Document:

Exhibit 10.3

 

Hogan Lovells US LLP Draft August 8, 2017

 

AMENDMENT NUMBER TWO

TO

EMPLOYMENT CONTRACT

(Herbert M. Gardner)

 

This Amendment Number Two to Employment Contract (this “Amendment”) is made and entered into as of August 8, 2017 by and between Supreme Industries, Inc., a Delaware corporation (the “Company”), and Herbert M. Gardner (the “Executive”).  The Company and the Executive are sometimes referred to herein as the “Parties.”

 

RECITALS

 

WHEREAS, the Company and the Executive have entered into that certain Employment Contract, as amended and restated effective January 1, 2005, and subsequently amended by Amendment Number One to Employment Contract, effective June 29, 2012 (the “Employment Contract”);

 

WHEREAS, the Company and the Executive have entered into that certain Confidentiality Agreement and Covenant Not to Compete, effective January 1, 2005 (the “Confidentiality Agreement”);

 

WHEREAS, the Company and the Executive have entered into that certain Indemnification Agreement effective September 30, 2008, and Supreme Corporation and the Executive have entered into that certain Indemnification Agreement effective September 30, 2008 (collectively, the “Indemnification Agreements”);

 

WHEREAS, the Company, Wabash National Corporation, a Delaware corporation (“Parent”), and Redhawk Acquisition Corporation, a Delaware corporation (“Merger Subsidiary”), have entered into that certain Agreement and Plan of Merger, dated as of August 8, 2017 (the “Merger Agreement”), pursuant to which following the consummation of the Offer (as defined in the Merger Agreement), Merger Subsidiary will be merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger and as a wholly owned subsidiary of Parent;

 

WHEREAS, the Parties wish to amend the Employment Contract to, among other things, memorialize the Parties’ understanding regarding the termination of the Executive’s employment in connection with the consummation of the Merger and the amount of termination payments and benefits that the Executive will receive in connection with such termination; and

 

WHEREAS, capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Employment Contract.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.              The Executive’s employment with the Company and its subsidiaries shall terminate effective as of the Closing (as defined in the Merger Agreement).

 

2.              In connection with the Executive’s termination of employment, the Executive (or, in the event of the Executive’s death, the Executive’s wife or his estate, whichever is applicable)

 

 

shall receive termination payments and benefits pursuant to and in accordance with Section 9 of the Employment Contract; provided, however, that the aggregate value of such termination payments and benefits shall be equal to $1,984,785 (the “Severance Amount”), which value shall be allocated as follows:

 

a.              an amount equal to $540,000 in the aggregate (or $108,000 per annum) in the form of the continued payment of base salary;

 

b.              an amount equal to $1,004,620 in the aggregate (or $200,924 per annum) in the form of the continued payment of the Pre-Tax Bonus; and

 

c.               an amount equal to $440,165 in the aggregate in the form of the continued provision of fringe benefits, including $29,380 in respect of Medical Benefits, $321,680 in respect of Insurance, $25,000 in respect of Dental Benefits, and $64,105 in respect of the vehicle buyout.

 

3.              The Severance Amount shall be paid or provided to the Executive, less applicable tax withholding, in the forms and at the times set forth in Section 9 of the Employment Contract, based on the allocation set forth in Section 2 above.  Notwithstanding the foregoing, if and when the Executive is no longer eligible to participate in the Company’s medical or health plans pursuant to Section 4980B of the Code, the Company may satisfy its obligation under Section 9 of the Employment Contract with respect to Medical Benefits by paying the Executive an aggregate amount equal to the then-remaining balance of the amount specified in Section 2 above for Medical Benefits, in substantially equal monthly installments over the remainder of the period during which the Executive is entitled to receive the Severance Amount.  Except for the payment or provision of the Severance Amount, the Company and its subsidiaries and affiliates shall have no further obligations to the Executive under the Employment Contract upon the Executive’s termination of employment.

