Document:

exv10w2

 

Exhibit 10.2

GUARANTEE

     FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in connection with
that certain funding agreement (the “Funding Agreement”), entered into by and between Principal
Life Insurance Company, an Iowa insurance company (“Principal Life”), and Principal Life Income
Fundings Trust 20, a New York common law trust (the “Trust”), relating to the notes (the “Notes”)
issued by the Trust, Principal Financial Group, Inc., a Delaware corporation and the indirect
parent company of Principal Life (the “Guarantor”), hereby furnishes to the Trust its full and
unconditional guarantee of the Guaranteed Amounts (as hereinafter defined) as follows:

     1. Guarantee.

               (a) The Guarantor hereby fully, irrevocably, absolutely and unconditionally guarantees, as a
guarantee of payment and not merely as a guarantee of collection, immediate payment when due to the
Trust any payments required to be made by Principal Life to the Trust under the Funding Agreement
which shall become due and payable regardless of whether such payment is due at maturity, on an
interest payment date or as a result of redemption or otherwise (the “Scheduled Payments”) but
shall be unpaid by Principal Life (the “Guaranteed Amounts”). Notwithstanding anything to the
contrary contained herein, in no event shall the Guaranteed Amounts exceed the Deposit (as defined
in the Funding Agreement) of the Funding Agreement, plus accrued but unpaid interest and any other
amounts due and owing under the Funding Agreement, less any amounts paid by Principal Life to the
Trust.

               (b) In the event that Principal Life fails to make a Scheduled Payment in full when due (the
“Payment Notice Date”), then the Trust or Citibank, N.A., as indenture trustee for the benefit of
the holders of the Notes (the “Indenture Trustee”), pursuant to the indenture (the “Indenture”)
between the Trust and the Indenture Trustee, may present the Guarantor with notice (each, a
“Payment Notice”) of such failure in writing on or after the Payment Notice Date. The Payment
Notice shall identify (1) the Funding Agreement, (2) the Trust, (3) the Payment Notice Date and (4)
the amount of the Scheduled Payments not paid by Principal Life to the Trust as of the Payment
Notice Date. Upon receipt of such Payment Notice, the Guarantor will immediately pay the
Guaranteed Amounts pursuant to Section 7.

               (c) In the event that, after receipt of a Payment Notice from the Trust, the Guarantor fails
to make immediate payment to the Trust or the Indenture Trustee of the Guaranteed Amounts, then
the Trust and the Indenture Trustee may enforce the obligations of the Guarantor under this
Guarantee, including by immediately bringing suit directly against the Guarantor (without first
bringing suit against Principal Life) for the Guaranteed Amounts not paid to the Trust as of the
Payment Notice Date.

               (d) This Guarantee is an unsecured, unsubordinated and contingent obligation of the Guarantor
and ranks equally with all other unsecured and unsubordinated obligations of the Guarantor.

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               2. Termination. This Guarantee is a continuing and irrevocable guarantee of the
Guaranteed Amounts now or hereafter existing and shall terminate and be of no further force and
effect with respect to the Funding Agreement and the Notes upon the full payment of the Scheduled
Payments or upon the earlier extinguishment of the obligations of Principal Life under the Funding
Agreement.

               3. Amendments. Subject to the trust agreement relating to the Trust and the Indenture, no
provision of this Guarantee may be waived, amended, supplemented or modified, except by a written
instrument executed by the Trust and the Guarantor.

               4. Assignment; Governing Law. This Guarantee shall inure to the benefit of the Trust and its
successors, assigns and pledgees. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to conflict of law principles.

               5. Notices. All notices given pursuant to this Guarantee shall be in writing, and shall
either be delivered, mailed or telecopied to the locations listed below or at such other address or
to the attention of such other persons as such party shall have designated for such purpose in a
written notice complying as to delivery with the terms of this Section 5. Each such notice shall
be effective (i) if given by telecopy, when transmitted to the applicable number so specified in
this Section 5 (such notice shall also be sent by mail, with first class postage prepaid), (ii) if
given by mail, three days after deposit in the mails with first class postage prepaid, or (iii) if
given by any other means, when actually delivered at such address.

