Document:

hsdt-ex42_9.htm

Execution Version

Exhibit 4.2
 
Helius Medical Technologies, Inc.

 

and 

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC as

Warrant Agent

 

 

Warrant Agency Agreement

 

Dated as of February 1, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT, dated as of February 1, 2021 (“Agreement”), between Helius Medical Technologies, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to an offering by the Company of Warrants (as defined below), the Company wishes to issue Warrants in book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street name”, a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to 372,468 shares of Class A Common Stock (the “Common Stock”) underlying the Warrants (as defined below) upon the terms and subject to the conditions hereinafter set forth (the “Offering”); 

 

WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange, exercise and replacement of the Warrants.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

 

(a) “Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which the Nasdaq Stock Market is authorized or required by law or other governmental action to close.

 

(c) “Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

(e) “Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 

(f)  “Warrants” means Common Stock Purchase Warrants of the Company with a term of exercise of five years following the Initial Exercise Date.

 

 

 

(g)  “Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1-A hereto, representing such number of Warrant Shares (as defined below) as is indicated therein, provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include delivery of notice from the Depositary or a Participant (each as defined below) of the transfer or exercise of the Warrant in the form of a Global Warrant (as defined below).

 

(h)  “Warrant Shares” means the shares of Common Stock underlying the Warrants and issuable upon exercise of the Warrants.

 

All other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificates. 

 

Section 2. Appointment of Successor Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the express terms or conditions hereof (and no implied terms and conditions), and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint such Co-Warrant Agents as it may, in its sole discretion, deem necessary or desirable upon ten (10) calendar days’ prior written notice to the Warrant Agent. The Warrant Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such Co-Warrant Agent.  In the event the Company appoints one or more co-Warrant Agents, the respective duties of the Warrant Agent and any Co-Warrant Agent shall be as the Company shall reasonably determine, provided that such duties and determination are consistent with the terms and provisions of this Agreement.

 

Section 3. Global Warrants. 

 

(a) The Warrants, shall be issuable in book entry form (the “Global Warrants” and, each, a “Global Warrant”).  All of the Warrants shall initially be represented by one or more Global Warrants, deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial interests in the Warrants, shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a “Participant”).  For purposes of Regulation SHO, a holder whose interest in a Global Warrant is a beneficial interest in certificate(s) representing such Warrant held in book-entry form through the Depositary shall be deemed to have exercised its interest in such Warrant upon instructing its broker that is a Participant to exercise its interest in such Warrant, provided that in each such case payment of the applicable aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two trading days and (ii) the number of trading days comprising the Standard Settlement Period, in each case following such instruction.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of trading days, on the Company’s primary trading market with respect to the Common Stock as in effect on the date of delivery of the Exercise Notice.

 

(b) If the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall 

 

 

provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent in writing to deliver to each Holder a Warrant Certificate.

 

(c)  A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate Request Notice (as defined below).  Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s Global Warrants for a Warrant Certificate, evidencing the same number of Warrants, which request shall be in the form attached hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver, at the expense of the Company, to the Holder a Warrant Certificate, for such number of Warrants in the name set forth in the Warrant Certificate Request Notice.  Such  Warrant Certificate, shall be dated the original issue date of the Warrants, shall be executed by manual signature by an authorized signatory of the Company, shall be in the form attached hereto as Exhibit 1-A or Exhibit 1-B, respectively.  In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant Certificate, to the Holder within three (3) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”).  Notwithstanding anything herein to the contrary, the Company shall act as warrant agent with respect to any physical Warrant Certificate issued pursuant to this section.  If the Company fails for any reason to deliver to the Holder the Warrant Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Warrant Certificate (based on the VWAP (as defined in the Warrants) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day for each Business Day after such Warrant Certificate Delivery Date until such Warrant Certificate, as applicable, is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange.  In no event shall the Warrant Agent be liable for the Company’s failure to deliver the Warrant Certificate by the Warrant Certificate Delivery Date. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant Certificate, as applicable, and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes to contain all of the terms and conditions of the Warrants, evidenced by such Warrant Certificate, and the terms of this Agreement, other than Sections 3(c) and 9 herein, shall not apply to the Warrants evidenced by the Warrant Certificate.  In the event a beneficial owner requests a Warrant Exchange, upon issuance of the paper Warrant Certificate, the Company shall act as warrant agent and the terms of the paper Warrant Certificate so issued shall exclusively govern in respect thereof.

 

Section 4. Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock (“Exercise Notice”) and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1-A hereto and the Warrant 

 

 

Certificate, together with the form of Exercise Notice and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1-B hereto. 

 

Section 5. Countersignature and Registration. The Warrant Certificates shall be executed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer or Vice President, either manually or by facsimile signature, and have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Warrant Certificates shall be countersigned by the Warrant Agent by either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

 

The Warrant Agent will keep or cause to be kept, at its office designated for such purposes, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number of warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate.  The Warrant Agent will create a special account for the issuance of Warrant Certificates.

 

Section 6. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect to the  Global Warrant, subject to the provisions of the Warrant Certificate, and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date (as such term is defined in the Warrant Certificate), any Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates, together with the required form of assignment and certificate duly executed and properly completed and such other documentation as the Warrant Agent may reasonably request, to be transferred, split up, combined or exchanged at the office of the Warrant Agent designated for such purpose, provided that no such surrender is applicable to the Holder of a Global Warrant. Any requested transfer of Warrants, whether in book-entry form or certificate form, shall be accompanied by evidence of authority of the party making such request that may be reasonably required by the Warrant Agent. Thereupon the 

 

 

Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Warrant Certificates. The Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made.

 

Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss, theft or destruction, of indemnity or security reasonably acceptable to the Company and the Warrant Agent, and satisfaction of any other reasonable requirements established by Section 8-405 of the Uniform Commercial Code as in effect in the State of Delaware, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.

 

Section 7. Exercise of Warrants; Exercise Price; Termination Date. 

 

(a) The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination Date (as such term is defined in the Warrant Certificate).  Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant, may exercise the Warrant, in whole or in part upon surrender of the  Warrant Certificate, if required, with the properly completed and duly executed Exercise Notice and payment of the Exercise Price (unless exercised via a cashless exercise), which may be made, at the option of the Holder, by wire transfer or by certified or official bank check in United States dollars, to the Warrant Agent at the office of the Warrant Agent designated for such purposes. In the case of the Holder of a Global Warrant, the Holder shall deliver the duly executed Exercise Notice and the payment of the Exercise Price as described herein. Notwithstanding any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), shall effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation, as applicable). The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment at Warrant Agent risk and for its benefit of funds held in those accounts from time to time.  Neither the Company nor the Holders will receive interest on any deposits or Exercise Price. No ink-original 

 

 

Exercise Notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice be required.

 

(b) Upon receipt of an Exercise Notice for a Cashless Exercise, the Warrant Agent shall deliver a copy of the Exercise Notice to the Company and request from the Company and the Company shall promptly calculate and transmit to the Warrant Agent in writing the number of Warrant Shares issuable in connection with such Cashless Exercise. The Warrant Agent shall have no obligation under this Agreement to calculate, the number of Warrant Shares issuable in connection with a Cashless Exercise nor shall the Warrant agent have any duty or obligation to investigate or confirm whether the Company’s determination of the number of Warrant Shares issuable upon such exercise, pursuant to this Section 7, is accurate or correct.1

 

(c) Upon the Warrant Agent’s receipt of a Warrant Certificate, at or prior to the Close of Business on the Termination Date set forth in such Warrant Certificate, with the executed Exercise Notice and payment of the Exercise Price for the shares to be purchased (other than in the case of a Cashless Exercise) and an amount equal to any applicable tax, or governmental charge referred to in Section 6 by wire transfer, or by certified check or bank draft payable to the order of the Company (or, in the case of the Holder of a Global Warrant, the delivery of the executed Exercise Notice and the payment of the Exercise Price (other than in the case of a Cashless Exercise) and any other applicable amounts as set forth herein), the Warrant Agent shall cause the Warrant Shares underlying such Warrant Certificate, or Global Warrant, to be delivered to or upon the order of the Holder of such Warrant Certificate, or  Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery Date (as such term is defined in the Warrant Certificate. If the Company is then a participant in the DWAC system of the Depositary and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of the  Warrant Certificate, such obligation shall be solely that of the Company and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a) hereof by the Warrant Share Delivery Date, the Warrant Agent will not obligated to deliver such Warrant Shares (via DWAC or otherwise) until following receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Warrant Agent. 

 

(d) The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via email at the end of each day on which exercise notices are received or funds for the exercise of any Warrant are received of the amount so deposited to its account. 

	
	 

	
1 
	
 TBD cost basis of shares issued.

 

 

 

 

(e) In case the Holder of any Warrant Certificate shall exercise fewer than all Warrants evidenced thereby, upon the request of the Holder, a new Warrant Certificate evidencing the number of Warrants equivalent to the number of Warrants remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to his duly authorized assigns in accordance with Section 2(d)(ii) of the Warrant Certificate, subject to the provisions of Section 6 hereof.

