Document:

ljpc-ex103_186.htm

 

EXHIBIT 10.3

 

 

LA JOLLA PHARMACEUTICAL COMPANY

2018 EMPLOYEE STOCK PURCHASE PLAN

 

1.Purpose.

 

The purpose of the 2018 Employee Stock Purchase Plan, including any sub-plans or appendices hereto (the “Plan”), is to provide an opportunity for Employees of La Jolla Pharmaceutical Company, a California corporation (the “Company”) and its Participating Subsidiaries to purchase Common Stock of the Company and thereby to have an additional incentive to contribute to the prosperity of the Company. It is the intention of the Company that the Plan (excluding any sub-plans thereof except as expressly provided in the terms of such sub-plan) qualify as an “Employee Stock Purchase Plan” under Section 423 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and the Plan shall be administered in accordance with this intent. In addition, the Plan authorizes the grant of options pursuant to sub-plans or special rules adopted by the Committee designed to achieve desired tax or other objectives in particular locations outside of the United States or to achieve other business objectives in the determination of the Committee, which sub-plans shall not be required to comply with the requirements of Section 423 of the Code or all of the specific provisions of the Plan, including but not limited to terms relating to eligibility, Offering Periods or Purchase Price.

 

2.Definitions.

 

(a)“Applicable Law” means the legal requirements relating to the administration of an employee stock purchase plan under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, the Code, any stock exchange rules or regulations and the applicable laws of any other country or jurisdiction, as such laws, rules, regulations and requirements shall be in place from time to time.

 

(b)“Board” means the Board of Directors of the Company.

 

(c)“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and regulations issued thereunder.

 

(d)“Commencement Date” means, with respect to a given Offering Period, the first Trading Day during such Offering Period.

 

(e)“Committee” means the Compensation Committee of the Board (or any successor committee) or the officer, officers or committee as designated by the Board to administer the Plan in accordance with Section 15.

 

(f)“Common Stock” means the common stock of the Company, par value $0.0001 per share, or any securities into which such Common Stock may be converted.

 

(g)“Compensation” means the total compensation paid by the Company to an Employee with respect to an Offering Period, including salary, commissions, overtime, shift differentials, performance-based cash bonuses and all or any portion of any item of compensation considered by the Company to be part of the Employee's regular earnings, but excluding items not considered by the Company to be part of the Employee's regular earnings. Items excluded from the definition of “Compensation” include but are not limited to such items as relocation bonuses, expense reimbursements, certain bonuses paid in connection with mergers and acquisitions, author incentives, recruitment and referral bonuses, foreign service premiums,  differentials and allowances, imputed income pursuant to Section 79 of the Code, income realized as a result of participation in any stock option, restricted stock, restricted stock unit, stock purchase or similar equity plan maintained by the Company or a Participating Subsidiary and tuition 

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and other reimbursements. The Committee shall have the authority to determine and approve all forms of pay to be included in the definition of Compensation and may change the definition on a prospective basis.

 

(h)“Effective Date” means July [_], 2018, the date on which the Plan was adopted by the Board.

 

(i)“Employee” means an individual classified as an employee (within the meaning of Code Section 3401(c) and the regulations thereunder) by the Company or a Participating Subsidiary on the Company’s or such Participating Subsidiary’s payroll records during the relevant participation period. Notwithstanding the foregoing, no employee of the Company or a Participating Subsidiary shall be included within the definition of “Employee” if such person's customary employment is for less than 20 hours per week or for less than 5 months per year. Individuals classified as independent contractors, consultants or advisers are not considered “Employees.”

 

(j)“Enrollment Period” means, with respect to a given Offering Period, that period established by the Committee prior to the commencement of such Offering Period during which Employees may elect to participate in order to purchase Common Stock at the end of that Offering Period in accordance with the terms of this Plan.

 

(k)“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any reference to a section of the Exchange Act shall include any successor provision of the Exchange Act.

 

(l)“Fair Market Value” means as of any date, the value of the Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange, system or market, its Fair Market Value shall be the closing price for the Common Stock as quoted on such exchange, system or market as reported in the Wall Street Journal or such other source as the Committee deems reliable (or, if no sale of Common Stock is reported for such date, on the next preceding date on which any sale shall have been reported); and (ii) in the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Committee by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treas. Reg. § 409A-1(b)(5)(iv)(B) as the Committee deems appropriate.

 

(m)“Offering Period” means a period of no more than 27 months at the end of which an option granted pursuant to the Plan shall be exercised. The Plan shall be implemented by a series of Offering Periods with terms established by the Committee in accordance with the Plan. Once established, the duration and timing of Offering Periods may be changed or modified by the Committee as permitted by the Plan. If the Committee does not establish different rules with respect to an Offering Period, then the duration of an Offering Period shall be 6 months and there shall be no overlapping Offering Periods.

 

(n)“Offering Price” means the Fair Market Value of a share of Common Stock on the Commencement Date for a given Offering Period.

 

(o)“Participant” means a participant in the Plan as described in Section 5 of the Plan.

 

(p)“Participating Subsidiary” means a Subsidiary that has been designated by the Committee in its sole discretion as eligible to participate in the Plan with respect to its Employees.

 

(q)“Purchase Date” means the last Trading Day of each Offering Period.

 

(r)“Purchase Price” shall have the meaning set out in Section 8(b).

 

(s)“Securities Act” means the U.S. Securities Act of 1933, as amended, as amended from time to time, and any reference to a section of the Securities Act shall include any successor provision of the Securities Act.

 

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(t)“Shareholder” means a record holder of shares entitled to vote such shares of Common Stock under the Company's bylaws.

 

(u)“Subsidiary” means any business entity (including a limited liability company, corporation or a partnership) in which the Company owns (either directly or indirectly through one or more other Subsidiaries) 50% or more of the total combined voting power of all classes of outstanding equity interests.

 

(v)“Trading Day” means a day on which U.S. national stock exchanges are open for trading and the Common Stock is being publicly traded on one or more of such markets.

 

3.Eligibility.

 

(a)Any Employee of the Company or any Participating Subsidiary at the beginning of an Enrollment Period for a given Offering Period shall be eligible to participate in the Plan with respect to such Offering Period and future Offering Periods, provided that the Committee may establish administrative rules requiring that employment commence some minimum period (not to exceed 90 days) prior to an Enrollment Period and/or that customary employment exceed a specified number of hours or period during a calendar year to be eligible to participate with respect to the associated Offering Period. The Committee may also determine that a designated group of highly compensated Employees is ineligible to participate in the Plan so long as the excluded category fits within the definition of “highly compensated employee” in Code Section 414(q). If the Committee does not establish different rules with respect to an Offering Period, the minimum period of employment that must be completed prior to the beginning of an Enrollment Period shall be 5 working days.

 

(b)No Employee may participate in the Plan if immediately after an option is granted the Employee owns or is considered to own (within the meaning of Code Section 424(d)) shares of Common Stock, including Common Stock which the Employee may purchase by conversion of convertible securities or under outstanding options granted by the Company or its Subsidiaries, possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any of its Subsidiaries. All Employees who participate in the Plan shall have the same rights and privileges under the Plan, except for differences that may be mandated by local law and that are consistent with Code Section 423(b)(5); provided that individuals participating in a sub-plan adopted pursuant to Section 16 which is not designed to qualify under Code section 423 need not have the same rights and privileges as Employees participating in the Code section 423 Plan.

 

4.Offering Periods.

 

The Plan shall be implemented by a series of Offering Periods, which shall possess terms specified by the Committee in accordance with the terms of the Plan. Offering Periods shall continue until the Plan is terminated pursuant to Section 14 hereof. Once established, the Committee shall have the authority to change the frequency and/or duration of Offering Periods (including the Commencement Dates thereof) with respect to future Offering Periods if such change is announced prior to the scheduled occurrence of the Enrollment Period for the first Offering Period to be affected thereafter. If the Committee does not establish different rules with respect to an Offering Period, then the duration of an Offering Period shall be 6 months and there shall be no overlapping Offering Periods.

 

5.Participation.

 

(a)An Employee who is eligible to participate in the Plan in accordance with its terms at the beginning of an Enrollment Period for an Offering Period and elects to participate in such Offering Period shall automatically receive an option in accordance with Section 8(a). Such an Employee shall become a Participant by completing and submitting, on or before the date prescribed by the Committee with respect to a given Offering Period, a completed payroll deduction authorization and Plan enrollment form provided by the Company or its Participating Subsidiaries or 

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by following an electronic or other enrollment process as prescribed by the Committee. An eligible Employee may authorize payroll deductions at the rate of any whole percentage of the Employee’s Compensation, not to be less than 1% and not to exceed 10% of the Employee’s Compensation (or such other percentages as the Committee may establish from time to time before an Enrollment Period for a future Offering Period) on each payday during the Offering Period. All payroll deductions will be held in a general corporate account or a trust account. No interest shall be paid or credited to the Participant with respect to such payroll deductions. The Company shall maintain or cause to be maintained a separate bookkeeping account for each Participant under the Plan and the amount of each Participant’s payroll deductions shall be credited to such account. A Participant may not make any additional payments into such account, unless payroll deductions are prohibited under Applicable Law, in which case the provisions of Section 5(b) of the Plan shall apply.

