Document:

ex10-2.htm

 

Exhibit 10.2

 

LRAD CORPORATION

 

NOTICE OF STOCK OPTION GRANT

 

	
Participant:
	

	Address:	 
	

	 

 

Participant has been granted an Option to purchase Common Stock of LRAD Corporation (the “Company”), subject to the terms and conditions of this Notice of Stock Option Grant (the “Notice of Grant”), the LRAD Corporation 2015 Equity Incentive Plan (the “Plan”), and the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”), as follows. Capitalized terms not otherwise defined herein or in the Agreement shall have the meanings ascribed to such terms in the Plan.

 

	
Grant Number:
	  
	 	 
	
Date of Grant: 
	  
	 	 
	
Vesting Commencement Date: 
	  
	 	 
	
Number of Shares Granted: 
	  
	 	 
	
Exercise Price per Share: 
	  
	 	 
	
Total Exercise Price: 
	  
	 	 
	
Type of Option (check one):
	Incentive Stock Option
	 	 
	  	  Nonstatutory Stock Option
	 	 
	
Term/Expiration Date: 
	  

 

Vesting Schedule: 

 

Subject to accelerated vesting as set forth below or in the Plan, this Option will be exercisable, in whole or in part, in accordance with the following schedule: 

 

[25% of the Shares subject to this Option shall vest on the 1 year anniversary of the Vesting Commencement Date, and 1/16th of the Shares subject to this Option shall vest one each three-month anniversary of the Vesting Commencement Date such that all of the Shares subject to this Option shall be vested on the 4 year anniversary of the Vesting Commencement Date, subject to Participant continuing to be a Service Provider through each such date.]

 

Notwithstanding the foregoing, the vesting of the Shares subject to this Option shall be subject to any vesting acceleration provisions applicable to this Option contained in the Plan and/or any employment or service agreement, offer letter, change in control severance agreement or policy, or any other agreement or policy that, prior to and effective as of the date of this Notice of Grant, has been entered into or agreed upon, as the case may be, between Participant and the Company or any parent or subsidiary corporation of the Company (such agreement or policy, a “Separate Agreement”) to the extent not otherwise duplicative of the vesting terms described above (by way of example, if a Separate Agreement provides for different acceleration of vesting provisions for all of Participant’s stock options upon a termination of Participant as a Service Provider for “good reason” that is defined differently, and the Participant’s status as a Service Provider terminates in a manner that would trigger “good reason” under the Separate Agreement but not under the Agreement, the Participant would remain entitled to the acceleration of vesting under the Separate Agreement).

 

 

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Termination Period:

 

Except as provided in a Separate Agreement, this Option will be exercisable for 90 days after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability, in which case this Option will be exercisable for 12 months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, if the exercise of this Option within the applicable time periods set forth in the preceding sentence is prevented by Section 21 of the Plan, this Option shall remain exercisable until 30 days (or such longer period of time as determined by the Administrator, in its discretion) after the date Participant is notified by the Company that this Option is exercisable, but in any event no later than the expiration of the term of this Option as set forth in the Notice of Grant. Notwithstanding anything herein to the contrary, in no event may this Option be exercised after the Term/Expiration Date as provided above and may be subject to earlier termination as provided in Section 14(c) of the Plan.

 

By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and the Agreement, including exhibits hereto and thereto, all of which are made a part of this document. Participant has reviewed the Plan and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Agreement and fully understands all provisions of the Plan and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and the Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated in this Grant of Notice.

 

The parties have executed this Agreement as of the Grant Date.

 

	
PARTICIPANT
	
 
	
LRAD CORPORATION

	 	 	 
	 	 	 
	
  
	
 
	
 

	
Signature
	
 
	By
	 	 	 
	 	 	 
	Print Name	
 
	
Title

      

 

2

 

 

 

Grant Number:           

 

EXHIBIT A 

 

STOCK OPTION AGREEMENT

 

1.             Grant of Option. The Company hereby grants to the individual named in the Notice of Grant (the “Participant”) an option (the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to all of the terms and conditions in this Stock Option Agreement (this “Agreement”), the Plan, and the Separate Agreement (as applicable), which are incorporated herein by reference. Subject to Section 20(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail. The Option will be designated in the Notice of Grant as either an Incentive Stock Option (“ISO”) or a Nonstatutory Stock Option (“NSO”). If designated in the Notice of Grant as an ISO, the Option is intended to qualify as an ISO under Section 422 of the Code. However, if the Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 limitation of Code Section 422(d) such excess portion of the Option will be treated as an NSO. Further, if for any reason the Option (or portion thereof) will not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as an NSO granted under the Plan. In no event will the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.

