Document:

rgnx-ex1035_282.htm

 

EXHIBIT 10.35

 

This Employment Agreement (this “Agreement”) is entered into as of February 29, 2016, by and between Faraz Ali (the “Employee”) and REGENXBIO Inc., a Delaware corporation (the “Company”).

	
 
	
1.
	
Position.

 

	
 
	
(a)
	
During your employment with the Company pursuant to this Agreement, you will hold the title of Chief Business Officer. As the Chief Business Officer, you shall report directly to the President and Chief Executive Officer. By signing this Agreement, you agree to perform the duties and fulfill the responsibilities normally inherent in the position of Chief Business Officer and such other duties and responsibilities as may from time to time reasonably be assigned to you.  

	
 
	
(b)
	
You agree that, to the best of your ability and experience, you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company.  During the term of your employment with the Company, you further agree that (i) you will devote substantially all of your business time and attention to the business of the Company, (ii) the Company will be entitled to all of the benefits and profits arising from or incident to all such business services, (iii) you will not render commercial or professional services of any nature to any person or organization outside of the Company without the prior written approval of the Board, and (iv) you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Notwithstanding the above, you may continue, on your own time, at your own expense and so as to not interfere with your duties and responsibilities at the Company to (i) subject to the prior approval of the Company’s Chief Executive Officer, serve as a member of an advisory board or board of directors of other companies that are not competitive in any manner with the Company,  (ii) accept speaking or presentation engagements in exchange for honoraria, and (iii) participate in civic, educational, charitable or fraternal organizations. This Agreement does not prevent you from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange and is a competitor or potential competitor of the Company.

	
 
	
2.
	
Offer Letter. This Agreement shall supersede and replace the offer letter you entered into with the Company, dated, February 2, 2016, other than the 

 

 

	
 
		
Proprietary Information and Inventions Agreement, which shall continue in full force and effect.   

	
 
	
3.
	
Compensation.

	
 
	
(a)
	
Base Salary.  You will be paid a monthly salary at a rate of $25,833.34, which is equivalent to $310,000.00 on an annualized basis, which will be paid bi-weekly in accordance with the Company’s standard payroll procedures.   

	
 
	
(b)
	
Incentive Bonus.  You shall be eligible for an annual incentive bonus with a target amount equal to 35% of your Base Salary (the “Annual Target Bonus”).  Such bonus (if any) shall be awarded based on criteria established in advance by the Board or the Compensation Committee of the Board (the “Compensation Committee”).  Any incentive bonus earned by you for any fiscal year shall only be paid to you only if you remain employed by the Company through the payment date for the bonus.  The Company shall determine when to pay to you any earned incentive bonus, but shall in no event pay such bonus more than 21⁄2 months following the close of the fiscal year for which it is earned.    The determinations of the Board or the Compensation Committee with respect to such bonus shall be final and binding.

	
 
	
(c)
	
Annual Review.  Your compensation will be reviewed by the Board or Compensation Committee annually.

 

For purposes of this Agreement, “Cause” shall mean (i) the conviction of, or the entering a plea of guilty or no contest (or pleading or accepting deferred adjudication or receiving unadjudicated probation) to or for, any felony or any crime involving moral turpitude, (ii) the commission of a material breach of any of the covenants, terms and provisions of this Agreement or the Proprietary Information and Inventions Agreement you will enter into as a condition of your employment, (iii) the commission of an act of fraud, embezzlement, misappropriation, willful misconduct or breach of fiduciary duty against the Company or other similar conduct materially harmful or potentially materially harmful to the Company’s best interest, as determined by the Board, in its reasonable sole discretion, (iv) the failure to perform assigned duties or responsibilities as the Chief Business Officer, (other than a failure resulting from Disability (as defined below)); provided, however, that you shall be given written notice of, and shall have a ten (10) day period following such notice to cure a failure or refusal under this subclause (iv)), or (v) the violation of any federal or state law or regulation applicable to the Company’s business.

