Document:

Exhibit 10.4

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated October 23, 2012, is by and between Verastem, Inc. (the “Company”), a Delaware corporation with its principal place of business at 215 First Street, Suite 440, Cambridge, MA 02142, and Joanna Horobin (the “Executive”) of 47 Norwich Road, Wellesley, MA 02481.

 

WHEREAS, the Executive has certain experience and expertise that qualify her to provide management direction and leadership for the Company.

 

WHEREAS, the Company wishes to employ the Executive to serve as its Chief Medical Officer.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company offers and the Executive accepts employment upon the following terms and conditions:

 

1.                                      Position and Duties.  Upon the terms and subject to the conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts employment with the Company to serve as its Chief Medical Officer, reporting initially to the Company’s Chief Operating Officer.  The Executive agrees to perform the duties of the Executive’s position and such other duties as reasonably may be assigned to the Executive from time to time.  The Executive also agrees that while employed by the Company, the Executive will devote one hundred percent (100%) of the Executive’s business time and the Executive’s reasonable commercial efforts, business judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and to the discharge of the Executive’s duties and responsibilities for it.   Subject to prior approval of the Chief Operating officer, with such approval not to be unreasonably withheld, the Executive may maintain a consulting relationship with her previous employer for up to 12 months and join the board of directors of one company.

 

2.                                      Compensation and Benefits.  During the Executive’s employment, as compensation for all services performed by the Executive for the Company and subject to her performance of her duties and responsibilities for the Company, pursuant to this Agreement or otherwise, the Company will provide the Executive the following pay and benefits:

 

(a)                                 Base Salary; Annual Bonus.  From the period of the date hereof until December 31, 2013, the Company will pay the Executive a base salary at the rate of Three Hundred Fifty Thousand Dollars ($350,000) per year.  Such amount shall be payable in accordance with the regular payroll practices of the Company for its executives, as in effect from time to time, and subject to increase from time to time by the Board in its discretion.  The Executive shall have the opportunity to earn an annual target bonus measured against performance criteria to be determined by the Board (or a committee thereof) of 35% of the Executive’s then current annual base salary.  Any bonus amount payable by the Company, if any, shall be paid no later than March 15 of the year following the year in which such bonus is earned.

 

 

(b)                                 Stock Option.  Subject to Board approval, the Company will grant the Executive a stock option to purchase Two Hundred Thousand (200,000) shares of the Company’s Common Stock at fair market value on the date of grant.  The stock option will vest over four years at the rate of 25% on the one year anniversary of the Executive’s date of hire subject to her continuing employment with the Company, and no shares shall vest before such date, except as provided below.  The remaining shares shall vest quarterly over the next three years in equal quarterly amounts subject to the Executive’s continuing employment with the Company, except as noted below.

 

(c)                                  Participation in Employee Benefit Plans.  The Executive will be entitled to participate in all Employee Benefit Plans from time to time in effect for employees of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided the Executive under this Agreement (e.g., severance pay) or under any other agreement.  The Executive’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies.  The Company may alter, modify, add to or delete its Employee Benefit Plans at any time as it, in its sole judgment, determines to be appropriate, without recourse by the Executive.  For purposes of this Agreement, “Employee Benefit Plan” shall have the meaning ascribed to such term in Section 3(3) of ERISA, as amended from time to time.

 

(d)                                 Vacation.  The Executive will accrue three weeks paid vacation per year (or such greater amount as is generally made available to the Company’s executive officers) in accordance with the Company’s policies from time to time in effect and receive paid holidays in accordance with the Company holiday schedule.  Vacation may be taken at such times and intervals as the Executive shall determine, subject to the business needs of the Company, and otherwise shall be subject to the policies of the Company, as in effect from time to time.

