Document:

EX-10.18

 Exhibit 10.18 
 ULTRA PETROLEUM CORP. 
 2016 KEY EMPLOYEE INCENTIVE PLAN 

1. Purpose. This Ultra Petroleum Corp. (the “Company”) 2016 Key Employee Incentive
Plan (the “Plan”) is designed to align the interests of the Company and eligible key employees of the Company and its subsidiaries. 
 2. Adoption of the Plan. The Company, intending to be legally bound, hereby adopts the Plan effective as of January 1, 2016 (the “Effective Date”). The Plan shall be in
effect from the Effective Date and shall continue until December 31, 2016 (the “Term”). The expiration of the Term shall not in any event reduce or adversely affect any amounts due to any Participant hereunder. 

3. General. The compensation provided under the Plan is intended to be in addition to all other compensation
payable to Participants under any employment agreement or incentive plan or program in effect with the Company or its direct or indirect subsidiaries. 
 4. Definitions. For purposes of this Plan: 
 (a)
“Board” means the Company’s Board of Directors. 
 (b) “Committee” means
any committee authorized by the Board to administer the Plan. If no committee is duly authorized by the Board to administer the Plan, the term “Committee” shall be deemed to refer to the Board for all purposes of the Plan. 

(c) “Company Group” means the Company and its direct and indirect subsidiaries. 

(d) “Participant” shall have the meaning ascribed thereto in Section 5 hereof. 

(e) “Performance Goals” means the Performance Metric (as defined below) goals set forth on
Schedule A, as follows: (i) Quarterly Threshold Performance Goals, (ii) Quarterly Target Performance Goals, (iii) Cumulative Threshold Performance Goals and (iv) Cumulative Target Performance Goals. 

(f) “Performance Metrics” means the performance metrics used to measure the Company’s performance
under the Plan as set forth on Schedule A. 
 (g) “Quarter” means each calendar quarter
commencing during the Term, specifically: January 1, 2016 through March 31, 2016 (“First Quarter”), April 1, 2016 through June 30, 2016 (“Second Quarter”), July 1, 2016 through September 30, 2016 (“Third
Quarter”), and October 1, 2016 through December 31, 2016 (“Fourth Quarter”). 
 (h)
“Quarterly Performance Incentive” shall mean, in the case of any Participant, the incentive payable to such Participant under the Plan for the applicable Quarter. 

(i) “Quarterly Performance Incentive Amount” shall mean, in the case of any Participant, the amount of
the Quarterly Performance Incentive for such Participant as set forth on Schedule A. 
 5. Eligible
Participants. Each person listed on Schedule A, as amended from time to time by the Board or the Committee, shall be a Participant under the Plan and eligible to receive a Quarterly Performance Incentive with respect to each Quarter.

 6. Term of Participation. 

(a) Subject to the provisions of this Plan, each Participant shall earn a Quarterly Performance Incentive as of the end
of each Quarter, equal to all or a portion of the Quarterly Performance Incentive Amount, depending upon the extent to which the Performance Goals set forth in Schedule A have been achieved for such

 
Quarter; provided that with respect to the First Quarter only, a Participant shall earn 100% of the Quarterly Performance Incentive Amount, subject to such Participant’s continuous
employment with the Company Group through the Quarterly Performance Incentive payment date for the First Quarter. 
 (b) In addition to being measured on a Quarterly basis, the Performance Goal for each Performance Metric shall be measured cumulatively from the beginning of the Second Quarter through the end of each of
the Third and Fourth Quarters. 
  

	 	(i)	 Third Quarter Catch-Up: A Participant shall earn, in addition to any Quarterly Performance Incentive payable for the Third Quarter
pursuant to Section 6(a) above, an amount equal to (i) the aggregate Quarterly Performance Incentive Amount payable based on achievement of the Cumulative Performance Goal as of the end of the Third Quarter, minus (ii) the Quarterly
Performance Incentive Amount actually paid for the Second Quarter, if any, and payable for the Third Quarter pursuant to Section 6(a) above. 

