Document:

Exhibit 10.8

 

LEMONADE, INC.

AMENDED AND RESTATED 2015 INCENTIVE SHARE OPTION PLAN

 

 

LEMONADE, INC.

AMENDED AND RESTATED 2015 INCENTIVE SHARE OPTION PLAN

 

This plan, as amended from time to time, shall be known as the Amended and Restated Lemonade, Inc. 2015 Incentive Share Option Plan (the “ISOP”).

 

1.                                      PURPOSE OF THE ISOP

 

The ISOP is intended to provide an incentive to retain, in the employ of the Company (as defined below) and its Affiliates (as defined below), persons of training, experience, and ability, to attract new employees, directors, consultants, and other service providers, to encourage the sense of proprietorship of such persons, and to stimulate the active interest of such persons in the development and financial success of the Company by providing them with opportunities to purchase shares in the Company, pursuant to this ISOP.

 

2.                                      DEFINITIONS

 

For purposes of the ISOP and related documents, including the Option Agreement (as defined below), the following definitions shall apply:

 

2.1.                            “Affiliate” for purposes of US Options and any related definition, means a Subsidiary or Parent; and for purposes of Israeli Options and any related definitions means any “employing company” within the meaning of Section 102(a) of the Ordinance.

 

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

 

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

 

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

 

2.3.                            “Cause” means, (i) conviction of any felony involving moral turpitude or affecting the Company and/or its Affiliates; (ii) any refusal to carry out a reasonable directive of the chief executive officer, the Board or the Optionee’s direct supervisor, which involves the business of the Company and/or its Affiliates and was capable of being lawfully performed; (iii) embezzlement of funds of the Company and/or its Affiliates; (iv) any breach of the Optionee’s fiduciary duties or duties of care owed to the Company and/or its Affiliates; including without limitation disclosure of confidential information of the Company and/or of its Affiliates; (v) dismissal under the circumstances defined in Section 16 and/or Section 17 of the Israeli Severance Pay Law, 1963; and (vi) any conduct (other than conduct in good faith) reasonably determined by the Board to be materially detrimental to the Company and/or to its Affiliates.

 

2.4.                            “Certificate” means the Certificate of Incorporation of the Company, as may be amended from time to time.

 

2.5.                            “Chairman” means the chairman of the Committee.

 

2.6.                            “Code” means the United States Internal Revenue Code of 1986 as amended.

 

2.7.                            “Committee” means a compensation committee or any other similar committee as may be appointed by the Board in accordance with applicable law.

 

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2.8.                            “Company” means Lemonade, Inc., a company incorporated under the laws of the State of Delaware together with its Subsidiary Lemonade Ltd., a company incorporated under the laws of the State of Israel.

 

2.9.                            “Controlling Shareholder” shall have the meaning ascribed to such term in Section 32(9) of the Ordinance.

 

2.10.                     “Date of Grant” means, the date of grant of an Option, as determined by the Board and set forth in the Optionee’s Option Agreement.

 

2.11.                     “Employee” means an Israeli Employee or a US Employee, as applicable, as well as any employees of the Company and/or any of its Affiliates worldwide who are domiciled in other jurisdictions and therefore subject to different tax regimes and further subject to any applicable sub-plans to this ISOP as may be adopted by the Board from time to time.

 

2.11.1.           “Israeli Employee” means a person who is considered an Israeli resident for Israeli income tax purposes and who is employed by the Company or its Affiliates, including an individual who is serving as a director or an office holder of the Company or its Affiliates, but excluding for purposes of any 102 Option, any Controlling Shareholder.

 

2.11.2.           “US Employee” means any person, including an individual who is serving as a director or an office holder, employed by the Company or any Affiliate, who is a United States tax payer. A US Employee shall not cease to be a US Employee in the case of (i) any leave of absence approved by the Company or any Affiliate or (ii) transfers between locations of the Company or between the Company, its Affiliates or any successor. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed and a period of leave exceeds three (3) months, then on the 1st day after the end of such three (3) month period, any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

 

2.12.                     “Expiration Date” means the date upon which an Option shall expire, as set forth in Section 10.2 of the ISOP.

 

2.13.                     “Fair Market Value” means as of any date, the value of a Share determined as follows:

 

(i)                                     If the Shares are listed on any established stock exchange or a national market system, including without limitation the Tel Aviv Stock Exchange, NASDAQ National Market system, or the NASDAQ SmallCap Market of the NASDAQ Stock Market, the Fair Market Value shall be the closing sales price for such Shares (or the closing bid, if no sales were reported), as quoted on such exchange or system for the last market trading day prior to time of determination, as reported in the Wall Street Journal, or such other source as the Board deems reliable. Without derogating from the above, solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the Date of Grant the Company’s shares are listed on any established stock

 

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exchange or a national market system or if the Company’s shares will be registered for trading within ninety (90) days following the Date of Grant, the Fair Market Value of a Share at the Date of Grant shall be determined in accordance with the average value of the Company’s shares on the thirty (30) trading days preceding the Date of Grant or on the thirty (30) trading days following the date of registration for trading, as the case may be;

 

(ii)                                  If the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the Shares on the last market trading day prior to the day of determination, or;

 

(iii)                               In the absence of an established market for the Shares, the Fair Market Value thereof shall be determined in good faith by the Board.

 

2.14.                     “IPO” means the initial public offering of the Company’s shares.

 

2.15.                     “ISOP” means this Amended and Restated Lemonade, Inc. 2015 Incentive Share Option Plan.

 

2.16.                     “ITA” means the Israeli Tax Authorities.

 

2.17.                     “Non-Employee” means a consultant, advisor, service provider, Controlling Shareholder (for purposes of 102 Options) or any other person who is not an Employee.

 

2.18.                     “Option” means an option to purchase one or more Shares of the Company pursuant to the ISOP.

 

2.18.1.           “Israeli Options” means 102 Options and 3(i) Options.

 

2.18.1.1.                    “102 Option” means any Option granted to Israeli Employees pursuant to Section 102 of the Ordinance.

 

2.18.1.2.                    “Approved 102 Option” means an Option granted pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of the Optionee.

 

2.18.1.3.                    “Unapproved 102 Option” means an Option granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.

 

2.18.1.4.                    “3(i) Option” means an Option granted pursuant to Section 3(i) of the Ordinance.

 

2.18.1.5.                    “Capital Gain Option (CGO)” as defined in Section 5.4 below.

 

2.18.1.6.                    “Ordinary Income Option (OIO)” as defined in Section 5.5 below.

 

2.18.2.           “US Options” means Incentive Stock Options and Nonstatutory Stock Options.

 

2.18.2.1.                    “Incentive Stock Option” shall have the meaning given to such term under Section 422 of the Code.

 

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2.18.2.2.                    “Nonstatutory Stock Options” means options to U.S. residents which would not qualify as Incentive Stock Options.

 

2.19.                     “Optionee” means a person who receives or holds an Option under the ISOP.

 

2.20.                     “Option Agreement” means the share option agreement between the Company and an Optionee that sets out the terms and conditions of an Option grant.

 

2.21.                     “Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961, as amended.

 

2.22.                     “Purchase Price” means the price for each Share subject to an Option.

 

2.23.                     “Section 102” means section 102 of the Ordinance, as amended.

 

2.24.                     “Share” means one share of Common Stock of the Company, $ 0.00001 to be par value each.

 

2.25.                     “Successor Company” means any entity the Company is merged to or is acquired by, in which the Company is not the surviving entity.

