Document:

HEI Exhibit 4.2

 

[HEI Letterhead]

 

March 23, 2011

 

WI Implementations

Fidelity Investments

100 Magellan Way, KE22

Covington, KY  41015

 

Re: Changes to the Investment Options with respect to the Plans specified below (the “Plans”):

 

	
Legal Plan Name
    	
 
    	
FPRS Plan
   Number
    	
 
    	
Plan Type (reference only)
    
	
Hawaiian Electric Industries Retirement Savings Plan
    	
 
    	
56566
    	
 
    	
Qualified Plan
    
	
American Savings Bank 401(k) Plan
    	
 
    	
75615
    	
 
    	
Qualified Plan
    

 

Dear WI Implementations:

 

This letter relates to the Plan investment options available under the trust agreement between Hawaiian Electric Industries, Inc. and American Savings Bank, F.S.B. (collectively and individually, the “Sponsor”) and Fidelity Management Trust Company (“Trustee”), dated February 1, 2000, as amended, for the Plans, (the “Agreement”).  The parties intend and agree that this letter shall constitute an amendment to the applicable Agreement and the parties shall make corresponding changes to the Plan Administration Manual to the extent the direction contained herein modifies the investment options available under the Plans and/or to the extent the directions modify the investment options to be used for the investment of assets for which the Trustee has not received investment direction from the Sponsor or participants as applicable.

 

Sponsor hereby directs Trustee to replace the previously signed letter amendment, dated March 7, 2011, with this newly agreed upon letter amendment.

 

Sponsor hereby directs Trustee to implement the Plan investment option changes described in the attached Direction to Change Investment Options and subject to the terms thereof.

 

Fees paid directly to any Fidelity affiliate by non-Fidelity mutual fund vendors will be posted and updated quarterly on Plan Sponsor Webstation at http://psw.fidelity.com or a successor site.

 

Timeframes

 

Trustee  will implement the fund changes directed by Sponsor on the dates specified in the attached Direction to Change Investment Options and deliver communications in a timely manner as described herein,  provided Trustee is in receipt of this signed letter by March 28, 2011.  The fund changes described herein will not be implemented and communications not delivered unless this signed letter is received by Trustee by March 28, 2011.

 

This letter (including any attachments hereto, each of which is incorporated herein by reference) constitutes the entire agreement between the parties with respect to the subject matter hereof and

 

Fidelity Confidential Project Number: 3496522

 

 

supersedes all prior and contemporaneous agreements and understandings, whether written or oral, between the parties with respect to the subject matter hereof.  There are no representations, understandings or agreements relating to the directions given in this letter that are not fully expressed herein.  Sponsor recognizes the importance of changes to a Plan’s investment choices and the significant risks (financial and otherwise) associated with any incorrect actions in this regard and therefore confirms that it has read this letter fully, understands and confirms the accuracy of the directions being provided herein.

 

By signing below, the undersigned represent that they are authorized to execute this document on behalf of the respective parties.  Notwithstanding any contradictory provision of any Agreement, each party may rely without duty of inquiry on the foregoing representation.

 

Hawaiian Electric Industries, Inc. and American Savings Bank, F.S.B.

 

	
By:
    	
/s/   James A. Ajello
    	
 
    
	
 
    	
(Signature   of Authorized Individual)
    	
 
    
	
Name:   
    	
James   A. Ajello
    	
 
    
	
 
    	
(Printed   Name)
    	
 
    
	
Title:   
    	
Chairman,   Pension Investment Committee
    	
 
    
	
Date:   
    	
3/24/11
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Chet A. Richardson
    	
 
    
	
 
    	
(Signature   of Authorized Individual)
    	
 
    
	
Name:   
    	
Chet   A. Richardson
    	
 
    
	
 
    	
(Printed   Name)
    	
 
    
	
Title:   
    	
Secretary,   Pension Investment Committee
    	
 
    
	
Date:   
    	
3/24/11
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
A copy of this letter will be returned to Sponsor  after it has been countersigned by Trustee.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Agreed to and accepted by:
    	
 
    
	
 
    	
 
    	
 
    
	
Fidelity Management Trust Company
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Mark C. Kohus
    	
 
    
	
(Signature   of Fidelity Authorized Individual)
    	
 
    
	
Name:   
    	
