Document:

ex101to10q05558_03312010.htm

Exhibit 10.1

 

SETTLEMENT AGREEMENT AND RELEASE

 

This Settlement Agreement and Release (“Agreement”), dated as of the 11th day of May, 2010, is entered into by and among Plaintiff Empire Resorts, Inc., a corporation incorporated under the laws of Delaware, its parents, subsidiaries, divisions and affiliates (collectively, “Empire Resorts”), Third-Party Defendants Kien Huat Realty III, Ltd., a corporation organized under the laws of the Isle of Man, its parents, subsidiaries, divisions and affiliates (collectively, “Kien Huat”), Kok Thay Lim, Colin Au Fook Yew, G. Michael Brown, and Defendant Joseph Bernstein (collectively, Plaintiff, Third-Party Defendants, and Defendant are sometimes referred to herein as the “Parties”).

 

WHEREAS, Empire Resorts has commenced an action, captioned Empire Resorts, Inc., v. Joseph E. Bernstein, (the “Empire Resorts Action”) in the United States District Court for the Southern District of New York (the “Court”);

 

WHEREAS, Joseph Bernstein has filed counterclaims against Empire Resorts and a third-party claim against Kien Huat, Kok Thay Lim, Colin Au Fook Yew, and G. Michael Brown in the Empire Resorts Action;

 

WHEREAS, the Parties on behalf of themselves and their predecessors, assignors, successors, agents, related companies, subsidiaries, affiliates, divisions, officers, employees, representatives, heirs, executors, administrators and assigns, desire to settle and terminate all of their disputes with each other, including without limitation all claims that are or could be asserted in the Empire Resorts Action or in any other proceeding involving the Parties;

 

WHEREAS, in entering into this Agreement, none of the Parties concedes the sufficiency or validity of any claims, cross claims, third-party claims, or defenses that were asserted or could be asserted by any of the Parties, or any other persons;

 

  

  

  

 

NOW THEREFORE, in consideration of the mutual promises, releases and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties enter into this Agreement, and it is hereby agreed by and between them as follows:

 

	
1.

	
Settlement Value

 

Within three (3) business days after receipt by Empire Resorts’ counsel of this Agreement executed by Joseph Bernstein, and as a condition of Joseph Bernstein’s obligations under this Agreement becoming effective, Empire Resorts shall:

 

(a)           pay to Joseph Bernstein the sum of One Million, Five Hundred Thousand Dollars ($1,500,000) by wire transfer to: Joseph Bernstein, Account #                            , Routing #                            , J.P. Morgan Chase Bank, N.A.,  12 East 86th St., New York, N.Y. 10028, Tel. 212-288-3061; and

 

(b)           issue to Joseph Bernstein Common Stock Purchase Warrants to purchase three million two hundred fifty thousand shares (3,250,000) at $2.00 per share, as follows: (i)  two million (2,000,000) shares in the form annexed hereto as Exhibit A, with an expiration date of May 10, 2020; (ii) two hundred fifty thousand (250,000) shares in the form annexed hereto as Exhibit B, with an expiration date of May 10, 2015; and (iii) one million (1,000,000) shares in the form annexed hereto as Exhibit C, with an expiration date of May 10, 2015.

 

The Parties agree that the Settlement Value set forth above relates to the claims and counterclaims in the Empire Resorts Action and each Party will allocate the Settlement Value as they deem appropriate according to their own respective assessments of the values of the claims and counterclaims asserted.

 

Empire Resorts shall have no defense or offset, for any reason whatsoever, to the exercise of any of the options provided for in paragraph 1(b)(ii) and (iii), other than the failure of Joseph Bernstein to pay the exercise price after an exercise within the applicable exercise period and as otherwise stated in the Common Stock Purchase Warrants annexed hereto as Exhibits B and C.

 

  

  

  

 

	
2.

	
Reaffirmation of Prior Options

 

Nothing in this Agreement shall be deemed to affect the options previously issued to Joseph Bernstein to purchase 750,000 shares of Empire Resorts’ common stock, and the parties hereby reaffirm that such options remain vested, in full force and effect, and unaltered by this Agreement, as follows:  Options to purchase five hundred thousand (500,000) shares granted on June 8, 2009, pursuant to an Employment Agreement dated as of June 1, 2009, at an exercise price of $1.78, expiring June 7, 2014; and, options to acquire, pursuant to a stock option agreement dated as of April 27, 2009, two hundred fifty thousand shares (250,000) shares at an exercise price of $1.14, expiring on April 26, 2014.  Empire Resorts shall have no defense or offset, for any reason whatsoever, to the exercise of any of the foregoing options, other than the failure of Joseph Bernstein to pay the exercise price after an exercise within the applicable exercise period.

 

	
3.

	
Dismissal of the Empire Resorts Action

 

The Parties will file with the Court the Stipulation and Order, attached as Exhibit D hereto and executed by counsel for all Parties, dismissing the Empire Resorts Action, including all claims, counterclaims, and third-party claims, with prejudice and without costs or attorneys fees.

 

  

  

  

 

	
4.

	
Release of Empire Resorts, Kien Huat, Kok Thay Lim, Colin Au Fook Yew and G. Michael Brown

 

(a)           Joseph Bernstein for himself and for his heirs, executors, affiliates, and assigns, whether as an employee, stockholder or otherwise (hereinafter collectively referred to in this paragraph as the “Releasor”), hereby releases, discharges and acquits forever Empire Resorts and Kien Huat, the direct or indirect beneficial owners of Kien Huat, and each of their respective present and former officers, directors, employees, agents, employee benefit and/or pension plans or funds, trustees, administrators, attorneys, successors, agents, and each of their affiliates and assigns, and Kok Thay Lim, Colin Au Fook Yew, and G. Michael Brown and each of their attorneys, successors, agents, and assigns (hereinafter collectively referred to in this paragraph as the “Releasees”) from any and all claims, demands, rights, causes of action, liabilities, and damages whatsoever (“Claims”), whether such Claims are known or unknown, suspected or unsuspected, fixed or contingent, that the Releasor ever had, or now has, from the beginning of the world to the date of execution of this Agreement against the Releasees, including without limitation any Claims based in any way upon, related in any way to, or arising in any way from, out of or in connection with any agreement (including without limitation the Employment Agreement by and between Empire Resorts and Joseph Bernstein, dated as of June 1, 2009 (the “Employment Agreement”), the Option Agreement dated as of April 27, 2009 between Empire Resorts and Joseph Bernstein (the “Option Agreement”) and the Investment Agreement, dated as of August 19, 2009 between Empire Resorts and Kien Huat), understanding, arrangement, transaction, investment, or any other matter that in any way involved, concerned, related to or touched upon Empire Resorts (or its business) or any person or entity affiliated in any way with Releasees and any and all Claims that have been asserted or could have been asserted in the Empire Resorts Action, or arising from or relating to its subject matter.  The releases set forth in this Agreement are not intended to and do not release Releasees from any of their obligations under this Agreement, including without limitation Empire Resorts’ obligations concerning the Common Stock Purchase Warrants and the previously issued stock options reference in paragraph 2 above, nor does this Agreement release Empire Resorts from any indemnification obligations to Joseph Bernstein deriving from his services as a director or officer of Empire Resorts, other than those related to the dispute settled by this Agreement.