If to the Guarantor:

Principal Financial Group, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

If to the Trust:

Principal Life Income Fundings Trust (followed by the number of the Trust specified in this Guarantee)

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c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, New York 10005

Attention: Thomas E. Tabor

Telephone: (212) 361-6184

Facsimile: (212) 809-5459

With a copy to:

Citibank, N.A.

Citibank Agency and Trust

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Nancy Forte

Telephone: (212) 816-5685

Facsimile: (212) 816-5527

               6. Representations and Warranties. The Guarantor represents and warrants that: (i) it is duly
organized and in good standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guarantee, and all necessary authority has been
obtained; (ii) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors’ rights and general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; (iii) the making and performance of this
Guarantee does not and will not violate the provisions of any applicable law, regulation or order,
and does not and will not result in the breach of, or constitute a default under, any material
agreement, instrument or document to which it is a party or by which it or any of its property may
be bound or affected, except to the extent disclosed in the registration statement registering the
issuance of this Guarantee and the Funding Agreement, as amended, supplemented or modified from
time to time (the “Registration Statement”), and to the extent that any such violation, breach or
default does not result in a material adverse effect on the Guarantor; and (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with, any governmental
authority required under applicable law and regulations for the making and performance of this
Guarantee have been obtained or made and are in full force and effect, except to the extent
disclosed in the Registration Statement and to the extent that the failure to acquire any such
consent, approval, license, authorization, filing or registration does not result in a material
adverse effect on the Guarantor.

               7. Notice of, and Consent to, Security Interest. The Trust hereby notifies the Guarantor that
it has granted to the Indenture Trustee, on behalf of the holders of the Notes, a security interest
in the Collateral (as defined in the Indenture), including, but not limited to, any and all payment
to be made by the Guarantor to the Trust under this Guarantee. The Trust hereby notifies the
Guarantor that it has collaterally assigned to the Indenture Trustee, for the benefit of the
holders of the Notes, this Guarantee. The Guarantor, by executing this Guarantee, hereby (i)
affirms that it has made or simultaneously will make changes to its books and records to reflect
such security interest and collateral assignment, (ii) consents to the security interest

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granted, and collateral assignment made, by the Trust to the Indenture Trustee of this
Guarantee, (iii) agrees to make all payments due under this Guarantee to the Collection Account (as
defined in the Indenture) or any other account designated in writing to the Guarantor by the
Indenture Trustee and (iv) agrees to comply with all orders of the Indenture Trustee with respect
to this Guarantee without any further consent from the Trust.

               8. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
GUARANTOR WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING
OUT OF THIS GUARANTEE. THIS GUARANTEE REPRESENTS THE FINAL AGREEMENT BETWEEN THE GUARANTOR AND THE
TRUST AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

	 	 	 	 	 	 	 
	 	 	PRINCIPAL FINANCIAL GROUP, INC.
	 
	 	 
	 

	 	By:	 	/s/ James C. Fifield 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	James C. Fifield 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Counsel 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:
	 	The Effective Date (as defined in the Funding Agreement)	 	 

Acknowledged and Agreed:

THE PRINCIPAL LIFE INCOME FUNDINGS

TRUST DESIGNATED IN THIS GUARANTEE

	 	 	 	 
	By:

	 	U.S. Bank Trust National Association,
not in its individual capacity, but solely in its
capacity as trustee	 
	 
	 	 
	By:

	 	Bankers Trust Company, N.A.,
under Limited Power of Attorney, dated February 16, 2006
	 
	 	 
	By:
	 	/s/ Debra Williams
	 

	 	 
	 
	 	 
	Name:
	 	Debra Williams
	 

	 	 
	 
	 	 
	Title:
	 	Vice President
	 

	 	 
	 
	 	 
	Date:

	 	The Effective Date (as defined in the Funding Agreement)

4<PAGE>

                                                                    Exhibit 10.1

                               UTi WORLDWIDE INC.