 

4.              The Executive’s receipt of the Severance Amount shall be subject to the Executive’s execution and non-revocation of a release of claims substantially in the form of the release attached hereto as Exhibit A (the “Release”).  The Release shall be furnished to the Executive not later than five (5) days after the Closing Date (as defined in the Merger Agreement), and must be executed and returned to the Company, and any revocation period provided in the Release must have expired, not later than sixty (60) days after the Closing Date, in order for the Executive to be eligible to receive the Severance Amount.  No portion of the Severance Amount shall be paid or provided to the Executive until the date on which the revocation period expires, and all amounts that would otherwise have been paid or provided to the Executive prior to such date shall be paid or provided as soon as practical after such date; provided, however, that if the sixtieth day after the Closing Date falls in the calendar year after the year that includes the Closing Date, no portion of the Severance Amount that is subject to Section 409A of the Code shall be paid or provided before the first day of such following calendar year.  If the revocation period provided in the Release has not expired on or prior to the sixtieth day after the Closing Date, then the Company and its subsidiaries and affiliates shall have no obligation to pay or provide the Severance Amount to the Executive.

 

 

5.              Notwithstanding anything else to the contrary in the Confidentiality Agreement, nothing therein shall prevent the Executive from reporting a possible violation of law to a governmental entity or law enforcement, including making a disclosure that is protected under the whistle blower protections of applicable law.

 

6.              This Amendment shall be effective as of and contingent upon the consummation of the Merger.  In the event the consummation of the Merger does not occur or the Merger Agreement is otherwise terminated, this Amendment shall thereupon be null and void.

 

7.              All provisions of the Employment Contract, the Confidentiality Agreement and the Indemnification Agreements not specifically amended by this Amendment shall remain in full force and effect and shall be unaffected by this Amendment.  In the event of any conflict or inconsistency between the terms and conditions of this Amendment and the terms and conditions of the Employment Contract, the Confidentiality Agreement or the Indemnification Agreements, as applicable, the terms and conditions of this Amendment shall control.

 

8.              This Amendment shall be governed by and construed and enforced in accordance with the internal laws of the state of Delaware (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).

 

9.              This Amendment may be executed in multiple counterparts, each of which shall be an original, but all of which shall constitute one and the same agreement.

 

[Signature Page Below]

 

 

IN WITNESS WHEREOF, the Parties have executed this Amendment on the date first set forth above.

 

	
 
    	
SUPREME   INDUSTRIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark D. Weber
    
	
 
    	
 
    	
Name: Mark D. Weber
    
	
 
    	
 
    	
Title: President & CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Herbert M. Gardner
    
	
 
    	
Herbert M. Gardner
    

 

 

EXHIBIT A

 

General Release of Claims

 

In consideration of the payments to be made to me by Supreme Industries, Inc. (the “Company”) under Section 9 of that certain Employment Contract between me and the Company, as amended and restated effective January 1, 2005, and subsequently amended on June 29, 2012 and August 8, 2017 (the “Employment Contract”), I, Herbert M. Gardner, intending to be legally bound, agree as follows:

 