 

Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled certificates.

 

Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a) This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due execution thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b) As of the date hereof, the authorized capital stock of the Company consists of (i) 150,000,000 shares of Common Stock, of which 2,537,821 shares of Common Stock are issued and outstanding, and 372,469 shares of Common Stock are reserved for issuance upon exercise of the Warrants, (ii) 10,000,000 shares of preferred stock, none of which are issued and outstanding.  Additionally, as of the date hereof, there are (i) 111,074 shares of Common Stock issuable upon the exercise of outstanding stock options, (ii) 260,272 shares of Common Stock issuable upon the exercise of outstanding warrants (excluding the Warrants), and (iii) 96,969 shares of Common Stock reserved for future issuance under the Company’s 2018 Omnibus Incentive Plan.

 

 

 

(c) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(d) The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Warrants.

 

(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company’s and the Warrant Agent’s reasonable satisfaction that no such tax or governmental charge is due.

 

Section 10. Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued (or to whose broker’s account is credited shares of Common Stock through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date on which submission of the Exercise Notice was made, provided that the Warrant Certificate evidencing such Warrant was duly surrendered (but only if required herein) and payment of the Exercise Price (and any applicable transfer taxes) was received on or prior to the Warrant Share Delivery Date; provided, however, that, if the date of submission of the Exercise Notice is a date upon which the Common Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding day on which the Common Stock transfer books of the Company are open.

 

Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant Certificate.  In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 3 of the Warrant Certificate, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares.  All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise 

 

 

Price pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.  

 

Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable upon the exercise of each Warrant Certificate is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting forth the Exercise Price of each Warrant Certificate, as so adjusted, and a brief, reasonably detailed statement of the facts accounting for such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate and (c) instruct the Warrant Agent, at the Company’s expense, to send a brief summary thereof to each Holder of a Warrant Certificate. The Warrant Agent shall be fully protected in relying on such certificate and on any adjustment or statement therein contained and shall have no duty or liability with respect to, and shall not be deemed to have knowledge of any such adjustment or any such event unless and until it shall have received such certificate.

 

Section 13. Fractional Shares of Common Stock. 

 

(a) The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down).

 

(b) The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.

Section 14. Concerning the Warrant Agent. 

(a) The Company agrees to pay to the Warrant Agent, pursuant to the fee schedule mutually agreed upon by the parties hereto and provided separately on the date hereof, for all services rendered by it hereunder and, from time to time, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder. 

(b) The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against any costs, expenses (including reasonable fees and expenses of its legal counsel), losses or damages, which may be paid, incurred or suffered by or to which it may become subject, arising from or out of, directly or indirectly, any claims or liability resulting from its actions or omissions as Warrant Agent pursuant hereto; provided, that such covenant and agreement does not extend to, and the Warrant Agent shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a result of, or arising out of, its gross negligence, bad faith, or willful misconduct (each as 

 

 

determined by a final non-appealable court of competent jurisdiction). Notwithstanding anything in this Agreement to the contrary, any liability of the Warrant Agent under this Agreement will be limited to the amount of annual fees paid by the Company to the Warrant Agent during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought. The costs and expenses incurred by the Warrant Agent in enforcing this right of indemnification shall be paid by the Company.

(c)  Upon the assertion of a claim for which the Company may be required to indemnify the Warrant Agent, the Warrant Agent shall promptly notify the Company of such assertion, and shall keep the other party reasonably advised with respect to material developments concerning such claim. However, failure to give such notice shall not affect the Warrant Agent’s right to and the Company’s obligations for indemnification hereunder.

(d) Neither party to this Agreement shall be liable to the other party for any consequential, indirect, punitive, special or incidental damages under any provisions of this Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen the possibility of such damages. 

(e) Notwithstanding anything contained herein to the contrary, the rights and obligations of the parties set forth in this Section 14 shall survive termination of this Agreement, the expiration of the Warrants or the resignation, removal or replacement of the Warrant Agent. 

 

Section 15. Purchase or Consolidation or Change of Name of Warrant Agent. Any Person into which the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party, or any Person succeeding to the stock transfer or other shareholder services business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior 

 

 

name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

Section 16. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following express terms and conditions (and no implied terms and conditions), by all of which the Company, by its acceptance hereof, shall be bound and shall not assume any obligations or relationship of agency or trust with any of the Holders of the Warrants or any other Person:

 

(a) The Warrant Agent may consult with legal counsel selected by it (who may be legal counsel for the Company), and the opinion and advice of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in accordance with such opinion or advice.

 

(b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and such certificate shall be full authorization and protection to the Warrant Agent and the Warrant Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in reliance upon such certificate.  The Warrant Agent shall have no duty to act without such a certificate as set forth in this Section 16(b).

 

(c) Subject to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct (each as determined in a final, non-appealable judgment of a court of competent jurisdiction).

 

(d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (including in the case of any notation in book entry form to reflect ownership), except its countersignature thereof, by the Company or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e) The Warrant Agent shall not have any liability or be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such change or adjustment or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any 

 

 

representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable.

 

(f) Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by any party of the provisions of this Agreement.

 

(g) The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer, Chief Financial Officer or Vice President of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith or willful misconduct.

 

(h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other Person.

 

(i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent gross negligence or bad faith in the selection and continued employment thereof (which gross negligence and bad faith must be determined by a final, non-appealable judgment of a court of competent jurisdiction).

 

(j) The Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would expose or subject it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with assurances of repayment or indemnity satisfactory to it.

 

(k) The Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any registration statement filed with the Securities and Exchange Commission or this Agreement, including without limitation obligations under applicable regulation or law.

 

(l) The Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable 

 

 

“signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter have been altered, changed, amended or repealed. 

 

(l) In the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Warrant or any other Person for refraining from taking such action, unless the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent. 

 

This Section 16 shall survive the expiration of the Warrants, the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent.  The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company.

 

Section 17. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing sent to the Company and, in the event that the Warrant Agent or one of its affiliates is not also the transfer agent for the Company, to each transfer agent of the Common Stock. In the event the transfer agency relationship in effect between the Company and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned automatically and be discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall be responsible for sending any required notice thereunder. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a Person, other than a natural person, organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose but such predecessor Warrant Agent shall not be required to make any additional expenditure 

 

 

(without prompt reimbursement by the Company) or assume any additional liability in connection with the foregoing. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be. 

 

Section 18. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement.

 

Section 19. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or on the Company, (ii) by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given when in writing (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered via facsimile or e-mail attachment at or prior to 5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

	
 
	
(a)
	
If to the Company, to: 

 

Helius Medical Technologies, Inc.

642 Newtown Yardley Road, Suite 100

Newtown, Pennsylvania 18940

Attn: Joyce LaViscount

Email: jlaviscount@heliusmedical.com

 

 

 

 

With a copy (which shall not constitute notice) to:

 

Honigman LLP

650 Trade Centre Way, Suite 200

Kalamazoo, Michigan 49002

Attn: Phillip Torrence

Email: ptorrence@honigman.com

 

	
 
	
(b)
	
If to the Warrant Agent, to: 

 

American Stock Transfer & Trust Company, LLC 

6201 15th Avenue

Brooklyn, New York 11219

Email: Reorgwarrants@astfinancial.com

 

For any notice delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next Business Day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c) If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

Section 20. Supplements and Amendments. 

 

(a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrants in order to (i) add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants, (ii) to surrender any rights or power reserved to or conferred upon the Company in this Agreement, (iii) to cure any ambiguity, (iv) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or (v) to make any other provisions with regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary or desirable, provided that such addition, correction or surrender shall not adversely affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.

 

(b) In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority of the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying in any manner the rights of the Holders of the Global Warrants; provided, however, that no modification of the terms (including but not limited to the 

 

 

adjustments described in Section 11) upon which the Warrants are exercisable or reducing the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding warrant certificate affected thereby; provided further, however, that no amendment hereunder shall affect any terms of any Warrant Certificate issued in a Warrant Exchange. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section 20. No supplement or amendment to this Agreement shall be effective unless duly executed by the Warrant Agent.

 

Section 21. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 22. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 23. Governing Law; Jurisdiction. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflicts of law principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum.

 

Section 24. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original signature.

 

Section 25. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

Section 26.Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement; provided, however, that if such prohibited and invalid provision shall adversely affect the rights, immunities, liabilities, duties or 

 

 

obligations of the Warrant Agent, the Warrant Agent shall be entitled to resign immediately upon written notice to the Company.

 

Section 27.Force Majeure. Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.

 

Section 28.  Entire Agreement.  The parties hereto acknowledge that there are no agreements or understandings, written or oral, between them with respect to matters contemplated hereunder other than as set forth herein and the Warrant Certificates, that this Agreement and the Warrant Certificates contain the entire agreement between them with respect to the subject matter hereof and thereof.

