Document:

boh-ex103_44.htm

 

EXHIBIT 10.3

BANK OF HAWAII CORPORATION
2014 STOCK AND INCENTIVE PLAN

RESTRICTED STOCK grant AGREEMENT (Performance Based)
pursuant to THE 
BANK OF HAWAII Corporation 
SELECT EXECUTIVE RETENTION PROGRAM

 

This Restricted Stock Grant Agreement ("Agreement") dated ###GRANT_DATE### ("Grant Date"), between Bank of Hawaii Corporation, a Delaware corporation ("Company"), with its registered office at 130 Merchant Street, Honolulu, Hawaii 96813, and ###PARTICIPANT_NAME### ("Grantee"), an executive of the Company or subsidiary of the Company who as of the Grant Date is an Eligible Person under the Bank of Hawaii Corporation 2014 Stock and Incentive Plan ("Plan"), is made pursuant to the Plan and the Bank of Hawaii Corporation Select Executive Retention Program ("Retention Program").

1.Grant of Restricted Shares.  Pursuant to the Plan, and effective as of the Grant Date, the Human Resources and Compensation Committee of the Company's Board of Directors ("Committee") has granted to Grantee ###TOTAL_AWARDS### shares of Restricted Stock ("Restricted Shares").  Fifty percent (50%) of the Restricted Shares are hereby designated as "First Category Shares", and fifty percent (50%) as "Second Category Shares".

The Restricted Shares serve as the restricted stock award granted to Grantee as a Supplemental Restricted Stock Grant Program (SRSGP) participant under the Retention Program.  In accordance with the terms of the Retention Program, the performance period applicable with respect to the Restricted Shares shall be the five year period commencing on January 1, 2021, and Grantee must satisfy the following employment and performance requirements in order for the Restricted Shares to become vested: (a) from the Grant Date until March 31, 2026, Grantee must remain employed in Grantee's current position, or any other position as designated by the Chairman and President/Chief Executive Officer of Bank of Hawaii; and (b) from the Grant Date until March 31, 2026, Grantee must continue to perform at a Meets Expectations or better level, as determined by the Chairman and President/Chief Executive Officer of Bank of Hawaii (these requirements are together referred to herein as the "Employment and Performance Requirements").  

2.Restrictions During Period of Restriction.  The given category of Restricted Shares shall be subject to forfeiture by Grantee and shall be nontransferable until the "Period of Restriction" terminates as to such Restricted Shares.  The Restricted Shares shall vest in Grantee upon termination of the Period of Restriction (to the extent that the Restricted Shares have not previously been forfeited).  For purposes of this Agreement, the term "Period of Restriction" shall mean the period that commences on the Grant Date and terminates on the later of: (a) the date of certification of achievement of service and financial performance objectives by the Committee; and (b) the date of confirmation by People Services of Grantee's fulfillment of the Employment and Performance Requirements (the later of which is the "Date of Certification"), as described in Section 2.d below (or which Period of Restriction otherwise terminates as provided in Section 2.c below).  In the event the later of the Committee's certification or the confirmation by People Services is completed after the close of the New York Stock Exchange on the actual date of such certification (i.e., the date of the Committee meeting) or confirmation, the Date of Certification shall be deemed to be, and the Period of Restriction shall instead terminate, on the next business day.  

 

 

 

As described below, the Period of Restriction shall terminate based upon the level of achievement of specified financial performance criteria, where the First Category Shares shall be conditioned upon "Return on Equity", and the Second Category Shares shall be conditioned upon "Stock Price to Book Ratio" ("Financial Performance Criteria").  In this regard, the Period of Restriction shall terminate with respect to the "Applicable Vesting Percentage" of the First Category Shares and Second Category Shares, as the case may be, based upon the Company's achievement of the respective Financial Performance Criteria in accordance with the following schedule:

		
	
Return on Equity and Stock Price to Book Ratio

	
Financial Performance Criteria--
Five Year Average Percentile Rank
	
Applicable Vesting
Percentage

	
75th and Above (Maximum)
	
