Document:

exv10w4

 

Exhibit 10.4

THE SPECTRANETICS CORPORATION

2006 INCENTIVE AWARD PLAN

RESTRICTED STOCK AWARD GRANT NOTICE AND

RESTRICTED STOCK AWARD AGREEMENT

     The Spectranetics Corporation, a Delaware corporation (the “Company”), pursuant to its 2006
Incentive Award Plan (the “Plan”), hereby grants to the individual listed below (“Participant”),
the number of shares of the Company’s Common Stock set forth below (the “Shares”). This Restricted
Stock Award is subject to all of the terms and conditions as set forth herein and in the Restricted
Stock Award Agreement attached hereto as Exhibit A (the “Restricted Stock Agreement”)
(including without limitation the Restrictions on the Shares set forth in the Restricted Stock
Agreement) and the Plan, each of which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant
Notice and the Restricted Stock Agreement.

	 	 	 	 	 
	Participant:

	 	 	 	 
	 	 	 	 	 
	 
	Grant Date:

	 	 	 	 
	 	 	 	 	 
	 
	Total Number of Shares of
Restricted Stock:

	 	shares
 

	 	 
	 
	Purchase Price:

	 	$ 
 

	 	 
	 
	Vesting Schedule:

	 	[To be specified in individual Grant Notices.]	 	 

     By his or her signature and the Company’s signature below, Participant agrees to be bound by
the terms and conditions of the Plan, the Restricted Stock Agreement and this Grant Notice.
Participant has reviewed the Restricted Stock Agreement, the Plan and this Grant Notice in their
entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant
Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Agreement
and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this
Grant Notice or the Restricted Stock Agreement. If Participant is married, his or her spouse has
signed the Consent of Spouse attached to this Grant Notice as Exhibit B.

	 	 	 	 	 	 	 	 	 
	THE SPECTRANETICS CORPORATION:	 	PARTICIPANT:
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	Print Name:

	 	 

	 	Print Name:
	 	 

	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Address:

	 	 	 	Address:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

TO RESTRICTED STOCK AWARD GRANT NOTICE

THE SPECTRANETICS CORPORATION RESTRICTED STOCK AWARD AGREEMENT

     Pursuant to the Restricted Stock Award Grant Notice (the “Grant Notice”) to which this
Restricted Stock Award Agreement (the “Agreement”) is attached, The Spectranetics Corporation, a
Delaware corporation (the “Company”), has granted to Participant the right to purchase the number
of shares of Restricted Stock under the Company’s 2006 Incentive Award Plan (as amended from time
to time, the “Plan”) as set forth in the Grant Notice.

ARTICLE I.

GENERAL

     1.1 Definitions. All capitalized terms used in this Agreement without definition
shall have the meanings ascribed in the Plan and the Grant Notice.

     1.2 Incorporation of Terms of Plan. The Award is subject to the terms and conditions
of the Plan which are incorporated herein by reference. In the event of any inconsistency between
the Plan and this Agreement, the terms of the Plan shall control.

ARTICLE II.

AWARD OF RESTRICTED STOCK

     2.1 Award of Restricted Stock.

          (a) Award. In consideration of the Participant’s agreement to remain in the service
or employ of the Company or one of its Subsidiaries, and for other good and valuable consideration,
the Company issues to the Participant the Award described in this Agreement (the “Award”). The
number of shares of Restricted Stock (the “Shares”) subject to the Award is set forth in the Grant
Notice. The Participant is an Employee, Director or other Service Provider.

          (b) Purchase Price; Book Entry Form. The purchase price of the Shares is set forth on
the Grant Notice. At the sole discretion of the Committee, the Shares will be issued in either (i)
uncertificated form, with the Shares recorded in the name of the Participant in the books and
records of the Company’s transfer agent with appropriate notations to the extent that the Shares
remain subject to the Restrictions (as defined below); or (ii) certificate form pursuant to the
terms of Sections 2.1(c) and (d).

