Document:

Blueprint

 

 Exhibit 4.1

 

Underwriter Warrant

 

NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT SECURED BY SUCH SECURITIES.

 

AMERICAN RESOURCES CORPORATION

 

FORM OF UNDERWRITER WARRANT

 

Warrant
No. [___]  Original Issue Date: February 20,
2019

 

American Resources
Corporation, a Florida corporation (the “Company”),
hereby certifies that, as partial compensation for services, Maxim
Partners LLC or its registered assigns (the “Holder”),
is entitled to purchase from the Company up to a total of 70,000
shares of Common Stock (each such share, a “Warrant
Share” and all such shares, the “Warrant
Shares”), at any time and from time to time beginning on
August 15, 2019 and through and including 6:30pm New York City time
on February 15, 2021 (the “Expiration
Date”):

 

1.           Definitions.
As used in this Warrant, the following terms shall have the
respective definitions set forth in this Section 1.

 

“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 144.

 

“Business
Day” means any day except Saturday, Sunday and any day
which is a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.

 

 “Common
Stock” means the Class A common stock of the Company,
$0.0001 par value per share, and any securities into which such
common stock may hereafter be reclassified or for which it may be
exchanged as a class.

 

“Effective
Date” means the effective date of the Registration
Statement on Form S-1 (Registration No. 333-226042).

 

 

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

 

“Exercise
Price”
means $4.4, subject to adjustment in accordance with Section
9.

 

“Fundamental
Transaction” means any of the following: (1) the
Company effects any merger or consolidation of the Company with or
into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (4) the Company
effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or
property.

 

“New York
Courts” means the state and federal courts sitting in
the City of New York, Borough of Manhattan.

 

“Original Issue
Date” means the Original Issue Date first set forth on
the first page of this Warrant.

 

“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 

“Rule
144” means Rule 144 promulgated by the SEC pursuant to
the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the SEC on
having substantially the same effect as such Rule.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act”
means the Securities Act of 1933, as amended.

 

“Subsidiary”
means any “significant subsidiary” as defined in Rule
1-02(w) of Regulation S-X promulgated by the SEC under the Exchange
Act.

 

“Trading
Day” means (i) a day on which the Common Stock is
traded or quoted on a Trading Market, or (ii) if the Common Stock
is not traded or quoted on any Trading Market, a day on which the
Common Stock is quoted in the over-the-counter market as reported
by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in
the event that the Common Stock is not traded or quoted as set
forth in (i) or (ii) hereof, then Trading Day shall mean a Business
Day.

 

“Trading
Market” means whichever of the New York Stock
Exchange, NYSE American, the NASDAQ Capital Market, the NASDAQ
Global Market, the NASDAQ Global Select Market or OTC Bulletin
Board on which the Common Stock is listed or quoted for trading on
the date in question.

 

“Warrant
Shares” means the shares of Common Stock issuable upon
exercise of this Warrant.

 

 

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2.           Registration
of Warrant. The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder
hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for
the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

 

3.           Registration
of Transfers. Subject to the limitation set forth in the
last sentence of Section 4 hereof, the Company shall register the
transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Company at its
address specified herein. Upon any such registration or transfer, a
new Warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new Warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued
to the transferring Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a
Warrant.

 

4.           Exercise
and Duration of Warrants. This Warrant shall be exercisable
by the registered Holder at any time and from time to time
beginning on August 15, 2019 through and including the Expiration
Date. At 6:30 p.m., New York City time on the Expiration Date
which, in accordance with FINRA Rule 5110(f)(2)(G)(i) shall not be
more than five (5) years from the Effective Date, the portion of
this Warrant not exercised prior thereto shall be and become void
and of no value. The Company may not call or redeem any portion of
this Warrant without the prior written consent of the affected
Holder. This Warrant shall not be sold, transferred, assigned,
pledged, or hypothecated, or be the subject of any hedging, short
sale, derivative, put, or call transaction that would result in the
effective economic disposition of this Warrant by any person for a
period of 180 days from the Effective Date, except as provided in
FINRA Rule 5110(g)(2).

 

5.           Delivery
of Warrant Shares.

 

(a) To effect exercises
hereunder, the Holder shall not be required to physically surrender
this Warrant unless the aggregate Warrant Shares represented by
this Warrant is being exercised. Upon delivery of the Exercise
Notice (in the form attached hereto) to the Company (with the
attached Warrant Shares Exercise Log) at its address for notice set
forth herein and upon payment of the Exercise Price multiplied by
the number of Warrant Shares that the Holder intends to purchase
hereunder (provided, that, in lieu of the payment of the Exercise
Price, the Holder may have notified the Company in its Exercise
Notice that such exercise was made pursuant to a Cashless Exercise
(as defined in Section 11 hereof)), the Company shall promptly (but
in no event later than five Trading Days) after the Date of
Exercise (as defined herein)) issue and deliver to the Holder, a
certificate for the Warrant Shares issuable upon such exercise. The
Company shall, upon request of the Holder and subsequent to the
date on which a registration statement covering the resale of the
Warrant Shares, if any, has been declared effective by the SEC, use
its reasonable best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions, if
available, provided, that, the Company may, but will not be
required to change its transfer agent if its current transfer agent
cannot deliver Warrant Shares electronically through the Depository
Trust Corporation. A “Date of Exercise” means the date
on which the Holder shall have delivered to the Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it),
appropriately completed and duly signed and (ii) payment of the
Exercise Price for the number of Warrant Shares so indicated by the
Holder to be purchased.

 

 

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(b) If by the fifth
Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required
pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.

 

(c) The Company’s
obligations to issue and deliver Warrant Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other
Person, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in
connection with the issuance of Warrant Shares. Nothing herein
shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely
deliver certificates representing Warrant Shares upon exercise of
the Warrant as required pursuant to the terms hereof.

