unless qualified by materiality or reference to the absence of a Material Adverse Change, in which event such representations and warranties are true and correct) on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (unless qualified by materiality or reference to the absence of a Material Adverse Change, in which event such representations and warranties are true and correct) as of such earlier date.

  3099804.5

  

   

  a.No event has occurred and is continuing, which constitutes a Potential Default or an Event of Default.

  b.This Amendment has been duly authorized, executed and delivered by the Loan Parties so as to constitute the legal and binding obligation of the Loan Parties, enforceable against each Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, preference or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

  4.CONDITIONS PRECEDENT.  The effectiveness of this Amendment is subject to the conditions precedent that Administrative Agent shall have received the following (the date when such conditions shall have been satisfied or waived, the “First Amendment Effective Date”):

  4.01.Agreement and Other Documents.  This Amendment, and each other document required by Administrative Agent in connection with the execution and delivery of this Amendment by Administrative Agent, duly executed and delivered by the Loan Parties and Administrative Agent;

  4.02.Promissory Notes.  Notes and/or amended and restated Notes, as necessary, reflecting the Commitment Increase, each in form and substance reasonably satisfactory to the Administrative Agent and each Incremental Lender to which such Note is made;

  4.03.Fee Letter.  A fee letter dated on or before the First Amendment Effective Date, duly executed and delivered by the Borrower in favor of each of PNCCM (which was dated and delivered as of April 4, 2022) and Wells Fargo Securities, LLC (which was dated and delivered as of April 4, 2022), and its respective affiliated Lead Lender; 

  4.04.Legal Opinion.  A customary legal opinion of counsel for the Loan Parties addressed to the Administrative Agent and the Lenders dated as of the First Amendment Effective Date and in form and substance reasonably satisfactory to the Administrative Agent;

  4.05.No Material Adverse Change.  Since December 31, 2021, there has been no occurrence of any event, condition or state of facts which would reasonably be expected to result in a Material Adverse Change;

  4.06.Evidence of Authority.  Evidence reasonably satisfactory to the Administrative Agent that all corporate action necessary to authorize the execution, delivery and performance by the Loan Parties of this Amendment shall have been duly and effectively taken; 

  4.07.Constituent Documents.  Evidence reasonably satisfactory to the Administrative Agent that the Loan Parties’ organizational documents and certificates that were previously delivered to the Administrative Agent in connection with the Credit Agreement have not been amended or modified since the date of such delivery; 

  4.08.Legal Due Diligence.  All materials reasonably requested by Administrative Agent in order to complete its environmental, tax, legal, regulatory, insurance, business, intellectual property, information technology, and accounting due diligence, and the results such due diligence shall be acceptable to Administrative Agent in its reasonable discretion; and

  2

   

  

   

  4.09.Fees and Expenses.  In connection with this Amendment, the Administrative Agent shall have received all fees, expenses, and other amounts due and payable under the Loan Documents and in connection with this Amendment and, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Loan Parties hereunder.

  The parties hereto hereby agree that, upon satisfaction or waiver of the conditions precedent in this Section 4, the conditions to the effectiveness of the Commitment Increase shall be deemed satisfied.

   

  5.NO OTHER AMENDMENTS; RATIFICATION OF LOAN DOCUMENTS.  Except for the amendments set forth in Section 2 of this Amendment, (a) the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect and (b) nothing in this Agreement is intended, or shall be construed, to constitute a novation or an accord and satisfaction of the Loan Parties’ Obligations under or in connection with the Credit Agreement or any other Loan Document.  Each Loan Party hereby ratifies, confirms, and reaffirms all of the terms and conditions of the Credit Agreement and each of the other Loan Documents, and further acknowledges and agrees that all of the terms and conditions of the Credit Agreement and such Loan Documents remain in full force and effect, in each case, except as expressly provided in this Amendment.  This Amendment shall constitute a Loan Document for all purposes.

  6.MISCELLANEOUS.  

  6.01.Governing Law.  This Amendment shall be governed by and construed in accordance with the law of the State of New York.

  6.02.Successors and Assigns.  The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

  6.03.Invalid Provisions.  If any provision of this Amendment is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Amendment, such provision shall be fully severable and this Amendment shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Amendment, and the remaining provisions of this Amendment shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Amendment, unless such continued effectiveness of this Amendment, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.  

