Document:

Exhibit 4.3

 

EXECUTION VERSION

 

 

 

 

 

EIGHTH SUPPLEMENTAL INDENTURE

 

between

 

HOSPITALITY PROPERTIES TRUST

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

 

 

 

Dated as of September 18, 2019

 

 

 

SUPPLEMENTAL TO THE INDENTURE DATED AS OF
FEBRUARY 3, 2016

 

 

 

 

 

 

HOSPITALITY PROPERTIES TRUST

 

4.950% Senior Notes due 2029

 

 

 

 

 

 

 

    

     

    

 

This EIGHTH SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”) dated as of September 18, 2019 between Hospitality Properties Trust,
a real estate investment trust organized and existing under the laws of the State of Maryland (the “Company”)
having its principal office at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, and U.S. Bank National
Association, a national banking organization organized and existing under the laws of the United States, as Trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company and the
Trustee are parties to an Indenture, dated as of February 3, 2016 (as from time to time hereafter amended, supplemented or otherwise
modified, the “Base Indenture” and, together with this Supplemental Indenture, as amended, supplemented or otherwise
modified from time to time, the “Indenture”) to provide for the future issuance of the Company’s senior
unsecured debentures, notes or other evidences of indebtedness (the “Securities”) to be issued from time to
time in one or more series; and

 

Pursuant to the terms
of the Base Indenture, the Company desires to provide for the establishment of a series of its Securities, to be known as its 4.950%
Senior Notes due 2029, the form and substance of such Securities and the terms, provisions and conditions thereof to be set forth
as provided in the Indenture;

 

NOW, THEREFORE, THIS
SUPPLEMENTAL INDENTURE WITNESSETH:

 

ARTICLE
1

DEFINED TERMS

 

Section
1.1               Terms Defined
in Indenture. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.

 

Section
1.2               Supplemental
Definitions. The following definitions supplement, and, to the extent inconsistent with, replace the definitions in Section 101
of the Base Indenture:

 

“Acquired
Debt” means Debt of a Person (i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection
with the acquisition of assets from such Person, in each case, other than Debt incurred in connection with, or in contemplation
of, such Person becoming a Subsidiary or such acquisition. Acquired Debt shall be deemed to be incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.

 

“Adjusted
Total Assets” has the meaning provided in clause (i) of Section 3.1(a) hereof.

 

“Annual Debt
Service” as of any date means the maximum amount which is expensed in any 12-month period for interest on Debt of the
Company and its Subsidiaries, excluding amortization of debt discounts and deferred financing costs.

 

    

     

    

 

“Business
Day” means any day other than a Saturday or Sunday or a day on which banking institutions in The City of New York or
in the city in which the Corporate Trust Office is located are required or authorized to close.

 

“Capital Stock”
means, with respect to any Person, any capital stock (including preferred stock), shares, interests, participation or other ownership
interests (however designated) of such Person and any rights (other than debt securities convertible into or exchangeable for capital
stock), warrants or options to purchase any thereof.

 

“Cash Equivalents”
means demand deposits, certificates of deposit or repurchase agreements with banks or other financial institutions, marketable
obligations issued or directly and fully guaranteed as to timely payment by the United States of America or any of its agencies
or instrumentalities, or any commercial paper or other obligation rated, at time of purchase, “P-2” (or its equivalent)
or better by Moody’s or “A-2” (or its equivalent) or better by Standard & Poor’s.

 

“Consolidated
Income Available for Debt Service” for any period means Earnings from Operations of the Company and its Subsidiaries
plus amounts which have been deducted, and minus amounts which have been added, for the following (without duplication): (i) interest
on Debt of the Company and its Subsidiaries, (ii) cash reserves made by lessees as required by the Company’s leases for periodic
replacement and refurbishment of the Company’s assets, (iii) provision for taxes of the Company and its Subsidiaries based
on income, (iv) amortization of debt discounts and deferred financing costs, (v) provisions for gains and losses on properties
and property depreciation and amortization, (vi) the effect of any noncash charge resulting from a change in accounting principles
in determining Earnings from Operations for such period and (vii) amortization of deferred charges.

 

“Debt”
of the Company or any Subsidiary means, without duplication, any indebtedness of the Company or any Subsidiary, whether or not
contingent, in respect of:

 

(i)            
borrowed money or evidenced by bonds, notes, debentures or similar instruments;

 

(ii)           
indebtedness for borrowed money secured by any Encumbrance existing on property owned by the Company or any Subsidiary,
to the extent of the lesser of (x) the amount of indebtedness so secured or (y) the fair market value of the property subject to
such Encumbrance;

 

(iii)            the reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued
(other than letters of credit issued to provide credit enhancement or support with respect to other indebtedness of the Company
or any Subsidiary otherwise reflected as Debt hereunder) or amounts representing the balance deferred and unpaid of the purchase
price of any property or services, except any such balance that constitutes an accrued expense or trade payable, or all conditional
sale obligations or obligations under any title retention agreement;

 

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(iv)          
the principal amount of all obligations of the Company or any Subsidiary with respect to redemption, repayment or
other repurchase of any Disqualified Stock; or

 

(v)            any
lease of property by the Company or any Subsidiary as lessee which is reflected on the Company’s consolidated balance sheet
as a capitalized lease in accordance with generally accepted accounting principles,

 

to the extent, in the
case of items of indebtedness under (i) through (v) above, that any such items (other than letters of credit) would be properly
classified as a liability on the Company’s consolidated balance sheet in accordance with generally accepted accounting principles.
Debt also (1) excludes any indebtedness (A) with respect to which a defeasance or covenant defeasance or discharge has been effected
(or an irrevocable deposit is made with a trustee in an amount at least equal to the outstanding principal amount of such indebtedness,
the remaining scheduled payments of interest thereon to, but not including, the applicable maturity date or redemption date, and
any premium or otherwise as provided in the terms of such indebtedness) in accordance with the terms thereof or which has been
repurchased, retired, repaid, redeemed, irrevocably called for redemption (and an irrevocable deposit is made with a trustee in
an amount at least equal to the outstanding principal amount of such indebtedness, the remaining scheduled payments of interest
thereon to, but not including, such redemption date, and any premium) or otherwise satisfied or (B) that is secured by cash or
Cash Equivalents irrevocably deposited with a trustee in an amount, in the case of this clause (B), at least equal to the outstanding
principal amount of such indebtedness and the remaining scheduled payments of interest thereon and (2) includes, to the extent
not otherwise included, any obligation by the Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business), Debt of another Person (other than the Company or any
Subsidiary) (it being understood that Debt shall be deemed to be incurred by the Company or any Subsidiary whenever the Company
or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof).

 

“Depositary”
has the meaning provided in Section 2.1(d) hereof.

 

“Disqualified
Stock” means, with respect to any Person, any Capital Stock of such Person which by the terms of such Capital Stock (or
by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of
any event or otherwise (i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than
Capital Stock which is redeemable solely in exchange for Capital Stock which is not Disqualified Stock or for Subordinated Debt),
(ii) is convertible into or exchangeable or exercisable for Debt, other than Subordinated Debt, or Disqualified Stock, or (iii)
is redeemable at the option of the holder thereof, in whole or in part (other than Capital Stock which is redeemable solely in
exchange for Capital Stock which is not Disqualified Stock or for Subordinated Debt), in each case on or prior to the Stated Maturity
of the principal of the Notes (as defined below).