          (c) Legend. Certificates representing Shares issued pursuant to this Agreement shall,
until all restrictions on transfer imposed pursuant to this Agreement lapse or shall have been
removed and new certificates are issued, bear the following legend (or such other legend as shall
be determined by the Committee):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING
REQUIREMENTS AND MAY BE SUBJECT TO FORFEITURE UNDER THE TERMS OF THAT CERTAIN
RESTRICTED STOCK AWARD AGREEMENT, DATED [                                                             , 200      
              ], BY AND BETWEEN THE
SPECTRANETICS CORPORATION AND THE REGISTERED OWNER OF SUCH

A-1

 

SHARES, AND SUCH SHARES MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY
CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.”

          (d) Escrow. The Secretary of the Company or such other escrow holder as the Committee
may appoint may retain physical custody of the certificates representing the Shares until all of
the restrictions on transfer imposed pursuant to this Agreement lapse or shall have been removed.
In such event the Participant shall not retain physical custody of any certificates representing
unvested Shares issued to the Participant.

     2.2 Restrictions.

          (a) Repurchase of Shares Subject to Restrictions. In the event that the Participant
ceases to be an Employee, Director or other Service Provider for any reason, the Company shall have
the right to repurchase from the Participant any or all Shares then subject to the Restrictions at
a cash price per Share equal to the price paid by the Participant for such Shares. For purposes of
this Agreement, “Restrictions” shall mean the restrictions on sale or other transfer set forth in
Section 3.1 and the exposure to repurchase set forth in this Section 2.2(a).

          (b) Vesting and Lapse of Restrictions. Subject to Sections 2.2(a) and 2.2(c), the
Award shall vest and the Restrictions shall lapse in accordance with the vesting schedule set forth
on the Grant Notice.

          (c) Acceleration of Vesting. Notwithstanding Sections 2.2(a) and 2.2(b), pursuant to
Section 11.2 of the Plan, the Award shall become fully vested and all Restrictions applicable to
such Award shall lapse in the event of a Change in Control in connection with which the successor
corporation does not assume the Award or substitute an equivalent right for the Award. Should the
successor corporation assume the Award or substitute an equivalent right, then no such acceleration
shall apply.

          (d) Tax Withholding; Conditions to Issuance of Certificates. Notwithstanding any
other provision of this Agreement (including without limitation Section 2.1(b)):

               (i) No Shares shall be recorded in the name of the Participant in the books and records of the
Company’s transfer agent and no new certificate shall be delivered to the Participant or his legal
representative unless and until the Participant or his legal representative shall have paid to the
Company the full amount of all federal and state withholding or other taxes applicable to the
taxable income of Participant resulting from the grant of Shares or the lapse or removal of the
Restrictions.

               (ii) The Company shall not be required to record any Shares in the name of the Participant in
the books and records of the Company’s transfer agent or issue or deliver any certificate or
certificates for any Shares prior to the fulfillment of all of the following conditions: (A) the
admission of the Shares to listing on all stock exchanges on which the Company’s Common Stock is
then listed, (B) the completion of any registration or other qualification of the Shares under any
state or federal law or under rulings or regulations of the Securities and Exchange Commission or
other governmental regulatory body, which the Committee shall, in its sole and absolute discretion,
deem necessary and advisable, (C) the obtaining of any approval or other clearance from any state
or federal governmental agency that the Committee shall, in its absolute discretion, determine to
be necessary or advisable and (D) the lapse of any such reasonable period of time following the
date the Restrictions lapse as the Committee may from time to time establish for reasons of
administrative convenience.

A-2

 

ARTICLE III.

OTHER PROVISIONS

     3.1 Restricted Stock Not Transferable. No Shares that are subject to the Restrictions
or any interest or right therein or part thereof shall be liable for the debts, contracts or
engagements of the Participant or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided, however, that this Section
3.1 notwithstanding, with the consent of the Committee, the Shares may be transferred to certain
persons or entities related to Participant, including but not limited to members of Participant’s
family, charitable institutions or trusts or other entities whose beneficiaries or beneficial
owners are members of Participant’s family and/or charitable institutions, or to such other persons
or entities as may be expressly approved by the Committee, pursuant to any such conditions and
procedures the Committee may require. Notwithstanding the foregoing, in no event shall the Award
be transferable by the Participant to a third party (other than the Company) for consideration.

