Document:

ex_332328.htm

Exhibit 10.1

 

GENASYS INC.

CHANGE IN CONTROL SEVERANCE BENEFIT PLAN 

 

SECTION 1. INTRODUCTION. 

 

The Genasys Inc. Change in Control Severance Benefit Plan (the “Plan”) was established effective February 4, 2022 (the “Adoption Date”). The purpose of the Plan is to provide severance benefits to certain eligible employees of the Company and its Affiliates upon selected terminations of service in connection with a Change in Control (as defined below).

 

This Plan shall supersede any generally applicable change in control severance plan, policy, or practice, whether written or unwritten, with respect to each employee who becomes a Participant in the Plan. In consideration for the benefits set forth in this Plan, this Plan shall also supersede and replace the change in control benefits in any individually negotiated employment contract or agreement, or any written plans that are not of general application, and, except as set forth in the Participation Notice (as defined below), each Participant’s change in control severance benefits shall be governed solely by the terms of this Plan.

 

This Plan document is also the Summary Plan Description for the Plan.

 

SECTION 2. DEFINITIONS. 

 

The following shall be defined terms for purposes of the Plan:

 

(a)         “Affiliate” means, with respect to any individual or entity, any other individual or entity who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such individual or entity.

 

(b)         “Base Salary” means a Participant’s monthly base salary in effect immediately prior to the Covered Termination and prior to any reduction in base salary that would permit such Participant to voluntarily terminate employment for Good Reason (as defined below) (including without limitation any compensation that is deferred by Participant into a Company-sponsored retirement or deferred compensation plan, exclusive of any employer matching contributions by the Company associated with any such retirement or deferred compensation plan and exclusive of any other Company contributions) and excludes all bonuses, commissions, expatriate premiums, fringe benefits (including without limitation car allowances), option grants, equity awards, employee benefits and other similar items of compensation.

 

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

 

(d)         “Cause” means with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s employment is either for Cause or without Cause shall be made by the Company in its sole discretion. Any determination by the Company that the employment of a Participant was terminated by reason of dismissal without Cause for the purposes of this Plan shall have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

 

(e)         “Change in Control” means the occurrence of any of the following events prior to the automatic termination of this Plan as provided in Section 6(b):

 

(1)         The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other reorganization is not owned by persons who were stockholders of the Company immediately prior to such merger, consolidation or other reorganization, in substantially the same relative proportions as their ownership of the combined voting power of the Company immediately prior to such merger, consolidation or other reorganization;

 

 

 

 

(2)         There is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company to an entity, more than 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition;

 

(3)         When a majority of the incumbent directors on the Board are replaced by new directors within any 18-month period; provided, however, that each director (i) whose election has been approved by a vote of at least a majority of the directors who were either incumbent directors at the beginning of the period or elected or nominated in accordance with clause (i) or (ii) of this Section 2(e)(3) during such period or (ii) whose nomination for election by the Company’s stockholders has been approved by a committee of the Board, a majority of whose members are directors who were either incumbent directors at the beginning of the period or elected or nominated in accordance with clause (i) or (ii) of this Section 2(e)(3) during such period shall be deemed to be an “incumbent director” and not a “new director” for purposes of this Section 2(e)(3); or

 

(4)         Any “person” that (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) by the acquisition or aggregation of securities is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company.

 

The term “Change in Control” shall not include a transaction, the sole purpose of which is to change the state of the Company’s incorporation.

 

(f)         “Company” means Genasys Inc. or, following a Change in Control, the surviving entity resulting from such transaction or the parent company of such surviving entity.

 

(g)         “Compensation Committee” means the Compensation Committee of the Board.

 

(h)         “Covered Termination” means, with respect to a Participant who immediately prior to a termination of employment was an employee of the Company, such Participant’s termination of employment by the Company without Cause or a voluntary resignation of employment by the Participant for Good Reason; provided that the involuntary termination or the event giving rise to the resignation for Good Reason, as applicable, occurs within the three months prior to, or twelve months following, the effective date of a Change in Control.

 

(i)         “Good Reason” means, with respect to a Participant, the occurrence of one or more of the following events, if applicable, without such Participant’s express written consent:

 

(1)         A material reduction in such Participant’s authority, duties or responsibilities (and not simply a change in title or reporting relationships);

 

(2)         A material reduction by the Company in such Participant’s Base Salary;

 

 

 

 

(3)         A material adverse change by the Company to Participant’s Target Bonus or to the criteria, milestones or objectives related to such Participant’s Target Bonus that is reasonably likely to result in the Participant earning less than his or her Target Bonus during the subsequent applicable period;

 

(4)         A relocation of the Participant’s principal place of work to a location that would increase the Participant’s one-way commute from his or her personal residence to the new principal place of work by more than 50 miles.

 

Notwithstanding the foregoing, a Participant shall have “Good Reason” for his or her resignation only if: (a) the Participant notifies the Company in writing, within 30 days after the occurrence of one of the foregoing events, that he or she intends to terminate his or her employment no earlier than 30 days after providing such notice; (b) the Company does not cure such condition within 30 days following its receipt of such notice or states unequivocally in writing that it does not intend to attempt to cure such condition; and (c) the Participant resigns from employment within 180 days following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so.

 

(j)         “Health Severance Benefits Period” means 24 months.

 

(k)         “Participant” means an individual who (i) is employed by the Company or its Affiliates, (ii) has been designated eligible to participate in the Plan by the Compensation Committee in its sole discretion (either by a specific designation or by virtue of being a member of a class of employees who have been so designated) and (iii) who has received a Participation Notice from the Company and elected to participate in the Plan by executing and returning such Participation Notice to the Company within the time period set forth therein.

 

(l)         “Participation Notice” means the latest notice delivered by the Company to a Participant substantially in the form of Exhibit A hereto or such other form as may be approved by the Plan Administrator.

