Document:

Exhibit 10.2

Zep Inc.

 

Performance Stock Unit Award Agreement

 

THIS AGREEMENT has been presented by Zep Inc., a Delaware corporation, (the “Company”) to                               , an employee of the Company (“Grantee”) as of                                  (the “Grant Date”) subject to Grantee’s acceptance of this Agreement in accordance with Section 1.2 of this Agreement.

 

WHEREAS, the Company maintains the Amended and Restated Zep Inc. 2010 Omnibus Incentive Plan (the “Plan”), and Grantee has been selected by the Committee to receive a Performance Stock Unit Award under the Plan subject to the terms and conditions of the Plan and this Agreement;

 

WHEREAS, Grantee desires to accept the Performance Stock Unit Award proposed by the Committee subject to the terms and conditions of the Plan and this Agreement.

 

1.                                      Award

 

1.1                               Grant.  Effective as of the Grant Date, but subject to Grantee’s acceptance of this award pursuant to Section 1.2 below, the Company hereby awards to Grantee the number of performance stock units set forth on, and determined in accordance with, Exhibit A, attached to and made a part of this Agreement (the “Performance Stock Units”), all subject to the terms and conditions set forth in this Agreement and in the Plan.

 

1.2                               Acceptance by Grantee.  This Performance Stock Unit award is conditioned upon Grantee’s acceptance of all of the terms and conditions set forth in this Agreement and the Plan, as evidenced by Grantee’s electronic acceptance of this Agreement during the time period allowed by the Committee.  If all of the terms and conditions of this Agreement are not so timely accepted by Grantee, the Performance Stock Units awarded pursuant to this Agreement shall be cancelled by the Committee.

 

1.3                               Plan Terms and Conditions.  This Agreement shall be construed in accordance with, and shall be subject to, the provisions of the Plan (the provisions of which are incorporated into this Agreement by this reference) and, except as otherwise expressly set forth in this Agreement, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.  In the event that any provision of this Agreement conflicts with a provision of the Plan, the Plan provision shall control.

 

2.                                      Performance Stock Unit

 

2.1                               Description.  A Performance Stock Unit is an accounting unit which represents the opportunity for Grantee to receive for each Performance Stock Unit one share of Common Stock or a cash amount equal to the Fair Market Value of one share of Common Stock.  The Committee may, in its discretion determine whether  the requirements set forth in this Agreement for the receipt of stock or cash have been  satisfied, and whether Grantee will receive stock or cash.

 

2.2                               Cash Payment.  If the Committee determines that Grantee will receive cash for a Performance Stock Unit (a “Cash Payment”), the cash for each Performance Stock Unit which vests

 

 

pursuant to Section 3 will equal  the Fair Market Value of a share of Common Stock on (a)  the vesting date set forth in Exhibit A (the “Vesting Date”) if the payment is based on the achievement of a performance goal under Exhibit A; (b)  the date that Grantee has a separation from service if the payment is made pursuant to Section 3.2,  or (c)  the effective date of a Change in Control if the payment is made pursuant to Section 3.3.  A Cash Payment may be rounded to the nearest whole dollar.

 

2.3                               Performance Goal.  The performance goal for the Performance Stock Units is set forth in Exhibit A.  As set forth on Exhibit A, there are “Threshold,” “Target” and “Maximum” levels of achievement of the performance goal each of which results in a different number of Performance Stock Units being granted hereunder.  If the Company’s performance fails to reach the “Threshold” performance level as set forth on Exhibit A, no Performance Stock Units will be earned hereunder, and Grantee will no longer have the right to receive any shares of Common Stock or a Cash Payment with respect to the this award.

 

3.                                      Timing of Payment

 

3.1                               General Rule.  As soon as administratively feasible after end of the Performance Period set forth in Exhibit A (the “Measurement Date”), the Committee shall certify the level of achievement of the Performance Goal.  Thereafter, subject to Sections 3.2, 3.3 and 3.4, Grantee will be entitled to receive a number of shares of Common Stock or a Cash Payment, as determined by the Committee.  The Committee shall cause the Company to issue shares of Common Stock or make a Cash Payment to, or on behalf of, Grantee pursuant to this Section 3.1 at a time determined by the Committee, which in no event shall be later than two and a half months after the end of the calendar year in which the Performance Period ends.