100%

	
62.5th – 74.99th
	
75%

	
50th - 62.49th
	
50%

	
Below 50th
	
0%

For purposes of this Agreement, the terms "Return on Equity" and "Stock Price to Book Ratio" (as defined by the Federal Reserve Bank) shall mean such terms as determined for the banks that comprise the S&P Supercomposite Regional Bank Index (where for the applicable year, Return on Equity shall be measured as of December 31 of such year, and Stock Price to Book Ratio shall be measured based on stock price as of December 31 and book value as of September 30 of such year).  With respect to the given Financial Performance Criteria, the "Five Year Average Percentile" shall mean the Company's percentile level on the S&P Supercomposite Regional Bank Index for the average of the numerical measures over the five year period commencing on January 1, 2021, and ending on December 31, 2025.  The Financial Performance Criteria shall be determined based on references to measures and percentiles for the peer group banks that comprise the S&P Supercomposite Regional Bank Index (with peer group banks determined by excluding banks with assets >$50B) as of January 4, 2021.

a.Termination of Period of Restriction For First Category Shares

The Period of Restriction shall terminate with respect to the amount equal to the Applicable Vesting Percentage multiplied by the First Category Shares, provided that: (i) the Committee shall have certified the Five Year Average Percentile level for the Company's "Return on Equity" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed Grantee's fulfillment of the Employment and Performance Requirements.

b.Termination of Period of Restriction Second Category Shares

The Period of Restriction shall terminate with respect to the amount equal to the Applicable Vesting Percentage multiplied by the Second Category Shares, provided that: (i) the Committee shall have certified the Five Year Average Percentile level for the Company's "Stock Price to Book Ratio" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed Grantee's fulfillment of the Employment and Performance Requirements.

2.

 

c.Termination of Period of Restriction Upon Certain Terminations of Employment

In addition to the termination of the Period of Restriction based on the achievement of the service and financial performance objectives as described in Sections 2.a-2.b above, the Period of Restriction shall terminate in connection with certain terminations of Grantee's employment with the Company and its subsidiaries as described in this Section 2.c.  Specifically, the Period of Restriction for all of the Restricted Shares shall terminate (to the extent that the Period of Restriction has not previously terminated or the Restricted Shares have not previously been forfeited) upon the occurrence of any of the following: (i) the death of Grantee; (ii) the Grantee ceasing to be an Employee due to "disability" within the meaning of that term under Section 409A of the Internal Revenue Code of 1986, as amended ("Code"), and the regulations promulgated thereunder; or (iii) upon or after the occurrence of a "Change in Control" (within the meaning of Section 2.5 of the Bank of Hawaii Corporation Change-in-Control Retention Plan, restatement effective December 17, 2009 ("Change-in-Control Plan")) either (A) Grantee's employment with the Company and its subsidiaries is terminated by the Company without "Cause" (within the meaning of Section 2.4 of the Change-in-Control Plan) or (B) Grantee terminates employment with the Company and its subsidiaries for "Good Reason" (within the meaning of Section 2.15 of the Change-In-Control Plan).

d.Committee and People Services Determinations.  The Committee shall certify whether the Financial Performance Criteria for the First Category Shares and Second Category Shares have been achieved as soon as administratively practicable following the completion of the five year performance period commencing on January 1, 2021, and ending on December 31, 2025.  To the extent that the satisfaction of the Financial Performance Criteria is certified, and People Services has confirmed Grantee's fulfillment of the Employment and Performance Requirements (the date of the later to occur is the Date of Certification), the Restricted Shares subject to vesting shall vest on the Date of Certification (i.e., the Period of Restriction shall be terminated on the Date of Certification).

3.Forfeiture of Unvested Restricted Shares.  Restricted Shares as to which the Period of Restriction has not terminated shall be forfeited and transferred to the Company upon the first to occur of: (a) Grantee's ceasing to be an Employee for any reason, whether voluntary or involuntary (other than for a termination of employment described in Section 2.c), and (b) the date the Committee determines the Financial Performance Criteria were not met (to the extent that the Restricted Shares do not become vested based on the Applicable Vesting Percentages).  However, as described in Section 2 above with respect to the termination of the Period of Restriction on the Date of Certification, the Applicable Vesting Percentage of the given category of Restricted Shares shall not be forfeited, to the extent that:  (a) with respect to such Applicable Vesting Percentage of such category of Restricted Shares, the Committee has certified that the corresponding Five Year Average Percentile level for such Applicable Vesting Percentage has been achieved; and (b) the Grantee is an Employee on the Date of Certification.  Grantee's employment shall not be treated as terminated in the case of a transfer of employment within the Company and its subsidiaries or in the case of sick leave and other approved leaves of absence.

