Document:

Exhibit 10.9

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (this “Amendment”) is made as of this    day of July, 2016 (the “Effective Date”), by and between 55 Cambridge Parkway, LLC, a Delaware limited liability company (the “Landlord”), having an address do Invesco Real Estate, 1166 Avenue of the Americas, New York, New York 10036, as landlord, and CarGurus, Inc., a Delaware corporation (the “Tenant”) having an address of 2 Canal Park Cambridge, MA 02141, as tenant.

 

WHEREAS, Landlord and Tenant are landlord and tenant, respectively, under an Office Lease Agreement dated as of March 11, 2016 for certain premises consisting of approximately 30,534 rentable square feet of space (the “Original Premises”) on the fifth (5th) floor of the West Wing (i.e., 15,267 rentable square feet) of the building (the “Building”) at 55 Cambridge Parkway, Cambridge, Massachusetts and on the sixth (6th) floor of the West Wing (i.e., 15,267 rentable square feet) of the Building, all as described therein (the “Lease”).

 

WHEREAS, Tenant has exercised its right of first offer to lease the “5th Floor East Wing Space” described in Section 2(a) of Exhibit J to the Lease.

 

WHEREAS, the parties desire to (i) memorialize Tenant’s leasing of the 5th Floor East Wing Space pursuant to Section 2 (a)(iii) of Exhibit J to the Lease, and (ii) amend the Lease in certain other respects, all as hereinafter set forth.  Capitalized terms not defined herein shall have the same meanings ascribed to them in the Lease.

 

WITNESSETH

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.                                      Inclusion of Fifth Floor East Wing Premises Under Lease.  Effective as of the “Fifth Floor East Wing Premises Commencement Date” (as hereinafter defined), there shall be added to the Premises under the Lease the space shown on Schedule 1 hereto, which space consists of approximately 21,389 rentable square feet of floor area on the fifth (5th) floor of the East Wing of the Building (the “Fifth Floor East Wing Premises”).  In addition to the Fifth Floor East Wing Premises, subject to the below provisions of this Section 1, Tenant shall have the exclusive use of the fifth (5th) floor lobby as shown on Exhibit A as the “Fifth Floor Lobby” and located between the “Fifth Floor West Wing Premises” (as such term is defined herein) and the Fifth Floor East Wing Premises (the “Fifth Floor Lobby”).  Subject to (A) Landlord’s approval rights as provided in the Lease, (B) Tenant’s compliance (at Tenant’s sole cost and expense) with respect to all applicable codes, (C) Tenant’s procurement, at Tenant’s sole cost and expense, for all permits and approvals therefor, and (D) Landlord and its property manager, maintenance, engineering staff and contractors maintaining access to the Fifth Floor Lobby at all times for inspections and maintenance and repair obligations under the Lease, Tenant’s exclusive rights to use the Fifth Floor Lobby shall include: (i) the right to design and make improvements, at Tenant’s expense, to the Fifth Floor Lobby, (ii) the right, at Tenant’s expense, to adjust elevator controls to create a lock-out system for the fifth (5th) floor and (iii) the right, at Tenant’s expense, to adjust stairway egress controls to create a lock-out system for the fifth (5th) floor.

 

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Tenant’s exclusive use of the Fifth Floor Lobby shall be subject to all terms and provisions of the Lease, except (I) Tenant shall not be obligated to pay Base Rent for the Fifth Floor Lobby and (II) Tenant’s Proportionate Share for the Fifth Floor East Wing Premises (as described in Section 4(0 of this Amendment) shall not be impacted by Tenant’s exclusive use of the Fifth Floor Lobby.  Notwithstanding the above, if at any time Tenant shall not be leasing the entirety of the Fifth Floor East Wing Premises or the entirety of the Fifth Floor West Wing Premises, (i) Tenant shall perform, at Tenant’s sole cost and expense, all necessary Building standard improvements and alterations required by Landlord to cause the Fifth Floor Lobby to be returned to a multi-tenant lobby; and (ii) Tenant shall no longer have the exclusive right to use the Fifth Floor Lobby.

 

Notwithstanding any provisions of the Lease to the contrary, the Original Term of the Lease for the Fifth Floor East Wing Premises shall be the period commencing on February 1, 2017 (the “Fifth Floor East Wing Premises Commencement Date”) (unless delayed under Paragraph 2 of this First Amendment) and ending on January 31, 2024 at 5:00 pm local time (the “Fifth Floor East Wing Premises Original Term”).

 

Except as otherwise provided herein and except to the extent inconsistent herewith, all terms and provisions of the Lease shall be applicable to Tenant’s leasing of the Fifth Floor East Wing Premises, except that (i) there shall be no free rent or abated rent period for the Fifth Floor East Wing Premises, (ii) Exhibit E of the Lease shall not be applicable to Tenant’s leasing of the Fifth Floor East Wing Premises, and (iii) Section 1 (Extension Option) of Exhibit J of the Lease shall be applicable to Tenant’s leasing of the Fifth Floor East Wing Premises to the extent provided herein.  In the event Tenant shall exercise its rights for an Extension Option under Section 1 of Exhibit J for the Original Premises then, at Tenant’s further option the exercise may either include or exclude the Fifth Floor East Wing Premises, and in the event Tenant shall include the Fifth Floor East Wing Premises in the exercise of its Extension Option then (A) the term of the Lease for the Fifth Floor East Wing Premises shall be extended so as to be co-terminus with the Extension Term as provided in Exhibit J of the Lease, (B) the Extension Term for all the Premises shall be on all the terms and conditions provided in Exhibit J to the Lease, except that, for the period from the beginning of the Extension Term until January 31, 2024, the Rent with respect to the Fifth Floor East Wing Premises shall be as provided in this First Amendment, and (C) Exhibit D shall not be applicable to the Fifth Floor East Wing Premises.

 

2.                                      Delivery Condition For Fifth Floor East Wine Premises; Landlord’s Allowance For Fifth Floor East Wing Premises.  Except for the work described in Exhibit B hereto (the “Fifth Floor East Wing Premises Shell Condition Work”), Tenant hereby acknowledges and agrees that it shall accept the Fifth Floor East Wing Premises in their “AS-IS” condition as of the date of this Amendment, and Landlord shall have no obligation to perform any work therein (including, without limitation, the construction of any tenant finish-work or other improvements therein), and Landlord shall not be obligated to reimburse Tenant or provide an allowance for any costs related to the demolition or construction of improvements therein other than the Landlord’s Fifth Floor East Wing Premises Allowance and the Landlord’s Fifth Floor East Wing Premises Space Planning Allowance (as such terms are defined in Exhibit C hereto) pursuant to the terms and provisions of Exhibit C hereto.  Landlord shall use reasonable efforts to substantially complete the Fifth Floor East Wing Premises Shell Condition Work on or before September 30, 2016 (the “Fifth Floor East Wing Premises Estimated Delivery Date”).

 

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If Landlord is unable to tender possession of the Fifth Floor East Wing Premises in such condition to Tenant by the Fifth Floor East Wing Premises Estimated Delivery Date, then: (a) the validity of this Lease shall not be affected or impaired thereby; (b) Landlord shall not be in default hereunder or be liable for damages therefor; (c) Tenant shall accept possession of the Fifth Floor East Wing Premises when Landlord tenders possession thereof to Tenant and (d) the Fifth Floor East Wing Premises Commencement Date and the Fifth Floor East Wing Premises Rent Commencement Date shall be extended day for day for each day after the Fifth Floor East Wing Premises Estimated Delivery Date that Landlord fails to deliver the Fifth Floor East Wing Premises to Tenant in the condition required herein.  By occupying the Fifth Floor East Wing Premises, Tenant shall be deemed to have accepted the Fifth Floor East Wing Premises in their condition as of the date of such occupancy except as to items noted by Tenant within fifteen (15) days after taking such occupancy.  Prior to occupying the Fifth Floor East Wing Premises, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit G to the Lease confirming: (1) the Commencement Date for the Fifth Floor East Wing Premises and the expiration date of the Fifth Floor East Wing Premises Original Term; (2) that Tenant has accepted the Fifth Floor East Wing Premises; and (3) that subject to Tenant’s right to note deficiencies within fifteen (15) days after taking such occupancy, Landlord has performed all of its obligations with respect to the Fifth Floor East Wing Premises; however, the failure of the parties to execute such letter shall not defer the Commencement Date for the Fifth Floor East Wing Premises or otherwise invalidate this Amendment, and provided further that, upon Tenant’s request, at the time of execution of such letter Landlord shall deliver to Tenant an executed Notice of Lease amending the Notice of Lease recorded with Middlesex County (Southern District) Registry of Deeds in Book 67192 Page 262.  Tenant’s failure to execute such document within ten (10) days of receipt thereof from Landlord shall be an Event of Default (as defined in Section 17 of the Lease) under the Lease if such execution is warranted by the facts and shall be deemed to constitute Tenant’s agreement to the contents of such document.  Occupancy of the Fifth Floor East Wing Premises prior to the Fifth Floor East Wing Premises Commencement Date shall be subject to all of the provisions of the Lease (as amended hereby), excepting only those requiring the payment of Rent.

 

3.                                      Base Years For Fifth Floor East Wing Expansion Premises.  Notwithstanding anything to the contrary contained in the Lease, the Base Year for Operating Costs for the Fifth Floor East Wing Premises shall be calendar year 2017, and the Tax Base Year for the Fifth Floor East Wing Premises shall be the period of July 1, 2017 through June 30, 2018.  The Base Years for the Original Premises shall remain as set forth in the Lease.

 

4.                                      Amendments to the Lease.

 

a.                                      Premises.                                              As of the Fifth Floor East Wing Premises Commencement Date, the first sentence of the definition of “Premises” in the Basic Lease Information Section of the Lease shall be amended in its entirety to read as follows:

 

“Premises:                                       Approximately 51,923 rentable square feet, consisting of (i) approximately 15,267 rentable square feet of space on the fifth (5th) floor of the West Wing of the Building (the “Fifth Floor West Wing Premises”), (ii) approximately

 

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21,389 rentable square feet of space on the fifth (5th) floor of the East Wing of the Building (the “Fifth Floor East Wing Premises”), and (iii) approximately 15,267 rentable square feet of space on the sixth (6th) floor of the West Wing of the Building (the “Sixth Floor West Wing Premises”).  The Premises are located in the building commonly known as 55 Cambridge Parkway (the “Building”), having a street address of 55 Cambridge Parkway, Cambridge, MA.  The Premises are outlined on the plan attached to the Lease as Exhibit A.  The land on which the Building is located (the “Land”) is described on Exhibit B.  The term “Project” shall collectively refer to the Building, the Land and the driveways, parking facilities, and similar improvements and easements associated with the foregoing or the operation thereof, including without limitation the Common Areas (as defined in Section 7(c)).”

 

b.                                      Original Term.  As of the Effective Date, the definition of “Original Term” in the Basic Lease Information Section of the Lease is amended in its entirety to read as follows:

 

“Original Term:            (a)  Fifth Floor West Wing Premises and Sixth Floor West Wing Premises.  April 23, 2016 until 5:00 pm local time on November 30, 2022.

 

(b)  Fifth Floor East Wing Premises: The period beginning on the Fifth Floor East Wing Premises Commencement Date and ending at 5:00 pm local time on January 31, 2024.”

 

c.                                       Base Rent Commencement Date.  As of the Effective Date, the definition of “Base Rent Commencement Date” in the Basic Lease Information Section of the Lease shall be amended in its entirety to read as follows:

 

Sixth Floor West Wing Premises: September 1, 2016 (the “Sixth Floor West Wing Premises Rent Commencement Date”)

 

Fifth Floor West Wing Premises: November 1, 2016 (the “Fifth Floor West Wing Premises Rent Commencement Date”)

 

Fifth Floor East Wing Premises: The Fifth Floor East Wing Premises Commencement Date (the “Fifth Floor East Wing Premises Rent Commencement Date”).

 

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d.                                      Base Rent.  As of the Effective Date, the definition of “Base Rent” in the Basic Lease Information Section of the Lease shall be amended by adding the following new section at the end thereof:

 

“Base Rent for Fifth Floor East Wing Premises only:

 

(i)                                     For the period commencing on Fifth Floor East Wing Premises Rent Commencement Date and ending on January 31, 2018: $1,561,397.00 per annum ($130,116.41 per month);

 

(ii)                                  For the period commencing on February 1, 2018 and ending on January 31, 2019: $1,582,786.00 per annum ($131,898.83 per month);

 

(iii)                               For the period commencing on February 1, 2019 and ending on January 31, 2020: $1,604,175.00 per annum ($133,681.25 per month);

 

(iv)                              For the period commencing on February 1, 2020 and ending on January 31, 2021: $1,625,564.00 per annum ($135,463.66 per month);

 

(v)                                 For the period commencing on February 1, 2021 and ending on January 31, 2022: $1,646,953.00 per annum ($137,246.08 per month);

 

(vi)                              For the period commencing on February 1, 2022 and ending on January 31, 2023: $1,668,342.00 per annum ($139,028.50 per month);

 

(vii)                           For the period commencing on February 1, 2023 and ending on January 31, 2024: $1,689,731.00 per annum ($140,810.91 per month); and

 

(viii)                        Extension Terms For Fifth Floor East Wing Premises (if duly exercised): See Exhibit D of First Amendment To Lease.”

 

e.                                       Security Deposit.  As of the Effective Date, the definition of “Security Deposit” in the Basic Lease Information Section of the Lease shall be amended to read as follows:

 

“$1,044,455.00 in the form of a Letter of Credit, subject to reduction in accordance with Section 6.”

 

Tenant shall deposit with Landlord on the Effective Date either (I) an amendment to the existing Letter of Credit increasing the amount to

 

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$1,044,455.00 or (ii) a new Letter of Credit (meeting the standards of Section 6 of the Lease) in such $1,044,455.00 amount.

 

f.                                        Tenant’s Proportionate Share.  As of the Fifth Floor East Wing Premises Commencement Date, the definition of “Tenant’s Proportionate Share” in the Basic Lease Information Section of the Lease shall be amended by adding the following new section at the end thereof.

 

“Tenant’s

Proportionate

Share For Fifth Floor

East Wing Premises:  7.8%, which is the percentage obtained by dividing (a) the number of rentable square feet in the Fifth Floor East Wing Premises as stated above by (b) the rentable square feet in the Building at the time a respective charge was incurred, which at the time of execution of that certain First Amendment of Lease between Landlord and Tenant is 274,235 rentable square feet.”

 

g.                                       Exhibit A.  As of the Fifth Floor East Wing Premises Commencement Date, Exhibit A to the Lease shall be deleted in its entirety and replaced with Exhibit A attached hereto.

