Document:

bioa-ex103_8.htm

 

Exhibit 10.3

 

 

EMPLOYMENT AGREEMENT

ENTERED INTO as of July 28th, 2015 (the “Effective Date”).

		
	
BETWEEN:
	
BIOAMBER INC., a corporation duly incorporated in Delaware, having a corporate office located at 1250 Rene-Levesque West, Suite 4310, Montreal, Quebec, Canada H3B 4W8, represented for the purposes hereof by Jean-Francois Huc, its Chief Executive Officer, duly authorized as he so declares;

(hereinafter referred to as the "Corporation")

	
AND:
	
MS. ANDREW P. ASHWORTH, residing and domiciled at 28 Wren Field Lane, Pittsford, New York, 14534;

(hereinafter referred to as the "Employee")

 

WHEREAS the Corporation wishes to employ the Employee as its Chief Financial Officer;

WHEREAS the Employee wishes to act as the Corporation’s Chief Financial Officer;

THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

	
1.
	
EMPLOYMENT

	
 
	
1.1.
	
The Employee shall serve as Chief Financial Officer of the Corporation, and perform the functions and duties attached to such position in all of the Corporation’s sectors of activity, as well as the tasks and duties that the Chief Executive Officer of the Corporation may delegate to him from time to time.  The Employee will report to the Chief Executive Officer of the Corporation.

	
 
	
1.2.
	
Upon the termination date of Mr. François Laurin’s employment with the Corporation, the Employee will also become an officer of the Corporation, holding the title of “Chief Financial Officer”, until his successor is duly elected and qualified, or until his earlier death, resignation or removal from such offices by the Board or the Chief Executive Officer.  During the Employee’s tenure as the Corporation’s Chief Financial Officer, the Employee shall be the Corporation’s principal financial officer and principal accounting officer. 

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2.
	
REMUNERATION 

	
 
	
2.1.
	
In consideration of the Employee’s services pursuant to this Agreement, the Corporation shall:

	
 
	
2.1.1.
	
pay to the Employee, US$23,333.33 per month which annualizes to  US$280,000.00, as annual gross base salary, payable in accordance with the Corporation's remuneration policy; 

	
 
	
2.1.2.
	
pay to the Employee, in the first quarter of each fiscal year, a cash bonus equal to up to 40% of the base salary provided in Section 2.1.1 as paid to the Employee for the previous year, based on the Employee’s and the Corporation’s performance during the previous fiscal year, such performance evaluation and bonus determination being at the discretion of the Board of Directors of the Corporation.  For clarity, the Employee will be entitled to receive a bonus, calculated on a pro rata basis, for the portion of the fiscal year during which this Agreement is terminated, according to the terms described in this Section 2.1.2. 

	
3.
	
STOCK OPTIONS 

	
 
	
3.1.
	
The Corporation hereby confirms that the Employee has been granted 20,000 options pursuant to the Corporation’s Stock Option and Incentive Plan, giving the Employee the right to acquire 20,000 shares of Common Stock of the Corporation at a price per share to be determined in accordance with the terms of the Equity Grant Award Policy of the Corporation, vesting as follows: 100% of these options will vest upon the termination of this Agreement, the whole according to and subject to the terms and conditions of the Corporation’s Stock Option and Incentive Plan, its other applicable policies and the applicable rules and regulations of the Securities and Exchange Commission and of the New York Stock Exchange.

	
 
	
3.2.
	
The Corporation also confirms to the Employee that all options that were exercisable when the Employee retired as Chief Financial Officer of the Corporation in December 2014 and the 20,000 options granted pursuant to Section 3.1 of this Agreement will be exercisable until December 31, 2018, irrespective of the date of termination of this Agreement.

	
4.
	
FRINGE BENEFITS

	
 
	
4.1
	
The Employee shall be entitled, as an employee of the Corporation, to the insurance and benefits approved from time to time by the Board of Directors of the Corporation, if eligibility requirements are met.

   

	
5.
	
EXPENSES

	
 
	
5.1.
	
The Corporation agrees to reimburse the Employee, for all the reasonable fees, 

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expenses and disbursements incurred by him in the performance of his duties, on behalf and for the benefit of the Corporation.  The Employee shall submit to the Corporation a periodic report together with supporting documents concerning the fees, disbursements and expenses incurred by him in the performance of his duties during the said period. 

	
6.
	
UNDERTAKINGS OF THE EMPLOYEE

	
 
	
6.1.
	
The Employee undertakes, during the term of this Agreement:

	
 
	
6.1.1.
	
on a full-time basis, to devote and to use all his efforts and professional knowledge in the exercise of his functions; and

	
 
	
6.1.2.
	
to act at all times within the scope of his employment and in the best interests of the Corporation, to perform his duties to the best of his ability, faithfully, honestly and diligently and to conform at all times to the instructions and directives that may be given to him by the Chief Executive Officer of the Corporation.

	
7.
	
INTELLECTUAL PROPERTY

	
 
	
7.1.
	
The Employee hereby:

	
 
	
7.1.1.
	
transfers and assigns to the Corporation, without any compensation other than the remuneration provided in Section 2 hereof, all property rights he might own on all documents or works done by the Employee, alone or in collaboration, in the framework of the services rendered pursuant to this Agreement (the “Works”), and more particularly, but without limitation, all property rights on any material support of the Works and all intellectual property rights on the Works;

	
 
	
7.1.2.
	
renounces to any right, and more particularly, but without limitation, to any intellectual property rights which may arise during the execution of the Works, including any moral rights; and

	
 
	
7.1.3.
	
agrees that the Corporation may dispose of or modify the Works and the rights pertaining to the Works, at its sole discretion, and without any obligation on its part to consult, notify or compensate the Employee.