 

(e)                                  Business Expenses.  The Company will pay or reimburse the Executive for all reasonable business expenses incurred or paid by the Executive in the performance of her duties and responsibilities for the Company, subject to any maximum annual limit and other restrictions on such expenses set by the Company and to such reasonable substantiation and documentation as it may specify from time to time.  Any such reimbursement that would constitute nonqualified deferred compensation subject to Section 409A shall be subject to the following additional rules: (i) no reimbursement of any such expense shall affect the Executive’s right to reimbursement of any other such expense in any other taxable year; (ii) reimbursement of the expense shall be made, if at all, not later than the end of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit.

 

3.                                      Confidential Information, Non-Competition and Proprietary Information.  The Executive has executed or will execute the Company’s standard Employee Non-Solicitation, Non-Competition, Confidential Information and Inventions Assignment Agreement.  It is understood and agreed that breach by the Executive of the Employee Non-Solicitation, Non-Competition, Confidential Information and Inventions Assignment Agreement shall constitute a material breach of this Agreement.

 

2

 

4.                                      Termination of Employment.  The Executive’s employment under this Agreement shall continue until terminated pursuant to this Section 4.

 

(a)                                 The Company may terminate the Executive’s employment for “Cause” upon written notice to the Executive received at least five business days prior to such termination setting forth in reasonable detail the nature of the Cause.  The following, as determined by the Board in good faith and using its reasonable judgment, shall constitute Cause for termination: (i) the Executive’s willful failure to perform, or gross negligence in the performance of, the Executive’s material duties and responsibilities to the Company and its Affiliates which is not remedied within thirty (30) days of written notice thereof; (ii) material breach by the Executive of any material provision of this Agreement or any other agreement with the Company or any of its Affiliates which is not remedied within thirty (30) days of written notice thereof; (iii) fraud, embezzlement or other dishonesty with respect to the Company and any of its Affiliates, taken as a whole, which, in the case of such other dishonesty, causes or could reasonably be expected to cause material harm to the Company and any of its Affiliates, taken as a whole; or (iv) the Executive’s conviction of a felony.

 

(b)                                 The Company may terminate the Executive’s employment at any time other than for Cause upon one month’s written notice to the Executive.

 

(c)                                  The Executive may terminate her employment hereunder for Good Reason by providing notice to the Company of the condition giving rise to the Good Reason no later than thirty (30) days following the occurrence of the condition, by giving the Company thirty (30) days to remedy the condition and by terminating employment for Good Reason within thirty (30) days thereafter if the Company fails to remedy the condition.  For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent, the occurrence of anyone or more of the following events: (i) material diminution in the nature or scope of the Executive’s responsibilities, duties or authority, provided that in the absence of a Change of Control neither (x) the Company’s failure to continue the Executive’s appointment or election as a director or officer of any of its Affiliates nor (y) any diminution in the nature or scope of the Executive’s responsibilities, duties or authority that is reasonably related to a diminution of the business of the Company or any of its Affiliates shall constitute “Good Reason”; (ii) a material reduction in the Executive’s base salary other than one temporary reduction of not more than 120 days and not in excess of 20% of the Executive’s base salary in connection with and in proportion to a general reduction of the base salaries of the Company’s executive officers; (iii) failure of the Company to provide the Executive the salary or benefits in accordance with Section 2 hereof after thirty (30) days’ notice during which the Company does not cure such failure; or (iv) relocation of the Executive’s office more than forty (40) miles from the location of the Company’s principal offices as of the date of Employee’s hire.

 

(d)                                 The Executive may terminate her employment with the Company other than for Good Reason at any time upon one month’s notice to the Company.

