Document:

ck889123-ex103_7.htm

 

Exhibit 10.3

 

SECURED PROMISSORY NOTE

 

		
	
$800,000.00
	
October 19, 2020

 

FOR VALUE RECEIVED, receipt of which is hereby acknowledged, Redwood Mortgage Investors IX, LLC, a Delaware limited liability company (“Maker”), promises to pay to Redwood Mortgage Investors VIII, a California limited partnership (“Payee”), the principal sum of Eight Hundred Thousand Dollars ($800,000.00) (“Principal”) together with interest as provided in this Secured Promissory Note (“Note”) and on the following terms and conditions:

 

1.Secured Note. This Note is secured by that certain Pledge and Security Agreement of even date herewith, entered into by and between Maker and Payee (the “Pledge Agreement”). All capitalized terms not otherwise defined herein shall have the meanings given in the Pledge Agreement.

 

2.Maturity Date. All unpaid Principal, Interest and any and all other sums payable to Payee under this Note shall be due and payable, in full, on the earlier of: (i) the closing of the Purchase Transaction contemplated in the Pledge Agreement; and (ii) November 30, 2020 (the “Maturity Date”).

 

3.Interest. In addition to the repayment of the Principal amount of this Note, Maker shall pay to Payee interest in the amounts provided herein (collectively referred to herein as “Interest”).

 

(a)If Principal is repaid to Payee upon the closing of the Purchase Transaction, Interest payable to Payee on the corresponding Maturity Date shall be Interest equal to the sum of following: (i) Interest in an amount equal to the Payee’s Pro Rata Share of the weighted average interest that accrues on the Loans Held for Sale from the date of this Note through the closing of the Purchase Transaction and corresponding Maturity Date; and (ii) Payee’s Pro Rata Share of any prepayment premium payable to Maker in the Purchase Transaction. For the purposes of this Note, the Payee’s “Pro Rata Share” means the fraction, expressed as a percentage, the numerator of which is the aggregate principal balance of the Loans Held for Sale and the denominator of which is the Principal amount of this Note as of the Purchase Transaction closing and corresponding Maturity Date.

 

(b)If the Purchase Transaction fails to close by the November 30, 2020, Maturity Date or the provisions of subsection (a) are otherwise inapplicable: (i) Interest payable to Payee on the Maturity Date shall be equal to the Payee’s Pro Rata Share of the weighted average interest that accrues on the Loans Held for Sale from the date of this Note through the Maturity Date; and (ii) Payees Pro Rata Share of the prepayment premium described in subsection (a)(ii) above shall be payable to Maker if and when the Purchase Transaction is closed and the prepayment premium is paid by the purchaser.

 

4.Payment. No payments shall be due from Maker under this Note prior to the Maturity Date. On the Maturity Date, Maker shall make a lump sum payment to Payee which shall include all unpaid Principal, all Interest and any and all other sums due under this Note. This Note may be prepaid at any time by paying all unpaid Principal and all Interest payable as of the date of prepayment. All payments made by Maker hereunder shall be applied first to Interest, then to the outstanding Principal.

 

5.Default. The occurrence of any of the following (each, an “Event of Default”), shall constitute a default hereunder: 

 

(a)Failure of Maker to pay all amounts due under this Note on the Maturity Date.

 

(b)Default in the performance of any obligation contained in the Pledge Agreement or any other instrument (including any amendment, modification or extension thereof) given by Maker for the purpose of securing this Note.

 

 

35701.3 16955818.2

 

 

(c)Maker shall commence (or take any action for the purpose of commencing) or Maker shall have commenced against it any proceeding under any bankruptcy, reorganization, readjustment of debt or similar law or statute, a receiver, trustee or custodian is appointed for a substantial part of Maker’s assets, Maker makes assignment for the benefit of creditors, or Maker is otherwise deemed to be insolvent.

6.Remedies. Upon the occurrence of any Event of Default, Payee, at its option and without further notice, demand, or presentment for payment to Maker or others, may declare immediately due and payable the unpaid Principal balance of this Note and all Interest payable thereon together with all other sums owed by Maker under this Note. Payment of such sums may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to Payee under this Note and the Pledge Agreement.

7.Remedies Cumulative. The rights and remedies of Payee provided in this Note and the Pledge Agreement are cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion Payee, and may be exercised as often as occasion therefor shall occur. The failure of the Payee to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

8.Costs. Maker agrees to pay immediately upon demand all costs, expenses and fees, including without limitation reasonable attorneys’ fees incurred by Payee in any proceeding for the collection of the debt evidenced by this Note, in any litigation or controversy arising from or connected with the enforcement of this Note or the Pledge Agreement, and/or in any proceedings to enforce payment of Maker’s obligations hereunder by an action or participation in, or in connection with, a case or proceeding under Chapter 7, 1l or 13 of the Bankruptcy Code, or any successor statute thereto.

