Document:

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), including the attached Exhibit “A”, is entered into between Green Bancorp, Inc., a Texas corporation, having its principal office at 4000 Greenbriar St., Houston, Texas 77098 (“Employer” or the “Company”), and Terry S. Earley, an individual currently residing at 4444 Westheimer Road, Apt A546, Houston, TX 77027 (“Employee”), to be effective as of April 11, 2017 (the “Effective Date”).

WITNESSETH:

WHEREAS, Employer and Employee desire to enter into this Agreement.

WHEREAS, Employer desires to employ Employee pursuant to the terms and conditions and for the consideration set forth in this Agreement, and Employee desires to be employed by Employer pursuant to such terms and conditions and for such consideration.

WHEREAS, Employee will receive compensation and benefits to be paid or provided to the Employee by the Employer under this Agreement, and Employee will receive confidential information that will be provided to Employee during the Term (defined below) of this Agreement.

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and obligations contained herein, Employer and Employee agree as follows:

ARTICLE 1:   EMPLOYMENT AND DUTIES:

1.1          Employer agrees to employ Employee, and Employee agrees to be employed by Employer, beginning as of the Effective Date, for a term of two (2) years from the Effective Date, which term shall extend for an additional year on each anniversary of the Effective Date that Employee remains employed by Employer (including, for the avoidance of doubt, the first (1st) anniversary of the Effective Date) (the “Term”) or any subsequent modifications or extensions made in accordance with Section 6.11 herein.

1.2          Employee agrees to serve in the assigned position and to perform diligently and to the best of Employee’s abilities the duties and services appertaining to such position as determined by Employer, as well as such additional or different duties and services appropriate to such position which Employee from time to time may be reasonably directed to perform by Employer.  Employee shall at all times comply with and be subject to such policies and procedures as Employer may establish from time to time.

1.3          Employee shall, during the period of Employee’s employment by Employer, devote Employee’s full business time, energy, and best efforts to the business and affairs of Employer.  Employee may not engage, directly or indirectly, in any other business, investment, or activity that interferes (without written approval from the Employer’s Board of Directors) with Employee’s performance of Employee’s duties hereunder, is contrary to the interests of Employer, or requires any significant portion of Employee’s business time.

1.4          In connection with Employee’s employment by Employer, Employer promises and agrees to provide Employee access to confidential information pertaining to the business and services of Employer as is appropriate for Employee’s employment responsibilities.

ARTICLE 2:   COMPENSATION AND BENEFITS:

2.1          Employee’s monthly base salary during the Term shall be not less than the amount set forth under the heading “Monthly Base Salary” on Exhibit A or any subsequent extension or modification thereof, subject to increase at the sole discretion of the Employer, which shall be paid in semimonthly installments in accordance with Employer’s standard payroll practice (“Monthly Base Salary”).  Any calculation to be made under this Agreement with respect to Employee’s Monthly Base Salary shall be made using the then current Monthly Base Salary in effect at the time of the event for which such calculation is made.

2.2          Notwithstanding anything herein to the contrary, provided that Employee in not in material breach of this Agreement, Employee shall receive his Annual Base Salary for the entire Term unless (i) Employee is terminated by Employer for “cause” in accordance with Section 3.1(i) or (ii) Employee terminates the employment relationship with Employer without “Good Reason.”

2.3          While employed by Employer, Employee shall be allowed to participate, on the same basis generally as other employees of Employer, in all general employee benefit plans and programs, including improvements or modifications of the same, which on the Effective Date or thereafter are made available by Employer to all or substantially all of Employer’s employees.  Such benefits, plans, and programs may include, without limitation, medical, health, and dental care, life insurance, disability protection, and pension plans.  Nothing in this Agreement is to be construed or interpreted to provide greater rights, participation, coverage, or benefits under such benefit plans or programs than provided to similarly situated employees pursuant to the terms and conditions of such benefit plans and programs.

2.4          Employer shall not by reason of this Article 2 be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such incentive compensation or employee benefit program or plan, so long as such actions are similarly applicable to covered employees generally.  Unless specifically provided for in a written plan document adopted by the Board of Directors of Employer, none of the benefits or arrangements described in this Article 2 shall be secured or funded in any way, and each shall instead constitute an unfunded and unsecured promise to pay money in the future exclusively from the general assets of Employer.

2.5          Employer may withhold from any compensation, benefits, or amounts payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

2.6          Upon the consummation of a Change in Control (as defined in the Green Bancorp, Inc. 2014 Omnibus Equity Incentive Plan (the “2014 Plan”)), Employee shall be entitled to receive a cash bonus from the Executive Incentive Plan for the partial year based on the Change

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of Control date and a partial payment based on time left until agreement expiration; provided that Employee in not in material breach of this Agreement at such time.

