Document:

Exhibit

T. ROWE PRICE GROUP, INC.
2018 ANNUAL INCENTIVE COMPENSATION POOL
FOR EXECUTIVE OFFICERS

SECTION 1
Purpose

The purpose of the T. Rowe Price Group, Inc. 2018 Annual Incentive Compensation Pool for Executive Officers is to attract and retain executives and to motivate those executives to promote the profitability and growth of T. Rowe Price Group, Inc. (the “Company”), by permitting the Company to make annual incentive compensation awards based on the Company’s performance to select Executive Officers.

SECTION 2
Definitions

“Award” will mean the Award for a Participant finally determined by the Committee under Section 4(c).

“Maximum Award” will mean the maximum percentage of the Incentive Pool granted to a Participant by the Committee for a Performance Period. The Maximum Award granted to any Participant for a Performance Period may not exceed 35% of the Incentive Pool. 

“Board” will mean the Board of Directors of the Company, or any successor thereto.

“Committee” will mean the Executive Compensation and Management Development Committee of the Board.

“Exchange Act” will mean the Securities Exchange Act of 1934, as amended.

“Executive Officer” will mean any employee of the Company who is designated as an Executive Officer under Item 402 of Regulation S-K of the Securities Act of 1933, as amended.

“Incentive Pool” will mean an amount equal to 6% of the first $50,000,000 of our annual Income before Income Taxes and Minority Interests for the applicable year, as reflected in our audited consolidated statement of income ("adjusted earnings"), plus 8% of our adjusted earnings in excess of $50,000,000. Notwithstanding the foregoing, "adjusted earnings" will be calculated without regard to (i) any gains or losses classified as "discontinued operations," and any other unusual or nonrecurring gains or losses, (ii) charges relating to goodwill, and (iii) the cumulative effect of changes in accounting policy (which include changes in accounting principles generally accepted in the United States) adopted by us. In each instance, the foregoing adjustments must be recognized in accordance with accounting principles generally accepted in the United States and must appear on the face of our consolidated statement of income for such year. 
“Participant” will mean, for each Performance Period, each Executive Officer who has been selected by the Committee to participate in the Plan.

“Performance Period” will mean the Company’s fiscal year.

“Plan” will mean this T. Rowe Price Group, Inc. Annual Incentive Compensation Pool, as amended from time to time.

SECTION 3
Administration

The Committee will administer the Plan and will have full and exclusive authority to interpret the Plan, to establish rules and regulations relating to the operation of the Plan, to select Participants in the Plan, to determine the amounts of any Awards and to make all determinations and take all other actions necessary or appropriate for the proper administration of the Plan. The Committee’s interpretation of the Plan, and all actions taken within the scope of its authority, will be final and binding on the Company, its stockholders and Participants, Executives, former Executives and their respective successors and assigns. No member of the Committee will be eligible to participate in the Plan.

SECTION 4
Determination of Awards

(a) Prior to the beginning of each Performance Period, or at such later time as the Committee may determine, the Committee will in its sole discretion designate in writing the Executive Officers who will participate in the Plan for that Performance Period and the Maximum Award that each Participant will be eligible to receive. The actual Award granted to a Participant may be less than the Maximum Award permitted for the Performance Period and may be subject to such other limitations as may be established by the Committee in its sole and absolute discretion. 
(b) Following the end of each Performance Period, and before any payments are made under the Plan, the Committee will certify in writing (i) the amount of the Incentive Pool, if any, for the Performance Period and (ii) the amount of the Maximum Awards provided for in Section 4(a). Notwithstanding the foregoing, the Committee in its sole discretion may prior to the end of a Performance Period (x) perform the certification described in Section 4(b)(i) based on preliminary financial results for the Performance Period and (y) determine the amount of any Awards as described in Section 4(b)(ii); provided, however, that the certification of the amount of the Incentive Pool and any Maximum Awards prior to the end of a Performance Period does not exempt the Committee from performing the post-Performance Period certification otherwise described in this Section 4(b).  

