Document:

seas-ex103_214.htm

Exhibit 10.3

OPTION GRANT NOTICE
UNDER THE
SeaWorld Entertainment, Inc.
2017 OMNIBUS INCENTIVE PLAN

(Time-Based Matching Options)

 

SeaWorld Entertainment, Inc., a Delaware corporation (the “Company”), pursuant to its 2017 Omnibus Incentive Plan (the “Plan”), hereby grants to the Participant set forth below the number of Options (each Option representing the right to purchase one share of Common Stock) set forth below, at an Exercise Price per share as set forth below. The Options are subject to all of the terms and conditions as set forth herein, in the Option Agreement (attached hereto or previously provided to the Participant in connection with a prior grant), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan.  

	
Participant:
	
[Participant Name]

	
Number of Purchased Shares:
	
[Number of Purchased Shares purchased]

	
Purchase Date(s):
	
[Date(s) upon which Purchased Shares were purchased]

	
Date of Grant: 
	
[Date of Grant], 20221

	
Number of Options:
	
[Number of Options]2

	
Exercise Price: 
	
[Insert Exercise Price per share]

	
Option Period Expiration Date: 
	
Ten (10) years from the Date of Grant.

	
Type of Option: 
	
Nonqualified Stock Option

	
Vesting Schedule:
	
Provided the Participant has not undergone a Termination prior to the applicable vesting date, 100% of the Options shall vest on the third anniversary of the Date of Grant (the “Vesting Date”).  Notwithstanding the foregoing, upon a Change in Control, all unvested Options shall remain outstanding and shall vest upon the one year anniversary of the date of the Change in Control, provided the Participant has not undergone a Termination prior to such vesting date.  Further, upon a Termination (

	
	 

	
1
	
 To be on or within 10 days following the Purchase Date.

	
2
	
 To equal the number of Purchased Shares

 

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i) by the Company without Cause (other than due to death or Disability) or (ii) by the Participant, for Good Reason, in each case, within the twelve (12) months immediately following a Change in Control, all unvested Options shall vest immediately upon such Termination. For purposes of this Option Grant Notice “Good Reason” shall mean without Participant’s consent, (i) a material diminution in Participant’s title, duties, or responsibilities, (ii) a material reduction in Participant’s base salary (other than an across the board reduction, applicable to other senior executives of the Company), or (iii) the relocation of Participant’s principal place of employment by more than fifty (50) miles from the Participant’s current location; provided that the Participant must provide the Company fifteen (15) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to the Company within sixty (60) days of the Participant’s knowledge (whether actual or constructive, including, without limitation, knowledge that Executive would have reasonably obtained after making due and appropriate inquiry) of such event. During such fifteen (15) day notice period, the Company shall have a cure right (if curable), and if not cured within such period, the Participant’s termination will be effective upon the expiration of such cure period.

	
Participant Representations: 
	
The Participant hereby represents and warrants to the Company that:

(i) The Participant has acquired the Purchased Shares on the Purchase Dates(s) for the Participant’s own account (either individually or jointly with a spouse or domestic partner) and the Purchased Shares are not subject to any Lien (as defined in the Option Agreement); 

(ii) The Purchaser intends to hold and not Transfer (as defined in the Option Agreement) the Purchased Shares until at least the third anniversary of the Date of Grant;

(iii) If the Purchaser Transfers any of the Purchased Shares on or before (or otherwise does not retain the Purchased Shares through) the third anniversary of the Date of Grant, then 100% of the Options (and any shares of Common Stock issued thereunder) shall be forfeited, as provided in the Option Agreement; 

(iv) The Purchaser must hold all of the Purchased Shares in a monitored brokerage account through the Company’s stock plan administrator from time to time (currently Merrill Lynch, Pierce, Fenner & Smith Inc.) until the third anniversary of the Date of Grant; and

(v) The Purchaser understands that any failure to move such Purchased Shares to such brokerage account within 30 days following the Date of Grant or to retain such Purchased Shares in such brokerage account until the third anniversary of the Date of Grant shall result in a forfeiture of the Options (and any shares of Common Stock issued thereunder), as provided in the Option Agreement.

***

 

 

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THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS OPTION GRANT NOTICE, THE OPTION AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF OPTIONS HEREUNDER, AGREES TO EXECUTE THIS AGREEMENT WITHIN TEN (10) DAYS OF THE DATE OF GRANT AND BE BOUND BY THE TERMS OF THIS OPTION GRANT NOTICE, THE OPTION AGREEMENT AND THE PLAN.
 