  6.04.Headings.  Section headings are for convenience of reference only and shall in no way affect the interpretation of this Amendment.

  6.05.Counterparts; Integration; Effectiveness.  This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Amendment and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4, this Amendment shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment.

   

  3

   

  

   

   

  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

   

  
[SIGNATURE PAGE FOLLOWS]

   

  4

   

  

   

  IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written.

  		
	 
	BORROWER:
 

   

  Signature Page to
First Amendment to Credit Agreement

  

   

  		
	 
	APARTMENT INCOME REIT, L.P. f/ka/ AIMCO Properties, L.P., a Delaware limited partnership
 
By:  AIR-GP, INC. f/k/a AIMCO-GP, Inc., a Delaware corporation,
its general partner
 
By:
Name:	Paul Beldin
Title:	Executive Vice President and Chief Financial Officer
 
GUARANTORS:
 
APARTMENT INCOME REIT CORP.,
a Maryland corporation
 
By:
Name:	Paul Beldin
Title:	Executive Vice President and Chief Financial Officer
 
AIR REIT SUB 1, LLC, a Delaware limited liability company
 
By:
Name:	Paul Beldin
Title:	Executive Vice President and Chief Financial Officer
 
AIR REIT SUB 2, LLC, a Delaware limited liability company
 
By:
Name:	Paul Beldin
Title:	Executive Vice President and Chief Financial Officer
 
 
 
 
 
 
AIR/BETHESDA HOLDINGS, INC. f/k/a AIMCO/Bethesda Holdings, Inc., a Delaware corporation
 
By:
Name:	Paul Beldin

   

  Signature Page to
First Amendment to Credit Agreement

  

   

  		
	 
	Title:	Executive Vice President and Chief Financial Officer
 
 
AIR SUBSIDIARY REIT I, LLC, f/k/a AIMCO Subsidiary REIT I, LLC, a Delaware limited liability company
 
By:
Name:	Paul Beldin
Title:	Executive Vice President and Chief Financial Officer

   

  Signature Page to
First Amendment to Credit Agreement

  

   

  	
	ADMINISTRATIVE AGENT:
 
PNC BANK, NATIONAL ASSOCIATION, as
Administrative Agent, a Lender, Swingline Loan
Lender and the Issuing Lender
 
By:
Name:	James Harmann
Title:	Senior Vice President
 
OTHER LENDERS:
 
WELLS FARGO BANK, 
NATIONAL ASSOCIATION
 
By:
Name:
Title:

	 
 
[other lenders]

   

  Signature Page to
First Amendment to Credit AgreementDocument

EXHIBIT 10.1                            

PERFORMANCE UNIT GRANT 
AWARD AGREEMENT

            This AGREEMENT (“Agreement”) is made as of February 16, 2022, by and between Service Corporation International, a Texas corporation (the “Company”), and 
                (the “Employee”).

    WHEREAS, the Compensation Committee (“Compensation Committee”) of the Board of Directors of the Company has determined that it is to the advantage and interest of the Company to grant to the Employee the performance units grant provided for herein in consideration of services provided by the Employee and to provide focus on the longer-term success of the Company.
    NOW, THEREFORE, the Company and the Employee hereby agree as follows:
1.Grant of Award.  
a.Pursuant to the Company’s Amended and Restated 2016 Equity Incentive Plan (“Plan”), the Employee is hereby granted as of January 1, 2022, a Performance Unit Grant Award (the “Award”), subject to the terms and conditions set forth below, with respect to              performance units (“Units”).  
b.Each Unit shall have a value equal to the value of one share of the Company’s common stock. 
c.If a dividend is paid on the Company’s common stock during the Performance Cycle, the number of Units listed above shall be increased on the dividend payment date by (i) multiplying the per share dividend amount by the number of Units credited under this Agreement on the dividend payment date, and (ii) dividing that amount by the value of a share of the Company’s common stock on the dividend payment date. 
d.If the Units covered by this Award become vested in accordance with Section 2 below, the Employee will be entitled to receive, net of applicable withholding or applicable social security taxes, a cash payment representing the product of (i) the value of a share of the Company’s common stock on the date of approval of the payment by the Compensation Committee (which value shall be an average of the closing price of Company common stock over the five trading days up to and including the date of approval), multiplied by (ii) the number of Units vested, multiplied by (iii) the Performance Settlement Factor as determined using Exhibit A, attached hereto and made a part of this Agreement.  
e.If the Award becomes vested and payable, the Award will be paid to the Employee as soon as practicable after the end of the Performance Cycle, but no later than March 15, 2025.
2.Vesting.  If the Employee is employed by the Company (or any Affiliate thereof) continuously during the Performance Cycle and through the payment date for the Award, as described in Section 1(e) above (the “Payment Date”), the Award will vest 100% on the Payment Date.  Except as provided below, this Award shall terminate, and 
1