 

(m)         “Payment Commencement Date” means, with respect to a Participant, (i) if such Covered Termination occurs prior to the applicable Change in Control, the later of (A) such Change in Control or (B) the effective date of the Release (as defined below) or (ii) if such Covered Termination occurs on or after the applicable Change in Control, the later of (X) the date of such Covered Termination or (Y) the effective date of the Release.

 

(n)         “Plan Administrator” means the Company.

 

(o)         “Target Bonus” means the target bonus (i.e., the annual bonus amount payable to a Participant in cash, common stock or other property if exactly 100% of all performance goals are achieved) most recently approved by the Compensation Committee or the Board for such Participant prior to the earlier of (i) the Payment Commencement Date and (ii) any reduction in Target Bonus that would permit such Participant to voluntarily terminate employment for Good Reason.

 

(p)         “Vesting Acceleration Benefit” means the remainder of all vesting installments, whether time-based or performance-based, for a Participant.

 

The following additional terms are defined in the Section identified below:

 

 

	
			TERM

				 	
			SECTION

				 
	
			“Adoption Date”

				 	 	1	 
	
			“COBRA”

				 	
			7(a)

				 
	
			“Code”

				 	
			4(a)(4)

				 
	
			“ERISA”

				 	 	10	 
	
			“Plan”

				 	 	1	 
	
			“Release”

				 	 	3	 

 

 

 

 

SECTION 3. ELIGIBILITY FOR BENEFITS. 

 

Subject to the requirements set forth in this Section, the Company shall provide change in control severance benefits under the Plan to the Participants. In order to be eligible to receive benefits under the Plan, a Participant must (i) experience a Covered Termination and (ii) execute a general waiver and release (the “Release”) in substantially the form attached hereto as Exhibit B (or as then may be required by law to effect a release of claims), and such Release must become effective in accordance with its terms; provided, however, that no such Release shall require the Participant to forego any unpaid salary, any accrued but unpaid vacation pay or any benefits payable pursuant to this Plan. With respect to any outstanding option held by the Participant, no provision set forth in this Plan granting the Participant additional rights to exercise the option can be exercised unless and until the Release becomes effective.

 

The Participant must execute the Release within the time period set forth therein, but in no event later than (x) if a Change in Control shall have occurred prior to such Covered Termination, 45 days following termination of employment or (y) if a Change in Control shall not have occurred prior to such Covered Termination, the later of (A) 45 days following termination of employment or (B) ten days following such Change in Control, and such release must become effective in accordance with its terms.

 

Unless a Change in Control has occurred, the Plan Administrator, in its sole discretion, may modify the form of the required Release to comply with applicable law and shall determine the form of the required Release, which may be incorporated into a termination agreement or other agreement with the Participant; provided, that, after a Change in Control occurs, the Plan Administrator may modify the form of required Release only if necessary to comply with applicable law.

 

SECTION 4. AMOUNT OF BENEFIT. 

 

(a)          Provision of Benefits. Subject to the limitations and reductions provided in this Plan, benefits under this Plan, if any, shall be provided to the Participants described in Section 3 in the following amounts. Effective commencing with the Payment Commencement Date, such Participant shall receive the following severance package:

 

(1)          Cash Severance Benefits. The Company shall make a cash severance payment to the Participant in an amount equal to 24 months of Base Salary. Any such payment pursuant to this Section 4(a)(1) shall be in a single lump sum to be paid within 10 days following the Payment Commencement Date.

 

(2)          Bonus Severance Benefits. The Company shall make a cash severance payment to the Participant in an amount equal to such Participant’s Target Bonus. Any such bonus payment pursuant to this Section 4(a)(2) shall be in a single lump sum to be paid within 10 days following the Payment Commencement Date.

 

(3)          Health Severance Benefits. During the Health Severance Benefits Period, the Company will pay all premiums for group medical, dental and vision coverage elected by such Participant for the Participant and his or her eligible dependents under any individual policy providing group medical, dental and vision benefits substantially similar to those provided to Participant immediately prior to his or her termination of service.

 

(4)          Equity Award Acceleration. The vesting and exercisability of all outstanding options to purchase the Company’s common stock, or restricted stock units or other equity awards issued pursuant to any equity incentive plan of the Company or any Affiliate that are then held by the Participant on such date shall be accelerated to the extent applicable so that the Participant shall receive the Vesting Acceleration Benefit, any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to any other equity award granted to the Participant by the Company shall lapse so that the Participant shall receive the Vesting Acceleration Benefit, and the vesting of any other equity awards granted to the Participant by the Company, and any issuance of shares triggered by the vesting of such equity awards, shall be accelerated so that the Participant shall receive the Vesting Acceleration Benefit. If the Covered Termination occurs prior to the applicable Change in Control, such vesting acceleration shall be deemed effective as of the date of the Covered Termination. Notwithstanding the foregoing, this Section 4(a)(4) shall not apply to equity awards issued under or held in any plan sponsored by the Company or an Affiliate that is intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (“Code”). Notwithstanding the provisions of this Section 4(a)(4), in the event that the provisions of this Section 4(a)(4) regarding acceleration of vesting of an option or restricted stock unit would adversely affect a Participant’s option (including, without limitation, its status as an incentive stock option under Section 422 of the Code) or restricted stock unit that is outstanding on the date the Participant commences participation in the Plan, such acceleration of vesting shall be deemed null and void as to such option or restricted stock unit unless the affected Participant consents in writing to such acceleration of vesting as to such option or restricted stock unit at the time he or she becomes a Participant.

