Document:

exv4w1

 

Exhibit 4.1

Warrant Certificate No. SP-___

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON THE
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO
THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF
THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTOR SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

	 	 	 
	Dated: July 11, 2005

	 	Void After: July 10, 2009

ASIA PAYMENT SYSTEMS INC.

WARRANT TO PURCHASE COMMON STOCK

     Asia Payment Systems Inc., a Nevada corporation (the “Company”), for value received on
July 11, 2005 (the “Effective Date”), hereby issues to                                                              (the
“Holder”) this Warrant (the “Warrant”) to purchase 31,579 shares (each such share
being a “Warrant Share” and all such shares being the “Warrant Shares”) of the
Company’s Common Stock (as defined below), at the Exercise Price (as defined below), as adjusted
from time to time as provided herein, on or before July 10, 2009 (the “Expiration Date”),
all subject to the following terms and conditions.

     As used in this Warrant, (i) “Common Stock” means the common stock of the Company,
$0.001 par value per share, and such other securities as such class of common stock may be
converted from time to time in the future; and (ii) “Exercise Price” means the following,
subject to adjustment as provided herein:

     (a) $1.50 between the Effective Date and the first anniversary of the Effective Date; or

 

 

     (b) $2.00 beginning on the first anniversary of the Effective Date and continuing until the
Expiration Date.

1. DURATION AND EXERCISE OF WARRANTS

     (a) The Holder may exercise this Warrant on any business day on or before 5:00 P.M., New York
Time, on the Expiration Date, at which time this Warrant shall become void and of no value.

     (b) While this Warrant remains outstanding and exercisable in accordance with Section 1(a),
the Holder may exercise this Warrant in whole or in part by:

          (i) surrender of this Warrant, with a duly executed copy of the Notice of Exercise attached as
Exhibit A, to the Secretary of the Company at its principal offices or at such other
office or agency as the Company may specify in writing to the Holder; and

          (ii) payment of the Exercise Price per share multiplied by the number of Warrant Shares being
purchased upon exercise of the Warrant in lawful money of the United States of America.

     Upon the exercise of this Warrant in compliance with the provisions of this Section 1(b), the
Company shall promptly issue and cause to be delivered to the Holder a certificate for the Warrant
Shares purchased by the Holder. Each exercise of this Warrant shall be effected immediately prior
to the close of business on the date (the “Date of Exercise”) which the conditions set
forth in Section 1(b)(i) and (ii) have been satisfied.

     (c) This Warrant shall be exercisable, either as an entirety or, from time to time, for part
only of the number of Warrant Shares referenced by this Warrant. If this Warrant is exercised in
part, the Company shall issue, at its expense, a new Warrant, in substantially the form of this
Warrant, referencing such reduced number of Warrant Shares which remain subject to this Warrant.

2. ISSUANCE OF WARRANT SHARES

     (a) The Company covenants that all Warrant Shares will, upon issuance in accordance with the
terms of this Warrant, be (i) duly authorized, fully paid and non-assessable, and (ii) free from
all liens, charges and security interests, with the exception of claims arising through the acts or
omissions of any Holder and except as arising from applicable Federal and state securities laws.

     (b) The Company shall register this Warrant upon records to be maintained by the Company for
that purpose in the name of the record holder of such Warrant from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner thereof for the purpose
of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

     (c) The Company will not, by amendment of its certificate of incorporation, by-laws or through
any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will at all times in

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good faith assist in the carrying out of all the provisions of this Warrant and in the taking of
all the action as may be necessary or appropriate in order to protect the rights of the Holder to
exercise this Warrant.

3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT SHARES

     (a) The Exercise Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain events described in
this Section 3(a).

          (i) Subdivision or Combination of Stock. In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such combination shall
be proportionately increased.

          (ii) Dividends in Stock, Property, Reclassification. If at any time or from time to
time the Holders of Common Stock (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received or become entitled to receive, without
payment therefore:

               (A) any shares of stock or other securities which are at any time directly or indirectly
convertible into or exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or

               (B) additional stock or other securities or property (including cash) by way of spin-off,
split-up, reclassification, combination of shares or similar corporate rearrangement, (other than
shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered
by the terms of Section 3(a)(i) above),

then and in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Common Stock receivable thereupon, and without
payment of any additional consideration therefor, the amount of stock and other securities and
property (including cash in the cases referred to in clause (ii) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such Common Stock as of the
date on which holders of Common Stock received or became entitled to receive such shares or all
other additional stock and other securities and property.

