Document:

alks-ex101_38.htm

Exhibit 10.1

COOPERATION AGREEMENT

This Cooperation Agreement (this “Agreement”), dated as of December 10, 2020, is by and among Elliott Investment Management L.P., a Delaware limited partnership, Elliott Associates, L.P., a Delaware limited partnership (“Elliott Associates”), Elliott Advisors (UK) Limited, a private limited company organized under the laws of the United Kingdom, and Elliott International, L.P., a Cayman Islands limited partnership (each an “Investor” and collectively, the “Investors”), and Alkermes plc, an Irish public limited company (the “Company”). Each of the Company, on the one hand, and the Investors collectively, on the other hand, shall be referred to herein as a “Party” and together, the “Parties”.

In consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Investors and the Company agree as follows:

1.Board Composition and Other Matters.

(a)Effective as of the execution of this Agreement, Elliott Associates hereby withdraws its notice of nomination to the Company, dated as of December 1, 2020, in respect of its intention to nominate, and to solicit proxies for the election of, three individuals as director candidates to the Board of Directors of the Company (the “Board”) at the Company’s 2021 Annual General Meeting of Shareholders (the “2021 AGM”).

(b)The Company and the Investors shall cooperate in good faith to identify and agree upon a Qualified Candidate to be appointed to the Board in accordance with the Company’s Articles of Association (as may be amended from time to time, the “Articles of Association,” and such Qualified Candidate, the “Additional Director”), with such appointment to take place as promptly as practicable following the date of this Agreement, and in any event prior to March 31, 2021.

(c)No later than twenty (20) Business Days from the date of this Agreement, the Board shall take all action necessary to form a committee of the Board (the “New Committee”) to oversee achievement of profitability targets and implementation of the Company’s cost optimization activities, including the potential monetization of the Company’s non-core assets, as set forth in the Press Release (as defined below).  Initially, the Board shall cause the New Committee to be composed of four (4) members, including Richard F. Pops, Frank Anders Wilson, Mr. Daglio and Mr. McKeon as the members of the New Committee. Upon the Additional Director’s appointment to the Board, the Board would appoint the Additional Director to the New Committee as an additional member. The Company and Elliott shall cooperate in good faith to agree upon a charter for the New Committee, which shall be consistent with the Press Release.

(d)If the Additional Director resigns from the Board or ceases to be a director for any other reason prior to the Expiration Time (as defined below), and at such time the Investors beneficially own a “net long position” (as defined in Rule 14e-4 under the Exchange Act (as defined below)) of, or have aggregate net long economic exposure to, at least 3.0% (the “Minimum Ownership Threshold”) of the then outstanding ordinary shares, par value $0.01, of the Company (“Company Ordinary Shares”), then, as promptly as practicable, the Company and the Investors shall cooperate with each other to select a mutually acceptable Qualified Candidate to be appointed to the Board in accordance with the Articles of Association (such Qualified Candidate, the “Replacement Additional Director”), and the Board shall take all action necessary to appoint such person to serve as a director of the Company for the remainder of the Additional Director’s term.  Effective upon the appointment of a Replacement Additional Director to the Board, such Replacement Additional Director shall be considered an Additional Director for all purposes of this Agreement.  In the event that the Investors seek to exercise their rights under this Section 1(d), the 

 

 

Investors shall certify in writing to the Company that their (together with their Affiliates) beneficial ownership of, or aggregate economic exposure to, Company Ordinary Shares satisfies the Minimum Ownership Threshold as of the proposed time of any such exercise. The Company’s obligations under this Section 1(d) shall terminate as a nonexclusive remedy for any material breach of this Agreement by any Investor upon ten (10) Business Days’ written notice by the Company to the Investors if such breach has not been cured within such notice period, provided that the Company is not in material breach of this Agreement at the time such notice is given or prior to the end of such notice period.

(e)The Board shall propose an amendment to the Articles of Association for approval by the Company’s shareholders at the 2021 AGM to declassify the Board, and shall recommend to the Company’s shareholders that they vote in favor of such proposal. 

(f)On or prior to March 31, 2021, the Company shall hold an “Investor Day” for the Company’s ordinary shareholders consistent with the Press Release.

2.Cooperation.

(a)Each of the Investors and the Company agrees that, from the date of this Agreement until the Expiration Time (such period, the “Cooperation Period”), the Company and each Investor shall each refrain from making, and shall cause their respective controlling and controlled Affiliates and its and their respective principals, directors, members, general partners, officers and key employees, and its and their respective Representatives acting on their behalf, not to make or cause to be made any statement or announcement that constitutes an ad hominem attack on, or that otherwise disparages, defames, slanders, impugns or is reasonably likely to damage the reputation of, (A) in the case of any such statements or announcements by any of the Investors or their related parties, the Company and its Affiliates or any of their current or former officers, directors, or employees, and (B) in the case of any such statements or announcements by the Company or its related parties, the current or former principals, directors, members, general partners, officers or employees of the Investors or any of their Affiliates; in each case, including (1) in any statement (oral or written), document or report filed with, furnished or otherwise provided to the SEC or any other governmental or regulatory agency, (2) in any press release or other publicly available format or (3) to any journalist or member of the media (including, in a television, radio, newspaper or magazine interview or otherwise); provided, however, that any unpremeditated, private, informal remark to any person that is not part of any coordinated communication or campaign, and is not intended or designed to circumvent, directly or indirectly, the restrictions contemplated by this Section 2(a), will not be deemed a breach of this Section 2(a). The foregoing shall not (x) restrict the ability of any person to comply with any subpoena or other legal process or respond to a request for information from any governmental authority with jurisdiction over the party from whom information is sought or to enforce such person’s rights hereunder or (y) apply to any private communications among the Investors and their Affiliates and Representatives (in their capacity as such), on the one hand, and among the Company and its Affiliates and Representatives (in their capacity as such), on the other hand.

(b)During the Cooperation Period, each Investor shall cause all of the outstanding Company Ordinary Shares that such Investor or any of its controlled Affiliates has the right to vote as of the applicable record date, to be present in person or by proxy for quorum purposes, and to be voted, at any general or extraordinary meeting of the Company, and at any adjournments or postponements thereof (any such general or extraordinary meeting, or adjournment or postponement thereof, a “Shareholder Meeting”), and to consent in connection with any action by written consent in lieu of a meeting, in each case in accordance with the Board’s recommendations, as such recommendations are set forth in the applicable definitive proxy statement or consent statement filed in respect thereof, with respect to (i) the election, removal and/or replacement of directors (or the requisition of an extraordinary general meeting in respect of any of the foregoing) (a “Director Proposal”) and (ii) any other proposal submitted to the shareholders 

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of the Company other than proposals related to any Extraordinary Transaction (as defined below); provided, however, that in the event that either Institutional Shareholder Services Inc. (“ISS”) or Glass Lewis & Co., LCC (“Glass Lewis”) issue voting recommendations that differ from the voting recommendation of the Board with respect to any Company proposal submitted to shareholders at a Shareholder Meeting (other than Director Proposals), the Investors shall be permitted to vote in accordance with the ISS or Glass Lewis recommendation(s), as applicable.

(c)During the Cooperation Period, each Investor shall not, and shall cause its controlling and controlled Affiliates and its and their respective Representatives acting on their behalf (together with the Investors, the “Restricted Persons”) not to, directly or indirectly, without the prior written consent, invitation or authorization by the Company or the Board:

	
 
	
(i)
	
acquire, or offer or agree to acquire, by purchase or otherwise, or direct any third party in the acquisition of, any Voting Securities, or engage in any swap or hedging transactions or other derivative agreements of any nature with respect to any Voting Securities, in each case if such acquisition, offer, agreement or transaction would result in the Investors (together with their respective Affiliates) having beneficial ownership of more than 9.9% of the Company Ordinary Shares outstanding at such time;

	
 
	
(ii)
	
(A) requisition, request or call for (publicly or otherwise), alone or in concert with others, a Shareholder Meeting or action by written consent (or the setting of a record date therefor), (B) seek, alone or in concert with others, election or appointment to, or representation on, the Board or nominate or propose the nomination of, or recommend the nomination of, any candidate to the Board, except as expressly set forth in Section 1, (C) make,  alone or in concert with others, or be the proponent of any shareholder proposal to the Company, (D) seek, alone or in concert with others (including through any “withhold” or similar campaign), the removal of any member of the Board or (E) conduct a referendum of shareholders;

	
 
	
(iii)
	
(A) make any request for, or exercise any right conferred by Irish or other applicable law, to inspect or request a copy of the Company’s register of shareholders, register maintained under section 1061 of the Companies Act 2014 of Ireland (the “Irish Companies Act”) or other books and records of the Company or any of its subsidiaries under applicable law providing for shareholder access to books and records, (B) apply for the appointment of an inspector to investigate the affairs or membership of the Company or any of its Affiliates or (C) require the Company to exercise its powers under section 1064 of the Irish Companies Act;

	
 
	
(iv)
	
engage in any “solicitation” (as such term is used in the proxy rules of the SEC, excluding carve-outs relating to solicitations of ten or fewer shareholders) of proxies or consents, with respect to the election or removal of directors of the Company or any other matter or proposal relating to the Company or become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A promulgated under the Exchange Act) in any such solicitation of proxies or consents;

	
 
	
(v)
	
submit to the Company a proposal for, or offer of (with or without conditions), either alone or in concert with others, any tender offer, exchange offer, merger, amalgamation, consolidation, acquisition, business combination, recapitalization, 

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restructuring, liquidation, dissolution or similar extraordinary transaction involving the Company or any of its subsidiaries or joint ventures or any of their respective securities or assets (each, an “Extraordinary Transaction”) either publicly or in a manner that would reasonably require public disclosure by the Company or any of the Investors (it being understood that the foregoing shall not restrict an Investor from tendering shares, receiving payment for shares or otherwise participating in any such transaction on the same basis as other shareholders of the Company); 

	
 
	
(vi)
	
make any public proposal with respect to (A) any change in the number, term or identity of directors or the filling of any vacancies on the Board, (B) any change in the capitalization, capital allocation policy or dividend policy of the Company, (C) any other change in the Company’s management or corporate or governance structure, except for such statements that are consistent with the Press Release or the provisions of this Agreement, (D) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (E) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

	
 
	
(vii)
	
knowingly encourage or intentionally or deliberately advise any other person or intentionally or deliberately assist any person in so encouraging or advising any other person with respect to the giving or withholding of any proxy, consent or other authority to vote any Voting Securities, or in conducting any type of referendum relating to the Company (other than such encouragement or advice that is consistent with the Board’s recommendation in connection with such matter, if applicable), or otherwise form, join or act in concert with any “group” as defined in Section 13(d)(3) of the Exchange Act, with respect to any Voting Securities (other than a “group” solely including other Restricted Persons with respect to any securities of the Company now or hereafter owned by them);

	
 
	
(viii)
	
enter into a voting trust, arrangement or agreement with respect to any Voting Securities, or subject any Voting Securities to any voting trust, arrangement or agreement (excluding customary brokerage accounts, margin accounts, prime brokerage accounts and the like), in each case other than (A) this Agreement, (B) solely with Affiliates of the Investors or (C) granting proxies in solicitations approved by the Board;

	
 