 

 

 

 

(b)          Certain Reductions. Notwithstanding any other provision of the Plan to the contrary, any benefits payable to a Participant under Sections 4(a) of this Plan shall be reduced (but not below zero) by any severance benefits payable by the Company or an Affiliate to such Participant under any other policy, plan, program, agreement or arrangement, including, without limitation, a contract between such Participant and any entity, covering such Participant. In addition, to the extent that any federal, state or local laws, including, without limitation the Worker Adjustment Retraining Notification Act, 29 U.S.C. Section 2101 et seq., or any similar state statute, require the Company to give advance notice or make a payment of any kind to a Participant because of that Participant’s involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, change of control, or any other similar event or reason, the benefits payable under Sections 4(a)(1) and 4(a)(3) of this Plan shall either be reduced or eliminated by such required payments or notice. The benefits provided under this Plan are intended to satisfy any and all statutory obligations that may arise out of a Participant’s involuntary termination of employment for the foregoing reasons, and the Plan Administrator shall so construe and implement the terms of the Plan.

 

(c)          Application of Section 409A. Any compensation and benefits payable under the Plan are intended to be payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations. Notwithstanding the foregoing, if the Company determines that any payments hereunder fail to satisfy the distribution requirement of Section 409A(a)(2)(A) of the Code, the payment of such benefit shall be delayed until six months after separation from service if the Participant is a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service.

 

(d)          Withholding. All payments under the Plan will be subject to all applicable withholding obligations of the Company, including, without limitation, obligations to withhold for federal, state and local income and employment taxes.

 

SECTION 5. LIMITATIONS ON BENEFITS. 

 

(a)          Mitigation. Except as otherwise specifically provided herein, a Participant shall not be required to mitigate damages or the amount of any payment provided under the Plan by seeking other employment or otherwise, nor shall the amount of any payment provided for under the Plan be reduced by any compensation earned by a Participant as a result of employment by another employer or any retirement benefits received by such Participant after the date of service or employment termination.

 

(b)          Non-Duplication of Benefits. No Participant is eligible to receive benefits under this Plan more than one time.

 

(c)          Indebtedness of Participants. To the extent permitted by law, if a Participant is indebted to the Company or an Affiliate on the date of his or her termination of employment or service, the Company reserves the right to offset any severance benefits payable in cash under the Plan by the amount of such indebtedness. A Participant may be required to execute an agreement to such effect if requested by the Company.

 

SECTION 6. RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION. 

 

(a)          Exclusive Discretion. The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons.

 

 

 

 

(b)          Change of State of Incorporation, Amendment or Termination. The Board reserves the right to change the state of incorporation, and the Board and the Compensation Committee reserve the right to amend or terminate this Plan or the benefits provided hereunder at any time; provided, however, that no such change of state, amendment or termination shall impair or reduce the rights of a Participant unless such Participant consents to such amendment or termination of the Plan in writing. Notwithstanding the foregoing, the Plan shall automatically terminate on the tenth anniversary from the Adoption Date, unless extended by the Board or the Compensation Committee. Any action amending, terminating or extending the Plan shall be in writing and executed by the Board or the Compensation Committee.

 

SECTION 7. CONTINUATION OF CERTAIN EMPLOYEE BENEFITS. 

 

(a)          COBRA. Each Participant who is enrolled in a group medical, dental or vision plan sponsored by the Company or an Affiliate may be eligible to continue coverage under such group medical, dental or vision plan (or to convert to an individual policy), at the time of the Participant’s termination of employment under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). The Company will notify the Participant of any such right to continue group medical coverage at the time of termination of the Health Severance Benefits. No provision of this Plan will affect the continuation coverage rules under COBRA. Therefore, the period during which a Participant may elect to continue the Company’s group medical, dental or vision coverage at his or her own expense under COBRA, the length of time during which COBRA coverage will be made available to the Participant, and all other rights and obligations of the Participant under COBRA will be applied in the same manner that such rules would apply in the absence of this Plan. At the conclusion of the COBRA premium reimbursements made by the Company, if any, the Participant will be responsible for the entire payment of premiums required under COBRA for the duration, if any, of the COBRA period.

 

(b)          Other Employee Benefits. All non-health benefits (such as life insurance, AD&D, disability and 401(k) plan coverage) terminate as of an employee’s termination date (except to the extent that a conversion privilege may be available thereunder).

 

SECTION 8. NO IMPLIED EMPLOYMENT CONTRACT. 

 

The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ or service of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time and for any reason, which right is hereby reserved.

 

SECTION 9. CLAIMS, INQUIRIES AND APPEALS. 

 

(a)          Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative). The Plan Administrator is:

 

Genasys Inc.

Attn: Chief Financial Officer

16262 West Bernardo Drive

San Diego, CA 92127

 

(b)         Denial of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The written notice of denial will be set forth in a manner designed to be understood by the employee and will include specific reasons for the denial, specific references to the Plan provision upon which the denial is based, a description of any information or material that the Plan Administrator needs to complete the review and an explanation of the Plan’s review procedure. This written notice will be given to the applicant within 90 days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional 90 days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial 90-day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application. If written notice of denial of the application for benefits is not furnished within the specified time, the application shall be deemed to be denied. The applicant will then be permitted to appeal the denial in accordance with the review procedure described below.

 

 

 

 

(c)          Request for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Compensation Committee within 60 days after the application is denied. A request for a review shall be in writing and shall be addressed to:

 

Compensation Committee

Attn: Chairman

c/o Genasys Inc.

16262 West Bernardo Drive

San Diego, CA 92127

 

A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The applicant (or his or her representative) shall have the opportunity to submit (or the Compensation Committee may require the applicant to submit) written comments, documents, records, and other information relating to his or her claim. The applicant (or his or her representative) shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim. The review shall take into account all comments, documents, records and other information submitted by the applicant (or his or her representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

(d)          Decision on Review. The Compensation Committee will act on each request for review within 60 days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional 60 days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial 60 day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Compensation Committee is to render its decision on the review. The Compensation Committee will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor. In the event that the Compensation Committee confirms the denial of the application for benefits in whole or in part, the notice will set forth, in a manner calculated to be understood by the applicant, the specific Plan provisions upon which the decision is based. If written notice of the Plan Administrator’s decision is not given to the applicant within the time prescribed in this Section 9(d) the application will be deemed denied on review.