all of the Employee’s rights hereunder shall be forfeited, if the Employee is not employed on the Payment Date.
a.Death, Disability and Termination by the Company without Cause.  In the event of the termination of the Employee’s employment with the Company (or any Affiliate thereof) prior to the Payment Date due to the Employee’s death, Disability or termination by the Company (or an Affiliate thereof) without Cause (as that term is defined in Employee’s employment agreement with an Affiliate of Company, or if none, as determined by the Company in its reasonable discretion), a pro-rata portion of the Award will vest, as determined in accordance with the following calculation:  The number of Units under the Award to be vested is determined by the number of active months of employment by the Employee during the Performance Cycle divided by 36 (which is the number of months in the “Performance Cycle” as set forth in Exhibit A).
b.Retirement.  In the event of the termination of the Employee’s employment with the Company (or any Affiliate thereof) prior to the to the Payment Date due to the Employee’s retirement on or after attainment of age 60 with ten (10) years of service, or retirement on or after attainment of age 55 with twenty (20) years of service, the Award will vest, if the Compensation Committee, in its sole discretion, acting by meeting or unanimous consent occurring prior to the effective date of the Employee’s retirement, causes the Award to vest, in which event the Award will fully vest without prorating regardless of the number of months remaining in the Performance Cycle.
c.Change of Control.  In the event of a Change of Control of the Company during the Performance Cycle, the Award will be governed by Section 4.9 of the Plan so long as the Award is honored or assumed or replaced in accordance with Exhibit B attached hereto.  Otherwise, the Award will be fully vested and paid at the Target amount set forth on Exhibit A, on the date a Change of Control occurs.
Notwithstanding any provision of this Agreement or any other agreement between the Employee and the Company to the contrary, in the event of a termination of the Employee’s employment with the Company (or any Affiliate thereof) by the Company for Cause (as described above), or if the Employee terminates his or her employment with the Company (or any Affiliate thereof) for any reason, any unpaid Award shall be forfeited in its entirety and will not be paid. 
3.Transfer Restrictions.  This Award is non-transferable other than by will or by the laws of descent and distribution, and may not otherwise be assigned, pledged or hypothecated and shall not be subject to execution, attachment or similar process.  Upon any attempt by the Employee (or the Employee’s successor in interest after the Employee’s death) to effect any such disposition, or upon the levy of any such process, the Award may immediately become null and void, at the discretion of the Compensation Committee.
4.Tax.  The Employee will pay any and all Federal, state or local income tax and all associated employment taxes (FICA) when the Award is paid.
5.Miscellaneous.  This Agreement (i) shall be binding upon and inure to the benefit of any successor of the Company, (ii) shall be governed by the laws of the State of Texas and any applicable laws of the United States, and (iii) may not be amended without the written consent of both the Company and the Employee.  No contract or right of employment shall be implied by this Agreement. 
2