          (iii) Reorganization, Reclassification, Consolidation, Merger or Sale. If any
recapitalization, reclassification or reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of all or
substantially all of its assets or other transaction shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities, or other assets or property (an
“Organic Change”), then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right
to purchase and receive (in lieu of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant)
such shares of stock, securities or other assets or property as may be issued or payable

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with
respect to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore purchasable and receivable
assuming the full exercise of the rights represented by this Warrant. In the event of any Organic
Change, appropriate provision shall be made by the Company with respect to the rights and interests
of the Holder of this Warrant to the end that the provisions hereof (including, without limitation,
provisions for adjustments of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company
will not effect any such consolidation, merger or sale unless, prior to the consummation thereof,
the successor corporation (if other than the Company) resulting from such consolidation or the
corporation purchasing such assets shall assume by written instrument reasonably satisfactory in
form and substance to the Holders executed and mailed or delivered to the registered Holder hereof
at the last address of such Holder appearing on the books of the Company, the obligation to deliver
to such Holder such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.

     (b) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 3, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to each holder of this
Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the written request,
at any time, of any such holder, furnish or cause to be furnished to such holder a like certificate
setting forth: (i) such adjustments and readjustments; and (ii) the number of shares and the
amount, if any, of other property which at the time would be received upon the exercise of the
Warrant.

     (c) Certain Events. If any event occurs as to which, in the opinion of the Company,
the other provisions of this Section 3 are not strictly applicable but the lack of any adjustment
would not in the opinion of the Company fairly protect the purchase rights of the Holder under this
Warrant in accordance with the basic intent and principles of such provisions, or if strictly
applicable would not fairly protect the purchase rights of the Holder under this Warrant in
accordance with the basic intent and principles of such provisions, then the Company shall make the
adjustments which the board of directors described therein.

4. TRANSFERS AND EXCHANGES OF WARRANT AND WARRANT SHARES

     (a) Registration of Transfers and Exchanges. Subject to Section 4(c), upon the
Holder’s surrender of this Warrant, with a duly executed copy of the Assignment Notice attached as
Exhibit B, to the Secretary of the Company at its principal offices or at such other office
or agency as the Company may specify in writing to the Holder, the Company shall register the
transfer of all or any portion of this Warrant. Upon such registration of transfer the Company
shall issue a new Warrant, in substantially the form of this Warrant, evidencing the acquisition
rights transferred to the transferee and a new Warrant, in similar form, evidencing the remaining
acquisition rights not transferred, to the Holder requesting the transfer.

     (b) Warrant Exchangeable for Different Denominations. The Holder may exchange this
Warrant for a new Warrant or Warrants, in substantially the form of this Warrant, evidencing in the
aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder,
each of such new Warrants to be dated the date of such exchange and to represent the

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right to purchase such number of Warrant Shares as shall be designated by the Holder. The
Holder shall surrender this Warrant with duly executed instructions regarding such
re-certification of this Warrant to the Secretary of the Company at its principal offices or at
such other office or agency as the Company may specify in writing to the Holder.

     (c) Restrictions on Transfers. This Warrant may not be transferred at any time
without (i) registration under the Act or (ii) an exemption from such registration and a written
opinion of legal counsel addressed to the Company that the proposed transfer of the Warrant may be
effected without registration under the Act, which opinion will be in form and from counsel
reasonably satisfactory to the Company.

5. MUTILATED OR MISSING WARRANT CERTIFICATE

     If this Warrant is mutilated, lost, stolen or destroyed, upon request by the Holder, the
Company will issue, in exchange for and upon cancellation of the mutilated Warrant, or in
substitution for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the form of
this Warrant, representing the right to acquire the equivalent number of Warrant Shares, provided
however, as a prerequisite to the issuance of a substitute Warrant, the Company may require
satisfactory evidence of loss, theft or destruction as well as an indemnity from the Holder of a
lost, stolen or destroyed Warrant.

6. PAYMENT OF TAXES

     The Company will pay all transfer and stock issuance taxes attributable to the preparation,
issuance and delivery of this Warrant and the Warrant Shares including, without limitation, all
documentary and stamp taxes; provided, however, that the Company shall not be
required to pay any tax in respect of the transfer of this Warrant, or the issuance or delivery of
certificates for Warrant Shares or other securities in respect of the Warrant Shares to any person
or entity other than the Holder.

7. FRACTIONAL WARRANT SHARES

     No fractional Warrant Shares shall be issued upon exercise of this Warrant. The Company
shall, in lieu of issuing any fractional Warrant Share, shall round up the number of Warrant Shares
issuable to nearest whole share.