 

6.           Charges,
Taxes and Expenses. Issuance and delivery of Warrant Shares upon
exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, withholding tax, transfer agent fee
or other incidental tax or expense in respect of the issuance of
such certificates, all of which taxes and expenses shall be paid by
the Company; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any
transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder.
The Holder shall be responsible for all other tax liability that
may arise as a result of holding or transferring this Warrant or
receiving Warrant Shares upon exercise hereof.

 

7.           Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only
upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable
indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and
pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a
mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.

 

8.           Reservation
of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of
this entire Warrant, free from preemptive rights or any other
contingent purchase rights of Persons other than the Holder (taking
into account the adjustments and restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and
nonassessable.

 

 

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9.           Certain
Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.

 

(a) Stock Dividends and Splits. If
the Company, at any time while this Warrant is outstanding, (i)
pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, or (iii) combines
outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii) or (iii) of this paragraph
shall become effective immediately after the effective date of such
subdivision or combination.

 

(b) Fundamental Transactions. If,
at any time while this Warrant is outstanding there is a
Fundamental Transaction, then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have
been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the
“Alternate Consideration”). For purposes of any such
exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. At the Holder’s
option and request, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a
new warrant substantially in the form of this Warrant and
consistent with the foregoing provisions and evidencing the
Holder’s right to purchase the Alternate Consideration for
the aggregate Exercise Price upon exercise thereof. The terms of
any agreement pursuant to which a Fundamental Transaction is
effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph
(b) and insuring that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

 

(c) Number of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant
to this Section 9, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or
decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number
of Warrant Shares shall be the same as the aggregate Exercise Price
in effect immediately prior to such adjustment.

 

 

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(d) Calculations. All calculations
under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the
disposition of any such shares shall be considered an issue or sale
of Common Stock.

 

(e) Notice of Adjustments. Upon the
occurrence of each adjustment pursuant to this Section 9, the
Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate
setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant
(as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and
to the Company’s Transfer Agent.

 

(f) Notice of Corporate Events. If
the Company (i) declares a dividend or any other distribution of
cash, securities or other property in respect of its Common Stock,
including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the
material terms and conditions of such transaction (but only to the
extent such disclosure would not result in the dissemination of
material, non-public information to the Holder) at least 10
calendar days prior to the applicable record or effective date on
which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the
Company will take all steps reasonably necessary in order to give
the Holder the practical opportunity to exercise this Warrant prior
to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such
notice or any defect therein shall not affect the validity of the
corporate action required to be described in such
notice.

 

10.           Payment
of Exercise Price. The Holder shall pay the Exercise Price
by delivering immediately available funds if the Holder did not
notify the Company in the Exercise Notice that the exercise was
made pursuant to a Cashless Exercise as further described in
Section 11 hereof.

 

11.           Cashless
Exercise. Notwithstanding anything contained herein to the
contrary (other than Section 12 below), the Holder may, in lieu of
making the cash payment otherwise contemplated to be made to the
Company upon exercise, elect instead to receive upon such exercise
the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless
Exercise”):

 

Net
Number = (A x B) - (A x
C)

B

 

 

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For
purposes of the foregoing formula:

 

A = the
total number of shares with respect to which this Warrant is then
being exercised.

 

B = as
applicable: (i) the closing sale price of the Common Stock on the
Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and
delivered pursuant to Section 5 hereof on a day that is not a
Trading Day or (2) both executed and delivered pursuant to Section
5 hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(64) of Regulation
NMS promulgated under the federal securities laws) on such Trading
Day, (ii) the bid price of the Common Stock as of the time of the
Holder’s execution of the applicable Exercise Notice if such
Exercise Notice is executed during “regular trading
hours” on a Trading Day pursuant to Section 5 hereof, (iii)
the closing sale price of the Common Stock on the date of the
applicable Exercise Notice if the date of such Exercise Notice is a
Trading Day and such Exercise Notice is both executed and delivered
pursuant to Section 5 hereof after the close of “regular
trading hours” on such Trading Day, or (iv) if the Common
Stock is not traded in such manner that the quotations referred to
above are available, the fair value per share of the Common Stock
as determined by the Board of Directors of the Company in good
faith.

 

    C
= the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.

 

12.           Limitations
on Exercise. Notwithstanding anything to the contrary
contained herein, the number of Warrant Shares that may be acquired
by the Holder upon any exercise of this Warrant (or otherwise in
respect hereof) shall be limited to the extent necessary to insure
that, following such exercise (or other issuance), the total number
of shares of Common Stock then beneficially owned by such Holder
and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed
9.99% of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock
issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated
thereunder. This provision shall not restrict the number of shares
of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration
that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. This
restriction may not be waived. Notwithstanding anything to the
contrary contained in this Warrant, (a) no term of this Section may
be waived by any party, nor amended such that the threshold
percentage of ownership would be directly or indirectly increased,
(b) this restriction runs with the Warrant and may not be modified
or waived by any subsequent holder hereof and (c) any attempted
waiver, modification or amendment of this Section will be void ab
initio.

 

13.           No
Fractional Shares. No fractional shares of Common Stock will
be issued in connection with any exercise of this Warrant. In lieu
of any fractional shares which would, otherwise be issuable, the
Company shall pay cash equal to the product of such fraction
multiplied by the closing price of one Warrant Share as reported by
the applicable Trading Market on the date of exercise.

 

 

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14.           Notices.
Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this
Section prior to 6:30 p.m. (New York City time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day
or later than 6:30 p.m. (New York City time) on any Trading Day,
(iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if to
the Company, to 9002 Technology Lane, Fishers, IN 46038, telecopy
number: (606) 393-0190, Attention:  Chief Executive
Officer (or such other address as the Company shall indicate in
writing in accordance with this Section), or (ii) if to the Holder,
to the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder
may provide to the Company in accordance with this
Section.