 

 

 

 

 

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8.
	
VACATION 

	
 
	
8.1.
	
The Employee shall be entitled to two weeks of vacation for the initial term of this Agreement, and then shall be entitled to two days of vacation for each month during which this Agreement may be renewed according to Section 9 hereof., the duration of which and the dates of which shall be established reasonably and professionally managed by the Employee taking into account his functions and duties.

	
9.
	
TERM

	
 
	
9.1.
	
This Agreement shall take effect on the Effective Date and continue in force for a period of six (6) months thereafter.  This Agreement may then be extended for additional period(s) of one (1) month each, at the Corporation’s option, provided the Corporation notifies the Employees of such at least two (2) weeks before the expiry of the initial term of this Agreement and of any extension thereof.

	
 
	
9.2.
	
This Agreement shall terminate:

	
 
	
9.2.1.
	
upon the termination of the employment of the Employee resulting from (i) the commitment by the Employee of any act of embezzlement, fraud or similar conduct involving the Corporation, and/or (ii) the commission of any indictable offence by the Employee, and/or (iii) the persistent failure of Employee to perform his duties hereunder after notices to do so by the Corporation, or

	
 
	
9.2.2.
	
upon the death of the Employee,

in any case without any severance payment in lieu of notice being due.

	
10.
	
CONFIDENTIALITY AND NON-COMPETITION

	
 
	
10.1.
	
The Employee agrees (i) that he shall not, as long as he is employed by the Corporation and forever after employment ends, disclose and/or reveal in any manner whatsoever and to whomever, confidential information obtained during his employment on and about the business of the Corporation and its affiliated companies, (ii) to maintain the confidentiality of this information and to prevent any inopportune disclosure including but not limited to, information regarding the financial situation of the Corporation and its affiliated companies, their operations and their projects of operation, and undertakes not to use for his own benefit or for purposes other than those of the Corporation and its affiliated companies, to the detriment of the Corporation and its affiliated companies, any information thus obtained.  The disclosure of confidential information shall be restricted to the officers, directors and shareholders and, on a need to know basis, employees, agents and professional advisors of the Corporation and of its affiliated companies. Any confidentiality undertaking made under this subsection shall continue to be in full force after the termination of this Agreement. The confidentiality undertakings provided in this section shall not apply to information that: i) is already known to the Employee without having been obtained from the Corporation or its affiliated 

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companies, directly or indirectly, ii) was in the public domain before its disclosure to the Employee, iii) becomes in the public domain after its disclosure to the Employee without breach of any obligation under this Agreement, and iv) is required to be disclosed by operation of law or a judicial order. 

 

	
 
	
10.2.
	
The Employee agrees, for so long as he is employed by the Corporation and, until the expiry of a period of twelve (12) months thereafter, that he shall not, directly or indirectly, alone or through a company, or jointly with any person, firm, corporation, partnership, company or other business organization whether as principal or as agent, mandater, mandatory, officer, partner, director, employee, consultant, shareholder or in any other manner except for the benefit and in the interests of the Corporation or its affiliated companies:

	
 
	
10.2.1.
	
encourage or attempt to bring any person employed by the Corporation or any of its affiliated companies to leave his employment with the Corporation or its affiliated companies; and

	
 
	
10.2.2.
	
be involved in or carry on a business engaged in, involved in or interested in the Corporation’s current or future sectors of activities, being currently related to the development, production and sale of biobased succinic acid and butanediol products, within the territories in which the Corporation does business; without limiting the preceding, the following entities will be deemed to be involved in the Corporation’s sectors of activities for the purposes of the application of this section 10.2: DSM, Roquette, Reverdia, Myriant, Corbion, BASF, Succinity, Genomatica, PTT Group (including PTTMCC BioChem), Mitsubishi Chemical Corporation and GranBio.

	
 
	
10.3.
	
The Employee acknowledges that his failure to respect his undertakings and obligations mentioned in 10.1 and 10.2 would be detrimental to the Corporation so as to justify, without prejudice to any other recourse of the Corporation, an injunction and a seizure before judgment, all recourses of the Corporation being cumulative and non-alternative. 

	
 
	
10.4.
	
The Employee acknowledges and agrees that all the restrictions contained in 10.1 and 10.2 are reasonable and valid, in particular in respect of their duration, their scope and the persons they affect, and that these restrictions are essential in order to allow the Corporation and its affiliated companies to adequately protect their position in the field in which they carry on business and operate. 

	
11.
	
ASSIGNMENT

	
 
	
11.1.
	
Except in the event of a merger or change in control involving the Corporation, the Corporation may not transfer or assign in whole or in part its rights and obligations hereunder without the prior written consent of the Employee. The Employee may not transfer or assign in whole or in part its rights and obligations hereunder.

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12.
	
PREAMBLE

	
 
	
12.1.
	
The preamble forms an integral part of this Agreement.

 

	
13.
	
NOTICES

	
 
	
13.1.
	
Any notice or other communication which is required or permitted to be given hereunder shall be given in writing and shall be deemed properly given when delivered to its recipient, either by bailiff, by courier, messenger or by mail, or by fax, in which latter case said notice shall immediately thereafter be confirmed by mail copy, when sent to the addresses set out on the first page hereof.

	
 
	
13.2.
	
Any notice sent in accordance with this Agreement shall be deemed to be received by its recipient at the time of its delivery, if delivered by courier, messenger or by bailiff, or the fifth (5th) business day following its sending by mail, or the business day after its sending by fax.  However, if ordinary postal or fax service is interrupted and such interruption is by reason of force majeure, the party sending said notice shall use a service that has not been interrupted or send said notice by courier or messenger to ensure prompt delivery of same.  Any change of address may be given in the manner above described.