 

h.                                      Parking.  As of the Fifth Floor East Wing Premises Commencement Date, Exhibit I of the Lease is hereby amended by deleting the words “forty-three (43) parking spaces” and by substituting the words “seventy-two (72) parking spaces” therefor.  Notwithstanding such increase in the number of parking spaces, on or before the date that is sixty (60) days after the Effective Date of this Amendment, Tenant shall notify Landlord in writing (the “Parking Space Election Notice”) of the actual number of parking spaces (i.e., up to seventy-two [72]) that Tenant desires to use effective as of the Fifth Floor East Wing Premises Commencement Date.  From and after the Fifth Floor East Wing Premises Commencement Date, Tenant shall be obligated to pay Landlord the Parking Charges for, and Tenant shall only have the right to use, such number of parking spaces elected by Tenant in the Parking Space Election Notice (or, in the absence of such timely election, for all 72 spaces), regardless of whether Tenant or any invitees, employees or contractors actually use all or any of such spaces.  Notwithstanding the above, commencing with the date of Tenant’s occupancy of any portion of the Original Premises until the day before the Fifth Floor East Wing Premises Commencement Date, Tenant shall pay Landlord the Parking Charges for forty-three (43) parking spaces, regardless of whether Tenant or any other invitees, employees or contractors actually use all or any of such spaces.

 

i.                                          Right of First Offer - 7th Floor West.  Exhibit J paragraph 2 (c) is amended to provide that only in the event Landlord shall give Tenant the 7th Floor West Wing ROFO Offer Notice on or before January 31, 2017 then the 7th

 

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Floor West Wing ROFO Offer Space Offered Terms will include (i) that the term of the lease for the 7th Floor West Wing Offer Space will be from its commencement date until January 31, 2024 and (ii) that the Tenant shall have with respect to the 7th Floor West Wing Offer Space the same extension right as is provided in Exhibit D hereto.

 

5.                                      Amendment to Section 6 of Lease.  Effective as of the Effective Date, Section 6 of the Lease is hereby amended by deleting the last paragraph thereof and by substituting therefor the following three paragraphs:

 

Provided that Tenant (i) has not been in default of any of its monetary or material non-monetary obligations under this Lease in the twelve (12) months prior to the applicable Reduction Date, as hereafter defined, and (ii) has not been in default under this Lease beyond applicable notice and cure periods at any time during the Term (collectively, “Reduction Conditions”), the Letter of Credit may be reduced as set forth below on the Reduction Date.  As used herein, “Reduction Date” shall be the first day of the month following the end of the first full calendar year in the Term in which Tenant’s total annual revenue from Tenant’s sales equals or exceeds One Hundred Fifty Million and 00/100 dollars ($150,000,000.00) for such calendar year, as evidenced by Tenant’s written financial statements prepared in accordance with GAAP, as certified by Tenant’s chief financial officer and held in confidence by Landlord in the same manner as provided for financial statements in Section 26(q).  Provided that the Reduction Conditions are met on the Reduction Date, the Letter of Credit shall be reduced by $261,113.75 effective as of the Reduction Date, thereby leaving a remaining balance of $783,341.25 (the “Reduced Amount”).  Tenant shall request such reduction in a written notice to Landlord within sixty (60) days after the applicable Reduction Date, and if the Reduction Conditions have been met, Landlord shall notify Tenant, whereupon Tenant shall provide Landlord with a Substitute Letter of Credit in the Reduced Amount (in which event Landlord shall forthwith return the previously held Letter of Credit, or an amendment to the Letter of Credit reducing it to the Reduced Amount.

 

As used herein, “Secondary Reduction Date” shall be the first day of the month following the end of the first calendar year in the Term in which Tenant’s total annual revenue from Tenant’s sales equals or exceeds Two Hundred Fifty Million and --/100 dollars ($250,000,000.00) for such calendar year, as evidenced by Tenant’s written financial statements prepared in accordance with GAAP, as certified by Tenant’s chief financial officer and held in confidence by Landlord in the same manner as provided for financial statements in Section 26(q).  Provided the Reduction Conditions are met on the Secondary Reduction Date the Letter of Credit shall be reduced by an additional $261,113.75 effective as of the Secondary Reduction Date leaving a remaining balance of $522,227.50 (the “Secondary Reduced Amount”).  Tenant shall request such reduction in a written notice to Landlord within sixty (60) days after the applicable Reduction Date, and if the Reduction Conditions have been met, Landlord shall notify Tenant, whereupon Tenant shall provide Landlord with a Substitute Letter of Credit in the Reduced Amount (in which event Landlord shall forthwith return the previously held Letter of Credit, or an amendment to the Letter of Credit reducing it to the Reduced Amount.

 

At such time as the term of the Lease for the Original Premises shall have ended but the term of the Lease for the Fifth Floor East Wing Premises (and, if applicable the Seventh Floor

 

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West Wing Premises and/or the Sixth Floor East Wing Premises) shall remain in effect, then, if the Reduction Conditions have been met, the Security Deposit and the letter of credit securing the Security Deposit shall be further reduced to be in the aggregate amount equal to the sum of $251,300.50 plus any amount of Security Deposit made in connection with the Sixth Floor East Wing Premises or the Seventh Floor West Wing Premises.

 

6.                                      Broker.  Landlord and Tenant hereby represent and warrant to each other that, other than CBRE and Lincoln Property Company (the “Brokers”), neither has dealt with any real estate broker or agent in connection with the procurement of this Amendment.  Other than the Brokers, whose commissions shall be payable by Landlord pursuant to a separate agreement, Tenant shall indemnify and hold Landlord harmless from any costs, expense or liability (including costs of suit and reasonable attorneys’ fees) for any compensation, commission or fees claimed by any real estate broker or agent in connection with the procurement of this Amendment because of any act or statement by Tenant.

 

7.                                      Ratification of Lease Provisions; Estoppel.  Except as otherwise expressly amended, modified and provided for in this Amendment, Landlord and Tenant hereby ratify all of the provisions, covenants and conditions of the Lease, and such provisions, covenants and conditions shall be deemed to be incorporated herein and made a part hereof and shall continue in full force and effect.  Landlord and Tenant each acknowledge that, to each party’s knowledge (but without investigation or inquiry), as of the date hereof the other is not in any material default under the terms of the Lease.

 

8.                                      Entire Amendment.  This Amendment contains all the agreements of the parties with respect to the subject matter hereof and supersedes all prior dealings between the parties with respect to such subject matter.

 

9.                                      Binding Amendment.  This Amendment shall be binding upon, and shall inure to the benefit of the parties hereto, and their respective successors and assigns.

 

10.                               Amendment to Notice of Lease.  Upon request by Tenant, Landlord shall execute an amendment to the Notice of Lease that references the Lease and that was previously recorded with the Middlesex South District Registry of Deeds, which amendment shall reflect Tenant’s leasing of Fifth Floor East Wing Premises.

 

11.                               Governing Law.  This Amendment shall be governed by the laws of the Commonwealth of Massachusetts without regard to conflict of laws principles.

 

12.                               Authority; Landlord’s Representation Regarding Mortgages And Primary Leases.  Landlord and Tenant each warrant to the other that the person or persons executing this Amendment on its behalf has or have authority to do so and that such execution has fully obligated and bound such party to all terms and provisions of this Amendment.  Landlord represents and warrants that, as of the Effective Date, there are no Mortgages or Primary Leases encumbering the Building.

 

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13.                               No Reservation.  Submission of this Amendment for examination or signature is without prejudice and does not constitute a reservation, option or offer, and this Amendment shall not be effective until execution and delivery by each of the parties hereto.

 

14.                               Counterparts.  This Amendment may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  An electronic mail or facsimile version of an executed original of this Amendment shall be deemed an original, and each of the parties hereto intends to be bound by an electronic mail or facsimile version of a fully-executed original hereof or of an electronic mail or facsimile version of executed counterpart originals hereof.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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EXECUTED under seal as of the date first above written.

 

	
 
    	
LANDLORD:
    
	
 
    	
 
    
	
 
    	
55 CAMBRIDGE PARKWAY, LLC,
    
	
 
    	
a Delaware limited liability   company
    
	
 
    	
 
    
	
 
    	
By:
    	
Invesco ICRE Massachusetts REIT
    
	
 
    	
 
    	
Holdings, LLC, Its sole   member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
CARGURUS, INC.,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ E. Langley Steinert
    
	
 
    	
 
    	
Name: Langley Steinert
    
	
 
    	
 
    	
Title CEO
    
						

 

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SCHEDULE 1

 

PLAN OF FIFTH FLOOR EAST WING PREMISES AND
 FIFTH FLOOR LOBBY

 

Schedule 1 is intended only to show the general outline of the Fifth Floor East Wing Premises and the Fifth Floor Lobby as of the beginning on the Fifth Floor East Wing Premises Commencement Date.  The depiction of interior windows, cubicles, modules, furniture and equipment in this Exhibit is for illustrative purposes only, but does not mean that such items exist.  Landlord is not required to provide, install or construct any such items.  It does not in any way supersede any of Landlord’s rights set forth in the Lease with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or locations.  It is not to be scaled; any measurements or distances shown should be taken as approximate.  The inclusion of elevators, stairways electrical and mechanical closets, and other similar facilities for the benefit of occupants of the Building does not mean such items are part of the Fifth Floor East Wing Premises or the Fifth Floor Lobby.

 

 

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EXHIBIT A

 

OUTLINE OF PREMISES AND FIFTH FLOOR LOBBY

 

Exhibit A is intended only to show the general outline of the Premises and the Fifth Floor Lobby as of the Fifth Floor East Wing Premises Commencement Date.  The depiction of interior windows, cubicles, modules, furniture and equipment in this Exhibit is for illustrative purposes only, but does not mean that such items exist.  Landlord is not required to provide, install or construct any such items.  It does not in any way supersede any of Landlord’s rights set forth in the Lease with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or locations.  It is not to be scaled; any measurements or distances shown should be taken as approximate.  The inclusion of elevators, stairways electrical and mechanical closets, and other similar facilities for the benefit of occupants of the Building does not mean such items are part of the Premises or the Fifth Floor Lobby.

 

 

B-1

 

 

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SHELL CONDITION WORK FOR FIFTH FLOOR EAST WING PREMISES

 

DEMOLITION SCOPE FOR FIFTH FLOOR EAST WING PREMISES 155 CAMBRIDGE
 PARKWAY

 

ARCHITECTURAL

 

Remove and discard:

 

·                  Partitions and other non-structural buildouts, including false columns, UON, all doors and hardware Tenant reserves the right to identify some or all of the doors for salvage and reuse.  LL shall remove and store identified doors on site

 

·                  Existing communicating stair - Tenant intends to reuse communicating stair.  Landlord is to remove all stair finishes, railings, tread and riser finishes.  Steel structure and gyp board below stair to remain.

 

·                  All hung ceilings, including acoustic and GWB soffits

 

·                  All millwork, including pantry

 

·                  All finish flooring materials and substrates; take down to concrete slab (including restroom tile); remove all remaining adhesives.  Existing concrete slab is to be structurally sound.  Slab surface is to be delivered as is.

 

·                  All wall base, including at perimeter

 

·                  All toilet room steel partitions and accessories

 

·                  All loose furnishings and office system furniture

 

Retain in place:

 

·                  Perimeter GWB laminations

 

·                  Restroom GWB partitions and entrance doors

 

·                  Restroom plumbing (new fixtures will be installed at existing plumbing locations)

 

·                  All column enclosures, enclosing building structural steel columns, shall remain

 

MECHANICAL, ELECTRICAL, PLUMBING, FIRE PROTECTION

 

Remove and discard:

 

·                  All ductwork and associated diffusers/registers and controls and VAV’s.  Existing HVAC duct trunk line is to remain for reuse by the tenant.  LL is to remove all insulation from remaining trunk line.  Tenant’s Engineer is to provide a sketch identifying the components to remain in place.

 

·                  All light fixtures

 

·                  All conduit, BX/Greenfield, and associated wiring with the exception of the perimeter

 

·                  All low voltage cabling and devices, including security wiring

 

·                  Pantry plumbing; remove back to riser

 

·                  All restroom plumbing fixtures and fittings

 

·                  All existing floor power boxes and stub ups (cores to be filled by Landlord)

 

Retain in place:

 

·                  Existing electrical panels

 

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·                  Sprinkler mains, all branch piping is to remain.  Landlord is to provide 100% sprinkler coverage per NFPA, w/ the sprinkler heads “turned up” at the completion of demolition and time of possession for the tenant.)

 

·                  Restroom plumbing

 

·                  Existing air handlers and all other equipment in mechanical room

 

·                  Existing HVAC duct trunk line is to remain for reuse by Tenant.  Landlord is to remove all insulation from remaining trunk line.  Tenant’s Engineer is to provide a sketch identifying the components to remain in place.

 

All fire alarm conduit, wiring, devices, and components are to remain for reuse by Tenant.

 

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EXHIBIT C

 

TENANT IMPROVEMENTS: LANDLORD’S FIFTH FLOOR EAST WING PREMISES
 ALLOWANCE

 

This Exhibit C forms a part of that certain First Amendment To Lease (the “Amendment”) by and between 55 Cambridge Parkway, LLC, a Delaware limited liability company (“Landlord”), and CarGurus, Inc., a Massachusetts corporation (“Tenant”), to which this Exhibit is attached.  If there is any conflict between this Exhibit and the Lease regarding the construction of the Tenant Improvements (hereinafter defined), this Exhibit shall govern.  All capitalized terms referred to in this Exhibit shall have the same meaning provided in the Lease, except where expressly provided to the contrary in this Exhibit.

 

ARTICLE 1 DEFINITIONS

 

1.                                      Additional Definitions.  Each of the following terms shall have the following meaning:

 

Architect: The architectural firm selected by Tenant and approved by Landlord in its good faith discretion to prepare the “Preliminary Plans” and “Final Plans” (as such terms are hereinafter defined).

 

Contractor: The general contractor selected by Tenant and approved by Landlord in its sole and absolute discretion to construct the Tenant Improvements.  The general contractor must be licensed and bondable in the Commonwealth of Massachusetts.  Tenant may request that Landlord approve three (3) or more Contractors prior to competitive bidding, in which case Tenant may select any one of the Contractors approved by Landlord.

 

Construction Contract: The construction contract to be entered into by Tenant and its Contractor in form, scope and substance satisfactory to Tenant.

 

Landlord’s Fifth Floor East Wing Premises Allowance: A total amount equal to One Million One Hundred Seventy-Six Thousand Three Hundred Ninety-Five and No/100 Dollars ($1,176,395.00) to be paid by Landlord for the Construction Costs for the Tenant Improvements as provided in this Exhibit.  Any unused portion of Landlord’s Allowance shall remain the property of Landlord, and Tenant shall have no interest in said funds.  Landlord’s Fifth Floor East Wing Premises Allowance under this Exhibit may only be used for Tenant Improvements for the Fifth Floor East Wing Premises.

 

Landlord’s Fifth Floor East Wing Premises Space Planning Allowance: A total amount equal to Two Thousand One Hundred Thirty-Eight and 90/100 Dollars ($2,138.90) to be paid by Landlord toward the cost of the Space Planning Fees for the Fifth Floor East Wing Premises as provided in this Exhibit.  Any unused portion of Landlord’s Fifth Floor East Wing Premises Space Planning Allowance shall remain the property of Landlord, and Tenant shall have no interest in said funds.