ARTICLE 3:   TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION:

3.1.         Notwithstanding any other provisions of this Agreement, Employer shall have the right to terminate Employee’s employment under this Agreement at any time for any of the following reasons:

		(i)	
for “cause” upon the determination by the Employer’s Board of Directors that “cause” exists for the termination of the employment relationship.  As used in this Agreement, the term “cause” shall mean (a) Employee’s gross negligence, recklessness or willful misconduct in the performance of the duties and services required of Employee pursuant to this Agreement; (b) Employee has been convicted of, plead guilty or no contest to, accepted a deferred adjudication or probated sentence in connection with, an alleged felony; (c) Employee has willfully refused without proper legal reason to perform the duties and responsibilities required of Employee under this Agreement which remains uncorrected for thirty (30) days following written notice to Employee by Employer of such failure to perform; (d) Employee has willfully engaged in conduct or acts of moral turpitude that Employee knows or should know is materially injurious to Employer or any of its subsidiaries and affiliates; (e) Employee’s breach of any provision of this Agreement or corporate code or policy; or (f) Employee violates any applicable law in the conduct of Employee’s duties hereunder.  It is expressly acknowledged and agreed that the decision as to whether “cause” exists for termination of the employment relationship by Employer is delegated to the Employer’s Board of Directors for determination.  If Employee disagrees with the decision reached by Employer’s Board of Directors, the dispute will be limited to whether Employer’s Board of Directors reached its decision in good faith;

		(ii)	
for any other reason whatsoever, with or without cause, in the sole discretion of the Board of Directors of Employer;

		(iii)	
upon Employee’s death; or

		(iv)	
upon Employee’s becoming disabled so as to entitle Employee to benefits under Employer’s long-term disability plan or, if Employee is not eligible to participate in such plan, then Employee is permanently and totally unable to perform Employee’s duties for Employer as a result of any medically determinable physical or mental impairment as supported by a written medical opinion to the foregoing effect by a physician selected by Employer.

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3.2          Notwithstanding any other provisions of this Agreement, Employee shall have the right to terminate the employment relationship under this Agreement at any time for any of the following reasons:

		(i)	
a material breach by Employer of any material provision of this Agreement;

		(ii)	
for “Good Reason”.  As used in this Agreement, the term “Good Reason” shall mean (A) a material adverse change, not consented to by Employee, in the nature or scope of Employee’s responsibilities, authorities or duties, (B) a material diminution of Employee’s Base Salary, or (C) the relocation of Employee’s place of employment to a location in excess of fifty (50) miles from the place of Employee’s employment on the date Employee executes this Agreement.  In addition, the Employer shall have at least 30 days after the notice of the Good Reason event, which must be provided by the Employee within at least 90 days after the initial existence of the event, to cure the Good Reason event and, if Employer cures such event within such 30 days, “Good Reason” shall not exist with respect to such event; or

		(iii)	
for any other reason whatsoever, in the sole discretion of Employee.

3.3          Upon the termination of Employee’s employment relationship with Employer as a result of Employee’s death (Section 3.1(iii)) or Employee becoming disabled (Section 3.1(iv)), in each case, Employee (or, in the case of death, Employee’s heirs, administrators, or legatees) shall be entitled to any amounts to which Employee may otherwise be entitled under any and all severance plans (including any individual bonuses or individual incentive compensation not yet paid to Employee at such date), but shall not be entitled to any (x) individual bonuses or individual incentive compensation not yet paid at the date of such termination or (y) future benefits for which Employee is eligible under this Agreement.

3.4          In all cases, the compensation and benefits payable to Employee under this Agreement upon termination of the employment relationship shall be offset against any amounts to which Employee may otherwise be entitled under any and all severance plans, and policies of Employer and its subsidiaries or affiliates.

3.5          Termination of the employment relationship for any reason does not terminate those obligations imposed by this Agreement which are continuing obligations, including, without limitation, Employee’s obligations under Articles 4 and 5 of this Agreement.

3.6          Notwithstanding any provision of this Agreement to the contrary, if at the time of Employee’s separation from employment Employee is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), then to the extent that any amount to which Employee is entitled in connection with his separation from employment is subject to Section 409A, payments of such amounts to which Employee would otherwise be entitled during the six (6) month period following Employee’s separation from employment will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Employee’s separation from employment.  This paragraph shall apply only to

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the extent required to avoid Employee’s incurrence of any additional tax or interest under Section 409A.