	
14.
	
ARBITRATION PROVISION

	
 
	
14.1.
	
The parties understand that they would have had a right or opportunity to litigate disputes through a court and to have a judge or jury decide their case, but they choose to have any disputes resolved through arbitration.

	
 
	
14.2
	
The parties agree that any claim or dispute between them, and any claim by either of them against any agent, employee, successor, or assign of the other, including, to the full extent permitted by applicable law, third parties who are not signatories to this agreement, whether related to this agreement or otherwise, including past, present, and future claims and disputes, and including any dispute as to the validity or applicability of this arbitration clause, shall be resolved by binding arbitration administered by the National Arbitration Forum under the Code of Procedure in effect when the claim is filed. 

	
15.
	
GENERAL PROVISIONS

	
 
	
15.1.
	
The parties agree to sign all documents and to do all things required to give effect to the provisions of this Agreement.

	
 
	
15.2.
	
All amounts referred to in this Agreement are so in US Dollars (US$).

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15.3.
	
The waiver by a party hereto to the breach of any provision of this Agreement by the other party shall not prevent said party from exercising any of its rights as a result of a subsequent breach of said provision or of any other provision of this Agreement.  A waiver by a party to any provision of this Agreement shall be made in writing; otherwise it shall not be deemed to be a waiver. 

	
 
	
15.4.
	
This Agreement expresses the entire agreement between the parties hereto with respect to all matters contained herein and supersedes any other agreement, proposal, representation, negotiation, oral or written, among the parties concerning such matters. 

	
 
	
15.5.
	
The headings and captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation hereof.

	
 
	
15.6.
	
The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of that section or of this Agreement.  If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted and enforced only to the extent that such provision is enforceable.

	
 
	
15.7.
	
Any modification, amendment or qualification hereof shall be null and void and shall not be binding upon any party unless recorded by written instrument duly signed by the parties hereto.

	
 
	
15.8.
	
This Agreement shall be governed by, construed and interpreted in accordance with the laws in force in the state of Delaware.

	
 
	
15.9.
	
This Agreement may be executed in one or more counterparts, each of which so executed shall constitute an original and all of which together shall constitute one and the same Agreement.

	
 
	
15.10.
	
Subject to section 14, each of the parties attorns and submits to the non-exclusive jurisdiction of the courts of the state of Minnesota with respect to any matter or dispute pertaining to this Agreement.

	
 
	
15.11.
	
This Agreement shall be binding upon and enure to the benefit of the parties hereto together with their respective heirs, executors, successors and permitted assigns.

 

 

 

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IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS AGREEMENT AT THE PLACE AND AT THE DATE HEREINABOVE FIRST MENTIONED.

		
	
 
	
BIOAMBER INC.

	
 
	
 

	
 
	
 

	
Per:
	
/s/ Jean-François Huc

	
 
	
JEAN-FRANÇOIS HUC

Chief Executive Officer

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
/s/ Andrew P. Ashworth

	
 
	
ANDREW P. ASHWORTH

 

 

-8-Exhibit 10.13

 

FORM OF CIFC LLC

 

AMENDED AND RESTATED 2011 SHARE OPTION AND INCENTIVE PLAN

 

SECTION 1.         GENERAL PURPOSE OF THE PLAN; DEFINITIONS

 

The name of the plan is the CIFC LLC Amended and Restated 2011 Share Option and Incentive Plan (the “Plan”).  The purpose of the Plan is to encourage and enable the officers, employees, Non­Employee Directors and other key persons and entities (including Consultants and prospective employees) providing services to CIFC LLC (the “Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company.  It is anticipated that providing such persons and entities with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its shareholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

 

In connection with the consummation of the transactions contemplated by the Agreement and Plan of Merger by and among the Company, CIFC Corp., and CIFC Merger Corp., the Company assumed all obligations under the CIFC Corp. 2011 Stock Option and Incentive Plan (the “CIFC Corp. Plan”), all rights of participants to acquire shares of common stock of CIFC Corp. under the CIFC Corp. Plan were converted into rights to acquire Shares in accordance with the terms of the Plan, and shares of common stock of CIFC Corp. issuable under the CIFC Corp. Plan were converted on a one-for-one basis into Shares.

 

The following terms shall be defined as set forth below:

 

“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

“Administrator” means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee and which is comprised of not less than two (2) Non-Employee Directors.  To the extent that an Award is intended to constitute “qualified performance-based compensation” within the meaning of the regulations promulgated under Section 162(m) of the Code, the Administrator shall consist of two or more members, each of whom is an Outside Director.

 

“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Share Options, Share Appreciation Rights, Restricted Share Units, Restricted Share Awards, Unrestricted Share Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights.

 

“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan.  Each Award Certificate is subject to the terms and conditions of the Plan.

 

“Board” means the Board of Directors of the Company.

 

“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

 

“Consultant” means any natural person or entity that provides bona fide services to the Company or any Subsidiary as a consultant or advisor.

 

“Covered Employee” means an employee designated by the Company as a potential “Covered Employee” within the meaning of Section 162(m) of the Code.

 

“Director” means a member of the Board.

 

 

“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the Shares specified in the Dividend Equivalent Right (or other award to which it relates) if such Shares had been issued to and held by the grantee.

 

“Effective Date” means          .

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

“Fair Market Value” of the Shares on any given date means the fair market value of the Shares determined in good faith by the Administrator and in accordance with Section 409A; provided, however, that if a Share is admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Capital Market or another national securities exchange, the determination shall be made by reference to market quotations.  If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations.

 

“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.

 

“Option” or “Share Option” means any option to purchase Shares granted pursuant to Section 5.