 

C-1

 

Substantial Completion, Substantially Complete, and Substantially Completed (or similar phrase): The foregoing shall mean when the following have occurred or would have occurred but for any delay cause by Tenant:

 

(a)                                 Tenant has delivered to Landlord a certificate from the Architect, in a form reasonably approved by Landlord, that the Tenant Improvements have been Substantially Completed substantially in accordance with the Final Plans, except for “punch list” items which may be completed within thirty (30) days following the completion of the applicable punchlist pursuant to Section 4.2 below without impairing Tenant’s use of the Premises or a material portion thereof, and Landlord has approved of the work in its sole and absolute discretion; and

 

(b)                                 Tenant has obtained from the appropriate governmental authority a final certificate of occupancy (or all building permits with all inspections approved or the equivalent) and all other approvals and permits for the Fifth Floor East Wing Premises permitting Tenant’s occupancy and use of the Fifth Floor East Wing Premises for the Permitted Use under the Lease (a “Certificate of Occupancy”).

 

Tenant Improvements: The improvements to be constructed in the Fifth Floor East Wing Premises in accordance with the Final Plans.  Said work shall include architectural, mechanical and electrical work and life safety systems, and shall be in accordance with the criteria, procedures and schedules referred to in this Exhibit.  The Tenant Improvements shall comply in all respects with all applicable Laws.

 

Construction Costs: All costs, expenses, fees, taxes and charges to construct the Tenant Improvements, including, without limitation, the following:

 

(1)                                 surveys, reports, environmental and other tests and investigations of the site and any improvements thereon;

 

(2)                                 architectural and engineering fees;

 

(3)                                 labor, materials, equipment and fixtures supplied by the Contractor, its subcontractors and/or materialmen, including, without limitation, charges for a job superintendent and project representative;

 

(4)                                 the furnishing and installation of all heating, ventilation and air conditioning duct work, terminal boxes, distributing defusers and accessories required for completing the heating, ventilation and air-conditioning system in the Fifth Floor East Wing Premises, including costs of meter and key control for after-hour usage, if required by Landlord;

 

(5)                                 all electrical circuits, wiring, lighting fixtures, data cabling and tube outlets furnished and installed throughout the Fifth Floor East Wing Premises, including costs of meters;

 

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(6)                                 all window and floor coverings in the Fifth Floor East Wing Premises, including, without limitation, all treatment and preparatory work required for the installation of floor coverings over the concrete or other structural floor;

 

(7)                                 all fire and life safety control systems, such as fire walls, wiring and accessories installed within the Fifth Floor East Wing Premises;

 

(8)                                 all plumbing, fixtures, pipes and accessories installed within the Fifth Floor East Wing Premises;

 

(9)                                 fees charged by the city and/or county where the Building is located (including, without limitation, fees for building permits and approvals and plan checks) required for the work in the Fifth Floor East Wing Premises;

 

(10)                          all taxes, fees, charges and levies by governmental and quasi-governmental agencies for authorization, approvals, licenses and permits; and all sales, use and excise taxes for the materials supplied and services rendered in connection with the installation and construction of the Tenant Improvements; and

 

(11)                          all costs and expenses incurred to comply with all Laws of any governmental authority for any work at the Fifth Floor East Wing Premises in order to construct the Tenant Improvements.

 

The term “Construction Costs” under this Exhibit shall not include (i) any fees, costs, expenses, compensation or other consideration payable to Tenant, or any of its officers, directors, employees or affiliates or (ii) the cost of any of Tenant’s furniture, artifacts, trade fixtures, telephone and computer systems and related facilities except as provided for above in clause (5), or equipment.  Any fees or costs referred to in clauses (i) through (ii) above shall be paid by Tenant without resort to the Landlord’s Fifth Floor East Wing Premises Allowance.

 

ARTICLE 2 CONSTRUCTION OF TENANT IMPROVEMENTS

 

2.1                               Preparation of Plans

 

(a)                                 Preliminary Plans.  As soon as is reasonably possible after the date of the Lease, Tenant shall submit to its Architect all additional information, including occupancy requirements for the Fifth Floor East Wing Premises (“Information”), necessary to enable the Architect to prepare preliminary plans for the Tenant Improvements showing, among other things, all demising walls, corridors, entrances, exits, doors, interior design and partition, and the locations of all display and storage rooms and bathrooms.  As soon as is commercially reasonable after the date hereof, Tenant shall cause the Architect to prepare preliminary plans for the Tenant Improvements and shall deliver two copies of same to Landlord for its review and written approval in its good faith discretion.  Within ten (10) days after receipt of the preliminary plans, Landlord shall notify Tenant in writing that (i) Landlord approves of such preliminary

 

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plans or (ii) Landlord disapproves of such preliminary plans, the basis for disapproval and the changes requested by Landlord.  Tenant shall cause the preliminary plans to be revised and shall submit the revised plans to Landlord for its review and approval as provided in this section.  After approval of the preliminary plans as provided above, the preliminary plans shall be referred to as the “Preliminary Plans.”

 

(b)                                 Final Plans.  Tenant shall cause the Architect to prepare final working drawings, which shall be consistent with the Preliminary Plans, compatible with the design, construction and equipment of the Building, comply with all applicable Laws, capable of logical measurement and construction, and contain all such information as may be required for obtaining all permits and other governmental approvals for the construction of the Tenant Improvements (the “Working Drawings”).  As soon as is commercially reasonable after the Preliminary Plans are approved by the parties as provided above, Tenant shall submit two copies of the Working Drawings to Landlord for its review and approval in its good faith discretion.  Within ten (10) days after receipt of the Working Drawings, Landlord shall notify Tenant in writing that (i) Landlord approves of such Working Drawings, or (ii) Landlord disapproves of such Working Drawings, the basis for disapproval and the changes requested by Landlord.  Tenant shall cause the Working Drawings to be revised and shall submit the revised Working Drawings to Landlord for its review and approval as provided in this section.  The Working Drawings approved in writing by the parties shall be referred to as the “Final Plans.”

 

(c)                                  General.  It is the responsibility of Tenant to assure that the Final Plans and the Tenant Improvements constructed thereunder conform to all applicable Laws.  Tenant shall submit to Landlord one (1) reproducible and four (4) prints of the Final Plans and, if applicable, an electronic unlocked version in CAD format.

 

2.2                               Selection and Approval of Certain Contractors.  Any subcontractor performing any work on the life safety or alarm systems or work affecting the roof shall be subject to Landlord’s prior written approval in its sole and absolute discretion and Landlord may require the Tenant use Landlord’s contractor or a specific subcontractor for any such work.  Landlord shall provide written notice of approval or disapproval within five (5) Business Days after Tenant’s request for such approval.  The construction contract shall require, among other things, that the Contractor (a) obtain and deliver to Landlord evidence of insurance required by Landlord, (b) execute, obtain and deliver to Tenant within ten (10) days after the date of Substantial Completion lien waivers from the Contractor and all of its subcontractors holding contracts in excess of $10,000 (“Major Subcontractors”) and suppliers holding contracts in excess of $10,000, and (c) monthly progress payments, with a ten percent (10%) retention until the construction is fifty (50%) complete.

 

2.3                               Information Provided by Landlord.  Acceptance or approval of any plan, drawing or specification, including, without limitation, the Preliminary Plans and the Final Plans, by Landlord shall not constitute the assumption of any responsibility by Landlord for the accuracy or sufficiency of such plans and materials and Tenant shall be solely responsible therefor.  Tenant agrees and understands that the review of all plans pursuant to the Lease or this Exhibit by Landlord is to protect the interests of Landlord in the Building, and Landlord shall not be the guarantor of, nor be responsible for, the correctness, completeness or accuracy of any such plans or compliance of such plans with applicable Laws.  Any information that may have been

 

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furnished to Tenant by Landlord or others about the mechanical, electrical, structural, plumbing or geological (including soil and sub-soil) characteristics of the Building or Project (hereinafter referred to as the “Site Characteristics”) are for Tenant’s convenience only, and Landlord does not represent or warrant that the Site Characteristics are accurate, complete or correct or that the Site Characteristics are as indicated.  Any information that has been furnished by Landlord to Tenant has been delivered on the expressed condition and understanding that Tenant will independently verify whether such information is accurate, complete or correct and not rely on such information provided by Landlord.

 

2.4                               No Responsibility of Landlord.  Landlord’s approval of any plans, including, without limitation, the Preliminary Plans or the Final Plans, shall not: (i) constitute an opinion or agreement by Landlord that such plans and Tenant Improvements are in compliance with all applicable Laws, (ii) impose any present or future liability on Landlord, including, without limitation, with respect to the Building’s Structure and/or Building’s Systems; (iii) constitute a waiver of Landlord’s rights hereunder or under the Lease or this Exhibit except that Landlord shall be bound by any approval given in accordance with the Lease or this Exhibit; (iv) impose on Landlord any responsibility for a design and/or construction defect or fault in the Tenant Improvements; or (v) constitute a representation or warranty regarding the accuracy, completeness or correctness thereof

 

2.5                               Changes.  After approval of the Preliminary Plans or Final Plans by Landlord and Tenant, any changes in the Preliminary Plans or Final Plans shall require the prior written consent of Landlord which shall not be unreasonably withheld, delayed or conditioned and the parties shall follow the same process as was required under Section 2.1 for approval of plans.  Any change requested by Tenant that is approved in writing by Landlord shall be prepared by the Architect and shall be subject to the review and approval of Landlord’s architect which shall not be unreasonably withheld, delayed or conditioned.  The cost of such changes, including the cost to revise such plans, obtain any additional permits and construct any additional improvements required as a result thereof, and the cost for materials and labor, shall be included as part of the Construction Costs for the Tenant Improvements.

 

2.6                               Construction Budget for Tenant Improvements.  After approval of the Final Plans by Landlord and Tenant as provided above, Tenant shall prepare a detailed estimate of the Construction Costs for the Tenant Improvements (the “Construction Budget”).  Tenant shall deliver a copy of the Construction Budget to Landlord for Landlord’s approval, which shall not be unreasonably withheld, conditioned or delayed.

 

2.7                               Building Permits and Approvals.  Not later than fifteen (15) days after approval by Landlord and Tenant of the Final Plans and Construction Budget as provided above, Tenant or its Contractor shall submit the Final Plans to the appropriate governmental body for plan checking and all building permits and other governmental and quasi-governmental approvals.

 

2.8                               Conduct of Work.  Tenant shall confine the construction activity to within the Fifth Floor East Wing Premises as much as possible and shall work in an orderly manner removing trash and debris from the Fifth Floor East Wing Premises on a daily basis.  At no time will pipes, wires, boards or other construction materials cross public areas where harm could be caused to the public.  All such work shall be undertaken in strict compliance with all applicable

 

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Laws and this Lease.  If Tenant fails to comply with these requirements, Landlord shall have the right, but not the obligation, to cause remedial action (at Tenant’s cost) as deemed necessary by Landlord to protect the public.  Tenant shall complete construction of the Tenant Improvements free and clear of all liens, security interests and encumbrances of any kind.

 

(a)           Pre-construction Submittals to Landlord.  Prior to the commencement of construction, Tenant shall submit the following items to Landlord:

 

(1)           A certificate setting forth the proposed commencement date of construction and the estimated completion dates of construction work, fixturing work and projected date of Substantial Completion;

 

(2)           Certificates of all insurance required under the Lease and this Exhibit; and

 

(3)           Copies of all building permits, and all other permits and approvals required by governmental agencies to construct the Tenant Improvements;

 

(b)           Delays.  Tenant shall, with reasonable diligence, prosecute construction of the Tenant Improvements to complete all work by the Commencement Date.  Any delay in completing such work, including any delay as a result of governmental delays, force majeure and other events beyond the control of Tenant, excepting only acts or failures to act of Landlord or persons claiming under Landlord shall not extend or delay the time for the commencement of payment Rent or any other sum under the Lease.

 

(c)           Correction of Work.  Landlord may reject any portion of the Tenant Improvements which is not in material conformity with the Final Plans.  Landlord shall not be responsible for correcting the portions of the Tenant Improvements which were defective or not in compliance with the Final Plans; all such work shall be the responsibility of Tenant at its sole cost and expense.

 

2.9          Copy of Record set of Plans.  At the conclusion of construction: (i) Tenant shall cause the Architect and Contractor (A) to update the Final Plans as necessary to reflect all changes made to the Final Plans during the course of construction, (B) to certify to the best of their knowledge that the “record-set” of as-built drawings are true and correct, which certification shall survive the expiration or termination of this Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set of drawings within ninety (90) days following issuance of a Certificate of Occupancy for the Fifth Floor East Wing Premises; and (ii) Tenant shall deliver to Landlord a copy of all signed building permits and certificates of occupancy, and all warranties, guaranties, and operating manuals and information relating to the improvements, equipment and systems in the Premises.

 

2.10        Tenant’s Parties and Insurance.  The Contractor and all subcontractors, laborers, materialmen, and suppliers used by Tenant collectively shall be referred to in this Exhibit C as “Tenant’s Parties”.

 

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(a)           Indemnity.  Tenant’s indemnity of Landlord as set forth in the Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant’s Parties, or any one directly or indirectly employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of the Tenant Improvements and/or Tenant’s disapproval of all or any portion of any request for payment.

 

(b)           Requirements of Tenant’s Parties.  Each of Tenant’s Parties shall guarantee to Tenant and shall be requested to also guarantee for the benefit of Landlord that the portion of the Tenant Improvements for which it is responsible shall be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion thereof.  Each of Tenant’s Parties shall be responsible for the replacement or repair, without additional charge, of all work done or furnished in accordance with its contract that shall become defective within one (1) year after the later to occur of (i) completion of the work performed by such contractor or subcontractors, and (ii) the date when the Tenant Improvements have been Substantially Completed.  The correction of such work shall include, without additional charge, all additional expenses and damages incurred in connection with such removal or replacement of all or any part of the Tenant Improvements, and/or the Building and/or Common Areas that may be damaged or disturbed thereby.  All such warranties or guarantees as to material or workmanship of or with respect to the Tenant Improvements shall be contained in the construction contract or subcontract and shall be written such that such guarantees or warranties shall inure to the benefit of Tenant and shall be requested to inure to the benefit of Landlord, as their respective interests may appear, so as to be directly enforced by either.

 

(c)           Insurance Requirements.  In addition to the insurance requirements set forth in the Lease, Tenant shall comply with the following requirements:

 

(1)           General Coverages.  All of Tenant’s Parties shall carry worker’s compensation insurance covering all of their respective employees, and shall also carry commercial liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant as set forth in the Lease.

 

(2)           Special Coverage.  Tenant’s Contractor, or in the case of a construction management contract Tenant’s Major Subcontractors shall carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of the Tenant Improvements, and such other insurance as Landlord may require.  Such insurance shall be in amounts and shall include such extended coverage endorsements including the requirement that all of Tenant’s Parties shall carry excess liability and Products and Completed Operation Coverage insurance, each in amounts not less than $1,000,000 per incident, $2,000,000 in aggregate, and in form and with companies as are required to be carried by Tenant as set forth in the Lease.