 

(e)                                  This Agreement shall automatically terminate in the event of the Executive’s death during employment.  The Company may terminate the Executive’s employment, upon notice to the Executive, in the event the Executive becomes disabled during employment and, as a result, is unable to continue to perform substantially all of her material

 

3

 

duties and responsibilities under this Agreement for one-hundred and fifty (150) days during any period of three hundred and sixty-five (365) consecutive calendar days.  If any question shall arise as to whether the Executive is disabled to the extent that the Executive is unable to perform substantially all of her material duties and responsibilities for the Company and its Affiliates, the Executive shall, at the Company’s request and expense, submit to a medical examination by a physician selected by the Company to whom the Executive or the Executive’s guardian, if any, has no reasonable objection to determine whether the Executive is so disabled and such determination shall for the purposes of this Agreement be conclusive of the issue.  If such a question arises and the Executive fails to submit to the requested medical examination, the Company’s determination of the issue shall be binding on the Executive.

 

5.                                      Severance Payments and Other Matters Related to Termination.

 

(a)                                 Termination pursuant to Section 4(b) or 4(c).

 

i.                                          Except as provided in Section 5(c) below, in the event of termination of the Executive’s employment either by the Company other than for Cause pursuant to Section 4(a) of this Agreement or by the Executive for Good Reason pursuant to Section 4(c) of this Agreement, (I) all unvested options, restricted stock, and restricted stock unit and which, by their terms, vest only based on the passage of time (disregarding any acceleration of the vesting of such options, restricted stock or restricted stock units based on individual or Company performance) shall vest as of the date of termination (notwithstanding anything to the contrary in Section 2(b) of this Agreement) with respect to an additional nine (9) months of vesting; and (II) the Company shall pay the Executive’s then-current annual base salary for a period of nine (9) months in accordance with the Company’s payroll practice then in effect, beginning on the Payment Commencement Date.

 

ii.                                       If the Executive is participating in the Company’s group health plan and/or dental plan at the time the Executive’s employment terminates, and the Executive exercises her right to continue participation in those plans under the federal law known as COBRA, or any successor law, the Company will pay or, at its option, reimburse the Executive, for the full premium cost of that participation for nine (9) months following the date on which the Executive’s employment with the Company terminates or, if earlier, until the date the Executive becomes eligible to enroll in the health (or, if applicable, dental) plan of a new employer, payable in accordance with regular payroll practices for benefits beginning on the Payment Commencement Date.  The Company will also pay the Executive on the date of termination any base salary earned but not paid through the, date of termination and pay for any vacation time accrued but not used to that date.  In addition, the Company will pay the Executive any bonus which has been awarded to the Executive, but not yet paid on the date of termination of her employment, payable in a lump sum on the Payment Commencement Date.

 

iii.                                    Any obligation of the Company to provide the Executive severance payments or other benefits under this Section 5(a) is conditioned on the Executive’s signing an effective and reasonable release of claims in the form provided by the Company (the “Employee Release”) within 60 days following the termination of the Executive’s employment, which release shall not apply to (i) claims for indemnification in the Executive’s capacity as an officer or director of the Company under the Company’s Certificate of Incorporation, By-laws or

 

4

 

agreement, if any, providing for director or officer indemnification, (ii) rights to receive insurance coverage and payments under any policy maintained by the Company and (iii) rights to receive retirement benefits that are accrued and fully vested at the time of the Executive’s termination and rights under such plans protected by ERISA.  Any severance payments to be made in the form of salary continuation pursuant to the terms of this Agreement shall be payable in accordance with the normal payroll practices of the Company, and will begin at the Company’s next regular payroll period following the effective date of the Employee Release, but shall be retroactive to the date of termination.  The Executive agrees to provide the Company prompt notice of the Executive’s eligibility to participate in the health plan and, if applicable, dental plan of any employer.  The Executive further agrees to repay any overpayment of health benefit premiums made by the Company hereunder.

 

(b)                                 Termination other than pursuant to Section 4(b) or 4(c).  In the event of any termination of the Executive’s employment, other than a termination by the Company pursuant to Section 4(b) of this Agreement or a termination by the Executive for Good Reason pursuant to Section 4(c) of this Agreement, the Company will pay the Executive any base salary earned but not paid through the date of termination and pay for any vacation time accrued but not used to that date.  In addition, the Company will pay the Executive any bonus which has been awarded to the Executive, but not yet paid on the date of termination of the Executive’s employment.  The Company shall have no other payment obligations to the Executive under this Agreement.