3.

 

4.Issuance of Shares; Registration; Withholding Taxes.  Restricted Shares shall be issued in Grantee's name, shall bear the restrictive legends as are required or deemed advisable by the Company under the provisions of any applicable law, and shall be held by the Company until all restrictions lapse or such shares are forfeited as provided herein.  Upon the lapsing of all restrictions with respect to a portion of the Restricted Shares, the Company shall deliver to the Grantee (or, if applicable, to the Grantee's legal representatives, beneficiaries or heirs) those Shares that vested upon the lapsing of restrictions through the Direct Registration System or Electronic Share Transfer. The Shares as to which all restrictions have lapsed shall be free of the restrictive legends referred to in this Section 4 above.  The Company may postpone the issuance or delivery of the Shares until (a) the completion of registration or other qualification of such Shares or transaction under any state or federal law, rule or regulation, or any listing on any securities exchange, as the Company shall determine to be necessary or desirable; (b) the receipt by the Company of such written representations or other documentation as the Company deems necessary to establish compliance with all applicable laws, rules and regulations, including applicable federal and state securities laws and listing requirements, if any; and (c) the payment to the Company of any amount required by the Company to satisfy any federal, state or other governmental withholding tax requirements related to the issuance or delivery of the Shares.  Grantee shall comply with any and all legal requirements relating to Grantee's resale or other disposition of any Shares acquired under this Agreement.

5.Share Adjustments.  The number and kind of Restricted Shares or other property subject to this Agreement shall be subject to adjustment in accordance with Section 13 of the Plan.

6.Rights as Shareholder.  Unless otherwise provided herein, Grantee shall be entitled to all of the rights of a shareholder with respect to the Restricted Shares, including the right to vote such Shares and to receive dividends and other distributions (not including share adjustments as described in Section 5 above) payable with respect to such Shares from and after the Grant Date.  Grantee's rights as a shareholder shall terminate with respect to any Restricted Shares forfeited by Grantee.

7.Employment Rights.  Neither the Plan nor the granting of the Restricted Shares shall be a contract of employment of Grantee by the Company or any of its subsidiaries.  Grantee may be discharged from employment at any time by the employing Company or subsidiary, subject to any employment contract that may otherwise apply to Grantee.

8.Amendment.  This Agreement may be amended by the Committee at any time based on its determination that the amendment is necessary or advisable in light of any addition to, or change in, the Code or regulations issued thereunder or any federal or state securities law or other law or regulation, or the Plan, or based on any discretionary authority of the Committee under the Plan.  Unless necessary or advisable due to a change in law, any amendment to this Agreement which has a material adverse effect on the interest of Grantee under this Agreement shall be adopted only with the consent of Grantee.

9.Section 83(b) Election.  Grantee shall promptly deliver to the Company a copy of any election filed by Grantee in respect of the Restricted Shares pursuant to Code Section 83(b).

4.

 

10.Notices.  Any notice or other communication made in connection with this Agreement shall be deemed duly given when delivered in person or mailed by certified or registered mail, return receipt requested, to Grantee at Grantee's address shown on Company records or such other address designated by Grantee by similar notice, or to the Company at its then principal office, to the attention of the Corporate Secretary of the Company.  Furthermore, such notice or other communication shall be deemed duly given when transmitted electronically to Grantee at Grantee's electronic mail address shown on the Company records or, to the extent that Grantee is an active employee, through the Company's intranet.

11.Plan Governs.  The Restricted Shares evidenced by this Agreement are subject to the terms and conditions of the Plan and of this Agreement.  In case of conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall control.  Capitalized terms used in this Agreement and not defined herein shall have the meaning assigned in the Plan unless the context indicates otherwise.

12.Miscellaneous.  This Agreement shall bind and benefit Grantee, the heirs, distributees and personal representative of Grantee, and the Company and its successors and assigns.  This Agreement may be signed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one and the same instrument.  Capitalized terms not herein defined shall have the meanings prescribed to them under the Plan.