(c) Following the certification required by paragraph (b) of this Section, the Committee may determine to grant to any Participant an Award that may not exceed the Maximum Award determined in accordance with Section 4(a). The Committee in its sole discretion may reduce or eliminate the Award granted to any Participant under Section 4(a) based on factors determined by the Committee, including but not limited to, performance against qualitative and quantitative goals, which may be pre-established, and the Participant’s individual performance. 

SECTION 5
Payment of Awards

Each Participant will be eligible to receive, as soon as practicable after the amount of such Participant’s Award for a Performance Period has been determined under Section 4(b), but in no event later than two and one-half months after the end of the  Performance Period to which the Award relates, payment of the Award in cash.  Notwithstanding the foregoing, no more than [INSERT LIMITATION (e.g., one-half, two-thirds, 75%)] of the Award may be paid to a Participant prior to the end of the Performance Period. If a Participant’s employment with the Company terminates prior to the conclusion of a Performance Period, the Committee may determine, in its discretion, an amount, if any, to be paid to the Participant in connection with the Participant’s period of employment. Payment of any Award may be deferred to any then existing deferred compensation plan in accordance with a written election by the Participant pursuant to procedures established by the Committee.

SECTION 6
Amendments

The Committee may amend the Plan at any time and from time to time, provided that no such amendment that would require the consent of the stockholders of the Company pursuant to the NASDAQ listing rules or the Exchange Act, or any other applicable law, rule or regulation, will be effective without such consent. No amendment which adversely affects a Participant’s rights to, or interest in, an Award granted prior to the date of the amendment will be effective unless the Participant has agreed thereto in writing.

SECTION 7
Termination

The Committee may terminate this Plan at any time but in no event will the termination of the Plan adversely affect the rights of any Participant to a previously granted Award without the Participant’s written consent.

SECTION 8
Other Provisions

(a) No Executive Officer or other person will have any claim or right to be granted an Award under this Plan until such Award is actually granted. Neither the establishment of this Plan, nor any action taken hereunder, will be construed as giving any Executive Officer any right to be retained in the employ of the Company. Nothing contained in this Plan will limit the ability of the Company to make payments or awards to Executive Officers under any other plan, agreement, or arrangement.

(b) The rights and benefits of a Participant hereunder are personal to the Participant and, except for payments made following a Participant’s death, will not be subject to any voluntary or involuntary alienation, assignment, pledge, transfer, encumbrance, attachment, garnishment or other disposition.

(c) Awards under this Plan will not constitute compensation for the purpose of determining participation or benefits under any other plan of the Company unless specifically included as compensation in that plan.

(d) The Company will have the right to deduct from Awards any taxes or other amounts required to be withheld by law.

(e) Nothing contained in the Plan will be construed to prevent the Company or any of its subsidiaries from taking any corporate action which is deemed by it to be appropriate or in its best interest, whether or not such action would have an adverse effect on any awards made under the Plan and nothing in the Plan will be deemed to limit or restrict the ability of the Company or any of its subsidiaries from establishing any compensation plan or arrangement, or making any payment, or granting any award to any Executive Officer. No employee, beneficiary or other person will have any claim against the Company or any of its subsidiaries as a result of any such action.

(f) All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan will be determined in accordance with the laws of the State of Maryland without regard to principles of conflict of laws.

(g) No member of the Committee or the Board, and no officer, employee or agent of the Company will be liable for any act or action hereunder, whether of commission or omission, taken by any other member, or by any officer, agent, or employee, or, except in circumstances involving bad faith, for anything done or omitted to be done in the administration of the Plan.

SECTION 9
Effective Date

The Plan will be effective as of January 1, 2018 and will continue until terminated by the Committee.Exhibit 4.1

 

THE SECURITIES OF THE COMPANY OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN RELIANCE UPON REGULATION D PROMULGATED UNDER THE ACT, AND THE SECURITIES OFFERED HEREBY HAVE NOT BEEN QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS IN THE STATES WHERE THIS OFFERING IS MADE.  THEREFORE, THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT OR QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.  THESE SECURITIES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS STATES WHERE THEY ARE BEING SOLD.

