Document:

Exhibit

EXHIBIT 10.3

EXECUTION VERSION

PRINCIPAL SHAREHOLDER AGREEMENT

This PRINCIPAL SHAREHOLDER AGREEMENT (this “Agreement”) is made as of February 28, 2017 among Maxwell Technologies, Inc., a corporation incorporated under the laws of the State of Delaware (“Purchaser”) and each of the shareholders listed on Schedule A attached hereto (individually, a “Shareholder” and collectively, the “Shareholders”).  Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Plan of Arrangement (as defined below).  If the terms of this Agreement conflict in any way with the provisions of the Arrangement Agreement, then the provisions of the Arrangement Agreement shall control.
RECITALS
WHEREAS, Shareholder is the beneficial owner of certain common shares (the “Company Shares”) of Nesscap Energy Inc. (the “Company”), as described more particularly on Schedule A hereto (together with any additional Company Shares acquired after the date hereof, the “Subject Shares”).
WHEREAS, any shares of Company common stock or other securities of the Company that Shareholder purchases or with respect to which Shareholder otherwise acquires beneficial ownership (as defined in Rule 13d-3 under the 1934 Exchange Act) after the date of this Agreement and prior to the Effective Time, including by reason of any stock split, stock dividend, reclassification, recapitalization or other similar transaction or pursuant to the exercise of options or warrants to purchase such shares, upon the conversion of any convertible debentures or exchange for debt, shall be subject to the terms and conditions of this Agreement to the same extent as if they comprised a portion of the Subject Shares and shall be deemed to be included in the Subject Shares for the purposes hereof.
WHEREAS, the Purchaser is, concurrently herewith, entering into an arrangement agreement, as the same may be amended from time to time (the “Arrangement  Agreement”), with the Company, which provides for, among other things, upon the satisfaction of the conditions in the Arrangement Agreement, the acquisition by Purchaser of substantially all of the assets of the Company, pursuant to and in the manner provided for by the plan of arrangement (the “Plan of Arrangement”).
WHEREAS, this Agreement sets out the terms and conditions of the agreement of Shareholder to, among other things, agree: (i) not to acquire shares of the Purchaser other than pursuant to the Plan of Arrangement without the prior consent of the Purchaser; (ii) to certain non-competition and non-solicitation obligations, and (iii) to abide by the other restrictions and covenants, each as further set forth herein. 
NOW, THEREFORE, this Agreement witnesses that, in consideration of the premises and the covenants and agreements herein contained, the parties hereto agree as follows:
1.Lock-Up Agreement.
1.1    The Shareholder agrees that the (i) Maxwell Shares issued to Shareholder in connection with the Plan of Arrangement, including any shares issued in connection with any stock split, stock dividend, recapitalization, reorganization, or the like that occurs following the Effective Time; and (ii) any shares of common stock of Purchaser or any securities convertible into, exercisable or exchangeable for or that represent the right to receive common stock of Purchaser (including without limitation, common stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and securities which may be issued upon exercise of a stock option or warrant) whether now owned or 

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hereafter acquired (collectively, the “Lock-Up Shares”), shall be subject to the restrictions and obligations as set forth in this Section 1.
1.2    The Shareholder shall not, without the prior written consent of Purchaser and Purchaser, directly or indirectly, during the Lock-Up Period (as defined below): (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of or lend, directly or indirectly, Lock-Up Shares; (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of common stock of the Purchaser or such other securities, in cash or otherwise; (iii) make any demand for or exercise any right with respect to, the registration of any common stock  of Purchaser or any security convertible into or exercisable or exchangeable for common stock of Purchaser; (iv) enter into any transaction set forth in Section 2; or (v) publicly disclose the intention to do any of the foregoing (each of the foregoing a “Disposition”).  The “Lock-Up Period” shall mean the period commencing on the date of the Arrangement Agreement and continue and include the date 18 months after the date of the Effective Time. “Hedging Transaction” means any short sale (whether or not against the box) or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from the Lock-Up Shares.
1.3    Notwithstanding any other provision of this Section 1, the Shareholder may transfer any or all of the Lock-Up Shares (i) by gift or to any member of the immediate family of the Shareholder or to any trust or partnership for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder (including by will or intestate succession), provided that any such transfer shall not involve a disposition for value, (ii) to any Affiliates (as defined below), associates, limited partners, members or shareholders of the Shareholder, and (iii) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of Maxwell Shares involving a change of control of Purchaser; provided, however, that in any such case it shall be a condition to the transfer pursuant to clauses (i) and (ii) above, that the transferee executes an agreement stating that the transferee is receiving and holding the Lock-Up Shares subject to the provisions of this Agreement and there shall be no further transfer of such Lock-Up Shares except in accordance with this Agreement.
1.4    Without limiting the restrictions or obligations herein, any Disposition by the Shareholder shall remain at all times subject to applicable securities laws.
1.5    The Shareholder agrees that Purchaser and/or Purchaser may place an appropriate restrictive legend on the stock certificates representing the Lock-Up Shares issued to the Shareholder to indicate that such shares are subject to the terms of this Agreement. Purchaser and Purchaser each agrees that it will (or will instruct the transfer agent to) promptly remove such restrictive legend upon the termination of this Agreement and that the Purchaser and Purchaser shall pay all costs associated with such removal (including all reasonable legal and broker fees of the Shareholder).
2.    Standstill.  
2.1    Separate and apart from the duties and responsibilities of the Shareholder Director (as defined below), each of the Shareholders agree that, during the period commencing on the date of the Arrangement Agreement and continue and include the date 18 months after the date of the Effective Time 

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(the “Standstill Period”), (unless specifically requested in writing by the Purchaser, acting through a resolution of a majority of Purchaser’s directors), it shall not, and shall cause each of its Affiliates (collectively, including the Shareholders, the “Principal Shareholder Affiliates”), not to, directly or indirectly, in any manner, alone or in concert with others: 
(a)    make, engage in, or in any way participate in, directly or indirectly, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC but without regard to the exclusion set forth in Rule 14a1(l)(2)(iv) of the 1934 Exchange Act) or consents to vote or advise, encourage or influence any person other than any Principal Shareholder Affiliate with respect to the voting of any securities of the Purchaser or any securities convertible or exchangeable into or exercisable for any such securities (collectively, “securities of Purchaser”) for the election of individuals to the Board or to approve stockholder proposals, or become a “participant” in any contested “solicitation” for the election of directors with respect to the Purchaser (as such terms are defined or used under the 1934 Exchange Act), other than a “solicitation” or acting as a “participant” in support of all of the nominees of the Board at any stockholder meeting or voting its shares at any such meeting in its sole discretion (subject to compliance with this Agreement), or make or be the proponent of any stockholder proposal (pursuant to Rule 14a-8 under the 1934 Exchange Act or otherwise), except in all cases as expressly permitted by this Agreement;
(b)    form, join, encourage, influence, advise or in any way participate in any “group” (as such term is defined in Section 13(d)(3) of the 1934 Exchange Act) with any persons (excluding, for the avoidance of doubt, any group composed solely of the Shareholders and the Principal Shareholder Affiliates) with respect to any securities of Purchaser or otherwise in any manner agree, attempt, seek or propose to deposit any securities of Purchaser in any voting trust or similar arrangement, or subject any securities of Purchaser to any arrangement or agreement with respect to the voting thereof (including by granting any proxy, consent or other authority to vote), except as expressly set forth in this Agreement;
(c)    acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group, through swap or hedging transactions or otherwise, any securities of Purchaser or any rights decoupled from the underlying securities of Purchaser that would result in the Principal Shareholders Affiliates owning, controlling or otherwise having any beneficial or other ownership interest in fifteen percent (15%) or more of Common Stock outstanding at such time; provided, that, nothing herein will require common stock of Purchaser to be sold to the extent that the Principal Shareholder Affiliates, collectively, exceed the ownership limit under this clause (c) as the result of a share repurchase or similar Purchaser action that reduces the number of outstanding shares of common stock of Purchaser;
(d)    effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, acquisition, sale of all or substantially all assets, scheme of arrangement, plan of arrangement or other business combination involving the Purchaser or any of its subsidiaries or joint ventures or any of their respective securities or a material amount of any of their respective assets or businesses (each, an “Extraordinary Transaction”), or encourage, initiate or support any other third party in any such activity; provided, however, that this clause (e) shall not preclude the tender (or action not to tender) by the Principal Shareholder Affiliates of any securities of Purchaser into any tender or exchange offer or vote for or against any transaction by any Principal Shareholder Affiliate of any securities of Purchaser with respect to any Extraordinary Transaction;