 

2.26.                     “Transaction” means: (A) (1) any consolidation, reorganization or merger of the Company in which the Company is not the continuing or surviving corporationor pursuant to which Options would be converted into cash, securities or other property, other than a merger of the Company in which the holders of Ordinary Shares immediately prior to the merger have the same proportionate ownership of Ordinary Shares of the surviving corporation immediately after the merger; or (2) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets or shares of the Company; (B) any person or group (within the meaning of Section 13(d)(3) of the U.S. Securities Exchange Act of 1934) other than the Company making a tender offer or exchange offer to acquire any Ordinary Shares (or securities convertible into Ordinary Shares) for cash, securities or any other consideration, provided that: (1) at least a portion of such securities sought pursuant to the offer in question is acquired; and (2) after consummation of such offer, the person in question is the “beneficial owner” (as such term is defined in Rule 13d-3 under the U.S. Securities Exchange Act of 1934), directly or indirectly, of 50% or more of the outstanding Ordinary Shares (calculated as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire Ordinary Shares); in each case unless the Board or the Committee decides that such transaction shall not constitute a Transaction.

 

2.27.                     “Trustee” means any person appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance, as well as a custodian performing similar functions as may be required under any applicable tax regime or jurisdiction.

 

2.28.                     “Vested Option” means any Option, which has already been vested according to the Vesting Dates.

 

2.29.                     “Vesting Dates” means, as determined by the Board or by the Committee, the date as of which the Optionee shall be entitled to exercise the Options or part of the Options, as set forth in Section 11 of the ISOP.

 

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2.30.                     “10% Shareholder” means an Optionee who at the time of grant owns, or is considered as owning within the meaning of Section 424(d) of the Code, shares possessing more than 10% of the total combined voting power of all classes of shares of the Company (or any Parent or Subsidiary of the Company).

 

3.                                      ADMINISTRATION OF THE ISOP

 

3.1.                            The Board shall have the power to administer the ISOP either directly or upon the recommendation of the Committee, all as provided by applicable law and in the Certificate. Notwithstanding the above, the Board shall automatically have residual authority if no Committee shall be constituted or if such Committee shall cease to operate for any reason.

 

3.2.                            The Committee shall have the power to recommend to the Board and the Board shall have the full power and authority to: (i) designate participants; (ii) determine the terms and provisions of the respective Option Agreements, including, but not limited to, the number of Options to be granted to each Optionee, the number of Shares to be covered by each Option, provisions concerning the time and the extent to which the Options may be exercised and the nature and duration of restrictions as to the transferability or restrictions constituting substantial risk of forfeiture and to cancel or suspend awards, as necessary; (iii) determine the Fair Market Value of the Shares covered by each Option in accordance with the principles set forth in section 2.13 of the ISOP; (iv) make an election as to the type of Approved 102 Option; (v) designate the type of Options; (vi) alter any restrictions and conditions of any Options or Shares subject to any Options; (vii) interpret the provisions and supervise the administration of the ISOP; (viii) accelerate the right of an Optionee to exercise in whole or in part, any previously granted Option; (ix) determine the Purchase Price of the Option in accordance with the terms of the ISOP; (x) prescribe, amend and rescind rules and regulations relating to the ISOP; and (xi) make all other determinations deemed necessary or advisable for the administration of the ISOP, including make any requisite adjustments in the ISOP and determine the relevant terms in any Option Agreement in order to comply with the requirements of any relevant tax regimes and make any requisite adjustments in the ISOP and determine the relevant terms with respect to any applicable sub-plans to this ISOP as may be adopted by the Board.

 

3.3.                            Notwithstanding the above, the Committee shall not be entitled to grant Options to the Optionees.

 

3.4.                            The Board shall have the authority to grant, at its discretion, to the holder of an outstanding Option, in exchange for the surrender and cancellation of such Option, a new Option having a purchase price equal to, lower than or higher than the Purchase Price of the original Option so surrendered and canceled and containing such other terms and conditions as the Board may prescribe in accordance with the provisions of the ISOP.

 

3.5.                            All decisions and selections made by the Board or the Committee pursuant to the provisions of the ISOP shall be made in accordance with the Certificate, the Company’s By-Laws and applicable law .

 

3.6.                            The interpretation and construction by the Committee of any provision of the ISOP or of any Option Agreement thereunder shall be final and conclusive unless otherwise determined by the Board.

 

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3.7.                            Subject to the Company’s Certificate, applicable law and to all approvals legally required, including, each member of the Board or the Committee shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the ISOP unless arising out of such member’s own fraud or bad faith, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the member may have as a director or otherwise under the Certificate, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise, subject however to any limitations under any applicable law.

 

4.                                      DESIGNATION OF PARTICIPANTS AND OTHER MATTERS

 

4.1.                            The persons eligible for participation in the ISOP as Optionees shall include any Employees and/or Non-Employees of the Company or of any Affiliate.

 

4.2.                            The ISOP is intended to enable the Company to grant options and issue shares under various and different tax regimes, including, without limitation: (i) pursuant and subject to Section 102 or any provision which may amend or replace it and any regulations, rules, orders or procedures promulgated thereunder and to designate them as either grants made through a trustee or not through a trustee; (ii) pursuant and subject to Section 3(i) of the Ordinance; (iii) as Incentive Stock Options; (iv) Nonstatutory Stock Options; (v) to Optionees in jurisdictions other than Israel and the United States; and (vi) as restricted shares. Accordingly, the Board may consider and resolve (subject to the Certificate and applicable law) on introducing amendments to this ISOP and/or to adopt sub-plans thereto in order to accommodate any of the foregoing or any other types of options or stock based incentives under any applicable tax regime or jurisdiction.

 

4.3.                            Notwithstanding anything provided herein, the Company does not warrant that the ISOP will be recognized by the income tax authorities in any jurisdiction or that future changes will not be made to the provisions of applicable laws, or rules or regulations which are promulgated from time to time thereunder, or that any exemption or benefit currently available, whether pursuant to the Ordinance or the Code or otherwise, will not be abolished.

 

4.4.                            Incentive Stock Options may be granted only to US Employees. 102 Options may be granted only to Israeli Employees.

 

4.5.                            In the event that the Options are designated as Incentive Stock Options, then notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For the purposes of this Section 4.5, Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

 

4.6.                            The grant of an Option hereunder shall neither entitle the Optionee to participate nor disqualify the Optionee from participating in, any other grant of Options pursuant to the ISOP or any other option or share plan of the Company or any of its Affiliates.

 

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4.7.                            Anything in the ISOP to the contrary notwithstanding, all grants of Options to directors and office holders shall be authorized and implemented in accordance with the provisions of all applicable law.

 

5.                                      DESIGNATION OF OPTIONS PURSUANT TO SECTION 102

 

5.1.                            The Company may designate Options granted to Employees pursuant to Section 102 as Unapproved 102 Options or Approved 102 Options.

 

5.2.                            The grant of Approved 102 Options shall be made under this ISOP and shall be conditioned upon the approval of this ISOP by the ITA.

 

5.3.                            Approved 102 Option may either be classified as Capital Gain Option or Ordinary Income Option.

 

5.4.                            Approved 102 Option elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) of the Ordinance shall be referred to herein as “CGO”.

 

5.5.                            Approved 102 Option elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance shall be referred to herein as “OIO”.

 

5.6.                            The Company’s election of the type of Approved 102 Options as CGO or OIO granted to Employees (the “Election”), shall be appropriately filed with the ITA before the Date of Grant of an Approved 102 Option. Such Election shall become effective beginning the first Date of Grant of an Approved 102 Option under this ISOP and shall remain in effect at least until the end of the year following the year during which the Company first granted Approved 102 Options. The Election shall obligate the Company to grant only the type of Approved 102 Option it has elected, and shall apply to all Optionees who were granted Approved 102 Options during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, such Election shall not prevent the Company from granting Unapproved 102 Options simultaneously.

 

5.7.                            All Approved 102 Options must be held in trust by a Trustee, as described in Section 6 below.

