Document:

Exhibit 10.55

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) is made as of [·], 20[·], by and between Kadmon Holdings, Inc., a Delaware corporation (the “Corporation”), and [·] (“Indemnitee”). Capitalized terms used, but not otherwise defined herein, shall have the meanings set forth in Section 1.

 

RECITALS

 

A.                                    Highly competent and qualified persons have become more reluctant to serve corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance coverage or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the corporation.

 

B.                                    The board of directors of the Corporation (the “Board”) has determined that, in order to attract and retain competent and qualified individuals, the Corporation will seek to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Corporation and its subsidiaries from certain liabilities. However, as a result of changes in the marketplace for insurance it has become increasingly difficult to obtain liability insurance on terms providing reasonable protection at reasonable cost. The uncertainties relating to liability insurance have increased the difficulty of attracting and retaining such persons.

 

C.                                    The Board has determined that the potential inability to attract and retain highly competent and qualified persons to serve the Corporation would be detrimental to the best interests of the Corporation and its shareholders and that the Corporation should act to assure such persons that there will be increased certainty of adequate protection against risks of claims and actions against them arising out of their service to and activities on behalf of the Corporation in the future.

 

D.                                    The Board has determined that it is reasonable, prudent and necessary for the Corporation to contractually obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Corporation free from undue concern that they will not be so indemnified.

 

E.                                     Indemnitee has agreed to serve the Corporation in a Director, Officer and/or Key Employee capacity provided that Indemnitee is provided the protections available under this Agreement, the Corporation’s Certificate of Incorporation (as amended, modified, supplemented, restated or amended and restated from time to time, the “Certificate of Incorporation”), the Corporation’s Bylaws (as amended, modified, supplemented, restated or amended and restated from time to time, the “Bylaws”) and directors’ and officers’ liability insurance coverage, as well as other applicable liability insurance coverage, that is adequate in the present circumstances.

 

F.                                      This Agreement is a supplement to and in furtherance of any protections provided by the Certificate of Incorporation, the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder. In addition, Indemnitee will be entitled to indemnification pursuant to the Delaware General Corporation Law.

 

NOW THEREFORE, in consideration of the foregoing and the covenants, promises and representations set forth herein, and for other good and valuable consideration, including Indemnitee’s agreement to serve as a Director, Officer and/or Key Employee after the date hereof, and intending to be legally bound hereby, the parties hereto agree as follows:

 

 

1.                                      Certain Definitions for Purposes of this Agreement.  The following terms as used in this Agreement shall have the meanings set forth below.

 

(a)                                 “Change in Control” shall have occurred if, during any period of two consecutive years, individuals who at the beginning of that period constitute the Board cease for any reason to constitute at least a majority of it, unless the election of each new Director was approved in advance by a vote of at least a majority of the Directors then still in office who were Directors at the beginning of the period.

 

(b)                                 “Corporation” includes any domestic or foreign predecessor entity of the Corporation in a merger or other transaction in which the predecessor’s existence ceased on consummation of the transaction.

 

(c)                                  “Director” means an individual who is or was a director of the Corporation or an individual who, while a director of the Corporation, is or was serving at the Corporation’s request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, or other entity.  A Director is considered to be serving an employee benefit plan at the Corporation’s request if that Director’s duties to the Corporation also impose duties on, or otherwise involve services by, him or her to the plan or to participants in or beneficiaries of the plan.

 

(d)                                 “Disinterested Director” or “Disinterested Officer” means a Director or Officer, respectively, who at the time of a vote or selection referred to in Section 4(b) or 5(c) is not a party to the Proceeding.

 

(e)                                  “Key Employee” means an individual who is or was (i) an employee of the Corporation and/or affiliate or wholly or partially owned subsidiary of the Corporation and (ii) serving in a key legal, accounting or human resources role, as determined by the Board.  A Key Employee is considered to be serving an employee benefit plan at the Corporation’s request if that Key Employee’s duties to the Corporation also impose duties on, or otherwise involve services by, him or her to the plan or to participants in or beneficiaries of the plan.

 

(f)                                   “Enterprise” means (i) the Corporation, (ii) any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that is an affiliate or wholly or partially owned subsidiary of the Corporation and of which Indemnitee is or was serving as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary, and (iii) any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the express written request of the Corporation as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary.

 

(g)                                  “Expenses” includes all reasonable counsel fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

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(h)                                 “Independent Legal Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Corporation, (ii) Indemnitee, (iii) any affiliate of the Corporation or Indemnitee, (iv) any member of Indemnitee’s immediate family, (v) any company of which Indemnitee is an executive officer, in each case in any matter material to such party, or (vi) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

(i)                                     “Liability” includes the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable Expenses actually incurred with respect to a Proceeding.

 

(j)                                    “Officer” means an individual who is or was an officer of the Corporation or an individual who, while an officer of the Corporation, is or was serving at the Corporation’s request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, or other entity.  An Officer is considered to be serving an employee benefit plan at the Corporation’s request if that Officer’s duties to the Corporation also impose duties on, or otherwise involve services by, him or her to the plan or to participants in or beneficiaries of the plan.

 

(k)                                 “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Corporation or other Enterprise or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a Director, Officer and/or Key Employee, by reason of any action taken by Indemnitee or of any inaction on Indemnitee’s part while acting as a Director, Officer and/or Key Employee, or by reason of the fact that Indemnitee is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of another Enterprise; in each case whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by Indemnitee pursuant to this Agreement to enforce Indemnitee’s rights under this Agreement.

 

(l)                                     “Reviewing Party” shall mean the person or persons making the entitlement determination pursuant to Section 5 of this Agreement, and shall not include a court making any determination under this Agreement or otherwise.

 

2.                                      Basic Indemnification Arrangement.

 

(a)                                 Obligation to Indemnify; Standard of Conduct.  Except as provided in Sections 2(e), 2(f), 2(g) or 7 below, the Corporation shall indemnify Indemnitee and hold harmless Indemnitee, to the fullest extent authorized or permitted by applicable law, in the event Indemnitee is made a party to a Proceeding because he or she is or was a Director, Officer and/or Key Employee, against Liability incurred in the Proceeding if:

 

(i)                                     Indemnitee conducted himself or herself in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation; and

 

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(ii)                                  in the case of any criminal Proceeding, Indemnitee had no reasonable cause to believe his or her conduct was unlawful.

 

(b)                                 Service with Respect to Employee Benefit Plan.  Indemnitee’s conduct with respect to an employee benefit plan for a purpose he or she believed in good faith to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of Section 2(a)(1).

 

(c)                                  Reliance as Safe Harbor.  For purposes of any determination hereunder, Indemnitee shall be deemed to have acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal Proceeding, to have had no reasonable cause to believe Indemnitee’s conduct was unlawful, if Indemnitee’s conduct was based primarily on: (i) the records or books of account of the Corporation or relevant entity, including financial statements, (ii) information supplied to Indemnitee by the Officers of the Corporation or relevant entity in the course of their duties, (iii) the advice of legal counsel for the Corporation or relevant entity, or (iv) information or records given or reports made to the Corporation or relevant entity by an independent certified public accountant, or by an appraiser or other expert selected with reasonable care by the Corporation or relevant entity.  The provisions of this Section 2(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the relevant standard of conduct set forth in this Agreement.