 

(3)           General Terms.  Certificates for all insurance carried pursuant to the foregoing sections shall be delivered to Landlord before the commencement of construction of the Tenant Improvements and before the Contractor’s equipment is moved onto the site.  All such policies of insurance must contain a provision that the company writing said policy will give Landlord thirty (30) days’ prior written notice of any cancellation or lapse of the effective

 

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date or any reduction in the amounts of such insurance.  In the event that the Tenant Improvements are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant’s sole cost and expense.  Tenant’s Parties shall maintain all of the foregoing insurance coverage in force until the Tenant Improvements are fully completed except for any Products and Completed Operation Coverage insurance required by Landlord, which is to be maintained for six (6) years following completion of the work and acceptance by Landlord and Tenant.  All policies carried under this section shall insure Landlord and Tenant, as their interests may appear, as well as Contractor and Tenant’s Parties.  All insurance, except Workers’ Compensation, maintained by Tenant’s Parties shall preclude or waive subrogation claims by the insurer against anyone insured thereunder.  Such insurance shall provide that it is primary insurance as respects the Landlord and that any other insurance maintained by Landlord is excess and noncontributing with the insurance required hereunder.  The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under the Lease or this Exhibit.

 

2.11        Labor Matters.  Tenant shall perform or cause Tenant’s Contractor to perform all work in the making and/or installation of any repairs, alterations or improvements in a manner so as to avoid any labor dispute which causes or is likely to cause stoppage or impairment of work or delivery service or any other services in the Project.  In the event there shall be any such stoppage or impairment as the result of any such labor dispute or potential labor dispute caused by Tenant’s Contractor, Tenant shall immediately undertake such actions as may be necessary to eliminate such dispute or potential dispute, including, but not limited to, (a) removing all disputants from the job site until such time as the labor dispute no longer exists, (b) seeking an injunction in the event of a breach of contract between Tenant and Tenant’s contractor, and (c) filing appropriate unfair labor practice charges in the event of a union jurisdictional dispute.

 

2.12        Temporary Facilities During Construction.  Tenant shall obtain in its name and pay for all temporary utility facilities, and the removal of debris, as necessary and required in connection with the construction of the Tenant Improvements.  Storage of Tenant’s contractors’ construction material, tools, equipment and debris shall be confined to the Premises and any other areas which may be designated for such purposes by Landlord.  Landlord shall not be responsible for any loss or damage to Tenant’s and/or Tenant’s contractors’ equipment.  In no event shall any materials or debris be stored in the malls or service or exit corridors of the Project.

 

2.13        Miscellaneous.  The Tenant Improvements shall be subject to the inspection and approval of Landlord and its supervisory personnel.  All contractors engaged by Tenant shall be bondable, licensed contractors, possessing good labor relations, capable of performing quality workmanship.

 

2.14        Construction Management Fee.  Landlord, or an agent of Landlord, shall provide construction management services in connection with the construction of the Tenant Improvements and the change orders.  Such construction management services shall be performed for a fee (the “Construction Management Fee”) equal to one percent (1%) of the amount of the Construction Costs for the Tenant Improvements, including the costs of any permits and approvals associated therewith.  Landlord shall deduct from Landlord’s Fifth Floor East Wing Premises Allowance and pay its agent the amount of Construction Management Fee

 

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on a monthly basis prorated over the duration of construction of the Tenant Improvements.  Tenant shall be responsible for payment of the Construction Management Fee to the extent Construction Costs exceed the Landlord’s Fifth Floor East Wing Premises Allowance.

 

ARTICLE 3 PAYMENT OF CONSTRUCTION COSTS

 

3.1          Payment of Construction Costs.  Tenant shall pay for the Construction Costs for the Tenant Improvements, except as provided in the next sentence.  Landlord shall only be responsible to Tenant for payment of the Construction Costs for the Tenant Improvements up to the lesser of the (a) actual Construction Costs for the Tenant Improvements, and (b) amount of the Landlord’s Fifth Floor East Wing Premises Allowance (the lesser of (a) and (b) shall be referred to herein as “Landlord’s Maximum Construction Cost Obligation”).  If the aggregate Construction Costs for the Tenant Improvements are greater than Landlord’s Maximum Construction Cost Obligation, then Tenant shall be solely responsible for such additional costs above Landlord’s Maximum Construction Cost Obligation.

 

3.2          Payment By Landlord of Landlord’s Allowance.

 

(a)           Payment by Landlord of Landlord’s Allowance.  So long as there shall not then be an Event of Default of Tenant under the Lease and the below conditions for each installment of the Landlord’s Fifth Floor East Wing Premises Allowance are satisfied as set forth below, the Landlord’s Fifth Floor East Wing Premises Allowance shall be disbursed by Landlord, based upon requests for payment submitted by Tenant upon receipt of then appropriate invoices and forms required and submitted by Tenant not more often than once per month (except if applicable, in the case of the final disbursement of the Landlord’s Fifth Floor East Wing Premises Allowance); provided, however, that in no event shall Landlord be obligated to disburse to Tenant in the aggregate for Construction Costs for the Tenant Improvements more than Landlord’s Maximum Construction Cost Obligation.  Each request for payment by Tenant shall be accompanied by a written certification satisfactory to Landlord by the Architect that all work up to the date of the request for payment has been completed in accordance with the Schedule of Values contained in Tenant’s construction contract(s) with the Contractor, along with releases (partial or complete) of liens from all of Tenant’s contractors and subcontractors for all work performed and materials furnished up to the date of Tenant’s immediately prior request for payment (and Tenant’s final request for payment shall also be accompanied by the applicable items required below under clause (b) of this Section 3.2 below), along with any other supporting documentation reasonably required by Landlord in connection therewith and the calculation of retainage provided for in the construction contract.  Upon receipt of each applicable complete payment request by Tenant, Landlord shall pay to Tenant, within twenty-one (21) days after submission of such complete payment request to Landlord, the amount of such request for payment; provided, however, that Landlord’s aggregate obligation to pay for such requests for payment shall in no event exceed Landlord’s Maximum Construction Cost Obligation less any retainage withheld pursuant to the Construction Contract.  Upon final completion of the Tenant Improvements and receipt by Landlord of the items required under clause (b) of this Section 3.2 below, Landlord shall pay to Tenant, within twenty-one (21) days following Tenant’s written request, the remaining unadvanced retainage portion of Landlord’s Maximum Construction Cost Obligation; provided, however, that the retainage shall not have to be released by Landlord until the punchlist items have been completed as provided in Section 4.2

 

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below.  Any and all costs for the construction of the Tenant Improvements in excess of the Landlord’s Maximum Construction Cost Obligation shall be paid by Tenant to the Contractor and other applicable contractors, subcontractors, and material suppliers.  Landlord reserves the right to make any payment (or portion thereof) of Landlord’s Maximum Construction Cost Obligation payable jointly to Tenant and the Contractor (or subcontractor or supplier) or directly to the Contractor or any subcontractor or supplier.

 

(b)           The final disbursement of Landlord’s Maximum Construction Cost Obligation by Landlord shall be subject to Tenant delivering to Landlord: (i) the final Certificate of Occupancy for the Fifth Floor East Wing Premises, (ii) copies of all applicable building permits and inspection approvals reflecting final sign-off by the local governmental authority with respect to the Tenant Improvements, (iii) a copy of the as-built Final Plans for the Tenant Improvements, (iv) unconditional lien waivers from the Contractor and all Major Subcontractors and suppliers for the Tenant Improvements and Tenant’s furniture, fixture and equipment in the Premises, (v) receipt of the Architect’s certificate for the Tenant Improvements referred to in the definition of Substantial Completion in this Exhibit.

 

(c)           In no event shall Landlord be obligated to reimburse any portion of the Landlord’s Maximum Construction Cost Obligation that Tenant requests from Landlord after January 31, 2018.

 

3.3          Payment by Landlord of Landlord’s Space Planning Allowance.  So long as there shall not then be an Event of Default of Tenant under the Lease, within sixty (60) days following Landlord’s receipt of invoices evidencing such Space Planning Fees, Landlord shall reimburse Tenant for the Space Planning Fees actually incurred by Tenant up to an amount not to exceed the Landlord’s Fifth Floor East Wing Premises Space Planning Allowance.

 

ARTICLE 4 GENERAL PROVISIONS

 

4.1          Bonds.  Upon the request of Landlord prior to commencing construction of the Tenant Improvements, Tenant shall deliver to Landlord certified copies of a payment and performance bond issued by a surety company authorized to do business in the Commonwealth of Massachusetts in a principal amount not less than the full amount of the Construction Costs, issued on behalf of Tenant’s Contractor, naming Tenant and Landlord (and if requested by Landlord, Landlord’s Mortgagee under any Mortgage or other financing instrument affecting the Project or any portion thereof) as dual obligees.  Notwithstanding the delivery by Tenant of such bond, Tenant shall pay promptly for all labor and materials supplied to Tenant in connection with the construction of the Tenant Improvements, shall not cause or permit any liens for such labor or materials to attach to the Land or the Building, and shall bond or discharge any such lien which may be filed or recorded except for any lien caused by any action of Landlord or any person claiming under Landlord within fifteen (15) days after Tenant receives actual notice of such filing or recording.

 

4.2          Completion of Punchlist Items.  In or within seven (7) Business Days following Substantial Completion of the Tenant Improvements, the parties shall schedule a meeting(s) to jointly inspect the Fifth Floor East Wing Premises and the Tenant Improvements in order to identify those incomplete items or unfinished details that will be part of the punch list for the

 

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Tenant Improvements.  Such punch list items shall be completed by Tenant as soon as practicable thereafter and in any event not later than thirty (30) days following the completion of the applicable punchlist (except for such item(s) that, by its nature or due to circumstances beyond the reasonable control of the party charged with doing such work, cannot be completed within such 30 day period).

 

4.3          Tenant’s Representative.  Tenant hereby authorizes Mark Hopkins of Winstanley Construction, 150 Baker Avenue, Concord, MA, as Tenant’s representative to act on its behalf and represents its interests with respect to all matters which pertain to the construction of Tenant Improvements, and to make decisions binding upon Tenant with respect to such matters.

 

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EXHIBIT D

 

EXTENSION OPTION FOR FIFTH FLOOR EAST WING PREMISES

 

So long as there shall not then be an Event of Default under this Lease, Tenant may extend the term of the Lease for the Fifth Floor East Wing Premises beyond the expiration of Fifth Floor East Wing Premises Original Term (i.e., beyond January 31, 2024) for one (1) additional period of five (5) years (the “Fifth Floor East Wing Premises Extension Term”), by delivering written notice of the exercise thereof to Landlord not later than twelve (12) months (nor earlier than eighteen (18) months) before the expiration of the Fifth Floor East Wing Premises Original Term.  The Base Rent payable for each month during the Fifth Floor East Wing Premises Extension Term shall be the prevailing rental rate (the “Prevailing Rental  Rate”), at the commencement of the Fifth Floor East Wing Premises Extension Term, for renewals of space in Cambridge, Massachusetts of equivalent quality, size, utility and location, taking into account prevailing concessions including, but not be limited to, tenant improvements, tenant improvement allowances, rental abatement, the length of the Fifth Floor East Wing Premises Extension Term, size of the premises, condition of the premises, escalation charges, location of the premises, location and age of the building, free rent periods, brokerage commissions and lease term.  Within fourteen (14) days after receipt of Tenant’s notice to extend, Landlord shall deliver to Tenant written notice of the Prevailing Rental Rate and shall advise Tenant of the required adjustment to Base Rent, if any, and the other terms and conditions offered.  Tenant shall, within twenty-one (21) days after receipt of Landlord’s notice, notify Landlord in writing whether Tenant accepts or rejects Landlord’s determination of the Prevailing Rental Rate (“Tenant Notice”).  If Tenant timely notifies Landlord that Tenant accepts Landlord’s determination of the Prevailing Rental Rate, then, on or before the commencement date of the Fifth Floor East Wing Premises Extension Term, Landlord and Tenant shall execute an amendment to this Lease extending the Term on the same terms provided in this Lease, except as follows:

 

(a)                                 Base Rent shall be adjusted to the Prevailing Rental Rate;

 

(b)                                 Tenant shall have no further extension option unless expressly granted by Landlord in writing; and

 

(c)                                  Landlord shall lease to Tenant the Premises in their then-current condition, and Landlord shall not provide to Tenant any allowances (e.g., moving allowance, construction allowance, and the like) or other tenant inducements.

 

If Tenant rejects Landlord’s determination of the Prevailing Rental Rate, then the Base Rent payable for each month during the Fifth Floor East Wing Premises Extension Term (“Fair Market Rent”) shall be established by appraisal in the following manner.  By not later than the thirtieth (30th) day after the Tenant Notice, Landlord and Tenant shall each appoint one (1) qualified appraiser (as hereinafter defined) and the two (2) qualified appraisers so appointed shall determine the Fair Market Rent within thirty (30) days following their appointment.  As used herein, the term “qualified appraiser” shall mean any independent person (a) who is employed by an appraisal or brokerage firm of recognized competence in the greater Boston area and (b) who has not less than ten (10) years’ experience in commercial office leasing with respect to, or in

 

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appraising and valuing properties of, the general location, type and character as the Premises.  If either Landlord or Tenant fails to appoint a qualified appraiser within said thirty (30) day period, then the other party shall have the power to appoint the qualified appraiser for the defaulting party.  If said qualified appraisers are unable to agree on the Fair Market Rent within said thirty (30) day period, then they jointly shall appoint a third qualified appraiser within ten (10) days of the expiration of such thirty (30) day period.  If the first two appraisers shall fail to appoint a third appraiser within such ten (10) day period, either appraiser may request the President of the Boston Bar Association to appoint the third appraiser.  Within thirty (30) days after the appointment of the third appraiser, all three qualified appraisers shall meet and determine the Fair Market Rent.  If all three qualified appraisers are unable unanimously to agree upon the Fair Market Rent, then the first two qualified appraisers simultaneously shall deliver their final Fair Market Rent numbers to the third qualified appraiser, and the third qualified appraiser shall select the number as the Fair Market Rent number that is closest to the Fair Market Rent number determined by the third appraiser, and the Fair Market Rent so selected shall be conclusive and binding upon the Landlord and Tenant.  Each party shall bear the cost of its qualified appraiser, and the cost of the third qualified appraiser shall be borne equally between the parties.  Until such time as the Fair Market Rent is so determined, from and after the commencement date of the Extension Term, Tenant shall pay Base Rent at the average of Landlord’s and Tenant’s appraisers’ designations of fair market rent, with an appropriate retroactive adjustment once the Fair Market Rent has been determined.

 

Tenant’s rights under this Exhibit D shall terminate if (1) this Lease or Tenant’s right to possession of the Fifth Floor East Wing Premises is terminated, (2) Tenant assigns any of its interest in the Lease or sublets more than fifty percent (50%) of the Premises, or (3) Tenant fails to timely exercise its option under this Exhibit, time being of the essence with respect to Tenant’s exercise thereof.