                    NON-EMPLOYEE DIRECTORS SHARE OPTION PLAN

          1. PURPOSE. The purpose of this Plan is to advance the interests of
UTi Wordwide Inc., a British Virgin Islands corporation (the "Company"), and its
shareholders ("Shareholders") by (a) encouraging increased share ownership by
the Company's directors who are not employees of the Company or any of its
subsidiaries, (b) enhancing the Company's ability to attract and retain the
services of experienced, able and knowledgeable persons to serve as directors
and (c) providing additional incentive for directors to contribute their best
efforts to the Company's success.

          2. NON-QUALIFIED STOCK OPTIONS. The options to be granted pursuant to
this Plan ("Options" or, individually, an "Option") are nonstatutory options and
are not intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended.

          3. ADMINISTRATION. This Plan shall be administered by the Company's
Board of Directors (the "Board"). The Board shall have full authority,
consistent with this Plan, to construe and interpret this Plan and any
agreements defining the rights and obligations of the Company and Eligible
Directors (as defined below) under the Plan, to promulgate, amend and rescind
such rules and regulations with respect to this Plan as it deems desirable and
to make all other determinations necessary or desirable for the administration
of this Plan. All decisions, determinations and interpretations of the Board
shall be binding upon all Eligible Directors, the Company and all other
interested persons. The Board may, in its discretion, delegate any or all of its
authority under the Plan to a committee consisting of two or more directors of
the Company, so long as allowable under applicable law.

          4. SHARES SUBJECT TO THE PLAN. The shares of stock to be issued upon
the exercise of Options shall be authorized shares of the Company's voting
ordinary shares ("Shares" or, individually, "Share"), either previously unissued
or previously issued but reacquired by the Company. The aggregate number of
Shares to be issued upon the exercise of Options granted under this Plan shall
be one million two hundred thousand (1,200,000),(1) subject to adjustment as
provided in Section 8 below. Any Share subject to an Option which is cancelled
or terminated without having been exercised shall again be available to be
awarded under this Plan.

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(1)  On March 7, 2006, the Board approved a 3-for-1 division of the Company's
     ordinary shares of no par value (the "Stock Split"). Pursuant to Section 8
     of the Plan, the number of ordinary shares authorized to be issued under
     the Plan was automatically adjusted from 400,000 ordinary shares to
     1,200,000 ordinary shares on March 27, 2006 as a result of the Stock Split.

<PAGE>

          5. GRANTING OF OPTIONS.

          (a) Eligible Director. As used herein, "Eligible Director" means any
of the Company's directors who are not employees of the Company or any
subsidiary of the Company (collectively, "Eligible Directors" and, individually,
an "Eligible Director").

          (b) Initial Grants. The Company shall grant an initial Option to
purchase twenty-two thousand eight hundred and ninety (9,000)(2) shares to each
person who is an Eligible Director as of the date that this Plan is approved by
the Board. Thereafter, the Company shall grant an initial Option to purchase one
hundred fourteen thousand four hundred fifty (45,000)(2) shares to each person
who becomes an Eligible Director after the date this Plan is approved by the
Board (but, who previously has not been an Eligible Director under this Plan),
which Option shall be granted on the date such person is first elected or
appointed as a director.

          (c) Automatic Grants. On the date of each annual meeting of
shareholders, commencing with the 2001 annual meeting, the Company shall grant
an Option to purchase twenty-two thousand eight hundred and ninety (9,000)(2)
shares to each Eligible Director as of the date of such meeting, provided that
such Eligible Director continues as a director after such annual meeting.
Notwithstanding the previous sentence, Eligible Directors who received an
initial grant under Section 5(b) during the calendar year in which such annual
meeting is held shall be ineligible for the automatic grant of Options provided
for in this Section 5(c) in such year.

          (d) No Option Grant Where Prohibited. No person shall be granted an
Option under this Plan if at the time of such grant, the grant is prohibited by
applicable law or by the policies of the employer of such person or the policies
of any other company of which such person is a member of the board of directors,
a general partner or a manager.