ARTICLE 4:   NON-DISCLOSURE COVENANT:

4.1          For the purposes of this Article 4, the phrase “Confidential Information” means any and all of the following: trade secrets concerning the business and affairs of the Employer or its subsidiaries and affiliates, product specifications, data, know-how, processes, graphs, inventions and ideas, past, current, and planned research and development, current and planned distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code, machine code, and source code), computer software and database technologies, systems, structures, and architecture (and related formulae, compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs, and methods); information concerning the business and affairs of the Employer or its subsidiaries and affiliates (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, policies and procedures, personnel training techniques and materials, however documented); and notes, analysis, compilations, studies, summaries, and other material prepared by or for the Employer or its subsidiaries and affiliates containing or based, in whole or in part, on any information included in the foregoing. Employee acknowledges and agrees that Confidential Information includes any such information that Employee may originate, learn, have access to, or obtain, whether in tangible form or memorized.  Notwithstanding the foregoing, Confidential Information shall not include any information that the Employee demonstrates was or became generally available to the public other than as a result of a disclosure of such information by the Employee or any other person under a duty to keep such information confidential.

4.2          The Employee acknowledges that (i) during the Term and as part of the employment under this Agreement, Employer promises and agrees to provide Employee Confidential Information that the Employer has devoted substantial time, effort, and resources to develop and compile; (ii) public disclosure of such Confidential Information would have an adverse effect on the Employer and its business; (iii) the Employer would not disclose such information to the Employee, nor employ or continue to employ the Employee without the agreements and covenants set forth in this Article 4; and (iv) the provisions of this Article 4 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information.

4.3          In consideration of the compensation and benefits to be paid or provided to the Employee by the Employer, the Employee agrees and covenants as follows:

(i)            The Employee will hold in strictest confidence the Confidential Information and will not disclose it to any person except with the specific prior written consent of the Employer or as may be required by court order, law, government agencies with which the Employer deals in the ordinary course of its business, or except as otherwise expressly permitted by the terms of this Agreement. The Employee will not remove from the Employer’s premises or record (regardless of the media) any Confidential Information of the Employer or its subsidiaries and affiliates, except to the extent such removal or recording is necessary for the performance of the

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Employee’s duties. The Employee acknowledges and agrees that all Confidential Information and physical embodiments thereof, whether or not developed by the Employee, are the exclusive property of the Employer or its subsidiaries and affiliates, as the case may be.

(ii)           The Employee recognizes that the Employer and its subsidiaries and affiliates have received and in the future will receive from third parties their confidential or proprietary information subject to a duty on their parts to maintain the confidentiality of such information and to use it only for certain limited purposes. The Employee agrees that Employee owes the Employer, its subsidiaries and affiliates, and such third parties, at all times, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person (except as necessary in carrying out such Employee’s duties for the Employer consistent with the Employer’s agreement with such third party) or to use it for the benefit of anyone other than for the Employer or such third party (consistent with the Employer’s agreement with such third party) without the express written authorization of the Employer or its affiliate, as the case may be.

(iii)          The Employee agrees that when the employment relationship terminates, Employee will deliver to the Employer any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any of the aforementioned items belonging to the Employer or any of its subsidiaries and affiliates.

ARTICLE 5:   NON-SOLICITATION AND NON-INTERFERENCE:

5.1          The Employer and the Employee hereby mutually agree that the nature of the Employer’s business and the Employee’s employment hereunder are based on the Employer’s goodwill, public perception, and customer relations. Therefore, in consideration of the acknowledgments and promises set forth in Section 4.2 herein, including without limitation Employer’s promise to provide Employee Confidential Information, and the compensation and benefits to be paid to the Employee pursuant to this Agreement, the Employee hereby agrees and covenants to each and all of the following:

(i)            During the time period Employee is receiving the Monthly Base Salary, and for an additional twelve (12) months after Employee receives the last payment of the Monthly Base Salary, the Employee hereby covenants and agrees that Employee will not, either directly, indirectly or through an affiliate, solicit (a) any customer of the Employer or its subsidiaries and affiliates that has utilized the services or products of the Employer; or (b) anyone about whom Employee obtained Confidential Information during employment with Employer for purposes of selling products or services to such person that are in competition with the products or services offered or sold by the Employer or its subsidiaries and affiliates.

(ii)           During the time period Employee is receiving the Monthly Base Salary, and for an additional 12 months after Employee receives the last payment of the Monthly Base Salary, the Employee hereby agrees not to employ, either directly, indirectly or through an affiliate, any current employee of the Employer or its subsidiaries and affiliates or any individual who was an employee of the Employer or its subsidiaries and affiliates at any time during the Term, with

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whom Employee had contact during the Term or about whom Employee obtained Confidential Information, and agrees not to solicit, or contact in any manner that could reasonably be construed as a solicitation, either directly, indirectly or through a subsidiary or an affiliate, any such employee of the Employer or its subsidiaries and affiliates for the purpose of encouraging such employee to leave or terminate his or her employment with the Employer or its subsidiaries and affiliates.

