Document:

Exhibit 10.4

 

SPONSOR
AGREEMENT

 

This SPONSOR
AGREEMENT (the “Sponsor Agreement”), dated as of March 8, 2021, is entered into by and between Motion Acquisition
LLC, a Delaware limited liability company (“Sponsor”), Motion Acquisition Corp., a Delaware corporation (“Parent”),
and Ambulnz, Inc., a Delaware corporation (the “Company”).

 

W
I T N E S S E T H:

 

WHEREAS,
concurrently with the execution of this Sponsor Agreement, Parent, the Company, and Motion Merger Sub Corp., a Delaware corporation
and direct wholly owned subsidiary of Parent (“Merger Sub”), will enter into that certain Agreement and Plan
of Merger, dated as of the date hereof (the “Merger Agreement”), pursuant to which Merger Sub will merge with
and into the Company with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”);

 

WHEREAS,
Sponsor is the sole holder of Class B Common Stock, par value $0.0001, of the Parent (the “Parent Class B Common Stock”);
and

 

WHEREAS,
the Sponsor has agreed to waive certain of its anti-dilution and conversion rights in connection with the Merger;

 

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

 

		1.	Definitions.
                                         Capitalized terms used but not otherwise defined herein shall have the meanings ascribed
                                         to such terms in the Merger Agreement.

 

		2.	Waiver.
                                         Immediately prior to, and conditioned upon, the Effective Time, Sponsor shall, automatically
                                         and without any further action by Sponsor or Parent, (a) irrevocably waive its respective
                                         rights under the anti-dilution and conversion provisions of (B)(2)(ii) of Article FOURTH
                                         of the Amended and Restated Certificate of Incorporation of the Parent, dated October
                                         14, 2020 (the “Parent Charter”), with respect to each of its shares
                                         of Parent Class B Common Stock held as of the date hereof and (b) agree that each of
                                         its shares of Parent Class B Common Stock held as of the date hereof shall convert to
                                         Parent Class A Common Stock on a one-to-one basis in accordance with the provisions of
                                         (B)(2)(i) of Article FOURTH of the Parent Charter. For the avoidance of doubt, the preceding
                                         sentence shall include a waiver of any anti-dilution and conversion rights of Sponsor
                                         in connection with the transactions contemplated by the Merger Agreement and any issuance
                                         of Parent Class A Common Stock in connection with those certain PIPE Financing subscription
                                         agreements entered into with certain investors and Parent simultaneously with the execution
                                         of the Merger Agreement.

 

     

     

    

 

		3.	Sponsor
                                         Representations and Warranties. The Sponsor hereby represents and warrants as of
                                         the date hereof as follows:

 

		(a)	The
                                         Sponsor holds all of the issued and outstanding Parent Class B Common Stock.

 

		(b)	The
                                         Sponsor has all requisite power and authority to execute and deliver this Sponsor Agreement
                                         and to consummate the transactions contemplated hereby and to perform all of its obligations
                                         hereunder.

 

		(c)	The
                                         execution and delivery of this Sponsor Agreement has been, and the consummation of the
                                         transactions contemplated hereby have been, duly authorized by all requisite action by
                                         the Sponsor.

 

		(d)	This
                                         Sponsor Agreement has been duly and validly executed and delivered by the Sponsor and,
                                         assuming this Sponsor Agreement has been duly authorized, executed and delivered by the
                                         other parties hereto, this Sponsor Agreement constitutes, and upon its execution will
                                         constitute, a legal, valid and binding obligation of the Sponsor enforceable against
                                         it in accordance with its terms.

 