 

(e)          Rules and Procedures. The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

 

(f)          Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the claimant (i) has submitted a written application for benefits in accordance with the procedures described by Section 10(a) above, (ii) has been notified by the Plan Administrator that the application is denied (or the application is deemed denied due to the Plan Administrator’s failure to act on it within the established time period), (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 10(c) above, and (iv) has been notified in writing that the Compensation Committee has denied the appeal (or the application is deemed denied due to the Plan Administrator’s failure to act on it within the established time period).

 

 

 

 

SECTION 10. LEGAL CONSTRUCTION. 

 

This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of California. The Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be excepted from the definitions of “employee pension benefit plan” and “pension plan” set forth under section 3(2) of ERISA, and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations §2510.3-2(b).

 

SECTION 11. BASIS OF PAYMENTS TO AND FROM PLAN. 

 

All benefits under the Plan shall be paid by the Company. The Plan shall be unfunded, and benefits hereunder shall be paid only from the general assets of the Company. A Participant’s right to receive payments under the Plan is no greater than that of the Company’s unsecured general creditors. Therefore, if the Company were to become insolvent, the Participant might not receive benefits under the Plan.

 

SECTION 12. SUCCESSORS AND ASSIGNS. 

 

This Plan shall be binding upon any surviving entity resulting from a Change in Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such person actively adopts or formally continues the Plan. Participants, to the extent they are otherwise eligible for benefits under the Plan, are intended third party beneficiaries of this provision.

 

 

 

 

EXHIBIT A

PARTICIPATION NOTICE AND ACKNOWLEDGEMENT

 

 

To:

 

Date:

 

Deadline to Return Participation Notice:

 

Genasys Inc. (the “Company”) has adopted the Change in Control Severance Benefit Plan (the “Plan”). The Company is providing you with this Participation Notice to inform you that you have been designated as a Participant in the Plan. A copy of the Plan document is attached to this Participation Notice. The terms and conditions of your participation in the Plan are as set forth in the Plan and this Participation Notice, which together also constitutes a summary plan description of the Plan.

 

In consideration for the benefits set forth in the Plan, each Participant’s change in control benefits shall be governed by the terms of the Plan and the Plan shall supersede and replace any individually negotiated change in control benefits in any employment contract or agreement and all change in control benefits payable to you as set forth in any agreement, including offer letters, with the Company entered into prior to the date hereof.

 

If you choose to participate in the Plan, please return to the Company (Attn. Chief Financial Officer) a copy of this Participation Notice and Acknowledgement signed by you and retain a copy, along with the Plan document, for your records. Please note that you are not a Participant in the Plan until you execute and return this Participation Notice and Acknowledgement to the Company.

 

The undersigned hereby acknowledges receipt of the foregoing Participation Notice. In the event the undersigned holds outstanding stock options as of the date of this Participation Notice, the undersigned hereby (check one box—failure to check a box will be deemed the selection of the second alternative):

 

☐         accepts all of the benefits of Section 4(a)(4) of the Plan regardless of any potential adverse effects on any outstanding option or restricted stock unit

 

☐         accepts the benefits of Sections 4(a)(4) of the Plan that have no adverse effect on outstanding options or other stock awards and rejects the benefits of Sections 4(a)(4) of the Plan as to those outstanding options and other stock awards that would have potential adverse effects

 

☐         other (please describe):                                                                                  

 

The undersigned acknowledges that he/she has been advised to obtain tax and financial advice regarding the consequences of this election including the effect, if any, on the status of the stock options for tax purposes under Sections 409A and 422 of the Internal Revenue Code.

 

	 	 	 	 	 	 
	
			Genasys Inc.

				 	 	
			[Participant Name]

			
	 	 	 	
			Participant Signature

			
	
			By:

				 	 	 	 	 
	
			Its:

				 	 	 	 	 

 

 

 

 

EXHIBIT B

RELEASE AGREEMENT

 

I understand and agree completely to the terms set forth in the Genasys Inc. Change in Control Severance Benefit Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company. Certain capitalized terms used in this Release are defined in the Plan.

 

I hereby confirm my obligations under the Company’s Employee Proprietary Information and Inventions Agreement.

 

In exchange for the consideration to be provided to me under the Plan to which I am not otherwise entitled, I hereby generally and completely release American Technology Corporation and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Agreement (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; or (2) any rights which are not waivable as a matter of law. In addition, nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding. I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

 

I acknowledge and represent that I have not suffered any age or other discrimination, harassment, retaliation, or wrongful treatment by any Released Party. I also acknowledge and represent that I have not been denied any rights including, but not limited to, rights to a leave or reinstatement from a leave under the Family and Medical Leave Act of 1993, the California Family Rights Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, or any similar law of any jurisdiction. I further acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given for the Released Claims is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) the Released Claims do not apply to any rights or claims that arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do so); (c) I have 21 days to consider this Release (although I may choose to voluntarily to sign it sooner); (d) I have seven days following the date I sign this Release to revoke the Release by providing written notice to an officer of the Company; and (e) the Release will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release (“Effective Date”).

