Document:

cgc-ex104_108.htm

Exhibit 10.4

 

CANOPY GROWTH CORPORATION

EMPLOYEE STOCK PURCHASE PLAN

 

	
1.
	
Plan Description

 

The Canopy Growth Corporation (the “Company”) Employee Stock Purchase Plan is intended to promote the interests of the Company and its subsidiaries by providing eligible employees an opportunity to acquire a proprietary interest in the Company through a stock purchase plan.   The Plan includes two components: a 423 Component and a Non-423 Component. The Company intends (but makes no undertaking or representation to maintain) for the 423 Component to qualify as an as “employee stock purchase plan” under Section 423 of the Code.  The provisions of the 423 Component, accordingly, will be construed in a manner that is consistent with the requirements of Section 423 of the Code.  In addition, this Plan authorizes grants of purchase rights under the Non-423 Component that do not meet the requirements of Section 423 of the Code.  Except as otherwise provided in the Plan or determined by the Committee, the Non-423 Component will operate and be administered in the same manner as the 423 Component.  

 

	
2.
	
Definitions

 

“423 Component” means the part of the Plan, which excludes the Non-423 Component, pursuant to which purchase rights that satisfy the requirements for an employee stock purchase plan under Section 423 of the Code may be granted to Eligible Persons, and such purchase rights are intended to be exempt from the application of Section 409A of the Code under U.S. Treasury Regulation Section 1.409A-1(b)(5)(ii).  

 

“Affiliate” has the meaning assigned by the Securities Act (Ontario), as amended from time to time.

 

“Associate” has the meaning assigned by the Securities Act (Ontario), as amended from time to time.

 

“Annual Compensation” means, for each Participant, the annualized gross salary of that Participant, i.e., regular compensation earned during each payroll period, before any deductions or withholding, but excluding commissions, overtime pay, bonuses, amounts paid as reimbursements of expenses and other additional compensation, under rules uniformly applied by the Committee (for Employees who have a compensation plan with a base and incentive portion comprising a target, Annual Compensation shall mean the base for that individual). 

 

“Blackout Period” means a period when the Eligible Person is prohibited by law, by the policies of the Exchange or by the policies of the Company from trading in Common Shares.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day which is a trading day on the Exchange.

Page 1 of 13

 

 

 

“Change in Control” shall mean:

 

	
 
	
(i)
	
when any person, together with any Affiliate or Associate of such person (other than the Company or its subsidiaries, or an employee benefit plan of the Company or its subsidiaries, including any trustee of such plan acting as trustee) hereafter acquires, the direct or indirect “beneficial ownership”, as defined by the Canada Business Corporations Act (the “CBCA”), of securities of the Company representing fifty (50%) percent or more of the combined voting power of the Company’s then outstanding securities; or

 

	
 
	
(ii)
	
the occurrence of a transaction requiring approval of the Company’s shareholders involving the acquisition of the Company or all or substantially all of its business by an entity through purchase of assets by amalgamation, arrangement or otherwise;

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

 

“Committee” means the compensation committee appointed by the Board of Directors to administer the Plan. All references in the Plan to the Committee means the Board of Directors if no Committee has been appointed.  

 

“Designated Company” means any Subsidiary or Affiliate that has been designated by the Committee in its sole discretion as eligible to participate in the Plan.  For purposes of the 423 Component, only the Company and its Subsidiaries may be Designated Companies, provided that a Subsidiary that is a Designated Company under the 423 Component may not simultaneously be a Designated Company under the Non-423 Component.

 

“Common Shares” means common shares in the capital of the Company.

 

“Eligible Person” means an Employee who is eligible to participate in the Plan pursuant to Section 4.

 

“Employee” means a full or part time employee of the Company or any of its Subsidiaries (provided such part time employees work a minimum of 28 hours per week on a non-seasonal basis, and, for purposes of the 423 Component, such part time employees work a minimum of 20 hours per week and more than five (5) months per calendar year).

 

“Exchange” means the Toronto Stock Exchange or such other exchange upon with the Company may be listed, should it no longer be listed on the Toronto Stock Exchange. 

 

Page 2 of 13

 

 

“Fair Market Value” per Common Share shall be the volume-weighted average price of Common Shares on the Exchange for the ten trading days immediately preceding the applicable date, calculated by dividing the total value by the total volume of securities traded for the ten trading days immediately preceding the applicable date.

 

“Insider” means: 

	
 
	
(i)
	
an insider of the Company as defined by the Securities Act (Ontario) as amended from time to time; and 

	
 
	
(ii)
	
an Associate or Affiliate of any person who is an Insider by virtue of clause (i) of this definition.

 

“Leave of Absence” has the meaning ascribed thereto in Section 8 hereof. 

 

“Non-423 Component” means the part of the Plan, which excludes the 423 Component, pursuant to which purchase rights that are not intended to satisfy the requirements for an employee stock purchase plan under Section 423 of the Code may be granted to Eligible Persons.  The Non-423 Component is intended to be exempt from the application of Section 409A of the Code, to the extent applicable, as rights granted thereunder are intended to constitute “short term deferrals” and any ambiguities herein will be interpreted such that those rights shall so be exempt from Section 409A of the Code.

 

“Offering” means the grant to Eligible Persons of rights to purchase Common Shares pursuant to the Plan, with the exercise of those purchase rights automatically occurring at the end of each Offering Period.

 

“Offering Period” means, unless otherwise provided by the Committee, one of the six month periods commencing in each year either on the third Business Day after the first public announcement of the Company’s first quarter financial results or on the third Business Day after the first public announcement of the Company’s third quarter financial results; provided, however, that if an Offering Period is scheduled to commence during a Blackout Period, the Offering Period will instead begin on the first Business Day following the expiration of the Blackout Period.  Notwithstanding the foregoing, the Committee may establish an Offering Period with a duration that is shorter or longer than six (6) months (provided that for the 423 Component, an Offering Period may not be longer than twenty-seven (27) months) and/or has a different commencement date.

 

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

  

“Participant” means an Eligible Person who is participating in the Plan pursuant to Section 3.

 

“Payroll Deduction” has the meaning ascribed thereto in Sub-section 5(b) hereof. 

 

Page 3 of 13

 

 

“Plan” means this Canopy Growth Corporation Employee Stock Purchase Plan. 