 

2.             Vesting Schedule. Except as provided in Section 3, the Option awarded by this Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Shares scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs.

 

3.             Administrator Discretion. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Option at any time, subject to the terms of the Plan. If so accelerated, such Option will be considered as having vested as of the date specified by the Administrator.

 

4.             Exercise of Option.

 

(a)     Right to Exercise. The Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Agreement.

 

(b)     Method of Exercise. The Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit B (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which will state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will be completed by Participant and delivered to the Company. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares together and of any Tax-Related Items (as defined in Section 6(a) of this Agreement). The Option will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price.

 

 

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5.             Method of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant: 

 

(a)     cash;

 

(b)     check;

 

(c)     consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or

 

(d)     surrender of other Shares which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares, provided that accepting such Shares, in the sole discretion of the Administrator, will not result in any adverse accounting consequences to the Company.

 

6.             Tax Obligations.

 

(a)     Responsibility for Taxes. Notwithstanding any contrary provision of this Agreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of any applicable federal, state or local income, employment, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant including, without limitation, in connection with the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired under the Plan and/or the receipt of any dividends on such Shares which the Company determines must be withheld (“Tax-Related Items”). To the extent determined appropriate by the Company in its discretion, it will have the right (but not the obligation) to satisfy any Tax-Related Items by reducing the number of Shares otherwise deliverable to Participant. If Participant fails to make satisfactory arrangements for the payment of any required Tax-Related Items hereunder at the time the Option is exercised, Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if such amounts are not delivered at the time the Option is exercised. Participant authorizes the Company to withhold any Tax-Related Items legally payable by Participant from his or her wages or other cash compensation paid to Participant by the Company or from proceeds of the sale of Shares. Regardless of any action of the Company, Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company. Participant further acknowledges that the Company (1) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option; and (2) does not commit to and is under no obligation to structure the terms of the Award or any aspect of the Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result.

 

 

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(b)     Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date 2 years after the Date of Grant, or (ii) the date 1 year after the date of exercise, Participant will immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant.

 

(c)     Code Section 409A. Under Code Section 409A, an option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the fair market value of a share on the date of grant (a “Discount Option”) may be considered “deferred compensation.” A Discount Option may result in (i) income recognition by Participant prior to the exercise of the option, (ii) an additional 20% federal income tax, and (iii) potential penalty and interest charges. The Discount Option may also result in additional state income, penalty and interest charges to Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share Exercise Price of this Option equals or exceeds the Fair Market Value of a Share on the Date of Grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share Exercise Price that was less than the Fair Market Value of a Share on the Date of Grant, Participant will be solely responsible for Participant’s costs related to such a determination.

 

7.             Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant. After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

 

8.             No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE, SUBJECT TO APPLICABLE LAWS.

 

 

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9.             Service Acknowledgments. In accepting the Option, Participant acknowledges, understands and agrees that:

 

(a)     the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

 

(b)     the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;

 

(c)     all decisions with respect to future option or other grants, if any, will be at the sole discretion of the Company;

 

(d)     Participant is voluntarily participating in the Plan;

 

(e)     the Option and any Shares acquired under the Plan are not intended to replace any pension rights or compensation;

 

(f)     the Option and Shares acquired under the Plan and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

 

(g)     the future value of the Shares underlying the Option is unknown, indeterminable, and cannot be predicted with certainty;

 

(h)     if the underlying Shares do not increase in value, the Option will have no value;

 

(i)      if Participant exercises the Option and acquires Shares, the value of such Shares may increase or decrease in value, even below the Exercise Price;

 