	
(ix)
	
engage in any short sale or any purchase, sale or grant of any option, warrant, convertible security, stock appreciation right or other similar right (including any put or call option or “swap” transaction) with respect to any security (other than any index fund, exchange traded fund, benchmark fund or broad basket of securities) that includes, relates to or derives any significant part of its value from a decline in the market price or value of the securities of the Company and would, in the aggregate or individually, result in the Investors ceasing to have a “net long position” in the Company;

	
 
	
(x)
	
sell, offer or agree to sell, all or substantially all, directly or indirectly, through swap or hedging transactions or otherwise, voting rights decoupled from the underlying Company Ordinary Shares held by a Restricted Person to any third party;

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(xi)
	
institute, solicit or join, as a party, any litigation, arbitration or other proceeding against or involving the Company, its Affiliates or any of their respective current or former directors or officers (including derivative actions); provided, however, that for the avoidance of doubt, the foregoing shall not prevent any Restricted Person from (A) bringing litigation to enforce the provisions of this Agreement instituted in accordance with and subject to Section 9, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company or its Affiliates against a Restricted Person, (C) bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement (including the Press Release), (D) exercising statutory appraisal rights or (E) responding to or complying with a validly issued legal process;

	
 
	
(xii)
	
enter into any negotiations, agreements (whether written or oral), arrangements or understandings with any third party to take any action that the Restricted Persons are prohibited from taking pursuant to this Agreement; or

	
 
	
(xiii)
	
make any request or submit any proposal to amend or waive the terms of this Agreement (including this clause), in each case, publicly or which would reasonably be expected to result in a public announcement or disclosure of such request or proposal by the Company or any of the Restricted Persons; 

provided, however, that the restrictions in this Section 2(c) shall terminate automatically upon the earliest of the following: (i) as a nonexclusive remedy for any material breach of this Agreement by the Company (including, without limitation, a failure to appoint the Additional Director to the Board, to establish the New Committee in accordance with Section 1 or to issue the Press Release in accordance with Section 3) upon five (5) business days’ written notice by any of the Investors to the Company if such breach has not been cured within such notice period, provided that the Investors are not in material breach of this Agreement at the time such notice is given or prior to the end of the notice period; (ii) the Company’s entry into (x) a definitive agreement with respect to any Extraordinary Transaction that would result in the acquisition by any person of more than 30% of the Voting Securities or assets having an aggregate value exceeding 30% of the aggregate enterprise value of the Company during the Cooperation Period, other than consistent with the Press Release, or (y) one or more definitive agreements providing for a transaction or series of transactions which would in the aggregate result in the Company issuing to one or more third parties at least 15% of the outstanding Company Ordinary Shares immediately prior to such issuance(s) (including in a PIPE, convertible note, convertible preferred security or similar structure) on an as-converted basis during the Cooperation Period; and (iii) the commencement of any tender or exchange offer (by any person other than the Investors or their Affiliates) which, if consummated, would constitute an Extraordinary Transaction that would result in the acquisition by any person of more than 50% of the Voting Securities, where the Company files with the SEC a Schedule 14D-9 (or any amendment thereto) that does not recommend that its shareholders reject such tender or exchange offer (provided that nothing herein will prevent the Company from issuing a “stop, look and listen” communication pursuant to Rule 14d-9(f) promulgated under the Exchange Act in response to the commencement of any tender or exchange offer). 

(d)Nothing in this Agreement shall in any way prohibit, restrict or limit any Restricted Person’s ability to (i) make any public or private statement or announcement with respect to any Extraordinary Transaction (except for issuer tender offers of the Company to repurchase Company Ordinary 

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Shares) that is publicly announced by the Company or a third party, (ii) make any factual statement or disclosure as required by applicable legal process, subpoena or legal requirement from any governmental authority with competent jurisdiction over the party from whom information is sought (so long as such request did not arise as a result of discretionary acts by the Investor or any of its Affiliates), (iii) grant any liens or encumbrances on any claims or interests in favor of a bank or broker-dealer or prime broker holding such claims or interests in custody or prime brokerage in the ordinary course of business, which lien or encumbrance is released upon the transfer of such claims or interests in accordance with the terms of the custody or prime brokerage agreement(s), as applicable, (iv) negotiate, evaluate and/or trade, directly or indirectly, in any index fund, exchange traded fund, benchmark fund or broad basket of securities which may contain or otherwise reflect the performance of, but not primarily consist of, securities of the Company, or (v) provide its views privately to the Board or management on any matter or to privately request a waiver of any provision of this Agreement as long as such actions would not reasonably be expected to require public disclosure of such actions by the Company or the Investors.

3.Public Announcement.

(a)The Company shall (x) announce this Agreement by means of a press release in the form attached to this Agreement as Exhibit A (the “Press Release”) and (y) file with the SEC a Current Report on Form 8-K reporting its entry into this Agreement, disclosing applicable items to conform to its obligations hereunder and appending this Agreement as an exhibit thereto, in each case no later than 8:00 a.m., New York City time, on December 10, 2020. The Form 8-K shall be consistent with the terms of this Agreement and the Press Release. The Company shall provide the Investors and their Representatives with a reasonable opportunity to review and comment on the Form 8-K prior to the filing with the SEC and consider in good faith any comments of the Investors and their Representatives.

(b)Prior to the issuance of the Press Release, neither the Company nor the Investors shall issue any press release or other public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the other party. 

4.Representations and Warranties of the Company.  The Company represents and warrants to the Investors as follows:  (a) the Company has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated by this Agreement and (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company and is enforceable against the Company in accordance with its terms, except as enforcement of this Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the right of creditors and subject to general equity principles.

5.Representations and Warranties of the Investors.  Each Investor represents and warrants to the Company as follows:  (a) such Investor has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated by this Agreement, and (b) this Agreement has been duly and validly authorized, executed and delivered by such Investor, constitutes a valid and binding obligation and agreement of such Investor and is enforceable against such Investor in accordance with its terms, except as enforcement of this Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the right of creditors and subject to general equity principles. 

6.Definitions.  For purposes of this Agreement:

(a)the term “Affiliate” has the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; provided, that none of the Company or its Affiliates or Representatives, on the one hand, 

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and the Investors and their Affiliates or Representatives, on the other hand, shall be deemed to be “Affiliates” with respect to the other for purposes of this Agreement; provided, further, that “Affiliates” of a person shall not include any entity, solely by reason of the fact that one or more of such person’s employees or principals serves as a member of its board of directors or similar governing body, unless such person otherwise controls such entity (as the term “control” is defined in Rule 12b-2 promulgated by the SEC under the Exchange Act); provided, further, that with respect to the Investors, “Affiliates” shall not include any portfolio operating company (as such term is understood in the private equity industry) of any of the Investors or their Affiliates;

(b)the terms “beneficial owner” and “beneficially own” have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act, except that a person shall also be deemed to be the beneficial owner of all shares of the Company’s capital stock which such person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to the exercise of any rights in connection with any securities or any agreement, arrangement or understanding (whether or not in writing), regardless of when such rights may be exercised and whether they are conditional, and all shares of the Company’s capital stock which such person or any of such person’s Affiliates has or shares the right to vote or dispose;

(c)the term “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or obligated to be closed by applicable law;

(d)the term “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

(e)the term “Expiration Time” means the earlier of (x) December 31, 2021 and (y) the date that is 30 calendar days prior to the notice deadline under the Articles of Association for the nomination of director candidates for election to the Board at the Company’s 2022 Annual General Meeting of Shareholders;

(f)the term “Independent” means that such person qualifies as independent of the Company under all applicable listing standards, applicable rules of the SEC and publicly disclosed standards used by the Board in determining the independence of the Company’s directors;

(g)the terms “person” or “persons” mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature;

(h)the term “Qualified Candidate” shall mean an individual who (i) qualifies as Independent, (ii) is not an employee, director, general partner, manager or other agent of an Investor or of any Affiliate of an Investor, (iii) is not a limited partner, member or other investor in any Investor or any Affiliate of an Investor, (iv) does not have any agreement, arrangement or understanding, written or oral, with any Investor or any Affiliate of an Investor regarding such person’s service as a director on the Board, and (v) meets all other qualifications required for service as a director set forth in the Articles of Association and the Company’s Corporate Governance Guidelines;

(i)the term “Representatives” means a person’s respective directors, officers, employees, partners, members, managers, consultants, legal or other advisors, agents and other representatives acting in a capacity on behalf of such person;

(j)the term “SEC” means the U.S. Securities and Exchange Commission; and

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(k)the term “Voting Securities” means the Company Ordinary Shares and any other Company securities entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for, such shares or other securities, whether or not subject to the passage of time or other contingencies; provided that as pertains to any obligations of the Investors or any Restricted Persons hereunder (including under Section 2(b) and (c)), “Voting Securities” will not include any securities contained in any index fund, exchange traded fund, benchmark fund or broad basket of securities which may contain or otherwise reflect the performance of, but not primarily consist of, securities of the Company.

7.Notices.  All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard to this Agreement shall be in writing and shall be deemed validly given, made or served, if (a) given by email, when such email is sent to the email address set forth below, (b) given by fax, when transmitted to the fax number set forth below, (c) given by a nationally recognized overnight carrier, one Business Day after being sent or (d) if given by any other means, when actually received during normal business hours at the address specified in this Section 7:

if to the Company:

Connaught House, 1 Burlington Rd.

Dublin 4, Ireland D04 C5Y6

Attention: Secretary; Chief Legal Officer

Telephone: +353 1 772‐8000

Email: david.gaffin@alkermes.com

Fax: +353 1 772-8001

 

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

Sidley Austin LLP

787 Seventh Avenue

New York, NY 10019

Attention: Kai H. Liekefett; Derek Zaba

Telephone: (212) 839-8744; (650) 565-7131

Email: kliekefett@sidley.com; dzaba@sidley.com

Fax: (212) 839-5599

if to the Investors:

Elliott Advisors (UK) Limited

Park House

116 Park Street

London W1K 6AF

Attention: Sebastien de La Riviere

Telephone: +44 (0)20 3009 1180

Email: sdelariviere@elliottadvisors.co.uk

Fax: +44 (0)20 3009 1181

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

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, NY 10019

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Attention: Steve Wolosky; Kenneth Mantel

Telephone: (212) 451-2333; (212) 451-2326

Email: swolosky@olshanlaw.com; kmantel@olshanlaw.com

Fax: (212) 451-2222

 

8.Expenses.  All fees, costs and expenses incurred in connection with this Agreement and all matters related to this Agreement shall be paid by the party incurring such fees, costs or expenses.

9.Specific Performance; Remedies; Venue.

(a)The Company and the Investors acknowledge and agree that irreparable injury to the other party would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages).  It is accordingly agreed that the Company and the Investors shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity.  FURTHERMORE, THE COMPANY AND EACH INVESTOR AGREES THAT (I) THE NON-BREACHING PARTY SHALL BE ENTITLED TO INJUNCTIVE AND OTHER EQUITABLE RELIEF, WITHOUT PROOF OF ACTUAL DAMAGES; (II) THE BREACHING PARTY SHALL NOT PLEAD IN DEFENSE THERETO THAT THERE WOULD BE AN ADEQUATE REMEDY AT LAW; AND (III) THE BREACHING PARTY AGREES TO WAIVE ANY BONDING REQUIREMENT UNDER ANY APPLICABLE LAW, IN THE EVENT ANY OTHER PARTY SEEKS TO ENFORCE THE TERMS BY WAY OF EQUITABLE RELIEF.  THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

(b)The Company and each Investor (i) irrevocably and unconditionally submits to the personal jurisdiction of the United States District Court for the Southern District of New York, (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that any actions or proceedings arising in connection with this Agreement or the transactions contemplated by this Agreement shall be brought, tried and determined only in the United States District Court for the Southern District of New York, (iv) waives any claim of improper venue or any claim that those courts are an inconvenient forum and (v) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated hereunder in any court other than the aforesaid courts.  The parties to this Agreement agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7 or in such other manner as may be permitted by applicable law as sufficient service of process shall be valid and sufficient service thereof.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

10.Severability.  If at any time subsequent to the date hereof, any provision of this Agreement is held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.  In addition, the parties agree to use their reasonable best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or unenforceable by a court of competent jurisdiction. 

