Document:

Exhibit 10.2

 

AQUAVENTURE HOLDINGS LLC

 

A DELAWARE LIMITED LIABILITY COMPANY

 

EQUITY INCENTIVE PLAN EXHIBIT

 

This Amended and Restated Equity Incentive Plan (the “Plan”) is hereby approved and adopted by the Members of AquaVenture Holdings LLC, a Delaware limited liability company (the “Company”), as of October 27, 2014.  Capitalized terms used but not defined herein shall have the meaning ascribed to them in the limited liability agreement of the Company, as such agreement may be amended from time to time (the “LLC Agreement”).

 

1.                                      Purpose.  This Equity Incentive Plan of the Company is intended to provide incentives to Managers and Officers of the Company, the officers, employees, directors and consultants (including prospective consultants and employees) of the Company and its Subsidiaries and other individuals as determined by the Board of Managers of the Company (the “Board”) by providing such persons with awards of Shares in the Company denominated as Incentive Common Shares (the “Incentive Shares”), Management Incentive Plan Shares (the “MIP Shares”), Class B Shares (“Class B Shares”) of the Company or of options to acquire Ordinary Common Shares of the Company (the “Ordinary Shares”), Class B Shares or Incentive Shares (“Options”), the rights, preferences, limitations, obligations, and liabilities of which are governed by the LLC Agreement and the letter agreement, option agreement or employment agreement or letter relating to each award (the “Award Letter”) and this Plan.  If the terms of this Plan or any Award Letter conflict in any way with the provisions of the LLC Agreement, the LLC Agreement shall govern.  The terms of this Plan or any Award Letter shall not be deemed in conflict or inconsistent with the provisions of the LLC Agreement merely because they impose greater or additional restrictions, obligations or duties, or if the provisions of the Plan or Award Letter state that such Plan or Award Letter terms apply notwithstanding provisions to the contrary in the LLC Agreement.

 

2.                                      Administration of the Plan.

 

A.                                    Board or Committee Administration.  The Plan shall be administered by the Board or by a “compensation committee” appointed by the Board (the “Committee”).  Hereinafter, all references in this Plan to the “Committee” shall mean the Board if no Committee has been appointed.  Subject to the terms of the Plan, the Committee shall have the authority to (i) determine to whom among the eligible Participants (as defined below) MIP Shares, Incentive Shares, Class B Shares and/or Options may be awarded; (ii) determine the number of MIP Shares, Incentive Shares, Class B Shares and/or Options, and the type of Shares to be subject to an Option, to be awarded; (iii) determine the time or times at which MIP Shares, Incentive Shares, Class B Shares and/or Options shall be awarded; (iv) determine the Strike Price or the purchase or exercise price of MIP Shares, Incentive Shares, Class B Shares and/or Options (if any) and the method of payment of the purchase or exercise price (if applicable); (v) determine the time or times when MIP Shares, Incentive Shares, Class B Shares and/or Options shall become vested and the duration of the vesting period; (vi) determine whether restrictions such as repurchase options are to be imposed on MIP Shares, Incentive Shares, Class B Shares and/or

 

 

Options and the nature of such restrictions, if any; (vii) determine any and all other terms and conditions with respect to awards not inconsistent with the LLC Agreement or this Plan; and (viii) interpret the Plan and prescribe and rescind rules and regulations relating to it.  The interpretation and construction by the Committee of any provisions of the Plan, any Award Letter, and the LLC Agreement with respect to any MIP Shares, Incentive Shares, Class B Shares or Options awarded under this Plan shall be final unless otherwise determined by the Board.  The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem advisable.  No member of the Committee shall be liable for any action, omission or determination made in good faith with respect to the Plan or any MIP Shares, Incentive Shares, Class B Shares and/or Options awarded under it.

 

B.                                    Committee Actions.  The Committee may select one of its members as its chairman, and shall hold meetings at such time and places as it may determine.  A majority of the Committee shall constitute a quorum and acts by a majority of the members of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee shall constitute the valid acts of the Committee.

 

C.                                    Delegation of Committee Authority.  The Committee may at any time and from time to time authorize by written resolution one or more of the Company’s Managers or Officers to award MIP Shares, Incentive Shares, Class B Shares and/or Options to particular eligible Participants within such parameters as shall be specified in such resolution, and the action taken by such authorized persons shall for all purposes be deemed action by the Committee hereunder.

 

3.                                      Eligible Participants.  MIP Shares, Incentive Shares, Class B Shares and Options may be awarded to any Manager or Officer of the Company, any officer, employee, director and consultant (including any prospective consultant and employee) of the Company or any of its Subsidiaries and any other individual as determined by the Board (the “Participants”).  The Committee may take into consideration a recipient’s individual circumstances in determining whether to award MIP Shares, Incentive Shares, Class B Shares or an Option.  The awarding of any MIP Shares, Incentive Shares, Class B Shares or Option to any individual shall neither entitle such person to, nor disqualify such person from, participation in any other grant of MIP Shares, Incentive Shares, Class B Shares or Options.

 

4.                                      Shares Under the Plan.  The MIP Shares, Incentive Shares, Class B Shares and Ordinary Shares issuable as contemplated by this Plan shall be authorized but unissued MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares of the Company or MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares reacquired by the Company in any manner.  The aggregate number of Common Shares that may be issued and outstanding at any given time pursuant to this Plan is 10,668,814 (which may consist of either Incentive Shares or Ordinary Shares as determined by the Committee from time to time), the aggregate number of Class B Shares that may be issued and outstanding at any given time pursuant to this Plan is 6,000,000  and the aggregate number of MIP Shares that may be issued and outstanding at any given time pursuant to this Plan is 7,900,000, in each case subject to adjustment as provided in paragraph 10 of the Plan and subject, in all cases, to the LLC Agreement.  If any MIP Share, Incentive Share, Class B Shares or Ordinary Share or Option awarded under this Plan shall be forfeited for any reason without having been vested or shall be repurchased by the Company, such MIP Share,

 

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Incentive Share, Class B Shares or Ordinary Share subject to an award shall again be available for awards under the Plan.

 

5.                                      Vesting of Shares.  Each MIP Share, Incentive Share, Class B Share or Option awarded under the Plan shall become vested as follows:

 

A.                                    Vesting.  Each MIP Share, Incentive Share, Class B Share or Option shall either be fully vested on the date of award or shall become vested thereafter in such amounts and under such circumstances as the Committee shall determine and as shall be specified in the Award Letter. The Committee shall determine any maximum vesting period.

 

B.                                    Full Vesting of Installments.  Once a MIP Share, Incentive Share, Class B Share or Option becomes vested pursuant to the terms of the relevant Award Letter it shall remain vested unless otherwise specified by the Committee and set forth in the Award Letter, subject to any right the Company may have to repurchase such vested MIP Share, Incentive Share, Class B Share or Option if the Participant’s Business Relationship (as defined below) is terminated.

 

C.                                    Acceleration or Waiver of Vesting.  The Committee shall have the right to accelerate the date that any MIP Share, Incentive Share or Option becomes vested or waive vesting requirements, in whole or in part, in any Award Letter for any reason or for no reason in the sole discretion of the Committee.

 

6.                                      Termination of Business Relationship.  Each Award Letter may provide that the MIP Shares, Incentive Shares, Class B Shares or Options awarded thereby shall be forfeited before their stated vesting dates, upon terms specified by the Committee, if the Participant ceases to be a Manager or Officer of the Company, an officer, employee, director or consultant of the Company or any of its Subsidiaries or to have any other qualifying business relationship with the Company or any of its Subsidiaries as determined by the Board (such relationship hereinafter referred to as a “Business Relationship”), or if the Participant otherwise fails to satisfy vesting requirements with respect to MIP Shares or Incentive Shares, Class B Shares awarded under this Plan or a specific Award.  Nothing in the Plan or in any Award Letter shall be deemed to give any Participant the right to continue his or her Business Relationship for any period of time.

 

7.                                      Cause; Constructive Termination; Resignation; Death; Disability.

 

A.                                    Cause.  Except as otherwise set forth in an Award Letter, “Cause” for purposes of the Plan shall mean (i) a willful and material breach of any obligations under any employment agreement or other contract with the Company or its Subsidiaries or Affiliates, (ii) fraud or dishonesty, (iii) competition with the Company or its Subsidiaries or Affiliates in violation of any noncompetition or nonsolicitation obligation to the Company or any of its Subsidiaries or Affiliates, (iv) unauthorized use of any trade secrets or confidential information of the Company or its Subsidiaries or Affiliates or any breach of any obligations to the Company or any of its Subsidiaries or Affiliates with respect to trade secrets or confidential information, or (v) continued substantial neglect by such Participant. “Substantial Neglect” shall mean the Participant’s failure to attend to duties assigned to him and which are customary to Participant’s position and material to the successful operation of the business of the Company or its

 

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Subsidiaries or Affiliates, if such failure to attend to such assigned duties continues for 30 days after written notice to Participant specifying in reasonable detail the duties being substantially neglected by the Participant, provided no further notice is needed for additional substantial neglect. “Fraud” or “dishonesty” as used in this paragraph means intentional and willful deception of a material and significant nature.  No act, or failure to act, by a Participant shall be considered “willful” if done, or omitted to be done, by him in good faith and in the reasonable belief that his act or omission was in the best interest of the Company and its Subsidiaries and/or required by applicable law.

 

B.                                    Cessation of Business Relationship.  If a Participant’s Business Relationship is terminated for any reason, unless otherwise specified by the Committee, then the Participant shall forfeit all of his unvested MIP Shares, Incentive Shares, Class B Shares and Options for no consideration as of the date of the termination of such Participant’s Business Relationship, and the Company shall have the right, but not the obligation, to purchase all of the Participant’s vested MIP Shares, Incentive Shares, Class B Shares and any Incentive Shares, Class B Shares or Ordinary Shares received upon exercise of a vested Option, at their fair market value determined as of the date of the termination of such Participant’s Business Relationship, as determined pursuant to paragraph 14 of this Plan, which right may be exercised at any time after the effective date of such Termination until the later of (i) sixty (60) days thereafter and (ii) seven (7) months after the last issuance or vesting of such Incentive Shares, Class B Shares or Options, and which purchase shall occur within thirty (30) days after the exercise.

 

8.                                      Transferability.  The MIP Shares, Incentive Shares, Class B Shares and Ordinary Shares awarded or issued as contemplated by this Plan shall not be transferable except as permitted under the LLC Agreement.  Options shall not be transferable.

 

9.                                      Terms and Conditions of Awards.  All awards of MIP Shares, Incentive Shares, Class B Shares and Options under this Plan shall be evidenced by Award Letters (which need not be identical) signed by the Company, and the individual receiving the award in such form or forms as the Committee may from time to time approve.  Such Award Letters shall conform to the terms and conditions of this Plan and may contain such other provisions as the Committee deems advisable which are not inconsistent with the Plan or the LLC Agreement.  Such Award Letters shall contain a requirement that the recipient of any MIP Shares, Incentive Shares, Class B Shares or Options shall execute and become a party to the LLC Agreement by the execution of a Joinder Agreement.  The Committee may from time to time confer authority and responsibility on one or more of its own members and/or one or more Managers or Officers of the Company to execute and deliver such Award Letters.  The proper Managers or Officers are authorized and directed to take any and all action necessary or advisable from time to time to carry out the terms of such Award Letters.  MIP Shares, Incentive Shares, Class B Shares and Options may be awarded under the Plan at any time on or after the date hereof pursuant to an Award Letter in such form as approved by the Committee.  The date of award of MIP Shares, Incentive Shares, Class B Shares or Options under the Plan will be the date specified in the Award Letter; provided, however, that such date shall not be prior to the date on which the Committee acts to approve the award.

 

10.                               Adjustments.  All of the MIP Share, Incentive Share, Class B Shares and Ordinary Share numbers set forth in the Plan reflect the capital structure of the Company on the

 

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Effective Date. Upon the occurrence of any of the following events, a Participant’s rights with respect to MIP Shares, Incentive Shares, Class B Shares, Ordinary Shares and/or Options awarded to such Participant hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in the Award Letter relating to such MIP Shares, Incentive Shares, Class B Shares, Ordinary Shares and/or Options and subject to the LLC Agreement:

 

A.                                    Splits.  If the MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares shall be subdivided or combined into a greater or smaller number of MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares, respectively, the number of MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares, respectively, subject to an award hereunder, the purchase or exercise price therefor referred to in Section 2(A) of the Plan and any repurchase price under Section 7(B) of the Plan (to the extent such repurchase price has been determined prior to such subdivision, combination or distribution) shall each be appropriately increased or decreased proportionately.