 

3.2                               Subject to Section 3.3 and Section 3.4, if Grantee fails for any reason whatsoever to be continuously employed by the Company from the Grant Date through the Vesting Date, Grantee’s Performance Stock Units shall, unless otherwise determined by the Committee, automatically be cancelled and Grantee shall not receive any shares of Common Stock or Cash Payment with respect to Grantee’s Performance Stock Units.

 

3.3                               Death or Disability.  If Grantee’s continuous employment after the Grant Date is interrupted before the Vesting Date as a result of a “separation from service” (within the meaning of Section 409A of the Code) with the Company by reason of Grantee’s death or Disability, (a) Grantee’s Performance Stock Units shall cease to be subject to a risk of forfeiture under Section 3.1, (b) the Committee shall treat the date of Grantee’s separation from service as the Vesting Date with respect to Grantee’s Performance Stock Units, (c) the Committee shall deem the applicable performance goal to have been met at the “Target Level” of achievement as set forth in Exhibit A, and (d) the Committee shall cause the Company to issue shares of Common Stock or make a Cash Payment to, or on behalf of, Grantee at the “Target Level” of achievement at a time picked by the Committee which is no event later than thirty (30) days after the Grantee’s separation from service.

 

3.4                               Change in Control.  If there is a Change in Control within the meaning of Section 409A of the Code before the Vesting Date and Grantee has been continuously employed from the Grant Date to the effective date of such Change in Control, (a) Grantee’s Performance Stock Units shall cease to be subject to a risk of forfeiture under Section 3.1, (b) the Committee shall treat the effective date of such Change in Control as the Vesting Date with respect to Grantee’s Performance Stock Units, (c) the Committee shall deem the performance goal to have been met at the “Target Level” of achievement as

 

 

set forth in Exhibit A, and (d) the Committee shall cause the Company to issue shares of Common Stock or make a Cash Payment to Grantee at the “Target Level” of achievement at a time picked by the Committee which in no event shall be later than thirty (30) days after the effective date of such Change in Control.

 

4.                                      Shareholder Rights and Dividend Equivalents

 

4.1                               Shareholder Rights.  Grantee shall have no rights as a shareholder of the Company unless, and until, shares of Common Stock are actually issued to Grantee pursuant to this Agreement, in which event Grantee’s rights as a shareholder shall only relate to periods which begin on or after the date the shares of Common Stock are actually issued to Grantee.

 

4.2                               Dividend Equivalents.  If shares of Common Stock are issued or Cash Payment is made to or on behalf of Grantee under Section 3, a cash payment shall be made at the same time to or on behalf of Grantee equal to (a) the sum of the dividends actually paid with respect to a share of Common Stock during the period which starts on the Grant Date and ends on (1) the Vesting Date if the issuance or payment is based on the achievement of a performance goal under Section 3.1, (2) the date that Grantee has a separation from service if the issuance or payment is made pursuant to Section 3.2 or (3) the effective date of a Change in Control if the issuance or payment is made pursuant to Section 3.3 times (b) the number of shares of Common Stock issued or, if a Cash Payment is made, the number of shares of Common Stock which would have been issued but for the Committee’s decision to make a Cash Payment.

 

5.                                      Miscellaneous

 

5.1                               Employment by Affiliates.  For purposes of this Agreement, employment with any Affiliate of the Company shall be treated as employment with the Company.

 

5.2                               Death.  If shares of Common Stock are to be issued or a Cash Payment is to be made after Grantee’s death, the shares of Common Stock shall be issued or the Cash Payment shall be made to the Grantee’s surviving spouse or, if there is no surviving spouse, to the Grantee’s estate.

 

5.3                               Assignment.  Grantee’s rights under this Agreement are personal to Grantee.  Grantee shall not have the right to assign or otherwise transfer Grantee’s right to any person and any attempt to do so shall be null and void and shall not be recognized by the Company.

 

5.4                               General and Unsecured Creditor Status.  Grantee’s status with respect to the issuance of shares of Common Stock or the Cash Payment under this Agreement shall be no more than the status of a general and unsecured creditor of the Company.

 

5.5                               Material Business Event.  If the Committee determines that there has been a Material Business Event (as defined in the Plan), the Committee may take any of the actions contemplated under Section 14 of the Plan to make an adjustment with respect to the number of Grantee’s Performance Stock Units.

 

5.6                               Investment Representation Letter.  The Company reserves the right to require Grantee to sign an investment representation letter prepared by the Company as a condition to the transfer of any Shares of stock to Grantee.