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(e)    (i) call or request the calling of any meeting of stockholders, including by written consent, (ii) seek representation on, or nominate any candidate to, the Board, except as set forth herein, (iii) seek the removal of any member of the Board, (iv) solicit consents from stockholders or otherwise act or seek to act by written consent, (v) conduct a referendum of stockholders, (vi) present at any annual meeting or any special meeting of Purchaser’s stockholders, or (v) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the Delaware General Corporation Law or otherwise;
(f)    except as set forth herein, take any action in support of or make any proposal or request that constitutes: (i) controlling, changing or influencing the Board or management of the Purchaser, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board; (ii) any material change in the capitalization, stock repurchase programs and practices, capital allocation programs and practices or dividend policy of the Purchaser; (iii) any other material change in Purchaser’s management, business or corporate structure; (iv) seeking to have the Purchaser waive or make amendments or modifications to Purchaser’s certificate of incorporation or the by-laws, or other actions, that may impede or facilitate the acquisition of control of the Purchaser by any person; (v) causing a class of securities of Purchaser to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (vi) causing a class of securities of Purchaser to become eligible for termination of registration pursuant to Section 12(g)(4) of the 1934 Exchange Act;
(g)    make or cause to be made, or in any way encourage any other person to make or cause to be made, any public statement or announcement, including in any document or report filed with or furnished to the SEC or through the press, media, analysts or other persons, that constitutes an ad hominem attack on, or otherwise disparages, defames or slanders the Purchaser or Affiliates thereof or any of their respective current or former officers, directors or employees, provided that the Shareholders will, subject to the confidentiality obligations as provided in Section 4, be permitted to make objective statements that reflect the Shareholder’s view, as a shareholder, with respect to factual matters concerning specific acts or determinations of the Purchaser occurring after the date of this Agreement;
(h)    make any public disclosure, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board, Purchaser, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement;
(i)    enter into any discussions, negotiations, agreements or understandings with any Third Party to take any action with respect to any of the foregoing, or advise, assist, knowingly encourage or seek to persuade any Third Party to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing;
(j)    institute, solicit, assist or join, as a party, any litigation, arbitration or other proceedings against or involving the Purchaser or any of its current or former directors or officers (including derivative actions), other than an action to enforce the provisions of this Agreement instituted in accordance with and subject to the terms of this Agreement; or
(k)    request, directly or indirectly, any amendment or waiver of the foregoing.
3.    Non-Competition/Non-Solicitation.    
3.1    For purposes of this Agreement:  

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(a)    “Affiliate” shall mean with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.
(b)    “Business” shall mean any business that develops, designs, markets, produces, sells, promotes, distributes, provides or is otherwise involved with energy storage and power delivery solutions.
(c)    “Business Territory” shall mean worldwide.
(d)    "Control" means with respect to any Person, the capacity to, directly or indirectly, determine the financial and operating management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.
(e)    “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated entity or governmental entity.
(f)    “Restricted Period” shall mean the three (3) year period commencing on the Effective Date (as defined in the Arrangement Agreement).
(g)    "Restricted Employee" means (i) any Person who was an employee or independent contractor of the Purchaser or any of its Affiliates within the past six (6) months immediately before the Closing or (ii) any current or former employee or independent contractor of the Company or any of its subsidiaries who has accepted an offer of employment with the Purchaser or any of its Affiliates.
3.2    During the Restricted Period, unless otherwise requested in writing by the Purchaser, Shareholder will not, personally or through other Persons:
(a)    hire or solicit for employment or as a consultant, or induce or attempt to persuade to terminate or significantly reduce his or her employment or consulting relationship with the Purchaser or any of its Affiliates, any Restricted Employee; 
(b)    assist or knowingly facilitate any Person in the hiring or recruitment (including assessment) of any Restricted Employee; 
(c)    knowingly encourage, recruit, solicit, or invite any Restricted Employee to enter into employment or a service arrangement of any kind with any Person; or 
(d)    solicit or encourage any customer or potential customer, supplier, manufacturer or Person that has a business relationship with the Purchaser or one of its Affiliates to reduce, alter or terminate its relationship with or divert any customer or potential customer of the Purchaser or any of its Affiliates away from the Purchaser or such Affiliate for the benefit of any Person competing with the Business within the Business Territory.
3.3    During the Restricted Period, the Shareholder will not, personally or through other Persons:

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(a)    participate or engage in, or render any services to any Person, firm, association, corporation, business or other entity that competes with, or has been formed to pursue a business that would compete with, the Business within the Business Territory, including, but not limited to, making, manufacturing, selling promoting, distributing and/or developing any products related to the Business;
(b)    promote or assist, financially or otherwise, any Person, firm, association, corporation or other entity engaged in the Business anywhere in the Business Territory; or
(c)    develop any intellectual property related to the Business anywhere in the Business Territory.
3.4    Section 2.3 notwithstanding, Shareholder may own, directly or indirectly, solely as an investment, any class of publicly-traded securities, any privately held corporation; and any investment fund so long as Shareholder does not provide services to any such Business that are prohibited by Section 3.2 or 3.3 of this Agreement. 
3.5    During the Restricted Period, Shareholder shall not criticize or disparage the Purchaser or any of its Affiliates, or make any statements to, or take any actions with respect to, any Person who is or, to Shareholder’s knowledge, is reasonably likely to become a customer, supplier, contractor or client of the Purchaser or any of its subsidiaries, which are intended to, or reasonably likely to, damage Purchaser’s or its subsidiaries’ relationship with such Persons.
4.    Shareholder Director.  
4.1    The Purchaser agrees that in accordance with the Purchaser’s certificate of incorporation and by-laws and Delaware law, the Board of Directors of the Purchaser (the “Board”) shall appoint Ilya Golubovich as a single director nominated by the Shareholders (the “Shareholder Director”) to serve as a director of the Purchaser as promptly as reasonably possible but no later than the next business day following the Purchaser’s 2017 Annual Meeting of Stockholders.  So long as (i) the Shareholders continue to retain at least five percent (5%) or more of the  beneficial ownership of Common Stock outstanding and (ii) the Shareholder Director shall have not be removed by the shareholders or otherwise voted against appointment as a member of the Board, then Purchaser shall include the Shareholder Director (other than in the case of the refusal or inability of any such person to serve, in which case the Board shall include his substitute chosen in accordance with Section 4.4) appointed to the Board pursuant to this Section 4.1 as a nominee to the Board on the slate of nominees recommended by the Board in the Purchaser’s proxy statement and on its proxy card relating to the annual meeting of the Board in which such Shareholder Director stands for re-election (the “Future Shareholder Meeting”) and shall use its reasonable best efforts (which shall include the solicitation of proxies) to obtain the election of the Shareholder Director at such Future Shareholder Meeting (it being understood that such efforts shall not be less than the efforts used by the Purchaser to obtain the election of any other independent director nominee nominated by it to serve as a director at such meeting). 
4.2    As a condition to the Shareholder Director’s appointment to the Board, the Shareholders shall (or shall cause the Shareholder Director to) have provided to the Purchaser completed D&O Questionnaires in the form customarily provided by the Purchaser to its directors and executed irrevocable resignations as director in the form attached hereto as Exhibit A (the “Irrevocable Resignation Letter”). As a further condition to the Shareholder’s nomination for election as a director of the Purchaser, the Shareholders shall (or shall cause the Shareholder Director to), as promptly as practicable upon request of the Purchaser, provide (i) executed consents from the Shareholder Director to be named as a nominee in 