 

(d)                                 Termination of Proceeding Not Determinative.  The termination of a Proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption or be determinative that Indemnitee is not entitled to indemnification or reimbursement of Expenses hereunder or otherwise.

 

(e)                                  Limits on Indemnification.  Unless, and then only to the extent that, a court of competent jurisdiction acting pursuant to Section 6 of this Agreement or the Delaware General Corporation Law, determines that, in view of the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification, the Corporation shall not indemnify Indemnitee under this Agreement:

 

(i)                                     in connection with a Proceeding by or in the right of the Corporation, except for reasonable Expenses (including an excise tax assessed with respect to an employee benefit plan) and amounts paid in settlement not exceeding, in the judgment of the Board, the estimated expense of litigating the Proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of the Proceeding, including any appeal thereof; or

 

(ii)                                  in connection with a Proceeding by or in the right of the Corporation with respect to any claim, issue or matter as to which Indemnitee shall have been adjudged liable to the Corporation.

 

(f)                                   Proceeding Brought by Indemnitee.  Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding or claim brought or made by Indemnitee against the Corporation or its Directors, Officers, Key Employees or other indemnitees, other than (i) a Proceeding or claim seeking or defending Indemnitee’s right to indemnification or advancement of Expenses pursuant to Section 6 of this Agreement or otherwise, or (ii) a Proceeding authorized by the Board prior to its initiation.

 

(g)                                  Settlements.  The Corporation acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay,

 

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distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(h)                                 Mandatory Indemnification.  The Corporation shall indemnify Indemnitee to the extent that he or she has been successful, on the merits or otherwise, in the defense of any Proceeding to which Indemnitee was a party, or in defense of any claim, issue or matter, because Indemnitee is or was a Director, Officer and/or Key Employee, against reasonable Expenses incurred by Indemnitee in connection with the Proceeding.

 

3.                                      Contribution.

 

(a)                                 Whether or not the indemnification provided hereunder is available, in respect of any Proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Corporation shall pay the entire amount of any Expenses, judgments, penalties, fines or amounts paid or to be paid in settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Corporation hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Corporation shall not enter into any settlement of any Proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee without any injunction or other equitable relief being imposed against Indemnitee.

 

(b)                                 Without diminishing or impairing the obligations of the Corporation set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Corporation shall contribute to the amount of Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Corporation and all Directors, Officers or Key Employees of the Corporation, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Corporation and all Directors, Officers or Key Employees of the Corporation other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Expenses, judgments, penalties, fines or settlement amounts, as well as any other equitable considerations which the Delaware General Corporation Law may require to be considered. The relative fault of the Corporation and all Directors, Officers or Key Employees of the Corporation, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

(c)                                  The Corporation hereby agrees to indemnify and hold harmless Indemnitee from any claims of contribution which may be brought by Directors, Officers or Key Employees of the Corporation, other than Indemnitee, who may be jointly liable with Indemnitee.

 

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4.                                      Advances for Expenses.

 

(a)                                 Obligations and Requirements.  The Corporation shall advance, to the extent not prohibited by applicable law, the Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Corporation of any statement requesting such advances (which shall include invoices received by Indemnitee in connection with such Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the invoice) from time to time, whether prior to or after final disposition of any Proceeding.  Any such statement shall reasonably evidence the Expenses incurred by Indemnitee. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Corporation to support the advances claimed. Indemnitee shall qualify for advances upon the execution and delivery to the Corporation of this Agreement, subject to the condition that if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Corporation, Indemnitee shall undertake to the fullest extent permitted by law to repay the advance.  Such undertaking shall be an unlimited general obligation of Indemnitee but need not be secured and shall be accepted without reference to Indemnitee’s financial ability to make repayment.  The right to advances under this Section 4 shall in all events continue until final disposition of any Proceeding, including any appeal thereof.

 

(b)                                 Evaluation of Reasonableness of Expenses.  Evaluation as to reasonableness of Expenses of Indemnitee in the specific case shall be made in the same manner as the determination that indemnification is permissible, as described in Section 5 below, except that if the determination is made by Independent Legal Counsel, evaluation as to reasonableness of Expenses shall be made by those entitled under Section 5(c)(3) to select Independent Legal Counsel.  Notwithstanding the foregoing sentence, any Expenses claimed by Indemnitee shall be deemed reasonable if the Reviewing Party fails to make the reasonableness evaluation within thirty (30) days following the Corporation’s receipt of invoices for specific Expenses to be reimbursed or advanced.

 

5.                                      Authorization of and Determination of Entitlement to Indemnification.

 

(a)                                 Entitlement Determination.  The Corporation and Indemnitee acknowledge that indemnification of Indemnitee under Section 2 of this Agreement has been pre-authorized by the Corporation as permitted by the Delaware General Corporation Law.  Nevertheless, the Corporation shall not indemnify Indemnitee under Section 2 unless a separate determination has been made in the specific case that indemnification of Indemnitee is permissible in the circumstances because Indemnitee has met the relevant standard of conduct set forth in Section 2(a); provided, however, that: (i) no such entitlement decision need be made prior to the advancement of Expenses; and (ii) regardless of the result or absence of any such determination, the Corporation shall make any indemnification mandated by Section 2(h) above.

 

(b)                                 To obtain indemnification (including advancement of Expenses) under this Agreement, Indemnitee shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

 

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(c)                                  Reviewing Party.  The determination referred to in Section 5(a) shall be made, at the election of the Board, by any of the following Reviewing Parties (unless a Change in Control shall have occurred after Indemnitee first began serving as a Director, Officer and/or Key Employee, in which case Indemnitee shall be entitled to designate that the determination shall be made by Independent Legal Counsel selected in the manner set forth in Section 5(d) below):

 

(i)                                     by the Board by a majority vote of a quorum consisting of Disinterested Directors; or

 

(ii)                                  by a majority vote of a committee duly designated by the Board (in which designated Directors who do not qualify as Disinterested Directors may participate) consisting solely of two or more Disinterested Directors; or

 

(iii)                               by Independent Legal Counsel: (A) Selected in the manner prescribed in paragraph (1) or (2) of this Section 5(c); or (B) if a quorum of Directors cannot be obtained for purposes of paragraph (1) and the committee cannot be designated under paragraph (2), selected by a majority vote of the full Board (in which selected Directors who do not qualify as Disinterested Directors may participate); or

 

(iv)                              by the shareholders of the Corporation, by a majority vote of a quorum consisting of shareholders who were not Parties to that Proceeding or, if no such quorum is obtainable, by a majority vote of shareholders who were not Parties to that Proceeding.