Mark   C. Kohus
    	
 
    
	
 
    	
(Printed   Name)
    	
 
    
	
Title:   
    	
Vice   President, DC Implementations
    	
 
    
	
Date:   
    	
4/4/2011
    	
 
    

 

Fidelity Confidential Project Number: 3496522

 

2

 

DIRECTION TO CHANGE INVESTMENT OPTIONS

 

I. Fund Additions

 

The Plans specified below will be adding the funds listed below after 4:00 PM ET on the live date indicated below:

 

	
Plan #
    	
 
    	
Live Date
    	
 
    	
Ticker
    	
 
    	
Legal Fund
   Name
    	
 
    	
FPRS
   Code
    	
 
    	
VRS
   Code
    	
 
    	
Redemption/Short-
   Term Trading
   Fees
    
	
56566
    	
 
    	
04/29/2011
    	
 
    	
MPVLX
    	
 
    	
Invesco Value II Fund Class Y
    	
 
    	
OFMV
    	
 
    	
93582
    	
 
    	
—
    
	
56566
    	
 
    	
04/29/2011
    	
 
    	
NBPIX
    	
 
    	
Neuberger Berman Partners Fund   Class Institutional
    	
 
    	
OKUU
    	
 
    	
42796
    	
 
    	
—
    
	
56566
    	
 
    	
04/29/2011
    	
 
    	
VTSGX
    	
 
    	
Vanguard Total International Stock Index Fund Signal   Shares
    	
 
    	
OERL
    	
 
    	
77799
    	
 
    	
2.00 % / 60 days
    
	
56566
    	
 
    	
04/29/2011
    	
 
    	
FISGX
    	
 
    	
Nuveen Mid Cap Growth Opportunities Fund   Class I
    	
 
    	
OKJY
    	
 
    	
40974
    	
 
    	
—
    
	
56566
    	
 
    	
04/29/2011
    	
 
    	
PIMVX
    	
 
    	
Virtus Mid-Cap Value Fund Class I
    	
 
    	
OLSU
    	
 
    	
19258
    	
 
    	
—
    
	
56566
    	
 
    	
04/29/2011
    	
 
    	
MSIQX
    	
 
    	
Morgan Stanley Institutional International Equity Fund   Class I
    	
 
    	
OFAI
    	
 
    	
99966
    	
 
    	
2.00 % / 30 days
    
	
75615
    	
 
    	
04/29/2011
    	
 
    	
MPVLX
    	
 
    	
Invesco Value II Fund Class Y
    	
 
    	
OFMV
    	
 
    	
93582
    	
 
    	
—
    
	
75615
    	
 
    	
04/29/2011
    	
 
    	
NBPIX
    	
 
    	
Neuberger Berman Partners Fund   Class Institutional
    	
 
    	
OKUU
    	
 
    	
42796
    	
 
    	
—
    
	
75615
    	
 
    	
04/29/2011
    	
 
    	
VTSGX
    	
 
    	
Vanguard Total International Stock Index Fund Signal   Shares
    	
 
    	
OERL
    	
 
    	
77799
    	
 
    	
2.00 % / 60 days
    
	
75615
    	
 
    	
04/29/2011
    	
 
    	
FISGX
    	
 
    	
Nuveen Mid Cap Growth Opportunities Fund   Class I
    	
 
    	
OKJY
    	
 
    	
40974
    	
 
    	
—
    
	
75615
    	
 
    	
04/29/2011
    	
 
    	
PIMVX
    	
 
    	
Virtus Mid-Cap Value Fund Class I
    	
 
    	
OLSU
    	
 
    	
19258
    	
 
    	
—
    
	
75615
    	
 
    	
04/29/2011
    	
 
    	
MSIQX
    	
 
    	
Morgan Stanley Institutional International Equity   Fund Class I
    	
 
    	
OFAI
    	
 
    	
99966
    	
 
    	
2.00 % / 30 days
    

 

Fidelity Confidential Project Number: 3496522

 

3

 

Restrictions:

 

·                  Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the new investment options will be opened for all money-in and money-out transactions, and will not be restricted from any transaction.

 

Performance:

 

·                  Fund Performance will be made available on the VRU, NetBenefits, and Statements.