 

D-2Exhibit 10.8

 

 

INDIA GLOBALIZATION CAPITAL, INC.

 

2018 OMNIBUS INCENTIVE PLAN

 

Effective as of April 1, 2018

 

 

 

TABLE OF CONTENTS

 

	
ARTICLE 1.

	
ESTABLISHMENT, PURPOSE, AND DURATION

	
1

	
ARTICLE 2.

	
DEFINITIONS

	
1

	
ARTICLE 3.

	
ADMINISTRATION

	
6

	
ARTICLE 4.

	
SHARES SUBJECT TO THE PLAN

	
8

	
ARTICLE 5.

	
ELIGIBILITY AND PARTICIPATION

	
10

	
ARTICLE 6.

	
STOCK OPTIONS

	
10

	
ARTICLE 7.

	
STOCK APPRECIATION RIGHTS

	
13

	
ARTICLE 8.

	
RESTRICTED STOCK AND RESTRICTED STOCK UNITS

	
15

	
ARTICLE 9.

	
PERFORMANCE UNITS/PERFORMANCE SHARES

	
17

	
ARTICLE 10.

	
CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS

	
19

	
ARTICLE 11.

	
PERFORMANCE MEASURES

	
20

	
ARTICLE 12.

	
DIVIDEND EQUIVALENTS

	
22

	
ARTICLE 13.

	
BENEFICIARY DESIGNATION

	
22

	
ARTICLE 14.

	
RIGHTS OF PARTICIPANTS

	
22

	
ARTICLE 15.

	
CHANGE IN CONTROL

	
23

	
ARTICLE 16.

	
CANCELLATION OF AWARDS

	
24

	
ARTICLE 17.

	
AMENDMENT, MODIFICATION AND TERMINATION

	
25

	
ARTICLE 18.

	
WITHHOLDING

	
25

	
ARTICLE 19.

	
INDEMNIFICATION

	
26

	
ARTICLE 20.

	
SUCCESSORS

	
26

	
ARTICLE 21.

	
GENERAL PROVISIONS

	
27

 

 

i

INDIA GLOBALIZATION CAPITAL, INC.

 

2018 OMNIBUS INCENTIVE PLAN

 

ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION

 

1.1 Establishment of the Plan.  India Globalization Capital, Inc. (the “Company”), hereby establishes a stock option and incentive award plan known as the “India Globalization Capital, Inc. 2018 Omnibus Incentive Plan” (the “Plan”), effective as of the date of approval by the shareholders.  The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Other Stock-Based Awards and Cash-Based Awards.

 

1.2 Purpose of the Plan.  The purpose of the Plan is to secure for the Company and its shareholders the benefits of the incentive inherent in stock ownership in the Company by key employees, directors, consultants and other persons who perform services for the Company and its Parent, Subsidiaries and Affiliates (the “Participants”), who are responsible for its future growth and continued success.  The Plan promotes the success and enhances the value of the Company by linking the personal interests of Participants to those of the Company’s shareholders, and by providing Participants with an incentive for outstanding performance.  The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants upon whose judgment, interest and special effort the successful conduct of its operation largely depends.

 

1.3 Duration of the Plan.  The Plan shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article 17, for a duration of ten (10) years from the Plan’s effective date.  After this Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and this Plan’s terms and conditions.

 

ARTICLE 2.  DEFINITIONS

 

Whenever used in the Plan, the following terms shall have the meanings set forth below:

 

	
(a)  

	
“Affiliate” shall mean any corporation or other entity (including, but not limited to, a partnership or limited liability company) that is affiliated with the Company through stock or equity ownership such that it controls or is controlled by, or is under common control with, the Company.

 

	
(b)  

	
“Agreement” means an agreement entered into by each Participant and the Company, setting forth the terms and provisions applicable to Awards granted to Participants under this Plan.

 

	
(c)  

	
“Award” means, individually or collectively, a grant under this Plan of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Other Stock-Based Awards and Cash-Based Awards.

 

 

1

 

 

	
(d)  

	
“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

	
(e)  

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

 

	
(f)  

	
“Cause” means (i) the same definition for “cause” set forth in any employment agreement between the Participant and the Company, Subsidiary and/or Affiliate in effect when the event(s) occur, or, (ii) in the absence of such an employment agreement, the Participant’s conduct that is (A) the Participant’s engaging in any act or omission in the capacity of his or her employment with the Company, Subsidiary and/or Affiliate constituting dishonesty, theft, fraud, embezzlement, moral turpitude or other wrongdoing or malfeasance; or, (B) the Participant’s conviction of a felony under federal or state law; or, (C) the Participant’s engaging in any act or omission constituting gross misuse of his or her authorities, gross or continual dereliction of his or her duties to the Company, Subsidiary and/or Affiliate, or that is materially injurious or embarrassing to any such entity’s business, operations or reputation; or, (D) the Participant breaching the noncompetition, nonsolicitation, or confidentiality provisions of any written agreement with the Company, Subsidiary and/or Affiliate prohibiting such conduct.  Solely for purposes of this Plan, the Plan Administrator may use the designation of “Cause,” or without “Cause,” determined by the Company (or any subsidiary that is the “employer” of the Participant) or the Plan Administrator may make an independent designation of “Cause” with respect to employment termination in accordance with the terms of this Plan.  The designation of the Plan Administrator with respect to “Cause” under this Plan shall not be used for any other purpose and shall not be used against either the Company or any Participant.

 

	
(g)  

	
“Change in Control” has meaning set forth in Article 15 of this Plan.

 

	
(h)  

	
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor act thereto.

 

	
(i)  

	
“Committee” means the Compensation Committee of the Board of Directors appointed by the Board to administer the Plan with respect to grants of Awards, as specified in Article 3, and to perform the functions set forth therein; or in the absence of such appointment, the Board itself.

 

	
(j)  

	
“Common Stock” means the common stock of the Company.

 

	
(k)  

	
“Company” means India Globalization Capital, Inc., a Maryland corporation, or any successor thereto as provided in Article 20.

 

	
(l)  

	
“Covered Employee” means any key Employee who is or may become a “Covered Employee,” as defined in Code Section 162(m), and who is designated, either as an individual Employee or class of Employees, by the Committee within the shorter of: (i) ninety (90) days after the beginning of the Performance Period, or (ii) twenty-five percent (25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for such applicable Performance Period.

 

 

2

 

 

	
(m)  

	
“Detrimental Activity” means the violation of any agreement between the Company, Subsidiary and/or Affiliate and the Participant pertaining to (a) the disclosure of confidential information or trade secrets of any such entity, (b) the solicitation of employees, customers, suppliers, licensees, licensors or contractors of any such entity, or (c) the performance of competitive services with respect to the business of the Company, Subsidiary and/or Affiliate; provided, that the Committee may provide in the Agreement that only certain of the restrictions provided above apply for purposes of the Agreement.

 

	
(n)  

	
“Director” means any individual who is a member of the Board of Directors of the Company or any Parent, Subsidiary, or Affiliate and who is not an Employee.

 

	
(o)  

	
“Disability” shall have the meaning ascribed in such term in the Company’s long-term disability plan covering the Participant, or in the absence of such plan, a meaning consistent with Code Section 22(e)(3), unless otherwise specified in an employment agreement between the Company, Subsidiary and/or Affiliate and a Participant.  The existence of Disability shall be determined by the Committee in good faith.  To the extent an Award constitutes “deferred compensation” subject to Code Section 409A and provides for payment upon disability, the Agreement shall define “disability” pursuant to Treasury Regulation Section 1.409A-3(i)(4).

 

	
(p)  

	
“Employee” means any employee of the Company or any Parent, Subsidiary, or Affiliate.

 

	
(q)  

	
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

 

	
(r)  

	
“Fair Market Value” shall be determined as follows:

 

	
(i)  

	
If, on the relevant date, the Shares are traded on a national or regional securities exchange or on The New York Stock Exchange (Market) (“NYSE AMERICAN”) and closing sale prices for the Shares are customarily quoted, on the basis of the closing sale price on the principal securities exchange on which the Shares may then be traded or, if there is no such sale on the relevant date, then on the immediately preceding day on which a sale was reported;

 

	
(ii)  

	
If, on the relevant date, the Shares are not listed on any securities exchange or traded on NYSE AMERICAN, but nevertheless are publicly traded and reported on NYSE AMERICAN without closing sale prices for the Shares being customarily quoted, on the basis of the mean between the closing bid and asked quotations in such other over-the-counter market as reported by NYSE AMERICAN; but, if there are no bid and asked quotations in the over-the-counter market as reported by NYSE AMERICAN on that date, then the mean between the closing bid and asked quotations in the over-the-counter market as reported by NYSE AMERICAN on the immediately preceding day such bid and asked prices were quoted; and

 

	
(iii)  

	
If, on the relevant date, the Shares are not publicly traded as described in (i) or (ii), on the basis of the good faith determination of the Committee.

 

 

3

 

 

	
(s)  

	
“Grant Price” means the price established when the Committee approves the grant of a SAR pursuant to Article 7, used to determine whether there is any payment due upon exercise of the SAR.

 

	
(t)  

	
“Incentive Stock Option” or “ISO” means an option to purchase Shares granted under Article 6 to an Employee which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code, or any successor provision.

 

	
(u)  

	
“Insider” shall mean an individual who is, on the relevant date, an officer or a director, or a ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act or any successor provision, as “officer” and “director” are defined under Section 16 of the Exchange Act.

 

	
(v)  

	
“Nonqualified Stock Option” or “NQSO” means an option to purchase Shares granted under Article 6, and which is not intended to meet the requirements of Code Section 422 or which fails to meet such requirements.

 

	
(w)  

	
“Non-Tandem SAR” means a SAR that is granted independently of any Option, as described in Article 7.

 

	
(x)  

	
“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article 6.

 

	
(y)  

	
“Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee.

 

	
(z)  

	
“Other Stock-Based Award” means an equity-based or equity-related Award not otherwise described by the terms of this Plan, granted pursuant to Article 10.

 

	
(aa)  

	
“Parent” means a “parent corporation,” whether now or hereafter existing as defined in Code Section 424(e).

 

	
(bb)  

	
“Participant” means an Employee, a Director, consultant or other person who performs services for the Company or a Parent, Subsidiary, or Affiliate of the Company, who has been granted an Award under the Plan which is outstanding.

 

	
(cc)  

	
“Performance-Based Compensation” means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for certain performance-based compensation paid to Covered Employees.  Notwithstanding the foregoing, nothing in this Plan shall be construed to mean that an Award which does not satisfy the requirements for performance-based compensation under Code Section 162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A.

 

 

4

 

 

	
(dd)  

	
“Performance-Based Exception” means the exception for Performance-Based Compensation from the tax deductibility limitations of Code Section 162(m).

 

	
(ee)  

	
“Performance Measures” means measures as described in Article 11 on which the performance goals are based and which are approved by the Company’s shareholders pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.

 

	
(ff)  

	
“Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award.

 

	
(gg)  

	
“Performance Share” means an Award under Article 9 and subject to the terms of this Plan, denominated in fully paid Shares, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria or Performance Measure(s), as applicable, have been achieved.

 

	
(hh)  

	
“Performance Unit” means an Award under Article 9 and subject to the terms of this Plan, denominated in units, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria or Performance Measure(s), as applicable, have been achieved.

 

	
(ii)  

	
“Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals, or the occurrence of other events as determined by the Committee, in its discretion).

 

	
(jj)  

	
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

 

	
(kk)  

	
“Plan” means this India Globalization Capital, Inc. 2018 Omnibus Incentive Plan, including any amendments thereto.

 

	
(ll)  

	
“Plan Year” means the Company’s fiscal year.

 

	
(mm)  

	
“Restricted Stock” means an Award of Common Stock granted in accordance with the terms of Article 8 and the other provisions of the Plan, and which is nontransferable and subject to a substantial risk of forfeiture.  Shares of Common Stock shall cease to be Restricted Stock when, in accordance with the terms hereof and the applicable Agreement, they become transferable and free of substantial risk of forfeiture.

 

 

5

 

 

	
(nn)  

	
“Restricted Stock Unit” means an Award to a Participant pursuant to Article 8, except that no Shares are actually awarded to the Participant on the Grant Date.

 

	
(oo)  

	
“Shares” means the shares of Common Stock of the Company (including any new, additional or different stock or securities resulting from the changes described in Section 4.2).

 

	
(pp)  

	
“Stock Appreciation Right” or “SAR” means an Award, designated as a SAR, pursuant to the terms of Article 7 herein.

 

	
(qq)  

	
“Subsidiary” means (i) in the case of an ISO, any company during any period in which it is a “subsidiary corporation” (as that term is defined in Code Section 424(f)), and (ii) in the case of all other Awards, in addition to a “subsidiary corporation” as defined above, a partnership, limited liability company, joint venture or other entity in which the Company as fifty percent (50%) or more of the voting power or equity interests.

 

	
(rr)  

	
“Tandem SAR” means a SAR that is granted in connection with a related Option pursuant to Article 7, the exercise of which shall require forfeiture of the right to purchase a Share under the related Option (and when a Share is purchased under the Option, the Tandem SAR shall similarly be forfeited).

 

	
(ss)  

	
“Third-Party Service Provider” means any consultant, agent, advisor, or independent contractor who renders services to the Company, any Parent, any Subsidiary, or an Affiliate that: (i) are not in connection with the offer or sale of the Company’s securities in a capital raising transaction; and (ii) do not directly or indirectly promote or maintain a market for the Company’s securities.

 

ARTICLE 3.  ADMINISTRATION

 

3.1 The Committee.  The Plan shall be administered by the Committee.  The Committee shall consist of not less than two (2) Directors who are both non-employee directors, within the meaning of Rule 16b-3 of the Exchange Act, and “outside directors,” as defined in Treasury Regulation Section 1.162-27; provided, however, that if at any time any member of the Committee is not an outside director, as so defined, the Committee may establish a subcommittee, consisting of all members who are outside directors, for all purposes of any Award to a Covered Employee, unless the Committee determines that such an Award is not intended to qualify for the Performance-Based Exception.

 

 

6

 

 

3.2 Authority of the Committee.  The Committee shall have full and exclusive discretionary power to construe and interpret the terms and the intent of this Plan and any Agreement or instrument entered into under the Plan or document ancillary to or in connection with this Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms, instruments, and guidelines for administering this Plan.  Such authority shall include, but not be limited to, selecting Award recipients, establishing all terms and conditions (including the terms and conditions set forth in Agreements), granting Awards as an alternative to or as the form of payment for grants or rights earned or due under compensation plans or arrangements of the Company, construing any provision of the Plan or any Agreement, and, subject to Article 17, adopting modifications and amendments to this Plan or any Agreement, including without limitation, accelerating the vesting of any Award or extending the post-termination exercise period of an Award (subject to the limitations of Code Section 409A), or any other modifications or amendments that are necessary to comply with the law of the countries and other jurisdictions in which the Company, its Affiliates and/or its Subsidiaries operate.  The Committee may employ attorneys, consultants, accountants, agents, and other individuals, any of whom may be an Employee, and the Committee, the Company, and its officers and Directors shall be entitled to rely upon the advice, opinions, or valuations of any such individuals.  All expenses of administering this Plan shall be borne by the Company.  For any Award and Participant subject to the Worker Economic Opportunity Act (“Act”) because the Participant is a “non-exempt” employee for purposes of the Fair Labor Standards Act of 1938 (“FLSA”), the Committee shall establish the terms and conditions intended to comply with the Act or the Committee shall determine that an Award shall be made without regard to the Act.

