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Exhibit 4.2
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the material rights of our capital stock and related provisions of our articles of incorporation, or articles, and bylaws. The following description of our capital stock does not purport to be complete and is subject to, and qualified in its entirety by, our articles and bylaws, which we have included as exhibits to our filings with the Securities and Exchange Commission. We urge you to read these documents for a more complete understanding of shareholder rights.
Our articles authorize the issuance of up to 60,000,000 shares of common stock, without par value, and up to 10,000,000 shares of preferred stock, without par value.
Common Stock
Governing Documents. Holders of shares of our common stock have the rights set forth in our articles, our bylaws and the CGCL.
Dividends and Distributions. The holders of our common stock are entitled to share equally in any dividends that our board of directors may declare from time to time out of funds legally available for dividends, subject to limitations under California law and any preferential rights of holders of our then outstanding preferred stock.
Ranking. Our common stock ranks junior with respect to dividend rights and rights upon liquidation, dissolution or winding up to all our other securities and indebtedness.
Upon any voluntary or involuntary liquidation, dissolution or winding up, the holders of our common stock are entitled to share equally, on a per share basis, in all of our assets available for distribution, after payment to creditors and subject to any prior distribution rights granted to holders of any then outstanding shares of preferred stock.
Conversion Rights. Our common stock is not convertible into any other shares of our capital stock.
Preemptive Rights. Holders of our common stock do not have any preemptive rights.
Voting Rights. The holders of our common stock are entitled to one vote per share on any matter to be voted on by the shareholders. A plurality of the shares voted shall elect all of the directors then standing for election at a meeting of shareholders at which a quorum is present.
Redemption. We have no obligation or right to redeem our common stock.
Stock Exchange Listing. Our common stock is listed on the Nasdaq Global Market under the trading symbol “PCB.”
Preferred Stock
Upon authorization of our board of directors, we may issue shares of one or more series of our preferred stock from time to time. Our board of directors may, without any action by holders of common stock and except as may be otherwise provided in the terms of any series of preferred stock of which there are shares outstanding, adopt resolutions to designate and establish a new series of preferred stock. Upon establishing such a series of preferred stock, the board will determine the number of shares of preferred stock of that series that may be issued and the rights and preferences of that series of preferred stock. The rights of any series of preferred stock may include, among others:
•general or special voting rights;
•preferential liquidation rights;
•preferential cumulative or noncumulative dividend rights;
•redemption or put rights; and
•conversion or exchange rights.