     3.2 Rights as Stockholder. Except as otherwise provided herein, upon the Grant Date
the Participant shall have all the rights of a stockholder with respect to the Shares, subject to
the Restrictions herein, including the right to vote the Shares and the right to receive any cash
or stock dividends paid to or made with respect to the Shares. 

     3.3 Not a Contract of Employment. Nothing in this Agreement or in the Plan shall
confer upon the Participant any right to continue to serve as an employee or other service provider
of the Company or any of its Subsidiaries.

     3.4 Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the terms of this
Agreement regardless of the law that might be applied under principles of conflicts of laws.

     3.5 Conformity to Securities Laws. The Participant acknowledges that the Plan and
this Agreement are intended to conform to the extent necessary with all provisions of the
Securities Act of 1933, as amended, and the Exchange Act, and any and all regulations and rules
promulgated thereunder by the Securities and Exchange Commission, including without limitation Rule
16b-3 under the Exchange Act. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Awards are granted, only in such a manner as to conform to such laws, rules
and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be
deemed amended to the extent necessary to conform to such laws, rules and regulations.

     3.6 Amendment, Suspension and Termination. To the extent permitted by the Plan, this
Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any
time or from time to time by the Committee or the Board, provided, that, except as may otherwise be
provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall
adversely effect the Award in any material way without the prior written consent of the
Participant.

     3.7 Notices. Notices required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the United States mail
by certified mail, with postage and fees prepaid, addressed to the Participant to his address shown
in the Company records, and to the Company at its principal executive office.

A-3

 

     3.8 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,
this Agreement shall be binding upon Participant and his or her heirs, executors, administrators,
successors and assigns.

A-4

 

EXHIBIT B

TO RESTRICTED STOCK AWARD GRANT NOTICE

CONSENT OF SPOUSE

     I,                                         , spouse of                         
                , have read and approve the foregoing
Agreement. In consideration of issuing to my spouse the shares of the common stock of The
Spectranetics Corporation set forth in the Agreement, I hereby appoint my spouse as my
attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound
by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares
of the common stock of The Spectranetics Corporation issued pursuant thereto under the community
property laws or similar laws relating to marital property in effect in the state of our residence
as of the date of the signing of the foregoing Agreement.

	 	 	 	 	 	 	 
	Dated:                     ,                     

	 	 	 	 
 

	 	 
	 

	 	 	 	Signature of Spouse	 	 

B-120th  December, 2005

 

Mr. John Scott

 

 

LETTER OF ENGAGEMENT

 

This letter outlines the terms and conditions relating to your employment with Caspian Services Inc., further detailed in the Employment Agreement attached hereto.

 

	
            1.
 	
            Position:  Chief Operating Officer
 

 

	
            2.
 	
            The position reports to:  Chief Executive Officer
 

 

	
            3.
 	
            The Effective Date (start date):  20th March 2006
 

 

	
            4.
 	
            The engagement term is unlimited. 
 

 

	
            5.
 	
            The post is based in Almaty (place of assignment), Kazakhstan, but extensive travel within the region and overseas may be required.
 

 

	
            6.
 	
            Home Base – UK.
 

 

	
            7.
 	
            Salary US $15,000.00 (fifteen thousand) per month equating to $180,000 per annum.
 

 

	
            8.
 	
            Republic of Kazakhstan (excludes any home base taxes or social payments) income and social taxes will be paid by the Company.
 

 

	
            9.
 	
            Feeding and accommodation costs whilst on work assignment outside Almaty will be borne by the Company. 
 

 

	
            10.
 	
            Housing or appropriate housing allowance will be provided by the Company. The allowance will not exceed $5,000 per month and be fully inclusive: utilities, satellite TV, domestic staff, inter alia.
 

 

	
            11.
 	
            The Company will be responsible for relocation costs, namely shipping one shipment of personal effects from Dubai to Almaty and on retirement, resignation or termination one shipment of personal effects from Almaty to France. The Company will provide additional 
 

 

Page 1 of 16

 

furniture for Almaty rented apartment up to $15,000 in value. The furniture will remain the property of the Company.

 

	
            12.
 	
            The Company will provide a dedicated vehicle and driver. 
 