·                  The addition of the Fund Performance may take 1 to 3 business days following the fund effective date to populate on NetBenefits.

·                  The Standard Performance will be made available:

 

Standard Performance Options

 

	
VRU
    	
 
    	
NetBenefits
    
	
Cumulative Year To Date
    	
 
    	
1, 3, 5, 10 Year Average Annual
    
	
1, 5, 10 Year Average Annual
    	
 
    	
Life of Fund Average Annual
    
	
52 Week High
    	
 
    	
3 Month Cumulative
    
	
52 Week Low
    	
 
    	
Year to Date Cumulative
    

 

Plan Level Fee Processing:

 

·                  The new funds will be added to the fee processing hierarchies in the last position.

 

Distribution Redemption Methods:

 

·                  The new funds will be added to the redemption methods for all withdrawals and loans according to the below methodology:

 

·                  For redemptions using a pro-rata method, the new funds will be added.

 

·                  For redemptions using a hierarchal method,  the new funds will be added in the last position.

 

II. Fund Closures

 

As indicated in the chart below, the Plans specified will be (i) freezing the funds indicated below and redirecting contributions effective as of the market close (generally 4:00 P.M. Eastern time) on the live date listed below, and/or (ii) reallocating the balances in frozen funds in the Plans (whether frozen pursuant to this or a previous direction) effective as of the market close (generally 4:00 P.M. Eastern time) on the date specified below.

 

Fidelity Confidential Project Number: 3496522

 

4

 

	
Plan #
    	
 
    	
Request Type-
   Redirection/
   Reallocation/
   Both
    	
 
    	
Re-
   Direct
   Trade
   Date
    	
 
    	
Re-
   Allocate
   Trade Date
    	
 
    	
Fidelity
   (FROM)
   FPRS
   Code &
   Ticker
    	
 
    	
From Legal
   Name
    	
 
    	
→
    	
 
    	
To Legal
   Name
    	
 
    	
Fidelity
   (TO)
   FPRS
   Code &
   Ticker
    	
 
    	
Redemption/
   Short-Term
   Trading
   Fees on
   From Fund
    
	
56566
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OFM6
   MPVAX
    	
 
    	
Invesco Value II Fund Class A
    	
 
    	
→
    	
 
    	
Invesco Value II Fund Class Y
    	
 
    	
OFMV
   MPVLX
    	
 
    	
N/A
    
	
56566
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OFN5
   NBPTX
    	
 
    	
Neuberger Berman Partners Fund Class Trust
    	
 
    	
→
    	
 
    	
Neuberger Berman Partners Fund   Class Institutional
    	
 
    	
OKUU
   NBPIX
    	
 
    	
N/A
    
	
56566
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OMHE
   VGTSX
    	
 
    	
Vanguard Total International Stock Index Fund   Investor Shares
    	
 
    	
→
    	
 
    	
Vanguard Total International Stock Index Fund Signal   Shares
    	
 
    	
OERL
   VTSGX
    	
 
    	
2.00 % / 60
   days
   Preserved
    
	
56566
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OSVV
   FRSLX
    	
 
    	
Nuveen Mid Cap Growth Opportunities Fund   Class A
    	
 
    	
→
    	
 
    	
Nuveen Mid Cap Growth Opportunities Fund   Class I
    	
 
    	
OKJY
   FISGX
    	
 
    	
N/A
    
	
56566
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OSOF
   FMIVX
    	
 
    	
Virtus Mid-Cap Value Fund Class A
    	
 
    	
→
    	
 
    	
Virtus Mid-Cap Value Fund Class I
    	
 
    	
OLSU
   PIMVX
    	
 
    	
N/A
    
	
56566
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OFZT
   MIQBX
    	
 
    	
Morgan Stanley Institutional International Equity   Fund Class P
    	
 
    	
→
    	
 
    	
Morgan Stanley Institutional International Equity   Fund Class I
    	
 
    	
OFAI
   MSIQX
    	
 
    	
2.00 % / 30
   days
   Preserved
    
	
75615
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OFM6
   MPVAX
    	
 
    	
Invesco Value II Fund Class A
    	
 
    	
→
    	
 
    	
Invesco Value II Fund Class Y
    	
 
    	
OFMV
   MPVLX
    	
 
    	
N/A
    
	
75615
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OFN5
   NBPTX
    	
 
    	