 

15.           “Piggy-Back”
Registration Rights. The Holder shall have the right, for a
period of three (3) years from the Effective Date, to include the
shares of Common Stock underlying the Warrants (the
“Registrable Securities”) as part of any other
registration of securities filed by the Company (other than in
connection with a transaction contemplated by Rule 145(a)
promulgated under the Securities Act or pursuant to Form S-8 or any
equivalent form); provided, however, that if, solely in connection
with any primary underwritten public offering for the account of
the Company, the managing underwriter(s) thereof shall, in its
reasonable discretion, impose a limitation on the number of shares
of Common Stock underlying the Warrants which may be included in
the registration statement because, in such underwriter(s)’
judgment, marketing or other factors dictate such limitation is
necessary to facilitate public distribution, then the Company shall
be obligated to include in such registration statement only such
limited portion of the Registrable Securities with respect to which
the Holder requested inclusion hereunder as the underwriter(s)
shall reasonably permit. Any exclusion of Registrable Securities
shall be made pro rata among the Holders seeking to include
Registrable Securities in proportion to the number of Registrable
Securities sought to be included by such Holders; provided,
however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding
securities, the holders of which are not entitled to inclusion of
such securities in such registration statement or are not entitled
to pro rata inclusion with the Registrable Securities. The Holders
shall be entitled to unlimited piggy-back registration rights
pursuant to this Section 15. Any holder of Registrable Securities
may elect to withdraw such Holder’s request for inclusion of
Registrable Securities in any piggy-back registration by giving
written notice to the Company of such request to withdraw prior to
the effectiveness of the registration statement. The Company
(whether on its own determination or as the result of a withdrawal
by persons making a demand pursuant to written contractual
obligations) may withdraw a registration statement at any time
prior to the effectiveness of the registration statement.
Notwithstanding any such withdrawal, the Company shall pay all
expenses incurred by the Holders of Registrable Securities in
connection with such piggy-back registration as provided in this
Section 15. The Company shall bear all fees and expenses attendant
to registering the Registrable Securities pursuant to this Section
15, including the reasonable and documented expenses of a single
legal counsel selected by the Holders to represent them in
connection with the sale of the Registrable Securities, but the
Holders shall pay any and all underwriting commissions or brokerage
fees related to the Registrable Securities. In the event of such a
proposed registration, the Company shall furnish the then Holders
of outstanding Registrable Securities with not less than fifteen
(15) days written notice prior to the proposed date of filing of
such registration statement. Such notice to the Holders shall
continue to be given for each registration statement filed by the
Company until such time as all of the Registrable Securities have
been sold by the Holder. The holders of the Registrable Securities
shall exercise the “piggy-back” rights provided for
herein by giving written notice, within ten (10) days of the
receipt of the Company’s notice of its intention to file a
registration statement. The Company shall use its commercially
reasonable efforts to cause any registration statement filed
pursuant to the piggyback right granted under this Section 15 to
remain effective for a period of at least nine (9) consecutive
months from the date that the Holders of the Registrable Securities
covered by such registration statement are first given the
opportunity to sell all of such securities.

 

 

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16.           Warrant
Agent. The Company shall serve as warrant agent under this
Warrant. Upon 10 days’ notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company
or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant
agent shall be a party or any corporation to which the Company or
any new warrant agent transfers substantially all of its corporate
trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such
successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail,
postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.

 

17.           Miscellaneous.

 

(a) This Warrant shall
be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant
may be amended only in writing signed by the Company and the Holder
or, if applicable, their respective successors and
assigns.

 

(b) All questions
concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed
and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning
the interpretations, enforcement and defense of this Warrant and
the transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in
the New York Courts. Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the
jurisdiction of any New York Court, or that such Proceeding has
been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing
a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this
Warrant or the transactions contemplated hereby. If either party
shall commence a Proceeding to enforce any provisions of this
Warrant, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.

 

(c) The headings herein
are for convenience only, do not constitute a part of this Warrant
and shall not be deemed to limit or affect any of the provisions
hereof.

 

 

9

 

   

(d) In case any one or
more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any
way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this
Warrant.

 

(e) Prior to exercise
of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to
the Warrant Shares.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

 

SIGNATURE
PAGE FOLLOWS]

 

 

10

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated
above.

 

AMERICAN
RESOURCES CORPORATION

 

By                                                                        

Name:

Title:

 

[Signature Page to Warrant]

 

 

11

 

 

EXERCISE
NOTICE

AMERICAN
RESOURCES CORPORATION

WARRANT
DATED ________

 

The
undersigned Holder hereby irrevocably elects to purchase _____
shares of Common Stock pursuant to the above referenced Warrant.
Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Warrant.

 

(1) 

The undersigned
Holder hereby exercises its right to purchase _____ Warrant Shares
pursuant to the Warrant.

 

(2) 

The holder intends
that payment of the Exercise Price shall be made as:

 

_____ a
“Cash Exercise” with respect to _____ Warrant Shares;
and/or

 

_____ a
“Cashless Exercise” with respect to _____ Warrant
Shares.

 

(3) 

Pursuant to this
Exercise Notice, the Company shall deliver to the holder _____
Warrant Shares in accordance with the terms of the
Warrant.

 

(4) 

By its delivery of
this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of
shares of Common Stock (determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934) permitted to be owned under
Section 12 of this Warrant to which this notice
relates.

 

	

Dated:                       ____________________,
______

 

	

Name of
Holder:

 

	
 

	

(Print)                                                                

 

	
 

	
 

	
 

	

By:                                                               

 

	
 

	

Name

	
 

	

Title

	
 

	

(Signature
must conform in all respects to name of holder as specified on the
face of the Warrant)

 

 

 

12

 

 

Warrant Shares Exercise Log

 

	

Date

 

	

Number
of Warrant Shares Available to be Exercised

 

	

Number
of Warrant Shares Exercised

 

	

Number
of Warrant Shares Remaining to be Exercised

 

	
 

	
 

	
 

	
 

 

 

13

 

 

AMERICAN
RESOURCES CORPORATION

WARRANT
DATED ________

WARRANT
NO. [___]

 

FORM OF
ASSIGNMENT

 

[To be
completed and signed only upon transfer of Warrant]

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____ the right represented by the above-captioned Warrant to
purchase _____ shares of Common Stock to which such Warrant relates
and appoints _____ attorney to transfer said right on the books of
the Company with full power of substitution in the
premises.