 

(c)                                  Upon a Change of Control.

 

i.                                          If, within ninety (90) days prior to the Change of Control or within eighteen (18) months following a Change of Control (as defined in Section 6 hereof), the Company or any successor thereto terminates the Executive’s employment other than for Cause, or the Executive terminates her employment for Good Reason, then, in lieu of any payments to the Executive or on the Executive’s behalf under Section 5(a) hereof, (i) all of the Executive’s then remaining unvested options, restricted stock and restricted stock units which, by their terms, vest only based on the passage of time (disregarding any acceleration of the vesting of such options, restricted stock or restricted stock units based on individual or Company performance) shall automatically vest as of the date of termination (notwithstanding anything to the contrary in Section 2(b) of this Agreement) and (ii) the Company shall pay, within thirty (30) days of such termination, a lump sum payment equal to the Executive’s then-current annual base salary for a period of twelve (12) months; provided, however, that if such termination occurs prior to a Change of Control, such severance payments shall be made at the time and in the manner set forth in Section 5(a)(i) during the period beginning on the date of termination through the date of the Change of Control with any severance remaining to be paid under this Section 5(c)(i) payable in a lump sum on the closing date of the Change of Control; and,

 

ii.                                       If the Executive is participating in the Company’s group health plan and/or dental plan at the time the Executive’s employment terminates (whether such termination is as described in (i) above), and the Executive exercises her right to continue participation in those plans under the federal law known as COBRA, or any successor law, the Company will pay or, at its option, reimburse the Executive, for the full premium cost of that participation for twelve (12) following the date on which the Executive’s employment with the

 

5

 

Company terminates or, if earlier, until the date the Executive becomes eligible to enroll in the health (or, if applicable, dental) plan of a new employer, with such amount payable on a pro-rata basis in accordance with the Company’s regular payroll practices for benefits.  The Company will also pay the Executive on the date of termination any base salary earned but not paid through the, date of termination and pay for any vacation time accrued but not used to that date.  In addition, the Company will pay the Executive any bonus which has been awarded to the Executive, but not yet paid on the date of termination of her employment, payable within 30 days of the date of termination

 

iii.                                    Any obligation of the Company to provide the Executive severance payments or other benefits under this Section 5(c) is conditioned on the Executive’s signing an effective and reasonable release of claims in the form provided by the Company (the “Employee Release”) within 60 days following the termination of the Executive’s employment, which release shall not apply to (i) claims for indemnification in the Executive’s capacity as an officer or director of the Company under the Company’s Certificate of Incorporation, By-laws or agreement, if any, providing for director or officer indemnification, (ii) rights to receive insurance coverage and payments under any policy maintained by the Company and (iii) rights to receive retirement benefits that are accrued and fully vested at the time of the Executive’s termination and rights under such plans protected by ERISA.

 

(d)                                 Except for any right the Executive may have under applicable law to continue participation in the Company’s group health and dental plans under COBRA, or any successor law, benefits shall terminate in accordance with the terms of the applicable benefit plans based on the date of termination of the Executive’s employment, without regard to any continuation of base salary or other payment to the Executive following termination.

 

(e)                                  Provisions of this Agreement shall survive any termination if so provided in this Agreement or if necessary or desirable to accomplish the purposes of other surviving provisions, including without limitation the Executive’s obligations under Section 3 of this Agreement and under the Employee Non-Solicitation, Non- Competition, Confidential Information and Inventions Assignment Agreement.  The obligation of the Company to make payments to the Executive or on the Executive’s behalf under Section 5 of this Agreement is expressly conditioned upon the Executive’s continued full performance of the Executive’s obligations under Section 3 hereof, under the Employee Non-Solicitation, Non-Competition, Confidential Information and Inventions Assignment Agreement to be executed herewith, and under any subsequent agreement between the Executive and the Company or any of its Affiliates relating to confidentiality, non-competition, proprietary information or the like; provided however that any future agreement that Executive is asked to execute does not impose any greater restrictions or obligations upon Executive or upon her post-termination activities than the agreements signed at the outset of her employment with the Company.