 

  

  

  

 

(b)           Without limiting the generality of the foregoing Paragraph 4(a), this Agreement is intended to and shall release the Releasees from any and all Claims arising out of Joseph Bernstein’s employment with Empire Resorts and/or the expiration of Joseph Bernstein’s employment, including but not limited to any Claim(s) under or arising out of (i) Title VII of the Civil Rights Act of 1964, as amended; (ii) the Americans with Disabilities Act, as amended; (iii) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (excluding claims for accrued, vested benefits under any employee benefit plan of Empire Resorts in accordance with the terms of such plan and applicable law); (iv) the Age Discrimination in Employment Act, as amended, or the Older Workers Benefit Protection Act; (v) the WARN Act; (vi) the New York State and City Human Rights Laws; (vii) the Delaware Fair Employment Practices Act; (viii) Section 806 of the Sarbanes Oxley Act of 2002; (ix) alleged discrimination or retaliation in employment (whether based on federal, state or local law, statutory or decisional); (x) the terms and conditions of Joseph Bernstein’s employment with Empire Resorts, the expiration of such employment, and/or any of the events relating directly or indirectly to or surrounding that expiration, including Claims arising out of or in connection with the Employment Agreement or Option Agreement; (xi) New York Civil Rights Laws; and (xii) any law (statutory or decisional) providing for attorneys’ fees, costs, disbursements and/or the like.  The releases set forth in this Agreement are not intended to and do not release Empire Resorts from any of its obligations under this Agreement.

 

  

  

  

 

(c)           Notwithstanding the foregoing, nothing in this Agreement shall be construed to prevent Joseph Bernstein from cooperating in an investigation conducted by the New York State Racing and Wagering Board, to the extent required or permitted by law.  Nevertheless, Joseph Bernstein understands and agrees that he is waiving any right to relief (including, for example, monetary damages, reimbursement of attorney’s fees or reinstatement) with respect to any such investigation.

 

	
5.

	
Release of Joseph Bernstein

 

Empire Resorts, Kien Huat, Kok Thay Lim, Colin Au Fook Yew, and G. Michael Brown (hereinafter collectively referred to in this paragraph as the “Releasors”) hereby release, discharge and acquit forever Joseph Bernstein, his heirs and executors (hereinafter collectively referred to in this paragraph as the “Releasee”) from any and all Claims, whether such Claims are known or unknown, suspected or unsuspected, fixed or contingent, that the Releasors ever had, or now have, from the beginning of the world to the date of execution of this Agreement against the Releasee, including from any and all Claims, whether such Claims are known or unknown, suspected or unsuspected, fixed or contingent, that the Releasors ever had, or now have, from the beginning of the world to the date of execution of this Agreement against the Releasee, including without limitation any Claims based in any way upon, related in any way to, or arising in any way from, out of, or in connection with any agreement (including without limitation the Employment and the Option Agreement), understanding, arrangement, transaction, investment, or any other matter that in any way involved, concerned, related to or touched upon Empire Resorts (or its business) or any person or entity affiliated in any way with Releasees and any and all Claims that have been asserted or could have been asserted in the Empire Resorts Action, or arising from or relating to its subject matter; provided, however, that nothing in this paragraph is intended to release Joseph Bernstein from his continuing obligations under Section 4 of the Employment Agreement except as specifically set forth in paragraph 6 below.

 

  

  

  

 

	
6.

	
Release of Certain Future Obligations of Joseph Bernstein and Rights of Empire Resorts under the Employment Agreement

 

Notwithstanding anything contrary to this Agreement, Empire Resorts hereby releases Joseph Bernstein from all of his obligations under the Employment Agreement, except that

 

(a)           Joseph Bernstein shall not be released from and shall continue to be obligated to comply with Section 4 of the Employment Agreement relating to confidentiality.  With respect to Section 4(B) of the Employment Agreement, counsel for Joseph Bernstein will continue to hold the images made by the third party vendor of Joseph Bernstein’s laptop, iPhone and backup drive for a period of three (3) years, after which they may be destroyed, and, in the event the need arises (including, without limitation, in order to comply with its legal obligations in litigation or to governmental regulatory authorities), shall cooperate with counsel for Empire Resorts to determine a protocol for delivery to Empire Resorts of all materials contained therein that Empire Resorts is entitled to have returned under Section 4(B) of the Employment Agreement and deletion of the same from Mr. Bernstein’s computer and iPhone and any other computer, phone or electronic device used by Mr. Bernstein during his employment by Empire Resorts.  Nothing herein shall require Mr. Bernstein to retain any such information.

 

(b)           For a period of ten (10) years, Joseph Bernstein may not, directly or indirectly, perform services within the Territory (as that term is defined in the Employment Agreement), for the St. Regis Mohawk Tribe, whether as an employee, consultant, agent or contractor or in any capacity, and Joseph Bernstein also may not hold office as an officer or director or like positions in the St. Regis Mohawk Tribe.

 

  

  

  

 

	
7.

	
Confidentiality of Settlement and Non-Disparagement

 

(a)           Promptly after execution of this Agreement, Empire Resorts will issue a press release in the form annexed hereto as Exhibit E.  Subject to Paragraph 4(c) above, no party will issue or make any public statement about the Empire Resorts Action, the underlying dispute, or its settlement other than releasing Exhibit E and will respond to any inquiries solely by referring to the press release.

 

(b)           Other than as provided for in Paragraph 4(c) above, and provided that he shall not be prohibited from responding to any legal subpoena or other judicially enforceable written request from any court or governmental agency of competent jurisdiction and testifying truthfully pursuant to such subpoena or other request, Joseph Bernstein will not make any statement, written or verbal, or release information, that is injurious to the reputation of Empire Resorts, Kien Huat, the direct or indirect beneficial owners of Kien Huat, Kok Thay Lim, Colin Au Fook Yew, or G. Michael Brown, and expressly agrees that he shall not, and shall instruct his agents or representatives not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing) to any person not a Party, any remark, comment, message, information, declaration, communication or other statement of any kind, whether oral, in writing, electronically transferred or otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward Empire Resorts, Kien Huat, the direct or indirect beneficial owners of Kien Huat, Kok Thay Lim, Colin Au Fook Yew, or G. Michael Brown.

 

(c)           Joseph Bernstein further agrees not to make any public statements or encourage others to make any public statements regarding or relating to the business or business practices of Empire Resorts, Kien Huat or the direct or indirect beneficial owners of Kien Huat (including each of their present and former officers, directors, shareholders, direct or indirect beneficial owners, employees, agents, trusts, administrators or affiliates), or regarding or relating to Kok Thay Lim, Colin Au Fook Yew, or G. Michael Brown, except as required by law.

 

  

  

  

 

(d)           Each of Empire Resorts, Kien Huat, Kok Thay Lim, Colin Au Fook Yew, and G. Michael Brown shall not make any public statement or release information, that is injurious to the reputation of Joseph Bernstein, and expressly agrees that they shall not, and shall instruct their respective agents or representatives, if any, not to, directly or indirectly, in any capacity or manner, publicly make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing) to any person not a Party, any remark, comment, message, information, declaration, communication or other statement of any kind, whether oral, in writing, electronically transferred or otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward Joseph Bernstein, provided that they shall not be prohibited from responding to any legal subpoena or other judicially enforceable written request from any court or governmental agency of competent jurisdiction, testifying truthfully pursuant to such subpoena or other request, and disclosing such information as is required by any securities laws or rules or regulations promulgated from time to time by the SEC or applicable state securities agencies or as otherwise required by law.