 

“Earnings
from Operations” for any period means net earnings excluding gains and losses on sales of investments, extraordinary
items, gains and losses from early extinguishment of debt and property valuation losses, in each case as reflected in the financial
statements of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with generally
accepted accounting principles.

 

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“Encumbrance”
means any mortgage, lien, charge, pledge, security interest or other encumbrance of any kind.

 

“Interest
Payment Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(e)
of this Supplemental Indenture.

 

“Joint Venture
Interests” means assets of the Company and its Subsidiaries constituting an equity investment in real estate assets or
other properties, or in an entity holding real estate assets or other properties, jointly owned by the Company and its Subsidiaries,
on the one hand, and one or more other Persons not constituting Affiliates of the Company, on the other hand, excluding any entity
or properties (i) which is a Subsidiary or are properties if the co-ownership thereof (if in a separate entity) would constitute
or would have constituted a Subsidiary, or (ii) to which, at the time of determination, the Company’s manager at such time
or an Affiliate of the Company’s manager at such time provides management services. In no event shall Joint Venture Interests
include equity securities that are part of a class of equity securities that are traded on a national or regional securities exchange
or a recognized over-the-counter market or any investments in debt securities, mortgages or other Debt.

 

“Make-Whole
Amount” means, in connection with any optional redemption of any Notes prior to July 1, 2029, the excess, if any, of
(i) the aggregate present value as of the date of such redemption of each dollar of principal being redeemed and the amount of
interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of such dollar if such
redemption had been made on July 1, 2029, determined by discounting, on a semiannual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given) from the respective
dates on which such principal and interest would have been payable if such redemption had been made on July 1, 2029, over (ii)
the aggregate principal amount of the Notes being redeemed. In the case of any redemption of Notes on or after July 1, 2029, the
Make-Whole Amount means zero. The Make-Whole Amount shall be calculated by the Company and set forth in an Officer’s Certificate
delivered to the Trustee, and the Trustee shall be entitled to rely on said Officer’s Certificate.

 

“Moody’s”
means Moody’s Investors Service, Inc., or any successor thereof.

 

“Notes”
means the Company’s 4.950% Senior Notes due 2029, issued under this Supplemental Indenture and the Indenture, as amended
or supplemented from time to time.

 

“Regular Record
Date” with respect to the Notes is defined in Section 101 of the Base Indenture and Section 2.1(e)
of this Supplemental Indenture.

 

“Reinvestment
Rate” means a rate per annum equal to the sum of 0.50% (fifty one hundredths of one percent) and the arithmetic mean
of the daily yields published in the Statistical Release on treasury securities at constant maturity for the maturity (rounded
to the nearest month) corresponding to the remaining life to maturity (which, in the case of maturities corresponding to the principal
and interest due on the Notes at their maturity, shall be deemed to be July 1, 2029), of the Notes being redeemed. If no maturity
exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall
be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For purposes of calculating
the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount
shall be used.

 

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“Secured Debt”
means Debt of the Company or its Subsidiaries secured by an Encumbrance on the property of the Company or its Subsidiaries.

 

“Significant
Subsidiary” means any Subsidiary which is a “significant subsidiary” (within the meaning of Regulation S-X,
promulgated by the Commission under the Securities Act) of the Company.

 

“SMTA Purchase
Agreement” means that certain Equity Purchase Agreement, dated as of June 2, 2019, among the Company, Spirit MTA REIT,
SMTA Financing JV, LLC and Banner NewCo LLC, as the same may from time to time be amended, modified, and supplemented in accordance
with its terms.

 

“SMTA Transaction”
means the transactions contemplated by the SMTA Purchase Agreement.

 

“Special
Mandatory Redemption Date” has the meaning provided in Section 2.1(h)(i) hereof.

 

“Special
Mandatory Redemption Event” has the meaning provided in Section 2.1(h)(i) hereof.

 

“Special
Mandatory Redemption Notice” has the meaning provided in Section 2.1(h)(ii) hereof.

 

“Special
Mandatory Redemption Price” has the meaning provided in Section 2.1(h)(i) hereof.

 

“Standard
 & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services
LLC business, or any successor thereof.

 

“Statistical
Release” means the statistical release designated “Selected Interest Rates (Daily) — H.15” or any successor
publication which is published by the Federal Reserve System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination under
this Supplemental Indenture, then any publicly available source of similar market data used for this purpose in accordance with
customary market practice which shall be designated by the Company.

 

“Subordinated
Debt” means Debt which by the terms of such Debt is subordinated in right of payment to the principal of and interest
and premium, if any, on the Notes.

 

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“Subsidiary”
means any corporation or other Person of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding
equity interests of which are owned, directly or indirectly, by the Company or one or more other Subsidiaries of the Company. For
the purposes of this definition, “voting equity securities” means equity securities having voting power for the election
of directors or persons serving comparable functions as directors, whether at all times or only so long as no senior class of security
has such voting power by reason of any contingency.

 

“Total Assets”
as of any date means the sum of (i) the Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with generally accepted accounting principles (but excluding accounts receivable and intangibles).

 

“Total Unencumbered
Assets” as of any date means the sum of (i) Undepreciated Real Estate Assets not securing any portion of Secured Debt
and (ii) the amount of all other assets of the Company and its Subsidiaries not securing any portion of Secured Debt, in each case
on such date determined on a consolidated basis in accordance with generally accepted accounting principles (but excluding accounts
receivable and intangibles); provided that, in determining Total Unencumbered Assets as a percentage of the aggregate outstanding
principal amount of the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis for purposes of the covenant
set forth in Section 3.1(b) of this Supplemental Indenture, Joint Venture Interests shall be excluded from Total Unencumbered
Assets to the extent such Joint Venture Interests would otherwise be included therein.

 

“Undepreciated
Real Estate Assets” as of any date means the cost (original cost plus capital improvements) of real estate assets of
the Company and its Subsidiaries on such date, before depreciation and amortization determined on a consolidated basis in accordance
with generally accepted accounting principles.

 

“Unsecured
Debt” means any Debt of the Company or its Subsidiaries which is not Secured Debt.

 

ARTICLE
2

TERMS OF THE NOTES

 

Section
2.1                Terms of the
Notes. Pursuant to Section 301 of the Base Indenture, the Notes shall have the following terms and conditions:

 

(a)              
Title. The Notes shall be in registered form under the Indenture and shall be known as the Company’s
 “4.950% Senior Notes due 2029.”

 

(b)              
Aggregate Principal Amount. Except (i) as provided in this Section and (ii) for Notes authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305,
306, 906 or 1107 of the Base Indenture and except for any Notes which, pursuant to Section 303
of the Base Indenture, are deemed never to have been authenticated and delivered hereunder, the Notes will be limited to an aggregate
principal amount of $425,000,000, subject to the right of the Company to reopen such series for issuances of additional Notes having
the same terms and conditions as the Notes first issued except for issue date, issue price and, if applicable, the first Interest
Payment Date thereon and related interest accrual date.

 

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(c)              
Form of Notes. The Notes (together with the Trustee’s certificate of authentication) shall be substantially
in the form of Exhibit A hereto, which is hereby incorporated in and made a part of this Supplemental Indenture.

 

(d)              
Registered Securities in Book Entry Form. The Notes shall be initially issued in the form of one or more registered
Global Securities without coupons (each, a “Global Note”) and shall be deposited with, or on behalf of, The
Depository Trust Company (“DTC” and, together with any successor depositary with respect to the Global Notes
appointed under the Indenture, the “Depositary”) and registered in the name of DTC’s nominee, Cede &
Co. Unless and until it is exchanged in whole or in part for the individual Notes represented thereby under the circumstances described
below, a Global Note may not be transferred except as a whole by a Depositary to its nominee, by a nominee of a Depositary to such
Depositary or another nominee of such Depositary, or by a Depositary or its nominee to a successor Depositary or a nominee of such
successor.