 

 

 

 

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

 

	 
	
			EMPLOYEE

			
	 
	
			Employee Signature

			
	 
	
			Employee Name

			
	 
	
			Date:EX-4.2

 Exhibit 4.2 

VALERO ENERGY CORPORATION 

4.000% Senior Notes due 2052 
 A
single series of Securities is hereby established pursuant to Section 301 of the Indenture dated as of March 10, 2015 (the “Indenture”), between Valero Energy Corporation, a Delaware corporation (the
“Company”), and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as Trustee (in such capacity, the “Trustee”), as follows (capitalized terms used and not
defined herein shall have the meanings assigned to them in the Indenture, and all references herein to a Section shall refer to the corresponding Section in the Indenture): 

1.    The title of the 4.000% Senior Notes due 2052 shall be “4.000% Notes due 2052” (the
“Notes”). 
 2.    The initial limit upon the aggregate principal amount of the Notes that may be
authenticated and delivered under the Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906 or 1207) is $650,000,000,
provided, however, that the authorized aggregate principal amount of the Notes may be increased above such amount by a Board Resolution to such effect. 

3.    The Notes shall be initially issued as Registered Securities in the form of one or more global securities under the
Indenture. The Depository Trust Company is hereby designated as the Depository for these global Securities under the Indenture. 

4.    As long as any Note is in global form, then, notwithstanding clause (11) of Section 301 and the provisions
of Section 302, any such global Note shall represent such of the outstanding Notes as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time be reduced to reflect exchanges or redemptions. Any endorsement of a global Note to reflect the amount, or any increase or decrease in the amount, of outstanding Notes
represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified in such Note or in a Company Order to be delivered to the Trustee pursuant to Section 303. Subject to
the provisions of Section 303 and, if applicable Section 304, the Trustee shall deliver and redeliver any Note in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Note or in the
applicable Company Order. With respect to Notes that are represented by a global Note, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily
provided for by the Depository appointed with respect to such global Note. Any global Note may be deposited with the Depository or its nominee, or may remain in the custody of the Trustee pursuant to a FAST Balance Certificate Agreement or similar
agreement between the Trustee and the Depository. If a Company Order has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Note in global form shall be in writing but
need not comply with Section 102 and need not be accompanied by an Opinion of Counsel. 

 Members of, or participants in, the Depository (“Agent Members”) shall have
no rights under the Indenture with respect to any global Note held on their behalf by the Depository, or the Trustee as its custodian, or under such global Note and the Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such global Note for all purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of a global Note may grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through an Agent Member, to take any action that a Holder is entitled to take under the Indenture or the Notes and (ii) nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by the Depository or shall impair, as between the Depository and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Note. 
 Notwithstanding Section 305, and except as otherwise provided pursuant to
Section 301, transfers of a global Note shall be limited to transfers of such global Note in whole but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in a global Note may be
transferred in accordance with the rules and procedures of the Depository. In all other respects, Notes shall be transferred to all beneficial owners in exchange for their beneficial interest in a global Security solely as expressly provided in
Section 305. 
 In connection with any transfer of a portion of the beneficial interest in a global Note to beneficial owners pursuant
hereto and Section 305, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the global Note in an amount equal to the principal amount of the beneficial interest in the global Note to
be transferred, and the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication and delivery of Notes shall authenticate and deliver, one or more Notes of like tenor and amount. 

In connection with the transfer of an entire global Note to beneficial owners pursuant hereto and Section 305, the global Security shall
be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the global
Note, an equal aggregate principal amount of Notes of authorized denominations. 
 Neither the Company nor the Trustee will have any
responsibility or liability for any aspect of the records relating to, or payments made on account of, Notes by the Depository, or for maintaining, supervising or reviewing any records of the Depository relating to the Notes. Neither the Company nor
the Trustee shall be liable for any delay by the related global Note Holder or the Depository in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such global
Note Holder or the Depository for all purposes (including with respect to the registration and delivery, and the principal amount, of the Notes to be issued). 

Notwithstanding the provisions of Sections 201 and 307, unless otherwise specified as contemplated by Section 301, payment of principal
of, premium (if any) or interest on any global Note shall be made to the Person or Persons specified in such global Note. 

5.    The date on which the principal of the Notes are payable shall be June 1, 2052. 

  
 2 

 6.    The rate at which the Notes shall bear interest shall be 4.000%
per annum. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The date from which interest shall accrue for the Notes shall be
February 7, 2022. The Interest Payment Dates on which interest on the Notes shall be payable are June 1 and December 1, commencing June 1, 2022. Interest on the Notes shall be payable to the persons in whose name the Notes are
registered at the close of business on the Regular Record Date for such interest payment, except in the case of default interest, which will be payable as provided in the Indenture. The Regular Record Date for the interest payable on the Notes on
any Interest Payment Date shall be the May 15 and November 15, as the case may be, immediately preceding such Interest Payment Date. No Additional Amounts shall be payable with respect to the Notes. 

7.    The place or places where the principal of, premium (if any) on and interest on the Notes shall be payable is at the
office or agency of the Paying Agent and Security Registrar in New York, New York or such other offices or agencies maintained for such purpose as the Company may from time to time and in accordance with the Indenture designate. If appropriate wire
transfer instructions have been received by the Trustee, not later than five Business Days prior to the record date for an applicable Interest Payment Date, then payments in respect of the Notes evidenced by a global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Holder of such global Note. In all other cases, payment of interest on the Notes may be made at the option of the Company
by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register. 

8.    The Notes will be redeemable at any time and from time to time prior to December 1, 2051, in whole or in part,
at the option of the Company, at a redemption price equal to the greater of (i) 100% of the principal amount of such Notes, and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date of redemption) calculated as if the maturity date of the Notes was December 1, 2051, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined below) plus 30 basis points, as calculated by an Independent Investment Banker (as
defined below) plus, in each case, accrued and unpaid interest thereon to, but not including, the date of redemption; provided that the principal amount of a Security outstanding after redemption in part shall be $2,000 or an integral multiple of
$1,000 in excess thereof. 
 On or after December 1, 2051, the Notes will be redeemable at any time, in whole or in part, at the option
of the Company, at a redemption price equal to 100% of the principal amount of such Notes, plus accrued and unpaid interest to, but not including, the date of redemption. 