 

  

  

  

 

(e)           Except as otherwise required by law, the Parties (including, but not limited to, their respective attorneys) agree to keep and represent that they have kept confidential:  (i) any and all of the terms of this Agreement, (ii) any and all of the terms proposed during the negotiation process (whether or not accepted), and (iii) the discussions and negotiations that led to this Agreement.  Notwithstanding anything in this paragraph to the contrary, no provision of this Agreement shall prohibit any party from disclosing or having disclosed the terms of this Agreement to their attorneys, to a tax accountant for purposes of seeking tax advice, or to their spouse, children,  significant other, or executive assistant; and nothing shall prohibit any party from (i) filing any documents required by the Securities and Exchange Commission (the “SEC”) or applicable state securities agencies or making any other public disclosure required by the federal or state securities law or other applicable law, provided that the content of any document so filed does not violate any of the other terms and conditions of this Agreement unless such content constitutes disclosure required by any securities laws or rules or regulations promulgated from time to time by the SEC or applicable state securities agencies or other applicable law; (ii) filing any documents or disclosing any information required to be filed or disclosed pursuant to the Internal Revenue Code of 1986, as amended, the rules and regulations thereunder, any applicable state or local tax code, or the rules and regulations under such state or local code; (iii) responding to any legal subpoena or other judicially enforceable written request from any court or governmental agency of competent jurisdiction and testifying truthfully pursuant to such subpoena or other request; or (iv) enforcing any rights of such party under this Agreement.  To the extent any information concerning this Agreement is publicly disclosed pursuant to (i)-(iv) of this paragraph, the obligation of confidentiality as to that information shall no longer apply.  In the event any Party receives any legal subpoena or other judicially enforceable written request from any court or governmental agency of competent jurisdiction concerning any matter covered in this Agreement, the party receiving such subpoena or written request shall promptly notify all other parties hereto.  A party shall not produce or disclose any material until a reasonable period of time after such notice is given to counsel for the other parties, to allow the other parties to seek relief from such subpoena or other written request.  In all events in which a party can practically do so without risking contempt or similar sanctions, such party shall provide the other parties with at least seven business days’ notice of such subpoena or written request.

 

  

  

  

 

	
8.

	
Non-Interference

 

(a)           Joseph Bernstein agrees not to serve as a named plaintiff in any class action suit against Empire Resorts or Kien Huat, or against each of their present and former officers, directors, stockholders, direct or indirect beneficial owners, employees, agents, employee benefit and/or pension plans or funds, trustees, administrators, attorneys, successors, and each of their affiliates and assigns, or against Kien Huat, Kok Thay Lim, Colin Au Fook Yew, or G. Michael Brown and each of their successors, agents, or assigns, and except as required by law, agrees not to investigate or assist in any such class action suit.

 

(b)           Joseph Bernstein further agrees to not to serve as legal counsel in any legal action or proceeding against Empire Resorts or Kien Huat, or against each of their present and former officers, directors, employees, agents, employee benefit and/or pension plans or funds, trustees, administrators, attorneys, successors, and each of their affiliates and assigns, where doing so would conflict with his continuing obligations under Section 4 of the Employment Agreement.

 

(c)           For a period of ten (10) years from the date of this Agreement, Joseph Bernstein shall not initiate, directly or indirectly, any communication of any kind with any member of the St. Regis Mohawk Tribe (the “Tribe”) or its counsel.  If a member of the Tribe initiates contact with Joseph Bernstein, he will advise the individual that he cannot communicate with them and will promptly end the communication.  It will not be a violation of this paragraph for Joseph Bernstein to communicate with members of the Tribe with whom he has a personal relationship, including Barbara Lazore or Lorraine White, provided however, that any such communications shall be limited to personal, non-business matters, and Joseph Bernstein expressly agrees to not have any communication with any member of the Tribe that refers or relates to Empire Resorts, Kien Huat, Kok Thay Lim, Colin Au Fook Yew, and G. Michael Brown, and any of the present or former officers, directors, shareholders, employees, agents of Empire Resorts or Kien Huat.   Provided, however, that nothing in this Paragraph shall inhibit communication with any federal or state governmental official acting in that capacity who is a member of the Tribe.

 

  

  

  

 

	
9.

	
Remedies for Breach

 

(a)           The Parties agree that any breach of any of the provisions in Paragraphs 7 and 8 of this Agreement will cause irreparable injury for which there is no adequate remedy at law, and agree that the non-breaching parties, in addition to all other remedies available to them, will be entitled to equitable relief, including but not limited to, injunctive relief to enforce these provisions of the Agreement, without the requirement to post a bond or other security.

 

(b)           Without in any way limiting any of the additional remedies available against him, Joseph Bernstein agrees that in the event he materially breaches any provision of this Agreement: (i) he will be obligated to immediately return to Empire Resorts $250,000 of the Settlement Sum paid to him pursuant to paragraph 1(a) of this Agreement; and (ii) all Common Stock Purchase Warrants issued to Joseph Bernstein pursuant to paragraph 1(b)(i) (Exhibit A hereto) that have not been exercised will terminate immediately.  The remedies provided for in this subparagraph 9(b) are only available if Empire Resorts provides notice to Joseph Bernstein as specified in Paragraph 9(c) below.  Empire Resorts shall be the sole entity entitled to exercise its right to the remedy in this subparagraph with respect to a breach of this Agreement by Joseph Bernstein and may do so with respect to a breach as against any other party.  The Parties expressly agree that the remedies set forth herein are not a penalty, but rather a reasoned amount taking into consideration the anticipated minimum actual harm that may be caused by such a material breach.

 

  

  

  

 

(c)           In the event of a material breach of this Agreement by Joseph Bernstein, and an election by Empire Resorts to assert the remedies provided for under paragraph 9(b), Empire Resorts will provide written notice to Joseph Bernstein within fifteen (15) business days of learning of the material breach.  The written notice provided for herein shall be deemed to have been given if sent by nationally recognized overnight courier to:  Joseph E. Bernstein, 6663 Casa Grande Way, Delray Beach, Florida 33446, with a copy to Henry P. Bubel, Esq., Patterson Belknap Webb & Tyler LLP, 1133 Avenue of the Americas, New York, NY 10036-6710.  Copies of said written notice shall also be sent by nationally recognized overnight courier as follows:

 

If to Kien Huat or Kok Thay Lim, to:

Kien Huat Realty III Limited

c/o Kien Huat Realty Sdn Bhd.

22nd Floor Wisma Genting

Jalan Sultan Ismail

50250 Kuala Lumpur

Malaysia

Attention:  Gerard Lim

with a copy (which copy alone shall not constitute notice):

 Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Steven L. Wilner

The Parties may designate alternate addresses for delivery of notices by sending notice thereof to the addresses set forth above.

 

(d)           If, within 45 (forty-five) days after receiving notice from Empire Resorts pursuant to paragraph 9(c) above, Joseph Bernstein initiates an action to seek a declaration from a court of competent jurisdiction that he has not materially breached this Agreement, the provisions of paragraph 9(b) above will be stayed pending resolution of litigation; provided, however, that the Common Stock Purchase Warrants issued pursuant to paragraph 1(b)(i) (Exhibit A hereto) shall remain unexercisable pending resolution of such action.

 

  

  

  

 

(e)           Without in any way limiting any of the additional remedies available to Joseph Bernstein, the Parties agree that in the event that any of the Releasees as defined in paragraph 4(a) above materially breaches any provision of this Agreement, then paragraph 9(b) above shall become null, void, and of no effect.  The remedies provided for in this subparagraph 9(e) are only available if Joseph Bernstein provides notice to Empire Resorts as specified in Paragraph 9(f) below.  Joseph Bernstein may exercise his right to the remedy in this subparagraph with respect to a material breach of this Agreement by any of the Releasees as defined in paragraph 4(a) above.  The Parties expressly agree that the remedies set forth herein are not a penalty, but rather a reasoned amount taking into consideration the anticipated minimum actual harm that may be caused by such a material breach.

 

(f)           In the event of a material breach of this Agreement by any of the Releasees as defined in paragraph 4(a) above, and an election by Joseph Bernstein to assert the remedies provided for under paragraph 9(e), Joseph Bernstein will provide written notice to Empire Resorts within fifteen (15) business days of learning of the material breach.  The written notice provided for herein shall be deemed to have been given if sent by nationally recognized overnight courier as follows:

 

Empire Resorts, Inc.

P.O. Box 5013

Monticello, New York 12701-5193

Attn: Chief Executive Officer

with copies to the following (which alone shall not constitute notice):

Robert H.Friedman, Esq.