9.Assignment. This Note may not be assigned, transferred, pledged or hypothecated by Maker without the prior written consent of Payee, which may be withheld by Payee in its sole discretion. Payee shall have the absolute right to assign this Note without Maker’s consent

10.Severability. If any provision of this Note, or the application of it to any party or circumstance is held to be invalid, such provision shall be ineffective, but the remainder of this Note, and the application of such provision to the other parties or circumstances, shall not be affected thereby.

 

	
MAKER:
	
REDWOOD MORTGAGE INVESTORS IX, LLC

	
 
	
a Delaware limited liability company

	
 
	
 
	
 

	
 
	
By:
	
Redwood Mortgage Corp., 

	
 
	
 
	
a California corporation, its General Partner

	
 
	
 
	
 

	
 
	
By:
	
/s/ Michael Burwell
	
 

	
 
	
 
	
Michael Burwell, President

 

 

 

 

35701.3 16955818.2

 

 

PLEDGE AND SECURITY AGREEMENT

This Pledge and Security Agreement (this “Agreement”) is made and entered into on October 14, 2020, (“Effective Date”) by and between Redwood Mortgage Investors VIII, a California limited partnership (the “Secured Part”), and Redwood Mortgage Investors IX, LLC, a Delaware limited liability company (“Pledgor”), with reference to the following facts: 

RECITALS

A.Contemporaneously herewith, Secured Party has made a short term loan to Pledgor in the amount of $800,000 (the “Loan”). which Loan is evidenced by the that certain Secured Promissory Note made by Pledgor in favor of Secured Party and dated as of the Effective Date hereof (the “Secured Note”). 

B.Peldgor is a mortgage fund in the business of making loans secured by California real estate and, as of the Effective Date, Pledgor is holding the loans identified in Exhibit A of this agreement for sale to third parties (the “Loans Held for Sale”). Pledgor has received and is assessing competing bids for the purchase of its Loans Held for Sale and currently expects that a purchase and sale transaction with one of existing bidders will occur and be closed in October or November of 2020 (the “Purchase Transaction”). Pledgor also intends to utilize the proceeds from the Loan Purchase Transaction to: (i) repay all of Pledgor’s obligations due to Western Alliance Bank (“Credit Line Lender”) under its existing credit line with Credit Line Lender (“Credit Line Agreement”) that are secured by the Loans Held for Sale (as applicable) (the “Credit Line Obligations”); and (ii) repay all of the obligations due to Secured Party under the Secured Note. 

D.Secured Party is only willing to make the Loan to Pledgor on the express condition that the Loan and Pledgor’s obligations to Secured Party under the Secured Note be secured by a pledge of Pledgor’s interest in the Purchase Transaction proceeds (net of the Credit Line Obligations), Pledgor’s right to receive payments under the Loans Held for Sale (after payment of all applicable Credit Line Obligations) and all other Collateral (as defined herein) on the terms set forth in this Agreement. 

AGREEMENT

NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, the parties hereby agree as follows: 

1.Recitals.  The above stated Recitals are true and correct as of the Effective Date and are hereby incorporated into this Agreement in their entirety. 

2.Pledge of Collateral.  Pledgor hereby pledges and grants to Secured Party, as collateral security for the prompt and complete payment and performance of the Obligations (as defined in Section 3, below), a first priority security interest in all right title and interest of Pledgor, whether now existing or hereafter from time to time arising or acquired in and to the following (“Collateral”): 

(a)all sale proceeds payable to Pledgor from the Purchase Transaction and any other sale of the Loans Held for Sale to the extent they exceed the Credit Line Obligations with respect the Loans Held For Sale (as applicable); 

(b)all payment premiums payable to Pledgor with respect to the sale of any of the Loans Held for Sale, whether in a currently contemplated Purchase Transaction or otherwise; and 

(c)all payments of principal, interest and other monies due or to become due with respect to the Loans Held for Sale in excess of the Credit Line Obligations payable with respect to any Loans Held For Sale (as applicable); and 

(d)all claims, rights and interest in proceeds, collections, and recoveries with respect to the foregoing. 

 

16955978.1

 

3.Secured Obligations.  The pledge set forth in Section 2, is made by Pledgor in favor of Secured Party to secure the prompt and complete performance of Pledgor’s obligations under the Secured Note and this Agreement (collectively, the “Obligations”). 

4.Perfection of Security Interest. This Agreement shall constitute a security agreement under California Uniform Commercial Code (“UCC”). Pledgor acknowledges that the perfection of the security interest provided for herein shall be made by filing a financing statement in the form attached hereto as Exhibit B (“Financing Statement”) with the California Secretary of State. Pledgor hereby authorized Secured Party to file the Financing Statement and to take any other actions and make any other filings Secured Party deems necessary to perfect or continue the perfection of the security interest granted by Pledgor under this Agreement. 

5.Representations and Warranties; Covenants. 

(a)Pledgor hereby represents and warrants to the Secured Party that Pledgor has good title (to the Collateral, free and clear of all claims, pledges, security interests, liens or encumbrances of every nature whatsoever. 