 

	
            13.
 	
            School fees will be borne by the Company:  100% fees for Kazakhstan based schooling. 80% fees for foreign based schooling.
 

 

	
            14.
 	
            30 days vacation per annum. Company will provide two business class family round trip airline tickets per annum. 
 

 

	
            15.
 	
            BUPA International family medical insurance will be provided by the Company. The policy excludes the US.
 

 

	
            16.
 	
            Stock option grant:
 

 

The number of options issued annually (on the anniversary of the Effective Date) to Executive Employee shall be equal to the amount of the Executive Employee’s annual salary divided by average bid price of the Company’s common stock, on whichever exchange the Company’s common stock is then trading on, for the five trading day period immediately preceding the anniversary date of employment with the Company.   However, the number of stock options issued shall not be less than thirty-six-thousand (36,000). The exercise (or grant) price of the options shall be equal to the average bid price of the Company’s common stock for the five trading day period immediately preceding the anniversary date of  employment with the Company. 

 

Options vest over 3 years, exercisable within 5 years of full vesting.

 

	
            17.
 	
            At the Company’s discretion you may also be considered for other discretionary stock option grants. 
 

 

 

Yours sincerely,

For and behalf of Caspian Services Inc.

 

Page 2 of 16

 

 

Employment Agreement

 

Page 3 of 16

 

LETTER OF ENGAGEMENT                                          
                                          
                                          
              1

 

	
             
 	
            Form of Agreement
 	
            5
 

 

	
             
 	
            Executive Employee Employment Agreement
 	
            5
 

 

	
             
 	
            Absences
 	
            5
 

 

	
             
 	
            Compassionate Leave
 	
            5
 

 

	
             
 	
            Medical Leave
 	
            5
 

 

	
             
 	
            Family Status
 	
            6
 

 

	
             
 	
            Married Status
 	
            6
 

 

	
             
 	
            Dependent Children
 	
            6
 

 

	
             
 	
            Children’s Educational Assistance
 	
            6
 

 

	
             
 	
            Eligibility
 	
            6
 

 

	
             
 	
            Educational Assistance
 	
            7
 

 

	
             
 	
            Housing and Transportation
 	
            7
 

 

	
             
 	
            Remuneration
 	
            7
 

 

	
             
 	
            Currency of Payment
 	
            7
 

 

	
             
 	
            Health Care Plan
 	
            8
 

 

	
             
 	
            Insurance Plans
 	
            9
 

 

	
             
 	
            Vacation
 	
            9
 

 

	
             
 	
            General
 	
            9
 

 

	
             
 	
            Vacation Days Accrual
 	
            9
 

 

	
             
 	
            Vacation Salary
 	
            9
 

 

	
             
 	
            Vacation Travel Entitlement
 	
            10
 

 

	
             
 	
            Relocation
 	
            11
 

 

	
             
 	
            Temporary living expenses
 	
            11
 

 

	
             
 	
            Relocation
 	
            11
 

 

	
             
 	
            Departures
 	
            11
 

 

	
             
 	
            Business Travel & Related Expenses
 	
            11
 

 

	
             
 	
            General
 	
            12
 

 

	
             
 	
            Travel Management
 	
            12
 

 

	
             
 	
            Travel Class
 	
            12
 

 

	
             
 	
            Miscellaneous
 	
            12
 

 

	
             
 	
            Entertainment
 	
            12
 

 

	
             
 	
            Expense Reports
 	
            12
 

 

	
             
 	
            Legal Fees and Governing Law
 	
            13
 

 

	
             
 	
            Legal Fees
 	
            13
 

 

	
             
 	
            Governing Law
 	
            13
 

 

	
             
 	
            Arbitration
 	
            13
 

 

	
             
 	
            Severance Plan and Stock Options Plan
 	
            13
 

 

	
             
 	
            Executive Employee Severance Agreement
 	
            13
 

 

	
             
 	
            Stock Option Grant
 	
            15
 

 

Page 4 of 16

 

Form of Agreement

 

Executive Employee Employment Agreement

 

This Executive Employee Employment Agreement, is entered into by and between Caspian Services Incorporated (“Company”) incorporated under the laws of the state of Nevada on July 14, 1998 and Mr. John Scott (“Executive Employee”), effective the 20th day of March 2006 (the “Effective Date”).