(j)      for purposes of the Option, Participant’s status as a Service Provider will be considered terminated as of the date Participant is no longer actively providing services to the Company or any Parent or Subsidiary (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is a Service Provider or the terms of Participant’s service agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Administrator, (i) Participant’s right to vest in the Option under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is a Service Provider or the terms of Participant’s service agreement, if any, unless Participant is providing bona fide services during such time); and (ii) the period (if any) during which Participant may exercise the Option after such termination of Participant’s engagement as a Service Provider will commence on the date Participant ceases to actively provide services and will not be extended by any notice period mandated under employment laws in the jurisdiction where Participant is employed or terms of Participant’s engagement agreement, if any; the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of his or her Option grant (including whether Participant may still be considered to be providing services while on a leave of absence); and

 

 

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(k)     unless otherwise provided in the Plan or by the Company in its discretion, the Option and the benefits evidenced by this Agreement do not create any entitlement to have the Option or any such benefits transferred to, or assumed by, another company nor be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares.

 

10.          No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations or assessments regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

 

11.          Address for Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company at LRAD Corporation, 16990 Goldentop Road, Suite A, San Diego, CA 92127, or at such other address as the Company may hereafter designate in writing.

 

12.          Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.

 

13.          Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

14.          Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any state or federal law, the tax code and related regulations or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the purchase by, or issuance of Shares to, Participant (or his or her estate) hereunder, such purchase or issuance will not occur unless and until such listing, registration, qualification, rule compliance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority or securities exchange. Assuming such compliance, for income tax purposes the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with respect to such Exercised Shares.

 

 

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15.          Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan.

 

16.          Administrator Authority. The Administrator will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the Option have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.

 

17.          Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to Options awarded under the Plan or future options that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means. Participant hereby consents to receive such documents by such means of electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company which may, but do not necessarily, include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company. Participant consents to the electronic delivery of the Plan documents and this Agreement. Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to Participant by contacting the Company by telephone or in writing. Participant further acknowledges that Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, Participant understands that Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. Participant may revoke his or her consent to the electronic delivery of documents or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, Participant understands that he or she is not required to consent to electronic delivery of documents.

 

18.          Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

19.          Agreement Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

 

20.          Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Option under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

 

 

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21.          Governing Law and Venue. This Agreement will be governed by the laws of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Option or this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation will be conducted in the courts of the County of San Diego, California, or the federal courts for the United States for the Southern District of California, and no other courts, where this Option is made and/or to be performed.

 

22.          Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code in connection with the Option.

 

23.          Waiver. Participant acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant or any other Participant.

 

 

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EXHIBIT B 

 

LRAD CORPORATION
2015 EQUITY INCENTIVE PLAN
EXERCISE NOTICE 

 

LRAD Corporation

16990 Goldentop Road, Suite A

San Diego, CA 92127

Attention: Stock Administration 

 

1.     Exercise of Option. Effective as of today, _____________, _________, the undersigned (“Purchaser”) hereby elects to purchase _____________ shares (the “Shares”) of the Common Stock of LRAD Corporation (the “Company”) under and pursuant to the 2015 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement dated _____________, _________ (the “Agreement”). The purchase price for the Shares will be $____________, as required by the Agreement.

 

2.     Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price of the Shares and any required tax withholding to be paid in connection with the exercise of the Option.

 

3.     Representations of Purchaser. Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Agreement and agrees to abide by and be bound by their terms and conditions.

 

4.     Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to the Option, notwithstanding the exercise of the Option. The Shares so acquired will be issued to Purchaser as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 14 of the Plan.

 

5.     Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

 

6.     Entire Agreement; Governing Law. The Plan, the Notice of Grant and the Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the Notice of Grant, and the Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California.

 

 

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The Purchaser has submitted this Exercise Notice as of the date first written above.