(b)Pledgor agrees that, until the Obligations are fully satisfied, Pledgor will not (whether voluntarily, involuntarily or by operation of law) sell, assign, dispose or otherwise transfer (or attempt to sell, assign, dispose or otherwise transfer), or grant or create (or attempt to grant or create) any security interest, lien, pledge, claim or other encumbrance with respect to, any of the Collateral. Any transfer or encumbrance of any Collateral in violation of this Section 5(b) shall be deemed null and void ab initio. 

6.Rights on Default.  Upon the occurrence of a default by Pledgor with respect the Obligations, Secured Party shall have all of the rights and remedies granted to the Secured Party under the UCC and any other applicable laws, and such rights, powers and remedies will be exercisable by the Secured Party with respect to all or any portion of the Collateral. 

7.Further Assurances.  Pledgor and Secured Party hereby agree that, from time to time, Pledgor will promptly execute, deliver and file such instruments, certificates and documents and take such further acts as the Secured Party may reasonably request in order to perfect, preserve, protect and defend the pledge or security interest granted or purported to be granted hereunder or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any or all of Collateral. 

8.Waiver.  No failure, forbearance or delay by the Secured Party to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Secured Parry from exercising any such right, power or remedy at any later time or times. No waiver of any of the provisions contained in this Agreement shall be valid unless made in writing and executed by the waiving party. 

9.Miscellaneous. 

(a)This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to any conflict of laws principles of that or any other jurisdiction. 

(b)This Agreement and the Secured Note constitute the entire agreement between the parties with respect to the subject matter hereof, and supersede any prior agreements with respect to the subject matter hereof. 

(c)If any provision of this Agreement is held to be invalid or unenforceable, the invalidity or enforceability of any such provision shall not affect the validity or enforceability of any other provision hereof. This Agreement may not be assigned by either party without the prior written consent of the other party. Any assignment in violation of this Section 9(c) shall be null and void. This Agreement shall (i) be binding upon the Pledgor’s successors and assigns and (ii) inure to the benefit of the successors and permitted assigns of the Secured party. 

 

16955978.1

 

(d)If any dispute between the parties under this Agreement or the Secured Note results in litigation or arbitration, the prevailing party shall be entitled to recover all reasonable costs incurred by such party in connection with such action, including, but not limited to, reasonable attorneys’ fees and expenses and, if Secured Party is the prevailing party, Secured Party’s reasonable collection costs. 

(e)All headings are used herein for convenience of reference only and shall not be used to construe or interpret this Agreement. Unless varied by this Agreement, all terms used herein which are defined by the Delaware Uniform Commercial Code shall have the same meanings hereunder as assigned to them by the Delaware Uniform Commercial Code. 

IN WITNESS WHEREOF, the parties hereto have executed this Pledge & Security Agreement effective as of the Effective Date. 

 

	
PLEDGOR:
	
 
	
SECURED PARTY:

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
REDWOOD MORTGAGE INVESTORS IX, LLC
	
 
	
REDWOOD MORTGAGE IVESTORS VIII

	
a Delaware limited liability company
	
 
	
a California limited partnership

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
Redwood Mortgage Corp.,
	
 
	
By:
	
Redwood Mortgage Corp.,

	
 
	
a California corporation. its Manager
	
 
	
 
	
a California corporation, its General Partner

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Michael Burwell
	
 
	
 
	
By:
	
/s/ Michael Burwell

	
 
	
 
	
Michael Burwell, President
	
 
	
 
	
 
	
Michael Burwell, President

 

 

16955978.1

 

EXHIBIT A

LOANS HELD FOR SALE

 

	
Loan Number.
	
Name of Borrower
	
Original Principal Balance

	
4683
	
Clara J., LLC
	
$2,300,000.00

	
4744
	
Afredo Muccino
	
$850,000.00

	
4775
	
Ablehed Family Trust
	
$2,000,000.00

	
4815
	
Entrust Group, Inc.
	
$1,007,500 .00

	
 
	
Michael Campesino
	
$1,400,000.00

 

 