Neuberger Berman Partners Fund Class Trust
    	
 
    	
→
    	
 
    	
Neuberger Berman Partners Fund   Class Institutional
    	
 
    	
OKUU
   NBPIX
    	
 
    	
N/A
    
	
75615
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OMHE
   VGTSX
    	
 
    	
Vanguard Total International Stock Index Fund   Investor Shares
    	
 
    	
→
    	
 
    	
Vanguard Total International Stock Index Fund Signal   Shares
    	
 
    	
OERL
   VTSGX
    	
 
    	
2.00 % / 60
   days
   Preserved
    

 

Fidelity Confidential Project Number: 3496522

 

5

 

	
75615
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OSVV
   FRSLX
    	
 
    	
Nuveen Mid Cap Growth Opportunities Fund   Class A
    	
 
    	
→
    	
 
    	
Nuveen Mid Cap Growth Opportunities Fund   Class I
    	
 
    	
OKJY
   FISGX
    	
 
    	
N/A
    
	
75615
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OSOF
   FMIVX
    	
 
    	
Virtus Mid-Cap Value Fund Class A
    	
 
    	
→
    	
 
    	
Virtus Mid-Cap Value Fund Class I
    	
 
    	
OLSU
   PIMVX
    	
 
    	
N/A
    
	
75615
    	
 
    	
Both
    	
 
    	
04/29/2011
    	
 
    	
04/29/2011
    	
 
    	
OFZT
   MIQBX
    	
 
    	
Morgan Stanley Institutional International Equity   Fund Class P
    	
 
    	
→
    	
 
    	
Morgan Stanley Institutional International Equity   Fund Class I
    	
 
    	
OFAI
   MSIQX
    	
 
    	
2.00 % / 30
   days
   Preserved
    

 

Transactional Details:

 

·                  Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the “From Fund” investment options will be closed for all money-in and money-out transactions, and will be restricted from all transactions.

 

·                  Prospectus, if available, will be automatically generated according to the participants’ mail preference as a result of this reallocation.

 

·                  All assets will be liquidated and processed as a cash transaction.

 

Auto Rebalance Notification

 

·                  Participants enrolled in the Auto Rebalance service offered by the plan will need to re-enroll if any of the closing funds are included in their rebalance order. A notification of this service will be included in the participant communication.

 

III. Communications Strategy

 

Trustee will draft the fund change notification for all plan participants and beneficiaries with a balance and all eligible employees.  Trustee will provide Sponsor with a draft of the notification in advance to review the accuracy of the notification in order to meet the confirmed delivery date.  Communications will be sent out at least 30 days prior to the earliest effective date unless otherwise directed by the Sponsor.

 

Trustee will distribute the fund change notification electronically, via standard email notification and NetBenefits, with print distribution to all beneficiaries and to participants who do not have a valid email address on file.

 

Sponsor has considered whether the directions herein implicate the Sarbanes-Oxley Act of 2002 (“SOA”) and to the extent implicated, has determined that any applicable SOA requirements have been or will be satisfied.

 

Fidelity Confidential Project Number: 3496522

 

6Exhibit 10.4

 

GLEACHER & COMPANY, INC.

 

2007 INCENTIVE COMPENSATION PLAN

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (this “Agreement”) confirms the grant on May 9, 2011 (the “Grant Date”) by Gleacher & Company, Inc., a Delaware corporation (the “Company”), to Thomas J. Hughes (“Employee”) of non-qualified options (“Options”) to acquire shares of the Company’s common stock (“Shares”), as follows:

 

Number of Shares Covered by Option Granted:  2,000,000

 

How Options Vest and Become Exercisable:  33-1/3% of the Options if not previously forfeited will vest and become exercisable on the first anniversary of the Grant Date; 33-1/3% of the Options, if not previously forfeited, will vest and become exercisable on the second anniversary of the Grant Date; and 33-1/3% of the Options, if not previously forfeited, will vest and become exercisable on the third anniversary of the Grant Date; provided in each case that Employee continues to be employed by the Company or another Group Entity (sometimes referred to herein as an “Employer”) on such vesting date (each, a “Stated Vesting Date”), except as otherwise provided in Section 4 of the Terms and Conditions of Stock Options attached hereto (the “Terms and Conditions”).  If Employee has a Termination of Employment prior to a Stated Vesting Date, any Options that are not otherwise vested and exercisable by that date, will be immediately forfeited, except as otherwise provided in Section 4 of the Terms and Conditions.