(iii)          During the time period Employee is receiving the Monthly Base Salary, and for an additional twelve (12) months after Employee receives the last payment of the Monthly Base Salary, the Employee hereby agrees not to interfere with the Employer’s relationship with any person who at the relevant time is an employee, contractor, supplier, or customer of the Employer or its subsidiaries and affiliates.

5.2          The Employee acknowledges and agrees that the length and scope of the restrictions contained in Section 5.1 are reasonable and necessary to protect the legitimate business interests of the Employer. The duration of the agreements contained in Section 5.1 shall be extended for the amount of any time of any violation thereof and the time, if greater, necessary to enforce such provisions or obtain any relief or damages for such violation through the court system. If any covenant in Section 5.1 of this Agreement is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope and time, and such lesser scope or time, or either of them, as an arbitrator or a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding, and enforceable against the Employee. In the event of termination of the Employee’s employment with the Employer for any reason, the Employee consents to the Employer communicating with the Employee’s new employer, any entity in the business or through or in connection with which the Employee is restricted hereunder, or any other party about the restrictions and obligations imposed on the Employee under this Agreement.

5.3          In the event Employer shall file a lawsuit in any court of jurisdiction alleging a breach of any of the Employee’s obligations under Section 5.1 of this Agreement, the Non-Solicitation and Non-Interference periods referenced in Section 5.1 shall be tolled during any time the Employee was in breach of those obligations.

ARTICLE 6:   MISCELLANEOUS:

6.1          For purposes of this Agreement the terms “affiliates” of an entity or person or “affiliated” with an entity or person means any other entity or person who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the entity or person.

6.2          For purposes of this Agreement the terms “subsidiary” of an entity means any other entity which is directly owned by the Employer entity.

6.3          For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally

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delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Employer:

Green Bancorp, Inc.

4000 Greenbriar

Houston, Texas 77098

Attention:  President

If to Employee, to the address shown on the first page hereof.

Either Employer or Employee may furnish a change of address to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

6.4          This Agreement shall be exclusively governed in all respects by the laws of the State of Texas, excluding any conflict-of-law rule or principle that might refer the construction of the Agreement to the laws of another State or country.

6.5          No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

6.6          The covenants by the Employee in Articles 4 and 5 are essential elements of this Agreement, and without the Employee’s agreement to comply with such covenants, the Employer would not have entered into this Agreement or employed or continued the employment of Employee. The Employer and Employee have independently consulted their respective counsel and have been advised in all respects concerning the reasonableness and propriety of such covenants, with specific regard to the nature of the business conducted by the Employer.  If the Employee’s employment hereunder expires or is terminated by either party, this Agreement will continue in full force and effect as is necessary or appropriate to enforce the covenants and agreements of the Employee in Articles 4 and 5.

6.7          It is a desire and intent of the parties that the terms, provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law.  If any such term, provision, covenant, or remedy of this Agreement or the application thereof to any person, association, or entity or circumstances shall, to any extent, be construed to be invalid or unenforceable in whole or in part, then such term, provision, covenant, or remedy shall be construed in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law.  In any case, the remaining provisions of this Agreement or the application thereof to any person, association, or entity or circumstances other than those to which they have been held invalid or unenforceable, shall remain in full force and effect.

6.8          Employee’s rights and obligations under Agreement hereof are personal and such rights, benefits, and obligations of Employee shall not be voluntarily or involuntarily assigned,

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alienated, or transferred, whether by operation of law or otherwise, without the prior written consent of Employer.

6.9          Notwithstanding anything herein to the contrary, neither the Employer nor its affiliates shall be required to make any payment or provide any benefit to the extent prohibited by any applicable law, regulation, or written regulatory action or directive, including 12 USC 1828(k) or any implementing regulation thereof.

6.10        Any litigation that may be brought by either Employer or Employee involving the enforcement of this Agreement or the rights, duties, or obligations of this Agreement, shall be brought exclusively in the State or federal courts sitting in Houston, Harris County, Texas.

6.11        This Agreement may be amended, modified, extended or supplemented only by a written mutual agreement duly executed and delivered by Employer and Employee.