 

“Outside Director” means a member of the Board who is an “outside director” within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder.

 

“Performance-Based Award” means any Restricted Share Award, Restricted Share Units, Performance Share Award or Cash-Based Award granted to a Covered Employee that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code and the regulations promulgated thereunder.

 

“Performance Criteria” means the criteria that the Administrator selects for purposes of establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle.  The Performance Criteria (which shall be applicable to the organizational level specified by the Administrator, including, but not limited to, the Company or a unit, division, group, or Subsidiary of the Company) that will be used to establish Performance Goals are limited to the following:  (a) earnings before interest, taxes, depreciation and amortization, (b) net income (loss) (either before or after interest, taxes, depreciation and/or amortization), (c) changes in the market price of the Shares, (d) economic value-added, (e) funds from operations or similar measure, (f) sales or revenue, (g) acquisitions or strategic transactions, (h) operating income (loss), (i) cash flow (including, but not limited to, operating cash flow and free cash flow), (j) return on capital, assets, equity, investment or assets under management, (k) shareholder returns, (l) return on sales, (m) gross or net profit levels, (n) productivity, (o) expense, (p) margins, (q) operating efficiency, (r) customer satisfaction, (s) working capital, (t) earnings (loss) per Share, (u) sales, (v) market share, (w) number of customers, (x) REIT taxable income, (y) cash dividends per share, (z) book value, (aa) ratio of pre­tax net income to gross income, (ab) assets under investment management, (ac) investment management fees, and (ad) new originations of assets, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.

 

“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Share Award, Restricted Share Units, Performance Share Award or Cash­Based Award.  Each such period shall not be less than twelve (12) months.

 

“Performance Goals” means, for a Performance Cycle, the specific goals established in writing by the Administrator for the Performance Cycle based upon the Performance Criteria.

 

“Performance Share Award” means an Award entitling the recipient to acquire Shares upon the attainment of specified Performance Goals.

 

 

“Restricted Share” means a Share subject to such restrictions and conditions as the Administrator may determine at the time of grant.

 

“Restricted Share Award” means an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Administrator, Restricted Shares.

 

“Restricted Share Units” means an Award of phantom share units to a grantee.

 

“Sale Event” shall mean (a) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (b) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (c) the sale of all of the Shares of the Company to an unrelated person or entity, or (d) any other transaction in which the owners of the Company’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.

 

“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by shareholders, per Share pursuant to a Sale Event.

 

“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.

 

“Share” means a common share representing a limited liability interest in CIFC LLC, subject to adjustments pursuant to Section 3.

 

“Share Appreciation Right” means an Award entitling the recipient to receive Shares or cash, as determined by the Administrator, having a value equal to the excess of the Fair Market Value of the Share on the date of exercise over the exercise price of the Share Appreciation Right multiplied by the number of Shares with respect to which the Share Appreciation Right shall have been exercised.

 

“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a fifty percent (50%) interest, either directly or indirectly.

 

“Unrestricted Share Award” means an Award of Shares free of any restrictions.

 

SECTION 2.         ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS

 

(a)           Administration of Plan.  The Plan shall be administered by the Administrator; provided, that the amount, timing and terms of the grants of Awards to persons who are subject to the reporting and other provisions of Section 16 of the Exchange Act shall be determined by (i) the Board or (ii) a committee of the Board of not less than two (2) members that is comprised solely of Non-Employee Directors who meet the conditions set forth in Rule 16b-3(b)(3) promulgated under the Exchange Act (and for such purposes, the Board or such committee shall be deemed the “Administrator” hereunder).

 

(b)           Powers of Administrator.  The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:

 

(i)            to select the individuals to whom Awards may from time to time be granted;

 

(ii)           to determine the time or times of grant, and the extent, if any, of Options, Share Appreciation Rights, Restricted Share Awards, Restricted Share Units, Unrestricted Share Awards, Cash-

 

 

Based Awards, Performance Share Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;

 

(iii)          to determine the number of Shares to be covered by any Award;

 

(iv)          to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the forms of Award Certificates;

 

(v)           to accelerate at any time the exercisability or vesting of all or any portion of any Award;

 

(vi)          subject to the provisions of Section 5(b) and Section 409A, to extend at any time the period in which Options may be exercised; and

 

(vii)         at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.

 

All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.

 

(c)           Delegation of Authority to Grant Options.  Subject to applicable law, the Administrator, in its discretion, may delegate to any one or more executive officers of the Company, as a single member committee, all or part of the Administrator’s authority and duties with respect to the granting of Options to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not Covered Employees.  Any such delegation by the Administrator shall include a limitation as to the amount of Options that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria.  The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.  Any delegation pursuant to this Section 2(c) shall automatically terminate, without any additional action by the Administrator, at such time as the executive officer(s) of the Company cease(s) to serve as executive officer(s).

 

(d)           Award Certificate.  Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or service terminates.

 

(e)           Indemnification.  Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s limited liability company agreement or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.

 

(f)            Foreign Award Recipients.  Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to:  (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be

 

 

necessary or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or after an Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals.  Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.

 

SECTION 3.         SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

 

(a)           Shares Issuable.  The maximum number of Shares reserved and available for issuance under the Plan shall be 6,181,929 Shares, subject to adjustment as provided in this Section 3.  For purposes of this limitation, the Shares underlying any Awards that are forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Shares or otherwise terminated (other than by exercise) shall be added back to the Shares available for issuance under the Plan.  Subject to such overall limitations, Shares may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Options or Share Appreciation Rights with respect to no more than 6,181,929 Shares may be granted to any one individual grantee during any one calendar year period.  The shares available for issuance under the Plan may be authorized but unissued Shares or Shares reacquired by the Company.