 

B.                                    Issuances of Shares and Options.  Except as expressly provided herein and in the LLC Agreement, no issuance by the Company of equity or debt instruments of any class shall affect, and no adjustment by reason thereof shall be made with respect to, the number of MIP Shares, Incentive Shares or Class B Shares awarded to any Participant or Incentive Shares or Ordinary Shares subject to Options.

 

C.                                    Fractional Shares.  No fractional MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares shall be issued under the Plan (but fractional MIP Shares, Incentive Shares, Class B Shares, Ordinary Shares or Options to purchase Incentive Shares, Class B Shares or Ordinary Shares may become vested pursuant to a percentage vesting schedule).

 

D.                                    Increase in Authorized Shares.  Upon the happening of any of the events described in subparagraph A above, the aggregate number of Incentive Shares, Class B Shares or Ordinary Shares set forth in Section 4 of the Plan which previously have been or subsequently may be awarded under the Plan shall also be appropriately adjusted to reflect the events described in such subparagraph.  The Committee shall determine the specific adjustment to be made under this paragraph 10 and its determination shall be conclusive.

 

E.                                     Consequences of a Merger or Consolidation.  In connection with the merger or consolidation of the Company into or with a corporation or other Person pursuant to which securities or other consideration are (or are to be) issued or delivered with respect to the outstanding Shares, the Board or the board of directors of the surviving or acquiring Person (as used in this Section 10.E, also the “Board”) shall, as to outstanding Awards (on the same basis or on different bases as the Board shall specify), make appropriate provision for either (i) the continuation of such Awards by the Company or (ii) the assumption of such Awards by the surviving or resulting corporation or Person (or the ultimate parent corporation or Person of the surviving or resulting corporation or Person, if the surviving or resulting corporation or Person is a subsidiary of another corporation or Person) and by substituting on an equitable basis for the shares then subject to such Awards (A) the consideration payable with respect to the outstanding Shares of the same class or series (for Shares with a Strike Price, after taking into account the Strike Price) in connection with such merger or consolidation, (B) equity securities or shares of capital stock of the surviving or resulting corporation or Person (or the ultimate parent

 

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corporation or Person of the surviving or resulting corporation or Person, if the surviving or resulting corporation or Person is a subsidiary of another corporation or Person) or (C) such other securities or other consideration as the Board deems appropriate, the fair market value of which (as determined by the Board in its sole and absolute discretion) shall not materially differ from the fair market value of the Shares subject to such Awards immediately preceding the consummation of such merger or consolidation.  In addition to or in lieu of the foregoing, with respect to outstanding Options, the Board may (on the same basis or on different bases as the Board shall specify), upon written notice to the affected Holders, provide that (x) one or more Options then outstanding must be exercised, in whole or in part, within a specified number of days of the date of such notice, at the end of which period such Options shall terminate, (y) one or more Options then outstanding, in whole or in part, shall be terminated in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole and absolute discretion) for the Shares subject to such Options over the exercise price thereof, or (z) with respect to any Option then outstanding with an exercise price equal to or more than the fair market value (as determined by the Board in its sole discretion) of the Shares subject to such Option, such Option shall be terminated immediately prior to or upon the effectiveness of such merger or consolidation without the payment of any consideration.  Unless otherwise determined by the Board (on the same basis or on different bases as the Board shall specify), any repurchase rights or other rights of the Company that relate to an Option or other Award shall continue to apply to consideration, including cash, that has been substituted, assumed or amended for an Option pursuant to this Section 10.E. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions.

 

F.                                      Dissolution.  In the event of the proposed dissolution of the Company, the Board shall notify each holder of an Option as soon as practicable prior to the effective date of such dissolution. To the extent it has not been previously exercised, an Option will terminate immediately prior to the dissolution of the Company.  In lieu of the foregoing, with respect to outstanding Options, the Board may (on the same basis or on different bases as the Board shall specify), upon written notice to the affected Participants, provide that one or more Options then outstanding, in whole or in part, shall be terminated in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole discretion) for the Shares subject to such Options over the exercise price thereof.

 

G.                                    Amendment of Awards.  The Committee may amend, modify or terminate any outstanding Award, including (but not limited to) substituting therefor another Award of the same or a different type, and changing the date of exercise or realization, provided that the applicable Participant’s consent to such action shall be required unless the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant. The Plan and the LLC Agreement may be amended as specified herein or therein, which amendments may not require the consent of any Participant but shall be binding on all Participants and shall apply to and amend each Award to the extent applicable even without the consent of the Participant receiving such Award, provided that the applicable Participant’s consent to such amendment of such Participant’s Award  (but not the Plan or the LLC Agreement) shall be required unless the Committee determines that the amendment, taking into account any related action, would not materially and adversely affect the Participant’s Award.

 

11.                               Amendment of Plan.  Subject to the provisions of the LLC Agreement, the

 

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Board may terminate or amend the Plan in any respect at any time.

 

12.                               Application of Funds.  The proceeds received by the Company, if any, from the sale of MIP Shares or Incentive Shares, Class B Shares awarded under the Plan or the exercise of Options shall be used by the Company for general purposes.

 

13.                               Withholding of Income Taxes.  Upon the award of MIP Shares, Incentive Shares, Class B Shares or Options, the vesting or transfer of restricted MIP Shares, Incentive Shares, Class B Shares or Options, or the making of a distribution or other payment with respect to such MIP Shares, Incentive Shares, Class B Shares, Ordinary Shares or Options, the Company may withhold taxes in respect of amounts that the Committee, in its discretion, determines constitute compensation includible in gross income.  The Committee in its discretion may condition (i) the award of a MIP Share, Incentive Share, Class B Share or Option or (ii) the vesting or transferability of MIP Shares, Incentive Shares, Class B Shares, Ordinary Shares or Options, on the Participant’s making satisfactory arrangement for such withholding.  Such arrangement may include payment by the Participant in cash or by check of the amount of the withholding taxes or, at the discretion of the Committee, by the Participant’s delivery of previously held MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares having an aggregate fair market value equal to the amount of such withholding taxes.

 

14.                               Determination of Fair Market Value.  The Committee, in its reasonable discretion, shall determine the fair market value of MIP Shares, Incentive Shares, Class B Shares or Ordinary Shares whenever it is necessary or desirable to determine such fair market value.

 

15.                               Definition of Sale Event. For purposes of the Plan and any Awards issued pursuant to the Plan, “Sale Event” shall mean any of the following events, unless the holders of at least fifty-nine percent (59%) of the then outstanding Class A Preferred Shares, given in writing or by vote at a meeting, consenting or voting (as the case may be) as a separate class, elect otherwise by written notice given to the Company prior to the effective date of any such event:

 

A.                                    a merger or consolidation in which (i) the Company is a constituent party or (ii) a Subsidiary of the Company is a constituent party and the Company issues its equity securities pursuant to such merger or consolidation;

 

B.                                    the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Company or any Subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole; or

 

C.                                    the sale, exchange or transfer by the Members, in a single transaction or series of related transactions, of then outstanding equity securities of the Company representing a majority of the voting power of the Company to a person or “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,

 

except (1) a merger or consolidation effected solely to change the Company’s domicile, or (2) any such (x) merger or consolidation, (y) sale, lease, transfer or other disposition of assets, or (z) sale, exchange or transfer of equity securities of the Company in which holders of equity securities of the Company immediately before such transaction shall, after such transaction, own

 

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a majority of the outstanding equity securities of, or have sufficient voting power (by virtue of number of votes and/or special voting rights) to elect a majority of the members of the board of directors or other similar governing body of, (m) the surviving or resulting person in such a merger or consolidation or the person that acquires, leases or receives such assets or equity securities, or (n) if the surviving or resulting person in such a merger or consolidation or the person that acquires, leases or receives such assets or equity securities is wholly owned or controlled by another person immediately following such transaction, the ultimate parent of, or other person controlling, such surviving or resulting person in such a merger or consolidation or the person that acquires, leases or receives such assets or equity securities (provided that, for the purpose of this definition, all Common Shares issuable upon exercise of Options outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding Common Shares are converted or exchanged).  Notwithstanding the foregoing, (i) no transaction involving the Company or any of its direct or indirect subsidiaries, on the one hand, and Element Partners, any affiliate or portfolio company of Element Partners or investment funds it manages or operates, or any of its or their direct or indirect subsidiaries, on the other, shall be considered a Sale Event; (ii) the Company’s initial public offering, any subsequent public offering or any other transaction or series of transactions principally for bona fide equity or debt financing purposes shall not constitute a Sale Event; and (iii) if a direct or indirect Subsidiary of the Company completes an initial public offering of its equity securities, the subsequent distribution(s) in accordance with this Agreement of equity securities of such Subsidiary shall not constitute a Sale Event.

 

16.                               Section 409A Awards.  To the extent that any award of MIP Shares, Incentive Shares, Class B Shares or Options under this Plan is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (“Section 409A” and any such award, a “409A Award”), such award shall be subject to such additional rules and requirements as may be specified by the Committee from time to time.  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 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 months and one 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.  The Company makes no representation or warranty and shall have no liability to any grantee under the Plan or any other person with respect to any penalties or taxes under Section 409A that are, or may be, imposed with respect to any award under this Plan.

 

17.                               Governmental Regulation.  The Company’s obligation to sell and deliver Incentive Shares, Class B Shares, Ordinary Shares or Options under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such Incentive Shares, Class B Shares, Ordinary Shares or Options.  Government regulations may impose reporting or other obligations on the Company with respect to the Plan.  For example, the Company may be required to file tax information returns reporting the income received by Participants in connection with the Plan.

 

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18.                               Governing Law.  The validity and construction of the Plan and the Award Letter evidencing Awards of MIP Shares, Incentive Shares, Class B Shares, Ordinary Shares or Options shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof.

 

19.                               DISPUTE RESOLUTION; CONSENT TO JURISDICTION.  ALL DISPUTES BETWEEN OR AMONG ANY PERSONS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS PLAN, ANY AWARD LETTER OR ANY AWARD OF INCENTIVE SHARES, CLASS B SHARES OR OPTIONS UNDER THIS PLAN (INCLUDING ANY INTERPRETATION OF THE LLC AGREEMENT AS IT PERTAINS TO THE INCENTIVE SHARES, CLASS B SHARES AND OPTIONS AWARDED UNDER THIS PLAN) SHALL BE SOLELY AND FINALLY SETTLED BY THE COMMITTEE, THE DETERMINATION OF WHICH SHALL BE FINAL.  ANY MATTERS NOT COVERED BY THE PRECEDING SENTENCE, BUT WHICH ARISE UNDER THE LLC AGREEMENT SHALL BE SOLELY AND FINALLY SETTLED IN ACCORDANCE WITH THE DISPUTE RESOLUTION EXHIBIT TO THE LLC AGREEMENT.

 

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AQUAVENTURE HOLDINGS LLC

 

OPTION AWARD LETTER

 

[NAME]

[ADDRESS]

 

Re:                             Award of Option to Purchase [NUMBER] [TYPE] shares to [NAME] (“Recipient”) Awarded on [DATE] (the “Award Date”)

 

Dear Mr./Ms. [NAME]:

 

I am pleased to inform you that the Board of Managers of AquaVenture Holdings LLC, a Delaware limited liability company (the “Company”), has awarded you an Option to purchase that number of [TYPE] Shares set forth above for an exercise price of $[       ] per Share (the “Exercise Price”) in consideration of the services to be rendered by you to the Company and its Subsidiaries and of any other agreements and covenants, including any covenants not to compete, entered into by you with the Company and its Subsidiaries.  The commencement date for purposes of vesting of the Options shall be the Award Date (the “Commencement Date”).  The purpose of this award is to give you the opportunity to share in the long-term success of the Company.