 

6.                                      Definitions.  For purposes of this agreement; the following definitions apply:

 

“Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, equity interest or otherwise.

 

6

 

“Change of Control” shall mean (i) the acquisition of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly by any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), of securities of the Company representing a majority or more of the combined voting power of the Company’s then outstanding securities, other than an acquisition of securities for investment purposes pursuant to a bona fide financing of the Company; (ii) a merger or consolidation of the Company with any other corporation in which the holders of the voting securities of the Company prior to the merger or consolidation do not own more than 50% of the total voting securities of the surviving corporation; or (iii) the sale or disposition by the Company of all or substantially all of the Company’s assets other than a sale or disposition of assets to an Affiliate of the Company or a holder of securities of the Company; notwithstanding the foregoing, no transaction or series of transactions shall constitute a Change of Control unless such transaction or series of transactions constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i).

 

“Person” means an individual, a corporation, an association, a partnership, an estate, a trust and any other entity or organization, other than the Company or any of its Affiliates.

 

7.                                      Conflicting Agreements.  The Executive hereby represents and warrants that her signing of this Agreement and the performance of her obligations under it will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not now subject to any covenants against competition or similar covenants or any court order that could affect the performance of the Executive’s obligations under this Agreement.  The Executive agrees that she will not disclose to or use on behalf of the Company any proprietary information of a third party without that party’s consent.

 

8.                                      Withholding; Other Tax Matters.  Anything to the contrary notwithstanding, (a) all payments required to be made by the Company hereunder to Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation, and (b) all severance payments and benefits payable pursuant to Sections 5(a) and 5(c) hereof shall be subject to the terms and conditions set forth on Exhibit A attached hereto.

 

9.                                      Assignment.  Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without the Executive’s consent to one of its Affiliates or to any Person with whom the Company shall hereafter affect a reorganization, consolidate with, or merge into or to whom it transfers all or substantially all of its properties or assets.  This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of our respective successors, executors, administrators, heirs and permitted assigns.

 

10.                               Severability.  If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

7

 

11.                               Miscellaneous.  This Agreement, together with the Employee Non-Solicitation, Non-Competition, Confidential Information and Inventions Assignment Agreement, sets forth the entire agreement between the Executive and the Company and replaces all prior communications, agreements and understandings, written or oral, with respect to the terms and conditions of the Executive’s employment.  This Agreement may not be modified or amended, and no breach shall be deemed to be waived, unless agreed to in writing by the Executive and an expressly authorized representative of the Board.  The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.  This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.  This is a Massachusetts contract and shall be governed and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the conflict-of-laws principles thereof.

 

12.                               Notices.  Any notices provided for in this Agreement shall be in writing and shall be effective when delivered in person, consigned to a reputable national courier service for overnight delivery or deposited in the United States mail, postage prepaid, and addressed to the Executive at the Executive’s last known address on the books of the Company or, in the case of the Company, to it by notice to the Chairman of the Board of Directors, c/o Verastem, Inc.  at its principal place of business, or to such other addressees) as either party may specify by notice to the other actually received.

 

[Remainder of page intentionally left blank.]

 

8

 

IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorized representative, and by the Executive, as of the date first stated above.