 

5.8.                            For the avoidance of doubt, the designation of Unapproved 102 Options and Approved 102 Options shall be subject to the terms and conditions set forth in Section 102 of the Ordinance and the regulations promulgated thereunder.

 

5.9.                            With regards to Approved 102 Options, the provisions of the ISOP and/or the Option Agreement shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s (within the ITA) permit, and the said provisions and permit shall be deemed an integral part of the ISOP and of the Option Agreement. Any provision of Section 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the ISOP or the Option Agreement, shall be considered binding upon the Company and the Optionees.

 

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6.                                      TRUSTEE

 

6.1.                            Appointment of Trustee. The Board shall appoint (and may, from time to time, replace) a Trustee for the purposes of the ISOP, in accordance with the requirements of aplpicable law.

 

6.2.                            Holding Period. Approved 102 Options which shall be granted under the ISOP and/or any Shares allocated or issued upon exercise of such Approved 102 Options and/or other shares received subsequently following any realization of rights, including without limitation bonus shares, shall be allocated or issued to the Trustee and held for the benefit of the Optionees for such period of time as required by Section 102 or any regulations, rules or orders or procedures promulgated thereunder (the “Holding Period”). In the case the requirements for Approved 102 Options are not met, then the Approved 102 Options may be treated as Unapproved 102 Options, all in accordance with the provisions of Section 102 and regulations promulgated thereunder.

 

6.3.                            Optionee’s Tax Liabilities. Notwithstanding anything to the contrary, the Trustee shall not release any Shares allocated or issued upon exercise of Approved 102 Options prior to the full payment of the Optionee’s tax liabilities arising from Approved 102 Options which were granted to him and/or any Shares allocated or issued upon exercise of such Options.

 

6.4.                            Holding Limitations. With respect to any Approved 102 Option, subject to the provisions of Section 102 and any rules or regulation or orders or procedures promulgated thereunder, an Optionee shall not sell or release from trust any Share received upon the exercise of an Approved 102 Option and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Holding Period required under Section 102 of the Ordinance. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 of the Ordinance and under any rules or regulation or orders or procedures promulgated thereunder shall apply to and shall be borne by such Optionee.

 

6.5.                            Trustee Release. Upon receipt of Approved 102 Option, the Optionee will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with the ISOP, or any Approved 102 Option or Share granted to him thereunder.

 

7.                                      SHARES RESERVED FOR THE ISOP; RESTRICTION THEREON

 

7.1.                            The Company may reserve shares of Common Stock for the purposes of the ISOP, subject to adjustment as set forth in Section 9 below, and as may be increased from time to time in accordance with the terms of this ISOP. 5,970,303 Shares shall be reserved for issuance under the ISOP, all of which may be issued pursuant to Incentive Stock Options. Any Shares which remain unissued and which are not subject to the outstanding Options at the termination of the ISOP shall cease to be reserved for the purpose of the ISOP, but until termination of the ISOP the Company shall at all times reserve sufficient number of Shares to meet the requirements of the ISOP. Should any Option for any reason expire or be cancelled prior to its exercise or relinquishment in full, the Shares subject to such Option may again be subjected to an Option under the ISOP or under the Company’s other share option plans.

 

7.2.                            Each Option granted pursuant to the ISOP, shall be evidenced by a written Option Agreement between the Company and the Optionee, in such form as the Board or the

 

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Committee shall from time to time approve. Each Option Agreement shall state, among other matters, the number of Shares to which the Option relates, the type of Option granted thereunder (whether a CGO, OIO, Unapproved 102 Option, 3(i) Option, Incentive Stock Option or Nonstatutory Stock Option), the Vesting Dates, the Purchase Price per share, the Expiration Date and such other terms and conditions as the Committee or the Board in its discretion may prescribe, provided that they are consistent with this ISOP and subject to the applicable law.

 

7.3.                            Until the consummation of an IPO, such Shares shall be voted by an irrevocable proxy (the “Proxy”) pursuant to the directions of the Board, such Proxy to be assigned to the person or persons designated by the Board. Such person or persons designated by the Board shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him/her, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the voting of such Proxy unless arising out of such member’s own fraud or bad faith, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the person(s) may have as a director or otherwise under the Company’s Certificate, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise. Without derogating from the above, with respect to Approved 102 Options, such shares shall be voted in accordance with the provisions of Section 102 and any rules, regulations or orders promulgated thereunder

 

8.                                      PURCHASE PRICE

 

8.1.                            The Purchase Price of each Share subject to an Option shall be determined by the Committee in its sole and absolute discretion in accordance with applicable law, subject to any guidelines as may be determined by the Board from time to time. However, in the case of a US Option, the Purchase Price shall not be less than 100% of the Fair Market Value of the underlying Shares on the Date of Grant or such other amount as may be required pursuant to the Code. Each Option Agreement will contain, inter alia, the Purchase Price determined for each Optionee.

 

8.2.                            No Incentive Stock Option shall be granted to an Optionee who is a 10% Shareholder, unless at such time the Purchase Price is at least 110% of the Fair Market Value of the underlying Shares and the Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the Date of Grant.

 

8.3.                            The Purchase Price shall be payable upon the exercise of the Option in a form satisfactory to the Board or Committee, including without limitation, by cash or check. The Committee shall have the authority to postpone the date of payment on such terms as it may determine.

 

8.4.                            The Purchase Price shall be denominated in the currency of the primary economic environment of, either the Company, any of its Affiliates, or the Optionee (that is the functional currency of the Company or the currency in which the Optionee is paid) as determined by the Company.

 

9.                                      ADJUSTMENTS.

 

Upon the occurrence of any of the following described events, Optionee’s rights to purchase Shares under the ISOP shall be adjusted as hereafter provided:

 

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9.1.                            Transaction Events. In the event of a Transaction, the Committee, as constituted before such Transaction, may, in its sole discretion (except as may be otherwise provided in the Option Agreement): (i) cancel any outstanding unexercised Options (whether or not vested) that have a Purchase Price that is greater than the Transaction Price (defined below); or (ii) cancel any outstanding unexercised Options (whether or not vested) that have a Purchase Price that is less than or equal to the Transaction Price in exchange for a cash payment in an amount equal to (A) the difference between the Transaction Price and the Purchase Price, multiplied by (B) the total number of Shares underlying such Options that are vested and exercisable at the time of the Transaction. The Committee may, in its discretion, include such further provisions and limitations in any Option Agreement as it may deem desirable. The “Transaction Price” means the lower of (I) the Fair Market Value of a Share as of the date of the Transaction, or (II) the price paid per Share as part of the transaction which constitutes the Transaction. Notwithstanding the foregoing, the Committee or the Board shall have full power and authority to determine that the Options shall not be cancelled but shall be assumed or substituted for an appropriate number of shares of each class of shares or other securities of the Successor Company (or a parent or subsidiary of the Successor Company) as were distributed to the Company or the shareholders of the Company in connection and with respect to the Transaction. In the case of such assumption and/or substitution of Options, appropriate adjustments shall be made to the Purchase Price so as to reflect such action and all other terms and conditions of the Option Agreements shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Committee or the Board, which determination shall be in their sole discretion and final. Notwithstanding anything else in this ISOP to the contrary, any assumption or substitution of US Options shall be made in a manner that complies with Code Section 424(a) (whether or not the Option is an Incentive Stock Option).

 

9.2.                            Acceleration. Notwithstanding the above and subject to any applicable law, the Board shall have full power and authority to determine (but that shall not be obligated to determine) that in certain Option Agreements:

 

9.2.1.                  There shall be a clause instructing that, in any Transaction or the occurrence of any other event determined by the Board, the Vesting Dates shall be accelerated, or partially accelerated so that any unvested Option or any portion thereof shall be immediately vested as of the date which is ten (10) days prior to the effective date of the Transaction (and contingent upon the occurrence of the Transaction) or prior to the effective date of the event determined by the Board of Directors.