 

The Option is subject in all respects to the provisions of this Award Letter, which includes the attached terms and conditions which set forth (among other things) certain vesting requirements, the Equity Incentive Plan of the Company, as amended from time to time, and the Fourth Amended and Restated Limited Liability Company Agreement of the Company, as amended from time to time (the “LLC Agreement”), a copy of each of which has been provided to you.  As a condition to your receipt of the Option, you agree to become a Member of the Company before or contemporaneously with exercising the Option and agree to be bound by the terms of the LLC Agreement by executing the Joinder Agreement attached hereto, and to execute and deliver to the Company an Acknowledgement in the form provided to you separately.

 

Also enclosed you will find an extra copy of this Award Letter. Please sign both copies of this Award Letter and date and return one completed copy to AquaVenture Holdings LLC, c/o Lee Muller, 14400 Carlson Circle, Tampa, FL 33626 in the enclosed envelope.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

 

 

	
 
    	
AQUAVENTURE   HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Douglas R. Brown
    
	
 
    	
 
    	
Title: Chief Executive Officer
    

 

Accepted and agreed by the undersigned this     day of                  ,          :

 

	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    	
 
    
			

 

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AQUAVENTURE HOLDINGS LLC

 

TERMS AND CONDITIONS FOR EQUITY INCENTIVE PLAN OPTION

 

1.                                      Option Grant Under Equity Incentive Plan of AquaVenture Holdings LLC.  This award (the “Award”) of an Option is made to Recipient named in the Award Letter to which these Terms and Conditions are attached and is made pursuant to and is governed by the Company’s Equity Incentive Plan, as amended from time to time (the “Plan”), the Award Letter (which includes these Terms and Conditions), and the Fourth Amended and Restated Limited Liability Company Agreement of the Company, as amended from time to time (the “LLC Agreement”).  The Option shall be exercisable to purchase up to the number and type of Shares (the “Award Shares”) set forth in the Award Letter at the per share Exercise Price set forth in the Award Letter in accordance with the terms and conditions set forth in the Plan and the Award Letter until the date ten years after the Award Date set forth in the Award Letter, or such earlier date as is specified herein (the “Expiration Date”).  The Option is not intended to qualify as an “incentive stock option” as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”).  Capitalized terms not defined herein, but used herein shall have the meaning assigned such terms in the LLC Agreement.  Determinations made in connection with this Award shall be governed by the Plan.  To the extent that these Terms and Conditions modify the provisions of the Plan, these Terms and Conditions shall control.

 

2.                                      Other Awards.  This Award of the Option is in addition to any other Shares or Options heretofore or hereafter awarded to Recipient by the Company, but a duplicate original of this Award Letter shall not result in the award of additional Options.

 

3.                                      Exercisability & Vesting of Award Shares if Business Relationship Continues.

 

(a)                                 No portion of the Option may be exercised until such portion shall have vested.  Subject to the terms hereof, including the forfeiture and repurchase provisions of paragraph 4, if Recipient has continued to serve the Company or one or more direct or indirect subsidiaries of the Company (collectively, the “Company Group”) as a result of Recipient’s Business Relationship from the Commencement Date set forth in the Award Letter (the “Commencement Date”) through the vesting dates set forth under the heading “Vesting Dates” in the table below, the Option shall become exercisable and vested with respect to the number of Award Shares set forth opposite the date under the heading “Award Shares Vested” in the table below (each number represents the additional number of the Award Shares which will become exercisable and vested as of the applicable date).

 

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Vesting Dates
    	
 
    	
Award Shares Vested
    
	
 
    	
 
    	
 
    
	
Before the first anniversary of Commencement Date
    	
 
    	
0% of the Award Shares
    
	
 
    	
 
    	
 
    
	
On the first anniversary of Commencement Date
    	
 
    	
25% of the Award Shares
    
	
 
    	
 
    	
 
    
	
On the last day of each of the next 12 three-month   periods following the first anniversary of Commencement Date
    	
 
    	
6.25% of the Award   Shares
    

 

Notwithstanding any other provision hereof or of the Plan, no portion of the Option shall be exercisable after the Expiration Date.

 

(b)                                 In addition, all then unvested Award Shares shall vest in full immediately prior to the occurrence of a Sale Event (as defined in Section 15 of the Plan) that occurs before the termination of Recipient’s Business Relationship.

 

(c)                                  In addition, subject to the terms hereof (including the forfeiture and repurchase provisions of paragraph 6), the vesting of the Award Shares shall be accelerated as provided in a written employment agreement or letter between the Company or any Subsidiary and Recipient.

 

4.                                      Exercise of Stock Option.

 

(a)                                 Recipient may exercise the Option by delivering an Option exercise notice (an “Exercise Notice”) in the form of Appendix A hereto indicating Recipient’s election to purchase some or all of the Award Shares with respect to which the Option is exercisable at the time of such notice.  Such notice shall specify the number of Award Shares to be purchased.  Payment of the purchase price may be made by one or more of the following methods:

 

(i)                                     in cash, by certified or bank check or other instrument acceptable to the Committee in U.S. funds payable to the order of the Company in an amount equal to the purchase price of such Award Shares being purchased; or

 

(ii)                                  if the initial public offering of equity securities of any member of the Company Group has occurred, by Recipient 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 to pay the purchase price; provided that in the event Recipient chooses to pay the purchase price as so provided, Recipient and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of such payment procedure.

 

Payment instruments will be received subject to collection.

 

(b)                                 Certificates for the Award Shares so purchased will be issued and delivered to Recipient upon compliance to the satisfaction of the Committee with all requirements under this Award Letter, the LLC Agreement and applicable laws or regulations in

 

2

 

connection with such issuance.  Until Recipient shall have complied with the requirements hereof and of the LLC Agreement, the Plan and applicable laws and regulations, the Company shall be under no obligation to issue the Award Shares subject to the Option, and the determination of the Committee as to such compliance shall be final and binding on Recipient.  Recipient shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Shares subject to the Option unless and until the Option shall have been exercised pursuant to the terms hereof, the Company shall have issued and delivered the Award Shares to Recipient, Recipient shall have been admitted as a Member (as defined in the LLC Agreement) of the Company, and Recipient’s name shall have been entered as a member or stockholder of record on the books of the Company.

 

5.                                      Termination.  Except as may otherwise be provided by the Committee, if the Recipient’s Business Relationship is terminated, the period within which to exercise the Option will be subject to earlier termination as set forth below (and if not exercised within such period, shall thereafter terminate):

 

(i)                                     Termination Due to Death or Disability.  If the Recipient’s Business Relationship terminates by reason of such Recipient’s death or disability (as defined in Section 422(c) of the Code), the Option may be exercised, to the extent exercisable on the date of such termination, by the Recipient or the Recipient’s legal representative or legatee until the earlier of the date 180 days after such termination, or the Expiration Date.

 

(ii)                                  Other Termination.  If the Recipient’s Business Relationship terminates for any reason other than death or disability (as defined in Section 422(c) of the Code), and unless otherwise determined by the Committee, the Option may be exercised, to the extent exercisable on the date of termination, until the earlier of the date 90 days after the date of such termination or the Expiration Date; provided, however, that, if the Recipient’s Business Relationship is terminated for Cause, the Option shall terminate immediately upon the date of such termination.

 

For purposes hereof, the Committee’s determination of the reason for termination of the Recipient’s Business Relationship shall be conclusive and binding on the Recipient and the Recipient’s representatives or legatees.  Any portion of the Option that is not exercisable on the date of termination of the Recipient’s Business Relationship shall terminate immediately and be null and void.

 

6.                                      Repurchase or Forfeiture of Award Shares Upon Termination of Business Relationship.

 

(a)                                 Repurchase or Forfeiture upon Termination.  Except as may otherwise be provided in a written employment agreement or letter between the Company or any Subsidiary and Recipient, if Recipient’s Business Relationship with the Company Group is terminated (the “Termination”), the Company shall have the right, but not the obligation, to purchase the vested Award Shares (the “Repurchase Securities”) as set forth in this Section 4.

 

(b)                                 Repurchase Rights.  The Company may elect to purchase all or any portion of the Repurchase Securities by notifying the holder of the Repurchase Securities (the

 

3

 

“Repurchase Notice”) at any time after the effective date of such Termination until the later of (i) sixty (60) days thereafter and (ii) seven (7) months after the last issuance or vesting of any of the Repurchase Securities.  The Repurchase Notice will set forth the number of such Repurchase Securities to be acquired, the aggregate consideration to be paid for such Repurchase Securities and the time and place for the closing of the transaction, in each case, as provided for in this Section 4.

 

(c)                                  Repurchase Price.  The purchase price for the Repurchase Securities shall be the fair market value of the Repurchase Securities as of the effective date of Termination.  Fair market value shall be determined by the Board in good faith without taking into account any applicable minority interest or liquidity discount.  Any disagreement regarding the fair market value of the Repurchase Securities shall be resolved in accordance with Exhibit I to the LLC Agreement.

 

(d)                                 Procedures.  The Committee shall determine the procedures as are necessary to permit the Company to exercise its rights under this Section 4.  The Company will pay the purchase price for the Repurchase Securities by payment of consideration in cash.  Recipient will be required to make representations and warranties to the effect that Recipient has good and marketable title to the Repurchase Securities, free and clear of all liens, claims and other encumbrances.  The closing of the acquisition of any Repurchase Securities shall occur no later than thirty (30) days following the date the Repurchase Notice is received by the seller.

 

(e)                                  Repurchase Subject to the Act.  Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Award Shares by the Company shall be subject to applicable restrictions contained in the Act.

 

7.                                      Absence of Conflicting Agreements and Obligations. Recipient represents and warrants that he is not a party to or bound by any other agreement or understanding of any type, whether written or oral, or by any statutory or common law duty or obligation which, in any case, would in any way restrict his ability to be employed by the Company Group, or hold ownership interests in the Company or his ability to compete freely with other Persons.

 

8.                                      Illiquidity; Conversion; Restrictions on Transfer. There is no market for the Award Shares and no assurance that a market for the Award Shares will develop.

 

Pursuant to the LLC Agreement, the Committee may determine the consideration received by the Members as a result of a merger, consolidation, incorporation or other business combination. Without limiting any of the parties’ rights under Exhibit I of the LLC Agreement, Recipient shall have no statutory dissenter’s rights or appraisal rights with respect to such a transaction as a result of holding the Award Shares. The Company is under no obligation to register the Award Shares or any securities received with respect to the Award Shares. If the Company is converted to a corporation, the Award Shares shall be converted to common stock of the new corporation on the basis determined by the Committee.

 

The Award Letter and the Options evidenced by the Award Letter are personal to Recipient and are not transferable by Recipient in any manner other than by will or by the laws of descent and distribution.  The Option may be exercised during Recipient’s lifetime

 

4

 

only by the Recipient (or by Recipient’s legal representative or guardian in the event of Recipient’s incapacity).  Recipient may elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company, and may revoke or change such designation at any time by filing written notice of revocation or change with the Company; and any such beneficiary may exercise Recipient’s Option in the event of Recipient’s death to the extent provided herein.  If Recipient does not designate a beneficiary, or if the designated beneficiary predeceases Recipient, the legal representative of Recipient may exercise this Option in the event of Recipient’s death to the extent provided herein.

 

The Award Shares are not transferable without the prior written consent of the Committee. Furthermore, any transfer must comply with all federal and state securities laws or an exemption therefrom. In addition, even if a transfer is permitted, the Award Shares awarded hereunder that are transferred shall continue to be subject to this Award Letter, the Plan and the LLC Agreement, including the vesting requirements and repurchase rights set forth herein.

 

9.                                      No Obligation to Continue Business Relationship. Neither the Plan, this Award Letter, nor the award of Award Shares pursuant to this Award Letter imposes any obligation on the Company Group to continue any Business Relationship with Recipient.

 

10.                               Income Tax Treatment; Withholding Taxes. The Company can give no assurance to Recipient with respect to the federal, state or local income tax consequences to Recipient of the award or exercise of the Option hereunder, the vesting of Award Shares hereunder, the exchange of the Option or Award Shares for other securities (including the exchange for common stock or options therefor). Recipient must seek tax advice from his or her own tax accountant or tax attorney concerning these and other tax matters.