On behalf of myself and my heirs and any other person or entity who could assert a claim in my name or on my behalf, I hereby release and discharge the Company, its subsidiaries and affiliates, and any and all of their respective owners, partners, board members, employees, agents and other representatives, successors, assigns, and administrators or any other fiduciaries of any employee benefit plan sponsored by the Company or any of its subsidiaries or affiliates, from any and all claims I have or may have, whether known or unknown, based on any event, transaction or matter occurring or existing prior to my signing this General Release of Claims (this “Release”).  This Release includes, but is not limited to, all claims arising from or related to my employment or termination of employment with the Company.  This Release includes any rights or claims I may have under any federal, state, or other law relating to pay, benefits, or other terms and conditions of employment, or relating to any employment discrimination or other law, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Equal Pay Act; the Americans with Disabilities Act; the Family Medical and Leave Act, the Employee Retirement Income Security Act of 1974; and Delaware, New York, Indiana, or other state and any local laws governing employment, all as amended.  This Release also includes claims based on any other statutory or administrative law or regulation, or on contract, tort, or any other common law doctrine.  This is a general release, except that I am not releasing any right to enforce this Release or the Indemnification Agreements, any claim for indemnification under the Company’s directors and officers liability insurance or under the Certificate of Incorporation or By-Laws of the Company, any claim for unemployment or workers compensation benefits, any claim to benefits under any employee benefit plans of the Company or its subsidiaries or affiliates in accordance with the terms of such plans and applicable law, continuation coverage benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), or any other rights that may not be released as a matter of law by this Release.  I agree not to file any lawsuit or claim seeking monetary recovery or other relief for myself and asserting any claims that are lawfully released herein, and I unconditionally waive all rights to recover the same.  However, notwithstanding any other provision of this Release, this Release is not intended to, and shall not be construed to, limit my right to file a charge, communicate information or take other action before the Equal Employment Opportunity Commission or any other federal, state or local government agency to the extent such right as a matter of law may not be limited by private agreement and nothing herein shall prevent me from reporting a possible violation of law to a governmental entity or law enforcement, including making a disclosure that is protected under the whistle blower protections of applicable law; provided that this Release does waive any right to seek, recover, or accept any monetary payments or other individual relief for myself connected to any agency or other action related to claims (except for any government issued bounty award) that are lawfully released in this Release.

 

I further acknowledge that this Release includes all claims under the Age Discrimination in Employment Act and the Older Workers’ Benefit Protection Act.  I acknowledge that I have been hereby advised to consult with an attorney before signing this Release.  I further agree that I have been given twenty-one (21) days in which to consider whether to sign this Release and that after signing I will have

 

 

seven (7) calendar days to revoke the agreement if I wish to do so.  To make an effective revocation, I know that I must deliver notice of revocation in writing to        , at          no later than the end of the seventh calendar day after I have signed this Release.  I acknowledge that this Release will not become effective or enforceable until the seven-day revocation period has expired without revocation and that if I do not revoke this agreement it will be effective at the conclusion of the seven-day period.

 

On this          day of                    , 2017 by my signature below and intending to be legally bound, I acknowledge my acceptance of this Release.

 

	
 
    	
 
    
	
Herbert M. GardnerTRANSACT TECHNOLOGIES INCORPORATED

2014 EQUITY INCENTIVE PLAN

(Adopted by Directors April 1, 2014)

(Approved by Shareholders May 15, 2014)

(Amended by Directors March 1, 2017, Amendment Approved by Shareholders May 22, 2017)

	
1.

	
DEFINED TERMS

Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related to those terms.

	
2.

	
PURPOSE

The Plan has been established to advance the interests of the Company by providing for the grant to Participants of Stock-based and other incentive Awards.

	
3.

	
ADMINISTRATION

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures relating to the Plan; and otherwise do all things necessary or appropriate to carry out the purposes of the Plan.  Determinations of the Administrator made under the Plan will be conclusive and will bind all parties.

	
4.

	
LIMITS ON AWARDS UNDER THE PLAN

(a)            Number of Shares.  The maximum number of shares of Stock that may be delivered in satisfaction of Awards under the Plan is 1,400,000.  Up to the total number of shares available for awards to employee Participants may be issued in satisfaction of ISOs, but nothing in this Section 4(a) will be construed as requiring that any, or any fixed number of, ISOs be awarded under the Plan.  The number of shares of Stock delivered in satisfaction of Awards will, for purposes of this Section 4(a), be determined net of shares of Stock withheld by the Company in payment of the exercise price of the Award or in satisfaction of tax withholding requirements with respect to the Award.  For the avoidance of doubt, shares of Stock underlying the portion of any Award that is settled in cash or the portion of any Award that expires, terminates or is forfeited prior to the issuance of Stock thereunder shall not be treated as having been delivered.  The limit set forth in this Section 4(a) will be construed to comply with Section 422 and regulations thereunder.  To the extent consistent with the requirements of Section 422 and regulations thereunder, and with other applicable legal requirements (including applicable stock exchange requirements), Stock issued under awards of an acquired company that are converted, replaced, or adjusted in connection with the acquisition will not reduce the number of shares available for Awards under the Plan.

