Document:

Exhibit 4.14

 

Fresenius Medical Care AG & Co. KGaA

NxStage Long Term Incentive Plan

 

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TABLE OF CONTENTS

 

	
CLAUSE
    	
 
    	
PAGE
    
	
1.
    	
PREAMBLE AND PURPOSE
    	
3
    
	
2.
    	
ELIGIBILITY TO RECEIVE   PERFORMANCE SHARES
    	
3
    
	
3.
    	
PERFORMANCE SHARES
    	
4
    
	
4.
    	
GRANT OF PERFORMANCE   SHARES
    	
4
    
	
5.
    	
PERFORMANCE TARGETS
    	
5
    
	
6.
    	
VESTING OF PERFORMANCE   SHARES
    	
10
    
	
7.
    	
SETTLEMENT OF   PERFORMANCE SHARES
    	
11
    
	
8.
    	
PERFORMANCE SHARES IN   SPECIAL CASES
    	
12
    
	
9.
    	
NO TRANSFERABILITY /   FORFEITURE
    	
15
    
	
10.
    	
TAXES, CONTRIBUTIONS   AND OTHER EXPENSES
    	
15
    
	
11.
    	
PROCEDURE, ENDING AND   ADJUSTMENT OF THE PLAN
    	
15
    
	
12.
    	
LIABILITY RISKS,   EXCHANGE RISKS AND TAX RISKS
    	
18
    
	
13.
    	
TERM OF THE PLAN
    	
18
    
	
14.
    	
MISCELLANEOUS   PROVISIONS
    	
18
    
	
15.
    	
DEFINITIONS
    	
19
    

 

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1.                                      Preamble and Purpose

 

1.1                               The management board (the Management Board) of Fresenius Medical Care Management AG (the General Partner), the general partner of Fresenius Medical Care AG & Co. KGaA (the Company), decided to establish the Fresenius Medical Care NxStage Long Term Incentive Plan (the Plan) to enable the granting of virtual performance-based shares of the Company (the Performance Shares) to members of the management board and to executives (Führungskräfte) of NxStage Medical, Inc. (each a Participant) in consequence of the integration of NxStage Medical, Inc. into the FME Group. The Performance Shares may entitle the Participants to receive a cash payment from the Company subject to the following provisions.

 

1.2                               The Plan contains the requirements, terms and conditions as well as the procedures for the grant and settlement of Performance Shares (the Plan Conditions) and has been adopted by the Management Board.

 

1.3                               The purpose of this Plan is to align the interests of the Participants with the interests of the Company and its shareholders in encouraging the long-term and sustainable growth of the Company. This Plan offers the Participants a competitive and transparent compensation component which combines the long-term benefits for the Participants with the sustained success of the Company.

 

1.4                               Capitalized terms used in this Plan but not defined in the body of the Plan are defined in Clause 15.

 

2.                                      Eligibility to receive Performance Shares

 

2.1                               The eligibility of Participants to receive Performance Shares will be finally determined by the Management Board in accordance with the Plan Conditions.

 

2.2                               This Plan does not establish and should not be read or construed so as to establish a legal right to receive Performance Shares. Neither the status or possible status of an employee or a member of the management within FME Group as Participant nor the fact that a Participant was granted Performance Shares in previous periods shall be interpreted as an obligation that Performance Shares shall be granted or, if granted, shall continue to be granted in the future. In particular, granting Performance Shares

 

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does not constitute an operational practice (betriebliche Übung), even if Performance Shares have been granted for several successive years.

 

3.                                      Performance Shares

 

3.1                               Performance Shares issued under the Plan may entitle a Participant to receive a cash payment from the Company or from any Affiliated Company in accordance with the Plan Conditions.

 

3.2                               A Performance Share is a non-equity, cash-settled virtual compensation instrument. The Performance Shares will not be evidenced by certificates. Without limiting the generality of the foregoing, nothing in this Plan, nor any grant of Performance Shares, nor the achievement of any Performance Target for any Performance Shares nor the vesting of any Performance Shares shall entitle any Participant to receive shares of the Company or confer upon or be interpreted as conferring upon any Participant any right or interest whatsoever as a shareholder of the Company or of any other member of the FME Group including, but not limited to, the right to vote at, to receive notice of, or to attend any meeting of shareholders of any member of the FME Group or any other proceedings of any such FME Group member, or the right to dividends or other distributions.

 

4.                                      Grant of Performance Shares

 

4.1                               Subject to final determination by the Management Board, the Participants will be granted Performance Shares as of 21 February 2019 (i.e. the day that NxStage Medical, Inc. has become a part of FME Group) (the Grant Date).

 

4.2                               Each Participant will be awarded an individual Grant Value in the currency in which the Participant receives his/her base salary (the Grant Currency) from the Company or an Affiliated Company at the time when the Grant Value is determined by the Company or the General Partner (the Grant Value). To determine the number of Performance Shares to be granted to the respective Participant (the Number of Granted Performance Shares) the Grant Value denominated in the Grant Currency will then be converted into Euro based on the average Foreign Currency Exchange Rates effectively established over a period of 30 (thirty) calendar days prior to the Grant Date (the FX Rates at Grant Date) and divided by the value per Performance Share at Grant Date. The value per Performance Share will be determined in accordance with

 

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IFRS 2 on the Grant Date, denominated in Euro, and considering the average Stock Exchange Price effectively established over a period of 30 (thirty) calendar days prior to the Grant Date. For the avoidance of doubt, the Number of Granted Performance Shares will be rounded up or down to the next closest integer number (e.g. 124.54 will result in 125). The amount of the individual Grant Value shall be determined on the basis of the Participant’s responsibilities within FME Group.

 

4.3                               The grant of Performance Shares will be made without any payment by the Participant.

 

4.4                               The grant shall be communicated to the Participants in text form, i.e. by mail, email or via an online platform. No grant shall be effective unless and until it is communicated to the Participant by way of an official notification about the grant.