 

If the Committee in its sole discretion determines that the Company Group is obligated to withhold any tax in connection with the award or exercise of the Option, or in connection with the transfer of, or the lapse of restrictions on, any Award Shares, Recipient hereby agrees that the Company Group may withhold from Recipient’s remuneration and the Committee may cause the Company to withhold from any distribution due Recipient the appropriate amount of any such tax.  At the discretion of the Committee, the amount required to be withheld may be withheld in cash or property from such remuneration or distributions, as the case may be. Recipient further agrees that, if the Company Group does not withhold a sufficient amount from Recipient’s remuneration or distributions, as the case may be, due Recipient to satisfy such withholding obligation, Recipient will make reimbursement on demand, in cash, for the amount under-withheld. The award of the Option hereunder is conditioned upon Recipient’s agreement to pay all applicable withholding amounts.  Accordingly, failure by Recipient to pay withholding amounts due hereunder within 30 days after written notice shall result in the forfeiture of all Options and Award Shares granted Recipient.

 

11.                               Lock-up Agreement.  In connection with any underwritten public offering of equity interests in any member of the Company Group, without the prior written consent of the Company or the principal underwriter managing such public offering, Recipient shall not directly or indirectly sell or otherwise transfer or dispose of any Shares or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Shares held by Recipient (whether

 

5

 

such shares or any such securities are then owned by Recipient or are thereafter acquired), during the period commencing on the date of the final prospectus relating to such public offering and ending on the date specified by the Company and the managing underwriter (such period to be determined in good faith by the Committee).  The foregoing provisions of this Section shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement.  Recipient shall execute such agreements as may be reasonably requested by the Company or the underwriters in connection with such registration that are consistent with this Section or that are necessary to give further effect thereto.

 

12.                               Provision of Documentation to Recipient. By signing the Award Letter, Recipient acknowledges receipt of a copy of the Award Letter (including these Terms and Conditions), a copy of the Plan and a copy of the LLC Agreement, with all Exhibits thereto, as in effect as of the date hereof, and that Recipient has read and is familiar with such documents and has had the opportunity to ask questions concerning such documents.

 

13.                               No Assurance Company’s Business Plan Can Be Achieved.  The Board, the Committee, Officers or other representatives of the Company Group may have shared business and financial plans, models or projections with Recipient concerning the Company. Such plan, models or projections were based on underlying assumptions that may or may not be attained or achieved. There can be no assurance that the Company will meet or exceed its business and financial plans, models or projections or that such plans, models or projections will not be materially modified in the future as a result of change in circumstances or otherwise.

 

14.                               Effect of Certain Transactions.  Except as expressly provided herein or in the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, of capital stock, membership or other equity interests shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Award Shares subject to this Option.  No adjustments need be made for dividends or distributions paid in cash, property or securities other than the shares of the type issuable upon exercise of this Option.  Recipient acknowledges that the Plan provides for certain adjustments and changes to this Option and the Award Shares issuable upon exercise of this Option in connection with any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s membership interests, the outstanding Shares of the type issuable upon exercise of this Option are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company, or, if, as a result of any merger, consolidation, sale of all or substantially all of the assets or dissolution of the Company.  If there shall be any change in the Shares of the type issuable upon exercise of this Option through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, liquidation, spin-off, split-up or other similar change in capitalization or event, the restrictions contained in this Agreement shall apply with equal force to additional and/or substitute securities, if any, received by Recipient in exchange for, or by virtue of Recipient’s ownership of, Award Shares, except as otherwise determined by the Board.

 

15.                               Certain LLC Agreement Provisions.  Recipient acknowledges that the LLC

 

6

 

Agreement contains restrictions on transfers of Award Shares, rights of refusal and co-sale rights relating to transfers of Award Shares, and drag-along rights in connection with certain transactions involving the Company, all of which may effect the Option as well as the Award Shares.  Recipient shall abide by the terms and conditions set forth in the LLC Agreement, including those relating to restrictions on transfers of Award Shares, rights of refusal and co-sale rights relating to transfers of Award Shares, and drag-along rights in connection with certain transactions involving the Company.  If requested by the Company, Recipient shall enter into an agreement with the Company and the other persons specified by the Company that contains provisions regarding the transfer of Award Shares or other membership interests in the Company (or the capital stock or other equity interests of any successor to the Company) substantially similar to those set forth in the LLC Agreement, the Plan or this Award Letter with respect to the Option and Award Shares, and entry into such an agreement may be required as a condition to Recipient’s exercise of the Option.

 

16.                               Miscellaneous.

 

A.                                    Notices.   All notices hereunder shall be in writing and shall be deemed given when received by certified or registered mail, postage prepaid, return receipt requested, addressed as follows: if to the Company or the Committee, to the Company’s principal business address, addressed to the Committee and the Chief Executive Officer; if to Recipient, to the address set forth in the Award Letter. The addresses for such notices may be changed from time to time by written notice given in the manner provided for in this Section 16.A.

 

B.                                    Entire Agreement; Modification; Controlling Documents. This Award Letter (which includes these Terms and Conditions), together with the Plan and the LLC Agreement, constitutes the entire agreement between the parties relative to the subject matter hereof, and supersedes all proposals, written or oral, and all other communications between the parties relating to the Option awarded hereunder. These Terms and Conditions and the Award Letter may be modified, amended or rescinded only by a written agreement executed by both parties. The Plan and the LLC Agreement may be amended as specified herein or therein, which amendments may not require the consent of Recipient but shall be binding on Recipient and shall apply to and amend this Award to the extent applicable even without the consent of Recipient, provided that Recipient’s consent to such amendment of this Award (but not the Plan or the LLC Agreement) shall be required unless the Committee determines that the amendment, taking into account any related action, would not materially and adversely affect this Award.  Any Award Shares that shall have been issued upon exercise of the Option shall continue to be subject to the Plan, this Award Letter and the LLC Agreement.

 

C.                                    Severability.  The invalidity, illegality or unenforceability of any provision of this Award Letter (which includes these Terms and Conditions) shall in no way affect the validity, legality or enforceability of any other provision.

 

D.                                    Successors and Assigns. This Award Letter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This

 

7

 

Agreement and all rights hereunder are personal to Recipient and may not be transferred or assigned by Recipient at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or any portion of its business and assets, provided that any such assignee assumes the Company’s obligations hereunder.

 

E.                                     Governing Law; Consent to Exclusive Jurisdiction. This Award Letter and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof. The preceding choice of law provision shall apply to all claims, under any theory whatsoever, arising out of the relationship of the parties contemplated herein.

 

F.                                      Committee Determinations; Consent To Jurisdiction.  THE COMPANY AND RECIPIENT HEREBY EXPRESSLY CONSENT TO THE APPLICATION OF THE PROVISIONS OF PARAGRAPH 17 OF THE PLAN GOVERNING DETERMINATIONS BY THE COMMITTEE, AND CONSENT TO JURISDICTION.

 

G.                                    Evidence of Award Shares. The Option awarded hereunder is evidenced by this Award Letter, the Plan and the LLC Agreement.

 

8

 

Appendix A

 

OPTION EXERCISE NOTICE

 

AquaVenture Holdings LLC

 

 

 

Attention:

 

Ladies and Gentlemen:

 

Pursuant to the terms of my Award Letter dated                       (the “Option”) under AquaVenture Holdings LLC’s (the “Company”) Equity Incentive Plan, I, [Insert Name]                                 , hereby [Circle One] partially/fully exercise such Option by including herein payment in the amount of $       representing the purchase price for [Fill in number of Award Shares]                  Award Shares.  I have chosen the following form(s) of payment:

 

o                                    1.                                      Cash

 

o                                    2.                                      Certified or bank check payable to the Company

 

o                                    3.                                      Other (as permitted in the Agreement (please describe))                                                      .

 

In connection with my exercise of the Option as set forth above, I hereby represent and warrant to the Company as follows:

 

·                  I am purchasing the Award Shares for my own account for investment only, and not for resale or with a view to the distribution thereof.

 

·                  I have had such an opportunity as I have deemed adequate to obtain from the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company and have consulted with my own advisers with respect to my investment in the Company.

 

·                  I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Award Shares and to make an informed investment decision with respect to such purchase.

 

·                  I can afford a complete loss of the value of the Award Shares and am able to bear the economic risk of holding such Award Shares for an indefinite period of time.

 

·                  I understand that the Award Shares may not be registered under the Securities Act of 1933 (it being understood that the Award Shares are being issued and sold in reliance on the exemption thereunder) or any applicable state securities or “blue sky” laws and may not be sold or otherwise transferred or disposed of in the absence of an effective registration statement under the Securities Act of 1933 and under any applicable state securities or “blue sky” laws (or exemptions from the registration requirement thereof).  I

 

 

further acknowledge that certificates representing Award Shares will bear restrictive legends reflecting the foregoing.

 

	
 
    	
Sincerely   yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    

 

 

AQUAVENTURE HOLDINGS LLC
 MANAGEMENT INCENTIVE PLAN SHARE AWARD LETTER

 

[Name of Grantee]

[Address Line 1]

[Address Line 2]

 

Re:                             Award of [number of shares] Management Incentive Plan Shares to [Name] (“Recipient”) Awarded on [date of award] (the “Award Date”)

 

Dear Ms/r. [   ]:

 

I am pleased to inform you that the Board of Managers of AquaVenture Holdings LLC, a Delaware limited liability company (the “Company”), has awarded you that number of Management Incentive Plan Shares set forth above in consideration of the services to be rendered by you to the Company and its Subsidiaries and of any other agreements and covenants, including any covenants not to compete, entered into by you with the Company and its Subsidiaries.  The commencement date for purposes of vesting of the Management Incentive Plan Shares shall be the Award Date (the “Commencement Date”).  The Management Incentive Plan Shares subject to this Award are intended to qualify as profits interests as contemplated by Section 2.7 of the LLC Agreement (as defined below), and the Strike Price of the Incentive Shares subject to the Award shall be $0.00 per share. The purpose of this award is to give you the opportunity to share in the long-term success of the Company.

 

The Management Incentive Plan Shares are subject in all respects to the provisions of this Award Letter, which includes the attached terms and conditions which set forth (among other things) certain vesting requirements, the Equity Incentive Plan of the Company, as amended from time to time, and the Fourth Amended and Restated Limited Liability Company Agreement of the Company, as amended from time to time (the “LLC Agreement”), a copy of each of which has been provided to you.  As a condition to your receipt of the Management Incentive Plan Shares, you agree to become a Member of the Company and agree to be bound by the terms of the LLC Agreement by executing the Joinder Agreement attached hereto, and to execute and deliver to the Company an Acknowledgement in the form provided to you separately.

 

Also enclosed you will find:

 

1.                                      An extra copy of this Award Letter. Please sign both copies of this Award Letter and date and return one completed copy to AquaVenture Holdings LLC, c/o John Curtis, 14400 Carlson Circle, Tampa, FL 33626 in the enclosed envelope.

 

2.                                      A form for an election under Section 83(b) of the Internal Revenue Code.  Most recipients of Management Incentive Plan Shares will find it beneficial to make this Section 83(b) election.  If you wish to make the election, you must file the election with the Internal Revenue Service within 30 days of the date of this Award.

 

1

 

EXECUTION PAGE FOR MANAGEMENT INCENTIVE PLAN SHARE AWARD LETTER

BETWEEN

[RECIPIENT] AND AQUAVENTURE HOLDINGS LLC

 

3.                                      A Joinder Agreement, pursuant to which you will become a Member of the Company.  Please sign and date the Joinder Agreement and return the original to AquaVenture Holdings LLC, c/o John Curtis, 14400 Carlson Circle, Tampa, FL 33626 in the enclosed envelope.

 

	
 
    	
AQUAVENTURE   HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
John F. Curtis
    
	
 
    	
 
    	
President   and Chief Executive Officer
    

 

Accepted and agreed by the undersigned this     day of            , 2014:

 

 

	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    	
 
    
			

 

2

 

AQUAVENTURE HOLDINGS LLC

 

TERMS AND CONDITIONS FOR EQUITY INCENTIVE PLAN AWARD

 

1.                                      Grant Under Equity Incentive Plan of AquaVenture Holdings LLC. This award (the “Award”) of Management Incentive Plan Shares (the “Award Shares”) is made to Recipient named in the Award Letter to which these Terms and Conditions are attached and is made pursuant to and is governed by the Company’s Equity Incentive Plan, as amended from time to time (the “Plan”), the Award Letter (which includes these Terms and Conditions), and the Fourth Amended and Restated Limited Liability Company Agreement of the Company, as amended from time to time (the “LLC Agreement”).  Capitalized terms not defined herein, but used herein shall have the meaning assigned such terms in the LLC Agreement.  Determinations made in connection with this Award shall be governed by the Plan.  To the extent that these Terms and Conditions modify the provisions of the Plan, these Terms and Conditions shall control.