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We may issue shares of, or rights to purchase shares of, one or more series of our preferred stock that have been designated from time to time, the terms of which might:
•adversely affect voting or other rights evidenced by, or amounts otherwise payable with respect to, the common stock or other series of preferred stock;
•discourage an unsolicited proposal to acquire us; or
•facilitate a particular business combination involving us.
Any of these actions could have an anti-takeover effect and discourage a transaction that some or a majority of our shareholders might believe to be in their best interests or in which our shareholders might receive a premium for their stock over our then market price.
The Company previously had issued and outstanding two series of preferred stock, the Series A and Series B Fixed Rate Perpetual Preferred Stock, both of which were fully redeemed and retired in a series of direct repurchases and redemptions in 2013 and 2014.
Senior Non-Cumulative Perpetual Preferred Stock, Series C
The following is a brief description of the terms of our Senior Non-Cumulative Perpetual Preferred Stock, Series C (“series C preferred stock”) that may be resold by the initial securityholder under certain circumstances. This summary does not purport to be complete in all respects. This description is subject to and qualified in its entirety by reference to our articles of incorporation, as amended, including the certificate of determination with respect to the series C preferred stock, copies of which have been filed with the SEC and are also available upon request from us.
General
Under our articles of incorporation, as amended, we have authority to issue up to 10 million shares of preferred stock, no par value per share. Of such number of shares of preferred stock, 69,141 shares have been designated as series C preferred stock, all of which shares were issued to the initial securityholder in a transaction exempt from the registration requirements of the Securities Act. The issued and outstanding shares of series C preferred stock are validly issued, fully paid and nonassessable.
Dividends Payable on Shares of Series C Preferred Stock
Holders of shares of series C preferred stock are entitled to receive non-cumulative cash dividends out of assets legally available for payment on the dividend payment date that is at least two years from the original issue date, if and when declared by our board of directors or a duly authorized committee of the board, at a rate per annum of zero percent for the first two years after issuance, and thereafter at a rate which is between the floor dividend rate per annum of 0.50% and the ceiling dividend rate per annum of 2.00% on a liquidation preference of $1,000 per share of series C preferred stock. The dividend rate after the initial two years will be reset annually until the tenth anniversary of the issuance and will be based upon the annual change in actual qualified lending pursuant to the terms of the ECIP relative to a baseline level of qualified lending, expressed as a percentage of the aggregate liquidation amount of the series C preferred stock. The final reset will be based upon the average annual increase in qualified lending over the nine-year period preceding the last reset date, expressed as a percentage of the aggregate liquidation amount.
Dividends which are declared on the series C preferred stock are payable quarterly in arrears on March 15, June 15, September 15, and December 15, each a dividend payment date, starting with the June 15, 2024 payment date. If any dividend payment date is not a business day, then the next business day will be the applicable dividend payment date, and no additional dividends will accrue as a result of the applicable postponement of the dividend payment date. Dividends declared and payable during any dividend period are computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends declared with respect to the series C preferred stock are payable to holders of record of shares of series C preferred stock on the date that is 15 calendar days immediately preceding the applicable dividend payment date or such other record date as the board of directors or any duly authorized committee of the board determines, so long as such record date is not more than 60 nor less than 10 days prior to the applicable dividend payment date.
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The terms of the series C trust preferred stock provide that the dividends shall be non-cumulative.  If the board of directors does not declare a dividend on the series C preferred stock with respect to any dividend period, the holders of series C preferred stock shall have no right to receive any dividend with respect to such dividend period, and we shall have no obligation to pay a dividend with respect to such dividend period, whether or not dividends are declared for any subsequent dividend period. However, so long as any series C preferred stock remains outstanding, we are prohibited from paying cash dividends to shareholders or repurchasing stock unless full dividends on all outstanding shares of series C preferred stock with respect to the most recently completed dividend period have been or are contemporaneously declared and paid and we are not in default on our obligation to redeem any shares of series C preferred stock that have been called for redemption.
We are subject to various regulatory policies and requirements related to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The Board of Governors of the Federal Reserve System, or the Federal Reserve Board, is authorized to determine, under certain circumstances relating to the financial condition of a bank holding company, such as us, that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. In addition, we are subject to California state laws relating to the payment of dividends. Since we receive substantially all of our revenue from Pacific City Bank, our ability to pay dividends on our common stock or preferred stock depends on our receipt of dividends from Pacific City Bank. Dividend payments from Pacific City Bank are subject to legal and regulatory limitations, generally based on net income and retained earnings. The ability of Pacific City Bank to pay dividends to us is also subject to its profitability, financial conditions, capital expenditures and other cash flow requirements.
Priority of Dividends
With respect to the payment of dividends and the amounts to be paid upon liquidation, the series C preferred stock will rank:
•Senior to our common stock and all other equity securities designated as ranking junior to the series C preferred stock; and
•at least equally with all other equity securities designated as ranking on a parity with the series C preferred stock, or parity stock, with respect to the payment of dividends and distribution of assets upon our liquidation, dissolution or winding up of PCB Bancorp.
So long as any shares of series C preferred stock remain outstanding, unless full dividends on all outstanding shares of series C preferred stock with respect to the most recently completed dividend period have been or are contemporaneously declared and paid and we are not in default on our obligation to redeem any shares of series C preferred stock that have been called for redemption, no dividend whatsoever shall be paid or declared on PCB Bancorp’s common stock, other junior stock, or dividend parity stock other than a dividend payable solely in common stock. We and our subsidiaries also may not purchase, redeem or otherwise acquire for consideration any shares of our common stock, other junior stock, or dividend parity stock unless full dividends on all outstanding shares of series C preferred stock with respect to the most recently completed dividend period have been or are contemporaneously declared and paid and we are not in default on our obligation to redeem any shares of series C preferred stock that have been called for redemption. 
If the board of directors elects to declare only partial instead of full dividends for a dividend payment date and related dividend period on the shares of series C preferred stock, or any dividend parity stock, then to the extent permitted by the terms of the series C preferred stock and each outstanding series of dividend parity stock, such partial dividends shall be declared on shares of C preferred stock and each outstanding series of dividend parity stock, and dividends so declared shall be paid, as to any such dividend payment date and related dividend period in amounts such that the ratio of the partial dividends declared and paid on each such series to full dividends on each such series is the same. 
Subject to the foregoing, such dividends (payable in cash, stock or otherwise) as may be determined by our board of directors (or a duly authorized committee of the board) may be declared and paid on our common stock and any other stock ranking equally with or junior to the series C preferred stock from time to time out of any funds legally available for such payment, and the series C preferred stock shall not be entitled to participate in any such dividend.
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Redemption
The series C preferred stock may be redeemed (i) in whole or in part, from time to time, on any dividend payment date on or after June 15, 2027, or (ii) in whole but not in part at any time within 90 days following a regulatory capital treatment event, as defined in the relevant certificate of determination, subject to the approval of the Federal Reserve Board, in whole or in part, subject to the notice as described below.
In any redemption or repurchase, the redemption or repurchase price is an amount equal to the per share liquidation amount plus any declared but unpaid dividends to but excluding the date of redemption. 
The series C preferred stock will not be subject to any mandatory redemption, sinking fund or similar provisions. Holders of shares of series C preferred stock have no right to require the redemption or repurchase of the series C preferred stock. 
If fewer than all of the outstanding shares of series C preferred stock are to be redeemed, the shares to be redeemed shall equal at least 20% of the number of originally issued shares of series C preferred stock, or all of the then outstanding shares if the number of shares then outstanding is less than 20% of the number of originally issued shares of series C preferred stock and, in any case, the shares to be redeemed shall be selected either pro rata from the holders of record of shares of series C preferred stock in proportion to the number of shares held by those holders or in such other manner as our board of directors or a committee thereof may determine to be fair and equitable. 
We will mail notice of any redemption of series C preferred stock by first class mail, postage prepaid, addressed to the holders of record of the shares of series C preferred stock to be redeemed at their respective last addresses appearing on our books. This mailing will be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed or otherwise given as described in this paragraph will be conclusively presumed to have been duly given, whether or not the holder receives the notice, and failure duly to give the notice by mail or otherwise, or any defect in the notice or in the mailing or provision of the notice, to any holder of series C preferred stock designated for redemption will not affect the redemption of any other series C preferred stock. Each notice of redemption will set forth the applicable redemption date, the redemption price, the place where shares of series C preferred stock are to be redeemed, and the number of shares of series C preferred stock to be redeemed (and, if less than all shares of series C preferred stock held by the applicable holder, the number of shares to be redeemed from the holder). 
Shares of series C preferred stock that are redeemed, repurchased or otherwise acquired by us will revert to authorized but unissued shares of our preferred stock. 
Liquidation Rights
