Document:

Exhibit 10.14

 

FX ALLIANCE INC.

 

 

2012 INCENTIVE COMPENSATION PLAN

 

 

ARTICLE I
  PURPOSE

 

The purpose of this FX Alliance Inc. 2012 Incentive Compensation Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer Eligible Individuals cash and stock-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders.  The Plan is effective as of the date set forth in Article XV.

 

ARTICLE II
  DEFINITIONS

 

For purposes of the Plan, the following terms shall have the following meanings:

 

2.1                               “Acquisition Event” has the meaning set forth in Section 4.2(d).

 

2.2                               “Affiliate” means each of the following:  (a) any Subsidiary; (b) any Parent; (c) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its Affiliates; (d) any trade or business (including, without limitation, a partnership or limited liability company) which directly or indirectly controls 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) of the Company; and (e) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee; provided that, unless otherwise determined by the Committee, the Common Stock subject to any Award constitutes “service recipient stock” for purposes of Section 409A of the Code or otherwise does not subject the Award to Section 409A of the Code.

 

2.3                               “Award” means any award under the Plan of any Stock Option, Stock Appreciation Right, Restricted Stock, Performance Award, Other Stock-Based Award or Other Cash-Based Award.  All Awards shall be granted by, confirmed by, and subject to the terms of, a written agreement executed by the Company and the Participant.

 

2.4                               “Award Agreement” means the written or electronic agreement setting forth the terms and conditions applicable to an Award.

 

2.5                               “Board” means the Board of Directors of the Company.

 

2.6                               “Cause” means any of the following as determined by the Company: (i) the Participant engages in willful misconduct or gross negligence in the performance of the

 

 

Participant’s duties to the Company; (ii) the Participant fails to perform the Participant’s duties to the Company or to follow the lawful directives of the Board or any executive to which the Participant reports (other than as a result of death or Disability); (iii) the Participant commits any serious or persistent (i.e., willfully repeated after written notice) breach of the terms and conditions of his or her employment; (iv) the Participant engages in gross misconduct or gross negligence in connection with his or her employment; (v) the Participant commits any act of fraud, misappropriation or embezzlement against or in connection with the Company; (vi) the Participant’s conduct brings or is likely to bring him or her or the Company into disrepute; (vii) the Participant is convicted of (or pleads nolo contendere to) an arrestable offence (other than a road traffic offence for which a non-custodial penalty is imposed); or (viii) the Participant’s excessive use of liquor or narcotics, or use of illicit drugs.

 

2.7                               “Change in Control” has the meaning set forth in 11.2.

 

2.8                               “Change in Control Price” has the meaning set forth in Section 11.1.

 

2.9                               “Code” means the Internal Revenue Code of 1986, as amended.  Any reference to any section of the Code shall also be a reference to any successor provision and any treasury regulation promulgated thereunder.

 

2.10                        “Committee” means any committee of the Board duly authorized by the Board to administer the Plan.  If no committee is duly authorized by the Board to administer the Plan, the term “Committee” shall be deemed to refer to the Board for all purposes under the Plan.

 

2.11                        “Common Stock” means the common stock, $0.0001 par value per share, of the Company.

 

2.12                        “Company” means FX Alliance Inc., a Delaware corporation, and its successors by operation of law.

 

2.13                        “Consultant” means any natural person who is an advisor or consultant to the Company or its Affiliates.

 

2.14                        “Disability” means, unless otherwise provided by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination, a permanent and total disability as defined in Section 22(e)(3) of the Code.  Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

 

2.15                        “Effective Date” means the effective date of the Plan as defined in Article XV.

 

2.16                        “Eligible Employees” means each employee of the Company or an Affiliate.

 

2.17                        “Eligible Individual” means any Eligible Employee, Non-Employee Director or Consultant who is designated by the Committee in its discretion as eligible to receive Awards subject to the conditions set forth herein.

 

2

 

2.18                        “Exchange Act” means the Securities Exchange Act of 1934, as amended.  Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

2.19                        “Fair Market Value” means, for purposes of the Plan, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below, the last sales price reported for the Common Stock on the applicable date:  (a) as reported on the principal national securities exchange in the United States on which it is then traded or (b) if the Common Stock is not traded, listed or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market Value in whatever manner it considers appropriate taking into account the requirements of Section 409A of the Code.  For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted.  For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Committee or, if not a day on which the applicable market is open, the next day that it is open.

 

2.20                        “Family Member” means “family member” as defined in Section A.1.(a)(5) of the general instructions of Form S-8.

 

2.21                        “Incentive Stock Option” means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parents (if any) under the Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

 

2.22                        “Non-Employee Director” means a director or a member of the Board of the Company or any Affiliate who is not an active employee of the Company or any Affiliate.

 

2.23                        “Non-Qualified Stock Option” means any Stock Option awarded under the Plan that is not an Incentive Stock Option.

 

2.24                        “Non-Tandem Stock Appreciation Right” shall mean the right to receive an amount in cash and/or stock equal to the difference between (x) the Fair Market Value of a share of Common Stock on the date such right is exercised, and (y) the aggregate exercise price of such right, otherwise than on surrender of a Stock Option.

 

2.25                        “Other Cash-Based Award” means an Award granted pursuant to Section 10.3 of the Plan and payable in cash at such time or times and subject to such terms and conditions as provided by the Committee in the applicable Award Agreement.

 

2.26                        “Other Stock-Based Award” means an Award under Article X of the Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Common Stock, including, without limitation, an Award valued by reference to an Affiliate.

 

2.27                        “Parent” means any parent corporation of the Company within the meaning of Section 424(e) of the Code.

 

3

 

2.28                        “Participant” means an Eligible Individual to whom an Award has been granted pursuant to the Plan.

 

2.29                        “Performance Award” means an Award granted to a Participant pursuant to Article IX hereof contingent upon achieving certain Performance Goals.

 

2.30                        “Performance Goals” means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable based on one or more of the performance goals set forth in Exhibit A hereto.

 

2.31                        “Performance Period” means the period designated during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.

 

2.32                        “Plan” means this 2012 Incentive Compensation Plan, as amended from time to time.

 

2.33                        “Reference Stock Option” has the meaning set forth in Section 7.1.

 

2.34                        “Registration Date” means the date on which the Company sells its Common Stock in a bona fide, firm commitment underwriting pursuant to a registration statement under the Securities Act.

 

2.35                        “Restricted Stock” means an Award of shares of Common Stock under the Plan that is subject to restrictions under Article VIII.

 

2.36                        “Restriction Period” has the meaning set forth in Section 8.3(a) with respect to Restricted Stock.

 

2.37                        “Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.

 

2.38                        “Section 162(m) of the Code” means the exception for performance-based compensation under Section 162(m) of the Code and any applicable treasury regulations thereunder.

 

2.39                        “Section 409A of the Code” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable treasury regulations and other official guidance thereunder.

 

2.40                        “Securities Act” means the Securities Act of 1933, as amended and all rules and regulations promulgated thereunder.  Reference to a specific section of the Securities Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

2.41                        “Stock Appreciation Right” shall mean the right pursuant to an Award granted under Article VII.

 

4

 

2.42                        “Stock Option” or “Option” means any option to purchase shares of Common Stock granted to Eligible Individuals pursuant to Article VI.

 

2.43                        “Subsidiary” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.

 

2.44                        “Tandem Stock Appreciation Right” shall mean the right to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount in cash and/or stock equal to the difference between (i) the Fair Market Value on the date such Stock Option (or such portion thereof) is surrendered, of the Common Stock covered by such Stock Option (or such portion thereof), and (ii) the aggregate exercise price of such Stock Option (or such portion thereof).

 

2.45                        “Ten Percent Stockholder” means a person owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent.

 

2.46                        “Termination” means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.

 

2.47                        “Termination of Consultancy” means:  (a) that the Consultant is no longer acting as a consultant to the Company or an Affiliate; or (b) when an entity which is retaining a Participant as a Consultant ceases to be an Affiliate unless the Participant otherwise is, or thereupon becomes, a Consultant to the Company or another Affiliate at the time the entity ceases to be an Affiliate.  In the event that a Consultant becomes an Eligible Employee or a Non-Employee Director upon the termination of such Consultant’s consultancy, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant, an Eligible Employee or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may otherwise define Termination of Consultancy in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Consultancy thereafter, provided that any such change to the definition of the term “Termination of Consultancy” does not subject the applicable Award to Section 409A of the Code.

 

2.48                        “Termination of Directorship” means that the Non-Employee Director has ceased to be a director of the Company; except that if a Non-Employee Director becomes an Eligible Employee or a Consultant upon the termination of such Non-Employee Director’s directorship, such Non-Employee Director’s ceasing to be a director of the Company shall not be treated as a Termination of Directorship unless and until the Participant has a Termination of Employment or Termination of Consultancy, as the case may be.

 

2.49                        “Termination of Employment” means:  (a) a termination of employment (for reasons other than a military or personal leave of absence granted by the Company) of a Participant from the Company and its Affiliates; or (b) when an entity which is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate at the time the entity ceases to be an Affiliate.  In the event that an Eligible Employee becomes a Consultant or a Non-Employee Director upon the termination of such Eligible Employee’s employment, no Termination of Employment shall be

 

5

 

deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee, a Consultant or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may otherwise define Termination of Employment in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter, provided that any such change to the definition of the term “Termination of Employment” does not subject the applicable Award to Section 409A of the Code.

 

2.50                        “Transfer” means:  (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in any entity), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in any entity) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law).  “Transferred” and “Transferable” shall have a correlative meaning.

 

2.51                        “Transition Period” means the period beginning with the Registration Date and ending as of the earlier of:  (i) the date of the first annual meeting of stockholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Registration Date occurs; and (ii) the expiration of the “reliance period” under Treasury Regulation Section 1.162-27(f)(2).

 

ARTICLE III
  ADMINISTRATION

 

3.1                               The Committee.  The Plan shall be administered and interpreted by the Committee.  To the extent required by applicable law, rule or regulation, it is intended that each member of the Committee shall qualify as (a) a “non-employee director” under Rule 16b-3, (b) an “outside director” under Section 162(m) of the Code and (c) an “independent director” under the rules of any national securities exchange or national securities association, as applicable.  If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify.

 

3.2                               Grants of Awards.  The Committee shall have full authority to grant, pursuant to the terms of the Plan, to Eligible Individuals:  (i) Stock Options; (ii) Stock Appreciation Rights; (iii) Restricted Stock; (iv) Performance Awards; (v) Other Stock-Based Awards; and (vi) Other Cash-Based Awards.  In particular, the Committee shall have the authority:

 

(a)          to select the Eligible Individuals to whom Awards may from time to time be granted hereunder;

 

(b)         to determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Individuals;

 

(c)          to determine the number of shares of Common Stock to be covered by each Award granted hereunder;

 

6

 

(d)         to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the shares of Common Stock relating thereto, based on such factors, if any, as the Committee shall determine);

 

(e)          to determine the amount of cash to be covered by each Award granted hereunder;

 

(f)            to determine whether, to what extent and under what circumstances grants of Options and other Awards under the Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company outside of the Plan;

 

(g)         to determine whether and under what circumstances a Stock Option may be settled in cash, Common Stock and/or Restricted Stock under Section 6.4(d);

 

(h)         to determine whether a Stock Option is an Incentive Stock Option or Non-Qualified Stock Option;

 

(i)             to determine whether to require a Participant, as a condition of the granting of any Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of an Award for a period of time as determined by the Committee following the date of the acquisition or exercise of such Award;

 

(j)             to modify, extend or renew an Award, subject to Article XII and Section 6.4(l), provided, however, that such action does not subject the Award to Section 409A of the Code without the consent of the Participant; and

 

(k)          solely to the extent permitted by applicable law, to determine whether, to what extent and under what circumstances to provide loans (which may be on a recourse basis and shall bear interest at the rate the Committee shall provide) to Participants in order to exercise Options under the Plan.

 

3.3                               Guidelines.  Subject to Article XII hereof, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of the Plan.  The Committee may adopt special guidelines and provisions for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with applicable tax and securities laws of such domestic or foreign jurisdictions.  Notwithstanding the foregoing, no action of the Committee under this Section 3.3 shall impair the rights of any Participant without the Participant’s consent.  To the extent applicable, the Plan is intended to comply with the applicable requirements of Rule 16b-3, and with respect to Awards intended to be “performance-

 

7

 

based,” the applicable provisions of Section 162(m) of the Code, and the Plan shall be limited, construed and interpreted in a manner so as to comply therewith.

 

3.4                               Decisions Final.  Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company, the Board or the Committee (or any of its members) arising out of or in connection with the Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.

 

3.5                               Procedures.  If the Committee is appointed, the Board shall designate one of the members of the Committee as chairman and the Committee shall hold meetings, subject to the By-Laws of the Company, at such times and places as it shall deem advisable, including, without limitation, by telephone conference or by written consent to the extent permitted by applicable law.  A majority of the Committee members shall constitute a quorum.  All determinations of the Committee shall be made by a majority of its members.  Any decision or determination reduced to writing and signed by all of the Committee members in accordance with the By-Laws of the Company, shall be fully effective as if it had been made by a vote at a meeting duly called and held.  The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

 

3.6                               Designation of Consultants/Liability.

 

(a)          The Committee may designate employees of the Company and professional advisors to assist the Committee in the administration of the Plan and (to the extent permitted by applicable law and applicable exchange rules) may grant authority to officers to grant Awards and/or execute agreements or other documents on behalf of the Committee.  In the event of any designation of authority hereunder, subject to applicable law, applicable stock exchange rules and any limitations imposed by the Committee in connection with such designation, such designee or designees shall have the power and authority to take such actions, exercise such powers and make such determinations that are otherwise specifically designated to the Committee hereunder.

 

(b)         The Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent.  Expenses incurred by the Committee or the Board in the engagement of any such counsel, consultant or agent shall be paid by the Company.  The Committee, its members and any person designated pursuant to sub-section (a) above shall not be liable for any action or determination made in good faith with respect to the Plan.  To the maximum extent permitted by applicable law, no officer of the Company or member or former member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.

 

3.7                               Indemnification.  To the maximum extent permitted by applicable law and the Certificate of Incorporation and By-Laws of the Company and to the extent not covered by insurance directly insuring such person, each officer or employee of the Company or any Affiliate and member or former member of the Committee or the Board shall be indemnified and held

 

8

 

harmless by the Company against any cost or expense (including reasonable fees of counsel reasonably acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of the Plan, except to the extent arising out of such officer’s, employee’s, member’s or former member’s own fraud or bad faith.  Such indemnification shall be in addition to any right of indemnification the employees, officers, directors or members or former officers, directors or members may have under applicable law or under the Certificate of Incorporation or By-Laws of the Company or any Affiliate.  Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual with regard to Awards granted to such individual under the Plan.