 

2.                                      Other Shares. This Award of the Award Shares is in addition to any other Shares heretofore or hereafter awarded to Recipient by the Company, but a duplicate original of this Award Letter shall not result in the award of additional Shares.

 

3.                                      Vesting of Award Shares.

 

(a)  Subject to the terms hereof, including the forfeiture and repurchase provisions of paragraph 4, if Recipient has continued to serve the Company or one or more direct or indirect subsidiaries of the Company (collectively, the “Company Group”) as a result of Recipient’s Business Relationship from the Commencement Date set forth in the Award Letter (the “Commencement Date”) through the vesting dates set forth under the heading “Vesting Dates” in the table below, Recipient shall be vested in the number of Award Shares set forth opposite the date under the heading “Award Shares Vested” in the table below (each number represents the additional number of the Award Shares in which Recipient will be vested as of the applicable date).

 

	
Vesting Dates
    	
 
    	
Award Shares Vested
    
	
 
    	
 
    	
 
    
	
Before June 30, 2014
    	
 
    	
0% of the Award Shares
    
	
 
    	
 
    	
 
    
	
On June 30, 2014
    	
 
    	
12.5% of the Award   Shares
    
	
 
    	
 
    	
 
    
	
On the last day of each of the next seven calendar quarters   following June 30, 2014
    	
 
    	
12.5% of the Award   Shares
    

 

(b)                                 In addition, all then unvested Award Shares shall vest in full immediately prior to the occurrence of a Sale Event (as defined in Section 15 of the Plan) that occurs before the termination of Recipient’s Business Relationship.

 

1

 

(c)                                  In addition, subject to the terms hereof (including the forfeiture and repurchase provisions of paragraph 4), the vesting of the Award Shares shall be accelerated as provided in a written employment agreement or letter between the Company or any Subsidiary and Recipient.

 

4.                                      Repurchase or Forfeiture of Award Shares Upon Termination of Business Relationship.

 

(a)                                 Repurchase or Forfeiture upon Termination.  Except as may otherwise be provided in a written employment agreement or letter between the Company or any Subsidiary and Recipient, if Recipient’s Business Relationship with the Company Group is terminated (the “Termination”), the Company shall have the right, but not the obligation, to purchase the vested Award Shares (the “Repurchase Securities”) as set forth in this Section 4 and all unvested Award Shares shall be forfeited immediately.

 

(b)                                 Repurchase Rights.  The Company may elect to purchase all or any portion of the Repurchase Securities by notifying the holder of the Repurchase Securities (the “Repurchase Notice”) at any time after the effective date of such Termination until the later of (i) sixty (60) days thereafter and (ii) seven (7) months after the last issuance or vesting of any of the Repurchase Securities.  The Repurchase Notice will set forth the number of such Repurchase Securities to be acquired, the aggregate consideration to be paid for such Repurchase Securities and the time and place for the closing of the transaction, in each case, as provided for in this Section 4.

 

(c)                                  Repurchase Price.  The purchase price for the Repurchase Securities shall be the fair market value of the Repurchase Securities as of the effective date of Termination.  Fair market value shall be determined by the Board in good faith without taking into account any applicable minority interest or liquidity discount.  Any disagreement regarding the fair market value of the Repurchase Securities shall be resolved in accordance with Exhibit I to the LLC Agreement.

 

(d)                                 Procedures.  The Committee shall determine the procedures as are necessary to permit the Company to exercise its rights under this Section 4.  The Company will pay the purchase price for the Repurchase Securities by payment of consideration in cash.  Recipient will be required to make representations and warranties to the effect that Recipient has good and marketable title to the Repurchase Securities, free and clear of all liens, claims and other encumbrances.  The closing of the acquisition of any Repurchase Securities shall occur no later than thirty (30) days following the date the Repurchase Notice is received by the seller.

 

(e)                                  Repurchase Subject to the Act.  Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Award Shares by the Company shall be subject to applicable restrictions contained in the Act.

 

5.                                      Absence of Conflicting Agreements and Obligations. Recipient represents and warrants that he is not a party to or bound by any other agreement or understanding of any type, whether written or oral, or by any statutory or common law duty or obligation which, in any

 

2

 

case, would in any way restrict his ability to be employed by the Company Group, or hold ownership interests in the Company or his ability to compete freely with other Persons.

 

6.                                      Illiquidity; Conversion; Restrictions on Transfer. There is no market for the Award Shares and no assurance that a market for the Award Shares will develop.

 

Pursuant to the LLC Agreement, the Committee may determine the consideration received by the Members as a result of a merger, consolidation, incorporation or other business combination. Without limiting any of the parties’ rights under Exhibit I of the LLC Agreement, Recipient shall have no statutory dissenter’s rights or appraisal rights with respect to such a transaction as a result of holding the Award Shares. The Company is under no obligation to register the Award Shares or any securities received with respect to the Award Shares. If the Company is converted to a corporation, the Award Shares shall be converted to common stock of the new corporation on the basis determined by the Committee.

 

The Award Shares are not transferable without the prior written consent of the Committee. Furthermore, any transfer must comply with all federal and state securities laws or an exemption therefrom. In addition, even if a transfer is permitted, the Award Shares awarded hereunder that are transferred shall continue to be subject to this Award Letter, the Plan and the LLC Agreement, including the vesting requirements and repurchase rights set forth herein.

 

7.                                      No Obligation to Continue Business Relationship. Neither the Plan, this Award Letter, nor the award of Award Shares pursuant to this Award Letter imposes any obligation on the Company Group to continue any Business Relationship with Recipient.

 

8.                                      Income Tax Treatment; Withholding Taxes. The Company can give no assurance to Recipient with respect to the federal, state or local income tax consequences to Recipient of the award of the Award Shares hereunder, the vesting of Award Shares hereunder, the exchange of Award Shares for other securities (including the exchange of Award Shares for common stock or options therefor). Recipient must seek tax advice from his or her own tax accountant or tax attorney concerning these and other tax matters.

 

If the Committee in its sole discretion determines that the Company Group is obligated to withhold any tax in connection with the award of the Award Shares, or in connection with the transfer of, or the lapse of restrictions on, any Award Shares, Recipient hereby agrees that the Company Group may withhold from Recipient’s remuneration and the Committee may cause the Company to withhold from any distribution due Recipient the appropriate amount of any such tax.  At the discretion of the Committee, the amount required to be withheld may be withheld in cash or property from such remuneration or distributions, as the case may be. Recipient further agrees that, if the Company Group does not withhold a sufficient amount from Recipient’s remuneration or distributions, as the case may be, due Recipient to satisfy such withholding obligation, Recipient will make reimbursement on demand, in cash, for the amount under-withheld. The award of the Award Shares hereunder is conditioned upon Recipient’s agreement to pay all applicable withholding amounts. Accordingly, failure by Recipient to pay withholding amounts due hereunder within 30 days after written notice shall result in the forfeiture of all Award Shares granted Recipient.

 

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9.                                      Lock-up Agreement.  In connection with any underwritten public offering of equity interests in any member of the Company Group, without the prior written consent of the Company or the principal underwriter managing such public offering, Recipient shall not directly or indirectly sell or otherwise transfer or dispose of any Shares or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Shares held by Recipient (whether such shares or any such securities are then owned by Recipient or are thereafter acquired), during the period commencing on the date of the final prospectus relating to such public offering and ending on the date specified by the Company and the managing underwriter (such period to be determined in good faith by the Committee).  The foregoing provisions of this Section shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement.  Recipient shall execute such agreements as may be reasonably requested by the Company or the underwriters in connection with such registration that are consistent with this Section or that are necessary to give further effect thereto.

 

10.                               Provision of Documentation to Recipient. By signing the Award Letter, Recipient acknowledges receipt of a copy of the Award Letter (including these Terms and Conditions), a copy of the Plan and a copy of the LLC Agreement, with all Exhibits thereto, as in effect as of the date hereof, and that Recipient has read and is familiar with such documents and has had the opportunity to ask questions concerning such documents.

 

11.                               No Assurance Company’s Business Plan Can Be Achieved. The Board, the Committee, Officers or other representatives of the Company Group may have shared business and financial plans, models or projections with Recipient concerning the Company. Such plan, models or projections were based on underlying assumptions that may or may not be attained or achieved. There can be no assurance that the Company will meet or exceed its business and financial plans, models or projections or that such plans, models or projections will not be materially modified in the future as a result of change in circumstances or otherwise.

 

12.                               Certain LLC Agreement Provisions.  Recipient acknowledges that the LLC Agreement contains restrictions on transfers of Award Shares, rights of refusal and co-sale rights relating to transfers of Award Shares, and drag-along rights in connection with certain transactions involving the Company, all of which may effect the Award Shares.  Recipient shall abide by the terms and conditions set forth in the LLC Agreement, including those relating to restrictions on transfers of Award Shares, rights of refusal and co-sale rights relating to transfers of Award Shares, and drag-along rights in connection with certain transactions involving the Company.  If requested by the Company, Recipient shall enter into an agreement with the Company and the other persons specified by the Company that contains provisions regarding the transfer of Award Shares or other membership interests in the Company (or the capital stock or other equity interests of any successor to the Company) substantially similar to those set forth in the LLC Agreement, the Plan or this Award Letter with respect to the Award Shares.

 

13.                               Miscellaneous.

 

A.                                    Notices.  All notices hereunder shall be in writing and shall be deemed given when received by certified or registered mail, postage prepaid, return receipt requested,

 

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addressed as follows: if to the Company or the Committee, to the Company’s principal business address, addressed to the Committee and the Chief Executive Officer; if to Recipient, to the address set forth in the Award Letter. The addresses for such notices may be changed from time to time by written notice given in the manner provided for in this Section 13.A.

 

B.                                    Entire Agreement; Modification; Controlling Documents. This Award Letter (which includes these Terms and Conditions), together with the Plan and the LLC Agreement, constitutes the entire agreement between the parties relative to the subject matter hereof, and supersedes all proposals, written or oral, and all other communications between the parties relating to the Award Shares awarded hereunder. These Terms and Conditions and the Award Letter may be modified, amended or rescinded only by a written agreement executed by both parties. The Plan and the LLC Agreement may be amended as specified herein or therein, which amendments may not require the consent of Recipient but shall be binding on Recipient and shall apply to and amend this Award to the extent applicable even without the consent of Recipient, provided that Recipient’s consent to such amendment of this Award (but not the Plan or the LLC Agreement) shall be required unless the Committee determines that the amendment, taking into account any related action, would not materially and adversely affect this Award.  Any Award Shares that shall have vested shall continue to be subject to the Plan, this Award Letter and the LLC Agreement.

 

C.                                    Severability.  The invalidity, illegality or unenforceability of any provision of this Award Letter (which includes these Terms and Conditions) shall in no way affect the validity, legality or enforceability of any other provision.

 

D.                                    Successors and Assigns. This Award Letter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement and all rights hereunder are personal to Recipient and may not be transferred or assigned by Recipient at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or any portion of its business and assets, provided that any such assignee assumes the Company’s obligations hereunder.

 

E.                                     Governing Law; Consent to Exclusive Jurisdiction. This Award Letter and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof. The preceding choice of law provision shall apply to all claims, under any theory whatsoever, arising out of the relationship of the parties contemplated herein.

 

F.                                      Committee Determinations; Consent To Jurisdiction.  THE COMPANY AND RECIPIENT HEREBY EXPRESSLY CONSENT TO THE APPLICATION OF THE PROVISIONS OF PARAGRAPH 17 OF THE PLAN GOVERNING DETERMINATIONS BY THE COMMITTEE, AND CONSENT TO JURISDICTION.

 

G.                                    Evidence of Award Shares. The Award Shares awarded hereunder are evidenced by this Award Letter, the Plan and the LLC Agreement.