 

 

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For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, without your written consent: (i) a significant reduction in your duties or responsibilities or your removal from the position contemplated by this Agreement; (ii) a significant reduction (thirty percent (30%) or more) in your base salary as in effect immediately prior to such reduction; or (iii) a significant reduction in the type or level of employee benefits to which you are entitled that results in a significant reduction to your overall benefits package, as determined by the Company’s Board of Directors in its sole discretion; or (iv) relocation of your principal workplace by more than 35 miles from the primary office where you performed services prior to the relocation. Good reason will not be deemed to occur unless you give the Company written notice of the condition within 90 days after the condition comes into existence and the Company fails to remedy the condition with 30 days after receiving said notice.

 

 

	
 
	
4.
	
Benefits. As an employee of the Company, you will also be eligible to receive certain employee benefits including paid time off and medical, dental, life, and long term disability insurance. You will also be eligible to participate in our 401(k) savings plan.  

 

	
 
	
5.
	
At-Will Employment; Proprietary Information and Inventions Agreement.  Employment with the Company is for no specific period of time.  Your employment with the Company is “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause.  In addition, you should note that the Company may modify your job title, salary or benefits at its discretion.  You agree and affirm that your continued employment with the Company is contingent upon your agreement to comply with the Proprietary Information and Inventions Agreement, previously executed, a copy of which is attached hereto as Exhibit A.

 

	
 
	
6.
	
 Indemnification.  The Company shall indemnify you to the fullest extent allowed by law, in accordance with the terms of the Company’s Certificate of Incorporation and Bylaws. You shall become a party to the Company’s standard Indemnification Agreement.

	
 
	
7.
	
Evidence of Employment Eligibility. For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States.  Such documentation must be provided to us within three (3) business days of your Start Date, or our employment relationship with you may be terminated. 

	
 
	
8.
	
Company Handbook.  As a Company employee, you will be expected to abide by the Company's rules of operation and standards of conduct.  Specifically, you 

 

 

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will be required to sign an acknowledgment that you have read and that you understand such rules and standards, which are set forth in the Company Handbook.  

 

	
 
	
9.
	
Termination of Employment and Severance Benefits.

 

	
 
	
(a)
	
Preconditions.  Any other provision of this Agreement notwithstanding, the remaining Subsections of this Section 9 shall not apply unless each of the following requirements is satisfied:

	
 
	
(i)
	
You have executed a general release of all known and unknown claims that you may then have against the Company or persons affiliated with the Company in a form prescribed by the Company, without alterations.  You shall execute and return the release on or before the date specified by the Company in the prescribed form.  The release deadline shall in no event be later than sixty (60) days after your termination of employment (the “Release Deadline”).  If the 60 day period described in the prior sentence spans two calendar years, then the payments will begin on the first payroll period, following expiration of the revocation period, in the second calendar year. If you fail to return the release on or before the Release Deadline, or if you revoke the release, then you shall not be entitled to the benefits described in this Section 9; and 

	
 
	
(ii)
	
You have returned all property of the Company in your possession.

	
 
	
(b)
	
Termination of Employment.  Except for the severance benefits provided below, the Company’s obligations under this Agreement may be terminated upon the occurrence of any of the following events:

	
 
	
(i)
	
The Company’s determination in good faith that it is terminating you for Cause (“Termination for Cause”);

	
 
	
(ii)
	
The Company’s determination that it is terminating you without Cause, which determination may be made by the Company at any time at the Company’s sole discretion, for any or no reason (“Termination Without Cause”); 

	
 
	
(iii)
	
Thirty (30) days following delivery by you of a written notice to the Company stating that you are electing to terminate your employment with the Company (“Voluntary Termination”);

 

 

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(iv)
	
Following your death or Disability (as defined below); or 

	
 
	
(v)
	
Your determination in good faith that you are electing to terminate your employment with the Company for Good Reason.