 

ARTICLE IV
  SHARE LIMITATION

 

4.1                               Shares.  (a) The aggregate number of shares of Common Stock that may be issued or used for reference purposes or with respect to which Awards may be granted under the Plan shall not exceed 5 million  shares (subject to any increase or decrease pursuant to Section 4.2), which may be either authorized and unissued Common Stock or Common Stock held in or acquired for the treasury of the Company or both.  The maximum number of shares of Common Stock with respect to which Incentive Stock Options may be granted under the Plan shall be 5 million shares.  With respect to Stock Appreciation Rights settled in Common Stock, upon settlement, only the number of shares of Common Stock delivered to a Participant (based on the difference between the Fair Market Value of the shares of Common Stock subject to such Stock Appreciation Right on the date such Stock Appreciation Right is exercised and the exercise price of each Stock Appreciation Right on the date such Stock Appreciation Right was awarded) shall count against the aggregate and individual share limitations set forth under Sections 4.1(a) and 4.1(b).  If any Option, Stock Appreciation Right or Other Stock-Based Awards granted under the Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of shares of Common Stock underlying any unexercised Award shall again be available for the purpose of Awards under the Plan.  If any shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock awarded under the Plan to a Participant are forfeited for any reason, the number of forfeited shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock shall again be available for purposes of Awards under the Plan.  If a Tandem Stock Appreciation Right or a Limited Stock Appreciation Right is granted in tandem with an Option, such grant shall only apply once against the maximum number of shares of Common Stock which may be issued under the Plan.  Any Award under the Plan settled in cash shall not be counted against the foregoing maximum share limitations.

 

(b)         Individual Participant Limitations.  To the extent required by Section 162(m) of the Code for Awards under the Plan to qualify as “performance-based compensation,” the following individual Participant limitations shall only apply after the expiration of the Transition Period:

 

(i)                                     The maximum number of shares of Common Stock subject to any Award of Stock Options, or Stock Appreciation Rights, or shares of Restricted Stock, or Other

 

9

 

Stock-Based Awards for which the grant of such Award or the lapse of the relevant Restriction Period is subject to the attainment of Performance Goals in accordance with Section 8.3(a)(ii) which may be granted under the Plan during any fiscal year of the Company to any Participant shall be 500,000 shares per type of Award (which shall be subject to any further increase or decrease pursuant to Section 4.2), provided that the maximum number of shares of Common Stock for all types of Awards does not exceed 500,000 shares (which shall be subject to any further increase or decrease pursuant to Section 4.2) during any fiscal year of the Company.  If a Tandem Stock Appreciation Right is granted or a Limited Stock Appreciation Right is granted in tandem with a Stock Option, it shall apply against the Participant’s individual share limitations for both Stock Appreciation Rights and Stock Options.

 

(ii)                                  There are no annual individual share limitations applicable to Participants on Restricted Stock or Other Stock-Based Awards for which the grant, vesting or payment (as applicable) of any such Award is not subject to the attainment of Performance Goals.

 

(iii)                               The maximum number of shares of Common Stock subject to any Performance Award which may be granted under the Plan during any fiscal year of the Company to any Participant shall be 500,000 shares (which shall be subject to any further increase or decrease pursuant to Section 4.2) with respect to any fiscal year of the Company.

 

(iv)                              The maximum value of a cash payment made under a Performance Award which may be granted under the Plan with respect to any fiscal year of the Company to any Participant shall be $3 million.

 

(v)                                 The individual Participant limitations set forth in this Section 4.1(b) (other than Section 4.1(b)(iii)) shall be cumulative; that is, to the extent that shares of Common Stock for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by an Award to such Participant in a fiscal year, the number of shares of Common Stock available for Awards to such Participant shall automatically increase in the subsequent fiscal years during the term of the Plan until used.

 

4.2                               Changes.

 

(a)          The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any Affiliate, (iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of all or part of the assets or business of the Company or any Affiliate or (vi) any other corporate act or proceeding.

 

(b)         Subject to the provisions of Section 4.2(d), if there shall occur any such change in the capital structure of the Company by reason of any stock split, reverse stock split, stock dividend, extraordinary dividend (whether cash or stock), subdivision, combination or reclassification of shares that may be issued under the Plan, any recapitalization, any merger, any consolidation, any spin off, any reorganization or any partial or complete liquidation, or any other

 

10

 

corporate transaction or event having an effect similar to any of the foregoing (a “Section 4.2 Event”), then (i) the aggregate number and/or kind of shares that thereafter may be issued under the Plan, (ii) the number and/or kind of shares or other property (including cash) to be issued upon exercise of an outstanding Award granted under the Plan, and/or (iii) the purchase price thereof, shall be appropriately adjusted.  In addition, subject to Section 4.2(d), if there shall occur any change in the capital structure or the business of the Company that is not a Section 4.2 Event (an “Other Extraordinary Event”), including by reason of any conversion, any adjustment, any issuance of any class of securities convertible or exercisable into, or exercisable for, any class of stock, or any sale or transfer of all or substantially all of the Company’s assets or business, then the Committee, in its sole discretion, may adjust any Award and make such other adjustments to the Plan.  Any adjustment pursuant to this Section 4.2 shall be consistent with the applicable Section 4.2 Event or the applicable Other Extraordinary Event, as the case may be, and in such manner as the Committee may, in its sole discretion, deem appropriate and equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants under the Plan.  Any such adjustment determined by the Committee shall be final, binding and conclusive on the Company and all Participants and their respective heirs, executors, administrators, successors and permitted assigns.  Except as expressly provided in this Section 4.2 or in the applicable Award Agreement, a Participant shall have no rights by reason of any Section 4.2 Event or any Other Extraordinary Event.

 

(c)          Fractional shares of Common Stock resulting from any adjustment in Awards pursuant to Section 4.2(a) or 4.2(b) shall be aggregated until, and eliminated at, the time of exercise by rounding-down for fractions less than one-half and rounding-up for fractions equal to or greater than one-half.  No cash settlements shall be made with respect to fractional shares eliminated by rounding.  Notice of any adjustment shall be given by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.

 

(d)         In the event of a merger or consolidation in which the Company is not the surviving entity or in the event of any transaction that results in the acquisition of substantially all of the Company’s outstanding Common Stock by a single person or entity or by a group of persons and/or entities acting in concert, or in the event of the sale or transfer of all or substantially all of the Company’s assets (all of the foregoing being referred to as an “Acquisition Event”), then the Committee may, in its sole discretion, terminate all outstanding and unexercised Stock Options, Stock Appreciation Rights, or any Other Stock-Based Award that provides for a Participant elected exercise, effective as of the date of the Acquisition Event, by (i) cashing-out such Awards upon the date of consummation of the Acquisition Event, or (ii) delivering notice of termination to each Participant at least 20 days prior to the date of consummation of the Acquisition Event, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Acquisition Event, each such Participant shall have the right to exercise in full all of such Participant’s Awards that are then outstanding (without regard to any limitations on exercisability otherwise contained in the Award Agreements), but any such exercise shall be contingent on the occurrence of the Acquisition Event, and, provided that, if the Acquisition Event does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise pursuant thereto shall be null and void.

 

11

 

If an Acquisition Event occurs but the Committee does not terminate the outstanding Awards pursuant to this Section 4.2(d), then the provisions of Section 4.2(b) and Article XI shall apply.

 

4.3                               Minimum Purchase Price.  Notwithstanding any provision of the Plan to the contrary, if authorized but previously unissued shares of Common Stock are issued under the Plan, such shares shall not be issued for a consideration that is less than as permitted under applicable law.

 

ARTICLE V
  ELIGIBILITY

 

5.1                               General Eligibility.  All current and prospective Eligible Individuals are eligible to be granted Awards.  Eligibility for the grant of Awards and actual participation in the Plan shall be determined by the Committee.

 

5.2                               Incentive Stock Options.  Notwithstanding the foregoing, only Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock Options under the Plan.  Eligibility for the grant of an Incentive Stock Option and actual participation in the Plan shall be determined by the Committee.

 

5.3                               General Requirement.  The vesting and exercise of Awards granted to a prospective Eligible Individual are conditioned upon such individual actually becoming an Eligible Employee, Consultant or Non-Employee Director, respectively.

 

ARTICLE VI
  STOCK OPTIONS

 

6.1                               Options.  Stock Options may be granted alone or in addition to other Awards granted under the Plan.  Each Stock Option granted under the Plan shall be of one of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option.

 

6.2                               Grants.  The Committee shall have the authority to grant to any Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock Options.  The Committee shall have the authority to grant any Consultant or Non-Employee Director one or more Non-Qualified Stock Options.  To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof which does not so qualify shall constitute a separate Non-Qualified Stock Option.

 

6.3                               Incentive Stock Options.  Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of the Participants affected, to disqualify any Incentive Stock Option under such Section 422.

 

12

 

6.4                               Terms of Options.  Options granted under the Plan shall be subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:

 

(a)          Exercise Price.  The exercise price per share of Common Stock subject to a Stock Option shall be provided by the Committee in the applicable Award Agreement at the time of grant, provided that the per share exercise price of a Stock Option shall not be less than 100% (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110%) of the Fair Market Value of the Common Stock at the time of grant.

 

(b)         Stock Option Term.  The term of each Stock Option shall be fixed by the Committee, provided that no Stock Option shall be exercisable more than 10 years after the date the Option is granted; and provided further that the term of an Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed five years.

 

(c)          Exercisability.  Unless otherwise provided by the Committee in accordance with the provisions of this Section 6.4, Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be provided by the Committee in the applicable Award Agreement at the time of grant.  If the Committee provides, in its discretion, that any Stock Option is exercisable subject to certain limitations (including, without limitation, that such Stock Option is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after the time of grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such Stock Option may be exercised), based on such factors, if any, as the Committee shall determine.

 

(d)         Method of Exercise.  Subject to whatever installment exercise and waiting period provisions apply under Section 6.4(c), to the extent vested, Stock Options may be exercised in whole or in part at any time during the Option term, by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased.  Such notice shall be accompanied by payment in full of the purchase price as follows:  (i) in cash or by check, bank draft or money order payable to the order of the Company; (ii) solely to the extent permitted by applicable law, if the Common Stock is traded on a national securities exchange, and the Committee authorizes, through a procedure whereby the Participant delivers irrevocable instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to the purchase price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, having the Company withhold shares of Common Stock issuable upon exercise of the Stock Option, or by payment in full or in part in the form of Common Stock owned by the Participant, based on the Fair Market Value of the Common Stock on the payment date as determined by the Committee).  No shares of Common Stock shall be issued until payment therefor, as provided herein, has been made or provided for.

 

(e)          Non-Transferability of Options.  No Stock Option shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Participant’s lifetime, only by the Participant.  Notwithstanding the foregoing, the Committee may provide in the applicable Award Agreement at the time of grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant to this

 

13

 

Section is Transferable to a Family Member in whole or in part and in such circumstances, and under such conditions, as specified by the Committee.  A Non-Qualified Stock Option that is Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently Transferred other than by will or by the laws of descent and distribution and (ii) remains subject to the terms of the Plan and the applicable Award Agreement.  Any shares of Common Stock acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a Non-Qualified Stock Option or a permissible transferee pursuant to a Transfer after the exercise of the Non-Qualified Stock Option shall be subject to the terms of the Plan and the applicable Award Agreement.

 

(f)            Termination by Death and Disability.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by reason of death or Disability, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of one year from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options; provided, however, that, following a termination by reason of Disability, if the Participant dies within such exercise period, all unexercised Stock Options held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one year from the date of such death, but in no event beyond the expiration of the stated term of such Stock Options.

 

(g)         Involuntary Termination Without Cause.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by involuntary termination by the Company without Cause, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of 90 days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.

 

(h)         Voluntary Termination.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is voluntary (other than a voluntary termination described in Section 6.4(i)(y) hereof), all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of 90 days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.

 

(i)             Termination for Cause.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as provided in Section 6.4(h)) after the occurrence of an event that would be grounds for a Termination for Cause, all Stock Options, whether vested or not vested, that are held by such Participant shall thereupon terminate and expire as of the date of such Termination.

 

(j)             Unvested Stock Options.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, or if no rights of the Participant are reduced,

 

14

 

thereafter, Stock Options that are not vested as of the date of a Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.

 

(k)          Incentive Stock Option Limitations.  To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under the Plan and/or any other stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.  Should any provision of the Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.

 

(l)             Form, Modification, Extension and Renewal of Stock Options.  Subject to the terms and conditions and within the limitations of the Plan, Stock Options shall be evidenced by such form of agreement or grant as is approved by the Committee, and the Committee may (i) modify, extend or renew outstanding Stock Options granted under the Plan (provided that the rights of a Participant are not reduced without such Participant’s consent and provided further that such action does not subject the Stock Options to Section 409A of the Code without the consent of the Participant), and (ii) accept the surrender of outstanding Stock Options (to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution therefor (to the extent not theretofore exercised).

 

(m)       Deferred Delivery of Common Shares.  The Committee may in its discretion permit Participants to defer delivery of Common Stock acquired pursuant to a Participant’s exercise of an Option in accordance with the terms and conditions established by the Committee in the applicable Award Agreement, which shall be intended to comply with the requirements of Section 409A of the Code.

 

(n)         Early Exercise.  The Committee may provide that a Stock Option include a provision whereby the Participant may elect at any time before the Participant’s Termination to exercise the Stock Option as to any part or all of the shares of Common Stock subject to the Stock Option prior to the full vesting of the Stock Option and such shares shall be subject to the provisions of Article VIII and be treated as Restricted Stock.  Unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Committee determines to be appropriate.

 

(o)         Other Terms and Conditions.  The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Non-Qualified Stock Option on a cashless basis on the last day of the term of such Option if the Participant has failed to exercise the Non-Qualified Stock Option as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Non-Qualified Stock Option exceeds the exercise price of such Non-Qualified Stock Option on the date of expiration of such Option, subject to Section 14.4.  Stock Options may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.

 

15

 

ARTICLE VII
  STOCK APPRECIATION RIGHTS

 

7.1                               Tandem Stock Appreciation Rights.  Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option (a “Reference Stock Option”) granted under the Plan (“Tandem Stock Appreciation Rights”).  In the case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of the grant of such Reference Stock Option.  In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Reference Stock Option.