          (e) Option Agreement. Each Option shall be evidenced by an option
agreement executed by the Company and the Eligible Director receiving such
Option. Each such agreement shall state the terms and conditions of the grant,
not inconsistent with this Plan, as the Board in its sole discretion shall
determine and approve.

          (f) Option Price. The purchase price for each Share subject to an
Option shall be its Fair Market Value (as defined in paragraph 5(g) below)
determined as of the date such Option is granted (the "Grant Date").

          (g) Definition of Fair Market Value. For the purposes of this Plan,
"Fair Market Value" as of a certain date (the "Determination Date") means: (i)
the closing price of a share of the Company's voting ordinary shares of no par
value on the New York Stock Exchange or the American Stock Exchange
(collectively, the "Exchange"), on the Determination Date, or, if shares were
not traded on the

----------
(2)  Adjusted effective March 27, 2006 to give effect to the Stock Split.

<PAGE>

Determination Date, then on the nearest preceding trading day during which a
sale occurred; or (ii) if such stock is not traded on the Exchange but is quoted
on NASDAQ or a successor quotation system, (A) the last sales price (if the
stock is then listed as a National Market Issue under The Nasdaq National Market
System) or (B) the mean between the closing representative bid and asked prices
(in all other cases) for the stock on the Determination Date as reported by
NASDAQ or such successor quotation system; or (iii) if such stock is not traded
on the Exchange or quoted on NASDAQ but is otherwise traded in the United States
over-the-counter, the mean between the representative bid and asked prices on
such date in the United States over-the-counter market as reported by the
National Quotation Bureau, Inc. or any successor organization; or (iv) if
subsections (i)-(iii) do not apply, the fair market value established in good
faith by the Board.

          (h) Nontransferability. An Option shall be nonassignable and
nontransferable other than by will or the laws of descent and distribution.
Notwithstanding the foregoing, Options may be transferred to an Eligible
Director's family members who acquire the Options from the Eligible Director
through a gift or a domestic relations order which meets the requirements set
forth in general instruction a(5) of Form S-8 Registration Statement under the
United States Security Act of 1933, as amended. In the event of an Eligible
Director's death, an Option may be exercised by such director's designated
beneficiary or, in the absence of such designation, by will or the laws of
descent and distribution to the extent permitted by this Plan. An Option shall
be nonassignable and nontransferable other than by will or the laws of descent
and distribution. Notwithstanding the foregoing, Options may be transferred to
an Eligible Director's family members who acquire the Options from the Eligible
Director through a gift or a domestic relations order which meets the
requirements set forth in general instruction a(5) of Form S-8 Registration
Statement under the United States Security Act of 1933, as amended. In the event
of an Eligible Director's death, an Option may be exercised by such director's
designated beneficiary or, in the absence of such designation, by will or the
laws of descent and distribution to the extent permitted by this Plan.

          6. EXERCISE OF OPTIONS.

          (a) Vesting Schedule. Except as provided in Section 6(d) hereof, each
Option shall become exercisable on the following schedule: (i) beginning on the
first anniversary of the Grant Date, as to thirty-three percent (33%) of the
Shares covered by such Option (the "Covered Shares"), (ii) beginning on the
second anniversary of the Grant Date, as to sixty-six percent (66%) of the
Covered Shares, and (iii) beginning on the third anniversary of the Grant Date,
and thereafter until the expiration of such Option pursuant to Section 7 of this
Plan, as to one hundred percent (100%) of the Covered Shares. Any other
provision of this Plan notwithstanding, no Option shall be exercisable as to any
Shares with respect to which such Option previously has been exercised.