 

“Plan Account” means, for each Participant, an account maintained by the Company or its designated record keeper to which such Participant’s payroll deductions are credited and against which funds used to purchase Common Shares are charged and to which Common Shares purchased are credited.

 

“Purchase Date” means the first Business Day which is six months (unless the Committee specifies a different duration, which shall not exceed twenty-seven (27) months with respect to the 423 Component) following the first Business Day of each Offering Period in respect of any Offering Period. 

 

“Purchase Price” means the lesser of (i) 90% of the Fair Market Value of the Common Shares on the first day of the Offering Period in which the Purchase Date falls, and (ii) 90% of the Fair Market Value of the Common Shares on the Purchase Date for that Offering Period.

 

“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 

 

	
3.
	
Shares Subject to the Plan 

 

Subject to Section 13, the aggregate number of Common Shares which may be sold under the Plan is 600,000.  The maximum number of Common Shares which may be issued under the Plan in any one fiscal year shall not exceed 300,000. No fractional shares may be purchased or issued hereunder. The following restrictions shall also apply to this Plan as well as all other plans or stock option agreements to which the Company may be a party: 

 

	
 
	
(i)
	
the aggregate number of Common Shares issuable to Insiders, at any time, under all of the Company’s security-based compensation arrangements, cannot exceed 10% of the issued and outstanding Common Shares of the Company; and

 

	
 
	
(ii)
	
Insiders shall not be issued, under this Plan and all of the Company’s other security-based compensation arrangements, within any one year period, a number of Common Shares which exceeds 10% of the issued and outstanding Common Shares of the Company. 

 

	
4.
	
Eligible Persons 

 

Each Employee (an “Eligible Person”) who has provided services to the Company or any of its subsidiaries for at least three months and who is continuing to provide such services may participate in the Plan. The Committee may exclude all, but not less than all, of the Employees of any subsidiary of the Company located outside of Canada where participation by such Employees would be impractical.

 

Page 4 of 13

 

 

	
5.
	
Offering Periods and Participation in the Plan

 

	
 
	
a.
	
Common Shares shall be offered for purchase under the Plan through a series of successive Offering Periods until such time as: (i) the maximum number of Common Shares available for purchase under the Plan shall have been purchased; or (ii) the Plan shall have been terminated in accordance with the terms hereof.  With respect to the 423 Component, an Offering will comply with the requirement of Section 423(b)(5) of the Code that all Eligible Persons granted purchase rights will have the same rights and privileges.  

 

	
 
	
b.
	
An Eligible Person who is an Employee may participate in the Plan by electronically enrolling using the Company’s equity management software prior to the tenth day of an Offering Period (or such other date as the Committee may determine) a subscription agreement and an electronic election form which authorizes payroll deductions (the “Payroll Deductions”) from such Employee’s pay for the purposes of acquiring Common Shares.  Such Payroll Deductions shall commence on the first regularly scheduled payroll day of the applicable Offering Period following the receipt by the Company of the electronic election form.  Such Payroll Deductions shall continue until such Employee terminates participation in the Plan or the Plan is terminated prior to such time.  Unless otherwise specified in an electronic election form or a new electronic election form is filed pursuant to Section 7 of the Plan or participation in the Plan is terminated pursuant to Section 7 of the Plan, Employees who have filed a completed subscription agreement and electronic election form shall be deemed to participate in the Plan in subsequent Offering Periods.

 

	
 
	
c.
	
Notwithstanding the foregoing, an Eligible Person shall not be entitled to purchase Common Shares under this Plan on any Purchase Date if the purchase would not comply with the restrictions respecting the issuance/sale of Common Shares set forth in Section 3. 

 

	
 
	
d.
	
If the aggregate number of Common Shares subscribed for pursuant to the Plan exceeds the total number of Common Shares permitted to be issued under the Plan or the maximum number of Common Shares permitted to be issued under the Plan in respect of a fiscal year, the Common Shares available will be allocated by the Company on a pro rata basis in proportion to each Participant’s balance in his or her Plan Account, and a cash payment for the balance remaining will be refunded to the Participant on the Purchase Date, such calculation and allotment by the Company to be final and binding on all Participants.

 

	
 
	
e.
	
Any provisions of the Plan to the contrary notwithstanding, with respect to any Offering under the 423 Component, no Eligible Person will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Person (or any other person whose stock would be attributed to such Eligible Person pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options or rights to purchase such stock possessing five percent (5%) or more of the total 

Page 5 of 13

 

 

	
 
		
combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate that exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code.

 

	
6.
	
Limits on Payroll Deductions

  

Payroll Deductions shall be made from the amounts paid to each Participant for each payroll period in such amounts as such Participant shall authorize in such Participant’s electronic election form. The maximum Payroll Deduction for each Participant shall be 5% of the Participant’s Annual Compensation, and the minimum Payroll Deduction for each Participant shall be 1% of the Participant’s Annual Compensation. If a Participant’s Annual Compensation is insufficient in any pay period to allow the entire Payroll Deduction elected under the Plan, no deduction shall be made for such pay period. Payroll Deductions will resume with the next regularly scheduled payroll period in which the Participant has pay sufficient to permit the Payroll Deduction.  Payroll Deductions under the Plan shall be made in any period only after all other withholdings, deductions, garnishments and the like have been made.   

 

	
7.
	
Changes in Payroll Deductions

 

Subject to the minimum and maximum deductions set forth above in Section 6, a Participant may change the amount of such Participant’s Payroll Deductions by filing a new electronic election form with the Company during such period as the Committee may determine with respect to an Offering Period, which change shall be effective for such Offering Period. 

 

	
8.
	