SeaWorld Entertainment, Inc.Participant3

 

________________________________________________________________
By:[Insert Name Participant]
Title: 

	
	 

	
3  
	
To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute the Participant’s signature hereof. 

 

 

 

 

OPTION AGREEMENT
UNDER THE
SeaWorld Entertainment, Inc.
2017 OMNIBUS INCENTIVE PLAN

Pursuant to the Option Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Option Agreement (this “Option Agreement”) and the SeaWorld Entertainment, Inc. 2017 Omnibus Incentive Plan, as it may be amended and restated from time to time (the “Plan”), SeaWorld Entertainment, Inc., a Delaware corporation (the “Company”), and the Participant agree as follows.  Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan. 

1. Grant of Option.  Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Options provided in the Grant Notice (with each Option representing the right to purchase one share of Common Stock), at an Exercise Price per share as provided in the Grant Notice.  The Company may make one or more additional grants of Options to the Participant under this Option Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Option Agreement to the extent provided therein.  The Company reserves all rights with respect to the granting of additional Options hereunder and makes no implied promise to grant additional Options. 

2. Vesting.  Subject to the conditions contained herein and in the Plan, the Options shall vest as provided in the Grant Notice. 

3. Exercise of Options Following Termination.  The provisions of Section 7(c)(ii) of the Plan are incorporated herein by reference and made a part hereof. In the event of (A) the Participant’s Termination by the Company for Cause, all outstanding Options shall immediately terminate and expire, (B) the Participant’s Termination due to death or Disability a number of Options equal to (x) the number of Options subject to the Grant Notice that would have vested on the next vesting date as if there was no Termination multiplied by (y) a fraction (i) the numerator of which is the number of days elapsed from the last vesting date (or Date of Grant, if no vesting date has occurred) through the date of such Termination and (ii) the denominator of which is 365 (or 366, as applicable) (rounded up to the nearest whole number), shall vest, and each outstanding vested Option shall remain exercisable for one (1) year thereafter (but in no event beyond the expiration of the Option Period) and (C) the Participant’s Termination for any other reason each outstanding unvested Option shall immediately terminate and expire, and each outstanding vested Option shall remain exercisable for ninety (90) days thereafter (but in no event beyond the expiration of the Option Period).

 

4. Transfer Restrictions; Brokerage Account; Forfeitures.  

 

(a) Participant shall transfer the Purchased Shares (as identified in the Grant Notice) into a brokerage account selected by the Company (the “Designated Brokerage Account”) within thirty days of the Date of Grant.

 

 

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(b) If, prior to the third anniversary of the Date of Grant, the Participant (x) Transfers any Purchased Shares (other than pursuant to Section 4(a) above), (y) fails to retain any Purchased Shares in the Designated Brokerage Account, or (z) enters into hedging or similar transactions with respect to any Purchased Shares, then 100% of the Options shall immediately be forfeited for no consideration.  The foregoing sentence shall not apply following the death of the Participant. 

 

(i)“Transfer” shall mean to, directly or indirectly, voluntarily or in-voluntarily, sell, remove, hypothecate, pledge, assign (as collateral or otherwise), encumber, use as collateral against a Lien, use to hedge, or otherwise transfer or dispose.  

 

(ii)“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement).

 

5. Method of Exercising Options. The Options may not be exercised until such Options become vested.  The vested Options may be exercised by the delivery of notice of the number of Options that are being exercised accompanied by payment in full of the Exercise Price applicable to the Options so exercised.  Such notice shall be delivered either (x) in writing to the Company at its principal office or at such other address as may be established by the Committee, to the attention of the Corporate Secretary; or (y) to a third-party plan administrator as may be arranged for by the Company or the Committee from time to time for purposes of the administration of outstanding Options under the Plan, in the case of either (x) or (y), as communicated to the Participant by the Company from time to time.  Payment of the aggregate Exercise Price may be made using any of the methods described in Section 7(d)(i) or (ii) of the Plan; provided, that the Participant shall obtain written consent from the Committee prior to the use of the method described in Section 7(d)(ii)(A) of the Plan.  

6. Issuance of Shares.  Following the exercise of an Option hereunder, as promptly as practical after receipt of such notification and full payment of such Exercise Price and any required income or other tax withholding amount (as provided in Section 10 hereof), the Company shall issue or transfer, or cause such issue or transfer, to the Participant the number of shares with respect to which the Options have been so exercised, and shall either (a) deliver, or cause to be delivered, to the Participant a certificate or certificates therefor, registered in the Participant’s name or (b) cause such shares to be credited to the Participant’s account at the third-party plan administrator. 