BY ACCEPTING THE RESTRICTED SHARES GRANTED UNDER THIS RESTRICTED STOCK GRANT AGREEMENT, GRANTEE AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT AND IN THE PLAN.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

		
	
 
	
BANK OF HAWAII CORPORATION

       

By ____________________________________
       Patrick M. McGuirk      

       Its Senior Executive Vice President

"Company"

	
 
	
Agreed and Accepted:

###ACCEPTANCE_DATE### 

_______________________________________

###PARTICIPANT_NAME###    "Grantee"

 

 

5.Exhibit 4.7

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

As of December 31, 2020,
Benessere Capital Acquisition Corp. (“we,” “our,” “us” or the “Company”) had the following
three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):
(i) its units, consisting of one share of Class A common stock (as defined below), one right to receive one-tenth (1/10) of
one Class A common stock upon the consummation of our initial business combination, and three-fourths of one redeemable warrant (as
defined below), with each whole warrant (as defined below) entitling the holder thereof to purchase one share of Class A common stock
(the “units”), (ii) its Class A common stock, $0.0001 par value per share (“Class A common stock”),
(iii) its public rights (“rights”) and (iii) its public warrants, with each whole warrant exercisable for one share
of Class A common stock for $11.50 per share (the “warrants”).

 

Pursuant
to our amended and restated certificate of incorporation, our authorized capital stock consists of 111,000,000 shares of common stock,
including 100,000,000 shares of Class A common stock, $0.0001 par value and 10,000,000 shares of Class B common stock, $0.0001
par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material
terms of our capital stock and does not purport to be complete. It is subject to, and qualified in its entirety by reference to,
our amended and restated certificate of incorporation, our bylaws and our warrant agreement, each of which is incorporated by reference
as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Report”) of which this
Exhibit 4.7 is a part.

 

Defined terms used herein
but not otherwise defined shall have the meaning ascribed to such terms in the Report.

 

Units

 

Each consists of one share
of Class A common stock, three-fourths of one redeemable warrant and one right. Only whole warrants are exercisable. Each whole warrant
entitles the holder to purchase one share of common stock. Pursuant to the warrant agreement, a warrant holder may exercise his, her or
its warrants only for a whole number of shares of common stock. Each right entitles the holder thereof to receive one-tenth (1/10) of
one Class A common stock upon consummation of our initial business combination.

 

Class A Common Stock

 

Common stockholders of record
are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the Class A common stock and
holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders,
except as required by law. There is no cumulative voting with respect to the election of directors, with the result that the holders of
more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive
ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.

 

We will provide our stockholders
with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation
of our initial business combination including interest earned on the funds held in the trust account and not previously released to us
to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. Our sponsor, officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect
to any founder shares and placement shares and any public shares held by them in connection with the completion of our initial business
combination.

 

If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any
affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined
under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15%
of the shares of common stock sold in our initial public offering, which we refer to as the Excess Shares. However, we would not be restricting
our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business
combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market.
Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the initial
business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose
such shares would be required to sell their stock in open market transactions, potentially at a loss.

 

    

     

    

 

In the event of a liquidation,
dissolution or winding up of the company after an initial business combination, our stockholders are entitled to share ratably in all
assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock,
if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking
fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public
shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of our
initial business combination, subject to the limitations described in the Report.

 

Redeemable Warrants

 

Each whole warrant entitles
the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as
discussed below, at any time commencing on the later of January 7, 2022 and 30 days after the completion of our initial business
combination. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A
common stock.

 

The warrants will expire
five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption
or liquidation.

 

We will not be obligated
to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant
exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the
warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with
respect to registration. No warrant will be exercisable and we will not be obligated to issue shares of Class A common stock upon
exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to
be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions
in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled
to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any
warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such
warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.

 

We have agreed that as soon
as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best
efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants,
to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A
common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the
shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after
the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement
and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if
a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified
period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act,
provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise
their warrants on a cashless basis.

 

Once the warrants become
exercisable, we may call the warrants for redemption:

 

		•	in whole and not in part;

 

		•	at a price of $0.01 per warrant;

 

    

     

    

 

		•	upon not less than 30 days’ prior written notice
of redemption given after the warrants become exercisable (the “30-day redemption period”) to each warrant holder; and

 

		•	if, and only if, the reported last sale price of the Class A
common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and
the like) for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending three business
days before we send the notice of redemption to the warrant holders.

 

If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants
is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or
qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of
residence in those states in which the warrants were offered by us in our initial public offering.