  

	 	(ii)	 Fourth Quarter Catch-Up: A Participant shall earn, in addition to any Quarterly Performance Incentive payable for the Fourth Quarter
pursuant to Section 6(a) above, an amount equal to (i) the aggregate Quarterly Performance Incentive Amount payable based on achievement of the Cumulative Performance Goal as of the end of the Fourth Quarter, minus (ii) the Quarterly
Performance Incentive Amount actually paid for the Second and Third Quarters, if any, and payable for the Fourth Quarter pursuant to Section 6(a) above. 

(c) If the Term ends after the commencement, and before the end, of a Quarter, each Participant who is then employed by
the Company shall earn a prorated amount of the Quarterly Performance Incentive for the Quarter in which the Term ends (based on the portion of the Quarter that has elapsed as of the last day of the Term), and the Participant shall not be eligible
to earn a Quarterly Performance Incentive following the Term. 
 (d) Any Quarterly Performance Incentive
required to be made under this Plan shall be paid by the Company within 45 days after the end of the applicable Quarter. 
 (e) In order to earn a Quarterly Performance Incentive for any Quarter, a Participant must remain employed by the Company Group through the Quarterly Performance Incentive payment date with respect to
such Quarter. A Participant whose employment with the Company Group terminates for any reason shall forfeit the right to any Quarterly Performance Incentive that has not been paid as of the date of such termination. 

7. Performance Goals. Promptly after the end of each Quarter (but in any event within 30 days of the end of
the Quarter), the Committee shall certify the degree to which the applicable Performance Goals have been achieved and the amount payable to each Participant hereunder. 

8. Plan Administration. This Plan shall be administered by the Committee. The Committee is given full
authority and discretion within the limits of this Plan to establish such administrative measures as may be necessary to administer and attain the objectives of this Plan and may delegate the authority to administer the Plan to an officer of the
Company. The Committee (or its delegate, as applicable) shall have full power and authority to construe and interpret this Plan and any interpretation by the Committee shall be binding on all Participants and shall be accorded the maximum
deference permitted by law. 
 (a) All rights and interests of Participants under this Plan shall be
non-assignable and nontransferable, and otherwise not subject to pledge or encumbrance, whether voluntary or involuntary, other than by will or by the laws of descent and distribution. In the event of any sale, transfer or other disposition of all
or substantially all of the Company’s assets or business, whether by merger, stock sale, consolidation or otherwise, the Company may assign this Plan. 
 (b) Any payment to a Participant in accordance with the provisions of this Plan shall, to the extent thereof, be in full satisfaction of all claims against the Company Group, and the Company may require
Employee, as a condition precedent to such payment, to execute a receipt and release to such effect. 

 (c) Payment of amounts due under the Plan shall be provided to Participant
in the same manner as Participant receives his or her regular paycheck or by mail at the last known address of Participant in the possession of the Company, at the discretion of Committee. The Company will deduct all applicable taxes and any other
withholdings required to be withheld with respect to the payment of any award pursuant to this Plan. 
 (d) The
Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any award provided for hereunder. Quarterly Performance Incentive payments shall not be considered as
extraordinary, special incentive compensation, and it will not be included as “earnings,” “wages,” “salary,” or “compensation” in any pension, welfare, life insurance, or other employee benefit plan or
arrangement of the Company Group. 
 (e) The Company, in its sole discretion, shall have the right to modify,
supplement, suspend or terminate this Plan at any time; provided that in no event shall any amendment or termination adversely affect the rights of Participants regarding any Quarterly Performance Incentive for a Quarter that has commenced as
of the date of such action without the prior written consent of the affected Participants. Subject to the foregoing, the Plan shall terminate upon the satisfaction of all obligations of the Company or its successor entities hereunder.

 (f) Nothing contained in this Plan shall in any way affect the right and power of the Company to discharge
any Participant or otherwise terminate his or her employment at any time or for any reason or to change the terms of his or her employment in any manner. 
 (g) Except as otherwise provided under this Plan, any expense incurred in administering this Plan shall be borne by the Company. 

(h) Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit
the scope or intent of any provision hereof. 
 (i) The administration of the Plan shall be governed by the laws
of the State of Texas, without regard to the conflict of law principles of any state. Any persons or corporations who now are or shall subsequently become parties to the Plan shall be deemed to consent to this provision. 