In the event that we voluntarily or involuntarily liquidate, dissolve or wind up our affairs, holders of series C preferred stock will be entitled to receive an amount per share, referred to as the total liquidation amount, equal to the fixed liquidation preference of $1,000 per share, plus any declared and unpaid dividends. Holders of the series C preferred stock will be entitled to receive the total liquidation amount out of our assets that are available for distribution to shareholders, after payment or provision for payment of our debts and other liabilities but before any distribution of assets is made to holders of our common stock or any other shares ranking, as to that distribution, junior to the series C preferred stock. 
If our assets are not sufficient to pay the total liquidation amount in full to all holders of series C preferred stock and all holders of any shares of outstanding parity stock, the amounts paid to the holders of series C preferred stock and other shares of parity stock will be paid pro rata in accordance with the respective total liquidation amount for those holders. If the total liquidation amount per share of series C preferred stock has been paid in full to all holders of series C preferred stock and other shares of parity stock, the holders of our common stock or any other shares ranking, as to such distribution, junior to the series C preferred stock will be entitled to receive all of our remaining assets according to their respective rights and preferences. 
For purposes of the liquidation rights, neither the sale, conveyance, exchange or transfer of all or substantially all of our property and assets, nor the consolidation or merger by us with or into any other corporation or by another corporation with or into us, will constitute a liquidation, dissolution or winding up of our affairs.
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Voting Rights
Except as indicated below or otherwise required by law, the holders of series C preferred stock will not have any voting rights.
Board Observation Rights.  
If the dividends on the series C preferred stock have not been declared and paid for an aggregate of five quarterly dividend periods or more (whether or not consecutive), we are obligated to invite a representative (“preferred observer”) selected by the holders of series C preferred stock, voting as a single class, to attend all meetings of our board of directors in a nonvoting observer capacity and, in this respect, shall give such preferred observer copies of all notices, minutes, consents, and other materials that it provides to its directors in connection with such meetings
The rights of holders of series C preferred stock to have a preferred observer on the board shall terminate when full dividends have been timely paid on the series C preferred stock for at least 4 consecutive dividend periods, subject to revesting in the event of each and every subsequent occurrence triggering the right.
Election of Two Directors upon Non-Payment of Dividends.  
If the dividends on the series C preferred stock have not been declared and paid in full for an aggregate of six quarterly dividend periods or more (whether or not consecutive), the holders of series C preferred stock, voting as a single class, have the right, but not the obligation, to elect two members of our board of directors, referred to as the preferred stock directors, at the next annual meeting (or at a special meeting called for the purpose of electing the preferred stock directors prior to the next annual meeting) and at each subsequent annual meeting until full dividends have been timely paid on the series C preferred stock for at least 4 consecutive dividend periods, subject to revesting in the event of each and every subsequent occurrence triggering the right. Our bylaws provide that in the event such voting right is triggered, the authorized number of directors on our board of directors shall be increased by two members. The election of any preferred stock director is subject to the qualification that the election would not cause us to violate the corporate governance requirement of the NASDAQ Global Select Market (or any other exchange on which our securities may be listed) that listed companies must have a majority of independent directors. 
Upon the termination of the right of the holders of series C preferred stock, as described above, the preferred stock directors will immediately cease to be qualified as directors, their term of office shall terminate immediately and the number of our authorized directors will be reduced by the number of preferred stock directors that the holders of series C preferred stock and voting parity stock had been entitled to elect. The holders of a majority of shares of series C preferred stock, voting as a class, may remove any preferred stock director, with or without cause, and the holders of a majority of the shares series C preferred stock, voting as a class, may fill any vacancy created by the removal of a preferred stock director. If the office of a preferred stock director becomes vacant for any other reason, the holders of series C preferred stock may choose a successor to fill such vacancy for the remainder of the unexpired term. 
Other Voting Rights.  
So long as any shares of series C preferred stock are outstanding, in addition to any other vote or written consent of shareholders required by law or by our articles of incorporation, the vote or written consent of the holders of at least 66 2/3% of the shares of series C preferred stock at the time outstanding, together with the holders of any outstanding parity stock with like voting rights, referred to as voting parity stock, voting separately as a single class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:
•any amendment or alteration of the certificate of determination for the series C preferred stock or our articles of incorporation to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of capital stock ranking senior to the series C preferred stock with respect to payment of dividends and/or distribution of assets on our liquidation, dissolution or winding up;  
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•any amendment, alteration or repeal of any provision of the certificate of determination for the series C preferred stock so as to adversely affect the rights, preferences, privileges or voting powers of the series C preferred stock; or  
•any consummation of a binding share exchange or reclassification involving the series C preferred stock or of a merger or consolidation by us with another entity, unless the shares of series C preferred stock remain outstanding following any such transaction or, if we are not the surviving entity, such shares are converted into or exchanged for preference securities and such remaining outstanding shares of series C preferred stock or preference securities have rights, preferences, privileges and voting powers that are not materially less favorable than the rights, preferences, privileges or voting powers of the series C preferred stock, taken as a whole.
•any consummation of a holding company transaction, unless as a result of the holding company transaction each share of series C preferred stock shall be converted into or exchanged for one share with an equal liquidation preference of our preference securities or the acquiror.  Any such conversion shares shall be issued on terms that are equivalent to the terms of the series C preferred stock being exchanged.
To the extent of the voting rights of the series C preferred stock, each holder of series C preferred stock will be entitled to one vote for each share of series C preferred stock held.
The foregoing voting provisions will not apply if, at or prior to the time when the vote or consent would otherwise be required, all outstanding shares of series C preferred stock have been redeemed or called for redemption upon proper notice and sufficient funds have been set aside by us for the benefit of the holders of series C preferred stock to effect the redemption.
Anti-Takeover Considerations and Special Provisions of Our Articles, Bylaws and California Law
California law and certain provisions of our articles and bylaws could have the effect of delaying or deferring the removal of incumbent directors or delaying, deferring or discouraging another party from acquiring control of us, even if such removal or acquisition would be viewed by our shareholders to be in their best interests. These provisions, summarized below, are intended to encourage persons seeking to acquire control of us to first negotiate with our board of directors. These provisions also serve to discourage hostile takeover practices and inadequate takeover bids. We believe that these provisions are beneficial because the negotiation they encourage could result in improved terms of any unsolicited proposal.
Authorized But Unissued Capital Stock. We have authorized but unissued shares of common stock and preferred stock, and our board of directors may authorize the issuance of one or more series of preferred stock without shareholder approval. These shares could be used by our board of directors to make it more difficult or to discourage an attempt to obtain control of us through a merger, tender offer, proxy contest or otherwise.
Limitation on Right to Call a Special Meeting of Shareholders. Our bylaws provide that special meetings of shareholders may only be called by our board, Chairman, or President, or by one or more holders of not less than 10% of our outstanding shares of capital stock entitled to vote for the purpose or purposes for which the meeting is being called.
Advance Notice Provisions. Additionally, our bylaws provide that nominations for directors must be made in accordance with the provisions of our bylaws, which generally require, among other things, that such nominations be provided in writing to our President, not less than 14 days and no more than 50 days prior to the date of the meeting. The advance notice provision gives the board adequate time to respond to the shareholder proposal. If the shareholder fails to provide the notice within the time prescribed under the bylaws, the Chairman of the meeting can exclude the proposal at the shareholders meeting
Action by Written Consent of Shareholders. Our bylaws provide that any action required or permitted to be taken by the holders at a duly called annual or special meeting of the holders of our capital stock may be effected by any consent in writing by signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting our shareholders. However, in the case of election of directors, such a consent shall be effective only if signed by the holders of all outstanding shares entitled to vote for the election of directors.
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Filling of Board Vacancies. Any vacancies in our board of directors and any directorships resulting from any increase in the number of directors may be filled by a majority of the remaining directors, whether or not they constitute quorum, or a sole remaining director. The shareholders may elect a director at any time to fill any vacancy not filled by the directors. Any such election by written consent other than to fill a vacancy created by removal, which requires the unanimous consent of all shares entitled to vote for the election of directors, requires the consent of a majority of the outstanding shares entitled to vote. However, a vacancy created by the removal of a director (other than when the removed director has been convicted of a felony or declared of unsound mind by an order of court) may be filled only by the affirmative vote of a majority of the shares represented and entitled to vote at a duly held meeting at which a quorum is present, or by the unanimous written consent of all shares entitled to vote thereon.
Amendment of the Bylaws. Our bylaws provide that our bylaws may be amended or repealed, and new bylaws may be adopted, by the vote of a majority of the board of directors. Accordingly, our board could take action to amend our bylaws in a manner that could have the effect of delaying, deferring or discouraging another party from acquiring control of us.
Elimination of Cumulative Voting. Our bylaws contain a provision that eliminates cumulative voting for the election of directors. Our shareholders may not vote cumulatively in the election of directors.

