Document:

EX-10.17

  Exhibit 10.17

   

  CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

   

  Exhibit A-1

  This Exhibit A-1 Replaces Exhibit A to the Supply Agreement dated May 22, 2020 between Thinxxs Microtechnology AG And TALIS BIOMEDICAL CORPORATION (“Talis”)

  PRODUCTS

  [...***...]

   

   

  

   

  [...***...]. In addition, and without limiting the foregoing, thX and Talis agree in good faith on cost reduction goals and shall work together to achieve such goals via process changes, material changes and other improvements to Products. The benefit of cost reductions shall be shared between the parties

  2.	Product Specifications (Including Acceptance Criteria)

  Product Specifications are available as follows:

  [...***...]

   

  4.	Key Performance Indicators (KPI’s)

  thX will provide Talis with the following reports on a quarterly basis for the following:

  •On Time Delivery

  •Cost Reductions

  •Benchmarking (and lead time reduction to meet benchmarks)

  •On Hand Inventory, Projected Available, Critical Items

  ThX will start and/or maintain a continuous improvement strategy for Product quality, cost, delivery, inventory reduction and service including the above stated KPI’s

  [...***...]

   

   

  

   

  [...***...]

  thinXXS Microtechnology AG	Talis Biomedical Corporation

  By: /s/ Joe Rytell		By:  /s/ Roger Moody	

  Name: Joe Rytell		Name: Roger Moody	

  Title: Managing Director		Title: Chief Financial Officer	

   

   

  

   

   

  PURCHASE AGREEMENT

  This Purchase Agreement (the “Purchase Agreement”), entered into as of 13 December 2021 (the “Effective Date”) sets forth the terms of the agreement between Talis Biomedical Corporation (“Talis” or the “Company”) and thinXXS Microtechnology AG (“thX”) (each a “Party” and together, the “Parties”) regarding purchase commitments made under the Supply Agreement executed between the Parties as of August 12, 2020 (the “Supply Agreement”).

  1	Definitions

  1.1 Any capitalized terms not specifically defined in this Purchase Agreement shall be given the definition set forth in the Supply Agreement.

  1.2 “Raw Cards” shall mean a Product that is a [...***...] as described in the Specifications contained in attached Exhibit 1 (the “Raw Card Specifications”), and the Parties acknowledge and agree that the Raw Card Specifications are hereby incorporated into Section 2 of Exhibit A-1 to the Supply Agreement.

  2	Purchase Commitment.

  2.1  Talis shall purchase a minimum of [...***...] Raw Cards per [...***...] from thX during the period of [...***...] (the “Committed Quantity”) at a purchase price of [...***...]. Upon execution of this Purchase Agreement, Talis shall issue a purchase order for [...***...]. For the sake of clarity, the Parties agree that the obligations, rights and remedies of each Party provided under the Supply Agreement shall apply to the Purchase PO. Subject to each Party’s obligations, rights and remedies under the Supply Agreement, the purchase of the Committed Quantity is a [...***...]. Within [...***...] of the Effective Date of this Purchase Agreement, Talis will issue a Purchase Order (the “Purchase PO”) in the amount of [...***...] for the remainder of the Committed Quantity. For clarity, subject to the terms of this Purchase Agreement, the Purchase PO constitutes a binding and noncancelable commitment on Talis to purchase and on thX to manufacture and supply the Committed Quantity of Raw Cards set forth in such Purchase PO. If thX fails to timely provide Raw Cards in accordance with the Specifications, the Quality Agreement, timing requirements, and all other requirements of the Supply Agreement, the Parties rights and responsibilities will be determined by the terms of the Supply Agreement, including that if there is any Chronic Supply Delay, the Parties agree that Talis may choose to waive the Committed Quantity for any [...***...] impacted by a Chronic Supply Delay.

  2.2.  The Parties acknowledge and agree that in order for Talis to receive the intended benefit and use of the Committed Quantity of Raw Cards, thX must manufacture and supply the requested quantity of reagent plugs in accordance with the applicable Specifications and the Quality Agreement. As such, the Parties further acknowledge and agree that [...***...]