 

(b)Notwithstanding any other provisions of the Plan to the contrary, in locations where local law prohibits payroll deductions, an eligible Employee may elect to participate through contributions to his or her account under the Plan in a form acceptable to the Committee. In such event, any such Employees shall be deemed to be participating in a sub-plan, unless the Committee otherwise expressly provides that such Employees shall be treated as participating in the Plan.

 

(c)Under procedures and at times established by the Committee, a Participant may withdraw from the Plan during an Offering Period, by completing and filing a new payroll deduction authorization and Plan enrollment form with the Company or by following electronic or other procedures prescribed by the Committee. If a Participant withdraws from the Plan during an Offering Period, his or her accumulated payroll deductions will be refunded to the Participant without interest, his or her right to participate in the current Offering Period will be automatically terminated and no further payroll deductions for the purchase of Common Stock will be made during the Offering Period. Any Participant who wishes to withdraw from the Plan during an Offering Period, must complete the withdrawal procedures prescribed by the Committee, subject to any rules established by the Committee, or changes to such rules, pertaining to the timing of withdrawals, limiting the frequency with which Participants may withdraw and re-enroll in the Plan, or imposing a waiting period on Participants wishing to re-enroll following withdrawal.

 

(d)A Participant may not increase his or her rate of contribution through payroll deductions or otherwise during a given Offering Period. A Participant may decrease his or her rate of contribution through payroll deductions during a given Offering Period during such times specified by the Committee by filing a new payroll deduction authorization and Plan enrollment form or by following electronic or other procedures prescribed by the Committee. If a Participant has not followed such procedures to change the rate of contribution, the rate of contribution shall continue at the originally elected rate throughout the Offering Period and future Offering Periods. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code for a given calendar year, the Committee may reduce a Participant’s payroll deductions to 0% at any time during an Offering Period scheduled to end during such calendar year. Payroll deductions shall re-commence at the rate provided in such Participant’s enrollment form at the beginning of the first Offering Period, which is scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 5(c).

 

6.Termination of Employment.

 

In the event any Participant terminates employment with the Company and its Participating Subsidiaries for any reason (including death) prior to the expiration of an Offering Period, the Participant’s participation in the Plan shall terminate and all amounts credited to the Participant’s account shall be paid to the Participant or, in the case of death, to the Participant’s heirs or estate, without interest. Whether a termination of employment has occurred shall be determined by the Committee. If a Participant’s termination of employment occurs within a certain period of time as specified by the Committee (not to exceed 30 days) prior to the Purchase Date of the Offering Period then in progress, his or her option for the purchase of shares of Common Stock will be exercised on such Purchase Date in accordance with Section 9 as if such Participant were still employed by the Company. If the Committee does not establish different rules with respect to an Offering Period, then if a Participant’s 

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termination of employment occurs on or after the 5th working day preceding the Purchase Date of an Offering Period, then his or her option for the purchase of shares of Common Stock will be exercised on such Purchase Date in accordance with Section 9 as if such Participant were still employed by the Company. Following the purchase of shares on such Purchase Date, the Participant’s participation in the Plan shall terminate and all amounts credited to the Participant’s account shall be paid to the Participant or, in the case of death, to the Participant’s heirs or estate, without interest. The Committee may also establish rules regarding when leaves of absence or changes of employment status will be considered to be a termination of employment, including rules regarding transfer of employment among Participating Subsidiaries, Subsidiaries and the Company, and the Committee may establish termination-of-employment procedures for this Plan that are independent of similar rules established under other benefit plans of the Company and its Subsidiaries; provided that such procedures are not in conflict with the requirements of Section 423 of the Code.

 

7.Stock.

 

Subject to adjustment as set forth in Section 11, the aggregate number of shares of Common Stock which may be issued pursuant to the Plan shall initially be 750,000 shares (the “Share Reserve”). Notwithstanding the foregoing, subject to adjustment as set forth in Section 11, the maximum number of shares of Common Stock that may be issued to any Employee in a given Offering Period shall be 20,000 shares of Common Stock. The Committee may change this limitation at any time on a prospective basis to apply to future Offering Periods. If, on a given Purchase Date, the number of shares with respect to which options are to be exercised exceeds either maximum, the Committee shall make, as applicable, such adjustment or pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.

 

8.Offering.

 

(a)On the Commencement Date relating to each Offering Period, each eligible Employee, whether or not such Employee has elected to participate as provided in Section 5(a), shall be granted an option to purchase a number of whole shares of Common Stock (as adjusted as set forth in Section 11) established by the Committee, which may be purchased with the payroll deductions accumulated on behalf of such Employee during each Offering Period at the purchase price specified in Section 8(b) below, subject to the additional limitation that no Employee participating in the Plan shall be granted an option to purchase Common Stock under the Plan if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a rate which exceeds U.S. $25,000 of the Fair Market Value of such Common Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. For purposes of the Plan, an option is “granted” on a Participant’s Commencement Date. An option will expire upon the earliest to occur of (i) the termination of a Participant’s participation in the Plan or such Offering Period and (ii) the termination of the Offering Period. This Section 8(a) shall be interpreted so as to comply with Code Section 423(b)(8).

 

(b)The Purchase Price under each option shall be with respect to an Offering Period the lower of (i) a percentage (not less than 85%) (“Designated Percentage”) of the Offering Price, or (ii) the Designated Percentage of the Fair Market Value of a share of Common Stock on the Purchase Date on which the Common Stock is purchased; provided that the Purchase Price may be adjusted by the Committee pursuant to Sections 11 or 12 in accordance with Section 424(a) of the Code. For a given Offering Period, the Designated Percentage shall be established no later than the beginning of the Enrollment Period for such Offering Period. The Committee may change the Designated Percentage with respect to any future Offering Period, but not to below 85%, and the Committee may determine with respect to any prospective Offering Period that the Purchase Price shall be the Designated Percentage of the Fair Market Value of a share of the Common Stock solely on the Purchase Date. If the Committee does not establish the Designated Percentage prior to the beginning of the Enrollment Period for a given Offering Period, the Designated Percentage for such Offering Period shall be 85%.

 

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9.Purchase of Stock.

 

Unless a Participant withdraws from the Plan as provided in Section 5(c), terminates employment prior to the end of an Offering Period as provided in Section 6, or except as provided in Sections 7, 12 or 14(b), upon the expiration of each Offering Period, a Participant’s option shall be exercised automatically for the purchase of that number of whole shares of Common Stock which the accumulated payroll deductions credited to the Participant’s account at that time shall purchase at the applicable price specified in Section 8(b) in accordance with the terms of the Plan, including Section 7. Notwithstanding the foregoing, the Company or its Participating Subsidiary may make such provisions and take such action as it deems necessary or appropriate for the withholding of taxes and/or social insurance and/or other amounts which the Company or its Participating Subsidiary determines is required by Applicable Law. Each Participant, however, shall be responsible for payment of all individual tax liabilities arising under the Plan. The shares of Common Stock purchased upon exercise of an option hereunder shall be considered for tax purposes to be sold to the Participant on the Purchase Date. A Participant’s option to purchase shares of Common Stock hereunder is exercisable only by him or her.

 

10.Payment and Delivery.

 

As soon as practicable after the exercise of an option, the Company shall deliver or cause to have delivered to the Participant a record of the Common Stock purchased and the balance of any amount of payroll deductions credited to the Participant’s account not used for the purchase of Common Stock, except as specified below. The Committee may permit or require that shares be deposited directly with a broker designated by the Committee or to a designated agent of the Company, and the Committee may utilize electronic or automated methods of share transfer. The Committee may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. If the Committee does not establish different rules with respect to an Offering Period, all shares of Common Stock purchased on each Purchase Date may not be sold prior to the earliest of: (i) the first anniversary of the applicable Purchase Date; (ii) the date on which a Participant terminates service with the Company or a Participating Subsidiary, or (iii) the consummation of a Covered Transaction (as defined in the 2013 Equity Incentive Plan). The Company or its Participating Subsidiary shall retain the amount of payroll deductions used to purchase Common Stock as full payment for the Common Stock and the Common Stock shall then be fully paid and non-assessable. No Participant shall have any voting, dividend, or other Shareholder rights with respect to shares subject to any option granted under the Plan until the shares subject to the option have been purchased and delivered to the Participant as provided in this Section 10. The Committee may in its discretion direct the Company to retain in a Participant’s account for the subsequent Offering Period any payroll deductions which are not sufficient to purchase a whole share of Common Stock or return such amount to the Participant. Any other amounts left over in a Participant’s account after a Purchase Date shall be returned to the Participant. If the Committee does not establish different rules with respect to an Offering Period, then all amounts left over in a Participant’s account after a Purchase Date shall be returned to the Participant.