		4.	Successors
                                         and Assigns. The Sponsor acknowledges and agrees that the terms of this Sponsor Agreement
                                         are binding on and shall inure to the benefit of their respective beneficiaries, heirs,
                                         legatees and other statutorily designated representatives. The Sponsor also understands
                                         that this Sponsor Agreement, once executed, is irrevocable and binding, and if the Sponsor
                                         Transfers any shares of Parent Class B Common Stock held by the Sponsor as of the date
                                         of this Agreement prior to giving effect to the waiver and conversion pursuant to Paragraph
                                         2 above, the transferee shall execute a joinder to this Sponsor Agreement in a form
                                         reasonably acceptable to the Parent and the Company. As used herein, “Transfer”
                                         shall mean the (a) sale or assignment of, offer to sell, hypothecation, pledge, contract
                                         or agreement to sell, grant of any option to purchase or otherwise dispose of or agreement
                                         to dispose of, directly or indirectly, or establishment or increase of a put equivalent
                                         position or liquidation with respect to or decrease of a call equivalent position within
                                         the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the
                                         rules and regulations of the Commission promulgated thereunder with respect to, any security,
                                         (b) entry into any swap or other arrangement that transfers to another, in whole or in
                                         part, any of the economic consequences of ownership of any security, whether any such
                                         transaction is to be settled by delivery of such securities, in cash or otherwise or
                                         (c) public announcement of any intention to effect any transaction specified in clause
                                         (a) or (b). “Transferred” or “Transferring” shall have a correlative
                                         meaning.

 

		5.	Termination.
                                         This Sponsor Agreement shall terminate, and have no further force and effect, as of the
                                         earlier to occur of (a) Closing (after giving effect to Paragraph 2) and (b) the
                                         termination of the Merger Agreement in accordance with its terms prior to the Effective
                                         Time.

 

		6.	Counterparts.
                                         This Sponsor Agreement may be executed in counterparts (including by electronic means),
                                         all of which shall be considered one and the same agreement and shall become effective
                                         when signed by each of the parties and delivered to the other parties, it being understood
                                         that all parties need not sign the same counterpart.

 

    2

     

    

 

		7.	Governing
                                         Law. All issues and questions concerning the construction, validity, interpretation
                                         and enforceability of this Sponsor Agreement shall be governed by and construed in accordance
                                         with the laws of the State of Delaware, without giving effect to any choice of law or
                                         conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction)
                                         that would cause the application of the laws of any jurisdiction other than the State
                                         of Delaware. The parties hereto (i) all agree that any action, proceeding, claim or dispute
                                         arising out of, or relating in any way to, this Sponsor Agreement shall be brought and
                                         enforced in the courts of the State of Delaware or the federal courts located in the
                                         State of Delaware, and irrevocably submit to such jurisdiction and venue, which jurisdiction
                                         and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction
                                         and venue or that such courts represent an inconvenient forum.

 

		8.	Waiver
                                         of Jury Trial. EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
                                         WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES,
                                         AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
                                         SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING DIRECTLY OR INDIRECTLY
                                         ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
                                         AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR
                                         ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
                                         PARTY WOULD NOT, IN THE EVENT OF A PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER,
                                         (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C)
                                         EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED
                                         TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
                                         IN THIS PARAGRAPH 9.

 

[signature
page follows]

 

    3

     

    

 

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

 

	 	MOTION ACQUISITION LLC
	 	 
	 	By:	/s/ James Travers
	 	Name: 	James Travers
	 	Title:	Managing Member
	 	 	 
	 	MOTION ACQUISITION CORP.
	 	 
	 	By:	/s/ Michael Burdiek
	 	Name:	Michael Burdiek
	 	Title:	Chief Executive Officer 
	 	 	 
	 	AMBULNZ, INC.
	 	 
	 	By:	/s/ Stan Vashovsky
	 	Name:	 Stan Vashovsky
	 	Title:	 Chief Executive Officer

 

[Signature Page to Sponsor Agreement]prdo-ex101_25.htm

Exhibit 10.1

Approved by the Compensation Committee 3/8/2021

 

 

 

 

Perdoceo Education Corporation

2021 Annual Incentive Award Program

pursuant to the

2016 Incentive Compensation Plan

 

ARTICLE 1

PURPOSE AND PERFORMANCE PERIOD

 

1.1Purpose.  This document is created to set forth the terms and conditions for certain Participants who have been selected to participate in the Annual Incentive Award portion of the Plan for calendar year 2021.  To the extent that there is any conflict between the terms of this document and the terms of the Plan, the Plan shall control.  

 

1.2Performance Period.  This document is effective for certain Annual Incentive Awards calculated for Participants under the Plan relating to calendar year 2021.  The 2021 Annual Incentive Awards earned pursuant to this Program shall be paid no later than March 15, 2022.