(j) The Plan is intended to either comply with, or be exempt from, the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Code Section 409A”). To the extent that the Plan is not exempt from the requirements of Code Section 409A, the Plan is intended to comply with the requirements of Code Section 409A and shall
be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion or other penalty that may be imposed on a
Participant by Code Section 409A or for damages for failing to comply with Code Section 409A. 

*    *    *    *    * 

 SCHEDULE A 

 

	1.	 List of Participants and Quarterly Incentive Amounts 

 

					
	 Participant
	  	Quarterly
Performance
Incentive
Amount	 
	 Michael Watford - Chairman, President & CEO
	  	$	832,500	  
	 Garland Shaw - SVP & CFO
	  	$	399,250	  
	 Brad Johnson - SVP Operations
	  	$	294,250	  
	 Kent Rogers - VP Drilling & Completions
	  	$	163,000	  
	 Douglas Selvius - VP Exploration
	  	$	122,750	  
	 Garrett Smith - VP & GC
	  	$	225,380	  

  

	2.	 Performance Metrics and Goals 

  

	 	(a)	 Quarter Ending March 31, 2016. Not applicable. Quarterly Performance Incentive Amount earned in accordance with Section 6(a) of the
Plan. 

  

	 	(b)	 Quarters Ending June 30, 2016, September 30, 2016 and December 31, 2016: 

The portion of the Quarterly Performance Incentive Amount that is contingent upon a Performance Metric is the
“Applicable Portion.” 
  

			
	Portion of Applicable Portion Payable if Quarterly and/or Cumulative Threshold Performance Goal Achieved:	  	65%
	Portion of Applicable Portion Payable if Quarterly and/or Cumulative Target Performance Goal Achieved:	  	100%
	Portion of Applicable Portion Payable if Achievement is Between Quarterly and/or Cumulative Threshold and Target Performance Goals:	  	 Linear interpolation between

65% and 100%

  

	 	(i)	 Performance Metric: Production (measured in billion cubic feet equivalent) 

Applicable Portion: 33.33% 
  

													
	 Quarter Ending:
	  	June 30, 2016	 	  	September 30, 2016	 	  	December 31, 2016	 
	 Quarterly Threshold Performance Goal
	  	 	66.0	  	  	 	65.0	  	  	 	64.0	  
	 Quarterly Target Performance Goal
	  	 	69.5	  	  	 	68.5	  	  	 	68.0	  
	 Cumulative Threshold Performance Goal
	  	 	66.0	  	  	 	131.0	  	  	 	195.0	  
	 Cumulative Target Performance Goal
	  	 	69.5	  	  	 	138.0	  	  	 	206.0	  

  

	 	(ii)	 Performance Metric: Cash Costs/mcfe* (determined as a weighted average) 

Applicable Portion: 33.33% 
  

													
	 Quarter Ending:
	  	June 30, 2016	 	  	September 30, 2016	 	  	December 31, 2016	 
	 Quarterly Threshold Performance Goal
	  	$	1.39	  	  	$	1.45	  	  	$	1.51	  
	 Quarterly Target Performance Goal
	  	$	1.25	  	  	$	1.30	  	  	$	1.35	  
	 Cumulative Threshold Performance Goal
	  	$	1.39	  	  	$	1.42	  	  	$	1.45	  
	 Cumulative Target Performance Goal
	  	$	1.25	  	  	$	1.28	  	  	$	1.30	  

  

	*	 mcfe (million cubic feet equivalent): Calculation excludes interest expense and all restructuring costs. 

	 	(iii)	 Performance Metric: Capital Expenditures in millions of USD 

Applicable Portion: 33.33% 
  

													
	 Quarter Ending:
	  	June 30, 2016	 	  	September 30, 2016	 	  	December 31, 2016	 
	 Quarterly Threshold Performance Goal
	  	$	73.5	  	  	$	70.0	  	  	$	66.5	  
	 Quarterly Target Performance Goal
	  	$	66.0	  	  	$	62.0	  	  	$	60.0	  
	 Cumulative Threshold Performance Goal
	  	$	73.5	  	  	$	143.5	  	  	$	210.0	  
	 Cumulative Target Performance Goal
	  	$	66.0	  	  	$	128.0	  	  	$	188.0Exhibit