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Purchaser’s proxy statement and to serve as a director if so elected, in the form customarily provided by the Purchaser to its directors, (ii) any information required to be or customarily disclosed for all applicable directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or stock exchange rules or listing standards, (iii) information in connection with assessing eligibility, independence and other criteria applicable to all applicable directors or satisfying compliance and legal obligations, and (iv) such other information as reasonably requested by the Purchaser from time to time with respect to the Shareholders or the Shareholder Director.  
4.3     At all times while serving as a member of the Board, the Shareholder Director shall comply with all policies, procedures, processes, codes, rules, standards and guidelines applicable to all non-employee Board members, including, but not limited to, the Purchaser’s Code of Business Conduct and Ethics and Insider Trading Policy.
4.4    If, during the Standstill Period, the Shareholder Director resigns (including by reason of a change in principal business occupation or position or service on additional boards), or refuses to serve, or the Shareholder Director is unable to serve due to death or disability, in each case provided that such Shareholder Director is otherwise then entitled to be appointed or serve, as applicable, as a director of the Purchaser pursuant to this Agreement, then the Shareholders shall be entitled to designate a replacement director or directors, as applicable, who shall (A) be reasonably acceptable to the Purchaser, (B) qualify as an independent director of the Purchaser under the listing rules of NASDAQ, and (D) provide the items required to be provided by the Shareholder Director pursuant to Section 3.2, and thereafter such individual or individuals, as applicable, shall be considered to be the “Shareholder Director” under this Agreement. 
4.5    Notwithstanding anything to the contrary in this Agreement, the obligations set forth in this Section 4 shall be contingent upon the Closing of the Arrangement Agreement in accordance with the Plan of Arrangement and become effective at, and subject to, the occurrence of the Effective Time.  
4.6    Notwithstanding anything to the contrary in this Agreement, the Purchaser’s obligations under this Agreement shall terminate immediately, and the Shareholder Director shall promptly offer to resign from the Board and any committee thereof (and, if requested by the Purchaser, promptly deliver the written resignation to the Board (which shall provide for the immediate resignation) it being understood that it shall be in the Board’s sole discretion whether to accept or reject such resignations), and the Purchaser shall have no further obligation with respect to the Shareholder Director under this Section 3, if (a) notwithstanding the standstill obligations set forth in Section 1, the aggregate beneficial ownership of the Shareholders is less than five percent (5%)  of the aggregate number of shares of the common stock of the Purchaser (on an as-converted-to-common stock basis and as the same may be adjusted from time to time for stock splits, stock dividends, combinations, subdivisions, recapitalizations and the like) or (b) the Shareholders the Shareholders cease to comply with or breaches any of the terms of this Agreement in any material respect and, if capable of being cured, such material breach or failure has not been cured within 15 days after receipt by the Shareholders of written notice from the Purchaser specifying such material breach or failure, or, the confidentiality obligations contained in Section 4 in any material respect. In furtherance of this Section 3.5, the Shareholder Director has, concurrently with the execution of this Agreement, executed the Irrevocable Resignation Letter and delivered it to the Purchaser.
4.7    The Shareholder Director shall also be appointed to be a member of the Governance and Nominating Committee of the Board, subject to the agreement of the Shareholder Director and the qualification requirements of the committee (with such appointment to be effective no earlier than the Board’s next regularly scheduled  Board meeting following the appointment of the Shareholder Director to the Board.

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4.8    The Shareholders (and the Shareholder Director) acknowledge that the Shareholder Director shall have all of the rights and obligations, including fiduciary duties to Board and its stockholders, of a director under applicable law and Purchaser’s organizational documents while such Shareholder Director is serving on the Board. 
5.    Confidentiality.  Except as may otherwise be publicly disclosed by the Purchaser or the Company, Shareholder shall hold any confidential information provided by the Purchaser or the Company or in the possession of the Shareholders, regarding this Agreement, the Arrangement Agreement and the Plan of Arrangement or otherwise, in strict confidence and shall not divulge any such information to any third person; provided, however, that Shareholder may disclose such information (i) to his, her or its attorneys, accountants, consultants, trustees, beneficiaries and other professionals to the extent necessary to obtain their services in connection with monitoring Shareholder’s interests in the Company and Shareholder’s rights under the Arrangement Agreement or other agreements entered into in connection with the Plan of Arrangement, including his, her or its rights to receive proceeds pursuant to or as a result of the Plan of Arrangement (provided such advisors are subject to rules of ethical or professional rules of such Person’s profession or have at least as restrictive confidentiality provisions as the Company), and (ii) to any existing Affiliate, officer, director, employee, partner, member, shareholder, parent or subsidiary of Shareholder in the ordinary course of his, her or its business, provided in each case that such Shareholder informs the Person receiving the information that such information is confidential and such Person agrees in writing to abide by the terms of this Section 4.  Neither Shareholder, nor any of his, her or its Affiliates (other than the Company, whose actions shall be governed by the Arrangement Agreement), shall issue or cause the publication of any press release or other public announcement with respect to this Agreement, the Arrangement Agreement, the Plan of Arrangement or the other transactions contemplated hereby or thereby without the prior written consent of the Purchaser, except as may be required by applicable law in which circumstance such announcing party shall make reasonable efforts to consult with the Purchaser to the extent practicable. The Shareholders further acknowledge and agree that non-public materials provided to the Shareholder Director and communications relating to the Board shall be deemed confidential information.
6.    Miscellaneous.
6.1    Notices.  Any notice or other communication required or permitted to be given hereunder shall be sufficiently given if in writing, delivered or sent by telecopier or facsimile transmission or e-mail or similar means of recorded electronic communication:
In the case of the Shareholder:
To the address set forth on the signature page hereto. 
In the case of the Purchaser:
Maxwell Technologies, Inc.
3888 Calle Fortunada
San Diego, California 92123
Attention: Emily Lough
E-mail: elough@maxwell.com

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with a copy (which will not constitute notice) to:

DLA Piper LLP (US)
4365 Executive Dr #1100
San Diego, CA 92121
Attention:     Larry W. Nishnick 
Facsimile No.:    (858) 638-6014 
E-mail:         larry.nishnick@dlapiper.com
and
DLA Piper (Canada) LLP
1 First Canadian Place, Suite 600
100 King Street West, Toronto, Ontario, M5X 1E2
Attention:     Robert Fonn 
Facsimile No.:    (416) 369-5239
E-Mail:        robert.fonn@dlapiper.com

or to such other street address, individual or electronic communication number or address as may be designated by notice given by any party to the others. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by facsimile or electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the following Business Day if not given during such hours on any day.
6.2    Interpretation.  When a reference is made in this Agreement to sections or exhibits, such reference shall be to a section of or an exhibit to this Agreement unless otherwise indicated.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.”  The phrases “the date of this Agreement,” “the date hereof,” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date first above written.  Unless the context of this Agreement otherwise requires: (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, and (iii) the terms “hereof,” “herein,” “hereunder” and derivative or similar words refer to this entire Agreement.
6.3    Specific Performance; Injunctive Relief.  The parties hereto acknowledge that the Purchaser will be irreparably harmed and that there will be no adequate remedy at law for a violation of any of the covenants or agreements of Shareholder set forth herein.  Therefore, it is agreed that, in addition to any other remedies that may be available to the Purchaser upon any such violation of this Agreement, the Purchaser shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to the Purchaser at law or in equity and Shareholder hereby waives any and all defenses that could exist in his, her or its favor in connection with such enforcement and waives any requirement for the security or posting of any bond in connection with such enforcement.
6.4    Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more 

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counterparts have been signed by each of the parties and delivered to the other parties hereto; it being understood that all parties need not sign the same counterpart.
6.5    Entire Agreement; Nonassignability; Parties in Interest; Death or Incapacity.  This Agreement and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto (i) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) are not intended to confer, and shall not be construed as conferring, upon any person other than the parties hereto any rights or remedies hereunder.  Except as otherwise provided in this Agreement, neither this Agreement nor any of the rights, interests, or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by Shareholder without the prior written consent of the Purchaser, and any such assignment or delegation that is not consented to shall be null and void.  This Agreement, together with any rights, interests or obligations of the Purchaser hereunder, may be assigned or delegated in whole or in part by the Purchaser to any direct or indirect wholly owned subsidiary of the Purchaser; without the consent of or any action by Shareholder upon notice by the Purchaser to Shareholder as provided herein, provided, however, that the Purchaser shall remain liable for all of its obligations under this Agreement.  Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns (including any person to whom any Shares or New Shares are sold, transferred or assigned).  All authority conferred herein shall survive the death or incapacity of Shareholder and in the event of Shareholder’s death or incapacity, any obligation of Shareholder hereunder shall be binding upon the heirs, personal representatives, successors and assigns of Shareholder.
6.6    Severability.  In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and the application of such provision to other persons or circumstances shall be interpreted so as reasonably to effect the intent of the parties hereto.  The parties hereto further agree to use their commercially reasonable efforts to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
6.7    Remedies Cumulative.  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party shall be deemed cumulative (but without duplication) with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy shall not preclude the exercise of any other remedy.
6.8    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to such state’s principles of conflicts of law.  The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of California and the Federal courts of the United States of America located within the County of San Diego in the State of California, in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a California State or Federal court located in San Diego County.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree 