 

5.                                      Performance Targets

 

5.1                               Based on the degree of attainment of three pre-determined financial targets (the Performance Targets) the Number of Performance Shares to Vest (within the meaning of Clause 5.5) can vary from 0% to 200% of the Number of Granted Performance Shares. The three Performance Targets are:

 

(a)                                 Revenue Growth

 

(b)                                 Net Income Growth and

 

(c)                                  Return on Invested Capital.

 

5.2                               The degree of attainment of the respective Performance Targets is measured over a three-year performance period from 1 January 2018 until 31 December 2020 (the Performance Period) and is determined as follows:

 

(a)                                 Revenue Growth shall mean the annual growth of revenues of the Company determined following the International Financial Reporting Standards (IFRS) using the Company’s consolidated reported and audited figures in Euro for the financial statements prepared in accordance with IFRS. The growth rates for the former are determined at Constant Currency.

 

For Revenue Growth, a target achievement of 100% is reached at an average annual Revenue Growth throughout the Performance Period of 7%. For Revenue Growth between 0% to 7% and 7% to 16% the target achievement is linearly interpolated — see Figure 1. The target achievement for this

 

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Performance Target is capped at 200% for each year of the Performance Period.

 

	
 
    	
 
    	
Growth
    	
 
    	
Achievement
    	
 
    	
Weight
    	
 
    
	
Performance   Target 1:
    	
 
    	
<   0%
    	
 
    	
0
    	
%
    	
 
    	
 
    
	
Revenue   Growth
    	
 
    	
7%
    	
 
    	
100
    	
%
    	
1/3
    	
 
    
	
 
    	
 
    	
>   16%
    	
 
    	
200
    	
%
    	
 
    	
 
    

 

Figure 1 —Revenue Growth

 

In case of changes to IFRS accounting principles in the first year in which such policies become effective the relevant figures of the respective prior year as restated according to such policies should form the basis for the determination of the growth in revenues. If such restatements will not be made, pro forma figures for the relevant year in which such changes become effective for the first time shall be calculated under the old regime with reasonable effort to determine the Revenue Growth.

 

(b)                                 Net Income Growth shall mean the annual growth of net income attributable to the shareholders of the Company determined in accordance with IFRS using the consolidated reported and audited figures in Euro for the financial statements prepared in accordance with IFRS. The growth rates for the former are determined at Constant Currency.

 

For Net Income Growth, a target achievement of 100% is reached at an average annual Net Income Growth throughout the Performance Period of 7%. For a Net Income Growth between 0% to 7% and 7% to 14% the target achievement is linearly interpolated — see Figure 2. The target achievement for this Performance Target is capped at 200% for each year of the Performance Period.

 

	
 
    	
 
    	
Growth
    	
 
    	
Achievement
    	
 
    	
Weight
    	
 
    
	
Performance   Target 2:
    	
 
    	
<   0%
    	
 
    	
0
    	
%
    	
 
    	
 
    
	
Net   Income Growth
    	
 
    	
7%
    	
 
    	
100
    	
%
    	
1/3
    	
 
    
	
 
    	
 
    	
>   14%
    	
 
    	
200
    	
%
    	
 
    	
 
    

 

Figure 2 - Net Income Growth

 

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In case of changes to IFRS accounting principles in the year in which such policies become effective the relevant restated figures of the prior year should form the basis for the determination of the Net Income Growth. If such restatements will not be made, pro forma figures for the relevant year in which such changes become effective for the first time shall be calculated under the old regime with reasonable effort to determine the Net Income Growth.

 

(c)                                  Return on Invested Capital (ROIC) shall mean the yearly level of the ROIC based on the Company’s audited consolidated financial statements determined in accordance with IFRS.

 

The ROIC is measured against a target ROIC (the Target ROIC) defined for each year throughout the Performance Period. The Target ROIC is defined as the ROIC level at which a target achievement of 100% will be reached. For 2018 the Target ROIC is 7.7%, for 2019 the Target ROIC is 7.9%, and for 2020 the Target ROIC is 8.1%. The respective Target ROICs are shown in Figure 3.

 

 

Figure 3 — Target ROICs throughout the Performance Period

 

The target achievement will be 0% in case the ROIC of the respective year will be 0.2%-points or more below the Target ROIC for such year. Accordingly, a ROIC target achievement of 200% will apply in case the ROIC for a respective year will be 0.2%-points or more above the Target ROIC for

 

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such year. For ROIC levels between 0.2%-points below the Target ROIC and 0.2%-points above the Target ROIC, the respective degree of attainment of the ROIC target will be calculated by means of linear interpolation — see Figure 4. The target achievement for this Performance Target is capped at 200% for each year of the Performance Period.

 

	
 
    	
 
    	
Level
    	
 
    	
Achievement
    	
 
    	
Weight
    	
 
    
	
Performance   Target 3:
    	
 
    	
0.2%-points below TR
    	
 
    	
0
    	
%
    	
 
    	
 
    
	
ROIC   level against Target ROIC (TR)
    	
 
    	
Target ROIC (TR)
    	
 
    	
100
    	
%
    	
1/3
    	
 
    
	
 
    	
 
    	
0.2%-points above TR
    	
 
    	
200
    	
%
    	
 
    	
 
    

 

Figure 4 - ROIC level against the Target ROIC

 

In case that the annual ROIC target achievement in the third year of the Performance Period is equal to or higher than each annual ROIC target achievement of the Performance Period, the annual ROIC target achievement of the third year shall be applied for the determination of the Yearly Target Achievements, as defined in Clause 5.3, for the first and the second year of the Performance Period.

 

In case of changes to IFRS accounting principles first effective on or after 1 January 2019, the ROIC determining the respective ROIC target achievement for the relevant year in which such changes become effective for the first time as well as for the relevant consecutive years shall be calculated under the old regime with reasonable effort to determine the ROIC level.

 

5.3                               The degree of attainment of the Performance Targets is determined annually, as described in Clause 5.2, and for each year of the Performance Period (the Yearly Target Achievement) and as soon as the Company’s audited figures for such respective year are available; for this purpose, the three Performance Targets are weighted equally (i.e. 1/3, 1/3, 1/3).