7ex_398914.htm

Exhibit 10.1

 

 

Note: Do not sign and return this document to the Company. By clicking on the “ACCEPT” box, you acknowledge that you have read the information below and agree to be bound by the terms of the Plan and this Agreement. Please provide such acceptance within ninety (90) days of the Grant Date.

 

Mesa Laboratories, Inc.

2021 Equity Incentive Plan 

 

Performance Stock Unit Award Agreement

 

 

GrantDate

 

ParticipantName

 

Address 1

Address 2

 

 

Dear ParticipantName:

 

We are pleased to inform you that Mesa Laboratories, Inc. (the “Company”) has made an award of performance stock units to you (the “Performance Stock Units”) as indicated in this Performance Stock Unit Award Agreement (this “Award Agreement”). The Performance Stock Units are issued pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) and are subject to and governed by the Plan generally. All capitalized terms not defined herein shall have the meanings given to such terms in the Plan.

 

	Notice of Award	 
	 	 
	
			Grant Date

				
			GrantDate

			
	 	 
	
			Target Performance Stock Units

				
			QuantityGranted (“Target PSUs”)

			
	 	 
	
			Performance Period

				
			April 1, 2022 – March 31, 2023

			
	 	 
	
			Time-Vesting Date

				
			March 31, 2025

			
	 	 
	
			Settlement Date

				
			DistributionDateandQuantity

			
	 	 
	
			Overview

				
			This award of Performance Stock Units entitles you to earn shares of Common Stock based on the satisfaction of the performance goals set forth in Appendix A and your Continuous Service (defined below) thereafter through the Time-Vesting Date.

			

 

 

 

 

	
			General Vesting and Payment Provisions

				
			The actual number of shares of Common Stock earned, if any, is equal to the number of Performance Stock Units that become vested (“Vested PSUs”), determined as follows (except as otherwise set forth herein):

			
	 	 	 
	 	●	First, at the end of the Performance Period, the Company will determine the number of Performance Stock Units that are eligible to vest (the “Conditional PSUs”) by applying the formula(s) in Appendix A taking into account the level of achievement of the relevant performance goals and the Target PSUs awarded to you. The Conditional PSUs, if any, may be greater than or less than the Granted PSUs, but can never exceed the Max PSUs.
	 	 	 
	 	●	Next, the Conditional PSUs, if any, shall become Vested PSUs based on your Continuous Service with the Company or its Subsidiaries following the end of the Performance Period through the Time-Vesting Date. The Company shall issue you one share of Common Stock for each Vested PSU, as described in the “Payment” section below.
	 	 
	 	You have no rights as a stockholder of the Company pursuant to this Agreement until such time, if any, as shares of Common Stock are issued to you.
	 	 