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that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.1 shall be valid and sufficient service thereof.  With respect to any particular action, suit or proceeding, venue shall lie solely in the State of California.
6.9    Termination.  The term of this letter agreement shall continue in full force and effect from the date hereof through the fifth (5th) year anniversary of the Effective Time, unless earlier terminated on the earliest of the following dates: (a) the date as of which the parties hereto terminate this letter agreement by written agreement; (b) the date as of which the last of the rights and obligations provided by Section 1-4 have expired and are in no further effect; (c) any material violation of the terms of the Confidential Agreement which (i) remains uncured within five business days after receipt of notice thereof, or (ii) if such violation is not subject to cure, directly causes material harm to the Purchaser in the Board’s reasonable discretion; or (d) the closing of a transaction or series of related transactions deemed to be a liquidation, dissolution. winding up, merger or consolidation of the Purchaser (collectively, the “Expiration Date”).  
6.10    Amendment.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each of the parties hereto, or in the case of a waiver, by the party against which the waiver is to be effective.  Notwithstanding the foregoing, no failure or delay by any party hereto in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any right hereunder.
6.11    Rules of Construction.  The parties hereto agree that they have been (or have had the opportunity to be) represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.
6.12    Additional Documents, Etc.  Shareholder shall execute and deliver any additional documents necessary or desirable, in the reasonable opinion of the Purchaser, to carry out the purpose and intent of this Agreement.  
6.13    WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

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IN WITNESS WHEREOF, the parties hereto have caused this Shareholder Agreement to be executed as of the date first above written.
	
			
	 
	MAXWELL TECHNOLOGIES, INC.

	 
	Per:
	  /s/ Franz Fink

	 
	 
	Name:    Franz Fink
Title:   President and CEO

	 
	 

	 
	

SHAREHOLDER: 

I2BF ENERGY LIMITED

	 
	Per:
	  /s/ Areti Charidemou

	 
	 
	Name:   Areti Charidemou
Title:    Director

	 
	   
   Address: c/o I2BF LLC
      304 Park Ave. South, 9 FL
      New York, NY 10010

   Email: ilyag@i2bf.com

	 
	

	 
	ARBAT CAPITAL GROUP LTD.

	 
	Per:
	 /s/ Alexey Golubovich

	 
	 
	Name:   Alexey Golubovich 
Title:    Director

	 
	

   Address:
      c/o I2BF LLC
      304 Park Ave. South, 9 FL
      New York, NY 10010
Email: denis.chigirev@arbatcapital.com

SCHEDULE A 
LIST OF SHAREHOLDERS
and
OWNERSHIP OF COMPANY SUBJECT SHARES

	
				
	Name and Address
	Subject Shares beneficially owned
	Registered Holder if different from beneficial owner
	Total number of Subject Shares owned or controlled

	

12BF Energy Limited

 

	229,000,529
	--
	229,000,529

	Arbat Capital Group Ltd.

	228,270,591
	--
	228,270,591

 

        

EXHIBIT A
FORM OF IRREVOCABLE RESIGNATION
OF THE SHAREHOLDER DIRECTOR
January __, 2017
Attention: Board of Directors
Maxwell Technologies 
3888 Calle Fortunada
San Diego, CA 92123

Re: Resignation
Ladies and Gentlemen:
This irrevocable resignation is delivered pursuant to Section 3.2 and 3.5 of the Shareholder Agreement, dated as of January__, 2017 (the “Agreement”), by and between Maxwell Technologies, Inc. (“Purchaser”) and the Shareholders. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement. Effective only upon, and subject to, such time as the Shareholders cease to comply with or breaches any of the terms of the Agreement in any material respect and, if capable of being cured, such material breach or failure has not been cured within 15 days after receipt by the Shareholders of written notice from the Purchaser specifying the material breach or failure, or the confidentiality obligations  set forth in the Agreement in any material respect, I hereby resign from my position as a director of the Purchaser and from any and all committees of the Board on which I serve.

This resignation may not be withdrawn by me at any time during which it is effective.

Sincerely,

By:
Name:Exhibit

Exhibit 10.16.1

EMPLOYMENT AGREEMENT
THIS AGREEMENT (the “Agreement”) is entered into the 29th day of April, 2011 ("Effective Date"), between Mike Abbaei (“Employee”) and DST Brokerage Solutions, LLC (the "Company” or "DSTBS"), a Delaware limited liability company and a direct or indirect wholly-owned subsidiary of DST Systems, Inc. (“DST”), a Delaware corporation.  
In consideration of the promises and mutual covenants contained herein and intending to be legally bound hereby, the parties agree as follows:
WHEREAS, pursuant to an Asset Purchase Agreement (the "Finix Transaction Agreement") dated April 21, 2011 among Finix Business Strategies, LLC, a Maryland limited liability company ("Finix"), the owners of Finix' outstanding membership interests, and Finix Professional Services, LLC, a Delaware limited liability company and a direct or indirect wholly-owned subsidiary of DST ("New Finix"), New Finix has acquired all of the assets of Finix (the "Finix Transaction"); 
WHEREAS, pursuant to an Asset Purchase Agreement (the "Finix Converge Transaction Agreement") dated April 21, 2011 among Finix Converge, LLC, a Maryland limited liability company ("Finix Converge"), the owners of Finix Converge's outstanding membership interests, and Converge Systems, LLC, a Delaware limited liability company and a direct or indirect wholly-owned subsidiary of DST ("New Converge"), New Converge has acquired all of Finix Converge's assets (the "Finix Converge Transaction"); and 
WHEREAS, DST and the Company have continued the Finix and Finix Converge businesses and, as part of the Finix Transaction and the Finix Converge Transaction, Company has agreed that it will employ Employee under the terms and conditions of this Agreement.  
1.    EMPLOYMENT.
1.1    Agreement Term.  The Company agrees to employ Employee, and Employee agrees to be employed, under such terms and conditions as are provided herein through December 31, 2013 ("Agreement Term"), unless this Agreement is earlier terminated under Paragraph 3 of this Agreement.  
1.2    Duties.  Employee shall initially serve as the Company's President.  He shall have the duties, authority and responsibilities as the Company or the Company entity for which he is employed may from time to time prescribe or request, except that such duties, authority and responsibilities shall remain at all times commensurate with those of an executive level position; Employee shall continue throughout his employment with DST to report directly to DST’s Chief Operating Officer or above; and Employee shall not be required to relocate his principal office to any location outside of the continental United States.  Employee further agrees that while employed by any Company entity, he will devote substantially all of his working time and efforts to the business of the Company and its affiliates.
1.3    Employing Entity.  Employee expressly consents to be bound by the provisions of this Agreement for the benefit of the Company and of any subsidiary or affiliate of the Company to whose employ Employee may be transferred (the "Employing Entity"), without the necessity that this Agreement be re-executed at the time of such transfer, and this Agreement shall be deemed assigned to the Employing Entity, which shall assume all obligations hereunder.  
2.    COMPENSATION AND BENEFITS.