 

	

Dated:
____________________, ______

 

	
 

	
 

	

(Signature
must conform in all respects to name of holder as specified on the
face of the Warrant)

 

	
 

	
 

	
 

	

Address
of Transferee:

 

	
 

	
 

	
 

	
 

	
 

	
 

	

In the
presence of

 

	
 

	
 

	
 

 

 

 

14Exhibit

Exhibit 10.2.21

CAPITAL ONE FINANCIAL CORPORATION
2004 Stock Incentive Plan
Performance Unit Award Agreement

No. of Performance Units at Target: [# Units] 

THIS PERFORMANCE UNIT AWARD AGREEMENT (this “Agreement”), dated [Month] [Day], 2019 (the “Date of Grant”), between CAPITAL ONE FINANCIAL CORPORATION, a Delaware corporation ("Capital One" or the “Company”), and [Full NAME] (“you”), is made pursuant and subject to the provisions of the Company's 2004 Stock Incentive Plan, as amended and restated (the “Plan”) and all capitalized terms used herein that are defined in the Plan shall have the same meaning given them in the Plan unless they are otherwise defined herein.

WHEREAS, Article 9 of the Plan provides for the award from time to time in the discretion of the Committee of performance units, the vesting and issuance of which are subject to certain service, performance or other conditions;

W I T N E S S E T H :

1.    Grant of Performance Units.  Capital One hereby grants to you an award of performance units (the “Units”) with a target award of [# Units] Units (the “Target Award”).  The maximum payout for this award is 150% of the Target Award plus accrued dividends pursuant to Section 6.  The Units shall vest and the underlying shares of common stock of Capital One, $.01 par value per share (such underlying shares, the “Shares”), shall be issuable only in accordance with the provisions of this Agreement and of the Plan.  The Units will not have voting rights.

2.    Non-Transferability.  Subject to the provisions of Section 3 and 13 hereof, the right to receive some or all of the Units and the Shares related thereto shall not be assignable or transferable, or otherwise alienated, pledged or hypothecated or otherwise encumbered under any circumstances.  Any purported or attempted assignment, transfer, alienation, pledge, hypothecation or encumbrance of such rights or of the Units or the Shares related thereto prior to their issuance to you shall be null and void and shall result in the immediate forfeiture of such rights or Units, including the Shares related thereto, and cancellation of this Agreement.

3.    Lapse of Restrictions.

(a)Vesting.  Except as provided in Sections 3(b) and 3(c) below and to the extent not previously vested or forfeited as provided herein, the Units shall vest on a date as determined by the Committee after termination of the Performance Period (as defined below) and certification of performance by the Committee, but no later than March 15, 2022 (the “Date of Issuance”).  On the Date of Issuance, the Units shall vest, and the Shares shall become issuable as determined based on the Company’s Adjusted ROTCE and Growth of Tangible Book Value Per Share Plus Common Dividends, each as defined on Appendix A, relative to the peer group defined on Appendix B, over a three-year performance period beginning on January 1, 2019 and ending on December 31, 2021 (the “Performance Period”) as certified by the Committee following the end of the Performance Period. The number of Units that shall vest and the number of Shares that shall become issuable on the Date of Issuance shall be determined as set forth on Appendix A. The number of Units vesting and the number of Shares that shall become issuable on the Date of Issuance shall be reduced in the event that Adjusted ROTCE for one or more fiscal years in the Performance Period is less than or equal to zero, as provided on Appendix A.  The number of Units vesting and the number of Shares that shall become issuable on the Date of Issuance shall also be subject to reduction in accordance with section 12(b) below.

With respect to any Units that have vested on the Date of Issuance, the Shares related thereto shall be issued to you, in settlement of such vested Units, on such Date of Issuance.  Dividends will be accrued and paid out as additional shares at the time of the award, as provided in Section 6 below.  All Units, including your rights thereto and to the underlying Shares, which do not vest on or before the Date of Issuance, as provided in this Section 3, shall immediately be forfeited as of such Date of Issuance (to the extent not previously forfeited as provided herein).

(b)    Effect of Termination of Employment.

(i)    Except as provided in Sections 3(b)(ii), 3(b)(iii), and 3(b)(iv), upon termination of your employment with Capital One for any reason prior to the Date of Issuance, all Units shall immediately be forfeited (to the extent not previously vested or forfeited as provided herein).

(ii)    Upon termination of your employment as a result of your death or Disability on or prior to December 31, 2021, a number of the Units equal to (1) the Target Award amount as specified above, or (2) following a Change of Control, the Time-Based Units as calculated in Section 3(c) below, shall immediately vest and the Shares shall be immediately issuable to you as soon as practicable following your death or Disability and in all events on or before the later of December 31 of the year of termination or 2.5 months following such termination.  Upon your termination of employment as a result of your death or Disability on or after January 1, 2022, but prior to the Date of Issuance, the number of Units that shall vest and the number of Shares that shall be issuable to you shall be as calculated in Section 3(a) above.

(iii)    Upon your Retirement on or before December 31, 2021, the number of Units that shall vest and the number of Shares that shall be issuable to you shall be as calculated in Section 3(a) and 3(c).

(iv)    Subject to Section 3(b)(v), upon termination of your employment by Capital One not for Cause on or before December 31, 2021 and prior to the occurrence of a Change of Control, the number of Units that will vest and the number of underlying Shares that will become issuable to you shall be as calculated in Section 3(a) as if a termination of employment had not occurred, subject to (A) your execution of a separation agreement and/or general release of claims within a period of time as required by Capital One (in a form as prescribed by Capital One, a “Release”), (B) such Release becoming effective and irrevocable in accordance with its terms and (C) your continued compliance with the terms of such Release through the Date of Issuance. If the Date of Issuance occurs prior to the expiration of the period of time Capital One provides you to sign the Release, you shall be entitled to vesting of the Units even if you have not yet executed the Release.  For avoidance of doubt, such continued vesting shall immediately cease (and any Units shall be immediately forfeited) in the event that you violate the terms and conditions of the Release.