 

Section 29. Fees; Expenses.  As consideration for the services provided by AST (the “Services”), the Company shall pay to AST the fees set forth on Schedule 1 hereto (the “Fees”).  If the Company requests that AST provide additional services not contemplated hereby, the Company shall pay to AST fees for such services at AST’s reasonable and customary rates, such fees to be governed by the terms of a separate agreement to be mutually agreed to and entered into by the Parties at such time (the “Additional Service Fee”; together with the Fees, the “Service Fees”)

 

(a)The Company shall reimburse AST for all reasonable and documented expenses incurred by AST (including, without limitation, reasonable and documented fees and disbursements of counsel) in connection with the Services (the “Expenses”); provided, however, that AST reserves the right to request advance payment for any out-of-pocket expenses.   The Company agrees to pay all Service Fees and Expenses within thirty (30) days following receipt of an invoice from AST.  

 

(b)The Company agrees and acknowledges that AST may adjust the Service Fees annually, on or about each anniversary date of this Agreement, by the annual percentage of change in the latest Consumer Price Index of All Urban Consumers United States City Average, as published by the U.S. Department of Labor, Bureau of Labor Statistics.   

 

(c)Upon termination of this Agreement for any reason, AST shall assist the Company with the transfer of records of the Company held by AST.  AST shall be entitled to reasonable additional compensation and reimbursement of any Expenses for the preparation and delivery of such records to the successor agent or to the Company, and for maintaining records and/or Stock Certificates that are received after the termination of this Agreement (the “Record Transfer Services”).

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

Helius Medical Technologies, Inc.,

 

 

By: /s/ Joyce LaViscount

Name: Joyce LaViscount

Title: Chief Financial Officer, Chief Operating Officer and Secretary

 

 

 

 

 

AMERICAN STOCK TRANSFER & TRUST COMPANY LLC

 

 

By: /s/ Michael Legregin

Name: Michael Legregin

Title: Senior Vice President

 

 

 

 

 

 

 

Annex A: Form of Warrant Certificate Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

To: American Stock Transfer & Trust Company, LLC, as Warrant Agent for Helius Medical Technologies, Inc. (the “Company”)

The undersigned Holder of Helius Medical Technologies, Inc. Common Stock Purchase Warrants (“Warrants”) in the form of [_______] [_______] Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:

	
 
	
1.
	
Name of Holder of [_______] [_______] Warrants in form of Global Warrants: ___________________________
	
 

	
 
	
2.
	
Name of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________
	
 

	
 
	
3.
	
Number of Warrants in name of Holder in form of Global Warrants: ___________________
	
 

	
 
	
4.
	
Number of Warrants for which Warrant Certificate shall be issued: __________________
	
 

	
 
	
5.
	
Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if any: ___________
	
 

 

	
 
	
6.
	
[_______] [_______] Warrant Certificate shall be delivered to the following address:

 

______________________________

 

______________________________

 

______________________________

 

______________________________

 

The undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.

 

[SIGNATURE OF HOLDER]

 

 

 

 

 

Name of Investing Entity: ____________________________________________________

 

Signature of Authorized Signatory of Investing Entity: ______________________________

 

Name of Authorized Signatory: ________________________________________________

 

Title of Authorized Signatory: _________________________________________________

 

Date: _______________________________________________________________

 

 

 

 

 

Exhibit 1-A: Form of Warrant Certificate

 

 

 

 

 

 

 

 

 

 

Schedule 1

FeesExhibit 10.6

 

COHERENT, INC.

 

2005 DEFERRED
COMPENSATION PLAN

 

     

     

    

 
Table
                                         of Contents

 

Page

 

	Article
    I	Definitions	1
	1.1	Definitions	1
	Article
    II	Participation	5
	2.1	Date of Participation	5
	2.2	Resumption of Participation
    Following Return to Service	5
	2.3	Change in Employment
    Status	5
	Article
    III	Contributions	5
	3.1	Deferral Contributions	5
	3.2	Accounts	7
	3.3	Company Discretionary
    Contributions	7
	3.4	Cancellation of Elections
    Due to Unforeseeable Emergency Distribution	7
	Article
    IV	Participants’
    Accounts	8
	4.1	Individual Accounts	8
	4.2	Accounting for Distributions	8
	4.3	Separate Accounts	8
	Article
    V	Investment
    of Contributions	8
	5.1	Manner of Investment	8
	5.2	Investment Decisions	8
	Article
    VI	Distributions	8
	6.1	Certain Distributions
    to Participants and Beneficiaries	8
	6.2	Subsequent Election to
    Delay or Change Form of Payment	10
	6.3	Lump-Sum Distribution
    Timing	10
	6.4	Installment Amounts	10
	6.5	Unforeseeable Emergency
    Distributions	11
	6.6	Scheduled In-Service
    Distribution	11
	6.7	Death	12
	6.8	Notice to Trustee	12
	6.9	Time of Distribution	12
	6.10	Domestic Relations Order
    Distributions	12
	6.11	Conflicts of Interest
    and Ethics Rules Distributions	12
	6.12	FICA and Related Income
    Tax Distribution	12
	6.13	State, Local and Foreign
    Tax Distribution	13

 

    	 	-i-	 

     

    

 

Table
of Contents

(continued)

 

Page

 

	6.14	Code Section
    409A Distribution	13
	6.15	Tax Withholding	13
	6.16	Special 2008 Election	13
	Article
    VII	Change
    of Control	13
	7.1	No New Participants Following
    Change of Control	13
	Article
    VIII	Termination
    Due to Corporate Dissolution or Pursuant to Bankruptcy Court Approval	13
	8.1	Corporate Dissolution	13
	8.2	Bankruptcy Court Approval	13
	Article
    IX	Amendment
    and Termination	14
	9.1	Amendment by Employer	14
	9.2	Retroactive Amendments	14
	9.3	Plan Deferral Termination	14
	9.4	Distribution upon Certain
    Plan Terminations	14
	Article
    X	The
    Trust	14
	10.1	Establishment of Trust	14
	Article
    XI	Miscellaneous	15
	11.1	Limitation of Rights	15
	11.2	Nontransferability; Domestic
    Relations Orders	15
	11.3	Facility of Payment	15
	11.4	Information between Employer
    and Trustee	15
	11.5	Notices	15
	11.6	Governing Law	16
	11.7	No Guarantees Regarding
    Tax Treatment; Disclaimer	16
	Article
    XII	Plan
    Administration	16
	12.1	Powers and Responsibilities
    of the Administrator	16
	12.2	Nondiscriminatory Exercise
    of Authority	16
	12.3	Claims and Review Procedures	17
	12.4	Exhaustion of Claims
    Procedure and Right to Bring Legal Claim	20
	12.5	Plan’s Administrative Costs	20

 

    	 	-ii-	 

     

    

 

PREAMBLE

 

This Coherent, Inc.
2005 Deferred Compensation Plan is adopted by Coherent, Inc. for the benefit of certain of its Employees and members of its
Board of Directors, effective as of January 1, 2005 (the “Effective Date”). The purpose of the Plan is to provide
supplemental retirement income and to permit eligible Participants the option to defer receipt of Compensation, pursuant to the
terms of the Plan. The Plan is intended to be an unfunded deferred compensation plan maintained for the benefit of a select group
of management or highly compensated employees under sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and is intended
to comply with Section 409A of the Internal Revenue Code. Participants shall have the status of unsecured creditors of Coherent, Inc.
with respect to the payment of Plan benefits.

 

From and
after the Effective Date, this Plan replaces the Coherent, Inc. 1995 Deferred Compensation Plan, the Coherent, Inc.
Supplementary Retirement Plan and the Director Deferred Compensation Plan, which have been frozen to new deferrals as of December 31,
2004 so as to qualify these prior plans for “grandfather” treatment under Internal Revenue Code Section 409A.

 

Article I

 

Definitions

 

1.1       Definitions.
Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by
the context:

 

(a)        “Account”
means an account established on the books of the Employer for the purpose of recording amounts credited on behalf of a Participant
and any expenses, gains or losses included thereon.

 

(b)        “Administrator”
means the Employer, or the Committee, if one has been designated by such Employer.

 

(c)        “Bankruptcy
Court Approval” means the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A).

 

(d)        “Beneficiary”
means the person or persons entitled under Section 6.7 to receive benefits under the Plan upon the death of a Participant.

 

(e)        “Change
of Control Event” means a change in ownership or effective control of the Company or in the ownership of a substantial
portion of the Company’s assets, as defined under Code Section 409A.

 

(f)        “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

(g)        “Code
Section 409A” means Code Section 409A and the proposed or final (as applicable) Treasury regulations and other
official guidance promulgated thereunder.

 

    	 	1	 

     

    

 

(h)        “Code
Section 409A Distribution” means a distribution pursuant to Section 6.15 hereof.