16955978.1Document

Exhibit 10.1

Coupang Executive Severance Policy

As Adopted on January 1, 2021 and amended on July 18, 2021

1.Purpose
This Executive Severance Policy, including any addenda and exhibits (this “Policy”) governs the payment of severance pay to Executives of the Approved Coupang Group Companies. It is administered by the Compensation Committee of the Company, or such other body or person as may be appointed by resolution of the Compensation Committee of the Company from time to time (the “Administrator”). As of the Effective Date, the Administrator for Executives at a level of SVP and above is the Company’s Compensation Committee, and the Administrator for Executives below the SVP level is the Policy Owner.  Capitalized terms not otherwise defined herein, are defined in Section 3 of this Policy. 
For the purposes of this Policy, Approved Coupang Group Companies are: i) the Company, ii) each Coupang U.S Company, and iii) each Coupang Korea Company. The Global Compensation Team will maintain a list of Approved Coupang Group Companies that are subject to this Policy. 
2.Policy Statements
(a)Eligibility for Severance Pay 
For the purposes of this Policy, an Executive means any of the following: 
i.officers of the Approved Coupang Group Companies who have a job level of Level 9 and above, in accordance with the Company’s job levelling guidelines; and 
ii.officers who, regardless of job level, are registered directors of a Coupang Korea Company who in each case must be on the payroll of one of the Coupang Korea Companies (provided that an Executive only by reason of serving as a registered director of a Coupang Korea Company (i.e., Level 8 or below) will be an Executive only for such Coupang Korea Company). 
An Executive is eligible to receive severance pay upon a qualifying resignation or termination of the Executive’s appointment (as set forth in Section 2(b) of this Policy), on the condition that: 
i.except with respect to a termination due to death or Incapacity, the Executive first executes a resignation and release agreement provided by the Company upon such terms, including any terms providing for restrictive covenants, as are determined by the Company from time to time in its discretion (the “Release Agreement”), and allows any mandatory consideration or revocation period provided by law to lapse, provided that such Release Agreement must in any event become irrevocable no later than sixty (60) days following such termination; 
ii.the Executive continues to comply with the terms of any applicable confidentiality, non-competition, and invention assignment agreement and any such other appropriate agreements between the Executive and  a Coupang Group Company;
iii.there was no “Cause” (as defined below) to terminate the Executive at the time of the Executive’s termination or resignation; and
iv.the Executive meets such other conditions as are stipulated in this Policy.

A material breach of the Release Agreement, if any, by an Executive will cause any and all installment severance payments to cease, and will require the Executive to repay any severance pay already received.
An Executive’s resignation or termination from one of the Approved Coupang Group Companies will not result in entitlement for his/her severance pay, as long as the Executive maintains the status of Executive at another Approved Coupang Group Company, and severance pay will be determined only upon final resignation or termination from all Approved Coupang Group Companies. Also, an Executive will not be entitled to severance pay if the Executive is transferring from one of the Approved Coupang Group Companies to another, as long as the Executive has obtained Executive status at that other Approved Coupang Group Company, and severance pay will be determined only upon final resignation or termination from all Approved Coupang Group Companies. A Coupang Group Company that has finally determined and paid severance pay shall claim the severance pay from all former Coupang Group Companies where the Executive has worked in proportion to the Executive’s service period at each of such companies.
(b)Qualifying Resignation and Termination Types
The types of qualifying resignations and terminations under the Policy are as follows: 
    Non-CIC Involuntary Termination
An Executive will qualify for severance pay upon a “Non-CIC Involuntary Termination” if the Executive’s appointment is terminated by the relevant Approved Coupang Group Company without Cause (including by reason of death or Incapacity) other than during a Change in Control Period.
    CIC Involuntary Termination
An Executive will qualify for severance pay upon a “CIC Involuntary Termination” if the Executive’s appointment is terminated by the relevant Approved Coupang Group Company without Cause (including by reason of death or Incapacity) or the Executive resigns for Good Reason, in either case during a Change in Control Period.
    Other Termination Types
Additional qualifying resignations and termination types may be specified in the applicable Country Addendum. 
For the avoidance of doubt, the non-renewal of a fixed-term agreement with an Executive shall not be treated as a Non-CIC Involuntary Termination or a CIC Involuntary Termination, but may qualify as an additional qualifying resignation or termination, if expressly specified in the Country Addendum. An Executive may not receive benefits with respect to more than one of the types of resignations and terminations under this Policy. The severance pay, if any, payable by an Approved Coupang Group Company under this Policy is calculated solely and separately based on the compensation paid by such Approved Coupang Group Company.
(c)Severance Pay Calculation
Executives who are eligible for severance pay under this Policy as determined in accordance with Sections 2(a) and (b) above will be paid severance pay calculated in accordance with the relevant Country Addendum: 
2

						
	Country Addendum 
	Applicability 

	Republic of Korea
	Korea Executives (Non-Expat)
Korea Executives (Expat)

	U.S.A.