Termination of Participation in Plan

 

A Participant’s participation in the Plan shall be terminated upon the termination of such Employee’s employment with the Company or a Designated Company for any reason and such Participant shall cease to be an Eligible Person at such time.  Unless determined otherwise by the Committee, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company shall not be treated as terminated under the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s purchase right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code and does not cause any option thereunder to fail to comply with Section 423 of the Code.  If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the purchase right will remain non-qualified under the Non-423 Component.  In the event that a Participant’s participation in the Plan is voluntarily or involuntarily terminated, Payroll Deductions under the Plan shall 

Page 6 of 13

 

 

cease and any payments credited to such Participant’s Plan Account prior to such time shall be returned to the Participant. For purposes of this Section 8, the date of termination of an Employee’s employment shall be the date designated in writing by the Company (or by its subsidiary, as the case may be) as the effective date of termination, notwithstanding any period of notice or reasonable notice that the Company (or subsidiary, as the case may be) may be required by contract or at law to provide to the Participant in connection with such termination.  For greater clarity, a temporary leave of absence (whether with or without pay) of a Participant from his or her employment with the Company (a “Leave of Absence”) shall not be treated as terminating such Participant’s participation in any Offering Period, provided, however, that (a) in the event of any Leave of Absence of a Participant without pay, such Participant’s Payroll Deductions under the Plan, if any, shall be suspended for the duration of such Leave of Absence, (b) any such suspension of Payroll Deductions shall not be deemed to be a change made pursuant to Sections 7 or 8 hereof for the determination of the amount of the Purchase Price related to any Common Shares to be purchased in an Offering Period, and (c) with respect to the 423 Component, where the Leave of Absence exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the commencement of such leave.

 

	
9.
	
Purchase of Shares

 

	
 
	
a.
	
On each Purchase Date, the Company shall apply the funds credited to each Participant's Plan Account to the purchase (without commissions or fees) of that number of whole Common Shares determined by dividing the Purchase Price into the balance in the Participant's Plan Account on the Purchase Date. Any amount remaining shall be carried forward to the next Purchase Date unless the Plan Account is closed.

 

	
 
	
b.
	
As soon as practicable after each Purchase Date, an electronic statement shall be delivered to each Participant  through the Company’s equity management software which shall include the number of Common Shares purchased on the Purchase Date on behalf of such Participant under the Plan.

 

	
10.
	
Rights as a Shareholder

 

As of the Purchase Date, a Participant shall be treated as record owner of his/her Common Shares purchased pursuant to the Plan.

 

Page 7 of 13

 

 

	
11.
	
Rights Not Transferable

 

Rights under the Plan are not transferrable by a Participant other than by will or the laws of succession, and are exercisable during the Participant's lifetime only by the Participant or by the Participant's guardian or legal representative. No rights or Payroll Deductions of a Participant shall be subject to execution, attachment, levy, garnishment or similar process.

 

	
12.
	
Application of Funds

 

All funds of Participant's received or held by the Company under the Plan before purchase of the Common Shares shall be held by the Company without liability for interest or other increment.

 

	
13.
	
Adjustments in Case of Changes Affecting Common Shares

 

In the event of a subdivision or consolidation of outstanding Common Shares of the Company, or the payment of a stock dividend, the number of Common Shares approved for the Plan shall be increased or decreased proportionately, and such other adjustment shall be made as may be deemed equitable by the Committee (including, without limitation, the class and number of securities subject to, and the purchase price applicable to outstanding Offerings and purchase rights).  In the event of any other change affecting the Common Shares, such adjustment shall be made as shall be deemed equitable by the Committee to give proper effect to such event. If the Committee determines that such change will constitute a change requiring shareholder approval, it may refrain from making such adjustments. The Committee or the Board of Directors shall determine the adjustments to be made under this Section 13, and its determination shall be conclusive.

 

	
14.
	
Administration of the Plan

 

The Plan shall be administered by the Committee. The Committee shall have the authority to construe and interpret the provisions of the Plan and make rules and regulations for the administration of the Plan, and its interpretations and decisions with regard to the Plan and such rules and regulations shall be final and conclusive on all persons affected thereby unless otherwise determined by the Board of Directors.  The day-to-day administration of the Plan may be delegated to such officers and employees of the Company or its subsidiaries as the Committee shall determine.  In addition, the provisions of the 423 Component will be interpreted and construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.  

 

Page 8 of 13

 

 

	
15.
	
Amendments to the Plan

 

	
 
	
a.
	
Subject to the rules and policies of any stock exchange on which the Common Shares are listed and applicable law, the Board of Directors may, without notice or shareholder approval, at any time or from time to time, amend the Plan for the purposes of:

 

	
 
	
i.
	
making any amendments to the provisions set out in Section 8 of the Plan;

 

	
 
	
ii.
	
making any amendments to add covenants of the Company for the protection of Participants, provided that the Board of Directors shall be of the good faith opinion that such additions will not be prejudicial to the rights or interests of the Participants;

 

	
 
	
iii.
	
making any amendments not inconsistent with the Plan as may be necessary or desirable with respect to matters or questions, which in the good faith opinion of the Board of Directors, having in mind the best interests of the Participants, it may be expedient to make, provided that the Board of Directors shall be of the opinion that such amendments and modifications will not be prejudicial to the interests of the Participants; or

 

	
 
	
iv.
	
making any such changes or corrections which, on the advice of counsel to the Company, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error, provided that the Board of Directors shall be of the opinion that such changes or corrections will not be prejudicial to the rights and interests of the Participants.

 

	
 
	
b.
	
Notwithstanding any other provision of this Plan, none of the following amendments shall be made to this Plan without approval of the Exchange (to the extent the Company has any securities listed on such exchange) and the approval of shareholders:

 

	
 
	
i.
	
amendments to the Plan which would increase the number of Common Shares issuable under the Plan, otherwise than in accordance with Section 13 of this Plan; 

 

	
 
	
ii.
	
amendments to the Plan which would increase the number of Common Shares issuable to Insiders under the Plan, otherwise than in accordance with Section 13 of this Plan; 

 

	
 
	
iii.
	
amendments to the Plan which would increase the number of Common Shares issuable to Directors under the Plan, otherwise than in accordance with Section 13 of this Plan; 

 

	
 
	
iv.
	
amendments that would reduce the Purchase Price payable by Insiders; 

 

Page 9 of 13

 

 

	
 
	
v.
	
amendments to the Plan that would result in an extension of the term, under a security based compensation arrangement benefiting an insider of the issuer;

 

	
 
	
vi.
	
amendments that would increase the percentage discounts set forth in the definition of Purchase Price; 

 

	
 
	
vii.
	
increase the maximum percentage of the Annual Compensation that any Participant may direct be contributed, pursuant to the Plan, towards the purchase of Common Shares on his or her behalf through Payroll Deductions;

 

	
 
	
viii.
	
the addition of any form of financial assistance to a Participant;

 

	
 
	
ix.
	
the adoption of an employer matching contribution; and

 

	
 
	
x.
	
any amendment to the Plan that would result in an amendment to an amending provision within the Plan.

 

	
 
	
c.
	