 

11.Recapitalization.

 

Subject to any required action by the Shareholders of the Company, if there is any change in the outstanding shares of Common Stock or other securities of the Company because of a merger, consolidation, spin-off, reorganization, recapitalization, dividend in property other than cash, extraordinary dividend whether in cash and/or other property, stock split, reverse stock split, stock dividend, liquidating dividend, combination or reclassification of the Common Stock or other securities (including any such change in the number of shares of Common Stock or other securities effected in connection with a change in domicile of the Company), or any other increase or decrease in the number of shares of Common Stock or other securities effected without receipt of consideration by the Company, provided that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration,” the type and number of securities covered by each option under the Plan which has not yet been exercised and the type and number of securities which have been authorized and remain available for issuance under the Plan, as well as the maximum number of securities which may be purchased by a Participant in an Offering Period, and the price per share covered by each option under the Plan which has not yet been exercised, shall be appropriately and proportionally adjusted by the Board, and the Board shall take any further actions 

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which, in the exercise of its discretion, may be necessary or appropriate under the circumstances. The Board’s determinations under this Section 11 shall be conclusive and binding on all parties.

 

12.Merger, Liquidation and Other Corporate Transactions.

 

(a)In the event of a proposed liquidation or dissolution of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed transaction, unless otherwise provided by the Board in its sole discretion, and all outstanding options shall automatically terminate and the amounts of all payroll deductions will be refunded without interest to the Participants.

 

(b)In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger or consolidation or similar combination of the Company with or into another entity, then in the sole discretion of the Board, (1) each option shall be assumed or an equivalent option shall be substituted by the successor corporation or parent or subsidiary of such successor entity, (2) on a date established by the Board on or before the date of consummation of such merger, consolidation, combination or sale, such date shall be treated as a Purchase Date, and all outstanding options shall be exercised on such date, (3) all outstanding options shall terminate and the accumulated payroll deductions will be refunded without interest to the Participants, or (4) outstanding options shall continue unchanged.

 

13.Transferability.

 

Neither payroll deductions credited to a Participant’s bookkeeping account nor any rights to exercise an option or to receive shares of Common Stock under the Plan may be voluntarily or involuntarily assigned, transferred, pledged, or otherwise disposed of in any way, and any attempted assignment, transfer, pledge, or other disposition shall be null and void and without effect. If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights or interests under the Plan, other than as permitted by the Code, such act shall be treated as an election by the Participant to discontinue participation in the Plan pursuant to Section 5(c).

 

14.Amendment or Termination of the Plan.

 

(a)The Plan shall continue from the Effective Date until the time that the Plan is terminated in accordance with Section 14(b).

 

(b)The Board or the Committee may, in its sole discretion, insofar as permitted by law, terminate or suspend the Plan, or revise or amend it in any respect whatsoever, except that, without approval of the Shareholders, no such revision or amendment shall increase the number of shares subject to the Plan, other than an adjustment under Section 11 of the Plan, or make other changes for which Shareholder approval is required under Applicable Law. Upon a termination or suspension of the Plan, the Board may in its discretion (i) return without interest the payroll deductions credited to Participants’ accounts to such Participants or (ii) set an earlier Purchase Date with respect to an Offering Period then in progress.

 

15.Administration.

 

(a)The Board has appointed the Committee to administer the Plan, who will serve for such period of time as the Board may specify and whom the Board may remove at any time. The Committee will have the authority and responsibility for the day-to-day administration of the Plan, the authority and responsibility specifically provided in this Plan and any additional duty, responsibility and authority delegated to the Committee by the Board, which may include any of the functions assigned to the Board in this Plan. The Committee may delegate to a sub-committee and/or to an officer or officers or employees of the Company the day-to-day administration of the Plan. The Committee shall have full power and authority to adopt, amend and rescind any rules and regulations which it deems 

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desirable and appropriate for the proper administration of the Plan, to construe and interpret the provisions and supervise the administration of the Plan, to make factual determinations relevant to Plan entitlements and to take all action in connection with administration of the Plan as it deems necessary or advisable, consistent with the delegation from the Board. Decisions of the Committee shall be final and binding upon all Participants. Any decision reduced to writing and signed by a majority of the members of the Committee shall be fully effective as if it had been made at a meeting of the Committee duly held.

 

(b)In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the Company, members of the Board and of the Committee and their delegates shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted under the Plan, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within 60 days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

 

16.Committee Rules for Foreign Jurisdictions.

 

The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding handling of payroll deductions or other contributions by Participants, payment of interest, conversion of local currency, data privacy security, payroll tax, withholding procedures and handling of stock certificates which vary with local requirements; however, if such varying provisions are not in accordance with the provisions of Section 423(b) of the Code, including but not limited to the requirement of Section 423(b)(5) of the Code that all options granted under the Plan shall have the same rights and privileges unless otherwise provided under the Code and the regulations promulgated thereunder, then the individuals affected by such varying provisions shall be deemed to be participating under a sub-plan and not in the Plan. The Committee may also adopt sub-plans applicable to particular Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Code section 423 and shall be deemed to be outside the scope of Code section 423 unless the terms of the sub-plan provide to the contrary. The rules of such sub-plans may take precedence over other provisions of this Plan, with the exception of Section 7, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan. The Committee shall not be required to obtain the approval of the Shareholders prior to the adoption, amendment or termination of any sub-plan unless required by the laws of the foreign jurisdiction in which Employees participating in the sub-plan are located.

 

17.Securities Laws Requirements.

 

(a)No option granted under the Plan may be exercised to any extent unless the shares to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act, the Exchange Act, the rules and regulations promulgated thereunder, applicable state and foreign securities laws and the requirements of any stock exchange upon which the Shares may then be listed, subject to the approval of counsel for the Company with respect to such compliance. If on a Purchase Date in any Offering Period hereunder, the Plan is not so registered or in such compliance, options granted under the Plan which are not in material compliance shall not be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than 12 months and the Purchase Date shall in no event be more than 27 months from the Commencement Date relating to such Offering Period. If, on the Purchase Date of any offering hereunder, as delayed 

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to the maximum extent permissible, the Plan is not registered and in such compliance, options granted under the Plan which are not in material compliance shall not be exercised and all payroll deductions accumulated during the Offering Period (reduced to the extent, if any, that such deductions have been used to acquire shares of Common Stock) shall be returned to the Participants, without interest. The provisions of this Section 17 shall comply with the requirements of Section 423(b)(5) of the Code to the extent applicable.

 

(b)As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

 

18.Government Regulations.

 

This Plan and the Company's obligation to sell and deliver shares of its stock under the Plan shall be subject to the approval of any governmental authority required in connection with the Plan or the authorization, issuance, sale or delivery of stock hereunder.

 

19.No Enlargement of Employee Rights.

 

Nothing contained in this Plan shall be deemed to give any Employee or other individual the right to be retained in the employ or service of the Company or any Participating Subsidiary or to interfere with the right of the Company or Participating Subsidiary to discharge any Employee or other individual at any time, for any reason or no reason, with or without notice.

 

20.Governing Law.

 

This Plan shall be governed by applicable laws of the State of California and applicable federal law.

 

21.Effective Date.

 

This Plan shall be effective on the Effective Date, subject to approval of the Shareholders of the Company within 12 months before or after its date of adoption by the Board.

 

22.Reports.

 

Individual accounts shall be maintained for each Participant in the Plan. Statements of account shall be made available to Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any.

 

23.Designation of Beneficiary for Owned Shares.

 

With respect to shares of Common Stock purchased by the Participant pursuant to the Plan and held in an account maintained by the Company or its assignee on the Participant’s behalf, the Participant may be permitted to file a written designation of beneficiary, who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to the end of an Offering Period but prior to delivery to him or her of such shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to the Purchase Date of an Offering Period. If a Participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective, to the extent required by local law. The Participant (and if required under the preceding sentence, his or her spouse) may change such designation of beneficiary at any time by written notice. Subject to local legal requirements, in the event of a Participant’s death, the Company or its assignee shall deliver any shares of Common Stock and/or cash to the 

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designated beneficiary. Subject to local law, in the event of the death of a Participant and in the absence of a beneficiary validly designated who is living at the time of such Participant’s death, the Company shall deliver such shares of Common Stock and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company in its sole discretion, may deliver (or cause its assignee to deliver) such shares of Common Stock and/or cash to the spouse, or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may determine. The provisions of this Section 23 shall in no event require the Company to violate local law, and the Company shall be entitled to take whatever action it reasonably concludes is desirable or appropriate in order to transfer the assets allocated to a deceased Participant’s account in compliance with local law.