Olshan Grundman Frome Rosenzweig & Wolosky, LLP

65 East 55th Street

New York, New York 10022

 

  

  

  

 

Kien Huat Realty III Limited

c/o Kien Huat Realty Sdn Bhd.

22nd Floor Wisma Genting

Jalan Sultan Ismail

50250 Kuala Lumpur

Malaysia

Attention:  Gerard Lim

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Steven L. Wilner

The Parties may designate alternate addresses for delivery of notices by sending notice thereof to the addresses set forth above.

 

(g)           If, within 45 (forty-five) days after receiving notice from Joseph Bernstein pursuant to paragraph 9(f) above, Empire Resorts initiates an action to seek a declaration from a court of competent jurisdiction that there has been no material breach of this Agreement, the provisions of paragraph 9(e) above will be stayed pending resolution of litigation.

 

	
10.

	
Miscellaneous

 

(a)           In the event any action suit or other proceeding is instituted to remedy, prevent or obtain relief relating to this Agreement, arising out of a breach of this Agreement, involving claims within the scope of the releases contained in this Agreement, or pertaining to a declaration of rights under this Agreement, the prevailing party shall recover all of such party’s reasonable attorneys’ fees and costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. As used herein, reasonable attorneys’ fees shall be deemed to mean the full and actual reasonable costs of any legal services actually performed in connection with the matters involved, calculated on the basis of the usual fee charged by the attorneys performing such services.

 

  

  

  

 

(b)           The Parties hereto represent and warrant that they have made no assignment, transfer, conveyance or other disposition of any of the Claims released herein and they are fully authorized and entitled to give their full and complete release of all such claims.

 

(c)           In the event that any provision of this Agreement is declared void and unenforceable by a court of competent jurisdiction, all other provisions shall nonetheless remain in full force and effect.

 

(d)           The failure of any Party to this Agreement to insist upon strict adherence to any term of this Agreement will not be considered a waiver of any right arising thereunder or deprive that Party of the right thereafter.

 

(e)           This Agreement shall be in all respects governed by the laws of the State of New York, notwithstanding any rules on conflict or choice of laws that might apply the substantive law of another jurisdiction.

 

(f)           This Agreement shall be binding upon and inure to the benefit of the heirs, devisees, legatees, executors, administrators, successors, agents, assigns, officers, directors, trustees, agents, partners, employees and affiliates of each of the Parties hereto.

 

(g)           The Parties to this Agreement represent and warrant to each other that they have read and understood its terms, that they have been represented by counsel with respect to this Agreement and all matters covered by and relating to it, that they have been fully advised by counsel with respect to their rights and with respect to the execution of this Agreement and that the Parties have entered into this Agreement for reasons of their own and not based upon the representations of any Party hereto except as contained in this Agreement.  Each Party has participated in, or contributed to, the drafting and preparation of this Agreement, and in the construction of this Agreement, the provisions shall not be construed for, or against, any Party, but shall be construed according to their plain meaning.

 

  

  

  

 

(h)           The Parties understand and agree that this is a compromise settlement of disputed claims and that the furnishing of the consideration for this settlement and release of claims shall not be deemed or construed as an admission of liability.  The making of this Agreement is not intended, and shall not be construed, as an admission that any of the Parties have violated any federal, state, or local law (statutory or decisional), ordinance or regulation, breached any contract, or committed any wrong whatsoever.  The Parties further agree and understand that this Agreement is being entered into solely for the purpose of avoiding further expense and litigation and that this Agreement may not be used as evidence in a subsequent proceeding except in a proceeding to enforce the terms of this Agreement.

 

(i)           This Agreement constitutes the entire agreement between the Parties and it is expressly understood and agreed that this Agreement may not be altered, amended, modified or otherwise changed in any respect or particular whatsoever except by a writing duly executed by all authorized representatives of all the Parties, and the Parties acknowledge and agree that they will make no claim at any time or place that this Agreement has been orally altered or modified in any respect whatsoever, and the Parties further acknowledge and agree that all other agreements, representations and warranties of any kind are suspended and merged into this Agreement.  This Agreement is not effective until it has been fully executed and delivered by all Parties.

 

(j)           This Agreement may be executed electronically and in one or more counterparts, each of which shall constitute a duplicate original.

 

  

  

  

 

Signature Page to Agreement and Release

 

 

 

	
Dated:

	May 11, 2010	  	

/s/ Joseph Bernstein

	  	  	  	
Joseph Bernstein

	  	  	  	  
	  	  	  	  
	
Dated:

	May 10, 2010	  	

/s/ Kok Thay Lim

	  	  	  	
Kok Thay Lim

	  	  	  	  
	  	  	  	  
	
Dated:

	May 10, 2010  	  	

/s/ Colin Au Fook Yew

	  	  	  	
Colin Au Fook Yew

	  	  	  	  
	  	  	  	  
	
Dated:

	May 12, 2010	  	

/s/ G. Michael Brown

	  	  	
G. Michael Brown

	
EMPIRE RESORTS, INC.

	  	  
	  	  	  
	
By:

	/s/ Joseph A. D'Amato	  	
Date

	May 13, 2010
	
Name:

	Joseph A. D'Amato	  	  
	
Title:

	CEO	  	  

	
KIEN HUAT REALTY III, LIMITED

	  	  
	  	  	  
	
By:

	/s/ Gerard Lim 	  	
Date

	May 10, 2010  
	
Name:

	Gerard Lim	  	  
	
Title:

	Authorized Signatory	  	  

 

  

  

  

Exhibit D

 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

 

	
 

EMPIRE RESORTS, INC.,

 

Plaintiff/Counterclaim-Defendant,

 

v.

 

JOSEPH E. BERNSTEIN,

 

Defendant/Counterclaim Plaintiff..

 

	
 

 

 

 

 

 

 

Case No. 1:10-cv-00110-SHS

	
 

JOSEPH E. BERNSTEIN,

 

Third-Party Plaintiff,

 

v.

 

AU FOOK YEW, LIM KOK THAY, G. MICHAEL BROWN, KIEN HUAT REALTY III, LIMITED, AND JOHN DOES NO. 1-10.

 

Third-Party Defendants.

 

	  

STIPULATION AND ORDER OF DISMISSAL WITH PREJUDICE

 

IT IS HEREBY STIPULATED AND AGREED by and between the undersigned counsel for plaintiff Empire Resorts, Inc. (“Empire Resorts”), defendant Joseph Bernstein, third-party defendants Kien Huat Realty III, Limited (“Kien Huat”), Kok Thay Lim, Colin Au Fook Yew, and G. Michael Brown (collectively, the “Parties”) that, pursuant to Federal Rule of Civil Procedure 41(a)(1), the Parties, by their undersigned counsel, hereby stipulate to the dismissal with prejudice of the claims asserted by plaintiff Empire Resorts against defendant Joseph Bernstein and to the counter claims and third-party claims asserted by Joseph Bernstein against Empire Resorts, Kien Huat, Kok Thay Lim, Colin Au Fook Yew and G. Michael Brown, without costs.

 

  

  

  

	
Dated:    New York, New York

	  
	
May __, 2010

	  
	  	

 

	  	
Lori Marks-Esterman

	  	
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

	  	
Attorney for Empire Resorts, Inc., G.   Michael Brown and Colin Au Fook Yew

	  	  	
Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

	  	

 

	  	
Kim J. Landsman

	  	
PATTERSON BELKNAP WEBB & TYLER LLP

	  	
Attorney for Joseph Bernstein

	  	  	
1133 Avenue of the Americas

New York, NY 10036-6710

(212) 336-2000

	  	

 

	  	
Howard Zelbo

	  	
CLEARY GOTTLIEB STEEN & HAMILTON LLP

	  	
Attorney for Kien Huat & Kok Thay Lim

	  	  	
1133 Avenue of the Americas

New York, NY 10036-6710

(212) 336-2000

 

	
SO ORDERED on May    , 2010,

	  	  
	  	  	  
	  	  	  
	

 

	  	  
	
The Honorable Sidney H. Stein

United States District Judgeex10-1.htm

    NATIONAL
INSTRUMENTS CORPORATION

     

    2010
INCENTIVE PLAN

     

    1. Purposes of the
Plan.  The purposes of this Plan are:

     

    
      	
              ·  

            	
              to
      attract and retain the best available personnel for positions of
      substantial responsibility,

            

    

     

    
      	
              ·  

            	
              to
      provide incentives to individuals who perform services to the Company,
      and

            

    

     

    
      	
              ·  

            	
              to
      promote the success of the Company’s
business.