11.Termination.  This Agreement shall terminate at the Expiration Time.  Upon such termination, this Agreement shall have no further force and effect.  Notwithstanding the foregoing, Sections 6, 7, 9, 10, 11, 

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13, 14, 15 and 16 hereof shall survive termination of this Agreement and no termination of this Agreement shall relieve any party of liability for any breach of this Agreement arising prior to such termination.

12.Counterparts.  This Agreement may be executed in one or more counterparts and by scanned computer image (such as pdf), each of which shall be deemed to be an original copy of this Agreement.

13.No Third Party Beneficiaries.  This Agreement is solely for the benefit of the Company and the Investors and is not enforceable by any other persons, except as otherwise allowed under this Section 13.  No party to this Agreement may assign its rights or delegate its obligations under this Agreement, whether by operation of law or otherwise, without the prior written consent of the other parties, and any assignment in contravention hereof shall be null and void ab initio.  

14.No Waiver.  No failure or delay by any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder.

15.Entire Understanding.  This Agreement (including that certain Confidentiality Agreement, dated as of November 30, 2020, by and between Elliott Investment Management L.P. and the Company), contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all prior and contemporaneous agreements, memoranda, arrangements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter of this Agreement.  This Agreement may be amended only by an agreement in writing executed by the Company and the Investors.

16.Interpretation and Construction.  Each of the parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said counsel.  Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation.  Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by the Company and each Investor, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

[Signature page follows]

 

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.

INVESTORS

ELLIOTT INVESTMENT MANAGEMENT L.P.

 

By: /s/ Elliot Greenberg                

Name:Elliot Greenberg

Title:Vice President

ELLIOTT ASSOCIATES, L.P.

By:Elliott Investment Management L.P., as attorney-in-fact

 

 

By: /s/ Elliot Greenberg                              

Name:Elliot Greenberg

Title:Vice President

ELLIOTT INTERNATIONAL, L.P.

By:Hambledon, Inc., its General Partner

By:Elliott Investment Management L.P., as attorney-in-fact

 

By: /s/ Elliot Greenberg                              

Name:Elliot Greenberg

Title:Vice President

ELLIOTT ADVISORS (UK) LIMITED

 

By: /s/ Christopher Leonard               

Name:C.P. Leonard

Title:Director

[Signature Page to Cooperation Agreement]

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.

THE COMPANY

ALKERMES PLC

 

By: /s/ Tom Riordan    

Name:Tom Riordan

Title:Assistant Company Secretary

 

 

 

[Signature Page to Cooperation Agreement]

 

EXHIBIT A

 

Press Release

 

 

 

 

     Alkermes Contacts: 

For Investors:  Sandy Coombs +1 781 609 6377

For Media:  Katie Joyce +1 781 609 6806

 

Alkermes Announces Strategic Value Enhancement Plan and 
Continued Board Refreshment 

 

	
 
	
—
	
Commits to Non-GAAP Net Income Margin Targets of ~25% for FY 2023 and ~30% for FY 2024, Reflecting Rigorous Expense Management, Expected Revenue Growth and Commitment to Shareholder Value Creation —

 

	
 
	
—
	
Announces Potential Monetization of Non-Core Assets and Reiterates Commitment to Exploring Strategic Collaborations Around ALKS 4230 —

 

	
 
	
—
	
Two New Independent Directors Appointed and Board Refreshment Program to Continue —

 

	
 
	
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Alkermes to Host Investor Day in the First Quarter of 2021 to Update Investors on Plan Implementation and R&D Portfolio —

 

DUBLIN, Ireland, Dec. X, 2020 – Alkermes plc (Nasdaq: ALKS) today announced a Value Enhancement Plan, or the Plan, designed to drive growth, improve operational and financial performance and enhance shareholder value, as the company continues to advance its mission of developing new medicines designed to have a real-world impact in the treatment of serious mental illness, addiction and cancer. The Plan includes a commitment to multi-year profitability targets, a review and optimization of the company’s cost structure, potential monetization of non-core assets, and continued governance enhancements, including the addition of two new independent directors with substantial financial and operational expertise to the company’s board of directors (the “Board”). 

 

The Value Enhancement Plan is the result of an intensive process initiated over the last several months and is intended to position the company to efficiently execute on its business strategy, support the continued growth of its commercial products, including the potential approval and launch of ALKS 3831, and further the advancement of its pipeline of development programs. The Plan builds upon the company’s implementation of a restructuring and addition of two new independent directors to the Board in the fall of 2019 and the company’s board refreshment efforts announced in July 2020. These initiatives also follow constructive dialogue with the company’s shareholders, including funds advised by Elliott Advisors (UK) Limited (“Elliott”), and entry into an associated cooperation agreement between Alkermes and affiliates of Elliott.

 

 

 

“Alkermes’ Board and management are committed to engaging with shareholders and understanding their perspective and have been working on initiatives to drive greater operational efficiency, with a focus on shareholder value creation. These new initiatives also support our strong growth trajectory, which has come more clearly into focus over the past few months, with the positive advisory committee meeting and constructive regulatory interactions for ALKS 3831 for schizophrenia and bipolar I disorder, and with new clinical data emerging in our ALKS 4230 immuno-oncology program,” said Richard Pops, Chairman and Chief Executive Officer of Alkermes. “We believe these actions, alongside our focus on commercial execution, the potential approval and commercial launch of ALKS 3831, and the continued development of our pipeline candidates, position the company well for long-term value creation.” 

 

A spokesperson for Elliott said, “Elliott is highly supportive of the initiatives announced today and commends the Board and management of Alkermes on taking these steps. From our dialogue with management we are confident that the Company is committed to creating shareholder value. Further, both David Daglio and Brian McKeon will add significant value to Alkermes’ Board and the newly formed board committee. Alkermes is significantly undervalued given its attractive assets and growth potential, and we are confident that these new initiatives will yield meaningful share price upside. We thank Richard and the rest of the team for their constructive dialogue and look forward to an ongoing engagement with the Company.”

 

Profitability Targets & Cost Structure Optimization Efforts

 

As part of the Value Enhancement Plan, the company today announced its commitment to achieving: 

	
 
	
-
	
FY 2023 non-GAAP net income equal to 25% of the company’s total revenues and EBITDA margin1 of 20% of total revenues 

	
 
	
-
	
FY 2024 non-GAAP net income equal to 30% of the company’s total revenues and EBITDA margin of 25% of total revenues 

 

	
	 

	
1 
	
 Calculated as earnings before interest, taxation, depreciation, amortization and one-time items, includes share-based compensation expenses 

 

 

The company plans to achieve these margins through disciplined management of the company’s cost structure combined with revenue growth, and is committed to meeting these targets in a range of scenarios. To underline Alkermes’ commitment to strong profitability, the compensation committee of the Board will consider these targets in its design of this year’s long-term incentive plan for senior management.

Alkermes has already undertaken several important initiatives to support these targets, including a reorganization of the company’s commercial infrastructure, which was implemented in November 2020. As part of the reorganization, several functional areas within the company’s commercial organization were consolidated to improve efficiencies and approximately 80 full-time positions were reallocated to support the anticipated launch of ALKS 3831, reducing the need for previously planned new hires. Additionally, the company has commenced an extensive review of its operations and structure both internally and with external advisors to identify potential areas for improved efficiencies. This review is ongoing, and the company plans to provide an update on the findings and planned initiatives resulting from the review following its conclusion, expected in the first quarter of 2021. 

 

Evaluation of Strategic Opportunities 

 

A newly set-up committee of the board will evaluate a broad range of potential strategic options related to Alkermes’ non-core assets, including monetization and divestiture opportunities. 

 

In addition, the company underscored its prior commitment to exploring a strategic collaboration for ALKS 4230, the company’s immuno-oncology pipeline candidate, as an important element of the company’s focus on realizing the full potential of ALKS 4230 across a broad spectrum of possible treatment combinations, tumor types and lines of therapy. Alkermes believes that accumulating objective response data and subcutaneous administration data from its ARTISTRY development program for ALKS 4230 will serve as the basis for potential collaboration discussions.     

 

Board Refreshment and Governance Update

 

The company today announced that it is taking a series of actions as part of its ongoing commitment to strong corporate governance and regular Board refreshment. These efforts build 

 

 

upon the refreshment process that began in 2019 with the engagement of a leading recruitment firm and the subsequent appointment of two highly-qualified independent directors: Andy Wilson and Richard Gaynor, M.D.  

	
 
	
-
	
Following the company’s July 2020 announcement of its continuing Board refreshment efforts, the Alkermes Board has appointed two new independent directors – David Daglio and Brian McKeon – who bring investor perspectives and strong financial and operational expertise to the Board.

	
 
	
-
	
Two long-serving directors, Robert Breyer and Paul Mitchell, plan to retire and step down from the Board at the close of the company’s 2021 Annual General Meeting of Shareholders. 

	
 
	
-
	
The Board plans to identify at least one additional independent director to be appointed in the first half of 2021. 

 

“Our board refreshment efforts during the past two years reflect our continued commitment to a strong, independent board with expertise that aligns with and directly supports Alkermes’ strategic priorities,” said Lead Independent Director David W. Anstice. “I am pleased to welcome David and Brian to the Board and believe that Alkermes will benefit greatly from their distinct combination of financial and operational expertise. We are confident that the Board is well positioned to provide robust guidance and oversight as the company continues its efforts to positively impact the lives of patients living with serious mental illness, addiction and cancer, while driving shareholder value creation.” 

 

“On behalf of the Board, I would also like to express our most sincere appreciation to Paul Mitchell and Bob Breyer for their long and distinguished tenure on the Board and their invaluable contributions to Alkermes,” Mr. Anstice added.

In addition to the appointment of new directors, the company will also undertake the following corporate governance actions:

	
 
	
-
	
The Board plans to form a committee to oversee achievement of the Profitability Targets and the potential monetization of the company’s non-core assets. The committee will initially be comprised of the Chief Executive Officer and three independent directors, including two of the newly appointed directors.

 

 

	
 
	
-
	
The Board also intends to recommend that the company’s shareholders approve, at the company’s 2021 Annual General Meeting of Shareholders, an amendment to the company’s Articles of Association to declassify the Board. 

Investor Day

The company plans to host an investor day in the first quarter of 2021 to provide an update on the implementation of the Value Enhancement Plan and highlight some of the new research and development programs in the company’s portfolio. 