2.1    Base Salary.  The Company shall pay Employee as compensation for his services hereunder an annual base salary of Four Hundred Thousand Dollars ($400,000), subject to adjustment from time to time as agreed by the parties. 
2.2    General Benefits.  Employee shall participate in the benefit plans and programs generally available to all Company officers.  At the commencement of his employment with the Company, Employee shall participate in the benefit programs attached to this Agreement as Exhibit D.  The benefit structure is subject to change from time to time as DST, the Company or the Compensation Committee or other appropriate committee of DST's Board (the "DST Compensation Committee" or the "Committee") determine. During his employment, Executive shall be entitled to reimbursement for ordinary and necessary business expenses in accordance with Company policies and procedures.  
2.3    Incentive Program Benefits.  Employee shall be eligible to participate in a DST annual incentive award program (“Program”) beginning on a pro rata basis for the 2011 performance year based on the number of days from March 1, 2011 through December 31, 2011.  
Program participation is under such terms as are determined from time to time by the Compensation Committee.
Payment to Employee of an annual bonus (“Annual Incentive”) may depend on achievement of DST, Company or other goals as the DST Compensation Committee determines, including without limitation a combination of goals.  Any payout upon goal achievement may consist of any combination of cash, deferred cash or other award components selected by the Committee.
Subject to the terms of the Program, Employee’s Threshold, Target and Maximum opportunity levels (if and to the extent applicable under the Program structure upon which Employee’s Annual Incentive is based) shall be the following percentages of annual base salary as of the beginning of each year:
	
			
	Threshold
	Target
	Maximum

	50%
	100%
	150%

	 

Employee understands that the DST Board or the Committee may change, revoke or terminate a Program or Employee’s participation therein at any time; provided that, while the Program is in effect, Employee’s Threshold, Target and Maximum Annual Incentive percentages (if and to the extent applicable under the Program structure upon which Employee’s Annual Incentive is based) will not be reduced below the percentages shown above.  
The terms of Employee’s participation in a Program are established by the DST Board or the Committee and not by this Agreement.  The actual amount of any Annual Incentive earned will be based upon meeting specific corporate or business unit goals set in accordance with the Program.
2.4    Restricted Stock Unit Grants.  In consideration of employment hereunder and for other good and valuable consideration, a grant of Two Thousand Four Hundred (2,400) time-vesting restricted stock units and Nine Thousand Six Hundred (9,600) performance-vesting restricted stock units under the DST Systems, Inc. 2005 Equity Incentive Plan will be proposed to the DST Compensation Committee at its first regularly scheduled meeting after the completion of the Finix Transaction and the Finix Converge Transaction, which meeting is expected to occur May 10, 2011.  The Committee's grants 

- 2 -

will be subject to Paragraph 5 hereof and to execution of restricted stock unit award agreements containing the terms and conditions set forth in Exhibits A and B hereto.
2.5    Incentive Bonus.  If Employee is employed by DST, the Company or any DST subsidiary as of the dates indicated below, then the Company shall pay Employee, on the next regularly scheduled payroll date following such date the lump sum amount indicated below.  Such payments (in the aggregate, the "Total Incentive Bonus") shall be ordinary income reportable as compensation income on Employee's W-2 for the year of payment:
Date    Incentive Bonus Amount

December 1, 2012    Seven Hundred Eighty Thousand Dollars ($780,000)
December 1, 2013    Five Hundred and Twenty Five Thousand Dollars ($525,000)

If Employee's employment is terminated by the Employing Entity under Paragraph 3.3 (Without Cause by the Company), then Employee shall receive upon his termination the portion of the Total Incentive Bonus that is unpaid as of the date of termination of employment ("Unpaid Amount").    
If Employee's employment is terminated as a result of "disability" as defined and determined by the DST Compensation Committee or if Employee dies, then Employee (or his estate or beneficiary, as may be appropriate) shall receive all of the Unpaid Amount.     

Notwithstanding any other provision of this Agreement, the obligations in this Paragraph 2.5 to pay the Unpaid Amount shall not apply unless Employee executes a general release in favor of the Company and all DST subsidiaries, joint ventures and other affiliates, and the directors, officers, employees and agents thereof.  If Employee's employment with an Employing Entity terminates for any reason other than as provided above in this Paragraph 2.5, then the Unpaid Amount shall not be owed.
3.    TERMINATION.
3.1    Death, Disability, and Voluntary Termination of Employment.  Employee’s employment under this Agreement shall terminate upon his death, "disability" as defined and determined by the DST Compensation Committee, or voluntary termination of employment.  Upon such termination, Employee (or his estate or beneficiary, as may be appropriate) shall be entitled to receive (i) an amount equal to all base salary earned and accrued to the date of termination of employment, to the extent theretofore unpaid; and (ii) any other benefits payable upon his termination of employment under any applicable employee benefit plan in which Employee participated at the date of his termination of employment.  If the termination of employment is as a result of disability as defined and determined by the DST Compensation Committee or death, then Employee shall be entitled to all of the Unpaid Amount of the Incentive Bonus, as provided in Paragraph 2.5.  Except as provided under this Agreement or under any applicable employee benefit plan, all other obligations of the Company under this Agreement shall terminate as of the date of Employee’s termination of employment.
3.2    For Cause by the Company.  The Company may terminate this Agreement and Employee’s employment for cause immediately upon notice to Employee.  For purposes of this Agreement, termination for “cause” shall mean termination based upon any one or more of the following:(a)    Any material breach of this Agreement by Employee which is not, or cannot be, cured (in each case in the reasonable judgment of the Company’s President or Board or the President, Chief Executive Officer or 

- 3 -

Board of DST) within thirty (30) days after written notice of such breach to Employee and a reasonable opportunity for Employee to respond to any allegation of material breach of this Agreement by Employee;
		
	(b)
	Employee's dishonesty involving the Company or any DST affiliate which is harmful to any such entity or its reputation; 

		
	(c)
	Gross negligence or willful misconduct in the performance of Employee’s duties as determined in  the reasonable judgment of the Company’s President or Board or the President, Chief Executive Officer or Board of DST, following written notice to Employee and a reasonable opportunity for Employee to respond to any allegations of such gross negligence or willful misconduct;

		
	(d)
	Willful failure by Employee to follow reasonable instructions of the Company’s Board or any officer to whom Employee reports concerning the operations or business of the Company or any DST affiliate, as determined in the reasonable judgment of the Company’s President or Board or the President, Chief Executive Officer or Board of DST, following written notice to Employee and a reasonable opportunity for Employee to respond to any allegations of such willful failure;

		
	(e)
	Employee’s fraud or criminal activity; or

		
	(f)
	Embezzlement or misappropriation by Employee.

Notwithstanding Employee's reasonable opportunity to respond provided in clauses (a), (c), and (d) above, the final determination of whether a termination for cause has or will occur is the determination of the Company’s President or Board or the President, Chief Executive Officer or Board of DST.
3.3    Without Cause by the Company.  The Company may terminate Employee’s employment under this Agreement at any time without cause by giving written Notice of Termination to Employee.  If the Company terminates Employee’s employment without cause at any time during the Agreement Term (the "Period"), the Company shall have the obligations set forth in this Paragraph 3.3 and in Paragraph 2.5; provided, however, that notwithstanding any other provision of this Agreement, the obligations in such Paragraphs shall not apply unless Employee executes a general release in favor of the Company and all DST subsidiaries, joint ventures and other affiliates, and the directors, officers, employees and agents thereof.Within seventy-five (75) days after termination of employment without cause during the Period, the Company shall pay to Employee a lump sum amount equal to amount of base salary Employee would have received from the date of termination of employment through the last day of the Period had his employment continued through the end of the Period.  For avoidance of doubt, neither termination of employment for disability nor assignment or deemed assignment of this Agreement to a DST subsidiary, joint venture or other affiliate shall be treated as a termination without cause.  The Company's payment obligation under this Paragraph 3.3 shall not apply to any termination without cause on or after expiration of the Period.  For purposes of Paragraph 2.5 and this Paragraph 3.3, cause shall have the meaning stated in Paragraph 3.2.
4.    NON-DISCLOSURE, INVENTION OWNERSHIP, NON-SOLICITATION AND NON-COMPETITION.  Employee agrees to abide by the covenants and obligations set forth in Exhibit C.  Such agreement is in consideration of the hiring of Employee, Employee's participation in the benefits and equity 