 

Notwithstanding the foregoing, members of the Board or the Committee who are either eligible for Awards or have been granted Awards may vote on any and all matters, including matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan.  However, no such member shall act upon the granting of a specific Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board or the Committee during which action is taken with respect to the granting of an Award to him or her.

 

3.3 Delegation.  The Committee may delegate to one or more of its members or to one or more officers of the Company, and/or its Subsidiaries and Affiliates or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan.  The Committee may, by resolution, authorize one or more officers of the Company to do the following on the same basis as can the Committee: (a) designate Employees or Third-Party Service Providers to be recipients of Awards; and/or (b) determine the size of any such Awards; provided, however, (i) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an Employee who is considered an Insider; (ii) the resolution providing such authorization sets forth the total number of Awards such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated.

 

3.4 Decisions Binding.  All determinations and decisions made by the Committee pursuant to the provision of the Plan and all related orders and resolutions of the Board shall be final, conclusive and binding on all Persons, including the Company, the shareholders, Participants and their estates and beneficiaries.

 

3.5 Employees in Foreign Countries.  The Committee shall have the authority to adopt such modifications, procedures, appendices and sub plans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or any Subsidiary may operate to assure the viability of the benefits from Awards granted to Employees employed in such countries and to meet the objectives of the Plan.

 

 

7

 

 

ARTICLE 4.  SHARES SUBJECT TO THE PLAN

 

4.1 Number of Shares.  Subject to adjustment as provided in Section 4.2, the total number of Shares available for grant of Awards under the Plan shall be 130,000, increased on April 1 of each year, by a number of shares equal to fifteen percent (15%) of the number of Shares outstanding on such date less 857,010 shares; provided, however, that any such increase shall be made only to the extent that the Company has sufficient authorized and unreserved stock for such purpose.  Such increase shall be made each April 1, regardless of the number of shares of Stock remaining available for issuance under the Plan on such date.  The Shares may, in the discretion of the Company, be either authorized but unissued Shares or Shares held as treasury shares, including Shares purchased by the Company, whether on the market or otherwise.

 

4.2 Share Usage.  The Shares available for issuance under this Plan may be authorized and unissued Shares, treasury Shares or Shares available on the open market.  For purposes of determining the number of Shares available for grants subject to Awards, the following shall apply:

 

	
(a)  

	
The grant of an Award shall reduce the Shares available for grant under the Plan by the number of Shares subject to the Award.

 

	
(b)  

	
While an Award is outstanding, Shares subject to the Award shall be counted against the authorized pool of Shares, regardless of vested status.

 

	
(c)  

	
Any Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under this Plan.

 

	
(d)  

	
If the Option Price of any Option granted under this Plan is satisfied by tendering Shares to the Company (by either actual delivery or by attestation and subject to Section 6.7), or if a SAR is exercised, only the number of Shares issued, net of the Shares tendered, if any, will be delivered for purposes of determining the maximum number of Shares available for delivery under this Plan.

 

4.3 Annual Award Limits.  Unless and until the Committee determines that an Award to a Covered Employee shall not be designed to qualify as Performance-Based Compensation, the following limits (each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall apply to grants of such Awards under this Plan:

 

	
(a)  

	
Options.  The maximum aggregate number of Shares subject to Options granted in any one Plan Year to any one Participant shall be three million (3,000,000) as adjusted pursuant to Sections 4.4 and/or 17.2.

 

	
(b)  

	
SARs.  The maximum number of Shares subject to Stock Appreciation Rights granted in any one Plan Year to any one Participant shall be three million (3,000,000), as adjusted pursuant to Sections 4.4 and/or 17.2.

 

 

8

 

 

	
(c)  

	
Restricted Stock Units or Restricted Stock.  The maximum aggregate grant with respect to Awards of Restricted Stock Units or Restricted Stock that a Participant may receive in any one Plan Year shall be three million (3,000,000) Shares, as adjusted pursuant to Sections 4.4 and/or 17.2, or equal to the value of three million (3,000,000) Shares, as adjusted pursuant to Sections 4.4 and/or 17.2.

 

	
(d)  

	
Performance Units or Performance Shares.  The maximum aggregate Award of Performance Units or Performance Shares that a Participant may receive in any one Plan Year shall be three million (3,000,000) Shares, as adjusted pursuant to Sections 4.4 and/or 17.2, or equal to the value of three million (3,000,000) Shares, as adjusted pursuant to Sections 4.4 and/or 17.2, determined as of the date of vesting or payout, as applicable.

 

	
(e)  

	
Cash-Based Awards.  The maximum aggregate amount awarded or credited with respect to Cash-Based Awards to any one Participant in any one Plan Year may not exceed the greater of the value of eighteen million dollars ($18,000,000) or three million (3,000,000) Shares, as adjusted pursuant toSections 4.4 and/or 17.2, determined as of the date of vesting or payout, as applicable.

 

	
(f)  

	
Other Stock-Based Awards.  The maximum aggregate grant with respect to Other Stock-Based Awards pursuant to Section 10.2  in any one Plan Year to any one Participant shall be three million (3,000,000) Shares, as adjusted pursuant to Sections 4.4 and/or 17.2.

 

4.4 Adjustments in Authorized Shares.  In the event of any corporate event or transaction (including, but not limited to, a change in the authorized number of Shares of the Company or the capitalization of the Company) such as an amalgamation, a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, division, consolidation or other distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure, number of issued Shares or distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, the number and kind of Shares subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards, the Annual Award Limits, and other value determinations applicable to outstanding Awards shall be adjusted to prevent dilution or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as applicable, the number of such Shares.

 

The Committee, in its sole discretion, may also make appropriate adjustments in the terms of any Awards under this Plan to reflect, or related to, such changes or distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the length of Performance Periods.  The determination of the Committee as to such adjustment, if any, shall be conclusive and binding on Participants under this Plan.

 

 

9

 

 

Subject to the provisions of Article 17 and notwithstanding anything else herein to the contrary, without affecting the number of Shares reserved or available hereunder, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any amalgamation, merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate (including, but not limited to, a conversion of equity awards into Awards under this Plan in a manner consistent with paragraph 53 of FASB Interpretation No. 44 or subsequent accounting guidance), subject to compliance with the rules under Code Sections 422 and 424, as and where applicable.  The Committee shall provide to Participants reasonable written notice (which may include, without limit, notice by electronic means) within a reasonable time of any such determinations it makes.

 

ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

 

5.1 Eligibility.  Any Director, Employee, or Third-Party Service Provider to the Company or any Parent, Subsidiary, or Affiliate shall be eligible to receive an Award under the Plan.  In determining the individuals to whom such an Award shall be granted and the number of Shares which may be granted pursuant to that Award, the Committee may take into account the duties of the respective individual, his or her present and potential contributions to the success of the Company or a Parent, Subsidiary, or Affiliate, and such other factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan.

 

5.2 Leaves of Absence. Notwithstanding any other provision of the Plan to the contrary, for purposes of determining Awards granted hereunder, a Participant shall not be deemed to have incurred a termination of employment if such Participant is placed on military or sick leave or such other leave of absence which is considered as continuing intact the employment relationship with the Company, any Parent, any Subsidiary, or any Affiliate.  In such a case, the employment relationship shall be deemed to continue until the date when a Participant’s right to reemployment shall no longer be guaranteed either by law or contract.

 

5.3 Transfer of Service.  Notwithstanding any other provision of the Plan to the contrary, for purposes of determining Awards granted hereunder, a Participant shall not be deemed to have incurred a termination of employment if the Participant’s status as an Employee, Director, or Third-Party Service Provider terminates and the Participant is then, or immediately thereafter becomes, an eligible individual due to another status or relationship with the Company, any Parent, any Subsidiary, or any Affiliate.

 

ARTICLE 6.  STOCK OPTIONS

 

6.1 Grant of Options.  Subject to the terms and provisions of the Plan, Options may be granted to Employees, Directors and/or Third-Party Service Providers at any time and from time to time as shall be determined by the Committee.  The Committee shall have sole discretion in determining the number of Shares subject to Options granted to each Participant.  No Participant may be granted ISOs (under the Plan and all other incentive stock option plans of the Company and any Parent or Subsidiary) which are first exercisable in any calendar year for Common Stock having an aggregate Fair Market Value (determined as of the date an Option is granted) that exceeds One Hundred Thousand Dollars ($100,000).  The preceding annual limit shall not apply to NQSOs.  The Committee may grant a Participant ISOs, NQSOs or a combination thereof, and may vary such Awards among Participants; provided that only an Employee may be granted ISOs. The maximum aggregate number of shares of Stock subject to ISOs issued under the Plan shall not exceed ten million (10,000,000) shares.

 

 

10

 

 

6.2 Agreement.  Each Option grant shall be evidenced by an Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains and such other provisions as the Committee shall determine.  The Option Agreement shall further specify whether the Award is intended to be an ISO or an NQSO.  Any portion of an Option that is not designated as an ISO or otherwise fails or is not qualified as an ISO (even if designated as an ISO) shall be a NQSO.  The Committee may provide in the Option Agreement for transfer restrictions, repurchase rights, vesting requirements and other limitations on the Shares to be issued pursuant to the exercise of an Option.

 

6.3 Option Price.  The Option Price for each grant of an Option under this Plan shall be determined by the Committee in its sole discretion and shall be specified in the Agreement; provided, however, the Option Price must be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted.  In no event, however, shall any Participant who owns (within the meaning of Section 424(d) of the Code) stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, any Parent, any Subsidiary, or any Affiliate be eligible to receive an ISO at an Option Price less than one hundred ten percent (110%) of the Fair Market Value of a share on the date the ISO is granted.  The Option Price for any Option may be greater than the Fair Market Value of a Share on the date the Option is granted.

 

6.4 Duration of Options.  Each Option shall expire at such time as the Board shall determine at the time of grant; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary date of its grant; provided, further, however, that any ISO granted to any Participant who at such time owns (within the meaning of Section 424(d) of the Code) stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, shall not be exercisable later than the fifth (5th) anniversary date of its grant.

 

6.5 Termination of Options.  Each Option granted under the Plan to any Optionee shall expire no later than ninety (90) days from the date the Optionee terminates employment or services with the Company, unless earlier terminated pursuant to Section 6.4.  However, the Committee may provide in each Participant’s Agreement the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s employment or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.2 and 5.3.  The Committee shall determine any such provisions in its sole discretion, which provisions need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to breach or threatened breach of restrictive covenants to which the Participant is subject, if any.

 

6.6 Exercise of Options.  Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as set forth in each Agreement, including conditions related to the employment of or provision of services by the Participant with the Company or any Parent, Subsidiary or other entity, which need not be the same for each grant or for each Participant.  Each Option shall be exercisable for such number of Shares and at such time or times, including periodic installments, as set forth in each Agreement at the time of the grant.  Each Agreement may establish a minimum number of Shares (e.g., 100) for which an Option may be exercised at a particular time and may provide for an automatic accelerated vesting and other rights upon the occurrence of certain events as specified in the Agreement.  In addition, in order to exercise any ISOs granted under this Article 6, the Participant must be an Employee of the Company, any Subsidiary, or any Affiliate from the Grant Date until at least three months before the date the ISO is exercised.  Except as otherwise provided in the Agreement and Article 15, the right to purchase Shares that is exercisable in periodic installments shall be cumulative so that when the right to purchase any Shares has accrued, such Shares or any part thereof may be purchased at any time thereafter until the expiration or termination of the Option.

 

 

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6.7 Payment.  Options shall be exercised by the delivery of a written notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.  The Option Price upon exercise of any Option shall be payable to the Company in full under any of the following methods as determined by the Committee, in its discretion:  (a) in cash, (b) cash equivalent approved by the Committee, (c) if approved by the Committee, by tendering previously acquired Shares (or delivering a certification of ownership of such Shares) having an aggregate Fair Market Value at the time of exercise equal to the total Option Price, provided that the Company may refuse any such tender if the Committee, in its sole discretion, determines that such tender will cause adverse consequences under federal securities laws or applicable accounting standards, (d) by a cashless (broker-assisted) exercise as permitted under Federal Reserve Board’s Regulation T, subject to applicable securities law restrictions; or (e) by a combination of (a), (b), (c), and/or (d); or (f) any other method approved or accepted by the Committee in its sole discretion.

 

Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment of an Option, the Company shall deliver to the Participant evidence of book entry Shares, or upon the Participant’s request, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s), and may place appropriate legends on the certificates representing such Shares.

 

Unless otherwise determined by the Committee, all payments under all methods indicated above shall be paid in United States dollars.

 

6.8 Restrictions on Share Transferability.  The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, or under any blue sky or state securities laws applicable to such Shares.

 

6.9 Limited Transferability.  If permitted in the Agreement, a Participant may transfer an Option granted hereunder, including but not limited to transfers to members of his or her Immediate Family (as defined below), to one or more trusts for the benefit of such Immediate Family members, or to one or more partnerships where such Immediate Family members are the only partners, if (a) the Participant does not receive any consideration in any form whatsoever for such transfer, (b) such transfer is permitted under applicable tax laws, and (c) if the Participant is an Insider, such transfer is permitted under Rule 16b-3 of the Exchange Act, or its successor provisions as in effect from time to time.  Any Option so transferred shall continue to be subject to the same terms and conditions in the hands of the transferee as were applicable to said Option immediately prior to the transfer thereof.  Any reference in any such Agreement to the employment by or performance of services for the Company by the Participant shall continue to refer to the employment of, or performance by, the transferring Participant.  For purposes hereof, “Immediate Family” shall mean the Participant and the Participant’s spouse, children and grandchildren and any other member of the Participant’s family approved by the Committee.  Any Option that is granted pursuant to any Agreement that did not initially expressly allow the transfer of said Option and that has not been amended to expressly permit such transfer, shall not be transferable by the Participant other than by will or by the laws of descent and distribution and such Option thus shall be exercisable in the Participant’s lifetime only by the Participant.

 

 

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6.10 Notification of Disqualifying Disposition.  If any Participant shall make any disposition of Shares issued pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten (10) calendar days thereof.

 

ARTICLE 7.  STOCK APPRECIATION RIGHTS

 

7.1 Grant of SARs.  Subject to the terms and conditions of this Plan (including, if applicable, any Appendix), SARs may be granted to Employees, Directors and/or Third-Party Service Providers at any time and from time to time as shall be determined by the Committee.  The Committee may grant Non-Tandem SARs, Tandem SARs, or any combination of these forms of SARs.

 

Subject to the terms and conditions of this Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant and, consistent with the provisions of this Plan, in determining the terms and conditions pertaining to such SARs.