	
			Award Determination

				
			The Company shall determine the number of your Conditional PSUs as soon as practicable following the end of the Performance Period, and in all events within twenty (20) days following the last day of the Performance Period.

			
	 	 
	
			Vesting Date

				
			Subject to your Continuous Service with the Company or Subsidiaries from the Grant Date through the Time-Vesting Date, all Conditional PSUs shall become Vested PSUs on the Time-Vesting Date.

			For purposes of this Agreement, the term “Continuous Service” shall mean your uninterrupted service to the Company or any Subsidiary as an employee, non-employee director, or consultant. The Administrator shall determine in its discretion whether and when your Continuous Service has ended (including as a result of any leave of absence); provided, however, that your Continuous Service shall not be deemed to have ended in the event you retire or otherwise terminate as an employee but continue to perform services for the Company as a non-employee director or consultant.

			
	 	 
	
			Termination of Continuous Service

				
			General

			 

			Prior to the End of Performance Period. 

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated during the Performance Period for any reason other than for “Cause,” “Normal Retirement,” death or “Disability,” then (i) if less than 12 months have elapsed between the Grant Date and the date of termination, the Performance Stock Units shall be terminated and cancelled in full without payment, and you shall thereafter cease to have any rights with respect to such forfeited Performance Stock Units, or (ii) if 12 months or more have elapsed between the Grant Date and the date of termination, you shall be entitled to receive a number of Vested PSUs (if any) equal to the product of (x) a number of PSUs equal to the lesser of (i) the Target PSUs, or (ii) the number of PSUs determined in accordance with Appendix A based on the performance through the end of the Performance Period, multiplied by (y) a fraction, (i) numerator of which shall be the number of whole and partial calendar months of service during the Performance Period through the date of termination, with any partial calendar months credited as whole calendar months, and (ii) the denominator of which is the total number of months in the Performance Period. Vested PSUs, if any, shall be payable on the Settlement Date as set forth in the “Payment” section below.

			 

			On or After the End of the Performance Period.

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated following the end of the Performance Period and prior to the Time-Vesting Date for any reason other than for “Cause,” “Normal Retirement,” death or “Disability,” your Conditional PSUs, if any, shall immediately become Vested PSUs. Vested PSUs, if any, shall be payable on the Settlement Date as set forth in the “Payment” section below.

			 

			Termination without Cause

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated prior to the Time-Vesting Date for Cause, then all Performance Stock Units shall be terminated and cancelled in full without payment, and you shall thereafter cease to have any rights with respect to such forfeited Performance Stock Units.

			

 

 

 

 

	 	
			Normal Retirement

			 

			Prior to the End of Performance Period. 

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated during the Performance Period because of your “Normal Retirement,” then you shall be entitled to receive a number of Vested PSUs (if any) determined in accordance with Appendix A based on the performance through the end of the Performance Period. Vested PSUs, if any, shall be payable on the Settlement Date as set forth in the “Payment” section below.

			 

			On or After the End of the Performance Period.

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated following the end of the Performance Period and prior to the Time-Vesting Date because of your “Normal Retirement,” your Conditional PSUs, if any, shall immediately become Vested PSUs. Vested PSUs, if any, shall be payable on the Settlement Date as set forth in the “Payment” section below.

			 

			Disability

			 

			Prior to the End of Performance Period. 

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated during the Performance Period as a result of “Disability,” then you shall be entitled to receive a number of Vested PSUs equal to the product of (x) the Target PSUs, multiplied by (y) a fraction, (i) numerator of which shall be the number of whole and partial calendar months of service during the Performance Period through the date of termination, with any partial calendar months credited as whole calendar months, and (ii) the denominator of which is the total number of months in the Performance Period. Vested PSUs shall be payable on the Settlement Date as set forth in the “Payment” section below.

			

 

 

 

 

	 	
			On or After the End of the Performance Period.

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated following the end of the Performance Period and prior to the Time-Vesting Date as a result of “Disability,” your Conditional PSUs, if any, shall immediately become Vested PSUs. Vested PSUs, if any, shall be payable on the Settlement Date as set forth in the “Payment” section below.

			 

			Death

			 

			Prior to the End of Performance Period. 

			 

			In the event that your Continuous Service with the Company or its Subsidiaries is terminated during the Performance Period as a result of your death, then you shall be entitled to receive a number of Vested PSUs equal to the Target PSUs. Vested PSUs, if any, shall be payable within 90 days of your death, as set forth in the “Payment” section below.

			 

			On or After the End of the Performance Period.

			 

			In the event that your employment with the Company or its Subsidiaries is terminated following the end of the Performance Period and prior to the Time-Vesting Date as a result of your death, your Conditional PSUs, if any, shall immediately become Vested PSUs. Vested PSUs, if any, shall be payable within 90 days of your death, as set forth in the “Payment” section below.

			 

			
	
			Payment

				
			General

			 

			The Company shall issue to you one share of Common Stock for each Vested PSU hereunder, with the delivery of such Common Stock to occur on the Settlement Date (except as set forth below under the headings entitled “Death” and “Change of Control”).

			 

			Death

			 

			Notwithstanding the foregoing, in the event you terminate Continuous Service as a result of your death, delivery of Common Stock shall occur within 90 days after the date of death; provided, however, that in the event such 90-day period spans more than one taxable year, the issuance of Common Stock shall occur in the later taxable year.

			
	 	 
	
			Change of Control

				
			The provisions of Section 8.2 of the Plan shall apply upon the occurrence of a Change of Control.

			
	 	 
	
			Other Agreements

				
			The terms of this Performance Stock Unit Award, including the provisions above regarding your termination of Continuous Service, are subject to and are modified by any contrary terms in any employment agreement, severance letter, of similar agreement between you and the Company that may be in effect from time to time (an “Other Agreement”).