6.Incorporation of Plan Provisions. This Award and the terms and conditions herein set forth are subject in all respects to the terms and conditions of the Plan, which shall be controlling and are incorporated herein by reference.  Capitalized terms not otherwise defined herein (inclusive of Exhibit A) shall have the meanings set forth for such terms in the Plan.
7.IRC §409A Compliance.  Notwithstanding the applicable provisions of this Agreement regarding timing of distribution of payments, the following special rules shall apply in order for this Agreement to comply with IRC §409A: (i) to the extent any distribution is to a “specified employee” (as defined under IRC §409A) and to the extent such applicable provisions of IRC §409A require a delay of such distributions by a six month period after the date of such Employee’s separation of service with the Company, the provisions of this Agreement shall be construed and interpreted as requiring a six month delay in the commencement of such distributions thereunder.
To the extent of any compliance issues under IRC §409A, the Agreement shall be construed in such a manner so as to comply with the requirements of such provision so as to avoid any adverse tax consequences to the Employee.
8.Payment Limitations.  Notwithstanding anything herein to the contrary, the following limitations shall apply to any calculation of payments under this Agreement:
a.If the Company’s TSR for the Performance Cycle is negative, the Performance Settlement Factor used to calculate the Award payment shall not exceed the Target amount set forth in Section B of Exhibit A.  
b.If the Company’s TSR ranking for the Performance Cycle is below the 25th percentile of the TSR of the peers in the Comparator Group, then no payment shall be made under this Agreement.
c.If the Company’s Annualized ROE for each fiscal year during the Performance Cycle is less than the weighted average Annualized ROE of the companies that comprise the S&P midcap 400 for each such year during the Performance Cycle (as reported by Bloomberg, or a similar reporting service if Bloomberg is unavailable), then the amount that would otherwise have been paid under Section 1(d) of this Agreement shall be reduced by twenty-five percent (25%).  
9.Clawback.  If (i) the Employee is a Company officer at or above the level of Vice President at the date of this Agreement, and (ii) it is determined that the Employee has engaged in fraud that causes, in whole or in part, a material adverse restatement of the Company’s financial statements, then any unpaid Award shall be forfeited in its entirety.  In addition, if (A) an Award has been paid under this Agreement prior to the time of such determination, and (B) the payment occurred at any time after the ending date of the period covered by the incorrect financial statements, then the Employee must repay the Company the entire amount of his or her Award payment.  Any determination by the Board of Directors with respect to the foregoing shall be final, subject however to the right of the Employee to contest such determination in any court of competent jurisdiction.  The Company agrees to pay promptly as incurred all legal fees and expenses which the Employee may reasonably incur as a result of any such contest; provided however, if the Employee does not prevail in such contest, the Employee will reimburse the Company for all such legal fees and expenses.  As used herein, the term “fraud” shall mean the act of knowingly making a false representation of a material fact with the intent to deceive.
3

10.Binding Effect.  This Agreement shall be effective only if executed by the Company by means of a manual, typed, or stamped signature, or an e-signature, recorded as a performance unit grant in the minutes of the committee administering the Plan and executed by the Employee by means of a manual signature or an e-signature.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.
[Signature Page Attached]

4

    
IN WITNESS HEREOF, the Employee and the Company have executed this Performance Unit Grant Award as of the day and year first above written.

EMPLOYEE                                                     Service Corporation International

                                                        /s/ Gregory T. Sangalis
_________________________________       _______________________________
[Signature]                                                        Name:  Gregory T. Sangalis
                                                                         Title:     Senior Vice President
       General Counsel and Secretary

5

Exhibit A

Calculation of Performance Settlement Factor

The Performance Settlement Factor used to determine the amount payable under the Performance Unit Award described in the attached Performance Unit Grant Award Agreement, dated as of February 16, 2022, between Service Corporation International, a Texas corporation (the “Company” or “SCI”), and all of its Affiliates and the Employee, shall be calculated as provided in this Exhibit A.
A.Definitions.  For purposes of this Award, the following definitions will control:
•“Adjusted Average Equity” means Adjusted Prior Year Equity, plus Adjusted Current Year Equity, divided by 2. An adjusting entry in excess of $50 million may be carried forward to avoid distortion in the Return on Equity calculation during each year of the Performance Cycle.
•“Adjusted Current Year Equity” means Total Stockholder Equity, less accumulated Other Comprehensive Income as set forth in the Company’s Consolidated Balance Sheet, and excluding non-recurring items in both the current and prior fiscal years. 
•“Adjusted Prior Year Equity” means Total Stockholder Equity, as set forth in the Company’s Consolidated Balance Sheet, and excluding non-recurring items in the prior fiscal year.
•“Adjusted Net Income from Continuing Operations” means the Company’s consolidated net income from continuing operations, as determined under U.S. Generally Accepted Accounting Principles, for the fiscal year, as reported in the Company’s financial statements utilizing the forecasted normalized effective tax rate, which may be adjusted to exclude the following items:
1.Significant litigation costs and/or settlements.
2.Special accounting, tax or restructuring charges.
3.The cumulative effect of changes in accounting or tax principles.  
4.An extraordinary gain or loss or correction of an error.
5.All gains, losses or impairment charges recorded in association with the sale or potential sale of a business and/or real estate or any impairment(s) related to the evaluation of goodwill, intangible assets, long-lived assets or loss contracts.
6.Charges relating to the opening, closing, or relocation of subsidiaries or other overhead centers. 
7.The gain or loss associated with the early extinguishment of debt or other debt restructuring charges.
8.Accounting and/or tax charges relating to acquisitions and dispositions, system conversions and/or implementations, settlement or termination of pension obligations, and transitions or terminations of major vendors and/or suppliers of the Company.
9.Currency gains or losses. 