 

24.Additional Restrictions of Rule 16b-3.

 

The terms and conditions of options granted hereunder to, and the purchase of shares of Common Stock by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the shares of Common Stock issued upon exercise thereof shall be subject to, such additional conditions and restrictions, if any, as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

 

25.Notices.

 

All notices or other communications by a Participant to the Company or the Committee under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company or the Committee at the location, or by the person, designated by the Company for the receipt thereof.

 

10Document

Exhibit 10.1

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO TRAVELCENTERS OF AMERICA INC. IF PUBLICLY DISCLOSED.

WEX MERCHANT ACCEPTANCE AGREEMENT
This Agreement is made by and between TA Operating LLC (“MERCHANT”), a Delaware limited liability company with its principal place of business at 24601 Center Ridge Road, Westlake, OH 44145, and WEX INC., a Delaware corporation with its principal place of business at 97 Darling Avenue, South Portland, Maine 04106, (“WEX”).  This Agreement supersedes all previous agreements in place between the parties and their respective affiliates and subsidiaries, and any modifications shall be in writing and mutually agreed upon by the respective parties listed above.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties to this Agreement hereby agree as follows:
1.1    DEFINITIONS
A.    “Business Day” shall mean any Monday, Tuesday, Wednesday, Thursday or Friday but excluding any day when banks in Utah and/or New York are generally closed for business.
B.    “Card” or “Cards” shall mean the charge cards, virtual card numbers, or other approved account access devices which are described on Exhibit B attached hereto and made a part hereof.  Notwithstanding the foregoing, WEX shall be permitted to change the name of a Card from that described on Exhibit B provided that such successor Card shall be subject to the same terms and conditions of this Agreement (including, without limitation, the WEX fees and transaction types (i.e., Local and OTR)) as its predecessor.
C.    “Cardholder” shall mean the holder of the Card.
D.    “Card Sale” shall mean any transaction involving the use of any Card at a Distribution Site to purchase a Product.
E.    “Card Sale Procedures” shall mean the WEX Card Sale Procedures attached as Exhibit A-1 hereto and EFS Card Sale Procedures attached as Exhibit A-2 hereto.
F.    “Chargeback” means that a posted sale has been disputed and the amount of such sale will be deducted from the pending settlement in accordance with the provisions contained in the applicable Card Sale Procedures.
G.    “Confidential Information” shall include, without limitation, software, processes, trade secrets, financial information, customer lists, inventions, technical data, developments, 
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pricing, drawings, business plans, schedules, test marketing data, marketing plans of either party which shall be proprietary and confidential.
H.    “Distribution Sites” means the retail locations operated by MERCHANT.  Sites which use Merchant’s brand names but which are independently owned distributor, dealer or franchisee sites (collectively, “Franchise Sites”) shall have the right and option to accept Cards under terms compliant with this Agreement, but WEX shall be required to enter into their own acceptance agreements for these sites and Merchant shall have no liability with respect to the Franchise Sites or WEX’s obligations thereunder.
I.    “Effective Date” means November 7, 2016.
J.    “Local Transaction” shall mean a fuel transaction (gasoline and diesel) that is processed on the front islands (fore-court and not the commercial diesel islands) of a Distribution Site.
K.    “Over the Road Transaction” or “OTR Transaction” shall mean a diesel transaction that is processed on the truck diesel islands (sometimes referred to as the “back” or “commercial” diesel islands of a Distribution Site.
L.    “Prior Agreements” means (i) Fleet One Merchant Services Agreement dated January 12, 2012, as amended, between Merchant and Fleet One, LLC, (ii) EFS Transportation Processing Services Inc. Processing Agreement between Petro Stopping Centers, L.P. (Merchant’s predecessor in interest) and EFS Transportation Services, Inc. (“EFS”) dated April 1, 2003, as amended, (iii) Truck Stop Master Operating Policies and Procedures Contract between Merchant and EFS dated January 1, 2002, as amended, and Card Acceptance Agreement between Merchant and TA/TCH LLC dated April 30, 2008.
M.    “Products” for the purposes of this Agreement, shall mean and include motor fuel, motor oil, repairs, tires and merchandise.  Products shall exclude gift cards, non-WEX branded prepaid cards, lottery tickets or other games of chance.
N.    “WEX Fees” shall mean the fees charged by WEX to Merchant for processing Card Transactions, as more particularly described in Exhibit B.
1.2    HONORING CARDS
A.    MERCHANT shall in full compliance with this Agreement honor at its Distribution Sites in the United States and Canada, any Card properly presented for the purchase of Products based upon the Card Sale Procedures.
B.    Each Card Sale shall be deemed to create a sales draft issued by the Cardholder and instructing the card issuer to pay MERCHANT.  WEX shall honor such sales drafts issued in conformity with the terms and conditions set forth herein.
C.    This Agreement shall not apply to Local Transactions on gasoline and diesel islands at a Distribution Site that are branded (by a major oil company, such as Shell, BP, Exxon, 
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etc.) to the extent (and only to the extent) that Merchant accepts a Card through an agreement with such brand.
D.    An approved card issuer is an entity that has entered into an agreement with WEX to issue WEX branded cards and is the party that has a direct credit or prepaid card relationship with the fleet customer or Cardholder.  It is understood that approved card issuers may include subsidiaries and affiliates of WEX Inc. as well as other third party issuers.
D.    As settlement agent and servicer for its approved card issuers, including WEX Bank, WEX shall make all payments to MERCHANT on behalf of such approved card issuers.  WEX, as each approved card issuer’s servicer, shall be responsible for all of such card issuer’s communications with MERCHANT.  Except for its or their obligations to pay MERCHANT, WEX shall not have any rights, duties, or liabilities as principal hereunder for Cards not issued by WEX or its subsidiaries of affiliates.
2.1    CARD SALES
A.    MERCHANT agrees to comply with the Card Sale Procedures, and any related technical specifications regarding card acceptance provided in writing to Merchant by WEX.  The technical specification provides requirements for both the point of sale equipment and the network host for all Cards (“WEX Technical Specification”).  WEX reserves the right to amend, modify or supplement the WEX Technical Specification, [***].  MERCHANT agrees to adopt any such amendments or changes to the WEX Technical Specifications based upon a mutually agreed upon timeframe so that MERCHANT remains on the most up-to-date specification as required by WEX, provided, however, that if adopting such amendment or changes will require MERCHANT to make a capital investment that MERCHANT considers, in its sole discretion, material, MERCHANT shall have the right to terminate this Agreement upon notice given to WEX.
B.    WEX shall remit to MERCHANT [***], for all Card Sales under this Agreement as well as providing MERCHANT with reporting in a form agreed by WEX and Merchant through a [***] settlement file so that MERCHANT may allocate payments as appropriate to its Distribution Sites.  Notwithstanding the foregoing, WEX shall provide a separate payment to Merchant’s sites located in [***].
C.    WEX reserves the right to terminate acceptance at a Distribution Site if such Distribution Site does not remain compliant with the terms of this Agreement or if in WEX’s sole discretion, continued acceptance at the Distribution Site poses financial or reputational risk to WEX.
2.2    FEES
A.    MERCHANT shall pay to WEX the WEX Fees.
B.    [***]
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2.3    MISCELLANEOUS MERCHANT RESPONSIBILITIES
A.    Notwithstanding that WEX provides MERCHANT with a variety of reports for the Card Sales that WEX processes, MERCHANT agrees that it shall still maintain its own records of the Card Sales.
B.    WEX shall not be responsible for collecting, paying or reporting taxes, fees or other charges related to purchases made using Cards such as but not limited to sales and use taxes that are incurred by MERCHANT.  This section does not apply to the obligations of the parties as more fully described in Sections 5.1 and 5.2 related to federal and state fuel tax exemptions.
C.    MERCHANT shall review any reports provided by WEX regarding the Card Sales promptly upon receipt and shall notify WEX within [***] of the date of the report as to any mistakes contained therein.  Failure to do so shall be deemed MERCHANT’s acceptance of the report as complete and satisfactory performance of WEX under this Agreement.
D.    MERCHANT is responsible for the correction of all Card Sales that have been identified by WEX as having Merchant errors.  Uncorrected Card Sales will not be processed by WEX after [***] that WEX reported to MERCHANT the processing error.  MERCHANT can elect in writing to have WEX correct the errors on MERCHANT’S behalf based upon information provided by MERCHANT.  Such services will be performed at [***].
E.    MERCHANT shall provide WEX with a list of its locations, which shall be updated as necessary and prior to transmitting Card Sale data from a new location.
3.1    PAYMENT FOR CARD SALES BY WEX
A.    WEX shall pay MERCHANT for each Card Sale processed by WEX less any WEX Fee.  Payment shall be made by WEX by [***] in accordance with terms set forth on Exhibit B.
3.2    REPORTS
A.    WEX shall provide MERCHANT or its designee, reports in a form mutually agreed between Merchant and WEX for Card Sales and the amounts paid to MERCHANT through [***] settlement reports in an agreed form which may include, but not be limited to, information related to the [***].