 

The Grant Price for each grant of a SAR shall be determined by the Committee and shall be specified in the Agreement.  Notwithstanding the foregoing, the Grant Price of a Non-Tandem SAR on the Grant Date shall be at least equal to one hundred percent (100%) of the FMV of the Shares as determined on the Grant Date.  The Grant Price of a Tandem SAR on the Grant Date shall equal the Option Price of the related Option.

 

7.2 SAR Agreement.  Each SAR Award shall be evidenced by an Agreement that shall specify the Grant Price, the term of the SAR, and such other provisions as the Committee shall determine.

 

7.3 Term of SAR.  The term of a SAR granted under this Plan shall be determined by the Committee, in its sole discretion, and except as determined otherwise by the Committee and specified in the SAR Agreement, no SAR shall be exercisable later than the tenth (10th) anniversary of the Grant Date.  Notwithstanding the foregoing, for SARs granted to Participants outside the United States, the Committee has the authority to grant SARs that have a term greater than ten (10) years.

 

 

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7.4 Exercise of Tandem SARS.  Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option.  A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable.  Notwithstanding the foregoing, with respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR shall expire no later than the expiration of the underlying ISO; (ii) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent (100%) of the difference between the Option Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market Value of the Shares covered by the ISO exceeds the Option Price of the ISO.

 

7.5 Exercise of Non-Tandem SARs.  SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes.

 

7.6 Settlement of SARs.  Upon the exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

 

	
(a)  

	
The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price; by

 

	
(b)  

	
The number of Shares with respect to which the SAR is exercised.

 

At the discretion of the Committee, the payment upon SAR exercise may be in cash, fully paid Shares, or any combination thereof, or in any other manner approved by the Committee in its sole discretion.  The Committee’s determination regarding the form of SAR payout shall be set forth in the Agreement pertaining to the grant of the SAR.

 

7.7 Termination of Employment, Service as a Director or Third-Party Service Provider.  Each Agreement shall set forth the extent to which the Participant shall have the right to exercise the SAR following termination of the Participant’s employment with or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.2 and 5.3.  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Agreement entered into with Participants, need not be uniform among all SARs issued pursuant to this Plan, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to breach or threatened breach of restrictive covenants to which the Participant is subject, if any.

 

7.8 Other Restrictions.  The Committee shall impose such other conditions and/or restrictions on any Shares received upon exercise of a SAR granted pursuant to this Plan as it may deem advisable or desirable.  These restrictions may include, but shall not be limited to, a requirement that the Participant hold the Shares received upon exercise of a SAR for a specified period of time.

 

 

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ARTICLE 8.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

8.1 Grant of Restricted Stock/Restricted Stock Units.  Subject to the terms and provisions of this Plan, the Committee may from time to time in its discretion grant Restricted Stock and/or Restricted Stock Units to Employees, Directors and/or Third-Party Service Providers in such amounts as the Committee shall determine.

 

8.2 Restricted Stock/Restricted Stock Unit Agreement.  Each grant of Restricted Stock or Restricted Stock Units shall be evidenced by an Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine.  To the extent a Restricted Stock Unit Award constitutes “deferred compensation” within the meaning of Code Section 409A, the Committee shall establish Agreement terms and provisions which comply with Code Section 409A and regulations thereunder.

 

8.3 Other Restrictions.  At the time a grant of Restricted Stock and/or Restricted Stock Units is made, the Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock (which price shall not be less than par value of such Share) or each Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under Applicable Laws or under the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Stock or Restricted Stock Units.

 

Upon a grant of Restricted Stock, a stock certificate (or certificates) representing the number of Shares of Restricted Stock granted to the Participant shall be registered in the Participant’s name and, to the extent deemed appropriate by the Committee, may either be (i) held in custody by the Company or a bank selected by the Committee for the Participant’s account, or (ii) retained by the Company in the Company’s possession until such time as all condition and/or restrictions applicable to such Shares have been satisfied or lapse.

 

8.4 Certificate Legend.  In addition to any legends placed on certificates pursuant to Section 8.3, each certificate representing Shares of Restricted Stock granted pursuant to this Plan may bear a legend such as the following or as otherwise determined by the Committee in its sole discretion:

 

The sale or transfer of the common shares of India Globalization Capital, Inc. represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer as set forth in the India Globalization Capital, Inc. Omnibus Incentive Plan, and in the associated Agreement.  A copy of this Plan and such Agreement will be provided by India Globalization Capital, Inc., without charge, within ten (10) business days after receipt of a written request therefore.

 

 

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8.5 Rights of Holder; Limitations Thereon.  A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder.  Upon a grant of Restricted Stock and following registration of the Restricted Stock Shares in the Participant’s name, the Participant shall have the rights and privileges of a shareholder as to such Restricted Stock, including the right to receive dividends, if and when declared, and to vote such Restricted Stock, except that the right to receive cash dividends shall be the right to receive such dividends either in cash currently or by payment in Restricted Stock, as the Board shall determine, and except further that, the following restrictions shall apply:

 

	
(a)  

	
The Participant shall not be entitled to delivery of a certificate until the expiration or termination of the Period of Restriction for the Shares represented by such certificate and the satisfaction of any and all other conditions prescribed in the Agreement or by the Committee or Board;

 

	
(b)  

	
None of the Shares of Restricted Stock may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Period of Restriction and until the satisfaction of any and all other conditions prescribed in the Agreement or by the Committee or Board (including satisfaction of any applicable tax withholding obligations); and

 

	
(c)  

	
All of the Shares of Restricted Stock that have not vested shall be forfeited and all rights of the Participant to such Shares of Restricted Stock shall terminate without further obligation on the part of the Company, unless the Participant has remained an employee of (or Director of or active Third-Party Service Provider providing services to) the Company or any of its Subsidiaries, until the expiration or termination of the Period of Restriction and the satisfaction of any and all other conditions prescribed in the Agreement or by the Committee or Board applicable to such Shares of Restricted Stock.  Upon the forfeiture of any Shares of Restricted Stock, such forfeited Shares shall be transferred to the Company without further action by the Participant and shall, in accordance with Section 4.2, again be available for grant under the Plan.  If the Participant paid any amount for the Shares of Restricted Stock that are forfeited, the Company shall pay the Participant the lesser of the Fair Market Value of the Shares on the date they are forfeited or the amount paid by the Participant.

 

With respect to any Shares received as a result of adjustments under Section 4.2 hereof and any Shares received with respect to cash dividends declared on Restricted Stock, the Participant shall have the same rights and privileges, and be subject to the same restrictions, as are set forth in this Article 8.

 

8.6 Lapse of Restrictions.  Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations as set out in Article 14).  Restricted Stock Units shall be paid in cash, Shares or a combination of cash and Shares as the Committee, in its sole discretion shall determine.

 

 

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Notwithstanding any provision in the Plan or any Agreement to the contrary, to the extent an Award (i) constitutes “deferred compensation” within the meaning of Code Section 409A, (ii) is not exempt from the application of Code Section 409A and (iii) is payable to a specified employee (as determined in accordance with Code Section 409A(a)(2)(B) and applicable regulations) due to separation from service (as such term is defined under Code Section 409A), payment shall be delayed for a minimum of six (6) months from the date of separation from service.

 

8.7 Termination of Employment, Service as a Director or Third-Party Service Provider.  Each Agreement shall set forth the extent to which the restrictions placed on Restricted Stock and/or Restricted Stock Units shall lapse following termination of the Participant’s employment with or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.2 and 5.3  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Agreement entered into with each Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units issued pursuant to this Plan, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to breach or threatened breach of restrictive covenants to which the Participant is subject, if any.

 

8.8 Nonassignability.  Unless otherwise provided in the Agreement, no grant of, nor any right or interest of a Participant in or to, any Restricted Stock, or in any instrument evidencing any grant of Restricted Stock under the Plan, may be assigned, encumbered or transferred except, in the event of the death of a Participant, by will or the laws of descent and distribution.

 

8.9 Section 83(b) Election.  The Committee may provide in an Agreement that the Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Code Section 83(b).  If a Participant makes an election pursuant to Code Section 83(b) concerning a Restricted Stock Award, the Participant shall be required to file promptly a copy of such election with the Company.

 

ARTICLE 9.  PERFORMANCE UNITS/PERFORMANCE SHARES

 

9.1 Grant of Performance Units/Performance Shares.  Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance Shares to Employees, Directors and/or Third-Party Service Providers in such amounts and upon such terms as the Committee shall determine.

 

9.2 Performance Unit/Performance Shares Agreement.  Each Performance Unit and/or Performance Share grant shall be evidenced by an Agreement that shall specify the number of Performance Shares or the number of Performance Units granted, the applicable Performance Period, and such other terms and provisions as the Committee shall determine.  To the extent an Award constitutes “deferred compensation” within the meaning of Code Section 409A, the Committee shall establish Agreement terms and provisions which comply with Code Section 409A and regulations thereunder.

 

 

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9.3 Value of Performance Units/Performance Shares.  Each Performance Unit shall have an initial value that is established by the Committee at the time of grant.  Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Grant Date.  The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the value and/or number of Performance Units/Performance Shares that will be paid out to the Participant.

 

9.4 Earning of Performance Units/Performance Shares.  Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Units/Performance Shares shall be entitled to receive payout on the value and number of Performance Units/Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.

 

9.5 Form and Timing of Payment of Performance Units/Performance Shares.  Payment of earned Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in the Agreement.  Subject to the terms of this Plan, the Committee, in its sole discretion, may pay earned Performance Units/Performance Shares in the form of cash or in fully paid Shares (or in a combination thereof) equal to the value of the earned Performance Units/Performance Shares at the close of the applicable Performance Period, or as soon as practicable after the end of the Performance Period.  Any Shares may be granted subject to any restrictions deemed appropriate by the Committee.  The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Agreement pertaining to the grant of the Award.

 

Notwithstanding any provision in the Plan or any Agreement to the contrary, to the extent an Award (i) constitutes “deferred compensation” within the meaning of Code Section 409A, (ii) is not exempt from the application of Code Section 409A and (iii) is payable to a specified employee (as determined in accordance with Code Section 409A(a)(2)(B) and applicable regulations) due to separation from service (as such term is defined under Code Section 409A), payment shall be delayed for a minimum of six (6) months from the date of separation from service.

 

9.6 Termination of Employment, Service as a Director or Third-Party Service Provider.  Each Agreement shall set forth the extent to which the Participant shall have the right to receive payment for any Performance Units and/or Performance Shares following termination of the Participant’s employment with or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.2 and 5.3.  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Agreement entered into with each Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued pursuant to this Plan, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to the breach or threatened breach of restrictive covenants to which the Participant is subject, if any.

 

 

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ARTICLE 10.  CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS

 

10.1 Grant of Cash-Based Awards.  Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Employees, Directors and/or Third-Party Service Providers in such amounts and upon such terms as the Committee may determine.

 

10.2 Other Stock-Based Awards.  The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as the Committee shall determine.  Such Awards may involve the transfer of actual fully paid Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

 

10.3 Cash-Based or Other Stock-Based Award Agreement.  Each Cash-Based Award or Other Stock-Based Award grant shall be evidenced by an Agreement that shall specify the amount of the Cash-Based Award or Other Stock-Based Award granted and such other terms and provisions as the Committee shall determine; provided that no Agreement shall provide for the issuance of Shares except on a fully paid basis.  To the extent an Award constitutes “deferred compensation” within the meaning of Code Section 409A, the Committee shall establish Agreement terms and provisions which comply with Code Section 409A and regulations thereunder.

 

10.4 Value of Cash-Based and Other Stock-Based Awards.  Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee.  Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee.  The Committee may establish performance goals in its discretion.  If the Committee exercises its discretion to establish performance goals, the number and/or value of Cash-Based Awards or Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the performance goals are met, and provided the cash or services received by the Company in exchange for Shares shall have a value not less than the aggregate par value of any Shares issued as part of such Other Stock-Based Award.

 

10.5 Payment of Cash-Based Awards and Other Stock-Based Awards.  Payment, if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash or fully paid Shares as the Committee determines.  Notwithstanding any provision in the Plan or any Agreement to the contrary, to the extent an Award (i) constitutes “deferred compensation” within the meaning of Code Section 409A, (ii) is not exempt from the application of Code Section 409A and (iii) is payable to a specified employee (as determined in accordance with Code Section 409A(a)(2)(B) and applicable regulations) due to separation from service (as such term is defined under Code Section 409A), payment shall be delayed for a minimum of six (6) months from the date of separation from service.

 

10.6 Termination of Employment, Service as a Director or Third-Party Service Provider.  The Committee shall determine the extent to which the Participant shall have the right to receive Cash-Based Awards or Other Stock-Based Awards following termination of the Participant’s employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.2 and 5.3.  Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in an agreement entered into with each Participant, but need not be uniform among all Awards of Cash-Based Awards or Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination, or reasons relating to the breach or threatened breach of restrictive covenants to which the Participant is subject, if any.

 

 

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ARTICLE 11.  PERFORMANCE MEASURES

 

11.1 Performance Measures.  The performance goals upon which the payment or vesting of an Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be limited to the following Performance Measures:

 

	
(a)  

	
Net earnings or net income (before or after taxes);

	
(b)  

	
Earnings per share (basic or fully diluted);

	
(c)  

	
Net sales or revenue growth;

	
(d)  

	
Net operating profit;

	
(e)  

	
Return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue);

	
(f)  

	
Cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment);

	
(g)  

	
Earnings before or after taxes, interest, depreciation, and/or amortization;

	
(h)  

	
Gross or operating margins;

	
(i)  

	
Productivity ratios;

	
(j)  

	
Share price (including, but not limited to, growth measures and total shareholder return);

	
(k)  

	
Expense targets;

	
(l)  

	
Leverage targets (including, but not limited to, absolute amount of consolidated debt, EBITDA/consolidated debt ratios and/or debt to equity ratios);

	
(m)  

	
Credit rating targets;

	
(n)  

	
Margins;

	
(o)  

	
Operating efficiency;

	
(p)  

	
Market share;

	
(q)  

	
Developing new products and lines of revenue;

	
(r)  

	
Reducing operating expenses;

	
(s)  

	
Developing new markets;

	
(t)  

	
Meeting completion schedules;

	
(u)  

	
Developing and managing relationships with regulatory and other governmental agencies;

	
(v)  

	
Managing cash;

	
(w)  

	
Managing claims against the Company, including litigation; and

	
(x)  

	
Identifying and completing strategic acquisitions

 

 

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Any Performance Measure(s) may be used to measure the performance of the Company, any Subsidiary, or an Affiliate as a whole or any business unit of the Company, any Subsidiary, or an Affiliate or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Committee may select Performance Measure (j) above as compared to various stock market indices.  The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Article 11.

 

Notwithstanding the foregoing, for each Award designed to qualify for the Performance-Based Exception, the Committee shall establish and set forth in the Award the applicable performance goals for that Award no later than the latest date that the Committee may establish such goals without jeopardizing the ability of the Award to qualify for the Performance-Based Exception and the Committee shall be satisfied that the attainment of such Performance Measure(s) shall represent value to the Company in an amount not less than the par value of any related Performance Shares.