 

9.2.2.                  There shall be a clause instructing that, if the Optionee’s employment with the Successor Company is terminated by the successor company without Cause within certain period, as determined in the Option Agreement, which shall not exceed two (2) years of the closing of such Transaction, the Vesting Dates shall be accelerated so that certain unvested portion of the substituted Option shall be immediately vested in full or in part as of the date of such termination without Cause.

 

9.3.                            For the purposes of section 9.1 above, an Option shall be considered assumed or substituted if, following the Transaction, the Option confers the right to purchase or receive, for each Share underlying an Option immediately prior to the Transaction, the consideration (whether shares, options, cash, or other securities or property) received in the Transaction by the Company or by the holders of shares held on the effective date of the Transaction

 

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(and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Transaction is not solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Option, to be solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary equal in Fair Market Value to the per Share consideration received by holders of a majority of the outstanding shares in the Transaction; and provided further that the Committee may determine, in its discretion, that in lieu of such assumption or substitution of Options for options of the Successor Company or its parent or subsidiary, such Options will be substituted for any other type of asset or property including cash which is fair under the circumstances.

 

9.4.                            Liquidation or Dissolution. If the Company is voluntarily liquidated or dissolved while unexercised Options remain outstanding under the ISOP, the Company shall notify all unexercised Option holders of such liquidation, and the Option holders shall then have ten (10) days to exercise any unexercised Vested Option held by them at that time, in accordance with the exercise procedure set forth herein. Upon the expiration of such ten- days period, all remaining outstanding Options will terminate immediately.

 

9.5.                            Changes in Capitalization. If the outstanding shares of the Company shall at any time be changed or exchanged by declaration of a share dividend (bonus shares), share split, combination or exchange of shares, recapitalization, or any other like event by or of the Company (other than a Transaction), and as often as the same shall occur, then the number, class and kind of the Shares subject to the ISOP or subject to any Options therefore granted, and the Purchase Prices, shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate Purchase Price, provided, however, that no adjustment shall be made by reason of the distribution of subscription rights (rights offering) on outstanding shares. Upon happening of any of the foregoing, the class and aggregate number of Shares issuable pursuant to the ISOP (as set forth in Section 7 hereof), in respect of which Options have not yet been exercised, shall be appropriately adjusted, all as will be determined by the Board whose determination shall be final.

 

9.6.                            Anything herein to the contrary notwithstanding, if prior to the completion of the IPO all or substantially all of the shares of the Company are to be sold, or in case of a Transaction, all or substantially all of the shares of the Company are to be exchanged for securities of another Company, then each Optionee shall be obliged to sell or exchange, as the case may be, all of the Shares such Optionee purchased under the ISOP, in accordance with the instructions issued by the Board in connection with the Transaction, whose determination shall be final. Without derogating from the generality of the foregoing, and in addition thereto, each Optionee shall be obligated to sell and/or exchange all of the Shares such Optionee purchased under the ISOP, in accordance with any “bring along” (i.e. a provision according to which all shareholders of the Company are required to sell their shares/options in the event that the holders of a minimum percentage of the Company’s share capital has determined to sell or exchange such minimum percentage to a third party) or any similar provisions, all as specified in the Certificate.

 

9.7.                            The Optionee acknowledges that in the event that the Company’s shares shall be registered for trading in any public market, Optionee’s rights to sell the Shares may be subject to

 

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certain limitations (including a lock-up period), as will be requested by the Company or its underwriters, and the Optionee unconditionally agrees and accepts any such limitations.

 

10.                               TERM AND EXERCISE OF OPTIONS

 

10.1.                     Options may be exercised by the Optionee by giving written notice to the Company and/or to any third party designated by the Company (the “Representative”), in such form and method as may be determined by the Company and when applicable, by the Trustee in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice by the Company and/or the Representative and the payment of the Purchase Price at the Company’s or the Representative’s principal office and compliance with any tax obligations (including paying or making arrangements to satisfy any withholding or other tax obligations) as further specified in section 20.1 below, and/or in the Option Agreement. The notice shall specify the number of Shares with respect to which the Option is being exercised.

 

10.2.                     Options, to the extent not previously exercised, shall terminate forthwith upon the earlier of: (i) the date set forth in the Option Agreement; (ii) in the event of a Transaction and other events, as stated in Section 9 above, (iii) the date set forth in section 10.4 with respect to unvested Options and (iv) the expiration of any extended period in any of the events set forth in section 10.5 below, and with respect to Incentive Stock Options, also as prescribed under Section 8 above.

 

10.3.                     The Options may be exercised by the Optionee in whole at any time or in part from time to time, to the extent that the Options become vested and exercisable, prior to the Expiration Date, and provided that, subject to the provisions of section 10.5 below, the Optionee is employed by, serves as a director, or provides services to the Company or any of its Affiliates, at all times during the period beginning with the granting of the Option and ending upon the date of exercise, and subject, to the provisions of this ISOP as they may apply to Incentive Stock Options.

 

10.4.                     Subject to the provisions of section 10.5 below, in the event of termination of Optionee’s employment, directorship or service-provider relationship, with the Company or any of its Affiliates, all Options granted to such Optionee that are unvested as of the date of such termination will immediately expire. A notice of termination of employment, directorship or services shall be deemed to constitute termination of employment or services. For the avoidance of doubt, in case of such termination of employment, directorship or services, the unvested portion of the Optionee’s Option shall not vest and shall not become, exercisable.

 

10.5.                     Notwithstanding anything to the contrary hereinabove and unless otherwise determined in the Optionee’s Option Agreement, an Option may be exercised after the date of termination of Optionee’s employment or service with the Company or any Affiliates during an additional period of time beyond the date of such termination, but only with respect to the number of Vested Options at the time of such termination according to the Vesting Dates, if:

 

(i)                                     termination is without Cause, in which event any Vested Option still in force and unexpired may be exercised within a period of ninety (90) days after the date of such termination; or

 

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(ii)                                  termination is the result of death or disability of the Optionee, in which event any Vested Option still in force and unexpired may be exercised within a period of twelve (12) months after the date of such termination. With respect to Incentive Stock Option, if such disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, such Option shall automatically cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option on the day three months and one day following such termination. In the case of an Incentive Stock Option, such Option shall automatically cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option if exercised more than 1 (one) year following the date the Optionee ceased to be a US Employee as a result of his disability.; or

 

(iii)                               prior to the date of such termination, the Committee shall authorize an extension of the terms of all or part of the Vested Options beyond the date of such termination for a period not to exceed the period during which the Options by their terms would otherwise have been exercisable, and provided further that the Vested Options may lose their status as Incentive Stock Options and/or Approved 102 Option, if such extension extends beyond the maximum extension authorized by the Ordinance or the Code, as applicable.

 

If termination of employment or service is for Cause, any outstanding unexercised Option (whether vested or non-vested), will immediately expire and terminate, and the Optionee shall not have any right in connection to such outstanding Options.

 

10.6.                     The Optionees shall not have any of the rights or privileges of shareholders of the Company in respect of any Shares purchasable upon the exercise of any Option, until registration of the Optionee as holder of such Shares in the Company’s register of shareholders upon exercise of the Option in accordance with the provisions of the ISOP (following which time, the provisions of the Certificate shall apply subject to any applicable law), but in case of Options and Shares held by the Trustee, subject to the provisions of Section 6 and 7.3 of the ISOP.

 

10.7.                     Any form of Option Agreement authorized by the ISOP may contain such other provisions as the Committee may, from time to time, deem advisable.