 

7.2                               Terms and Conditions of Tandem Stock Appreciation Rights.  Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be provided by the Committee in the applicable Award Agreement at the time of grant, and the following:

 

(a)          Exercise Price.  The exercise price per share of Common Stock subject to a Tandem Stock Appreciation Right shall be provided by the Committee in the applicable Award Agreement at the time of grant, provided that the per share exercise price of a Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.

 

(b)         Term.  A Tandem Stock Appreciation Right or applicable portion thereof granted with respect to a Reference Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the Reference Stock Option, except that, unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, a Tandem Stock Appreciation Right granted with respect to less than the full number of shares covered by the Reference Stock Option shall not be reduced until, and then only to the extent that the exercise or termination of the Reference Stock Option causes, the number of shares covered by the Tandem Stock Appreciation Right to exceed the number of shares remaining available and unexercised under the Reference Stock Option.

 

(c)          Exercisability.  Tandem Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Reference Stock Options to which they relate shall be exercisable in accordance with the provisions of Article VI, and shall be subject to the provisions of Section 6.4(c).

 

(d)         Method of Exercise.  A Tandem Stock Appreciation Right may be exercised by the Participant by surrendering the applicable portion of the Reference Stock Option.  Upon such exercise and surrender, the Participant shall be entitled to receive an amount determined in the manner prescribed in this Section 7.2.  Stock Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent that the related Tandem Stock Appreciation Rights have been exercised.

 

(e)          Payment.  Upon the exercise of a Tandem Stock Appreciation Right, a Participant shall be entitled to receive up to, but no more than, an amount in cash and/or Common Stock (as chosen by the Committee) equal in value to the excess of the Fair Market Value of one share of Common Stock over the Option exercise price per share specified in the Reference Stock

 

16

 

Option agreement multiplied by the number of shares of Common Stock in respect of which the Tandem Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment.

 

(f)            Deemed Exercise of Reference Stock Option.  Upon the exercise of a Tandem Stock Appreciation Right, the Reference Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Article IV of the Plan on the number of shares of Common Stock to be issued under the Plan.

 

(g)         Non-Transferability. Tandem Stock Appreciation Rights shall be Transferable only when and to the extent that the underlying Stock Option would be Transferable under Section 6.4(e) of the Plan.

 

7.3                               Non-Tandem Stock Appreciation Rights.  Non-Tandem Stock Appreciation Rights may also be granted without reference to any Stock Options granted under the Plan.

 

7.4                               Terms and Conditions of Non-Tandem Stock Appreciation Rights.  Non-Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be provided by the Committee in the applicable Award Agreement at the time of grant, and the following:

 

(a)          Exercise Price.  The exercise price per share of Common Stock subject to a Non-Tandem Stock Appreciation Right shall be provided by the Committee in the applicable Award Agreement at the time of grant, provided that the per share exercise price of a Non-Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.

 

(b)         Term.  The term of each Non-Tandem Stock Appreciation Right shall be fixed by the Committee, but shall not be greater than 10 years after the date the right is granted.

 

(c)          Exercisability.  In accordance with the provisions of this Section 7.4, Non-Tandem Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be provided by the Committee in the applicable Award Agreement at the time of grant.  If the Committee provides, in its discretion, that any such right is exercisable subject to certain limitations (including, without limitation, that it is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such right may be exercised), based on such factors, if any, as the Committee shall determine.

 

(d)         Method of Exercise.  Subject to whatever installment exercise and waiting period provisions apply under Section 7.4(c), Non-Tandem Stock Appreciation Rights may be exercised in whole or in part at any time in accordance with the applicable Award Agreement, by giving written notice of exercise to the Company specifying the number of Non-Tandem Stock Appreciation Rights to be exercised.

 

17

 

(e)          Payment.  Upon the exercise of a Non-Tandem Stock Appreciation Right a Participant shall be entitled to receive, for each right exercised, up to, but no more than, an amount in cash and/or Common Stock (as chosen by the Committee) equal in value to the excess of the Fair Market Value of one share of Common Stock on the date that the right is exercised over the Fair Market Value of one share of Common Stock on the date that the right was awarded to the Participant.

 

(f)            Termination.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant or, if no rights of the Participant are reduced, thereafter, subject to the provisions of the applicable Award Agreement and the Plan, upon a Participant’s Termination for any reason, Non-Tandem Stock Appreciation Rights will remain exercisable following a Participant’s Termination on the same basis as Stock Options would be exercisable following a Participant’s Termination in accordance with the provisions of Sections 6.4(f) through 6.4(j).

 

(g)         Non-Transferability.  No Non-Tandem Stock Appreciation Rights shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all such rights shall be exercisable, during the Participant’s lifetime, only by the Participant.

 

7.5                               Limited Stock Appreciation Rights.  The Committee may grant Tandem and Non-Tandem Stock Appreciation Rights either as a general Stock Appreciation Right or as a Limited Stock Appreciation Right.  Limited Stock Appreciation Rights may be exercised only upon the occurrence of a Change in Control or such other event as the Committee may designate at the time of grant or thereafter.  Upon the exercise of Limited Stock Appreciation Rights, except as otherwise provided in an Award Agreement, the Participant shall receive in cash and/or Common Stock, an amount equal to the amount (i) set forth in Section 7.2(e) with respect to Tandem Stock Appreciation Rights, or (ii) set forth in Section 7.4(e) with respect to Non-Tandem Stock Appreciation Rights.

 

7.6                               Other Terms and Conditions.  The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Stock Appreciation Right on a cashless basis on the last day of the term of such Stock Appreciation Right if the Participant has failed to exercise the Stock Appreciation Right as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Stock Appreciation Right exceeds the exercise price of such Stock Appreciation Right on the date of expiration of such Stock Appreciation Right, subject to Section 14.4.  Stock Appreciation Rights may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.

 

ARTICLE VIII
  RESTRICTED STOCK

 

8.1                               Awards of Restricted Stock.  Shares of Restricted Stock may be issued either alone or in addition to other Awards granted under the Plan.  The Committee shall determine the Eligible Individuals, to whom, and the time or times at which, grants of Restricted Stock shall be made, the number of shares to be awarded, the price (if any) to be paid by the Participant (subject to Section 8.2), the time or times within which such Awards may be subject to forfeiture, the

 

18

 

vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.

 

The Committee may condition the grant or vesting of Restricted Stock upon the attainment of specified performance targets (including, the Performance Goals) or such other factor as the Committee may determine, including to comply with the requirements of Section 162(m) of the Code.

 

8.2                               Awards and Certificates.  Eligible Individuals selected to receive Restricted Stock shall not have any right with respect to such Award, unless and until such Participant has delivered a fully executed copy of the agreement evidencing the Award to the Company, to the extent required by the Committee, and has otherwise complied with the applicable terms and conditions of such Award.  Further, such Award shall be subject to the following conditions:

 

(a)          Purchase Price.  The purchase price of Restricted Stock shall be fixed by the Committee.  Subject to Section 4.3, the purchase price for shares of Restricted Stock may be zero to the extent permitted by applicable law, and, to the extent not so permitted, such purchase price may not be less than par value.

 

(b)         Acceptance.  Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the grant date, by executing a Restricted Stock agreement and by paying whatever price (if any) the Committee has designated thereunder.

 

(c)          Legend.  Each Participant receiving Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, unless the Committee elects to use another system, such as book entries by the transfer agent, as evidencing ownership of shares of Restricted Stock.  Such certificate shall be registered in the name of such Participant, and shall, in addition to such legends required by applicable securities laws, bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:

 

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the FX Alliance Inc. (the “Company”) 2012 Incentive Compensation Plan (the “Plan”) and an Agreement entered into between the registered owner and the Company dated                     .  Copies of such Plan and Agreement are on file at the principal office of the Company.”

 

(d)         Custody.  If stock certificates are issued in respect of shares of Restricted Stock, the Committee may require that any stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the Company, which would permit

 

19

 

transfer to the Company of all or a portion of the shares subject to the Restricted Stock Award in the event that such Award is forfeited in whole or part.

 

8.3                               Restrictions and Conditions.  The shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:

 

(a)          Restriction Period.  (i) The Participant shall not be permitted to Transfer shares of Restricted Stock awarded under the Plan during the period or periods set by the Committee (the “Restriction Period”) commencing on the date of such Award, as set forth in the Restricted Stock Award Agreement and such agreement shall set forth a vesting schedule and any event that would accelerate vesting of the shares of Restricted Stock.  Within these limits, based on service, attainment of Performance Goals pursuant to Section 8.3(a)(ii) and/or such other factors or criteria as the Committee may determine, the Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of all or any part of any Restricted Stock Award and/or waive the deferral limitations for all or any part of any Restricted Stock Award.

 

(ii)                                  If the grant of shares of Restricted Stock or the lapse of restrictions is based on the attainment of Performance Goals, the Committee shall establish the objective Performance Goals and the applicable vesting percentage of the Restricted Stock applicable to each Participant or class of Participants in writing prior to the beginning of the applicable fiscal year or at such later date as otherwise determined by the Committee and while the outcome of the Performance Goals are substantially uncertain.  Such Performance Goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.  With regard to a Restricted Stock Award that is intended to comply with Section 162(m) of the Code, to the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect.

 

(b)         Rights as a Stockholder.  Except as provided in Section 8.3(a) and this Section 8.3(b) or as otherwise provided by the Committee in the applicable Award Agreement at the time of grant, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of shares of Common Stock of the Company, including, without limitation, the right to receive dividends, the right to vote such shares and, subject to and conditioned upon the full vesting of shares of Restricted Stock, the right to tender such shares.  The Committee may provide in the applicable Award Agreement at the time of grant that the payment of dividends shall be deferred until, and conditioned upon, the expiration of the applicable Restriction Period.

 

(c)          Termination.  Unless otherwise provided by the Committee in the applicable Award Agreement at grant or, if no rights of the Participant are reduced, thereafter, subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the relevant Restriction Period, all Restricted Stock still subject to restriction will be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.

 

20

 

(d)         Lapse of Restrictions.  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates for such shares shall be delivered to the Participant.  All legends shall be removed from said certificates at the time of delivery to the Participant, except as otherwise required by applicable law or other limitations imposed by the Committee.

 

ARTICLE IX
  PERFORMANCE AWARDS

 

9.1                               Performance Awards.  The Committee may grant a Performance Award to a Participant payable upon the attainment of specific Performance Goals.  The Committee may grant Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, as well as Performance Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code.  If the Performance Award is payable in shares of Restricted Stock, such shares shall be transferable to the Participant only upon attainment of the relevant Performance Goal in accordance with Article VIII.  If the Performance Award is payable in cash, it may be paid upon the attainment of the relevant Performance Goals either in cash or in shares of Restricted Stock (based on the then current Fair Market Value of such shares), as provided by the Committee in the applicable Award Agreement at the time of grant.  Each Performance Award shall be evidenced by an Award Agreement in such form that is not inconsistent with the Plan and that the Committee may from time to time approve.

 

With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall condition the right to payment of any Performance Award upon the attainment of objective Performance Goals established pursuant to Section 9.2(c).

 

9.2                               Terms and Conditions.  Performance Awards awarded pursuant to this Article IX shall be subject to the following terms and conditions:

 

(a)          Earning of Performance Award.  At the expiration of the applicable Performance Period, the Committee shall determine the extent to which the Performance Goals established pursuant to Section 9.2(c) are achieved and the percentage of each Performance Award that has been earned.

 

(b)         Non-Transferability.  Subject to the applicable provisions of the Award Agreement and the Plan, Performance Awards may not be Transferred during the Performance Period.

 

(c)          Objective Performance Goals, Formulae or Standards.  With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the earning of Performance Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain.  Such Performance Goals may incorporate, if and

 

21

 

only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.  To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

(d)         Dividends.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, amounts equal to dividends declared during the Performance Period with respect to the number of shares of Common Stock covered by a Performance Award will not be paid to the Participant.

 

(e)          Payment.  Following the Committee’s determination in accordance with Section 9.2(a), the Company shall settle Performance Awards, in such form (including, without limitation, in shares of Common Stock or in cash) as determined by the Committee, in an amount equal to such Participant’s earned Performance Awards.  With respect to any Award that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall be precluded from having discretion to increase the amount of compensation payable under the terms of such Award.

 

(f)            Termination.  Subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the Performance Period for a given Performance Award, the Performance Award in question will vest or be forfeited in accordance with the terms and conditions established by the Committee at grant.

 

(g)         Accelerated Vesting.  Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Performance Award.

 

ARTICLE X
  OTHER STOCK-BASED AND CASH-BASED AWARDS

 

10.1                        Other Stock-Based Awards.  The Committee is authorized to grant to Eligible Individuals Other Stock-Based Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, including but not limited to, shares of Common Stock awarded purely as a bonus and not subject to restrictions or conditions, shares of Common Stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate, stock equivalent units, restricted stock units, and Awards valued by reference to book value of shares of Common Stock.  Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under the Plan.

 

Subject to the provisions of the Plan, the Committee shall have authority to determine the Eligible Individuals, to whom, and the time or times at which, such Awards shall be made, the number of shares of Common Stock to be awarded pursuant to such Awards, and all other

 

22

 

conditions of the Awards.  The Committee may also provide for the grant of Common Stock under such Awards upon the completion of a specified Performance Period.

 

The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified Performance Goals as the Committee may determine; provided that to the extent that such Other Stock-Based Awards are intended to comply with Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the grant or vesting of such Other Stock-Based Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain.  Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.  To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

10.2                        Terms and Conditions.  Other Stock-Based Awards made pursuant to this Article X shall be subject to the following terms and conditions:

 

(a)          Non-Transferability.  Subject to the applicable provisions of the Award Agreement and the Plan, shares of Common Stock subject to Awards made under this Article X may not be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.

 

(b)         Dividends.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant, subject to the provisions of the Award Agreement and the Plan, the recipient of an Award under this Article X shall not be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents in respect of the number of shares of Common Stock covered by the Award.

 

(c)          Vesting.  Any Award under this Article X and any Common Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement.

 

(d)         Price.  Common Stock issued on a bonus basis under this Article X may be issued for no cash consideration.  Common Stock purchased pursuant to a purchase right awarded under this Article X shall be priced, as determined by the Committee.

 

10.3                        Other Cash-Based Awards.  The Committee may from time to time grant Other Cash-Based Awards to Eligible Individuals in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by applicable law.  Other Cash-Based Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such

 

23

 

Awards at any time.  The grant of an Other Cash-Based Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder.