 

Exercise Prices of the Options:  The exercise price per Share of the Options will be $1.85.

 

Duration of the Options:  Except as otherwise provided in Section 4 of the Terms and Conditions, if not previously forfeited, the Options shall expire and shall no longer be exercisable after the expiration of six years from the Grant Date.

 

The Options are subject to the terms and conditions of the Company’s 2007 Incentive Compensation Plan (the “Plan”), and this Agreement, including the Terms and Conditions attached hereto.  The number of Options, the number and kind of Shares deliverable upon exercise of Options, and other terms relating to the Options are subject to adjustment in accordance with Section 5 of the Terms and Conditions and Section 5.3 of the Plan.

 

Employee acknowledges and agrees that (i) the Options are nontransferable, except as provided in Section 3 of the Terms and Conditions and Section

 

 

9.2 of the Plan, (ii) the Options are subject to forfeiture upon Employee’s Termination of Employment as set forth in Section 4 of the Terms and Conditions, and (iii) sales of Shares delivered in settlement of Options will be subject to the Company’s policies regulating trading by employees.

 

IN WITNESS WHEREOF, GLEACHER & COMPANY, INC. has caused this agreement to be executed by its officer thereunto duly authorized, and Employee has duly executed this Agreement, by which each has agreed to the terms of this Agreement.

 

 

	
 
    	
EMPLOYEE:
    	
 
    	
GLEACHER & COMPANY, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Thomas J. Hughes
    	
 
    	
By:
    	
/s/ Eric J. Gleacher
    
	
 
    	
Thomas J. Hughes
    	
 
    	
 
    	
Eric J. Gleacher
    
	
 
    	
 
    	
 
    	
 
    	
Chairman of the Board of Directors
    

 

TERMS AND CONDITIONS OF STOCK OPTIONS

 

The following Terms and Conditions apply to the Options granted to Employee by the Company, as specified in the Agreement (of which these Terms and Conditions form a part).  Certain terms of the Options, including the number of Options granted, vesting dates and expiration date, are set forth in the Agreement.

 

1.             GENERAL.  The Options are granted to Employee under the Company’s 2007 Incentive Compensation Plan (the “Plan”).  A copy of the Plan and information regarding the Plan, including documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933, can be obtained from the Company upon request.  All of the applicable terms, conditions and other provisions of the Plan are incorporated by reference herein.  Capitalized terms used in the Agreement and these Terms and Conditions but not defined herein shall have the same meanings as in the Plan.  If there is any conflict between the provisions of the Agreement and this Terms and Conditions and mandatory provisions of the Plan, the provisions of the Plan govern, otherwise, the terms of this document shall prevail.  By accepting the grant of the Options, Employee agrees to be bound by all of the terms and provisions of the Plan (as presently in effect or later amended), the rules and regulations under the Plan adopted

 

2

 

from time to time, and the decisions and determinations of the Company’s Executive Compensation Committee (the “Committee”) made from time to time; provided  that no such Plan amendment, rule or regulation or Committee decision or determination without the consent of an affected Participant shall materially impair the rights of Employee with respect to the Options.

 

2.             TIME AND METHOD OF EXERCISE.  At any time while any portion of the Options remain vested and exercisable, Employee may exercise such vested Options in whole or in part by delivering to the Company written notice of exercise and payment of the exercise price.  Such exercise price may be paid (i) in cash, by check or in another cash equivalent acceptable to the Company, (ii) by transfer to the Company of nonforfeitable, unrestricted Shares held by Employee, (iii) through broker-assisted “cashless” exercise arrangements, to the extent permissible under applicable law, (iv) by any other method permitted under the Plan and under rules established by the Committee and in effect from time to time, or (v) by a combination of the foregoing.

 

3.             NONTRANSFERABILITY.  Employee may not sell, transfer, assign, pledge, margin or otherwise encumber or dispose of Options or any rights hereunder to any third party other than by will or the laws of descent and distribution (or to a designated Beneficiary in the event of Employee’s death), and Options, if exercisable, shall be exercisable during the lifetime of Employee only by Employee or his guardian or legal representative.