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE PURCHASE AGREEMENT (AS DEFINED HEREIN) BY AND BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY WHICH MAY BE OBTAINED UPON REQUEST.

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. PURSUANT TO TREASURY REGULATION SECTION 1.1275-3, A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, AND YIELD TO MATURITY FOR THIS NOTE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUERS AT THE FOLLOWING ADDRESS: 201 MISSION STREET, SUITE 2375, SAN FRANCISCO, CA 94105, ATTENTION: CHIEF EXECUTIVE OFFICER.

 

	
Original Issue   Date:   [            ],   2017
    	
Principal Amount: $[       ]
    
	
 
    	
Purchase Price:   $[          ]
    

 

SECOND AMENDED ORIGINAL ISSUE DISCOUNT
  EXCHANGEABLE PROMISSORY NOTE DUE MAY 1, 2018

 

Napo Pharmaceuticals, Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to [                           ] (the “Holder”), the principal sum of [                           ] Dollars ($[         ]) with interest as provided below.  This Second Amended Original Issue Discount Exchangeable Promissory Note (this “Note”) is being issued as of [        ], 2017 (the “Effective Date”) pursuant to that certain Note Purchase Agreement dated [        ], 2017 between the Company and the parties identified therein (as amended, the “Purchase Agreement”).  This Note constitutes an amendment and substitution for that certain Original Issue Discount Exchangeable Promissory Note dated as of [        ], 2017 in the aggregate principal amount of $[        ] executed by the Company and made payable to the order of the Holder (the “Original Note”).  The indebtedness evidenced by the Original Note, as reduced to the amount provided in this Note, is continuing indebtedness evidenced hereby, and nothing herein shall be deemed to constitute a payment, settlement or novation of the Original Note, or to release or otherwise adversely affect any lien, mortgage or security interest securing such indebtedness or any rights of the Holder against any guarantor, surety or other party primarily or secondarily liable for such indebtedness. Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Purchase Agreement.

 

1.                                      Payment

 

(a)                                 Payments to Holder. The Company shall make payments hereunder to the Holder, at the address provided to the Company by the Holder in writing, in lawful money of the United States of America.

 

(b)                                 Interest. The Company promises to pay interest on the unpaid principal amount hereof from the Effective Date until paid in full at a rate per annum equal to three percent (3%).  Accrued and unpaid interest hereunder shall be paid on the Maturity Date, at the Company’s election, either (x) in cash or (y) in shares of Jaguar Common Stock as determined in the following sentence, provided that if Jaguar Common Stock is (i) neither listed on Nasdaq or the Bulletin Board or (ii) not registered under the Securities Act as of the date due for any applicable interest payment, the Company shall be required to pay such interest due in cash.  The number of shares of Jaguar Common Stock issued to the Holder pursuant to this Section 1(b) shall be determined by dividing the amount of interest then due to such Holder by the Jaguar Average Closing Price with such interest payment due date as the Valuation Date (rounded down to the nearest whole share).  All computations of interest shall be made on the basis of a 365 or 366 day year, as applicable, for the actual number of days elapsed in the relevant period.  In no event shall the interest rate payable on this Note exceed the maximum rate of interest permitted to be charged under applicable law.

 

 

(c)                                  Prepayment. Except in connection with a Change of Control, Merger, occurrence of the Merger Termination Date or Event of Default, the Company may not at any time prepay the principal or any accrued and unpaid interest of this Note in whole or in part, without the prior written consent of the Required Purchasers; provided, however, that in connection with any prepayment permitted hereunder, the Company shall give reasonable advance notice of such prepayment to the Purchaser.  Unless otherwise set forth herein, all permitted prepayments of this Note will be applied first to unpaid interest and then to principal.  For purposes of this Note, a “Change of Control” means: (i) the merger, consolidation or other business combination of Jaguar with any entity in which the stockholders of Jaguar immediately prior to such transaction in the aggregate cease to own at least 50% of the voting power of the voting securities of the entity surviving or resulting from such transaction (or the ultimate parent thereof), (ii) the sale, transfer, lease, assignment or other disposal of all or substantially all of the assets of Jaguar or (iii) any transaction or series of transactions in which more than 50% of the voting power of Jaguar’s voting securities is transferred to any person or group other than pursuant to a transaction or series of transaction primarily for capital raising purposes.