(b)            Type of Shares.  Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company.  No fractional shares of Stock will be delivered under the Plan.

(c)            Section 162(m) Limits.  The following additional limits will apply to Awards of the specified type granted, or in the case of Cash Awards payable, to any person in any calendar year:

(1)            Stock Options:  500,000 shares of Stock.

(2)            SARs:  500,000 shares of Stock.

(3)            Awards other than Stock Options, SARs or Cash Awards:  500,000 shares of Stock.

(4)            Cash Awards:  $750,000.

In applying the foregoing limits, (i) all Awards of the specified type granted to the same person in the same calendar year will be aggregated and made subject to one limit; (ii) the limits applicable to Stock Options and SARs refer to the number of shares of Stock subject to those Awards; (iii) the share limit under clause (3) refers to the maximum number of shares of Stock that may be delivered, or the value of which could be paid in cash or other property, under an Award or Awards of the type specified in clause (3) assuming a maximum payout; and (iv) the dollar limit under clause (4) refers to the maximum dollar amount payable under an Award or Awards of the type specified in clause (4) assuming a maximum payout.  The foregoing provisions will be construed in a manner consistent with Section 162(m), including, without limitation, where applicable, the rules under Section 162(m) pertaining to permissible deferrals of exempt awards.

	
5.

	
ELIGIBILITY AND PARTICIPATION

        The Administrator will select Participants from among key Employees and directors of, and consultants and advisors to, the Company and its Affiliates.  Eligibility for ISOs is limited to individuals described in the first sentence of this Section 5 who are employees of the Company or of a "parent corporation" or "subsidiary corporation" of the Company as those terms are defined in Section 424 of the Code.  Eligibility for Stock Options other than ISOs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Stock Option to the Company or to a subsidiary of the Company that would be described in the first sentence of Section 1.409A-1(b)(5)(iii)(E) of the Treasury Regulations.

	
6.

	
RULES APPLICABLE TO AWARDS

	
(a)

	
All Awards

(1)      Award Provisions.  The Administrator will determine the terms of all Awards, subject to the limitations provided herein.  By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms of the Award and the Plan.  Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein as determined by the Administrator.

(2)      Term of Plan.  No Awards may be made after ten years from the Date of Adoption, but previously granted Awards may continue beyond that date in accordance with their terms.

(3)      Transferability.  Neither ISOs nor, except as the Administrator otherwise expressly provides in accordance with the last sentence of this Section 6(a)(3), other Awards may be transferred other than by will or by the laws of descent and distribution.  During a Participant's lifetime, ISOs and, except as the Administrator otherwise expressly provides in accordance with the last sentence of this Section 6(a)(3), SARs and NSOs may be exercised only by the Participant.  The Administrator may permit the gratuitous transfer (i.e., transfer not for value) of Awards other than ISOs to any transferee eligible to be covered by the provisions of Form S-8 (under the Securities Act of 1933), subject to such limitations as the Administrator may impose.

(4)      Vesting.   The Administrator will determine the time or times at which an Award will vest or become exercisable and the terms on which a Stock Option or SAR will remain exercisable.  Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration.  Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant's Employment ceases:

	
(A)

	
Immediately upon the cessation of the Participant's Employment and except as provided in (B) and (C) below, each Stock Option and SAR that is then held by the Participant or by the Participant's permitted transferees, if any, will cease to be exercisable and will terminate, and all other Awards that are then held by the Participant or by the Participant's permitted transferees, if any, to the extent not already vested will be forfeited.