“Adjusted Treasury Rate” means, with respect to any date of redemption, (i) the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15 Daily Update” or any successor publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the remaining life, yields for the two published maturities most closely corresponding to the 

  
 3 

 
Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or
(ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such date of redemption. The Adjusted Treasury Rate shall be calculated on the third
Business Day preceding the date of redemption. 
 “Comparable Treasury Issue” means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes (assuming, for this purpose, that the Notes matured on December 1, 2051) that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes (assuming, for this purpose, that the Notes matured on December 1, 2051). 

“Comparable Treasury Price” means, with respect to any date of redemption, (i) the average of five Reference Treasury
Dealer Quotations for such date of redemption, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations. 
 “Independent Investment Banker” means one of the Reference
Treasury Dealers appointed by the Company to act as the independent investment banker from time to time. 
 “Reference Treasury
Dealers” means (i) means (i) J.P. Morgan Securities LLC, BofA Securities, Inc., Scotia Capital (USA) Inc. and Wells Fargo Securities, LLC or their respective affiliates or successors; provided that, if any of the foregoing shall cease
to be a primary U.S. Government securities dealer (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the Company. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any date of redemption, the
average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by
such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third Business Day preceding such date of redemption. 

Notwithstanding Section 1204, notice of any redemption will be mailed at least 10 days but not more than 60 days before the date of
redemption to each Holder of the Notes to be redeemed. Unless the Company defaults in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes or portions thereof called for redemption. 

Notwithstanding Section 104, any notice of redemption may, at the Company’s discretion, be subject to one or more conditions
precedent, including, but not limited to, completion of a corporate transaction that is pending (such as an equity or equity-linked offering, an incurrence of 

  
 4 

 
indebtedness or an acquisition or other strategic transaction involving a change of control in us or another entity). In addition, if such redemption or notice is subject to satisfaction of one
or more conditions precedent, the Company may, in its discretion, delay the Redemption Date until such time as any or all such conditions shall be satisfied or waived, or such redemption may not occur and such notice may be rescinded in the event
that any or all such conditions shall not have been satisfied or waived by the Redemption Date, or by the Redemption Date so delayed. 

9.    The Notes shall not be entitled to the benefit of any sinking fund, any optional repurchase or redemption right in
favor of any holder thereof or other mandatory repurchase or redemption provisions. 
 10.    The Notes shall be in
substantially the form of Attachment A hereto (the “Form of Note”). 
 11.    Each Note that is
a global Security shall bear the legend set forth on the face of the Form of Note. 
  

  
 5 

 Attachment A – Form of Note 

[FORM OF FACE OF SECURITY] 

[THIS SECURITY IS A GLOBAL SECURITY AS PROVIDED FOR IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.]*

 [Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation
(“DTC”), to the issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]* 
 VALERO ENERGY CORPORATION 

4.000% NOTES DUE 2052 
  

			
	No. [    ]	  	$[    ]
	REGISTERED	  	CUSIP No. 91913YBE9
		  	ISIN No. US91913YBE95

 VALERO ENERGY CORPORATION, a Delaware corporation (the “Company,” which term includes any successor
Person under the Indenture hereinafter referred to), for value received promises to pay to Cede & Co. or registered assigns, the principal sum of [ ] Dollars [or such lesser amount as indicated on the schedule of exchanges of Securities,]*
on June 1, 2052. 
 Interest Payment Dates: June 1 and December 1 

Regular Record Dates: May 15 and November 15 

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

	*	 To be included only if the Security is a Global Security. 

  
 A-1 

 IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by
facsimile by its duly authorized officers. 
  

							
	Dated: ,	 		 	VALERO ENERGY CORPORATION
				
		 		 	By:	 	  

		 		 		 	Jason W. Fraser
		 		 		 	Executive Vice President and
		 		 		 	Chief Financial Officer

  

			
	ATTEST:
		
	By:	 	  

		 	Jude A. Dworaczyk
		 	Assistant Secretary

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION: 

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

 

							
	Dated: ,	 		 	U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as successor in interest to U.S. Bank National Association,
		 		 		 	as Trustee
				
		 		 	By:	 	  

		 		 		 	Authorized Signatory

  
 A-2 

 [FORM OF REVERSE OF SECURITY] 

VALERO ENERGY CORPORATION 
 4.000%
NOTES DUE 2052 
 This Security is one of a duly authorized issue of debentures, notes or other evidences of indebtedness of VALERO
ENERGY CORPORATION, a Delaware corporation (the “Company”), issued under the Indenture hereinafter referred to and is one of a series of such debentures, notes or other evidences of indebtedness designated pursuant thereto as
4.000% Notes due 2052 (the “Securities”) of the Company. 
 1.    Interest. The Company promises
to pay interest on the principal amount of this Security at 4.000% per annum from February 7, 2022 until June 1, 2052 (“Maturity”). The Company will pay interest semiannually on June 1 and December 1 of each year
(each an “Interest Payment Date”) and on the Maturity of the Securities, or if any such day is not a Business Day, on the next succeeding Business Day. Interest on the Securities will accrue from the most recent Interest Payment
Date on which interest has been paid or, if no interest has been paid, from February 7, 2022; provided that if there is no existing Default in the payment of, or provisions for, interest, and if this Security is authenticated between a Regular
Record Date referred to on the face hereof (whether or not a Business Day) and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date
shall be June 1, 2022. The interest so payable, and punctually paid or provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest as set forth on the face hereof; provided, however, that interest payable at Maturity of this Security will be payable to the Person to whom the principal hereof shall
be payable. Any such interest which is so payable, but is not punctually paid or duly provided for on any Interest Payment Date, shall forthwith cease to be payable to the registered Holder on such Regular Record Date, and may be paid as more fully
provided in the Indenture. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