 

10.8.                     With respect to Unapproved 102 Options, if the Optionee ceases to be employed by the Company or any Affiliate, the Optionee shall extend to the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the rules, regulation or orders promulgated thereunder.

 

11.                               VESTING OF OPTIONS

 

11.1.                     Subject to the provisions of the ISOP, each Option shall vest following the Vesting Dates and for the number of Shares as shall be provided in the Option Agreement. However, no Option shall be exercisable after the Expiration Date.

 

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11.2.                     An Option may be subject to such other terms and conditions on the time or times when it may be exercised, as the Committee may deem appropriate. The vesting provisions of individual Options may vary.

 

12.                               SHARES SUBJECT TO RIGHT OF FIRST REFUSAL

 

12.1.                     Notwithstanding anything to the contrary in the Company’s Certificate, none of the Optionees shall have a right of first refusal in relation with any sale of shares in the Company.

 

12.2.                     Unless otherwise determined by the Committee, until such time as the Company shall complete an IPO, an Optionee shall not have the right to sell Shares issued upon the exercise of an Option within six (6) months and one day of the date of exercise of such Option or issuance of such Shares. Unless otherwise determined by the Committee, until such time as the Company shall complete an IPO, the sale of Shares issuable upon the exercise of an Option shall be subject to a right of first refusal as determined in the Company’s Certificate, as existing from time to time.

 

13.                               DIVIDENDS

 

With respect to all Shares (but excluding, for avoidance of any doubt, any unexercised Options) allocated or issued upon the exercise of Options purchased by the Optionee and held by the Optionee or by the Trustee, as the case may be, the Optionee shall be entitled to receive dividends in accordance with the quantity of such Shares, subject to the provisions of the Certificate and subject to any applicable taxation on distribution of dividends, and when applicable subject to the provisions of Section 102 and the rules, regulations or orders promulgated thereunder.

 

14.                               RESTRICTIONS ON ASSIGNABILITY AND SALE OF OPTIONS; MARKET STAND-OFF

 

14.1.                     No Option or any right with respect thereto, purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect to it given to any third party whatsoever, except as specifically allowed under the ISOP, and during the lifetime of the Optionee each and all of such Optionee’s rights to purchase Shares hereunder shall be exercisable only by the Optionee. Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void.

 

14.2.                     As long as Option’s and/or Shares are held by the Trustee on behalf of the Optionee, all rights of the Optionee over the Shares are personal, can not be transferred, assigned, pledged or mortgaged, other than by will or pursuant to the laws of descent and distribution.

 

14.3.                     In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the United States Securities Act of 1933, as amended or equivalent law in another jurisdiction, the Optionee shall not directly or indirectly, without the prior written consent of the Company or its underwriters, (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares acquired under this ISOP or any securities of the Company (whether or not such Shares acquired under this ISOP), or

 

15

 

(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares acquired under this ISOP, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares acquired under this ISOP or such other securities, in cash or otherwise. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the effective date of the registration statement relating to such offering, as may be requested by the Company or such underwriters, however in any event, such period shall not exceed 180 days (in the case of the Company’s first underwritten offering of its Shares) following the effective date of such registration statement or 90 days (in the case of a registration statement thereafter.

 

14.3.1.           In the event of a subdivision of the outstanding share capital of the Company, the declaration and payment of a share dividend (distribution of bonus shares), the declaration and payment of an extraordinary dividend payable in a form other than shares, a recapitalization, a reorganization (which may include a combination or exchange of shares or a similar transaction affecting the Company’s outstanding securities without receipt of consideration), a consolidation, a share split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, an adjustment in conversion ratio, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.

 

14.3.2.           In order to enforce the Market Stand-Off, the Company may impose stop- transfer instructions with respect to the Shares acquired under this Plan until the end of the applicable stand-off period.

 

14.3.3.           The underwriters in connection with a registration statement so filed are intended to be third party beneficiaries of this Section and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

14.4.                     The provisions of this Section shall apply to the Optionees and to any purchaser, assignee or transferee of any Shares.

 

15.                               EFFECTIVE DATE AND DURATION OF THE ISOP

 

15.1.                     The ISOP shall be effective as of the day it was adopted by the Board and shall terminate at the end of ten (10) years from such day of adoption.

 

15.2.                     The Company shall obtain the approval of the Company’s shareholders for the adoption of this ISOP or for any amendment to this ISOP, if shareholders’ approval is necessary or desirable to comply with any applicable law including without limitation the US securities law or the securities laws of other jurisdiction applicable to Options granted to Optionees under this ISOP, or if shareholders’ approval is required by any authority or by any governmental agencies or national securities exchanges including without limitation the US Securities and Exchange Commission or as may be required under the Company’s Certificate.

 

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16.                               AMENDMENTS OR TERMINATION

 

Without derogating from any other rights granted herein to the Board, the Board may at any time, but when applicable, after consultation with the Trustee, amend, alter, suspend or terminate the ISOP. No amendment, alteration, suspension or termination of the ISOP shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Company, which agreement must be in writing and signed by the Optionee and the Company. Termination of the ISOP shall not affect the Committee’s ability to exercise the powers granted to it hereunder with respect to Options granted under the ISOP prior to the date of such termination.

 

17.                               GOVERNMENT REGULATIONS

 

The ISOP, and the granting and exercise of Options hereunder, and the obligation of the Company to sell and deliver Shares under such Options, shall be subject to all applicable laws, rules, and regulations, whether of the State of Israel or of the United States or any other State having jurisdiction over the Company and the Optionee, including the registration of the Shares under the United States Securities Act of 1933, the Companies Law, the Israeli Securities Law 1968 and the Ordinance and to such approvals by any governmental agencies or national securities exchanges as may be required. Nothing herein shall be deemed to require the Company to register the Shares under the securities laws of any jurisdiction.

 

18.                               CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES ; NO CLAIMS

 

18.1.                     Neither the ISOP nor the Option Agreement with the Optionee shall impose any obligation on the Company or an Affiliate thereof, to continue any Optionee in its employ or service, and nothing in the ISOP or in any Option granted pursuant thereto shall confer upon any Optionee any right to continue in the employ or service of the Company or an Affiliate thereof or restrict the right of the Company or an Affiliate thereof to terminate such employment or service at any time.

 

18.2.                     No Optionee or other person shall have any claim to be granted any Options, and there is no obligation for uniformity of treatment of Optionees. The terms and conditions of Options and the Board’s determinations and interpretations with respect thereto need not be the same with respect to each Optionee (whether or not such Optionees are similarly situated).

 

18.3.                     No income or gain which shall be credited to or which purports to be credited to an Optionee as a result of this ISOP shall in any manner be taken into account in the calculation of the basis of the Optionee’s entitlements from the Company or any Affiliate or in the calculation of any social welfare right or other rights or benefits arising out of the employee/employer or any other relationship (including, without limitation, any benefits under any pension, retirement, severance, profit sharing, bonus, life insurance, vacation or other legal requirement or benefit plan of the Company or any Related Company). Except as otherwise determined by the Board, if, pursuant to any law, the Company or any Affiliate shall be obliged for the purposes of calculation of the said items to take into account income or gain actually or theoretically credited to the Optionee, the Optionee shall indemnify the Company or any Affiliate against any expense caused to it in this regard.

 

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19.                               GOVERNING LAW & JURISDICTION

 

The ISOP shall be governed by and construed and enforced in accordance with the laws of the State of Israel, applicable to contracts made and to be performed therein, without giving effect to the principles of conflict of laws, subject to the provisions of the Code with respect to Incentive Stock Options and, in the event of any ambiguity or conflict, the provisions hereof shall be so construed and applied as to give effect to the intention that any Incentive Stock Option granted will qualify as such under Section 422 of the Code. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matters pertaining to the ISOP.