EXHIBIT 10.1

PERFORMANCE STOCK AGREEMENT
THIS PERFORMANCE STOCK AGREEMENT (the “Award Agreement”), dated as of _____________ (the “Award Date”), is made by and between Integra LifeSciences Holdings Corporation, a Delaware corporation (the “Company”), and _____________________, an employee of the Company (or one or more of its Related Corporations or Affiliates), hereinafter referred to as the “Participant”:
WHEREAS, the Company has determined to grant to the Participant an award of Performance Stock (as defined below), on the terms set forth herein, under the Integra LifeSciences Holdings Corporation Second Amended and Restated 2003 Equity Incentive Plan, as amended (the “Plan”), the terms of which are hereby incorporated by reference and made part of this Award Agreement.
NOW, THEREFORE, in consideration of the various covenants herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I.
DEFINITIONS
Capitalized terms not otherwise defined below shall have the meaning set forth in the Plan.  The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

Section 1.1    Annual Revenue. “Annual Revenue” shall mean the Company’s gross revenue with respect to an applicable fiscal year; provided that in the event the Company sells or otherwise disposes of any business unit or division in a fiscal year during the Performance Period, the Annual Revenue for such year and for any prior fiscal year(s) shall not include any revenue attributable to such business unit or division.
Section 1.2    Catch-Up Performance Goal.  “Catch-Up Performance Goal” shall mean the specific goal determined by the Committee, as specified in Exhibit A.
Section 1.3    Catch-Up Shares.  “Catch-Up Shares” shall have the meaning as specified in Exhibit A.
Section 1.4    Change in Control. “Change in Control” shall have the meaning set forth in the Plan.
Section 1.5    Chief Human Resources Officer. “Chief Human Resources Officer” shall mean the Chief Human Resources Officer of the Company.
Section 1.6    Good Reason. “Good Reason” shall have the meaning set forth in the Plan.

 

Section 1.7    Performance Goals. “Performance Goals” shall mean the specific goal or goals determined by the Committee, as specified in Exhibit A, including (if applicable) the Catch-Up Performance Goal.
Section 1.8    Performance Period. “Performance Period” shall mean the period or periods of time that the Performance Goals must be met, as specified in Exhibit A.
Section 1.9    Performance-Vest. “Performance-Vest” shall mean that, with respect to a share of Performance Stock, the applicable Performance Goal has been achieved.
Section 1.10    Performance Vesting Percentage. “Performance Vesting Percentage” shall mean the percentage determined in accordance with Exhibit A attached hereto, which is a function of whether and to what extent the Performance Goals are achieved during the Performance Period.
Section 1.11    Qualifying Termination.  “Qualifying Termination” shall mean a Termination of Service by the Company without Cause or by the Participant for Good Reason.
Section 1.12    Rule 16b-3. “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.
Section 1.13    Termination of Service. “Termination of Service” shall mean the time when the Participant ceases to provide services to the Company and its Related Corporations and Affiliates as an employee or Associate for any reason with or without Cause, including, but not by way of limitation, a termination by resignation, discharge, death, or Disability.  A Termination of Service shall not include a termination where the Participant is simultaneously reemployed by, or remains employed by, or continues to provide services to, the Company and/or one or more of its Related Corporations and Affiliates or a successor entity thereto.
Section 1.14    Vest or Vested. “Vest” or “Vested” shall mean that, with respect to a share of Performance Stock, both (i) such share of Performance Stock has Performance-Vested and (ii) the continued service condition has been satisfied.

ARTICLE II.
AWARD OF PERFORMANCE STOCK
Section 2.1    Award of Shares of Performance Stock. Effective as of the Award Date, the Company grants to the Participant an award of _____________ target shares of Performance Stock (the “Target Performance Shares”).  Each share of Performance Stock represents the Participant’s right to receive one Share under this Award Agreement if the Performance Goals are met during the Performance Period and the vesting conditions set forth herein are satisfied.