	
(B)

	
Subject to (C) and (D) below, all Stock Options and SARs held by the Participant or the Participant's permitted transferees, if any, immediately prior to the cessation of the Participant's Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of three months or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

	
(C)

	
All Stock Options and SARs held by a Participant or the Participant's permitted transferees, if any, immediately prior to the Participant's death or voluntary resignation from active employment at or after age 55, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period ending with the first anniversary of the Participant's death or voluntary resignation from active employment at or after age 55 or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

	
(D)

	
All Stock Options and SARs (whether or not exercisable) held by a Participant or the Participant's permitted transferees, if any, immediately prior to the cessation of the Participant's Employment will immediately terminate upon such cessation of Employment if the Administrator determines that such cessation of Employment has resulted for reasons or in circumstances that cast such discredit on the Participant as to justify immediate termination of the Award.

(5)      Additional Restrictions.  The Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan, or if the Participant breaches any agreement with the Company or its Affiliates with respect to non-competition, non-solicitation or confidentiality.  Without limiting the generality of the foregoing, the Administrator may recover Awards made under the Plan and payments under or gain in respect of any Award to the extent required to comply with Section 10D of the Securities Exchange Act of 1934, as amended, or any stock exchange or similar rule adopted under said Section.

(6)      Taxes.  The delivery, vesting and retention of Stock, cash or other property under an Award are conditioned upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award.  The Administrator will prescribe such rules for the withholding of taxes as it deems necessary.  The Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax withholding requirements (but not in excess of the minimum withholding required by law).

(7)      Dividend Equivalents, etc.  The Administrator may provide for the payment of amounts (on terms and subject to conditions established by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award.  Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the requirements of Section 409A.  Dividends or dividend equivalent amounts payable in respect of Awards that are subject to restrictions may be subject to such limits or restrictions as the Administrator may impose.

(8)      Rights Limited.  Nothing in the Plan will be construed as giving any person the right to continued employment or service with the Company or its Affiliates, or any rights as a stockholder except as to shares of Stock actually issued under the Plan.  The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant.

(9)      Section 162(m).  In the case of any Performance Award (other than a Stock Option or SAR) intended to qualify for the performance-based compensation exception under Section 162(m), the Administrator will establish the applicable Performance Criterion or Criteria in writing no later than ninety (90) days after the commencement of the period of service to which the performance relates (or at such earlier time as is required to qualify the Award as performance-based under Section 162(m)) and, prior to the event or occurrence (grant, vesting or payment, as the case may be) that is conditioned on the attainment of such Performance Criterion or Criteria, will certify whether it or they have been attained.

(10)      Coordination with Other Plans. Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Affiliates.  For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or its Affiliates may be settled in Stock (including, without limitation, Unrestricted Stock) if the Administrator so determines, in which case the shares delivered will be treated as awarded under the Plan (and will reduce the number of shares thereafter available under the Plan in accordance with the rules set forth in Section 4).  In any case where an award is made under another plan or program of the Company or its Affiliates and such award is intended to qualify for the performance-based compensation exception under Section 162(m), and such award is settled by the delivery of Stock or another Award under the Plan, the applicable Section 162(m) limitations under both the other plan or program and under the Plan will be applied to the Plan as necessary (as determined by the Administrator) to preserve the availability of the Section 162(m) performance-based compensation exception with respect thereto.

(11)      Section 409A.  Each Award will contain such terms as the Administrator determines, and will be construed and administered, such that the Award either qualifies for an exemption from the requirements of Section 409A or satisfies such requirements.

(12)      Fair Market Value. In determining the fair market value of any share of Stock under the Plan, the Administrator will make the determination in good faith consistent with the rules of Section 422 and Section 409A to the extent applicable.

	
(b)

	
Stock Options and SARs

(1)        Time And Manner Of Exercise.  Unless the Administrator expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the Administrator), which may be an electronic notice, signed (including electronic signature in form acceptable to the Administrator) by the appropriate person and accompanied by any payment required under the Award.  A Stock Option or SAR exercised by any person other than the Participant will not be deemed to have been exercised until the Administrator has received such evidence as it may require that the person exercising the Award has the right to do so.