	US Executives 

Notwithstanding the foregoing, if at the time of his or her termination, an Executive is subject to an appointment agreement, service agreement, employment agreement, offer letter, separation agreement, or similar agreement with the relevant Approved Coupang Group Company providing for the payment of severance upon a termination of employment that is more favorable than the payments under this Policy, such Executive shall receive such severance payments rather than the severance payments provided for under this Policy, and any payments provided under this Policy will be deemed included in such contractual severance payments.
(d)    Taxation
Withholding
All payments under this Policy shall be subject to applicable deductions and withholdings.  
Section 409A
This section shall only apply to the extent an Executive is subject to income taxation pursuant to the United States Internal Revenue Code of 1986, as amended (the “Code”). The payments and benefits under this Policy are intended to be exempt from (and if not exempt from, compliant with) the application of Section 409A of the Code, as amended (“Section 409A”), and this Policy will be construed accordingly. Notwithstanding anything to the contrary herein, to the extent required to comply with Section 409A, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Policy providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A. The Executive's right to receive any installment payments will be treated as a right to receive a series of separate payments and, accordingly, each installment payment shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Policy, if the Executive is deemed by the Company at the time of the Executive's separation from service to be a “specified employee” for purposes of Section 409A, and if any of the payments upon separation from service set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation” subject to Section 409A then, to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A and the related taxation under Section 409A, such payments shall not be provided to the Executive prior to the earliest of (i) the expiration of the six-month period measured from the date of separation from service, (ii) the date of the Executive's death or (iii) such earlier date as permitted under Section 409A without the imposition of taxation thereunder. With respect to payments to be made upon execution of an effective release, if the release revocation period spans two calendar years, payments will be made in the second of the two calendar years to the extent such amounts are “deferred compensation” subject to Section 409A and necessary to avoid taxation under Section 409A. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Policy or any payments hereunder are determined not to be compliant with Section 409A.

Section 280G
This section shall only apply to the extent an Executive is subject to income taxation pursuant to the Code, and/or such Executive’s compensation gives rise to a tax deduction for a Coupang Group Company that may potentially be limited by operation of Section 280G and Section 4999 of the Code. Any provision of this Policy to the contrary notwithstanding, if any payment or benefit an Executive would receive pursuant to this Policy or 
3

otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction will occur in the manner that results in the greatest economic benefit for an Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata.  
Notwithstanding the foregoing, if the Company has not consummated an IPO and any Payment that would be otherwise reduced pursuant to the foregoing paragraph would not be so reduced if the stockholder approval requirements of Section 280G(b)(5) of the Code are capable of being satisfied, the Company will use its reasonable best efforts to cause such payments to be timely submitted for such approval in accordance with such requirements to the extent the Executive has waived any Payments that exceed the Threshold Amount.   An “IPO” shall mean the consummation of the first public offering pursuant to an effective registration statement under the U.S. Securities Act of 1933, as amended covering the offer and sale of the Company’s equity securities, as a result of or following which the Company’s common stock shall be publicly held. The “Threshold Amount” shall mean three times the Executive’s “base amount” as defined in Section 280G(b)(3) of the Code and the regulations thereunder, less one dollar.
3.Definitions

						
	Term
	Definition

	Approved Coupang Group Company

	has the meaning ascribed in Section 1 of this Policy.

	Basic Severance

	means an amount of severance pay calculated in the same manner as provided under the Guarantee of Workers Retirement Income Act (or any successor thereto), without regard to whether an Executive falls within the scope of “employees” covered by the act.

	Cause

	has the meaning set forth in an individual agreement between any of the Approved Coupang Group Companies and an Executive and, in the absence of such agreement, means: (i) misconduct or negligence in performing duties; (ii) dishonest or fraudulent conduct with regard to an Approved Coupang Group Company or one’s duties; (iii) continued failure to follow the directions of the Executive’s immediate supervisor (or supervisory body, as applicable); (iv) being officially charged with a crime punishable by potential imprisonment of at least one year, or any crime involving fraud or dishonesty, not including any labor, tax, or other compliance violations (a) committed by an Approved Coupang Group Company or its employees or officers in the course of an Approved Coupang Group Company’s business, and (b) for which the Executive’s own intentional misconduct or negligence was not a substantial cause; and (v) in the case of Korea Executives (Non-Expat) and Korea Executives (Expat), any other reason constituting justifiable grounds for termination under the laws of the Republic of Korea, including the Commercial Act.

	Change in Control

	means a Company Transaction, as defined in the Company’s 2011 Equity Incentive Plan; provided, however, that if the Company adopts a successor plan to the 2011 Equity Incentive Plan, “Change in Control” will have the meaning set forth in such successor plan. 

4

						
	Change in Control Period

	means the period commencing upon a Change in Control and ending twelve (12) months thereafter.

	Company

	means Coupang, LLC, a Delaware limited liability company, and any successor entity that adopts or assumes the Policy, including in connection with a Change in Control or incorporation.

	Country Addendum

	means the country-specific addenda to this Policy.

	Coupang Group Companies
	means the Company and any parent or subsidiary of the Company, in an unbroken chain of entities, if each of the entities other than the last entity in the unbroken chain owns securities possessing 50% or more of the total combined voting power of all classes of securities in one of the other entities in such chain. 

	Coupang Korea Company
	means any Coupang Group Company registered or incorporated in the Republic of Korea, which has established this Policy under the authority of its shareholder(s) pursuant to its articles of incorporation. The Global Compensation Team will maintain a list of Coupang Korea Companies that have established this Policy under the authority of their respective shareholder(s). 

	Coupang U.S. Company
	means any Coupang Group Company registered or incorporated in the United States of America.