B.    WEX shall use best efforts to provide accurate and complete reports, based upon the data transmitted to WEX by MERCHANT.  In the event that incorrect data was provided resulting in a correction to payment, WEX will adjust any payments to MERCHANT as required based upon the receipt of corrected data from the MERCHANT provided that such correction is requested in accordance with Section 2.3.0 or 2.3.D.
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C.    In the event that MERCHANT requests a custom report or custom file layout, such reports may be created by mutual agreement of the parties.  Additional fees may be charged to MERCHANT for the creation and maintenance of custom reporting files and will be charged only upon the agreement of the parties.
4.1    REPRESENTATIONS AND WARRANTIES
A.    The parties each hereby represent and warrant:
i.    They are duly organized, validly existing and in good standing under the laws of their state of their organization and have all governmental approvals, licenses, filings or permits necessary to conduct their business and enter into and perform this Agreement;
ii.    The Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
B.    In addition, MERCHANT represents and warrants as to each Card Sale reported to WEX:
i.    it represents a bona fide Card Sale of Products sold and delivered in the ordinary course of business for the total sales price reported by MERCHANT to WEX;
ii.    MERCHANT shall have performed all of its obligations to the Cardholder in connection with the Card Sale;
iii.    it involves no other Card Sale than the one described therein;
iv.    each Product had quality and grade as represented by MERCHANT;
v.    (for in-store Card Sales only) MERCHANT shall have taken commercially reasonable steps to [***]; and,
vi.    all electronically or telephonically or hardware generated invoices, receipts, records or memoranda of sales shall in fact be genuine and not forged or unauthorized.
C.    WEX hereby disclaims any and all warranties, express or implied, concerning card processing services covered by this Agreement including all warranties of merchantability and fitness for a particular purpose.
4.2    LIABILITIES
A.    The parties shall be liable to the other for actual damages resulting from a breach of this Agreement whether due to the performance or failure to perform by a party.
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B.    Notwithstanding the foregoing, the parties shall not be liable to the other for any indirect, special, incidental or consequential damages, including, but not limited to, lost profits even if the parties have knowledge of the possibility of such damages.
5.1    CREDIT CARD ISSUER EXEMPTIONS (FEDERAL EXCISE TAX AND SOME STATES)
A.    WEX provides net billing of the federal excise taxes on gasoline and diesel fuel in accordance with the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2005 as well as net billing for certain motor fuel taxes for those states that have adopted similar rules which allow the credit card issuer to facilitate exemptions to qualified tax exempt fleets (“Exempt Fleet”).
B.    MERCHANT shall be paid for Card Sales with the applicable taxes included and shall pay its Distribution Sites with applicable taxes included when WEX is administering the exemption.
C.    WEX will obtain from each Exempt Fleet copies of relevant tax exemption documentation necessary for the Exempt Fleet to demonstrate its tax-exempt status.
5.2    OTHER STATE AND LOCAL TAX EXEMPTIONS
A.    For tax jurisdictions except for those noted in Section 5.1 above, MERCHANT agrees to sell fuel to certain pre-qualified tax-exempt fleets net of any state, county or local taxes on motor fuel.  WEX will obtain from each Exempt Fleet copies of relevant tax exemption documentation necessary for the Exempt Fleet to demonstrate its tax-exempt status.
B.    MERCHANT is responsible for providing WEX with the Card Sale data.
C.    WEX will calculate the amount of tax to be exempted based on the Card Sale data provided by MERCHANT for each applicable taxing jurisdiction.  All tax-exempt Card Sales will be reported to WEX by MERCHANT in the amount of the full purchase price inclusive of all applicable taxes.
D.    WEX shall pay MERCHANT net of all taxes from which the Exempt Fleet is qualified for the exemption and for which MERCHANT has agreed to provide the exemption.
E.    WEX will provide MERCHANT, on or before [***].
5.3    ALLOCATION OF LIABILITY (ALL TAXES)
Notwithstanding any other provision contained in this Agreement, liability and loss with respect to any taxes, penalties, interest or other assessments arising out of incorrect tax exemption processing or documentation provided shall be allocated as follows:
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A.    WEX shall be responsible for tax losses that result from errors in data processing, including errors in establishing the qualification of an Exempt Fleet or calculating the amount of tax that may be exempted.
B.    MERCHANT shall be responsible for tax losses which arise from errors by WEX based on incorrect information and data provided by MERCHANT, including, but not limited to, incorrect product codes or site information.
C.    If MERCHANT incurs a tax loss for which WEX is not liable hereunder, WEX will assist MERCHANT, as appropriate, in attempting to collect from the Exempt Fleet and/or filing a refund claim, as appropriate.
6.1    ADDITIONAL FEATURES SPECIFIC TO OTR ACCEPTANCE
A.    Direct Bill Transactions:  In connection with OTR Transactions, MERCHANT may transmit Card Sales to WEX that are initiated using a Card, but for which Merchant has entered into its own independent agreements with the fleet customer to bill directly (“Direct Bill Transactions”).  WEX shall remit these transactions to Merchant for Merchant to bill the fleet directly.  Merchant agrees and understands that Merchant is responsible for any and all fraud or credit losses associated with these transactions.
B.    Cash Advance:  In order to facilitate providing Cardholders with cash advances, Merchant may accept either a Card approved for OTR Transactions or a check which has been provided to Merchant by WEX.  In the event that checks are provided, Merchant shall adhere to the authorization and acceptance procedures provided on the check or in writing by WEX.  Merchant agrees to take all commercially reasonable efforts to secure such checks in their possession.
7.1    TERM
A.    Initial Term:  This Agreement shall commence upon the Effective Date, and unless sooner terminated pursuant to the provisions of Section 7.2 hereof, shall remain in effect for sixty (60) months.
B.    Renewal Term:  Unless sooner terminated pursuant to Section 72 below, this Agreement shall automatically renew for additional twenty-four (24) month terms immediately upon expiration of the term then in effect.
7.2    TERMINATION
A.    Any party may terminate this Agreement upon the occurrence of any of the following:
i    Notice given by either party that it desires to terminate effective at the end of the term then in effect at least six (6) months prior to the expiration of the term then in effect;
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ii.    the failure of a party to comply with any of the material covenants or the material terms, conditions, agreements and limitations set forth in this Agreement, and such failure continues for more than thirty (30) days following written notice from the other party(s) and corrective action is not undertaken and diligently pursued or, if the nature of such failure is such that it cannot reasonably be cured in 30 days;
iii.    any representation or warranty made in connection with this Agreement shall prove to be false or misleading in any material respect and is not cured after thirty (30) days written notice, which may include MERCHANT’S compliance with its chargeback obligations as defined in the Card Sale Procedures;
iv.    the making of an assignment for the benefit of creditors or the institution of any bankruptcy or insolvency proceeding by a party or the institution by a third party of any bankruptcy proceeding against a party hereto which is not dismissed within sixty (60) days; or,
v.    the dissolution or termination of operations of a party other than in connection with a merger or sale of substantially all of such party’s assets;
vi.    a party’s failure to comply with all applicable and material legal and regulatory requirements, whether federal or state; or
vii.    a party’s intentional misrepresentation or fraud in relation to its performance under this Agreement.
B.    Merchant shall have a right with two (2) days advance notice to terminate this Agreement in the event that WEX does not make settlement payments for undisputed amounts in accordance with the terms of this Agreement provided that such termination shall not be Merchant’s exclusive remedy for such failure; provided, however, that in any rolling twelve (12) month period, Merchant’s termination right for the first and second such late settlement payment shall be delayed so that it is exercisable on the tenth (10th) day.  In all cases of undisputed settlement payments not paid when due, WEX shall pay to Merchant [***].
C.    If Merchant ceases to operate a Distribution Site (but not all or substantially all of Merchant’s business, which shall be governed by Section 8.1(B)(ii) below), MERCHANT shall immediately notify WEX whereupon WEX shall stop authorizing Card Sales and no longer process transactions subsequent from the notice date.  If it is found that the operation of a Distribution Site has changed without notice, WEX reserves the right to terminate the Agreement with respect to such Distribution Site.
D.    Upon termination of this Agreement, MERCHANT shall:
i.    cease entering into Card Sales using the Card or Cards with respect to the Distribution Site(s) as to which this Agreement is terminated;
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ii.    cease promoting Card Sales or acceptance of Cards including removing all decals or signage indicating acceptance from the Distribution Sites; and;
iii.    return any unused materials or supplies issued by WEX with respect to any Card.
E.    Termination shall not affect any party’s respective rights, duties or obligations hereunder with respect to pre-termination Card transactions.
8.1    ENTIRE AGREEMENT/ASSIGNMENT
A.    Entire Agreement:  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof; all prior agreements, representations, statements, negotiations and undertakings are superseded hereby.  This Agreement may be altered or amended only by a signed written agreement of the parties.
B.    Assignment:
i.    Assignment by WEX:  WEX may not assign or transfer this Agreement, in whole or in part, by operation of law, sale of assets, merger, consolidation or a change of control in the aggregate of 50% or more of the ownership, voting, membership or other indicia of ownership or control from that which exists as of the date of this Agreement, then WEX will provide written notice to Merchant and request Merchant’s written consent thereto, which consent shall not be unreasonably withheld.  If Merchant withholds its consent to an assignment or transfer, WEX may still proceed with such assignment or transfer whereupon Merchant shall have the option to terminate this Agreement after providing WEX with no less than 180 days prior written notice.  Notwithstanding the foregoing, Merchant’s consent shall not be required in connection with an assignment of this Agreement to a wholly owned subsidiary or affiliate of WEX.
ii.    Assignment by Merchant If Merchant assigns or transfers this Agreement, in whole or in part, by operation of law, sale of assets, merger, consolidation or a change within any 12 month period in the majority of Merchant’s board of directors which change is not approved by the board of directors of Merchant holding office prior to such change, then Merchant will provide written notice to WEX and request WEX’s written consent thereto, which consent will not be unreasonably withheld.  If WEX withholds its consent to an assignment or transfer Merchant may still proceed with such assignment or transfer whereupon WEX shall have the option to terminate this Agreement after providing Merchant no less than 180 days prior written notice.  Notwithstanding the foregoing, WEX’s consent shall not be required in connection with an assignment of this Agreement to a wholly owned subsidiary or affiliate of Merchant.
iii.    Assignee Bound.  Any party for which this Agreement is assigned shall be bound to the terms of the Agreement to the same extent as the parties named herein.
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C.    As part of any assignment, change in ownership, change in organizational structure (i.e. change from sole proprietor to partnership) or change in control, MERCHANT shall provide WEX with an updated W-9 validating their proper legal name change and tax identification number.
8.2    SEVERABILITY AND WAIVERS OF PROVISIONS
The fact that any provision of this Agreement may prove to be invalid or unenforceable under any law, rule or regulation of any governmental agency, shall not affect the validity or enforceability of any other provisions of this Agreement.  The waiver of any term, condition or right under this Agreement by any party shall not waive any other term, condition or right, or the same term, condition or right on any other occasion.
8.3    FORCE MAJEURE
The parties shall not be liable for failure to timely perform obligations hereunder if such performance is interrupted or delayed by reason of floods, fires, earthquakes, strikes, civil commotions, acts of war or other extraordinary or unexpected manifestations of physical occurrences which cannot be prevented by the exercise of reasonable diligence or ordinary care,
8.4    CONFIDENTIALITY AND DATA SECURITY
A.    The parties agree that it is in their mutual best interest to maintain the confidentiality of the provisions of this Agreement and accordingly, agree that they will not, without the written consent of the other, intentionally disclose the terms hereof, including without limitation, the price terms (unless required by court order or other governmental authority) and that all such terms shall be held in confidence and revealed only to employees, agents, lenders or other persons having a need to know such terms in the course of such person’s employment or business relationship with such party.
B.    Merchant acknowledges that it may become aware of WEX’s customers and details concerning their purchase transactions and Merchant agrees to keep such information confidential and that such information shall be revealed only to employees, agents, lenders or other persons having a need to know such terms in the course of such person’s employment or business relationship with Merchant.
C.    WEX acknowledges that it may become aware of Merchant’s customers and details concerning their purchase transactions and agrees that WEX will not solicit, directly or through any affiliate of WEX, Merchants customers provided however, that this Section shall not be construed to restrict or prohibit WEX from identifying and engaging trucking companies using some criteria other than being a Merchant customer for the marketing, promotion and sales by WEX of WEX’s various billing and other services and systems and that the foregoing does not prohibit WEX from accepting the request of a Merchant customer to use or convert to a WEX billing or other service or system.
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D.    The parties further agree that any obligations to protect Confidential Information is set forth herein shall survive termination of this Agreement for a period of three years, except that as to any Confidential Information designated in writing by the disclosing party to be a “trade secret”, such obligations shall continue indefinitely unless otherwise agreed in writing by the disclosing party.
E.    MERCHANT agrees that WEX may publish MERCHANT’S posted retail prices provided that in any such publication WEX is publishing the comparable (e.g., cash and/or credit) posted retail prices of similarly situated merchants.
F.    The parties each agree to establish security procedures in order to safeguard Card Sale data and Cardholder information.  Such procedures shall be compliant with all applicable data security laws and regulations.  In the event of a breach or compromise of a party’s systems resulting in a loss or theft of information (including cardholder information), or if such a breach or compromise is suspected, the impacted party shall immediately notify the other parties to this Agreement and shall indemnify, defend and hold harmless the other party to the extent that they were responsible for the breach of the Card Sale or Cardholder data.
8.5    LICENSING OF TRADEMARKS OR SERVICEMARKS
A.    Both parties own certain trademarks and service marks (“Marks”), which may be used by each other on marketing materials used in connection with the acceptance of Cards and in WEX’s standard marketing presentations identifying MERCHANT as a WEX accepting merchant (“Program Materials”).  The party granting the license in the use of their Marks to the other party is referred to as the “Licensor”.  The party receiving the benefits of the license in the other party’s Marks is referred to as the “Licensee”.
C.    Licensor hereby grants to Licensee, a limited non-exclusive, royalty free and non-transferable license to use certain trademarks and service marks of Licensor for the purpose of affixing such Marks to the any Program Materials developed for the Licensee in accordance with the terms of this Agreement.
D.    Licensee shall not in any manner represent that it has any ownership in the Licensor’s Marks or any registrations thereof.  Licensee acknowledges that use of the Marks shall not create in Licensee’s favor any right (other than the limited rights of use granted pursuant to this license), title or interest in, or to, the Marks and that use of the Marks by the Licensee inures to the benefit of the Licensee only to the extent of the limited rights and interests set forth in this Agreement, otherwise use of the Marks by Licensee inures to the benefit of the Licensor.
8.6    GOVERNING LAW
This Agreement shall be governed and construed by the internal laws of the State of Delaware (without reference to choice of law rules).
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8.7    AUDIT/FINANCIAL STATEMENTS
A.    Each party, at its sole expense, shall have the right to audit the books and records of the other party relating to such party’s performance of this Agreement.  All audits shall be conducted in accordance with professional auditing standards and during normal business hours and the requesting party shall provide at least fifteen (15) days advance notice of their intent to audit.  The audited party shall fully cooperate with the auditing party to accomplish the audit as expeditiously as possible.  Any audit shall be limited in scope to no more than twelve (12) months prior to the date of the actual audit.
B.    MERCHANT agrees, if requested by WEX, to furnish WEX with an income statement and statement of cash flows for the applicable fiscal year and a balance sheet, footnotes to the financial statements and auditor’s opinion letter, if applicable, prepared in accordance with generally accepted accounting principles, consistently applied, and which shall be in accordance with the books and records of MERCHANT.  Provided that Merchant (or the entity that wholly owns Merchant) remains a publicly traded company, WEX will obtain all information from public sources.
8.8    NOTICE.
Wherever in this Agreement it is required or permitted that notice or demand be given or served by either party to or on the other, such notice or demand shall be in writing and shall be given or served and shall not be deemed to have been duly given or served unless (a) in writing; or (b) either (1) delivered personally, (2) deposited with the United States Postal Service, as registered or certified mail, return receipt requested, bearing adequate postage, or (3) sent by overnight express courier (including, without limitation, Federal Express, DHL Worldwide Express, Airborne Express, United States Postal Service Express Mail) with a request that the addressee sign a receipt evidencing delivery; and (c) addressed to the party at the address below.  Either party may change such address by written notice to the other.  Service of any notice or demand shall be deemed completed forty-eight (48) hours after deposit thereof, if deposited with the United States Postal Service, or upon receipt (or upon refusal of delivery or confirmation of inability to deliver) if delivered by overnight courier or in person.
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	If to Merchant:	If to WEX:
	TA Operating LLC	WEX Inc.
	24601 Center Ridge Road	97 Darling Ave.
	Westlake, OH 44145	South Portland, ME 04106
	Attention:  Chief Executive Officer	Attn:  Senior Vice President Fleet
	with a copy to:	
	TA Operating LLC	WEX Inc.
	255 Washington Street	97 Darling Ave.
	Newton, MA 02458	South Portland, ME 04106
	Attention:  General Counsel	Attention:  General Counsel