 

 

5.7                               No Registration.  Grantee acknowledges that the Performance Stock Units, or shares of Common Stock issued in connection with the Performance Stock Units, may not be registered under the federal or any state or foreign securities laws, that there may be additional transfer restrictions on the shares issued to Grantee and, further, that the Company is not undertaking any obligation to register any shares issued pursuant to this Agreement under any federal, state or foreign securities laws or to qualify such securities for resale under the applicable foreign jurisdictions’ securities legislation.

 

5.8                               Tax Withholding.  The issuance of shares of Common Stock or the Cash Payment pursuant to this Agreement shall be subject to all applicable tax withholdings, and such withholdings shall be made in any manner which the Committee deems appropriate under the circumstances.

 

5.9                               Grantee Bound by the Plan.  Grantee hereby acknowledges receipt of a copy of the Plan and the prospectus for the Plan, and agrees to be bound by all the terms and provisions of the Plan.

 

5.10                        Modification of Agreement.  This Agreement may be modified, amended, suspended, or terminated, and any terms or conditions hereof may be waived in accordance with the provisions of Section 17.3 of the Plan.

 

5.11                        Severability.  Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

 

5.12                        Governing Law.  The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the state of Delaware of the United States of America without giving effect to the conflicts of laws principles thereof.

 

5.13                        Successors in Interest.  This Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns, whether by merger, consolidation, reorganization, sale of assets, or otherwise.  This Agreement shall inure to the benefit of Grantee’s legal representatives.  All obligations imposed upon Grantee and all rights granted to the Company under this Agreement shall be final, binding, and conclusive upon Grantee’s heirs, personal representatives, executors, administrators, and successors.

 

5.14                        Resolution of Disputes.  Any dispute or disagreement which may arise under, or as a result of, or in any way relate to the interpretation, construction, or application of this Agreement shall be determined by the Committee.  Any determination made under this Section 5.14 shall be final, binding, and conclusive on Grantee and the Company for all purposes.

 

 

Grantee’s electronic signature as follows evidences Grantee’s acceptance of all of the terms and conditions of this Agreement and the Plan as of the Grant Date.

 

 

Accepted by Grantee:

 

 

	
 
    	
 
    

 

 

Exhibit A

 

 [Entire Exhibit is Updated for RONA]

 

Performance Goal for Performance Stock Unit Award

 

	
Award Number:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Grant Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Target   Share Units:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Performance   Period:
    	
 
    	
September 1,   2014 through August 31, 2017
    
	
 
    	
 
    	
 
    
	
Measurement   Date:
    	
 
    	
August 31,   2017
    
	
 
    	
 
    	
 
    
	
Vesting   Date:
    	
 
    	
The   later of the date on which the Committee certifies the achievement level of   the Performance Goal after the Measurement Date or the third anniversary of   the Grant Date   (                      )
    

 

Performance Goal:

 

The achievement of a level of return on net assets (RONA) (the Achievement Level) between the Threshold and Maximum shown in the table below. Final performance will be measured against the payout curve as of the Measurement Date.  The number of shares you will receive will be calculated by multiplying your Target Share Units by the Payout % between 0% and 200%.  The exact Payout % will be determined by linear interpolation of the Achievement Level of the performance metric between the Threshold, Target and Maximum.   The following table shows the Achievement Level at Threshold, Target and Maximum.

 

	
Performance
    	
 
    	
Threshold
    	
 
    	
Target
    	
 
    	
Maximum
    
	
Measure
    	
 
    	
0% Payout
    	
 
    	
100% Payout
    	
 
    	
200% Payout
    
	
RONA
    	
 
    	
<10.0%
    	
 
    	
17.0%
    	
 
    	
22.0%
    

 

The calculation of the final RONA performance measure has been defined to take into consideration fluctuations in RONA throughout the three-year performance period.  RONA will be calculated at the end of each fiscal year using the following formula:

 

	
Profit Before Tax (PBT)
    	
 
    
	
Net Working   Capital(1)  + Net Fixed Assets(2)
    	
 
    

 

(1)         Net Working Capital (Current Assets - Current Liabilities) will be an average of beginning and ending values for each fiscal year.

(2)         Net Fixed Assets (Property, Plant and Equipment + Building and Leaseholder Improvements + Machinery and Equipment — Accumulated Depreciation) will be an average of the beginning and ending values for each fiscal year.