 

So long as a Depositary
or its nominee is the registered owner of a Global Note, such Depositary or its nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by such Global Note for all purposes under this Supplemental Indenture. Except
as provided below, owners of a beneficial interest in Notes evidenced by a Global Note will not be entitled to have any of the
individual Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical
delivery of any such Notes in definitive form and will not be considered the owners or holders thereof under the Indenture for
any purpose, including with respect to giving of any direction, instructions or approvals to the Trustee hereunder.

 

A Global Note may be
exchanged in whole or in part for individual Notes represented thereby only if (i) the Depositary (A) has notified the Company
that it is unwilling or unable to continue as a depositary for such Global Note or (B) has ceased to be a clearing agency registered
under the Exchange Act, and in either case a successor depositary shall not have been appointed by the Company within 90 days of
such notice or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Note and the Security
Register has received a written request from an owner of beneficial interest in such Global Note. In any such case, the Company
will issue individual Notes in exchange for such Global Note representing such Notes in authorized denominations.

 

Notwithstanding any provisions
of Section 2.1(e) or Section 2.1(f) of this Supplemental Indenture to the contrary, payments of principal, premium,
if any, and interest on any Global Note shall be made in accordance with the procedures of the Depositary and its participants
in effect from time to time.

 

(e)              
Interest and Interest Rate. The Notes will bear interest at a rate of 4.950% per annum, from September 18,
2019 (or, in the case of Notes issued upon the reopening of this series of Notes, from the date designated by the Company in connection
with such reopening), or from the immediately preceding Interest Payment Date to which interest has been paid or duly provided
for, payable semi-annually in arrears on April 1 and October 1 of each year, commencing April 1, 2020, or if such day is not a
Business Day, on the next succeeding Business Day (each of which shall be an “Interest Payment Date”), to the
Persons in whose names the Notes are registered in the Security Register at the close of business on the Regular Record Date for
such interest, which shall be March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date (each, a “Regular Record Date”).

 

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(f)               
Principal Repayment; Currency. The Stated Maturity of the principal of the Notes is October 1, 2029; provided,
however, the Notes may be earlier redeemed at the option of the Company as provided in Section 2.1(g) below or may
be required to be earlier redeemed by the Company as provided in Section 2.1(h) below. The principal of each Note payable
on its maturity date shall be paid against presentation and surrender thereof at the Corporate Trust Office of the Trustee, in
such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public or private
debts.

 

(g)              
Redemption at the Option of the Company. The Notes will be subject to redemption in whole at any time or in
part from time to time prior to their maturity at the option of the Company upon not less than 30 nor more than 60 days’
notice to each Holder of Notes to be redeemed at its address appearing in the Security Register, or, in the case of any Global
Note, in accordance with the procedures of the Depositary and its participants in effect from time to time, at a redemption price
equal to the sum of (i) the principal amount of the Notes being redeemed, plus accrued and unpaid interest, if any, from the date
of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but not including,
the applicable Redemption Date, plus (ii) the Make-Whole Amount, if any (it being understood that if the Notes are redeemed on
or after July 1, 2029, the Make-Whole Amount equals zero).

 

(h)              
Special Mandatory Redemption.

 

(i)           
If the SMTA Transaction is not completed on or prior to December 31, 2019, or if, on or at any time prior to
that date, the SMTA Purchase Agreement is terminated (each, a “Special Mandatory Redemption Event”), the Company
will be required to redeem on the Special Mandatory Redemption Date (as defined below) all of the Notes then outstanding at a special
mandatory redemption price equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest from the date
of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but excluding,
the Special Mandatory Redemption Date (such price, the “Special Mandatory Redemption Price”).

 

The “Special Mandatory
Redemption Date” means the date specified in the notice of special mandatory redemption (as described below) delivered
to the Holders, which date shall be three Business Days after such notice is mailed.

 

(ii)          
Upon the occurrence of a Special Mandatory Redemption Event, the Company will promptly (but in no event later than
five Business Days following such Special Mandatory Redemption Event) cause a notice of redemption (the “Special Mandatory
Redemption Notice”) to be transmitted to each Holder of the Notes.

 

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(iii)          Any
Special Mandatory Redemption Notice shall state: (1) the Special Mandatory Redemption Date; (2) the Special Mandatory Redemption
Price; (3) that on the Special Mandatory Redemption Date, the Special Mandatory Redemption Price shall become due and payable;
(4) the place or places where the Notes are to be surrendered for payment of the Special Mandatory Redemption Price; (5) that
the Notes shall cease to bear interest on and after the Special Mandatory Redemption Date; and (6) the CUSIP and/or ISIN numbers,
if any, printed on the Notes; provided, however, that such notice may state that no representation is made to the correctness
of such numbers.

 

(iv)          One Business Day prior to the Special Mandatory Redemption Date, the Company will deposit with the Trustee funds
sufficient to pay the Special Mandatory Redemption Price on all outstanding Notes.

 

(v)           The
Notes shall, on the Special Mandatory Redemption Date, become due and payable, and shall be paid by the Company, at the Special
Mandatory Redemption Price. If the deposit is made by the Company as described in Section 2.1(h)(iv) hereof, the Notes shall cease
to bear interest on and after the Special Mandatory Redemption Date and all rights under such Notes (other than the right to receive
the Special Mandatory Redemption Price) shall terminate.

 

(i)               Notices.
Notices to the Company shall be directed to it at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634,
fax number (617) 796-8349, Attention: President; notices to the Trustee shall be directed to it at One Federal Street, 3rd Floor,
Boston, Massachusetts 02110, fax number (617) 603-6683, Attention: Corporate Trust Department, Re: Hospitality Properties Trust
4.950% Senior Notes due 2029, or as to either party, at such other address as shall be designated by such party in a written notice
to the other party.

 

(j)               Legal
Holidays. If any Interest Payment Date, Stated Maturity date or Redemption Date, including a Special Mandatory Redemption
Date, for the Notes falls on a day that is not a Business Day, the payment otherwise payable on such day will be due and payable
on the next succeeding Business Day, and no interest will accrue thereon for the period from and after such Interest Payment Date,
Stated Maturity date or Redemption Date, as the case may be, through such next succeeding Business Day. The provisions of this
Section 2.1(j) shall supersede and replace Section 113 of the Base Indenture with respect to the Notes.

 

ARTICLE
3

ADDITIONAL COVENANTS

 

Section
3.1               Additional
Covenants of the Company. In addition to the covenants of the Company set forth in Article Eight and Article Ten of the Base
Indenture, for the benefit of the Holders of the Notes:

 

(a)             
Limitations on Incurrence of Debt.

 

(i)             The
Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to the incurrence
of such additional Debt and the application of the proceeds therefrom, the aggregate principal amount of all outstanding Debt
of the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles
is greater than 60% of the sum of (without duplication):

 

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(A)              the
Total Assets of the Company and its Subsidiaries as of the end of the fiscal quarter covered in the Company’s Annual Report
on Form 10-K, or its Quarterly Report on Form 10-Q, as the case may be, most recently filed with the Commission (or, if such filing
is not permitted or required under the Exchange Act, with the Trustee) prior to the incurrence of such additional Debt; and

 

(B)             
the purchase price of any real estate assets or mortgages receivable acquired, and the amount of any securities offering
proceeds received (to the extent that such proceeds were not used to acquire real estate assets or mortgages receivable or used
to reduce Debt), by the Company or any Subsidiary since the end of such fiscal quarter, including those proceeds obtained in connection
with the incurrence of such additional Debt.

