Document:

Exhibit 10.4

 

EXECUTION VERSION

OPTION AGREEMENT

THIS OPTION AGREEMENT (this “Agreement”) is made and entered into this 2nd day of March, 2015 (the “Effective Date”), by and among, Musclepharm Corporation, a Nevada Corporation (“MP”), and INI Parent, Inc., a Delaware corporation (the “Company”).  This Agreement shall become effective on the Effective Date (as defined below). 

RECITALS

A. On the date hereof,  MP and the Company are entering into a Warrant Purchase Agreement (the “Warrant Agreement”), pursuant to which the Company is issuing to MP a warrant (the “Warrant”)  to purchase shares of the Company’s Class B common stock, par value $0.001 per share (the “Class B Common Stock”), as more fully described in the Warrant Agreement.

B. All capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the Warrant Agreement.

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and agreements hereinafter set forth, MP and the Company hereby covenant and agree as follows:

1.MP Purchase Option.  At any time on or prior to [*] (the “Option Period”), subject to the provisions in this Agreement and assuming the Exercise Conditions remain capable of being satisfied, MP shall have the right (the “Option”) to purchase all of the remaining outstanding shares of the Company’s Common Stock MP does not own after giving effect to the exercise of the Warrant (and not less than all) on a Fully-Diluted Basis, based on an enterprise value, representing the aggregate value of 100% of the Company, equal to [*] Dollars ($[*]) in cash (the “Purchase Price”); provided that a condition to the exercise of the Option shall be the execution, delivery and consummation of the transaction contemplated by the Warrant Agreement.  Such purchase shall be consummated pursuant to a definitive merger agreement that shall be typical for transactions of this nature and which shall be reasonably negotiated by MP and the Company, pursuant to which, among other things, the Company would merge with a subsidiary of MP and survive the merger as a wholly-owned subsidiary of MP (the “Merger”).   To exercise the Option, the Company must deliver written notice of its exercise of the Option (the “Notice”) at least three (3) months prior to the date of the consummation of the Merger. For purposes of clarification, MP must deliver a Notice to the Company no later than the date that is fifteen ([*]) months after the Effective Date.    

2.Closing.  The closing of the Merger (the “Option Closing”) shall occur, if at all, at the offices of McDermott, Will & Emery as soon as practicable but in no event later than three (3) months after the Notice has been delivered to the Company, provided, that, the other conditions to the Closing have been satisfied.

3.Deliveries by MP.  At the Option Closing, MP shall deliver the following to the Company:

(a)an executed copy of the Notice of Exercise;

(b)the Aggregate Exercise Price;

(c)the Purchase Price; and

(d)such other instruments or documents as may be necessary or appropriate to carry out the transactions contemplated hereby.

4.Deliveries by the Company.  At an Option Closing, the Company shall deliver the following to MP:

(a)a certificate of an officer of the Company certifying, as of the date of an Option Closing, attached copies of resolutions of the board of directors and shareholders of the Company, approving and authorizing the Merger at the Option Closing; and

(b)such other endorsements, instruments or documents as may be necessary or appropriate to carry out the transactions contemplated hereby.

 

[*]  Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

 

5.Representations and Warranties of the Company.  The Company represents and warrants to MP as of the Effective Date and as of the Option Closing, as follows:

(a)Organization, Standing and Authority.  The Company is an entity which is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.  The Company has all requisite power and authority, without the consent of any other person, to execute and deliver this Agreement and the documents to be delivered at the Option Closing, and to carry out the transactions contemplated hereby and thereby.

(b)Approvals.  No approval, authorization, registration, consent, order or other action of or filing with any third-party or person, including any court, administrative agency or other government authority, is required for the execution and delivery by the Company of this Agreement and the agreements and documents referred to herein or the performance by the Company of its obligations hereunder or thereunder.

(c)Capitalization.  Set forth on Schedule 1 attached hereto is a true, complete, and accurate capitalization table of the Company as of the date hereof on a fully diluted basis, taking into account all equity interests of the Company issued or outstanding, or issuable upon conversion or exchange of any security, and any rights, options, or warrants or other agreements to acquire any such equity interests.

6.Representations and Warranties of MP.  MP represents and warrants to the Company as of the Effective Date and as of the Option Closing, as follows:

(a)Organization, Standing and Authority.  MP is an entity which is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.  MP has all requisite power and authority, without the consent of any other person, to execute and deliver this Agreement and the documents to be delivered by such party at the Option Closing, if any, and to carry out the transactions contemplated hereby and thereby.

