Document:

exv10w16

 

Exhibit 10.16

GOMEZ, INC.

Compensation and Reimbursement Arrangements for Outside Directors

These arrangements are adopted and approved by the board of directors (the “Board”) of Gomez, Inc.
(“Gomez”) as of April 21, 2008. For purposes of these arrangements, the term “Outside Director”
shall mean any member of the Board who is not an employee of Gomez or any of its subsidiaries.

Retainer Fees

Commencing as of the closing date (the “IPO Date”) of the initial public offering of common stock
of Gomez (“common stock”), each Outside Director shall be entitled to the following fees:

(a) retainer fees for Board service as follows:

	 	 	 	 	 	 	 
	Ÿ
	 	Chairman of the Board	 	$	40,000	 
	Ÿ
	 	Other members of the Board	 	 	20,000	 

(b) additional retainer fees for the following services, in the indicated amount per year:

	 	 	 	 	 	 	 
	Ÿ
	 	Chair of Audit Committee	 	$	10,000	 
	Ÿ
	 	Other members of Audit Committee	 	 	5,000	 
	Ÿ
	 	Chair of Compensation Committee	 	 	5,000	 
	Ÿ
	 	Other members of Compensation Committee	 	 	2,500	 
	Ÿ
	 	Chair of Nominating and Corporate Governance Committee	 	 	1,500	 
	Ÿ
	 	Other members of Nominating and Corporate Governance Committee	 	 	750	 

All retainer fees shall be paid quarterly in arrears, with fees earned during a fiscal quarter to
be paid during the first month of the immediately succeeding quarter. In the event an Outside
Director serves as a member of the Board or a committee or as Chair of a committee for less than
all of a fiscal quarter, the amount of the quarterly installment of each applicable retainer fee
above shall equal one-twelfth of the amount of such retainer fee as set forth in paragraph (a) or
(b) multiplied by the number of full or partial months served in such quarter.

Annual Equity Compensation

As of the date of each annual stockholder meeting following the IPO Date, each Outside Director
elected at, or continuing to serve after, such meeting (other than an Outside Director first
elected at such meeting) shall be entitled to the grant on such date of an option that (a) is
exercisable to purchase 10,000 shares of common stock, (b) has an exercise price equal to the fair
market value of the common stock on the grant date, (c) vests as determined by the Compensation
Committee and (d) terminates upon the earlier of three months after the final date on which the
Outside Director is a member of the Board and ten years after the grant date.

Initial Equity Compensation

Each Outside Director appointed or elected on or after the date of adoption hereof and before the
IPO Date shall be entitled to the grant, as of the IPO Date, of an option, and each Outside
Director appointed or elected on or after the IPO Date shall be entitled to the grant, as of the
date on which such Outside Director first joins the Board, of an option. Any such option (a) shall
be exercisable to purchase 25,000 shares of common stock, (b) shall have an exercise price equal to
the fair market value of the common stock on the grant date, (c) hall vest as determined by the
Compensation Committee and (d) shall terminate upon the earlier of three months after the final
date on which the Outside Director is a member of the Board and ten years after the grant date.

 

 

Any Outside Director who first joins the Board by election at an annual stockholder meeting held
after the IPO Date shall be entitled to receive on such date the option grant described in the
preceding paragraph, but shall not be entitled to receive on such date an option grant described
under “Annual Equity Compensation” above.

Reimbursement of Expenses

Gomez shall reimburse each Outside Director for all reasonable and necessary documented
out-of-pocket expenses incurred or paid by the Outside Director in connection with, or related to,
the performance of the Outside Director’s services. Reimbursement of travel expenses shall be
subject to the following additional guidelines and restrictions:

	(a)	 	Purposes. Reimbursement of travel expenses shall be made only in connection with (i) an
Outside Director’s attendance at stockholder, Board or Board committee meetings and (ii) any
other travel made at the request of, or otherwise with the prior consent of, the Chairman of
the Board and the Chief Executive Officer of Gomez.
	 
	(b)	 	Air travel. Reimbursement of airfare shall be limited to coach class service. Airline
flights are to be selected based on the lowest fare available for the required time schedule,
without carrier preferences. Whenever reasonably possible, airline reservations should be
booked 7 to 14 days prior to travel in order to obtain discounted fares.
	 