Subject to Sections 18 and 24, the Board of Directors shall not alter or impair any rights or increase any obligation with respect to previously agreed upon terms under the Plan without the consent of the Participant.

 

	
16.
	
Termination of the Plan

 

The Plan shall terminate upon the earlier of (a) the termination of the Plan by the Board of Directors of the Company as specified below, or (b) the date no more Common Shares remain to be purchased under the Plan. The Board of Directors of the Company may terminate the Plan as of any date, and the date of termination shall be deemed a Purchase Date. If on such Purchase Date Participants in the aggregate have options to purchase more Common Shares than are available for purchase under the Plan, each Participant shall be eligible to purchase a reduced number of Common Shares on a pro rata basis, and any excess Payroll Deductions shall be returned to Participants, all as provided by rules and regulations adopted by the Committee.

 

	
17.
	
Costs

 

All costs and expenses incurred in administering the Plan shall be paid by the Company.

 

Page 10 of 13

 

 

	
18.
	
Governmental Regulations

 

The Company's obligation to sell and deliver its Common Shares pursuant to the Plan is subject to:

 

	
 
	
a.
	
the satisfaction of all requirements under applicable securities law in respect thereof and obtaining all regulatory approvals as the Company shall determine to be necessary or advisable in connection with the authorization, issuance or sale thereof, including shareholder approval, if required;

 

	
 
	
b.
	
the admission of such Common Shares to listing on any stock exchange on which Common Shares may then be listed; and

 

	
 
	
c.
	
the receipt from the Participant of such representations, agreements and undertakings as to future dealings in such Common Shares as the Company determines to be necessary or advisable in order to safeguard against the violation of the securities law of any jurisdiction.

 

In this connection, the Company shall take all reasonable steps to obtain such approvals and registrations as may be necessary for the issuance of such Common Shares in compliance with applicable securities law and for the listing of such Common Shares on any stock exchange on which such Common Shares are then listed.

 

	
19.
	
Applicable Law  

 

The Plan is established under the laws of the Province of Ontario and the rights of all parties and the construction and effect of each provision of the Plan shall be according to the laws of the Province of Ontario and the laws of Canada applicable therein.

 

	
20.
	
Effect on Employment

 

The provisions of this Plan shall not affect the right of the Company or any subsidiary or any Participant to terminate the Participant's employment with the Company or any subsidiary.

 

	
21.
	
Withholding 

 

The Company reserves the right to withhold from stock or cash distributed to a Participant any amounts which it is required by law to withhold.

 

	
22.
	
Change in Control 

 

In the event of a proposed or actual Change in Control, the Company shall require that each outstanding right hereunder be assumed or an equivalent right be substituted by the successor or purchaser corporation 

Page 11 of 13

 

 

unless the Plan is terminated; provided, however, that if any successor or purchaser corporation (or its parent company) does not assume or continue purchase rights granted pursuant to the 423 Component or does not substitute similar rights for such purchase rights, then the accumulated contributions in the Plan Accounts of the Participants in the 423 Component will be used to purchase Common Shares within ten business days prior to the Change in Control, and the purchase rights under the 423 Component will terminate immediately after such purchase.

 

	
23.
	
Approvals

 

The Plan shall be subject to acceptance by the Exchange in compliance with all conditions imposed by the Exchange.  Any rights to purchase Common Shares granted prior to such acceptance shall be conditional upon such acceptance being given and any conditions complied with and no such right may be exercised unless such acceptance is given and such conditions are complied with. 

 

	
24.
	
Corporate Action 

 

Nothing contained in the Plan shall be construed so as to prevent the Company or any subsidiary of the Company from taking corporate action which is deemed by the Company or any subsidiary of the Company to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan.

 

	
25.
	
Limitation on Sale of Common Shares Purchased Under the Plan 

 

The Plan is intended to provide Common Shares for investment and not for resale.  The Company does not, however, intend to restrict or influence any Participant with respect to any dealings with Common Shares save and except as provided in Sub-section 18(c).  A Participant may, therefore, sell Common Shares purchased under the Plan provided he/she complies with all applicable securities laws.  Participants assume the risk of any market fluctuations in the price of the Common Shares. 

 

	
26.
	
Administration  

 

Administration of the Plan shall be managed solely through the Company’s equity management software.  All enrollments, Payroll Deductions (elections) and requests to withdraw from the Plan shall be effective solely through the Participant’s use of the Company’s equity management software.  Participant questions may be directed to stockadmin@canopygrowth.com.

 

Page 12 of 13

 

 

	
27.
	
Shareholder Approval 

 

The Plan shall become effective on the date it is adopted by the Board of Directors of the Company, provided that the shareholders of the Company approve it within 12 months after such date and then reapprove every five (5) years.

 

APPROVED: September 21, 2020

 

Page 13 of 13Exhibit 10.1

MMA CAPITAL HOLDINGS, INC.
AMENDED AND RESTATED
2012 NON-EMPLOYEE DIRECTORS’ COMPENSATION PLAN
(Effective November 5, 2020)
1.Purpose.  The purpose of this Amended and Restated 2012 Non-Employee Directors’ Compensation Plan (the “Plan”) of MMA Capital Holdings, Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company and its shareholders by providing a means to attract and retain highly qualified persons to serve as non-employee directors of the Company and to promote ownership by such directors of a greater proprietary interest in the Company, thereby aligning such directors’ interests more closely with the interests of shareholders of the Company.
2.Definitions.  In addition to terms defined elsewhere in the Plan, the following are defined terms under the Plan:
(a)“Code” means the Internal Revenue Code of 1986, as amended from time to time.  References to any provision of the Code include regulations thereunder and successor provisions and regulations thereto.
(b)For purposes of the Plan, a “Change in Control” shall have occurred if:
(i)Any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any entity controlling, controlled by or under common control with the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of either the combined voting power of the Company’s then outstanding voting securities or the then outstanding Shares (in either case, other than as a result of an acquisition of securities directly from the Company);
(ii)during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii), or (iv) of this Section 2(b)) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board;
(iii)the shareholders of the Company approve a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse share split of any class of voting securities of the Company, or the consummation of any such transaction if shareholder approval is not obtained, other than any such transaction which would result in at least 75% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after such transaction being beneficially owned by persons who together beneficially owned at least 75% of the combined voting power of the voting securities of the Company outstanding immediately prior to such transaction, with the relative voting power of each such continuing holder compared to the voting power of each other continuing holder not substantially altered as a result of the transaction; provided that, for purposes of this paragraph (iii), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the 