 

20.                               TAX CONSEQUENCES

 

20.1.                     Any tax consequences arising from the grant or exercise of any Option, from the payment for Shares covered thereby or from any other event or act (of the Company and/or its Affiliates, the Trustee or the Optionee), hereunder, shall be borne solely by the Optionee. The Company and/or its Affiliates and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including, without limitation, withholding taxes at source. Furthermore, the Optionee shall agree to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee.

 

20.2.                     The Company and/or, when applicable, the Trustee shall not be required to release any Share certificate to an Optionee until all required payments have been fully made.

 

21.                               NON-EXCLUSIVITY OF THE ISOP; MULTIPLE AGREEMENTS

 

21.1.                     The adoption of the ISOP by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of Options otherwise than under the ISOP, and such arrangements may be either applicable generally or only in specific cases. For the avoidance of doubt, prior grant of options to Optionees of the Company under their employment agreements, and not in the framework of any previous option plan, shall not be deemed an approved incentive arrangement for the purpose of this Section 21.

 

21.2.                     The terms of each Option may differ from other Options granted under the ISOP at the same time, or at any other time. The Board may also grant more than one Option to a given Optionee during the term of the ISOP, either in addition to, or in substitution for, one or more Options previously granted to that Optionee.

 

Adopted on December 14, 2017

 

18Exhibit 10.10

 

LEMONADE, INC.

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (the “Agreement”) is entered into as of June 1, 2017 by and between Lemonade, Inc., a Delaware corporation, f/k/a Lemonade Group, Inc., (the “Company”), and Timothy E. Bixby (“Purchaser”).

 

1.                                      Purchase and Sale of Stock

 

Subject to the terms and conditions of this Agreement, on the Purchase Date (as defined below), the Company will issue and sell to Purchaser, and Purchaser agrees to purchase from the Company, Three Hundred and Fifty Thousand (350,000) shares (the “Shares”) of the Company’s common stock (the “Common Stock”), par value $0.00001 per share, in exchange for payment of $2.65 per Share (total purchase price of $927,500) in the form of a Promissory Note, receipt of which is hereby acknowledged by the Company. The term “Shares” shall include the purchased Shares and all securities received in replacement of or in connection with the Shares pursuant to any stock dividends or splits, all securities received in replacement of the Shares in any recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

 

2.             Closing

 

The purchase and sale of the Shares shall occur at the principal office of the Company simultaneously on the date first set forth above or on such other date as the Company and Purchaser shall agree (the “Purchase Date “). On the Purchase Date, the Company will deliver to Purchaser a stock certificate representing the Shares purchased by Purchaser, against payment of the purchase price for the Shares by (a) check made payable to the Company, (b) cancellation of indebtedness of the Company to Purchaser, or (c) by a combination of the foregoing.

 

3.             Repurchase Right

 

In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares while the Shares are subject to the Company’s Repurchase Option (as defined below). After any Shares have been released from the Repurchase Option, Purchaser shall not assign, encumber or dispose of any interest in such Shares except in compliance with the provisions of this Agreement and applicable securities laws.

 

(a)           Repurchase Option.

 

(i)            In the event that Purchaser shall at any time cease to have an employment, consulting or other service relationship with the Company (or any successor or its parent company) for any reason (the date of such termination being the “Termination Date “), the Company shall have the right (the “Repurchase Option “), for a period of 90 days from such Termination Date (the “Option Period”), to repurchase any or all of the Shares that have not yet been released from the Repurchase Option pursuant to Section 3(b) (the “Unvested Shares”) at a repurchase price per Share in cash of $2.65 (the “Repurchase Price”). The Company may exercise its Repurchase Option as to any or all of the Unvested Shares at any time during the Option Period by written notice to Purchaser, provided, however, that without requirement of further action on the part of either party hereto, the Repurchase Option shall be deemed to have been automatically exercised as to all Unvested Shares at 5:00 p.m. Pacific time on the last day of the Option Period, unless the Company declines in writing to exercise its Repurchase Option in whole or in part prior to such time; provided further, that notwithstanding the above, the Repurchase Option shall not be deemed to have been automatically exercised, and shall instead be deemed to become temporarily unexercisable as of such time and date and extended by the duration of any such period, in any case

 

 

where such automatic exercise would result in a violation of applicable law (including without limitation Section 160 of the Delaware General Corporation Law), and the Repurchase Option shall once again be deemed exercisable (or, as provided above, exercised) as soon as a violation of applicable law would not result from its exercise.

 

(ii)           If the Company determines not to exercise the Repurchase Option in whole or in part, it shall notify Purchaser prior to the end of the Option Period, and the Repurchase Option shall thereupon terminate as to any Unvested Shares for which the Company declined to exercise the Repurchase Option. If the Repurchase Option is exercised or deemed to be exercised, then within five (5) business days after the date of such exercise or deemed exercise, the Company shall notify the Escrow Agent (as defined below) thereof and shall make payment of the aggregate Repurchase Price for the Unvested Shares being repurchased by any of the following methods: (A) delivering to Purchaser a check in the amount of the aggregate Repurchase Price; (B) canceling an amount of indebtedness of Purchaser to the Company equal to the aggregate Repurchase Price; or (C) any combination of (A) and (B) such that the combined payment and cancellation of indebtedness equals such aggregate Repurchase Price. Upon delivery of the payment of the aggregate Repurchase Price in any of the ways described above, the Company shall become the legal and beneficial owner of the Unvested Shares being repurchased and all related rights and interests therein, and the Company shall have the right to retain and transfer to its own name the number of Unvested Shares being repurchased by the Company.

 

(iii)          If the Company neither notifies Purchaser prior to the end of the Option Period of the Company’s decision not to exercise its Repurchase Option nor delivers payment of the aggregate Repurchase Price to Purchaser within five (5) business days after the actual or deemed exercise of the Repurchase Option (or within an additional period in accordance with Section 3(a)(0), then the sole remedy of Purchaser thereafter shall be to receive the aggregate Repurchase Price from the Company in the manner set forth above for the Unvested Shares deemed repurchased, and in no case shall Purchaser have any claim of ownership as to any of such Unvested Shares. If the Repurchase Option is terminated in whole or in part by written notice from the Company to Purchaser, then upon and following such termination the only remaining right of Purchaser under this Agreement shall be the right to receive and retain the Unvested Shares as to which the Repurchase Option was terminated, and Purchaser shall have no right whatsoever to receive the Repurchase Price.

 

(b)           Vesting; Release of Shares from Repurchase Option.

 

As of the date of this Agreement, all of the Shares shall initially be deemed Unvested Shares and subject to the Repurchase Option. One-fourth (1/4) of the Unvested Shares shall be released from the Repurchase Option on the first anniversary of the date of this Agreement so long as Purchaser has not voluntarily terminated his employment with the Company prior to such anniversary, and thereafter 1/12 of the remaining Unvested Shares shall be released from the Repurchase Option and shall thereupon cease to be Unvested Shares upon completion of each successive quarter of service after the first anniversary of this Agreement, until all Unvested Shares have been released from the Repurchase Option on the four (4) year anniversary of the date of this Agreement. In the event of a Change of Control in which the vesting of any equity award held by any employee, officer or director of the Company employed after the date of this Agreement, or which applies to employees generally under the terms of the document memorializing the change of control transaction, accelerates on a basis more favorable than that afforded to Purchaser hereunder, this Section 3(b) shall be deemed modified to provide Purchaser with such more favorable vesting acceleration; provided however, that, without limiting the foregoing, if a Change of Control occurs prior to the first anniversary of this Agreement, one-fourth (1/4) of the Unvested Shares shall be released from the Repurchase Option immediately prior to the Change of Control and shall thereupon cease to be Unvested Shares as of the Change of Control.