 

For purposes of this Supplemental Indenture, the sum
of (A) and (B) above is the Company’s “Adjusted Total Assets.”

 

(ii)          
The Company will not, and will not permit any Subsidiary to, incur any Secured Debt if, immediately after giving
effect to the incurrence of such additional Secured Debt and the application of the proceeds therefrom, the aggregate principal
amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with
generally accepted accounting principles is greater than 40% of Adjusted Total Assets.

 

(iii)         
The Company will not, and will not permit any Subsidiary to, incur any Debt if, immediately after giving effect to
the incurrence of such additional Debt and on a pro forma basis, including the application of the proceeds therefrom, the ratio
of Consolidated Income Available for Debt Service to the Annual Debt Service for the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Debt is to be incurred is less than 1.5 to 1.0, calculated on the assumptions
that:

 

(A)          
such Debt and any other Debt incurred by the Company and its Subsidiaries on a consolidated basis since the first
day of such four-quarter period and the application of the proceeds therefrom, including to refinance other Debt, had occurred
at the beginning of such period;

 

(B)          
the repayment, retirement or other discharge of any other Debt by the Company and its Subsidiaries on a consolidated
basis since the first day of such four-quarter period had occurred at the beginning of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such
Debt during such period);

 

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(C)            in
the case of Acquired Debt or Debt incurred in connection with or in contemplation of any acquisition, including any Person becoming
a Subsidiary, since the first day of such four-quarter period, the related acquisition had occurred as of the first day of such
period with appropriate adjustments with respect to such acquisition being included in such pro forma calculation; and

 

(D)          
in the case of any acquisition or disposition by the Company and its Subsidiaries of any asset or group of assets
since the first day of such four-quarter period, whether by merger, stock purchase or sale, or asset purchase or sale, such acquisition
or disposition or any related repayment of Debt had occurred as of the first day of such period with the appropriate adjustments
with respect to such acquisition or disposition being included in such pro forma calculation.

 

If the Debt
giving rise to the need to make the foregoing calculation or any other Debt incurred after the first day of the relevant four-quarter
period bears interest at a floating interest rate, then, for purposes of calculating the Annual Debt Service, the interest rate
on such Debt shall be computed on a pro forma basis as if the average interest rate which would have been in effect during the
entirety of such four-quarter period had been the applicable rate for the entirety of such period.

 

(b)              
Maintenance of Total Unencumbered Assets. The Company and its Subsidiaries will at all times maintain Total
Unencumbered Assets of not less than 150% of the aggregate outstanding principal amount of the Unsecured Debt of the Company and
its Subsidiaries on a consolidated basis in accordance with generally accepted accounting principles.

 

(c)              
Provision of Financial Information. Whether or not the Company is subject to Section 13 or 15(d) of the Exchange
Act, it will, within 15 days after each of the respective dates by which it would have been required to file annual reports, quarterly
reports and other documents with the Commission if it were so subject, (1) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such Holders, copies of the annual reports, quarterly reports and other
documents which it would have been required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, if
it were subject to such Sections, (2) file with the Trustee copies of the annual reports, quarterly reports and other documents
which it would have been required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, if it was subject
to such Sections, and (3) promptly upon written request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective Holder; provided that, the foregoing requirements shall be deemed satisfied if the
foregoing materials are available on the Commission’s EDGAR system or on the Company’s website within the applicable
time period. The Trustee shall have no liability or responsibility for the filing, timeliness or content of any such reports, documents
or information filed by the Company and delivery of such reports, documents or information to the Trustee is for informational
purposes only and receipt of such shall not constitute constructive notice thereof or any information contained therein.

 

Notwithstanding the
foregoing, if at any time the Notes are guaranteed by any direct or indirect parent company of the Company, the Company may satisfy
its obligations under this Section 3.1(c) with respect to financial information relating to the Company by furnishing financial
information relating to such direct or indirect parent company; provided, however, that the same is accompanied by consolidating
information that explains in reasonable detail the differences between the information relating to such direct or indirect parent
company and any of its Subsidiaries other than the Company and its Subsidiaries, on the one hand, and the information relating
to the Company and its Subsidiaries on a standalone basis, on the other hand.

 

    11

     

    

 

ARTICLE
4

OTHER PROVISIONS

 

Section
4.1               Sinking Funds
not Applicable.  Section 501(c) of the Base Indenture shall not be applicable to the Notes.

 

Section
4.2               Restatement
of Section 501(e) of Base Indenture. The provisions of Section 501(e) of the Base Indenture, as applied to the
Notes, shall be deemed to read as follows in lieu of the provisions set forth therein:

 

(e)       the
Company or one of its Significant Subsidiaries, if any, pursuant to or within the meaning of any Bankruptcy Law (i) commences a
voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, or (iii) consents to the appointment
of a Custodian of it or for all or substantially all of its property; or

 

Section
4.3               Restatement
of Section 501(f) of Base Indenture. The provisions of Section 501(f) of the Base Indenture, as applied to the
Notes, shall be deemed to read as follows in lieu of the provisions set forth therein:

 

(f)       a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company
or one of its Significant Subsidiaries in an involuntary case, (ii) appoints a Custodian of the Company or such Significant Subsidiary
or for all or substantially all of its property, or (iii) orders the liquidation of the Company or such Significant Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or

 

Section
4.4               Additional
Event of Default. In accordance with Section 501(g) of the Base Indenture, the following shall constitute an “Event
of Default” with respect to the Notes:

 

(a)             
default on the required payment in connection with a Special Mandatory Redemption Event when due and payable; or

 

(b)             
a default under any bond, debenture, note or other evidence of indebtedness of the Company, or under any mortgage,
indenture or other instrument of the Company (including a default with respect to debt securities issued under the Indenture other
than the Notes) under which there may be issued or by which there may be secured any indebtedness of the Company (or by any Subsidiary,
the repayment of which the Company has guaranteed or for which the Company is directly responsible or liable as obligor or guarantor),
whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay an aggregate
principal amount exceeding $50,000,000 of such indebtedness when due and payable after the expiration of any applicable grace period
with respect thereto and shall have resulted in such indebtedness in an aggregate principal amount exceeding $50,000,000 becoming
or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or annulled, within a period of ten days after there shall have
been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of
more than 25% in aggregate principal amount of the Outstanding Notes, a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such
notice is a “Notice of Default” under the Indenture.

 

    12

     

    

 

Section
4.5                No
Make-Whole Amount or Special Mandatory Redemption Price Upon Acceleration. Notwithstanding any provisions to the contrary
in the Base Indenture, upon any acceleration of the Notes under Section 502 of the Base Indenture, the amount immediately due
and payable in respect of the Notes shall equal the outstanding principal amount thereof, plus accrued and unpaid interest thereon.

 

Section
4.6                Satisfaction
and Discharge.  Article Four of the Base Indenture applies to the Notes, except for the proviso at the end of Section
401(a).

 

Section
4.7               Applicability
of Defeasance and Covenant Defeasance Provisions.  Article Thirteen of the Base Indenture, including provisions
for Defeasance and Covenant Defeasance, applies to the Notes, except for the proviso at the end of the first sentence of Section
1304(a).