​

​

failure to meet such 75% threshold (or to substantially preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company or such surviving entity or of any subsidiary of the Company or such surviving entity; or
(iv)the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect).
Notwithstanding the foregoing, no event or condition shall constitute a Change in Control to the extent that, if it were, a 20% tax would be imposed upon or with respect to any award under Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Change in Control to the maximum extent possible (e.g., if applicable, in respect of vesting without an acceleration of distribution) without causing the imposition of such 20% tax.  
(c) “Deferred Share” means a credit to a Participant’s deferral account under Section 8 which represents the right to receive one Share upon settlement of the deferral account.  Deferral accounts, and Deferred Shares credited thereto, are maintained solely as bookkeeping entries by the Company evidencing unfunded obligations of the Company.
(d)“Distribution Date” means the date or dates on which Deferred Shares will be distributed to the Participant.  Distributions may be made on Separation from Service, death, a specified date, or pursuant to a fixed schedule.  The timing of distributions shall be subject to such limitations as may be required to comply with the provisions of Section 409A of the Code.  Notwithstanding the foregoing, distributions due upon a Separation from Service and death shall be made no later than 90 days after the occurrence of such event.
(e)“Exchange Act” means the Securities Exchange Act of 1934, as amended.  References to any provision of the Exchange Act include the rules promulgated thereunder and successor provisions and rules thereto.
(f)“Fair Market Value” of a Share means, as of any given date, (i) if Shares are then listed on a national securities exchange or quoted or reported on a national quotation system, the closing sales price of a Share on the exchange or system for the applicable date, or, if such day was not a trading day, the closing sales price for the most recent trading day prior to such date on such exchange or system, (ii) if Shares are not then listed on a national securities exchanges or quoted on a national quotation system but are then traded on an over-the-counter market or PORTAL, the closing sales price for the most recent trading day prior to such date if at least 50,000 shares were traded on such date, and if not, then the average of the closing bid and asked prices for the Shares in such over-the-counter market or PORTAL for the last preceding date on which there was a sale of such Shares in such market or PORTAL, or (iii) if Shares are not then listed on a national securities exchange, quoted on a national quotations system or traded on an over-the-counter market or PORTAL, such value as may be determined by the Board by whatever means or method as to which the Board, in the good faith exercise of its discretion, shall at such time deem appropriate.  For purposes of determining the average Fair Market Value of a Share during a period of days, only trading days shall be taken into account.
(g)“Fiscal Quarter” means a fiscal quarter of the Company. 
(h)“Option” means the right, granted to a director under Section 9, to purchase a specified number of Shares at the specified exercise price for a specified period of time under the Plan.  All Options will be non-qualified stock Options.

- 2 -
​

(i) “Participant” means any person who, as a non-employee director of the Company, has been granted a Share, Deferred Share or Option which remains outstanding under the Plan.
(j)“Rule 16b-3” means Exchange Act Rule 16b-3 as from time to time in effect and applicable to the Plan and Participants.
(k)“Separation from Service” means a Participant’s separation from service with the Company and its subsidiaries.  Notwithstanding the foregoing, with respect to any award that is subject to Section 409A of the Code, Separation from Service shall be interpreted within the meaning of Section 409A(a)(2)(A)(i) of the Code.
(l)“Share” means a common share of the Company and such other securities as may be substituted for such Share or such other securities pursuant to Section 7; provided, however, that to the extent any class of common shares are readily tradable on an established securities market, such common shares shall be designated as the Shares for purposes of this Plan.
(m)“Total Annual Compensation” shall be determined as follows:
	i.		“Base Compensation”.  Base Compensation shall be $120,000.00 per annum, payable quarterly; and

	ii.		“Chairperson Compensation”.  In addition to the Base Compensation, an additional fee is payable quarterly to any director that serves as chairperson of the Board, or chairperson of any of the designated committees of the Board.  The additional fees are follows:

		1.	Chairperson of the Board - $20,000 per annum

		2.	Audit Committee - $15,000.00 per annum

		3.	Governance Committee - $10,000.00 per annum

		4.	Compensation Committee - $10,000.00 per annum 

The Board may amend the amounts in this Section from time to time, in its sole discretion, subject to the Company’s charter, By-laws, and applicable laws.
(n)“Total Quarterly Compensation” shall equal 1/4 of the Total Annual Compensation.
​
3.Shares Available Under the Plan.  Subject to adjustment as provided in Section 10, the total number of Shares reserved and available for issuance under the Plan is 2,000,000.  Such Shares may be authorized but unissued Shares, treasury Shares, or Shares acquired in the market for the account of the Participant.  For purposes of the Plan, Shares credited to a Participant’s deferral account will not be considered to be available, except for purposes of issuance upon the settlement of such account;  provided, however, that, if the Deferred Share is forfeited, the Shares credited in respect of a Deferred Share will again be available for issuance under the Plan.