 

(d)                                 Selection of Counsel after Change in Control.  If a Change in Control shall have occurred, Independent Legal Counsel shall be selected by Indemnitee (unless Indemnitee requests that the selection be made in the manner described in Section 5(c)(3)), and Indemnitee shall give written notice to the Corporation advising it of the identity of the Independent Legal Counsel so selected.  In either event, Indemnitee or the Corporation, as the case may be, may, within fifteen (15) days after the written notice of selection has been given, deliver to the Corporation or to Indemnitee, as the case may be, a written objection to the selection; provided, however, that the objection may be asserted only on the ground that the counsel so selected does not meet the requirements of “Independent Legal Counsel” as defined in Section 1 of this Agreement.  The objection shall set forth with particularity the factual basis of the assertion.  If a written objection is made and substantiated, the counsel selected may not serve as Independent Legal Counsel unless and until the objection is withdrawn or a court has determined that the objection is without merit.  If, within fifteen (15) days after submission by Indemnitee of a written request for indemnification, no Independent Legal Counsel shall have been selected and not objected to, either the Corporation or Indemnitee may petition the court conducting the Proceeding, or another court of competent jurisdiction, for resolution of any objection that shall have been made by the Corporation or Indemnitee to the other’s selection of Independent Legal Counsel and/or for the appointment as Independent Legal Counsel of a person selected by the court or by another person that the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Legal Counsel under Section 5(c).

 

(e)                                  Cooperation by Indemnitee.  Indemnitee shall cooperate with the Reviewing Party with respect to its determination of Indemnitee’s entitlement to indemnification, including providing to the Reviewing Party on reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to the determination.  Any Expenses incurred by Indemnitee in so cooperating with the Reviewing Party shall be borne by the Corporation, regardless of the determination as to Indemnitee’s entitlement to indemnification.

 

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(f)                                   If the Reviewing Party shall not have made a determination within sixty (60) days after receipt by the Corporation of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that (x) such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Reviewing Party in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and (y) that the foregoing provisions of this Section 5(f) shall not apply if the determination of entitlement to indemnification is to be made by the shareholders pursuant to Section 5(c)(4) and if (A) within fifteen (15) days after receipt by the Corporation of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the shareholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of shareholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

 

(g)                                  Other.

 

(i)                                     In making a determination with respect to entitlement to indemnification hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under this Agreement, and anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.  Neither the failure of the Corporation (including by its Directors or Independent Legal Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation (including by its Directors or Independent Legal Counsel) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(ii)                                  The Reviewing Party, however chosen, shall make the requested determination as promptly as reasonably practicable after a request for indemnification is presented.

 

(iii)                               Any determination by Independent Legal Counsel under this Section 5 shall be delivered in the form of a written opinion to the Board with a copy to Indemnitee.

 

(iv)                              The Corporation shall pay any and all reasonable fees and expenses of Independent Legal Counsel incurred by the counsel in connection with acting pursuant to this Section 5, and the Corporation shall pay all reasonable fees and expenses incident to the procedures of this Section 5, regardless of the manner in which such Independent Legal Counsel was selected or appointed.

 

(v)                                 On the due commencement of any action to seek court-ordered indemnification pursuant to Section 6 of this Agreement, Independent Legal Counsel shall be discharged and relieved of any further responsibility in that capacity, subject to the applicable standards of professional conduct then prevailing.

 

6.                                      Court-Ordered Indemnification and Advances for Expenses.

 

(a)                                 Procedure.  If Indemnitee is a party to a Proceeding, he or she may apply for indemnification or for advances for Expenses to the court conducting the Proceeding or to another court

 

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of competent jurisdiction.  For purposes of this Agreement, the Corporation consents to personal jurisdiction and venue in any court in which is pending a Proceeding to which Indemnitee is a party.  Regardless of any determination by the Reviewing Party that Indemnitee is not entitled to indemnification or to advancement of Expenses or as to the reasonableness of Expenses, and regardless of any failure by the Reviewing Party to make a determination as to the entitlement or the reasonableness of Expenses, the court’s review shall be a de novo review.  After receipt of an application and after giving any notice it considers necessary, the court may:

 

(i)                                     order indemnification or the advance for Expenses if it determines that Indemnitee is entitled to indemnification or to advance for Expenses under this Agreement, the Delaware General Corporation Law or otherwise; or

 

(ii)                                  order indemnification or the advance for Expenses if it determines that, in view of all the relevant circumstances, it is fair and reasonable to indemnify Indemnitee, or to advance Expenses to Indemnitee, regardless of whether Indemnitee has the relevant standard of conduct, complied with the requirements for advancement of Expenses, or been adjudged liable in a Proceeding referred to in Section 2(e) above (in which case any court-ordered indemnification need not be limited to Expenses incurred by Indemnitee, but may include penalties, fines, amounts paid in settlement, judgments and any other amounts ordered by the court to be indemnified or advanced).

 

(b)                                 Payment of Expenses to Seek Court-Ordered Indemnification.  If the court determines that Indemnitee is entitled to indemnification or to advance for Expenses, the Corporation shall pay Indemnitee’s reasonable Expenses to obtain the court-ordered indemnification or advance for Expenses.

 

7.                                      Limitations on Indemnification.  Regardless of whether Indemnitee has met the relevant standard of conduct set forth in Section 2(a), nothing in this Agreement shall require or permit indemnification of Indemnitee for any Liability or Expenses incurred in a Proceeding in which a judgment or other final adjudication establishes that Indemnitee’s actions or omissions to act were material to the cause of action so adjudicated and constitute:

 

(a)                                 a violation of criminal law, unless Indemnitee had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful;

 

(b)                                 a transaction from which Indemnitee derived an improper personal benefit, including, without limitation, any benefits received through the purchase and sale by Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or

 

(c)                                  willful misconduct or a conscious disregard for the best interests of the Corporation in a Proceeding by or in the right of the Corporation to procure a judgment in its favor or in a Proceeding by or in the right of a shareholder of the Corporation.

 

8.                                      Vested Rights; Specific Performance.  No amendment to the Certificate of Incorporation or Bylaws of the Corporation or any other corporate action shall in any way limit Indemnitee’s rights under this Agreement.  In any Proceeding brought by or on behalf of Indemnitee to specifically enforce the provisions of this Agreement, the Corporation waives the claim or defense in that Proceeding that the plaintiff or claimant has an adequate remedy at law, and the Corporation shall not urge in any such Proceeding the claim or defense that an adequate remedy at law exists.  The provisions of this Section 8,

 

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however, shall not prevent Indemnitee from seeking a remedy at law in connection with any breach of this Agreement.

 

9.                                      Liability Insurance.  To the extent the Corporation maintains an insurance policy or policies providing liability insurance, Indemnitee shall be covered by that policy or those policies, in accordance with its or their terms, to the maximum extent of the coverage provided under that policy or those policies in effect for any other Director, Officer or Key Employee, as the case may be.

 

10.                               Witness Fees.  Notwithstanding any other provision in this Agreement, to the extent that Indemnitee is made a witness in any Proceeding to which Indemnitee is not a party, because he or she is or was a Director, Officer and/or Key Employee, the Corporation hereby indemnifies and holds harmless Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

11.                               Security for Indemnification Obligations.  The Corporation may at any time and in any manner, at the discretion of the Board, secure the Corporation’s obligations to indemnify or advance Expenses to Indemnitee pursuant to this Agreement.