 

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ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER PURSUANT TO SECTION 83(B)OF THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:

 

1.                                      Name

Address

Address

 

SSN:

 

2.                                      Description of the property to which the election is being made:

 

            Management Incentive Plan Shares in AquaVenture Holdings LLC, a Delaware limited liability company.

 

3.                                      The date on which the property was transferred is           .

 

The taxable year to which this election relates is calendar year 20   .

 

4.                                      Nature of the restrictions to which the property is subject:

 

The Management Incentive Plan Shares are subject to vesting which may require forfeiture of all of such Management Incentive Plan Shares.

 

5.                                      The fair market value of the Management Incentive Plan Shares at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) was $       .

 

6.                                      Taxpayer’s consideration for said property was $      .

 

7.                                      A copy of this statement has been furnished to AquaVenture Holdings LLC.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    

 

 

JOINDER AGREEMENT

 

The undersigned hereby agrees to become a Member of AquaVenture Holdings LLC and hereby joins in, and becomes a party to, and agrees to be bound by, the terms of the Fourth Amended and Restated Limited Liability Company Agreement dated as of June 6, 2014 of AquaVenture Holdings LLC, as the same may be amended from time to time (the “LLC Agreement”).

 

The undersigned hereby acknowledges receipt of a copy of the LLC Agreement and all exhibits thereto.

 

IN WITNESS WHEREOF, intending to be legally bound, the undersigned has executed this Joinder Agreement as                , 20  .

 

 

	
 
    	
 
    
	
 
    	
 
    
	
Name:Exhibit 10.3

 

AQUAVENTURE HOLDINGS LIMITED

 

2016 SHARE OPTION AND INCENTIVE PLAN

 

SECTION 1.  GENERAL PURPOSE OF THE PLAN; DEFINITIONS

 

The name of the plan is the AquaVenture Holdings Limited 2016 Share Option and Incentive Plan (the “Plan”).  The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and Consultants of AquaVenture Holdings Limited (the “Company”) and its Subsidiaries (including Quench USA, Inc., a Delaware corporation and Seven Seas Water Corporation, a Delaware corporation, and each wholly-owned subsidiaries of the Company) upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its businesses to acquire a proprietary interest in the Company.  It is anticipated that providing such persons 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.

 

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 Non-Employee Directors who are independent.

 

“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Share Options, Non-Qualified 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 that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising

 

 

transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.

 

“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the Code.

 

“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the Ordinary 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 the date on which the Plan becomes effective as set forth in Section 21.

 

“Employer” means the Company or any Subsidiary that is in a service relationship with the recipient of an Award.

 

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

 

“Fair Market Value” of the Ordinary Shares on any given date means the fair market value of the Ordinary Shares determined in good faith by the Administrator; provided, however, that if the Ordinary Shares are admitted to quotation on the New York Stock Exchange (“NYSE”) 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; provided further, however, that if the date for which Fair Market Value is determined is the first day when trading prices for the Ordinary Shares are reported on a national securities exchange, the Fair Market Value shall be the “Price to the Public” (or equivalent) set forth on the cover page for the final prospectus relating to the Company’s Initial Public Offering.

 

“Incentive Share Option” means any Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

 

“Initial Public Offering” means the first underwritten, firm commitment public offering pursuant to an effective registration statement under the Act covering the offer and sale by the Company of its equity securities, or such other event as a result of or following which the Ordinary Shares shall be publicly held.

 

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

 

“Non-Qualified Share Option” means any Option that is not an Incentive Share Option.

 

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

 

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“Ordinary Shares” means the Ordinary Shares of the Company, subject to adjustments pursuant to Section 3.

 

“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:  total shareholder return, earnings before interest, taxes, depreciation and amortization, net income (loss) (either before or after interest, taxes, depreciation and/or amortization), changes in the market price of the Ordinary Shares, economic value-added, funds from operations or similar measure, sales or revenue, acquisitions or strategic transactions, operating income (loss), cash flow (including, but not limited to, operating cash flow and free cash flow), return on capital, assets, equity, or investment, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss) per Ordinary Share, sales or market shares and number of customers, 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.  The Committee may appropriately adjust any evaluation performance under a Performance Criterion to exclude any of the following events that occurs during a Performance Cycle: (i) asset write-downs or impairments, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reporting results, (iv) accruals for reorganizations and restructuring programs, and (v) any item of an unusual nature or of a type that indicates infrequency of occurrence, or both, including those described in the Financial Accounting Standards Board’s authoritative guidance and/or in management’s discussion and analysis of financial condition of operations appearing the Company’s annual report to shareholders for the applicable year.

 

“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 Cash-Based Award, the vesting and/or payment of which is subject to the attainment of one or more Performance Goals.  Each such period shall not be less than 12 months.

 

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

 

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

 

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“Restricted Shares” means the Ordinary Shares underlying a Restricted Share Award that remain subject to a risk of forfeiture or the Company’s right of repurchase.

 

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

 

“Restricted Share Units” means an Award of share units subject to such restrictions and conditions as the Administrator may determine at the time of grant.

 

“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding shares immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding shares or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Ordinary Shares of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately 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 Ordinary Share pursuant to a Sale Event.

 

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

 

“Share Appreciation Right” means an Award entitling the recipient to receive Ordinary Shares having a value equal to the excess of the Fair Market Value of the Ordinary Shares on the date of exercise over the exercise price of the Share Appreciation Right multiplied by the number of Ordinary 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 50 percent interest, either directly or indirectly.

 

“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.

 

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

 

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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.

 

(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 Incentive Share Options, Non-Qualified Share 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 Ordinary 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 in circumstances involving the grantee’s death, disability, retirement or termination of employment, or a change in control (including a Sale Event);

 

(vi)                              subject to the provisions of Section 5(c), 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 Awards.  Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards 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 Ordinary Shares underlying Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the

 

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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.

 

(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 articles or bylaws 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 foreign or United States securities law, the Code, or any other applicable foreign or United States governing statute or law.

 

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

 

(a)                                 Shares Issuable.  The maximum number of Ordinary Shares reserved and available for issuance under the Plan shall be 5,000,000 shares (the “Initial Limit”), subject to adjustment as provided in Section 3(c), plus on January 1, 2017 and each January 1 thereafter, the number of Ordinary Shares reserved and available for issuance under the Plan shall be cumulatively increased by four percent of the number of Ordinary Shares issued and outstanding on the immediately preceding December 31 (the “Annual Increase”).  Subject to such overall limitation, the maximum aggregate number of Ordinary Shares that may be issued in the form of Incentive Share Options shall not exceed the Initial Limit cumulatively increased on January 1,

 

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2017 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 5,000,000 Ordinary Shares, subject in all cases to adjustment as provided in Section 3(c).  For purposes of this limitation, the Ordinary 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 Ordinary Shares or otherwise terminated (other than by exercise) shall be added back to the Ordinary Shares available for issuance under the Plan.  In the event the Company repurchases Ordinary Shares on the open market, such shares shall not be added to the Ordinary Shares available for issuance under the Plan.  Subject to such overall limitations, Ordinary 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 the Initial Limit 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 Ordinary Shares or Ordinary Shares reacquired by the Company.

 

(b)                                 Maximum Awards to Non-Employee Directors.  Notwithstanding anything to the contrary in this Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year shall not exceed $750,000.  For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with ASC 718 or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions.

 

(c)                                  Changes in Shares.  Subject to Section 3(d) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the number of Company’s authorized shares, the outstanding Ordinary Shares are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such Ordinary Shares or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding Ordinary Shares are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Share Options, (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 an 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 Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event.  The adjustment by the Administrator shall be final, binding and conclusive.  No fractional

 

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Ordinary 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.

 

(d)                                 Mergers and Other Transactions.  In the case of and subject to the consummation of a Sale Event, the parties thereto may cause the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree.  To the extent the parties to such Sale Event do not provide for the assumption, continuation or substitution of Awards, upon the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate.  In the event of such termination, (i) the Company shall have the option (in its sole discretion) to make or provide for a payment, in cash or in kind, to the grantees holding Options and Share Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of Ordinary Shares subject to outstanding Options and Share Appreciation Rights (to the extent then exercisable  at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Share Appreciation Rights; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Share Appreciation Rights (to the extent then exercisable) held by such grantee.  The Company shall also have the option (in its sole discretion) to make or provide for a payment, in cash or in kind, to the grantees holding other Awards in an amount equal to the Sale Price multiplied by the number of vested Ordinary Shares under such Awards.

 

SECTION 4.  ELIGIBILITY

 

Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and Consultants of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

 

SECTION 5.  OPTIONS

 

(a)                                 Award of Options.  The Administrator may grant Options under the Plan.  Any Option granted under the Plan shall be in such form as the Administrator may from time to time approve.

 

Options granted under the Plan may be either Incentive Share Options or Non-Qualified Share Options.  Incentive Share Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code.  To the extent that any Option does not qualify as an Incentive Share Option, it shall be deemed a Non-Qualified Share Option.

 

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, 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.

 

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(b)                                 Exercise Price.  The exercise price per share for the Ordinary Shares covered by an Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant.  In the case of an Incentive Share Option that is granted to a Ten Percent Owner, the option price of such Incentive Share Option shall be not less than 110 percent of the Fair Market Value on the grant date.

 

(c)                                  Option Term.  The term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten years after the date the Option is granted.  In the case of an Incentive Share Option that is granted to a Ten Percent Owner, the term of such Option shall be no more than five years from the date of grant.

 

(d)                                 Exercisability; Rights of a Shareholder.  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 Option.  An optionee shall have the rights of a shareholder only as to shares acquired upon the exercise of an Option and not as to unexercised Options.

 

(e)                                  Method of Exercise.  Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company (or the Employer if required under the Award Agreement), specifying the number of shares to be purchased.  Payment of the purchase price may be made by one or more of the following methods except to the extent otherwise provided in the Option 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 following such procedures as the Company may prescribe) of Ordinary Shares that are not then subject to restrictions under any Company plan.  Such 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 Company shall prescribe as a condition of such payment procedure; or

 

(iv)                              With respect to Options that are not Incentive Share Options, by a “net exercise” arrangement pursuant to which the Company will reduce the number of Ordinary 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 Ordinary Shares to be purchased pursuant to the exercise of an Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Option) by the Company of the full

 

9

 

purchase price for such shares and the fulfillment of any other requirements contained in the Option 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 Ordinary Shares through the attestation method, the number of Ordinary Shares transferred to the optionee upon the exercise of the 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 Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Options may be permitted through the use of such an automated system.

 

(f)                                   Annual Limit on Incentive Share Options.  To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the Ordinary Shares with respect to which Incentive Share Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000.  To the extent that any Option exceeds this limit, it shall constitute a Non-Qualified Share Option.

 

SECTION 6.  SHARE APPRECIATION RIGHTS

 

(a)                                 Award of Share Appreciation Rights.  The Administrator may grant Share Appreciation Rights under the Plan.  A Share Appreciation Right is an Award entitling the recipient to receive Ordinary Shares having a value equal to the excess of the Fair Market Value of a Ordinary Share on the date of exercise over the exercise price of the Share Appreciation Right multiplied by the number of Ordinary Shares with respect to which the Share Appreciation Right shall have been exercised.

 

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

 

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

 

(d)                                 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 years.

 

SECTION 7.  RESTRICTED SHARE AWARDS

 

(a)                                 Nature of Restricted Share Awards.  The Administrator may grant Restricted Share Awards under the Plan.  A Restricted Share Award is any Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine 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

 

10

 

 

each such Award shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.

 

(b)                                 Rights as a Shareholder.  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 the voting of the Restricted Shares and receipt of dividends; provided that if the lapse of restrictions with respect to the Restricted Share Award is tied to the attainment of performance goals, any dividends paid by the Company during the performance period shall accrue and shall not be paid to the grantee until and to the extent the performance goals are met with respect to the Restricted Share Award.  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.  Restricted Shares 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 Shares that have not vested at the time of termination shall be transferred to the Company at its original purchase price (if any) by such grantee or such grantee’s legal representative as soon as possible after 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.  The acquisition by the Company shall be effected with due observance to all applicable laws and regulations. Following such reacquisition of Restricted Shares that are represented by physical certificates, if any, 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 Shares 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.”