   

   

  

   

  [...***...].

  3	Contract Revisions

  3.1 Purchase Order Number 2020112038. The Parties agree to cancel existing Purchase Order Number 2020112038 dated 25 November 2020, including its reissuance on 16 March 2021 as PO-000204 (the “Raw Card PO”).

  3.2 Release of Claims. Each Party, on behalf of itself and its parents, subsidiaries, affiliates, and insurers, successors, agrees to fully release and discharge the other Party from and for any and all rights, claims, controversies, damages, expenses, costs, obligations, causes of action, counterclaims, cross-claims, rights of set-off and recoupment, suits, debts, sums of money, accounts, breaches of duty, covenants, contracts, agreements, promises, judgments, executions, demands and liabilities of any nature whatsoever, in law or otherwise, whether known or unknown, that have ever existed, that now exist, or that may exist in the future, related in any way to the Raw Card PO.

  3.3	Supply Agreement

   

   

  

   

  3.3.1	Completion of Production Lines. The Parties have both met their obligations to design and establish semi-automated Production Lines in accordance with Section 2.3 of the Supply Agreement. At a future date, at Talis’s request, the Parties shall enter into a mutually agreed upon Statement of Work under which thX will establish a Production Line that delivers complete cards at the Automated Product Price of [...***...], subject to the conditions set forth in Exhibit A-1.

   

  3.3.2	Raw Material Purchasing.  Upon (a) [...***...], and notwithstanding Section 4.1(b) of the Supply Agreement, Talis will transfer to thX the Third Party Supplier parts listed in Exhibit 2 to this Purchase Agreement that are in Talis’s possession and on order by Talis (“Talis Third Party Supplier Parts”) up to [...***...] to support its manufacture of Talis’s Committed Quantity and any additional Talis Third Party Supplier Parts [...***...] in order to fulfill any future Talis order (“Transferred Inventory”). Talis acknowledges and agrees that thX will charge Talis [...***...] of the Transferred Inventory upon thX’s receipt of any portion of the Transferred Inventory from a Third Party Supplier or Talis, as requested by thX. For clarification and not limitation, once Third Party Supplier Parts are entirely shipped to thX (upon its request), thX shall on a going-forward basis, purchase the Raw Materials listed in Exhibit 2 to this Purchase Agreement as well as all Third Party Supplier parts required to manufacture Consumables from Third Party Suppliers and thX shall bill Talis [...***...] of Third Party Supplier Parts it purchases directly from Third Party Suppliers plus [...***...] when invoiced by such Third Party Suppliers. The Parties agree that all Third Party Supplier Parts and Raw Materials which are the subject of this subsection 3.3.2 shall be considered “Talis-Supplied Materials” as defined under the Supply Agreement during the Term of this Purchase Agreement [...***...]. After the end of the Term of this Purchase Agreement, all Third Party Supplier Parts and Raw Materials shall be deemed thX supplied materials[...***...].

  3.3.3	[...***...] Annual Commitment PO. In view of the purchase commitment and associated Purchase Order set forth in Section 2 of this Purchase Agreement, [...***...]. The obligations associated with Section 3.4 of the Supply Agreement will [...***...].

  3.4  Rolling Monthly Forecasts. In accordance with Section 3.3 of the Supply Agreement, on the first Business Day of each month, commencing on [...***...], Talis will provide thX with updated Rolling Monthly Forecasts. For clarity, other than as set forth in Section 2 of this Purchase Agreement or as secured by a binding Purchase Order as set forth in Section 3.5 of this Purchase Agreement, each Rolling Monthly Forecast shall be non-binding on both Parties; rather, the Rolling Monthly Forecasts will reflect Talis’s good faith expectation, at the time of submission of the forecast, of the quantity of Products Talis expects to order during the applicable [...***...] period.