(b)Approvals.  No approval, authorization, registration, consent, order or other action of any third-party or person or filing with any third-party or person, including any court, administrative agency or other government authority, is required for the execution and delivery by MP of this Agreement and the agreements and documents referred to herein or the performance by MP of its obligations hereunder or thereunder.

7.Covenants.

(a)From April 1, 2015, through the earlier of (i) the expiration of Option Period or (ii) the Option Closing, the Company shall make all books, records, and documents of the Company relating to it and its business available for inspection by MP or MP’s business, legal, and financial advisors upon reasonable advance notice, subject to reasonable limitations required by the Company for competition purposes or as required by confidentiality obligations imposed on the Company by third parties.

(b)During the period from the date hereof until the until the earlier of (i) the expiration or termination of this Agreement, and (ii) the Option Closing (assuming MP exercises the Option), except with the prior consent of MP (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, directly or indirectly declare or pay any cash dividend. 

8.General Provisions.

(a)Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered in accordance with the terms of Section 14 of the Warrant Agreement.

(b)Counterparts.  This Agreement may be executed simultaneously in two or more counterparts each of which shall be deemed an original, but all of which together constitute one and the same instrument.

(c)Entire Transaction.  This Agreement, the Warrant Agreement and the agreements and documents referred to herein and therein is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.

(d)Captions.  The titles and captions of the Sections and other provisions of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

- 2 -

 

[*]  Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

 

(e)Amendments and Waiver.  Neither this Agreement nor any term hereof may be amended, changed, waived, discharged or terminated without the prior written consent of the Company and MP to such action.  No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

(f)Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, provided that neither party shall have the right to assign its rights, or to delegate its obligations, hereunder without the prior written consent of the other party.

(g)Announcements.  The Parties to this Agreement shall not disclose to others the fact that this Agreement has been entered into or any of the terms of this Agreement, without the written approval of the other Parties hereto.

(h)No Third-Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any person or entity other than the parties hereto.

(i)Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

(j)Governing Law.  This Agreement is to be construed and enforced in accordance with and governed by the laws of the State of Delaware and without regard to the principles of conflicts of law of such state. 

(k)Exclusive Venue.  THIS AGREEMENT, AND ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT, WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.  THE PARTIES AGREE THAT ALL DISPUTES, LEGAL ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE BROUGHT EXCLUSIVELY IN A FEDERAL DISTRICT COURT LOCATED IN THE DISTRICT OF DELAWARE OR THE DELAWARE COURT OF CHANCERY IN NEW CASTLE COUNTY, DELAWARE (COLLECTIVELY THE “DESIGNATED COURTS”).  EACH PARTY HEREBY CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS. NO LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY OTHER FORUM.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL CLAIMS OF IMMUNITY FROM JURISDICTION AND ANY OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING IN ANY DESIGNATED COURT, INCLUDING ANY RIGHT TO OBJECT ON THE BASIS THAT ANY DISPUTE, ACTION, SUIT OR PROCEEDING BROUGHT IN THE DESIGNATED COURTS HAS BEEN BROUGHT IN AN IMPROPER OR INCONVENIENT FORUM OR VENUE.

(l)Mutual Waiver of Jury Trial.  THE PARTIES EACH WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE.  THE COMPANY AND MP EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION WILL BE TRIED BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF.  THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

 

- 3 -

 

[*]  Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

 

(m)Construction.  Unless the context otherwise requires, “or” is not exclusive, and references to sections or subsections refer to sections or subsections of this Agreement.  All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

(n)Fees and Expenses.  All reasonable fees and expenses (including, without limitation, legal, auditing and accounting fees, costs and expenses) incurred by MP in connection with considering, pursuing, negotiating, documenting and consummating this Agreement and the transaction contemplated hereby shall be borne and paid by MP.

(o)Termination. If the Warrant Agreement is terminated, this Agreement shall automatically terminate and be of no force or effect.

 

 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

- 4 -

 

[*]  Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

 

IN WITNESS WHEREOF, each of the parties hereto has executed or caused this Agreement to be executed all as of the date first written above.

 

	
MP:
	
 
	
Company:

	
 
	
 
	
 

	
MUSCLEPHARM CORPORATION
	
 
	
INI PARENT, INC.

	
By:
	
 
	
 
	
By:
	
 

	
Name:
	
 
	
 
	
Name:
	
 

	
Title: 
	
 
	
 
	
Title:
	
 

 

 

 

 

[*]  Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portion.