	
 
	
(c)
	
Severance Benefits.  You shall be entitled to receive severance benefits upon termination of employment only as set forth in this Section 9(c):

	
 
	
(i)
	
Voluntary Termination.  In the event of a Voluntary Termination you shall not be entitled to receive payment of any severance benefits.  You will receive payment(s) for all salary and unpaid vacation accrued as of the date of your Voluntary Termination and your benefits will be continued under the Company’s then existing benefit plans and policies to the extent permitted under such plans and policies and in accordance with such plans and policies in effect on the date of your Voluntary Termination and in accordance with applicable law.

	
 
	
(ii)
	
Involuntary Termination/No Change in Control.  If your employment is terminated under Section 9(b)(ii) or (v) above (such termination, an “Involuntary Termination”), you, or your estate or representative, if applicable, will be entitled to receive payment of severance benefits on the date of your Involuntary Termination (the “Severance Benefits”).  The Severance Benefits shall consist of salary continuation for nine (9) months of monthly Base Salary amounts; provided that if you become employed during this period, then the Company’s obligation to pay Severance Benefits shall cease upon commencement of your new employment.  If you elect to continue your health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the Separation, then the Company shall pay your monthly premium under COBRA until the earliest of (A) the date that is nine (9) months following your Involuntary Termination (the “Continuation Period”), (B) the expiration of your continuation coverage under COBRA and (C) the date when you are offered substantially equivalent health insurance coverage in connection with new employment or self-employment.  Notwithstanding anything to the contrary above, if deemed necessary or advisable by the Company in its sole discretion to avoid adverse tax consequences to the Company or any employee thereof, such COBRA premium payments will be treated as taxable compensation income to you, subject to all applicable withholdings.  

	
 
	
(iii)
	
Involuntary Termination/ Change in Control.  If your employment is terminated in an Involuntary Termination 

 

 

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immediately prior to or in the eighteen months following a Change in Control, you, or your estate or representative, if applicable, will be entitled to receive payment of severance benefits on the date of your Involuntary Termination (the “Change in Control Severance Benefits”).  The Change in Control Severance Benefits shall consist of  salary continuation for twelve (12) months’ of monthly Base Salary plus a monthly amount equal to your Annual Target Bonus  divided by twelve (12).  If you elect to continue your health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the Separation, then the Company shall pay your monthly premium under COBRA until the earliest of (A) the date that is twelve (12) months following your Involuntary Termination (the “Continuation Period”), (B) the expiration of your continuation coverage under COBRA and (C) the date when you are offered substantially equivalent health insurance coverage in connection with new employment or self-employment.  Notwithstanding anything to the contrary above, if deemed necessary or advisable by the Company in its sole discretion to avoid adverse tax consequences to the Company or any employee thereof, such COBRA premium payments will be treated as taxable compensation income to you, subject to all applicable withholdings.  If immediately prior to or following a Change in Control (as defined in the Company’s 2015 Equity Incentive Plan), your employment with the Company (or the Company’s successor) is terminated in an Involuntary Termination during the remaining vesting period of the options then outstanding as of the date of closing of the Change in Control (the “Options”), then one hundred percent (100%) of the unvested shares subject to the Options shall automatically vest. 

	
 
	
(iv)
	
Termination for Cause.  In the event of your Termination for Cause, you will receive payment(s) for all salary and unpaid vacation accrued as of the date of your Termination for Cause.  

	
 
	
(v)
	
Termination by Reason of Death or Disability.  In the event that your employment with the Company terminates as a result of your death or Disability (as defined below), you or your estate or representative will receive all salary and unpaid vacation accrued as of the date of your death or Disability, all severance benefits payable under Section 9(b)(ii) above (only to the extent that you were entitled to such benefits before your death) and any other benefits payable under the Company’s then existing benefit plans and policies, to the extent permitted under such plans and policies and in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law.  For purposes of this Agreement, “Disability” shall mean that you have 

 

 

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been unable to perform your duties hereunder as the result of physical or mental incapacity lasting at least forty-five (45) consecutive calendar days or ninety (90) calendar days during any consecutive twelve-month period, after which time such incapacity is determined to be permanent by a physician chosen by the Company and its insurers and acceptable to you or to your legal representative (with such agreement on acceptability not to be unreasonably withheld). 