ARTICLE 7:   ARBITRATION:

All disputes arising out of this Agreement shall be resolved as set forth in this Article 7; however, nothing contained in this agreement to arbitrate shall preclude the Bank from seeking injunctive relief in a court of competent jurisdiction for the purpose of enforcing the promises and covenants made by Employee in this Agreement, including those in Article 4 and 5 of this Agreement.  If the parties hereto are unable to resolve any dispute relating to the terms of this Agreement within ten (10) business days from the date negotiations began, then without the necessity of further agreement of either party, either party may submit the dispute to binding arbitration pursuant to this section.  Such arbitration shall be conducted before a panel of three (3) arbitrators in Houston, Texas, in accordance with the Employment Arbitration Rules and Mediation Procedures (formerly the National Rules for the Resolution of Employment Disputes) of the American Arbitration Association (“AAA”) then in effect, provided that the parties may agree to use arbitrators other than those provided by the AAA.  The arbitrators shall not have the authority to add to, detract from, or modify any provision of this Agreement.  The arbitrators shall have the authority to order all remedies otherwise available in a civil court, including, without limitation, back pay, severance compensation, vesting options (or cash compensation in lieu of vesting options), reimbursement of costs, including those incurred to enforce this Agreement.  A decision by a majority of the arbitration panel shall be final and binding.  The arbitration shall be conducted consistent with all applicable law, and the arbitration award shall be in writing, in a form capable of review if required by applicable law.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  The direct expense of any arbitration proceeding shall be borne equally by the parties; however, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees (as determined by the arbitrators) arising from the arbitration, provided that Employee shall obtain a final judgment substantially in favor of the Employee (as determined by the arbitrators).

ARTICLE 8:   SECTION 409A:

To the extent required by Section 409A:  (i) in no event shall any reimbursements under this Agreement be paid later than the last day of the calendar year following the calendar year in

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which the expense was incurred; (ii) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement during a calendar year will not affect the expenses eligible for reimbursement in any other calendar year; and (iii) the right to reimbursement or in-kind benefits provided under this Agreement shall not be subject to liquidation or exchange for another benefit.

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IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement in multiple originals to be effective on the date first stated above.

	 	
GREEN BANCORP, INC.

	 	 
	 	
By:

	
/s/ Geoffrey D. Greenwade

	 	 	
Geoffrey D. Greenwade

	 	 	
President

	 	 	 
	 	 	
4/11/2017

	 	 	
Date Signed

	 	
By:

	
/s/ Terry S. Earley

	 	 	
Terry S. Earley

	 	 	 
	 	 	 
	 	 	
4/11/2017

	 	 	
Date Signed

EXHIBIT “A” TO

EXECUTIVE EMPLOYMENT AGREEMENT

BETWEEN GREEN BANCORP, INC. AND TERRY S. EARLEY

	Employee Name:	
Terry S. Earley

	Company Position:	
Executive Vice President and Chief Financial Officer

	Location:	
Houston, Texas

	Reporting Relationship:	
President of Green Bancorp, Inc.

	Annual Base Salary:	
$300,000 annually, paid twice monthly on the 15th and the last day of the month.

	Monthly Base Salary:	
$25,000 monthly

	Incentive:	
Year-end cash bonus in accordance with the terms of the Executive Incentive Plan, less any applicable taxes and withholdings.  Bonus determination shall be at the sole discretion of the Compensation Committee of the Board of Directors.

	Stock Options:	
Subject to approval by the Board of Directors, Employee will be granted 70,000 stock options and 10,000 restricted stock units under the terms of the 2014 Plan, in each case, subject to vesting in accordance with the terms of the 2014 Plan. Upon a Change in Control under the terms of the 2014 Plan, any and all of Employee’s unvested stock options and restricted stock units shall vest.

	Apartment Expense:	
Out-of-pocket expenses of up to $2,000 per month towards rent on an apartment located in Houston, Texas.

	Airfare and Expenses:	
Reimbursement of (i) reasonable, out-of-pocket airfare costs for up to two roundtrips per month between Houston, Texas and Raleigh, North Carolina, (ii) out-of-pocket cellular phone and data expenses of up to $100 per month, and (iii) reasonable, out-of-pocket expenses directly related to Employee’s performance of his employment duties.

	Benefits:	
Eligible for any and all benefits offered to all full-time employees.

	Paid Time Off:	
Eligible for the Paid Time Off benefits offered to all full-time officers.Exhibit 10.1

 

AGILE THERAPEUTICS, INC.
 PERFORMANCE UNIT ISSUANCE AGREEMENT

 

RECITALS

 

A.                                    The Board has adopted the Plan for the purpose of retaining the services of selected Employees, non-employee members of the Board (or the board of directors of any Parent or Subsidiary) and consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary).