 

Section
4.8                Restatement
of Section 608 of Base Indenture. The provisions of Section 608 of the Base Indenture, as applied to the Notes,
shall be deemed to read as follows in lieu of the provisions set forth therein:

 

If the Trustee
has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and
this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of
being a trustee under this Indenture with respect to Securities of more than one series or a trustee under that certain Indenture,
dated as of February 25, 1998, between the Company and U.S. Bank National Association (as successor in interest to State Street
Bank and Trust Company).

 

ARTICLE
5

EFFECTIVENESS

 

This Supplemental Indenture
shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the
Company and the Trustee in accordance with Article Nine of the Base Indenture. As supplemented hereby, the Base Indenture is hereby
confirmed as being in full force and effect.

 

    13

     

    

 

ARTICLE
6

MISCELLANEOUS

 

Section
6.1                Separability.
In the event any provision of this Supplemental Indenture shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision hereof or any provision of the Indenture.

 

Section
6.2                Construction
of Terms. To the extent that any terms of this Supplemental Indenture or the Notes are inconsistent with the terms of the Base
Indenture, the terms of this Supplemental Indenture or the Notes shall govern and supersede such inconsistent terms.

 

Section
6.3                Effect
of Headings. The section headings herein are for convenience only and shall not affect the construction hereof.

 

Section
6.4                Governing
Law. This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

Section
6.5                Counterparts.
This Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

 

[Signature Page Follows]

 

    14

     

    

 

IN WITNESS WHEREOF,
the Company and the Trustee have caused this Supplemental Indenture to be executed as an instrument under seal in their respective
corporate names as of the date first above written.

 

	 	HOSPITALITY PROPERTIES TRUST
	 	 
	 	 
	 	By:	 /s/ Brian E. Donley 
	 	 	Name: 	Brian E. Donley
	 	 	Title: 	Chief Financial Officer and Treasurer
	 	 
	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as

                                                                                        Trustee

	 	 
	 	 
	 	By: 	/s/ David W. Doucette
	 	 	Name: 	David W. Doucette
	 	 	Title: 	Vice President

 

[Signature Page to Eighth Supplemental
Indenture]

 

    

     

    

 

 EXHIBIT
A

 

FORM OF NOTE

 

[Form of Face of Security]

 

[Insert Applicable Legends]

 

HOSPITALITY PROPERTIES TRUST

 

4.950%
Senior Notes due 2029

 

	No.              	$                        

 

Hospitality Properties
Trust, a real estate investment trust duly organized and existing under the laws of Maryland (herein called the “Company”,
which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay
to _____________________________, or registered assigns, the principal sum of ___________________ Dollars ($_____________) on October
1, 2029, and to pay interest thereon from September 18, 2019 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on April 1 and October 1 in each year, commencing April 1, 2020 at the rate of 4.950%
per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which
shall be March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities
of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

Payment of the principal
of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained
for that purpose in such coin or currency of the United States of America as at the time of payment is legal tender for payment
of public and private debts or, in the case of any Note that is a Global Security, in accordance with the procedures of The Depository
Trust Company (“DTC”), or any successor depositary with respect to the Global Notes appointed under the Indenture,
the “Depositary”), and its participants in effect from time to time; provided, however, that at
the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.

 

Reference is hereby
made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

 

Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

THE AMENDED AND RESTATED
DECLARATION OF TRUST ESTABLISHING HOSPITALITY PROPERTIES TRUST, DATED AUGUST 21, 1995, AS AMENDED AND SUPPLEMENTED, AS FILED WITH
THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT
OF HOSPITALITY PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, HOSPITALITY PROPERTIES TRUST. ALL PERSONS DEALING WITH HOSPITALITY PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE
ASSETS OF HOSPITALITY PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

    	 	A-1	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this instrument to be duly executed.

  

	Dated:	HOSPITALITY PROPERTIES TRUST
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	 
	CERTIFICATE OF AUTHENTICATION
	 	 
	Dated:	 

 

 

This is one of the
Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

  

    	 	A-2	 

     

    

 

[Form of Reverse of Security]

 

1.           General.
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”),
issued and to be issued in one or more series under an Indenture, dated as of February 3, 2016 (the “Base Indenture”),
between the Company and U.S. Bank National Association (herein called the “Trustee”, which term includes any
successor trustee under the Base Indenture), as supplemented by a Eighth Supplemental Indenture, dated as of September 18, 2019
(as amended, supplemented or otherwise modified from time to time, the “Supplemental Indenture” and the Base
Indenture, as supplemented by such Supplemental Indenture, the “Indenture”), between the Company and the Trustee,
and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is one of the series designated on the face hereof (such series, the “Notes”).

 

2.           Optional
Redemption. The Notes will be subject to redemption in whole at any time or in part from time to time prior to their maturity
at the option of the Company upon not less than 30 nor more than 60 days’ notice by mail to each Holder of Notes to be redeemed
at its address appearing in the Security Register or, in the case of any Note that is a Global Security, in accordance with the
procedures of the Depositary and its participants in effect from time to time, at a redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed plus accrued interest and unpaid interest, if any, from the date of initial issuance,
or the most recent date to which interest has been paid or provided for, whichever is later, to, but not including, the applicable
Redemption Date and (ii) the Make-Whole Amount, if any (it being understood that if the Notes are redeemed on or after July 1,
2029, the Make-Whole Amount equals zero).

 

As used herein the
term “Make-Whole Amount” means, in connection with any optional redemption of any Notes prior to July 1, 2029,
the excess, if any, of (i) the aggregate present value as of the date of such redemption of each dollar of principal being redeemed
and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of
such dollar if such redemption had been made on July 1, 2029, determined by discounting, on a semiannual basis, such principal
and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given)
from the respective dates on which such principal and interest would have been payable if such redemption had been made on July
1, 2029, over (ii) the aggregate principal amount of the Notes being redeemed. In the case of any redemption of Notes on or after
July 1, 2029, the Make-Whole Amount means zero. The Make-Whole Amount shall be calculated by the Company and set forth in an Officer’s
Certificate delivered to the Trustee, and the Trustee shall be entitled to rely on said Officer’s Certificate.

 

As used herein the
term “Reinvestment Rate” means a rate per annum equal to the sum of 0.50% (fifty one hundredths of one percent)
and the arithmetic mean of the daily yields published in the Statistical Release on treasury securities at constant maturity for
the maturity (rounded to the nearest month) corresponding to the remaining life to maturity (which, in the case of maturities corresponding
to the principal and interest due on the Notes at their maturity, shall be deemed to be July 1, 2029), of the Notes being redeemed.
If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such
maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For purposes
of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole
Amount shall be used.

 

As used herein the
term “Statistical Release” means the statistical release designated “Selected Interest Rates (Daily) —
H.15” or any successor publication which is published by the Federal Reserve System and which establishes yields on actively
traded United States government securities adjusted to constant maturities or, if such statistical release is not published at
the time of any determination under the Supplemental Indenture, then any publicly available source of similar market data used
for this purpose in accordance with customary market practice which shall be designated by the Company.

 

    	 	A-3	 

     

    

 

Except for the mandatory
redemption described in Section 3, the Company shall not be required to make sinking fund or redemption payments with respect to
the Notes.

 

In the event of redemption
of this Security in part only, a new Note or Notes and of like tenor for the unredeemed portion hereof will be issued in the name
of the Holder hereof upon the cancellation hereof.