- 4 -

grants described in Paragraph 2, the Company's other obligations to Employee and Employee's other rights set forth in this Agreement, DST's obligations in all agreements related to the Finix Transaction and Finix Converge Transaction, including without limitation the Finix Transaction Agreement and the Finix Converge Transaction Agreement, and the payments received by Employee under each such agreement.  Employee acknowledges and agrees that the consideration for the obligations in Exhibit C is full and adequate.  Employee further acknowledges and agrees that if he violates the noncompetition and other obligations set forth in Exhibit C, then Company is not bound by its obligations herein, DST is not bound by its obligations in connection with the Finix Transaction and the Finix Converge Transaction, Employee shall forfeit any rights to payments of any kind, and Company and DST may have such other rights and remedies as are set forth in any relevant agreement or available by law.  The provisions of this paragraph and Exhibit C shall survive Employee’s termination of employment and expiration or termination of this Agreement; provided, however, that the noncompetition and nonsolicitation periods shall be limited as described in Exhibit C.
5.    CODE PARAGRAPH 409A.
5.1    To extent that the Employee would otherwise be entitled to any payment or benefit under this Agreement or any plan or arrangement of the Company or its affiliates, that constitutes “deferred compensation” subject to Paragraph 409A of the Code (“Paragraph 409A”) and that if paid during the six months beginning on the date of Employee’s termination of employment would be subject to additional taxes and penalties under Paragraph 409A (“409A Penalties”) because the Employee is a “specified employee” (within the meaning of Paragraph 409A and as determined from time to time by the Compensation Committee of the Company), the payment will be paid to the Employee on the earliest of the six-month anniversary of the termination of employment, a change in ownership or effective control of the Company (within the meaning of Paragraph 409A) or the Employee’s death.  In addition, any payment or benefit due upon a termination of employment that represents a “deferral of compensation” within the meaning of Paragraph 409A shall be paid or provided to the Employee only upon a “separation from service” as defined in Treas. Reg. 1.409A-1(h).  To the extent applicable, each severance payment made under this Agreement shall be deemed to be separate payments, and amounts payable under this Agreement shall be deemed not to be a “deferral of compensation” subject to Paragraph 409A to the extent provided in the exceptions in Treas. Reg. 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)) and other applicable provisions of Treas. Reg. 1.409A-1 through 1.409A-6.
5.2    Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to Paragraph 409A, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year (except for any life-time or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Employee incurred such expenses, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.
6.    NOTICES.  All notices and other communications provided for herein that one party intends to give to the other party shall be in writing and shall be considered given when mailed or couriered, return receipt requested, or personally delivered, either to the party or at the addresses set forth below (or to such other address as a party shall designate by notice hereunder):

- 5 -

If to the Company:
DST Brokerage Solutions
c/o Steve Hooley, President of DST Systems, Inc. 
333 W. 11th, 5th Floor
Kansas City, MO 64105

cc:
Randall D. Young
General Counsel
DST Systems, Inc.
333 W. 11th, 5th Floor
Kansas City, MO 64105

If to Employee:
Mike Abbaei
22 Merry Hill Court
Pikesville, MD  21208
7.    AMENDMENTS.  This Agreement may be amended, modified or superseded only by a written instrument executed by both of the parties hereto.
8.    BINDING EFFECT.  This Agreement shall inure to the benefit of and shall be binding upon the Company and Employee and on their respective heirs, executors, personal representatives, successors and permitted assigns.
9.    ASSIGNABILITY.  This Agreement shall not be assigned, in whole or in part, by either party, without the prior written consent of the other party; provided, however, that this Agreement shall be deemed assigned, with no consent required, to any DST subsidiary, joint venture or affiliate to whose employ Employee may be transferred, which entity shall assume the obligations hereunder.
10.    GOVERNING LAW.  This Agreement shall be governed by the laws of the State of Missouri without regard to its conflicts of law principles.
11.    ENTIRE AGREEMENT.  This Agreement contains the entire Agreement between the parties relative to its subject matter, superseding all prior agreements or understandings of the parties relating hereto.
12.    WAIVER.  Any term or provision of this Agreement may be waived in writing at any time by the party entitled to the benefit thereof.  The failure of either party at any time to require performance of any provision of this Agreement shall not affect such party’s right at a later time to enforce such provision.  No consent or waiver by either party to any default or to any breach of a condition or term in this Agreement shall be deemed or construed to be a consent or waiver to any other breach or default.
13.    INVALIDITY OF PORTION OF AGREEMENT.  If any provision of this Agreement or the application thereof to either party shall be invalid or unenforceable to any extent, the remainder of this Agreement shall not be affected thereby and shall be enforceable to the fullest extent of the law.

- 6 -

14.    SURVIVAL.  The parties acknowledge and agree that their obligations under Paragraphs 2.5 and 3 through 13 of this Agreement survive the termination of this Agreement and continue after the termination of the employment relationship between Employee and any Employing Entity after termination of employment; provided, however, that for obligations set forth in any of such paragraphs that are limited to a specified period of the time, the limitations shall apply.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.

By:   \s\  Mike Abbaei    
Name:  Mike Abbaei

DST Brokerage Solutions, LLC

By:   \s\  Kenneth V. Hager    
Kenneth V. Hager
Title:  VP/Asst Secretary/Treasurer 

- 7 -

EXHIBIT A

Finix and Finix Converge Transaction Grant 

Summary of Restricted Stock Unit (“RSU”) Terms and Conditions – Time Based Vesting

	
		
	Event
	Restricted Stock Units Vesting

	Time-Based Vesting
	Vesting occurs in increments on the second Friday in March ("March Vest Date”) following the calendar anniversary dates of the grant as follows:  
•    20% after first anniversary
•    30% after second anniversary
•    50% after third anniversary
Forfeiture can also occur for termination of employment, as described in the next row. 
  

	Voluntary Termination of Employment that is not:
•    in connection with a "Reduction in Force" or "Business Unit Divestiture" (each defined in the Award Agreement), or
•    a "Retirement" (see definition below).
•    
	No vesting of unvested RSUs upon termination.  Forfeiture of unvested RSUs.  

	Disability (as defined in the Award Agreement) or Death
	Full vesting of unvested RSUs upon the disability or death, regardless of whether goal achievement has been certified.  

	Reduction in Force or Business Unit Divestiture (each as defined in the Award Agreement) 
Retirement:  A voluntary termination of employment, or an involuntary termination of employment by the Company without cause, at age 59 1⁄2 w/ at least 3 years of Company service.   
(each of the above a "Pro Rata Vesting Event") 
	The tranche of RSUs that would be scheduled to vest on next March Vest Date will vest pro rata on the date of the Pro-Rata Vesting Event based on the number of months between the previous March Vest Date (or, for the first tranche, one year prior to the initial March Vest Date) and the date of the Pro Rata Vesting Event; provided, however, that if the Pro Rata Vesting Event is a Reduction in Force or Business Unit Divestiture, no vesting will occur unless the Grant Date was at least six months prior to the date of the Pro Rata Vesting Event.  All future tranches (and the remaining portion of the tranche for the year of the Pro Rata Vesting Event) shall be forfeited.  

	Change in Control of DST (as defined in the 2005 Equity Incentive Plan)

	No early vesting upon Change in Control;  provided, however, that subsequent to the Change in Control, all unvested RSUs vest upon termination without cause (or, for certain executive officers, resignation for good reason). 

The grant is:
		
	•
	non- transferable, except upon death by beneficiary designation approved by Committee  

		
	•
	subject to the grantee’s acceptance of an award agreement, which shall contain non-compete, intellectual property protection, non-disclosure and non-solicitation provisions and remedies such as forfeiture for certain breaches of contract.  

		
	•
	Company procedures may allow the grantee to have shares withheld for taxes on vested RSUs through timely and proper elections in compliance with tax laws.

		
	•
	Company procedures may allow the grantee, through timely and proper elections in compliance with tax laws, to delay issuance of shares to a selected date ("Issuance Date") or, upon Retirement, to annually receive shares in five annual installments.  

		
	•
	Shares shall issue as soon as administratively practical after the vesting date or, if later, the Issuance Date.   

- 8 -

		
	•
	The grantee has a right to dividend equivalents in the form of additional RSUs in the event the Company declares dividends.  The additional RSUs are subject to forfeiture if the RSUs that are subject to this grant do not ultimately vest.   

This is a summary only.  The actual terms and conditions are governed by the award agreement, which controls in the event of a conflict or ambiguity.   

- 9 -

EXHIBIT B

Finix and Finix Converge Transaction Grant 

Summary of Restricted Stock Unit (“RSU”) Terms and Conditions – Performance Based Vesting

	
		
	Event
	Restricted Stock Units Vesting

	Goal-Based Vesting
The vesting is performance-based, and the performance period is 2011-2015.  Vesting can occur all at once on a vest date or on various vest dates over time, depending on the level of goal achievement.  

	

A percentage of the RSUs vest following each year of the performance period if improvement over prior year DST earnings per share as determined by the Committee has occurred.  The percentage of the aggregate number of RSUs vesting shall equal two times the percentage of increase over the previous year’s EPS, as defined in the appendix to the award agreement.  Any amounts not vested by the date of the Compensation Committee’s meeting in 2016 will be forfeited.