 

WHEREAS, Company is desirous of employing Executive Employee pursuant to the terms and conditions and for the consideration set forth in this Agreement, and Executive Employee is desirous of entering the employ of Company pursuant to such terms and conditions and for such consideration.

 

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

 

Absences

 

Compassionate Leave

Executive Employee

In case of death of a direct relative (spouse, child, parent or a brother or sister) of the Executive Employee, Compassionate Leave of up to seven days is granted. Remuneration continues during this leave, and travel expenses (travel class as per vacation) for the Executive Employee to attend the funeral are reimbursed by Company.

 

Spouse

In case of the death of a direct relative (parent, or a brother or sister) of the Executive Employee’s spouse, travel expenses (travel class as per vacation) for the spouse to attend the funeral are reimbursed by Company.

 

Medical Leave

Any absence from work arising from temporary incapacity due to an accident or illness is considered as medical leave.

Under this condition, the Executive Employee will receive:

• 100% of remuneration for a maximum period of six months from the day of interruption of work,

• 50% of remuneration for a maximum of six additional months.

 

In the event that employer liability insurance does not cover in full the above specified twelve month remuneration period, the Company will compensate the shortfall. After twelve months of continuous incapacity, the Company Insurance Plan, if any, becomes operative.

 

Successive periods of medical leave separated by less than six months and occurring within a twelve month period are added together and considered as one continuous period of incapacity.

 

Page 5 of 16

 

 

If required and when applicable, in-country Company accommodation continues to be provided for the family.

 

Vacation does not accrue during the absence from work.

 

A medical certificate is required as an evidence of the Executive Employee’s incapacity. The Company may require the Executive Employee to have a medical examination at any time.

 

Family Status

 

The Family Status of the Executive Employee is defined as “Married”. This can be further categorized by the number of “Dependent Children”, if any.

 

The Family Status is used in connection with policies and plans pertaining to housing, transportation, health care, educational assistance, and vacation travel.

 

Married Status

“Married Status” means the Executive Employee is legally married, and the spouse and family live at the place of assignment.

 

Dependent Children

A “Dependent Child” is defined as one who is unmarried, unemployed, in the legal custody of the Executive Employee, under nineteen years of age and who lives with the Executive Employee in a customary parent-child relationship.

 

In other cases, such as divorce or re-marriage, the Executive Employee is encouraged to expose his family situation to his/her Executive Employee Motivation Manager who will consider each case on its own merits.

 

In all cases, documentary evidence, such as birth certificates, legal custody agreements, proof of alimony payments, etc., are necessary for reimbursement of any expenses.

 

Children’s Educational Assistance

 

Eligibility

The Company participates in schooling expenses under the following conditions:

 

Reimbursement applies to children in the legal custody of Executive Employees under Married Status assigned outside their country of origin.

 

Page 6 of 16

 

Reimbursement applies to Dependent Children. It covers that part of the school year following the child’s third birthday and is extended until the end of the school year in which the child reaches eighteen.

 

Educational Assistance

Two cases are considered depending on the availability and the quality of the local schooling and the age of the child:

 

1: Schooling facilities available and deemed adequate by Executive Employee at place of assignment.

 

The Executive Employee’s child is expected to attend these schools and the Company will reimburse full (100%) all tuition and registration fees. Not reimbursable are schoolbooks, school insurance, uniforms and transportation costs.

 

2 : Schooling facilities not available or deemed inadequate at place of assignment by Executive Employee.

 

Executive Employee is authorized to send his/her children outside the place of assignment. In that instance, he/she will be reimbursed as per below:

 

- Eighty percent (80%) of the cost of tuition and registration fees. Not reimbursable are school insurance, uniforms, schoolbooks the indirect school expenses (room and board).

 

- one round-trip airfare, per calendar year, per child, at the most economic rate, between the school and the Executive Employee’s place of assignment, provided the trip is actually taken. This trip is in addition to the travel entitlement under “vacation” policy.