 

 

Each one-year result will be weighted at 20% and the average over the entire three-year period will be weighted at 40%.

 

At the Compensation Committee’s discretion, the Company’s calculated RONA as of the Measurement Date may be adjusted to derive RONA for purposes of determining the number of Performance Stock Units earned under this award.  Such adjustments may be added to or deducted from calculated RONA to obtain a measure more reflective of normal operations and may, at the Committee’s discretion, include one or more of the following:  restructuring charges; reductions-in-force; the effect of changes in accounting principles and tax laws; gains or losses on asset sales; discontinued operations; acquisitions; the effect of dispositions or divestitures; foreign currency fluctuations; equity adjustments; and extraordinary, unusual or non-recurring gains or losses realized other than in the ordinary course of business which may distort results.

 

Payout Example:

 

A payout example assuming an award of 100 Target Share Units, as well as its point on the payout curve follows.

 

	
 
    	
 
    	
Calculated 
   RONA
    	
 
    	
Payout 
   %
    	
 
    	
Weighting
    	
 
    	
Actual 
   Shares 
   Earned
    	
 
    
	
Year 1
    	
 
    	
17.0
    	
%
    	
100
    	
%
    	
20
    	
%
    	
20
    	
 
    
	
Year 2
    	
 
    	
17.0
    	
%
    	
100
    	
%
    	
20
    	
%
    	
20
    	
 
    
	
Year 3
    	
 
    	
20.0
    	
%
    	
160
    	
%
    	
20
    	
%
    	
32
    	
 
    
	
3-Year Average
    	
 
    	
18.0
    	
%
    	
120
    	
%
    	
40
    	
%
    	
48
    	
 
    
	
Actual Shares Received 
   (assuming award of 100 target share units)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
120Exhibit 10.3

 

Zep Inc.

Incentive Stock Option Agreement

 

THIS AGREEMENT, made as of October 1, 2014 (the “Grant Date”), between Zep Inc., a Delaware corporation (the “Company”), and                            (the “Grantee”).

 

WHEREAS, the Company maintains the Amended and Restated Zep Inc. 2010 Omnibus Incentive Plan (the “Plan”) in order to provide additional incentive to certain officers and key employees of the Company and its Subsidiaries; and

 

WHEREAS, the Grantee performs services for the Company and/or one of its Subsidiaries; and

 

WHEREAS, the Committee responsible for administration of the Plan has determined to grant the Option to the Grantee as provided herein; and

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.                                      Grant of Option.

 

1.1                               The Company hereby grants to the Grantee the right and option (the “Option”) to purchase all or any part of an aggregate of                      whole Shares subject to, and in accordance with, the terms and conditions set forth in this Agreement and the Plan.

 

1.2                               The Option is intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code and shall be so construed; provided, however, that nothing in this Agreement shall be interpreted as a representation, guarantee, or other undertaking on the part of the Company that the Option is or will be determined to be an Incentive Stock Option within the meaning of Section 422 of the Code.  To the extent this Option is not treated as an Incentive Stock Option, it will be treated as a Nonqualified Stock Option.

 

1.3                               This Agreement shall be construed in accordance and consistent with, and subject to, the provisions of the Plan (the provisions of which are incorporated herein by reference) and, except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

 

1.4                               The Option is conditioned upon Grantee’s acceptance of the terms of this Agreement, as evidenced by Grantee’s execution of this Agreement or by Grantee’s electronic acceptance of the Agreement in a manner and during the time period allowed by the Company.  If the terms of this Agreement are not timely accepted by the execution or by such electronic acceptance in the manner and during the time period allowed by the Company, the Option may be unilaterally canceled or terminated by the Committee.

 

2.                                      Purchase Price.

 

The price at which the Grantee shall be entitled to purchase Shares upon the exercise of the Option shall be                          per Share.

 

 

3.                                      Duration of Option.

 

The Option shall be exercisable to the extent and in the manner provided herein for a period of ten (10) years from the Grant Date (the “Exercise Term”); provided, however, that the Option may be earlier terminated as provided in Sections 1.4, 6 and 7.1 hereof.

 

4.                                      Vesting and Exercisability of Option.

 

The Option shall vest, and may be exercised, with respect to the Shares as set forth in the Grantee Summary attached hereto and made a part hereof, subject to earlier termination of the Option as provided in Sections 1.4, 6 and 7.1 hereof or in the Plan.  The right to purchase the Shares as they become vested shall be cumulative and shall continue during the Exercise Term unless sooner terminated as provided herein.