   

   

  

   

  3.5  Orders in Excess of Purchase PO. During the Term, [...***...], Talis may place a Purchase Order for Products in excess of the Committed Quantity per [...***...] recited in Section 2 ( “Excess PO”) by submitting to thX a written purchase order using Talis’s standard purchase order form, which shall (a) specify any quantity of Products (by Product type) in excess of the quantities set forth in the Purchase PO, (b) provide delivery dates for any such Product, and (c) include any reasonable special shipping, storage or other instructions applicable to such order. thX shall promptly (in all cases within [...***...] send its acceptance, rejection, or counter-offer of each Excess PO to Talis in writing, and any acceptance will be a binding obligation on thX to fulfill such Purchase Order at the prices set forth in Exhibit A-1, provided however that the pricing set forth therein shall [...***...]. thX shall use [...***...] to implement a second shift in order to accommodate an Excess PO.

  3.6  Except as specifically set forth above and Exhibit A-1, in all other aspects, the Supply Agreement (and all of its terms and conditions contained therein) shall remain in full force and effect and continue to govern the parties’ ongoing relationship. To the extent any provisions in the Purchase Agreement conflict, other than those changes set forth in this Section 3 and Exhibit A-1 of this Purchase Agreement above, with any provisions in the Supply Agreement and cannot be read together in a consistent manner, then the terms of the Supply Agreement control.

  3.7  License to Finish Raw Cards Manufactured by thX.

  (a)	During the term of the Supply Agreement and, further limited, to the period of time in which the Parties agree that Talis will Functionalize the Raw Cards, thX hereby grants to Talis a nonexclusive, worldwide, non-transferable, revocable, royalty-free and fully paid license to: (i) Functionalize, or sublicense to third parties that are not thX Competitors to Functionalize, the Raw Cards supplied by thX under the Supply Agreement to produce Consumables; and (ii) make, have made, use, sell, have sold, offer for sale, and import such Consumables Functionalized in accordance with subsection 3.9(a)(i). “Functionalize” shall mean [...***...]. No license is granted beyond the grant expressly set forth above.

  b) In connection with the exercise of the license granted above, thX shall provide, [...***...], applicable technology transfer and related training to enable Talis to set up facilities to Functionalize the Raw Cards to produce Cartridge. For the avoidance of doubt, thX consultation with respect to the production Equipment shall include advice regarding the Specifications for and setup of such production Equipment.

  4	[...***...] Payment. As consideration for settlement of Talis’s cancellation of the Raw Card PO and the Release of Claims set forth in Section 3.2 Talis will (i) issue the Purchase PO and purchase of the Committed Quantity thereunder, and (ii) pay thX the total reconciliation amount of [...***...]

   

   

  

   

   

  [...***...].  The Payment shall be paid electronically to the bank account as specified by thX with specific account information sufficient for Talis to pay the Payment electronically by such date.

  5	Term.  This Purchase Agreement is effective as of the Effective Date and will extend until December 31, 2022, unless the Supply Agreement is terminated in accordance with the terms of Section 11.2 of the Supply Agreement, in which case Purchase Agreement will terminate on the same date as the Supply Agreement. Sections 6 and 7 shall survive any expiration or termination of this Purchase Agreement.

  6	Miscellaneous. This Purchase Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between thX and the Talis with regard to its subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes all other such promises, warranties or representations. No amendment, modification or addition to this Purchase Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties. If any provision of this Purchase Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Purchase Agreement and the provision in question will be modified so as to be rendered enforceable. This Purchase Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of Illinois without regard to conflict of laws principles with venue and personal and subject matter jurisdiction agreed to be all exclusively in the state or federal courts located in Chicago, Illinois. Any ambiguity in this Purchase Agreement shall not be construed against either Party as the drafter. Any waiver of a breach of this Purchase Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach.

  7	This Purchase Agreement may be separately executed in one or more separate counterparts, and all of such separately signed counterparts shall constitute one and the same agreement upon exchange. The Parties agree that facsimile or electronic signatures shall be as effective as if originals.