            

    

     

    The Plan
permits the grant of Restricted Stock and Restricted Stock Units.

     

    2. Definitions.  As
used herein, the following definitions will apply:

     

    (a) “Administrator” means
the Board or any of its Committees as will be administering the Plan, in
accordance with Section 4 of the Plan.

     

    (b) “Applicable Laws”
means the requirements relating to the administration of equity-based awards
under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed
or quoted and the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.

     

    (c) “Award” means,
individually or collectively, a grant under the Plan of Restricted Stock or
Restricted Stock Units.

     

    (d) “Award Agreement”
means the written or electronic agreement setting forth the terms and provisions
applicable to each Award granted under the Plan.  The Award Agreement
is subject to the terms and conditions of the Plan.

     

    (e) “Board” means the
Board of Directors of the Company.

     

    (f) “Cash Position” means
as to any Performance Period, the Company’ s level of cash and cash equivalents,
including, without limitation, amounts classified for financial reporting
purposes as short-term investments and restricted investments.

     

    (g) “Change in Control”
means the occurrence of any of the following events:

     

    (i) Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; or

     

    (ii) Members
of the Incumbent Board cease for any reason to constitute at least a majority of
the Board; or

     

    (iii) A public
announcement is made of a tender or exchange offer for fifty percent (50%) or
more of the outstanding Voting Securities of the Company, and the Board approves
or fails to oppose that tender or exchange offer in its statements in Schedule
14D-9 under the Exchange Act; or

     

    (iv) The
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation or partnership (or, if no such approval is required,
the consummation of such a merger or consolidation of the Company), other than a
merger or consolidation that would result in the ownership of voting securities
of the Company outstanding immediately before the consummation thereof
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or of a parent of the surviving
entity) a majority of the combined voting power of the Voting Securities of the
surviving entity (or its parent) outstanding immediately after that merger or
consolidation; or

     

    (v) The
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company’s assets (or, if no such approval is required, the
consummation of such a liquidation, sale, or disposition in one transaction or
series of related transactions) other than a liquidation, sale, or disposition
of all or substantially all the Company’s assets in one transaction or a series
of related transactions to a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of Shares of the Company.

     

    (h) “Code” means the
Internal Revenue Code of 1986, as amended.  Any reference to a section
of the Code herein will be a reference to any successor or amended section of
the Code.

     

    (i) “Committee” means a
committee of Directors or of other individuals satisfying Applicable Laws
appointed by the Board in accordance with Section 4 hereof.

     

    (j) “Common Stock” means
the common stock of the Company.

     

    (k) “Company” means
National Instruments Corporation, a Delaware corporation, or any successor
thereto.

     

    (l) “Consultant” means any
person, including an advisor, engaged by the Company or a Parent or Subsidiary
to render services to such entity.

     

    (m) “Determination Date”
means the latest possible date that will not jeopardize the qualification of an
Award granted under the Plan as “performance-based compensation” under Section
162(m) of the Code.

     

    (n) “Director” means a
member of the Board.

     

    (o) “Disability” shall
have the meaning given it in the employment agreement of the Participant; provided, however, that if that
Participant has no employment agreement, “Disability” shall mean, as determined
by the Administrator in the sole discretion exercised in good faith of the
Board, a physical or mental impairment of sufficient severity that either the
Participant is unable to continue performing the duties he or she performed
before such impairment or the Participant’s condition entitles him or her to
disability benefits under any insurance or employee benefit plan of the Company
or its Subsidiaries and that impairment or condition is cited by the Company as
the reason for termination if the Participant ceases to be a Service
Provider.

     

    (p) “Earnings” for any
Fiscal Year shall mean the operating income of the Company on a consolidated
basis before taxes, interest, foreign currency exchange gains or losses, other
gains or losses and other extraordinary items for such Fiscal Year.

     

    (q) “Earnings Attainment”
for any Fiscal Year means a fraction, the numerator of which shall be the
percentage which Earnings constitutes of Net Sales for such Fiscal Year, and the
denominator of which shall be 18%.  In the event that there shall be
no Earnings for such Fiscal Year, the Earnings Attainment for such Fiscal Year
shall be zero.  Notwithstanding the foregoing, the Earnings Attainment
for any Fiscal Year shall not exceed one.

     

    (r) “Earnings Per Share”
means as to any Performance Period, the Company’s or a business unit’s Net
Income, divided by a weighted average number of Shares outstanding and dilutive
equivalent Shares deemed outstanding, determined in accordance with U.S. GAAP;
provided, however, that if Net Income as to any such Performance Period is a
negative amount, then Earnings Per Share means the Company’s or business unit’s
Net Income, divided by a weighted average number of Shares outstanding,
determined in accordance with U.S. GAAP.

     

    (s) “Effective Date” means
the date on which this Plan will take effect.

     

    (t) “Employee” means any
person, including Officers and Directors, employed by the Company or any Parent
or Subsidiary of the Company.  Neither service as a Director nor
payment of a director’s fee by the Company will be sufficient to constitute
“employment” by the Company.

     

    (u) “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    (v) “Exchange Program”
means a program under which outstanding Awards are surrendered or cancelled in
exchange for Awards of the same type, a different type of award, and/or
cash.  The Administrator will determine the terms and conditions of
any Exchange Program in its sole discretion.

     

    (w) “Excluded Items”
includes, without limitation, (i) incentive compensation, (ii) in-process
research and development expenses, (iii) acquisition costs,
(iv) compensation expense from equity compensation, (v) operating expenses
from acquired businesses, (vi) amortization of acquired intangible assets, and
(vii) such other unusual or one-time items as may be identified by the
Administrator.

     

    (x) “Fair Market Value”
means, as of any date, the value of Common Stock as the Administrator may
determine in good faith.

     

    (y) “Fiscal Year” means
the fiscal year of the Company.

     

    (z) “Incumbent Board”
means the individuals who, as of the Effective Date, constitute the Board and
any other individual who becomes a Director of the Company after that date and
whose election or appointment by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least a majority of the
Directors then comprising the Incumbent Board.

     

    (aa) “Inside Director”
means a Director who is an Employee.

     

    (bb) “Net Income” means as
to any Performance Period, the Company’s or a business unit’s income after taxes
determined in accordance with U.S. GAAP, adjusted for any Excluded Items
approved for exclusion by the Administrator.

     

    (cc) “Net Sales” for any
Fiscal Year shall mean the net sales of the Company on a consolidated basis for
such Fiscal Year.

     

    (dd) “Non-Surviving Event”
means an event of Restructuring as described in either Sections 2(qq)(ii) or
2(qq)(iii).

     

    (ee) “Officer” means a
person who is an officer of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated
thereunder.

     

    (ff) “Operating Cash Flow”
means as to any Performance Period, the Company’s or a business unit’s cash flow
generated from operating activities, as reported in the Company’s cash flow
statements and calculated in accordance with U.S. GAAP, adjusted for any
Excluded Items approved for exclusion by the Administrator.

     

    (gg) “Operating Income”
means as to any Performance Period, the Company’s or a business unit’s income
from operations determined in accordance with U.S. GAAP, adjusted for any
Excluded Items approved for exclusion by the Administrator.

     

    (hh) “Outside Director”
means a Director who is not an Employee.