 

 

	
THE   EXECUTIVE
    	
THE   COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Joanna Horobin
    	
 
    	
/s/   Robert Forrester
    
	
Joanna   Horobin
    	
Robert   Forrester
    
	
 
    	
Chief   Operating Officer
    
			

 

9

 

Exhibit A

 

Payments Subject to Section 409A

 

1.                                      Subject to this Exhibit A, any severance payments that may be due under the Agreement shall begin only upon the date of the Executive’s “separation from service” (determined as set forth below) which occurs on or after the termination of Executive’s employment.  The following rules shall apply with respect to distribution of the severance payments, if any, to be provided to Executive under the Agreement, as applicable:

 

(a)                                  It is intended that each installment of the severance payments under the Agreement provided under shall be treated as a separate “payment” for purposes of Section 409A.  Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments except to the extent specifically permitted or required by Section 409A.

 

(b)                                  If, as of the date of Executive’s “separation from service” from the Company, Executive is not a “specified Executive” (within the meaning of Section 409A), then each installment of the severance payments shall be made on the dates and terms set forth in the Agreement.

 

(c)                                   If, as of the date of Executive’s “separation from service” from the Company, Executive is a “specified Executive” (within the meaning of Section 409A), then:

 

(i)                                        Each installment of the severance payments due under the Agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when Executive’s separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be paid on the dates and terms set forth in the Agreement; and

 

(ii)                                     Each installment of the severance payments due under the Agreement that is not described in this Exhibit A, Section 1(c)(i) and that would, absent this subsection, be paid within the six-month period following Executive’s “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, Executive’s death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following Executive’s separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary

 

10

 

separation from service).  Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of Executive’s second taxable year following the taxable year in which the separation from service occurs.

 

2.                                      The determination of whether and when Executive’s separation from service from the Company has occurred shall be made and in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Exhibit A, Section 2, “Company” shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.

 

3.                                      The Company makes no representation or warranty and shall have no liability to Executive or to any other person if any of the provisions of the Agreement (including this Exhibit) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.

 

11Exhibit 10.4

 

TE CONNECTIVITY LTD.

EMPLOYEE STOCK PURCHASE PLAN

AS AMENDED AND RESTATED SEPTEMBER 19, 2012

 

ARTICLE 1 — PURPOSE

 

The TE Connectivity Ltd. Employee Stock Purchase Plan (the “Plan”) is created for the purpose of encouraging stock ownership by officers and employees of TE Connectivity Ltd. and its subsidiaries (the “Company”) so that they may share in the growth of the Company by acquiring or increasing their proprietary interest in the Company.

 

ARTICLE 2 — ADMINISTRATION OF THE PLAN

 

The Plan will be administered by the Management Development and Compensation Committee (the “Committee”) of the Board of Directors of the Company or its designee. The interpretation and construction by the Committee or its designee of any provision of the Plan shall be final unless otherwise determined by the Board of Directors.  The Committee or its designee may adopt, from time to time, such rules and regulations, as it deems appropriate for carrying out the Plan.  No member of the Committee or the Committee’s designee shall be liable for any action or determination made in good faith with respect to the Plan.

 

ARTICLE 3 — ELIGIBLE EMPLOYEES

 

The Senior Vice President, Human Resources of TE Connectivity will, from time to time, determine which of the Company’s employees (including employees of the Company’s subsidiaries and divisions) will be eligible to participate in the Plan.  All officers who are employees of the Company will be eligible to participate in the Plan, unless otherwise determined by the Senior Vice President, Human Resources of TE Connectivity.  Eligible employees who elect to participate in the Plan shall hereinafter be referred to as “Participants”.

 

Notwithstanding the foregoing, any employee who sells Shares purchased under the Plan within three months of the date of purchase shall be precluded from participating in the Plan for the next 12 months.

 

ARTICLE 4 — SHARES TO BE PURCHASED

 

The stock subject to purchase under the Plan is 6,000,000 shares (subject to adjustment in the event of stock splits, stock dividends, recapitalization, or similar adjustment in the Company’s common stock) of the common stock of the Company (the “Shares”).  At the discretion of the Company, Shares purchased on behalf of Plan Participants (a) will be purchased on the open market or (b) will be issued to the Plan by the Company and allocated to Plan Participants from newly-issued shares or from shares (“Treasury Shares”) acquired by the Company, any Subsidiary or any other person or entity designated by the Company, including the Company’s treasury shares.