(v)    Your right to continued vesting pursuant to Section 3(b)(iv) is expressly conditioned on your compliance with any and all restrictive covenant agreements or provisions to which you are a party with Capital One including, but not limited to, those with respect to non-competition, confidentiality and work product, non-solicitation of employees/no hire of employees, non-solicitation of customers, and garden transition period or leave (collectively, “Restrictive Covenant Agreements”).  You understand and agree that any actual or threatened action by you in violation of any Restrictive Covenant Agreements shall forfeit your right to continued post-employment vesting as of the date of such actual or threatened action by you in violation of such Restrictive Covenant Agreement.  You further understand and agree that any forfeiture of continued vesting rights under this Agreement, or waiver thereof, shall not limit Capital One’s rights to pursue any and all legal and equitable remedies and damages available for your breach of the Restrictive Covenant Agreements under the terms of such agreements and applicable law, including but not limited to, injunctive relief, monetary damages, costs and fees.

(c)    Effect of Change of Control.  Upon a Change of Control, a number of Units shall, upon certification of performance by the Committee, convert into time-based restricted stock units (the “Time-Based Units”) calculated based on a performance period from January 1, 2019 through the end of the fiscal quarter immediately preceding the closing date of the transaction giving rise to the Change of Control; and provided further that the Date of Issuance in such case shall be December 31, 2021 subject to either (1) your continued employment through such date or (2) your Retirement, pursuant to Section 3(b)(iii).  Upon your termination of employment by Capital One without Cause or for Good Reason (each as defined below), in either case on or prior to the second anniversary of the occurrence of a Change of Control of Capital One and prior to the Date of Issuance with respect to the Time-Based Units, then notwithstanding anything herein to the contrary, all of the Time-Based Units shall vest and the Shares shall be issuable in full without restrictions on transferability immediately upon the occurrence of your termination of employment following such Change of Control (to the extent not previously vested or forfeited as provided herein) and such date shall be the Date of Issuance; provided, however, that if the Time-Based Units are considered deferred compensation under Section 409A of the Code and not exempt from Section 409A of the Code as a short-term deferral or otherwise, and you are a “specified employee,” as defined in and pursuant to Reg. Section 1.409A 1(i) or any successor regulation, on the date of any such termination of employment without Cause or for Good Reason, you will not be entitled to such vesting earlier than the earlier of (i) the date which is six months from the date of your “separation from service” (as defined in Reg. Section 1.409A 1(h) or any successor regulation) as a result of such termination and (ii) your death.

With respect to any Time-Based Units that have vested, the Shares related thereto shall be issued to you, in settlement of such vested Time-Based Units, on the Date of Issuance.  Dividends will be accrued and paid out as additional shares at the time of the award, as provided in Section 6 below.  All Time-Based Units, including your rights thereto and to the underlying Shares, which do not vest on or before the Date of Issuance, as provided in this Section 3, shall immediately be forfeited as of such Date of Issuance (to the extent not previously forfeited as provided herein).

(d)    Definitions.

(i)    For purposes of this Agreement, “Cause” shall mean (1) the willful and continued failure to perform substantially your duties with the Company or any Affiliate (other than any such failure resulting from incapacity due to physical or mental illness or following your delivery of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to you by the Board or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or the Chief Executive Officer of the Company believes that you have not substantially performed your duties, or (2) the willful engaging by you in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. No act, or failure to act, on the part of you shall be considered “willful” unless it is done, or omitted to be done, by you in bad faith or without reasonable belief that your action or omission was in the best interests of the Company. Any act, or failure to act, based upon (A) authority given pursuant to a resolution duly adopted by the Board, or if the Company is not the ultimate parent corporation of the Affiliate and is not publicly-traded, the board of directors of the ultimate parent of the Company (the “Applicable Board”), (B) the instructions of the Chief Executive Officer of the Company (unless you are the Chief Executive Officer at the time of any such instruction) or (C) the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company. The cessation of your employment shall not be deemed to be for Cause unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Applicable Board (excluding you, if you are a member of the Applicable Board) at a meeting of the Applicable Board called and held for such purpose (after reasonable notice is provided to you and you are given an opportunity, together with your counsel, to be heard before the Applicable Board), finding that, in the good faith opinion of the Applicable Board, you are guilty of the conduct described in this Section 3(d)(i), and specifying the particulars thereof in detail.

(ii)    For purposes of this Agreement, “Good Reason” shall mean (1) the assignment to you of any duties inconsistent in any respect with your position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any action by the Company that results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by you; (2) any failure by the Company to pay your compensation owed other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by you; (3) the Company’s requiring you (I) to be based at any office or location more than 35 miles from the office or location at which you were required to work as of the date of this Agreement or (II) to travel on Company business to a substantially greater extent than required during the 120-day period immediately prior to the date the Change of Control occurs; or (4) any other action or inaction that constitutes a material breach by the Company of this Agreement or any employment agreement.  For purposes of this Section 3(d)(ii) of this Agreement, any good faith determination of Good Reason made by you shall be conclusive. Your mental or physical incapacity following the occurrence of an event described above in clauses (1) through (4) shall not affect your ability to terminate employment for Good Reason.

(iii)    Any termination by the Company for Cause, or by you for Good Reason, shall be communicated by Notice of Termination to the other party. “Notice of Termination” means a written notice that (1) indicates the specific termination provision in this Agreement relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated, and (3) if the Date of Termination (as defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination shall be not more than 30 days after the giving of such notice). The failure by you or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of you or the Company, respectively, hereunder or preclude you or the Company, respectively, from asserting such fact or circumstance in enforcing your or the Company’s respective rights hereunder.