 

(b)           Changes in Shares.  Subject to Section 3(c) hereof, in the event of any corporate event or transaction involving the Company or a Subsidiary such as a merger, consolidation, reorganization, recapitalization, reclassification, share dividend, share split, reverse share split, exchange of shares, spinoff, extraordinary cash dividend or other similar change in capital structure or similar corporate event or transaction, the Administrator shall, to prevent dilution or enlargement of participant’s rights under the Plan, in its sole discretion, make an appropriate or proportionate adjustment in (i) the maximum number and kind of Shares or other securities reserved for issuance under the Plan, (ii) the number of Options or Share Appreciation Rights that can be granted to any one individual grantee and the maximum number of Shares that may be granted under a Performance-Based Award, (iii) the number and kind of Shares or other securities subject to any then-outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Share Award, and (v) the exercise price for each Share subject to any then-outstanding Options and Share Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Options and Share Appreciation Rights) as to which such Options and Share Appreciation Rights remain exercisable.  The adjustment by the Administrator shall be final, binding and conclusive.  No fractional Shares shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional Shares.

 

(c)           Sale Event.  Upon the occurrence of a Sale Event after the Effective Date, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governing governmental agencies or national securities exchanges, or unless the Administrator shall determine otherwise in the Award Certificate, the Administrator is authorized (but not obligated) to make adjustments in the terms and conditions of outstanding Awards, including without limitation the following (or any combination thereof):  (i) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving company or corporation) or by the surviving company or corporation or its parent; (ii) substitution by the surviving company or corporation or its parent of awards with substantially the same terms for outstanding Awards (excluding the consideration payable upon settlement of the Awards); (iii) accelerated exercisability, vesting and/or lapse of restrictions under outstanding Awards immediately prior to the occurrence of such event; (iv) upon written notice, providing that any outstanding Awards must be exercised, to the extent then exercisable, during a reasonable period of time immediately prior to the scheduled consummation of the event or such other period as determined by the Administrator (contingent upon the consummation of the event), and at the end of such period, such Awards shall terminate to the extent not so exercised within the relevant period; (v) cancellation of all or any portion of outstanding Awards for fair value (in the form of cash, shares, other property or any combination thereof) as determined in the sole discretion of the Administrator and which value may be zero, provided, that, in the case of Options and Share Appreciation Rights or similar Awards, the fair value may equal the excess, if any, of the value of the consideration to be paid in the Sale Event transaction to holders of the same number of Shares subject to such

 

 

Awards (or, if no such consideration is paid, Fair Market Value of the Shares subject to such outstanding Awards or portion thereof being canceled) over the aggregate exercise price, with respect to such Awards or portion thereof being canceled, or if no such excess, zero; and (vi) cancellation of all or any portion of outstanding unvested and/or unexercisable Awards for no consideration.

 

(d)           Substitute Awards.  The Administrator may grant Awards under the Plan in substitution for share and share-based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock of the employing corporation.  The Administrator may direct that the substitute awards be granted on such terms and conditions as the Administrator considers appropriate in the circumstances.  Any substitute Awards granted under the Plan shall not count against the share limitation set forth in Section 3(a).

 

SECTION 4.         ELIGIBILITY

 

Grantees under the Plan will be such full- or part-time officers and other employees, Directors and key persons and entities (including Consultants and prospective employees) providing services to the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

 

SECTION 5.         SHARE OPTIONS

 

Any Share Option granted under the Plan shall be in such form as the Administrator may from time to time approve.  Share Options granted under the Plan are non­qualified Share Options.

 

Share Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable.  If the Administrator so determines, Share Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.

 

(a)           Exercise Price.  The exercise price per Share covered by a Share Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than one hundred percent (100%) of the Fair Market Value on the date of grant.

 

(b)           Option Term.  The term of each Share Option shall be fixed by the Administrator, but no Share Option shall be exercisable more than ten (10) years after the date the Share Option is granted.

 

(c)           Exercisability; Rights of a Shareholder.  Share Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date.  The Administrator may at any time accelerate the exercisability of all or any portion of any Share Option.  An optionee shall have the rights of a shareholder only as to shares acquired upon the exercise of a Share Option and not as to unexercised Share Options.

 

(d)           Method of Exercise.  Share Options may be exercised in whole or in part, by giving written or electronic notice of exercise, in accordance with procedures set forth by the Administrator, to the Company, specifying the number of shares to be purchased.  Payment of the purchase price may be made by one or more of the following methods to the extent provided in the Award Certificate:

 

(i)            in cash, by certified or bank check or other instrument acceptable to the Administrator;

 

(ii)           through the delivery (or attestation to the ownership) of Shares that are owned by the optionee and that are not then subject to restrictions under any Company plan, which surrendered Shares shall be valued at Fair Market Value on the exercise date;

 

(iii)          by the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and

 

 

acceptable to the Company for the purchase price; provided, that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; or

 

(iv)          by a “net exercise” arrangement pursuant to which the Company will reduce the number of Shares issuable upon exercise by the largest whole number of Shares with a Fair Market Value that does not exceed the aggregate exercise price.

 

Payment instruments will be received subject to collection.  The transfer to the optionee on the records of the Company or of the transfer agent of the Shares to be purchased pursuant to the exercise of a Share Option will be contingent upon receipt from the optionee (or a purchaser acting in his or her stead in accordance with the provisions of the Share Option) by the Company of the full purchase price for such Shares and the fulfillment of any other requirements contained in the Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee).  In the event an optionee chooses to pay the purchase price by previously-owned Shares through the attestation method, the number of Shares transferred to the optionee upon the exercise of the Share Option shall be net of the number of attested Shares.  In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Share Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Share Options may be permitted through the use of such an automated system.