 

4.             TERMINATION PROVISIONS.  The following provisions will govern the forfeiture of the Options upon the occurrence of certain events relating to a Termination of Employment, unless otherwise determined by the Committee:

 

(a)           Death or Disability.  In the event of Employee’s death or Disability (as defined below), all Options then outstanding, if not previously vested, will become vested and exercisable, and all then-outstanding Options will remain exercisable through the earlier of (i) the applicable expiration date set forth in the Agreement or (ii) the first anniversary of the date of the Termination of Employment; provided that, in the case of Disability, Employee (or his legal representative) executes and does not revoke a release and separation agreement in such form as may be requested by the Company within 45 days following the date of such Termination of Employment; provided, however, that any vested and unexercised Options will subsequently be forfeited if there occurs a Forfeiture Event (as defined below) prior to the occurrence of the earlier of the dates determined in accordance with clauses (i) and (ii) above.

 

(b)           Termination by Employee for Good Reason or by the Company without Cause following a Change in Control.  In the event of (i) Employee’s Termination of Employment by Employee for Good Reason (as defined below) or (ii) Employee’s Termination of Employment by the Company without Cause (as defined below) during the two-year period immediately following a Change in Control (as defined below), the portion of the then-

 

3

 

outstanding Options not vested as of the date of such Termination of Employment shall, subject to Employee executing and not revoking a release and separation agreement in such form as may be requested by the Company within 45 days following the date of Termination of Employment, accelerate and, all then- outstanding Options will remain exercisable through the earlier of (A) the applicable expiration date set forth in the Agreement or (B) the first anniversary of the date of the Termination of Employment; provided, however, that any vested and unexercised Options will subsequently be forfeited if there occurs a Forfeiture Event prior to the occurrence of the earlier of the dates determined in accordance with clauses (A) and (B) above.

 

(c)           Termination by Employee without Good Reason or by the Company without Cause prior to a Change in Control.  In the event of Employee’s Termination of Employment by the Company without Cause prior to a Change in Control or by the Employee without Good Reason, the portion of the then-outstanding Options not vested at the date of such Termination will be forfeited, and the portion of the then-outstanding Options vested at the date of such Termination will remain exercisable until the earliest of (i) the applicable expiration date set forth in the Agreement, or (ii) with respect to (A) a Termination of Employment by Employee without Good Reason, the 90th day following the date of such Termination of Employment and (B) a Termination of Employment by the Company without Cause prior to a Change in Control, the first anniversary of the date of such Termination of Employment; provided, however, that any vested and unexercised Options will subsequently be forfeited if there occurs a Forfeiture Event prior to the occurrence of the earlier of the dates determined in accordance with clauses (i) and (ii) above.

 

(d)           Termination by the Company for Cause.  In the event of Employee’s Termination of Employment by the Company for Cause, all then-outstanding Options, whether vested or unvested, shall be immediately forfeited for no consideration.

 

5.             SHAREHOLDER’S RIGHTS, DIVIDENDS AND ADJUSTMENTS.

 

(a)           Shareholder’s Rights and Dividends.  Employee will have no rights as a shareholder, and will not be entitled to any dividends declared or paid, with respect to any Share underlying an Option unless and until such Share is issued to Employee upon the proper exercise of such Option.

 

(b)           Adjustments.  The number of Options granted to Employee, the number of Shares underlying such Options and/or the exercise price per Share of such Options shall be appropriately adjusted, in order to prevent dilution or enlargement of Employee’s rights with respect to such Options and Shares or to reflect any changes in the number of outstanding Shares resulting from any event referred to in Section 5.3 of the Plan.

 

4

 

6.             EMPLOYEE REPRESENTATIONS AND WARRANTIES AND RELEASE.  As a condition to any exercise of the Options, the Company may require Employee (i) to make any representation or warranty to the Company as may be required under any applicable law or regulation, (ii) to make a representation and warranty that no Forfeiture Event has occurred or is contemplated and (iii) to execute a release of claims against the Company arising before the date of such release, in such form as may be specified by the Company.

 

7.             OTHER TERMS RELATING TO OPTIONS.

 

(a)           Deferral of Settlement.  No settlement of the exercise of an Option may be deferred hereunder.