 

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Example:

 

 

5.4                               The overall target achievement (the Overall Target Achievement) is calculated by taking the average of the Yearly Target Achievements of the Performance Period; for this purpose, each Yearly Target Achievement is weighted equally (i.e. 1/3, 1/3, 1/3).

 

Example:

 

 

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5.5                               The total number of Performance Shares attributable to each Participant pursuant to Clauses 4.2 and 5.1 to vest (the Number of Performance Shares to Vest) is calculated by multiplying the Number of Granted Performance Shares with the Overall Target Achievement.

 

Example:

 

 

5.6                               The individual figures for each Performance Target shall be rounded using commercial rounding to the second decimal place of the percentage figure (e.g. 8.1523% will result in 8.15%). The Yearly Target Achievement and the Overall Target Achievement shall be rounded using commercial rounding to the next integer in percentage points (e.g. 129.93% will result in 130%). Similarly, the Number of Performance Shares to Vest shall be commercially rounded to the next integer number (e.g. 162.5 will result in 163).

 

6.                                      Vesting of Performance Shares

 

6.1                               Vesting Date

 

Subject to the terms of this Plan, the Performance Shares will vest on 3 December 2022 (the Vesting Date). Exceptions or modifications may apply in special cases described in Clause 8.

 

6.2                               Additional Vesting Conditions

 

Subject to the terms of this Plan, the Performance Shares furthermore will vest only on the conditions and insofar as

 

(a)                                 the Participant continuously has been in an employment or service relationship with FME Group from the Grant Date to the Vesting Date (the Service Condition). In case the Service Condition has not been fulfilled, the

 

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Performance Shares are forfeited on the date on which the employment or service relationship of the Participant with FME Group ends. Exceptions or modifications may apply in special cases described in Clause 8 hereinafter; and

 

(b)                                 in relation to or in connection with his/her employment or service relationship with NxStage Medical, Inc. or its affiliated companies or with FME Group, the Participant has not committed any violations of legal provisions or other applicable rules, e.g. internal guidelines of NxStage Medical, Inc. or any of its affiliated companies or, upon their applicability vis-à-vis the Participant, of FME Group (the Compliance Violations). If, following a corresponding investigation, Compliance Violations have been determined conclusively with respect to a Participant, the Management Board is entitled to declare within its reasonable discretion and in due consideration particularly of the nature and the severity of the Compliance Violation the forfeiture, in whole or in part, of the Performance Shares granted to such Participant. The Participant shall be informed of the extent of the forfeited Performance Shares and of the reasons for the corresponding decision in text form, i.e. by mail, email or via an online platform.

 

7.                                      Settlement of Performance Shares

 

7.1                               One Performance Share carries the entitlement to receive a cash equivalent of the average Stock Exchange Price effectively established over a period of 30 (thirty) calendar days prior to the Vesting Date (the Performance Shares Proceeds). Such cash payment will be made on the Vesting Date, or as soon thereafter as is reasonably practicable. The Participant shall be informed of the Number of Performance Shares to Vest and the corresponding cash payments in text form, i.e. by mail, email or via an online platform.

 

7.2                               Performance Shares Proceeds are paid to the Participant in the currency in which the Participant receives his/her base salary from the Company or an Affiliated Company in the month of the Vesting Date (the Settlement Currency). For this purpose, the FX Rates at Grant Date shall be applied. The purpose of applying the FX Rates at Grant Date is to mitigate exposure arising from exchange rate fluctuations between the Grant Date and the Vesting Date. In cases of Extraordinary Developments, the Management Board is entitled to adjust the FX Rates at Grant Date to the benefit of the Participants.

 

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7.3                               Following and based on the determination of the Number of Performance Shares to Vest, each Participant shall receive the Performance Shares Proceeds pursuant to Clause 7.1 and Clause 7.2. Clause 10 and Clause 11.2 remain unaffected.

 

Example for a Participant to be paid in Euro:

 

 

7.4                               Payment of Performance Shares Proceeds to the Participant is made in each case with the proviso (condition subsequent) that with respect to the Participant a Compliance Violation within the meaning of, and pursuant to, Clause 6.2(b) has not been determined conclusively within a period of three years from the day of the payment of the Performance Shares Proceeds. Clause 11.6 shall remain unaffected.

 

8.                                      Performance Shares in Special Cases

 

8.1                               Retirement

 

(a)                                 For the purpose of this Plan, retirement is defined as a case in which the Participant has reached the age of 65 years and his/her employment or service relationship with FME Group ends (the Retirement). In case of Retirement, the Participant’s Performance Shares shall vest on the Vesting Date (subject to the fulfillment of the additional vesting condition pursuant to Clause 6.2(b)). However, if the Retirement occurs prior to the Vesting Date, the Participant’s Performance Shares shall be forfeited according to the following criteria: 100 % of the Participant’s Performance Shares are forfeited if the Retirement occurs on a date in the period from 21 February 2019 to 3 December 2019 (in each case inclusively), 75 % of the Participant’s Performance Shares are forfeited if the Retirement occurs on a date in the period from 4 December 2019 to 3 December 2020 (in each case inclusively), 50 % of the Participant’s Performance Shares are forfeited if the Retirement occurs on a date in the period from 4 December 2020 to 3 December 2021 (in each case inclusively), and 25 % of the Participant’s Performance

 

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Shares are forfeited if the Retirement occurs on a date in the period from 4 December 2021 to 3 December 2022 (in each case inclusively). For the avoidance of doubt, the remaining (i.e. non-forfeited) Number of Granted Performance Shares will be rounded up or down to the next closest integer number (e.g. 124.75 will result in 125).

 

(b)                                 As far as legally permissible, all of those Participant’s Performance Shares which have not yet been settled and paid out according to Clause 7 above are forfeited with immediate effect if the Participant, within twelve months after his/her employment or service relationship with FME Group has ended, engages in activities that, in the reasonable judgment of the Company, are directly or indirectly competitive to FME Group, including entering into any employment or consultation relationship with any entity or person engaged in activities directly or indirectly competitive to FME Group; if the prerequisites for a forfeiture were present, but the Participant’s Performance Shares have already been settled and paid out, the consequences in Clause 11.6 shall apply to the relevant Performance Shares Proceeds.