 

(c)           Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

 

“Change of Control” means (A) a merger, consolidation or reorganization involving the Company in which the

 

 

shares of capital stock of the Company outstanding immediately prior to such merger, consolidation or reorganization (or the shares of capital stock into which such shares are converted or for which such shares are exchanged in connection with such merger, consolidation or reorganization) do not represent immediately following such merger, consolidation or reorganization at least a majority, by voting power, of the capital stock of (1) the surviving or resulting entity or (2) if the surviving or resulting entity is a wholly owned subsidiary of another entity immediately following such merger, consolidation or reorganization, the parent entity of such surviving or resulting entity; or (B) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company.

 

(d)           Escrow. For purposes of facilitating the enforcement of the provisions of this Section 3, Purchaser agrees, immediately upon receipt of the certificate(s) for the Shares subject to the Repurchase Option, to deliver such certificate(s). together with an Assignment Separate From Certificate in the form attached to this Agreement as Exhibit B executed by Purchaser (and by Purchaser’s spouse if required for transfer), in blank, to the Secretary of the Company or the Secretary’s designee (as applicable, the “Escrow Agent”), to hold such certificate(s) and Assignment Separate From Certificate in escrow and to take all such actions and to effectuate all such transfers and/or releases as are in accordance with the terms of this Agreement. Purchaser hereby acknowledges that the Escrow Agent is so appointed as the escrow holder with the foregoing authorities as a material inducement to make this Agreement and that such appointment is coupled with an interest and is accordingly irrevocable. Purchaser agrees that the Escrow Agent shall not be liable to any party hereof (or to any other party). The Escrow Agent may rely upon any letter, notice or other document executed by any signature purported to be genuine and may resign at any time. Purchaser agrees that if the Escrow Agent resigns as escrow holder for any or no reason, the Board of Directors of the Company shall have the power to appoint a successor to serve as escrow holder pursuant to the terms of this Agreement. Certificates representing the Shares that have been released from the Repurchase Option shall be delivered to Purchaser upon request promptly after such release.

 

4.             Right of First Refusal

 

Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “Holder “) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 4 (the “Right of First Refusal”). Notwithstanding any other provision hereof, Purchaser shall not be entitled to sell or transfer any Shares which have not been released from the Repurchase Option.

 

(a)           Transfer Notice. In the event that Purchaser (i) proposes to sell, pledge, gift or otherwise voluntarily transfer to a third party any Shares, or any interest therein (any such event a “Voluntary Transfer”), or (ii) any Shares, or any interest therein, are to be transferred involuntarily to any third party pursuant to divorce, legal separation, foreclosure, legal judgment, bankruptcy or other legal or administrative proceeding, or any other involuntary transfer (any such event an “Involuntary Transfer”), the Company shall have the Right of First Refusal with respect to all or any portion thereof, of such Shares. In the event of a proposed Voluntary Transfer or Involuntary Transfer, Purchaser shall promptly give a written notice (the “Transfer Notice “) to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred (and the number of such Shares that arc Unvested Shares), the proposed transfer price (if applicable), the name and address of the proposed transferee (the “Transferee”), and evidence satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal or state securities laws. In the event of an Involuntary Transfer, the Transfer Notice shall contain an explanation of the circumstances of the transfer and copies of any related legal documents, including without limitation any judgment liens, court documents or foreclosure notices. The Company shall have the right to purchase all. or any portion thereof, of the Shares on the terms of the proposal described in

 

 

the Transfer Notice (subject, however, to any change in such terms permitted under Sections 4(b) and 4(c)) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company.

 

(b)           Transfer of Shares. If the Company fails to exercise its entire Right of First Refusal within 30 days after the date when it received the Transfer Notice, Purchaser may, not later than 90 days following receipt of the Transfer Notice by the Company, complete a transfer of the portion of the Shares not elected to be purchased by the Company, that are subject to the Transfer Notice on the terms and conditions described in the Transfer Notice, provided that any such sale must be made in compliance with applicable federal and state securities laws and not in violation of any other contractual restrictions to which Purchaser is bound. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by Purchaser or such Transferee, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in this Section 4. If the Company exercises any portion of its Right of First Refusal, the parties shall consummate the sale of the portion of the Shares to be purchased by the Company on the terms set forth in the Transfer Notice within 60 days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice), provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be made in a form other than cash or cash equivalents (an “In-Kind Transfer’”), the Company shall have the option of paying for the Shares with cash or cash equivalents at a price equal to the Fair Market Value (as determined pursuant to Section 4(c)) of the consideration described in the Transfer Notice.

 

(c)           Transfer Price. In the event of a Voluntary Transfer by pledge, gift or In-Kind Transfer, or any Involuntary Transfer, the price per Share shall be determined as follows. The Company shall be entitled to purchase any Unvested Shares at the Repurchase Price. The Company shall be entitled to purchase any Shares that are no longer Unvested Shares at the then effective fair market value for such Shares, (the “Fair Market Value “), as determined in good faith by the Board of Directors. In the event that Purchaser or any proposed Transferee (a “Disagreeing Party”) disagrees with such Fair Market Value determined by the Board of Directors, the Disagreeing Party shall be entitled to have the Fair Market Value determined by an independent appraiser or recognized standing mutually acceptable to the Company and the Disagreeing Party, the fees for which appraisal shall be borne solely by the Disagreeing Party.

 

(d)           Permitted Transfers. This Section 4 shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a Voluntary Transfer to any members of Purchaser’s Immediate Family (as defined below) or to a trust established by Purchaser for the benefit of Purchaser or Purchaser’s Immediate Family members, provided in each case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If Purchaser transfers any Shares, either under this Section 4(d) or after the Company has failed to exercise the Right of First Refusal, then this Section 4 shall apply to the Transferee to the same extent as it applied to Purchaser. “Immediate Family” as used herein shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, domestic partner, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships.

 

(i)            Termination of Right of First Refusal. The Right of First Refusal pursuant to this Section 4 shall terminate upon the earlier of (x) the first sale of Common Stock to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”) or (y) the closing of a Change of Control.

 

5.             Assignment of Company Purchase Rights

 

The rights of the Company to purchase any portion of the Shares under Section 3 or Section 4 of this Agreement may be assigned, in whole or in part, to any stockholder or stockholders of the Company or other persons or organizations approved by the Board of Directors.

 

 

6.             Termination of Rights as Stockholder

 

If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with Section 3 or Section 4 above, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a Holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor has or have been delivered as required by this Agreement.

 

7.             Market Standoff

 

In connection with the initial underwritten public offering by the Company of its equity securities, Purchaser agrees that it will not. without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company for its own behalf of shares of its common stock or other equity securities under the Securities Act and ending on the date specified by the Company and the managing underwriter (such period not to exceed 180 days, which period may be extended upon the request of the managing underwriter, to the extent required by any NASD, NYSE or FINRA rules, for an additional period of up to 15 days if the Company issues or proposes to issue an earnings or other public release within 15 days after the expiration of the 180-day period), (i) lend: offer: pledge: sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 7 shall apply only to the initial public offering of the Company, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions. The underwriters in connection with such registration are intended third-party beneficiaries of this Section 7 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto.

 

8.             Purchaser Representations

 

In connection with the purchase of the Shares, Purchaser represents and warrants to the Company the following:

 

(a)           Purchaser is acquiring the Shares for investment for Purchaser’s own account only, not as a nominee or agent, and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act. Purchaser has no present intention of selling, granting any participation in or otherwise distributing the Shares. Purchaser does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participations to such person or entity or to any other person or entity, with respect to any of the Shares. Purchaser understands that the Shares have not been registered under the Securities Act or any state securities laws by reason of specific exemptions therefrom that depend upon, among other things, the bona fide nature of the investment intent and the accuracy of Purchaser’s representations as expressed herein, and that the Shares must be held indefinitely, unless they are subsequently registered under the Securities Act and applicable state securities laws or Purchaser provides evidence satisfactory to the Company that an exemption from registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the Shares.