	
 
	
10.
	
Tax Matters.

 

	
 
	
(a)
	
Withholding.  All forms of compensation referred to in this Agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law.

 

	
 
	
(b)
	
Tax Advice.  You are encouraged to obtain your own tax advice regarding your compensation from the Company.  You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation.

 

	
 
	
(c)
	
280G.  Notwithstanding anything contained in this Agreement to the contrary, if any of the payments or benefits received or to be received by you pursuant to this Agreement when taken together with payments and benefits provided to you under any other plans, contracts, or arrangements with the Company (all such payments and benefits, the “Total Payments”), would be subject to any excise tax imposed under Code Section 4999 (together with any interest or penalties, the “Excise Tax”), then such Total Payments will be reduced to the extent necessary so that no portion thereof will be subject to the Excise Tax; provided, however, that if you would receive in the aggregate greater value (as determined under Code Section 280G and the regulations thereunder) on an after tax basis if the Total Payments were not subject to such reduction, then no such reduction will be made. To effect the reduction described herein, if applicable, the Company will first reduce or eliminate the payments and benefits provided under this Agreement. All calculations required to be made under this Section will be made by the Company’s independent public accountants, subject to the right of your representative to review the same.

 

	
 
	
11.
	
Miscellaneous Provisions.  

 

	
 
	
(a)
	
Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the 

 

 

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State of Maryland, without giving effect to the principles of conflicts of law. 

 

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

 

	
 
	
(c)
	
Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without such provision.

 

	
 
	
(d)
	
Acknowledgment.  You acknowledge that you have had the opportunity to discuss this matter with and obtain advice from your private attorney, have had sufficient time to read, and have carefully read and fully understand, all the provisions of this Agreement, and are knowingly and voluntarily entering into this Agreement.

 

	
 
	
(e)
	
Arbitration.  Any controversy or claim arising out of this Agreement and any and all claims relating to the Employee’s Employment with the Company shall be settled by final and binding arbitration.  The arbitration shall take place in Washington, D.C., or, at the Employee’s option, the County in which the Employee primarily worked when the arbitral dispute or claim first arose.  The arbitration shall be administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes.  Any award or finding shall be confidential.  The Employee and the Company agree to provide one another with reasonable access to documents and witnesses in connection with the resolution of the dispute.  The Employee and the Company shall share the costs of arbitration equally.  Each party shall be responsible for its own attorneys’ fees, and the arbitrator may not award attorneys’ fees unless a statute or contract at issue specifically authorizes such an award.  This Section 11(e) shall not apply to claims for workers’ compensation benefits or unemployment insurance benefits.  This Section 11(e) also shall not apply to claims concerning the ownership, validity, infringement, misappropriation, disclosure, misuse or enforceability of any confidential information, patent right, copyright, mask work, trademark or any other trade secret or intellectual property held or sought by either the Employee or the Company (whether or not arising under the Proprietary Information and Inventions Agreement between the Employee and the Company).

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

 

	
REGENXBIO INC.
	
EMPLOYEE

	
By:/s/ Kenneth Mills
	
By:/s/ Faraz Ali

	
Name:Kenneth Mills
	
Date:March 2, 2016

	
Title:President and CEO
	
 

 

 

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 EXHIBIT A

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

 

 

 

 

10sfm-ex101_115.htm

 

Exhibit 10.1

SPROUTS FARMERS MARKET, INC.

Performance Share award Agreement

Cover Sheet

Sprouts Farmers Market, Inc., a company incorporated under the laws of the State of Delaware (“Company”), hereby grants an award of performance shares (“Performance Shares”) to the individual named below.  The terms and conditions of the Performance Shares are set forth in this cover sheet (“Cover Sheet”), in the attached Performance Share Award Agreement (the “Agreement”) and in the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the “Plan”).  All capitalized terms used but not defined in this Cover Sheet and the Agreement will have the meanings ascribed to such terms in the Plan.  