 

3.           Special
Mandatory Redemption.

 

(i)          If
the SMTA Transaction is not completed on or prior to December 31, 2019, or if, on or at any time prior to that date, the SMTA Purchase
Agreement is terminated (each, a “Special Mandatory Redemption Event”), the Company will be required to redeem
on the Special Mandatory Redemption Date (as defined below) all of the Notes then outstanding at a special mandatory redemption
price equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest from the date of initial issuance,
or the most recent date to which interest has been paid or provided for, whichever is later, to, but excluding, the Special Mandatory
Redemption Date (such price, the “Special Mandatory Redemption Price”).

 

The “Special
Mandatory Redemption Date” means the date specified in the notice of special mandatory redemption (as described below)
delivered to the Holders, which date shall be three Business Days after such notice is mailed.

 

(ii)         Upon
the occurrence of a Special Mandatory Redemption Event, the Company will promptly (but in no event later than five Business Days
following such Special Mandatory Redemption Event) cause a notice of redemption (the “Special Mandatory Redemption Notice”)
to be transmitted to each Holder of the Notes.

 

(iii)        Any
Special Mandatory Redemption Notice shall state: (1) the Special Mandatory Redemption Date; (2) the Special Mandatory
Redemption Price; (3) that on the Special Mandatory Redemption Date, the Special Mandatory Redemption Price shall become due
and payable; (4) the place or places where the Notes are to be surrendered for payment of the Special Mandatory Redemption
Price; (5) that the Notes shall cease to bear interest on and after the Special Mandatory Redemption Date; and (6) the CUSIP
and/or ISIN numbers, if any, printed on the Notes; provided, however, that such notice may state that no representation is
made to the correctness of such numbers.

 

(iv)
        One Business Day prior to the Special Mandatory Redemption
Date, the Company will deposit with the Trustee funds sufficient to pay the Special Mandatory Redemption Price on all outstanding
Notes.

 

(v)         The
Notes shall, on the Special Mandatory Redemption Date, become due and payable, and shall be paid by the Company, at the Special
Mandatory Redemption Price. If the deposit is made by the Company as described in Section 3(iv) hereof, the Notes shall cease to
bear interest on and after the Special Mandatory Redemption Date and all rights under such Notes (other than the right to receive
the Special Mandatory Redemption Price) shall terminate.

 

4.           Discharge
and Defeasance. The Indenture contains provisions for discharge or defeasance at any time of the entire indebtedness of this
Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.

 

5.           Defaults
and Remedies. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes, plus
accrued and unpaid interest thereon, may be declared due and payable in the manner and with the effect provided in the Indenture.

 

6.          Actions
of Holders. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal
amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

    	 	A-4	 

     

    

 

As provided in and
subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with
respect to the Indenture or this Security or for the appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes,
the Holders of not less than a majority in principal amount of the Notes at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity,
and the Trustee shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

7.           Payments
Not Impaired. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

8.          Denominations,
Transfer, Exchange. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Notes are issuable
only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount
of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall
be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

 

9.           Persons
Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to
the contrary.

 

10.         Defined
Terms. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

    	 	A-5	 

     

    

 

[ASSIGNMENT FORM]

 

ABBREVIATIONS

 

The following abbreviations,
when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

 

	TEN COM	--	as tenants in common	UNIF GIFT MIN ACT	--	 	Custodian	 
	TEN ENT	--	as tenants by the entireties	 	 	(Cust)	 	(Minor)
	JT TEN	--	as joint tenants with right of survivorship	 	 	Under Uniform Gifts to Minors
	 	 	and not as tenants in common	 	 	Act	 	 
	 	 	 	 	 	 	(State)	 
	 	 	 	 	 	 	 	 	 	 

Additional abbreviations may also
be used though not in the above list.

  

 

 

 

FOR VALUE RECEIVED, the undersigned registered
holder hereby sell(s), assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

 

	 	 
	 	 

  

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
OF ASSIGNEE

  

 

the within security and all rights thereunder, hereby irrevocably
constituting and appointing

 

                                                                                                                                                                                                                       Attorney
to transfer said security on the books of the Company with full power of substitution in the premises.

 

 

	Dated:  	 	 	Signed:	 

 

	 	Notice:  The signature to this assignment must correspond with the name as it appears upon the face of the within security in every particular, without alteration or enlargement or any change whatever.

 

	 	Signature Guarantee*:	 	 

 

	 	* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

  

    	 	A-6vive20190808_pre14a.htm

Exhibit 10.1

 

VIVEVE MEDICAL, INC.

AMENDED AND RESTATED

2013 STOCK OPTION AND INCENTIVE PLAN, as amended

 

SECTION 1.  GENERAL PURPOSE OF THE PLAN; DEFINITIONS

 

The name of the plan is the Viveve Medical, Inc. Amended and Restated 2013 Stock Option and Incentive Plan (the “Plan”). The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and other key persons (including consultants and prospective employees) of Viveve Medical, Inc. (the “Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

 

The following terms shall be defined as set forth below:

 

“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

“Administrator” is defined in Section 2(a).

 

“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock Awards, Unrestricted Stock Awards and Dividend Equivalent Rights.

 

“Board” means the Board of Directors of the Company.

 

“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

 

“Committee” means the Compensation Committee of the Board or a similar committee performing the functions of the Compensation Committee and that is comprised of not less than two Non-Employee Directors who are independent.

 

“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the Code.

 

“Deferred Stock Award” means Awards granted pursuant to Section 8.

 

“Dividend Equivalent Right” means Awards granted pursuant to Section 12.

 

“Effective Date” means the date on which the Plan is approved by stockholders as set forth in Section 19.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is traded on a national securities exchange the Fair Market Value of the Stock will equal the closing sales price as reported on the principal exchange or market for the Stock on such date. If there is no trading on such date, the determination shall be made by reference to the last date preceding such date for which there was trading.

 

1

 

 

“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

 

“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.

 

“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

 

“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.

 

“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more performance criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Stock Award or Deferred Stock Award. Each such period shall not be less than three months.

 

“Restricted Stock Award” means Awards granted pursuant to Section 7.

 

“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.

 

“Stock” means the Common Stock, par value $0.0001 per share, of the Company, subject to adjustments pursuant to Section 3.

 

“Stock Appreciation Right” means any Award granted pursuant to Section 6.

 

“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has a controlling interest, either directly or indirectly.

 

“Unrestricted Stock Award” means any Award granted pursuant to Section 9.

 

SECTION 2.  ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS

 

(a)     Committee. The Plan shall be administered by the Compensation Committee (the “Administrator”).

 

(b)     Powers of Administrator. The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:

 

(i) to select the individuals to whom Awards may from time to time be granted;

 

(ii) to determine the time or times of grant, and the extent, if any, of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;

 

(iii) to determine the number of shares of Stock to be covered by any Award;

 

(iv) to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the form of written instruments evidencing the Awards;

 

(v) to accelerate at any time the exercisability or vesting of all or any portion of any Award;

 

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(vi) subject to the provisions of Section 5(a)(ii), to extend at any time the period in which Stock Options may be exercised; and

 

(vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.

 

All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.

 

(c)     Delegation of Authority to Grant Awards.  The Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards, to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act or “covered employees” within the meaning of Section 162(m) of the Code. Any such delegation by the Administrator shall include a limitation as to the amount of Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price of any Stock Option or Stock Appreciation Right, the conversion ratio or price of other Awards and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.