     

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

     

    (jj) “Participant” means
the holder of an outstanding Award.

     

    (kk) “Performance Goals”
means the goal(s) (or combined goal(s)) determined by the Administrator (in its
discretion) to be applicable to a Participant with respect to an Award granted
under the Plan.  As determined by the Administrator, the Performance
Goals applicable to an Award may provide for a targeted level or levels of
achievement using one or more of the following measures: (a) Cash Position,
(b) Earnings, (c) Earnings Attainment, (d) Earnings Per Share, (e) Net
Income, (f) Net Sales, (g) Operating Cash Flow, (h) Operating Income,
(i) Return on Assets, (j) Return on Equity, (k) Return on Sales,
(l) Revenue, (m) Sales Attainment, and (n) Total Shareholder
Return.  The Performance Goals may differ from Participant to
Participant and from Award to Award.  Prior to the Determination Date,
the Administrator will determine whether any significant element(s) will be
included in or excluded from the calculation of any Performance Goal with
respect to any Participant.

     

    (ll) “Performance Period”
means any Fiscal Year of the Company or such other period as determined by the
Administrator in its sole discretion.

     

    (mm) “Period of
Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are
subject to a substantial risk of forfeiture.  Such restrictions may be
based on the passage of time, the achievement of target levels of performance,
or the occurrence of other events as determined by the
Administrator.

     

    (nn) “Plan” means this 2010
Incentive Plan.

     

    (oo) “Restricted Stock”
means Shares issued pursuant to a Restricted Stock award under Section 6 of
the Plan.

     

    (pp) “Restricted Stock
Unit” means a bookkeeping entry representing an amount equal to the Fair
Market Value of one Share, granted pursuant to Section 7.  Each
Restricted Stock Unit represents an unfunded and unsecured obligation of the
Company.

     

    (qq) “Restructuring” means
the occurrence of any one or more of the following:

     

    (i) The
merger or consolidation of the Company with any person, whether effected as a
single transaction or a series of related transactions, with the Company
remaining the continuing or surviving entity of that merger or consolidation and
the Shares remaining outstanding and not changed into or exchanged for stock or
other securities of any other person or of the Company, cash, or other
property;

     

    (ii) The
merger or consolidation of the Company with any person, whether effected as a
single transaction or a series of related transactions, with (i) the Company not
being the continuing or surviving entity of that merger or consolidation or (ii)
the Company remaining the continuing or surviving entity of that merger or
consolidation but all or a part of the outstanding Shares are changed into or
exchanged for stock or other securities of any other person or the Company,
cash, or other property; or

     

    (iii) The
transfer, directly or indirectly, of all or substantially all of the assets of
the Company (whether by sale, merger, consolidation, liquidation, or otherwise)
to any person, whether effected as a single transaction or a series of related
transactions.

     

    (rr) “Return on Assets”
means as to any Performance Period, the percentage equal to the Company’s or a
business unit’s Operating Income divided by average net Company or business
unit, as applicable, assets, determined in accordance with U.S.
GAAP.

     

    (ss) “Return on Equity”
means as to any Performance Period, the percentage equal to the Company’s Net
Income divided by average stockholder’s equity, determined in accordance with
U.S. GAAP.

     

    (tt) “Return on Sales”
means as to any Performance Period, the percentage equal to the Company’s or a
business unit’s Operating Income divided by the Company’s or the business
unit’s, as applicable, Revenue.

     

    (uu) “Revenue” means as to
any Performance Period, the Company’s or business unit’s net sales, determined
in accordance with U.S. GAAP.

     

    (vv) “Rule 16b-3” means
Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.

     

    (ww) “Sales Attainment” for
any Fiscal Year means a fraction, the numerator of which shall equal the
percentage increase in Net Sales for such Fiscal Year over the Net Sales for the
immediately preceding Fiscal Year, and the denominator of which shall be
40%.  In the event that there shall be no increase in the Net Sales
for such Fiscal Year from that of the immediately preceding Fiscal Year, the
Sales Attainment for such Fiscal Year shall be zero.  Notwithstanding
the foregoing, in no event shall the Sales Attainment for any Fiscal Year exceed
one.

     

    (xx) “Section 16(b)”  means
Section 16(b) of the Exchange Act.

     

    (yy) “Service Provider”
means an Employee, Director or Consultant.

     

    (zz) “Share” means a share
of the Common Stock, as adjusted in accordance with Section 10 of the
Plan.

     

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

     

    (bbb) “Total Shareholder
Return” means as to any Performance Period, the total return (change in
share price plus reinvestment of any dividends) of a Share.

     

    (ccc) “U.S. GAAP” means
generally accepted accounting principles in the United States.

     

    (ddd) “Voting Securities”
means any securities that are entitled to vote generally in the election of
Directors, in the admission of general partners or in the selection of any other
similar governing body.

     

    3. Stock Subject to the Plan.

     

    (a) Stock Subject to the
Plan.  Subject to the provisions of Section 10 of the
Plan, the maximum aggregate number of Shares that may be awarded and sold under
the Plan is 2,000,000 plus (a) such number of Shares which have been reserved
but not issued under the Company’s 2005 Incentive Plan (the “2005 Plan”) as of
the date stockholders approve the Plan, and (b) any Shares returned to the
Company’s 1994 Incentive Stock Option Plan or the Company’s 2005 Plan as a
result of termination of options or repurchase of Shares issued under such
plan.  Shares shall not be deemed to have been issued pursuant to the
Plan with respect to any portion of an Award that is settled in
cash.  The Shares may be authorized, but unissued, or reacquired
Common Stock.

     

    (b) Lapsed
Awards.  If an Award expires, is surrendered pursuant to an
Exchange Program, or is forfeited to or repurchased by the Company, the
forfeited or repurchased Shares which were subject thereto will become available
for future grant or sale under the Plan (unless the Plan has
terminated).  However, Shares that have actually been issued under the
Plan under any Award will not be returned to the Plan and will not become
available for future distribution under the Plan; provided, however, that if
unvested Shares of Restricted Stock are repurchased by the Company or are
forfeited to the Company, such Shares will become available for future grant
under the Plan.  Shares used to pay the tax and exercise price of an
Award will become available for future grant or sale under the
Plan.  To the extent an Award under the Plan is paid out in cash
rather than Shares, such cash payment will not result in reducing the number of
Shares available for issuance under the Plan.

     

    (c) Share
Reserve.  The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as will be sufficient
to satisfy the requirements of the Plan.

     

    4. Administration of the
Plan.

     

    (a) Procedure.

     

    (i) Multiple Administrative
Bodies.  Different Committees with respect to different groups
of Service Providers may administer the Plan.

     

    (ii) Section 162(m).  To
the extent that the Administrator determines it to be desirable to qualify
Awards granted hereunder as “performance-based compensation” within the meaning
of Section 162(m) of the Code, the Plan will be administered by a Committee
of two or more “outside directors” within the meaning of Section 162(m) of
the Code.

     

    (iii) Rule
16b-3.  To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
will be structured to satisfy the requirements for exemption under Rule
16b-3.

     

    (iv) Other
Administration.  Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will
be constituted to satisfy Applicable Laws.

     

    (b) Powers of the
Administrator.  Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board
to such Committee, the Administrator will have the authority, in its
discretion:

     

    (i) to
determine the Fair Market Value;

     

    (ii) to select
the Service Providers to whom Awards may be granted hereunder;

     

    (iii) to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder;

     

    (iv) to
approve forms of agreement for use under the Plan;

     

    (v) to
institute an Exchange Program;

     

    (vi) to
construe and interpret the terms of the Plan and Awards granted pursuant to the
Plan;

     

    (vii) to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws;

     

    (viii) to modify
or amend each Award (subject to Section 15(c) of the Plan);

     

    (ix) to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;

     

    (x) to allow
a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award pursuant
to such procedures as the Administrator may determine; and

     

    (xi) to make
all other determinations deemed necessary or advisable for administering the
Plan.