 

(i)         “Committee”
means the Deferred Compensation Committee composed of three or more individuals appointed by the Compensation Committee of the
Board of Directors of the Employer, or following a Change of Control, appointed by the Committee, to function as the Administrator.
Once appointed, the Deferred Compensation Committee shall interpret and administer this Plan and take such other actions as may
be specified herein.

 

(j)         “Company”
means the Employer and any of its Subsidiaries.

 

(k)        “Compensation”
means (i) with respect to Eligible Employees, base salary, commissions, variable compensation plan bonuses, and, to the extent
that they qualify as Sales Commissions under Code Section 409A, sales commission plan bonuses and sales incentive bonuses,
including amounts that are otherwise excludable from the gross income of the Participant under a salary reduction agreement by
reason of the application of Sections 125 or 402(a)(8) of the Code, and (ii) with respect to Outside Directors, all
cash retainers and cash meeting fees, excluding expense reimbursements. Compensation does not include any severance payments or
benefits.

 

(l)         “Corporate
Dissolution” means a dissolution of the Company that is taxed under Code Section 331.

 

(m)       “Deferral
Contributions” means, for each Participant, the amount deferred pursuant to Section 3.1 hereof.

 

(n)        “Disability”
means the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can
be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering Company employees.

 

(o)        “Domestic
Relations Order” means a court order that qualifies as a domestic relations order under Code Section 414(p)(1)(B).

 

(p)        “Eligible
Participant” means (i) any employee within a category specified by the Committee, including without limitation,
a category based on annual base salary and position; (ii) any Outside Director, and (iii) any other employees designated
as eligible by the Committee.

 

(q)        “Employee”
means any employee of the Employer.

 

(r)        “Employer”
means Coherent, Inc. and any successors and assigns unless otherwise provided herein.

 

    	 	2	 

     

    

 

(s)        “Entry
Date” means (i) January 1 (which is also the Entry Date for employees who are promoted or given a base salary
increase or otherwise have a change in circumstance so as to become an Eligible Participant for the first time and for re-hires
who were previously Eligible Participants), (ii) for new employees who are Eligible Participants (including re-hires who
were not previously Eligible Participants), the first day of the next payroll period commencing after the next paydate following
receipt of their deferral election by the Company; provided, however, that such new employee’s deferral election must be
submitted no later than 30 days following their becoming newly eligible, or (iii) for Non-Employee Directors who are Eligible
Participants for the first time, the first day of the next Company fiscal quarter following their becoming a Non-Employee Director;
provided, however, that such new Non-Employee Director’s deferral election must be submitted no later than 30 days following
their becoming a newly eligible Non-Employee Director.

 

(t)         “ERISA”
means the Employee Retirement Income Security Act of 1974, as from time to time amended.

 

(u)        “FICA
Amount” means the aggregate Federal Insurance Contributions Act (FICA) tax imposed on any Account under Code Sections
3101, 3121(a) and 3121(v)(2), as applicable and any corresponding tax withholding provisions of applicable state, local or
foreign tax laws as a result of the payment of the FICA amount.

 

(v)        “401(k) Plan”
means the Coherent, Inc. Employee Retirement and Investment Plan.

 

(w)       “Outside
Director” means a member of the Board whom is not an Employee.

 

(x)        “Participant”
means any Employee or Outside Director who participates in the Plan in accordance with Article 2 hereof.

 

(y)        “Plan”
means this Coherent, Inc. 2005 Deferred Compensation Plan.

 

(z)        “Plan
Year” means the 12-consecutive month period beginning January 1 and ending December 31.

 

(aa)      “Prior
Plans” means the Coherent, Inc. 1995 Deferred Compensation Plan, the Coherent, Inc. Supplementary Retirement
Plan and the Director Deferred Compensation Plan.

 

(bb)      “Retirement”
means a Participant’s Separation from Service after attaining 50 years of age.

 

(cc)      “Sales
Commission” means “sales commission compensation” as such term is defined in Treasury Regulation §1.409A-2(a)(12)(i).

 

(dd)      “Separation
From Service” means a separation from service as defined under Code Section 409A. For this purpose, the employment
relationship will be treated as continuing intact while the Participant is on military leave, sick leave or other bona fide leave
of

 

    	 	3	 

     

    

 

absence, except that if the period of such leave exceeds six (6) months and the Participant does not retain a right to
re-employment under an applicable statute or by contract, then the employment relationship will be deemed to have terminated on
the first day immediately following such six-month period. A leave of absence constitutes a bona fide leave of absence only if
there is a reasonable expectation that the Participant will return to perform services for the Company.

 

(ee)      “Specified
Employee” means a Participant who, as of the date of his or her Separation from Service, is a key employee of the Company.
For this purpose, a Participant is a key employee if he or she meets the requirements of Code section 416(i)(1)(A)(i), (ii) or
(iii) (disregarding Code section 416(i)(5)). As of 2020, this generally includes (i) the top fifty (50) Company officers
with compensation greater than $185,000 per year, (ii) a 5% owner of the Company, or (iii) a 1% owner of the Company
with compensation greater than $150,000 per year. For purposes of the preceding sentence, “compensation” means compensation
as such term is defined in the 401(k) Plan for Code section 415 purposes. The determination of who is a Specified Employee
shall be made on December 31 of each year and shall include any employee who qualified as a Specified Employee at any time
during the preceding twelve-month period. Once so determined, the list of Specified Employees shall be initially effective on
the following April 1 and shall remain effective for twelve months (i.e., through March 31 of the following year).

 

(ff)        “Subsidiary”
means a subsidiary of the Employer, as such term is defined in Code section 424(f).

 

(gg)      “Trading
Day” means a day upon which the major U.S. national stock exchanges are open for trading.

 

(hh)      “Trust”
means the trust fund established pursuant to the terms of the Plan.

 

(ii)        “Trustee”
means the corporation or individuals named in the agreement establishing the Trust and such successor and/or additional trustees
as may be named in accordance with the Trust Agreement.

 

(jj)        “Unforeseeable
Emergency” means (a) a severe financial hardship to a Participant resulting from an illness or accident of the
Participant or his or her spouse, beneficiary or dependent (as defined in section 152 of the Code, but without regard to subsections
(b)(1), (b)(2) and (d)(1)(B) thereof), (b) loss of the Participant’s property due to casualty (including
the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural
disaster), or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control
of the Participant.

 

(kk)      “Year
of Service” means a period of 12 consecutive months during which the Participant is employed by the Employer or serves
as a Board member. Service commences on the date the Participant first commences service for the Employer and ends on the date
that the Participant quits, retires, is discharged, is determined to be Totally Disabled or dies.

 

    	 	4	 

     

    

 

(ll)        “Valuation
Date” means (i) for re-allocations of amounts previously deferred, the date of re-allocation, or, if that date
is not a Trading Day, then the next Trading Day, (ii) for distributions hereunder, the last day of the preceding month, or,
if that day is not a Trading Day, then the most recently concluded Trading Day, and (iii) for allocations of deferrals, the
next Trading Day following the payday to which the deferral relates.

 

Article II

 

Participation

 

2.1       Date
of Participation. Each Eligible Participant shall become a Participant as of the Entry Date next following their timely filing
of an election to defer Compensation in accordance with Section 3.1.

 

2.2       Resumption
of Participation Following Return to Service. If a Participant ceases to be an Employee or Outside Director and thereafter
returns to the service of the Employer he or she will again become a Participant as of the Entry Date following the date on which
he or she re-commences service with the Employer, provided he or she is an Eligible Participant and has timely filed an election
to defer Compensation pursuant to Section 3.1. Any scheduled Plan payments the Participant has been receiving shall continue
to be paid as previously scheduled.

 

2.3       Change
in Employment Status. If any Employee Participant continues in the employ of the Employer but ceases to be an Eligible Participant,
the individual shall continue to be a Participant until the entire amount of his benefit is distributed; provided, however, the
individual shall not be entitled to make Deferral Contributions during subsequent Plan Years in which he or she is not an Eligible
Participant. In the event an Employee Participant ceases to be an Eligible Participant, if such individual has not undergone a
Separation From Service, he or she shall continue to make Deferral Contributions under the Plan through the end of the Plan Year
in which he or she ceases to be an Eligible Participant. Thereafter, such individual shall not make any further Compensation deferral
contributions to the Plan unless or until he or she again becomes an Eligible Participant. In the event that the individual subsequently
again becomes an Eligible Participant, the individual may resume full participation on the next Entry Date in accordance with
Section 3.1.

 

Article III

 

Contributions

 

3.1       Deferral
Contributions.

 

(a)        Annual
Open Enrollment. Prior to the beginning of each Plan Year, each Eligible Participant (including newly eligible Eligible Participants
who were formerly Eligible Participants) may elect to execute a compensation reduction agreement with the Employer to reduce his
Compensation in accordance with procedures set by the Committee. Such agreement shall become irrevocable as of the last day of
the calendar year in which it is made and shall be effective, with respect to Eligible Employees, with the first payday in the
following Plan Year and with respect to Outside Directors, with the first day of service in the following Plan Year.