 

(d)     Indemnification.  Neither the Board nor the Committee, nor any member of either or any delegatee thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Committee (and any delegatee thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s organizational documents or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.

 

SECTION 3.  STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

 

(a)     Stock Issuable.  Subject to adjustment as provided in Section 3(b) and Section 3(c), the maximum number of shares of Stock reserved and available for issuance under the Plan shall be 4,000,000 shares of Stock (the “Initial Limit). For purposes of this limitation, the shares of Stock underlying any Awards that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. Shares tendered or held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding shall not be available for future issuance under the Plan. In addition, upon exercise of Stock Appreciation Rights, the gross number of shares exercised shall be deducted from the total number of shares remaining available for issuance under the Plan.

 

Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than a grant date fair value equivalent of $1,000,000 of shares of Stock may be granted to any one individual grantee during any one calendar period, and the maximum aggregate number of shares of Stock that may be issued in the form of Incentive Stock Options shall not exceed the Initial Limit cumulatively increased on the first January 1 following the Effective Date and on each January 1 thereafter by the lesser of the Annual Increase (as defined in Section 3(b)) for such year or 1,000,000 shares of Stock, subject in all cases to adjustment as provided in Section 3(c).

 

(b)     Increases in the Stock Issuable.  Notwithstanding Section 3(a) above, commencing on the first January 1 following the Effective Date and on each January 1 thereafter during the term of the Plan, the number of shares of Stock which shall be made available for sale under the Plan shall be increased by that number of shares of Stock equal to the lesser of: (i) 4% of the Company’s outstanding shares of Stock (on a fully diluted basis) on the applicable January 1 and (ii) a lesser number of shares of Stock as determined by the Board (the “Annual Increase”).

 

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(c)     Changes in Stock.  Subject to Section 3(d) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for a different number or kind of securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Unrestricted Stock Awards, Restricted Stock Awards or Deferred Stock Awards, (ii) the number of Stock Options or Stock Appreciation Rights that can be granted to any one individual grantee and the maximum number of shares that may be granted under a Performance-based Award, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, (v) the number of Stock Options automatically granted to Non-Employee Directors, and (vi) the price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.

 

The Administrator shall also adjust the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration material changes in accounting practices or principles, extraordinary dividends, acquisitions or dispositions of stock or property or any other event if it is determined by the Administrator that such adjustment is appropriate to avoid distortion in the operation of the Plan, provided that no such adjustment shall be made in the case of an Incentive Stock Option, without the consent of the grantee, if it would constitute a modification, extension or renewal of the Option within the meaning of Section 424(h) of the Code.

 

(d)     Mergers and Other Transactions.  In the case of and subject to the consummation of (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation in which the outstanding shares of Stock are converted into or exchanged for a different kind of securities of the successor entity and the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the successor entity immediately upon completion of such transaction, or (iv) the sale of all of the Stock of the Company to an unrelated person or entity (in each case, a “Sale Event”), the Plan and all outstanding Awards granted hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree. In the event of such termination, all Options and Stock Appreciation Rights that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective time of the Sale Event and all other Awards shall become fully vested and nonforfeitable as of the effective time of the Sale Event, except as the Administrator may otherwise specify with respect to particular Awards in the relevant Award documentation, and each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights held by such grantee, including those that will become exercisable upon the consummation of the Sale Event; provided, however, that the exercise of Options and Stock Appreciation Rights not exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.

 

Notwithstanding anything to the contrary in this Section 3(c), in the event of a Sale Event pursuant to which holders of the Stock of the Company will receive upon consummation thereof a cash payment for each share surrendered in the Sale Event, the Company shall have the right, but not the obligation, to make or provide for a cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the value as determined by the Administrator of the consideration payable per share of Stock pursuant to the Sale Event (the “Sale Price”) times the number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights.

 

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(e)     Substitute Awards.  The Administrator may grant Awards under the Plan in substitution for stock and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock of the employing corporation. The Administrator may direct that the substitute awards be granted on such terms and conditions as the Administrator considers appropriate in the circumstances. Any substitute Awards granted under the Plan shall not count against the share limitation set forth in Section 3(a).

 

SECTION 4.  ELIGIBILITY

 

Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and key persons (including consultants and prospective employees) of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

 

SECTION 5.  STOCK OPTIONS

 

Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve. Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.

 

(a)     Stock Options Granted to Employees and Key Persons.  The Administrator in its discretion may grant Stock Options to eligible employees and key persons of the Company or any Subsidiary. Stock Options granted pursuant to this Section 5(a) shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.

 

(i)     Exercise Price. The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5(a) shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant. If an employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation and an Incentive Stock Option is granted to such employee, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date.

 

(ii)     Option Term. The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than 10 years after the date the Stock Option is granted. If an employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation and an Incentive Stock Option is granted to such employee, the term of such Stock Option shall be no more than five years from the date of grant.

 

(iii)     Exercisability; Rights of a Stockholder. Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.

 

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(iv)     Method of Exercise. Stock Options may be exercised in whole or in part, by giving written notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods to the extent provided in the Option Award agreement:

 

(A)     In cash, by certified or bank check or other instrument acceptable to the Administrator;

 

(B)     Through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the optionee on the open market or that have been beneficially owned by the optionee for at least six months and are not then subject to restrictions under any Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date; or

 

(C)     By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure.

 

Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award agreement or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an Internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.

 

(v)     Annual Limit on Incentive Stock Options.  To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock Option.

 

(b)     Non-transferability of Options.  No Stock Option shall be transferable by the optionee otherwise than by will or by the laws of descent and distribution and all Stock Options shall be exercisable, during the optionee’s lifetime, only by the optionee, or by the optionee’s legal representative or guardian in the event of the optionee’s incapacity. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide in the Award agreement regarding a given Option that the optionee may transfer his Non-Qualified Stock Options to members of his immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Option.

 

SECTION 6.  STOCK APPRECIATION RIGHTS

 

(a)     Nature of Stock Appreciation Rights.  A Stock Appreciation Right is an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right, which price shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.

 

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(b)     Grant and Exercise of Stock Appreciation Rights.  Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan.

 

(c)     Terms and Conditions of Stock Appreciation Rights.  Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator, provided that all Stock Appreciation Rights shall be exercisable during the grantee’s lifetime only by the grantee or the grantee’s legal representative.

 

(d)     Stock Appreciation Rights Term.  The term of each Stock Appreciation Right shall be fixed by the Administrator, but no Stock Appreciation Right shall be exercisable more than ten years after the date the Stock Appreciation Right is granted.

 

SECTION 7.  RESTRICTED STOCK AWARDS

 

(a)     Nature of Restricted Stock Awards.  A Restricted Stock Award is an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Administrator, shares of Stock subject to such restrictions and conditions as the Administrator may determine at the time of grant (“Restricted Stock”). Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The grant of a Restricted Stock Award is contingent on the grantee executing the Restricted Stock Award agreement. The terms and conditions of each such agreement shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.

 

(b)     Rights as a Stockholder.  Upon execution of a written instrument setting forth the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the written instrument evidencing the Restricted Stock Award. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Stock shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Stock are vested as provided in Section 7(d) below, and (ii) certificated Restricted Stock shall remain in the possession of the Company until such Restricted Stock is vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.

 

(c)     Restrictions.  Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award agreement. Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, if any, if a grantee’s employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a shareholder. Following such deemed reacquisition of unvested Restricted Stock that are represented by physical certificates, grantee shall surrender such certificates to the Company upon request without consideration.