 

B.                                    The Participant is to render valuable services to the Corporation (or a Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s issuance of shares of Common Stock to the Participant under the Stock Issuance Program.

 

C.                                    All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.                                      Grant of Performance Units.  The Corporation hereby awards to the Participant, as of the Award Date, a target award of the number of Performance Units specified in the Award Summary below (the “Target Award”).  Each Performance Unit represents the right to receive one share of Common Stock on the specified Issue Date if the Threshold Performance Goal (or Target Performance Goal) and other conditions in this Agreement are met.  The Target Award, the Threshold Performance Goal and Target Performance Goal, the Performance Period, the date on which shares of Common Stock may become issuable to the Participant and the remaining terms and conditions governing the Award shall be as set forth in this Agreement.

 

AWARD SUMMARY

 

	
Award Date:
    	
 
    	
[                      ]
    
	
 
    	
 
    	
 
    
	
Target Award:
    	
 
    	
                     shares of Common Stock
    
	
 
    	
 
    	
 
    
	
Threshold Performance Goal:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Target Performance Goal:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Performance Period:
    	
 
    	
The Performance Period is the period beginning on   the Award Date and ending   [                      ].
    

 

 

2.                                      Vesting.

 

(a)                                 Subject to Paragraph 5, the Participant shall vest in the Performance Units as follows (if at all):  (i) the Participant shall vest in [                      ] of the Target Award if the Threshold Performance Goal is met for the Performance Period and if the Participant remains in Service through the Issue Date; or (ii) the Participant shall vest in 100% of the Target Award if the Target Performance Goal is met for the Performance Period and if the Participant remains in Service through the Issue Date.  In no event shall the Participant earn more than 100% of the Target Award.

 

(b)                                 At the end of the Performance Period, the Plan Administrator will determine whether and to what extent the Target Performance Goal and Threshold Performance Goal have been met and the amount to be paid to the Participant with respect to the Performance Units.  Except as described in Paragraph 5 below, the Participant must be providing Service to the Corporation on the Issue Date in order for the Participant to receive payment with respect to the Performance Units.

 

3.                                      Cessation of Service.  Except as otherwise provided in Paragraph 5 below, should the Participant cease Service for any reason prior to the Issue Date, then the Performance Units will be immediately cancelled.  The Participant shall thereupon cease to have any right or entitlement to receive any shares of Common Stock under the Performance Units.

 

4.                                      Payment with Respect to Performance Units.  If the Plan Administrator determines that the conditions to payment of the Performance Units have been met as set forth in this Agreement, the Corporation shall pay to the Participant shares of Common Stock equal to the number of Performance Units to be paid according to achievement of the Threshold Performance Goal or Target Performance Goal, as applicable, in accordance with Paragraph 2, subject to the payment of all Withholding Taxes as set forth in Paragraph 9.  Payment of the shares of Common Stock shall be made (if at all) between [                      ] and [                      ], except as provided in Paragraph 5 below.

 

5.                                      Change in Control.

 

(a)                                 In the event of a Change in Control on or prior to the end of the Performance Period, the Performance Units outstanding at the time of the Change in Control will vest immediately upon the closing of the Change in Control at [                      ] of the Target Award if the Threshold Performance Goal has been met on or prior to closing of the Change in Control or at 100% of the Target Award if the Target Performance Goal has been met on or prior to the closing of the Change in Control.  The shares of Common Stock subject to those vested Performance Units will be issued immediately upon the Change in Control or as soon as administratively practicable thereafter, but in no event more than fifteen (15) business days after such closing, or will otherwise be converted into the right to receive the same consideration per share of Common Stock payable to the other shareholders of the Corporation in consummation of the Change in Control and distributed at the same time as such stockholder payments, but the distribution to the Participant shall in no event be made later than the later of (i) the close of the calendar year in which the Change in Control is effected or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the effective date of such Change in Control.

 

(b)                                 If neither the Threshold Performance Goal nor the Target Performance Goal have been met on or prior to the closing of a Change in Control, the Performance Units outstanding at the time of the Change in Control will vest immediately upon the closing of the Change in Control at 100% of the Target Award.  The shares of Common Stock subject to those vested Performance Units will be issued immediately upon the Change in Control or as soon as administratively practicable thereafter, but in no event more than fifteen (15) business days after such closing, or will otherwise be converted into the right to receive the same consideration per share of Common Stock payable to the other shareholders of the

 

 

Corporation in consummation of the Change in Control and distributed at the same time as such stockholder payments, but the distribution to the Participant shall in no event be made later than the later of (i) the close of the calendar year in which the Change in Control is effected or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the effective date of such Change in Control.