 

11.2 Evaluation of Performance.  Subject to Section 11.3, the Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) asset write-downs and other asset revaluations, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, and (h) changes in material liability estimates.  To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

 

11.3 Adjustment of Performance-Based Compensation.  The degree of payout and/or vesting of Awards designed to qualify for the Performance-Based Exception shall be determined based upon the written certification of the Committee as to the extent to which the performance goals and any other material terms and conditions precedent to such payment and/or vesting have been satisfied.  The Committee shall have the sole discretion to adjust the determinations of the value and degree of attainment of the pre-established performance goals; provided, however, that the performance goals applicable to Awards which are designed to qualify for the Performance-Based Exception, and which are held by Covered Employees, may not be adjusted so as to increase the payment under the Award (the Committee shall retain the sole discretion to adjust such performance goals upward, or to otherwise reduce the amount of the payment and/or vesting of the Award relative to the pre-established performance goals).

 

11.4 Committee Discretion.  In the event that applicable tax and/or securities laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval.  In addition, in the event that the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make such grants without satisfying the requirements of Code Section 162(m) and base vesting on Performance Measures other than those set forth in Section 11.1.

 

 

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ARTICLE 12.  DIVIDEND EQUIVALENTS

 

Any Employees, Directors and/or Third-Party Service Providers selected by the Committee may be granted dividend equivalents based on the dividends declared on Shares that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee.  Such dividend equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such limitations as may be determined by the Committee.

 

Notwithstanding the foregoing, if the grant of an Award to a Covered Employee is designed to comply with the requirements of the Performance-Based Exception, the Committee may apply any restrictions it deems appropriate to the payment of dividends declared with respect to such Award, such that the dividends and/or the Award maintain eligibility for the Performance-Based Exception.  With respect to Restricted Stock and/or Restricted Stock Units, in the event that any dividend constitutes a derivative security or an equity security pursuant to the rules under Section 16 of the Exchange Act, such dividend shall be subject to a vesting period equal to the remaining vesting period of the Shares of Restricted Stock and/or Restricted Stock Unit with respect to which the dividend is paid.

 

ARTICLE 13.  BENEFICIARY DESIGNATION

 

To the extent applicable, each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit.  Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee and shall be effective only when filed by the Participant, in writing, with the Committee or its delegate during the Participant’s lifetime.  In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.  If required, the spouse of a married Participant domiciled in a community property jurisdiction shall join in any designation of a beneficiary or beneficiaries other than spouse.

 

ARTICLE 14.  RIGHTS OF PARTICIPANTS

 

14.1 Employment or Other Services.  Nothing in the Plan shall interfere with or limit in any way the right of the Company or a Parent, Subsidiary, or Affiliate to terminate any Participant’s employment by, or performance of services for, the Company or any Parent, Subsidiary, or Affiliate at any time, nor confer upon any Participant any right to continue in the employ or service of the Company or a Parent, Subsidiary, or Affiliate.  For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a termination of employment.  Further, neither an Award nor any benefits arising under this Plan shall constitute an employment contract or other service contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to Articles 3 and 17, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates, and/or its Subsidiaries.

 

 

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14.2 Participation.  No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.

 

14.3 Rights as a Shareholder.  Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the registered holder of such Shares.

 

ARTICLE 15.  CHANGE IN CONTROL AND OTHER REORGANIZATIONS

15.1 Adjustments to Awards Upon a Change in Control.  Upon a Change in Control (defined below), merger or other reorganization event, the Committee or Board may, in their sole discretion, take any one or more of the following actions pursuant to our Plan, as to some or all-outstanding Awards::

 

	
(a)  

	
provide that all outstanding Options shall be assumed or substituted by the successor corporation;

 

	
(b)  

	
in the event of a Change in Control or merger pursuant to which holders of the Company's common stock will receive a cash payment for each share surrendered in the merger, make or provide for a cash payment to the Participants equal to the difference between the merger price times the number of shares of the Company's common stock subject to such outstanding Options, and the aggregate Option Price of all such outstanding Options, in exchange for the termination of such Options;

 

	
(c)  

	
upon written notice to a Participant, (i) provide that the Participant’s unexercised Options or Awards will terminate immediately prior to the consummation of such transaction unless exercised by the Participant; or (ii) terminate all unexercised outstanding Options immediately prior to the consummation of such transaction unless exercised by the Participant;

 

	
(d)  

	
provide that all or any outstanding Options shall become exercisable in full immediately prior to such event; and

 

	
(e)  

	
provide that outstanding Awards shall be assumed or substituted by the successor corporation, become realizable or deliverable, or restrictions applicable to an Award will lapse, in whole or in part, prior to or upon the Change in Control, merger or other reorganization event, as the case may be.

 

 

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15.2 Definition.  For purposes of the Plan, a “Change in Control” means (i) the same definition for “Change in Control” set forth in any employment agreement between the Participant and the Company, Subsidiary and/or Affiliate in effect when the event(s) occur, or, (ii) in the absence of such an employment agreement, the occurrence of any of the following events:

 

	
(a)  

	
The closing of the sale of all or substantially all of Company’s assets as an entirety to any person or related group of persons other than an existing holder or existing holders of Company’s equity;

 

	
(b)  

	
The merger or consolidation of Company with or into another entity or the merger or consolidation of another entity with or into Company, in either case with the effect that immediately after such transaction the equity holders of Company immediately prior to such transaction hold less than a majority in interest of the total voting power of the outstanding voting interests of the entity surviving such merger or consolidation; or

 

	
(c)  

	
The closing of a transaction pursuant to which beneficial ownership of more than fifty percent (50%) of Company’s outstanding voting equity is transferred to any person or related group of persons other than an existing holder or existing holders of Company’s equity.

 

15.3 Provisions in Agreement.  Unless the Committee provides otherwise in an Award, the vesting of an Award shall accelerate 100% upon a Change in Control.  Notwithstanding the foregoing, to the extent an Award constitutes “deferred compensation” subject to Code Section 409A and provides for payment (in addition to vesting) upon a change in control, the Agreement shall define “change in control” pursuant to Treasury Regulation Section 1.409A-3(i)(5).

 

ARTICLE 16.  CANCELLATION OF AWARDS

 

16.1 Limitation or Cancellation of Award.  The Committee may provide in the Agreement that if a Participant engages in any Detrimental Activity, the Committee may, notwithstanding any other provision in this Plan to the contrary, cancel, rescind, suspend, withhold or otherwise restrict or limit any unexpired, unexercised or unpaid Award as of the first date the Participant engages in the Detrimental Activity, unless sooner terminated by operation of another term of this Plan or any other agreement.  Without limiting the generality of the foregoing, the Agreement may also provide that if the Participant exercises an Award hereunder at any time during the period beginning six months prior to the date the Participant first engages in Detrimental Activity and ending six months after the date the Participant ceases to engage in any Detrimental Activity, the Participant shall be required to pay to the Company the excess of the Fair Market Value of the Shares subject to the Award exercised over the total exercise price paid for such Shares.

 

16.2 Severability.  Should any provision of this Article 16 be held to be invalid or illegal, such illegality shall not invalidate the whole of this Article 16, but, rather, the Plan shall be construed as if it did not contain the illegal part or narrowed to permit its enforcement, and the rights and obligations of the parties shall be construed and enforced accordingly.

 

 

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ARTICLE 17.  AMENDMENT, MODIFICATION AND TERMINATION

 

17.1 Amendment, Modification and Termination.  The Committee may, at any time and from time to time, alter, amend, suspend or terminate the Plan and any Agreement in whole or in part; provided, that, unless approved by the holders of a majority of the total numbers of Shares of the Company represented and voted at a meeting at which a quorum is present, no amendment shall be made to the Plan if such amendment would (a) materially modify the eligibility requirements provided in Article 5; (b) increase the total number of Shares (except as provided in Section 4.2) which may be granted under the Plan; (c) extend the term of the Plan; (d) reprice, replace or regrant through cancellation Options or SARs issued under this Plan or lower the Option Price of a previously granted Option or the Grant Price of a previously granted SAR; or (e) amend the Plan in any other manner which the Committee, in its discretion, determines should become effective only if approved by the shareholders even if such shareholder approval is not expressly required by the Plan or by law.

 

17.2 Adjustment of Awards Upon Occurrence of Certain Unusual or Nonrecurring Events.  The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described inSection 4.4 hereof) affecting the Company or the financial statements of the Company or of changes in Applicable Laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan.  The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan.

 

17.3 Awards Previously Granted.  No termination, amendment or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan without the written consent of the Participant holding such Award.  The Committee shall, with the written consent of the Participant holding such Award, have the authority to cancel Awards outstanding.

 

17.4 Amendment to Conform to Law.  Notwithstanding any other provision of this Plan to the contrary, the Board may amend the Plan or an Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or an Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Code Section 409A), and to the administrative regulations and rulings promulgated thereunder.  By accepting an Award under this Plan, each Participant agrees to any amendment made pursuant to this Section 17.4 to any Award granted under the Plan without further consideration or action.

 

ARTICLE 18.  WITHHOLDING

 

18.1 Tax Withholding.  The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal (including the Participant’s FICA obligation), state and local taxes, domestic or foreign, required by law to be withheld with respect to any taxable event arising in connection with an Award under this Plan.

 

 

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18.2 Stock-Settled Awards.  Each Participant shall make such arrangements as the Committee may require, within a reasonable time prior to the date on which any portion of an Award settled in Shares is scheduled to vest, for the payment of all withholding tax obligations through (i) giving instructions to a broker for the sale on the open market of a sufficient number of Shares to pay the withholding tax in a manner that satisfies all applicable laws, (ii) depositing with the Company an amount of funds equal to the estimated withholding tax liability, (iii) withholding Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction, or (iv) such other method as the Committee in its discretion may approve, including a combination of (i), (ii) and (iii).  If a Participant fails to make such arrangements, or if by reason of any action or inaction of the Participant the Company fails to receive a sufficient amount to satisfy the withholding tax obligation, then, anything else contained in this Plan or any Award to the contrary notwithstanding, the Shares that would otherwise have vested on such date shall be withheld, as determined by the Committee, regardless of the Participant’s status as an Employee, Director or Third-Party Service Provider; provided, that the Committee, in its sole discretion, may permit a Participant to cure any failure to provide funds to meeting the withholding tax obligation (including any penalties or interest thereon), if the Committee determines that the failure was due to factors beyond the Participant’s control.  Any method elected by an Insider shall additionally comply with all legal requirements applicable to such Share transactions by such Participants.

 

ARTICLE 19.  INDEMNIFICATION

 

Each person who is or shall have been a member of the Committee, or the Board, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall be in addition to any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company have to indemnify them or hold them harmless.

 

ARTICLE 20.  SUCCESSORS

 

All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

 

 

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ARTICLE 21.  GENERAL PROVISIONS

 

21.1 Gender and Number.  Except where otherwise indicted by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

 

21.2 Severability.  If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 

21.3 Requirements of Law.  The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

21.4 Regulatory Approvals and Listing.  The Company shall not be required to issue or deliver evidence of title for Shares under the Plan prior to (a) obtaining any approval from any governmental agency which the Company shall, in its discretion, determine to be necessary or advisable, (b) the admission of such shares to listing on any national securities exchange or NASDAQ on which the Company’s Shares may be listed, and (c) the completion of any registration or other qualification of such Shares under any state, federal or foreign law or ruling or regulation of any governmental body which the Company shall, in its sole discretion, determine to be necessary or advisable.

 

Notwithstanding any other provision set forth in the Plan, if required by the then-current Section 16 of the Exchange Act, any “derivative security” or “equity security” offered pursuant to the Plan to any Insider may not be sold or transferred for at least six (6) months after the date of grant of such Award.  The terms “equity security” and “derivative security” shall have the meanings ascribed to them in the then-current Rule 16(a) under the Exchange Act.

 

21.5 Investment Representation.  The Committee may require any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention to sell or distribute such Shares.

 

21.6 Employees Based Outside of the United States.  Notwithstanding any provision of this Plan to the contrary, in order to comply with the laws in other countries in which the Company, its Affiliates, and/or its Subsidiaries operate or have Employees, Directors, or Third-Party Service Providers, the Committee, in its sole discretion, shall have the power and authority to:

 

	
(a)  

	
Determine which Affiliates and Subsidiaries shall be covered by this Plan;

 

	
(b)  

	
Determine which Employees, Directors, and/or Third-Party Service Providers outside the United States are eligible to participate in this Plan;

 

	
(c)  

	
Modify the terms and conditions of any Award granted to Employees and/or Third-Party Service Providers outside the United States to comply with applicable foreign laws;

 

 

27

 

 

	
(d)  

	
Establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable.  Any subplans and modifications to Plan terms and procedures established under this Section 21.6 by the Committee shall be attached to this Plan document as appendices; and

 

	
(e)  

	
Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

 

Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.

 

21.7 Uncertificated Shares.  To the extent that this Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable laws.

 

21.8 Unfunded Plan.  Participants shall have no right, title, or interest whatsoever in or to any investments that the Company, and/or its Subsidiaries, and/or its Affiliates may make to aid it in meeting its obligations under this Plan.  Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other individual.  To the extent that any individual acquires a right to receive payments from the Company, its Subsidiaries, and/or its Affiliates under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company, any Subsidiary, or an Affiliate, as the case may be.  All payments to be made hereunder shall be paid from the general funds of the Company, any Subsidiary, or an Affiliate, as the case may be and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.

 

21.9 No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to this Plan or any Award.  The Committee shall determine whether cash, Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

 

21.10 Retirement and Welfare Plans.  Neither Awards made under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company’s, any Subsidiary’s, or an Affiliate’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.

 

21.11 Deferred Compensation.  If any Award granted under the Plan is considered deferred compensation as defined under Code Section 409A, and if this Plan or the terms of an Award fail to meet the requirements of Code Section 409A with respect to such Award, then such Award shall remain in effect and be subject to taxation in accordance with Section 409A.  In this circumstance, the Committee may accelerate distribution or settlement of an Award in accordance with Code Section 409A.  The Company shall have no liability for any tax imposed on a Participant under Section 409A, and if any tax is imposed on a Participant, the Participant shall have no recourse against the Company for payment of any such tax.  Notwithstanding the foregoing, if any modification of an Award causes the Award to be deferred compensation under Code Section 409A, the Committee may rescind such modification in accordance with Code Section 409A.

 

 

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21.12 Nonexclusivity of this Plan.  The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

 

21.13 No Constraint on Corporate Action.  The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

 

21.14 Securities Law Compliance.  With respect to Insiders, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act.  To the extent any provisions of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.

 

21.15 Governing Law.  To the extent not preempted by Federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Maryland.

 

*   *   *   *

AS APPROVED BY THE BOARD OF DIRECTORS OF INDIA GLOBALIZATION CAPITAL, INC. EFFECTIVE AS OF MARCH  2, 2017.

INDIA GLOBALIZATION CAPITAL, INC.

By: /s/Ram Mukunda                                                                                                          

Its: President                                             

 

 

 

 

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