(iv)    “Date of Termination” means, if your employment is terminated by the Company for Cause, or by you for Good Reason, the date of receipt of the Notice of Termination or such later date specified in the Notice of Termination, as the case may be. You and the Company shall take all steps necessary to ensure that any termination described in this Section 3(d) constitutes a “separation from service” within the meaning of Section 409A of the Code, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the “Date of Termination.”

4.    Modification and Waiver.  Except as provided in the Plan with respect to determinations of the Board or the Committee and subject to the Board’s right to amend the Plan, neither this Agreement nor any provision hereof can be changed, modified, amended, discharged, terminated or waived orally or by any course of dealing or purported course of dealing, but only by an agreement in writing signed by you and Capital One; provided, that changes, modifications and amendments not detrimental to you may be made in writing signed only by Capital One.  No such agreement shall extend to or affect any provision of this Agreement not expressly changed, modified, amended, discharged, terminated or waived or impair any right consequent on such a provision.  The waiver of or failure to enforce any breach of this Agreement shall not be deemed to be a waiver or acquiescence in any other breach thereof.

5.    Tax Withholding.  If you become subject to withholding under applicable tax laws, you agree to pay Capital One the amount required to be withheld by one or more of the following methods:

(a)Capital One will automatically withhold the number of Shares having a Fair Market Value on the date the tax withholding obligation is to be determined equal to the amount required to be withheld (as determined pursuant to the Plan), rounded up to the nearest whole Share; or

		
	(b)
	by such other methods as Capital One may make available from time to time.

6.    Dividends.  Dividends with respect to the Shares shall accrue beginning on January 1, 2019, through the applicable Date of Issuance when the Shares underlying the Units or Time-Based Units are delivered, at which time such accrued dividends shall be paid out in the form of additional shares of common stock of the Corporation based on the Fair Market Value of a share of the Company’s common stock on the business day prior to the Date of Issuance.  The accrued dividends that shall be paid out to you shall be only such amount that has accrued with respect to the Shares underlying the Units or Time-Based Units that vest on the Date of Issuance.

7.    Governing Law.  This Agreement shall be governed by United States federal law and, to the extent not preempted thereby, by the laws of the State of Delaware.  Capital One and you hereby consent and submit to the personal jurisdiction and venue of any state or federal court located in any city or county of Delaware for resolution of any and all claims, causes of action or disputes arising out of this Agreement.  You and Capital One agree that the court shall not set aside the Committee’s determinations unless there is clear and convincing evidence of bad faith or fraud.
8.    Conflicts.  In the event of any conflict between the provisions of the Plan as in effect on the Date of Grant and the provisions of this Agreement, except terms otherwise defined herein, the provisions of this Agreement shall govern.  All references herein to the Plan shall mean the Plan as in effect on the date hereof.

9.    Bound by Plan.  In consideration of the grant of the Units and the Shares, you agree that you will comply with such conditions as the Committee may impose on the Units and the Shares and be bound by the terms of the Plan.

10.    Employment Status.  This Agreement does not constitute a contract of employment nor does it alter your terminable at will status or otherwise guarantee future employment.

11.Binding Effect.  This Agreement shall be binding upon, enforceable against, and inure to the benefit of you and your legatees, distributees and personal representatives, and Capital One and its successors and assigns.

12.Clawbacks and Other Forfeiture Events.

(a)    If, prior to the third anniversary of the Date of Issuance, a Restatement Date occurs, you shall deliver to the Company on the Restatement Delivery Date the Clawback Shares (each as defined below), if any, as determined under this Section 12(a).

For purposes of this Section 12(a):

(i)“Amended Adjusted ROTCE” means the Adjusted ROTCE over the Performance Period and taking into account the financial results of the Company as reflected in the Restatement.

(ii)“Amended Growth of Tangible Book Value Per Share Plus Common Dividends” means the Growth of Tangible Book Value Per Share Plus Common Dividends over the Performance Period and taking into account the financial results of the Company as reflected in the Restatement.

(iii)“Held Shares” means the Shares held by you as of the Restatement Delivery Date in the event that such number of Shares is less than the Clawback Shares.

(iv)“Clawback Shares” means the number of Shares equal to (A) the number of Shares that were issued to you under this Agreement on the Date of Issuance minus (B) the number of shares of common stock of the Company that would have been issuable to you on the Date of Issuance as determined based on the Amended Adjusted ROTCE and the Amended Growth of Tangible Book Value Per Share Plus Common Dividends and certified by the Committee following the Restatement Date.  For any member of the Peer Group that restates its financial results for all or any portion of the Performance Period prior to the date that the number of Clawback Shares is certified by the Committee, the Adjusted ROTCE and Growth of Tangible Book Value Per Share Plus Common Dividends for such member of the Peer Group used for purposes of calculating the Clawback Shares shall take into account such restatement.  For the avoidance of doubt, neither you nor the Company shall have any obligation with respect to the Clawback Shares in the event that the number of Shares in clause (B) of the preceding sentence exceeds the number of Shares in clause (A) of the preceding sentence.  The Clawback Shares shall be delivered to the Company in Shares; provided, however, that in the event that on the Restatement Delivery Date you do not hold a number of Shares equal to or greater than the Clawback Shares, you shall deliver to the Company (x) all Held Shares plus (y) the pre-tax proceeds from sales or other transfers of all Recovery Shares.  Such pre-tax proceeds shall be calculated starting with the most recent sale or other transfer of Recovery Shares prior to the Restatement Delivery Date and continuing in reverse chronological order with any prior sales or transfers of Recovery Shares until the pre-tax proceeds of all Recovery Shares are determined.  The “pre-tax proceeds” for any Recovery Shares that were transferred by you in a transaction other than a sale on the New York Stock Exchange shall be the Fair Market Value of such Recovery Shares as of the date of such transaction.  The “pre-tax proceeds” for any Recovery Shares that were withheld pursuant to Section 5 shall be the Fair Market Value of such Recovery Shares as of the date they were withheld.