 

Housing and Transportation

 

The Company provides an allowance to Executive Employee to secure suitable and appropriate accommodation for the Executive Employee and his/her immediate family. The allowance will not exceed $5,000 per month and be fully inclusive: utilities, satellite TV, domestic staff, inter alia.

The allowance will be reviewed by Company and Executive Employee for appropriateness as and when the housing rental market or assignment location changes.

 

The Company will provide additional furniture for the rented apartment at the assigned location up to $15,000 in value. The furniture will remain the property of the Company.

 

Company will provide a dedicated driver and suitable vehicle for the term of employment.

 

Remuneration

 

Page 7 of 16

 

Currency of Payment

 

The salary for Executive Employee is expressed, and paid as below, in US dollars through a dollar transfer according to the Executive Employee’s written instructions.

 

Salary is US $15,000.00 (fifteen thousand) per month, equating to $180,000 (one hundred and eighty) per annum.

 

This amount is NET. The Republic of Kazakhstan (excludes any home base taxes or social payments) income and social taxes will be paid by the Company.

 

Executive Employee’s base salary may thereafter be increased from time to time with the approval of the Board of Directors or its delegate, as applicable. Such increased base salary shall become the minimum base salary under this Agreement and may not be decreased thereafter without the written consent of Executive Employee.

 

Feeding and accommodation costs whilst on work assignment outside place of assignment will be borne by the Company.

 

While  employed  by  Company,   Executive Employee  shall  be  allowed  to participate,  on the same  basis  generally  as  other  employees  of Company,  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  Company to all or  substantially  all of Company’s  similarly situated employees. Such benefits, plans, and programs may include, without limitation, medical, health, and dental care, life insurance, disability protection, and qualified and non-qualified retirement plans. Except as specifically  provided herein,  nothing in this Agreement is to be  construed  or  interpreted  to  increase  or  alter  in any way the  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. While employed by Company, Executive Employee  shall be  eligible  to  receive  awards  under any plan provided, however, that the foregoing shall not be construed as a guarantee with respect to the type,  amount or frequency of such awards, if any, such decisions being  solely  within  the  discretion  of  the  Company or its delegate, as applicable.

 

Health Care Plan

 

BUPA International or equivalent.

 

The Health Care Plan covers the Executive Employees and their spouses and dependent children.

The Company pays the full cost of the program.

 

The Plan provides comprehensive medical, dental, and vision care coverage. It encourages prevention and offers the possibility of medical evacuation and assistance services, 365 days a year, including off-duty and vacation periods. Coverage is worldwide, except USA, and there are no restrictions on the choice of doctors, laboratories, clinics, or hospitals as long as dealing with recognized medical practitioners and institutions, which are pre-approved by the health care provider.

 

Page 8 of 16

 

Coverage begins on the Effective Date of hire. Executive Employees and their spouses and dependent children are covered under this Plan from the first day of their employment with the Company until 180 days after the day of termination or until the day they start working for another Company which ever occurs first.

 

Eligible dependents include spouse, dependent unmarried children up to age eighteen. There is no eligibility age limit for children who are physically or mentally incapacitated before their eighteenth birthday. The Plan or Company shall pay for a check-up a year for each insured person.

 

Insurance Plans

 

The Insurance Plan is designed to help Executive Employees and their dependents meet the financial difficulties which could result from their permanent (partial or total) disability, total work incapacity, or death. 

 

Where the Company does not provide a dedicated Company Insurance Plan, the Executive Employee will have the option to subscribe to a private insurance policy to which the Company shall refund 50% of the cost of premiums of such insurance plan.

 

Vacation

 

Vacation is intended to provide Executive Employee with the opportunity to take paid leave away from the place of assignment.

 

General

Management schedules vacation in advance, taking into account both the Executive Employee’s wishes and work requirements.

 

Vacation starts on the first day the Executive Employee is not available for work and ends on the day prior to returning to work. During this period any normal weekend days (any Saturday and Sunday) are not included as vacation.

 

At the close of the calendar year Company and Executive Employee will agree whether to pay off any unused vacation days or to roll over the amount of days into to following year. Payment is at the discretion of the Company.