  IN WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement as of the Effective Date.

  TALIS BIOMEDICAL CORPORATION

   

  By:  /s/ Roger Moody	

   

  Name: Roger Moody	

   

  Title:  Chief Financial Officer	

   

  Date:  Dec 15, 2021	

   

  thinXXS Microtechnology AG

   

   

  

   

  By:  /s/ Joe Rytell	

  Name: Joe Rytell	

  Title:  Managing Director	

  Date:  Dec 15, 2021	

   

   

  

   

  Exhibit 1

  Raw Card Specifications

  Product Specifications are available as follows:

  [...***...]

   

   

  

   

  Exhibit 2

  thX Purchase / Transfer from Talis of Third Party Supplier Parts

  [...***...]ex_347140.htm

Exhibit 10.1

 

 

inTEST CORPORATION

 

2022 EXECUTIVE OFFICER COMPENSATION PLAN

 

The Compensation Committee (the “Committee”) of the Board of Directors of inTEST Corporation (the “Company”) has approved a compensation plan for its executive officers. The components of this plan include (i) base salary, (ii) short term incentive compensation in the form of a performance based bonus and (iii) long term incentive compensation in the form of equity compensation grants. The executive officers who are eligible to participate in this plan are Richard N. Grant, Jr., President and Chief Executive Officer, and Duncan Gilmour, Chief Financial Officer, Treasurer and Secretary.

 

Base Salary

 

The base salary of each executive officer for 2022, effective on April 1, 2022, are as follows:

 

	Richard N. Grant, Jr.	$391,875
	 	 
	Duncan Gilmour	$260,000

 

Short Term Incentive Compensation

 

The performance bonus payment target percentages to be used in the executive officers’ bonus calculation for 2022 are as follows:    

 

	Richard N. Grant, Jr.	70%
	 	 
	Duncan Gilmour	55%

 

The amount of the executive officers’ bonus may range from zero (if none of the performance metrics are satisfied) to an amount that may exceed the target performance bonus amounts.

 

Chief Executive Officer Short Term Incentive Target and Performance Objectives

 

The President and Chief Executive Officer (the “CEO”) will be eligible to receive a performance bonus payment upon satisfaction of the following weighted performance metrics during 2022:

 

Achievement of Financial Goals – 60%

 

Financial Performance of Acquisitions Completed in 2021 – 20%

 

Implementation of Talent Development and Recruitment Plan – 20%

 

1

 

 

Achievement of Financial Goals

 

A portion of the CEO’s performance bonus may be earned based upon the Company’s achievement of revenue and Adjusted EBITDA for 2022. “Adjusted EBITDA” is derived by adding acquired intangible amortization, interest expense, income tax expense, depreciation, and stock-based compensation expense to net earnings (loss). The CEO is eligible to achieve this portion of the performance bonus based upon the following calculation:

 

	The CEO’s performance bonus target percentage multiplied by base salary; with that amount multiplied by the performance metric weighting factor (60%); with that amount multiplied by the Financial Goals percentage, if any, determined from the matrix below.  The Financial Goals percentage is determined by locating on the matrix below the intersection of (i) the column that indicates the percentage calculated by dividing (A) the Company’s actual revenue for 2022 by (B) its budgeted revenue for 2022 and (ii) the row that indicates the percentage calculated by dividing (A) the Company’s actual Adjusted EBITDA for 2022 by (B) its budgeted Adjusted EBITDA for 2022.

 

 

With regards to the revenue calculation, a column milestone is not achieved unless such percentage is exceeded without regards to rounding up the percentage achieved by the calculation. With regards to the Adjusted EBITDA calculation, a row milestone is not achieved unless such percentage is exceeded without regards to rounding up the percentage achieved by the calculation. Any expenses that are treated for accounting purposes as restructuring items or transaction related expenses, contingent consideration adjustments related to any acquisition earnouts and the impact from any completed acquisitions in 2022, shall be excluded from the actual amounts when determining the revenue and Adjusted EBITDA for 2022.