 

ARTICLE XI
 CHANGE IN CONTROL PROVISIONS

 

11.1                        Benefits.  In the event of a Change in Control of the Company (as defined below), and except as otherwise provided by the Committee in an Award Agreement, a Participant’s unvested Award shall not vest automatically and a Participant’s Award shall be treated in accordance with one of the following methods as determined by the Committee:

 

(a)          Awards, whether or not then vested, shall be continued, assumed, have new rights substituted therefor or be treated in accordance with Section 4.2(d) hereof, as determined by the Committee, and restrictions to which shares of Restricted Stock or any other Award granted prior to the Change in Control are subject shall not lapse upon a Change in Control and the Restricted Stock or other Award shall, where appropriate in the sole discretion of the Committee, receive the same distribution as other Common Stock on such terms as determined by the Committee; provided that the Committee may decide to award additional Restricted Stock or other Awards in lieu of any cash distribution.  Notwithstanding anything to the contrary herein, for purposes of Incentive Stock Options, any assumed or substituted Stock Option shall comply with the requirements of Treasury Regulation Section 1.424-1 (and any amendment thereto).

 

(b)         The Committee, in its sole discretion, may provide for the purchase of any Awards by the Company or an Affiliate for an amount of cash equal to the excess of the Change in Control Price (as defined below) of the shares of Common Stock covered by such Awards, over the aggregate exercise price of such Awards.  For purposes of this Section 11.1, “Change in Control Price” shall mean the highest price per share of Common Stock paid in any transaction related to a Change in Control of the Company.

 

(c)          Notwithstanding any other provision herein to the contrary, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.

 

11.2                        Change in Control.  Unless otherwise provided by the Committee in the applicable Award Agreement at the time of grant or other written agreement approved by the Committee, a “Change in Control” shall be deemed to occur if:

 

(a)          any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than TCV VI, L.P., Technology Crossover Management VI, L.L.C. or any other 10% or greater shareholder of FX Alliance Inc. and their respective affiliates (each a “Current Significant Shareholder”), or the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

 

24

 

(b)         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 paragraph (a), (c), or (d) of this definition, or a director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) whose election by the Board or nomination for election by the Company’s stockholders 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 two year 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;

 

(c)          a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), directly or indirectly, more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in paragraph (a) of this definition) acquires more than 50% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of the Company; or

 

(d)         a complete liquidation or dissolution of the Company or the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale.

 

Notwithstanding the foregoing, with respect to any Award that is characterized as “nonqualified deferred compensation” within the meaning of Section 409A of the Code, an event shall not be considered to be a Change in Control under the Plan for purposes of payment of such Award unless such event is also a “change in ownership,” a “change in effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code.

 

11.3                        Initial Public Offering not a Change in Control.  Notwithstanding the foregoing, for purposes of the Plan, the occurrence of the Registration Date or any change in the composition of the Board within one year following the Registration Date shall not be considered a Change in Control.

 

ARTICLE XII
 TERMINATION OR AMENDMENT OF PLAN

 

12.1                        Termination or Amendment.  Notwithstanding any other provision of the Plan, the Board may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan (including any amendment deemed necessary to ensure that the Company

 

25

 

may comply with any regulatory requirement referred to in Article XIV or Section 409A of the Code), or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided herein, the rights of a Participant with respect to Awards granted prior to such amendment, suspension or termination, may not be impaired without the consent of such Participant and, provided further, that without the approval of the holders of the Company’s Common Stock entitled to vote in accordance with applicable law, no amendment may be made that would (i) increase the aggregate number of shares of Common Stock that may be issued under the Plan (except by operation of Section 4.2); (ii) increase the maximum individual Participant limitations for a fiscal year under Section 4.1(b) (except by operation of Section 4.2); (iii) change the classification of individuals eligible to receive Awards under the Plan; (iv) decrease the minimum option price of any Stock Option or Stock Appreciation Right; (v) extend the maximum option period under Section 6.4; (vi) alter the Performance Goals for Restricted Stock, Performance Awards or Other Stock-Based Awards as set forth in Exhibit A hereto; (vii) award any Stock Option or Stock Appreciation Right in replacement of a canceled Stock Option or Stock Appreciation Right with a higher exercise price than the replacement award, or (viii) require stockholder approval in order for the Plan to continue to comply with the applicable provisions of Section 162(m) of the Code or, to the extent applicable to Incentive Stock Options, Section 422 of the Code.  In no event may the Plan be amended without the approval of the stockholders of the Company in accordance with the applicable laws of the State of Delaware  to increase the aggregate number of shares of Common Stock that may be issued under the Plan, decrease the minimum exercise price of any Award, or to make any other amendment that would require stockholder approval under  Financial Industry Regulatory Authority (FINRA) rules and regulations or the rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company.  Notwithstanding anything herein to the contrary, the Board may amend the Plan or any Award Agreement at any time without a Participant’s consent to comply with applicable law including Section 409A of the Code.

 

The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Article IV or as otherwise specifically provided herein, no such amendment or other action by the Committee shall impair the rights of any holder without the holder’s consent.

 

ARTICLE XIII
  UNFUNDED STATUS OF PLAN

 

The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payment as to which a Participant has a fixed and vested interest but which are not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any right that is greater than those of a general unsecured creditor of the Company.

 

ARTICLE XIV
 GENERAL PROVISIONS

 

14.1                        Legend.  The Committee may require each person receiving shares of Common Stock pursuant to a Stock Option or other Award under the Plan to represent to and agree with the

 

26

 

Company in writing that the Participant is acquiring the shares without a view to distribution thereof.  In addition to any legend required by the Plan, the certificates for such shares may include any legend that the Committee deems appropriate to reflect any restrictions on Transfer.  All certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed or any national securities exchange system upon whose system the Common Stock is then quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

14.2                        Other Plans.  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.

 

14.3                        No Right to Employment/Directorship/Consultancy.  Neither the Plan nor the grant of any Option or other Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any Affiliate, nor shall there be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate such employment, consultancy or directorship at any time.

 

14.4                        Withholding of Taxes.  The Company shall have the right to deduct from any payment to be made pursuant to the Plan, or to otherwise require, prior to the issuance or delivery of shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any federal, state or local taxes required by law to be withheld.  Upon the vesting of Restricted Stock (or other Award that is taxable upon vesting), or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding to the Company.  Any statutorily required withholding obligation with regard to any Participant may be satisfied, subject to the consent of the Committee, by reducing the number of shares of Common Stock otherwise deliverable or by delivering shares of Common Stock already owned.  Any fraction of a share of Common Stock required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.

 

14.5                        No Assignment of Benefits.  No Award or other benefit payable under the Plan shall, except as otherwise specifically provided by law or permitted by the Committee, be Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled to such benefit, nor shall it be subject to attachment or legal process for or against such person.

 

14.6                        Listing and Other Conditions.

 

(a)          Unless otherwise determined by the Committee, as long as the Common Stock is listed on a national securities exchange or system sponsored by a national securities association,

 

27

 

the issuance of shares of Common Stock pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system.  The Company shall have no obligation to issue such shares unless and until such shares are so listed, and the right to exercise any Option or other Award with respect to such shares shall be suspended until such listing has been effected.

 

(b)         If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Option or other Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise, with respect to shares of Common Stock or Awards, and the right to exercise any Option or other Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company.

 

(c)          Upon termination of any period of suspension under this Section 14.6, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares which would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.

 

(d)         A Participant shall be required to supply the Company with certificates, representations and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent or approval the Company deems necessary or appropriate.

 

14.7                        Stockholders Agreement and Other Requirements.  Notwithstanding anything herein to the contrary, as a condition to the receipt of shares of Common Stock pursuant to an Award under the Plan, to the extent required by the Committee, the Participant shall execute and deliver a stockholder’s agreement or such other documentation that shall set forth certain restrictions on transferability of the shares of Common Stock acquired upon exercise or purchase, and such other terms as the Board or Committee shall from time to time establish.  Such stockholder’s agreement or other documentation shall apply to the Common Stock acquired under the Plan and covered by such stockholder’s agreement or other documentation.  The Company may require, as a condition of exercise, the Participant to become a party to any other existing stockholder agreement (or other agreement).

 

14.8                        Governing Law.  The Plan and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware  principles of conflict of laws).

 

14.9                        Jurisdiction; Waiver of Jury Trial.  Any suit, action or proceeding with respect to the Plan or any Award Agreement, or any judgment entered by any court of competent jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Delaware  or the United States District Court for the District of Delaware  and the appellate courts having jurisdiction of appeals in such courts.  In that context, and without limiting the generality of the foregoing, the Company and each Participant shall irrevocably and unconditionally (a) submit in

 

28

 

any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement of any judgment in respect thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the State of Delaware, the court of the United States of America for the District of Delaware, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Delaware  State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to the Plan or any Award Agreement, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of a Participant, at the Participant’s address shown in the books and records of the Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Delaware.

 

14.10                 Construction.  Wherever any words are used in the Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.

 

14.11                 Other Benefits.  No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefit under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.

 

14.12                 Costs.  The Company shall bear all expenses associated with administering the Plan, including expenses of issuing Common Stock pursuant to Awards hereunder.

 

14.13                 No Right to Same Benefits.  The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.

 

14.14                 Death/Disability.  The Committee may in its discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award.  The Committee may also require that the agreement of the transferee to be bound by all of the terms and conditions of the Plan.

 

14.15                 Section 16(b) of the Exchange Act.  All elections and transactions under the Plan by persons subject to Section 16 of the Exchange Act involving shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3.  The Committee may establish and adopt written administrative guidelines, designed to facilitate compliance with

 

29

 

Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and operation of the Plan and the transaction of business thereunder.

 

14.16                 Section 409A of the Code.  The Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.  To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto.  Notwithstanding anything herein to the contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null and void.  The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee or the Company and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Company.  Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of such employee’s separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) upon expiration of such delay period.

 

14.17                 Successor and Assigns.  The Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate.

 

14.18                 Severability of Provisions.  If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.

 

14.19                 Payments to Minors, Etc.  Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipt thereof shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.

 

14.20                 Agreement.  As a condition to the grant of an Award, if requested by the Company and the lead underwriter of any public offering of the Common Stock (the “Lead Underwriter”), a Participant shall irrevocably agree not to sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose of, any interest in any Common Stock or any securities convertible into, derivative of, or exchangeable or exercisable for, or any other rights to purchase or acquire Common Stock (except Common Stock included in such public offering or acquired on the public market after such

 

30

 

offering) during such period of time following the effective date of a registration statement of the Company filed under the Securities Act that the Lead Underwriter shall specify (the “Lock-Up Period”).  The Participant shall further agree to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and agree that the Company may impose stop-transfer instructions with respect to Common Stock acquired pursuant to an Award until the end of such Lock-Up Period.

 

14.21                 Headings and Captions.  The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

 

14.22                 Section 162(m) of the Code.  Notwithstanding any other provision of the Plan to the contrary, (i) prior to the Registration Date and during the Transition Period, the provisions of the Plan requiring compliance with Section 162(m) of the Code for Awards intended to qualify as “performance-based compensation” shall only apply to the extent required by Section 162(m) of the Code, and (ii) the provisions of the Plan requiring compliance with Section 162(m) of the Code shall not apply to Awards granted under the Plan that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

14.23                 Post-Transition Period.  Following the Transition Period, any Award granted under the Plan that is intended to be “performance-based compensation” under Section 162(m) of the Code, shall be subject to the approval of the material terms of the Plan by a majority of the stockholders of the Company in accordance with Section 162(m) of the Code and the treasury regulations promulgated thereunder.

 

14.24                 Company Recoupment of Awards.  A Participant’s rights with respect to any Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with a Participant, or (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.

 

ARTICLE XV
 EFFECTIVE DATE OF PLAN

 

The Plan shall become effective on December 7, 2011, which is the date of its adoption by the Board, subject to the approval of the Plan by the stockholders of the Company in accordance with the requirements of the laws of the State of Delaware.

 

ARTICLE XVI
 TERM OF PLAN

 

No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the earlier of the date that the Plan is adopted or the date of stockholder approval, but Awards granted prior to such tenth anniversary may extend beyond that date; provided that no Award (other than a Stock Option or Stock Appreciation Right) that is intended to be “performance-based compensation” under Section 162(m) of the Code shall be granted on or after the fifth anniversary of the stockholder approval of the Plan unless the Performance Goals are re-approved (or other

 

31

 

designated Performance Goals are approved) by the stockholders no later than the first stockholder meeting that occurs in the fifth year following the year in which stockholders approve the Performance Goals.

 

ARTICLE XVII
 NAME OF PLAN

 

The Plan shall be known as the “FX Alliance Inc. 2012 Incentive Compensation Plan.”

 

32

 

EXHIBIT A

 

PERFORMANCE GOALS

 

To the extent permitted under Section 162(m) of the Code, performance goals established for purposes of Awards intended to be “performance-based compensation” under Section 162(m) of the Code, shall be based on the attainment of certain target levels of, or a specified increase or decrease (as applicable) in one or more of the following performance goals:

 

·                  earnings per share;

·                  operating income;

·                  gross income;

·                  net income (before or after taxes);

·                  cash flow;

·                  gross profit;

·                  gross profit return on investment;

·                  gross margin return on investment;

·                  gross margin;

·                  operating margin;

·                  working capital;

·                  earnings before interest and taxes;

·                  earnings before interest, tax, depreciation and amortization;

·                  return on equity;

·                  return on assets;

·                  return on capital;

·                  return on invested capital;

·                  net revenues;

·                  gross revenues;

·                  revenue growth, as to either gross or net revenues;

·                  annual recurring net or gross revenues;

·                  recurring net or gross revenues;

·                  license revenues;

·                  sales or market share;

·                  total shareholder return;

·                  economic value added;

·                  specified objectives with regard to limiting the level of increase in all or a portion of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee;

·                  the fair market value of a share of Common Stock;

·                  the growth in the value of an investment in the Common Stock assuming the reinvestment of dividends;

·                  reduction in operating expenses; or

·                  other objective criteria determined by the Committee.

 

A-1

 

With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, the Committee may, in its sole discretion, also exclude, or adjust to reflect, the impact of an event or occurrence that the Committee determines should be appropriately excluded or adjusted, including:

 

(a)          restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges as described in Accounting Standards Codification 225-20, “Extraordinary and Unusual Items,” and/or management’s discussion and analysis of financial condition and results of operations appearing or incorporated by reference in the Company’s Form 10-K for the applicable year;

 

(b)         an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or

 

(c)          a change in tax law or accounting standards required by generally accepted accounting principles.

 

Performance goals may also be based upon individual participant performance goals, as determined by the Committee.  In addition, Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code may be based on the performance goals set forth herein or on such other performance goals as determined by the Committee in its sole discretion.