 

1.3No Misconduct.   If at any time prior to the date the 2021 Annual Incentive Award is paid by the Company or an Affiliate, a Participant is determined by the Administrator to have engaged in Misconduct, then no such Annual Incentive Award shall be paid to such Participant.

 

 

ARTICLE 2

DEFINITIONS

 

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.  The following words and phrases shall have the following meanings:

 

2.1“Administrator” means a committee consisting of the Chief Financial Officer, the General Counsel and the designated representative from the Human Resources department (or their respective designees), and/or any other executive officer as determined by the Committee.

 

2.2“Affiliate” means any corporation, campus, or other entity that, directly or indirectly through one or more intermediaries, is owned by the Company.

 

2.3“AIP EBITDA” means the consolidated earnings, including both continuing and discontinued operations, of the total Company (and its Affiliates) for the year ended December 31, 2021, determined before interest, taxes, depreciation, amortization, asset impairments and non-operating miscellaneous income (expense).  The amount for each of these items shall be as reported on the consolidated statement of income (loss) and comprehensive income (loss) within the Company’s Form 10-K for the year ending on December 31, 2021 (which is prepared in accordance with the generally accepted accounting principles in the U.S. and filed with the U.S. Securities and Exchange Commission).  In addition, AIP EBITDA shall be (i) determined assuming that the EBITDA Performance Factor and Individual Goals Performance Factor are both 100% for all Participants eligible to receive a payment pursuant to this Program (i.e., assuming target payments), and (ii) subject to such adjustment, if any, as may be made by the Committee.

 

2.4“Covered Management Position” means a position within the Company which the Company has determined to be covered under 34 C.F.R. Section 668.14(b)(22)(iii)(C).

 

2.5“EBITDA Performance Factor” means a percentage (expressed to the second decimal place) determined pursuant to the table set forth in the applicable memorandum from the Company setting forth the criteria for a Participant’s Award.  The EBITDA Performance Factor may not be less than 0% nor more than 200%.

 

2.6“Eligible Earned Wages” means compensation for services performed in an incentive-eligible position (as determined pursuant to Article 3) that is eligible for inclusion when determining a Participant’s Annual Incentive Award.  Eligible Earned Wages are based on base earnings during the Performance Period only and exclude any other payments made during the Performance Period (i.e., teach pay, allowances, reimbursements, 

Program Effective January 1, 2021Page 2 of 6

 

equity grants, bonuses, incentive payments, short-term disability payments, long-term disability payments, etc.).  For the avoidance of doubt, Eligible Earned Wages for the Performance Period shall be determined consistent with Article 3 and any Participant who is not eligible for an award or payment pursuant to Article 3 shall have no Eligible Earned Wages for the Performance Period.

 

2.7“Individual Goals Performance Factor” means, with respect to each Participant, the Participant’s overall performance rating (expressed as a percentage and as determined by the Participant’s manager) based on the individual performance goals and competency rating, and weighting of such factors, established by the Participant’s manager or department head, as applicable, and recorded in the Company’s performance management system for the Performance Period. The Individual Goals Performance Factor may not be less than 0% nor more than 200%.

 

2.8“Misconduct” means any one of the following in which a Participant may engage prior to or during the Performance Period or any time thereafter, but prior to the date the 2021 Annual Incentive Award is paid: (a) any act of intentional misconduct, dishonesty, gross negligence, conscious abandonment, or neglect of duty; (b) any violation of the Company’s Code of Conduct, policies on maintaining confidentiality of proprietary information, Code of Ethics or non-discrimination or anti-harassment policy; (c) any commission of a criminal activity, fraud, or embezzlement; (d) any failure to reasonably cooperate in any investigation or proceeding concerning the Company or any of its Affiliates; (e) any unauthorized disclosure or use of confidential information or trade secrets; (f) any violation of any enforceable restrictive covenant, such as a non-compete, non-solicit, or non-disclosure agreement between the Participant and the Company or an Affiliate; or (g) any conduct that causes the Participant to be ineligible for benefits pursuant to the applicable Company severance plan.

 

2.9“Performance Period” means the calendar year ending December 31, 2021.

 

2.10“Plan” means the Career Education Corporation 2016 Incentive Compensation Plan, as amended.

 

2.11“Program” means this 2021 Annual Incentive Award Program, which is established under the Plan.