 

Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in any Share Options that have not vested shall automatically terminate upon the termination of the grantee’s employment (or other service relationship) with the Company and its Subsidiaries.

 

SECTION 6.         SHARE APPRECIATION RIGHTS

 

(a)           Exercise Price of Share Appreciation Rights.  The exercise price of a Share Appreciation Right shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant.

 

(b)           Grant and Exercise of Share Appreciation Rights.  Share Appreciation Rights may be granted by the Administrator independently of any Share Option granted pursuant to Section 5 of the Plan.

 

(c)           Terms and Conditions of Share Appreciation Rights.  Share Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator.  The term of a Share Appreciation Right may not exceed ten (10) years.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in any Share Appreciation Rights that have not vested shall automatically terminate upon the termination of the grantee’s employment (or other service relationship) with the Company and its Subsidiaries.

 

SECTION 7.         RESTRICTED SHARE AWARDS

 

(a)           Nature of Restricted Share Awards.  The Administrator shall determine the restrictions and conditions applicable to each Restricted Share Award at the time of grant.  Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.  The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.

 

(b)           Rights as a Shareholder.  Unless the Administrator shall otherwise determine, upon the grant of the Restricted Share Award and payment of any applicable purchase price, a grantee shall have the rights of a shareholder with respect to dividends and the voting of the Restricted Share, subject to such conditions contained in the Award Certificate.  Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Shares shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Shares are vested as provided in Section 7(d) below, and (ii) certificated Restricted

 

 

Shares shall remain in the possession of the Company until such Restricted Shares are vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.

 

(c)           Restrictions.  A Restricted Share may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Share Award Certificate.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, if a grantee’s employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Share that has not vested at the time of termination shall automatically and without any requirement of notice to such grantee from, or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a shareholder.  Following such deemed reacquisition of unvested Restricted Shares that are represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration.

 

(d)           Vesting of Restricted Shares.  The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Share and the Company’s right of repurchase or forfeiture shall lapse.  Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Shares and shall be deemed “vested.” Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in any Restricted Shares that have not vested shall automatically terminate upon the termination of the grantee’s employment (or other service relationship) with the Company and its Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.

 

SECTION 8.         RESTRICTED SHARE UNITS

 

(a)           Nature of Restricted Share Units.  The Administrator shall determine the restrictions and conditions applicable to each Restricted Share Unit at the time of grant.  Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.  The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.  At the end of the deferral period, the Restricted Share Units, to the extent vested, shall be settled in the form of Shares or cash, as determined by the Administrator.  To the extent that an award of Restricted Share Units is subject to Section 409A, it may contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order for such Award to comply with the requirements of Section 409A.

 

(b)           Election to Receive Restricted Share Units in Lieu of Compensation.  The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Share Units.  Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator.  Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Share Units based on the Fair Market Value of a Share on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein.  The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate.  Any Restricted Share Units that are elected to be received in lieu of cash compensation shall be fully vested, unless otherwise provided in the Award Certificate.

 

(c)           Rights as a Shareholder.  A grantee shall have the rights as a shareholder only as to Shares acquired by the grantee upon settlement of Restricted Share Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the phantom share units underlying his or her Restricted Share Units, subject to such terms and conditions as the Administrator may determine.

 

 

(d)           Termination.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s right in all Restricted Share Units that have not vested shall automatically terminate upon the termination of the grantee’s employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 9.         UNRESTRICTED SHARE AWARDS

 

Grant or Sale of Unrestricted Share Awards.  The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Share Award under the Plan.  Unrestricted Share Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.

 

SECTION 10.       CASH-BASED AWARDS

 

Grant of Cash-Based Awards.  The Administrator may, in its sole discretion, grant Cash-Based Awards to any grantee in such number or amount and upon such terms, and subject to such conditions, as the Administrator shall determine at the time of grant.  The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine.  Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator.  Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in Shares, as the Administrator determines.

 

SECTION 11.       PERFORMANCE SHARE AWARDS

 

(a)           Nature of Performance Share Awards.  The Administrator may, in its sole discretion, grant Performance Share Awards independent of, or in connection with, the granting of any other Award under the Plan.  The Administrator shall determine whether and to whom Performance Share Awards shall be granted, the Performance Goals, the periods during which performance is to be measured, and such other limitations and conditions as the Administrator shall determine.

 

(b)           Rights as a Shareholder.  A grantee receiving a Performance Share Award shall have the rights of a shareholder only as to Shares actually received by the grantee under the Plan and not with respect to Shares subject to the Award but not actually received by the grantee.  A grantee shall be entitled to receive Shares under a Performance Share Award only upon satisfaction of all conditions specified in the Performance Share Award Certificate (or in a performance plan adopted by the Administrator).

 

(c)           Termination.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Performance Share Awards shall automatically terminate upon the termination of the grantee’s employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 12.       PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

 

(a)           Performance-Based Awards.  Any employee or other key person providing services to the Company and who is selected by the Administrator may be granted one or more Performance-Based Awards in the form of a Restricted Share Award, Restricted Share Units, Performance Share Awards or Cash-Based Award payable upon the attainment of Performance Goals that are established by the Administrator and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Administrator.  The Administrator shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle.  Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual.  The Administrator, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (i) in the event of, or in anticipation of, any unusual or

 

 

extraordinary corporate item, transaction, event or development, (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (iii) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions; provided, however, that the Administrator may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Covered Employee.  Each Performance-Based Award shall comply with the provisions set forth below.  Each provision of the Plan and each Award Certificate relating to Performance-Based Awards shall be construed so that each such Award shall be “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and related regulations, and any provisions that cannot be so construed shall be disregarded.