 

In addition, such performance goals may be based upon the attainment of specified levels of Company (or subsidiary, division, other operational unit, administrative department or product category of the Company) performance under one or more of the measures described above relative to the performance of other corporations.  With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, but only to the extent permitted under Section 162(m) of the Code (including, without limitation, compliance with any requirements for stockholder approval), the Committee may also:

 

(a)                                  designate additional business criteria on which the performance goals may be based; or

 

(b)                                 adjust, modify or amend the aforementioned business criteria.

 

A-2Exhibit 10.1

 

 

MASTER CONFIRMATION

ACCELERATED SHARE REPURCHASE TRANSACTIONS

 

	
Date:
    	
November 18, 2011
    
	
 
    	
 
    
	
To:
    	
GT Advanced Technologies Inc.
    
	
 
    	
243 Daniel Webster Highway
    
	
 
    	
Merrimack, NH 03054
    
	
 
    	
 
    
	
Attention:
    	
Hoil Kim
    
	
Telephone:
    	
603-883-5200
    
	
Facsimile:
    	
603-598-0430
    
	
 
    	
 
    
	
From:
    	
UBS AG, London Branch
    
	
 
    	
c/o UBS Securities LLC
    
	
 
    	
677 Washington Boulevard
    
	
 
    	
Stamford, CT 06901
    

 

Re:  Accelerated Share Repurchase Transactions

 

Ladies and Gentleman:

 

This master confirmation (this “Master Confirmation”), dated as of November 18, 2011, sets forth certain terms and conditions of certain Transactions (each, a “Transaction”) that UBS AG, London Branch (“UBS”), will enter into with GT Advanced Technologies Inc. (“Counterparty”).  For each Transaction, UBS will act as principal and UBS Securities LLC (“UBS-S LLC”), an affiliate of UBS, will act as agent for UBS and Counterparty.

 

Each Transaction will have terms contained in this Master Confirmation and terms not contained in this Master Confirmation.  In particular, any Transaction entered into under this Master Confirmation will be subject to the additional terms set forth in a transaction confirmation in the form attached hereto as Schedule A, which transaction confirmation will reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation (each such transaction confirmation, a “Transaction Confirmation”).  For any Transaction, this Master Confirmation and the Transaction Confirmation for such Transaction together will constitute a “Confirmation” as referred to in the Agreement specified below.  Taken alone, this Master Confirmation is neither a commitment by either party to enter into any Transaction nor evidence of any Transaction.

 

This Master Confirmation incorporates the definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.  For each Transaction, this Master Confirmation and the Transaction Confirmation for such Transaction evidence a complete binding agreement between Counterparty and UBS with respect to the subject matter and terms of such Transaction and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

 

This Master Confirmation and the Transaction Confirmation for each Transaction each supplement, form a part of, and are subject to, an agreement in the form of the 1992 ISDA Master Agreement (Multicurrency—Cross Border) (the “Agreement”) as if UBS and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for the election of Loss and Second Method, New York law (without reference to its conflict of laws doctrine) as the governing law and US Dollars (“USD”) as the Termination Currency).

 

 

The Transactions shall be the sole Transactions under the Agreement.  If there exists any ISDA Master Agreement between UBS and Counterparty or any confirmation or other agreement between UBS and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between UBS and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which UBS and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement.

 

All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation and each Transaction Confirmation, except as expressly modified herein or in the related Transaction Confirmation.

 

If, in relation to any Transaction to which this Master Confirmation and a Transaction Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation, such Transaction Confirmation and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Transaction Confirmation; (ii) this Master Confirmation; (iii) the Agreement; and (iv) the Equity Definitions.

 

Each Transaction constitutes a Share Forward Transaction for purposes of the Equity Definitions.  Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Transaction Confirmation relating to such Transaction, shall govern any Transaction.

 

1.             General Terms.

 

	
Trade Date:
    	
 
    	
For any Transaction, the date set forth as such in the Transaction   Confirmation for such Transaction.
    
	
 
    	
 
    	
 
    
	
Buyer:
    	
 
    	
Counterparty
    
	
 
    	
 
    	
 
    
	
Seller:
    	
 
    	
UBS
    
	
 
    	
 
    	
 
    
	
Shares:
    	
 
    	
The   common stock of Counterparty, par value USD 0.01 per share (Symbol: GTAT)
    
	
 
    	
 
    	
 
    
	
Exchange:
    	
 
    	
The   NASDAQ Global Select Market
    
	
 
    	
 
    	
 
    
	
Related Exchange(s):
    	
 
    	
All   Exchanges
    
	
 
    	
 
    	
 
    
	
Prepayment:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Variable Obligation:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Prepayment Amount:
    	
 
    	
For   any Transaction, the amount set forth as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Prepayment Date:
    	
 
    	
For   any Transaction, the date set forth as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Calculation Agent:
    	
 
    	
UBS;   provided, that the Calculation Agent   will at all times act in good faith and in a commercially reasonable manner.
    
	
 
    	
 
    	
 
    
	
Valuation Terms:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
10b-18 VWAP Price:
    	
 
    	
Subject   to the provisions of “Valuation Disruption” below, for any Scheduled Trading   Day, as determined by the Calculation Agent based on the 10b-18 Volume   Weighted Average Price per Share for the regular trading session (including   any extensions thereof) of the Exchange on such Scheduled Trading Day (without   regard to pre-open or after hours trading outside of such regular trading   session for such Scheduled Trading Day), as published by Bloomberg at
    

 

2

 

	
 
    	
 
    	
4:15 p.m.,   New York time (or 15 minutes following the end of any extension of the   regular trading session), on such Scheduled Trading Day, on Bloomberg   page “GTAT <Equity> AQR SEC” (or any successor thereto), or if   such price (i) is not reported on such Bloomberg page or successor   page on such Scheduled Trading Day or (ii) is, in the Calculation   Agent’s reasonable discretion, erroneous,, the price reasonably determined by   the Calculation Agent to substitute for such unreported or erroneous price,   which price the Calculation Agent will base on only those trades that are   (i) reported on the Exchange during the period of time during which   Counterparty could have purchased Shares on the Exchange on such Scheduled   Trading Day pursuant to Rule 10b-18(b)(2) under the Securities   Exchange Act of 1934, as amended (the “Exchange Act”)   and (ii) effected such purchases pursuant to the conditions of   Rule 10b-18(b)(3) under the Exchange Act (such trades, “Rule 10b-18 Eligible Transactions”).
    
	
 
    	
 
    	
 
    
	
Forward Price:
    	
 
    	
For   any Transaction, the arithmetic average of the 10b-18 VWAP Prices with   respect to all Scheduled Trading Days in the Valuation Period for such   Transaction, subject to “Valuation Disruption” below.
    
	
 
    	
 
    	
 
    
	
Forward Price Discount:
    	
 
    	
For   any Transaction, the amount set forth as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Valuation Period:
    	
 
    	
For   any Transaction, the period from, and including, the Valuation Period Start   Date for such Transaction, to, and including, the Valuation Date for such   Transaction.
    
	
 
    	
 
    	
 
    
	
Valuation Period Start Date:
    	
For   any Transaction, the date set forth as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Valuation Date:
    	
 
    	
For   any Transaction, the Scheduled Valuation Date for such Transaction; provided that UBS may, in its sole discretion, designate   any Scheduled Trading Day during the period beginning on, and including, the   First Acceleration Date for such Transaction, and ending on, and including,   the Scheduled Valuation Date for such Transaction, to be the Valuation Date   for such Transaction by delivering notice to Counterparty of the occurrence   of such Valuation Date on or before 5:00 p.m., New York City time on the   Currency Business Day immediately following such Scheduled Trading Day.
    
	
 
    	
 
    	
 
    
	
Scheduled Valuation Date:
    	
For   any Transaction, the date set forth as such in the Transaction Confirmation   for such Transaction, subject to postponement as provided in “Valuation   Disruption” below.
    
	
 
    	
 
    	
 
    
	
First Acceleration Date:
    	
For   any Transaction, the date set forth as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Valuation Disruption:
    	
 
    	
Notwithstanding   anything to the contrary in the Equity Definitions or in this Master   Confirmation:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i) whenever   any Scheduled Trading Day during the Valuation Period for any Transaction is   a Disrupted Day, the Calculation Agent may, in its good faith and   commercially reasonable discretion, postpone the Scheduled Valuation Date for   such Transaction by one Scheduled Trading Day;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii) whenever   any Scheduled Trading Day during the Settlement Valuation Period, if any, for   any Transaction is a Disrupted Day, the Calculation Agent may, in its good   faith and commercially reasonable discretion, postpone the expected final   Scheduled Trading Day of such Settlement Valuation Period by one Scheduled   Trading Day; and
    

 

3

 

	
 
    	
 
    	
(iii) whenever   at least eight Scheduled Trading Days during the Valuation Period or the   Settlement Valuation Period, as the case may be, for any Transaction have   been Disrupted Days, the Calculation Agent, in its good faith and   commercially reasonable discretion, may deem the next Scheduled Trading Day   that is a Disrupted Day not to be a Disrupted Day (any such Disrupted Day, a   “Deemed Trading Day”), in which case   the Calculation Agent will not postpone the Scheduled Valuation Date or the   expected final Scheduled Trading Day of such Settlement Valuation Period   pursuant to clause (i) or (ii) above, as the case may be, for such   Deemed Trading Day.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Whenever   any Scheduled Trading Day during the Valuation Period or the Settlement   Valuation Period for any Transaction is a Deemed Trading Day, the Calculation   Agent will, in a good faith and commercially reasonable manner, calculate the   10b-18 VWAP Price for such Deemed Trading Day as its estimate of the value of   the Shares on such Deemed Trading Day, which estimate may be based on, among   other factors, historical trading patterns in the Shares, the volume of   Shares traded on such Deemed Trading Day and the price of the Shares, if any,   on the Exchange on such Deemed Trading Day, and such estimate will be the   10b-18 VWAP Price for such Deemed Trading Day.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   anything to the contrary in the Equity Definitions or in this Master   Confirmation, if a Market Disruption Event (or a deemed Market Disruption Event   as provided herein) occurred on any such Disrupted Day during the Valuation   Period or the Settlement Valuation Period, but such Disrupted Day is not a   Deemed Trading Day, the Calculation Agent shall determine whether   (i) such Disrupted Day is a Disrupted Day in full, in which case the   10b-18 VWAP Price for such Disrupted Day shall not be included for purposes   of determining the Forward Price or the Settlement Price, as the case may be,   or (ii) such Disrupted Day is a Disrupted Day only in part, in which   case the Calculation Agent will, in a good faith and commercially reasonable   manner, determine (A) the 10b-18 VWAP Price for such Disrupted Day based   on the Rule 10b-18 Eligible Transactions in the Shares effected on such   Disrupted Day before the relevant Market Disruption Event occurred and/or   after the relevant Market Disruption Event ended, and (B) the Forward   Price or the Settlement Price, as the case may be, based on adjusted   weightings that account for such Disrupted Day, which adjusted weightings may,   for the avoidance of doubt, deviate from the weightings that the Calculation   Agent would use to compute an arithmetic average and/or account for the   duration of any relevant Market Disruption Event during such Disrupted Day,   historical trading patterns in the Shares, the prices of the Shares on such   Disrupted Day and/or otherwise.
    
	
 
    	
 
    	
 
    
	
Market Disruption Event:
    	
The   definition of “Market Disruption Event” contained in   Section 6.3(a) of the Equity Definitions is hereby amended by:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i) deleting   the words “at any time during the one-hour period that ends at the relevant   Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out   Valuation Time, as the case may be” and inserting the words “at any time on   any Scheduled Trading Day during the Valuation Period or the Settlement   Valuation Period” after the word “material,” in the third line thereof; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii) replacing   the words “or (iii) an Early Closure” in the fifth line thereof with the   words “, (iii) an Early Closure or (iv) a Regulatory Disruption”.
    

 

4

 

	
Early Closure:
    	
 
    	
The   definition of “Early Closure” contained in Section 6.3(d) of the   Equity Definitions is hereby amended by deleting the remainder of the   provision following the term “Scheduled Closing Time” in the fourth line   thereof.
    
	
 
    	
 
    	
 
    
	
Regulatory Disruption:
    	
 
    	
If,   at any time, UBS determines, in its sole discretion, based upon the advice of   counsel, that it is reasonably necessary or appropriate with respect to any   legal, regulatory or self-regulatory requirements or related policies and   procedures (whether or not such requirements, policies or procedures are   imposed by law or have been voluntarily adopted by UBS), for UBS or any of   its affiliates to refrain from engaging in any transactions in the U.S.   securities markets in which it or they would otherwise engage in connection   with any Transaction for which UBS or Counterparty have not yet made all   payments and deliveries that are, or will be, due under this Master   Confirmation, then UBS may, by notice to Counterparty, elect to declare that   a Regulatory Disruption has occurred, which Regulatory Disruption will   continue until UBS delivers an additional notice to Counterparty indicating   that such Regulatory Disruption has ended.
    
	
 
    	
 
    	
 
    
	
Settlement Terms:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Settlement   Currency:
    	
 
    	
USD
    
	
 
    	
 
    	
 
    
	
Physical   Settlement:
    	
 
    	
If   the Number of Shares to be Delivered is positive, Applicable.
    
	
 
    	
 
    	
 
    
	
Additional   Settlement Provisions:
    	
To the extent that either   UBS or Counterparty is obligated to deliver Shares under any Transaction, the   last sentence of Section 9.2 of the Equity Definitions and Sections 9.8,   9.9, 9.10 of the Equity Definitions shall be applicable to such Transaction.   Furthermore, a party delivering Shares will ensure they are free from any   lien, charge, claim or other encumbrance (other than a lien routinely imposed   on all securities by the relevant Clearance System).
    
	
 
    	
 
    	
 
    
	
Initial Shares:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Initial Share Delivery:
    	
 
    	
For   any Transaction, UBS shall deliver to Counterparty a number of Shares equal   to the Number of Initial Shares for such Transaction on the Initial Share   Delivery Date for such Transaction, in accordance with Section 9.4 of   the Equity Definitions, with such Initial Share Delivery Date deemed to be a   “Settlement Date” for purposes of such Section 9.4.
    
	
 
    	
 
    	
 
    
	
Initial Share Delivery Date:
    	
For   any Transaction, the date set forth as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Number of Initial Shares:
    	
 
    	
For   any Transaction, the number equal to the product of (i)(A) the Prepayment   Amount for such Transaction divided by   (B) the closing price per Share on the Trade Date for such Transaction,   and (ii) the Initial Delivery Percentage for such Transaction; provided that if, for any Transaction, after using   good faith commercially reasonable efforts, UBS is unable to borrow or   otherwise acquire for delivery to Counterparty on the Initial Share Delivery   Date for such Transaction a number of Shares equal to the Number of Initial   Shares for such Transaction, the Number of Initial Shares shall be reduced to   the number of Shares that UBS is able to so borrow or otherwise acquire on   such Initial Share Delivery Date.
    