The Compensation Committee of the DST Board will, at each February meeting following a performance year (“February Meeting”), consider whether improvement in EPS for purposes of the award occurred for the performance year.  Any vesting will occur on the second Friday in March (“March Vest Date”) following the Committee’s certification of the level, if any, of improvement for the performance year.  
Any RSUs not vested by the March Vest Date following the final year (2015) of the performance period are forfeited.  Forfeiture can also occur for termination of employment, as described in the next row.   

	Voluntary Termination of Employment that is not:
•    in connection with a "Reduction in Force" or "Business Unit Divestiture" (each defined in the Award Agreement), or
•    a "Retirement" (see definition below).
	No vesting of unvested RSUs upon termination.  Forfeiture of unvested RSUs.  

	Disability (as defined in the Award Agreement) or Death
	Full vesting of unvested RSUs upon the disability or death, regardless of whether goal achievement has been certified.

	Retirement (a termination of employment on or after age 591⁄2--either by the grantee voluntarily or by the Company as a termination without cause-- and following a minimum of three (3) years of employment)
or
Reduction in Force
	The vesting determination shall be delayed until the February Meeting following the performance year in which the termination of employment occurred.  RSUs that would have vested on the March Vest Date in such year shall vest pro rata.  In other words, only a portion of the full number that would have vested for the performance year in which the termination occurred shall vest, depending on the number of months worked in the performance year.  All remaining RSUs shall be forfeited.

	Business Unit Divestiture ("BUD")
 
	Pro rata vesting of all RSUs unvested as of the date of the BUD, based on the number of calendar months that have elapsed from the beginning of the performance period to the date of the BUD, but only if any level of goal achievement has occurred prior to the performance year in which the BUD occurred. If no level of goal achievement has occurred by the date of the BUD, the determination of whether pro rata vesting shall occur is to be delayed until the February Meeting following the year in which the BUD occurred, and pro-rata vesting can occur if there was goal achievement for such year.  All remaining RSUs shall be forfeited.  

- 10 -

	
		
	Event
	Restricted Stock Units Vesting

	Change in Control of DST (as defined in the 2005 Equity Incentive Plan)

	No early vesting upon Change in Control.  Subsequent to the Change in Control, the unvested RSUs as of the date of the Change in Control vest in one third increments on each of the three anniversary dates of the Change in Control; provided, however, that all unvested RSUs vest upon termination without cause (or for certain executive officers a resignation for good reason).  If a voluntary Retirement occurs subsequent to a Change in Control, then a pro rata portion of the number of RSUs that would have vested on the next Change in Control anniversary date shall vest.  The pro rata amount shall be based on the number of months that have elapsed between the preceding anniversary date, of if none the Change in Control date, and the date of Retirement.

The grant is:
		
	•
	non- transferable, except upon death by beneficiary designation approved by Committee  

		
	•
	subject to the grantee’s acceptance of an award agreement, which shall contain non-compete, intellectual property protection, non-disclosure and non-solicitation provisions and remedies such as forfeiture for certain breaches of contract (and for an executive officer if the Company's recoupment policy requires a clawback based on a restatement of DST’s financial statements).  

		
	•
	Company procedures may allow the grantee to have shares withheld for taxes on vested RSUs through timely and proper elections in compliance with tax laws.

		
	•
	Company procedures may allow the grantee, through timely and proper elections in compliance with tax laws, to delay issuance of shares to a selected date ("Issuance Date") or, upon Retirement, to annually receive shares in five annual installments.  

		
	•
	Shares shall issue as soon as administratively practical after the vesting date or, if later, the Issuance Date.   

		
	•
	The grantee has a right to dividend equivalents in the form of additional RSUs in the event the Company declares dividends.  The additional RSUs are subject to forfeiture if the RSUs that are subject to this grant do not ultimately vest.   

This is a summary only.  The actual terms and conditions are governed by the award agreement, which controls in the event of a conflict or ambiguity.   

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EXHIBIT C

NONDISCLOSURE, INVENTION ASSIGNMENT
AND OWNERSHIP, NONCOMPETITION AND
NONSOLICITATION OBLIGATIONS

PREAMBLE

WHEREAS, Employee is subject to the following obligations as a result of the consideration recited in Paragraph 4 of the Employment Agreement to which this Exhibit is attached; and  
WHEREAS, from time to time, Employee may enter into an agreement that may contain one or more obligations protective of DST Systems, Inc. ("DST"), DST Brokerage Solutions, LLC ("DSTBS"),  Finix Professional Services, LLC ("New Finix"), Converge Systems, LLC ("New Converge"), and/or their respective affiliates (collectively for purposes of this Exhibit C, "the Company") and that is similar to, but more or less restrictive than, an obligation set forth in this Exhibit ("Competing Obligation").  
By executing the Employment Agreement, Employee agrees to each of the following obligations, and further agrees that if any Competing Obligation applies, he shall be bound by the obligation (whether in this Exhibit or in a separate agreement) that is the most protective to the Company.
1.1    Ownership and Confidentiality of Proprietary Information.
1.1.1    Definition of Proprietary Information.  All information and know how, whether or not in writing or other tangible or electronic form, concerning the business or financial affairs of the Company (which, as a reminder, includes DST, DSTBS, New Finix, New Converge and various other entities and their affiliates as stated in the Preamble to this Exhibit), including but not limited to all (i) inventions, discoveries, improvements and trade secrets, (ii) products and services and all plans, service levels, specifications and concepts for products and services, (iii) business plans, business and systems processes, methods, techniques, specifications and formulas, (iv) research and development projects and data, (v) financial and marketing data and information, (vi) information about customers and prospective customers, including contractual terms, customer specifications and the identity of and relationships with customer employees, (vii) names and other data relating to Company employees, consultants, suppliers and prospective employees, consultants and suppliers, (viii) computer data, reports, computer programs, source codes, object codes, manuals, tapes, listings, specifications, test results, programming sequences, application programming interfaces, screen designs and formats and user interfaces, algorithms, flow charts, program formats, user documentation and operating processes, (ix) trade names, copyrights and other intellectual property rights, and (x) tangible and intangible property and other assets owned by Finix Business Strategies, LLC ("Finix") or Finix Converge, LLC ("Finix Converge") prior to and at the time of the Finix Transaction and the Finix Converge Transaction and thereafter, in each case whether developed or invented by Employee or others and whether patentable, copyrightable or not, shall be “Proprietary Information.”
1.1.2    Ownership of Proprietary Information.  All Proprietary Information and all files, databases, letters, memoranda, reports, records, data, sketches, drawings, research notebooks, program listings or other written, photographic or other material containing Proprietary Information, whether created by Employee or others, and whether in tangible, intangible, written or electronic form, shall be and are the 

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exclusive property of the Company to be used by Employee only in the performance of Employee’s duties for the Company.  All Proprietary Information and all records or copies thereof and all tangible property of the Company in the custody or possession of Employee shall be delivered to the Company upon the earlier of (i) a request by the Company or (ii) the termination of Employee’s employment.
1.1.3    Nondisclosure.  Employee shall not, either during or after Employee’s employment by the Company, disclose any Proprietary Information to others outside the Company, or use the same for any purpose without prior written approval by the President or Chief Executive Officer of DST Systems, Inc. other than to discharge Employee’s duties of such employment, unless and to the extent that any Proprietary Information becomes generally known to and available for use by the public other than as a result of the Employee’s acts or omissions or that any Proprietary Information is required to be disclosed by valid court order and Employee has given the Company prompt notice of the order in advance of the disclosure.
1.2    Invention Non-Disclosure and Ownership.
1.2.1    Disclosure of Developments to the Company.  Employee shall make full and prompt disclosure to the Company of all inventions, designs, processes, improvements, discoveries, methods, computer hardware and software and other works of authorship, whether or not fully integrated, debugged or documented and whether patentable, copyrightable or not, which are created, made, conceived or reduced to practice by Employee or under Employee’s direction or jointly with others during Employee’s employment by the Company and related in any way to the business of the Company, whether or not during normal working hours or on the premises of the Company during Employee’s employment by the Company (all of which are collectively referred to as “Developments”).  In addition to and without limiting the foregoing, the term “Developments” shall also include all inventions, designs, processes, improvements, discoveries, methods, computer hardware and software and other works of authorship, whether or not fully integrated, debugged or documented and whether patentable, copyrightable or not, which were created, made, conceived or reduced to practice by Employee or under Employee’s direction or jointly with others during Employee’s employment by Finix or Finix Converge (or during Employee’s ownership of any interest in Finix or Finix Converge or any of their respective affiliates), whether or not during normal working hours or on the premises of Finix, Finix Converge, or any of their respective affiliates.  All of the Developments shall be deemed to be Proprietary Information.
1.2.2    Assignment of Developments.  All Developments will be the property of the Company, and to the extent necessary Employee hereby assigns to the Company (or any person or entity designated by the Company) all Employee’s right, title and interest in and to all such Developments and all related trademarks, patents, patent applications, copyrights and copyright applications.  In the event this Agreement shall be construed in accordance with the laws of any state which precludes a requirement in an agreement to assign certain classes of inventions made by an employee (“Non-Assignable Inventions”), this Paragraph 1.2.2 shall not apply to any Non-Assignable Invention which, pursuant to a final binding enforceable order of a court of competent jurisdiction, or pursuant to an agreement of the Company, falls within such classes.  However, with respect to any Non-Assignable Invention, Employee hereby grants to the Company a worldwide, perpetual, royalty-free, non-exclusive license to make, use and sub-license such Non-Assignable Invention, and to create derivative works therefrom, in connection with the conduct of the Company’s business.
1.2.3    Further Assurances.  Employee agrees to cooperate fully with the Company, both during and after Employee’s employment with the Company, with respect to the procurement, maintenance 