 

Vacation Days Accrual

 

Vacation days are accrued as follows:

2.5 days per calendar month

 

Page 9 of 16

 

It is expected that Executive Employees will return to their home country for vacation once during a calendar year. Such a trip may require a significant amount of travel time. Consequently, two travel days are allowed - one for travel from the assigned location to the home country, and one for travel from the home country to the assignment location. The following rules govern the use of these two travel days:

- a maximum of 2 days is allowed per calendar year

- both days must be used on the same vacation trip

Vacation Salary

 

Vacation salary is paid at the current salary.

In case of termination of employment, prorated vacation is computed and paid in the Executive Employee’s final paycheck.

 

Vacation Travel Entitlement

 

The Vacation Travel Entitlement is intended to cover the travel costs when an Executive Employee, his/her spouse and Dependent children return to the home country of the Executive Employee for vacation. Although the entitlement is computed on the basis of travel to the Executive Employee’s country of origin, it may be used for travel to any destination.

 

Period of validity:

Vacation travel entitlement will be assigned for the period beginning January 1 and ending December 31. The entitlement has to be used within the allotted period. The vacation travel entitlement cannot be carried over to the next calendar year. Any outstanding entitlement at year-end is lost unless the Executive Employee is on vacation during the change of the calendar year, in which case, upon return from vacation, expenses may be claimed against outstanding entitlement from the previous year.

 

Computation of Entitlement:

The allocated entitlement amount is based on the cost of two full fare business class round trip air tickets per person from the assignment location to the home base origin (as specified in the letter of employment) of the Executive Employee as quoted by IATA, and confirmed by the Company (location closest international airport to city of origin closest international airport). The Executive Employee’s spouse and Dependent children residing in the assigned location are included in the computation. In some cases, a Dependent Child (Children) may not be residing in the assigned location because schooling facilities are either not available or deemed inadequate at place of assignment. In these cases, the entitlement for such a child (children) will be computed as though they were residing in the assigned location.

 

For children, airlines quote the cost for the aforementioned ticket as follows:

-under 2 years of age charged 10% of adult rate,

-2-12 years of age charged 50% of adult rate 

- above 12 years of age charged at adult rate.

 

The Company will maintain the same rules as the airlines.

If a portion of the trip requires ground travel, then this will be computed as first class train fare (“single” berth), or other equivalent transport.

 

Page 10 of 16

 

 

Reimbursable Expenses

Any travel expenses related to vacation incurred by the Executive Employee, his/her spouse and dependent children may be claimed up to the allocated entitlement. Reimbursable expenses are:

- Tickets for public transport - planes, trains, buses, etc.

- Excess luggage,

 

Miscellaneous travel expenses such as taxis, airport taxes, or meals and single night of hotel for transit purposes are reimbursed through expense reports, provided they are justified, reasonable and actually incurred. All other expenses are not reimbursable.

 

Reimbursement procedure

The Executive Employee prepares an expense report respecting the following:

- expenses should be supported by an invoice or receipt. For public transport, only

- tickets must be provided.

- expenses should be less than three months old.

- although multiple trips may be made, no more than 2 expense reports may be

- submitted each year.

 

Resignation / Termination

In the case of resignation or termination, all outstanding vacation travel entitlements are lost. If the Executive Employee resigns while on vacation, expenses will be reimbursed up to a one-way economy ticket from place of assignment to City of Origin.

 

DAYS OF REST

All Executive Employees are entitled to at least eight Days of Rest per month. In a “normal” work-leisure cycle, this would be the local days off of the week. It is intended that as far as possible, Days of Rest be taken in this “normal” fashion, i.e. on a weekly basis. 

 

Relocation

 

This section applies to the Executive Employee relocating to the assignment location.

 

Temporary living expenses

The Company will reimburse, upon presentation of supporting documents, temporary living expenses (rental car, food and lodging) for Executive Employees and their families while locating and settling into adequate housing in their new assignment.

 

Relocation

The Company pays for the Executive Employee, his/her spouse and Dependent children to travel to the assigned location. The Company also pays for the shipping of personal effects to the assignment location.

 

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Departures

Redundancy / Termination

The Company pays for the Executive Employee, his/her spouse and Dependent children to return to the Executive Employee’s country of origin as per the rules stated in this Section under ‘Vacation’. The Company also pays for the shipping of personal effects back to the Executive Employee’s country of origin.