8.9    OTHER AGREEMENTS
A.    MERCHANT hereby    consents to WEX granting to their principal financing source(s) a security interest in and collateral assignment of this Agreement and acknowledges that, upon the occurrence of an event of default under the applicable loan documents in connection with the present or future financing arrangements between WEX and the financing source, such financing source shall have all of the rights of WEX and, with respect to amounts owed to Merchant, Merchant shall have the same rights against the financing source as it would WEX.
B.    This Agreement shall become effective on the Effective Date.  [***].
C    [***]

NOW THEREFORE, the parties hereto, each acting under due and proper authority, have caused this Agreement to be executed as of the day and year set forth below.
						
	WEX INC.	TA Operating LLC
	By:    Brian Fournier    
	By:    /s/Thomas M. O’Brien    

	Title:    VP, Merchant    
	Title:    CEO    

	Signed:    /s/ Brian Fournier    
	Signed:    /s/ Thomas M. O’Brien    

	Date:    11/5/16    
	Date:    11-4-16    

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EXHIBIT A-1 
CARD SALE PROCEDURE 
WEX Universal and FleetOne
The following are the Card Sale Procedures for WEX Universal, WEX Crossroads and FleetOne Cards only.  For the Card Sale Procedures for EFS and T-Chek Cards, please refer to - Exhibit A-2.
1.1    METHOD OF TRANSMISSION OF CARD SALES TO WEX
A.    MERCHANT shall have the necessary equipment to permit the electronic acceptance of the Card at its Distribution Sites including but not limited to their point of sale equipment and networking services.
B.    MERCHANT shall collect and transmit the Card Sale data in accordance with the WEX Technical Specification.  Merchant shall obtain from WEX the necessary acceptance certification for its network and equipment that will be used for processing sales transaction.
1.2    MANUAL CARD SALE PROCEDURES
A.    If MERCHANT is unable to obtain an electronic or digital authorization for a Card Sale because WEX’s communication facilities are not operable, MERCHANT may either decline to accept the Card Sale or may capture the sales transaction through the use of a suitable imprinter to legibly imprint the Cards on the sales slip and requiring the cardholder to sign the sales receipt (“Manual Card Sale”).
B.    MERCHANT shall obtain all information required in Section 1.3.A below for Manual Card Sales.  MERCHANT shall take all commercially reasonable efforts to protect Manual Card Sale data from fraud or misuse.
C.    In the event that MERCHANT allows a Manual Card Sale, it may obtain an authorization code from WEX.  In such case, WEX reserves the right to assess the Manual Transaction Fee set forth in Exhibit B.
D.    If Merchant accepts a Manual Card Sale without first obtaining an authorization code from WEX, the Merchant may still accept the Card for payment; however Merchant shall contact WEX as soon as communication with the WEX authorization facilities can be re-established.
E.    When submitting a Manual Card Sale for processing, MERCHANT shall include the authorization or other approval code it received from WEX when submitting the completed Card Sale to WEX for processing.
F.    If MERCHANT accepts a Manual Card Sale without receiving an authorization code, WEX’s liability shall be limited if the Cardholder does not pay for such Card Sale to $[***] per transaction and $[***] per day per Distribution Site.  WEX reserves the right 
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to change these limits from time to time, upon prior written notice.  Manual Card Sales that exceed these limits shall be at the credit risk of MERCHANT.
1.3    MINIMUM CARD SALE PROCESSING REQUIREMENTS
A.    Card Sale data sent to WEX shall include:  [***] and any other information as WEX and MERCHANT may mutually agree upon in writing.
B.    Other than as set forth in Section 1.2.F above, all Card Sales require an authorization or approval from WEX.  MERCHANT shall request such authorization from WEX for the total Card Sale amount prior to sending the Card Sale to WEX for processing.
C.    WEX does not provide pre-authorizations, nor does it place available credit on “hold”.  [***].
D.    WEX does not provide payment to merchants based upon receipt of information during the authorization process.  MERCHANT is still required to submit the completed Card Sale, including the authorization or other approval code, to WEX.  Obtaining an authorization without submitting the completed Card Sale to WEX may result in non-payment by WEX for such Card Sale.
E.    MERCHANT shall not accept payment through use of an expired Card or when advised upon authorization inquiry, that the Card is not to be honored.
F.    Merchant shall maintain for [***] a record of all information required in Section 1.3.A above.
G.    Upon request, MERCHANT shall provide the Cardholder with a copy of the transaction receipt documenting the Card Sale.  Such receipt shall not include the full account number or driver identification number printed on the receipt.
H.    [***]
I.    Any Card Sale data received by WEX from MERCHANT by the following times for the following Cards (which shall include cash advance transactions on such Card) shall be treated as having been received on that day.
FleetOne cards:    11:59 p.m. Central Time
Money Code/Plus Check:    11:59 p.m. Central Time
Any Card Sale data received by WEX from MERCHANT by the following times for the following Cards (which shall include cash advance transactions on such Card) shall be treated as having been received on the next business day.
WEX CrossRoads and WEX Universal:    5:00 p.m. Eastern Time
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J.    MERCHANT shall not divide the price of goods and services purchased in a single transaction among two (2) or more transaction receipts for billing to WEX.
K.    Merchant must not submit Card Sales until Products are delivered.
L    A Card must be present at the time of purchase.  In the event that MERCHANT processes a Card Sale when the Card is not present, MERCHANT bears the risk of the sale being charged back.
M.    MERCHANT shall maintain a record of the Card Sale, including all sales data required for a period of [***].  Upon the reasonable request of WEX, such records shall be provided to WEX within [***] of WEX’s request.  Failure to provide the requested record may result in a charge back of the Card Sale to MERCHANT if such failure results in WEX not being able to collect from the Cardholder.
1.4    DATA INPUT AND TRANSMISSION
A.    Merchant is responsible for the data entry of Card Sale information by its personnel, or representatives.  All data shall meet the prevailing WEX Technical Specification and shall be in good and usable condition.
B.    If information pertaining to any Card Sale is garbled in transmission such that part or all of the record is likely to vary from what MERCHANT transmitted, WEX may advise MERCHANT of the suspected inaccuracy and request retransmission of the record or other appropriate confirmation.  WEX may, with notice to MERCHANT, withhold payment for such Card Sales until the record is retransmitted or MERCHANT provides other appropriate confirmation.
C.    If MERCHANT has not provided WEX with required information or if WEX needs to interpret, verify, or validate a Card Sale, WEX may, withhold payment for such Card Sale until MERCHANT sends WEX the necessary information.  WEX may make appropriate adjustments in its settlements with MERCHANT to reflect the receipt or correction of any such Card Sale information.  WEX shall provide notice to MERCHANT of any Card Sales that it is not able to process due to errors or missing information through its daily settlement reports.
D.    MERCHANT shall submit all Card Sales to WEX for processing within [***] of the transaction date.  WEX may accept transactions up to [***] from the date of the transaction for processing and billing to the fleet, however, reserves the right to chargeback any such transaction that is disputed by a fleet customer.
1.5    CHARGEBACKS
A.    Chargebacks shall be made only for Card Sales (i) that are disputed by Cardholder and for which an authorization was not obtained by Merchant (ii) were for unauthorized Products, (iii) were fraudulently made by an employee of MERCHANT or (iv) the WEX 
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Card Sale Procedures were not followed by Merchant.  MERCHANT shall remain liable for all outstanding Chargebacks.  Notwithstanding the foregoing, there shall be no Chargeback, or the Chargeback shall be reversed, as applicable, if the Cardholder pays WEX and has no further right to dispute the underlying charge or receive its payment back from WEX whether by contract right or regulation.
B.    Any obligation to pay a Chargeback pursuant to this Agreement shall be unconditional and shall not be waived, released or affected by any settlement, extension, compromise of forbearance or other agreement made or granted by WEX with or to any Cardholder or obligor.  Failure to issue a Chargeback with knowledge of a breach of warranty or other defect shall not be deemed a waiver of any of WEX’s rights with respect to such a Card Sale.  WEX will expend normal business efforts to pursue remedies against Cardholders but shall not be required to exhaust its remedies against Cardholders or others as a condition precedent to requiring performance by MERCHANT of its obligations hereunder.