 

12.                               Non-exclusivity, No Duplication of Payments.  The rights of Indemnitee under this Agreement shall be in addition to any other rights with respect to indemnification, advancement of Expenses or otherwise that Indemnitee may have under the Certificate of Incorporation or Bylaws, the Delaware General Corporation Law or otherwise; provided, however, that the Corporation shall not be liable under this Agreement to make any payment to Indemnitee under this Agreement to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Certificate of Incorporation or Bylaws, or otherwise) of the amounts otherwise payable under this Agreement.  The Corporation’s obligation to indemnify or advance expenses under this Agreement to Indemnitee who is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of any other entity shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from that other entity.

 

13.                               Amendments.  To the extent that the provisions of this Agreement are held to be inconsistent with the provisions of the Delaware General Corporation Law, the provisions of that statute shall govern.  To the extent that the Delaware General Corporation Law is later amended to permit a Delaware corporation, without the need for shareholder approval, to provide to its Directors greater rights to indemnification or advancement of Expenses than those specifically set forth here, this Agreement shall be deemed amended to require the greater indemnification or more liberal advancement of Expenses to Indemnitee, in each case consistent with the Delaware General Corporation Law as so amended from time to time.  Otherwise, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the Corporation and Indemnitee.

 

14.                               Subrogation.  In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of that payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure those rights, including the execution of documents necessary to enable the Corporation effectively to bring suit to enforce those rights; provided, however, that any rights of recovery of Indemnitee pursuant to any liability insurance policy separately paid for by Indemnitee shall not be subject to subrogation under this Section 14 except that any amounts recovered under such policy shall be subject to Section 12 hereof.

 

15.                               Waiver.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall such a waiver constitute a continuing waiver.

 

10

 

16.                               Binding Effect, Etc.  This Agreement shall be binding on and inure to the benefit of and be enforceable by the parties to this Agreement and their respective successors or assigns (including any direct or indirect successor or assign by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Corporation), spouses, heirs, and personal and legal representatives.

 

17.                               Applicability of Agreement.  This Agreement shall apply retroactively with respect to acts or omissions of Indemnitee occurring since the date that Indemnitee first became a Director, Officer and/or Key Employee, and this Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a Director, Officer and/or Key Employee, but only in respect of acts or omissions occurring prior to the termination of Indemnitee’s service as a Director, Officer and/or Key Employee.

 

18.                               Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever:

 

(a)                                 the validity, legality, and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that is not itself invalid, illegal, or unenforceable) shall not in any way be affected or impaired by it;

 

(b)                                 the provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties to this Agreement; and

 

(c)                                  to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any provision held to be invalid, illegal, or unenforceable, that is not itself invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent manifested by it.

 

19.                               Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in Delaware without giving effect to the principles of conflicts of laws.

 

20.                               Headings.  The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction of this Agreement.

 

21.                               Inducement.  The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it under this Agreement in order to induce Indemnitee to serve or continue to serve as a Director, Officer and/or Key Employee, and the Corporation acknowledges that Indemnitee is relying on this Agreement in serving as a Director, Officer, Key Employee or agent of the Corporation or, at the request of the Corporation, as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other entity.

 

22.                               Notice by Indemnitee.  Indemnitee agrees promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered under this Agreement.  The failure of Indemnitee so to notify the Corporation shall not relieve the Corporation of any obligation that it may have to Indemnitee under this Agreement or otherwise.

 

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23.                               Notices.  All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if:  (i) delivered by hand and receipted for by the party to whom the notice or other communication shall have been directed; or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed if to the Corporation, to the principal office address of the Corporation, or if to Indemnitee, to the address of Indemnitee last on file with the Corporation, or to any other address that may have been furnished to Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case may be.

 

[Signature page follows.]

 

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The parties hereto have entered into this Agreement effective as of the date first above written.

 

	
 
    	
The Corporation:
    
	
 
    	
 
    
	
 
    	
KADMON   HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Indemnitee:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Name of Indemnitee]
    
	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
				

 

[Signature Page to Indemnification Agreement]EX-10.1

 Exhibit 10.1 

KORN/FERRY INTERNATIONAL 

LONG TERM PERFORMANCE UNIT PLAN 
  

	1.	PURPOSE OF PLAN 

 The purpose of this Plan is to promote the success of the Company by
providing a select group of management and highly compensated employees with nonqualified supplemental retirement benefits as an additional means to attract, motivate and retain such employees. Only Eligible Employees (as defined herein) are
eligible to participate in this Plan. 
  

	2.	DEFINITIONS 

 Whenever the following words and phrases are used in this Plan, with the
first letter capitalized, they shall have the meanings specified below. 
 “Annual Benefit” with respect to any Unit Award shall
mean $25,000 (or the lesser amount determined under Section 4.1.2 for a Participant who elects that the Annual Benefit be paid over a longer period than five years). However, if expressly provided in a Unit Award Agreement, the Annual Benefit
shall be subject to the positive or negative adjustment, if any, as set forth in Section 6.2. 
 “Annual Benefit Commencement
Date” shall mean the date determined under Section 4.1. 
 “Beneficiary” or “Beneficiaries” shall mean the
person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant, in accordance with procedures established by the Committee, to receive the benefits specified hereunder in the event of
the Participant’s death. No beneficiary designation shall become effective until it is filed with the Committee, and no beneficiary designation of someone other than the Participant’s spouse shall be effective unless such designation is
consented to by the Participant’s spouse on a form provided by and in accordance with the procedures established by the Committee. If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the
Participant’s surviving spouse shall be the Beneficiary. If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the
Participant’s estate (which shall include either the Participant’s probate estate or living trust) shall be the Beneficiary. In any case where there is no such personal representative of the Participant’s estate duly appointed and
acting in that capacity within 90 days after the Participant’s death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the
Participant’s death), then “Beneficiary” shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder. In
the event any amount is payable under this Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person’s living parent(s) to act as custodian, (b) if that person’s parents are then divorced,
and one parent is the sole custodial parent, to such custodial parent, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors
Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian 

  
 - 1 - 

 
to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly
appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor. 

“Board of Directors” or “Board” shall mean the Board of Directors of the Company. 