 

    	 	5	 

     

    

 

Except with
respect to payroll periods that cross-over from one calendar year to the next, the election shall not be effective with respect
to Compensation relating to services already performed. With respect to Compensation that qualifies as a Sales Commission, the
services relating to such Compensation shall be deemed performed in the year in which the customer pays the Company. An election
once made will remain in effect for paydays falling in the duration of the Plan Year. After the beginning of a Plan Year, a Participant
will not be permitted to change, terminate or revoke his or her Compensation Deferral election for such Plan Year, except to the
limited extent provided in Section 3.4. Amounts credited to a Participant’s Account prior to the effective date of
any new election will not be affected and will be paid in accordance with that prior election.

 

(b)        Newly
Eligible Participants. The same rules as in Section 3.1(a) above shall also apply to individuals who become
Eligible Participants for the first time, except (i) such new Eligible Participants shall have no more than thirty (30) days
following their becoming eligible for the first time under the Plan or any other non-qualified deferred compensation plans of
the Employer required to be aggregated with the Plan in which to elect to have their Compensation reduced, and (ii) the agreement
shall become effective, with respect to Eligible Employees, with the first full payroll period commencing following the receipt
of their election by the Company and with respect to Outside Directors, with the first day of service following the receipt of
their election by the Company. Newly eligible Outside Directors may not, however, defer quarterly fees payable on account of the
Company’s fiscal quarter in which the election is made.

 

(c)        Variable
Compensation Plan, Sales Commission Plan and Sales Incentive Bonuses Payable in a Subsequent Year. If a Variable Compensation
Plan, Sales Commission Plan or Sales Incentive Bonus (so long as such Sales Commission Plan and Sales Incentive Bonus qualifies
as Sales Commissions under Section 409A) is earned in one calendar year and would normally be paid in the first quarter of
the ensuing calendar year, it shall be deferred and distributed based upon the election made by the Eligible Participant in the
open enrollment period in the year prior to the year in which it was earned. For newly Eligible Participants, any such Variable
Compensation Plan, Sales Commission Plan or Sales Incentive Bonus shall be deferred and distributed based upon their initial election
made with respect to the year in which it was earned (or the year in which it was paid to the Company, with respect to Sales Commissions);
provided, however, that such election may apply to no more than the total amount of such compensation multiplied by the ratio
of the number of days remaining in the applicable performance period after such election becomes irrevocable over the total number
of days in the applicable performance period. Performance-based compensation may also be deferred in accordance with Treasury
Regulation §1.409A-2(a)(8).

 

EXAMPLE:
In the December, 2019 open enrollment period, an Eligible Participant elects to defer 75% of her Sales Incentive Bonus for
2020. The 2020 Sales Incentive Bonus is normally paid in March, 2021. The deferral and distribution of her 2020 Sales Incentive
Bonus otherwise payable in March 2021 are controlled by her election made in the 2019 open enrollment period.

 

(d)        Year-End
Cross-Over Payroll Periods. Paydays relating to periods of service that cross-over the calendar year end shall be covered
by the Participant’s deferral

 

    	 	6	 

     

    

 

election in effect for the later year, consistently with the default rules under Treasury
Regulation §1.409A-2(a)(13).

 

(e)        Limitation
on Deferral Changes. The dollar amount of any Plan deferrals shall not be reduced or increased during any Plan Year by virtue
of any Participant election to increase, decrease or terminate his or her rate of deferral in any other employee benefit plan,
including the Company’s employee stock purchase plan; except as permitted by Code Section 409A with respect to changes
in deferral elections under the Company’s 401(k) Employee Savings Plan and Code section 125 flexible benefits plan
(or as otherwise permitted under Code Section 409A).

 

3.2       Accounts.
The Employer shall credit an amount to the Account maintained on behalf of the Participant corresponding to the amount of said
reduction. Under no circumstances may an election to defer Compensation be adopted retroactively.

 

3.3       Company
Discretionary Contributions. The Company may, in its sole discretion, make a contribution to a Participant’s Account,
subject to such vesting and distribution conditions and limitations as the Company, in its sole discretion, shall impose. To the
extent such Company contributions do not vest, corresponding debits will be made to a Participant’s Account, including any
earnings on such forfeited amounts.

 

3.4       Cancellation
of Elections Due to Unforeseeable Emergency Distribution.

 

(a)        Unforeseeable
Emergency Distribution. A Participant’s deferral election shall be automatically cancelled in the event the Participant
obtains an unforeseeable emergency distribution from the Plan pursuant to Section 6.5 hereof. The Participant, if still an
Eligible Participant, may re-enroll in the Plan in the next open enrollment period.

 

(b)        Special
2005 Elections.

 

(i)         In
accordance with Internal Revenue Service Notice 2005-1, Q&A-21, Eligible Participants may make a deferral election with respect
to 2005 Compensation that has not been paid or become payable at the time of election, and superseding their prior election, if
any, with respect to such Compensation, on or before March 15, 2005, or such earlier time as is determined by the Administrator
(or its designee) in its sole discretion.

 

(ii)        In
accordance with Internal Revenue Service Notice 2005-1 and the proposed Treasury regulations promulgated under Code Section 409A,
and notwithstanding any contrary provision of the Plan, a Participant may elect to rescind or reduce his or her 2005 Compensation
deferral election made under Section 3.1 by filing a form specified by the Administrator (or its designee) with the Administrator
(or its designee) no later than December 31, 2005, or such earlier time as is determined by the Administrator (or its designee),
in its sole discretion. The amount subject to such election shall be distributed to the Participant in a single lump sum payment
of cash (or its equivalent) in calendar year 2005 or, if later, the Participant’s taxable year in which the amount becomes
earned and vested.

 

    	 	7	 

     

    

 

Article IV

 

Participants’
Accounts

 

4.1       Individual
Accounts. The Administrator will establish and maintain an Account for each Participant which will reflect Deferral Contributions
credited to the Account on behalf of the Participant with earnings, expenses, gains and losses credited thereto, attributable
to the investments made with the amounts in the Participant’s Account. Statements of their Account values will be made available
to Participants at least once each Plan Year.

 

4.2       Accounting
for Distributions. As of any date of a distribution to a Participant or a Beneficiary hereunder, the distribution to the
Participant or to the Participant’s Beneficiary(ies) shall be charged to the Participant’s Account.

 

4.3       Separate
Accounts. A separate account under the Plan shall established and maintained to reflect the Account for each Participant
with subaccounts to show separately the earnings, expenses, gains and losses credited or debited to that Account.

 

Article V

 

Investment
of Contributions

 

5.1       Manner
of Investment. All amounts credited to the Accounts of Participants shall be treated as though invested only in eligible investments
selected by the Employer.

 

5.2       Investment
Decisions.

 

(a)        Accounts
shall be treated as invested as directed by the Participant among the eligible investment alternatives selected by the Employer.
Participants may change their investment allocations as specified by the Committee.

 

(b)        All
dividends, interest, gains and distributions of any nature earned in respect of an investment alternative in which the Account
is treated as investing shall be credited to the Account in an amount equal to the net increase or decrease in the net asset value
of each investment option since the preceding Valuation Date.

 

Article VI

 

Distributions

 

6.1       Certain
Distributions to Participants and Beneficiaries.

 

(a)        Earliest
Distributions

 

(i)         Regular
Participants. Except as permitted by the Plan and Code Section 409A in connection with a Corporate Dissolution, pursuant
to a Bankruptcy Court Approval, a conflicts of interest or ethics rule distribution under Section 6.11, a FICA and related
income tax distribution under Section 6.12, a state, local or foreign tax distribution under Section 

 

    	 	8	 

     

    

 

6.13, or a Code
Section 409A Distribution, in no event may the account of a Participant who is not a Specified Employee be distributed earlier
than (i) the Participant’s Separation From Service, (ii) the Participant’s Disability, (iii) the Participant’s
death, (iv) a specified time under Section 6.6 hereunder, (v) the occurrence of an Unforeseeable Emergency, or
(vi) as required to satisfy a Domestic Relations Order.

 

(ii)        Specified
Employee Participants. Except as permitted by the Plan and Code Section 409A in connection with a Corporate Dissolution,
pursuant to a Bankruptcy Court Approval, a conflicts of interest or ethics rules distribution under Section 6.11, a
FICA and related income tax distribution under Section 6.12, a state, local or foreign tax distribution under Section 6.13,
or a Code Section 409A Distribution, in no event may a Specified Employee’s account be distributed earlier than (i) six
(6) months following the Specified Employee’s Separation From Service (or if earlier, the Specified Employee’s
death), (ii) the Specified Employee’s Disability, (iii) the Specified Employee’s death, (iv) a specified
time under Section 6.6 hereunder, (v) the occurrence of an Unforeseeable Emergency, or (vi) as required to satisfy
a Domestic Relations Order. In the event a Specified Employee’s Plan distributions are delayed due to the six-month delay
requirement, the amounts otherwise payable to the Specified Employee during such period of delay shall be paid on a date that
is at least six months and one day following Separation From Service, but no later than the end of the calendar year in which
such six month and one day period ends (or, if earlier, within 60 days following the death of the Specified Employee). The Participant’s
other scheduled distributions, if any, shall not be affected by the period of delay.