 

New Director Biographies

About David Daglio 

As former Executive Vice President and Chief Investment Officer of Mellon Investments, Mr. Daglio brings a seasoned institutional investment management perspective to the Board. Over his 21-year career at Mellon, Mr. Daglio oversaw active equity portfolio management teams, served as the head of Opportunistic Value strategies and on Mellon’s board of directors, and helped architect and manage the merger of three unique companies to create the 12th largest U.S. asset manager. In his roles at Mellon, Mr. Daglio worked with institutional clients and boards around the world and grew portfolio assets by more than five-fold. Mr. Daglio currently serves as a director of Total Brain Ltd.

 

About Brian McKeon 

Mr. McKeon brings strong financial and management expertise as well as public company executive and director experience to the Board. He has served as Executive Vice President and Chief Financial Officer of IDEXX Laboratories since 2014, leading its finance, corporate development and strategy, and investor relations functions, and, since June 2019, has overseen IDEXX’s livestock, water and human diagnostics businesses. Mr. McKeon previously served as a director of IDEXX from 2003 through 2013, and as a director of athenahealth, Inc. from September 2017 to February 2019. Prior to IDEXX, Mr. McKeon held executive leadership roles at Iron Mountain, The Timberland Company and PepsiCo.

 

About Alkermes

Alkermes plc is a fully integrated, global biopharmaceutical company developing innovative medicines in the fields of neuroscience and oncology. The company has a portfolio of 

 

 

proprietary commercial products focused on addiction and schizophrenia, and a pipeline of product candidates in development for schizophrenia, bipolar I disorder, neurodegenerative disorders and cancer. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio. For more information, please visit Alkermes’ website at www.alkermes.com.

 

About Elliott

Elliott Management Corporation manages approximately $41 billion of assets. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest funds of its kind under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, and employees of the firm. Elliott Advisors (UK) Limited is an affiliate of Elliott Management Corporation.

 

Non-GAAP Financial Measures

Non-GAAP net income (loss) adjusts for one-time and non-cash charges by excluding from U.S. generally accepted accounting principles (“GAAP”) results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; changes in the fair value of the contingent consideration; certain other one-time or non-cash items; and the income tax effect of these reconciling items.

 

Note Regarding Forward-Looking Statements

Certain statements set forth in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements concerning: the company’s expectations concerning future financial and operating performance, business plans or prospects, including expected revenue growth, the company’s commitment to, and ability to achieve, specified profitability targets, including non-GAAP net income and EBITDA margin targets as a percentage of total revenues, oversight of 

 

 

the achievement of such targets by a newly formed Board committee, and the company’s ability to create share price upside and long-term value for shareholders through expense management, cost structure optimization and potential monetization or divestiture of non-core assets; the company’s expectations regarding the timing and results of the review of the company’s operations and cost structure; the potential therapeutic and commercial value of the company’s marketed and development products; the company’s expectations concerning future development activities for the company’s development products, including expectations regarding the potential for future ALKS 4230 data to serve as a basis for a potential collaboration; expectations concerning the company’s regulatory interactions and commercial activities, including those relating to the potential approval and commercial launch of ALKS 3831; and the company’s plans for additional Board-related changes, including the expected appointment of at least one additional director and its plans to recommend declassification of the Board. The company cautions that forward-looking statements are inherently uncertain. The forward-looking statements are neither promises nor guarantees and they are necessarily subject to a high degree of uncertainty and risk. Actual performance and results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. These risks and uncertainties include, among others: the cost structure review and optimization activities being undertaken by the company may not yield the intended results; the company may not be able to achieve its targeted profitability metrics, including non-GAAP net income and EBITDA margin targets as a percentage of total revenues, in a timely manner or at all; the unfavorable outcome of litigation, including so-called “Paragraph IV” litigation and other patent litigation, related to any of the company’s products or products using the company’s proprietary technologies, which may lead to competition from generic drug manufacturers; clinical development activities may not be completed on time or at all; the results of the company’s clinical development activities may not be positive, or predictive of real-world results or of results in subsequent clinical trials; regulatory submissions may not occur or be submitted in a timely manner; the FDA or regulatory authorities outside the U.S. may make adverse decisions regarding the company’s products, such as decisions not to approve the company’s NDAs, including the NDA for ALKS 3831; the company and its licensees may not be able to continue to successfully commercialize their products; there may be a reduction in payment rate or reimbursement for the company’s products or an increase in the company’s financial obligations 

 

 

to governmental payers; the company’s products may prove difficult to manufacture, be precluded from commercialization by the proprietary rights of third parties, or have unintended side effects, adverse reactions or incidents of misuse; and the impacts of the ongoing COVID-19 pandemic and continued efforts to mitigate its spread on the company’s business, results of operations or financial condition; and those risks and uncertainties described under the heading “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2019, the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 and in subsequent filings made by the company with the U.S. Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release.

###EX-10.1

 Exhibit 10.1 

FIFTH AMENDED AND RESTATED EMPLOYMENT AGREEMENT 

This FIFTH AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of December 10, 2020 (the
“Execution Date”) between AGNC Mortgage Management, LLC, a Delaware limited liability company (the “Company”), and Gary Kain (the “Executive”) and supersedes and replaces in its entirety that
certain Fourth Amended and Restated Employment Agreement, entered into between the Company and the Executive, dated as of January 25, 2019 (the “Prior Agreement”). Other than the terms set forth in subparagraphs 4(b) and
4(c)(i) hereof with respect to 2021 annual cash bonus and long-term incentive awards and the final sentence of subparagraph 1(m), which shall each be effective as of the Execution Date, the remainder of this Agreement shall become effective on
July 1, 2021 (the “Effective Date”) subject to the Executive remaining continuously employed with the Company from the Execution Date through the Effective Date. For the avoidance of doubt, all provisions of the Prior Agreement
(other than as set forth above) shall remain in effect until the Effective Date. 
 W I T N E S S E T H: 

WHEREAS, the Company is currently engaged through its subsidiaries in the business of, among other things, managing mortgage real estate
investment trusts, which invest in (a) agency securities for which the principal and interest payments are guaranteed by U.S. Government agencies and U.S. Government-sponsored entities,
(b) non-agency securities and/or (c) other mortgage related investments; and 
 WHEREAS,
the Executive has received and will continue to receive specific trade secrets and confidential information, training and the benefit of established customer relationships relating to the businesses of the Company, which trade secrets and
confidential information, training and access to established customer relationships are necessary to enable the Executive to perform the Executive’s duties and to receive future compensation, and the Executive has played and will continue to
play a significant role in the development and management of the businesses of the Company; and 
 WHEREAS, it is in the interests of the
Company that the Executive’s services continue to be available to the Company; and 
 WHEREAS, the Company and the Executive are
parties to the Prior Agreement; and 
 WHEREAS, the parties wish to amend and restate the Prior Agreement in its entirety. 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree that the Prior Agreement is amended and restated in its entirety as follows: 

1. Definitions; Interpretations. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise
requires, the following terms shall have the following respective meanings: 
 (a) “AGNC” shall mean AGNC
Investment Corp. and its successors and assigns. 
 (b) “Base Salary” shall have the meaning specified in
subparagraph 4(a). 
 (c) “Board” shall mean the Board of Directors of AGNC. 

(d) “Change of Control” shall have the meaning set forth in the Equity Plan, including the relevant provisions
of Section 17 of the Equity Plan, as of the Effective Date. 

 (e) “Change of Control Protection Period” shall mean the 21-month period following the date of a Change of Control. 
 (f) “Code”
shall mean the Internal Revenue Code of 1986, as amended. 
 (g) “Company Managed Fund” shall mean
(i) AGNC and (ii) any other entity for which the Company or a subsidiary of the Company serves as investment manager or in a substantially similar capacity pursuant to a written agreement. 

(h) “Company’s Business” shall mean: 

(i) any business activity that would be the same or competitive with any business activity engaged in by AGNC, the Company or any of their
subsidiaries or any Company Managed Fund during the term of the Executive’s employment; and 
 (ii) the provision of management,
advisory or other investment services to mortgage real estate investment trusts or any other investment vehicles that engage primarily in the acquisition, trading, sales, financing, investment or management of mortgage- backed securities or other
real estate assets. 
 (i) “Compensation Committee” shall mean the Compensation and Corporate Governance
Committee of the Board. 
 (j) “Compensation Committee Charter” shall mean the AGNC Investment Corp.
Compensation and Corporate Governance Committee Charter, as may be in effect from time to time. 
 (k)
“Disability” shall mean a physical or mental condition of the Executive that, in the good faith judgment of not less than a majority of the members of the Board, prevents the Executive from being able to perform the services
required under this Agreement and that results in the Executive becoming eligible for long-term disability benefits (if such benefits are provided by the Company). If any dispute arises as to whether a Disability has occurred, or whether a
Disability has ceased and the Executive is able to resume duties, then such dispute shall be referred to a licensed physician, at the request of either the Executive or the Board. The Executive shall submit to such examinations and provide
information as such physician may request and the determination of such physician as to the Executive’s physical or mental condition shall be binding and conclusive on the parties. The Company shall pay the cost of any such physician and
examination. 
 (l) “Equity Plan” shall mean the AGNC Investment Corp. 2016 Equity and Incentive
Compensation Plan, as approved by the Board on October 18, 2016, as amended from time to time, and any successor plan thereto. 

(m) “Good Reason” shall mean the Executive’s reassignment by the Board to a position that is not
comparable to the position of Executive Chair of the Company. A job position will be considered “comparable” if (A) it does not involve a change in title from Executive Chair or a change in the Executive’s duties from those set
forth in this Agreement; (B) it provides the Executive annualized compensation opportunities comparable to the Executive’s position contemplated hereby (that includes both guaranteed compensation and upside potential); (C) it does not
require the Executive to relocate more than 50 miles from either (1) Bethesda, Maryland or (2) Boca Raton, Florida; and (D) the Executive and the Board mutually agree that the position is comparable. The Executive must provide written
notice to the Board within 90 days of the initial existence of a condition that constitutes Good Reason as defined herein and the Company shall have 30 days after receipt of any such notice to remedy

 
the condition. If the Company timely remedies such condition, such condition shall not constitute Good Reason. The Executive may not terminate the Executive’s employment hereunder for Good
Reason more than six months after the initial existence of one (or more) of the conditions that constitutes Good Reason. Notwithstanding anything to the contrary, and for the avoidance of doubt, the execution of this Agreement (including the change
in Executive’s role to Executive Chair of the Company and the changes to the Executive’s compensation and benefits as described in paragraph 4 hereof) shall not constitute “Good Reason” under this Agreement or the Prior
Agreement. 
 (n) “Person” shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust and an unincorporated organization. 
 (o) “Restricted Territory” shall mean: 

(i) the world; and 

(ii) North America; and 

(iii) the United States; and 

(iv) Maryland; and 

(v) Florida. 

(p) “Section 280G” shall mean Section 280G of the Code and the regulations thereunder.