 

2.12“Target Incentive Percentage” means a Participant’s target Annual Incentive Award percentage of Eligible Earned Wages as communicated to the Participant.

 

2.13​“Targeted AIP EBITDA” means the targeted AIP EBITDA for the Performance Period as approved by the Committee, which shall be consistent with the Company’s 2021 operating plan approved by the Board of Directors of the Company on January 29, 2021.

 

 

 

ARTICLE 3

ELIGIBILITY

 

3.1General Eligibility Requirements.  The Participants for the Performance Period consist of employees who are (a) not in a Covered Management Position; and (b) classified by the Company as (i) Grade E55 or higher or (ii) Grade T09, T10 or T12.  The Committee may designate additional Participants.  Participants are separately notified of their eligibility to participate in the Program.  If an individual is in a Covered Management Position at any point during the Performance Period, then such individual will not be eligible for an award or payment under this Program.  

 

3.2Employment Changes.  To the extent an individual is newly hired by the Company or any of its Affiliates or first moves into an incentive-eligible position on or after October 1, 2021, such individual shall not be eligible to receive an Annual Incentive Award pursuant to this Program.  Subject to Section 1.3 hereof and unless otherwise determined by the Committee, a Participant must be employed by the Company or an Affiliate on March 1, 2022 in order to be eligible to receive an Annual Incentive Award payment hereunder.  Notwithstanding the foregoing, 

Program Effective January 1, 2021Page 3 of 6

 

and subject to Section 1.3 hereof, if a Participant’s employment with the Company is terminated by the Company without Cause as part of a reduction in force on or after October 1, 2021, then such Participant shall remain eligible to receive an Annual Incentive Award payment pursuant to this Program and such Participant’s Eligible Earned Wages earned during the Performance Period prior to his or her termination shall continue to be Eligible Earned Wages for purposes of this Program; provided that, unless otherwise determined by the Committee, such Participant shall not be eligible for a payment hereunder to the extent such Participant received a severance package in connection with such termination and such severance package contained a payment related to or otherwise based on annual bonus.  In all cases, to the extent a Participant is no longer employed by the Company or an Affiliate on March 1, 2022 (a “Separated Participant”), then any Annual Incentive Award amount shall only be paid to such Separated Participant to the extent the Separated Participant has executed a release of claims against the Company and its Affiliates, which release must be in a form satisfactory to the Administrator, prior to the payment date for such Annual Incentive Award.  In addition, if applicable law requires that any such release be subject to a revocation period in order to become fully effective, payment of the Annual Incentive Award to a Separated Participant shall only be required if, prior to the payment date for the Annual Incentive Award, the applicable revocation period for the release has lapsed without any such revocation occurring.

 

ARTICLE 4

AWARD AMOUNT 

 

4.1Annual Incentive Award Weightings.  The following table identifies the Annual Incentive Award element weightings based on the performance components and Participant classification. Participant classification will be determined by the Administrator and communicated to the Participant. 

 

				
	
Participant Classification
	
Adjusted

EBITDA
	
Individual Goals
	
Total

	
E61 and Above
	
80%
	
20%
	
100%

	
E58 - E60, T12
	
75%
	
25%
	
100%

	
E55 – E57, T09, T10
	
70%
	
30%
	
100%

 

For Participants performing services during the Performance Period in multiple Participant classifications, the percentages set forth in the tables above may be subject to proration pursuant to Section 5.2 hereof.

 

4.2EBITDA Performance Component.  In respect of the EBITDA performance component, each Participant will be eligible to receive a payment equal to the result of applying the following formula to such Participant: 

 

A x B x C x D:

 

Where:

 

“A” equals such Participant’s Eligible Earned Wages;

“B” equals such Participant’s Target Incentive Percentage;

“C” equals the percentage set forth in the applicable box set forth in the “Adjusted EBITDA” column in the table in Section 4.1 hereof; and

“D” equals the applicable EBITDA Performance Factor.