	Good Reason
	has the meaning set forth in an individual agreement between any of the Approved Coupang Group Companies and an Executive and, in the absence of such agreement, means the occurrence of any of the following events or conditions that occurs upon or following a Change in Control, unless consented to by the Executive (and the Executive shall be deemed to have consented to any such event or condition unless the Executive provides written notice of the Executive’s non-acquiescence within 30 days of the effective time of such event or condition):
a)a change in the Executive’s responsibilities or duties which represents a material and substantial diminution in the Executive’s responsibilities or duties as in effect immediately preceding the consummation of the Change in Control; 
b)a reduction in the Executive’s base salary to a level below that in effect at any time within six (6) months preceding the consummation of a Change in Control or at any time thereafter; provided that an across-the-board reduction in the salary level of substantially all other individuals in positions similar to the Executive’s by the same percentage amount shall not constitute such a salary reduction; or
c)requiring the Executive to be based at any place outside a 50-mile radius from the Executive’s job location or residence immediately prior to the Change in Control except for reasonably required travel on business which is not materially greater than such travel requirements prior to the Change in Control. 
Notwithstanding the foregoing, “Good Reason“ shall not exist unless and until the Executive provides written notice of the acts alleged to constitute Good Reason within thirty (30) days of the effective time of such event or condition, and the relevant Approved Coupang Group Company fails to cure such acts within thirty (30) days of receipt of such notice, if curable. The Executive must terminate his or her employment within sixty (60) days following the expiration of such cure period for the termination to be on account of Good Reason.   

5

						
	Incapacity
	has the meaning of “incapacity” or “disability” as set forth in an individual agreement between any of the Approved Coupang Group Companies and an Executive and, in the absence of such agreement, means an Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and will be determined by the Administrator on the basis of such medical evidence as the Administrator deems warranted under the circumstances.

	Korea Executive (Non-Expat)
	means an Executive whose job location is the Republic of Korea, and who is a Korean national, and is on the payroll of any Coupang Korea Company.

	Korea Executive (Expat)
	means an Executive whose job location is the Republic of Korea, and who is not a Korean national, and is on the payroll of any Coupang Korea Company.

	Tier One Executive 
	means an Executive with a job level of Level 10 or above.

	Tier Two Executive

	means an Executive with a job level of 9. 

	Tier Three Executive

	means an Executive with a job level below 9. 

	US Executive 
	means an Executive who signs an appointment agreement with any Coupang U.S. Company, whose job location is in the United States of America, and is on the payroll of any Coupang U.S Company.

4.Inquiry
Questions about this Policy should be addressed to the Policy Owner.  
5.Dispensations
–Dispensations from the requirements to comply with this Policy may be granted in exceptional circumstances. Any special severance benefits in excess of the formula in the Severance Pay Calculation of the Country Addendum may be provided to Executive(s) if such Executive(s) contributes to the growth of the Company and provided that such special severance benefits are approved by the Administrator, and in the case of Korea Executives (Non-Expat) and Korea Executives (Expat), are approved by the shareholder(s) of the relevant Coupang Korea Company before separation.
–Requests for dispensation must be addressed to the Policy Owner. The request must state the specific policy requirement for which the dispensation is requested, and the reason for the request. 
–The Policy Owner will maintain a record of requests and dispensations.
6.Administration
The Administrator has the right, power and authority, in its discretion, to administer and interpret this Policy, and has all powers reasonably necessary to carry out its responsibilities under this Policy including (but not limited to) the discretion to:  (i) administer the Policy according to its terms and interpret the Policy provisions, (ii) resolve and clarify inconsistencies, ambiguities and omissions in the Policy and among and between the Policy and the other related documents, (iii) take all actions and make all decisions regarding questions of eligibility and entitlement to benefits, and benefit amounts, (iv) make, amend, interpret and enforce all appropriate rules and regulations for the administration of the Policy, and (v) decide or resolve any and all questions, including benefit entitlement determinations and interpretations of the Policy, as may arise in connection with the Policy.
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The decisions of the Administrator of any disputes arising under the Policy, including but not limited to questions of construction, interpretation and administration shall be final as to all persons having an interest in or under the Policy.  
7.Addendum 
This Policy shall apply to Executives who resign on or after the effective date (January 1, 2021) and shall apply to the calculation of severance pay for a service period of such Executives before the effective date.
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COUNTRY ADDENDUM – REPUBLIC OF KOREA
Applicability
This Country Addendum – Republic of Korea (“Country Addendum (Korea)”) is a Country Addendum to the Executive Severance Policy (the “Policy”), and applies to Korea Executives (Non-Expats) and Korea Executives (Expats). Capitalized terms not defined herein are defined in the Policy.  Subject to permitted dispensations in accordance with the Policy, the severance pay amounts set out in this Country Addendum (Korea) set out the maximum amounts an Executive is entitled to under the Policy. 
Additional qualifying resignation and termination types
In addition to the qualifying resignation and termination types specified in the Policy, the following additional qualifying resignation and termination types apply to this Country Addendum (Korea):
Voluntary Termination 
Subject to the eligibility conditions in section 2(a) of the Policy, an Executive will qualify for severance pay upon a “Voluntary Termination” if the Executive has resigned from the relevant Coupang Korea Company or his/her fixed-term service or appointment agreement or equivalent agreement has expired and not been renewed, and such resignation or expiration does not otherwise qualify as a Non-CIC Involuntary Termination or a CIC Involuntary Termination (as defined in the Policy).
Severance Pay Calculation
Non-CIC Involuntary Termination and CIC Involuntary Termination: 
The following severance pay calculation applies to a Non-CIC Involuntary Termination or a CIC Involuntary Termination: 
•The severance payable to Tier Three Executives will be Basic Severance.
•The aggregate amount of severance payable to a Tier One or Tier Two Executive shall be calculated as set forth below.
									