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Section 2.2    Forfeiture. Shares of Performance Stock shall be subject to forfeiture as provided in Section 3.2 below.
Section 2.3    Dividend Equivalents. The Participant shall be entitled to receive, with respect to each outstanding Vested but unissued share of Performance Stock, dividend equivalent amounts equal to the regular quarterly cash dividend paid or made with respect to the Shares underlying such Vested but unissued shares of Performance Stock (to the extent regular quarterly cash dividends are paid).  Such dividend equivalent amounts shall be aggregated and paid to the Participant within thirty (30) days following the date on which the Shares underlying the Vested shares of Performance Stock are issued to the Participant, but in no event later than December 31 of the year in which the Shares underlying the Vested shares of Performance Stock are issued to the Participant.  Notwithstanding the foregoing, if a “Change in Control” occurs prior to the date on which such dividend equivalent amounts are paid, such dividend equivalent amounts shall be paid to the Participant on the date of the Change in Control; provided, however, that such payment shall only occur if the Change in Control meets the requirements of Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “Code”) and its corresponding regulations.  For the avoidance of doubt, such dividend equivalent amounts shall only be paid to the extent that the shares of Performance Stock are Vested as of the applicable dividend payment date, and the Participant shall not be entitled to receive any dividend equivalent amounts with respect to shares of Performance Stock that have not Vested as of such dividend payment date.  The dividend equivalents and any amounts that may become payable in respect thereof shall be treated separately from the shares of Performance Stock and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Code Section 409A.
Section 2.4    Voting Rights. The Participant shall not have any voting rights in respect of the shares of Performance Stock and any Shares underlying the shares of Performance Stock unless and until such Shares shall have been issued by the Company and the Participant becomes the holder of record of such Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

ARTICLE III.
RESTRICTIONS
Section 3.1    Vesting. 
(a)    Subject to paragraph (b) below and Sections 3.2 and 3.5 below, shares of Performance Stock shall Vest in cumulative installments as follows:
(i)    With respect to fiscal year 2016, a number of shares of Performance Stock equal to the product of (x) thirty-three percent (33%) of the Target Performance Shares, 

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multiplied by (y) the applicable Performance Vesting Percentage determined in accordance with Exhibit A attached hereto, shall Vest on the first anniversary of the Award Date;  
(ii)    With respect to fiscal year 2017, a number of shares of Performance Stock equal to the product of (x) thirty-three percent (33%) of the Target Performance Shares, multiplied by (y) the applicable Performance Vesting Percentage determined in accordance with Exhibit A attached hereto, shall Vest on the second anniversary of the Award Date; and
(iii)    With respect to fiscal year 2018, a number of shares of Performance Stock equal to the product of (x) thirty-four percent (34%) of the Target Performance Shares, multiplied by (y) the applicable Performance Vesting Percentage determined in accordance with Exhibit A attached hereto, shall Vest on the third anniversary of the Award Date.
(b)    Subject to Sections 3.2 and 3.5 below, in the event that the Company achieves the Catch-Up Performance Goal with respect to the Performance Period, then any Catch-Up Shares shall Vest on the third anniversary of the Award Date.

Section 3.2    Effect of Termination of Service; Forfeiture.
(a)    In the event the Participant incurs, prior to or on the last day of the Performance Period, a Termination of Service by reason of the Participant’s Disability or death, any shares of Performance Stock which have not Vested in accordance with Section 3.1 above on or prior to such Termination of Service shall remain outstanding and eligible to Vest in accordance with Section 3.1 above and Section 3.5 below based on the Company’s achievement of the Performance Goals during the Performance Period.

(b)    Immediately upon the Participant’s Termination of Service that is not either (i) a Qualifying Termination within twelve (12) months following the date of a Change in Control (and prior to or on the last day of the Performance Period) or (ii) a Termination of Service by reason of the Participant’s Disability or death, the Participant shall automatically and without further action forfeit all shares of Performance Stock (and all dividend equivalent rights with respect to such shares of Performance Stock) which have not Vested in accordance with Section 3.1 above or Section 3.5 below on or prior to such Termination of Service, and the Participant shall have no further right to or interest in or with respect to such shares of Performance Stock (or such dividend equivalents).

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(c)    Any shares of Performance Stock that do not Performance-Vest in connection with a Change in Control pursuant to Sections 3.5(a) and 3.5(b) below (and all dividend equivalent rights with respect to such shares of Performance Stock) shall thereupon automatically be forfeited as of such Change in Control, and the Participant shall have no further right to or interest in or with respect to such shares of Performance Stock (or such dividend equivalents).