7. Company; Participant. 

(a) The term “Company” as used in this Option Agreement with reference to employment shall include the Company and its Subsidiaries. 

(b) Whenever the word “Participant” is used in any provision of this Option Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Options may be 

 

 

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transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons. 

8. Non-Transferability. The Options are not transferable by the Participant except to Permitted Transferees in accordance with Section 15(b) of the Plan and Section 4 hereof.  Except as otherwise provided herein, no assignment or transfer of the Options, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Options shall terminate and become of no further effect. 

9. Rights as Stockholder.  The Participant or a Permitted Transferee of the Options shall have no rights as a stockholder with respect to any share of Common Stock covered by an Option until the Participant shall have become the holder of record or the beneficial owner of such Common Stock, and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof. 

10. Tax Withholding. The provisions of Section 15(d) of the Plan are incorporated herein by reference and made a part hereof. 

11. Notice.  Every notice or other communication relating to this Option Agreement between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Corporate Secretary, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records.  Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time. 

12. No Right to Continued Service.  This Option Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Company. 

13. Binding Effect.  This Option Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 

14. Waiver and Amendments.  Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Option Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee.  No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or 

 

 

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transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 

15. Clawback/Repayment.  This Option Agreement shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (i) any clawback, forfeiture or other similar policy adopted by the Board or the Committee and as in effect from time to time; and (ii) applicable law.  In addition, if the Participant receives any amount in excess of what the Participant should have received under the terms of this Option Agreement for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), then the Participant shall be required to repay any such excess amount to the Company.  

16. Restrictive Covenants; Clawback/Forfeiture.  

(a) Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees, in Participant’s capacity as an equity (and/or equity-based Award) holder in the Company, to the provisions of Appendix A to this Option Agreement (the “Restrictive Covenants”).  Participant acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 1 of Appendix A (or a material breach or material threatened breach of any of the provisions of Section 2 of Appendix A of this Option Agreement) would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach.  In recognition of this fact, Participant agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Option Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.  Notwithstanding the foregoing and Appendix A, the provisions of Section 1(a)(i), (ii), (iii) and (iv)(B) of Appendix A shall not apply to the Participant if Participant’s principal place of employment is located in the State of California.  The Options granted (and the shares that may be issued upon exercise of the Options) hereunder shall be subject to Participant’s continued compliance with such restrictions.  For the avoidance of doubt, the Restrictive Covenants contained in this Option Agreement are in addition to, and not in lieu of, any other restrictive covenants or similar covenants or agreements between the Participant and the Company or any of its Affiliates. 

(b) Notwithstanding anything to the contrary contained herein or in the Plan, if the Participant has engaged in or engages in any Detrimental Activity, as determined by the Committee (including, without limitation, a breach of any of the covenants contained in Appendix A to this Option Agreement), then the Committee may, in its sole discretion, take actions permitted under the Plan, including: (i) cancel the Options, or (ii) require that the Participant forfeit any gain realized on the exercise of the Options, and repay such gain to the Company. 

17. Right to Offset.  The provisions of Section 15(x) of the Plan are incorporated herein by reference and made a part hereof.

 

 

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18. Governing Law. This Option Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof.  Notwithstanding anything contained in this Option Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Option Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware. THE PARTICIPANT IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF THE PARTICIPANT’S RIGHTS OR OBLIGATIONS HEREUNDER.

19. Plan. The terms and provisions of the Plan are incorporated herein by reference.  In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Option Agreement (including the Grant Notice), the Plan shall govern and control. 

 

 

 

 

 

 

Appendix A

 

Restrictive Covenants 

 

	
 
	
1.
	
Non-Competition; Non-Solicitation; Non-Disparagement.

(a)Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees as follows:

(i)During Participant’s employment with the Company or its Subsidiaries (the “Employment Term”) and for a period of two years following the date Participant ceases to be employed by the Company or its Subsidiaries (the “Restricted Period”), Participant will not, whether on Participant’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in soliciting in competition with the Restricted Group in the Business, the business of any then current or prospective client or customer with whom (A) Participant (or Participant’s direct reports) had personal contact or dealings on behalf of the Company or (B) Participant had knowledge of the Company’s dealings with, in each case, during the one-year period preceding Participant’s termination of employment.