8. NO STOCK RIGHTS AND LEGEND

     No holder of this Warrant Certificate, as such, shall be entitled to vote or be deemed the
holder of any other securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained herein be construed to confer upon the holder of this Warrant
Certificate, as such, the rights of a stockholder of the Company or the right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, or give
or withhold consent to any corporate action or to receive notice of meetings or other actions
affecting stockholders (except as provided herein), or to receive dividends or subscription rights
or otherwise (except as provide herein).

     Each certificate for Warrant Shares initially issued upon the exercise of this Warrant
Certificate, and each certificate for Warrant Shares issued to any subsequent transferee of any
such certificate, shall be stamped or otherwise imprinted with a legend in substantially the

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following form:

     “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES
LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN
OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.”

9. NOTICES

     All notices, consents, waivers, and other communications under this Warrant must be in writing
and will be deemed given to a party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail
with confirmation of transmission by the transmitting equipment; (c) received or rejected by the
addressee, if sent by certified mail, return receipt requested; if to the registered Holder hereof
or (d) seven days after the placement of the notice into the mails (first class postage prepaid),
to the Holder at the address or facsimile or e-mail address furnished by the registered Holder to
the Company in accordance with the Purchase Agreement, or if to the Company, to it at 800
5th Avenue, Suite 4100, Seattle, Washington 98104 Attention: Matt Mecke, telecopy
number: (206) 470-1150 (or to such other address, facsimile number, e-mail address as the Holder or
the Company as a party may designate by notice the other party).

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10. SEVERABILITY

     If a court of competent jurisdiction holds any provision of this Warrant invalid or
unenforceable, the other provisions of this Warrant will remain in full force and effect. Any
provision of this Warrant held invalid or unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or unenforceable.

11. BINDING EFFECT

     This Warrant shall be binding upon and inure to the sole and exclusive benefit of the Company,
its successors and assigns, the registered Holder or Holders from time to time of this Warrant and
the Warrant Shares.

12. SURVIVAL OF RIGHTS AND DUTIES

     This Warrant Certificate shall terminate and be of no further force and effect on the earlier
of 5:00 P.M., New York Time, on the Expiration Date or the date on which this Warrant has been
exercised.

13. GOVERNING LAW

     This Warrant will be governed by and construed under the laws of Nevada without regard to
conflicts of laws principles that would require the application of any other law.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized as of the date hereof.

	 	 	 	 	 
	 	 	ASIA PAYMENT SYSTEMS INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Charlie Rodriguez
	 

	 	 	 	Secretary

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EXHIBIT A

NOTICE OF EXERCISE

(To be executed by the Holder of Warrant if such Holder desires to exercise Warrant)

     To Asia Payment Systems Inc.:

     The undersigned hereby irrevocably elects to exercise this Warrant and to: purchase
thereunder,                                          full shares of                                          issuable upon exercise of the
Warrant and delivery of $                     (in cash as provided for in the foregoing Warrant) and any
applicable taxes payable by the undersigned pursuant to such Warrant.

The undersigned requests that certificates for such shares be issued in the name of:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	               (Please print name, address and social security or federal employer identification number
(if applicable)
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

If the shares issuable upon this exercise of the Warrant are not all of the Warrant Shares which
the Holder is entitled to acquire upon the exercise of the Warrant, the undersigned requests that a
new Warrant evidencing the rights not so exercised be issued in the name of and delivered to:

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	               (Please print name, address and social security or federal employer identification number
(if applicable)
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

	 	 	 	 	 	 	 
	 

	 	Name of Holder (print):	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	(Signature):	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	(By:)	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	(Title:)	 	 	 	 
	 

	 	 	 	 

	 	 

     Dated:                                         , ___

Exhibit A

 

 

EXHIBIT B

FORM OF ASSIGNMENT

     FOR VALUE RECEIVED,                                                              hereby sells, assigns and transfers to
each assignee set forth below all of the rights of the undersigned under the Warrant (as defined in
an evidenced by the attached Warrant) to acquire the number of Warrant Shares set opposite the name
of such assignee below and in and to the foregoing Warrant with respect to said acquisition rights
and the shares of ____________issuable upon exercise of the Warrant:

	 	 	 	 	 	 	 	 	 
	Name of Assignee

	 	 	 	Address
	 	 	 	Number of Warrant Shares
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 

     If the total of the Warrant Shares are not all of the Warrant Shares evidenced by the
foregoing Warrant, the undersigned requests that a new Warrant evidencing the right to acquire the
Warrant Shares not so assigned be issued in the name of and delivered to the undersigned.