 

8.2                               Occupational Disability

 

In the event of the Participant’s Occupational Disability, Clause 8.1(a) sentence 2 shall apply mutatis mutandis if (i) the participant provides the Company, or an institution designated by the Company, with suitable evidence of his/her Occupational Disability within three months of the occurrence of the Occupational Disability and (ii) the Participant’s employment or service relationship with FME Group is terminated due to the Occupational Disability. If such evidence is not provided within the time limit, the Management Board may declare those Performance Shares to be forfeited, which have not yet been settled and paid out according to Clause 7 above. For the avoidance of doubt, Clause 8.1(a) sentence 3 shall not apply in case of Occupational Disability.

 

8.3                               Ordinary Termination / Cancellation of Employment by Agreement

 

If a Participant’s employment or service relationship with FME Group has ended by termination or agreement and the legal consequences of Clause 8.1(a) sentence 2 do not apply in accordance with the provisions of Clause 8.1(a) or 8.2, all Performance Shares not vested on the effective date of the termination or the agreement are forfeited.

 

8.4                               Death

 

In case of death of a Participant, Clause 8.1(a) sentence 2 applies accordingly; for the

 

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avoidance of doubt, Clause 8.1(a) sentence 3 shall not apply in case of death. The Heirs of the Participant are entitled to receive the Performance Shares Proceeds if they give evidence of their entitlement to the Company or an office named by the Company within three months after the death of the Participant; otherwise, the Management Board may declare the Performance Shares to be forfeited. Clause 8.5 (Termination for Cause) remains unaffected.

 

8.5                               Termination for Cause

 

Notwithstanding Clauses 8.1 (Retirement), 8.2 (Occupational Disability), 8.3 (Ordinary Termination / Cancellation of Employment by Agreement) and 8.4 (Death), all Performance Shares shall be forfeited if the Participant’s employment or service relationship is terminated by the employer for cause, or if, at the time of leaving, there were grounds which would have entitled the employer to terminate the employment agreement or service relationship for cause.

 

8.6                               Engagement with Fresenius Group

 

The Performance Shares shall not be affected by the transfer of a Participant’s engagement from the Company or from an Affiliated Company to Fresenius SE & Co. KGaA or to an affiliated company of Fresenius SE & Co. KGaA within the meaning of sections 15 et seqq. of the German Stock Corporation Act (Aktiengesetz), including Fresenius Management SE.

 

8.7                               Effect of Change in Status as Affiliated Company

 

If a Participant is employed by a company which ceases to be or does no longer qualify as an Affiliated Company or, in the case of a transfer of a Participant’s engagement referred to in Clause 8.6, an affiliated company of Fresenius SE & Co. KGaA, all Performance Shares granted to the Participant shall be forfeited.

 

8.8                               Effect of Change in Status as General Partner

 

If the General Partner ceases to exercise the function of the Company’s general partner, all Performance Shares granted to a Participant employed by the General Partner shall be forfeited.

 

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8.9                               Individual Cases

 

In individual cases, the Management Board can waive or amend the provisions of this Clause 8, taking duly into account the Company’s interests.

 

9.                                      No Transferability / Forfeiture

 

Performance Shares granted under this Plan and Performance Shares inherited according to Clause 8.4 are not transferable. With the exception of inheritance according to Clause 8.4, any transfer, assignment or disposal of Performance Shares, such as the granting of sub-participations therein, pledging, granting usufruct rights (Nießbrauch) or the formation of a trust, shall be void and invalid. The same applies to legal transactions which are economically equal to a transfer or assignment.

 

10.                               Taxes, Contributions and other Expenses

 

Performance Shares Proceeds are considered gross. Any entitlements or benefits under this Plan may be subject to income tax, social security taxes and other taxes and contributions. This also depends on the legislation of the country where the Participant stays, resides or is subject to tax for other reasons. All taxes and contributions incurred in connection with the Plan shall be borne by the Participant, excluding taxes and contributions which are by law to be borne by the employer. The Company and any Affiliated Companies, as the case may be, are entitled to withhold and remit such taxes and contributions in accordance with the respective applicable laws.

 

11.                               Procedure, Ending and Adjustment of the Plan

 

11.1                        Unless otherwise provided in this Plan, the Plan shall be interpreted, waived, adjusted or otherwise administered, and may be amended or modified by the Management Board and all Performance Shares granted to Participants will be approved by the Management Board. Adjustments to the Plan may also be made with regard to Performance Shares which have already been granted, provided that this does not affect the value of the Performance Shares or that the Participant is fully compensated for any financial loss suffered. For the avoidance of doubt, any such adjustments with regard to Performance Shares which have already been granted should not result in a retroactive reduction or lowering of relevant performance target levels pursuant to this Plan.

 

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11.2                        In case of Extraordinary Developments, the Management Board is entitled to cap the amount of the Grant Value and/or the Number of Granted Performance Shares and/or the Performance Shares Proceeds to be paid to the Participants under the Plan.

 

11.3                        Furthermore, the Management Board is entitled to determine in certain cases, based on its respective reasonable discretion, that any extraordinary commercial, tax or similar impacts that may occur during any relevant Performance Period affecting the degree of Yearly Target Achievement and/or Overall Target Achievement in relation to individual grants shall in full or in part be disregarded for purposes of determining Yearly Target Achievement and/or Overall Target Achievement pursuant to this Plan in relation to such grants.

 

11.4                        The Management Board is entitled to end the Plan with effect for all Participants at any time. In this case, the Performance Shares already granted to the Participants remain unaffected.

 

11.5                        If the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the U.S. federal securities laws, the Company shall be entitled, without prejudice to Clause 11.6 hereafter, to recover to the full extent required under then current and applicable law and/or applicable stock exchange listing rules from current and former executive officers of the Company who received any bonus or other incentive-based compensation based on the erroneous data during the period of three years preceding the date the Company is required to prepare the accounting restatement, (i) the amount of such bonus or other incentive-based compensation in excess of what would have been paid to the executive officer under the accounting restatement and (ii) such other amounts, if any, as may be recoverable by applicable law.