 

Schedule 1

 

Capitalization

 

- 6 -Exhibit 10.1

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

This Restricted Stock Unit Award Agreement (the “Agreement”) has been made as of [                 ], (the “Date of Grant”) between Duke Energy Corporation, a Delaware corporation, with its principal offices in Charlotte, North Carolina (the “Corporation”), and [                      ] (the “Grantee”).

 

RECITALS

 

Under the Duke Energy Corporation 2015 Long-Term Incentive Plan, as it may, from time to time, be further amended (the “Plan”), the Compensation Committee of the Board of Directors of the Corporation (the “Committee”), or its delegate, has determined the form of this Agreement and selected the Grantee, as an Employee, to receive the award evidenced by this Agreement (the “Award”) and the “Restricted Stock Units” and tandem Dividend Equivalents that are subject hereto.  The applicable provisions of the Plan are incorporated in this Agreement by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

 

AWARD

 

In accordance with the Plan, the Corporation has made this Award, effective as of the Date of Grant and upon the following terms and conditions:

 

Section 1.              Number and Nature of Restricted Stock Units and Tandem Dividend Equivalents.  The number of Restricted Stock Units and the number of tandem Dividend Equivalents subject to this Award are each [                                                                     ].  Each Restricted Stock Unit, upon becoming vested, represents a right to receive payment in the form of one (1) share of Common Stock.  Each tandem Dividend Equivalent represents a right to receive cash payments equivalent to the amount of cash dividends declared and paid on one (1) share of Common Stock after the Date of Grant and before the Dividend Equivalent expires.  Restricted Stock Units and Dividend Equivalents are used solely as units of measurement and are not shares of Common Stock, and the Grantee is not, and has no rights as, a shareholder of the Corporation by virtue of this Award.

 

Section 2.              Vesting of Restricted Stock Units.  The specified percentage of the Restricted Stock Units subject to this Award, and not previously forfeited, shall vest, with such percentage considered satisfied to the extent such Restricted Stock Units have previously vested, as follows:

 

 

(a)           Upon Grantee remaining continuously employed by the Corporation, including Subsidiaries, through [                     ] (each a “Vesting Date”), the percentage of Restricted Stock Units set forth next to such date shall become vested:

 

2

 

(b)           If such employment terminates (i) as the result of Grantee’s death or (ii) as the result of Grantee’s permanent and total disability within the meaning of Section 22(e)(3) of the Code, all Restricted Stock Units subject to this Award, which units have not previously been forfeited or vested, immediately shall become fully vested, unless the Committee or its delegate, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, in which case any Restricted Stock Units not previously vested shall be forfeited.

 

(c)           If such employment terminates: (i) upon Retirement (as defined below), (ii) as the result of termination of such employment by the Corporation, or employing Subsidiary, other than for cause, as determined by the Committee or its delegate, or (iii) as the direct and sole result, as determined by the Committee or its delegate, in its sole discretion, of the divestiture of assets, a business or a company by the Corporation or a Subsidiary, then, unless the Committee or its delegate, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, in which case any Restricted Stock Units not previously vested shall be forfeited, the Restricted Stock Units subject to this Award shall vest at such vesting percentage determined by the Committee or its delegate, in its sole discretion, by prorating from the above schedule to reflect only that portion of the period beginning on the Date of Grant and ending with the [        ] anniversary of the Date of Grant during which such employment continued while Grantee was entitled to payment of salary, and any such Restricted Stock Units not then or previously vested shall be forfeited.  For purposes of this Agreement, “Retirement” shall mean [     ].

 

(d)           100% of the Restricted Stock Units shall become vested, if, following the occurrence of a Change in Control and before the [               ] anniversary of such occurrence, such employment is terminated involuntarily, and not for cause, by the Corporation, or employing Subsidiary, as determined by the Committee or its delegate in its sole discretion.

 

(e)           Unless the Grantee’s right to receive payment of the Restricted Stock Units constitutes a “deferral of compensation” within the meaning of Section 409A of the Code, in the event that at a time when vesting would otherwise occur under Section 2(a), 2(b) or 2(c) Grantee is on an employer-approved, personal leave of absence, then, unless prohibited by law, vesting shall be postponed and shall not occur unless and until Grantee returns to active service in accordance with the terms of the approved personal leave of absence and before January 14 of the calendar year immediately following the calendar year in which the leave commenced.  In the event Grantee does not return to active service from such leave of absence prior to January 14 of the calendar year immediately following the calendar year in which the leave commenced, any Restricted Stock Units covered by this Award that were not vested as of the commencement of such leave shall be immediately forfeited (as if Grantee terminated employment for purposes of Section 4 hereof).