	(c)	 	Hotel. Reimbursement of hotel expenses shall be limited to expenses for one night of lodging
for each calendar day of Board or Board committee meetings. Whenever practicable, Gomez shall
arrange for hotel rooms for Outside Directors attending stockholder, Board or Board committee
meetings. Hotel charges for laundry and dry cleaning, in-room movies and similar expenses are
not reimbursable.
	 
	(d)	 	Persons. Gomez shall not reimburse travel or other expenses incurred by, or on behalf of,
any Board observer or any person or persons accompanying an Outside Director.

Reimbursement requests must be submitted to the accounting department of Gomez within 30 days after
completion of a trip. All reimbursement requests must be accompanied by supporting documentation.
Original receipts, or photocopies thereof, are required for all expenses. If an expense is
incurred in a currency other than U.S. dollars, the related reimbursement request must include a
credit card bill or other documentation verifying the daily exchange rate. All reimbursement
reports and related documentation are subject to independent review for compliance with Internal
Revenue Service regulations and corporate policy by the Audit Committee of the Board as well as the
registered independent public accounting firm of Gomez. Gomez shall pay to the Outside Director
appropriate amounts shown on each such reimbursement request within 30 days after receipt thereof.

The Chairman of the Board and the Chief Executive Officer of Gomez must approve any exceptions to
the foregoing expense reimbursement arrangements.

- 2 -EXECUTION VERSION

OPC LLC

FIRST AMENDMENT TO AGREEMENT

FOR PURCHASE OF MEMBERSHIP INTERESTS IN

OPC LLC

This FIRST AMENDMENT TO AGREEMENT FOR PURCHASE OF MEMBERSHIP INTERESTS IN OPC LLC (this “Amendment”), dated as of April 17, 2008, is entered into by and among Ormat Nevada Inc., a Delaware corporation (“Ormat”), Morgan Stanley Geothermal LLC, a Delaware limited liability company (“Morgan Stanley Geothermal”) and Lehman-OPC, a Delaware limited liability company (“Lehman-OPC”) (each a “Party” and collectively the “Parties”).

PRELIMINARY STATEMENTS

(1) The Parties entered into that certain Agreement for Purchase of Membership Interests in OPC LLC, dated as of June 7, 2007 (the “Purchase Agreement”), by and among Ormat, Morgan Stanley Geothermal and Lehman-OPC. Capitalized terms used and not otherwise defined in this Amendment shall have the meanings ascribed thereto in the Purchase Agreement. 

(2) The Parties desire to amend the Purchase Agreement and are entering into this Amendment to reflect the following additional agreements.

SECTION 1. Amendment to the Purchase Agreement. 

Section 2.2(b)(ii). Section 2.2(b)(ii) of the Purchase Agreement is hereby amended by deleting Section 2.2(b)(ii) in its entirety and replacing it with the following:

“(ii) immediately prior to the Galena 3 Closing Date, the Base Case Model will be rerun, on the same basis and using the same methodology and principles as were used to prepare the Base Case Model, to determine the actual Galena 3 Closing Payment, but revised to reflect (A) the actual Galena 3 Closing Date, (B) the actual capital costs incurred for construction of the Galena 3 Project, (C) the approximately 3.07 MW increase in the projected generating capacity of the Galena 3 Project, (D) the increase in the Company’s projected operating costs due to its efforts to provide legal rights in ORNI 14 over the lands commonly known as the “Guisti” property for access, pipelines and/or electrical transmission, and (E) any change in allocation ratios if the IRS has announced a “safe harbor” for partnership flip transactions before the Galena 3 Closing Date
that requires such a shift. The revised Base Case Model will then be used to determine an adjustment to the Galena 3 Closing Payment, which when considering the

 

 

timing of such payments will leave the Purchasers with the same Target Internal Rate of Return (as defined in the Company LLC Agreement) projected on the Initial Closing Date assuming no other change in the Base Case Model. The adjustment will be treated as an adjustment to the purchase price for the Class B Membership Interests. Attached as Schedule 2.2(b)(ii) is a sample pro forma showing examples of the purchase price adjustment set forth above.”