 

(b)           Fractional Options and Shares.  The number of Shares underlying Options credited to Employee shall not include fractional shares, unless otherwise determined by the Committee.

 

(c)           Tax Withholding.  Employee shall make arrangements satisfactory to the Company, or, in the absence of such arrangements, a Group Entity may deduct from any payment to be made to Employee any amount necessary, to satisfy requirements of federal, state, local, or foreign tax law to withhold taxes or other amounts with respect to the exercise of the Options.  Unless Employee has made separate arrangements satisfactory to the Company, the Company may elect to withhold Shares deliverable in settlement of the Options having a Fair Market Value equal to the amount of such tax liability required to be withheld in connection with the exercise of the Options, but the company shall not be obligated to withhold such Shares.

 

8.             MISCELLANEOUS.

 

(a)           Binding Agreement; Written Amendments.  This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties.  This Agreement and the Plan constitute the entire agreement between the parties with respect to the Options, and supersede any prior agreements or documents with respect thereto.  No amendment, alteration, suspension, discontinuation, or termination of this Agreement that may impose any additional obligation upon the Company or materially impair the rights of Employee with respect to the Options shall be valid unless in each instance such amendment, alteration, suspension, discontinuation, or termination is expressed in a written instrument duly executed in the name and on behalf of the Company and by Employee.

 

(b)           No Promise of Employment.  The Options and the granting thereof shall not constitute or be evidence of any agreement or understanding, express or implied, that Employee has a aright to continue as an officer or employee of the Company for any period of time, or at any particular rate of compensation.

 

(c)           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF

 

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THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.

 

(d)           Legal Compliance.  Employee agrees to take any action the Company reasonably deems necessary in order to comply with federal and state laws, or the rules and regulations of the NASDAQ Global Market or any other stock exchange, or any other obligation of the Company or Employee relating to the Options or this Agreement.  Employee agrees that the Options are subject to any forfeiture that may be required by applicable law, as well as any policies of the Company, including, without limitation, any stock ownership guidelines and incentive compensation clawback policy applicable to senior executives of the Company, as each policy is adopted or amended from time to time..

 

(e)           Notices.  Any notice to be given the Company under this Agreement shall be addressed to the Company at 1290 Avenue of the Americas, New York, New York 10104, Attention: Corporate Secretary, and any notice to the Employee shall be addressed to the Employee at Employee’s address as then appearing in the records of the Company.

 

9.             CERTAIN DEFINITIONS.  The following definitions apply for purposes of this Agreement:

 

(a)           “Cause” has the meaning ascribed in the Letter Agreement.

 

(b)           “Change in Control” has the meaning ascribed in the Letter Agreement.

 

(c)           “Disability” means disability as defined in the Company’s long-term disability plan as in effect from time to time.

 

(d)           “Forfeiture Event” means without the consent in writing of the Board of Directors of the Company, Employee will not, at any time prior to an applicable Stated Vesting Date or exercise of vested Options, acting alone or in conjunction with others, directly or indirectly, (A) induce any customer or client of or investor (excluding anyone who is an investor solely as a holder of Company common stock ) in any Group Entity, to curtail, limit, or cancel their business with any Group Entity; (B) induce, or attempt to influence, any employee of any Group Entity to terminate employment; (C) solicit, hire or retain as an employee or independent contractor, or assist any third party in the solicitation, hire, or retention as an employee or independent contractor, any person who during the previous 12 months was an employee of any Group Entity; (D) otherwise fail to comply with the conditions set forth in Sections 7.4(b) and (c) of the Plan or (E) breach the covenants contained in the Letter Agreement and, for purposes of this clause (E), such covenants shall remain in effect and continue to apply through the later of the Stated Vesting Date or exercise of vested Options, notwithstanding any earlier expiration of such covenants for purposes of the Letter Agreement.

 

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(e)           “Good Reason” has the meaning ascribed in the Letter Agreement.

 

(f)            “Group Entity” means either the Company or any of its subsidiaries and affiliates.

 

(g)           “Letter Agreement” means that certain letter agreement entered into by and between Employee and the Company dated April 18, 2011.

 

(h)           “Termination of Employment” means the event by which Employee ceases to be employed by a Group Entity and immediately thereafter is not employed by any other Group Entity.

 

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