 

(b)           Grant of Performance-Based Awards.  With respect to each Performance-Based Award granted to a Covered Employee, the Administrator shall select, within the first ninety (90) days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the Code) the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including a threshold level of performance below which no amount will become payable with respect to such Award).  Each Performance-Based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets.  The Performance Criteria established by the Administrator may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Covered Employees.

 

(c)           Payment of Performance-Based Awards.  Following the completion of a Performance Cycle, the Administrator shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle.  The Administrator shall then determine the actual size of each Covered Employee’s Performance-Based Award, and, in doing so, may reduce or eliminate the amount of the Performance-Based Award for a Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.

 

(d)           Maximum Award Payable.  The maximum Performance-Based Award payable to any one Covered Employee under the Plan for a Performance Cycle is 843,976 Shares (subject to adjustment as provided in Section 3(b) hereof) or $5,000,000 in the case of a Performance-Based Award that is a Cash-Based Award.

 

(e)           Termination.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Performance-Based Awards shall automatically terminate upon the termination of the grantee’s employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 13.       DIVIDEND EQUIVALENT RIGHTS

 

(a)           Dividend Equivalent Rights.  A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Share Units, Restricted Share Award or Performance Share Award or as a freestanding award.  The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate.  Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or on a deferred basis.  Any reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any.  Dividend Equivalent Rights may be settled in cash or Shares or a combination thereof, in a single installment or installments.  A Dividend Equivalent Right granted as a component of an award of Restricted Share Units, Restricted Share Award or Performance Share Award may provide that such Dividend Equivalent Right shall be settled upon settlement or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award.  A Dividend Equivalent Right granted as a component of a Restricted Share Units, Restricted Share Award or Performance Share Award may also contain terms and conditions different from such other Award.

 

(b)           Termination.  Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 18 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent Rights or interest equivalents granted as a component of an award of Restricted Share Units, Restricted

 

 

Share Award or Performance Share Award that have not vested shall automatically terminate upon the termination of the grantee’s employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 14.       TRANSFERABILITY OF AWARDS

 

(a)           Transferability.  Except as provided in Section 14(b) below, during a grantee’s lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity.  No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order.  No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void.

 

(b)           Administrator Action.  Notwithstanding Section 14(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by subsequent written approval that the grantee (who is an employee or Director) may transfer his or her Awards (other than any Restricted Share Units) to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners; provided, that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award.  In no event may an Award be transferred by a grantee for value.

 

(c)           Family Member.  For purposes of Section 14(b), “family member” shall mean a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than fifty percent (50%) of the voting interests.

 

(d)           Designation of Beneficiary.  Each grantee to whom an Award has been granted under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death.  Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator.  If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.

 

SECTION 15.       TAX WITHHOLDING

 

(a)           Payment by Grantee.  Each grantee shall, no later than the date as of which the value of an Award or of any Share or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income.  The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee.  The Company’s obligation to deliver evidence of book entry (or share certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee.

 

(b)           Payment in Shares.  Subject to approval by the Administrator, a grantee may elect to have the Company’s minimum required tax withholding obligation satisfied, in whole or in part, by authorizing the Company to withhold from Shares to be issued pursuant to any Award a number of Shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due.

 

 

SECTION 16.       SECTION 409A AWARDS

 

(a)           General.  The Company intends that the Plan and all Awards be construed to avoid the imposition of additional taxes, interest, and penalties pursuant to Section 409A.  Notwithstanding the Company’s intention, in the event any Award is subject to such additional taxes, interest or penalties pursuant to Section 409A, the Administrator may, in its sole discretion and without a grantee’s prior consent, amend the Plan and/or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to (i) exempt the Plan and/or any Award from the application of Section 409A, (ii) preserve the intended tax treatment of any such Award, or (iii) comply with the requirements of Section 409A, including without limitation any such regulations, guidance, compliance programs, and other interpretative authority that may be issued after the date of the grant.

 

(b)           Specified Employees.  To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A.  In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six (6) months and one (1) day after the grantee’s separation from service or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A.  Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.

 

(c)           Separation from Service.  A termination of service shall not be deemed to have occurred for purposes of any provision of the Plan or any Award Certificate providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of service, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A.  For purposes of any such provision of the Plan or any Award Certificate relating to any such payments or benefits, references to a “termination,” “termination of employment,” “termination of service,” or like terms shall mean “separation from service.”

 

SECTION 17.       TRANSFER, LEAVE OF ABSENCE, ETC.

 

For purposes of the Plan, the following events shall not be deemed a termination of employment:

 

(a)           a transfer of employment to the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or

 

(b)           an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.

 

SECTION 18.       AMENDMENTS AND TERMINATION

 

The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent.  Except as provided in Section 3(b), 3(c) or 16, without prior shareholder approval, in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Share Options or Share Appreciation Rights or effect repricing through cancellation and re-grants or cancellation of Share Options or Share Appreciation Rights in exchange for cash.  To the extent required under the rules of any securities exchange or market system on which the Shares are listed or to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company shareholders

 

 

entitled to vote at a meeting of shareholders.  Nothing in this Section 18 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(b), 3(c) or 16.

 

SECTION 19.       STATUS OF PLAN

 

With respect to the portion of any Award that has not been exercised and any payments in cash, Shares or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards.  In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Shares or make payments with respect to Awards hereunder; provided, that the existence of such trusts or other arrangements is consistent with the foregoing sentence.

 

SECTION 20.       GENERAL PROVISIONS

 

(a)           No Distribution.  The Administrator may require each person acquiring Shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the Shares without a view to distribution thereof.