(ii)During the Restricted Period, Participant will not directly or indirectly:

(A)engage in the Business in any geographical area that is within 300 miles of any geographical area where the Restricted Group engages in the Business, including the greater metropolitan areas of Orlando, Florida, Tampa, Florida, San Diego, California, Chula Vista, California, San Antonio, Texas, Williamsburg, Virginia and Philadelphia/Langhorne, Pennsylvania;

(B)enter the employ of, or render any services to, a Core Competitor;

(C)acquire a financial interest in, or otherwise become actively involved with, any Person engaged in the Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or  

(D)adversely interfere with, or attempt to adversely interfere with, business relationships between the members of the Restricted Group and any of their clients, customers, suppliers, partners, members or investors.

(iii)Notwithstanding anything to the contrary in this Appendix A, Participant may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Business (including, without limitation, a Core Competitor) which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Participant (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 2% or more of any class of securities of such Person.

(iv)During the Restricted Period, Participant will not, whether on Participant’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

(A)solicit or encourage any employee of the Restricted Group to leave the employment of the Restricted Group;

 

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(B)hire any Executive-Level Employee who was employed by the Restricted Group as of the date of Participant’s termination of employment with the Company or who left the employment of the Restricted Group coincident with, or within one year prior to or after, the termination of Participant’s employment with the Company; or

(C)encourage any Material Consultant of the Restricted Group to cease working with the Restricted Group.

(ii)For purposes of this Appendix A:

(A)“Restricted Group” shall mean, collectively, the Company and its Subsidiaries and, to the extent engaged in the Business, their respective Affiliates.

(B)“Business” shall mean, collectively, the leisure, recreation and entertainment business, including, but not limited to, theme parks, amusement parks, water parks, cruises, facilities with rides and games, and entertainment (and venues associated therewith) or any other business engaged in or being developed (including production of materials used in the Company and its Subsidiaries’ businesses) by the Company and its Subsidiaries, or being considered by the Company and its Subsidiaries, at the time of Participant’s termination of employment.

(C)“Core Competitor” shall mean Walt Disney Parks and Resorts, Universal Parks and Resorts, Six Flags, Inc., Cedar Fair Entertainment Company and Merlin Entertainments Group Ltd., Herschend Family Entertainment, Parques Reunidos and each of their respective Affiliates.

(D)“Executive Level Employee” shall mean the Chief Executive officer, his/her director reports and their direct reports. 

(E)“Material Consultant” shall mean any Person providing services to any member of the Restricted Group with a contract value (payable in cash and/or equity) for any given year equal to or greater than $200,000.

(b)Non-Disparagement. Participant will not at any time (whether during or after Participant’s Employment Term) make public or private statements or public or private comments intended to be (or having the effect of being) of defamatory or disparaging nature regarding (including, without limitation, any statements or comments, whether in person, radio, television, film, social media or otherwise, that are (i) likely to be harmful to the business, business reputation or personal reputation of and (ii) for, on behalf of or in association with any trade, industry, activist or other advocacy group that has, at any time, made adverse or critical statements in relation to) the Company or any of its Subsidiaries or Affiliates or any of their respective businesses, shareholders, members, partners, employees, agents, officers, directors or contractors (it being understood that comments made in Participant’s good faith performance of Participant’s duties hereunder shall not be deemed disparaging or defamatory for purposes of this paragraph). Notwithstanding anything in this section 1(b), the Participant shall be permitted to (x) provide a reasonable and truthful response to or statement to defend Participant against any public statement made by the Company that is incorrect or disparages such person, to the extent necessary to correct or refute such public statement and (y) provide truthful testimony in any legal proceeding or process. 

(c)It is expressly understood and agreed that although Participant and the Company consider the restrictions contained in this Section 1 to be reasonable, if a final judicial determination is made by a 

 

 

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court of competent jurisdiction that the time or territory or any other restriction contained in this Appendix A is an unenforceable restriction against Participant, the provisions of this Appendix A shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Appendix A is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(d)The period of time during which the provisions of this Section 1 shall be in effect shall be extended by the length of time during which Participant is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

(e)The provisions of Section 1 hereof shall survive the termination of Participant’s employment for any reason, including but not limited to, any termination other than for Cause (except as otherwise set forth in Section 1 hereof).

(f)The provisions of Section 1(a)(i), (ii), (iii) and (iv)(B) hereof shall not apply if Participant’s principal place of employment is in the state of California.