 (q) “Section 409A” shall mean Section 409A of the Code and the regulations
thereunder. 
 (r) “Termination For Cause” shall mean the termination by the Board of the Executive’s
employment with the Company as a result of (i) the willful and continued failure by the Executive to perform substantially the Executive’s duties described in paragraph 3 (other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness) after two (2) written notices of such failure have been given to the Executive by the Board and the Executive has had a reasonable period (not to exceed 15 days from the second notice) to correct
such failure, (ii) the commission by the Executive of acts that are willfully dishonest and demonstrably injurious to the Company or any Company Managed Fund (monetarily or otherwise) in any material respect, (iii) the commission by the
Executive of an act of fraud, embezzlement or intentional sexual harassment in connection with the Executive’s duties for AGNC, the Company or any of their subsidiaries, (iv) the Executive’s conviction, or plea of guilty or nolo
contendere, with respect to an act of criminal misconduct involving any financial crime or an act of moral turpitude or (v) a willful and material breach or violation by the Executive of (A) any material provision of this Agreement or
(B) any material employment policy of AGNC, the Company or any of their subsidiaries that any such entity may publish and provide in writing to the Executive from time to time, which, in either case, if capable of being remedied or if the
negative impact can be substantially mitigated, remains substantially unremedied or unmitigated for more than 30 days after written notice thereof is given to the Executive by AGNC, the Company or any subsidiary, as applicable (as determined by the
Board acting in good faith). For purposes of this definition, no act or failure to act on the Executive’s part shall be considered grounds for a Termination for Cause if done or omitted to be done by the Executive in good faith and in the
reasonable belief that such act or failure to act was in the best interest of the Company or any Company Managed Fund or in furtherance of the Executive’s duties and responsibilities described in paragraph 3. 

 (s) “Termination For Good Reason” shall mean the
Executive’s termination of the Executive’s employment with the Company as a result of Good Reason. 
 (t)
“Termination Without Cause” shall mean the termination by the Board of the Executive’s employment with the Company for any reason other than a termination for Disability or a Termination For Cause and shall not include the
Board’s giving notice pursuant to subparagraph 5(a) that the Employment Period shall not be extended beyond the Initial Term or any Renewal Term (as such terms are defined in subparagraph 5(a)). 

(u) “Voluntary Termination” shall mean the Executive’s termination of the Executive’s employment
with the Company for any reason, other than a Termination For Good Reason, with at least ninety (90) days’ prior written to the Board. 

In this Agreement, unless a clear contrary intention appears, (a) the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular paragraph or subparagraph, (b) reference to any paragraph or subparagraph means such paragraph or subparagraph hereof,
(c) the words “including” (and with correlative meaning “include”) means including, without limiting the generality of any description preceding such term, and (d) where any provision of this Agreement refers to action
to be taken by a specific party, or which such party is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such party. The paragraph and subparagraph headings herein are for convenience
only and shall not affect the construction hereof. 
 2. Employment. The Company agrees to continue to employ the Executive, and the
Executive agrees to accept such continued employment with the Company, in each case on the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and ending as provided in paragraph 5 hereof (the
“Employment Period”). Notwithstanding anything in this Agreement to the contrary, the Executive shall be an at-will employee of the Company and the Executive or the Board may terminate the
Executive’s employment with the Company for any reason or no reason at any time, subject to the terms and conditions hereof, including any obligations the Company may have pursuant to paragraph 6 hereof. 

3. Positions and Duties. 

(a) During the Employment Period, the Executive shall serve as the Executive Chair of the Company. As such, the Executive
shall: (i) serve as the Chair of the Board; (ii) perform the duties that are typically expected to be performed by an Executive Chair as are assigned to the Executive by the Board in consultation with the Chief Executive Officer and Chief
Investment Officer of the Company; (iii) provide consultation and guidance to facilitate the orderly transition of the roles and duties of Chief Executive Officer and Chief Investment Officer of the Company; and (iv) perform such other
duties as may be reasonably designated to him by the Board. 
 (b) During the Employment Period, the Executive shall
(i) report directly to the Board and (ii) observe and comply with all lawful policies, directions and instructions of the Board that are consistent with this paragraph 3. 

(c) During the Employment Period, the Executive shall (i) devote a sufficient amount of the Executive’s business
time, attention, skill and efforts necessary to the faithful and efficient performance of the Executive’s duties hereunder (except for permitted vacation periods and reasonable periods of illness or other incapacity) and (ii) not accept
employment with any Person other than with the Company. Notwithstanding the foregoing, the Executive may engage in the following activities so long as they do not interfere in any material respect with the performance of the Executive’s duties
and responsibilities hereunder: (A) serve on corporate (if approved by the Board, such approval not to be unreasonably withheld), civic, religious, educational or charitable boards or committees or (B) manage the Executive’s personal
investments. 

 4. Compensation and Benefits. 

(a) Base Salary. For services rendered by the Executive under this Agreement during the Employment Period, the Company
shall pay to the Executive an annual base salary (“Base Salary”), evenly paid twice a month or on such other schedule as salaried employees of the Company are generally and regularly compensated. During the Employment Period,
effective July 1, 2021, the Base Salary shall be at the rate of $500,000 per year. On and after January 1, 2022, the Compensation Committee shall review the Executive’s Base Salary from time to time and may, in its sole discretion,
increase it; provided that the Base Salary shall not be lowered from the rate that may be in effect from time to time. 
 (b)
Annual Cash Bonus. With respect to each calendar year during the Employment Period, the Executive shall be eligible to earn an annual cash bonus. The actual annual bonus may range from 0% to 150% of a target value (the “Target Annual
Bonus Amount”), based on the level of achievement of specified performance measures and goals set by the Compensation Committee (with, subject to the Compensation Committee Charter, input from the Executive) for such calendar year (the
“Annual Performance Goals”). For performance in calendar year 2021, the Target Annual Bonus Amount shall be $4,500,000, which amount reflects the pro-ration of: (i) the rate of the Target
Annual Bonus Amount pursuant to the Prior Agreement (which rate is $5,400,000) to reflect the portion of the 2021 calendar year (six months) during which the Executive serves as the Chief Executive Officer and Chief Investment Officer of the
Company, and (ii) the rate of the Target Annual Bonus Amount for the remaining portion of the 2021 calendar year (six months) during which the Executive serves as the Executive Chair of the Company pursuant to this Agreement (which rate shall
be $3,600,000). For performance in calendar year 2022 and each calendar year thereafter, the Target Annual Bonus Amount shall be $3,600,000. The Compensation Committee (with, subject to the Compensation Committee Charter, input from the Executive),
in its reasonable judgment, shall determine the weightings of each performance measure and a threshold, target and maximum performance goal for each measure no later than ninety (90) days after the beginning of each calendar year. To the extent
that specified performance measures and goals apply to other executives of the Company, the threshold, target and maximum levels associated with such specified performance measures and goals will apply to the Executive in the same manner as they
apply to such other executives. Performance at the threshold, target or maximum levels would be expected to result in a bonus payment of 50%, 100% or 150% of the Target Annual Bonus Amount, respectively, for such measure. Performance below the
threshold level could result in no bonus payment for such measure. The bonus payment for performance between the threshold and target level or between the target and maximum level will be determined by linear interpolation. Subject to the provisions
of paragraph 6, the Executive must be employed on the date on which the annual cash bonus is paid in order to receive payment of any such annual cash bonus pursuant to this subparagraph 4(b). Any annual cash bonus earned pursuant to this
subparagraph 4(b) shall be paid to the Executive by March 15 of the calendar year following the calendar year to which such annual cash bonus relates. 

(c) Long-Term Incentive Awards. 

(i) During the first quarter of calendar year 2021, subject to approval by the Board, AGNC shall grant the Executive a long-term incentive
award with an aggregate target fair value of $6,150,000 (the “Target Annual LTIA”), which amount reflects the pro-ration of: (i) the rate of the Target Annual LTIA pursuant to the Prior
Agreement (which rate is $8,100,000) to reflect the portion of the 2021 calendar year (six months) during which the Executive serves as the Chief Executive Officer and Chief Investment Officer of the

 
Company, and (ii) the rate of the Target Annual LTIA for the remaining portion of the 2021 calendar year (six months) during which the Executive serves as the Executive Chair of the Company
pursuant to this Agreement (which rate shall be $4,200,000). During the first quarter of calendar year 2022, and during the first quarter of each calendar year thereafter, the Target Annual LTIA amount shall be $4,200,000. 67% of the Target Annual
LTIA (the “Performance-Based Award”) shall vest based upon the achievement of certain specified performance metrics (as determined by the Compensation Committee in its reasonable judgment) (the “Performance-Based
Metrics”) measured over a three-year performance period with the amount of shares and the associated performance targets specified at or before the grant date of the award. If the Performance-Based Metrics are exceeded (as determined by the
Compensation Committee in its reasonable judgment), the Executive may earn up to 200% of the target number of shares underlying the Performance-Based Award. The remaining 33% of the Target Annual LTIA that does not have Performance-Based Metrics
(the “Time-Based Award”) shall vest over a three-year period, with 1/3 of such portion vesting following each of the first, second and third anniversaries of the grant date. Notwithstanding the foregoing, the Target Annual LTIA
shall be subject to the terms and conditions of the Equity Plan and the applicable award agreement(s) to be entered into between AGNC and the Executive, which shall be consistent with the terms hereof. In the event that AGNC cannot grant the Target
Annual LTIA to the Executive, AGNC shall instead provide a cash award to the Executive with an equivalent fair value and under equivalent vesting terms, which shall be subject to the terms and conditions of an applicable award agreement to be
entered into between AGNC and the Executive (as approved by the Compensation Committee). 
 (ii) In the event that the Executive experiences
a Voluntary Termination, the Target Annual LTIA will vest in accordance with the Equity Plan and the applicable award agreement(s), except as follows: 
  

	 	(A)	 In the event that such Voluntary Termination occurs on or after July 1, 2021 but before January 1,
2022: 

  

	 	(1)	 The performance-based portion of any long-term incentive awards that had been granted to the Executive in
calendar year 2020 or earlier, and the portion of the Performance-Based Award granted to the Executive in calendar year 2021 that is attributable to the portion of the 2021 calendar year during which the Executive served as the Chief Executive
Officer and Chief Investment Officer of the Company, in each case that are then outstanding, if any, shall become vested on the same terms as though the Executive had remained employed for the remainder of the vesting period applicable to such
awards (and subject to actual performance results for the full performance period); provided, however, that such continued vesting shall only apply if the Executive complies with all covenants contained in paragraph 7 of this Agreement
for the remainder of the vesting period applicable to such awards notwithstanding any shorter period(s) that may be specified in such paragraph, including, but not limited to, the Non-Competition Period (as
defined therein). 

	 	(2)	 The unvested portion of any time-based long-term incentive awards that had been granted to the Executive in
calendar year 2020 or earlier, and the unvested portion of Time-Based Award granted to the Executive in calendar year 2021 that is attributable to the portion of the 2021 calendar year during which the Executive served as the Chief Executive Officer
and Chief Investment Officer of the Company, in each case that are then outstanding, if any, shall become vested in full upon such Voluntary Termination, subject to and in accordance with the applicable award agreement(s) governing such award(s).

  

	 	(B)	 In the event that such Voluntary Termination occurs on or after January 1, 2022 but before
December 31, 2022: 

  

	 	(1)	 All terms and conditions set forth in subparagraph 4(c)(ii)(A) above shall apply. 

 

	 	(2)	 The portion of the Performance-Based Award granted to the Executive in calendar year 2021 that is attributable
to the portion of the 2021 calendar year during which the Executive served as the Executive Chair shall become vested on the same terms as though the Executive had remained employed for the remainder of the vesting period applicable to such awards
(and subject to actual performance results for the full performance period); provided, however, that such continued vesting shall only apply if the Executive complies with all covenants contained in paragraph 7 of this Agreement for
the remainder of the vesting period applicable to such awards notwithstanding any shorter period(s) that may be specified in such paragraph, including, but not limited to, the Non-Competition Period (as
defined therein). 