- 3 -
​

4.Administration of the Plan.  The Plan will be administered by the Board of Directors of the Company (the “Board”); provided, however, that any action by the Board relating to the Plan will be taken only if, in addition to any other required vote, such action is approved by the affirmative vote of a majority of the directors who are not then eligible to participate in the Plan.  The Board shall have authority to (i) determine the number of Shares, Deferred Shares or Options to be credited to each Participant, and (ii) determine or impose conditions on such Shares, Deferred Shares and Options under the Plan as it may deem appropriate.  The Participant shall take whatever additional actions and execute whatever additional documents the Board may in its reasonable judgment deem necessary or advisable in order to carry out or effectuate one or more of the obligations or restrictions imposed on the Participant pursuant to the express provisions of the Plan.  In addition, notwithstanding any other provision of the Plan, the Board shall administer the Plan, and exercise authority and discretion under the Plan, to satisfy the requirements of Section 409A of the Code or any exemption thereto.
5.Eligibility.   Each individual who, on any date on which Shares, Deferred Shares or Options are to be granted or cash is to be paid under Section 6, is a director of the Company and is not an employee of the Company or any subsidiary of the Company will be eligible, at such date, for the compensation described in Section 6 (subject to any deferral election under Section 8), except if, pursuant to an agreement between the individual and the Company, the individual is not eligible for the Plan.  No other person will be eligible to participate in the Plan.
6.Quarterly Compensation.  Compensation for service on the Board during a Fiscal Quarter for each eligible director, as defined in Section 5 above, shall be made partly in cash and partly in Shares, Deferred Shares or Options, as described in this Section 6.
(i)Cash Payment.  For services during a Fiscal Quarter, each eligible director shall receive a cash payment equal to 50% of the Total Quarterly Compensation amount, except as described in item (iii) of this Section.  Payment with respect to a Fiscal Quarter shall be made on the last day of such Fiscal Quarter (or as soon as practicable thereafter, but in no event later than the date specified in Treas. Reg. § 1.409A-1(b)(4)(i)).  
(ii)Shares, Deferred Shares or Options.  For services during each Fiscal Quarter, each eligible director shall be granted Shares, Deferred Shares or Options in an amount equal to 50% of the Total Quarterly Compensation, except as described in item (iii) of this Section.
(iii)Coordination with Tax Benefits Rights Agreement.  In the instance where shares granted under paragraph (ii) of this Section would result in the issuance of shares to a person that results in ownership of greater than 4.9% of the shares outstanding, or would further increase ownership of an Exempted Person, as defined in the Tax Benefits Rights Agreement adopted on May 5, 2015, as amended on March 12, 2020 (the “Rights Agreement”), the director shall receive 100% of his or her compensation in cash pursuant to paragraph (i) of this Section, absent specific action of the Board to define the issuance of the additional shares to the Exempted Person as an Exempted Transaction in accordance with the terms of the Rights Agreement.
7. Shares. Each Participant receiving compensation relating to his or her service as a director in the form of Shares shall be made in accordance with this Section 7.    Shares shall be vested on the last business day of the Fiscal Quarter to which they relate, and, unless deferred pursuant to pursuant to Section 8, shall not be subject to restriction from any voluntary or involuntary sale, transfer, pledge, anticipation, alienation, encumbrance or assignment, other than those imposed by operation of law.  The Share price will be equal to the average Fair Market Value of a Share during the 30-calendar day period ending on the last 

- 4 -
​

business day of such Fiscal Quarter. Shares granted under the Plan may be evidenced in such manner as the Board shall determine. 
8.Deferred Shares.  Each Participant receiving compensation relating to his or her service as a director in the form of Shares, as specified in Section 6, may elect to receive Deferred Shares in lieu of Shares.  If so elected, payment of Deferred Shares shall be made in accordance with this Section 8. 
(a)Elections.  Each director who elects to defer payment of Shares awarded for service in a given calendar year under Section 6 and instead elects to receive Deferred Shares for such given calendar year must file a written election with the Secretary of the Company no later than December 31 of the year preceding such calendar year; provided, however, that any newly elected or appointed director may file an election for any year not later than 30 days after the date such person first became a director (with respect to Shares not earned as of the date of such election).  In no event may an election be made after the last date that such election must be made in order to comply with the provisions of Section 409A of the Code.  Each election may specify a Distribution Date for the Shares to which it pertains.  Except as provided under this Section 8(a), and in Section  8(b) below , an election for a calendar year (or in the case of a new Participant, the remainder of a calendar year) is irrevocable.  An election under this Section  8(a) must specify the following:
(i)The percentage of the Shares awarded to the Participant for such calendar year that are to be deferred in the form of Deferred Shares under the Plan; and
(ii)The Distribution Date of Deferred Shares.  If the Distribution Date is not specified in an initial or annual election, Shares subject to the election shall be settled 30 days after the Participant’s Separation from Service with the Company.  Any election to be paid upon a cessation of service as a director (or as soon as practicable thereafter) shall be settled upon a Separation from Service (or as soon as practicable, but no later than 90 days, thereafter). 
(b)Change in Election.  A director may change the Distribution Date with respect to Deferred Shares on an annual basis by making a subsequent election; provided that the subsequent election must, except as may otherwise be permitted under the rules applicable under Section 409A of the Code, (A) not be effective for at least one year after such election, or, in the case of payments to commence at a specific time, be made at least one year before the first scheduled payment and (B) defer the commencement of distributions (and each affected distribution) for at least five years.
An election by a director shall be deemed to be continuing and therefore applicable to subsequent Plan years as to both percentage and settlement date unless the director revokes or changes such election for a future year by filing a new election form by the due date for such form specified in this Section 8(a).
​
(c)Deferred Share Account.  The Company will establish a deferral account for each Participant who elects to receive Deferred Shares under this Section 8.  At any date on which Shares would otherwise be payable to a Participant who has elected to receive Deferred Shares, the Company will credit such Participant’s deferral account with a number of Deferred Shares equal to the number of Shares granted under Section 6 for which the Participant has elected to receive Deferred Shares.  The amount of Deferred Shares so credited shall include any fractional amounts calculated to at least two decimal places.
(d)Crediting of Dividend Equivalents.  Whenever dividends are paid or distributions are made with respect to Shares, a Participant to whom Deferred Shares are then credited in a deferral account shall be entitled to receive, as dividend equivalents, an amount equal in value to the amount of the dividend paid or property distributed on a single Share multiplied by the number of Deferred Shares (including any 