 

(d)     Vesting of Restricted Stock.  The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Stock and the Company’s right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Stock and shall be deemed “vested.” Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, a grantee’s rights in any shares of Restricted Stock that have not vested shall automatically terminate upon the grantee’s termination of employment (or other service relationship) with the Company and its Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.

 

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SECTION 8.  DEFERRED STOCK AWARDS

 

(a)     Nature of Deferred Stock Awards.  A Deferred Stock Award is an Award of phantom stock units to a grantee, subject to restrictions and conditions as the Administrator may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The grant of a Deferred Stock Award is contingent on the grantee executing the Deferred Stock Award agreement. The terms and conditions of each such agreement shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. At the end of the deferral period, the Deferred Stock Award, to the extent vested, shall be paid to the grantee in the form of shares of Stock. To the extent that a Deferred Stock Award is subject to Section 409A, it may contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order for such Award to comply with the requirements of Section 409A.

 

(b)     Election to Receive Deferred Stock Awards in Lieu of Compensation.  The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of the cash compensation or Restricted Stock Award otherwise due to such grantee in the form of a Deferred Stock Award. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate.

 

(c)     Rights as a Stockholder.  During the deferral period, a grantee shall have no rights as a stockholder; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the phantom stock units underlying his Deferred Stock Award, subject to such terms and conditions as the Administrator may determine.

 

(d)     Restrictions.  A Deferred Stock Award may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of during the deferral period.

 

(e)     Termination.  Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, a grantee’s right in all Deferred Stock Awards that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 9. UNRESTRICTED STOCK AWARDS

 

The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award to any grantee pursuant to which such grantee may receive shares of Stock free of any restrictions (“Unrestricted Stock”) under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.

 

SECTION 10. CASH-BASED AWARDS

 

The Administrator may, in its sole discretion, grant Cash-Based Awards to any grantee in such number or amount and upon such terms, and subject to such conditions, as the Administrator shall determine at the time of grant. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in shares of Stock, as the Administrator determines.

 

SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

 

Notwithstanding anything to the contrary contained herein, if any Restricted Stock Award, Cash-Based Award or Deferred Stock Award granted to a Covered Employee is intended to qualify as “Performance-based Compensation” under Section 162(m) of the Code and the regulations promulgated thereunder (a “Performance-based Award”), such Award shall comply with the provisions set forth below:

 

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(a)     Performance Criteria.  The Administrator shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. The Administrator, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (x) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (y) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (z) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions provided however, that the Administrator may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Covered Employee. The performance criteria used in performance goals governing Performance-based Awards granted to Covered Employees may include any or all of the following: (i) return on equity, assets, capital or investment: (ii) pre-tax or after-tax profit levels; (iii) cash flow, funds from operations or similar measure; (iv) total shareholder return; (v) changes in the market price of the Stock; (vi) revenues, sales or market share; (vii) net income (loss) or earnings per share; (viii) computer support availability; (ix) expense margins or operating efficiency (including budgeted spending limits) or (x) project development milestones, any of which may relate to the Company or any Subsidiary, division, operating unit or business segment of the Company, or any combination of the foregoing, and may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group and, for financial measures, may be based on numbers calculated in accordance with U.S. generally accepted accounting principles or on an as adjusted basis.

 

(b)     Grant of Performance-based Awards.  With respect to each Performance-based Award granted to a Covered Employee, the Committee shall select, within the first 90 days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the Code) the performance criteria for such grant, and the achievement targets with respect to each performance criterion (including a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The performance criteria established by the Committee may be (but need not be) different for each Performance Cycle and different goals may be applicable to Performance-based Awards to different Covered Employees.

 

(c)     Payment of Performance-based Awards.  Following the completion of a Performance Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the performance criteria for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-based Awards earned for the Performance Cycle. The Committee shall then determine the actual size of each Covered Employee’s Performance-based Award, and, in doing so, may reduce or eliminate the amount of the Performance-based Award for a Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.

 

(d)     Maximum Award Payable.  The maximum Performance-based Award payable to any one Covered Employee under the Plan for a Performance Cycle is a grant date fair value number of Shares (subject to adjustment as provided in Section 3(c) hereof) equal to $1,000,000 or $1,000,000 in the case of a Performance-Based Award that is a Cash-Based Award.

 

SECTION 12. DIVIDEND EQUIVALENT RIGHTS

 

(a)     Dividend Equivalent Rights.  A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee only as a component of an Unrestricted Stock Award, a Restricted Stock Award or a Deferred Stock Award. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award agreement. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other award. A Dividend Equivalent Right granted as a component of another Award may also contain terms and conditions different from such other award.

 

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(b)     Interest Equivalents.  Any Award under this Plan that is settled in whole or in part in cash on a deferred basis may provide in the grant for interest equivalents to be credited with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon such terms and conditions as may be specified by the grant.

 

(c)     Termination.  Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, a grantee’s rights in all Dividend Equivalent Rights or interest equivalents granted as a component of another Award that has not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

 

SECTION 13. TAX WITHHOLDING

 

(a)     Payment by Grantee.  Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Company’s obligation to deliver stock certificates to any grantee is subject to and conditioned on tax obligations being satisfied by the grantee.

 

(b)     Payment in Stock.  Subject to approval by the Administrator, a grantee may elect to have the minimum required tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due, or (ii) transferring to the Company shares of Stock owned by the grantee with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due.

 

SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC.  

 

For purposes of the Plan, the following events shall not be deemed a termination of employment:

 

(a)     a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or

 

(b)     an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.

 

SECTION 15. AMENDMENTS AND TERMINATION

 

The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in Section 3(c) or 3(d), in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing through cancellation and re-grants or by exchanging a Stock Option or Stock Appreciation Right for any other Award. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code or to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 15 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(d).

 

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SECTION 16. STATUS OF PLAN

 

With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.

 

SECTION 17. SECTION 409A AWARDS

 

To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.

 

SECTION 18. GENERAL PROVISIONS

 

(a)     No Distribution; Compliance with Legal Requirements.  The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.

 

No shares of Stock shall be issued pursuant to an Award until all applicable securities law and other legal and stock exchange or similar requirements have been satisfied. The Administrator may require the placing of such stop-orders and restrictive legends on certificates for Stock and Awards as it deems appropriate.

 

(b)     Delivery of Stock Certificates.  Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.

 

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(c)     Stockholder Rights.  Until Stock is deemed delivered in accordance with Section 18(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.

 

(d)     Other Compensation Arrangements; No Employment Rights.  Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.

 

(e)     Trading Policy Restrictions.  Option exercises and other Awards under the Plan shall be subject to such Company’s insider trading policy and procedures, as in effect from time to time.

 

(f)     Designation of Beneficiary.  Each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.

 

SECTION 19. EFFECTIVE DATE OF PLAN

 

This Plan shall become effective upon approval by the holders of a majority of the votes cast at a meeting of stockholders at which a quorum is present. Subject to such approval by the stockholders and to the requirement that no Stock may be issued hereunder prior to such approval, Stock Options and other Awards may be granted hereunder on and after adoption of this Plan by the Board. No Incentive Stock Option may be granted under the Plan after the 10-year anniversary of the most recent prior date on which the Plan was approved by the Board of Directors (provided that the Plan was approved by stockholders within 12 months of such date) and no other Award may be granted under the Plan after the 10-year anniversary of the most recent prior date on which the Plan was approved by stockholders.

 

SECTION 20. GOVERNING LAW

 

This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts, applied without regard to conflict of law principles.

 

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