 

(b)           Delivery of Share Certificates.  Share certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a share transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company.  Uncertificated Shares shall be deemed delivered for all purposes when the Company or a share transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records).  Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing Shares pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed, quoted or traded.  All share certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Federal, state or foreign jurisdiction, securities or other laws, rules and quotation systems on which the Shares are listed, quoted or traded.  The Administrator may place legends on any share certificate to reference restrictions applicable to the Shares.  In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements.  The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.

 

(c)           Shareholder Rights.  Until Shares are deemed delivered in accordance with Section 20(b), no right to vote or receive dividends or any other rights of a shareholder will exist with respect to Shares to be issued in connection with an Award, notwithstanding the exercise of a Share Option or any other action by the grantee with respect to an Award.

 

(d)           Other Compensation Arrangements; No Employment Rights.  Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases.  The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.

 

(e)           Trading Policy Restrictions.  Option exercises and other Awards under the Plan shall be subject to the Company’s insider trading policies and procedures, as in effect from time to time.

 

 

(f)            Forfeiture of Awards under Sarbanes-Oxley Act.  If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then any grantee who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any Award received by such individual under the Plan during the twelve (12)­month period following the first public issuance or filing with the United States Securities and Exchange Commission, as the case may be, of the financial document embodying such financial reporting requirement.

 

(g)           Erroneously Awarded Compensation.  All Awards, if and to the extent subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act, shall be subject to any incentive compensation policy established from time to time by the Company to comply with such Act.

 

(h)           Unfunded Plan.  Grantees shall have no right, title, or interest whatsoever in or to any investments that the Company or any of its Subsidiaries may make to aid it in meeting its obligations under the Plan.  Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any grantee, beneficiary, legal representative, or any other person.  To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company.  All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts.  The Plan is not subject to the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.

 

(i)            No Guarantees Regarding Tax Treatment.  Grantees (or their beneficiaries) shall be responsible for all taxes with respect to any Awards under the Plan.  The Administrator and the Company make no guarantees to any person regarding the tax treatment of Awards or payments made under the Plan.  Neither the Administrator nor the Company has any obligation to take any action to prevent the assessment of any tax on any person with respect to any Award under Section 409A or Section 457A of the Code or otherwise and none of the Company, any of its Subsidiaries, or any of their employees or representatives shall have any liability with respect thereto.

 

SECTION 21.       LIMITATION ON BENEFITS

 

The benefits that a participant may be entitled to receive under this Plan and other benefits that a participant is entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”), may constitute Parachute Payments that are subject to Code Sections 280G and 4999.  As provided in this Section 21, the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow a participant to receive a greater Net After Tax Amount than the participant would receive absent a reduction.

 

The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a participant.  The Accounting Firm also will determine the Net After Tax Amount attributable to the participant’s total Parachute Payments.

 

The Accounting Firm will next determine the largest amount of Payments that may be made to the participant without subjecting the participant to tax under Code Section 4999 (the “Capped Payments”).  Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

 

The participant will receive the total Parachute Payments or the Capped Payments, whichever provides the participant with the higher Net After Tax Amount.  If the participant will receive the Capped Payments, the total Parachute Payments will be adjusted in the following order:

 

·                  first, if the Parachute Payments include the value of acceleration in the time at which any Payment, not subject to Section 409A, is paid, a delay in the time of payment (but not a delay of vesting) of such Payment; provided, that such delay shall apply to the aggregate amount of such Payments (and not on a Payment-by-Payment basis) and such aggregate amount shall be delayed only to the extent necessary to satisfy this Section 21;

 

 

·                  second, to the extent further reduction is required by this Section 21, a reduction in the amount of Payments not subject to Section 409A required to be paid or delivered; provided, that the applicable Participant shall be entitled to select among the forms of Payment (not subject to Section 409A) that shall be reduced; and

 

·                  third, to the extent further reduction is required by this Section 21, if the Parachute Payments include the value of acceleration in the time at which any Payment vests, a cutback in the extent of such accelerated vesting; provided, however, that such cutback does not result in a violation of Section 409A or make the Payment subject to Section 409A, in which case the Payment shall be forfeited or another Payment must be reduced.  The cutback shall apply to the aggregate amount of such Payments (and not on a Payment-by-Payment basis) and accelerated vesting of such aggregate amount shall be cut back only to the extent necessary to satisfy this Section 21.

 

The Accounting Firm will notify the participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send the participant and the Company a copy of its detailed calculations supporting that determination.

 

As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 21, it is possible that amounts will have been paid or distributed to the participant that should not have been paid or distributed under this Section 21 (“Overpayments”), or that additional amounts should be paid or distributed to the participant under this Section 21 (“Underpayments”).  If the Accounting Firm determines, based on the assertion of a deficiency by the Internal Revenue Service against either the Company or the participant, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the participant must repay the amount of that Overpayment to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by the participant to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999.  If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the participant and the Company of that determination and the amount of that Underpayment will be paid to the participant promptly by the Company.

 

For purposes of this Section 21, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately before the date of the Sale Event.  For purposes of this Section 21, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any state or local income taxes applicable to the participant on the date of payment.  The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.  For purposes of this Section 21, the term “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

 

Notwithstanding any other provision of this Section 21, the limitations and provisions of this Section 21 shall not apply to any participant who, pursuant to an agreement with the Company or the terms of another plan maintained by the Company, is entitled to indemnification for any liability that the participant may incur under Code Section 4999.

 

SECTION 22.       EFFECTIVE DATE OF PLAN

 

This Plan shall become effective in accordance with applicable state law, the Company’s limited liability company agreement, and applicable stock exchange rules.  No grants of Share Options and other Awards may be made hereunder after the tenth (10th) anniversary of the Effective Date.

 

 

SECTION 23.       GOVERNING LAW

 

This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of New York, applied without regard to conflict of law principles.

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