          (b) Method of Exercise. Prior to its expiration pursuant to Section 7
hereof and in accordance with the vesting schedule outlined in Section 6(a)
hereof, each

<PAGE>

Option may be exercised, in whole or in part (provided, however, that the
Company shall not be required to issue fractional shares) by delivery of written
notice of exercise to the secretary of the Company accompanied by the full
purchase price of the Shares being purchased. The purchase price shall be paid
at the time of exercise (i) in cash, (ii) in Payment Shares (as defined in
Section 6(c) hereof), the Fair Market Value of which, as of the date of
exercise, is equal to the Purchase Price, or (iii) by any combination of cash or
Payment Shares. At its discretion, the Company shall arrange for the sale of the
shares underlying the Option through a broker in connection with so-called
cashless exercises of the Options.

          (c) Payment Shares. As used herein, "Payment Shares" means shares of
the Company's voting ordinary shares of no par value that (i) are owned by the
Eligible Director who is purchasing Shares pursuant to an Option, (ii) were not
acquired by such Eligible Director pursuant to an exercise of an Option (unless
such shares have been owned by such Eligible Director for at least 365
consecutive days), (iii) are all, at the time of such transfer, free and clear
of any and all claims, pledges, liens and encumbrances, or any restrictions
which would in any manner restrict the transfer of such shares to or by the
Company (other than such restrictions as may have existed prior to an issuance
of such shares by the Company to such Eligible Director), and (iv) are duly
endorsed for transfer to the Company.

          (d) Effect of Change in Control. In the event of a Change in Control
of the Company (as defined below), all unexpired Options held by each Eligible
Director on the date of such Change in Control shall be immediately exercisable
in full, notwithstanding the vesting schedule of Section 6(a) hereof.

          For purposes of this Plan, a "Change in Control" of the Company shall
mean a change in control of a nature that would be required to be reported in
response to Item 1 of Form 8-K required to be filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided that, without
limitation, such a Change in Control shall be deemed to have occurred if:

          (i) the shareholders of the Company approve a definitive agreement to
     sell, transfer, or otherwise dispose of all or substantially all of the
     Company's assets and properties; or

          (ii) any "person" (as such term is used in Section 13(d) and 14(d) of
     the Exchange Act), other than the Company or any "person" who as of the
     date this Plan is adopted by the Board, is a director or officer of the
     Company (including any trust of such director or officer), is or becomes
     the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
     directly or indirectly, of securities of the Company representing fifty
     percent (50%) or more of the combined voting power of the Company's then
     outstanding securities provided, however, that the following shall not
     constitute a "Change in Control" of the Company:

<PAGE>

               (a) any acquisition directly from the Company (excluding any
     acquisition resulting from the exercise of a conversion or exchange
     privilege in respect of outstanding convertible or exchangeable
     securities);

               (b) any acquisition by an employee benefit plan (or related
     trust) sponsored or maintained by the Company or any corporation controlled
     by the Company; or

               (c) upon the death of any person who as of the date of this
     Agreement is a director or officer of the Company, the transfer (a) by
     testamentary disposition or the laws of intestate succession to the estate
     or the legal beneficiaries or heirs of such person, or (b) by the
     provisions of any living trust to the named current income beneficiaries
     thereof of the securities of the Company beneficially owned by such
     director or officer of the Company; or

          (iii) during any period of two consecutive years during the term of
     this Plan, individuals who at the beginning of such period constitute the
     Board cease for any reason to constitute at least a majority thereof,
     unless the election of each director who was not a director at the
     beginning of such period has been approved in advance by directors
     representing at least two-thirds of the directors then in office who were
     directors at the beginning of the period; or

          (iv) the Shareholders of the Company approve the dissolution of the
     Company or a definitive agreement to merge or consolidate the Company with
     or into another entity in which the Company is not the continuing or
     surviving corporation or pursuant to which any shares of the Company's
     stock would be converted into cash, securities or other property of another
     entity, other than a merger of the Company in which holders of the
     Company's voting ordinary shares of no par value immediately prior to the
     merger own, either directly or indirectly, fifty percent (50%) or more of
     the equity interests or combined voting power of the surviving corporation
     or entity immediately following such merger.