 

(b)        Lump-Sum
or Installment Payment Initial Elections. At the same time their initial elections for any Plan Year are made, Participants
shall elect to have their Compensation deferrals for that Plan Year paid out, either following their Retirement or their Disability,
in one of the following forms of payment:

 

(i)         Lump
sum cash payment; or

 

(ii)        Two
to fifteen substantially equal annual installments.

 

At the same
time their initial elections for the 2021 Plan Year or thereafter are made, Participants shall elect to have their Compensation
deferrals for the 2021 Plan Year or any year thereafter paid out, following their Separation From Service other than by death,
in one of the following forms of payment:

 

(iii)       Lump
sum cash payment; or

 

(iv)       Two
to fifteen substantially equal annual installments.

 

For Compensation
deferrals for Plan Years before the 2021 Plan Year, in no event shall any Plan payments be made more than sixteen (16) years following
a Participant’s Separation From Service. Any payment with respect to Compensation deferrals for Plan Years before the 2021
Plan Year scheduled to be made more than sixteen (16) years following a Participant’s Separation From Service shall be paid
with the last scheduled payment with the sixteen (16) year period.

 

    	 	9	 

     

    

 

(c)        Other
Plan Payments. All Plan payments not specified in Section 6.1(b), except for certain scheduled in-service withdrawals
as specified in Section 6.6, shall be made in the form of a lump-sum payment.

 

(d)        Installment
Payments Treated as Single Payments. All installment payments under the Plan are considered a single payment for purposes
of complying with Code Section 409A.

 

6.2       Subsequent
Election to Delay or Change Form of Payment.

 

(i)         A
Participant’s initial election to receive a distribution may be delayed or the form of payment changed by filing an election,
in the form required by the Administrator, at least one year in advance of the date upon which any distribution would otherwise
have been made pursuant to the prior election. Such election shall not be effective for a period of one (1) year, and must
delay the initial payment by a period of at least five (5) years, but may not result in the initial payment occurring more
than then ten (10) years following Separation From Service or Disability. In the absence of such timely filed election, the
value of such Participant’s Account shall be distributed in accordance with their previously timely filed Account election.

 

(ii)        Because
Plan installment payments are considered a single payment for purposes of Code Section 409A, a subsequent election may accelerate
the method of distribution. For example, if a Participant initially elected to receive Separation From Service or Disability payments
in five annual installments following her Separation From Service, she could make a timely election to instead take a lump-sum
distribution five years following her Separation From Service. Moreover, a subsequent election may change a lump-sum distribution
to an installment election, so long as, in either case, the initial payment is delayed for a period of at least five (5) years,
the election is not effective for one (1) year and is made at least one (1) year in advance of the date upon which the
first distribution would have otherwise been made.

 

(iii)       Because
installment payments are treated as a single payment, any subsequent election must apply to all of the installment payments. For
example, if a Participant initially elected to receive Separation From Service or Disability payments in five annual installments
following her Separation From Service, the Participant may not elect to defer the 1st, 2d, 3rd and 5th installments only, but
must also defer the 4th installment.

 

6.3       Lump-Sum
Distribution Timing. Except as elected otherwise for Plan Years prior to the 2009 Plan Year, for Participants receiving a
lump-sum distribution, the value of their Account (or portion thereof specified in the Participant’s election) shall be
paid in a lump-sum cash payment in the first February following their Separation From Service, or, for Specified Employees
(or their estates or beneficiaries), if later, at least six months and one day after the date upon which they incur a Separation
From Service, but no later than the end of the calendar year in which such six month and one day period ends or, if earlier, upon
their death.

 

6.4       Installment
Amounts. For purposes of this Section 6, installment payments shall be determined by dividing the value of the Participant’s
Account at the time of such installment by the number of payments remaining. Except as elected otherwise for Plan Years prior
to the

 

    	 	10	 

     

    

 

2009 Plan Year, installment payments other than in-service distributions shall commence in the next February following
the triggering distribution event, or, for Specified Employees undergoing a Separation From Service triggering event, as soon
as is practicable at least six months and one day after the date upon which they incur a Separation From Service, but no later
than the end of the calendar year in which such six month and one day period ends. In-service distributions will commence in the
February of the specified year.

 

6.5       Unforeseeable
Emergency Distributions. With the consent of the Administrator, a Participant may withdraw up to one hundred percent
(100%) of his or her Account as may be required to meet a sudden Unforeseeable Emergency of the Participant. Such distribution
may only be made if the amounts distributed with respect to an Unforeseeable Emergency may not exceed the amounts necessary to
satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking
into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe
financial hardship).

 

6.6       Scheduled
In-Service Distribution. A Participant may elect, as provided in his or her Participant deferral election, to receive one
or more scheduled in-service (i.e., commencing while employed by the Company, or, for outside director Participants, while serving
as a Board member) distributions relating to the Plan Year to which the deferral election relates. Such in-service distributions
may only be scheduled for years at least two full calendar years following the end of the calendar year to which the deferrals
relate. Participants may elect to receive in-service distributions of deferrals in annual installments of up to five years.

 

EXAMPLE:
In the December, 2017 open enrollment period, an Eligible Participant elects to receive an in-service distribution of 50%
of her 2018 plan deferrals, plus earnings and losses thereon, in 2021. This includes a variable compensation plan bonus paid in
2019 but earned in 2018. Because the scheduled in-service distribution is at least two full calendar years following the end of
2018 (the end of the year to which the deferrals relate), the election is permissible.

 

Each scheduled
in-service distribution may only be postponed in accordance with Section 6.2 hereof. In the event a Participant incurs a
Separation From Service prior to receiving the first scheduled payment, then the scheduled in-service distribution election shall
be without further force and effect and the applicable Separation From Service distribution provisions of the Plan and the Participant’s
deferral election shall control. Similarly, in the event a Participant incurs a Separation From Service after receiving the first
scheduled in-service distribution payment, and if the Separation From Service is not pursuant to Retirement, Disability or death,
then any scheduled future installments of the in-service distribution election shall be without further force and effect and the
applicable Separation From Service distribution provisions of the Plan and the Participant’s deferral election shall control.
If, however, a Participant incurs a Separation From Service due to his or her Retirement, Disability or death after receiving
their first scheduled in-service distribution payment, then the scheduled in-service distributions will be made according to their
schedule and will take precedence over the Participant’s other deferral elections; provided, however, that the first scheduled
payment following the Separation From Service for a Specified Employee shall be paid on a date that is at least six months and
one day following

 

    	 	11	 

     

    

 

Separation From
Service, but no later than the end of the calendar year in which such six month and one day period ends (or, if earlier, upon
the death of the Specified Employee).

 

6.7       Death.
Except with respect to certain in-service distributions as provided below, if a Participant dies, his or her designated Beneficiary
or Beneficiaries will receive the balance of his or her Account in a lump sum. Moreover, if such death occurs prior to a Separation
From Service, the Account shall vest 100% as to any previously unvested Account balance. Distribution to the Beneficiary or Beneficiaries
will be made as soon as is practicable after death but no later than the end of the year following the year of death.

 

A Participant
may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries by giving notice
to the Administrator on a form designated by the Administrator (spousal consent to such change may be required on the form designated
by the Administrator). If more than one person is designated as the Beneficiary, their respective interests shall be as indicated
on the designation form.

 

If upon the
death of the Participant there is, in the opinion of the Administrator, no designated Beneficiary for part or all of the Participant’s
Account, the amount as to which there is no designated Beneficiary will be paid to his or her surviving spouse or, if none, to
his or her estate (such spouse or estate shall be deemed to be the Beneficiary for purposes of the Plan).

 

6.8       Notice
to Trustee. The Administrator will notify the Trustee in writing whenever any Participant or Beneficiary is entitled to receive
benefits under the Plan. The Administrator’s notice shall indicate the form, amount and frequency of benefits that such
Participant or Beneficiary shall receive.

 

6.9       Time
of Distribution. In no event will distribution to a Participant be made later than the date specified by the Participant in
his or her election to defer Compensation; provided, however, that if a Participant is a Specified Employee, his or her election
shall be subject to the six (6) month distribution delay requirements of the Plan and Code Section 409A.

 

6.10     Domestic
Relations Order Distributions. The Committee, in its sole discretion, may accelerate a payment (or payments) make such payments
to an individual other than the Participant as necessary to comply with the terms of a Domestic Relations Order.