 

SECTION 8.  RESTRICTED SHARE UNITS

 

(a)                                 Nature of Restricted Share Units.  The Administrator may grant Restricted Share Units under the Plan.  A Restricted Share Unit is an Award of share units that may be settled in Ordinary Shares upon the satisfaction of such restrictions and conditions 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 shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.  Except in the case of Restricted Share Units with

 

11

 

a deferred settlement date that complies with Section 409A, at the end of the vesting period, the Restricted Share Units, to the extent vested, shall be settled in the form of Ordinary Shares.  Restricted Share Units with deferred settlement dates are subject to Section 409A and shall contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order 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 the Ordinary Shares 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 Ordinary 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 share units underlying his Restricted Share Units, subject to the provisions of Section 11 and 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 grantee’s termination of 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.  The Administrator may grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Share Award under the Plan.  An Unrestricted Share Award is an Award pursuant to which the grantee may receive Ordinary Shares free of any restrictions 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 grant Cash-Based Awards under the Plan.  A Cash-Based Award is an Award that entitles the grantee to a payment in cash upon the attainment of specified Performance Goals.  The Administrator shall determine the maximum

 

12

 

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.

 

SECTION 11.  PERFORMANCE SHARE AWARDS

 

(a)                                 Nature of Performance Share Awards.  The Administrator may grant Performance Share Awards under the Plan.  A Performance Share Award is an Award entitling the grantee to receive Ordinary Shares upon the attainment of performance goals.  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, which may not be less than one year except in the case of a Sale Event, 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 Ordinary 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 Ordinary 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 agreement 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 grantee’s termination of 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.  The Administrator may grant 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.  Each Performance-Based Award shall comply with the provisions set forth below.

 

(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 90 days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m)

 

13

 

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.

 

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

 

SECTION 13.  DIVIDEND EQUIVALENT RIGHTS

 

(a)                                 Dividend Equivalent Rights.  The Administrator may grant Dividend Equivalent Rights under the Plan.  A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the Ordinary Shares specified in the Dividend Equivalent Right (or other Award to which it relates) if such shares had been issued to the grantee.  A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Share Units 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 may be deemed to be reinvested in additional Ordinary Shares, which may thereafter accrue additional equivalents.  Any such 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 Ordinary 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 or Performance Share Award shall provide that such Dividend Equivalent Right shall be settled only 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.

 

(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 shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

14

 

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 Non-Qualified Share Options 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 50 percent 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 50 percent of the voting interests.

 

(d)                                 Designation of Beneficiary.  To the extent permitted by the Company, each grantee to whom an Award has been made 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 Ordinary Shares or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Employer, 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 and the Employer’s obligation to deliver evidence of book entry (or

 

15

 

share certificates, if any) 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 Employer’s minimum required tax withholding obligation satisfied, in whole or in part, by authorizing the Employer to withhold from Ordinary 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.  The Administrator may also require Awards to be subject to mandatory share withholding up to the required withholding amount.  For purposes of share withholding, the Fair Market Value of withheld shares shall be determined in the same manner as the value of Ordinary Shares includible in income of the Participants.

 

SECTION 16.  SECTION 409A AWARDS

 

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 months and one 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.

 

SECTION 17.  TERMINATION OF EMPLOYMENT, TRANSFER, LEAVE OF ABSENCE, ETC.

 

(a)                                 Termination of Employment.  If the grantee’s employer ceases to be a Subsidiary, the grantee shall be deemed to have terminated employment for purposes of the Plan.

 

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

 

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

 

(ii)                                  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 re-employment 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

 

16

 

outstanding Award without the holder’s consent.  The Administrator is specifically authorized to exercise its discretion to reduce the exercise price of outstanding Options or Share Appreciation Rights or effect the repricing of such Awards through cancellation and re-grants.  To the extent required under the rules of any securities exchange or market system on which the Ordinary Shares are listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Share Options granted under the Plan are qualified under Section 422 of the Code, 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(c) or 3(d).

 

SECTION 19.  STATUS OF PLAN

 

With respect to the portion of any Award that has not been exercised and any payments in cash, Ordinary 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 Ordinary 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 Ordinary 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)                                 Issuance of Shares; Delivery of Share Certificates.  In connection with the issuance of any Shares pursuant to the Plan, the Company shall issue such Shares to the grantee’s Employer for delivery to the applicable grantee.  Share certificates to grantees, if any, under this Plan shall be deemed delivered for all purposes such certificates shall have been mailed in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Employer.  Uncertificated Shares shall be deemed delivered for all purposes when the Employer or a stock 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 Employer, 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 nor shall the Employer be required to deliver any certificates evidencing Ordinary 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 Ordinary 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

 

17

 

comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system 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 Ordinary Shares have been transferred in accordance with applicable laws, no right to vote or receive dividends or any other rights of a shareholder will exist with respect to Ordinary Shares to be issued in connection with an Award, notwithstanding the exercise of a 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)                                   Clawback Policy.  Awards under the Plan shall be subject to the Company’s clawback policy, as in effect from time to time.

 

SECTION 21.  EFFECTIVE DATE OF PLAN

 

This Plan shall become effective upon the effectiveness of the Company’s registration statement on Form S-1 in connection with its Initial Public Offering/shareholder approval in accordance with applicable law, the Company’s amended memorandum and articles of association, and applicable stock exchange rules or pursuant to written consent.  No grants of Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date and no grants of Incentive Share Options may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board.

 

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SECTION 22.  GOVERNING LAW

 

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

 

DATE APPROVED BY BOARD OF DIRECTORS:

 

DATE APPROVED BY SHAREHOLDERS:

 

19

 

 

INCENTIVE STOCK OPTION AGREEMENT
 UNDER THE AQUAVENTURE HOLDINGS LIMITED
 2016 SHARE OPTION AND INCENTIVE PLAN

 

	
Name of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of Option   Shares:
    	
 
    
	
 
    	
 
    
	
Option Exercise Price per   Share:
    	
$
    
	
 
    	
[FMV on Grant Date (110% of FMV   if a 10% owner)]
    
	
 
    	
 
    
	
Grant Date:
    	
 
    
	
 
    	
 
    
	
Expiration Date:
    	
 
    
	
 
    	
[up to 10 years (5 if a 10%   owner)]
    

 

Pursuant to the AquaVenture Holdings Limited 2016 Share Option and Incentive Plan as amended through the date hereof (the “Plan”), AquaVenture Holdings Limited (the “Company”) hereby grants to the Optionee named above, who is an employee of [            ], a wholly-owned subsidiary of the Company, an option (the “Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of Ordinary Shares (the “Ordinary Shares”), of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan.

 

1.                                      Exercisability Schedule.  No portion of this Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as the Optionee remains an employee of the Company or a Subsidiary on such dates:

 

	
Incremental Number of
   Option Shares Exercisable*
    	
 
    	
Exercisability Date
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    

 

* Max. of $100,000 per yr.

 

Once exercisable, this Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

 

2.                                      Manner of Exercise.

 

(a)                                 The Optionee may exercise this Option only in the following manner:  from time to time on or prior to the Expiration Date of this Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares shall be made to the Employer for remittance to the Company and may be made by one or more of the following methods:  (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 Ordinary Shares that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; or (iii) by the Optionee delivering to the Employer a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Employer for prompt delivery to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option 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) a combination of (i), (ii) and (iii) above.  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 Option Shares will be contingent upon (i) the Company’s receipt from the Employer of the full purchase price for the Option Shares from the Optionee, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company and Employer of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Common Shares to be purchased pursuant to the exercise of Options under the Plan and any subsequent resale of the Ordinary Shares will be in compliance with applicable laws and regulations.  Such Option Shares shall be issued to the Employer for delivery to the Optionee.  In the event the Optionee chooses to pay the purchase price by previously-owned Ordinary Shares through the attestation method, the number of Ordinary Shares transferred to the Optionee upon the exercise of the Option shall be net of the Shares attested to.

 

(b)                                 The Ordinary Shares purchased upon exercise of this Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Ordinary Shares subject to this Option unless and until this Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as

 

2

 

the shareholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Ordinary Shares.

 

(c)                                  The minimum number of shares with respect to which this Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Option is being exercised is the total number of shares subject to exercise under this Option at the time.

 

(d)                                 Notwithstanding any other provision hereof or of the Plan, no portion of this Option shall be exercisable after the Expiration Date hereof.

 

3.                                      Termination of Employment.  If the Optionee’s employment by the Employer (as defined in the Plan) is terminated, the period within which to exercise the Option may be subject to earlier termination as set forth below.

 

(a)                                 Termination Due to Death.  If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier.  Any portion of this Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)                                 Termination Due to Disability.  If the Optionee’s employment terminates by reason of the Optionee’s disability (as determined by the Administrator), any portion of this Option outstanding on such date, to the extent exercisable on the date of such termination of employment, may thereafter be exercised by the Optionee for a period of 12 months from the date of disability or until the Expiration Date, if earlier.  Any portion of this Option that is not exercisable on the date of disability shall terminate immediately and be of no further force or effect.

 

(c)                                  Termination for Cause.  If the Optionee’s employment terminates for Cause, any portion of this Option outstanding on such date shall terminate immediately and be of no further force and effect.  For purposes hereof, “Cause” shall mean, unless otherwise provided in an employment agreement between the Company and the Optionee, a determination by the Administrator that the Optionee shall be dismissed as a result of (i) any material breach by the Optionee of any agreement between the Optionee and the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the Optionee to a felony or a crime involving moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability) by the Optionee of the Optionee’s duties to the Company.

 

(d)                                 Other Termination.  If the Optionee’s employment terminates for any reason other than the Optionee’s death, the Optionee’s disability, or Cause, and unless otherwise determined by the Administrator, any portion of this Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of three months from the date of termination or until the Expiration Date, if earlier.  Any portion of this Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect.

 

3

 

The Administrator’s determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.

 

4.                                      Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.                                      Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.                                      Status of the Option.  This Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), but the Company does not represent or warrant that this Option qualifies as such.  The Optionee should consult with his or her own tax advisors regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.  To the extent any portion of this Option does not so qualify as an “incentive stock option,” such portion shall be deemed to be a non-qualified stock option.  If the Optionee intends to dispose or does dispose (whether by sale, gift, transfer or otherwise) of any Option Shares within the one-year period beginning on the date after the transfer of such shares to him or her, or within the two-year period beginning on the day after the grant of this Option, he or she will so notify the Company within 30 days after such disposition.

 

7.                                      Tax Withholding.  The Optionee shall, not later than the date as of which the exercise of this Option becomes a taxable event for Federal income tax purposes, pay to the Employer or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Employer shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from Ordinary Shares to be issued to the Optionee a number of Ordinary Shares with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

8.                                      No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.

 

9.                                      Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

4

 

10.                               Data Privacy Consent.  In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”).  By entering into this Agreement, the Optionee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Optionee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate.  The Optionee shall have access to, and the right to change, the Relevant Information.  Relevant Information will only be used in accordance with applicable law.

 

11.                               Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
AQUAVENTURE   HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.  Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Optionee (including through an online acceptance process) is acceptable.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Optionee’s   name and address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

5

 

NON-QUALIFIED STOCK OPTION AGREEMENT
 FOR COMPANY EMPLOYEES
 UNDER AQUAVENTURE HOLDINGS LIMITED
 2016 SHARE OPTION AND INCENTIVE PLAN

 

	
Name of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of Option   Shares:
    	
 
    
	
 
    	
 
    
	
Option Exercise Price   per Share:
    	
$
    
	
 
    	
[FMV on Grant Date]
    
	
 
    	
 
    
	
 
    	
 
    
	
Grant Date:
    	
 
    
	
 
    	
 
    
	
Expiration Date:
    	
                                                (1)
    

 

Pursuant to the AquaVenture Holdings Limited 2016 Share Option and Incentive Plan as amended through the date hereof (the “Plan”), AquaVenture Holdings Limited (the “Company”) hereby grants to the Optionee named above an option (the “Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of Ordinary Stock, par Shares (the “Ordinary Shares”) of the Company specified above, who is an employee of [                     ], a wholly-owned subsidiary of the Company, at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan.  This Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

 

1.                                      Exercisability Schedule.  No portion of this Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as Optionee remains an employee of the Company or a Subsidiary on such dates:

 

	
Incremental Number of
   Option Shares Exercisable
    	
 
    	
Exercisability Date
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    
	
(   %)
    	
 
    	
 
    	
 
    

 

(1)  No more than 10 years from grant date.