 

5.                                      Manner of Exercise and Payment.

 

5.1                               Subject to the terms and conditions of this Agreement and the Plan, the Option may be exercised by either (i) delivery of written or electronic notice to the Company, at its principal executive office or (ii) online notice given to an online broker with which the Company has made arrangement for the exercise of employee stock options, which notice satisfies the form and conditions set forth in such arrangement, which shall be provided to the Grantee from time to time.  Such notice shall state that the Grantee is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and, if delivered in writing to the Company, shall be signed by the person or persons exercising the Option.  If requested by the Committee, such person or persons shall (i) deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.

 

5.2                               The notice of exercise described in Section 5.1 shall be accompanied by the full purchase price for any Shares purchased pursuant to the exercise of an Option and shall be paid in full upon such exercise, (i) in cash, by check, by transferring Shares to the Company or by attesting to the ownership of Shares, upon such terms and conditions as may be acceptable to the Committee, or by net settlement of the Option in the manner determined by the Committee or (ii) by such arrangement as is made by the Company with the designated online broker.  Any Shares the Grantee transfers to the Company or attests to owning as payment of the purchase price under an Option shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option.

 

5.3                               Upon receipt of notice of exercise and full payment for the Shares in respect of which the Option is being exercised, the Company shall, subject to Section 15 of the Plan, take such action as may be necessary to effect the transfer to the Grantee of the number of Shares as to which such exercise was effective.

 

5.4                               The Grantee 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 until (i) the Option shall have been exercised pursuant to the terms of this Agreement and the Grantee shall have paid the full purchase price for the number of Shares in respect of which the Option was exercised, (ii) the Company shall have issued and delivered the Shares to the Grantee, and (iii) the Grantee’s name shall have

 

 

been entered as a stockholder of record on the books of the Company, whereupon the Grantee shall have full voting and other ownership rights with respect to such Shares.

 

6.                                      Termination of Employment.

 

6.1                               In General.  If the employment of the Grantee with the Company and its Subsidiaries shall terminate for any reason, other than for the reasons set forth in Sections 6.2 or 7.2 below, the Option shall continue to be exercisable (to the extent the Option was vested and exercisable on the date of the Grantee’s termination of employment) at any time within three (3) months after the date of such termination of employment, but in no event after the expiration of the Exercise Term (the “Expiration Date”), unless otherwise determined by the Committee.

 

6.2                               Termination of Employment Due to Death, Disability, or Retirement.  If the Grantee’s termination of employment is due to death, Disability, or Retirement (for purposes of this Agreement, “Retirement” means voluntary termination on or after age 65), or if Grantee terminates employment after age 55, the following shall apply:

 

(a)                                 Termination Due To Death.  In the event the Grantee dies while actively employed, the Option shall become immediately and fully exercisable, and shall remain exercisable at any time prior to the Expiration Date, or for one (1) year after the date of death, whichever period is shorter, by (A) such person(s) that have acquired the Grantee’s rights under such Options by will or by the laws of descent and distribution, or (B) if no such person described in (A) exists, the Grantee’s estate or representative of the Grantee’s estate.

 

(b)                                 Termination by Disability.  In the event the employment of the Grantee is terminated by reason of Disability, the Option shall become immediately and fully exercisable as of the date the Committee determines the Grantee terminated for Disability and shall remain exercisable at any time prior to the Expiration Date, or for one (1) year after the date of termination, whichever period is shorter.

 

(c)                                  Termination by Retirement.  In the event the employment of the Grantee is terminated by reason of Retirement, all outstanding unvested Options shall expire, and any Options vested as of Grantee’s date of Retirement shall remain exercisable at any time prior to the Expiration Date, or for five (5) years after the date of termination, whichever period is shorter.  In the event of the Grantee’s death after Retirement, the vested Options shall be exercisable in accordance with this subsection (c) and the Option shall be exercisable by the persons described in (a) above.

 

(d)                                 Termination After Attaining Age 55.  If the Grantee terminates employment (other than as a result of death or Disability) after attaining age 55 but prior to age 65, all outstanding unvested Options shall expire, and any Options vested as of Grantee’s date of termination shall, unless the Committee determines otherwise at the time of such termination, remain exercisable at any time prior to the end of the Exercise Term, or for five (5) years after the date of termination, whichever period is shorter.  In the event of the Grantee’s death after terminating after age 55, the vested Options shall be exercisable in accordance with this subsection (d) and the Option shall be exercisable by the persons described in (a) above.