 

			
	
Granted to:
	
 
	
 

	
Grant Date:
	
 
	
 

	
Number of Performance Shares:

 

 

 

 

 

 

 

 

 

Performance Criteria:
	
 
	
 

	
Issuance of Shares:
	
 
	
 

	
Vesting Schedule:
	
 
	
 

By signing this Cover Sheet, you agree to all of the terms and conditions described in this Cover Sheet, in the Agreement and in the Plan.  If you do not sign and return this Cover Sheet and the attached Irrevocable Standing Order to Sell Shares within 60 days of the Grant Date, the Company will have the right to rescind this award.

 

					
	
Signature:
	
 
	
 
	
Date:
	
 

SPROUTS FARMERS MARKET, INC.

 

	
By:
	
 
	
 

	
Name:
	
 
	
Brandon Lombardi

	
Title:
	
 
	
Chief Legal Officer

 

 

SPROUTS FARMERS MARKET, INC.

2013 INCENTIVE PLAN

Performance Share AWARD AGREEMENT

 

	
Right to Shares
	
 
	
The award of Performance Shares represents your right to receive, and the Company’s obligation to issue, one Share for each Performance Share earned, based on the Company’s Adjusted EBIT as set forth in the Cover Sheet.  The Shares issued will be subject to the vesting conditions described below.  Issuance of Shares equal to the Performance Shares earned will occur as soon as practicable following the date the Compensation Committee certifies annual Adjusted EBIT or aggregate Adjusted EBIT, as applicable, based on the Company’s audited financial statements, for each year of the Performance Period (each, a “Certification Date”).   

	
 
	
 
	
 

	
Vesting
	
 
	
The Performance Shares issued to you will vest in accordance with the schedule set forth in the Cover Sheet.

All Performance Shares will cease vesting as of the date your employment with the Company and its Affiliates has terminated for any reason.

	
 
	
 
	
 

	
Termination; Specified Conduct
	
 
	
Should your employment with the Company and its Affiliates terminate for any reason or if you engage in Specified Conduct (as defined in Exhibit A) prior to a Certification Date, you shall forfeit all rights to receive any Performance Shares. Should your employment with the Company and its Affiliates terminate for any reason after a Certification Date or if you engage in Specified Conduct after a Certification Date, you shall forfeit all Performance Shares that are not then vested, and such Performance Shares shall be returned to the Company automatically and for no consideration.

	
 
	
 
	
 

 

	
Change in Control
	
 
	
Notwithstanding the foregoing:

(A) if there occurs a Change in Control (as defined in Exhibit A), and this award does not continue or is not assumed by an acquiror, then (i) any Performance Shares that have been earned and remain outstanding as of the Change in Control will become fully vested and delivered immediately prior to the Change in Control, and (ii) with respect to each fiscal year during the Performance Period for which a Certification Date has not occurred as of the Change in Control, the target number of Performance Shares eligible to be earned for such fiscal year shall become fully vested and delivered immediately prior to the Change in Control; and

(B) if there occurs a Change in Control, and this award continues or is assumed by an acquiror, and your employment is terminated by the Company or an acquiror without Cause (as defined in Exhibit A) or by you for Good Reason (as defined in Exhibit A), in each case within 24 months following the Change in Control, then (i) any Performance Shares that have been earned and remain outstanding as of such termination shall become fully vested and delivered upon or as soon as practicable following such termination, and (ii) with respect to each fiscal year during the Performance Period for which a Certification Date has not occurred as of such termination, the target number of Performance Shares eligible to be earned for such fiscal year shall become fully vested and delivered upon or as soon as practicable following such termination.

For purposes of the foregoing, this award shall not be treated as continued or assumed unless it is continued or assumed on a substantially equivalent basis, including, without limitation, continuation or assumption of the same Company Adjusted EBIT performance metrics.