 

2

 

 

Financial Performance of the Three Acquisitions Completed in 2021         

 

A portion of the CEO’s performance bonus will be earned based upon a weighted average of performance factors determined by the financial performance of the three acquisitions completed in 2021 (Acculogic, Videology and North Sciences), relative to the acquisition models. The target financial performance metrics for these acquisitions are as follows:

 

	 	
			●

				
			Acculogic income from business operations of $[REDACTED]

			

	 	
			●

				
			Videology income from business operations of $[REDACTED]

			

	 	
			●

				
			North Sciences gross margin of $[REDACTED]

			

 

Performance factors will be determined based on actual results as follows:

 

	 	
			●

				
			If 95% of the metric is attained, the performance factor is 0.50

			

	 	
			●

				
			If 100% of the metric is attained, the performance factor is 1.00

			

	 	
			●

				
			If 110% of the metric is attained, the performance factor is 1.25

			

 

Performance that falls between these points will be rounded to the lowest nearest point. If performance falls below 95%, the performance factor is 0.

 

These performance factors will be weighted as:

 

	 	
			●

				
			Acculogic – 40%

			

	 	
			●

				
			Videology – 40%

			

	 	
			●

				
			North Sciences – 20%

			

 

The final calculation for determing this portion of the bonus will be:

 

The sum of (i) the Acculogic performance factor multiplied by 0.40, plus (ii) the Videology performance factor multiplied by 0.40, plus (iii) the North Sciences performance factor multiplied by 0.20, with that sum of (i), (ii) and (iii) then being multiplied by base salary multiplied by 0.70 and then by 0.20.

 

Bonus earned = ((Acculogic performance factor * 0.40) + (Videology performance factor * 0.40) + (North Sciences performance factor * 0.20)) * (base salary * 0.70 * 0.20)

 

3

 

 

Implementation of a Talent Development Program

 

A portion of the CEO’s performance bonus will be earned based on results of development and implementation of a talent development program. The program’s goal is to ensure the company has the talent necessary to execute near- and long-term strategic plans. The program must include initiatives to develop internal talent and recruit new talent to the company.

 

The following three specific goals will have equal weighting in determining the performance factor for this goal.

 

	 	
			1.

				
			By the end of 2022, all three of the general managers (“GMs”) have at least one named successor who is expected to be ready for promotion to GM, if needed, within three years.

			

 

	 	
			2.

				
			By end of 2022, at least half of all senior leadership team (“SLT”) roles (reports to GMs) across the business units have at least one named successor ready for promotion to such SLT role if needed within two years. 

			

 

	 	
			3.

				
			CEO will deliver a comprehensive mid-year update to the board no later than September 1, 2022.

			

 

The board shall review the progress of the talent development program in Q1 2023 and determine a performance factor ranging from 0% to 100%.

 

Chief Financial Officer Short Term Incentive Target and Performance Objectives

 

The Chief Financial Officer (the “CFO”) will be eligible to receive a performance bonus payment upon satisfaction of the following weighted performance metrics during 2022:

 

Achievement of Financial Goals – 60%

 

Financial Performance of Acquisitions Completed in 2022 – 20%

 

Achievement of CFO Specific Objectives – 20%

 

4

 

 

Achievement of Financial Goals

 

A portion of the CFO’s performance bonus may be earned based upon the Company’s achievement of revenue and Adjusted EBITDA as compared to budgeted revenue and Adjusted EBITDA for 2022. “Adjusted EBITDA” is derived by adding acquired intangible amortization, interest expense, income tax expense, depreciation, and stock-based compensation expense to net earnings (loss). The CFO is eligible to achieve this portion of the performance bonus based upon the following calculation:

 

	The CFO’s performance bonus target percentage multiplied by base salary; with that amount multiplied by the performance metric weighting factor (60%); with that amount multiplied by the Financial Goals percentage, if any, determined from the matrix below.  The Financial Goals percentage is determined by locating on the matrix below the intersection of (i) the column that indicates the percentage calculated by dividing (A) the Company’s actual revenue for 2022 by (B) its budgeted revenue for 2022 and (ii) the row that indicates the percentage calculated by dividing (A) the Company’s actual Adjusted EBITDA for 2022 by (B) its budgeted Adjusted EBITDA for 2022.