 

3

 

Section 3.              Restrictive Covenants.

 

(a)  In consideration of the Award, Grantee agrees that during the period ending on the [     ] anniversary of the Date of Grant (“Restricted Period”), Grantee shall not for any reason, directly or indirectly, without the prior written consent of the Corporation or its delegate: (i) become employed, engaged or involved with a competitor (defined below) of the Corporation or any Subsidiary in a position that involves: providing services that relate to or are similar in nature or purpose to the services performed by the Grantee for the Corporation or any Subsidiary at any time during his or her previous [                   ] years of employment with the Corporation or any Subsidiary; or, supervision, management, direction or advice regarding such services; either as principal, agent, manager, employee, partner, shareholder, director, officer or consultant (other than as a less-than three percent (3%) equity owner of any corporation traded on any national, international or regional stock exchange or in the over-the-counter market); or, (ii) induce or attempt to induce any customer, client, supplier, employee, agent or independent contractor of the Corporation or any of the Subsidiaries to reduce, terminate, restrict or otherwise alter (to the Corporation’s detriment) its business relationship with the Corporation.

 

(b)       The noncompetition obligations of clause (i) of the preceding sentence shall be effective only with respect to a “competitor” of the Corporation or any Subsidiary which is understood to mean any person or entity in competition with the Corporation or any Subsidiary, and more particularly those persons and entities in the businesses of:  production, transmission, distribution, or retail or wholesale marketing or selling of electricity; resale or arranging for the purchase or for the resale, brokering, marketing, or trading of electricity or derivatives thereof; energy management and the provision of energy solutions; development and operation of power generation facilities, and sales and marketing of electric power, domestically and abroad; and any other business in which the Corporation, including Subsidiaries, is engaged at the termination of Grantee’s continuous employment by the Corporation, including Subsidiaries; and within the following geographical areas: (i) any country in the world (other than the United States) where the Corporation, including Subsidiaries, has at least $25 million in capital deployed as of termination of Grantee’s continuous employment by the Corporation, including through its Subsidiaries; (ii) the states of Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Minnesota, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Vermont, Wisconsin and Wyoming; (iii) any other state in the United States where the Corporation including the Subsidiaries, has at least $25 million in capital deployed as of the termination of the Grantee’s employment with the Corporation or any Subsidiary.  The Corporation and Grantee intend the above restrictions on competition in geographical areas to be entirely severable and independent, and any invalidity or enforceability of this provision with respect to any one or more of such restrictions, including geographical areas, shall not render this provision unenforceable as applied to any one or more of the other restrictions, including geographical areas.

 

4

 

(c)        Grantee agrees not to: (i) disclose to any third party or otherwise misappropriate any confidential or proprietary information of the Corporation or of any Subsidiary (except as required by subpoena or other legal process, in which event the Grantee will give the Chief Legal Officer of the Corporation prompt notice of such subpoena or other legal process in order to permit the Corporation or any affected individual to seek appropriate protective orders); or, (ii) publish or provide any oral or written statements about the Corporation or any Subsidiary, any of the Corporation’s or any Subsidiary’s current or former officers, executives, directors, employees, agents or representatives that are false, disparaging or defamatory, or that disclose private or confidential information about their business or personal affairs.   The obligations of this paragraph are in addition to, and do not replace, eliminate, or reduce in any way, all other contractual, statutory, or common law obligations Grantee may have to protect the Corporation’s confidential information and trade secrets and to avoid defamation or business disparagement.

 

(d)       Notwithstanding any other provision of Section 3, the Grantee remains free to engage in “protected activity,” as defined in 10 CFR 50.7 and Section 211 of the Energy Reorganization Act of 1974, including, but not limited to, reporting any suspected instance of illegal activity of any nature, any nuclear safety concern, any workplace safety concern, any public safety concern, or any other matter within the United States Nuclear Regulatory Commission’s (“NRC”) regulatory responsibilities to the NRC, the United States Department of Labor, or any other federal or state governmental agency without providing the notice described in Section 3(c), and the Grantee remains free to participate in any governmental proceeding or investigation without providing the notice described in Section 3(c).

 

(e)       If any part of this Section is held to be unenforceable because of the duration, scope or geographical area covered, the Corporation and Grantee agree to modify such part, or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or geographical area.