 

4.3Individual Goals Performance Component.  In respect of the individual goals performance component, each Participant will be eligible to receive a payment equal to the result of applying the following formula to such Participant: 

 

Program Effective January 1, 2021Page 4 of 6

 

A x B x Y x D x Z:

 

Where:

 

“A” equals such Participant’s Eligible Earned Wages;

“B” equals such Participant’s Target Incentive Percentage;

“D” equals the applicable EBITDA Performance Factor;

“Y” equals the percentage set forth in the applicable box set forth in the “Individual Goals” column in the table in Section 4.1 hereof; and

“Z” equals the applicable Individual Goals Performance Factor.

 

Notwithstanding the foregoing, the product of D x Z may not be greater than 200%, and any payment pursuant to this Section 4.3 shall be adjusted accordingly to implement a 200% payout cap with respect to the individual goals performance component.

 

4.4Adjustment.  The individual goals performance component of each Participant’s Annual Incentive Award (determined without application of this Section 4.4) is subject to the aggregate funded amount for the individual goals performance component of all Participants (determined based on the EBITDA Performance Factor) and to adjustment by managers.  Such adjustment may be negative for those Participants who do not achieve the applicable goals, and positive for those Participants who demonstrate outstanding accomplishments.  For purposes of applying this Section 4.4, any positive adjustment made to the individual goals performance component of the Annual Incentive Award of one Participant must result in a dollar-for-dollar negative adjustment to the individual goals performance component of the Annual Incentive Award of one or more other Participants so that, in the aggregate, the application of the manager adjustment described in this Section 4.4 to all the Participants shall not result in any additional cost to the Company and its Affiliates for the group of Participants over which a particular manager retains authority.

 

ARTICLE 5

MISCELLANEOUS

 

5.1Miscellaneous.  The Committee may modify or terminate this Program at any time and for any reason, effective at such date as the Committee may determine, without the approval of the Participants or stockholders of the Company.  Without limiting the foregoing, the Committee reserves the right to adjust AIP EBITDA, the EBITDA Performance Factor, Targeted AIP EBITDA, the Target Incentive Percentage and the applicable individual goals, and to adjust, make or interpret any other determination or classification, for any or all Participants for any reason, including if, in the Committee’s sole discretion, any unforeseen or unplanned event results in a positive or negative impact on the performance of the Company (or its Affiliates) during the Performance Period or its overall financial position.  All such modifications, terminations, adjustments, determinations and interpretations relating to this Program shall be binding on all Participants.

 

5.2Proration.  If a Participant’s move between two or more incentive-eligible positions during the Performance Period impacts Participant classification for purposes of Section 4.1, then a proration may be applied to determine the amount due to such Participant pursuant to Article 4 hereof.  To the extent it applies, such proration shall be determined in the discretion of the Administrator, and shall be based on relevant factors, which may include, but shall not be limited to (a) the relative time spent by such Participant working at each level, and (b) the extent to which corporate or an education group was charged for the services of such Participant.  Unless otherwise determined by the Administrator, such proration will be based on whole months (rather than a day-by-day basis), and for purposes of such proration, actions taken prior to the fifteenth day of any month will be deemed to have happened on the first day of that month, while action taken on or after the fifteenth day of any month will be deemed to have happened on the first day of the following month.

 

5.3Compliance with Laws.  This Program was created to comply with the “incentive compensation” provisions of the Higher Education Act, 20 U.S.C.§ 1094(a)(20), and with the implementing regulations of the 

Program Effective January 1, 2021Page 5 of 6

 

U.S. Department of Education (“ED”), located at 34 C.F.R.§ 668.14(b)(22).  The Company is aware that the ED regulations changed, effective July 1, 2011, and this Program has been created to comply with changed regulations that took effect July 1, 2011.  All provisions of this Program will be interpreted and applied so as to be consistent with that statute and those regulations.  If at any time the Committee determines that any potential compensation action would, or in the Committee’s sole discretion might, violate that statute or those regulations, the Committee may in its sole discretion elect not to pay such compensation.  If the statute or regulations change or if ED provides guidance that changes the Committee’s understanding of how the statute and regulations will be applied, the Committee will make appropriate changes to this Program, or may terminate this Program, in its sole discretion, with or without advance notice to the Participants.  The Committee reserves the right to modify any element of this Program, to decline to make any payments under this Program, or to terminate this Program in its entirety, at any time for any reason, in its sole discretion, with or without advance notice to the Participants. 

 

 

 

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