 

 

With regards to the revenue calculation, a column milestone is not achieved unless such percentage is exceeded without regards to rounding up the percentage achieved by the calculation. With regards to the Adjusted EBITDA calculation, a row milestone is not achieved unless such percentage is exceeded without regards to rounding up the percentage achieved by the calculation. Any expenses that are treated for accounting purposes as restructuring items or transaction related expenses, contingent consideration adjustments related to any acquisition earnouts and the impact from any completed acquisitions in 2022, shall be excluded from the actual amounts when determining the revenue and Adjusted EBITDA for 2022.

 

Financial Performance of the Three Acquisitions Completed in 2021         

 

A portion of the CFO’s performance bonus will be earned based upon a weighted average of performance factors determined by the financial performance of the three acquisitions completed in 2021 (Acculogic, Videology and North Sciences), relative to the acquisition models. The target financial performance metrics for these acquisitions are as follows:

 

	 	
			●

				
			Acculogic income from business operations of at least $[REDACTED]

			

	 	
			●

				
			Videology income from business operations of at least $[REDACTED]

			

	 	
			●

				
			North Sciences gross margin of at least $[REDACTED]

			

 

5

 

 

Performance factors will be determined based on actual results as follows:

 

	 	
			●

				
			If 95% of the metric is attained, the performance factor is 0.50

			

	 	
			●

				
			If 100% of the metric is attained, the performance factor is 1.00

			

	 	
			●

				
			If 110% of the metric is attained, the performance factor is 1.25

			

 

Performance that falls between these points will be rounded to the lowest nearest point. If performance falls below 80%, the performance factor is 0.

 

These performance factors will be weighted as:

 

	 	
			●

				
			Acculogic – 40%

			

	 	
			●

				
			Videology – 40%

			

	 	
			●

				
			North Sciences – 20%

			

 

The final calculation for determing this portion of the bonus will be:

 

The sum of (i) the Acculogic performance factor multiplied by 0.40, plus (ii) the Videology performance factor multiplied by 0.4, plus (iii) the North Sciences performance factor multiplied by 0.20, with that sum then being multiplied by the executive’s base salary multiplied by 0.55 and then by 0.20.

 

Bonus earned = ((Acculogic performance factor * 0.40) + (Videology performance factor * 0.40) + (North Sciences performance factor * 0.20)) * (base salary * 0.55 * 0.20)

 

Final Average Net Working Capital (“NWC”) Management

 

A portion of the CFO’s performance bonus will be earned based upon actual results of net working capital relative to budgeted net working capital as a percentage of revenue calculated as:

 

NWC percentage = ((Trade accounts receivable, net of allowance for doubtful accounts + Inventories – Accounts Payable) / trailing 12 month revenue)) * 100

 

To calculate final Average NWC percentage, the monthly closing NWC percentage for each month in 2022 shall be added together with that sum then being divided by 12.

 

The budgeted NWC percentage for 2022 is [REDACTED]%.

 

To calculate the bonus payment for this goal, a performance factor shall be determined from the following schedule (rounding down to the nearest point):

 

	 	
			●

				
			If final average NWC is greater than 120% of budget, the performance factor is 0.00

			

	 	
			●

				
			If final average NWC is 120% of budget, the performance factor is 0.50

			

	 	
			●

				
			If final average NWC is 110% of budget, the performance factor is 0.75

			

	 	
			●

				
			If final average NWC is 100% of budget, the performance factor is 1.00

			

	 	
			●

				
			If final average NWC is 90% of budget, the performance factor is 1.25

			

	 	
			●

				
			If final average NWC is 80% of budget, the performance factor is 1.50

			

 

6

 

 

The bonus payment will then be calculated by multiplying the base salary times 0.55 and then by 0.20 and then by the performance factor.