 

 

Once exercisable, this Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

2.                                      Manner of Exercise.

 

(a)                                 The Optionee may exercise this Option only in the following manner:  from time to time on or prior to the Expiration Date of this Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares shall be made to the Employer for remittance to the Company and may be made by one or more of the following methods:  (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 Ordinary Shares that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee delivering to the Employer a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Employer for prompt delivery to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option 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; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of Ordinary Shares issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above.  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 Option Shares will be contingent upon (i) the Company’s receipt from the Employer of the full purchase price for the Option Shares from the Optionee, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company and the Employer of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of the Ordinary Shares to be purchased pursuant to the exercise of Options under the Plan and any subsequent resale of the Ordinary Shares will be in compliance with applicable laws and regulations.  Such Option Shares shall be issued to the Employer for delivery to the Optionee. In the event the Optionee chooses to pay the purchase price by previously-owned the Ordinary Shares through the attestation method, the number of Ordinary Shares transferred to the Optionee upon the exercise of the Option shall be net of the Shares attested to.

 

(b)                                 The Ordinary Shares purchased upon exercise of this Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the

 

2

 

Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Ordinary Shares subject to this Option unless and until this Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the shareholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Ordinary Shares.

 

(c)                                  The minimum number of shares with respect to which this Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Option is being exercised is the total number of shares subject to exercise under this Option at the time.

 

(d)                                 Notwithstanding any other provision hereof or of the Plan, no portion of this Option shall be exercisable after the Expiration Date hereof.

 

3.                                      Termination of Employment.  If the Optionee’s employment by the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to exercise the Option may be subject to earlier termination as set forth below.

 

(a)                                 Termination Due to Death.  If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier.  Any portion of this Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)                                 Termination Due to Disability.  If the Optionee’s employment terminates by reason of the Optionee’s disability (as determined by the Administrator), any portion of this Option outstanding on such date, to the extent exercisable on the date of such termination of employment, may thereafter be exercised by the Optionee for a period of 12 months from the date of disability or until the Expiration Date, if earlier.  Any portion of this Option that is not exercisable on the date of disability shall terminate immediately and be of no further force or effect.

 

(c)                                  Termination for Cause.  If the Optionee’s employment terminates for Cause, any portion of this Option outstanding on such date shall terminate immediately and be of no further force and effect.  For purposes hereof, “Cause” shall mean, unless otherwise provided in an employment agreement between the Company and the Optionee, a determination by the Administrator that the Optionee shall be dismissed as a result of (i) any material breach by the Optionee of any agreement between the Optionee and the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the Optionee to a felony or a crime involving moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability) by the Optionee of the Optionee’s duties to the Company.

 

(d)                                 Other Termination.  If the Optionee’s employment terminates for any reason other than the Optionee’s death, the Optionee’s disability or Cause, and unless otherwise determined by the Administrator, any portion of this Option outstanding on such date may be

 

3

 

exercised, to the extent exercisable on the date of termination, for a period of three months from the date of termination or until the Expiration Date, if earlier.  Any portion of this Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect.

 

The Administrator’s determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.

 

4.                                      Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in  Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.                                      Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.                                      Tax Withholding.  The Optionee shall, not later than the date as of which the exercise of this Option becomes a taxable event for Federal income tax purposes, pay to the Employer or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Employer shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from the Ordinary Shares to be issued to the Optionee a number of Ordinary Shares with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

7.                                      No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.

 

8.                                      Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

9.                                      Data Privacy Consent.  In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”).  By entering into this Agreement, the Optionee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Optionee may have with respect to the Relevant Information; (iii) authorizes the

 

4

 

Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate.  The Optionee shall have access to, and the right to change, the Relevant Information.  Relevant Information will only be used in accordance with applicable law.

 

10.                               Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
AQUAVENTURE   HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.  Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Optionee (including through an online acceptance process) is acceptable.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Optionee’s   name and address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

5

 

NON-QUALIFIED STOCK OPTION AGREEMENT
 FOR NON-EMPLOYEE DIRECTORS
 UNDER THE AQUAVENTURE HOLDINGS LIMITED
 2016 SHARE OPTION AND INCENTIVE PLAN

 

	
Name of Optionee:
    	
 
    
	
 
    	
 
    
	
No. of Option Shares:
    	
 
    
	
 
    	
 
    
	
Option Exercise Price   per Share:
    	
$
    
	
 
    	
[FMV on Grant Date]
    
	
 
    	
 
    
	
Grant Date:
    	
 
    
	
 
    	
 
    
	
Expiration Date:
    	
 
    
	
 
    	
[No more than 10 years]
    

 

Pursuant to the AquaVenture Holdings Limited 2016 Share Option and Incentive Plan Share Option and Incentive Plan as amended through the date hereof (the “Plan”), AquaVenture Holdings Limited (the “Company”) hereby grants to the Optionee named above, who is a Director of the Company but is not an employee of the Company, an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of Ordinary Shares (the “Ordinary Shares”), of the Company specified above at the Option Exercise Price per Ordinary Share specified above subject to the terms and conditions set forth herein and in the Plan.  This Stock Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

 

1.                                      Exercisability Schedule.  No portion of this Stock Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the following number of Option Shares on the dates indicated so long as the Optionee remains in service as a member of the Board on such dates:

 

	
Incremental Number of
   Option Shares Exercisable
    	
 
    	
Exercisability Date
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    

 

 

Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.

 

2.                                      Manner of Exercise.

 

(a)                                 The Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more of the following methods:  (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 Ordinary Shares that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; (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 to pay the option purchase price, provided that in the event the Optionee chooses to pay the option 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; (iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of Ordinary Shares issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; or (v) a combination of (i), (ii), (iii) and (iv) above.  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 Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Ordinary Shares to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the Ordinary Shares will be in compliance with applicable laws and regulations.  In the event the Optionee chooses to pay the purchase price by previously-owned Ordinary Shares through the attestation method, the number of Ordinary Shares transferred to the Optionee upon the exercise of the Stock Option shall be net of the Ordinary Shares attested to.

 

(b)                                 The Ordinary Shares purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the holder of, or to have any of the rights of a

 

2

 

holder with respect to, any Ordinary Shares subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the shareholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Ordinary Shares.

 

(c)                                  The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.

 

(d)                                 Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.

 

3.                                      Termination as Director. If the Optionee ceases to be a Director of the Company, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.

 

(a)                                 Termination Due to Death.  If the Optionee’s service as a Director terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date, to the extent exercisable on the date of death, may thereafter be exercised by the Optionee’s legal representative or legatee for a period of [12] months from the date of death or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of death shall terminate immediately and be of no further force or effect.

 

(b)                                 Other Termination.  If the Optionee ceases to be a Director for any reason other than the Optionee’s death, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date the Optionee ceased to be a Director, for a period of [six] months from the date the Optionee ceased to be a Director or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date the Optionee ceases to be a Director shall terminate immediately and be of no further force or effect.

 

4.                                      Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

5.                                      Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

 

6.                                      No Obligation to Continue as a Director.  Neither the Plan nor this Stock Option confers upon the Optionee any rights with respect to continuance as a Director.

 

3

 

7.                                      Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

8.                                      Data Privacy Consent.  In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”).  By entering into this Agreement, the Optionee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Optionee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate.  The Optionee shall have access to, and the right to change, the Relevant Information.  Relevant Information will only be used in accordance with applicable law.

 

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9.                                      Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
AQUAVENTURE   HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.  Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Optionee (including through an online acceptance process) is acceptable.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Optionee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Optionee’s   name and address:
    

 

 

 

5

 

RESTRICTED STOCK AWARD AGREEMENT
 UNDER THE AQUAVENTURE HOLDINGS LIMITED
 2016 SHARE OPTION AND INCENTIVE PLAN

 

 

	
Name of Grantee:
    
	
 
    
	
No. of Shares:
    
	
 
    
	
Grant Date:
    

 

Pursuant to the AquaVenture Holdings Limited 2016 Share Option and Incentive Plan (the “Plan”) as amended through the date hereof, AquaVenture Holdings Limited (the “Company”) hereby grants a Restricted Stock Award (an “Award”) to the Grantee named above, who is an employee of [          ], a wholly-owned subsidiary of the Company.  Upon acceptance of this Award, the Grantee shall receive the number of Ordinary Shares (the “Ordinary Shares”) of the Company specified above, subject to the restrictions and conditions set forth herein and in the Plan.  The Company acknowledges the receipt from the Employer of consideration from the Grantee of the Ordinary Shares in the form of cash, past or future services rendered to the Employer by the Grantee or such other form of consideration as is acceptable to the Administrator.

 

1.                                      Award.  The shares of Restricted Stock awarded hereunder shall be issued to the Employer for delivery to the Grantee and held by the Company’s transfer agent in book entry form, and the Grantee’s name shall be entered as the shareholder of record on the books of the Company, including the shareholders’ register of the Company.  Thereupon, the Grantee shall have all the rights of a shareholder with respect to such shares, including voting and dividend rights, subject, however, to the restrictions and conditions specified in Paragraph 2 below.  The Grantee shall (i) sign and deliver to the Company a copy of this Award Agreement and (ii) deliver to the Company a stock power endorsed in blank.

 

2.                                      Restrictions and Conditions.

 

(a)                                 Any book entries for the shares of Restricted Stock granted herein shall bear an appropriate legend, as determined by the Administrator in its sole discretion, to the effect that such shares are subject to restrictions as set forth herein and in the Plan.

 

(b)                                 Shares of Restricted Stock granted herein may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee prior to vesting.

 

(c)                                  If the Grantee’s employment with the Company and its Subsidiaries is voluntarily or involuntarily terminated for any reason (including death) prior to vesting of shares of Restricted Stock granted herein, all shares of Restricted Stock shall immediately be forfeited and returned to the Company.

 

3.                                      Vesting of Restricted Stock.  The restrictions and conditions in Paragraph 2 of this Agreement shall lapse on the Vesting Date or Dates specified in the following schedule so long

 

 

as the Grantee remains an employee of the Company or a Subsidiary on such Dates.  If a series of Vesting Dates is specified, then the restrictions and conditions in Paragraph 2 shall lapse only with respect to the number of shares of Restricted Stock specified as vested on such date.

 

	
Incremental Number
   of Shares Vested
    	
 
    	
Vesting Date
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    
	
                (   %)
    	
 
    	
 
    	
 
    

 

Subsequent to such Vesting Date or Dates, the shares on which all restrictions and conditions have lapsed shall no longer be deemed Restricted Stock.  The Administrator may at any time accelerate the vesting schedule specified in this Paragraph 3.

 

4.                                      Dividends.  Dividends on shares of Restricted Stock shall be paid currently to the Grantee.

 

5.                                      Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Award shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

 

6.                                      Transferability.  This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.

 

7.                                      Tax Withholding.  The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Employer or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  Except in the case where an election is made pursuant to Paragraph 8 below, the Employer shall have the authority to cause the required minimum tax withholding obligation to be satisfied, in whole or in part, by withholding from Ordinary Shares to be issued or released by the transfer agent a number of Ordinary Shares with an aggregate Fair Market Value that would satisfy the minimum withholding amount due.

 

8.                                      Election Under Section 83(b).  The Grantee and the Company hereby agree that the Grantee may, within 30 days following the Grant Date of this Award, file with the Internal Revenue Service and the Company an election under Section 83(b) of the Internal Revenue Code.  In the event the Grantee makes such an election, he or she agrees to provide a copy of the election to the Company.  The Grantee acknowledges that he or she is responsible for obtaining the advice of his or her tax advisors with regard to the Section 83(b) election and that he or she is relying solely on such advisors and not on any statements or representations of the Company or any of its agents with regard to such election.

 

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9.                                      No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time.

 

10.                               Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Award and supersedes all prior agreements and discussions between the parties concerning such subject matter.

 

11.                               Data Privacy Consent.  In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”).  By entering into this Agreement, the Grantee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Grantee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate.  The Grantee shall have access to, and the right to change, the Relevant Information.  Relevant Information will only be used in accordance with applicable law.

 

3

 

12.                               Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

	
 
    	
AQUAVENTURE   HOLDINGS LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.  Electronic acceptance of this Agreement pursuant to the Company’s instructions to the Grantee (including through an online acceptance process) is acceptable.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Grantee’s   Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Grantee’s   name and address:
    

 

 

 

4

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