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and enforcement of trademarks, copyrights and patents (in the United States and foreign countries) relating to Developments.  Employee agrees to sign all papers, including, without limitation, trademark applications, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Development.
1.3    The Company’s Right to Notify Subsequent Employers.  The Company may do all necessary things, and take all necessary action, in the Company’s discretion, to protect its rights under this Agreement, including without limitation notifying any subsequent employer, partner or business associate of Employee of the existence of (and furnishing to any such person) the provisions of this Exhibit C.
1.4    Other Agreements.  Employee hereby represents that Employee's employment with the Company will not breach the terms of any agreement with any previous employer or other third party including without limitation any requirement to refrain from directly or indirectly competing with the business or soliciting the customers of such previous employer or any other party.  Employee further represents that Employee’s performance as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Employee in confidence or in trust prior to Employee’s employment with the Company.  Employee agrees not to disclose to the Company or induce the Company to use any confidential proprietary information or material belonging to any previous employers or others.
1.5    Non-Solicitation and Non-Competition.
1.5.1    Employee covenants and agrees that during the "Restrictive Period" (as defined below) Employee will not directly or indirectly:
		
	(a)
	employ or seek to employ any person employed at that time by the Company (which, as a reminder, includes DST, DSTBS, New Finix, New Converge and various other entities and their affiliates as stated in the Preamble to this Exhibit) or otherwise encourage or entice any such person to leave such employment;

		
	(b)
	become employed by, enter into a consulting arrangement with or otherwise agree to perform personal services for a Competitor (as defined below);

		
	(c)
	acquire an ownership interest in a Competitor, other than not more than a two percent (2%) equity interest in a publicly-traded Competitor; or

		
	(d)
	solicit any customers or potential customers or vendors or potential vendors of the Company (which, as a reminder, includes DST, DSTBS, New Finix, New Converge, and various other entities and their affiliates as stated in the Preamble to this Exhibit) on behalf of or for the benefit of a Competitor.

Notwithstanding clause (b) above, Employee may become employed during the Restrictive Period by a financial brokerage firm, or by a financial services firm that is not a Competitor, if the position does not, and will not, involve or provide insight into responsibilities, sales, functions, policy-making, strategy, oversight or management pertaining to goods or services that are the same or similar to (or may be used as a substitute for) the DSTBS Services or any Other DST Services.    

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1.5.2    "Restrictive Period" means the period of Employee’s employment with the Company (which as a reminder includes DST, DSTBS, New Finix, New Converge and various other entities and their affiliates as stated in the Preamble to this Exhibit) plus a period that expires on the later of a) the fifth calendar anniversary of the closing of the Finix Transaction and the Finix Converge Transaction, or b) the second calendar anniversary of the termination of employment.  
1.5.3    “Competitor” means, unless the President or Chief Executive Officer of DST Systems, Inc. determines otherwise (which modification may only be for the benefit of  Employee by making these restrictive covenants less restrictive), any person, entity or organization that sells goods or services in the "geographic area" (as defined in subparagraph 1.5.4 below), which goods or services are (i) directly or indirectly related to "DSTBS Services" (as defined in subparagraph 1.5.5 below); or (ii) the same or similar to (or may be used as a substitute for) any "Other DST Services" (as defined in subparagraph 1.5.6 below). 
1.5.4    The “geographic area” referred to in this Exhibit C shall mean the United States and any other country in which any Company entity has, at the termination of Employee's employment, offices or operations which accounted for one percent (1%) or more of its annual revenues during the period of employment.  
1.5.5.     "DSTBS Services" mean any offerings related to any aspect of the businesses, services or products of DSTBS, New Finix, or New Converge, including without limitation:
		
	(a)
	Providing to businesses and persons in the financial services or technology industries any form or type of business consulting or advising, including without limitation consulting or services pertaining to strategic planning, implementation of plans, technology, mergers and acquisitions, operations, functional improvements, project management, budgeting, due diligence, and best practices;  

		
	(b)
	Providing software, platforms and advice pertaining to web-based information sharing or interactions, including without limitation social media solutions and social-enabled web presences; and

		
	(c)
	Providing to brokers, dealers, financial advisors or intermediaries and other businesses and persons in the financial services or technology industries any form or type of administrative or middle- or back-office services including without limitation recordkeeping; subaccounting; information processing; product or service distribution or distribution support; transaction processing; conversions of technology, accounts, or business; and business process management.   

1.5.6.    "Other DST Services" means any offerings related to any services or products of the Company (which, as a reminder, includes various entities and their affiliates as stated in the Preamble to this Exhibit) that were offered or sold by the Company in the geographic area at the time of or within the twelve months preceding Employee’s termination of employment.
1.6    Security Clearances.  The Company may obtain contracts with the United States of America or agencies or instrumentalities thereof or other governmental agencies or business firms under the terms of which the Company and its employees will be required to comply with certain security regulations 

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imposed by the United States Government or an agency thereof or other governmental agencies or business firms.  In the event the Company obtains any such contracts and if under the terms of such contracts it is necessary for Employee to obtain security clearances and abide by certain security regulations, Employee agrees to promptly and diligently apply for any necessary security clearances, comply with any and all such regulations, and make every reasonable effort to maintain Employee’s continued qualifications for all security clearances appropriate or necessary to the performance of duties properly assigned to Employee pursuant hereto.
1.7    Remedies.  Employee agrees that the restrictions contained in this Exhibit C are necessary for protection of the business of the Company and that unauthorized disclosure of any Proprietary Information or other violation of this Exhibit C would cause irreparable injury to the Company not adequately remediable in damages.  Employee agrees that any breach of his obligations under this Exhibit B shall, in addition to any other relief to which the Company may be entitled, entitle the Company to temporary, preliminary and final injunctive relief against further breach of such obligations, without the posting of any bond.  The existence of any claim or cause of action on the part of Employee against the Company, its successors or assigns, whether arising under an agreement between Employee and the Company or otherwise, shall in no way constitute a defense to the enforcement of these provisions.  The Restrictive Period shall be extended in an amount which equals the time period during which Employee is in violation of any of the provisions hereof.

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EXHIBIT D 

GENERAL BENEFITS

	
					
	401k and Profit Sharing
	Disability
	Life
	Health/Dental
	PTO or Vacation/ Sick Day

	Participate in P/S – historic 4% company contribution – 3% matching 401/K contribution
	Participate in Group LTD – 2/3 of base salary up to $20K per month
Eligible for officer LTD – individual policy which generally provides additional amount to provide approx. 2/3 of base plus incentive at 1x
Taxable fringe
	Participate in officer life – current program would be $600,000 face value individual policy – premium taxable benefit
	Covered under DST medical/dental/vision – 
UHC – medical
Delta Dental – Dental
VSP – Vision - voluntary
	4 weeks vac 2012 
Prorate vac
2011

40 hours sick
5/1/11

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