          7. EXPIRATION OF OPTIONS. Except as hereinafter provided, each Option
shall expire on the earlier of (a) the tenth anniversary of the Grant Date of
such Option or (b) the date that the Eligible Director holding such Option
ceases to be a member of the Board; provided, however, that to the extent any
unexpired Options are otherwise exercisable on the date that an Eligible
Director ceases to be a member of the Board for any reason other than "cause",
death or retirement under a retirement plan of the Company, such Options shall
remain exercisable for 90 days following the last day of the Eligible Director's
Board membership and shall expire if not exercised within said 90-day period. If
Board membership ceases on account of death or retirement under a retirement
plan of the Company, all unexpired Options held by the Eligible Director on the
last day of Board membership, which are then exercisable shall remain
exercisable for one year following the last day of the Eligible Director's Board
membership and shall expire if not exercised within said one-year period. To the
extent any otherwise unexpired Options are not exercisable in accordance with
the immediately preceding

<PAGE>

sentences, they shall expire as of the date of death or the effective date of
retirement, as the case may be. All Options held by an Eligible Director whose
membership on the Board ends after the occurrence of "cause" shall expire
immediately on the last date of membership. "Cause", for the purposes of this
paragraph 7, means any (i) act or omission for which indemnification of the
Eligible Director is prohibited by the laws of the jurisdiction of formation of
the Company, (ii) conviction of a felony which adversely affects the Company, or
(iii) misconduct involving personal profit to the Eligible Director.

          8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
or shares of voting ordinary shares of no par value of the Company occurs, the
number and kind of shares authorized by this Plan, and the number, Option price
and kind of shares covered by the Options granted hereunder, shall be
automatically adjusted as required in order to prevent an unfavorable effect
upon the value of the shares covered by the then outstanding Options and shares
covered by Options subsequently granted.

          9. TAX WITHHOLDING. Any exercise of an Option pursuant to this Plan
shall be subject to withholding of state and federal income taxes, FICA tax or
other taxes to the extent required by applicable law.

          10. LAWS AND REGULATIONS.

          (a) U.S. Securities Laws. This Plan, the grant and exercise of Options
under this Plan, and the obligation of the Company to sell or deliver any of its
securities (including, without limitation, Options and Shares) under this Plan
shall be subject to all applicable laws, regulations and rules. In the event
that the Shares are not registered under the Securities Act of 1933, as amended
(the "Act"), or any applicable state securities laws prior to the delivery of
such Shares, the Company may require, as a condition to the issuance thereof,
that the persons to whom Shares are to be issued represent and warrant in
writing to the Company that such Shares are being acquired by him or her for
investment for his or her own account and not with a view to, for resale in
connection with, or with an intent of participating directly or indirectly in,
any distribution of such Shares within the meaning of the Act, and a legend to
that effect may be placed on the certificates representing the Shares.

          (b) The Company may adopt rules and procedures relating to the
operation and administration of this Plan to accommodate the specific
requirements of local laws and procedures of particular countries. Without
limiting the foregoing, the Company is specifically authorized to adopt rules
and procedures regarding the conversion of local currency, taxes, withholding
procedures and handling of stock certificates which vary with the customs and
requirements of particular countries. The Company may adopt sub-plans applicable
to particular locations and countries.

<PAGE>

          11. TERMINATION AND AMENDMENT OF THIS PLAN. The Board may at any time
terminate this Plan or may at any time or times amend this Plan or amend any
outstanding Options for the purpose of satisfying the requirements of any
changes in applicable laws or regulations or for any other purpose which at the
time may be permitted by law.

          12. EFFECTIVE DATE. This Plan shall become effective on the date of
approval by the Board; provided, however, that this Plan shall be submitted to
the Company's shareholders for approval, and if not approved by the shareholders
within one year from the date of approval by the Board, this Plan shall be of no
force and effect. Options granted under this Plan before approval of this Plan
by the shareholders shall be granted subject to such approval and shall not be
exercisable before such approval.

          13. GOVERNING LAW. This Plan, and the related option agreements, shall
be governed by and enforced and construed in accordance with the internal
substantive laws (and not the laws of conflicts of laws) of the British Virgin
Islands.

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