			

 

 

 

 

	
			Other Terms and Conditions

				
			Are set forth in the accompanying Performance Stock Unit Award Terms and Conditions and the Plan.

			

 

 

Online Acceptance of Performance Stock Unit Award Agreement

 

By your online acceptance, you and the Company agree that the Performance Stock Units granted hereby are granted under and governed by the terms and conditions of this Performance Stock Unit Award Agreement and the accompanying Performance Stock Unit Award Terms and Conditions (the “Award Documents”), and the terms of the Plan. You hereby represent and acknowledge that you have been provided the opportunity to review the Plan and the Award Documents in their entirety, and you hereby agree to accept as binding, conclusive, and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and the Award Documents.

 

 

 

 

Appendix A

Performance Goals

 

 

Calculation of Conditional PSUs. The number of PSUs, if any, shall be determined based on Mesa Laboratories, Inc.’s (“Mesa” or the “Company”) performance over the Performance Period as measured by the following three metrics: Revenues (as defined below) and adjusted operating income (“AOI”) (also defined below), and performance against non-financial areas of strategic importance. Thirty-five percent of the Target PSUs shall be assigned to Revenues, 35% of the Target PSUs shall be assigned to AOI (together, revenue and AOI represent the “Financial Metrics”), and 30% shall be assigned to Strategic Performance. The amount earned as a result of the Financial Metrics shall be calculated separately, in accordance with the table below. The total PSUs, if any, shall be the sum of the PSUs earned in respect of each performance metric.

 

	 	 	
			Revenues

			Amount earned in respect of this metric shall equal:

			(Target Award * 35% * Revenues % Payout)

				 	 	
			AOI

			Amount earned in respect of this metric shall equal:

			(Target Award * 35% * AOI % Payout)

				 
	 	 	
			Revenues (thousands)

				 	 	
			Revenues %

			Payout

				 	 	
			AOI (thousands)

				 	 	
			AOI % Payout

				 
	
			Maximum

				 	$	236,981	 	 	 	200	%	 	$	59,454	 	 	 	200	%
	 	 	 	235,600	 	 	 	175	%	 	 	58,872	 	 	 	175	%
	 	 	 	234,220	 	 	 	150	%	 	 	58,290	 	 	 	150	%
	 	 	 	232,839	 	 	 	125	%	 	 	57,708	 	 	 	125	%
	
			Target

				 	 	231,458	 	 	 	100	%	 	 	57,126	 	 	 	100	%
	 	 	 	227,997	 	 	 	75	%	 	 	55,668	 	 	 	75	%
	
			Threshold

				 	 	225,921	 	 	 	60	%	 	 	54,793	 	 	 	60	%
	 	 	 	225,920	 	 	 	0	%	 	 	54,792	 	 	 	0	%

 

If the Company’s performance during the Performance Period falls between any of the percentages in the table above, the Revenues PSUs or AOI PSUs, as applicable, shall be calculated using linear interpolation (e.g. if Revenues for the Performance Period are $233,529, the result would be 137.5% payout of Revenues PSUs).

 

Strategic Performance/Achievement of Company Goals (which include but are not limited to bookings growth, OTD, improving employee engagement, product line and functional strategy implementation, acquisitions and integrations) shall represent 30% of the value of the award and success under the measure will be determined by the Compensation Committee of the Board of Directors.

 

 

 

 

Definitions

 

Revenues: Revenues is defined as GAAP revenues earned by the company over the Performance Period from April 1, 2022 through March 31, 2023. The number will be equal to GAAP revenues reported on Form 10-K for the fiscal year ending March 31, 2023. For the avoidance of doubt, results of acquisitions during the Performance Period will not be included in the final calculation of Revenues.

 

AOI: AOI, or Adjusted Operating Income is defined as GAAP operating income, exclusive of the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation and impairment of goodwill and long-lived assets. Furthermore, AOI will be adjusted to exclude transaction and implementation related costs associated with the Agena Acquisition. AOI will be measured over the Performance Period from April 1, 2022 through March 31, 2023. The number will be calculated by subtracting amortization of intangible assets acquired in a business combination, stock-based compensation and impairment of goodwill and long-lived assets from GAAP operating income as reported in the Company’s Form 10-K for the fiscal year ending March 31, 2023. For the avoidance of doubt, results of acquisitions during the Performance Period will not be included in the final calculation of AOI.

 

 

 

 

 

Performance Stock Unit Award Terms and Conditions

 

The following terms and conditions apply to the Performance Stock Units granted to you by the Company, as specified in the accompanying Performance Stock Unit Award Agreement (the “Award Agreement”).

 

1.           Award of Performance Stock Units. The Company has issued to you the Performance Stock Units set forth above in the Award Agreement, effective on the Grant Date, and subject to the terms and conditions set forth in the Award Agreement and the Performance Stock Unit Award Terms and Conditions (together, the “Award Documents”), and the Plan (which is incorporated herein by reference).

 

2.         Performance Stock Units Non-Transferable. Performance Stock Units (and related rights) may not be sold, assigned, alienated, transferred by gift or otherwise, pledged, hypothecated, or otherwise disposed of, by operation of law or otherwise. Any attempt to assign, alienate, transfer, pledge, sell or otherwise dispose of the Performance Stock Units or its related rights shall be ineffective and, if any such attempt is made, the Performance Stock Units will be forfeited and all of your rights under the Plan and the Award Documents shall immediately terminate without any payment or consideration by the Company.

 

3.          Vesting. Unless otherwise provided in the Plan, your Performance Stock Units shall vest and become Vested PSUs in accordance with the terms and conditions of the Award Agreement, or as set forth in the “Other Agreements” section of the Award Agreement.