 

ARTICLE 5 — PAYROLL DEDUCTIONS

 

Participants, upon entering the Plan, shall authorize payroll deductions to be made for the purchase of Shares.  The maximum deduction shall not, on a per pay period basis, exceed a Participant’s base salary or commission (in the case of an employee who receives commission and no base salary) and deductions shall be exclusive of overtime and net withholding and other deductions.  The Participant may authorize increases or decreases in the amount of payroll deductions.  In order to effect such a change in the amount of the payroll deductions, the Company must receive notice of such change in the manner specified by the Company and changes will take effect as soon as administratively possible.  The Company will accumulate and hold for the Participant’s account the amounts deducted from his/her pay.  No interest shall be paid on such amounts.  Notwithstanding the foregoing, the Committee may, in its sole discretion, authorize a special bonus payment be made to a Participant and such bonus be designated as an employee contribution.  Such employee contribution will be entitled to receive the matching Employer Contribution described in the next Article.  The bonus may exceed the contribution

 

 

limits otherwise imposed on the Participants.  In the event that payroll deductions are either prohibited under local law or otherwise deemed to be administratively burdensome, the Company may accept employee contributions to the Plan in such other form as is deemed appropriate.

 

Notwithstanding any other provision in the Plan to the contrary, the maximum annual employee contribution for employees who are subject to the reporting and short-swing profit provisions of Section 16 of the Securities and Exchange Act of 1934 shall be $25,000.

 

ARTICLE 6 — EMPLOYER CONTRIBUTION

 

The Company will match each employee’s contribution by contributing to the Plan an additional fifteen percent (15%) of the employee’s payroll deduction.  The Company matching contribution will be paid on employee contributions made to the Plan up to a maximum annual contribution of $40,000 (US). For purposes of determining the Company’s maximum annual contribution in countries outside the United States, the U.S. dollar equivalent of the $40,000 employee contribution (or other designated annual employee contribution) for any calendar year will be based on the exchange rate in effect on the first business day of December of the prior calendar year.  The Committee, from time to time, may increase or decrease the percentage of the Company’s contribution to the Participant’s payroll deduction if the interests of the Company so require.  The matching contributions hereunder are not intended to be entitled or part of the regular compensation of any Participant.  The Company will pay all commissions relating to the purchase of the Shares under the Plan, and the Company will pay all administrative costs associated with the implementation and operation of the Plan.

 

ARTICLE 7 — AUTHORIZATION FOR ENTERING THE PLAN

 

An eligible employee may enter the Plan by enrolling in the Plan and specifying his/her contribution amount in the manner authorized by the Company.  Such authorization will take effect as of the next practicable payroll period.  Unless a Participant authorizes changes to his/her payroll deductions in accordance with Article 5 or withdraws from the Plan, his/her deductions under the latest authorization on file with the Company shall continue from one payment period to the succeeding payment period as long as the Plan remains in effect.

 

ARTICLE 8 — PURCHASE OF SHARES

 

All Shares purchased under the Plan which are purchased on the open market shall be purchased by a broker designated, from time to time, by the Committee.  On a monthly basis, as soon as practicable following the month end, the Company shall remit the total of contributions to the broker for the purchase of the Shares.  The broker will then execute the purchase order and the Plan Administrator shall allocate Shares (or fraction thereof) to each participant’s individual recordkeeping account.  In the event the purchase of Shares takes place over a number of days and at different prices, then each participant’s allocation shall be adjusted on the basis of the average price per Share over such period.

 

All Shares issued to the Plan from newly-issued or Treasury Shares will be allocated to Participants’ accounts as of the eighth trading day of the month and will be allocated based on the volume weighted average price of the Company’s stock on the New York Stock Exchange on such date.