	
 
    	
 
    	
 
    
	
Initial Delivery Percentage:
    	
For   any Transaction, the percentage set forth as such in the Transaction   Confirmation for such Transaction.
    

 

5

 

	
Additional Shares:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Settlement Date:
    	
 
    	
For   any Transaction, if the Number of Shares to be Delivered is a positive   number, the date that is one Settlement Cycle immediately following the   Valuation Date for such Transaction.
    
	
 
    	
 
    	
 
    
	
Number   of Shares to be Delivered:
    	
For   any Transaction, a number of Shares equal to (i) the Prepayment Amount   for such Transaction divided by   (A) the Forward Price for such Transaction minus   (B) the Forward Price Discount for such Transaction, minus (ii) the number of Shares delivered by UBS to   Counterparty with respect to such Transaction pursuant to the provisions of   “Initial Share Delivery”.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If   the Number of Shares to be Delivered for any settlement of any Transaction is   a negative number, then the terms of the Counterparty Settlement Provisions   in Annex A shall apply.
    
	
 
    	
 
    	
 
    
	
Share Adjustments:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Method of Adjustment:
    	
 
    	
Calculation   Agent Adjustment; provided that   (i) the first sentence of Section 11.2(c) of the Equity   Definitions, prior to clause (A) thereof, is hereby amended to read as   follows: “(c) If “Calculation Agent Adjustment” is specified as the   Method of Adjustment in the related Confirmation of a Share Forward   Transaction, then following the announcement or occurrence of any Potential   Adjustment Event, the Calculation Agent will determine whether such Potential   Adjustment Event has a material effect on the theoretical value of the Shares   and, if so, will (i) make appropriate adjustment(s), if any, to any one   or more of:” and the portion of such sentence immediately preceding clause   (ii) thereof is hereby amended by deleting the words “diluting or   concentrative effect (provided that no adjustment will be made to account   solely for changes in volatility, expected dividends, stock loan rate or   liquidity relative to the relevant Shares)” and replacing such words with the   words “effect on the Transaction (and, for the avoidance of doubt,   adjustments may be made to account solely for changes in volatility, expected   dividends or liquidity relative to the relevant Shares)”; and   (ii) Sections 11.2(a) and (e)(vii) of the Equity Definitions   are hereby amended by deleting the words “diluting or concentrative” and   replacing them with the word “material”.
    
	
 
    	
 
    	
 
    
	
Potential Adjustment Event:
    	
Notwithstanding   anything to the contrary in Section 11.2(e) of the Equity   Definitions, an Extraordinary Dividend shall not constitute a Potential   Adjustment Event.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
It   shall constitute an additional Potential Adjustment Event if the Scheduled   Valuation Date for any Transaction is postponed pursuant to “Valuation   Disruption” above, in which case the Calculation Agent may, in its   commercially reasonable discretion, adjust any relevant terms of any such   Transaction as necessary to preserve as nearly as practicable the fair value   of such Transaction to both parties prior to such postponement.
    

 

6

 

	
Extraordinary Dividend:
    	
 
    	
For   any Calendar Period for any Transaction, any dividend or distribution on the   Shares with an ex-dividend date occurring during such Calendar Period (other   than any dividend or distribution of the type described in   Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or   (B) of the Equity Definitions) (a “Dividend”)   the amount or value of which (as determined by the Calculation Agent), when   aggregated with the amount or value (as determined by the Calculation Agent)   of any and all previous Dividends with ex-dividend dates occurring in the   same Calendar Period, exceeds the Ordinary Dividend Amount for such Calendar   Period.
    
	
 
    	
 
    	
 
    
	
Ordinary Dividend Amount:
    	
For   any Calendar Period for any Transaction, the amount set forth in the   Transaction Confirmation for such Transaction as the “Ordinary Dividend   Amount” for such Calendar Period.
    
	
 
    	
 
    	
 
    
	
Calendar Period:
    	
 
    	
For   any Transaction, each period set forth as such in the Transaction   Confirmation for such Transaction.
    
	
 
    	
 
    	
 
    
	
Early   Ordinary Dividend Payment:
    	
If   an ex-dividend date for any Dividend that is not an Extraordinary Dividend occurs   during any Calendar Period occurring (in whole or in part) during the   Relevant Dividend Period and is prior to the Scheduled Ex-Dividend Date for   such Calendar Period, the Calculation Agent shall make such adjustment to the   exercise, settlement, payment or any other terms of the relevant Transaction   as the Calculation Agent determines appropriate to account for the economic   effect on the Transaction of such event.
    
	
 
    	
 
    	
 
    
	
Scheduled   Ex-Dividend 

Dates:
    	
For   any Calendar Period during any Transaction, the date set forth as such for   such Calendar Period in the Transaction Confirmation for such Transaction.
    

 

Extraordinary Events:

 

Consequences of Merger Events:

 

	
(a)
    	
Share-for-Share:
    	
Calculation   Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(b)
    	
Share-for-Other:
    	
Cancellation   and Payment
    
	
 
    	
 
    	
 
    
	
(c)
    	
Share-for-Combined:
    	
Component   Adjustment or Cancellation and Payment, at the election of UBS.
    
	
 
    	
 
    	
 
    
	
Tender Offer:
    	
Applicable;   provided that   (i) Section 12.1(l) of the Equity Definitions shall be amended   (x) by deleting the parenthetical in the fifth line thereof, (y) by   replacing “that” in the fifth line thereof with “whether or not such   announcement” and (z) by adding immediately after the words “Tender   Offer” in the fifth line thereof “, and any publicly announced change or   amendment to such an announcement (including the announcement of an   abandonment of such intention)” and (ii) Sections 12.3(a) and   12.3(d) of the Equity Definitions shall each be amended by replacing   each occurrence of the words “Tender Offer Date” by “Announcement Date.”
    
	
 
    	
 
    
	
Consequences of Tender Offers:
    	
 
    
	
 
    	
 
    
	
(a)
    	
Share-for-Share:
    	
Modified   Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
(b)
    	
Share-for-Other:
    	
Modified   Calculation Agent Adjustment
    

 

7

 

	
(c)
    	
Share-for-Combined:
    	
Modified   Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
Nationalization, 
    	
 
    
	
Insolvency or Delisting:
    	
Cancellation   and Payment (Calculation Agent Determination); provided   that in addition to the provisions of Section 12.6(a)(iii) of the   Equity Definitions, it shall also constitute a Delisting if the Exchange is   located in the United States and the Shares are not immediately re-listed,   re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ   Global Select Market or The NASDAQ Global Market (or their respective   successors); if the Shares are immediately re-listed, re-traded or re-quoted   on any such exchange or quotation system, such exchange or quotation system   shall be deemed to be the Exchange.
    

 

Additional Disruption Events:

 

	
(a)
    	
Change   in Law:
    	
Applicable;   provided that Section 12.9(a)(ii) of   the Equity Definitions is hereby amended by (A) deleting the word “or”   the first time it occurs in the third line thereof, (B) adding the words   “(including, for the avoidance of doubt and without limitation, the adoption   or promulgation of new regulations authorized or mandated by existing   statute)” after the end of the parenthetical spanning the second and third   lines thereof, (C) inserting the phrase “or (C) due to the   effectiveness or implementation of the Dodd-Frank Wall Street Reform and   Consumer Protection Act of 2010” after the parenthetical in the fifth line   thereof and (D) adding the words “or hedging,” after the word   “performing” in clause (Y) thereto.
    
	
 
    	
 
    	
 
    
	
(b)
    	
Failure   to Deliver:
    	
Applicable
    
	
 
    	
 
    	
 
    
	
(c)
    	
Insolvency   Filing:
    	
Applicable
    
	
 
    	
 
    	
 
    
	
(d)
    	
Loss   of Stock Borrow:
    	
Applicable, only to the extent UBS borrows the   shares either internally or in the market.
    
	
 
    	
 
    	
 
    
	
 
    	
Maximum   Stock Loan Rate:
    	
 

For   any Transaction, the rate specified as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
(e)
    	
Increased   Cost of
    	
 
    
	
 
    	
Stock Borrow:
    	
Applicable, only to the extent UBS borrows the   shares either internally or in the market.
    
	
 
    	
 
    	
 
    
	
 
    	
Initial Stock Loan Rate:
    	
For   any Transaction, the rate specified as such in the Transaction Confirmation   for such Transaction.
    
	
 
    	
 
    	
 
    
	
Hedging   Party:
    	
UBS
    
	
 
    	
 
    
	
Determining   Party:
    	
UBS
    
	
 
    	
 
    
	
Cancellation   Amount:
    	
To   the extent a Cancellation Amount is required to be calculated pursuant to an   Additional Disruption Event, the provisions in Section 8(b) below   will apply, provided that the Cancellation Amount will be treated as a   Payment Amount.
    

 

Additional Representations and Acknowledgements:

 

	
Non-Reliance:
    	
 
    	
Applicable
    

 

8

 

	
Agreements and
    	
 
    	
 
    
	
Acknowledgements
    	
 
    	
 
    
	
Regarding   Hedging
    	
 
    	
 
    
	
Activities:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Additional
    	
 
    	
 
    
	
Acknowledgements:
    	
 
    	
Applicable
    

 

Additional Termination Events:

 

	
Additional   Termination Event(s):
    	
 
    	
 

The   declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date   for which occurs or is scheduled to occur during the Relevant Dividend   Period, will constitute an Additional Termination Event, with Counterparty as   the sole Affected Party and all Transactions hereunder as the Affected Transactions.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   anything to the contrary in the Equity Definitions, if, as a result of an   Extraordinary Event, any Transaction would be cancelled or terminated   (whether in whole or in part) pursuant to Article 12 of the Equity   Definitions, an Additional Termination Event (with such terminated   Transaction(s) (or portions thereof) being the Affected   Transaction(s) and Counterparty being the sole Affected Party) shall be   deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions,   Section 6 of the Agreement shall apply to such Affected Transaction(s).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   anything to the contrary in Section 6 of the Agreement, if an Automatic   Termination Price is specified in the Transaction Confirmation for any Transaction,   then an Additional Termination Event with Counterparty as the sole Affected   Party and such Transaction as the Affected Transaction will automatically   occur without any notice or action by UBS or Counterparty if the price of the   Shares on the Exchange at any time falls below such Automatic Termination   Price, and the Exchange Business Day on which the price of the Shares on the   Exchange at any time falls below the Automatic Termination Price will be the   “Early Termination Date” for purposes of the Agreement.
    
	
 
    	
 
    	
 
    
	
Relevant   Dividend Period:
    	
 
    	
For   any Transaction, the period beginning on, and including, the Valuation Period   Start Date for such Transaction to, and including, the Relevant Dividend   Period End Date for such Transaction.
    
	
 
    	
 
    	
 
    
	
Relevant   Dividend Period End Date:
    	
 
    	
 

For   any Transaction, if Annex A applies to such Transaction, the last day of the   Settlement Valuation Period applicable to such Transaction; otherwise, the   Valuation Date for such Transaction.
    

 

Accounts and Notices:

 

Account Details:

 

	
Account   for Payments to Counterparty:
    	
 
    	
To   be advised
    
	
 
    	
 
    	
 
    
	
Account   for Delivery of Shares to Counterparty:
    	
 
    	
To   be advised
    

 

9

 

	
Account   for Payments To UBS:
    	
 
    	
Citibank,   New York
    
	
 
    	
 
    	
For:   UBS Securities, LLC
    
	
 
    	
 
    	
ABA:   021 000 089
    
	
 
    	
 
    	
A/C#:   4065 2556
    
	
 
    	
 
    	
 
    
	
Notices
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Counterparty’s   Contact Details for Purpose of Giving Notice:
    	
 
    	
GT Advanced Technologies Inc.
    
	
 
    	
 
    	
243 Daniel Webster Highway
    
	
 
    	
 
    	
Merrimack, NH 03054
    
	
 
    	
 
    	
Attention:   Hoil Kim
    
	
 
    	
 
    	
Vice President,   General Counsel and Chief Administrative Officer
    
	
 
    	
 
    	
Telephone:   603-883-5200
    
	
 
    	
 
    	
Facsimile:   603-598-0430
    
	
 
    	
 
    	
Email:   Hoil.Kim@gtat.com
    
	
 
    	
 
    	
 
    
	
UBS’s   Contact Details For Purpose of Giving Notice:
    	
 
    	
UBS   AG, London Branch
    
	
 
    	
 
    	
c/o   UBS Securities LLC
    
	
 
    	
 
    	
1285   Avenue of the Americas
    
	
 
    	
 
    	
New   York, NY 10019
    
	
 
    	
 
    	
Attention:   Jennifer Van Nest
    
	
 
    	
 
    	
Telephone:   212-713-3638
    
	
 
    	
 
    	
Facsimile:   212-821-2407
    
	
 
    	
 
    	
Email:   Jennifer.VanNest@ubs.com
    

 

2.                                       Mutual representations, warranties and covenants.  In addition to the representations, warranties and covenants in the Agreement, each party represents, warrants and covenants to the other party on the Trade Date for each Transaction entered into under this Master Confirmation, that:

 

(a)                                  Eligible Contract Participant.  It is an “eligible contract participant,” as defined in the U.S. Commodity Exchange Act, as amended (the “CEA”), and is entering into such Transaction as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.  In addition, each party acknowledges that this Master Confirmation has been, and each Transaction entered into hereunder will be, subject to individual negotiation by the parties and has not been executed or traded on a “trading facility” as defined in the CEA.

 

(b)                                 Accredited Investor.  Each party acknowledges that the offer and sale of such Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, each party represents and warrants to the other party that (i) it has the financial ability to bear the economic risk of its investment in such Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) it is entering into such Transaction for investment and not with a view to the distribution or resale thereof in a manner that would violate the Securities Act, and (iv) the disposition of such Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.

 

3.                                       Additional representations, warranties and covenants of Counterparty.  In addition to the representations, warranties and covenants in the Agreement and those made by Counterparty under Section 2 of this Master Confirmation, Counterparty represents, warrants and covenants to UBS that:

 

(a)                                  10b5-1 Plan.  (i) Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable

 

10

 

state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.  Counterparty acknowledges that it is the intent of the Counterparty and UBS that each Transaction entered into under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A)(2) and (B)(3) of Rule 10b5-1 and that each Transaction entered into under this Master Confirmation shall be interpreted to comply with the applicable provisions of Rule 10b5-1(c).