 

(f)        Nothing in Section 3 shall be construed to prohibit Grantee from being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee from providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

 

(g)       Grantee’s agreement to the restrictions provided for in this Agreement and the Corporation’s agreement to provide the Award are mutually dependent consideration. Therefore, notwithstanding any other provision to the contrary in this Agreement, if Grantee materially breaches any provision of this Section 3 or if the enforceability of any material restriction on Grantee provided for in this Agreement is challenged and found unenforceable by a court of law then the Corporation shall, at its election, have the right to (i) cancel the Award, (ii) recover from Grantee any shares of Common Stock, Dividend Equivalents or other cash paid under Award, or (iii) with respect to any shares of Common Stock paid under the Award that have been disposed of, require the Grantee to repay to the Corporation the fair market

 

5

 

value of such shares of Common Stock on the date such shares were sold, transferred, or otherwise disposed of by Grantee.   This provision shall be construed as a return of consideration or ill-gotten gains due to the failure of Grantee’s promises under the Agreement, and not as a liquidated damages clause.  Nothing herein shall (i) reduce or eliminate the Corporation’s right to assert that the restrictions provided for in this agreement are fully enforceable as written, or as modified by a court pursuant to Section 3, or (ii) eliminate, reduce, or compromise the application of temporary or permanent injunctive relief as a fully appropriate and applicable remedy to enforce the restrictions provided for in Section 3 (inclusive of its subparts), in addition to recovery of damages or other remedies otherwise allowed by law.

 

Section 4.              Forfeiture.  Any unvested Restricted Stock Unit subject to this Award shall be forfeited upon the termination of Grantee’s continuous employment by the Corporation, including Subsidiaries, prior to a Vesting Date, except to the extent otherwise provided in Section 2.  Any Dividend Equivalent subject to this Award shall expire at the time the Restricted Stock Unit with respect to which the Dividend Equivalent is in tandem (a) is vested and paid, or deferred, or (b) is forfeited.

 

Section 5.              Dividend Equivalent Payments.  Payments with respect to any Dividend Equivalent subject to this Award shall be paid in cash to the Grantee within 60 days after the time cash dividends are declared and paid with respect to the Common Stock on or after the Date of Grant and before the Dividend Equivalent expires, but in no event later than the calendar year in which the dividends are declared and paid.  However, should the timing of a particular payment under Section 6 to the Grantee in shares of Common Stock in conjunction with the timing of a particular cash dividend declared and paid on Common Stock be such that the Grantee receives such shares without the right to receive such dividend and the Grantee would not otherwise be entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment.  Dividend Equivalent payments shall be subject to withholding for taxes. Any required income tax withholdings in respect of Dividend Equivalents attributable to Restricted Stock Units shall be satisfied by reducing the cash payment in respect of the required withholding amount, unless the Committee, or its delegate, in its discretion, requires Grantee to satisfy such tax obligation by other payment to the Corporation.

 

Section 6.              Payment of Restricted Stock Units.  Payment of Restricted Stock Units subject to this Award shall be made to the Grantee as soon as practicable following the time such units become vested in accordance with Section 2 but in no event later than 60 days following such vesting, except to the extent deferred by Grantee in accordance with such procedures as the Committee, or its delegate, may prescribe from time to time or except to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code.  To the extent the Grantee’s right to receive payment of the Restricted Stock Units constitutes a “deferral of compensation” within the meaning of Section 409A of the Code, then notwithstanding the first sentence of this Section 6, except in the event that the Grantee’s employment terminates as a result of death, payment of vested Restricted

 

6

 

Stock Units subject to this Award shall be made to the Grantee within 60 days following the applicable Vesting Date(s) as provided in Section 2(a).  Payment (or deferrals, as applicable) shall be subject to withholding for taxes.  Payment shall be in the form of one (1) share of Common Stock for each full Restricted Stock Unit and any fractional Restricted Stock Unit shall be made in a cash amount equal in value to the shares of Common Stock that would otherwise be paid, valued at Fair Market Value on the date the respective Restricted Stock Units became vested, or if later, payable.  Notwithstanding the foregoing, the number of shares of Common Stock that would otherwise be paid or deferred (valued at Fair Market Value on the date the respective Restricted Stock Unit became vested, or if later, payable) shall be reduced by the Committee, or its delegate, in its sole discretion, to fully satisfy tax withholding requirements, unless the Committee, or its delegate, in its discretion requires Grantee to satisfy such tax obligation by other payment to the Corporation.  In the event that payment, after any such reduction in the number of shares of Common Stock to satisfy withholding for tax requirements, would be less than ten (10) shares of Common Stock, then, if so determined by the Committee, or its delegate, in its sole discretion, payment, instead of being made in shares of Common Stock, shall be made in a cash amount equal in value to the shares of Common Stock that would otherwise be paid, valued at Fair Market Value on the date the respective Restricted Stock Units became vested, or if later, payable.