(2)        Exercise Price.  The exercise price (or the base value from which appreciation is to be measured) of each Award requiring exercise will be no less than 100% (or in the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422, 110%) of the fair market value of the Stock subject to the Award, determined as of the date of grant, or such higher amount as the Administrator may determine in connection with the grant.  No such Award, once granted, may be repriced other than with stockholder approval.

(3)        Payment of Exercise Price.  Where the exercise of an Award is to be accompanied by payment, the Administrator may determine the required or permitted forms of payment, subject to the following:  all payments will be by cash or check acceptable to the Administrator, or, if so permitted by the Administrator and if legally permissible, (i) through the delivery of shares of Stock that have been outstanding for at least six months (unless the Administrator approves a shorter period) and that have a fair market value equal to the exercise price, (ii) by delivery to the Company of a promissory note of the person exercising the Award, payable on such terms as are specified by the Administrator, (iii) through a broker-assisted exercise program acceptable to the Administrator, (iv) by other means acceptable to the Administrator, or (v) by any combination of the foregoing permissible forms of payment.  The delivery of shares in payment of the exercise price under clause (a)(i) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe.

(4)        Maximum Term.  Stock Options and SARs will have a maximum term not to exceed ten (10) years from the date of grant (five (5) years from the date of grant in the case of an ISO granted to a ten-percent shareholder described in Section 6(b)(2) above).

	
7.

	
EFFECT OF CERTAIN TRANSACTIONS

(a)            Change in Control.  In the event of a Change in Control, each Stock Option and SAR will become fully exercisable, any restrictions on each outstanding share of Stock will lapse, and each outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will become vested and the delivery of shares of Stock deliverable under each such Stock Unit will be accelerated and such shares will be delivered, in each case prior to the Change in Control on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award or the vesting or delivery of the shares, as the case may be, to participate as a stockholder in the Change in Control.  Notwithstanding the foregoing, payment of any amount constituting "nonqualified deferred compensation" subject to Section 409A will be accelerated pursuant to this Section 7(a) only if the event or circumstances constituting the Change in Control would also qualify as a "change in control event" under Section 1.409A-3(i)(5) of the Treasury Regulations.

(b)            Covered Transactions.  After giving effect to Section 7(a) above to the extent applicable, and except as otherwise provided in an Award agreement, the following provisions will apply in the event of a Covered Transaction:

(1)      Assumption or Substitution.  If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may (but, for the avoidance of doubt, need not) provide (i) for the assumption or continuation of some or all outstanding Awards or any portion thereof or (ii) for the grant of new awards in substitution therefor by the acquirer or survivor or an affiliate of the acquirer or survivor.

(2)      Cash-Out of Awards. Subject to Section 7(b)(5) below the Administrator may (but, for the avoidance of doubt, need not) provide for payment (a "cash-out"), with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (A) the fair market value of one share of Stock (as determined by the Administrator in its reasonable discretion) times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award or such portion (in the case of an SAR, the aggregate base value above which appreciation is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and subject to such conditions, as the Administrator determines.

(3)      Acceleration of Certain Awards. Subject to Section 7(b)(5) below, the Administrator may (but, for the avoidance of doubt, need not) provide that any Award requiring exercise will become exercisable, in full or in part and/or that the delivery of any shares of Stock remaining deliverable under any outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated in full or in part, in each case on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction.

(4)      Termination of Awards Upon Consummation of Covered Transaction.  Except as the Administrator may otherwise determine in any case, each Award will automatically terminate (and in the case of outstanding shares of Restricted Stock that have not vested pursuant to Section 7(a) above or otherwise, will automatically be forfeited) upon consummation of the Covered Transaction, other than Awards assumed pursuant to Section 7(b)(1) above.