Exhibit A – Page 1

•“Annualized ROE” means the product of (i) the sum of the Return on Equity for each fiscal year during the Performance Cycle, divided by (ii) three. 
•“Award” is a grant of Units as approved by the Compensation Committee.  The number Units subject to the Award shall be increased, as provided in Section 1(c) of the Agreement, to reflect the deemed reinvestment of dividends during the Performance Cycle.
•“Comparator Group” is defined as the publicly traded U.S. companies which are included in the reference group as documented in the 2022 Compensation Committee’s records and which are in existence at the end of the Performance Cycle.
•“Compensation Committee” means the Compensation Committee of the Board of Directors of Service Corporation International.
•“IRC §409A” means Section 409A of the Internal Revenue Code of 1986, as amended.
•“National Exchange” is defined as the New York Stock Exchange (NYSE) or the National Association of Stock Dealers and Quotes (NASDAQ).
•“Plan Administrator” is Compensation Committee, which may delegate certain elements of administrative responsibility to the Company’s CEO or appropriate members of his staff.  Any performance goals, performance standards and award determinations must be approved by the Compensation Committee.
•“Performance Cycle” is defined as the three-year period beginning January 1, 2022 and ending December 31, 2024.
•“Performance Settlement Factor” is the applicable percentage set forth in Section B below, which shall be applied to the number of vested units based on the Company’s relative TSR ranking within the Comparator Group, as interpolated.  
•“Return on Equity” shall be calculated for each fiscal year during the Performance Cycle by dividing (i) the Company’s Adjusted Net Income from Continuing Operations, for the fiscal year, by (ii) the Adjusted Average Equity for such fiscal year.  
•“Total Shareholder Return” (TSR) is defined as the rate of return reflecting stock price appreciation plus reinvestment of dividends over the Performance Cycle.  Specifically, TSR will be calculated using the following provisions: $100 invested in SCI stock on the first day of the Performance Cycle, with dividends reinvested on each applicable payment date, compared to $100 invested in each of the peer companies in the Comparator Group, with dividend reinvestment on each applicable payment date during the same period.  For purposes of this calculation, any determination of reinvested dividends shall be calculated as the sum of the total dividends paid on one share of stock during the Performance Cycle, assuming reinvestment of such dividends in such stock (based on the closing stock price of such stock on the applicable dividend payment date).  For the avoidance of doubt, it is intended that the foregoing calculation of 
Exhibit A – Page 2

reinvested dividend amount shall take into account not only the reinvestment of dividends in a share of stock but also capital appreciation or depreciation in the shares of stock deemed acquired by such reinvestment.
•“Unit” is a performance unit which shall have a value equal to the closing price of a share of the Company’s common stock.  
B.Performance Unit Awards Settlement Criteria:

									
	SCI Weighted Average Total Shareholder Return Ranking Relative to Comparator Group at End of Performance Cycle	Ranking	% of Target Award Paid as Incentive
(Performance Settlement Factor)

	Maximum	75th% or greater
	200%
		70th%ile
	180%
		65th%ile
	160%
		60th%ile
	140%
		55th%ile
	120%
	Target	50th%ile
	100%
		45th%ile
	85%
		40th%ile
	70%
		35th%ile
	55%
		30th%ile
	40%
	Threshold	25th%ile
	25%
	Below Threshold	Less than 25th%ile 
	0%