	 	 	 	 	 	 	 
	 

	 	Name of Holder (print):	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	(Signature):	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	(By:)	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	(Title:)	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Dated:
	 	                                        , ___	 	 

Exhibit Bexv10w2

 

EXHIBIT 10.2

October 2, 2005

Mr. George Burnett

c/o Dex Media, Inc.

198 Inverness Drive West

Englewood, CO 80112

     Re: Employment and Option Agreement Amendment

Dear George:

     This Letter Agreement confirms the understanding reached between you and Dex Media, Inc., a
Delaware corporation (together with any successor thereto, the “Company”), regarding the
terms of your continued employment with the Company. This Letter Agreement constitutes an
amendment to that certain Employment Agreement by and between you and the Company, originally
entered into as of November 8, 2002, and as amended and restated as of July 15, 2004 (the
“Employment Agreement”), and an amendment to all Option Agreements by and between you and
the Company (the “Option Agreements”) including without limitation those certain Option
Agreements dated as of November 8, 2002, September 9, 2003, and November 11, 2003, in each case as
amended prior to the date hereof. Capitalized terms used in this Letter Agreement and not defined
herein shall have the meaning given such terms in the Employment Agreement or Option Agreements, as
applicable. This Letter Agreement shall be effective immediately prior to the consummation of the
transactions (the “Merger”) evidenced by that certain Agreement and Plan of Merger by and among the Company, R.H. Donnelley Corporation (“Donnelley”) and
Forward Acquisition Corp., a wholly owned subsidiary of Donnelley. In the event that the Merger is
not consummated, this Letter Agreement shall be void ab initio.

     1. Termination of Employment. Notwithstanding anything to the contrary in the
Employment Agreement, if on or prior to the fourth anniversary of the Effective Time (as defined in
the Merger Agreement) your employment with the Company is terminated (either by you or by the
Company) for any reason or you cease for any reason to continue in the position of the Chairman of
the Board of Donnelley, the Company shall (subject to your entering into a waiver and release of
claims agreement in the Company’s customary form):

     (a) Pay to you a lump sum cash amount equal to the product of (i) the sum of (A) your
then-current Annual Base Salary (which shall not be less than $475,000) and (B) your then-current
target annual bonus (which shall not be less than 75% of your Annual Base Salary) and (ii) 1.5; and

     (b) Provide that you will be eligible to continue to receive health and welfare benefits from
the Company for three years following your termination of employment (for which you will pay full
premium costs). Following the expiration of such three year period, you shall be eligible to elect
to receive COBRA continuation coverage under the Company’s applicable group health plan in
accordance with the Company’s customary terms and procedures.

 

 

     For the avoidance of doubt, you and the Company acknowledge and agree that the payments and
benefits described in this Paragraph 1 shall be made in lieu of, and not in addition to, the
payments and benefits described in Section 5 of the Employment Agreement.

     2. Stock Options. Notwithstanding anything to the contrary in any Option Agreement
(a) all options evidenced by the Option Agreements (the “Options”) will become vested and
exercisable with respect to all shares of the Company’s common stock covered thereby immediately
prior to the Effective Time, subject to the consummation of the Merger, (b) each Option outstanding
immediately prior to the Effective Time will be converted into a fully vested Donnelley option with
an economic value that is substantially identical to the value of the Options immediately prior to
the Effective Time and (c) each such Option shall expire on the first to occur of (i) the tenth
anniversary of the Grant Date thereof, (ii) the first anniversary of your termination of employment
due to death or disability, or (iii) the 15th day of the third month following the date at which, or December 31 of the calendar year in which, the Option would otherwise have expired if the Option had not been extended pursuant to this Paragraph 2(c)(iii), based on the terms of the Option at the Grant Date.

     3. Assignment and Successors. As of the Effective Time, the Company shall assign, and
Donnelley shall assume, all rights and obligations under this Agreement, the Employment Agreement
and the Option Agreements. If Donnelley does not so assume this Agreement, the Employment
Agreement and the Option Agreements, the Company shall provide you with the payments and benefits
described in Paragraph 1 of this Letter Agreement immediately prior to the Effective Time.