 

ARTICLE 9 — ISSUANCE OF SHARES

 

The Shares purchased under the Plan shall be held by the Plan Administrator or its nominee.  Participants shall receive periodic statements that will evidence all activity in the accounts that have been established on their behalf.  Such statements will be issued by the Plan Administrator or its nominee.  In the event a Participant wishes to hold certificates in his/her own name, the Participant must instruct the Plan Administrator or its nominee independently and bear the costs associated with the issuance of such certificates and pay, if required, a fee for each certificate so issued.  Fractional Shares shall be liquidated on a cash basis only in lieu of the issuance of certificates for such fractional Shares upon the employee’s withdrawal.

 

 

ARTICLE 10 — AUTOMATIC DIVIDEND REINVESTMENT

 

Any dividends paid to Participants for Shares purchased under the Plan and held by the Plan Administrator shall be automatically reinvested in the Shares of the Company.

 

ARTICLE 11 — SALE OF SHARES PURCHASED UNDER THE PLAN

 

Each Participant may sell at any time all or any portion of the Shares acquired under the Plan and held by the Plan Administrator by notifying the Plan Administrator, or its designee, who will direct the broker to execute the sale on behalf of the Participant.  The Participant shall pay the broker’s commission and any other expenses incurred with regard to the sale of the Shares.  All such sales of the Shares will be subject to compliance with any applicable federal or state securities, tax or other laws.  Each participant assumes the risk of any fluctuations in the market price of the Shares.

 

ARTICLE 12 — WITHDRAWAL FROM THE PLAN

 

A Participant may cease making contributions to the Plan at any time by changing his/her payroll deduction to zero as described in Article 5.  In order to execute a sale of all or part of the Shares purchased under the Plan and held by the Plan Administrator, the Participant must contact the Plan Administrator, or its designee, directly.  If the Participant desires to withdraw from the Plan by liquidating all or part of his/her shareholder interest, he/she shall receive the proceeds from the sale thereof, minus the commission and other expenses on such sale.

 

ARTICLE 13 — NO TRANSFER OR ASSIGNMENT

 

A Participant’s right to purchase Shares under the Plan through payroll deduction is his/hers alone and may not be transferred or assigned to, or availed of, by any other person.

 

ARTICLE 14 — TERMINATION OF EMPLOYEE RIGHTS

 

All of the employee’s rights under the Plan will terminate when he/she ceases to be an eligible employee due to retirement, resignation, death, termination, or any other reason.  A notice of withdrawal will be deemed to have been received from a Participant on the day of his/her final payroll deduction.  If a Participant’s payroll deductions are interrupted by any legal process, a withdrawal notice will be deemed as having been received on the day the interruption occurs.

 

In the event of the employee’s termination of employment for any reason, a Participant will be required to:

 

1. Sell any shares then remaining in the Participant’s account; or

2. Transfer all remaining shares to an individual brokerage account; or

3. Request Computershare to issue a share certificate to the Participant for any shares remaining in the Participant’s account.

 

Any fractional shares remaining in the Participant’s account will be sold and the proceeds will be sent to the Participant.

 

If you do not take action within 60 days of notification by Computershare, your shares are issued in certificate form as described in option 3 above.  You will be sent a certificate representing your whole shares.  You will also receive a check equal to your proceeds from the sale of your fractional shares, less applicable transaction and handling fees.

 

ARTICLE 15 — TERMINATION AND AMENDMENT TO THE PLAN

 

The Plan may be terminated at any time by the Company’s Board of Directors if the interests of the Company so require.  Upon such termination, or any other termination of the Plan, all payroll deductions not used to purchase Shares will be refunded.  The Board of Directors also reserves the right to amend the Plan, from time to time, in any respect and authorizes the Committee to approve amendments to the Plan on its behalf.

 

 

ARTICLE 16 — LOCAL TAX LAWS

 

If the provisions of the Plan contradict local tax laws, the local tax laws shall prevail.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00209-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00209-of-00352.parquet"}]]