“Change in Control Event” shall mean any of the following: 

 

	 	(a)	An acquisition by any Person (excluding one or more Excluded Persons) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) or a pecuniary interest in (either comprising “ownership
of”) more than 30% of the Common Stock or voting securities entitled to then vote generally in the election of directors of the Company (“Voting Stock”), after giving effect to any new issue in the case of an acquisition from the
Company; or 

  

	 	(b)	Consummation of a merger, consolidation, or reorganization of the Company or of a sale or other disposition of all or substantially all of the Company’s consolidated assets as an entirety (collectively, a
“Business Combination”), other than a Business Combination (1) in which all or substantially all of the holders of Voting Stock hold or receive directly or indirectly 70% or more of the voting stock of the entity resulting from the
Business Combination (or a parent company), and (2) after which no Person (other than any one or more of the Excluded Persons) owns more than 30% of the voting stock of the resulting entity (or a parent company) who did not own directly or
indirectly at least that amount of Voting Stock immediately before the Business Combination, and (3) after which one or more Excluded Persons own an aggregate number of shares of the voting stock at least equal to the aggregate number of shares
of voting stock owned by any other Person who is not an Excluded Person (except for any person described in and satisfying the conditions of Rule 13d-1(b)(1) under the Exchange Act), if any, and who owns more than 30% of the voting stock; or

  

	 	(c)	Approval by the Board and (if required by law) by shareholders of the Company of a plan to consummate the dissolution or complete liquidation of the Company; or 

 

	 	(d)	During any period of two consecutive years, individuals who at the beginning of such period constituted the Board and any new director (other than a director designated by a person who has entered into an agreement or
arrangement with the Company to effect a transaction described in clause (a) or (b) of this definition) whose appointment, election, or nomination for election was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose appointment, election or nomination for election was previously so approved, cease
for any reason to constitute a majority of the Board. 

 For purposes of determining whether a Change in Control Event has occurred, a
transaction includes all transactions in a series of related transactions. 

  
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 “Code” shall mean the Internal Revenue Code of 1986, as amended. 

“Committee” shall mean the Compensation Committee of the Board, which shall administer this Plan in accordance with Section 9.

 “Company” shall mean Korn/Ferry International, a Delaware corporation, and any successor corporation. 

“Detrimental Activity” with respect to a Participant shall mean that such Participant: 

 

	 	(a)	has directly or indirectly engaged in any business for his or her own account that competes with the business of any entity within the Company Group (“Company Group” means the Company, the Subsidiaries, and
any affiliate of the Company or a Subsidiary) (a business in competition with any entity within the Company Group includes, without limitation, any business in an industry which any business in the Company Group may conduct business from time to
time and any business in an industry which any entity within the Company Group has specific plans to enter in the future and as to which the Participant is aware of such planning); or 

 

	 	(b)	has committed or engaged in an unauthorized disclosure or use of inside information, trade secrets or other confidential information, or an unauthorized use of trade names, trademarks, or other proprietary business
designations owned or used in connection with the business of any entity within the Company Group; has failed to timely return to the Company in accordance with Company policy all memoranda, books, papers, plans, information, letters and other data,
and all copies thereof or therefrom, in any way relating to the business of any entity within the Company Group; or 

  

	 	(c)	has entered the employ of, renders services to, or has acquired a financial interest in any person engaged in any business that competes with the business of any entity within the Company Group; has acted intentionally
in a manner injurious to the reputation, business or assets of, any entity within the Company Group; has interfered with business relationships (whether formed before or after the date hereof) between the Company, any Subsidiary, any of their
respective affiliates, and any customers, suppliers, officers, employees, partners, members or investors; has influenced or attempted to influence a vendor or customer of any entity within the Company Group, either directly or indirectly, to divert
their business away from the Company Group, induced a principal for whom an entity within the Company Group acts as agent to terminate such agency relationship, or induced an employee of any entity within the Company Group who earned $25,000 or more
on an annualized basis during the last six months of his or her employment to work for any business, individual, partnership, firm, corporation, or other entity then in competition with the business of any entity within the Company Group.

 “Disability” shall mean with respect to a Participant any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, by reason of which impairment the Participant 

  
 - 3 - 

 
is either unable to engage in any substantial gainful activity or is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering
employees of the Participant’s employer. 
 “Early Termination Date” shall have the meaning set forth in Section 5.1.

 “Eligible Employee” shall mean any Officer or any employee of a Participating Affiliate who is in the position category of vice
president or above and who customarily performs services for 30 or more hours per week for such Participating Affiliate. 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. 

“Excluded Person” means 
  

	 	(a)	the Company or any Subsidiary; 

  

	 	(b)	any person described in and satisfying the conditions of Rule 13d-1(b)(1) under the Exchange Act); 

  

	 	(c)	any employee benefit plan of the Company or a Subsidiary; 

  

	 	(d)	any affiliates (within the meaning of the Exchange Act), successors, or heirs, descendants or members of the immediate families of the individuals identified in part (b) of this definition. 

“Grant Date” shall mean, for each Unit Award, the date the Committee makes the Unit Award to the Participant, as set forth in the
Participant’s Unit Award Agreement. 
 “Officer” shall mean the Chief Executive Officer, Chief Financial Officer, any
Executive Vice President and any Vice President of the Company. 
 “Participant” shall mean any Eligible Employee who is selected
for participation in the Plan. 
 “Participating Affiliate” shall mean the Company and any Subsidiary, which by resolution of its
board of directors and with the approval of the Committee, elects to participate in this Plan. By electing to participate in this Plan, a Participating Affiliate agrees to be bound by any Plan amendment adopted by resolution of the Board of
Directors or by the written instrument of any person to whom the Board of Directors has delegated its authority to adopt the amendment. If a Participating Affiliate ceases to be a Subsidiary, except by merger with its parent, the employment of each
Eligible Employee of the Participating Affiliate shall be deemed to have terminated for purposes of this Plan, except to any extent any such Eligible Employee is required by law to continue to be treated under the Plan as an employee of the Company.

  
 - 4 - 

 “Plan” shall mean this Korn/Ferry International Long Term Performance Unit Plan set
forth herein, now in effect, or as amended from time to time. 
 “Separation from Service” shall have the meaning defined in
Section 409A of the Code and Treasury Regulations Section 1.409A-1(h). 
 “Subsidiary” shall mean (a) each
corporation which is (directly or indirectly) 50% or more owned by the Company, and (b) each entity which is partially owned by the Company and is organized under the laws of a nation other than the United States of America. 

“Termination Date” shall mean the date that the Participant’s has a “separation from service,” as defined in
Section 409A of the Code, from the Company and its Subsidiaries for any reason. 
 “Termination For Cause” shall mean a
termination of service, based upon a finding by the Company, acting in good faith and based on its reasonable belief at the time, that the Participant: 
  

	 	(a)	is or has been dishonest, incompetent, or negligent in the discharge of his or her duties to the Company; or has refused to perform stated or assigned duties; or 

 

	 	(b)	has committed a theft or embezzlement, or a breach of confidentiality or unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information, or a breach of fiduciary
duty involving personal profit, or a willful or negligent violation of any law, rule or regulation or of Company rules or policy, in any material respect; or has been convicted (including a plea of guilty or nolo contendere) of a felony or
misdemeanor (other than minor traffic violations or similar offenses); or 

  

	 	(c)	has materially breached any of the provisions of any agreement with the Company or a parent corporation; or 

  

	 	(d)	has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of the Company; or has induced a customer to break or terminate any contract with the
Company or an affiliate; or has induced any principal for whom the Company (or an affiliate) acts as agent to terminate such agency relationship; or 

  

	 	(e)	has made a misrepresentation or false statement in any application for employment, employment history, resume or other document submitted to the Company (whether before, during or after employment); or

  

	 	(f)	has engaged in Detrimental Activity. 