(v)“Recovery Shares” means the number of Shares equal to the difference between the Clawback Shares and your Held Shares.

(vi)“Restatement” means an accounting restatement of the Company’s financial statements, covering all or any portion of the Performance Period, due to the noncompliance of the Company with any financial reporting requirement under the securities laws.  For the avoidance of doubt, in the event that the Company makes any accounting restatement solely due to (A) any change after the Date of Issuance in U.S. generally accepted accounting principles or (B) any change after the Date of Issuance in financial reporting requirements under the securities laws, such restatement shall not constitute a “Restatement” under this Section 12(a).

(vii)“Restatement Date” means the date after the Date of Issuance upon which the Company first files (A) a Restatement or (B) a Current Report on Form 8-K with the Securities and Exchange Commission (or otherwise publicly announces) that the Company expects to issue a Restatement.

(viii)“Restatement Delivery Date” means the date that is 30 days after the number of Clawback Shares is certified by the Committee in accordance with this Section 12(a), or such earlier date upon which you deliver the Clawback Shares to the Company.

(b)    The number of Units vesting and the number of Shares that shall become issuable on the Date of Issuance shall be subject to reduction in an amount as determined by the Committee in its sole discretion in the event that, prior to the Date of Issuance, the Committee in its sole discretion determines that (i) there has been misconduct resulting in either a violation of law or of Capital One policy or procedures, including but not limited to Capital One’s Code of Business Conduct and Ethics, that in either case causes significant financial or reputational harm to Capital One and (ii) either you committed the misconduct or failed in your responsibility to manage or monitor the applicable conduct or risks.

(c)    You agree to reimburse the Company with respect to the Units and the Shares to the extent required under Section 304 of the Sarbanes-Oxley Act of 2002 or as otherwise required by law.
13.     Mandatory Holding Requirement.

(a)    You agree that with respect to the Applicable Holding Shares you may not transfer, sell, pledge, hypothecate or otherwise dispose of such Applicable Holding Shares until the Holding Date; provided that the requirements set forth in this Section 13 shall immediately lapse and be of no further force and effect upon your death, Disability or termination of employment by Capital One without Cause or for Good Reason following a Change of Control, pursuant to Section 3(c).

(b)    For purposes of this Section 13:

(i)    “Applicable Holding Shares” means 50% of the Shares acquired hereunder (not including any shares of common stock of the Company sold or retained by the Company or its designated agent to fund the payment of any tax withholding obligation, brokerage commission or fees payable in connection with the Shares) during your term of employment with the Company and during the one-year period after termination of your employment for any reason; and

(ii)    “Holding Date” means the first anniversary of the date of acquisition of any Applicable Holding Shares.

14.Data Protection.  You consent to the collection, processing and transfer (including international transfer) of your personally identifiable data in connection with the grant of the Units and participation in the Plan.

15.Severability.  This Agreement shall be enforceable to the fullest extent allowed by law.  In the event that any provision of this Agreement is determined to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, then that provision shall be reduced, modified or otherwise conformed to the relevant law, judgment or determination to the degree necessary to render it valid and enforceable without affecting the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement.

16.    Miscellaneous.  In accepting the grant, you acknowledge and agree that:
(a)    this Agreement is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in a manner so as to comply therewith;
(b)    your obligations under this Agreement shall survive any termination of your employment with the Company for any reason;
(c)    any of the Company’s rights or remedies under this Agreement shall be cumulative and in addition to whatever other remedies the Company may have under law or equity;
(d)    any recovery by the Company under this Agreement will be a recovery of Shares to which you were not entitled under this Agreement and is not to be construed in any manner as a penalty;
(e)    the Company may, to the maximum extent permitted by applicable law and Section 409A of the Code, retain for itself funds or securities otherwise payable to you pursuant to this Agreement to satisfy any obligation or debt that you owe to the Company, including any obligations hereunder.  The Company may not retain such funds or securities until such time as they would otherwise be distributable to you in accordance with this Agreement;
(f)    the Company reserves the right to impose other requirements on the Restricted Stock Units, any Shares acquired pursuant to the Restricted Stock Units, and your participation in the Plan, to the extent Capital One determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and regulations, or to facilitate the administration of the Restricted Stock Units and the Plan.  Such requirements may 

include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing; and
(g)    Capital One from time to time distributes and makes available to associates disclosure documents, including a prospectus, relating to the Plan.  You may also contact the HR Help Center to obtain copies of the Plan disclosure documents and the Plan.  You should carefully read the Plan disclosure documents and the Plan.  By accepting the benefits of this Agreement you acknowledge receipt of the Plan and the Plan disclosure documents and agree to be bound by the terms of this Agreement and the Plan.  You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by Capital One or a third-party designated by Capital One.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed on their behalf.

CAPITAL ONE FINANCIAL CORPORATION

By:    /s/ Jory Berson                
Jory Berson
Chief Human Resources Officer

PARTICIPANT

By: SIGNED BY ELECTRONIC SIGNATURE    
[FIRST NAME] [LAST NAME]

BY ELECTRONICALLY ACCEPTING THE AWARD, YOU AGREE THAT (i) SUCH ACCEPTANCE CONSTITUTES YOUR ELECTRONIC SIGNATURE IN EXECUTION OF THIS AGREEMENT; (ii) YOU AGREE TO BE BOUND BY THE PROVISIONS OF THE PLAN AND THE AGREEMENT; (iii) YOU HAVE REVIEWED THE PLAN AND THE AGREEMENT IN THEIR ENTIRETY, HAVE HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO ACCEPTING THE AWARD AND FULLY UNDERSTAND ALL OF THE PROVISIONS OF THE PLAN AND THE AGREEMENT; (iv) YOU HAVE BEEN PROVIDED WITH A COPY OR ELECTRONIC ACCESS TO A COPY OF THE U.S. PROSPECTUS FOR THE PLAN; AND (v) YOU HEREBY AGREE TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE COMMITTEE UPON ANY QUESTIONS ARISING UNDER THE PLAN AND THE AGREEMENT.