For the avoidance of doubt, in the event that the Performance Shares vest in accordance with the preceding clauses (A) or (B), you shall not be eligible to earn any Additional Shares.

	
 
	
 
	
 

	
Taxes
	
 
	
Unless you make an election under Section 83(b) of the Code within 30 days of a Certification Date, the value of the Performance Shares as and when they vest will be treated as wages subject to payroll withholding.  The Company will satisfy the withholding obligation through a “sell to cover” whereby you irrevocably direct a securities broker approved by the Company to sell a portion of your Performance Shares that are then scheduled to vest and to deliver the sale proceeds to the Company in payment of the applicable withholding taxes.  You agree to provide these directions by signing and returning the Irrevocable Standing Order to Sell Shares attached hereto, along with a signed copy of the Cover Sheet, within 60 days of the Grant Date. 

The number of Shares that the broker will sell will be based on an estimate made by the broker of the Shares required to be sold to satisfy the withholding taxes. You agree that the proceeds received from the sale of Shares will be used to satisfy the withholding taxes and, accordingly, you authorize the broker to pay such proceeds to the Company for such purpose. To the extent that the proceeds obtained by such sale exceed the amount necessary to satisfy the withholding taxes, such excess proceeds shall be deposited into your brokerage account and in the event of a shortfall, additional Shares may be sold and/or cash withholding may be required from you. Any remaining Shares shall be deposited into your brokerage account.

If there is not a market in the Shares or the Company determines in its sole discretion that the sell to cover procedure is not advisable or sufficient, the Company will have the right to make other arrangements to satisfy the withholding taxes due upon the vesting of the Shares with respect to the Performance Shares, including, but not limited to, the right to deduct amounts from salary or payments of any kind otherwise due to the Participant or withhold in Shares (by transferring Shares back to the Company, provided that the Company only withholds the amount of Shares necessary to satisfy the statutory minimum withholding amount).  If such other arrangements are made, your Irrevocable Standing Order to Sell Shares will be voided.

You represent to the Company that, as of the date you sign the Irrevocable Standing Order to Sell Shares, you are not aware of any material nonpublic information about the Company or the Shares. You and the Company have structured this Agreement to constitute a “binding contract” relating to the sale of Shares, consistent with the affirmative defense to liability under Section 10(b) of the Exchange Act under Rule 10b5-1(c) issued under such Act.

	
 
	
 
	
 

 

	
Restrictions on Resale 
	
 
	
By signing this Agreement, you agree not to sell any Performance Shares at a time when applicable laws, regulations or Company policies prohibit a sale.  

In addition, until the Performance Shares have vested pursuant to the schedule set forth in the Cover Sheet, they may not be sold, transferred, assigned, pledged, margined, or otherwise encumbered or disposed of (except for transfers and forfeitures to the Company).

The Company’s obligation to issue Performance Shares upon a Certification Date shall be subject to applicable laws, rules and regulations and also to such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations. 

You shall deliver to the Chief Legal Officer of the Company, at the time of execution of this Agreement and/or at such other time or times as the Chief Legal Officer may request, one or more executed stock powers, authorizing the transfer of the Performance Shares to the Company upon forfeiture, and you shall take such other steps or perform such other actions as may be requested by the Chief Legal Officer to effect the transfer of any forfeited Performance Shares.

	
 
	
 
	
 

	
Transfer of right to receive Performance Shares
	
 
	
Prior to a Certification Date, you cannot transfer or assign your right to receive Performance Shares.  For instance, you may not sell your right to Performance Shares or use such right as security for a loan.  If you attempt to do any of these things, your award will immediately become invalid.  

Regardless of any marital property settlement agreement, the Company or a securities broker, as applicable, is not obligated to recognize your former spouse’s interest in your right to Performance Shares in any way.