 A Termination For Cause shall be deemed to occur
(subject to reinstatement upon a contrary final determination by the Board or Committee) on the date when the Company first delivers notice to the Participant of a finding of Termination For Cause and shall be final in all respects on the date
following the opportunity to be heard and written notice to the Participant that his or her service is terminated. 

  
 - 5 - 

 “Unit Award” shall mean an award granted under this Plan. A Unit Award has a base value
of $50,000 for purposes of determining the payment made for a partially-vested Unit Award upon an Early Termination Date. A Unit Award has a full value of $125,000, which is the aggregate amount payable with respect to a fully-vested Unit Award
(subject to the adjustment, if any, as set forth in Section 6.2). 
 “Unit Award Agreement” shall mean the written agreement
evidencing an individual’s Unit Award granted under the Plan. The Unit Award Agreement may contain additional terms and conditions as agreed upon by the Company and the Participant. 

 

	3.	PARTICIPATION AND UNIT AWARD GRANT 

3.1        Participation. The Committee shall from time to time select from the
class of Eligible Employees those particular Eligible Employees who will participate in this Plan. Notwithstanding anything else contained herein to the contrary, the Committee shall limit the class of persons selected to participate in this Plan to
a select group of management or highly compensated employees, as set forth in Sections 201, 301 and 401 of ERISA. Participation shall commence upon the Committee making a Unit Award to a Participant. 

3.2        Unit Awards. The Committee shall have discretion to grant Unit Awards
to Eligible Employees selected to participate in the Plan, and shall have discretion to determine the amount and terms of each such Unit Award. The Committee may grant more than one Unit Award to a Participant under this Plan. Each grant of a Unit
Award shall be evidenced by a Unit Award Agreement. 
  

	4.	ELECTION OF ANNUAL BENEFIT COMMENCEMENT DATE AND PAYMENT PERIOD 

4.1        Initial Elections. Unless the Participant (i) has a Separation
from Service on account of the Participant’s death or Disability, or (ii) makes an election as provided in Sections 4.1.1 or 4.2, the Annual Benefit Commencement Date with respect to a Unit Award shall be the seventh anniversary of the
Grant Date of the Unit Award. Unless the Participant makes an election as provided in Section 4.1.2, the Annual Benefit shall be five equal installments each in the amount of one-fifth of the full Unit Award value (thus, in the absence of an
adjustment under Section 6.2, the Annual Benefit is $25,000). 
 4.1.1    Within thirty days of the Grant
Date of each Unit Award, the Participant may elect, on a form and in the manner prescribed by the Committee, a later, but not earlier, Annual Benefit Commencement Date, provided that the date specified by the Participant shall not be a date after
the Participant reaches age 70. In no case shall the Participant’s Annual Benefit Commencement Date occur after the later of age 70 or the seventh anniversary of the Grant Date of the Unit Award. 

4.1.2    Within thirty days of the Grant Date of each Unit Award, the Participant may elect, on a form and in the
manner prescribed by the Committee, a longer, but not shorter, number of full years over which the Annual Benefit shall be paid. If the Participant elects a longer number of full years over which the Annual Benefit shall be paid, the amount of the
Annual Benefit shall be the Unit Award value divided by the number of full years so elected by the Participant. 

  
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 4.2        Annual Benefit Commencement Date
Election Changes. The Participant may change the Annual Benefit Commencement Date applicable under Section 4.1 to the extent permitted by this Section 4.2. Any change must be made by providing notice to the Committee no less than
twelve months prior to the previously applicable Annual Benefit Commencement Date. The new Annual Benefit Commencement Date must be at least 5 years after the previously applicable Annual Benefit Commencement Date, and the new Annual Benefit
Commencement Date must be a date permitted under Section 4.1.1. 
 4.3        No
Right to Interest. No interest or other increase in benefits is payable (i) to any Participant who elects a later Annual Benefit Commencement Date under Sections 4.1.1 or 4.2, or (ii) to any Participant who elects a longer number
of full years over which the Annual Benefit shall be paid under Section 4.1.2. However, the Committee, in its sole discretion, may increase the amount payable to a Participant described in clause (i) or (ii) in an amount determined by
the Committee in its sole discretion. No Participant shall have any contractual right to such an increase at any time prior to actual payment. 
  

	5.	VESTING 

 5.1        Entitlement to
Annual Benefit. The Annual Benefit shall be payable with respect to a Unit Award under any of the following circumstances: 

5.1.1    The Participant continues to be employed by the Company through the fourth anniversary of the Grant Date
for such Unit Award; 
 5.1.2    The Participant continues to be employed by the Company through the later of
(i) the Participant’s 65th birthday or (ii) the second anniversary of the Grant Date for such Unit Award; 

5.1.3    The Participant’s employment with the Company is terminated due to death or Disability; or 

5.1.4    A Change in Control Event occurs while the Participant is employed by the Company. 

If the Participant’s Termination Date occurs before the Participant satisfies the requirements for payment of the Annual Benefit as
provided in Sections 5.1.1 through 5.1.4, the Participant is deemed to have had an “Early Termination Date” with respect to such Unit Award. If the Participant has an Early Termination Date, (i) the Annual Benefit shall not be payable
with respect to the Unit Award, and (ii) the payment (if any) with respect to the Unit Award shall be the amount (if any) determined under Section 5.2. 

5.2        Forfeiture or Lump Sum Payment. If a Participant’s Early
Termination Date occurs before the date that is 13 months after the Grant Date with respect to a Unit Award, the Unit Award is forfeited and no payment shall be made to the Participant with respect to the Unit Award. If a Participant’s Early
Termination Date occurs on or after the date 

  
 - 7 - 

 
that is 13 months after the Grant Date with respect to a Unit Award, the Participant shall be entitled to a lump sum payment equal to the lesser of (x) $50,0000 or (y) the product of
$12,500 times the number of full years of service completed between the Grant Date and the Termination Date. Such payment shall be made on the first day of the seventh month following the Participant’s Termination Date. 

5.2.1    The following hypothetical example illustrates the calculation of the lump sum payment. For purposes of
the hypothetical, assume the Participant has a Termination Date before reaching age 65 and after completing three full years of service after the Grant Date. Since the Termination Date was before the Participant satisfied the requirements for
payment of the Annual Benefit, it was an Early Termination Date. Therefore, the Annual Benefit is not payable, and the Participant is entitled to a lump sum benefit of $37,500. 

 

	6.	DISTRIBUTION OF BENEFITS 

6.1        Annual Distributions. With respect to each Unit Award for which the
Annual Benefit becomes payable, during the calendar year that includes the Annual Benefit Commencement Date and once per year during each of the next four calendar years thereafter (or such longer period as elected by the Participant pursuant to
Section 4.1.2), the Company shall pay the Participant an amount equal to the Annual Benefit. 

6.1.1    Except as provided in Sections 6.1.2 or 6.1.3, the Annual Benefit Commencement Date is the date
determined in Sections 4.1 and 4.2. 
 6.1.2    If the Participant’s Separation from Service is on account
of the Participant’s Disability, the Annual Benefit Commencement Date shall be one year following the Participant’s Separation from Service. 