 

(b)           Purchaser will not sell, transfer or otherwise dispose of the Shares in violation of the Securities Act. the Securities Exchange Act of 1934, any state securities law or the rules promulgated thereunder. Purchaser agrees that Purchaser will not dispose of the Shares unless and until Purchaser has complied with all requirements

 

 

of this Agreement applicable to the disposition of Shares and Purchaser has provided the Company with written assurances, in substance and form satisfactory to the Company, that (i) the proposed disposition does not require registration of the Purchased Shares under the Securities Act. or all appropriate action necessary for compliance with the registration requirements of the Securities Act or with any exemption from registration available under the Securities Act (including Rule 144) has been taken, and (ii) the proposed disposition will not result in the contravention of any transfer restrictions applicable to the Purchased Shares under any applicable state securities laws, rules and regulations.

 

(c)           Purchaser has been furnished with, and has had access to, such information as Purchaser considers necessary or appropriate for deciding whether to invest in the Shares, and Purchaser has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of the Shares.

 

(d)           Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares or Purchaser’s making of an election under Section 83(b) of the of the Internal Revenue Code of 1986, as amended (the “Code”) as contemplated by this Agreement. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company or counsel to the Company for any tax advice.

 

9.             Restrictive Legends and Stop-Transfer Orders

 

(a)           Legends. The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

 

(i)            THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT EFFECTIVE REGISTRATIONS THEREUNDER OR AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATIONS ARE NOT REQUIRED.

 

(ii)           THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES), A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

(b)           Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

(c)           Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. Any attempt to transfer contrary to the provisions of Section 4 shall be void.

 

(d)           Removal of Legend. When all of the following events have occurred, the Shares then held by Purchaser will no longer be subject to the legend referred to in Section 9(a)(ii): (i) the termination of the Right of First Refusal: (ii) the expiration or termination of the lock-up provisions of Section 7 (and of any agreement entered pursuant to Section 7); and (iii) the expiration or exercise in full of the Repurchase Option. After such time, and upon Purchaser’s request, a new certificate or certificates representing the Shares not repurchased shall be issued without the legend referred to in Section 9(a)(ii) and delivered to Purchaser.

 

 

10.          No Employment Rights

 

Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

 

11.          Section 83(b) Election

 

Purchaser understands that Section 83(a) of the Code taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares lapse. In this context, “restriction” means the right of the Company to buy back the Shares pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement. Purchaser understands that Purchaser may elect to be taxed at the time the Shares are purchased, rather than when and as the Repurchase Option expires, by filing an election under Section 83(b) of the Code (an “83(b) Election “) with the Internal Revenue Service within 30 days from the date of purchase. Even if the fair market value of the Shares at the time of the execution of this Agreement equals the amount paid for the Shares, the election must be made to avoid income under Section 83(a) of the Code in the future. Purchaser understands that failure to file such an election in a timely manner may result in adverse tax consequences for Purchaser. Purchaser acknowledges and agrees that it is solely Purchaser’s responsibility to timely file an 83(b) Election and any other filing related thereto, if Purchaser chooses to do so, that the Company has no responsibility or obligation of any kind to assist with such filing, and that Purchaser will have no claim of any kind against the Company or counsel to the Company if Purchaser fails to timely file such 83(b) Election. Purchaser acknowledges that the foregoing is only a summary ‘of the effect of United States federal income taxation with respect to purchase of the Shares hereunder and does not purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser’s death.

 

12.          General

 

(a)           Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.

 

(b)           Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

 

(c)           Amendment. Subject to applicable law, this Agreement and any of the provisions hereof may be amended, modified or supplemented, in whole or in part, only in a writing signed by the parties hereto.

 

(d)           Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded, and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

 

(e)           Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be

 

 

the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

 

(f)            Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by fax or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address or fax number as set forth below or as subsequently modified by written notice.

 

(f)            Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

(g)           Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns. Any successor (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall be deemed to assume the obligations and to be entitled to the benefits under this Agreement to the same extent as the Company would be required to perform such obligations or would be entitled to such benefits in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets that executes and delivers the assumption agreement described in this section or that becomes bound by the terms of this Agreement by operation of law.

 

(h)           Option Plan. Purchaser agrees that the terms and conditions of the Company 2015 Incentive Share Option Plan (the “Plan”) shall, to the extent applicable, apply to the Shares; provided that, in the event the terms of this Agreement conflict with the terms of the Plan, the terms of this Agreement shall control.

 

(i)            No Right to Continued Employment. Purchaser acknowledges and agrees that the vesting of Shares pursuant to this Agreement is earned only by continuing service as a service provider at will (and not through the act of being hired or purchasing Shares hereunder). Purchaser further acknowledges and agrees that this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as a service provider for the vesting period, or for any period at all, and shall not interfere with the Company’s right to terminate Purchaser’s relationship with the Company at any time, with or without cause or notice.

 

(j)            Specific Performance. Purchaser understands and agrees that monetary damages would not adequately compensate the Company for the breach of this Agreement by Purchaser, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, Purchaser hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

 

	
LEMONADE, INC,
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Daniel Schreiber
    	
 
    
	
Name:
    	
Daniel Schreiber
    	
 
    
	
Title:
    	
Chief Executive Officer
    	
 
    
	
 
    	
 
    
	
PURCHASER
    	
 
    
	
 
    	
 
    
	
/s/ Timothy E. Bixby
    	
 
    
	
Timothy E. Bixby
    	
 
    
	
 
    	
 
    
	
Address:
    	
[  ]
    	
 
    
				

 

 

EXHIBIT A

 

LEMONADE, INC.

 

SPOUSAL CONSENT

 

I, Heather J. Myers, spouse of Purchaser named in the foregoing Stock Purchase Agreement (“Agreement”), confirm that I have read and I understand such Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement, and further agree that any community property or similar interest that I may have in the Shares shall be similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

 

 

	
Dated:
    	
5-23-17
    	
 
    	
/s/ Heather J. Myers
    
	
 
    	
 
    	
Heather J. Myers
    

 

 

EXHIBIT B

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED and pursuant to that certain Stock Purchase Agreement between the undersigned (“Purchaser”) and Lemonade, Inc., a Delaware corporation (the “Company”), dated June 1, 2017 (the “Agreement”), Purchaser hereby sells, assigns and transfers unto the Company                 shares of the Common Stock of the Company standing in Purchaser’s name on the Company’s books and represented by Certificate No.     , and hereby irrevocably constitutes and appoints Daniel Schreiber or any other person designated by the Board to transfer such stock on the books of the Company with full power of substitution in the premises.

 

THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.

 

	
Dated:
    	
 
    
	
 
    	
Timothy E. Bixby
    

 

 

EXHIBIT C

 

LEMONADE GROUP, INC. RECEIPT AND CONSENT

 

The undersigned hereby acknowledges receipt of Certificate No.     for 350,000 shares of Common Stock of Lemonade, Inc. (the “Company”).

 

The undersigned further acknowledges that the Secretary of the Company, or his or her designee, is acting as escrow agent pursuant to the Stock Purchase Agreement that Purchaser has previously entered into with the Company. As escrow agent, the Secretary of the Company, or his or her designee, will hold the original of the aforementioned certificate issued in the undersigned’s name, and the undersigned consents to the Company delivering such certificate to such escrow agent on the undersigned’s behalf.

 

 

	
Dated: June 1,   2017
    	
/s/ Timothy E. Bixby
    
	
 
    	
Timothy E. Bixby

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