 

11.6                        If the Participants have committed Compliance Violations which have occurred and/or have been determined conclusively only after the settlement of Performance Shares within the meaning of Clause 7 above, the Management Board is entitled within its reasonable discretion to claim back the Performance Shares Proceeds, in whole or in part, from the Participant in the Company’s name, provided that and insofar as the Performance Shares Proceeds have been paid to the Participant at a point in time that is within a period of three years prior to the day on which the Company makes the repayment claim in writing, stating the reasons for such claim. For the avoidance of doubt, the Company’s rights pursuant to this Clause 11.6 shall not prejudice any other rights the Company may have against the Participant in relation to any Compliance

 

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Violations under or in connection with his or her employment or service relationship with the Company or an Affiliated Company.

 

11.7                        In general, benefit payments remain subject to a substantial risk of forfeiture until they are paid under Clause 7.1, due to the Service Condition imposed under Clause 6.2(a). In such cases, there is no “deferred compensation” and the constraints imposed by U.S. Internal Revenue Code Section 409A do not apply. However, when a Participant’s Performance Shares vest due to one of the special cases established under Clause 8, Plan benefits may constitute “deferred compensation.” In those cases, the Plan shall pay benefits on the fixed date specified in Clause 7.1, thereby complying with Treasury Regulation Section 1.409A-3(a)(4).

 

11.8                        The administration of any amounts payable hereunder that constitute “deferred compensation” within the meaning of Section 409A will comply with Section 409A, and this Plan shall be administered, interpreted and construed in a manner intended to avoid the imposition of additional taxes, penalties or interest under Section 409A. The Management Board may exercise its right to adjust the Plan pursuant to Clause 11.1 above in order to preserve the intended tax consequences of the Performance Shares, and avoid the imposition of any tax under Section 409A. Notwithstanding the foregoing, the Participant shall be solely responsible and liable for the satisfaction of all taxes, penalties and interest that may be imposed on or for the account of the Participant or his or her Heirs in connection with this Plan (including any taxes, penalties and interest under Section 409A), and neither the Company nor any Affiliated Company shall have any obligation to indemnify or otherwise hold the Participant (or any Heir) harmless from any or all of such taxes, penalties or interest.

 

11.9                        In the event that any payment to the Participant is deemed to be an installment payment of nonqualified deferred compensation under Section 409A, each individual installment payment shall be deemed to be a separate “payment” within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

11.10                 Other than by taking actions specifically permitted under this Plan, the Participant shall not have the right, directly or indirectly, to designate the taxable year during which a payment shall be made under this Plan.

 

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12.                               Liability Risks, Exchange Risks and Tax Risks

 

12.1                        The liability of the Company, its legal representatives, employees and agents for simple negligence and consequential loss and loss of profit is excluded.

 

12.2                        The Company grants no warranty for the general market development and price of the shares of the Company after granting Performance Shares or for any other point or period in time. Therefore, the acceptance of Performance Shares is at the sole risk of each Participant.

 

12.3                        The Company grants no warranty that the tax and contributions deducted in accordance with Clause 10 (Taxes, Contributions and other Expenses) or other tax and contributions payable by the Participants will be charged only on the Performance Shares Proceeds. Depending on a Participant’s personal circumstances, double taxation might occur if the Plan is subject to taxation in several countries. The Participants are advised to obtain advice on their personal tax situation.

 

13.                               Term of the Plan

 

This Plan shall be effective as of 21 February 2019 and shall apply to no more but one grant of Performance Shares to each individual Participant. The Plan will terminate following the payout of any Performance Shares Proceeds. Clauses 11.1 and 11.4 remain unaffected.

 

14.                               Miscellaneous Provisions

 

14.1                        This Plan is subject to German law.

 

14.2                        No provisions contained in this Plan (or in any documents referring to this Plan) transfer to a Participant or possible Participant any right to request the continuation of his/her employment or service relationship with the Company or any Affiliated Company. No employment or service relationship can be deducted from this Plan (or from any documents referring to this Plan), nor shall it have any effect on the right of the Company or any Affiliated Company to change compensation or other benefits of such Participant or to terminate his/her employment relationship with or without notice. This applies with the proviso that no provision in this Plan or in any document connected therewith will adversely influence any independent contractual right of these persons.

 

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14.3                        If any provision of this Plan is invalid or unenforceable, the validity or enforceability of the remaining provisions of the Plan shall not be affected. The same applies if it is ascertained that the Plan is subject to an omission. In these cases, the invalid or unenforceable provision shall be substituted or an omission repaired by such provision which most closely corresponds to the intended purpose of this Plan.

 

14.4                        References and headings attributed to individual Clauses and Sub-clauses of this Plan are solely for the purpose of easier reference. These headings are in no case significant or relevant for the interpretation of the Plan.

 

14.5                        No provision in this Plan leads to or infers a presumption that the authority of the Management Board to issue Performance Shares or approve other compensation connected or not connected to shares granted by any other share based long-term incentive program or any other authority may in any way be restricted.

 

15.                               Definitions

 

15.1                        Affiliated Company means any company within FME Group with the exception of the Company.

 

15.2                        Company is defined in Clause 1.1.

 

15.3                        Compliance Violations is defined in Clause 6.2(b).

 

15.4                        Constant Currency shall mean that for the purpose of this Plan the calculation of the figures stated under IFRS denominated in Euro shall be adjusted for currency effects. For the ascertainment of the currency adjustment all line items of the profit and loss statements of the companies that are included in the consolidated financial statements and which have a functional currency other than the reporting currency (Euro) are translated with the average exchange rates of the year of the consolidated financial statements that are the basis for the comparison.