     

    (c) Effect of
Administrator’s Decision.  The Administrator’s decisions,
determinations and interpretations will be final and binding on all Participants
and any other holders of Awards.

     

    5. Eligibility.  Restricted
Stock and Restricted Stock Units may be granted to Service
Providers.

     

    6. Restricted
Stock.

     

    (a) Grant of Restricted
Stock.  Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted
Stock to Service Providers in such amounts as the Administrator, in its sole
discretion, will determine.

     

    (b) Restricted Stock
Agreement.  Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of
Shares granted, and such other terms and conditions as the Administrator, in its
sole discretion, will determine.  Notwithstanding the foregoing,
during any Fiscal Year no Participant will receive more than an aggregate of
50,000 Shares of Restricted Stock; provided, however, that in connection with a
Participant’s initial service as an Employee, an Employee may be granted an
aggregate of up to an additional 100,000 Shares of Restricted
Stock.  Unless the Administrator determines otherwise, Shares of
Restricted Stock will be held by the Company as escrow agent until the
restrictions on such Shares have lapsed.

     

    (c) Transferability.  Except
as provided in this Section 6, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

     

    (d) Other
Restrictions.  The Administrator, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate.

     

    (e) Removal of
Restrictions.  Except as otherwise provided in this Section 6,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan will be released from escrow as soon as practicable after the last day of
the Period of Restriction.  Except as otherwise provided in this
Section 6, the Administrator, in its discretion, may accelerate the time at
which any restrictions will lapse or be removed.

     

    (f) Voting
Rights.  During the Period of Restriction, Service Providers
holding Shares of Restricted Stock granted hereunder may not exercise any voting
rights with respect to those Shares, unless the Administrator determines
otherwise.

     

    (g) Dividends and Other
Distributions.  During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will not be entitled to receive any
cash dividends paid with respect to such Shares, unless otherwise the
Administrator determines otherwise.  During the Period of Restriction,
if dividends or distributions are paid in Shares, Service Providers holding
Shares of Restricted Stock will be entitled to such dividends or
distributions.  The Shares received pursuant to any such dividend or
distribution will be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were
issued.

     

    (h) Return of Restricted Stock
to Company.  On the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed will revert to the
Company and again will become available for grant under the Plan.

     

    (i) Section 162(m) Performance
Restrictions.  For purposes of qualifying grants of Restricted
Stock as “performance-based compensation” under Section 162(m) of the Code,
the Administrator (which, for these purposes, will be a Committee established as
set forth in Section 4(a)(ii)), in its discretion, may set restrictions
based upon the achievement of Performance Goals.  The Performance
Goals will be set by the Administrator on or before the Determination
Date.  In granting Restricted Stock which is intended to qualify under
Section 162(m) of the Code, the Administrator will follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).

     

    7. Restricted Stock
Units.

     

    (a) Grant.  Restricted
Stock Units may be granted at any time and from time to time as determined by
the Administrator.  Notwithstanding the foregoing, during any Fiscal
Year no Participant will receive more than an aggregate of 50,000 Restricted
Stock Units; provided, however, that in connection with a Participant’s initial
service as an Employee, an Employee may be granted an aggregate of up to an
additional 100,000 Restricted Stock Units.  After the Administrator
determines that it will grant Restricted Stock Units under the Plan, it will
advise the Participant in writing or electronically of the terms, conditions,
and restrictions related to the grant, including the number of Restricted Stock
Units and the form of payout, which, subject to Section 7(d), may be left
to the discretion of the Administrator.

     

    (b) Vesting Criteria and Other
Terms.  The Administrator will set vesting criteria in its
discretion, which, depending on the extent to which the criteria are met, will
determine the number of Restricted Stock Units that will be paid out to the
Participant.  The Administrator may set vesting criteria based upon
the achievement of Company-wide, business unit, or individual goals (including,
but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.

     

    (c) Earning Restricted Stock
Units.  Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as specified in the Restricted
Stock Unit Award Agreement.  Notwithstanding the foregoing, at any
time after the grant of Restricted Stock Units, the Administrator, in its sole
discretion, may reduce or waive any vesting criteria that must be met to receive
a payout.

     

    (d) Form and Timing of
Payment.  Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) set forth in the Award
Agreement.  The Administrator, in its sole discretion, may pay earned
Restricted Stock Units in cash, Shares, or a combination
thereof.  Shares represented by Restricted Stock Units that are fully
paid in cash again will be available for grant under the Plan.

     

    (e) Cancellation.  On
the date set forth in the Restricted Stock Unit Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.

     

    (f) Section 162(m) Performance
Restrictions.  For purposes of qualifying grants of Restricted
Stock Units as “performance-based compensation” under Section 162(m) of the
Code, the Administrator (which, for these purposes, will be a Committee
established as set forth in Section 4(a)(ii)), in its discretion, may set
restrictions based upon the achievement of Performance Goals.  The
Performance Goals will be set by the Administrator on or before the
Determination Date.  In granting Restricted Stock which is intended to
qualify under Section 162(m) of the Code, the Administrator will follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Award under Section 162(m) of the Code (e.g.,
in determining the Performance Goals).

     

    8. Leaves of
Absence.  Unless the Administrator provides otherwise, vesting
of Awards granted hereunder will be suspended during any unpaid leave of
absence.  A Service Provider will not cease to be an Employee in the
case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, or any Subsidiary.

     

    9. Transferability of
Awards.  Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Participant, only by the
Participant.  If the Administrator makes an Award transferable, such
Award will contain such additional terms and conditions as the Administrator
deems appropriate.

     

    10. Adjustments; Dissolution or
Liquidation; Merger or Change in Control.

     

    (a) Adjustment of Awards and
Authorized Shares.  The terms of an Award and the number of
Shares authorized pursuant to Section 3 for issuance under the Plan and the
numerical Share limits set forth in Sections 6 and 7 shall be subject to
adjustment from time to time, in accordance with the following
provisions:

     

    (i) If at any
time, or from time to time, the Company shall subdivide as a whole (by
reclassification, by a stock split, by the issuance of a distribution on Shares
payable in Shares, or otherwise) the number of Shares then outstanding into a
greater number of Shares, then (i) the maximum number of Shares available
for the Plan as provided in Section 3 and the numerical Share limits set forth
in Sections 6 and 7 shall be increased proportionately, and the kind of shares
or other securities available for the Plan shall be appropriately adjusted,
(ii) the number of Shares (or other kind of shares or securities) that may
be acquired under any Award shall be increased proportionately, and
(iii) the price, if any, for each Share (or other kind of shares or
securities) subject to then outstanding Awards shall be reduced proportionately,
without changing the aggregate purchase price or value as to which outstanding
Awards remain exercisable or subject to restrictions.

     

    (ii) If at any
time, or from time to time, the Company shall consolidate as a whole (by
reclassification, reverse stock split, or otherwise) the number of Shares then
outstanding into a lesser number of Shares, then (i) the maximum number of
Shares available for the Plan as provided in Section 3 and the numerical Share
limits set forth in Sections 6 and 7 shall be decreased proportionately, and the
kind of shares or other securities available for the Plan shall be appropriately
adjusted, (ii) the number of Shares (or other kind of shares or securities)
that may be acquired under any Award shall be decreased proportionately, and
(iii) the price, if any, for each Share (or other kind of shares or
securities) subject to then outstanding Awards shall be increased
proportionately, without changing the aggregate purchase price, if any, or value
as to which outstanding Awards remain exercisable or subject to
restrictions.

     

    (iii) Whenever
the number of Shares subject to outstanding Awards and the price, if any, for
each Share subject to outstanding Awards are required to be adjusted as provided
in this Section 10(a), the Administrator shall promptly prepare a notice setting
forth, in reasonable detail, the event requiring adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the change
in price and the number of Shares, other securities, cash, or property
purchasable subject to each Award after giving effect to the
adjustments.  The Administrator shall promptly give each Participant
such a notice.