 

(i)                                     Counterparty will not seek to control or influence UBS’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this Master Confirmation, including, without limitation, UBS’s decision to enter into any hedging transactions.  Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Transaction Confirmation under Rule 10b5-1.

 

(ii)                                  Counterparty acknowledges and agrees that any amendment, modification or waiver of this Master Confirmation or any Transaction Confirmation must be effected in accordance with the requirements for the establishment of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification or waiver shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.  In addition, Counterparty acknowledges and agrees that it will not terminate the Master Confirmation or any Transaction Confirmation as part of a plan or scheme to evade the prohibitions of Rule 10b-5.

 

(b)                                 Tender Offer Rules.  The purchase or writing of each Transaction and the transactions contemplated hereby will not violate Rule 13e-1 under the Exchange Act and will not be required to comply with Rule 13e-4 under the Exchange Act.

 

(c)                                  Share Repurchase Program.  Each Transaction is being entered into pursuant to a publicly disclosed Share repurchase program and Counterparty’s board of directors has approved the use of derivatives to effect the Share repurchase program.

 

(d)                                 10b-18.  Neither Counterparty nor any “affiliated purchaser”, as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”), shall, without prior written consent of UBS, directly or indirectly purchase any Shares (including by means of a derivative instrument including, without limitation, through a structured share repurchase), listed contracts on the Shares or securities that are convertible into or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during the Relevant Period (as defined below) for any Transaction, except through UBS-S LLC.

 

In addition, notwithstanding anything to the contrary in this Master Confirmation or in the Equity Definitions, Counterparty agrees that:

 

(i)                                     Counterparty will not during the period beginning on, and including, the Trade Date for any Transaction and ending on, and including, the last day of the Relevant Period for such Transaction, make or permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of a Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening or after the close of the regular trading session for the Shares on the Exchange;

 

(ii)                                  after any such announcement is made, Counterparty shall promptly (but in no event later than two hours prior to the next opening of the regular trading session on the Exchange) deliver written notice to UBS that such announcement has been made, which notice shall also specify (A) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the date on which such announcement was made that were not effected through UBS or its affiliates and (B) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the date on which such announcement

 

11

 

was made.  Such written notice shall be deemed to be a certification by Counterparty to UBS that such information is true and correct;

 

(iii)                               after any such announcement is made, Counterparty shall promptly notify UBS of the earlier to occur of the completion of such transaction and the completion of any shareholder vote related to such matter; and

 

(iv)                              Counterparty is aware that each notice delivered pursuant to this section may result in the adjustment of the terms of, or the termination of, one or more Transactions; accordingly, Counterparty acknowledges that its delivery of such notice will comply with the standards set forth in clause (a) of this Section 3.

 

For each Transaction, “Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

 

For any Transaction, the “Relevant Period” means the period beginning on, and including, the Valuation Period Start Date for such Transaction and ending on, and including, the later of the Valuation Date or the final Scheduled Trading Day of the Settlement Valuation Period for such Transaction, or such earlier day as elected by UBS and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Friendly Transaction Announcements” below).

 

(e)                                  MNPI and Manipulation.   Counterparty is not entering into any Transaction under this Master Confirmation (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares, (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).

 

(f)                                    Regulation M.  The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act) at any time during the Relevant Period for any Transaction unless Counterparty has provided written notice of such restricted period to UBS at least three Scheduled Trading Days immediately preceding the first day of such “restricted period.”  In addition, Counterparty acknowledges that any such notice may result in a Regulatory Disruption and that Counterparty’s deliver of such notice must comply with the standards set forth in clause (a) of this Section 3.

 

(g)                                 Reporting Requirements.  Counterparty shall comply with all reporting requirements applicable to each Transaction that Counterparty enters under this Master Confirmation, including, without limitation, those applicable pursuant to the Exchange Act and the Rules and Regulations promulgated under the Exchange Act.  In addition, as of (i) the date hereof and (ii) the Trade Date for each Transaction that Counterparty enters under this Master Confirmation, Counterparty is, and will be, in compliance with its reporting obligations under the Exchange Act and Counterparty’s most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date on which Counterparty is making this representation, do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(h)                                 Investment Company.  Counterparty is not and, after giving effect to any Transaction that it enters under this Master Confirmation, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(i)                                     Solvency.  As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the Settlement Date and the date of any Second Settlement, if any, for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

 

12

 

(j)                                     Limitation of Rights.  Counterparty will not take any action or refrain from taking any action that would limit or in any way adversely affect UBS’s rights under the Agreement, this Master Confirmation or the Transaction Confirmation for any Transaction entered into by Counterparty under this Agreement.

 

4.                                       Acknowledgments by Counterparty and UBS.  Each of Counterparty and UBS intend that:

 

(a)                                  each Transaction that Counterparty enters into under this Master Confirmation will be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;

 

(b)                                 the Agreement will be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;

 

(c)                                  a party’s right to liquidate, terminate or accelerate any Transaction entered by Counterparty under this Master Confirmation, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction entered into by Counterparty under this Master Confirmation will constitute a “contractual right” (as defined in the Bankruptcy Code); and

 

(d)                                 all payments for, under or in connection with each Transaction entered into by Counterparty under this Master Confirmation, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).

 

5.                                       Additional Counterparty Acknowledgments.  Counterparty agrees and acknowledges that:

 

(a)                                  during the term of any Transaction entered into by Counterparty under this Master Confirmation, UBS and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to such Transaction;

 

(b)                                 UBS and its affiliates may also be active in the market for the Shares other than in connection with hedging activities in relation to any Transaction;

 

(c)                                  UBS shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the 10b-18 VWAP Price;

 

(d)                                 any market activities of UBS and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and 10b-18 VWAP Price, each in a manner that may be adverse to Counterparty;

 

(e)                                  each Transaction entered into by Counterparty under this Master Confirmation is a derivatives transaction in which Counterparty has granted UBS an option; UBS may purchase Shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction;

 

(f)                                    without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither UBS nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of any Transaction that Counterparty enters into under this Master Confirmation under any accounting standards including, without limitation, ASC Topic 260, Earnings

 

13

 

Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity; and

 

(g)                                 Counterparty is not relying, and has not relied, upon UBS or UBS-S LLC with respect to the legal, accounting, tax or other implications of entering into this Master Confirmation and any Transaction that it enters under this Master Confirmation.  In addition, Counterparty has conducted its own analysis of the legal, accounting, tax and other implications of entering into this Master Confirmation and of entering into Transactions under this Master Confirmation.   Counterparty further acknowledges and agrees that neither UBS nor UBS-S LLC have acted as its advisor in any capacity in connection with this Master Agreement or the Transactions contemplated by this Master Confirmation.  Counterparty acknowledges that neither UBS nor UBS-S LLC is acting as the agent for Counterparty in effecting any purchase of Shares pursuant to this Agreement.

 

6.                                       Special Provisions for Merger Transactions.  Notwithstanding anything to the contrary herein or in the Equity Definitions:

 

(a) Counterparty agrees that it:

 

(i)                    will not during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the Settlement Valuation Period for any Transaction make, or permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares;

 

(ii)                 shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify UBS following any such announcement that such announcement has been made; and

 

(iii)              shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide UBS with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through UBS or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the announcement date.  Such written notice shall be deemed to be a certification by Counterparty to UBS that such information is true and correct.  In addition, Counterparty shall promptly notify UBS of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.  Counterparty acknowledges that any such notice may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 3 above.

 

(b)                                 Upon the public announcement of any Merger Transaction UBS in its commercially reasonable discretion may (i) make adjustments to the terms of any Transaction, including, without limitation, the Scheduled Valuation Date or the Forward Price Discount, and/or suspend the Calculation Period and/or any Settlement Valuation Period in good faith as necessary to preserve as nearly as practicable the fair value of the Transactions to UBS prior to such announcement or (ii) treat the occurrence of such public announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.

 

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

 

14

 

7.                                       SPECIAL PROVISIONS FOR FRIENDLY TRANSACTION ANNOUNCEMENTS.

 

(a)                                  If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for any Transaction, then the Number of Shares to be Delivered for such Transaction shall be determined as if the words “(A)” and “minus (B) the Forward Price Discount for such Transaction” were deleted from the definition thereof.

 

If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Transaction Announcement.

 

In addition, if a Friendly Acquisition Transaction Announcement occurs after the Settlement Date for any Transaction or any earlier date of termination or cancellation of such Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions, then a second settlement of such Transaction (a “Second Settlement”) shall occur (notwithstanding such earlier termination or cancellation) with a Number of Shares to be Delivered equal to the lesser of (i) zero and (ii) (x) the Number of Shares to be Delivered determined pursuant to the immediately preceding paragraph of this clause (a) of this Section 7 as if such Acquisition Transaction Announcement occurred prior to such Settlement Date minus (y) the Number of Shares to be Delivered determined pursuant to Section 1 of this Master Confirmation (provided that in the case of a Second Settlement occurring after such an early termination or cancellation, a Number of Shares to be Delivered shall not be determined and instead a Forward Cash Settlement Amount will be determined as provided in Annex A).

 

(b)                                 “Friendly Transaction Announcement” means (i) an Acquisition Transaction Announcement by Counterparty or its board of directors prior to the Settlement Date or any earlier date of termination or cancellation of the relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions (such date, the “Actual Settlement Date”), (ii) an announcement by Counterparty or its board of directors prior to the date three months following the Scheduled Valuation Date that an Acquisition Transaction that is the subject of an Acquisition Transaction Announcement occurring prior to the Actual Settlement Date has been approved, agreed to, recommended by or otherwise consented to by Counterparty or its board of directors, or negotiated by Counterparty or any authorized representative of Counterparty, or (iii) where Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of any such Acquisition Transaction prior to the date three months following the Scheduled Valuation Date, the absence of a recommendation that its shareholders reject such transaction.

 

(c)                                  “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, or (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction. For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.

 

(d)                                 “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “15%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 15% of the market capitalization of Counterparty, excluding, for the avoidance of doubt, any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event between the Counterparty and one or more of its affiliates or between two or more of the Company’s affiliates, and (v) any transaction in which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

 

15

 

8.                                       Miscellaneous.

 

(a)                                  Delivery of Shares.  Notwithstanding anything to the contrary herein, UBS may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

 

(b)                                 Early Termination.  In the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated or deemed to occur with respect to any Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Amount”), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which such Transaction is terminated, elect to deliver or for UBS to deliver, as the case may be, to the other party a number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Merger Event (each such unit, an “Alternative Delivery Unit” and, the securities or property comprising such unit, “Alternative Delivery Property”)) with a value equal to the Payment Amount, as determined by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account the market price and the price at which UBS covers its outstanding position in the Shares or acquires Alternative Delivery Property as of such early termination date, and, if such delivery is made by UBS, the prices at which UBS purchases Shares or Alternative Delivery Property to fulfill its delivery obligations under this Section 8(b)); provided that in determining the composition of any Alternative Delivery Unit, if the relevant Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. If such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.

 

(c)                                  Calculations and Payment Date upon Early Termination.  The parties acknowledge and agree that in calculating Loss pursuant to Section 6 of the Agreement UBS may (but need not) determine losses without reference to actual losses incurred but based on expected losses assuming a commercially reasonable (including without limitation with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss to avoid awaiting the delay associated with closing out any hedge or related trading position in a commercially reasonable manner prior to or sooner following the designation of an Early Termination Date.  Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive Shares or Alternative Delivery Property in accordance with clause (b) of this Section 8, such Shares or Alternative Delivery Property shall be delivered on a date selected by UBS as promptly as practicable.

 

(d)                                 Delivery of Cash.  For the avoidance of doubt, nothing in this Master Confirmation shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transactions contemplated by this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for classification of the contract as equity under ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity as in effect on the relevant Trade Date (including, without limitation, where Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of such Transactions).

 

(e)                                  Set-off.  The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

 

“(f)  Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X owed to Y (whether or not matured or contingent and whether or not arising under the

 

16

 

Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).  Y will give notice to the other party of any set-off effected under this Section 6(f).

 

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.  If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.  Nothing in this Section 6(f) shall be effective to create a charge or other security interest.  This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

 

Notwithstanding anything to the contrary in the foregoing, UBS agrees not to set off or net amounts due from Counterparty with respect to any Transaction against amounts due from UBS to Counterparty with respect to contracts or instruments that are not Equity Contracts.  “Equity Contract” means any transaction or instrument that does not convey to UBS rights, or the ability to assert claims, that are senior to the rights and claims of common stockholders in the event of Counterparty’s bankruptcy.

 

(f)            No Collateral.  Counterparty and UBS acknowledge that no Transaction entered into under this Master Agreement is secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement.

 

(g)           Subordinated to Level of Equity.  UBS acknowledges and agrees that this Master Confirmation is not intended to convey to it rights with respect to any Transaction entered under it that are senior to the claims of the holders of the Shares in the event of Counterparty’s bankruptcy.

 

(h)           Agent for UBS; Limitation of Liability.  UBS-S LLC (the “Agent”) shall act as “agent” for UBS and Counterparty within the meaning of Rule 15a-6 under the Exchange Act.  The Agent is not a principal to this Master Confirmation and shall have no responsibility or liability to UBS or Counterparty in respect of this Master Confirmation or the Transaction Confirmation for any Transaction entered into by Counterparty under this Master Confirmation, including, without limitation, in respect of the failure of UBS or Counterparty to pay or perform under this Master Confirmation or the Transaction Confirmation for any Transaction entered into by Counterparty under this Master Confirmation.  Each of UBS and Counterparty agrees to proceed solely against the other to collect or recover any securities or money owing to it in connection with or as a result of this Master Confirmation or the Transaction Confirmation for any Transaction entered into by Counterparty under this Master Confirmation.  The Agent shall otherwise have no liability in respect of this Master Confirmation or the Transaction Confirmation for any Transaction entered into by Counterparty under this Master Confirmation Agreement, except for its gross negligence or willful misconduct in performing its duties as Agent hereunder or thereunder.  As a broker-dealer registered with the Securities and Exchange Commission, UBS-S LLC, in its capacity as agent, will be responsible for (i) effecting any Transaction contemplated in this Master Confirmation, (ii) issuing all required notices, confirmations and statements to Buyer and Seller and (iii) maintaining books and records relating to this Master Confirmation and the Transaction Confirmation for any Transaction entered into by Counterparty under this Master Confirmation.

 

For the avoidance of doubt, any performance by Counterparty of its obligations (including notice obligations) through or by means of the Agent’s agency for UBS shall constitute good performance of Counterparty’s obligations hereunder to UBS; however, performance by UBS of its obligations hereunder (including notice obligations) to Counterparty through or by means of the Agent’s agency for UBS shall not constitute good performance of UBS’s

 

17

 

obligations hereunder unless and then only to the extent that Counterparty actually receives the benefit of such performance.