 

4.           Payment. Payment in respect of Vested PSUs shall be made at the time(s) and in the form(s) set forth in the Award Agreement. Any distribution or delivery to be made to you under the Award Documents will, if you are then deceased, be made to the administrator or executor of your estate. Any such administrator or executor must furnish the Company or its designated agent with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company or its designated agent to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

 

5.           Stockholder Rights. You and your estate or heirs shall not have any rights as a stockholder of the Company until you become the holder or record of any Shares issued as payment pursuant to Section 4, above, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date prior to the date you become the holder of record of such Shares unless specifically provided otherwise in the Plan.

 

6.         Additional Requirements. The transfer of any Shares hereunder shall be effective only at such time as the company shall have determined that the issuance and delivery of such Shares is in compliance with all applicable laws and the requirements of any securities exchange on which the Shares are then traded. You acknowledge that Shares acquired as payment pursuant to Section 4, above, may bear such legends as the Company deems appropriate to comply with applicable federal, state or foreign securities laws. In connection therewith and prior to the issuance of the Shares, you may be required to deliver to the Company such other documents as may be reasonably necessary to ensure compliance with applicable law.

 

 

 

 

7.          Termination of Employment; Forfeiture. Upon the termination of your continued employment or service for any reason, any Performance Stock Units that have not become or are not eligible to become Vested PSUs in accordance with Section 3 and the Award Agreement (after taking into account the “Other Agreements” section of the Award Agreement) shall immediately be forfeited. Upon forfeiture, you shall have no further rights with respect to such Performance Stock Units.

 

8.           Tax Treatment; Section 409A. You may incur tax liability as a result of the receipt of Performance Stock Units and payments thereunder. You should consult your own tax adviser for tax advice. You acknowledge that the Administrator, in the exercise of its sole discretion and without your consent, may amend or modify the Award Documents in any manner, and delay the payment of any amounts thereunder, to the minimum extent necessary to satisfy the requirements of Section 409A. The Company will provide you with notice of any such amendment or modification. This Section 6 does not, and shall not be construed so as to, create any obligation on the part of the Company to adopt any such amendments or to take any other actions or to indemnify you for any failure to do so.

 

9.           Tax Withholding. You shall make appropriate arrangements with the Company’s agent to provide for payment of any federal, state, local or foreign taxes of any kind required by law to be withheld in respect of your Performance Stock Units. Such arrangements may include, but are not limited to, the payment of the withholding amount by you in cash, withholding from proceeds of the sale of Shares acquired as payment for the PSUs either through a voluntary sale or through a mandatory sale arranged by the Company’s agent (on your behalf pursuant to this authorization without further consent), non-discretionary withholding by the Company’s agent of Shares that would otherwise be issuable to you as payment in respect of your Performance Stock Units, or voluntary share withholding as described below. Voluntary Share withholding is subject to the prior approval of the Administrator, which may be withheld by the Administrator in its sole discretion. If approved, you may elect to satisfy the statutory withholding obligations, in whole or in part, by having the Company’s agent withhold Shares otherwise issuable to you hereunder. The Shares delivered or withheld shall have an aggregate fair market value not in excess of the maximum statutory tax rates in your applicable jurisdictions. The fair market value of the Shares used to satisfy the withholding obligation shall be determined by the Company’s agent as of the date on which taxation occurs. Shares used to satisfy any tax withholding obligation must be vested and cannot be subject to any repurchase, forfeiture, or other similar requirements. Any election by you to have Shares withheld shall be irrevocable, made in writing (or electronically), signed by you (including electronically), and shall be subject to any restrictions or limitations that the Administrator, in its sole discretion, deems appropriate. Further, if you become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company and/or its Subsidiaries (or former employer, as applicable) may be required to withhold or account for federal, state, local or foreign taxes of any kind in more than one jurisdiction.

 

10.           Acknowledgements. If you reside outside the U.S., the following additional provisions shall apply:

 

a.         the Performance Stock Units and the Shares issuable pursuant to the Performance Stock Units are not intended to replace any pension rights;

 

 

 

 

b.         no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance Stock Units resulting from termination of your employment or services by the Company or its Subsidiaries (whether or not in breach of employment laws in the country where you resides and whether or not later found to be invalid) and in consideration of the Performance Stock Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company or its Subsidiaries, waive your ability, if any, to bring any such claim, and releases the Company and its Subsidiaries from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims;

 

c.         in the event of termination of your Continuous Service (regardless of the reason for such termination and whether or not in breach of employment laws in the country where you reside or are employed or provide services or the terms of your employment agreement, if any, and whether or not later found to be invalid), your right to vest in the Performance Stock Units under the Plan, if any, will terminate effective as of the date that you are no longer actively providing services and will not be extended by any notice period mandated under employment laws in the country where you reside or are employed or provide services (e.g., active employment would not include any contractual notice period or any period of “garden leave” or similar period mandated in the country in which you reside or are employed or provide services or the terms of your employment agreement, if any); the Administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the Performance Stock Units (including whether or not you may still be considered as actively providing services while on an approved leave of absence);

 

d.         the Performance Stock Units and the Shares issuable pursuant to the Performance Stock Units are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or you, and are outside the scope of your employment or service contract, if any; and

 

e.         neither the Company nor any Subsidiary or Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Restricted Stock Units or of any amount due to you pursuant to this Award or upon the subsequent sale of Shares acquired hereunder.