 

A lower Average NWC percentage indicates the corporation was more cash efficient, so the performance factor scale is inversely proportional to the Final Average NWC percentage relative to budget.

 

General

 

The Committee shall calculate and determine achievement of all components of the short term incentive compensation. In the case of financial achievements, the determination shall be based on amounts derived from the Company’s audited financial statements. The Committee reserves the right to make subjective determinations and interpretations regarding the impact of unusual circumstances or events on achievement of each performance metric component by the executive officers. All such determinations will apply to all executive officers in the same manner. The Committee shall have final decision making authority regarding all issues related to the short term incentive compensation component of the Plan. The Committee shall finalize the amount of and authorize payment of the bonuses as part of the approval process for the Company’s 2022 audited financial statements. If the CEO or CFO leave the Company other than for death, disability, or retirement, they will receive no bonus if they are not employed on December 31, 2022.  If the CEO or CFO retire (age plus years of service equal to at least 70), or die or become disabled, they are entitled to a pro-rated bonus calculated by multiplying the bonus calculated above by the result obtained by dividing the number of completed months the executive officer is employed in 2022 by twelve.  Any bonus payment shall be made on or before March 15, 2023. The Committee shall have such authority to demand the repayment or “claw back” of any amounts paid pursuant to this Plan as needed to comply with all applicable laws and regulations.

 

Long Term Incentive Compensation

 

The executive officers shall be entitled to receive equity compensation grants consisting of restricted stock and stock options under the inTEST Corporation Third Amended and Restated 2014 Stock Plan, as amended, as follows:

 

	 	
			Shares of 

			Time Vested 

			Restricted Stock

				
			Shares of

			Performance Vested

			Restricted Stock

				
			Options to 

			Purchase Shares

			of Common Stock

			
	
			Richard N. Grant, Jr.

				
			13,664

				
			13,662

				
			25,692

			
	
			Duncan Gilmour

				
			6,832

				
			6,831

				
			12,848

			

 

All equity compensation shall be awarded to the executive officers as soon as possible in 2022 and will be based on the closing price of the shares of the Company’s common stock on March 9, 2022. The Company will grant restricted stock pursuant to award agreements in the form attached as Exhibit A hereto. The value of the grants shall be structured in equal thirds with the first third being time vested restricted stock (Exhibit A), the second third being performance vested restricted stock (Exhibit A) and the final third being stock options (the quantity of which shall be determined using a Black-Scholes model) (Exhibit B). The closing price of the Company’s shares on March 9, 2022, shall be used for all calculations. The time vested restricted stock awards will vest in equal increments over four years. All stock option awards will vest in equal increments over four years.

 

7

 

 

The performance metric used for the shares of performance vested restricted stock shall be 3-year organic revenue CAGR. The beginning revenue from which CAGR shall be measured is the pro forma value inclusive of all 2021 revenue from North Sciences, Videology and Acculogic regardless of when the companies were acquired.

 

The following schedule shall determine how many shares of the performance vested restricted stock are delivered:

 

	
			Vesting Percentage Matrix

			
	
			 

				
			Organic CAGR for the three year period ending December 31, 2024

			
	 	
			< 9%

				
			9%

				
			10%

				
			11%

				
			12%

				
			13% or more

			
	
			Percent of granted Shares to become vested

				
			0%

				
			50%

				
			75%

				
			100%

				
			125%

				
			150%

			

 

To achieve a given performance level, results must equal or exceed the threshold for that level, otherwise the percentage delivered shall be rounded down to the nearest point on the schedule.

 

[Exhibits A and B are omitted here. The Company’s standard form of Restricted Stock Agreement for Employees was previously filed with the Company’s Form 10-Q for the quarter ended September 30, 2020 and the Company’s standard form of Incentive Stock Option Agreement is filed with the Company’s Form 8-K filed on March 16, 2021.]

 

8

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