2.    Method of Payment. Payment of the principal of (and premium, if any) and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in New York, New York, or at such other offices or agencies maintained for such purpose as the Company may from time to time and in accordance with the Indenture designate, in
such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that (i) payment of interest may, at the option of the Company, be made (subject to
collection) by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register or, with respect to Securities evidenced by a global Security, if appropriate wire transfer instructions have been
received in writing by the Trustee (as defined below), not later than five Business Days prior to the record date for an applicable Interest Payment Date, be made by wire transfer of immediately available funds in accordance with such wire transfer
instructions; and (ii) payment of available funds upon surrender of this Security will be made at the office or agency of the Company maintained for that purpose in New York, New York or at such additional offices or agencies maintained for
such purpose as the Company may from time to time and in accordance with the Indenture designate. 

  
 A-3 

 3.    Certain Office. Initially, U.S. Bank Trust Company,
National Association, as successor in interest to U.S. Bank National Association (in such capacities, the “Paying Agent” and the “Security Registrar”) will, at its offices located at 100 Wall Street, Suite 1600, New
York, New York 10005, act as the Company’s office or agency solely for purposes of where the Securities may be presented or surrendered for payment and where the Securities may be surrendered for registration of transfer or exchange. For all
other purposes, including where notices and demands to or upon the Company in respect of the Securities and the Indenture may be served, U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, the
Trustee under the Indenture (the “Trustee”), will act at its offices located at 8 Greenway Plaza, Suite 1100, Houston, TX 77046-0892. 

4.    Indenture. The Company issued the Securities under an Indenture dated as of March 10, 2015 (the
“Indenture”) between the Company and the Trustee. The terms of the Securities include those stated in the Indenture (including terms defined therein, which terms when used herein, unless the context requires otherwise, shall have
the meanings assigned to such terms in the Indenture) and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of execution of the Indenture. The
Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. The Securities are unsecured general obligations of the Company initially limited to $650,000,000 in aggregate principal
amount and will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company; provided, however, that the authorized aggregate principal amount of the Securities may be increased above such amount by a Board Resolution to
such effect. The Indenture provides for the issuance of other series of debentures, notes and other evidences of indebtedness (including the Securities, the “Debt Securities”) thereunder. 

5.    Denominations, Transfer, Exchange. The Securities are in registered form without coupons and, if not in
global form, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Security Registrar and the Trustee may require
a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Security Registrar need not exchange or register the transfer of any Securities
during the period beginning on the opening of business 15 days before the day of mailing of a notice of redemption of the Securities and ending at the close of business on the day of such mailing or of any Securities selected for redemption, except
the unredeemed portion of any Securities being redeemed in part. 
 6.    Persons Deemed Owners. The registered
Holder of a Security shall be treated as its owner for all purposes. 
 7.    Redemption. The Securities will be
redeemable at any time and from time to time prior to December 1, 2051, in whole or in part, at the option of the Company, at a redemption price equal to the greater of (i) 100% of the principal amount of such Securities, and (ii) the sum
of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption), calculated as if the Maturity of the Securities was
December 1, 2051, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted

  
 A-4 

 
Treasury Rate (as defined below) plus 30 basis points, as calculated by the Independent Investment Banker (as defined below) plus, in each case, accrued and unpaid interest thereon to, but not
including, the date of redemption; provided that the principal amount of a Security outstanding after redemption in part shall be $2,000 or an integral multiple of $1,000 in excess thereof. 

On or after December 1, 2051, the Securities will be redeemable at any time, in whole or in part, at the option of the Company, at a
redemption price equal to 100% of the principal amount of such Securities, plus accrued and unpaid interest to, but not including, the date of redemption. 

“Adjusted Treasury Rate” means, with respect to any date of redemption, (i) the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15 Daily Update” or any successor publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the remaining life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption. The Adjusted Treasury Rate shall be calculated on the third Business Day preceding the date of redemption. 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of the Notes (assuming, for this purpose, that the Securities matured on December 1, 2051) that would be utilized, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes (assuming, for this purpose, that the Securities matured on December 1, 2051). 

“Comparable Treasury Price” means, with respect to any date of redemption, (i) the average of five Reference Treasury
Dealer Quotations for such date of redemption, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations. 
 “Independent Investment Banker” means one of the Reference
Treasury Dealers appointed by the Company to act as the independent investment banker from time to time. 
 “Reference Treasury
Dealers” means (i) means (i) J.P. Morgan Securities LLC, BofA Securities, Inc., Scotia Capital (USA) Inc. and Wells Fargo Securities, LLC or their respective affiliates or successors; provided that, if any of the foregoing shall cease
to be a primary U.S. Government securities dealer (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the Company. 

  
 A-5 

 “Reference Treasury Dealer Quotations” means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third Business Day preceding such date of redemption. 

Notice of any redemption will be mailed at least 10 days but not more than 60 days before the date of redemption to each Holder of the
Securities to be redeemed. Unless the Company defaults in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Securities or portions thereof called for redemption. 

Any notice of redemption may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to,
completion of a corporate transaction that is pending (such as an equity or equity-linked offering, an incurrence of indebtedness or an acquisition or other strategic transaction involving a change of control in us or another entity). In addition,
if such redemption or notice is subject to satisfaction of one or more conditions precedent, the Company may, in its discretion, delay the Redemption Date until such time as any or all such conditions shall be satisfied or waived, or such redemption
may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied or waived by the Redemption Date, or by the Redemption Date so delayed. 