1.6    Checks.  Cardholders may present a check issued by WEX for the purchase of Products or for cashing.  The check should be filled out completely and include an authorization number or other code.  MERCHANT may obtain or verify this code using the POS device, or by calling the customer service number listed on the check or the back of cardholders’ actual card.  MERCHANT shall follow the verification procedures provided by WEX prior to accepting or cashing the check.  Please note that even if there is an authorization number included on the check at the time presented to you, you are still required to validate the authorization number prior to accepting or cashing the check.
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EXHIBIT A-2 
CARD SALE PROCEDURE 
EFS, T-Chek, and EFSTS
The following are the Card Sale Procedures for EFS LLC, T-Chek, and EFSTS Cards only.  For the Card Sale Procedures for WEX Universal, WEX Crossroads and Fleet One Cards, please refer to Exhibit A-1.
1.1    METHOD OF TRANSMISSION OF CARD SALES TO WEX
A.    MERCHANT shall have the necessary equipment to permit the electronic acceptance of the Card at its Distribution Sites including but not limited to their point of sale equipment and networking services.
B.    MERCHANT shall collect and transmit the Card Sale data in accordance with the WEX Technical Specification, as applicable to the relevant Card (EFS, T-Chek, or EFSTS).  Merchant shall obtain from WEX the necessary acceptance certification for its network and equipment that will be used for processing sales transactions.
1.2    MANUAL CARD SALE PROCEDURES
A.    If MERCHANT is unable to obtain an electronic or digital authorization through the point of sale equipment, MERCHANT may contact WEX to obtain authorization for the transaction via voice authorization (“Voice Authorization Transaction”).
B.    Merchant should not accept a Manual Card Sale without obtaining an authorization code from WEX.  If Merchant accepts a Card for payment without receiving an authorization code from WEX, Merchant does so at its own risk, and there is no guarantee that WEX will accept the charge and settle the transaction
C.    In the event that MERCHANT allows a Voice Authorization Transaction—unless such transaction is necessitated by the failure WEX’s communication facilities—WEX reserves the right to assess the [***].
1.3    MINIMUM CARD SALE PROCESSING REQUIREMENTS
A.    Card Sale data sent to WEX shall include:  [***].
B.    All Card Sales require an authorization or approval from WEX.  MERCHANT shall request such authorization from WEX for the total Card Sale amount prior to sending the Card Sale to WEX for processing.
C.    WEX does not provide payment to merchants based upon receipt of information during the authorization process.  MERCHANT is still required to submit the completed Card Sale, including the authorization or other approval code, to WEX.  Obtaining an authorization without submitting the completed Card Sale to WEX may result in non-payment by WEX for such Card Sale.
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D.    MERCHANT shall not accept payment through use of a Card after the card’s expiration date (if any) or when advised upon authorization inquiry that the Card is not to be honored.
E.    Merchant shall maintain for [***] a record of all information required in Section 1.3.A above.
F.    Upon request, MERCHANT shall provide the Cardholder with a copy of the transaction receipt documenting the Card Sale.  Such receipt shall not include the full account number or driver identification number printed on the receipt.
G.    If the Card Sale is not an island card reader transaction (“pay-at-the-pump”), MERCHANT shall require [***].  Cardholder must be present when receiving authorization of transaction
H.    Any Card Sale data received by WEX from MERCHANT by the following times for the following Cards or product (which shall include cash advance transactions on such Card) shall be treated as having been received on that day.
EFS, TChek and EFSTS branded cards:    11:59 p.m. Central Time
Money Code/Plus Check:    11:59 p.m. Central Time
J.    MERCHANT shall maintain a record of the Card Sale, including all sales data required for a period of [***].  Upon the reasonable request of WEX, such records shall be provided to WEX within — [***] of WEX’s request.  Failure to provide the requested record may result in a charge back of the Card Sale to MERCHANT if such failure results in WEX not being able to collect from the Cardholder.
1.4    DATA INPUT AND TRANSMISSION
A.    Merchant is responsible for the data entry of Card Sale information by its personnel, or representatives.  All data shall meet the prevailing WEX Technical Specification and shall be in good and usable condition.
B.    If information pertaining to any Card Sale is garbled in transmission such that part or all of the record is likely to vary from what MERCHANT transmitted, WEX may advise MERCHANT of the suspected inaccuracy and request retransmission of the record or other appropriate confirmation.  WEX may, with notice to MERCHANT, withhold payment for such Card Sales until the record is retransmitted or MERCHANT provides other appropriate confirmation.
C.    If MERCHANT has not provided WEX with required information or if WEX needs to interpret, verify, or validate a Card Sale, WEX may, withhold payment for such Card Sale until MERCHANT sends WEX the necessary information.  WEX may make appropriate adjustments in its settlements with MERCHANT to reflect the receipt or correction of any such Card Sale information.  WEX shall provide notice to 
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MERCHANT of any Card Sale that it is not able to process due to errors or missing information through its daily settlement reports.
D.    MERCHANT shall submit all Card Sales to WEX for processing within [***] of the transaction date.  WEX may accept transactions up to [***] from the date of the transaction for processing and billing to the fleet, however, WEX reserves the right to chargeback any such transaction that is disputed by a fleet customer.
1.5    CHARGEBACKS
A.    Chargebacks shall be made only for Card Sales (i) that are disputed by Cardholder and for which an authorization was not obtained by Merchant, (ii) were for unauthorized Products, (iii) were fraudulently made by an employee of MERCHANT or (iv) the WEX Card Sale Procedures were not followed by Merchant.  MERCHANT shall remain liable for all outstanding Chargebacks.
B.    Any obligation to pay a Chargeback pursuant to this Agreement shall be unconditional and shall not be waived, released or affected by any settlement, extension, compromise of forbearance or other agreement made or granted by WEX with or to any Cardholder or obligor.  Failure to issue a Chargeback with knowledge of a breach of warranty or other defect shall not be deemed a waiver of any of WEX’s rights with respect to such a Card Sale.  WEX will expend normal business efforts to pursue remedies against Cardholders but shall not be required to exhaust its remedies against Cardholders or others as a condition precedent to requiring performance by MERCHANT of its obligations hereunder.  Notwithstanding the foregoing, there shall be no Chargeback, or the Chargeback shall be reversed, as applicable, if the Cardholder pays WEX and has no further right to dispute the underlying charge or receive its payment back from WEX whether by contract right or regulation.
1.6    Checks.  Cardholders may present a check issued by WEX for the purchase of Products or for cashing.  The check should be filled out completely and include an authorization number or other code.  MERCHANT may obtain or verify this code using the POS device, or by calling the customer service number listed on the check or the back of cardholders’ actual card.  MERCHANT shall follow the verification procedures provided by WEX prior to accepting or cashing the check.  Please note that even if there is an authorization number included on the check at the time presented to you, you are still required to validate the authorization number prior to accepting or cashing the check.
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Exhibit B 
WEX Fee, Settlement 
Timing, and Other Fees
WEX Fees and Settlement:
A.    Any amounts due to MERCHANT from WEX as a result of the submission of a sales draft may be paid, at MERCHANTS option, to MERCHANT’S designee, based on the banking information that is provided to WEX.  WEX’S payment to MERCHANT’S designee constitutes payment in full to MERCHANT.
B.    For each Card (described below) used by a Cardholder to purchase Product for a particular transaction type (described below), WEX shall pay Merchant [***].  Settlements will be made in batches [***] on the payment schedule below (each a “Settlement”).
C.    Transactions of the same transaction type (funded or direct bill) containing both a cash advance along with other Products (such as fuel) will be considered one transaction and only be charged the WEX Fee applicable to the other Product.
															
	Program		Transaction Type	WEX Fee	Settlement Date from the Posting Date (see sample payment schedule attached as Exhibit B-2)
	[***]	[***]	[***]	[***]	[***] business day by ACH
		[***]	[***]	[***]	[***] business day by ACH
			[***]	[***]	[***] business day by ACH
			[***]	[***]	[***] business day by ACH
	[***]	[***]	[***]	[***]	[***] business day by ACH
		[***]	Funded - Other Products	[***]	[***] business day by ACH

						
	Other
		
	Voice Authorization (provided that such authorization is not required as a result of the unavailability of WEX’s automated authorization system)	[***]
	Corporate Settlement	[***]

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Exhibit B-1
Sample Payment Schedule
TA Settlement Schedule — [***]
															
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]	[***]

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