     

    (iv) Adjustments
under Sections 10(a)(i) and 10(a)(ii) shall be made by the Administrator, and
its determination as to what adjustments shall be made and the extent thereof
shall be final, binding, and conclusive.  No fractional interest shall
be issued under the Plan on account of any such adjustments.

     

    (v) Except as
set forth in Sections 10(a)(i) and 10(a)(ii), in the event that any dividend or
other distribution (whether in the form of Shares, other securities, or other
property), recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of
the Company, or other change in the corporate structure of the Company affecting
the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, may (in its sole discretion) adjust the number and class of
Shares that may be delivered under the Plan and/or the number, class, and price
of Shares covered by each outstanding Award, and the numerical Share limits set
forth in Sections 6 and 7.

     

    (b) Dissolution or
Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as
soon as practicable prior to the effective date of such proposed
transaction.

     

    (c) Change in
Control.  Upon the occurrence of a Change in Control the
restriction period of any Award of Restricted Stock or Restricted Stock Units
shall immediately be accelerated and the restrictions shall
expire.  If a Change in Control involves a Restructuring or occurs in
connection with a series of related transactions involving a Restructuring and
if such Restructuring is in the form of a Non-Surviving Event and as a part of
such Restructuring Shares, other securities, cash, or property shall be issuable
or deliverable in exchange for Shares, then the Participant shall be entitled to
purchase or receive (in lieu of the Total Shares that the Participant would
otherwise be entitled to purchase or receive), as appropriate for the form of
Award, the number of Shares, other securities, cash, or property to which that
number of Total Shares would have been entitled in connection with such
Restructuring.  Nothing in this Section 10(c) shall impose on
Participant the obligation to exercise any Award immediately before or upon the
Change of Control, or cause Participant to forfeit the right to exercise the
Award during the remainder of the original term of the Award because of a Change
in Control.

     

    (d) Restructuring Without a
Change in Control.  In the event a Restructuring shall occur at
any time while there is any outstanding Award hereunder and that Restructuring
does not occur in connection with a Change in Control or a series of related
transactions involving a Change in Control, then:

     

    (i) the
restriction period of any Award of Restricted Stock or Restricted Stock Units
shall not immediately be accelerated and the restrictions expire merely because
of the occurrence of the Restructuring; and

     

    (ii) at the
option of the Administrator, the Administrator may (but shall not be required
to) cause the Company to take any one or more of the following
actions:

     

    (1) accelerate
in whole or in part the expiration of some or all of the restrictions on any
Restricted Stock Award;

     

    (2) if the
Restructuring is in the form of a Non-Surviving Event, cause the surviving
entity to assume in whole or in part any one or more of the outstanding Awards
upon such terms and provisions as the Administrator deems desirable;
or

     

    (3) redeem in
whole or in part any one or more of the outstanding Awards (whether or not then
exercisable) in consideration of a cash payment, as such payment may be reduced
for tax withholding obligations in an amount equal to the Fair Market Value,
determined as of the date immediately preceding the consummation of the
Restructuring, of the aggregate number of Shares subject to the Award and as to
which the Award is being redeemed.

     

    The
Company shall promptly notify each Participant of any election or action taken
by the Company under this Section 10(d).  In the event of any election
or action taken by the Company pursuant to this Section 10(d) that requires the
amendment or cancellation of any Award Agreement as may be specified in any
notice to the Participant thereof, that Participant shall promptly deliver that
Award Agreement to the Company in order for that amendment or cancellation to be
implemented by the Company and the Administrator.  The failure of the
Participant to deliver any such Award Agreement to the Company as provided in
the preceding sentence shall not in any manner affect the validity or
enforceability of any action taken by the Company and the Administrator under
this Section 10(d), including without limitation any redemption of an Award as
of the consummation of a Restructuring.  Any cash payment to be made
by the Company pursuant to this Section 10(d) in connection with the redemption
of any outstanding Awards shall be paid to the Participant thereof currently
with the delivery to the Company of the Award Agreement evidencing that Award;
provided, however, that any
such redemption shall be effective upon the consummation of the Restructuring
notwithstanding that the payment of the redemption price may occur subsequent to
the consummation.  If all or any portion of an outstanding Award is to
be exercised or accelerated upon or after the consummation of a Restructuring
that does not occur in connection with a Change in Control and is in the form of
a Non-Surviving Event, and as a part of that Restructuring shares of stock,
other securities, cash, or property shall be issuable or deliverable in exchange
for Shares, then the Participant shall thereafter be entitled to purchase or
receive (in lieu of the number of Shares that the Participant would otherwise be
entitled to purchase or receive) the number of Shares, other securities, cash,
or property to which such number of Shares would have been entitled in
connection with the Restructuring and such Award shall be subject to adjustments
that shall be as nearly equivalent as may be practical to the adjustments
provided for in this Section 10.

     

    (e) Notice of
Restructuring.  The Company shall attempt to keep all
Participants informed with respect to any Restructuring or of any potential
Restructuring to the same extent that the Company’s stockholders are informed by
the Company of any such event or potential event.

     

    11. Tax
Withholding

     

    (a) Withholding
Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company will have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

     

    (b) Withholding
Arrangements.  The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation) (a) paying cash, (b) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the amount required to be withheld, (c) delivering to the Company
already-owned Shares having a Fair Market Value equal to the amount required to
be withheld, or (d) selling a sufficient number of Shares otherwise deliverable
to the Participant through such means as the Administrator may determine in its
sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld.  The amount of the withholding requirement
will be deemed to include any amount which the Administrator agrees may be
withheld at the time the election is made, not to exceed the amount determined
by using the maximum federal, state or local marginal income tax rates
applicable to the Participant with respect to the Award on the date that the
amount of tax to be withheld is to be determined.  The Fair Market
Value of the Shares to be withheld or delivered will be determined as of the
date that the taxes are required to be withheld.

     

    12. No Effect on Employment or
Service.  Neither the Plan nor any Award will confer upon a
Participant any right with respect to continuing the Participant’s relationship
as a Service Provider with the Company, nor will they interfere in any way with
the Participant’s right or the Company’s right to terminate such relationship at
any time, with or without cause, to the extent permitted by Applicable
Laws.

     

    13. Date of
Grant.  The date of grant of an Award will be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the
Administrator.  Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

     

    14. Term of
Plan.  Subject to Section 18 of the Plan, the Plan will
become effective upon its adoption by the Board.  It will continue in
effect until the Company’s stockholder meeting in 2015, but in no event beyond
December 31, 2015, unless terminated earlier under Section 15 of the
Plan.

     

    15. Amendment and Termination of
the Plan.

     

    (a) Amendment and
Termination.  The Administrator may at any time amend, alter,
suspend or terminate the Plan.

     

    (b) Stockholder
Approval.  The Company will obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable
Laws.

     

    (c) Effect of Amendment or
Termination.  No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the
Company.  Termination of the Plan will not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

     

    16. Conditions Upon Issuance of
Shares.

     

    (a) Legal
Compliance.  Shares will not be issued pursuant to the exercise
of an Award unless the exercise of such Award and the issuance and delivery of
such Shares will comply with Applicable Laws and will be further subject to the
approval of counsel for the Company with respect to such
compliance.

     

    (b) Investment
Representations.  As a condition to the exercise of an Award,
the Company may require the person exercising such Award to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

     

    17. Inability to Obtain
Authority.  The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, will relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority will not have
been obtained.

     

    18. Stockholder
Approval.  The Plan will be subject to approval by the
stockholders of the Company after the date the Plan is adopted.  Such
stockholder approval will be obtained in the manner and to the degree required
under Applicable Laws.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}]]