Section 3.1(b)(xiii). Section 3.1(b)(xiii) of the Purchase Agreement is hereby amended by deleting Section 3.1(b)(xiii) in its entirety and replacing it with the following:

“3.1(b)(xiii) Real Property. All real property owned or leased by ORNI 14 or to which ORNI 14 has rights under easements or rights-of-way, and the title insurance maintained by ORNI 14 with respect to all such property, is described on Schedule 3.1(b)(xiii). The real property owned or leased, or in which rights are held, by ORNI 14, described on Schedule 3.1(b)(xiii) (including such rights under instruments identified in the Galena 3 Closing Post Closing Deliverable Side Letter), has been, and in the case of the instruments identified in the Galena 3 Closing Post Closing Deliverable Side Letter, will be, sufficient to enable ORNI 14 to conduct its operations as a geothermal power project prior to the Galena 3 Closing Date including providing adequate ingress and egress and transmission
capabilities from the Galena 3 Project and adequate sewer, water, gas and electricity for the Galena 3 Project. Neither ORNI 14 nor Seller has been informed in writing by the owner of any such real property that ORNI 14 is in breach of its obligations with respect to such property. All premiums with respect to the title insurance for ORNI 14 shown on Schedule 3.1(b)(xiii) have been paid and, insofar as Seller has Knowledge, there are no circumstances that have rendered such title insurance unenforceable.”

Annex I. Annex I of the Purchase Agreement is hereby amended by adding the following definition:

“Galena 3 Closing Post Closing Deliverable Side Letter” means the letter agreement, dated April ___, 2008, by and among Seller and the Purchasers. 

 

 

2

 

Schedule 1. Schedule 1 of the Purchase Agreement is hereby amended by deleting the second table in Schedule 1 in its entirety and replacing it with the following:

After the Galena 3 Closing:

 

	
                        Name of Project
 Company
 	
                         
 	
                        Project
 	
                         
 	
                        Location of
 Project
 	
                         
 	
                        Generating
 Capacity
 (MW)
 	
                         
 	
                        PPA Offtaker
 	
                         
 	
                        PPA End
 Date
 
	
                        ORNI 3, LLC
 	
                         
 	
                        Desert Peak 2
 	
                         
 	
                        Churchill County, Nevada
 	
                         
 	
                        12
 	
                         
 	
                        Nevada Power Company
 	
                         
 	
                        2027
 
	
                        Steamboat Hills, LLC
 	
                         
 	
                        Galena 2
 	
                         
 	
                        Washoe County, Nevada
 	
                         
 	
                        10
 	
                         
 	
                        Nevada Power Company
 	
                         
 	
                        2027
 
	
                        Steamboat Hills, LLC
 	
                         
 	
                        Steamboat Hills
 	
                         
 	
                        Washoe County, Nevada
 	
                         
 	
                        10
 	
                         
 	
                        Sierra Pacific Power Company
 	
                         
 	
                        2018
 
	
                        ORNI 14, LLC (“ORNI 14”)
 	
                         
 	
                        Galena 3
 	
                         
 	
                        Washoe County, Nevada
 	
                         
 	
                        20
 	
                         
 	
                        Sierra Pacific Power Company
 	
                         
 	
                        2028*
 

SECTION 2. Reference to and Effect on the Purchase Agreement. On and after the date hereof, each reference in the Purchase Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Purchase Agreement shall mean and be a reference to the Purchase Agreement as amended hereby. Except as specifically amended hereby, the Purchase Agreement shall continue to be in full force and effect in accordance with its terms.

SECTION 3. Governing Law. THIS AMENDMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR CONSTRUCTION OF THIS AMENDMENT TO THE LAW OF ANOTHER JURISDICTION.

SECTION 4. Counterparts. This Amendment may be executed and delivered (including by facsimile transmission) in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.

[Remainder of page intentionally left blank. Signature page to follow.]

 

 

3

 

IN WITNESS WHEREOF, the Parties, intending to be legally bound, have executed this Amendment effective as of the date first set forth above. 

 

	
                         
 	
                         
 	
                        ORMAT NEVADA INC.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                           
 
	
                         
 	
                         
 	
                         
 	
                        Name: 
 Title:
 

 

	
                         
 	
                         
 	
                        MORGAN STANLEY GEOTHERMAL LLC
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                           
 
	
                         
 	
                         
 	
                         
 	
                        Name: 
 Title:
 

 

	
                         
 	
                         
 	
                        LEHMAN-OPC LLC
 
	
                           
 	
                         
 	
                        

                        By: 
 	
                           
 
	
                         
 	
                         
 	
                         
 	
                        Name: 
 Title:
 

[Signature Page to First Amendment to Purchase Agreement]

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