	
 
	
 
	
 

	
Stockholder Rights; Dividend Equivalent Rights
	
 
	
You, or your estate or heirs, have no rights as a stockholder of the Company in respect of Performance Shares until a Certification Date.  No adjustments are made for dividends or other rights if the applicable record date occurs before Shares are issued, except as described in the Plan.

On and following a Certification Date, you shall have the rights as a stockholder, subject to the restrictions set forth in this Agreement (including, without limitation, transfer restrictions and forfeiture during the vesting period).

	
 
	
 
	
 

	
Applicable Law
	
 
	
This Agreement will be interpreted and enforced under the laws of the State of Delaware.

	
 
	
 
	
 

	

The Plan and Other Agreements
	
 
	
The text of the Plan and any amendments thereto are incorporated in this Agreement by reference.

This Agreement, the Cover Sheet and the Plan constitute the entire understanding between you and the Company regarding the Performance Shares.  Any prior agreements, commitments or negotiations concerning the Performance Shares are superseded.

 

By signing the Cover Sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan and evidence your acceptance of the powers of the Committee of the Board of Directors of the Company that administers the Plan.

 

Exhibit A

Certain Definitions

“Adjusted EBIT” means the Company’s consolidated net income (loss) computed in accordance with generally accepted accounting principles (GAAP), plus, without duplication and to the extent reflected as a charge or expense in the calculation of net income, the sum of (i) income tax expense/benefit, (ii) net interest expense, (iii) impairments, including goodwill and other asset and store-level impairments, (iv) long-lived asset write downs, (v) transaction and transition costs and charges relating to any acquisitions and divestitures, (vi) store closure and exit costs, (vii) prepayment penalties, charges and acceleration of capitalized deferred financing costs and original issue discounts related to refinancing not already included in net interest expense above, (viii) expense related to executive severance obligations, (ix) costs and expenses associated with equity offerings, (x) employer taxes associated with stock option exercises, (xi) net gain or loss on disposal of assets, and (xii) any income or expense that is unusual, non-recurring, or extraordinary, as the compensation committee of the board of directors shall deem equitable and appropriate (including, but not limited to, non-cash accruals necessary to comply with GAAP related to acquisitions and non-cash write-offs and charges).  

“Affiliate” means, when used with reference to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, or owns greater than fifty percent (50%) of the voting power in, the specified Person (the term “control” for this purpose shall mean the ability, whether by the ownership of shares or other equity interest, by contract or otherwise, to elect a majority of the directors of a corporation, independently to select the managing partner of a partnership or the managing member or the majority of the managers, as applicable, of a limited liability company, or otherwise to have the power independently to remove and then select a majority of those Persons exercising governing authority over an entity, and control shall be conclusively presumed in the case of the direct or indirect ownership of fifty percent (50%) or more of the voting equity interests in the specified Person).

“Cause” shall have the meaning ascribed thereto in any effective employment agreement between you and the Company or its Affiliates, or if no employment agreement is in effect that contains a definition of cause, then Cause shall mean that you have (i) committed a felony or a crime involving moral turpitude, (ii) committed any act of gross negligence or fraud, (iii) failed, refused or neglected to substantially perform your duties (other than by reason of a physical or mental impairment) or to implement the reasonable directives of the Company (which, if deemed curable in the discretion of the Committee, is not cured within 30 days after notice thereof to you by the Committee), (iv) materially violated any policy of the Company (which, if deemed curable in the discretion of the Committee, is not cured within 30 days after notice thereof to you by the Committee), or (v) engaged in conduct that is materially injurious to the Company, monetarily or otherwise.

“Change in Control” shall mean: 

	
 
	
(i)
	
any event occurs the result of which is that any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, becomes the “beneficial owner”, as defined in Rules l3d-3 and l3d-5 under the Exchange Act directly or indirectly, of more than  50% of the voting stock of the Company or any successor company thereto, including, without limitation, through a merger or consolidation or purchase of voting stock of the Company; provided that the transfer of 100% of the voting stock of the Company to a Person that has an ownership structure identical to that of the Company prior to such transfer, such that the Company becomes a wholly owned subsidiary of such Person, shall not be treated as a Change in Control;

	
 
	
(ii)
	
during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board, together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the 

 

	
 
		
beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board then in office; 

	
 
	
(iii)
	
the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions other than a merger or consolidation, of all or substantially all of the assets of the Company and its consolidated subsidiaries taken as a whole to any Person or group of related Persons; or

	
 
	
(iv)
	
the adoption of a plan relating to the liquidation or dissolution of the Company.