 

15.5                        Extraordinary Developments shall mean any kind of extraordinary scenarios in which the price of the Company’s shares would have lost any reasonably arguable correlation to the Company’s intrinsic enterprise value (such as hyper-inflation); however, no such Extraordinary Development shall be applicable in cases in which the price of Company’s shares rises (even substantially) as a result of the performance of the Participants.

 

19

 

15.6                        FME Group stands for the group of entities including the General Partner, the Company and its affiliated companies within the meaning of sections 15 et seqq. of the German Stock Corporation Act, with the exception of Fresenius SE & Co. KGaA and the companies affiliated with Fresenius SE & Co. KGaA within the meaning of sections 15 et seqq. of the German Stock Corporation Act in any manner other than through the Company.

 

15.7                        Foreign Currency Exchange Rates means the nominal prices of the foreign exchange rates as published by the European Central Bank. If no prices are published by the European Central Bank, the Management Board is entitled to agree on a suitable other form for obtaining the prices.

 

15.8                        FX Rates at Grant Date is defined in Clause 4.2.

 

15.9                        General Partner is defined in Clause 1.1.

 

15.10                 Grant Currency is defined in Clause 4.2.

 

15.11                 Grant Date is defined in Clause 4.1.

 

15.12                 Grant Value is defined in Clause 4.2.

 

15.13                 Heir means the person, the persons, the trust or trusts, which are nominated by a Participant or, if no such nomination is made, is or are entitled by will or the respective applicable law in the event of the death of a Participant, to receive the benefit of the Performance Shares under this Plan. The concept “heir” therefore also includes the executor appointed by will or the administrator appointed by the court, if no heir is named and is in a position to act under the given circumstances.

 

15.14                 IFRS means the “International Financial Reporting Standards” which are issued by the International Accounting Standards Board, as amended.

 

15.15                 Management Board is defined in Clause 1.1.

 

15.16                 Net Income Growth is defined in Clause 5.2(b).

 

15.17                 Number of Granted Performance Shares is defined in Clause 4.2.

 

15.18                 Number of Performance Shares to Vest is defined in Clause 5.5.

 

20

 

15.19                 Occupational Disability is a condition in which the Participant is unable, for an indefinite period of time, to exercise his/her current position or a comparable replacement position in an employment or service relationship with the FME Group under normal conditions, due to illness or disability. For the purposes of this Plan, a Participant’s classification as fully disabled by the US Social Security Administration constitutes Occupational Disability.

 

15.20                 Overall Target Achievement is defined in Clause 5.4.

 

15.21                 Participant is defined in Clause 1.1.

 

15.22                 Performance Period is defined in Clause 5.2.

 

15.23                 Performance Shares is defined in Clause 1.1.

 

15.24                 Performance Shares Proceeds is defined in Clause 7.1.

 

15.25                 Performance Targets is defined in Clause 5.1.

 

15.26                 Plan is defined in Clause 1.1.

 

15.27                 Plan Conditions is defined in Clause 1.2.

 

15.28                 Retirement is defined in Clause 8.1(a).

 

15.29                 Return on Invested Capital (ROIC) is defined in Clause 5.2(c).

 

15.30                 Revenue Growth is defined in Clause 5.2(a).

 

15.31                 Service Condition is defined in Clause 6.2(a).

 

15.32                 Settlement Currency is defined in Clause 7.2.

 

15.33                 Stock Exchange Price means the closing price (Schlusskurs) of the Company’s shares in the electronic XETRA trading system of Deutsche Börse AG in Frankfurt/Main or a comparable successor system denominated in Euro. If no closing price is set in the XETRA trading system, the Management Board is entitled to agree on a suitable means of replacing the closing price.

 

15.34                 Target ROIC is defined in Clause 5.2(c).

 

21

 

15.35                 Vesting Date is defined in Clause 6.1.

 

15.36                 Yearly Target Achievement is defined in Clause 5.3.

 

22EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
 February 20, 2020

 T-Mobile US, Inc. 

12920 SE 38th Street 
 Bellevue, Washington 

Deutsche Telekom AG 
 Friedrich-Ebert-Allee 140 

53113 Bonn, Germany 
 Dear Ladies and Gentlemen: 

Reference is made to the Business Combination Agreement, dated as of April 29, 2018 (the “Original Agreement”), as
amended by Amendment No. 1, dated as of July 26, 2019 (“Amendment No. 1”) and Amendment No. 2, dated as of the date hereof (“Amendment No. 2”; and the Original
Agreement, as amended by Amendment No. 1 and Amendment No. 2, and as it may be further amended from time to time, the “Business Combination Agreement”), by and among T-Mobile US,
Inc., a Delaware corporation (“T-Mobile”), Huron Merger Sub LLC, a Delaware limited liability company, Superior Merger Sub Corporation, a Delaware corporation, Sprint Corporation, a Delaware
corporation, Starburst I, Inc., a Delaware corporation (“Starburst”), Galaxy Investment Holdings, Inc., a Delaware corporation (“Galaxy”), and, for the limited purposes of the covenants and representations and
warranties set forth in the Agreement that are expressly obligations of such persons, Deutsche Telekom AG, an Aktiengesellschaft organized and existing under the laws of the Federal Republic of Germany (“DT”), Deutsche
Telekom Holding B.V., a besloten vennootschap met beperkte aansprakelijkheid organized and existing under the laws of the Netherlands, and SoftBank Group Corp., a Japanese kabushiki kaisha (“SoftBank”). 

In connection with the transactions contemplated by the Business Combination Agreement and as an inducement to the willingness of SoftBank, T-Mobile, DT and their applicable affiliates to enter into Amendment No. 2, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows: 
 1.1    Definitions. 

(a)    Unless otherwise specifically defined herein, each capitalized term used but not defined in this
letter agreement shall have the meaning given to such term in the Business Combination Agreement. 

(b)    For purposes of this letter agreement: 

(i)    “Acquisition Price” shall mean the value of the
per-share consideration payable in respect of shares of T-Mobile Common Stock in the applicable Sale of the Company, determined as of immediately prior to the closing of
the Sale of the Company. 