(5)      Additional Limitations.  Any share of Stock and any cash or other property delivered pursuant to Section 7(b)(2) or Section 7(b)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction.  For purposes of the immediately preceding sentence, a cash-out under Section 7(b)(2) above or acceleration under Section 7(b)(3) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition.  In the case of Restricted Stock that does not vest and is not forfeited in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

(c)            Changes in and Distributions With Respect to Stock

(1)      Basic Adjustment Provisions.  In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company's capital structure that constitutes an equity restructuring within the meaning of FASB ASC Topic 718, the Administrator will make appropriate adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan and to the maximum share limits described in Section 4(c), and will also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

(2)      Certain Other Adjustments.  The Administrator may also make adjustments of the type described in Section 7(c)(1) above to take into account distributions to stockholders other than those provided for in Section 7(b) and 7(c)(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan, having due regard for the qualification of ISOs under Section 422, the requirements of Section 409A, and for the performance-based compensation rules of Section 162(m), where applicable.

(3)      Continuing Application of Plan Terms.  References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.

	
8.

	
LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived.  The Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act of 1933 or any applicable state or non-U.S. securities law.  Any Stock required to be issued to Participants under the Plan will be evidenced in such manner as the Administrator may deem appropriate, including book-entry registration or delivery of stock certificates.  In the event that the Administrator determines that Stock certificates will be issued to Participants under the Plan, the Administrator may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.

	
9.

	
AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Administrator may not, without the Participant's consent, alter the terms of an Award so as to affect materially and adversely the Participant's rights under the Award, unless the Administrator expressly reserved the right to do so at the time the Award was granted.  Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by law (including the Code and applicable stock exchange requirements), as determined by the Administrator.

	
10.

	
OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect the Company's right to Award a person bonuses or other compensation in addition to Awards under the Plan.

	
11.

	
WAIVER OF JURY TRIAL

By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim will be tried before a court and not before a jury.  By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.  Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit disputes arising under the terms of the Plan or any Award made hereunder to binding arbitration or as limiting the ability of the Company to require any eligible individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.

	
12.

	
LIMITATION OF LIABILITY

Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of the Company, any Affiliate, or the Administrator, will be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any interest and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to the Award; provided, that nothing in this Section 12 will limit the ability of the Administrator or the Company, in its discretion, to provide by separate express written agreement with a Participant for any payment in connection with any such acceleration of income or additional tax.

	
13.

	
ESTABLISHMENT OF SUB-PLANS

The Administrator may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions.  The Administrator will establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Administrator's discretion under the Plan as it deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as it deems necessary or desirable.  All supplements so established will be deemed to be part of the Plan, but each supplement will apply only to Participants within the affected jurisdiction (as determined by the Administrator).

	
14.

	
GOVERNING LAW

(a)            Certain Requirements.  Awards will be granted and administered consistent with the requirements of applicable Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case as determined by the Administrator.

(b)            Other Matters.  Except as otherwise provided by the express terms of an Award agreement, under a sub-plan described in Section 13 or as provided in Section 14(a) above, the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof will be governed by and construed in accordance with the domestic substantive laws of the State of Connecticut without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

(c)            Jurisdiction.  By accepting an Award, each Participant will be deemed to (a) have submitted irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of  the United States District Court for the District of Connecticut for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (b) agree not to commence any suit, action or other proceeding arising out of or based upon the Plan or an Award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Connecticut; and (c) waive, and agree not to assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or an Award or the subject matter thereof may not be enforced in or by such court.

EXHIBIT A

Definition of Terms

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

"Administrator":  The Compensation Committee, except that the Compensation Committee may delegate (i) to one or more of its members (or one or more other members of the Board (including the full Board)) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (iii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate.  In the event of any delegation described in the preceding sentence, the term "Administrator" will include the person or persons so delegated to the extent of such delegation.

"Affiliate":  Any corporation or other entity owning, directly or indirectly, 50% or more of the outstanding Stock of the Company, or in which the Company or any such corporation or other entity owns, directly or indirectly, 50% of the outstanding capital stock (determined by aggregate voting rights) or other voting interests.

"Award":  Any or a combination of the following:

(i)        Stock Options

(ii)        SARs

(iii)        Restricted Stock

(iv)        Unrestricted Stock

(v)        Stock Units, including Restricted Stock Units.

(vi)        Performance Awards

(vii)        Cash Awards

(viii)        Awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock

"Board":  The Board of Directors of the Company.