6.1.3    If the Participant’s Separation from Service is on account of the Participant’s death, the
Annual Benefit Commencement Date shall be sixty days following the Participant’s Separation from Service. 
 The payment date within any calendar year
shall be determined by the Company. Notwithstanding any provision of the Plan to the contrary, any payments commencing due to a Participant’s Separation from Service (other than his or her death) shall not be made prior to the date that is six
months following the date of such Separation from Service. 
 6.2        Adjustment to
Annual Benefit. The Committee may, in its sole discretion, provide in a Unit Award Agreement that the Annual Benefit is subject to the adjustment provided in this Section 6.2. Unless expressly provided in a Unit Award Agreement, the
adjustment described in this Section 6.2 does not apply. 
 6.2.1    If the adjustment in this
Section 6.2 applies, then the Unit Award value shall be increased (or decreased) according to a formula determined by the Committee at the time a Unit Award is granted, and such formula shall be specified in the Unit Award Agreement. By way of
example and not limitation, such formula may be based on changes to the trading price of the Company’s Common Stock during a period after the Unit Award is granted. 

  
 - 8 - 

 6.3    Liability for Payment. Notwithstanding anything
else in this Plan to the contrary: (1) a Participant’s benefits with respect to this Plan shall be paid by the Participating Affiliate to whose employment of the Participant such benefits relate, and (2) a Participant shall have no
right or claim to Plan benefits from any other Participating Affiliate other than the employer referenced in the foregoing clause. 
  

	7.	FORFEITURE; DETRIMENTAL ACTIVITY. 

 A Participant’s rights with respect to the Unit
Award, whether vested or unvested, shall terminate, become null and void, and be immediately forfeited if (i) the Participant’s employment ends as a result of a Termination for Cause, or (ii) the Participant engages in any Detrimental
Activity at any time prior to the date the last Annual Benefit payment is made under the Unit Award. In the event that the Committee determines that a Participant has engaged in Detrimental Activity at any time prior to the date the last Annual
Benefit payment is made under the Unit Award, the Committee shall cease to make payments under the Plan to the Participant and the Participant will forfeit any remaining Unit Award or Annual Benefit. Determinations of whether (i) a
Participant’s employment has ended as a result of a Termination for Cause, and (ii) a Participant has engaged in Detrimental Activity shall be made by the Committee in its sole discretion. For avoidance of doubt, if a Unit Award is
forfeited under this Section 7, the Participant and Beneficiary forfeit all rights to any payments under such Unit Award, even if such Unit Award had previously become fully or partially vested under Section 5.1 or Section 5.2.
Notwithstanding the foregoing, the Committee, in its sole discretion, may provide that some or all of the benefit described in Section 5.2 (i.e., the vested portion of $50,000) shall be payable to a Participant whose benefit is otherwise
subject to forfeiture under this Section 7. No Participant shall have any contractual right to a payment described in the preceding sentence at any time prior to actual payment. 

 

	8.	FUNDING 

 8.1        Type of
Plan. The Plan is a defined benefit, unfunded, non-qualified deferred compensation plan. The benefits provided under this Plan are not based on any salary reduction by the Participants. Participants do not have the option of receiving any
current payment or bonus in lieu of the benefits provided under this Plan. 

8.2        Rabbi Trust. The Company may establish a “rabbi trust” to
which contributions may be made to provide the Company with a source of funds for purposes of satisfying the obligations of the Company under the Plan. Any such trust shall constitute an unfunded arrangement and shall not affect the status of the
Plan as an unfunded plan. The Participant and his Beneficiaries shall have no beneficial ownership interest in any assets held in the trust. 
  

	9.	PLAN ADMINISTRATION 

9.1        Committee. The Committee shall be appointed as set forth in the
Company’s governing documents. 

  
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 9.2        Committee Action. The
Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by a
majority of the members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as an
Participant. The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee. 

9.3        Powers and Duties of the Committee. The Committee, on behalf of the
Participants and their Beneficiaries, shall enforce this Plan in accordance with its terms, shall be charged with the general administration of this Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of
limitation, the following: 
  

	 	(a)	To construe and interpret the terms and provisions of this Plan and to make factual determinations hereunder; 

  

	 	(b)	To compute and certify the amount and kind of benefits payable to Participants and their Beneficiaries, and to determine the time and manner in which such benefits are paid; 

 

	 	(c)	To maintain all records that may be necessary for the administration of this Plan; 

  

	 	(d)	To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law; 

 

	 	(e)	To make and publish such rules for the regulation of this Plan and procedures for the administration of this Plan as are not inconsistent with the terms hereof; 

 

	 	(f)	To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of this Plan as the Committee may from time to time prescribe (including but not
limited to the power to approve the designation of Subsidiaries as Participating Affiliates under this Plan); and 

  

	 	(g)	To require or permit Participant (or Beneficiary, as the context may require) elections and/or consents under this Plan to be made by means of such electronic media as the Committee may prescribe. 

9.4        Construction and Interpretation. Prior to a Change in Control Event,
the Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or
Beneficiary. Any 

  
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interpretation, construction or determination made after a Change in Control Event shall be subject to judicial review on a de novo basis. The Committee shall administer the terms and
provisions of this Plan in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to this Plan. 

9.5        Compensation, Expenses and Indemnity. The members of the Committee
shall serve without compensation for their services hereunder. Expenses and fees in connection with the administration of this Plan shall be paid by the Company. The Committee is authorized at the expense of the Company to employ such legal counsel
as it may deem advisable to assist in the performance of its duties hereunder. To the extent permitted by applicable state law, the Company shall indemnify and save harmless the Committee and each member thereof, the Board of Directors and any
delegate of the Committee who is an employee of a Participating Affiliate against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to this Plan, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Participating
Affiliate or provided by the Participating Affiliate under any bylaw, agreement or otherwise, as such indemnities are permitted under state law. 
  

	10.	MISCELLANEOUS 

 10.1      Unsecured General
Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of any Participating Affiliate. No assets of any Participating
Affiliate shall be held under any trust or held in any way as collateral security for the fulfilling of the obligations of any Participating Affiliate. Any and all of each Participating Affiliate’s assets shall be, and remain, the general
unpledged, unrestricted assets of the Participating Affiliate. Each Participating Affiliate’s obligations under this Plan shall be merely that of an unfunded and unsecured promise of the Participating Affiliate to pay money in the future to
those persons to whom the Participating Affiliate has a benefit obligation under this Plan, and the respective rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. 

10.2      Restriction Against Assignment. The respective Participating Affiliate shall pay
all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation. No part of the Unit Award or Annual Benefit shall be liable for the debts, contracts, or engagements of any Participant,
his or her Beneficiary, or successors in interest, nor shall a Participant’s Unit Award or Annual Benefit be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have
any right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the
benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct. 