 (ii)    “End Date” shall mean, if the
Closing Date is (i) before May 1, 2020, then December 31, 2025, or (ii) on or after May 1, 2020 then either (A) December 31, 2025 or (B) the sixth (6th) anniversary of the Closing Date, in either case of clause
(A) or (B), as set forth in the SoftBank Election Notice. 
 (iii)    “Threshold
Price” shall mean, if the Closing Date is (i) before May 1, 2020, then one hundred and fifty dollars ($150.00), or (ii) on or after May 1, 2020, then either (A) if the End Date set forth in the SoftBank Election
Notice is December 31, 2025, one hundred and fifty dollars ($150.00), or (B) if the End Date set forth in the SoftBank Election Notice is the sixth (6th) anniversary of the Closing Date, (I) one hundred and fifty dollars ($150.00)
through and including the fifth (5th) anniversary of the Closing Date and (II) one hundred and sixty dollars ($160.00) following the fifth (5th) anniversary of the Closing Date through the End Date. 

(iv)    “Sale of the Company” shall have the meaning given to such term in the
Stockholders’ Agreement. 
 (v)    “Trading Day” shall mean any day on which NASDAQ
is open for trading and has a scheduled closing time of 4:00 p.m. New York City time; 

(vi)    “T-Mobile VWAP” shall mean, for any
Trading Day, the trailing volume-weighted average price per share of T-Mobile Common Stock on NASDAQ (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually
selected by T-Mobile and SoftBank) measured over the forty-five (45) consecutive Trading Day period immediately preceding such Trading Day. 

1.2    Surrender of Shares by SoftBank. SoftBank hereby agrees to cause its affiliates to surrender, convey,
assign, transfer and deliver to T-Mobile, for no additional consideration, an aggregate of 48,751,557 shares of T-Mobile Common Stock (such number of shares, the
“SoftBank Specified Shares Amount”) effective immediately following the Effective Time, it being agreed that T-Mobile shall be entitled to take, and to direct the Exchange Agent to take, such
actions as T-Mobile or the Exchange Agent reasonably determine are necessary or appropriate to effect the foregoing surrender, conveyance, assignment, transfer and delivery effective as of such time, without
any further action on the part of SoftBank, SoftBank UK HoldCo or their respective affiliates; provided that SoftBank shall, and shall cause its affiliates to, execute and deliver any assignments, assurances, instruments or documents, and
take and do any other actions or things, as T-Mobile may reasonably request to accomplish or in furtherance of the foregoing. 

1.3    Additional Shares Issuable to SoftBank. If the T-Mobile VWAP, at any
time during the period commencing on the second (2nd) anniversary of the Closing Date and ending on the End Date, is an amount equal to or greater than the Threshold Price (such condition, the “Additional Shares Issuance
Condition”), then, subject to the remaining provisions of this Section 1.3, T-Mobile shall promptly, and in any event within ten (10) business days following the
delivery of such documents as may be reasonably required by the transfer agent for the T-Mobile Common Stock, issue to SoftBank or, at SoftBank’s written request, an affiliate of

  
 -2- 

 
SoftBank that is then a record holder of shares of T-Mobile Common Stock (a “SoftBank Designee”), for no additional consideration, a
number of shares of T-Mobile Common Stock equal to the SoftBank Specified Shares Amount (the “SoftBank True-Up Shares”). Notwithstanding the foregoing, (i) T-Mobile shall have the right to withhold, and shall not be required to issue (whether upon the satisfaction of the Additional Share Issuance Condition or at any time thereafter), shares of T-Mobile Common Stock comprising the SoftBank True-Up Shares to the extent T-Mobile elects, in
T-Mobile’s sole discretion, in order to recoup any or all indemnity obligations in respect of Specified Claims then due and owing from SoftBank or any of its affiliates pursuant to Section 9.4 of the
Business Combination Agreement, whether owed to T-Mobile or any other Section 9.4 Indemnitee (the “Section 9.4 Obligations”), with such shares of T-Mobile Common Stock valued for purposes of this clause (i) at the T-Mobile VWAP as of the date of the satisfaction of the Additional Share Issuance Condition, and with
such recoupment to be effected by T-Mobile withholding a number of shares of T-Mobile Common Stock that, when multiplied by such
T- Mobile VWAP, equals the amount of Section 9.4 Obligations then due and owing; (ii) without limiting the rights of T-Mobile under clause (i), the issuance of
18,000,000 of the shares of T-Mobile Common Stock comprising the SoftBank True-Up Shares (the “Pledged Shares”) shall be subject to and conditioned upon
(A) the delivery by each and every applicable affiliate of SoftBank to which the Pledged Shares are issuable hereunder a valid and binding pledge agreement, in the form attached hereto as Exhibit A, securing the Section 9.4
Obligations (the “Pledge Agreements”), and (B) the completion of such other steps as are reasonably necessary to reflect the creation and perfection of the related security interest; (iii) if between the Closing Date and
(A) the End Date, the shares of T-Mobile Common Stock shall have been changed into a different number of shares or a different class of shares by reason of any stock dividend or distribution, subdivision, reorganization, reclassification,
recapitalization, stock split, stock equity split, combination, exchange of shares or any similar event (an “Adjustment Event”), then the Threshold Price (but, for the avoidance of doubt, not any dates or periods set forth therein),
the SoftBank True-Up Shares Amount and the number of shares set forth in the foregoing clause (ii) shall be equitably adjusted, without duplication, to provide SoftBank (or, if applicable, the SoftBank
Designee) with the same economic benefit, if any, that SoftBank (or, if applicable, such SoftBank Designee) would have had the right to receive if the Adjustment Event had not occurred, or (B) the second (2nd) anniversary of the Closing Date, a
definitive agreement for the Sale of the Company is entered into, then, subject to the foregoing clauses (i) and (ii) (which shall apply to any consideration to which SoftBank (or, if applicable, the SoftBank Designee) may become entitled in
connection with the Sale of the Company pursuant to this clause (B)), if the Acquisition Price is equal to or greater than the Threshold Price, then T-Mobile shall issue to SoftBank (or, if applicable, the
SoftBank Designee) the SoftBank True-Up Shares for no additional consideration immediately prior to the closing of such Sale of the Company, such that SoftBank (or, if applicable, the SoftBank Designee) shall
receive the applicable per-share consideration payable in respect of each such share of T-Mobile Common Stock in the Sale of the Company; and (iv) the Threshold
Price shall be reduced by the per share amount of any cash dividends or other cash distributions declared or paid on the T-Mobile Common Stock between the Closing Date and the End Date. For the avoidance of
doubt, all shares of T-Mobile Common Stock issued pursuant to this Section 1.3 shall be subject to the terms and conditions of the Stockholders’ Agreement and the Voting and
Proxy Agreement in the same manner as if such shares had been issued at the Closing without giving effect to Section 1.2. 