 

 

 

 

11.           Personal Information. The Company and its Subsidiaries may collect, store, disclose, use, or otherwise process certain personal information about you for the purpose of managing and administering the Plan, such as your name, home address and telephone number, date of birth, social security number or other employee identification number, e-mail address, salary, nationality, job title, any shares or directorships held in the Company, details of all Performance Stock Units and other equity awards or any other entitlement to shares awarded, canceled, purchased, vested, unvested or outstanding in your favor (“Data”). The Company and/or its Subsidiaries may disclose Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and the Company and/or any of its Subsidiaries may each further disclose Data to any third parties assisting the Company in the implementation, administration and management of the Plan, including the Company’s stock plan administrative agent and the Plan recordkeeper. These recipients may be located throughout the world, including the United States. You understand and agree that these parties may receive, possess, use, retain, transfer, and otherwise process the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer or disclosure of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares on your behalf to a broker or other third party with whom you may elect to deposit any shares acquired pursuant to the Plan. Notwithstanding anything to the contrary in this Section 8, you acknowledge and agree that the Company and its Subsidiaries may also collect, store, use, disclose, and otherwise process your Data where such processing is necessary to comply with a legal obligation, for the Company or its Subsidiaries’ legitimate business purposes, or with your consent if applicable law requires consent. You may, at any time, request to access, correct, delete or restrict processing of your Data by contacting the Company in writing. Applicable law may allow or require the Company to refuse to provide you with access to, delete, or restrict processing of some or all of the Data that the Company or its Subsidiaries hold about you, or the Company or its Subsidiaries may have destroyed, erased, or made such Data anonymous in accordance with applicable record retention obligations and practices. If the Company cannot provide you with access to, delete or restrict processing of your Data, the Company will inform you of the reasons why, subject to any legal or regulatory restrictions. For more information on the processing of your Data, contact your human capital representative.

 

12.         Other Employee Benefits. Except as specifically provided otherwise in any relevant employee benefit plan, program, or arrangement, the Performance Stock Units evidenced hereby are not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

 

13.          Electronic Delivery. BY YOUR ELECTRONIC ACCEPTANCE OF THIS AWARD, YOU HEREBY CONSENT TO ELECTRONIC DELIVERY OF THE PLAN, AND ANY DISCLOSURE OR OTHER DOCUMENTS RELATED TO THE PLAN, INCLUDING FUTURE AWARD DOCUMENTS (COLLECTIVELY, THE “PLAN DOCUMENTS”). THE COMPANY (THROUGH ITS’ STOCK PLAN ADMINISTRATIVE AGENT) MAY DELIVER THE PLAN DOCUMENTS ELECTRONICALLY TO YOU BY E-MAIL, BY POSTING SUCH DOCUMENTS ON THE AGENT’S WEBSITE OR BY ANOTHER MODE OF ELECTRONIC DELIVERY AS DETERMINED BY THE COMPANY’S AGENT IN ITS SOLE DISCRETION. YOU ACKNOWLEDGE THAT YOU ARE ABLE TO ACCESS, VIEW AND RETAIN AN E-MAIL ANNOUNCEMENT INFORMING YOU THAT THE PLAN DOCUMENTS ARE AVAILABLE IN EITHER HTML, PDF OR SUCH OTHER FORMAT AS THE COMPANY’S AGENT DETERMINES IN ITS SOLE DISCRETION.

 

 

 

 

14.           Notices. Any notice required or permitted to be given hereunder shall be in writing and shall be given by hand delivery, by e-mail, by facsimile, or by first class registered or certified mail, postage prepaid, addressed, if to the Company, to its Corporate Secretary, and if to you, to your address now on file with the Company, or to such other address as either may designate in writing. Any notice shall be deemed to be duly given as of the date delivered in the case of personal delivery, e-mail, or facsimile, or as of the second day after enclosed in a properly sealed envelope and deposited, postage prepaid, in a United States post office, in the case of mailed notice.

 

15.            Amendment. Except as provided herein, the Award Documents may not be amended or otherwise modified unless evidenced in writing and signed by the Company and you.

 

16.           Relationship to Plan. Nothing in the Award Documents shall alter the terms of the Plan. If there is a conflict between the terms of the Plan and the terms of the Award Documents, the terms of the Plan shall prevail.

 

17.         Construction; Severability. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of the Award Documents. The invalidity or unenforceability of any provision of the Award Documents shall not affect the validity or enforceability of any other provision hereof, and each other provision hereof shall be severable and enforceable to the extent permitted by law.

 

18.           Waiver. Any provision contained in the Award Documents may be waived, either generally or in any particular instance, by the Administrator appointed under the Plan, but only to the extent permitted under the Plan.

 

19.           Binding Effect. The Award Documents shall be binding upon and inure to the benefit of the Company and to you and your respective heirs, executors, administrators, legal representatives, successors and assigns.

 

20.          Rights to Employment or Service. Nothing contained in the Award Documents shall be construed as giving you any right to be retained in the Continuous Service of the Company or any of its Subsidiaries and the Award Documents are limited solely to governing your rights and obligations with respect to the Performance Stock Units.

 

21.            Governing Law. The Award Documents shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to the choice of law principles thereof.

 

22.           Company Policies to Apply; Potential Clawback. The sale of any shares of Common Stock received as payment under the Performance Stock Units is subject to the Company’s policies regulating securities trading by employees, all relevant federal and state securities laws and the listing requirements of any stock exchange on which the shares of the Company’s Common Stock are then traded. In addition, participation in the Plan and receipt of remuneration as a result of the Performance Stock Units is subject in all respects to any laws, rules, and regulations related to the clawback of compensation that may be in effect from time to time.

 

23.           Section 409A Compliance. The Performance Stock Units granted hereunder are intended to comply with or be exempt from the requirements of Section 409A, and the Award Documents shall be interpreted and administered in a manner consistent with such intent. You shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on you in connection with the Performance Stock Units granted hereunder (including any taxes and penalties under Section 409A), and neither the Company nor any of its Affiliates shall have any obligation to indemnify or otherwise hold you harmless from any or all of such taxes or penalties.

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