(d)    Any shares of Performance Stock that fail to vest as of the third anniversary of the Award Date (and all dividend equivalent rights with respect to such Performance Stock) shall automatically and without further action be cancelled and forfeited, and the Participant shall have no further right to or interest in or with respect to such unvested shares of Performance Stock (or such dividend equivalents).

Section 3.3    Issuance of Shares.
(a)    Subject to a determination of the Committee as to whether and to what extent the applicable Performance Goals have been met, Shares represented by shares of Performance Stock which Vest pursuant to Section 3.1 above or Section 3.5 below shall be issued to the Participant or his or her legal representative on or within five (5) business days following the date on which such shares of Performance Stock Vest pursuant to Section 3.1 above or Section 3.5 below (but in no event later than December 31 of the applicable year in which such shares of Performance Stock Vest).
(b)    All Shares issued hereunder shall be issued in certificated form or shall be recorded with the Company’s transfer agent.  All such Shares shall be issued free from any restrictions; provided, however, that such Shares shall be subject to any restrictions and conditions as may be required pursuant to Section 4.6 below and those that the Company imposes on its employees in general with respect to selling its Shares.  Notwithstanding the foregoing, the Company shall not be required to issue or record such Shares in the name of the Participant or his or her legal representative unless the Participant or his or her legal representative shall have satisfied the full amount of all federal, state and local withholding or other employment taxes applicable to the taxable income of the Participant resulting from the vesting of the shares of Performance Stock and issuance of the Shares as provided in this Award Agreement (including, without limitation, in the manner set forth in Section 4.3 below).
Section 3.4    Clawback. Notwithstanding anything contained in the Plan or the Award Agreement to the contrary, the shares of Performance Stock, and any related payments, shall be subject to the provisions of any clawback, repayment or recapture policy implemented by the Company, including any such policy adopted to comply with applicable law (including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act) or securities 

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exchange listing standards and any rules or regulations promulgated thereunder, to the extent set forth in such policy and/or in any notice or agreement relating to the shares of Performance Stock under the Plan.
Section 3.5    Change in Control.  In the event that a Change in Control occurs during the Performance Period:
(a)    A number of shares of Performance Stock shall Performance-Vest equal to a number determined at the greater of (i) the achievement of the “Target Level” Performance Vesting Percentage with respect to the fiscal year in which the Change in Control occurs, as specified in Exhibit A attached hereto and (ii) the Company’s actual achievement of the Performance Goal for such year through the Change in Control.  Subject to Sections 3.5(d) and (e) below, such Performance-Vested shares of Performance Stock shall remain outstanding and eligible to Vest on the anniversary of the Award Date immediately following the Change in Control, subject to the Participant’s continuous service. 
(b)    In addition, and subject to Sections 3.5(d) and (e) below, a number of shares of Performance Stock shall Performance-Vest equal to the number of shares of Performance Stock that could vest with respect to each fiscal year of the Performance Period following the fiscal year in which the Change in Control occurs (if any) based on the achievement of the “Target Level” Performance Vesting Percentage with respect to each such year, as specified in Exhibit A, and shall remain outstanding and eligible to Vest on the date(s) outlined in Section 3.1(a)(ii) and/or (iii) (excluding any Catch-Up Shares which are forfeited in the event of a Change in Control), subject to the Participant’s continued service.
(c)    In addition, if the Change in Control occurs following the completion of a fiscal year in the Performance Period but prior to the date on which shares of Performance Stock with respect to such year become Vested pursuant to Section 3.1(a) above, then such shares of Performance Stock shall Vest as of immediately prior to the Change in Control in a number determined in accordance with Section 3.1(a) above.
(d)    If the Participant incurred a Termination of Service by reason of the Participant’s Disability or death, in either case, prior to the Change in Control date, then any shares of Performance Stock that Performance-Vest in accordance with Sections 3.5(a) and (b) above shall Vest as of immediately prior to the Change in Control.
(e)     Notwithstanding Sections 3.5(a) and 3.5(b) above, if the Participant incurs (1) a Qualifying Termination on or within twelve (12) months following the date of a Change in Control and prior to or on the last day of the Performance Period, or (2) a Termination of Service by reason of the Participant’s Disability or death on or following a Change in Control and prior to or on the last day of the Performance Period, then in either case any Performance-Vested 