8.    Amendments and Waivers. Subject to certain exceptions and limitations, the Indenture or the Securities may be
supplemented with the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Securities, and any past default under the Indenture with respect to the Securities, and its consequences, may be waived (other
than a default in the payment of the principal of (or premium, if any) or interest on the Securities or in respect of a covenant or provision of the Indenture which under Article 9 thereof cannot be modified or amended without the consent of the
Holder of each outstanding Security) by the Holders of not less than a majority in principal amount of the outstanding Securities in accordance with the terms of the Indenture. Without the consent of any Holder, the Company and the Trustee may
supplement the Indenture or the Securities (i) to cure any ambiguity, omission, defect or inconsistency, in each case which shall not be inconsistent with the provisions of the Indenture and which shall not adversely affect the interest of the
Holders of the Securities in any material respect; (ii) to evidence the assumption by a successor Person of the obligations of the Company under the Indenture and this Security; (iii) to change or eliminate any restrictions on the payment
of principal (or premium, if any) on Registered Securities, to permit Registered Securities to be exchanged for Bearer Securities or to permit the issuance of Securities in uncertificated form, provided any such action shall not adversely affect the
interest of the Holders of the Securities in any material respect; (iv) to add to the covenants of the Company for the benefit of the Holders of the Securities or Holders of other series of Debt Securities, or to surrender any right or power
conferred by the Indenture upon the Company; (v) to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms or purpose of issue, authentication and delivery of the Securities as set forth in
the Indenture; or (vi) to evidence and provide for the 

  
 A-6 

 
acceptance of appointment under the Indenture by a successor Trustee with respect to the Securities and to add to or change any of the provisions of the Indenture as shall be necessary to provide
for or facilitate the administration of the trusts thereunder by more than one Trustee, pursuant to the requirements of the Indenture. 

The right of any Holder to participate in any consent required or sought pursuant to any provision of the Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which consent is required or sought as of a date fixed
in accordance with the terms of the Indenture. 
 Subject to certain exceptions and limitations set forth in the Indenture, without the
consent of each Holder affected, the Company may not (i) change the Stated Maturity of the principal of or any installment of interest on any Security, (ii) reduce the principal amount of, or any premium or interest on, any Security,
(iii) change any Place of Payment where, or the currency in which, any Security or any premium or interest thereon is payable, (iv) impair the right to institute suit for the enforcement of any payment with respect to any Security after
the Stated Maturity thereof (or, in the case of redemption, on or after the applicable Redemption Date), (v) reduce the percentage in principal amount of the outstanding Securities whose Holders must consent to a supplement or waiver, or reduce the
requirements in Section 1504 of the Indenture for quorum or voting, or make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of the Indenture or (vi) waive a continuing
Default or Event of Default in the payment of principal of or premium (if any) or interest on the Securities. 
 A supplemental indenture
that changes or eliminates any covenant or other provision of the Indenture which has expressly been included solely for the benefit of one or more particular series of Debt Securities under the Indenture, or which modifies the rights of the Holders
of Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under the Indenture of the Holders of Debt Securities of any other series. 

9.    Defaults and Remedies. Events of Default are defined in the Indenture and generally include: (i) failure
to pay principal of or any premium on any Security when due and payable; (ii) failure to pay any interest on any Security when due and payable, and the continuation of the default for 30 days; (iii) failure to perform any other covenant,
or breach of any warranty, of the Company in the Indenture, continued for 60 days after written notice is given or received as provided in the Indenture; and (iv) certain events of bankruptcy, insolvency or reorganization. If any Event of
Default at any time outstanding occurs and is continuing, either the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Securities may declare the principal amount of all Securities to be due and payable
immediately. At any time after a declaration or occurrence of acceleration with respect to the Securities has been made, but before a judgment or decree based on acceleration has been obtained, the Event of Default giving rise to such declaration of
acceleration shall, under certain circumstances, be deemed to have been waived, and such declaration and its consequences shall be deemed to have been rescinded and annulled. 

Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or 

  
 A-7 

 
the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power with
respect to the Securities. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal, premium (if any) or interest) if in good faith it determines that withholding notice is in their interests.
The Company must furnish an annual compliance certificate to the Trustee. 
 10.    Discharge Prior to Maturity.
The Indenture with respect to the Securities shall be discharged and canceled upon the payment of all Securities and, as provided in the Indenture, shall be discharged except for certain obligations upon the irrevocable deposit with the Trustee of
funds sufficient for such payment. 
 11.    Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 

12.    Authentication. This Security shall not be valid until authenticated by the manual signature of an
authorized signer of the Trustee. 
 13.    CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the correctness of such numbers as
printed on the Securities and reliance may be placed only on the other identification numbers printed thereon. 

14.    Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform gifts to Minors Act). 

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Request may be made to: 

Valero Energy Corporation 
 One Valero Way 

San Antonio, Texas 78249 
 Telephone: (210) 345-2000 
 Attention: General Counsel 

  
 A-8 

 SCHEDULE OF EXCHANGES OF SECURITY* 

The following exchanges of a part of this global Security for definitive Securities have been made: 

 

									
	 Date of exchange
	  	 Amount of decrease in
principal amount
of this
global Security
	  	 Amount of increase in
principal amount
of this
global Security
	  	 Principal amount of this
global
Security following
such decrease (or increase)
	  	 Signature of authorized
officer of
Trustee or Security
Registrar

		  		  		  		  	

  

	*	 This schedule to be included only if the Security is a Global Security. 

  
 A-9 

 ASSIGNMENT FORM 

To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to (Insert assignee’s social security
or tax I.D. number) 
 (Print or type assignee’s name, address and zip code) 

                    ,
                                        
and irrevocably appoint
                                        
as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. 
  

							
	Date:	 		 	Your Signature:	 	 
		 		 		 	(Sign exactly as your name appears on the face of this Security)

  

							
	Signature Guarantee:	 	 	 		 	
		 	(Participant in a Recognized Signature Guaranty Medallion Program)	 		 	

  
 A-10

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