  
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 10.3      Tax Withholding. The Company (or the
Subsidiary by which the Participant is employed) may satisfy any state or federal employment tax withholding obligation, or such other withholding obligation as required by the Company’s (or Subsidiary’s) jurisdiction, with respect to the
Unit Award under this Plan by deducting such amounts from any compensation payable by the Company (or a Subsidiary) to the Participant. There shall be deducted from each payment or distribution made under this Plan, or any other compensation payable
to the Participant (or Beneficiary), all taxes which are required to be withheld by the Company (or a Subsidiary) in respect to such payment or distribution or this Plan. If the Company, for any reason, elects not to (or cannot) satisfy the
withholding obligation from the amounts otherwise payable under this Plan, the Participant shall pay or provide for payment in cash of the amount of any taxes which the Company (or a Subsidiary) may be required to withhold with respect to the
benefits hereunder. 
 10.4      Amendment, Modification, Suspension or Termination. The
Board or the Committee may amend, modify, suspend or terminate this Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any outstanding Unit Awards or accelerate or
defer the timing of any distributions under this Plan as provided in Sections 5 or 6. A Participating Affiliate may elect to terminate its status as such at any time and, in such event, such termination shall not affect the Participating
Affiliate’s obligations under this Plan with respect to amounts previously awarded under this Plan for which the Participating Affiliate is liable. 

10.5      Governing Law; Severability. This Plan shall be construed, governed and
administered in accordance with the laws of the State of Delaware. If any provisions of this instrument shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully
effective. To the extent that the Plan is subject to Section 409A of the Code, the Plan shall be construed and interpreted to the maximum extent reasonably possible to avoid the imputation of any tax, penalty or interest pursuant to
Section 409A. The Company reserves the right to amend the Plan to the extent it reasonably determines is necessary in order to preserve the intended tax consequences of deferrals made under the Plan in light of Section 409A and any
regulations or other guidance promulgated thereunder. 
 10.6      Receipt or Release.
Any payment to a Participant or the Participant’s Beneficiary in accordance with the provisions of this Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee, the Company and the Subsidiaries. The
Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. 

10.7      Payment on Behalf of Persons Under Incapacity. In the event that any amount
becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any
person found by 

  
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the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee, the
Company and the Subsidiaries. 
 10.8      No Right to Employment. Participation in this
Plan shall not give any person the right to continued employment or service or any rights or interests other than as expressly provided herein. No Participant shall have any right to any payment or benefit hereunder except to the extent provided in
this Plan. 
 10.9      Titles and Headings. Headings and subheadings in this Plan are
inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof. 

10.10    Claims Procedure. A person who believes that he or she is being denied a benefit to which he
or she is entitled under this Plan (hereinafter referred to as “Claimant”) may file a written request for such benefit with the Committee, setting forth his or her claim. The request must be addressed to the Committee at the Company’s
then principal executive offices. 
 Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be forthcoming
within ninety days and shall, in fact, deliver such reply within such period. The Committee may, however, extend the reply period for an additional ninety days for special circumstances. If the claim is denied in whole or in part, the Committee
shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth: (i) the specified reason or reasons for such denial, (ii) the specific reference to pertinent provisions of this Plan on which
such denial is based, (iii) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary, (iv) appropriate information
as to the steps to be taken if the Claimant wishes to submit the claim for review, and (v) the time limits for requesting a review set forth below. 

Within sixty days after the receipt by the Claimant of the written reply described above, the Claimant may request in writing that the
Committee review its determination. Such request must be addressed to the Committee at the Company’s then principal executive offices. The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents
and submit issues and comments in writing for consideration by the Committee. If the Claimant does not request a review within such sixty day period, he or she shall be barred and estopped from challenging the Committee’s determination. 

Within sixty days after the Committee’s receipt of a request for review, after considering all materials presented by the Claimant, the
Committee will inform the Claimant in writing, in manner calculated to be understood by the Claimant, of its decision setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Plan on
which the decision is based. If special circumstances require that the sixty day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty days after
receipt of the request for review. 

  
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 10.11    Arbitration. Any dispute regarding the Plan
shall be submitted to mandatory, binding arbitration. A Claimant must exhaust the claims procedure set forth in Section 10.10 as a condition of commencing arbitration. If a civil action concerning the Plan has been brought, the Company and the
Claimant shall take such actions as are necessary or appropriate, including dismissal of the civil action, so that the arbitration can be timely heard. Once arbitration is commenced, it may not be discontinued without the unanimous consent of all
parties to the arbitration. 
 Any claim for arbitration may be submitted as follows: if the Claimant disagrees with an interpretation of
this Plan by the Company or any fiduciary of this Plan, or disagrees with the calculation of his or her benefit under this Plan, such claim may, after exhaustion of the claims procedure set forth in Section 10.10, be filed in writing with an
arbitrator of the Claimant’s choice who is selected by the method described in the next four sentences. The first step of the selection shall consist of the Claimant submitting in writing a list of five potential arbitrators to the Company.
Each of the five potential arbitrators must be either (i) a member of the National Academy of Arbitrators located in the state of California or, if the Claimant is a resident of the United States, the state of the Claimant’s residence or
(ii) a retired California Superior Court or Appellate Court judge. Within ten business days after receipt of the list, the Company shall select one of the five arbitrators as the arbitrator of the dispute in question. If the Company
fails to select an arbitrator in a timely manner, the Claimant then shall designate one of the five arbitrators as the arbitrator of the dispute in question. 

The arbitration hearing shall be held within thirty days (or as soon thereafter as possible) after the selection of the arbitrator. No
continuance of said hearing shall be allowed without the mutual consent of the Claimant and the Company. Absence from or non-participation at the hearing by any party shall not prevent the issuance of an award. Hearing procedures that will expedite
the hearing may be ordered at the arbitrator’s discretion, and the arbitrator may close the hearing in his sole discretion when he or she decides he or she has heard sufficient evidence to justify issuance of an award. The arbitrator shall
apply the same standard of review referred to in Section 9.4 as would be applied by a court of proper jurisdiction. Accordingly, with respect to any interpretation, construction or determination by the Committee prior to a Change in Control
Event, the arbitrator shall not apply a de novo standard of review in reviewing the decision rendered through the claims procedure but rather shall review the Committee’s interpretation, construction or determination under an abuse of
discretion standard, and with respect to any interpretation, construction or determination by the Committee upon and after a Change in Control Event, the arbitrator shall apply a de novo standard of review. 

The arbitrator’s award shall be rendered as expeditiously as possible and in no event later than one week after the close of the hearing.
In the event the arbitrator finds that the Claimant is entitled to the benefits he or she claimed, the arbitrator shall order the Company to pay or deliver such benefits, in the amounts and at such time as the arbitrator determines. The award of the
arbitrator shall be final and binding on the parties. The 

  
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Company shall thereupon pay or deliver to the Claimant immediately the amount that the arbitrator orders to be paid or delivered in the manner described in the award. The award may be enforced in
any appropriate court as soon as possible after its rendition. If any action is brought to confirm the award, no appeal shall be taken by any party from any decision rendered in such action. 

If a Change in Control Event has occurred and the arbitrator determines that the Claimant is entitled to the claimed benefits, the arbitrator
shall direct the Company to pay to the Claimant, and the Company shall pay to the Claimant in accordance with such order, an amount equal to the Claimant’s expenses in pursuing the claim, including attorneys’ fees. 

  
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