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shares of Performance Stock that are then-outstanding and have not yet Vested shall Vest in full upon such Termination of Service.    
ARTICLE IV.
MISCELLANEOUS
Section 4.1    No Additional Rights. Nothing in this Award Agreement or in the Plan shall confer upon any person any right to a position as an Associate or continued employment by the Company or any of its Related Corporations or Affiliates or affect in any way the right of any of the foregoing to terminate the services of an individual at any time.
Section 4.2    Anti-Assignment. The Participant shall have no right to sell, assign, transfer, pledge, or otherwise encumber or dispose of the Participant’s award of shares of Performance Stock.
Section 4.3    Tax Withholding. In satisfaction of all applicable requirements with respect to amounts required by federal, state or local tax law to be withheld with respect to the vesting, distribution or payment of the shares of Performance Stock, the Company shall withhold Shares otherwise issuable upon such distribution or payment of the shares of Performance Stock having a Fair Market Value equal to the sums required to be withheld.  Subject to the following sentence, the number of Shares which shall be so withheld in order to satisfy the Participant’s federal, state and local withholding tax liabilities with respect to the vesting of the shares of Performance Stock or issuance of Shares in payment of the shares of Performance Stock shall be limited to the number of Shares which have a Fair Market Value on the date of issuance equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state and local tax purposes that are applicable to, and required in connection with, all or a portion of such supplemental taxable income.  In the event that the number of Shares having a Fair Market Value equal to the sums required to be withheld is not a whole number of Shares, the number of Shares so withheld shall be rounded up to the nearest whole share.
Section 4.4    Notices. Any notice to be given under the terms of this Award Agreement to the Company shall be addressed to the Company in care of its Chief Human Resources Officer, and any notice to be given to the Participant shall be addressed to the Participant at his or her address of record maintained by the Human Resources Department.  By a notice given pursuant to this Section 4.4, either party may hereafter designate a different address for notices to be given to it or him.  Any notice which is required to be given to the Participant shall, if the Participant is then deceased, be given to the Participant’s personal representative if such representative has previously informed the Company of his or her status and address by written notice under this Section 4.4.  Any notice shall have been deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

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Section 4.5    Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.
Section 4.6    Conformity to Securities Laws. This Award Agreement is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including, without limitation, Rule 16b-3.  Notwithstanding anything herein to the contrary, this Award Agreement shall be administered, and the shares of Performance Stock shall be issued, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, this Award Agreement and the shares of Performance Stock issued hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
Section 4.7    Amendment. This Award Agreement may be amended only by a writing executed by the parties hereto which specifically states that it is amending this Award Agreement.
Section 4.8    Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Award Agreement regardless of the law that might be applied under principles of conflicts of laws.
Section 4.9    Section 409A. This Award Agreement shall be interpreted in accordance with the requirements of Section 409A of the Code.  Notwithstanding any provision in this Award Agreement to the contrary, if a payment is deemed to be deferred compensation subject to the requirements of Section 409A of the Code, such payment may only be made under this Award Agreement upon an event and in a manner permitted by Section 409A of the Code.  If a payment is not made by the designated payment date under this Award Agreement, the payment shall be made by December 31 of the calendar year in which the designated date occurs.  In no event may the Participant, directly or indirectly, designate the calendar year of payment.  A termination of service shall not be deemed to have occurred for purposes of any provision of this Award Agreement providing for the payment of any amounts or benefits upon or following a termination of service that are considered “nonqualified deferred compensation” under Section 409A of the Code unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this award Agreement, references to a “termination,” “Termination of Service” or like terms shall mean “separation from service.”  Notwithstanding anything to the contrary in this Award Agreement, no amounts payable to the Participant under this Award Agreement shall be paid to the Participant prior to the expiration of the 6-month period following the Participant’s “separation from service” if the Company determines that paying such amounts at the time or times indicated in this Award Agreement would be a prohibited distribution under Section 409A(a)(2)(b)(i) of the Code.  If the payment of any such amounts is delayed as a result of the previous sentence, then on the first day 

8

 

following the end of such 6-month period, the Company shall pay the Participant a lump-sum amount equal to the cumulative amount that would have otherwise been payable to the Participant during such 6-month period.
Section 4.10    Electronic Delivery and Acceptance. Participant hereby consents to receive the Notice of Grant of Award and Award Agreement and any other documents related to this award or future awards by electronic delivery and to accept this or future awards through an on-line or electronic system established and maintained by the Company or another third party designated by the Company Participant acknowledges that he/she has read, understand and agrees to the terms of the Notice of Grant of Award and Award Agreement.  By clicking the “ACCEPT” button on E*TRADE’s on-line grant agreement response page, it will act as Participant’s electronic signature to these documents and will result in a contract between Integra LifeSciences Holdings Corporation and the Participant with respect to the award.