     4. Section 409A. You and the Company acknowledge and agree that, to the extent
applicable, this Letter Agreement, the Employment Agreement and the Option Agreements shall be
interpreted in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and Department of Treasury regulations and other interpretive guidance issued
thereunder. Notwithstanding any provision of this Letter Agreement, the Employment Agreement or
the Option Agreements to the contrary, in the event that any amounts payable to you could
reasonably be expected to be immediately taxable to you under Section 409A of the Code and related
Department of Treasury guidance, you and the Company shall cooperate in good faith and shall take
such reasonable actions as may be necessary or appropriate to comply with the requirements of
Section 409A of the Code and related Department of Treasury guidance. You and the Company
acknowledge and agree that, to the extent provided by the Merger Agreement, the conversion of your
Options pursuant to Section 2.4 of the Merger Agreement may be adjusted as necessary or appropriate
to comply with Section 409A of the Code and to preserve the intended tax treatment of the Options.

5. 280G Excise Tax Gross-Up

     (a) If it is determined by the nationally recognized United States public accounting firm used
by the Company immediately prior to any Change of Control (or such other nationally recognized
United States public accounting firm as may be agreed to in writing by you and the Company) (the
“Auditors”) that any payment or benefit made or provided to you in connection with this
Letter Agreement or otherwise (including without limitation any Option or other equity compensation
award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by
Section 4999 of the Code (the “Parachute Tax”), then the Company shall pay to you, prior to
the time the Parachute Tax is payable with respect to such Payment, an additional payment (a
“Gross-Up Payment”) in an amount such that, after you pay all taxes (including any Parachute
Tax) imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to the
Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by
the Auditors, subject

 

 

to adjustment, as necessary, as a result of any Internal Revenue Service position. For
purposes of making the calculations required by this Letter Agreement, the Auditors may make
reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of Sections 280G and 4999 of the Code,
provided that the Auditors’ determinations must be made with substantial authority (within the
meaning of Section 6662 of the Code). To the extent that the Company obtains a written opinion
from the Auditors with respect to Parachute Tax issues, the Company shall direct the Auditors to
extend such opinion to you (to the extent that such extension is permitted by the Auditors).

     (b) The federal tax returns filed by you (and any filing made by a consolidated tax group
which includes the Company) shall be prepared and filed on a basis consistent with the
determination of the Auditors with respect to the Parachute Tax payable by you. You shall make
proper payment of the amount of any Parachute Tax based on such determination, and at the request
of the Company, provide to the Company true and correct copies (with any amendments) of your
federal income tax return as filed with the Internal Revenue Service, and such other documents
reasonably requested by the Company, evidencing such payment, provided that any information
unrelated to the Parachute Tax may be deleted from the copies of the returns and documents
delivered to the Company. If, after the Company’s payment to you of the Gross-Up Payment, the
Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or
increased, or a determination is made by the Internal Revenue Service that would make the prior
Gross-Up Payment amount not accurate, then within ten (10) business days of such determination, you
shall pay to the Company the amount of any such reduction, or the Company shall pay to you the
amount of any such increase; provided, however, that in no event shall you have any such refund
obligation if it is determined by the Company that to do so would be a violation of the
Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if
you have prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due
only to the extent that a refund of such amount is received by you; and provided, further, that (i)
the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for
services rendered, in connection with the Auditors’ determination of the Parachute Tax or any
challenge by the Internal Revenue Service or other taxing authority relating to such determination
shall be paid by the Company and (ii) the Company shall indemnify and hold you harmless on an
after-tax basis for any interest and penalties imposed upon you to the extent that such interest
and penalties are related to the Auditors’ determination of the Parachute Tax or the Gross-Up
Payment. Notwithstanding anything to the contrary herein, your rights under this Paragraph 5 shall
survive the termination of your employment for any reason and the termination or expiration of this
Letter Agreement for any reason.

     6. Employment and Option Agreements. You and the Company acknowledge and agree that,
except as provided by this Letter Agreement, the Employment Agreement and the Option Agreements
shall remain in full force and effect.

     7. Further Assurances. You and the Company agree to execute and deliver such other
documents, certificates, agreements and other writings and to take such other actions as may be
necessary or desirable in order to consummate or implement expeditiously the terms of this Letter
Agreement.

[signature page follows]

 

 

     Please indicate your acceptance of the terms and provisions of this Letter Agreement by
signing both copies of this Letter Agreement and returning one copy to me. The other copy is for
your files. By signing below, you acknowledge and agree that you have carefully read this Letter
Agreement in its entirety; fully understand and agree to its terms and provisions; and intend and
agree that it be final and legally binding on you and the Company. This Letter Agreement shall be
governed and construed under the internal laws of the State of Delaware and may be executed in
several counterparts.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/  SCOTT BONTEMPO
 	 
	 	Name:  	Scott Bontempo 	 
	 	Title:  	Senior Vice President, Human Resources 	 
	 

Agreed and Accepted:

/s/ GEORGE BURNETT          

George Burnett

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