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

“Good Reason” shall have the meaning ascribed thereto in any effective employment agreement between you and the Company or its Affiliates, or if no employment agreement is in effect that contains a definition of good reason, then Good Reason shall mean that the Company or its Affiliates (i) has required that you relocate to a principal place of employment that is more than 50 miles from your then-current principal place of employment; (ii) has reduced, or has notified you of its intent to reduce, your base salary by more than 10%, unless such reduction is agreed to by you or is involuntarily imposed upon all other employees of the Company who are similarly situated to you; or (iii) without your consent, materially diminishes your authority or responsibilities; provided, however, that in the event you believe any of the forgoing conditions exist that constitute Good Reason, prior to Good Reason being established, you will first provide notice to the Company and give the Company a reasonable opportunity (not to exceed thirty (30) calendar days) to cure the condition you contend establishes Good Reason.

“Person” means and includes any individual, partnership, joint venture, corporation, limited liability company, estate, trust, or other entity.

“Specified Conduct” means, if you are party to an employment agreement that contains post-termination restrictive covenants, a breach of any such covenant, or if you are not party to an employment agreement that contains post-termination restrictive covenants, your (i) unauthorized disclosure of confidential information relating to the Company or its Affiliates, (ii) engaging, directly or indirectly, as an employee, partner, consultant, director, stockholder (other than as a passive investor in not more than 5% of the shares of any publicly traded class of securities of any business), owner, or agent in any business that is competitive with the businesses conducted by the Company and its Affiliates at the time of termination of your employment, (iii) soliciting or inducing, directly or indirectly, any former, present or prospective customer or client of the Company or its Affiliates to purchase any services or products offered by the Company or its Affiliates from any Person other than the Company or its Affiliates, or (iv) hiring, directly or indirectly, any individual who was an employee of the Company or its Affiliates within the six month period prior to termination of your employment, or soliciting or inducing, directly or indirectly, any such individual to terminate his or her employment with the Company or its Affiliates.

 

IRREVOCABLE STANDING ORDER TO SELL SHARES

I have been granted an award in respect of Performance Shares (“Performance Shares”) by Sprouts Farmers Market, Inc. (the “Company”), which is evidenced by a performance share award agreement between me and the Company (the “Agreement,” copy attached).  Provided that I remain employed by the Company on the applicable vesting date, the shares vest according to the provisions of the Agreement. 

I understand that on each Certification Date (as defined in the Agreement), the Performance Shares will be deposited into my account at E*Trade (the “Broker”) and that on the applicable vesting date, I will recognize taxable ordinary income as a result.  Pursuant to the terms of the Agreement and as a condition of my receipt of the Shares, I understand and agree that, on the vesting date, I must sell a number of shares sufficient to satisfy all withholding taxes applicable to that ordinary income. Therefore, I hereby direct the Broker to sell, at the market price and on the vesting date (or the first business day thereafter if the vesting date should fall on a day when the market is closed), the number of Shares that the Company informs the Broker is sufficient to satisfy the applicable withholding taxes, which shall be calculated based on the closing price of the Company’s ordinary shares on the last trading day before the vesting date. I understand that the Broker will remit the proceeds to the Company for payment of the withholding taxes. 

I understand and agree that by signing below, I am making an Irrevocable Standing Order to Sell Shares which will remain in effect until the vesting date. I also agree that this Irrevocable Standing Order to Sell Shares is in addition to and subject to the terms and conditions of any existing Account Agreement that I have with the Broker. 

 

	
	
 

	
 

	
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