 

If we call the warrants for
redemption as described above, our management will have the option to require any holder that wishes to exercise its warrant to do so
on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,”
our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect
on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. If
our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for
that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares
of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
 “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose
shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day
prior to the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option,
the notice of redemption will contain the information necessary to calculate the number of shares of Class A common stock to be received
upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner
will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature
is an attractive option to us if we do not need the cash from the exercise of the warrants after our initial business combination. If
we call our warrants for redemption and our management does not take advantage of this option, our sponsor and its permitted transferees
would still be entitled to exercise their placement warrants for cash or on a cashless basis using the same formula described above that
other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis,
as described in more detail below.

 

A holder of a warrant may
notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant,
to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s
actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the shares of Class A
common stock outstanding immediately after giving effect to such exercise.

 

The warrants have certain
anti-dilution and adjustment rights upon certain events.

 

The warrants will be issued
in registered form under a warrant agreement between Continental, as warrant agent, and us. You should review a copy of the warrant agreement,
which has been filed as an exhibit to the Registration Statement for a complete description of the terms and conditions applicable to
the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any
ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the
warrants and the warrant agreement, or defective provision, but requires the approval by the holders of at least a majority of the then
outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.

 

In addition, if (x) we
issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing
of our initial business combination at a Newly Issued Price of less than $9.20 per share of Class A common stock (with such issue
price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor
or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such
issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest
thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination
(net of redemptions), and (z) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly
Issued Price.

 

    

     

    

 

The warrants may be exercised
upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form
on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price
(or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised.
The warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise
their warrants and receive shares of Class A common stock. After the issuance of shares of Class A common stock upon exercise
of the warrants, each holder will be entitled to one (1) vote for each share held of record on all matters to be voted on by stockholders.

 

No fractional shares will
be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest
in a share, we will, upon exercise, round down to the nearest whole number of shares of Class A common stock to be issued to the
warrant holder.

 

Rights

 

Each holder of a right will
receive one-tenth (1/10) of one Class A common stock upon consummation of our initial business combination, even if the holder of
such right redeemed all Class A common stock held by it in connection with the initial business combination. No additional consideration
will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of an initial business combination,
as the consideration related thereto has been included in the unit purchase price paid for by investors in our initial public offering.
If we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement
will provide for the holders of rights to receive the same per share consideration the holders of the Class A common stock will receive
in the transaction on an as-converted into Class A common stock basis, and each holder of a right will be required to affirmatively
convert its rights in order to receive the 1/10 share underlying each right (without paying any additional consideration) upon consummation
of the business combination. More specifically, the right holder will be required to indicate its election to convert the rights into
underlying shares as well as to return the original rights certificates to us.

 

If we are unable to complete
an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights
will not receive any such funds with respect to their rights, nor will they receive any distribution from our assets held outside of the
trust account with respect to such rights, and the rights will expire worthless.

 

As soon as practicable upon
the consummation of our initial business combination, we will direct registered holders of the rights to return their rights to our rights
agent. Upon receipt of the rights, the rights agent will issue to the registered holder of such rights the number of full Class A
common stock to which it is entitled. We will notify registered holders of the rights to deliver their rights to the rights agent promptly
upon consummation of such business combination and have been informed by the rights agent that the process of exchanging their rights
for Class A common stock should take no more than a matter of days. The foregoing exchange of rights is solely ministerial in nature
and is not intended to provide us with any means of avoiding our obligation to issue the shares underlying the rights upon consummation
of our initial business combination. Other than confirming that the rights delivered by a registered holder are valid, we will have no
ability to avoid delivery of the shares underlying the rights. Nevertheless, there are no contractual penalties for failure to deliver
securities to the holders of the rights upon consummation of an initial business combination.

 

The shares issuable upon
conversion of the rights will be freely tradable (except to the extent held by affiliates of ours). We will not issue fractional shares
upon conversion of the rights. Fractional shares will be rounded down to the nearest whole share. As a result, you must hold rights
in multiples of 10 in order to receive shares for all of your rights upon closing of a business combination. If we are unable to complete
an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights
will not receive any of such funds with respect to their rights, nor will they receive any distribution from our assets held outside of
the trust account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure
to deliver securities to the holders of the rights upon consummation of an initial business combination. Accordingly, the rights may expire
worthless.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00325-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00325-of-00352.parquet"}]]