 

(d)                                 Maturity Date.  Unless this Note is terminated earlier in accordance with the terms hereof, the maturity date for this Note shall be May 1, 2018 at which time the Holder shall receive payment in full of the outstanding principal and interest of this Note (such date, the “Maturity Date”).  Unless earlier repaid or exchanged in accordance with the terms hereof, the outstanding principal amount and all accrued and unpaid interest under this Note shall be paid in full on the Maturity Date.

 

2.                                      Default and Remedies

 

(a)                                 The occurrence of any one or more of the following shall constitute an “Event of Default” hereunder:

 

(i)                                     The Company fails to repay the principal or interest on this Note within five (5) business days following the due date thereof.

 

(ii)                                  The Company fails to deliver the Initial Exchange Shares within three (3) Trading Days after receiving a notice of exchange as provided in Section 3 below.

 

(iii)                               The Company makes an assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver of or for the major part of its properties.

 

(iv)                              A trustee or receiver is appointed for the Company or for a material part of its properties and the order of such appointment is not discharged, vacated or stayed within ninety (90) days after such appointment.

 

(v)                                 Bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings for relief under any bankruptcy or similar Laws or Laws for the relief of debtors, are instituted by or against the Company and, if so instituted, are consented to by the Company, or, if contested, are not dismissed by the adverse parties or by an order, decree or judgment within ninety (90) days after such institution.

 

(vi)                              Jaguar Common Stock ceases to trade on either Nasdaq or the Bulletin Board.

 

(vii)                           The occurrence of a default under any material agreement of the Company.

 

(b)                                 If any Event of Default occurs under Sections 2(a)(i), 2(a)(ii), or 2(a)(vi), the Required Purchasers may declare the entire outstanding principal amount of the Notes and all accrued but unpaid interest thereon and all other payments payable on the Notes to be forthwith due and payable in cash immediately, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company, to the fullest extent permitted by applicable law. If an Event of Default specified in Sections 2(a)(iii), 2(a)(iv) or 2(a)(v) occurs and is continuing, then the outstanding principal balance, accrued interest thereon and all other payments payable hereunder shall become and be immediately due and payable in cash without any declaration or other act on the part of the Holder or the Requisite Investors. The Requisite Investors by notice to the Company may rescind an acceleration and its consequences. No such rescission shall affect any subsequent default or impair any right thereto. Notwithstanding anything to the contrary set forth herein, in no event will any right or remedy conferred to the Holder under this Section 2(b) be exercised prior to the earliest of (i) July 1, 2017, or (ii) the consummation of the Merger.

 

(c)                                  No right, power or remedy conferred hereby or now or hereafter available at law, in equity, by statute or otherwise shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise, but all rights, powers and remedies of the Holder shall be cumulative and not alternative.

 

 

3.                                      Exchange.

 

(a)                                 Subject to Section 5.6 of the Purchase Agreement, the Holder may, at any time prior to the Maturity Date and subsequent to the earlier of the Merger Effective Date or the Merger Termination Date, exchange this Note for the number of Initial Exchange Shares equal to the quotient obtained by dividing (i) the outstanding principal balance of this Note plus all accrued and unpaid interest thereon by (ii) the Conversion Price.  The Holder shall provide written notice to the Company, which shall be obligated to exchange this Note for such Initial Exchange Shares within three (3) Trading Days after the receipt of the notice.