- 5 -
​

fractional Share) credited to his or her deferral account as of the record date for such dividend or distribution.  Such dividend equivalents shall be credited to the Participant’s deferral account as a number of Deferred Shares determined by dividing the aggregate value of such dividend equivalents by the Fair Market Value of a Share at the payment date of the dividend or distribution.  No distributions shall be made with respect to such dividend equivalents until the Participant’s Distribution Date applicable to the Deferred Shares associated with the dividend equivalents.
(e)Settlement of Deferred Shares.  The Company will settle the Participant’s deferral account by delivering to the Participant (or his or her beneficiary) a number of Shares equal to the number of whole Deferred Shares then credited to his or her deferral account (or a specified portion in the event of any partial settlement), together with cash in lieu of any fractional share remaining at a time when less than one whole Deferred Share is credited to such deferral account.  Such settlement shall be made on the Distribution Date specified or deemed specified in the Participant’s election filed in accordance with this Section 8.
(f)Unforeseen Emergency.  Notwithstanding the foregoing provisions of this Section 8, a Participant may receive any amounts deferred by the Participant in the event of an “Unforeseeable Emergency.”  For these purposes, an “Unforeseeable Emergency,” as determined by the Board in its sole discretion, is a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in Section 152(a) of the Code); loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, but only where such severe financial hardship is not and may not be relieved (i) through reimbursement or compensation by insurance or otherwise, or (ii) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship.  The determination of whether a financial hardship constitutes an Unforeseeable Emergency shall be made in accordance with the provisions of Section 409A(a)(2)(B)(ii) of the Code.  The amount distributed shall be limited to the amount necessary to satisfy the emergency need (which amount may include amounts necessary to pay federal, state and local income taxes that will be incurred in connection with the distribution).  In the event of a distribution on account of an Unforeseeable Emergency, any deferral election that is in effect on behalf of the Participant for the calendar year of distribution shall be cancelled.
(g)Nonforfeitability.  The interest of each Participant in any Deferred Shares (and the deferral account relating thereto) at all times will be nonforfeitable.
(h)Compliance with Section 409A.  Notwithstanding anything herein to the contrary, all distributions of Deferred Shares shall be made in accordance with the provisions of Section 409A of the Code and the Plan shall be interpreted consistent with this intention.
​
9.Options.  Each Participant receiving compensation relating to his or her service as a director in the form of Shares, as specified in Section 6, may elect to receive Options in lieu of Shares.  If so elected, payment of Options shall be made in accordance with this Section 9.  
(a)Exercise Price.  The exercise price per Share purchasable upon exercise of an Option will be equal to 100% of the Fair Market Value of a Share on the date of grant of the Option.
(b)Option Expiration.  A Participant’s Option will expire at the earlier of (i) ten years after the date of grant or (ii) one year after the date the Participant ceases to serve as a director of the Company for any reason.

- 6 -
​

(c)Exercisability.  No Option may be exercised unless and until it has become exercisable in accordance with this Section 9(c).  A Participant’s Option received upon initial election will become exercisable on the next anniversary of the director’s initial election; provided, however, that a Participant’s Option will become immediately exercisable in full at the time the Participant ceases to serve as a director due to death or disability or upon a Change in Control; and provided further, that a Participant’s Option may be exercised after the Participant ceases to serve as a director for any reason other than death or disability only to the extent that the Option was exercisable at the date he or she ceased to be a director or has become exercisable pursuant to this Section 9(c) within two months after the date he or she ceased to be a director.
(d)Method of Exercise.  A Participant may exercise an Option, in whole or in part, at such time as it is exercisable and prior to its expiration, by giving written notice of exercise to the Secretary of the Company,  in the form attached hereto as Exhibit B, specifying the Option to be exercised and the number of Shares to be purchased, and paying in full the exercise price in cash (including by check) or by surrender of Shares already owned by the Participant (except for Shares acquired from the Company by exercise of an Option or other award less than six months before the date of surrender) having a Fair Market Value at the time of exercise equal to the exercise price, or by a combination of cash and Shares.
10.Adjustment Provisions.
(a)Corporate Transactions and Events.  In the event any recapitalization, reorganization, merger, consolidation, spin-off, combination, repurchase, exchange of Shares or other securities of the Company, share split or reverse split, extraordinary dividend (whether in the form of cash, Shares, or other property), liquidation, dissolution, or other similar corporate transaction or event affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of each Participant’s rights under the Plan (which would not include a transaction in which public stockholders retain no interest in the surviving company), then an adjustment shall be made, in a manner that is proportionate to the change to the Shares and otherwise equitable, in (i) the number and kind of Shares remaining reserved and available for issuance under Section 3, (ii) the number and kind of Shares under Section 6, (iii) whether Deferred Shares are issued under Section 8, and (iv) the number of Shares to be issued upon settlement of Deferred Shares under Section 8.  The foregoing notwithstanding, no adjustment may be made hereunder except as will be necessary to maintain the proportionate interest of the Participant under the Plan and to preserve, without exceeding, the value of outstanding Deferred Shares.
(b)Insufficient Number of Shares.  If at any date an insufficient number of Shares are available under the Plan for the receipt of Shares or deferral of Deferred Shares at that date, Shares will be distributed proportionately to each eligible director to the extent Shares are then available.
11.Interpretation and Other Rules.  The Board may make such rules and regulations and establish such procedures for the administration of the Plan as it deems appropriate.  Without limiting the generality of the foregoing, the Board may (i) interpret the Plan and any agreements under Section 13(a), with such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law, provided, that the Board’s interpretation shall not be entitled to deference on and after a Change in Control except to the extent that such interpretations are made exclusively by members of the Board who are individuals who served as Board members before the Change in Control, and (ii) take any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof.  In the event of any dispute or disagreement as to the interpretation of the Plan or of any rule, regulation or procedure, or as to any question, right or obligation arising from or related to the Plan, the decision of the Board shall be final and binding upon all persons.  Except as provided in Section 8 with respect to Deferred Shares, Shares are 

- 7 -
​

not intended to provide for the deferral of compensation subject to Section 409A of the Code and, if any provision of the Plan is subject to more than one interpretation or construction, such ambiguity shall be resolved in favor of that interpretation or construction which is consistent with such grants or payments not being subject to the provisions of Section 409A of the Code.  Deferred Shares are subject to Section 409A of the Code.  
12.Changes to the Plan.  The Board may amend, alter, suspend, discontinue, or terminate the Plan or authority to grant Shares or to permit payment of Deferred Shares under the Plan without the consent of shareholders or Participants, except that any amendment or alteration will be subject to the approval of the Company’s shareholders at or before the next Annual Meeting for which the record date is after the date of such Board action if such shareholder approval is required by any applicable federal or state law or regulation or the rules of any stock exchange or automated quotation system as then in effect, and the Board may otherwise determine to submit other such amendments or alterations to shareholders for approval; provided, however, that, without the consent of an affected Participant, no such action  may materially impair the rights of such Participant with respect to any previous award of Shares or Deferred Shares, provided, further that no such amendment, discontinuance or termination of the Plan shall accelerate the time for payment of any Deferred Shares or other amounts subject to Section 409A of the Code (except to the extent permitted by Section 409A of the Code).  For purposes of this Section 122, a termination of the Plan that involves an accelerated payment of amounts due under the Plan is not considered to materially impair the rights of a Participant.
13.General Provisions.
(a)Agreements.  Deferred Shares and any other right or obligation under the Plan may be evidenced by agreements or other documents executed by the Company and the Participant incorporating the terms and conditions set forth in the Plan, together with such other terms and conditions not inconsistent with the Plan, as the Board may from time to time approve.  Such agreements and documents which pertain to awards that are subject to Section 409A of the Code shall include such additional terms and conditions as may be required to satisfy the requirements thereof.
(b)Compliance with Laws and Obligations.  The Company will not be obligated to issue or deliver Shares in connection with any award of Shares or in settlement of Deferred Shares in a transaction subject to the registration requirements of the Securities Act of 1933, as amended, or any other federal or state securities law, any requirement under any listing agreement between the Company and any stock exchange or automated quotation system, or any other law, regulation, or contractual obligation of the Company, until the Company is satisfied that such laws, regulations, and other obligations of the Company have been complied with in full.  Certificates representing Shares issued under the Plan will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws, regulations, and other obligations of the Company, including any requirement that a legend or legends be placed thereon.
(c)Compliance.  The obligation of the Company to provide Shares under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board.  The election and settlement of Deferred Shares shall be administered in conformance with the provisions of Section 409A of the Code.  The Board may make such changes to the Plan as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain tax benefits applicable to rights under the Plan.  Notwithstanding any other provision of the Plan, the Company shall not be required to take or permit any action under the Plan or any agreement under Section 133(a) which, in the good-faith determination of the Company, would result in a material risk of a violation by the Company of Section 13(k) of the Exchange Act.