  
 -3- 

 1.4    SoftBank Election Notice. If the Closing Date is on or
after May 1, 2020, then SoftBank shall, by written notice (the “SoftBank Election Notice”) to T-Mobile and DT delivered no later than the Closing Date (provided, that if the
Closing Date shall not have occurred prior to June 1, 2020, then the SoftBank Election Notice shall be delivered no later than June 1, 2020), elect the terms set forth in either (but not any combination of) the following clause (a) or
the following clause (b): 
 (a)    an End Date of December 31, 2025 and a Threshold Price of one hundred and fifty
dollars ($150.00); or 
 (b)    an End Date of the sixth (6th) anniversary of the Closing Date and a Threshold Price of
(i) one hundred and fifty dollars ($150.00) through and including the fifth (5th) anniversary of the Closing Date and (ii) one hundred and sixty dollars ($160.00) following the fifth (5th) anniversary of the Closing Date through the End
Date. 
 1.5    Term and Termination. This letter agreement shall continue in full force and effect from and
after the date hereof until the earliest of (i) the issuance of all SoftBank True-Up Shares to which SoftBank is entitled pursuant to Section 1.3 (and subject to the execution
and delivery of the Pledge Agreement(s) by SoftBank and/or its applicable affiliate(s), as applicable), whereupon Section 1.3 of this letter agreement (other than the last sentence thereof) shall forever terminate,
automatically and without any further action on the part of the parties hereto, and shall become void and of no force or effect, (ii) the End Date, if the Additional Shares Issuance Condition has not been satisfied as of such date, whereupon
Section 1.3 of this letter agreement shall forever terminate, automatically and without any further action on the part of the parties hereto, and shall become void and of no force or effect, (iii) the consummation of a
Sale of the Company pursuant to which the Acquisition Price is less than the Threshold Price, whereupon Section 1.3 of this letter agreement (other than the last sentence thereof) shall forever terminate, automatically and
without any further action on the part of the parties hereto, and shall become void and of no force or effect, and (iv) the termination of the Business Combination Agreement prior to the SoftBank US Mergers Effective Time, whereupon this letter
agreement shall forever terminate, automatically and without any further action on the part of the parties hereto, and shall become void and of no force or effect. 

1.6    Amendment; Waiver. Any amendment or modification of this letter agreement shall require the prior written
consent of each of T-Mobile, DT and SoftBank. A party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other parties or (b) waive compliance by the
other party with any of the agreements or conditions contained in this letter agreement. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of
such party. Any extension or waiver given in compliance with this Section 1.5 or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. 
 1.7    Miscellaneous. The provisions of Article X (General
Provisions) (other than Section 10.1, Section 10.9 and Section 10.14) of the Business Combination Agreement shall apply mutatis mutandis to this letter agreement. This letter agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs, legal representatives and permitted assigns. Except as otherwise provided in this letter agreement 

  
 -4- 

 
(with respect to T-Mobile or DT only and, for the avoidance of doubt, without limiting any right of T-Mobile to
agree to or consummate a Sale of the Company), no party may directly or indirectly assign any of its rights or delegate any of its obligations under this letter agreement, without the prior written consent of the other parties; provided that,
without the written consent of the other parties, (a) DT may assign any of its rights or obligations hereunder, in whole or in part, to any Person (as used herein, such term shall have the meaning given to such term in the Stockholders’
Agreement) that will be a successor to or that will acquire Control (as used herein, such term shall have the meaning given to such term in the Stockholders’ Agreement) of DT, whether by merger, consolidation or sale of all or substantially all
of its assets, and (b) T-Mobile’s obligations will succeed to any Person that will be a successor to T-Mobile, whether by merger, consolidation or sale of all
or substantially all of its assets. Any purported direct or indirect assignment in violation of this Section 1.7 shall be null and void ab initio. 

1.8    Security Interest. Without in any way limiting the effect of Section 1.3 above,
SoftBank hereby grants to T-Mobile a security interest in all of its rights and interests in respect of the Pledged Shares under this letter agreement, as collateral security for the prompt and complete
payment and performance of the Section 9.4 Obligations, whether such Section 9.4 Obligations are owed to T-Mobile or any other Section 9.4 Indemnitee; provided that the security interest
hereunder shall automatically terminate upon execution and delivery of the Pledge Agreement(s) by SoftBank and/or its applicable affiliate(s), as applicable. 

[Signature page follows] 

  
 -5- 

 
			
	Very truly yours,
	
	SOFTBANK GROUP CORP.
		
	By:	 	 /s/ Marcelo Claure

	Name:	 	Marcelo Claure
	Title:	 	Executive Vice President and Chief Operating Officer

  

			
	 Accepted and agreed to as of
 the
date set forth above:

	
	T-MOBILE US, INC.
		
	By:	 	 /s/ G. Michael Sievert

	Name:	 	G. Michael Sievert
	Title:	 	President and Chief Operating Officer
	
	DEUTSCHE TELEKOM AG
		
	By:	 	 /s/ Thorsten Langheim

	Name:	 	Thorsten Langheim
	Title:	 	Member of Management Board
		
	By:	 	 /s/ Dr. Axel Lützner

	Name:	 	Dr. Axel Lützner
	Title:	 	Vice President DT Legal

  
 [Signature Page to
Letter Agreement]

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