  

	 	(3)	 The unvested portion of the Time-Based Award granted to the Executive in calendar year 2021 that is
attributable to the portion of the 2021 calendar year during which the Executive served as the Executive Chair shall become vested in full upon such Voluntary Termination, subject to and in accordance with the applicable award agreement(s) to be
entered into between AGNC and the Executive. 

  

	 	(C)	 In the event that such Voluntary Termination occurs on or after December 31, 2022: 

 

	 	(1)	 All terms and conditions set forth in subparagraphs 4(c)(ii)(A) and (B) above shall apply.

  

	 	(2)	 The performance-based portion of any long-term incentive awards that may be granted to the Executive in
subsequent years after the 2021 calendar year that are then outstanding, if any, shall become vested on the same terms as though the Executive had remained employed for the remainder of the vesting period applicable to such awards (and subject to
actual performance results for the full performance 

	 	
period); provided, however, that such continued vesting shall only apply if the Executive complies with all covenants contained in paragraph 7 of this Agreement for the remainder of
the vesting period applicable to such awards notwithstanding any shorter period(s) that may be specified in such paragraph, including, but not limited to, the Non-Competition Period (as defined therein);
provided further, that with respect to any long-term incentive award granted to the Executive in the calendar year in which the Executive’s Voluntary Termination occurs, such vesting terms shall only apply to a pro-rated portion of such award in an amount equal to the total award multiplied by a fraction, the numerator of which will equal the number of full calendar months in the year of the Voluntary Termination that the
Executive was employed prior to such Voluntary Termination and the denominator of which will equal twelve (12). 

  

	 	(3)	 The unvested portion of any time-based long-term incentive awards that may be granted to the Executive in
subsequent years following the 2021 calendar year that are then outstanding, if any, shall become vested in full upon such Voluntary Termination, subject to and in accordance with the applicable award agreement(s) to be entered into between AGNC and
the Executive; provided, however, that with respect to any long-term incentive award granted to the Executive in the calendar year in which the Executive’s Voluntary Termination occurs, such vesting terms shall only apply to a pro-rated portion of such award in an amount equal to the total award multiplied by a fraction, the numerator of which will equal the number of full calendar months in the year of such Voluntary Termination that the
Executive was employed prior to such Voluntary Termination and the denominator of which will equal twelve (12). 

  

	 	(D)	 The time of payment for the Target Annual LTIA shall be in accordance with the terms of the applicable award
agreement and the Equity Plan. Notwithstanding anything in this Agreement, the Equity Plan, and/or the applicable award agreement(s) to the contrary, any payment for any vested portion of the Target Annual LTIA and any other long-term incentive
awards following the Executive’s Voluntary Termination shall be payable in accordance with the requirements of Section 409A. 

(d) Other Benefits. During the Employment Period, the Executive shall be entitled to receive all employee benefits,
fringe benefits and other perquisites that may be offered by the Company to its senior employees as a group, including, without limitation, participation by the Executive and, where applicable, the Executive’s dependents, in the various
employee benefit plans or programs (including, without limitation, retirement plans, stock plans, health plans, life insurance, parking and disability insurance but excluding, except as hereinafter provided in subparagraph 6(b), 6(c), 6(d) or 6(e),
any severance pay program or policy of AGNC, the Company or any of their subsidiaries) generally provided to senior employees of the Company, subject to meeting the eligibility requirements with respect to each of such benefit plans or programs.
However, nothing in this subparagraph 4(d) shall be deemed to prohibit the applicable plan sponsor from making any changes in any of the plans, programs or benefits described herein, provided such changes apply to all similarly situated senior
employees. 

 (e) Attorneys’ Fees. Within sixty (60) days following the
Executive’s submission of appropriate supporting documentation, the Company will reimburse the Executive for the attorneys’ fees incurred in connection with the review and negotiation of this Agreement; provided, however,
that the aggregate amount of such reimbursement shall not exceed $10,000. 
 (f) Clawback Policy. The Executive agrees
that performance-based incentive compensation awarded or paid by AGNC or the Company to the Executive (whether in cash or equity) shall be subject to the clawback policy of the Company in effect as of the Execution Date, including as it may be
amended from time to time in order to comply with the final rules or regulations adopted by the U.S. Securities and Exchange Commission and the NASDAQ Stock Market that implement the incentive-based compensation recovery requirements set forth in
Section 10D of the Securities Exchange Act of 1934, as added by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any other applicable legal requirements or listing standards that may be enacted and in
effect from time to time (the “Clawback Rules”) or as otherwise may be amended or adopted in good faith by the Board for the Company’s employees. Such clawback policy, as it may be amended or adopted, will trigger the
forfeiture or recoupment of the Executive’s performance-based incentive compensation (and such other compensation covered by the Clawback Rules or determined by the Board in good faith and specified in such policy) if the performance-based
incentive compensation (or other compensation) is of the type covered by the Clawback Rules or such clawback policy for employees as adopted by the Board in good faith and (i) in the event that AGNC is required to prepare an accounting
restatement due to AGNC’s material noncompliance with any financial reporting requirement under U.S. federal securities laws, provided that such forfeiture or recoupment shall be limited to the portion of applicable compensation that would not
have been awarded or paid to the Executive for or in respect of such restated fiscal year had such financial statements been accurate (as reasonably determined by the Board in accordance with the Clawback Rules), (ii) in such other circumstances as
may be required to comply with the Clawback Rules, in which case such forfeiture or recoupment shall be limited to the portion of the applicable compensation required to be forfeited/recouped under the Clawback Rules, or (iii) in such other
circumstances and in such amount as the Board may determine in good faith as specified in such policy. 
 (g) Stock
Ownership Guidelines. The Executive agrees that all shares of common stock of AGNC owned by the Executive shall be subject to any applicable stock ownership guidelines that may be reasonably implemented by the Board from time to time. 

5. Employment Period. 

(a) Except as hereinafter provided, the Employment Period shall begin on the Effective Date and shall continue until, and shall
end on, December 31, 2022 (such period, the “Initial Term”). On January 1, 2023, and on each anniversary thereafter, unless the Employment Period shall have ended pursuant to subparagraph 5(b) below or the Board or the
Executive shall have given the other party ninety (90) days’ prior written notice that the Employment Period will not be extended, the Employment Period shall be extended for an additional year (each such year, a “Renewal
Term”). 
 (b) Notwithstanding subparagraph 5(a) above, the Employment Period shall end early upon the first to
occur of any of the following events: 
 (i) the Executive’s death; 

 (ii) the Board’s termination of the Executive’s employment due to Disability;

 (iii) a Termination For Cause; 

(iv) a Termination Without Cause; 

(v) a Termination For Good Reason; or 

(vi) a Voluntary Termination. 

6. Post-Employment Payments. 

(a) At the end of the Executive’s employment for any reason, the Executive shall cease to have any rights to salary,
expense reimbursements or other benefits, except that (to the extent applicable) the Executive shall be entitled to (i) any Base Salary which has been earned but is unpaid as of the end of the Employment Period, which shall be paid by the
Company to the Executive on the first payroll date following the Executive’s termination of employment, (ii) any annual cash bonus that has been earned for a prior calendar year pursuant to subparagraph 4(b) but is unpaid, which shall be
paid by the Company to the Executive by March 15 of the calendar year in which the Executive’s termination of employment occurs (but only if the termination is not a Termination For Cause), (iii) any reimbursable expenses which have been
incurred but are unpaid as of the end of the Employment Period, which shall be paid by the Company to the Executive in accordance with the Company’s applicable reimbursement policies, (iv) any plan benefits which by their terms extend
beyond termination of the Executive’s employment (but only to the extent provided in any benefit plan in which the Executive has participated as an employee of the Company and excluding, except as hereinafter provided in subparagraph 6(b),
6(c), 6(d) or 6(e), any severance pay program or policy of AGNC, the Company or any of their subsidiaries) and (v) any benefits to which the Executive is entitled under Part 6 of Subtitle B of Title I of the Employee Retirement Income Security
Act of 1974, as amended (“COBRA”). In addition, subject to subparagraph 6(g), the Executive shall be entitled to the additional amounts described in subparagraph 6(b), 6(c), 6(d) or 6(e), in the circumstances described in such
subparagraphs. 
 (b) If the Employment Period ends during the Initial Term pursuant to subparagraph 5(b) on account of a
Termination Without Cause or a Termination For Good Reason, and such termination of employment does not occur during the Change of Control Protection Period, the Executive shall be entitled to receive the following amounts: 

(i) an amount equal to the product of (A) 1.5, multiplied by (B) the sum of (x) the Executive’s Base Salary at the time of such
termination of employment, plus (y) the Target Annual Bonus Amount for the calendar year in which such termination of employment occurs; provided, however, that such amount shall be reduced by 1/18 for each month of the
Initial Term that passes and during which the Executive remains employed with the Company (such amount, including the effect of the 1/18 reduction described in this subparagraph 6(b)(i), the “Severance Amount”), which shall be paid
by the Company to the Executive in equal installments during the period of time following such termination of employment until the expiration of the Initial Term (such period of time, the “Severance Period”) in accordance with the
Company’s normal payroll practices. For the avoidance of doubt, the Executive shall not be entitled to any Severance Amount set forth in this subparagraph 6(b)(i) for any termination of employment that occurs after the expiration of the Initial
Term. 

 (ii) an amount equal to the product of (A) the annual cash bonus the Executive would
have been entitled to receive pursuant to subparagraph 4(b) if he had remained employed through December 31 of the calendar year in which such termination of employment occurs (as determined by the Compensation Committee but assuming that the
Executive achieved all qualitative and subjective metrics of the Annual Performance Goals at their target level), multiplied by (B) a fraction (x) the numerator of which is the number of days that the Executive remained employed during the
calendar year in which such termination of employment occurs and (y) the denominator of which is 365 (the “Assumed Pro Rata Bonus”), which shall be paid by the Company to the Executive in a single lump sum by March 15 of
the calendar year following the calendar year in which such termination of employment occurs; 
 (iii) (A) if the Executive (or any of his
eligible dependents) elects continuation coverage under the Company’s medical, dental and/or vision plans pursuant to COBRA, reimbursement for the Executive’s (and any such eligible dependent’s) COBRA premium payments (provided such
reimbursement does not result in any taxes or penalties for the Company) until the earlier of (x) the Executive’s eligibility for any such coverage under another employer’s or any other medical plan or (y) the end of the
Severance Period (such period, the “COBRA Period”), with each such COBRA reimbursement being made by the Company to the Executive within thirty (30) days following the payment of any such COBRA premiums by the Executive (and
any such eligible dependent) (the “COBRA Reimbursements”); or (B) if the Executive (or any of his eligible dependents) elects continuation coverage under the Company’s medical, dental and/or vision plans pursuant to COBRA
but the COBRA Reimbursements would result in taxes or penalties for the Company, monthly cash payments, with each such monthly cash payment being equal to the Executive’s (and any such eligible dependent’s) monthly COBRA premium payments
during the COBRA Period, which shall be paid by the Company to the Executive on the first payroll date of each month following the month with respect to which the Executive’s (and any such eligible dependent’s) monthly COBRA premiums were
paid during the COBRA Period (the “Substitute Payments”); and 
 (iv) acceleration of any outstanding unvested awards under
the Equity Plan, subject to and in accordance with the applicable award agreement(s) to be entered into between AGNC and the Executive. 