2.Confidentiality; Intellectual Property.

(a)Confidentiality.

(i)Participant will not at any time (whether during or after Participant’s Employment Term) (x) retain or use for the benefit, purposes or account of Participant or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations or otherwise in performance of Participant’s duties under Participant’s employment and pursuant to customary industry practice), any non-public, proprietary or confidential information —including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals, safety, zoological and/or animal training or care practices, protocols, policies or procedures — concerning the past, current or future business, activities and operations of the Company, its Subsidiaries or Affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

(ii)“Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Participant’s breach of this covenant; (b) made legitimately available to Participant by a third party without breach of any confidentiality obligation of which Participant has knowledge; or (c) required by law to be disclosed; provided that with respect to subsection (c) Participant shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and reasonably cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(iii)Except as required by law, Participant will not disclose to anyone, other than Participant’s family (it being understood that, in this Option Agreement, the term “family” refers 

 

 

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to Participant, Participant’s spouse, children, parents and spouse’s parents) and advisors, the existence or contents of this Option Agreement; provided that Participant may disclose to any prospective future employer the provisions of this Appendix A. This Section 2(a)(iii) shall terminate if the Company publicly discloses a copy of this Option Agreement (or, if the Company publicly discloses summaries or excerpts of this Option Agreement, to the extent so disclosed).

(iv)Upon termination of Participant’s employment with the Company for any reason, Participant shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its Subsidiaries or Affiliates; and (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Participant’s possession or control (including any of the foregoing stored or located in Participant’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information, except that Participant may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information. 

(b)Intellectual Property.

(i)If Participant has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with third parties, prior to Participant’s employment by the Company, that are relevant to or implicated by such employment (“Prior Works”), Participant hereby grants the Company a perpetual, non-exclusive, royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company’s current and future business.

(ii)If Participant creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Participant’s employment by the Company and within the scope of such employment and with the use of any the Company resources (“Company Works”), Participant shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

(iii)Participant shall take all reasonably requested actions and execute all reasonably requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works. If the Company is unable for any other reason, after reasonable attempt, to secure Participant’s signature on any document for this purpose, then Participant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Participant’s agent and attorney in fact, to act for and in Participant’s behalf and stead to execute any documents and to do all other lawfully permitted acts required in connection with the foregoing.

 

 

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(iv)Participant shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Participant shall comply with all relevant policies and guidelines of the Company that are from time to time previously disclosed to Participant, including regarding the protection of Confidential Information and intellectual property and potential conflicts of interest. Participant acknowledges that the Company may amend any such policies and guidelines from time to time, and that Participant remains at all times bound by their most current version from time to time previously disclosed to Participant.

(v)The provisions of Section 2 hereof shall survive the termination of Participant’s employment for any reason (except as otherwise set forth in Section 2(a)(iii) hereof).

3.Permitted Disclosure.  Nothing in this Appendix A shall prohibit or impede a Participant from communicating, cooperating or filing a complaint with any United States federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any United States federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law.  Each Participant understands and acknowledges that (i) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (A) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (B) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (ii) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.  A Participant does not need to give prior notice to (or get prior authorization from) the Company regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is a Participant authorized to disclose any information covered by attorney-client privilege or attorney work product or trade secrets of any member of the Company Group without prior written consent of the Company’s Board of Directors or other officer designed by the Company’s Board of Directors.Document