- 8 -
​

(d)Limitations on Transferability.  Deferred Shares and rights relating thereto under the Plan will not be transferable by a Participant except by will or the laws of descent and distribution (or to a designated beneficiary in the event of a Participant’s death), and will be exercisable during the lifetime of the Participant only by such Participant or his or her guardian or legal representative.  A Participant may designate a beneficiary by filing with the Company the beneficiary Designation Form attached to the Plan. The Company may rely upon the beneficiary designation last filed in accordance with this Section 13(d).  Deferred Shares and rights relating thereto under the Plan may not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to the claims of creditors of any Participant.
(e)No Fiduciary Relationship.  Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create or shall be construed to create a trust of any kind, or a fiduciary relationship between the Company or its subsidiaries, or their officers or the Board, on the one hand, and the Participant, the Company, its subsidiaries or any other person or entity, on the other.
(f)Notices.  All notices under the Plan shall be in writing, and if to the Company, shall be delivered to the Company or mailed to its principal office, addressed to the attention of the Board; and if to the Participant, shall be delivered personally, sent by facsimile transmission or mailed to the Participant at the address appearing in the records of the Company.  Such addresses may be changed at any time by written notice to the other party given in accordance with this Section 13(f).
(g)Unfunded Status of Accounts.  With respect to any Shares or payments not yet made to a Participant in respect of Deferred Shares, nothing contained in the Plan or such Deferred Shares shall give any such Participant any rights that are greater than those of a general unsecured creditor of the Company; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Plan to deliver cash or Shares, which trusts or other arrangements shall be consistent with the “unfunded” status of the Plan.
(h)Compliance with Rule 16b-3.  It is the intent of the Company that this Plan complies in all respects with applicable provisions of Rule 16b-3.  Accordingly, if any provision of this Plan or any agreement hereunder does not comply with the requirements of Rule 16b-3 as then applicable to a transaction by a Participant, such provision will be construed or deemed amended to the extent necessary, to conform to the applicable requirements with respect to such Participant.
(i)No Right To Continue as a Director.  Nothing contained in the Plan or any agreement hereunder will confer upon any Participant any right to continue to serve as a director of the Company.
(j)No Shareholder Rights Conferred.  Nothing contained in the Plan or any agreement hereunder will confer upon any Participant (or any person or entity claiming rights by or through a Participant) any rights of a shareholder of the Company unless and until Shares are in fact issued to such Participant (or person).
(k)Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board nor any submission thereof to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other compensatory arrangements for directors as it may deem desirable.
(l)Limitation of Liability.  Each member of the Board shall be entitled to, in good faith, rely or act upon any report or other information furnished to him by any officer or other employee of the Company or any subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant, legal counsel, or other professional retained by the Company to assist in the 

- 9 -
​

administration of the Plan.  No member of the Board, nor any officer or employee of the Company acting on behalf of the Board, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board and any officer or employee of the Company acting on behalf of the Board or members thereof shall, to the extent permitted by, law, be fully indemnified and protected by the Company with respect to any such action, determination, or interpretation.
(m)Captions.  The use of captions in this Plan is for convenience.  The captions are not intended to provide substantive rights.
(n)Governing Law.  The validity, construction, and effect of the Plan and any agreement hereunder will be determined in accordance with the Delaware Limited Liability Company Act and other laws (including those governing contracts) of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable federal law.
(o)Tax Withholding. Prior to the payment or settlement of any award under the Plan, the Participant must pay, or make arrangements acceptable to the Company for the payment of, any and all federal, state and local tax withholding (including FICA tax) that in the opinion of the Board is required by law. If the Participant does not make such payment or arrangement, in the Board’s discretion, the Participant may forfeit the award.  The Board shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, the minimum statutory amount to satisfy federal, state and local tax withholding (including FICA tax), required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.  The Participant shall remain responsible at all times for paying any tax due with respect to any award under the Plan, and the Company shall not be liable for any interest or penalty that a Participant incurs by failing to make timely payments of tax.
14.Effective Date and Plan Termination.  The Plan will be effective upon the date specified herein upon approval of the Board, subject to its approval by the shareholders of the Company if such shareholder approval is required by any applicable federal or state law or regulation or the rules of any stock exchange or automated quotation system as then in effect.  Unless earlier terminated by action of the Board, the Plan will remain in effect until such time as no Shares remain available for issuance under the Plan and the Company and Participants have no further rights or obligations under the Plan.  The Board may (without the approval or consent of any Participant) elect to settle (and distribute) all Deferred Shares within thirty (30) days prior to, or twelve (12) months following, a “Change In Control” (as defined for purposes of Section 409A of the Code), provided that all substantially similar arrangements that are sponsored by the Company which are deemed to be part of a single plan for purposes of Section 409A of the Code are terminated, and all Deferred Shares are settled within twelve (12) months of the date of termination.  In the event the Plan is terminated, any distribution or settlement of Deferred Shares shall conform to the applicable requirements of Section 409A of the Code so that Participant avoids liability under Section 409A.
As adopted by the Board: November 5, 2020

- 10 -
​

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00316-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00316-of-00352.parquet"}]]