	Rank

	Korea Executives (Non-Expats)

	Korea Executives (Expats) 

	Tier One 
	Greater of (A) 1.0 multiplied by the Executive’s annual rate of base salary*; and (B) the amount that would have been payable upon a Voluntary Termination, as described below
	1.0 multiplied by the Executive’s annual rate of base salary*

	Tier Two
	Greater of (A) 0.75 multiplied by the Executive’s annual rate of base salary*; and (B) the amount that would have been payable upon a Voluntary Termination, as described below
	0.75 multiplied by the Executive’s annual rate of base salary*

*Base salary includes only compensation denoted as “base salary” or an equivalent term in the relevant documentation and does not include any one-time, performance, discretionary or other bonuses. The annual rate of base salary shall be calculated based on the salary at the time of the separation. 
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Voluntary Termination:
The following severance pay calculation applies to a Voluntary Termination: 
•The severance payable to Tier Three Executives will be Basic Severance.
•The aggregate amount of severance payable to Tier One and Tier Two Executives shall be calculated as follows: 
[Executive’s Average Monthly Compensation] multiplied by [years of service as an Executive (pro rated for partial years, including period of service less than one year)] multiplied by [the Executive Multiplier]. 
“Average Monthly Compensation” means the monthly average base salary for the previous three months immediately prior to termination or resignation (as applicable), provided that, where the Executive has been promoted in rank: (A) the Average Monthly Compensation shall be based on the monthly average base salary calculated separately for each rank based on the last three months of service for each rank; and (B) in addition, the Executive Multiplier shall be applied separately for the Executive’s period of service for each rank. If a period of service of less than three months exists for a rank, the Average Monthly Compensation shall be calculated based on the average monthly base salary for such period.
“Executive Multiplier” has the meaning set out in the table below:
									
	Rank
	Korea Executives (Non-Expats)
	Korea Executives (Expats)

	Tier One - L12+
	4x	1x
	Tier One - L10 and L11
	3x	1x
	Tier Two - L9
	2x	1x

General Adjustments
Any severance payment under this Country Addendum (Korea) will be inclusive of, or will be offset by, any payment made in the name of severance received by the Executive including pay during “garden leave” provided expressly as a form of severance. If the Executive has executed a fixed-term service agreement, the Executive agrees to not seek additional damages against any Coupang Group Company with respect to the Executive’s services for any Coupang Group Company and/or separation, as the severance pay specified in this Country Addendum (Korea) includes all damages that can be claimed by the Executive against any Coupang Group Company with respect to the Executive’s services for the Coupang Group Companies and/or separation, including damages due to the termination of the Executive’s fixed-term service agreement prior to the expiration date, whether under any contract or the Korean Commercial Code.
Form and time of payment
Severance pay under this Policy other than Basic Severance may be paid either as a single lump sum or in equal monthly installment payments over a period of up to 12 months (in the case of Tier One) and nine months (in the case of Tier Two), in the sole discretion of the Administrator unless otherwise agreed between an Executive and the relevant Coupang Korea Company taking into account Section 409A of the Code with respect to any Executive who is subject to income taxation pursuant to the Code. The Administrator will notify the Executive of the form of payment prior to making the first payment.
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Severance pay under this Policy, or the first installment thereof, will be paid within 14 days from: 
i.the later of (a) the date an Executive executes and delivers the Release Agreement to the Company and (b) the effective date of the Executive’s resignation or termination (as applicable); or  
ii.if no Release Agreement is required under this Policy, the effective date of the Executive’s resignation or termination (as applicable).
Promotion from non-Executive to Executive 
In respect of officers that have been promoted from a non-Executive role to an Executive role: (i) the relevant Coupang Korea Company shall determine the severance payment amount for the period during which they were a non-Executive employee, in accordance with Korean laws and regulations; and (ii) those officers will become eligible for severance under this Policy on the effective date of their promotion to an Executive role. If an Executive was previously a non-Executive for less than one (1) year, the Executive’s severance compensation amount for such period shall be calculated and paid pro-rata.
For Executives who were already promoted from non-Executive roles to an Executive role on or before the effective date of this Policy, but had not received pay-out of the statutory severance pay which was accrued during their period of service as a non-Executive officer, (i) the severance payment amount for the period during which they were a non-Executive employee shall be determined in accordance with Korean laws and regulations; and (ii) if the period of service as a non-Executive was for less than one (1) year, the severance compensation amount for such period shall be determined on a pro-rata basis; and (iii) those officers will become eligible for severance under this Policy on the effective date of their promotion to an Executive role.
Amendments 
In the case of each Coupang Korea Company, this Policy and Country Addendum (Korea) are established under the authority of each Coupang Korea Company’s shareholder(s) pursuant to the relevant Coupang Korea Company’s articles of incorporation, and it may be revised, suspended, or rescinded at any time by resolution of the relevant Coupang Korea Company’s shareholder(s). 