 

	
Submitted by:
	
 
	
Accepted by:

	 	 	 
	PARTICIPANT	 	LRAD CORPORATION
	 	 	 
	 	 	 
	
  
	
 
	
 

	
Signature
	
 
	
By

	 	 	 
	  	 	 
	Print Name	
 
	
Title

	 	 	 
	Address:	 	 	Date Received:	 
	 	 	 	 	 
	 	 	 	 	 

  

 

 

 

B-2VRTV-20141231-Exhibit 10.21

EXHIBIT 10.21

VERITIV CORPORATION 
FORM OF DIRECTOR DEFERRED SHARE UNIT AWARD AGREEMENT
This certifies that Veritiv Corporation (the “Company”) grants to the Grantee named below, subject to the provisions of the Veritiv Corporation 2014 Omnibus Incentive Plan (the “Plan”) and this Director Deferred Share Unit Award Agreement (this “Award Agreement”), including the attached terms and conditions (which are incorporated herein and made a part of this Award Agreement), the following number of Deferred Share Units, on the Grant Date set forth below (the “Deferred Share Units”).  Capitalized terms used but not defined in this Award Agreement shall have the meanings assigned to such terms in the Plan.  Each Deferred Share Unit represents the right to receive a cash payment equal to the Fair Market Value of one Share.
		
	Name of Grantee:
	[•]

		
	Number of Deferred Share Units:
	[•]

		
	Grant Date:
	[•]

		
	Fully Vested Award:
	The Deferred Share Units are fully vested and nonforfeitable as of the Grant Date, and shall be paid to the Grantee in cash at the time provided in the attached terms and conditions.

    
IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed by its duly authorized officer as of the Grant Date, and the Grantee has also executed this Award Agreement.

VERITIV CORPORATION

__________________________________
By:
Title:

I acknowledge that I have received a copy of the Plan and that I have carefully reviewed the terms of this Award Agreement (including the attached terms and conditions) and wish to be eligible to receive the Award described herein.  I agree to comply with the terms of this Award Agreement (including the attached terms and conditions) in order to be eligible to receive this Award.

GRANTEE

___________________________________
Print Name: _________________________

VERITIV CORPORATION
TERMS AND CONDITIONS OF 
DIRECTOR DEFERRED SHARE UNIT AWARD

Veritiv Corporation (the “Company”) has granted an Award of Deferred Share Units under the Plan to the Grantee named in this Award Agreement, subject to the provisions of the Plan and the terms and conditions set out below, which are incorporated into and made a part of this Award Agreement.  Capitalized terms used but not defined in this Award Agreement shall have the meanings set forth in the Plan.

1.    Crediting of Deferred Share Units.  Each Deferred Share Unit shall represent the right to receive a cash payment equal to the Fair Market Value of one Share, subject to the terms and conditions of the Plan and this Award Agreement, and shall at all times be equal in value to one Share.  The Deferred Share Units shall be credited to a notional account established for the Grantee until payment in accordance with Section 3 hereof.

2.    Fully Vested Award.  Each Deferred Share Unit shall be fully vested and nonforfeitable as of the Grant Date set forth in this Award Agreement.

3.    Payment of Deferred Share Units.  Except as otherwise may be provided pursuant to Section 5 hereof, within thirty (30) days after the Grantee’s termination of service as a Director for any reason (or, if earlier, within thirty (30) days after a Change in Control), the Company shall make a single lump sum cash payment to the Grantee (or to the Grantee’s estate in the event of death) equal to the product of (a) the number of Deferred Share Units credited to the Grantee’s account hereunder multiplied by (b) the Fair Market Value per Share on the date of the Grantee’s termination of service as a Director (or, if applicable, the Fair Market Value per Share on the date of the Change in Control).

4.      No Shareholder Rights.  The Company’s obligations with respect to the Deferred Share Units shall be satisfied in full upon cash payment of the Deferred Share Units in accordance with Section 3 hereof.  The Grantee shall not possess any incidents of ownership (including, without limitation, dividend or voting rights) in the Shares to which the Deferred Share Units relate.  The rights of the Grantee hereunder will be no greater than those of an unsecured general creditor of the Company. No Shares will be issued to the Grantee pursuant to this Award Agreement, and no assets of the Company will be held or set aside as security for the obligations of the Company hereunder.