[Signature page follows]

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

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

By:  _________________________________
Name:  Peter J. Arduini
Title:  President and Chief Executive Officer

PARTICIPANT
      

__________________________________

      
    

S-1

 

EXHIBIT A
PERFORMANCE GOALS AND PERFORMANCE PERIOD
Capitalized terms shall have the meaning set forth in Performance Stock Agreement.
The “Performance Period” shall be the three-year period beginning January 1, 2016 and ending December 31, 2018.
The “Initial Revenue Target” shall mean the final revenue results as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
The “Catch-Up Performance Goal” shall mean that the Company achieves, as of the end of the Performance Period (but not due to a Change in Control), an increase in Annual Revenue of at least 21% over the Initial Revenue Target.
With respect to each fiscal year in the Performance Period, the “Performance Goal” is that the Company achieves a Threshold Level or higher increase in Annual Revenue over the Initial Revenue Target, as set forth in the table below.  A number of shares of Performance Stock will Performance-Vest in accordance with Section 3.1 of the Performance Stock Agreement based on the percentage increase in Annual Revenue over the Initial Revenue Target:
	
							
	 
	 
	Annual Revenue Target ($)
	Increase in Annual Revenue over the Initial Revenue Target (%)
	Performance Vesting Percentage

	2016 PERFORMANCE YEAR
	 
	 
	 
	 

	 
	 
	< $____
	< 3%
	

	0
	%

	“Threshold Level”
	 
	$____
	3
	%
	50
	%

	“Target Level”
	 
	$____
	7
	%
	100
	%

	“Maximum Level”
	 
	> $____
	> 11%
	

	150
	%

	 
	 
	 
	 
	 

	2017 PERFORMANCE YEAR
	 
	 
	 
	 

	 
	 
	< $____
	< 6%
	

	0
	%

	“Threshold Level”
	 
	$____
	6
	%
	50
	%

	“Target Level”
	 
	$____
	14
	%
	100
	%

	“Maximum Level”
	 
	> $____
	> 22%
	

	150
	%

	 
	 
	 
	 
	 

	2018 PERFORMANCE YEAR
	 
	 
	 
	 

	 
	 
	< $____
	< 9%
	

	0
	%

	“Threshold Level”
	 
	$[____
	9
	%
	50
	%

	“Target Level”
	 
	$____
	21
	%
	100
	%

	“Maximum Level”
	 
	> $____
	> 33%
	

	150
	%

A-1

 

In the event that the increase in Annual Revenue over the prior fiscal year falls between the “Threshold Level” and the “Target Level,” then the Performance Vesting Percentage shall be determined by means of linear interpolation between the “Threshold Level” and “Target Level” Performance Vesting Percentages specified above; and in the event that the increase in Annual Revenue over the prior fiscal year falls between the “Target Level” and the “Maximum Level,” then the Performance Vesting Percentage shall be determined by means of linear interpolation between the “Target Level” and “Maximum Level” Performance Vesting Percentages specified above.
Notwithstanding the forgoing, in the event that (i) a Change in Control does not occur during the Performance Period, (ii) the Performance Goal with respect to a given fiscal year in the Performance Period is not achieved at the applicable Target Level or higher, and (iii) the Catch-Up Performance Goal is achieved, then a number of shares of Performance Stock equal to the difference between (x) the number of shares of Performance Stock which would have Vested in the event that the Performance Goal had been achieved at the Target Level with respect to such fiscal year and (y) the number of shares of Performance Stock which actually became Vested based on the applicable Performance Vesting Percentage for such fiscal year, shall become Vested in accordance with Section 3.1(b) of the Performance Stock Agreement (such number of shares, the “Catch-Up Shares”).  

A-2

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