 

(c)                                  This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

6.                                      Limited Transferability.  Prior to the actual issuance of shares of Common Stock under the Award, the Participant may not transfer any interest in the Performance Units or the underlying shares of Common Stock; provided, however, any Performance Units which vest hereunder but which otherwise remain unpaid at the time of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or the laws of inheritance or to the Participant’s designated beneficiary or beneficiaries of the Award.  The Participant may also direct the Corporation to issue stock certificates for any shares of Common Stock which in fact become issuable hereunder to one or more designated Family Members or a trust established for the Participant and/or his or her Family Members.  The Participant may make a beneficiary designation or certificate directive for the Award at any time by filing the appropriate form with the Plan Administrator or its designee.

 

7.                                      Stockholder Rights.  Neither the Participant nor any other person having an interest in the Award, shall have any stockholder rights, including voting or dividend rights, with respect to the shares of Common Stock underlying the Award until the Participant becomes the record holder of those shares following their actual issuance upon the Corporation’s collection of the applicable Withholding Taxes.

 

8.                                      Adjustment in Shares.  Should any change be made to the outstanding Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, or should the value of the outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution or should there occur any merger, consolidation or other reorganization (including, without limitation, a Change in Control transaction) then equitable adjustments shall be made to the total number and/or class of securities issuable pursuant to the Award in such manner as the Plan Administrator deems appropriate in order to reflect such change and thereby prevent the dilution or enlargement of benefits hereunder.

 

9.                                      Collection of Withholding Taxes.

 

(a)                                 Upon the applicable Issue Date, the Corporation shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the applicable number of underlying shares of Common Stock, subject, however, to the Corporation’s collection of the applicable Withholding Taxes.

 

(b)                                 Until such time as the Corporation provides the Participant with written or electronic notice to the contrary, the Corporation shall collect the Withholding Taxes required to be withheld with respect to the issuance of the shares of Common Stock underlying vested Performance Units hereunder through an automatic share withholding procedure pursuant to which the Corporation will withhold, at the time of such issuance, a portion of the shares with a Fair Market Value (measured as of the issuance date) equal to the amount of those taxes (the “Share Withholding Method”); provided, however, that the amount of any shares so withheld shall not exceed the amount necessary to satisfy the Corporation’s required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes that are applicable to supplemental taxable income.

 

 

(c)                                  Should any shares of Common Stock underlying Performance Units be distributed at a time that the Share Withholding Method is not available, then the Withholding Taxes required to be withheld with respect to those shares shall be collected from the Participant through either of the following alternatives:

 

·                  the Participant’s delivery of his or her separate check payable to the Corporation in the amount of such Withholding Taxes, or

 

·                  the use of the proceeds from a next-day sale of the shares issued to the Participant, provided and only if (i) such a sale is permissible under the Corporation’s trading policies governing the sale of Common Stock, (ii) the Participant makes an irrevocable commitment, on or before the Issue Date for those shares, to effect such sale of the shares and (iii) the transaction is not otherwise deemed to constitute a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002.

 

(d)                                 Notwithstanding the provisions of subparagraphs (a) and (b) of this Paragraph 9, the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of the Performance Units (the “Employment Taxes”) shall in all events be collected from the Participant no later than the last business day of the calendar year in which the Performance Units vest hereunder.  Accordingly, to the extent the Issue Date for one or more vested Performance Units is to occur in a year subsequent to the calendar year in which those Performance Units vest, the Participant shall, on or before the last business day of the calendar year in which the Performance Units vest, deliver to the Corporation a check payable to its order in the dollar amount equal to the Employment Taxes required to be withheld with respect to those Performance Units.  The provisions of this Paragraph 9(d) shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Code Section 3121(v).

 

(e)                                  Except as otherwise provided in Paragraph 5, the settlement of all Performance Units which vest under the Award shall be made solely in shares of Common Stock.  In no event, however, shall any fractional shares be issued.  Accordingly, the total number of shares of Common Stock to be issued pursuant to the Award shall, to the extent necessary, be rounded down to the next whole share in order to avoid the issuance of a fractional share.

 

10.                               Compliance with Laws and Regulations.  The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and the Participant with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange on which the Common Stock may be listed for trading at the time of such issuance.

 

11.                               Notices.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices.  Except to the extent electronic notice is expressly authorized hereunder, any notice required to be given or delivered to the Participant shall be in writing and addressed to the Participant at the address indicated below the Participant’s signature line on this Agreement.  All notices shall be deemed effective upon personal delivery (or electronic delivery to the extent authorized hereunder) or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

 

12.                               Successors and Assigns.  Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and the Participant, the Participant’s assigns, the legal representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the Award designated by the Participant.