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COUNTRY ADDENDUM – UNITED STATES OF AMERICA
Applicability
This Country Addendum – U.S.A (“Country Addendum (US)”) is a Country Addendum to the Executive Severance (Severance Pay Calculation) Policy (this “Policy”), and applies to US Executives. This Policy is intended to be an unfunded welfare benefit plan maintained primarily for the purpose of providing severance pay to a select group of key management employees.  Capitalized terms not defined herein are defined in the Policy.
Severance Pay Calculation
Non-CIC Involuntary Termination and CIC Involuntary Termination: 
The following severance pay calculation applies to a Non-CIC Involuntary Termination or a CIC Involuntary Termination:
The aggregate amount of severance payable to the Executive shall be calculated as set forth below (without duplication of any other severance benefits to which a US Executive would otherwise be entitled under any other general severance policy or severance plan maintained by a Coupang Group Company or any agreement between a US Executive and a Coupang Group Company that provides for severance benefits (unless the policy, plan or agreement expressly provides for severance benefits to be in addition to those provided under this Policy) and will be offset by any statutory or “garden leave” severance received by the Executive
						
	Rank	US Executive
	Tier One	1.0x annual rate of base salary
	Tier Two	0.75x annual rate of base salary

Form and time of payment 
Severance pay under this Policy may be paid as a single lump sum or in equal monthly installment payments over a period of up to 12 months (in the case of Tier One Executives) and nine months (in the case of Tier Two Executives), in the sole discretion of the Administrator taking into account Section 409A of the Code. The Administrator will notify the Executive of the form of payment prior to making the first payment.
Severance pay under this Policy, or the first installment thereof, will be paid within 14 days from: 
i.the later of (a) the expiration of any revocation period with respect to the Release Agreement that has been executed and delivered to the Company by the Executive and (b) the effective date of the Executive’s termination; or 
ii.if no Release Agreement is required under this Policy, the effective date of the Executive’s termination.
COBRA Reimbursement  
Upon a termination triggering severance payments under this Policy, if the Executive timely elects continued group health plan continuation coverage under the United States Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Coupang Group Companies shall pay a portion of the Executive’s premiums on behalf of the Executive for the Executive’s continued coverage under a Coupang Group Company’s group health plan, including coverage for the Executive’s eligible dependents, for (a) in the case of a Tier One Executive, 12 months; and (b) in the case of Tier Two Executive, nine months, or, in either case, until such earlier date on which the Executive becomes eligible for health coverage from another employer (the “COBRA Payment Period”).  The amount of this portion will be the same portion of the premium cost as was borne by the Coupang Group Companies under the level of coverage selected by the Executive and in effect at the time of the qualifying termination. Upon the conclusion of such period of insurance premium payments made by the Coupang Group Companies, or the provision of coverage under a self-funded group health plan, the Executive will be responsible for the entire payment of premiums (or 
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payment for the cost of coverage) required under COBRA for the duration of the Executive’s eligible COBRA coverage period.  Notwithstanding the foregoing, if the Executive timely elects continued group health plan continuation coverage under COBRA and at any time thereafter the Coupang Group Companies determines, in their sole discretion, that they cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law, then in lieu of paying the employer portion of the COBRA premiums on the Executive’s behalf, the Coupang Group Companies will instead pay the Executive on the last day of each remaining month of the COBRA Payment Period a fully taxable cash payment equal to the employer portion of the COBRA premium for that month, subject to applicable tax withholding (such amount, the “Special Severance Payments”).  Such Special Severance Payments shall end upon expiration of the COBRA Payment Period.
Amendments 
In the case of each Coupang U.S. Company, this Policy and Country Addendum (United States of America) may be revised, suspended, or rescinded at any time by resolution of the Administrator.
At-will Employment
This Policy does not alter the status of each US Executive as an at-will employee of a Coupang U.S. Company.  Nothing contained herein shall be deemed to give any US Executive the right to remain employed by a Coupang U.S. Company or to interfere with the rights of a Coupang U.S. Company to terminate the employment of any US Executive at any time, with or without Cause.

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