*          *          *         *          *

APPENDIX A

PERFORMANCE SHARE METRICS AND PAYOUT 

		
	1.
	Company Performance Relative to Peer Group

The number of Units that shall vest and the number of Shares that shall become issuable on the Date of Issuance pursuant to Section 3(a) shall be based on the Company’s performance over the Performance Period, measured by two metrics weighted as follows:

		
	(a)
	One-Third of the Units (the “Adjusted ROTCE Tranche”) shall become issuable as Shares based on the Adjusted ROTCE achieved by the Company over the Performance Period, relative to the Adjusted ROTCE achieved by each member of the Peer Group over the Performance Period, expressed as a percentile (the “Adjusted ROTCE Percentile”), such that:

		
	(i)
	If the Company’s Adjusted ROTCE Percentile is 80th or higher, then 150% of the Adjusted ROTCE Tranche shall be issuable as Shares.

		
	(ii)
	If the Company’s Adjusted ROTCE Percentile is 25th, then 40% of the Adjusted ROTCE Tranche shall be issuable as Shares.

		
	(iii)
	If the Company’s Adjusted ROTCE Percentile below 25th, then 0% of the Adjusted ROTCE Tranche shall be issuable as Shares.

		
	(iv)
	If the Company’s Adjusted ROTCE Percentile is above 25th but below 80th, then the number of issuable Shares shall be calculated by straight line interpolation from the points listed above.

“Adjusted ROTCE” means the ratio, expressed as a percentage, of (a) the Company’s net income available to common stockholders, excluding, on a tax adjusted basis, the impact of impairment, amortization and re-measurement of intangible assets, to (b) the Company’s average tangible common equity; and shall exclude the initial effects of changes in tax laws, accounting principles or regulations, or other laws or provisions affecting the reported results if the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or necessary or appropriate to comply with applicable laws, rules or regulations.  

		
	(b)
	Two-Thirds of the Units (the “Growth of Tangible Book Value Per Share Plus Common Dividends Tranche”) shall become issuable as Shares based on the Growth of Tangible Book Value Per Share Plus Common Dividends achieved by the Company over the Performance Period, relative to the Growth of Tangible Book Value Per Share Plus Common Dividends achieved by each member of the Peer Group over the Performance Period, expressed as a percentile (the “Growth of Tangible Book Value Per Share Plus Common Dividends Percentile”), such that:

		
	(i)
	If the Company’s Growth of Tangible Book Value Per Share Plus Common Dividends Percentile is 80th or higher, then 150% of the Growth of Tangible Book Value Per Share Plus Common Dividends Tranche shall be issuable as Shares.

		
	(ii)
	If the Company’s Growth of Tangible Book Value Per Share Plus Common Dividends Percentile is 25th, then 40% of the Growth of Tangible Book Value Per Share Plus Common Dividends Tranche shall be issuable as Shares.

		
	(iii)
	If the Company’s Growth of Tangible Book Value Per Share Plus Common Dividends Percentile below 25th, then 0% of the Growth of Tangible Book Value Per Share Plus Common Dividends Tranche shall be issuable as Shares.

		
	(iv)
	If the Company’s Growth of Tangible Book Value Per Share Plus Common Dividends Percentile is above 25th but below 80th, then the number of issuable Shares shall be calculated by straight line interpolation from the points listed above.

“Growth of Tangible Book Value Per Share Plus Common Dividends” means the three year average of the ratios, expressed as a percentage, of (a) the Company’s tangible book value per share at the end of each year within the 

Performance Period, plus total common dividends per share paid during such year, to (b) the Company’s tangible book value per share at the beginning of each corresponding year within the Performance Period; and shall exclude the initial effects of changes in tax laws, accounting principles or regulations, or other laws or provisions affecting the reported results if the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or necessary or appropriate to comply with applicable laws, rules or regulations.. 

Subject to section 2 below, the total Shares issuable pursuant to this Agreement (the “Total Shares Earned”) shall be equal to the sum of the Shares issuable pursuant to paragraphs (a) and (b) above.

		
	2.
	Absolute Performance Modifier

In the event that the Company’s Adjusted ROTCE for one or more fiscal years in the Performance Period is less than or equal to zero, the Total Shares Earned shall be reduced as provided below:

		
	(a)
	If the Company’s Adjusted ROTCE is less than or equal to zero for one fiscal year within the Performance Period, the Total Shares Earned shall be reduced by one-sixth;

		
	(b)
	If the Company’s Adjusted ROTCE is less than or equal to zero for any two fiscal years within the Performance Period, the Total Shares Earned shall be reduced by one-third; and

		
	(c)
	If the Company’s Adjusted ROTCE is less than or equal to zero for all three fiscal years within the Performance Period, the Total Shares Earned shall be forfeited in full.

APPENDIX B

PEER GROUP
 

The “Peer Group” shall consist of the companies in the KBW Bank Sector index as of January 1, 2019, excluding custody banks in that index, as shown below.  For members of the Peer Group who fail or are acquired, the Adjusted ROTCE and Growth of Tangible Book Value Per Share Plus Common Dividends through the time the independent company stops reporting GAAP financials will be frozen and serve as their final metrics for the Performance Period.  Members of the Peer Group that continue to operate as independent companies but that fall out of the KBW Bank Sector index will continue to be used in the Peer Group.  Any new entrants to the KBW Bank Sector index after January 1, 2019 will not be considered members of the Peer Group for any award determination or calculation related to this Agreement.

Bank of America
BB&T Corporation
Citigroup
Citizens Financial Group
Comerica
Fifth Third Bancorp
First Republic
Huntington Bancshares
JP Morgan Chase
KeyCorp
M&T
New York Community Bancorp
People’s United
PNC
Regions
SunTrust
SVB Financial
US Bancorp
Wells Fargo
Zions

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