 

(b)                                 Subject to the conditions set forth in the following sentence and Section 5.6 of the Purchase Agreement, the Holder shall, at any time prior to the Maturity Date, exchange this Note for the number of Initial Exchange Shares equal to the quotient obtained by dividing (x) the outstanding principal balance of this Note plus all accrued and unpaid interest thereon by (y) the Conversion Price. The Holder’s obligation to exchange this Note is conditioned upon (i) either the Merger Effective Date or the Merger Termination Date having occurred, (ii) a registration statement, in accordance with Section 4.13 of the Purchase Agreement, being effective, and (iii) shares of common stock to be issued under the Merger Agreement must have a closing sale price in excess of $1.00 as reported on its principal trading market for the immediately preceding 10 Trading Days (excluding any Trading Day during which the daily volume is less than 50,000 shares of shares of common stock to be issued under the Merger Agreement).

 

4.                                      Tax Information Statements. Napo shall use commercially reasonable efforts to provide the Holder of this Note with information as may be necessary for the Holder to satisfy U.S. federal income tax obligations, including without limitation I.R.S. Form 1099-OID.

 

5.                                      [Reserved]

 

6.                                      Amendment Provisions.  This Note may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by the Company, the Required Purchasers and, prior to the Merger, Nantucket, and then only to the extent set forth therein.

 

7.                                      Severability.  If any provision of this Note is determined to be invalid, illegal or unenforceable, in whole or in part, the validity, legality and enforceability of any of the remaining provisions of this Note shall not in any way be affected or impaired thereby and this Note shall nevertheless be binding between the Company and the Holder.

 

8.                                      Successors and Assigns.  This Note shall be binding upon, and shall inure to the benefit of, the Company and the Holder thereof and their respective permitted successors and assigns.  The Company may not assign any of its rights or obligations hereunder or under any Transaction Document without the prior written consent of the Required Purchasers.  Holder (or its transferees and/or assigns) may assign any rights and/or delegate any obligations hereunder or under any Transaction Document to an Affiliate but not to any other third party without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed), provided that any such assignee agrees in writing to be subject to the terms of the NDA.

 

9.                                      No Notice.  Except as expressly forth herein, the Company hereby waives notice of default, presentment or demand for prepayment, protest or notice of nonpayment of dishonor and all other notices or demands relative to this instrument.

 

10.                               No Waiver.  The failure in any one or more instances of a party to insist upon performance of any of the terms, covenants or conditions of this Note or to exercise any right or privilege conferred hereby, or the waiver by said party of any breach of any of the terms, covenants or conditions of this Note shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

11.                               Time of the Essence.  Time is of the essence with respect to all obligations hereunder.

 

12.                               No Usury.  If any provision of this Note would require the Company to pay interest hereunder at a rate exceeding the maximum rate permitted by applicable law, the Company shall instead pay interest on the outstanding principal balance of this Note at the maximum rate permitted by applicable law.

 

13.                               Business Days; Holidays.  If payment hereunder becomes due and payable on a Saturday, Sunday or legal holiday under the laws of the United States or the State of Illinois, the due date thereof shall be extended to the next succeeding business day.

 

 

14.                               Governing Law.  This Note shall be governed and controlled by the internal Laws of the State of Delaware as to interpretation, enforcement, validity, construction and effect and in all other respects, including, without limitation, the legality of the interest rate and other charges.

 

15.                               Notices.  All notices required or permitted to be given hereunder shall be in writing and may be delivered in accordance with Section 7.2 of the Purchase Agreement.

 

16.                               Expenses of Enforcement.  The Company shall pay on demand all expenses of the Holder (including reasonable attorney’s fees) incurred in connection with the Holder’s enforcement of its rights and remedies arising under the Transaction Documents.

 

*****

 

 

IN WITNESS WHEREOF, the Company has duly caused this Second Amended Original Issue Discount Exchangeable Promissory Note to be signed in its name and on its behalf by its duly authorized officer as of the Effective Date first written above.

 

 

	
 
    	
 
    	
NAPO   PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: 
    	
Lisa A.   Conte
    
	
 
    	
 
    	
Its: 
    	
Chief Executive   Officer

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