(c) If the Employment Period ends during the Initial Term pursuant to subparagraph 5(b) on account of a Termination Without
Cause or a Termination For Good Reason, and such termination of employment occurs during the Change of Control Protection Period, the Executive shall be entitled to receive the following amounts: 

(i) the Severance Amount (as defined in subparagraph 6(b)(i) above), which shall be paid by the Company to the Executive in a
lump sum on the first payroll date following the 60th day after such termination of employment; 
 (ii) an amount equal to
the product of (A) the Target Annual Bonus Amount for the calendar year in which such termination of employment occurs, multiplied by (B) a fraction (x) the numerator of which is the number of days that the Executive remained employed
during the calendar year in which such termination of employment occurs and (y) the denominator of which is 365, which shall be paid by the Company to the Executive in a single lump sum by March 15 of the calendar year following the
calendar year in which such termination of employment occurs; 

 (iii) the COBRA Reimbursements or the Substitute Payments (each as defined
in subparagraph 6(b)(iii)), as applicable; and 
 (iv) acceleration of any outstanding unvested awards under the Equity
Plan, subject to and in accordance with the applicable award agreement(s) to be entered into between AGNC and the Executive. 

(d) If the Employment Period ends after the expiration of the Initial Term pursuant to subparagraph 5(b) on account of a
Termination Without Cause, a Termination For Good Reason, or a Voluntary Termination, the Executive shall be entitled to receive the following amounts: 

(i) the Assumed Pro Rata Bonus, which shall be paid by the Company to the Executive in a single lump sum by March 15 of
the calendar year following the calendar year in which such termination of employment occurs; and 
 (ii) the same treatment
of any outstanding unvested awards under the Equity Plan as set forth in subparagraph 4(c)(ii)(C) of this Agreement as though such termination were a Voluntary Termination as described therein. 

(e) If the Employment Period ends pursuant to subparagraph 5(b) on account of the Executive’s death or Disability, the
Executive (or in the event of the Executive’s death, his estate or eligible dependents, as applicable) shall be entitled to receive the following: 

(i) the Assumed Pro Rata Bonus, which shall be paid by the Company to the Executive (or to his estate) in a single lump sum by
March 15 of the calendar year following the calendar year in which such termination of employment occurs; 
 (ii) if
such termination of employment due to the Executive’s death or Disability occurs during the Initial Term, the COBRA Reimbursements or the Substitute Payments (each as defined in subparagraph 6(b)(iii)), as applicable (provided that in the event
of the Executive’s death, the COBRA Reimbursements or the Substitute Payments, as applicable, shall be paid to the Executive’s eligible dependents); and 

(iii) acceleration of any outstanding unvested awards under the Equity Plan, subject to and in accordance with the applicable
award agreement(s) to be entered into between AGNC and the Executive. 
 (f) Any payment, reimbursement or benefit under
subparagraph 6(b), 6(c), 6(d) or 6(e) that is not made or provided during the period following the Executive’s termination of employment because the Executive (or, if applicable, his estate) has not executed the release described in
subparagraph 6(g) shall be paid to the Executive in a single lump sum (or shall be provided to the Executive) on the first payroll date following the 60th day after such termination of employment; provided that the Executive (or, if applicable, his
estate) executes and does not revoke the release in accordance with the requirements of subparagraph 6(g). 

 (g) Notwithstanding anything herein to the contrary, the Executive (or, if
applicable, his estate) shall not be entitled to receive any payment, reimbursement or benefit under subparagraph 6(b), 6(c), 6(d) or 6(e) hereof unless (i) prior to the 60th day following such termination of employment, the Executive (or, if
applicable, his estate) executes a standard release of all claims, known or unknown, arising on or before the date of the release, against AGNC, the Company and their subsidiaries and their directors, managers, officers, employees and affiliates, in
a standard form of release provided by the Board and agreed to by the Executive (which release shall not impose any further obligations, covenants or duties on the Executive), and (ii) any applicable revocation period has expired prior to the
60th day following such termination of employment without the Executive (or, if applicable, his estate) revoking such release. 
 7.
Confidential Information; Non-Competition; Intellectual Property. 
 (a) Confidential
Information. 
 (i) The Executive recognizes that the services to be performed by the Executive hereunder are special,
unique and extraordinary and that, by reason of such employment with the Company, the Executive has acquired and will continue to acquire Confidential Information (as defined below) concerning the operation of the Company, the use or disclosure of
which would cause the Company substantial loss and damages which could not be readily calculated and for which no remedy at law would be adequate. Accordingly, the Executive agrees that the Executive will not (directly or indirectly) at any time,
whether during or after the Executive’s employment hereunder, (A) knowingly use for an improper personal benefit any Confidential Information that the Executive may learn or has learned by reason of the Executive’s employment with the
Company or (B) disclose any such Confidential Information to any Person except (1) in the performance of the Executive’s obligations to the Company hereunder, (2) as required by applicable law, (3) in connection with the
enforcement of the Executive’s rights under this Agreement, (4) in connection with any disagreement, dispute or litigation (pending or threatened) between the Executive and the Company or (5) with the prior written consent of the
Board. As used herein, “Confidential Information” includes information with respect to the operation and performance of the Company and the Company Managed Funds, their investments, portfolio companies, products, services,
facilities, product methods, research and development, trade secrets and other intellectual property, systems, patents and patent applications, procedures, manuals, confidential reports, product price lists, customer lists, financial information,
business plans, prospects or opportunities (including, as applicable, all of the foregoing information regarding the Company’s and/or the Company Managed Funds’ past, current and prospective portfolio companies); provided,
however, that such term shall not include any information that (x) is or becomes generally known or available other than as a result of a disclosure by the Executive or (y) is or becomes known or available to the Executive on a
nonconfidential basis from a source (other than the Company) that, to the Executive’s knowledge, is not prohibited from disclosing such information to the Executive by a legal, contractual, fiduciary or other obligation to the Company. 

(ii) The Executive confirms that all Confidential Information is the exclusive property of the Company. All business records,
papers and documents kept or made by the Executive while employed by the Company relating to the business of the Company shall be and remain the property of the Company at all times. Upon the request of the Company at any time, the Executive shall
promptly deliver to the Company, and shall retain no copies of, any written materials, records and documents made by the Executive or coming into the Executive’s possession while employed by the Company concerning

 
the business or affairs of the Company other than personal materials, records and documents (including notes and correspondence) of the Executive not containing proprietary information relating
to such business or affairs. Notwithstanding the foregoing, the Executive shall be permitted to retain copies of, or have access to, all such materials, records and documents relating to any disagreement, dispute or litigation (pending or
threatened) between the Executive and the Company. 
 (iii) The U.S. Defend Trade Secrets Act of 2016
(“DTSA”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made in confidence to a federal, state or local
government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other
proceeding, if such filing is made under seal. In addition, the DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the
individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. 

(b) Non-Competition; Non-Solicitation. 

(i) The Executive agrees that (A) during the term of his employment with the Company and, (B) during the 18-month period following the termination of Executive’s employment with the Company for any reason (such period, the “Non-Competition Period”) within
the Restricted Territory, the Executive shall not, directly or indirectly, engage or participate in, prepare or set up, assist or have any interest in any person, partnership, corporation, firm, association or other business organization, entity or
enterprise, whether as an officer, employee, director, partner, stockholder, consultant or otherwise, that engages in the Company’s Business. Notwithstanding the foregoing, the Executive shall not be precluded from purchasing or owning,
directly or beneficially, as a passive investment, two percent (2%) or less of any class of publicly traded securities if he does not actively participate in or control, directly or indirectly, any investment or other decisions with respect to such
entity. 
 (ii) During the Non-Competition Period, the Executive shall not, directly or indirectly:

  

	 	(A)	 offer to hire, divert, entice away, solicit or in any other manner persuade, or attempt to do any of the
foregoing (each, a “Solicitation”), for any person who is an officer, employee, consultant or board member of the Company or any Company Managed Fund to accept employment or an engagement with a third party or engage in a
Solicitation with respect to any person or entity who is, or was, at any time within six months prior to the Solicitation, an officer, employee, agent or consultant of the Company or any Company Managed Fund to work for a third party engaged in the
Company’s Business or to engage in any of the activities hereby prohibited with respect to the Executive under this subparagraph 7(b)(ii); 

	 	(B)	 solicit, divert, entice away or in any other manner persuade, or attempt to do any of the foregoing, on
(1) any actual or prospective customer of or investor in the Company or any Company Managed Fund to become a customer of or investor in any third party engaged in the Company’s Business or (2) any customer or investor to cease doing
business with the Company or any Company Managed Fund; or 

  

	 	(C)	 make any statements or perform any acts intended to advance the interest of any person engaged in or proposing
to engage in the Company’s Business in any way that is intended to injure the interests of the Company or any Company Managed Fund. 

(c) Intellectual Property. The Executive agrees that during the term of the Executive’s employment with the
Company, and for a period of 12 months following the termination of the Executive’s employment for any reason, any and all inventions, discoveries, innovations, writings, domain names, improvements, trade secrets, designs, drawings, business
processes, secret processes and know-how, whether or not patentable or a copyright or trademark, which the Executive may create, conceive, develop or make, either alone or in conjunction with others and
related or in any way connected with the Company, its strategic plans, products, processes, apparatus or business now or hereafter carried on by the Company (collectively, “Inventions”), shall be fully and promptly disclosed to the
Company and shall be the sole and exclusive property of the Company (as the Board shall determine) as against the Executive or any of the Executive’s assignees. Regardless of the status of the Executive’s employment by the Company, the
Executive and the Executive’s heirs, assigns and representatives hereby assigns, or shall promptly assign, to the Company any and all right, title and interest in and to such Inventions made during the term of the Executive’s employment by
the Company. There are no Inventions with respect to the Company conceived of, developed or made by the Executive before the Effective Date which have not been disclosed to and assigned to the Company. The Executive further agrees that at the
request of and without charge to the Company, but at the Company’s expense, the Executive shall execute a written assignment of any Inventions to the Company and shall assign to the Company any application for letters patent or for trademark
registration made thereon, and to any common-law or statutory copyright therein; and the Executive shall do whatever may be necessary or desirable to enable the Company to secure any patent, trademark,
copyright, or other property right therein in the United States of America and in any foreign country, and any division, renewal, continuation, or continuation in part thereof, or for any reissue of any patent issues thereon. In the event that the
Company is unable, after reasonable effort, and in any event after 10 business days, to secure the Executive’s signature on a written assignment to the Company of any application for letters patent or to any
common-law statutory copyright or other property right therein, whether because of the Executive’s physical or mental incapacity or for any other reason whatsoever, the Executive irrevocably designates
and appoints the General Counsel of the Company as his attorney-in-fact to act on his behalf to execute and file any such application and to do all other lawfully
permitted acts to further the prosecution and issuance of such letters patent, copyright or trademark. 
 (d)
Remedies. 
 (i) The Executive acknowledges that a breach of any of the covenants contained in this paragraph
7 may result in material irreparable injury to the Company for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach, any payments or
benefits remaining under the terms of this Agreement shall cease and the Company shall be entitled to obtain a temporary restraining order or a preliminary or permanent injunction restraining the Executive from engaging in activities prohibited by
this paragraph 7 or such other relief as may be required to specifically enforce any of the covenants contained in this paragraph 7. 