 

 

13.                               Construction.  This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan.  All decisions of the Committee and Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.

 

14.                               Code Section 409A.  It is the intention of the parties that the provisions of this Agreement shall comply with the requirements of the short-term deferral exception to Section 409A of the Code and Treasury Regulations Section 1.409A-1(b)(4).  Accordingly, to the extent there is any ambiguity as to whether one or more provisions of this Agreement would otherwise contravene the requirements or limitations of Code Section 409A applicable to such short-term deferral exception, then those provisions shall be interpreted and applied in a manner that does not result in a violation of the requirements or limitations of Code Section 409A and the Treasury Regulations thereunder that apply to such exception.

 

15.                               Governing Law.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to that State’s conflict-of-laws rules.

 

16.                               Employment at Will.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate the Participant’s Service at any time for any reason, with or without cause.

 

17.                               Recoupment.  The Award shall be subject to any clawback, recoupment or other similar policy adopted by the Board as in effect from time to time, and the Award and any cash, shares of Common Stock or other property or amounts due, paid or issued to the Participant shall be subject to the terms of such policy, as in effect from time to time.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.

 

	
 
    	
AGILE   THERAPEUTICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[ 
    	
],   PARTICIPANT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
				

 

 

APPENDIX A

 

DEFINITIONS

 

The following definitions shall be in effect under the Agreement:

 

A.                                    Agreement shall mean this Performance Unit Issuance Agreement.

 

B.                                    Award shall mean the award of Performance Units made to the Participant pursuant to the terms of the Agreement.

 

C.                                    Award Date shall mean the date the Performance Units are awarded to the Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.

 

D.                                    Board shall mean the Corporation’s Board of Directors.

 

E.                                     Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:

 

(i)                                     the closing of a merger, consolidation or other reorganization approved by the Corporation’s stockholders, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately prior to such transaction,

 

(ii)                                  the closing of a stockholder-approved sale, transfer or other disposition (including in whole or in part through one or more licensing arrangements) of all or substantially all of the Corporation’s assets,

 

(iii)                               the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Corporation) acquires directly or indirectly beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Corporation’s securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Corporation or the acquisition of outstanding securities held by one or more of the Corporation’s existing stockholders, or

 

(iv)                              a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.

 

 

F.                                      Code shall mean the Internal Revenue Code of 1986, as amended.

 

G.                                    Common Stock shall mean the Corporation’s common stock.

 

H.                                   Corporation shall mean Agile Therapeutics, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of Agile Therapeutics, Inc. which has by appropriate action assumed the Plan.

 

I.                                        Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary, whether now existing or subsequently established), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

 

J.                                        Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

 

(i)                                     If the Common Stock is at the time traded on the Nasdaq Global or Global Select Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers for that particular Stock Exchange and published in The Wall Street Journal.  If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

 

(ii)                                  If the Common Stock is at the time listed on any other Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal.  If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

 

K.                                    Family Member shall mean any of the following members of the Participant’s family: any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

 

L.                                     Issue Date shall mean the date on which shares of Common Stock underlying the Performance Units are paid to the Participant in accordance with Paragraph 4 or 5 of the Agreement, as applicable.

 

M.                                 1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

N.                                    Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one or more of the other corporations in such chain.

 

O.                                    Participant shall mean the person to whom the Award is made pursuant to the Agreement.

 

P.                                      Performance Period shall mean the performance period set forth in Paragraph 1.

 

 

Q.                                    Performance Unit shall mean a hypothetical unit that represents the value of one share of Common Stock.

 

R.                                    Plan shall mean the Corporation’s 2014 Incentive Compensation Plan.

 

S.                                      Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as administrator of the Plan.

 

T.                                     Service shall mean the Participant’s performance of services for the Corporation (or any Parent or Subsidiary, whether now existing or subsequently established) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor.  Service shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however, that except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporation’s written policy on leaves of absence, no Service credit shall be given for vesting purposes for any period the Participant is on a leave of absence.

 

U.                                    Stock Exchange shall mean the Nasdaq Capital, Global or Global Select Market, the NYSE MKT, or the New York Stock Exchange.

 

V.                                    Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

W.                                 Target Performance Goal shall mean the performance goal set forth in Paragraph 1 that must be met in order for the Participant to be eligible to receive payout at 100% of the Target Award.

 

X.                                    Threshold Performance Goal shall mean the performance goal set forth in Paragraph 1 that must be met in order for the Participant to be eligible to receive payout at [                      ] of the Target Award.

 

Y.                                    Withholding Taxes shall mean the federal, state and local income and employment taxes required to be withheld by the Corporation in connection with the vesting and concurrent issuance of the shares of Common Stock under the Award.

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