5.    Section 409A of the Code.  The Company intends that each Award of Deferred Share Units will comply with the requirements of Section 409A of the Code, and this Award Agreement shall be interpreted and administered in accordance with such intent.  In particular, and notwithstanding any other provision of this Award Agreement to the contrary: (a) the phrase “termination of services as a Director” or words of similar import shall mean the Grantee’s “separation from service” with the Company within the meaning of Section 409A of the Code; (b) if the Grantee is a “specified employee” at the time of his or her “separation from service” with the Company (as determined by the Company in accordance with Section 409A of the Code), then, to the extent necessary to comply with Section 409A of the Code, Deferred Share Units otherwise payable as a result of the Grantee’s separation from service shall be paid within thirty (30) days after the first business day which is at least six (6) months after the Grantee’s separation from service (or if earlier, within 30 days after the Grantee’s death); and (c) any Deferred Share Units otherwise 

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payable as a result of a Change in Control shall not be paid at such time unless the Change in Control qualifies as a “change in control event” within the meaning of Section 409A of the Code and the Treasury Regulations thereunder.  Although the Company will use reasonable efforts to avoid the imposition of taxation, interest and penalties under Section 409A of the Code, the tax treatment of the Deferred Share Units is not warranted or guaranteed.  Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Grantee (or any other individual claiming a benefit through the Grantee) as a result of this Award Agreement or the Deferred Share Units granted hereunder.

6.    Taxes.  The Grantee understands that the Grantee (and not the Company) shall be responsible for his or her own tax liability that may arise as a result of the transactions contemplated by this Award Agreement and the Plan.  The Grantee acknowledges that nothing in this Award Agreement constitutes tax advice, and that the Grantee has been encouraged to seek the advice of his or her own tax advisor regarding the tax consequences of the Deferred Share Units.

7.    No Right to Reelection.  Nothing contained in this Award Agreement shall confer upon the Grantee any right to be nominated for reelection by the Company’s shareholders, or any right to remain a member of the Board for any period of time, or at any particular rate of compensation.

8.      Transferability.  The Deferred Share Units will not be subject to transfer, anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to transfer, anticipate, alienate, sell, assign, pledge, encumber, or charge such right or benefit will be void. The Deferred Share Units will not in any manner be liable for or subject to the debts, liabilities, or torts of the Grantee.

9.    Adjustments.  The number and kind of Deferred Share Units are subject to adjustment as provided in Section 4.3 of the Plan.   

10.      Successors.  The obligations of the Company under this Award Agreement shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.

11.    Relation to Plan.  This Award Agreement and the Deferred Share Units granted hereunder are subject to the terms and conditions of the Plan.  This Award Agreement and the Plan contain the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersede all prior written or oral communications, representations and negotiations in respect thereto.  In the event of any inconsistency between the provisions of this Award Agreement and the Plan, the Plan shall govern.  The Nominating and Corporate Governance Committee of the Board (the “Committee”), acting as the Administrator with respect to the Deferred Share Units pursuant to the Plan, have the right to determine any questions which arise in connection with the grant of the Deferred Share Units.

12.      Governing Law.  This Award Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

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13.      Amendment.  Subject to the terms of the Plan, the Committee may modify this Award Agreement upon written notice to the Grantee.  Any amendment to the Plan shall be deemed to be an amendment to this Award Agreement to the extent that the amendment is applicable hereto.  Notwithstanding the foregoing (and except as otherwise may be provided in the Plan), no amendment of the Plan or this Award Agreement shall adversely impair any rights of the Grantee under this Award Agreement without the Grantee’s written consent.

14.    Use of Grantee’s Information.  Information about the Grantee and the Grantee’s participation in the Plan may be collected, recorded and held, used and disclosed for any purpose related to the administration of the Plan.  The Grantee understands that such processing of this information may need to be carried out by the Company and its Affiliates and by third party administrators whether such persons are located within the Grantee’s country or elsewhere, including the United States of America.  The Grantee consents to the processing of information relating to the Grantee and the Grantee’s participation in the Plan in any one or more of the ways referred to above.

15.    Electronic Delivery.  The Grantee hereby consents and agrees to electronic delivery of any documents that the Company may elect to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with any Award made or offered under the Plan. The Grantee understands that, unless earlier revoked by the Grantee by giving written notice to the Company’s Senior Vice President, General Counsel and Corporate Secretary, this consent shall be effective for the duration of the Award.  The Grantee also understands that he or she shall have the right at any time to request that the Company deliver written copies of any and all materials referred to above at no charge. The Grantee hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may elect to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Grantee consents and agrees that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan.

* * * * * * * *

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