 (ii) The period of time during which the restrictions set forth in this
paragraph 7 will be in effect will be extended by the length of time during which the Executive is in breach of the terms of those provisions as determined by any court of competent jurisdiction on the Company’s application for injunctive
relief. 
 (e) Communication of Contents of Agreement. While employed by the Company and during the Non-Competition Period, the Executive shall communicate the contents of this paragraph 7 to any Person that the Executive intends to be employed by, associated with or represent. 

(f) The Company. For purposes of this paragraph 7, the Company shall include AGNC and any and all direct and indirect
subsidiary, parent, affiliated, or related companies of the Company for which the Executive worked or had responsibility at the time of termination of the Executive’s employment and at any time during the
2-year period prior to such termination. 
 8.
Non-Disparagement. 
 (a) The Executive agrees that he shall not talk about or otherwise
communicate to any third parties in a malicious, disparaging or defamatory manner regarding AGNC, the Company or any of their subsidiaries or any aspect of his employment with the Company. Further, the Executive shall not make or authorize to be
made any written or oral statement that may disparage or damage the reputation of AGNC, the Company or any of their subsidiaries. The Company shall instruct its senior executives and members of the Board not to talk about or otherwise communicate to
any third parties outside of AGNC, the Company or any of their subsidiaries in a malicious, disparaging or defamatory manner regarding the Executive or any aspect of his employment with the Company, and the Company shall not make or authorize to be
made any written or oral statement to any third parties outside of AGNC, the Company or any of their subsidiaries that may disparage or damage the reputation of the Executive. 

(b) Notwithstanding anything in this Agreement to the contrary, nothing in the Agreement prohibits or will be interpreted or construed to
prohibit the Executive from reporting any possible violation of federal law or regulation to any governmental agency or entity, including but not limited to the U.S. Department of Justice or the Securities and Exchange Commission, or providing
testimony to or communicating with such agency or entity in the course of its investigation, or from making any other disclosures that are protected under the whistleblower provisions of federal law and regulation. Any such reports, testimony or
disclosures do not require the Executive to provide notice or receive the authorization or consent of the Company or the Board. 
 9.
Survival. Subject to any limits on applicability contained therein, paragraphs 6, 7, 8, 9, 10, 11, 21 and 22 hereof shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment
Period. 
 10. Taxes. AGNC, the Company or any of their subsidiaries shall withhold from all payments due to the Executive all
applicable taxes (federal, state or other) that it is required to withhold therefrom unless the Executive has otherwise paid (or made other arrangements satisfactory) to AGNC, the Company or any of their subsidiaries, as applicable, the amount of
such taxes. Notwithstanding any other provision of this Agreement, none of AGNC, the Company or any of their subsidiaries shall be obligated to guarantee any particular tax result for the Executive with respect to any payment or benefit

 
provided to the Executive by AGNC, the Company or any of their subsidiaries (whether pursuant to this Agreement or otherwise), and the Executive shall be responsible for any taxes imposed on the
Executive with respect to any such payment. For the avoidance of doubt, in no event shall any provision of this Agreement (including, without limitation, paragraph 21 or 22) be construed to require AGNC, the Company or any of their subsidiaries to
provide any gross-up for the tax consequences of any provision under this Agreement or any payment or benefit provided to the Executive by AGNC, the Company or any of their subsidiaries (whether pursuant to
this Agreement or otherwise). 
 11. No Mitigation or Offset. The provisions of this Agreement are not intended to, nor shall they be
construed to, require that the Executive mitigate the amount of any payment provided for in this Agreement by seeking or accepting other employment, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation
earned by the Executive as the result of employment by another employer or otherwise. Without limitation of the foregoing, the Company’s obligations to make the payments to the Executive required under this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set off, counterclaim, recoupment, defense or other claim, right or action that the Company may have against the Executive. 

12. Assignability. The obligations of the Executive hereunder are personal and may not be assigned or delegated by the Executive or
transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer. The Company shall have the right to assign this Agreement and to delegate all rights, duties and obligations hereunder as
provided in paragraph 15. 
 13. Notices. All notices and all other communications provided for in the Agreement shall be in writing
and addressed (a) if to the Company, (i) at its principal office address or such other address as it may have designated by written notice to the Executive for purposes hereof, directed to the attention of the Board with a copy to the
General Counsel of the Company or (ii) to the company electronic mail address of the General Counsel of the Company and (b) if to the Executive, (i) at the Executive’s residence address on the records of the Company or to such
other address as the Executive may have designated to the Company in writing for purposes hereof or (ii) to the Executive’s company electronic mail address. Each such notice or other communication shall be deemed to have been duly given
when (A) delivered or mailed by United States registered mail, return receipt requested, postage prepaid or (B) when electronic evidence of electronic mail transmission is received, except that any notice of change of address shall be
effective only upon receipt. 
 14. Severability. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
 15.
Successors; Binding Agreement. This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees. If the Executive should die while any amounts would be payable to the Executive hereunder if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive’s devisee, legatee or other designee or, if there be no such designee, to the Executive’s estate. 

16. Amendments and Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and the Board. No waiver by either party hereto at any time of any breach by the Executive or the Company of, or in compliance with, any condition or provision of this Agreement to be
performed by the Executive or the Company, as applicable, shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 

 17. Complete Agreement. (a) This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter hereof and (b) this Agreement supersedes and preempts any prior understandings, agreements or representations by or between the Executive and AGNC, the Company and any of
their subsidiaries, written or oral (including, without limitation, the Prior Agreement), which may have related to the subject matter hereof in any way. 

18. Counterparts. This Agreement may be executed in one or more counterparts (including electronically transmitted counterparts), each
of which shall be deemed to be an original, but all of which together will constitute one and the same instrument. 
 19. Choice of
Law. This Agreement shall be governed by, and construed in accordance with, the internal, substantive laws of the State of Maryland. The Company and the Executive agree that the state and federal courts located in the State of Maryland shall
have jurisdiction in any action, suit or proceeding based on or arising out of this Agreement and the Company and the Executive hereby: (a) submit to the personal jurisdiction of such courts, (b) consent to service of process in connection
with any action, suit or proceeding and (c) waive any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal jurisdiction, venue or service of process. 

20. Indemnification and D&O Insurance. The Executive will be provided indemnification and mandatory advancement of expenses to the
maximum extent permitted by AGNC’s, the Company’s and their subsidiaries’ and affiliates’ Articles of Incorporation or Bylaws, with such indemnification to be on terms determined by the Board or the applicable board of directors
or managers, or any of their committees, but on terms no less favorable than provided to any other executive officer or director of such entities. AGNC and the Company shall maintain customary directors and officers insurance coverage for the
Executive’s benefit on the same basis as such coverage is maintained for the benefit of AGNC’s and the Company’s other executive officers and directors (including former executive officers and directors). 

21. Section 409A. 
 (a) The
parties intend for this Agreement to either comply with, or be exempt from, Section 409A, and all provisions of this Agreement shall be interpreted and applied accordingly. If any compensation or benefits provided by this Agreement may result
in the application of Section 409A, the Company shall, subject to the Executive’s prior written approval, modify the Agreement in the least restrictive manner necessary in order to exclude such compensation from the definition of
“deferral of compensation” within the meaning of Section 409A or in order to comply with the provisions of Section 409A and without any diminution in the value of the payments or benefits to the Executive. Each payment or
reimbursement under this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A. Any payments or reimbursements of any expenses provided for under this Agreement shall be made in
accordance with Treas. Reg. §1.409A-3(i)(1)(iv). 
 (b) To the extent that any payment or
benefit pursuant to this Agreement constitutes a “deferral of compensation” subject to Section 409A (after taking into account to the maximum extent possible any applicable exemptions) (a “409A Payment”) and is
treated as payable upon Separation from Service, then, if on the date of the Executive’s Separation from Service, the Executive is a Specified Employee, to the extent required for the Executive not to incur additional taxes pursuant to
Section 409A, no such 409A Payment shall be made to the Executive prior to the earlier of (i) six (6) months after the Executive’s Separation from Service or (ii) the date of the Executive’s death. Should this paragraph 21
result in payments or benefits to the Executive at a later time than otherwise would have been made under this Agreement, on the first day any such payments or benefits may be made without incurring additional tax pursuant to Section 409A, the
Company shall make such payments and provide such benefits as provided for in this Agreement. For purposes of this paragraph 21, the terms “Specified Employee” and “Separation from Service” shall have the meanings ascribed to
them in Section 409A. The parties intend that the phrase “termination of employment” and words and phrases of similar import used in this Agreement means a Separation From Service with the Company and its subsidiaries. 

 22. Section 280G. In the event that any payments, distributions, benefits or
entitlements of any type payable or provided by AGNC, the Company or any of their subsidiaries to the Executive, whether or not payable in connection with this Agreement or upon a termination of employment (“Payments”), (i)
constitute “parachute payments” within the meaning of Section 280G, and (ii) but for this paragraph 22 would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Payments shall be reduced to such lesser amount (the “Reduced Amount”) that would result in no portion of the Payments being subject to the Excise Tax; provided, however, that such Payments shall not be so reduced if a
nationally recognized accounting firm selected by the Board in good faith (the “Accountants”) determines that without such reduction, the Executive would be entitled to receive and retain, on a net
after-tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Code, federal, state and local income taxes, social security and Medicare taxes and all other applicable
taxes, determined by applying the highest marginal rate under Section 1 of the Code and under state and local tax laws which applied (or is likely to apply) to the Executive’s taxable income for the tax year in which the transaction which
causes the application of Section 280G occurs, or such other rate(s) as the Accountants determine to be likely to apply to the Executive in the relevant tax year(s) in which any of the Payments are expected to be made), an amount that is
greater than the amount, on a net after-tax basis, that the Executive would be entitled to retain upon receipt of the Reduced Amount. Unless the Board and the Executive otherwise agree in writing, any
determination required under this paragraph 22 shall be made in good faith by the Accountants in a timely manner and shall be binding on the parties absent manifest error. In the event of a reduction of Payments hereunder, the Payments shall be
reduced in the order determined by the Accountants that results in the greatest economic benefit to the Executive in a manner that would not result in subjecting the Executive to additional taxation under Section 409A. For purposes of making
the calculations required by this paragraph 22, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other
applicable legal authority. The Board and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably require in order to make a determination under this paragraph 22, and the Company shall bear
the cost of all fees charged by the Accountants in connection with any calculations contemplated by this paragraph 22. To the extent requested by the Executive, the Company shall cooperate with the Executive in good faith in valuing, and the
Accountants shall value, services to be provided by the Executive (including the Executive refraining from performing services pursuant to a covenant not to compete) before, on or after the date of the transaction which causes the application of
Section 280G such that Payments in respect of such services may be considered to be “reasonable compensation” within the meaning of Section 280G. Notwithstanding the foregoing, if the transaction which causes the application of
Section 280G occurs at a time during which Section 2(a)(i) of Q&A-6 of Treasury Regulation Section 1.280G would apply to the Executive, upon the request of the Executive, the Company shall
use reasonable efforts to obtain the vote of equity holders described in Q&A-7 of Treasury Regulation Section 1.280G. 

[SIGNATURES ON FOLLOWING PAGE] 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above. 
  

			
	AGNC MORTGAGE MANAGEMENT, LLC
		
	By:	 	 /s/ Kenneth Pollack

	Name: Kenneth Pollack
	Title: Senior Vice President and General Counsel
	
	EXECUTIVE
		
	By:	 	 /s/ Gary Kain

	Name: Gary Kain

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