AMENDMENT NO. 1 TO WARRANT AGREEMENT
THIS AMENDMENT NO. 1 TO WARRANT AGREEMENT (this “Amendment”), is made and entered into as of June 17, 2022, by and among Metromile, Inc., a Delaware corporation (f/k/a “INSU Acquisition Corp.  II”, the “Company”), Continental Stock Transfer & Trust Company, a New York limited purpose trust company, as warrant agent (“Continental”), and American Stock Transfer & Trust Company, LLC (“AST”).  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Warrant Agreement (as defined below).
WHEREAS, the Company and Continental previously entered into that certain Warrant Agreement, dated as of September 2, 2020 (the “Warrant Agreement”);
WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as of November 8, 2021 (the “Merger Agreement”), by and among Lemonade, Inc., a Delaware corporation (“Parent”), Citrus Merger Sub A, Inc., a Delaware corporation and a direct, wholly owned Subsidiary of Parent (“Acquisition Sub I”), Citrus Merger Sub B, LLC, a Delaware limited liability company and a direct, wholly owned Subsidiary of Parent (“Acquisition Sub II”), and the Company;
WHEREAS, pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Acquisition Sub I merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “First Merger”) and following the First Merger, the Company merged with and into Acquisition Sub II, with Acquisition Sub II surviving as “Metromile, LLC”;
WHEREAS, pursuant to the Merger Agreement, at the First Effective Time (as defined in the Merger Agreement), each Company Warrant (as defined in the Merger Agreement) shall, automatically and without any required action on the part of the holder thereof, cease to represent a Company Warrant in respect of Company Common Stock (as defined in the Merger Agreement) and shall be assumed by Parent and converted into a warrant denominated in shares of Parent Common Stock (as defined in the Merger Agreement);
WHEREAS, pursuant to Section 8.2.1 of the Warrant Agreement, Continental has agreed to resign its duties as the Warrant Agent as of the date hereof, and AST has agreed to serve as successor Warrant Agent from and after the date hereof; and
WHEREAS, pursuant to Section 9.8 of the Warrant Agreement, the parties may amend the Warrant Agreement without the consent of the Registered Holders with respect to matters or questions arising under the Warrant Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders.
NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:
1.Amendment of the Warrant Agreement.  The parties hereby amend, effective as of the date of this Amendment, the Warrant Agreement as provided in this Section 1:
1.1Change in Warrant Agent.  References to “Continental Stock Transfer & Trust Company” in the Warrant Agreement shall be replaced with “American Stock Transfer & Trust Company, LLC” and it shall be understood that “Warrant Agent” shall hereafter refer to AST.

1.2Change of Address of Warrant Agent.  Section 9.2 of the Warrant Agreement is hereby amended to direct that all notices, instructions and communications under the Warrant Agreement to the Warrant Agent shall be delivered to:
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Email: Reorg warrants@astfinancial.com
1.3Responsibilities of Warrant Agent for Cashless Exercise.  Section 3.3.3 of the Warrant Agreement is hereby amended to add the following sentences to the end of the existing paragraph:
“Upon receipt of any notice of exercise on a “cashless basis”, the Warrant Agent shall deliver a copy of such notice to the Company and the Company shall promptly calculate and transmit to the Warrant Agent in writing, the number of shares of Common Stock issuable in connection with such exercise.  The Warrant Agent shall have no obligation under this Agreement to calculate, the number of shares of Common Stock issuable in connection with any exercise on a “cashless basis”, nor shall the Warrant Agent have any duty or obligation to investigate or confirm whether the Company’s determination of the number of shares of Common Stock issuable upon such exercise, pursuant to this Section 3.3, is accurate or correct.”
2.Resignation of Current Warrant Agent and Appointment of Successor Warrant Agent.  Continental hereby resigns as Warrant Agent under the Warrant Agreement, and the Company hereby appoints AST to act as the Warrant Agent for the Company under the Warrant Agreement, and AST hereby accepts such appointment and agrees to perform the same duties and obligations in accordance with the terms and conditions set forth in the Warrant Agreement as modified by this Amendment.
3.Miscellaneous Provisions.
3.1Successors.  All the covenants and provisions of this Amendment by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective successors and assigns.
3.2Applicable Law.  The validity, interpretation, and performance of this Amendment shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  Each of the parties hereto hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Amendment shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
Each of the parties hereto hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
3.3Counterparts.  This Amendment may be executed in any number of original or electronic counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.
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3.4Effect of Headings.  The section headings herein are for convenience only and are not part of this Amendment and shall not affect the interpretation thereof.
3.5Severability.  This Amendment shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Amendment or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Amendment a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
3.6Effect on Warrant Agreement.  Other than as specifically set forth herein, all other terms and provisions of the Warrant Agreement shall remain unaffected by the terms of this Amendment, and shall continue in full force and effect and be enforceable against the parties thereto in accordance with its terms.
3.7Entire Agreement.  The Warrant Agreement, as modified by this Amendment, constitutes the entire understanding of the parties and supersedes all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
METROMILE, INC.
By:    /s/ Regi Vengalil    
Name: Regi Vengalil
Title: Chief Financial Officer
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By:    /s/ Henry Farrell    
Name: Henry Farrell
Title: Vice President
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
By:    /s/ Michael Legregin    
Name: Michael Legregin
Title: Senior Vice President, Corporate Actions Relationship Management & Operations

[Signature Page to Amendment No. 1 to Warrant Agreement]

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