 

Section 7.              No Employment Rights.  Nothing in this Agreement or in the Plan shall confer upon the Grantee the right to continued employment with the Corporation or any Subsidiary, or affect the right of the Corporation or any Subsidiary to terminate the employment or service of the Grantee at any time for any reason.

 

Section 8.              Nonalienation.  The Restricted Stock Units and Dividend Equivalents subject to this Award are not assignable or transferable by the Grantee.  Upon any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such Restricted Stock Unit or Dividend Equivalent, or of any right or privilege conferred hereby, or upon the levy of any attachment or similar process upon such Restricted Stock Unit or Dividend Equivalent, or upon such right or privilege, such Restricted Stock Unit or Dividend Equivalent or right or privilege, shall immediately become null and void.

 

Section 9.              Determinations.  Determinations by the Committee, or its delegate, shall be final and conclusive with respect to the interpretation of the Plan and this Agreement.

 

Section 10.            Governing Law.  The validity and construction of this Agreement shall be governed by the laws of the state of Delaware applicable to transactions taking place entirely within that state.

 

Section 11.            Conflicts with Plan, Correction of Errors, Section 409A and Grantee’s Consent.  In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the applicable provision of this Agreement shall be without force and effect to the extent

 

7

 

necessary to cause such Plan provision to be controlling.  In the event that, due to administrative error, this Agreement does not accurately reflect a Restricted Stock Unit Award properly granted to Grantee pursuant to the Plan, the Corporation, acting through its Executive Compensation and Benefits Department, reserves the right to cancel any erroneous document and, if appropriate, to replace the cancelled document with a corrected document.  It is the intention of the Corporation and the Grantee that this Award not result in unfavorable tax consequences to Grantee under Section 409A of the Code.  Accordingly, Grantee consents to such amendment of this Agreement as the Corporation may reasonably make in furtherance of such intention, and the Corporation shall promptly provide, or make available to, Grantee a copy of any such amendment.

 

To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Code and that this Award not result in unfavorable tax consequences to Grantee under Section 409A of the Code.  This Agreement will be administered and interpreted in a manner consistent with this intent, and any provision that would cause this Agreement to fail to satisfy Section 409A of the Code will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by Section 409A of the Code).  The Corporation and the Grantee agree to work together in good faith in an effort to comply with Section 409A of the Code including, if necessary, amending this Agreement based on further guidance issued by the Internal Revenue Service from time to time, provided that the Corporation shall not be required to assume any increased economic burden. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Grantee shall not be considered to have terminated employment with Corporation for purposes of this Agreement and no payments shall be due to him or her under this Agreement which are payable upon his or her termination of employment until he or she would be considered to have incurred a “separation from service” from the Corporation within the meaning of Section 409A of the Code.  To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Grantee’s termination of employment shall instead be paid within 60 days following the first business day after the date that is six months following his or her termination of employment (or upon his or her death or a regularly scheduled Vesting Date, if earlier).  In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided to the Grantee pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A of the Code.

 

Section 12.            Compliance with Law.  The Corporation shall make reasonable efforts to comply with all applicable federal and state securities laws applicable to the Plan and this Award; provided, however, notwithstanding any other provision of this Award, the Corporation shall not be obligated to deliver any shares of Common Stock pursuant to this Award if the delivery thereof would result in a violation of any such law.

 

8

 

Notwithstanding the foregoing, this Award is subject to cancellation by the Corporation in its sole discretion unless the Grantee, by not later than [                      ], [                  ], has signed a duplicate of this Agreement, in the space provided below, and returned the signed duplicate to [                                     ], which, if, and to the extent, permitted by the Executive Compensation and Benefits Department, may be accomplished by electronic means.

 

9

 

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed and granted in Charlotte, North Carolina, to be effective as of the Date of Grant.

 

 

	
 
    	
DUKE ENERGY CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    

 

Acceptance of Restricted Stock Unit Award

 

IN WITNESS OF Grantee’s acceptance of this Award and Grantee’s agreement to be bound by the provisions of this Agreement and the Plan, Grantee has signed this Agreement this [          ] day of [                                          ], [             ].

 

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Grantee’s Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(print   name)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(address)
    

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}]]