 

 

7.                                      Effect of Change in Control.

 

7.1                               Notwithstanding anything contained to the contrary in this Agreement, in the event of a Change in Control, the Option shall become immediately and fully exercisable, and the Committee, in its discretion, may terminate the Option, provided that at least 30 days prior to the Change in Control, the Committee notifies the Grantee that the Option will be terminated and provides the Grantee, at the election of the Committee, (i) the right to receive immediately a cash payment in an amount equal to the excess, if any, of (A) the greater of (x) the Fair Market Value on the date preceding the date of surrender, of the shares subject to the Option or portion of the Option surrendered, or (y) the Adjusted Fair Market Value of the Shares subject to the Option or portion thereof surrendered, over (B) the aggregate purchase price for such Shares under the Option; or (ii) the right to exercise all Options (including the Options vested as a result of the Change in Control) immediately prior to the Change in Control.

 

7.2                               If the Options remain outstanding after the Change in Control, and if the employment of the Grantee is terminated within two (2) years following a Change in Control, all vested Options shall continue to be exercisable at any time within five (5) years after the date of such termination of employment.  In no event shall the vested Options be exercisable after the Expiration Date.

 

8.                                      Nontransferability.

 

The Option may only be exercised by the Grantee or by Grantee’s estate.  The Option is not assignable or transferable, in whole or in part, and it may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Grantee upon his death, provided that the deceased Grantee’s beneficiary or the representative of the estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if the beneficiary or the estate were the Grantee.

 

9.                                      No Right to Continued Employment.

 

Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Grantee any right with respect to continuance of employment by the Company or a Subsidiary, nor shall this Agreement or the Plan interfere in any way with the right of the Company or a Subsidiary to terminate the Grantee’s employment at any time.

 

10.                               Adjustments.

 

In the event of a Material Business Event, the Committee may take any of the actions contemplated under Section 14 of the Plan with respect to this Award and/or the Shares.

 

11.                               Withholding of Taxes.

 

11.1                        The Grantee shall be responsible for all federal, state and local income taxes payable with respect to this Option.  The Company shall have the right to deduct from any

 

 

distribution of cash to the Grantee an amount equal to the federal, state, and local income taxes and other amounts as may be required by law to be withheld (the “Withholding Taxes”) with respect to the Option.  If the Grantee is entitled to receive Shares upon exercise of the Option, the Grantee shall pay the Withholding Taxes to the Company in cash prior to the issuance of such Shares.  In satisfaction of the Withholding Taxes, the Grantee may make a written election (the “Tax Election”) to have withheld a portion of the Shares issuable to him or her upon exercise of the Option, having an aggregate Fair Market Value equal to the Withholding Taxes, provided that, if the Grantee may be subject to liability under Section 16(b) of the Exchange Act, the election must comply with the requirements applicable to Share transactions by such Grantees.

 

11.2                        If the Grantee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to him pursuant to his exercise of the Option within the two-year period commencing on the day after the Grant Date or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Grantee pursuant to such exercise, the Grantee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office.

 

12.                               Employee Bound by the Plan.

 

The Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

 

13.                               Modification of Agreement.

 

This Agreement may be modified, amended, suspended, or terminated in accordance with the provisions of Section 17.3 of the Plan.

 

14.                               Severability.

 

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

 

15.                               Governing Law.

 

The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the state of Delaware without giving effect to the conflicts of laws principles thereof.

 

16.                               Successors in Interest.

 

This Agreement shall inure to the benefit of and be binding upon each successor corporation.  This Agreement shall inure to the benefit of the Grantee’s legal representatives.  All obligations imposed upon the Grantee and all rights granted to the Company under this Agreement shall be final, binding, and conclusive upon the Grantee’s heirs, executors, administrators, and successors.

 

 

17.                               Resolution of Disputes.

 

Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction, or application of this Agreement shall be determined by the Committee.  Any determination made hereunder shall be final, binding, and conclusive on the Grantee and the Company for all purposes.

 

 

	
Accepted   by Grantee:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

 

GRANTEE SUMMARY

 

 

Option Type:                                 

 

Grant Date:                                 

 

Shares Granted:

 

Vesting Dates:

 

	
Vest Date
    	
 
    	
Shares Vesting
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

Expiration Date:

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