•Calculation of awards for performance levels between Target and Maximum, or Threshold and Target will be calculated using straight-line interpolation.
•If mergers and acquisitions result in a reduction in the number of peer group companies during the cycle, these percentile rankings will reflect the Comparator Group companies still intact at the end of the Performance Cycle.
•As provided in Section 8(a) of the Agreement, in the event SCI’s TSR is negative at the end of the Performance Cycle, no payment hereunder will exceed the Target in the schedule above.
Exhibit A – Page 3

•As provided in Section 8(c) of the Agreement, If the Company’s Annualized ROE for each fiscal year during the Performance Cycle is less than the weighted average Annualized ROE of the companies that comprise the S&P midcap 400 for each such year during the Performance Cycle (as reported by Bloomberg, or a similar reporting service if Bloomberg is unavailable), then the amount that would otherwise have been paid under Section 1(d) of this Agreement shall be reduced by twenty-five percent (25%).
•The Compensation Committee shall have the reasonable discretion to interpret or construe ambiguous, unclear or implied terms applicable to this Agreement, and to make any findings of fact necessary to make a calculation or determination hereunder. 
•A decision made in good faith by the Compensation Committee shall govern and be binding in the event of any dispute regarding a method of calculation of performance or a determination of vesting or forfeiture in connection with the Award or this Agreement.

Exhibit A – Page 4

EXHIBIT B

No cancellation, acceleration of exercisability, vesting, cash settlement or other payment shall occur with respect to any Award if the Committee reasonably determines in good faith, prior to the occurrence of a Change of Control, that such Award shall be honored or assumed or replaced therefor (such honored, assumed or replaced Award hereinafter called an "Alternative Award"), by an Employee’s employer (or the parent or an Affiliate of such employer) immediately following the Change of Control; provided that any such Alternative Award must: 

(i)be based on stock which is traded on an established U.S. securities market; 

(ii)provide such Employee with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Award, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing and methods of payment; provided that, if determined by the Committee, any performance-based Awards may be converted into Alternative Awards that vest and become payable solely upon the continued performance of services and in respect of the amount that would have been payable based upon performance through the date of the Change in Control or other measure of performance specified in the Employee's applicable Award Agreement;

(iii)have substantially equivalent economic value to such Award (determined at the time of the Change of Control and using valuation principles permitted under Treas. Reg. §1.424-1); and 

(iv)have terms and conditions which provide that in the event that, during the CoC Protection Period, the Employee's employment or service is involuntarily terminated for any reason (including, but not limited to a termination due to death, Disability or without Cause) or terminated for Good Reason (as defined below), all of such Employee's Awards shall be deemed immediately and fully exercisable, any forfeiture restrictions shall lapse as to each of the Employee's outstanding Restricted Stock Awards, each of the Employee's outstanding Restricted Stock Units and Other Stock-Based Awards shall vest and be payable in full and each such Alternative Award shall be settled for a payment per each share of stock subject to the Alternative Award in cash, in immediately transferable, publicly traded securities or in a combination thereof, in an amount equal to, in the case of an Option or SAR, the excess of the fair market value of such stock on the date of the Employee's termination over the corresponding exercise or base price per share and, in the case of any Restricted Stock, Restricted Stock Unit, or Other Stock-Based Award, the fair market value of the number of shares of stock subject or related thereto.

For this purpose, an Employee’s employment or service shall be deemed to have been terminated for Good Reason if the Employee terminates employment or service within the CoC Protection Period for any of the following:

(a)The Company requires the Employee to be relocated more than 50 miles from the current office location, unless the Employee’s commute is reduced by the relocation;
Exhibit B – Page 1

(b)The Company materially reduces the responsibilities, authority or accountability of Employee from the same in effect immediately prior to the Change of Control;

(c)The Company reduces the base salary, Target Bonus or other compensation program participation of Employee; or

(d)The Company materially reduces the aggregate benefits of Employee.

The “CoC Protection Period” shall mean the period commencing sixty (60) days prior to a Change of Control and ending twenty-four months after the date upon which a Change of Control occurs.

Exhibit B – Page 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00344-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00344-of-00352.parquet"}]]