 

6.11     Conflicts
of Interest and Ethics Rules Distributions. The Committee, in its sole discretion, may accelerate a payment (or payments)
as necessary (i) for any U.S. federal officer or employee in the executive branch of the U.S. federal government to comply
with an ethics agreement with the U.S. federal government, or (ii) to avoid violating a U.S. federal, state, local or foreign
ethics law or conflicts of interest law, as specified under Code Section 409A.

 

6.12     FICA
and Related Income Tax Distribution. The Committee, in its sole discretion, may permit a distribution from a Participant’s
Account sufficient to pay any FICA Amounts due upon the vesting of any Company contribution as well as to satisfy the income tax
withholding requirements with respect to the FICA Amount and income tax payments under this Section 6.12. In no event may
the total payment under this Section 6.12 exceed the aggregate of the FICA Amount and the related income tax withholding.

 

    	 	12	 

     

    

 

6.13     State,
Local and Foreign Tax Distribution. The Committee, in its sole discretion, may permit a distribution from a Participant’s
Account sufficient to pay any state, local or foreign tax obligations arising from participation in the Plan that apply to an
amount deferred under the Plan prior to the scheduled distribution of such amount. In the event the Committee exercises such discretion,
the Committee may also permit a distribution sufficient to pay related income tax withholding in accordance with Code Section 409A.
In no event may the total payment under this Section 6.13 exceed the aggregate amount of such taxes due.

 

6.14     Code
Section 409A Distribution. In the event that the Plan fails to satisfy the requirements of Code Section 409A, then
the Committee, in its sole discretion, may permit a distribution from a Participant’s Account up to the maximum amount required
to be included in income as a result of the failure to comply with Code Section 409A.

 

6.15     Tax
Withholding. Payments under this Article VI shall be subject to all applicable withholding requirements for state and
federal income taxes and to any other federal, state or local taxes that may be applicable to such payments.

 

6.16     Special
2008 Election. Notwithstanding other Plan provisions, pursuant to and in accordance with IRS Notice 2007-86, in the 2008 Plan
Year, the Committee had the discretion to permit Participants to change the time and form or payment of Accounts with respect
to amounts credited on and after January 1, 2005 so long as the change did not (i) accelerate payment of amounts that
would otherwise be payable in a future year into the year of the new election, and (ii) apply to amounts that would otherwise
be paid in the year of the election.

 

Article VII

 

Change
of Control

 

7.1       No
New Participants Following Change of Control. No individual may commence participation in the Plan following a Change
of Control Event.

 

Article VIII

 

Termination
Due to Corporate Dissolution or Pursuant to Bankruptcy Court Approval

 

8.1       Corporate
Dissolution. The Administrator, in its sole discretion, may terminate the Plan and accelerate all scheduled Plan distributions
within 12 months following a Corporate Dissolution; provided that such termination and distribution acceleration complies with
the requirements of Code Section 409A.

 

8.2       Bankruptcy
Court Approval. The Administrator, in its sole discretion, may terminate the Plan and accelerate all scheduled Plan distributions
pursuant to Bankruptcy Court Approval; provided that such termination and distribution acceleration complies with the requirements
of Code Section 409A.

 

    	 	13	 

     

    

 

Article IX

 

Amendment
and Termination

 

9.1       Amendment
by Employer. The Employer reserves the authority to amend the Plan. Any such change notwithstanding, no Participant’s
Account shall be reduced by such change below the amount to which the Participant would have been entitled if he had voluntarily
left the employ of the Employer immediately prior to the date of the change. The Employer may from time to time make any amendment
to the Plan that may be necessary to satisfy Code Section 409A or ERISA.

 

9.2       Retroactive
Amendments. An amendment made by the Employer in accordance with Section 9.1 may be made effective on a date prior to
the first day of the Plan Year in which it is adopted if such amendment is necessary or appropriate to enable the Plan and Trust
to satisfy the applicable requirements of Code Section 409A or ERISA or to conform the Plan to any change in federal law
or to any regulations or rulings thereunder, so long as such retroactive amendment is permitted by applicable law.

 

9.3       Plan
Deferral Termination. The Employer has adopted the Plan with the intention and expectation that deferrals will be permitted
indefinitely. However, the Employer has no obligation to maintain the Plan for any length of time and may discontinue future Compensation
deferrals under the Plan in advance of any Plan Year by written notice delivered to Eligible Participants without any liability
for any such discontinuance.

 

9.4       Distribution
upon Certain Plan Terminations. Upon termination of the Plan other than pursuant to a Corporate Dissolution or pursuant to
a Bankruptcy Court Approval, no further Deferral Contributions or Employer Contributions shall be made under the Plan, but Accounts
of Participants maintained under the Plan at the time of termination shall continue to be governed by the terms of the Plan until
paid out in accordance with the terms of the Plan, Participants’ deferral elections and the requirements of Code Section 409A,
which latter requirements shall take precedence over the terms of the Plan and Participants’ deferral elections in the event
of any conflict. For purposes of clarity, the Employer may discontinue future Compensation deferrals in accordance with Section 9.3
but other than pursuant to a Corporate Dissolution or pursuant to a Bankruptcy Court Approval may not terminate the Plan pursuant
to Treas. Regulation 1.409A-3(j)(4)(ix)(B) or (C) in a manner that would provide for pay out of the Accounts of Participants
in a manner other than as elected in Participants’ deferral elections.

 

Article X

 

The Trust

 

10.1     Establishment
of Trust. The Employer shall establish the Trust between the Employer and the Trustee, in accordance with the terms and conditions
as set forth in a separate agreement, under which assets are held, administered and managed, subject to the claims of the Employer’s
creditors in the event of the Employer’s insolvency, until paid to Participants and their Beneficiaries as specified in
the Plan. The Trust is intended to be treated as a grantor trust

 

    	 	14	 

     

    

 

under the Code, and the establishment of the Trust is not intended
to cause Participants to realize current income on amounts contributed thereto.

 

Article XI

 

Miscellaneous

 

11.1     Limitation
of Rights. Neither the establishment of the Plan and the Trust, nor any amendment thereof, nor the creation of any
fund or account, nor the payment of any benefits, will be construed as giving to any Participant or other person any legal or
equitable right against the Employer, Administrator or Trustee, except as provided herein; and in no event will the terms of employment
or service of any Participant be modified or in any way affected hereby

 

11.2     Nontransferability;
Domestic Relations Orders. The right of any Participant, any Beneficiary, or any other person to the payment of any benefits
under this Plan shall not be assigned, transferred, pledged or encumbered; provided, however, that a Deferral Account hereunder
may be transferred to a Participant’s former spouse pursuant to a Domestic Relations Order.

 

11.3     Facility
of Payment. In the event the Administrator determines, on the basis of medical reports or other evidence satisfactory to the
Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his affairs by reason of minority,
illness, infirmity or other incapacity, the Administrator may direct the Trustee to disburse such payments to a person or institution
designated by a court which has jurisdiction over such recipient or a person or institution otherwise having the legal authority
under State law for the care and control of such recipient. The receipt by such person or institution of any such payments therefore,
and any such payment to the extent thereof, shall discharge the liability of the Trust for the payment of benefits hereunder to
such recipient.

 

11.4     Information
between Employer and Trustee. The Employer agrees to furnish the Trustee, and the Trustee agrees to furnish the Employer
with such information relating to the Plan and Trust as may be required by the other in order to carry out their respective duties
hereunder, including without limitation information required under the Code or ERISA and any regulations issued or forms adopted
thereunder.

 

11.5     Notices.
Any notice or other communication in connection with this Plan shall be deemed delivered in writing if addressed as provided below
and if either actually delivered at said address or, in the case of a letter, three business days shall have elapsed after the
same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified:

 

(a)        If
it is sent to the Employer or Administrator, it will be at the address specified by the Employer;

 

(b)        If
it is sent to the Trustee, it will be sent to the address set forth in the Trust Agreement; or, in each case at such other address
as the addressee shall have specified by written notice delivered in accordance with the foregoing to the addressor’s then
effective notice address.

 

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11.6     Governing
Law. The Plan will be construed, administered and enforced according to ERISA, and to the extent not preempted thereby,
the laws of the state of California.

 

11.7     No
Guarantees Regarding Tax Treatment; Disclaimer. Participants (or their Beneficiaries) will be completely responsible
for all taxes with respect to any benefits under the Plan. The Administrator, the Board of Directors and the Employer make no
guarantees regarding the tax treatment to any person of any deferrals or payments made under the Plan. The Plan is intended to
comply with the provisions of Code Section 409A. Neither the Employer nor any of their employees shall have any liability
to any Participant should the Plan or its administration fail to comply with Code Section 409A.