"Cash Award":  An Award denominated in cash.

"Change in Control":  Any of (i) a reorganization, merger, consolidation or similar transaction in which the surviving corporation is not, and is not a subsidiary of, a publicly owned corporation in which the stockholders of the Company immediately prior to the transaction continue to own beneficially securities representing more than 50% of the voting power of all outstanding voting securities of the Company, (ii) a sale, exchange or other disposition of all or substantially all the Company's assets, or (iii) any acquisition of voting securities of the Company by any person or group (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), but excluding (a) the Company or any of its subsidiaries, (b) any person who was an officer or director of the Company on the day prior to the Effective Date, or (c) any savings, pension or other benefits plan for the benefit of employees of the Company or any of its subsidiaries, which theretofore did not beneficially own voting securities representing more than 50% of the voting power of all outstanding voting securities of the Company, if such acquisition results in such entity, person or group owning beneficially securities representing more than 50% of the voting power of all outstanding voting securities of the Company. As used herein, "voting power" means ordinary voting power for the election of directors of the Company.

"Code":  The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect.

"Compensation Committee":  The Compensation and Corporate Governance Committee of the Board.

"Company":  TransAct Technologies Incorporated.

"Covered Transaction":  Any of (i) a reorganization, merger, consolidation or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company's then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company's assets, or (iii) a dissolution or liquidation of the Company.  Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction will be deemed to have occurred upon consummation of the tender offer.

"Date of Adoption":  The earlier of the date the Plan was approved by the Company's stockholders or adopted by the Board, as determined by the Committee.  The Date of Adoption of the Plan is April 1, 2014.

"Employee":  Any person who is employed by the Company or an Affiliate.

"Employment":  A Participant's employment or other service relationship with the Company or an Affiliate.  Employment will be deemed to continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to the Company or an Affiliate.  If a Participant's employment or other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant's Employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates.  Notwithstanding the foregoing and the definition of "Affiliate" above, in construing the provisions of any Award relating to the payment of "nonqualified deferred compensation" (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms will be construed to require a "separation from service" (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single "service recipient" with the Company under Section 1.409A-1(h)(3) of the Treasury Regulations.  The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a "separation from service" has occurred.  Any such written election will be deemed a part of the Plan.

"ISO":  A Stock Option intended to be an "incentive stock option" within the meaning of Section 422.  Each Stock Option granted pursuant to the Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO.

"NSO":  A Stock Option that is not intended to be an "incentive stock option" within the meaning of Section 422.

"Participant":  A person who is granted an Award under the Plan.

"Performance Award":  An Award subject to Performance Criteria.  The Committee in its discretion may grant Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and Performance Awards that are not intended so to qualify.

"Performance Criteria": Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award.  For purposes of Awards that are intended to qualify for the performance-based compensation exception under Section 162(m), a Performance Criterion will mean an objectively determinable measure of performance relating to any or any combination of the following (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; stockholder return; sales of particular products or services; customer acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings.  A Performance Criterion and any targets with respect thereto determined by the Administrator need not be based upon an increase, a positive or improved result or avoidance of loss.  To the extent consistent with the requirements for satisfying the performance-based compensation exception under Section 162(m), the Administrator may provide in the case of any Award intended to qualify for such exception that one or more of the Performance Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.

"Plan":  The TransAct Technologies Incorporated 2014 Equity Incentive Plan as from time to time amended and in effect.

"Restricted Stock":  Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

"Restricted Stock Unit":  A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.

"SAR": A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the fair market value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.

"Section 162(m)": Section 162(m) of the Code.

"Section 409A": Section 409A of the Code.

"Section 422": Section 422 of the Code.

"Stock":  Common stock of the Company, par value $0.01 per share.

"Stock Option":  An option entitling the holder to acquire shares of Stock upon payment of the exercise price.

 "Stock Unit":  An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.

"Unrestricted Stock":  Stock not subject to any restrictions under the terms of the Award.

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