 

(i)            Other Remuneration; Time of Transaction.  UBS-S LLC has received, or will receive, other remuneration from UBS for each Transaction.  The amount and source of such other remuneration will be furnished upon written request.  The time of each Transaction is available upon request.

 

(j)            Indemnification.  If UBS becomes involved in any capacity in any action, proceeding or investigation brought by or against any person in connection with any matter referred to in this Master Confirmation or the Transaction Confirmation for any Transaction entered into under this Master Confirmation, Counterparty will reimburse UBS periodically for its legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith.  Counterparty also will indemnify and hold UBS harmless against any losses, claims, damages or liabilities to which UBS may become subject in connection with any matter referred to in this Master Confirmation or the Transaction Confirmation for any Transaction entered into under this Master Confirmation, except to the extent that any such loss, claim, damage or liability results from the gross negligence or bad faith of UBS.  If for any reason the foregoing indemnification is unavailable to UBS or insufficient to hold it harmless, then Counterparty shall contribute to the amount paid or payable by UBS as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by Counterparty on the one hand and UBS on the other hand in the matters contemplated by this Master Confirmation or the Transaction Confirmation for any Transaction entered into under this Master Confirmation as well as the relative fault of Counterparty and UBS with respect to such loss, claim, damage or liability and any other relevant equitable considerations.  The relative benefits to Counterparty, on the one hand, and UBS, on the other hand, shall be in the same proportion as the Prepayment Amount bears to the customary brokerage commissions that UBS would charge to a party similar to Counterparty to purchase one Share multiplied by the lesser of (i) the Number of Initial Shares and (ii) the Number of Shares to be Delivered determined as though clause (ii) of the definition thereof were deleted therefrom.  The reimbursement, indemnity and contribution obligations of Counterparty under this Section 8(j) shall be in addition to any liability which Counterparty may otherwise have, shall extend upon the same terms and conditions to any affiliate of UBS and the partners, directors, officers, agents, employees and controlling persons (if any), as the case may be, of UBS and any such affiliate and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of Counterparty, UBS, any such affiliate and any such person.  Counterparty also agrees that UBS nor any of such affiliates, partners, directors, officers, agents, employees or controlling persons shall have any liability to Counterparty for or in connection with any matter referred to in this Master Confirmation or the Transaction Confirmation for any Transaction entered into under this Master Confirmation except to the extent that any losses, claims, damages, liabilities or expenses incurred by Counterparty result from the gross negligence or bad faith of UBS in effecting such Transaction.  The foregoing provisions shall survive any termination, completion or assignment of this Master Confirmation and/or any Transaction hereunder.

 

(k)           Severability.  If any term, provision, covenant or restriction of this Master Confirmation, the Agreement or the Transaction Confirmation for any Transaction entered into under this Master Confirmation is held by a court of competent jurisdiction to be invalid, void or unenforceable, the reminder of the terms, provisions, covenants and obligations set forth herein or therein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

(l)            Headings.  Descriptive headings herein are for convenience only and shall not control or affect the meaning or construction of any provision of this Master Confirmation.

 

(m)          Counterparts.  This Master Confirmation may be executed by the parties hereto in counterparts, and each such executed counterpart shall be, and shall be deemed to be, an original instrument and all such counterparts, taken together, shall constitute one and the same instrument.

 

(n)           Assignment.  Notwithstanding anything to the contrary in the Agreement or in this Master Confirmation, UBS may transfer or assign its rights and obligations hereunder, in whole or in part, without the consent of Counterparty to any affiliate of UBS.  Counterparty may not assign its rights or obligations hereunder, in whole or in part, without the prior written consent of UBS (which consent shall not be unreasonably withheld), and any attempt by Counterparty to assign any of its rights or obligations hereunder without such consent shall be void.

 

18

 

(o)           Waiver.  No failure or delay on the part of UBS or Counterparty in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  No amendment, modification or waiver of any provision of this Master Confirmation, the Agreement or the Transaction Confirmation for any Transaction entered into under this Master Confirmation, nor any consent to any departure by either party therefrom shall in any event be effective unless the same shall be in writing and, in the case of a waiver or consent, shall be effective only in the specific instance and for the purpose for which given.

 

(p)           Beneficiaries.  This Master Confirmation and the Transaction Confirmation for any Transaction entered into under this Master Confirmation shall be binding upon, and inure solely to the benefit of, Counterparty, UBS and, to the extent provided in clause (k) of this Section 7, the affiliates, partners, directors, officers, agents, employees and controlling persons, if any, of UBS, and their respective successors, assigns, heirs and personal representatives, and no other person shall acquire any rights hereunder.

 

(q)           Confidentiality.  Subject to any contrary requirement of law and to the right of each party to enforce its rights hereunder in any legal action, each of UBS and Counterparty shall keep strictly confidential and shall cause its employees and agents to keep strictly confidential the terms of this Master Confirmation and the Transaction Confirmation for any Transaction entered into under this Master Confirmation and any information of or concerning the other party which it or any of its agents or employees may acquire pursuant to, or in the course of performing its obligations under, any provision of this Master Confirmation or the Transaction Confirmation for any Transaction entered into under this Master Confirmation.  In the event disclosure is permitted pursuant to the preceding sentence, the disclosing party shall (i) provide prior notice of such disclosure to the other party, (ii) use its best efforts to minimize the extent of such disclosure and (iii) comply with all reasonable requests of the other party to minimize the extent of such disclosure.  However, this Section 7(r) shall not prevent either party from disclosing information as necessary to third-party advisors in connection with the transactions contemplated hereby provided that such advisors agree in writing to be bound by this Section 7(r) as if a party hereto.

 

(r)            Governing Law.  The Agreement, this Master Confirmation, each Transaction Confirmation and all matters arising in connection with the Agreement, this Master Confirmation and each Transaction Confirmation shall be governed by and construed and enforced in accordance with the laws of the State of New York without reference to conflict of law principles.  Each of UBS and Counterparty irrevocably submits to the extent permitted under applicable law to the non-exclusive jurisdiction of the federal and state courts located in the Borough of Manhattan, State of New York.  Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this the Agreement, this Master Confirmation and/or each Transaction Confirmation.

 

19

 

By manually signing this Master Confirmation and returning it to UBS at facsimile (203) 719-0538, Attn: Jared Rosenfeld, with a copy to Hina Mehta at facsimile (203) 719-5627 and Jennifer Van Nest at facsimile (212) 821-2407, Counterparty hereby (a) agrees that it has checked this Master Confirmation carefully for errors or discrepancies and (b) confirms that this Master Confirmation correctly sets forth the terms of the agreement between UBS and Counterparty with respect to any Transaction that Counterparty enters into with UBS under this Master Confirmation.

 

 

	
 
    	
 
    	
 
    	
Sincerely   yours,
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
UBS   SECURITIES LLC,
    
	
 
    	
 
    	
 
    	
Acting   as agent for UBS AG, LONDON BRANCH
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:   
    	
/s/   Jennifer Van Nest
    
	
 
    	
 
    	
 
    	
 
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:   
    	
/s/   Sanjeet Dewal
    
	
 
    	
 
    	
 
    	
 
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
UBS   AG, LONDON BRANCH
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
By:   
    	
/s/   Hina Mehta
    
	
 
    	
 
    	
 
    	
 
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    	
 
    	
Executive   Director and Counsel, Region Americas Legal
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/   Martin Gasparian
    
	
 
    	
 
    	
 
    	
 
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    	
 
    	
Director   and Counsel, Region Americas legal
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Agreed and Accepted By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
GT Advanced   Technologies Inc.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Hoil Kim
    	
 
    	
 
    	
 
    
	
 
    	
Name:   Hoil Kim
    	
 
    	
 
    	
 
    
	
 
    	
Title:   Vice President, Chief Administrative Officer and General Counsel
    	
 
    	
 
    	
 
    

 

 

ANNEX A

 

COUNTERPARTY SETTLEMENT PROVISIONS

 

1.             The following Counterparty Settlement Provisions shall apply to the extent indicated under the Master Confirmation:

 

	
Settlement   Currency:
    	
 
    	
USD
    
	
 
    	
 
    	
 
    
	
Settlement   Method Election:
    	
 
    	
 

Applicable;   provided that   (i) Section 7.1 of the Equity Definitions is hereby amended by   deleting the word “Physical” in the sixth line thereof and replacing it with   the words “Net Share” and (ii) the Electing Party may make a settlement   method election only if the Electing Party represents and warrants to UBS in   writing on the date it notifies UBS of its election that, as of such date,   the Electing Party is not aware of any material non-public information   concerning Counterparty or the Shares and is electing the settlement method   in good faith and not as part of a plan or scheme to evade compliance with   the federal securities laws.
    
	
 
    	
 
    	
 
    
	
Electing   Party:
    	
 
    	
Counterparty
    
	
 
    	
 
    	
 
    
	
Settlement   Method Election Date:
    	
 
    	
 

The   earlier of (i) the Scheduled Valuation Date and (ii) the second   Scheduled Trading Day immediately following the Valuation Date (if different   than the Scheduled Valuation Date), in which case the election under   Section 7.1 of the Equity Definitions shall be made no later than 10   minutes prior to the open of trading on the Exchange on such second Scheduled   Trading Day), as the case may be; provided that   if a Friendly Transaction Announcement occurs after the Settlement Date, the   Settlement Method Election Date for the Second Settlement shall be the date   of the Friendly Transaction Announcement.
    
	
 
    	
 
    	
 
    
	
Default   Settlement Method:
    	
 
    	
Cash   Settlement
    
	
 
    	
 
    	
 
    
	
Forward   Cash Settlement Amount:
    	
 
    	
 

The   Number of Shares to be Delivered multiplied   by the Settlement Price; provided that   in the case of a Second Settlement occurring after an early termination or   cancellation of the relevant Transaction pursuant to Section 6 of the   Agreement or Article 12 of the Equity Definitions, the Forward Cash   Settlement Amount shall equal the lesser    of (i) zero and   (ii)(x) the Payment Amount that would have been calculated for such   early termination or cancellation if the Number of Shares to be Delivered for   such Transaction were determined as if the words “(A)” and “minus (B) the Forward Price Discount for such   Transaction” were deleted from the definition thereof, as determined by the   Calculation Agent (with an amount that would have been owed by Counterparty   expressed as a negative number for purposes of this calculation) minus (y) the actual Payment Amount   calculated for such early termination or cancellation (with an amount that   would have been owed by Counterparty expressed as a negative number for   purposes of this calculation).
    
	
 
    	
 
    	
 
    
	
Settlement   Price:
    	
 
    	
The   arithmetic average of the 10b-18 VWAP Prices (or, in the case of a Second   Settlement, the Relevant Prices) for the Scheduled Trading Days in the   Settlement Valuation Period, subject to Valuation Disruption as
    

 

1

 

	
 
    	
 
    	
specified   in the Master Confirmation or, in the case of a Second Settlement, subject to   Section 6.6(a) of the Equity Definitions as if such dates were   Valuation Dates.
    
	
 
    	
 
    	
 
    
	
Settlement   Valuation Period:
    	
 
    	
 

A   number of Scheduled Trading Days selected by UBS in its reasonable   discretion, beginning on the Scheduled Trading Day immediately following the   Settlement Method Election Date or, in the case of a Second Settlement, the   date of the Friendly Transaction Announcement.
    
	
 
    	
 
    	
 
    
	
Cash   Settlement:
    	
 
    	
If   Cash Settlement is applicable, then Buyer shall pay to Seller the absolute   value of the Forward Cash Settlement Amount on the Cash Settlement Payment   Date.
    
	
 
    	
 
    	
 
    
	
Cash   Settlement Payment Date:
    	
 
    	
 

The   date one Settlement Cycle following the last day of the Settlement Valuation   Period.
    
	
 
    	
 
    	
 
    
	
Net   Share Settlement Procedures:
    	
 
    	
 

If   Net Share Settlement is applicable, Net Share Settlement shall be made in   accordance with paragraphs 2 through 7 below.
    

 

2.             Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value UBS is able to realize for such Shares (provided, that the value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount), in each case as determined by the Calculation Agent.

 

3.             Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

 

(a)           a registration statement covering public resale of the Registered Settlement Shares by UBS (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to UBS, in such quantities as UBS shall reasonably have requested, on or prior to the date of delivery;

 

(b)           the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be satisfactory to UBS;

 

(c)           as of or prior to the date of delivery, UBS-S LLC and its agents shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to UBS, in its discretion; and

 

(d)           as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with UBS-S LLC in connection with the public resale of the Registered Settlement Shares by UBS substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance satisfactory to UBS-S LLC, which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, UBS-S LLC and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

 

4.             If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

 

2

 

(a)           all Unregistered Settlement Shares shall be delivered to UBS (or any affiliate of UBS designated by UBS) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof;

 

(b)           as of or prior to the date of delivery, UBS-S LLC and any potential purchaser of any such Shares from UBS (or any affiliate of UBS designated by UBS) identified by UBS shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);

 

(c)           as of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with UBS-S LLC (or any affiliate of UBS designated by UBS) in connection with the private placement of such shares by Counterparty to UBS (or any such affiliate) and the private resale of such shares by UBS-S LLC (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to UBS, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating  to the indemnification of, and contribution in connection with the liability of, UBS and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all fees and expenses in connection with such resale, including all fees and expenses of counsel for UBS, and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

 

(d)           in connection with the private placement of such shares by Counterparty to UBS (or any such affiliate) and the private resale of such shares by UBS (or any such affiliate), Counterparty shall, if so requested by UBS, prepare, in cooperation with UBS-S LLC, a private placement memorandum in form and substance reasonably satisfactory to UBS.

 

5.             UBS, itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by Counterparty to UBS pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by UBS, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”).  If the proceeds of any sale(s) made by UBS, the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, UBS will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, UBS shall return to Counterparty on that date such unsold Shares.

 

6.             If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall”), Counterparty shall, on the Exchange Business Day next succeeding the day on which such Shortfall is established (the “Makewhole Notice Date”), deliver to UBS, through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares.  If Counterparty elects to deliver to UBS additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Exchange Business

 

3

 

Day equal to the Shortfall.  Such Makewhole Shares shall be sold by UBS in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to UBS further Makewhole Shares until such Shortfall has been reduced to zero.

 

7.             Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the “Capped Number”).  Counterparty represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

 

A — B

 

Where            A = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and

 

B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised.

 

“Reserved Shares” means initially, 50,000,000 Shares.  The Reserved Shares may be increased or decreased in a Transaction Confirmation.

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}]]