 

Article XII

 

Plan Administration

 

12.1     Powers
and Responsibilities of the Administrator. The Administrator has the full power and the full responsibility to administer
the Plan in all of its details, subject, however, to the applicable requirements of ERISA. The Administrator’s powers and
responsibilities include, but are not limited to, the following:

 

(a)        To
make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

 

(b)        The
discretionary authority to construe and interpret the Plan, its interpretation thereof in good faith to be final and conclusive
on all persons claiming benefits under the Plan;

 

(c)        To
decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;

 

(d)        To
administer the claims and review procedures specified in Section 12.3;

 

(e)        To
compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with
the provisions of the Plan;

 

(f)         To
determine the person or persons to whom such benefits will be paid;

 

(g)        To
authorize the payment of benefits;

 

(h)        To
appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan;

 

(i)         By
written instrument, to allocate and delegate its responsibilities.

 

12.2     Nondiscriminatory
Exercise of Authority. Whenever, in the administration of the Plan, any discretionary action by the Administrator is required,
the Administrator shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive
substantially the same treatment.

 

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12.3     Claims
and Review Procedures.

 

(a)        Purpose.
Every Participant or Beneficiary (or his or her representative who is authorized in writing by the Claimant to act on his or her
behalf) (hereinafter collectively, “Claimant”) shall be entitled to file with the Administrator (and subsequently
with the individual(s) designated to review claims appealed after being initially denied by the Administrator (the “Review
Panel”)) a written claim for benefits under the Plan. The Administrator and Review Panel shall each be able to establish
such rules, policies and procedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out
its duties and responsibilities under this Section 12.3. In the case of a denial of the claim, the Administrator or Review
Panel, as applicable, shall provide the Claimant with a written or electronic notification that complies with Department of Labor
Regulation Section 2520.104b-1(c)(1).

 

(b)        Denial
of Claim. If a claim is denied by the Administrator (or its authorized representative), in whole or in part, then the Claimant
shall be furnished with a denial notice that shall contain the following:

 

(i)         specific
reason(s) for the denial;

 

(ii)        reference
to the specific Plan provision(s) on which the denial is based;

 

(iii)       a
description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why
the material or information is necessary; and

 

(iv)       an
explanation of the Plan’s claims review procedure and the time limits applicable to such procedures, including a statement
of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a denial on review (as set
forth in Section 12.4 below).

 

The denial notice shall be furnished
to the Claimant no later than ninety (90)-days after receipt of the claim by the Administrator, unless the Administrator determines
that special circumstances require an extension of time for processing the claim. If the Administrator determines that an extension
of time for processing is required, then notice of the extension shall be furnished to the Claimant prior to the termination of
the initial ninety (90)- day period. In no event shall such extension exceed a period of ninety (90)-days from the end of such
initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which
the Plan expects to render the benefits determination.

 

(c)        Claim
Review Procedure. The Claimant may request review of the denial at any time within sixty (60) days following the date the
Claimant received notice of the denial of his or her claim. The Administrator shall afford the Claimant a full and fair review
of the decision denying the claim and, if so requested, shall:

 

(i)         provide
the Claimant with the opportunity to submit written comments, documents, records and other information relating to the claim for
benefits;

 

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(ii)        provide
that the Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records
and other information (other than documents, records and other information that is legally-privileged) relevant to the Claimant’s
claim for benefits; and

 

(iii)       provide
for a review that takes into account all comments, documents, records and other information submitted by the Claimant relating
to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

(d)        If
the claim is subsequently also denied by the Review Panel, in whole or in part, then the Claimant shall be furnished with a denial
notice that shall contain the following:

 

(i)         specific
reason(s) for the denial;

 

(ii)        reference
to the specific Plan provision(s) on which the denial is based; and

 

(iii)       an
explanation of the Plan’s claims review procedure and the time limits applicable to such procedures, including a statement
of the Claimant’s right to bring a civil action under ERISA Section 502(a) following the denial on review.

 

(e)        The
decision on review shall be issued within sixty (60) days following receipt of the request for review. The period for decision
may, however, be extended up to one hundred twenty (120) days after such receipt if the Review Panel determines that special circumstances
require extension. In the case of an extension, notice of the extension shall be furnished to the Claimant prior to the expiration
of the initial sixty (60)-day period. In no event shall such extension exceed a period of sixty (60) days from the end of such
initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which
the Plan expects to render the benefits determination.

 

(f)         Special
Procedure for Claims Due to Disability. To the extent an application for distribution as a result of a Disability requires
the Administrator or the Review Panel, as applicable, to make a determination of Disability under the terms of the Plan, then
such determination shall be subject to all of the general rules described in this Article, except as they are expressly modified
by this Section.

 

(i)         The
initial decision on the claim for a Disability distribution will be made within forty-five (45) days after the Plan receives the
Claimant’s claim, unless special circumstances require additional time, in which case the Administrator will notify the
Claimant before the end of the initial forty-five (45)-day period of an extension of up to thirty (30) days. If necessary, the
Administrator may notify the Claimant, prior to the end of the initial thirty (30)-day extension period, of a second extension
of up to thirty (30) days. If an extension is due to the Claimant’s failure to supply the necessary information, then the
notice of extension will describe the additional information and the Claimant will have forty-five (45) days to provide the additional
information. Moreover, the period for making the determination will be delayed from the date the notification of extension was
sent out until the Claimant responds to the request for additional information. No additional extensions may be made, except with
the Claimant’s

 

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voluntary consent. The contents of the notice shall be the same as described in Section 13.3(b) above.
If a disability distribution claim is denied in whole or in part, then the Claimant will receive notification, as described in
Section 12.3(b).

 

(g)        If
an internal rule, guideline, protocol or similar criterion is relied upon in making the adverse determination, then the denial
notice to the Claimant will either set forth the internal rule, guideline, protocol or similar criterion, or will state that such
was relied upon and will be provided free of charge to the Claimant upon request (to the extent not legally-privileged) and if
the Claimant’s claim was denied based on a medical necessity or experimental treatment or similar exclusion or limit, then
the Claimant will be provided a statement either explaining the decision or indicating that an explanation will be provided to
the Claimant free of charge upon request.

 

(h)        Any
Claimant whose application for a Disability distribution is denied in whole or in part, may appeal the denial by submitting to
the Review Panel a request for a review of the application within one hundred and eighty (180) days after receiving notice of
the denial. The request for review shall be in the form and manner prescribed by the Review Panel. In the event of such an appeal
for review, the provisions of Section 12.3(c) regarding the Claimant’s rights and responsibilities shall apply.
Upon request, the Review Panel will identify any medical or vocational expert whose advice was obtained on behalf of the Review
Panel in connection with the denial, without regard to whether the advice was relied upon in making the determination. The entity
or individual appointed by the Review Panel to review the claim will consider the appeal de novo, without any deference to the
initial denial. The review will not include any person who participated in the initial denial or who is the subordinate of a person
who participated in the initial denial.

 

(i)         If
the initial Disability distribution denial was based in whole or in part on a medical judgment, then the Review Panel will consult
with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment,
and who was neither consulted in connection with the initial determination nor is the subordinate of any person who was consulted
in connection with that determination; and upon notifying the Claimant of an adverse determination on review, include in the notice
either an explanation of the clinical basis for the determination, applying the terms of the Plan to the Claimant’s medical
circumstances, or a statement that such explanation will be provided free of charge upon request.

 

(j)         A
decision on review shall be made promptly, but not later than forty-five (45) days after receipt of a request for review, unless
special circumstances require an extension of time for processing. If an extension is required, the Claimant will be notified
before the end of the initial forty-five (45)-day period that an extension of time is required and the anticipated date that the
review will be completed. A decision will be given as soon as possible, but not later than ninety (90) days after receipt of a
request for review. The Review Panel shall give notice of its decision to the Claimant; such notice shall comply with the requirements
set forth in paragraph (h) above. In addition, if the Claimant’s claim was denied based on a medical necessity or experimental
treatment or similar exclusion, then the Claimant will be provided a statement explaining the decision, or a statement providing
that such explanation will be furnished to the Claimant free of charge upon request. The notice shall also contain the following
statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as

 

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mediation. One way
to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory
agency.”

 

12.4     Exhaustion
of Claims Procedure and Right to Bring Legal Claim. No action in law or equity shall be brought more than one (1) year
after the Review Panel’s affirmation of a denial of the claim, or, if earlier, more than four (4) years after the facts
or events giving rise to the Claimant’s allegation(s) or claim(s) first occurred.

 

12.5     Plan’s
Administrative Costs. The Employer shall pay all reasonable costs and expenses (including legal, accounting, and employee
communication fees) incurred by the Administrator and the Trustee in administering the Plan and Trust.

 

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IN WITNESS
WHEREOF, the Employer by its duly authorized officer(s), has caused this Plan to be adopted initially effective January 1,
2005, and amended and restated as of November 14, 2006, November 20, 2008, November 20, 2009, January 1, 2011,
December 2, 2020 and January 17, 2021.

 

	 	COHERENT, INC.
	 	 
	 	 
	 	By:	Mitchell A. McPeek
	 	 
	 	 
	 	 
	 	Date:	January 18, 2021

 

    	 	21

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