 

Lease cancellation

The Company will reimburse costs arising from the cancellation of an unexpired lease agreement on any rented accommodation at the sending location. 

 

Business Travel & Related Expenses

 

This section applies to travel other than that pertaining to vacation or relocation. 

 

General

During the Term, Company shall pay or reimburse Executive Employee for all actual, reasonable and customary expenses incurred by Executive Employee in the course of his  employment;   including,   but  not  limited  to,  travel,  entertainment, subscriptions  and dues associated with Executive Employee’s  membership in  professional, business and civic organizations;  provided that such expenses are incurred and accounted for in accordance with Company’s applicable policies and procedures.

 

Travel Management

All business travel must be coordinated and approved through the Executive Employee’s direct Manager.

 

Travel Class

Air

 

International outside flights

< 8 hours Economy class (i.e. to/from Europe), unless approved for upgrade by CEO

> 8 hours Business class (i.e. Transatlantic)

 

Domestic flights – Business Class

 

Rail

First class, and, when applicable, a single sleeping berth.

 

Page 12 of 16

 

Miscellaneous

Additional travel expenses such as taxis, airport fees, hotel and meals between connecting flights are refunded by the Company provided they are actually incurred and reasonable.

 

Entertainment

The main purpose of entertainment is to help improve customer relations. For reimbursement of entertainment expenses, name, Company affiliation, job title and the purpose of the business entertainment should identify the guest.

 

Expense Reports

All requests for the reimbursement of expenses, whatever their nature, must be made on expense reports.

The Executive Employee prepares an expense report respecting the following:

- expenses should be supported by an invoice or receipt;

- expenses should be less than three months old

Expenses are reimbursed in US Dollars.

 

Legal Fees and Governing Law

Legal Fees

In the event of any dispute, each party shall bear without limitation its own legal costs unless otherwise awarded in a ruling by a competent court or tribunal. 

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of England, Company and Executive Employee agree that all disputes between the parties shall be litigated only therein.

 

Arbitration 

Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in England, or in such other location as may be agreed to by Company and Executive Employee.

 

Severance Plan and Stock Options Plan

 

The Deferred Benefits package consists of the following plans:

- Severance Plans

- Stock Option Plan

 

Page 13 of 16

 

Executive Employee Severance Agreement 

 

The Executive Employee shall be eligible for termination compensation and benefits described below terminated under the following conditions: 

 

(a) The Executive Employee’s employment is Involuntarily Terminated or Voluntarily Terminated; 

 

(b) A Change in Control occurs with the result that the Executive Employee’s employment is Involuntarily or Voluntarily Terminated within thirty six (36) months following the date of the Change in Control; 

 

(c) A Change in Control occurs with the result that the Executive Employee’s employment is Involuntarily or Voluntarily Terminated within six (6) months prior to the date of the Change in Control; or 

 

The Executive Employee shall not be eligible for the termination compensation and benefits described below terminated under the following conditions: 

 

	
             
 	
            (a)
 	
            The Executive Employee’s employment is Terminated for Cause
 

 

(b)  The Executive Employee Resigns, except for reasons detailed under Voluntary Termination.  

 

Benefits Upon Termination. If the Executive Employee becomes eligible for benefits under the above section, the Company shall pay or provide to the Executive Employee the following compensation and benefits: 

 

(a) Salary. The Executive Employee will continue to receive his current salary for the twenty four (24) month period following the Executive Employee’s date of termination in the same manner as it was being paid as of the date of termination. For purposes hereof, the Executive Employee’s “current salary” shall be the highest rate in effect during the twelve-month period prior to the Executive Employee’s termination. 

 

(b) Stock Option Grant. The Executive Employee shall continue to participate in the stock option grant during the twenty four (24) month period following the Executive Employee’s date of termination unless the Executive Employee commences Employment prior to the end of the twenty four (24) month period, in which case, such participation shall end on the date of his new Employment. All of these stock options will vest immediately.

 

(c)Restricted Stock Grants and Options. Except for termination due to Cause, or when the Executive Employee resigns, except for reasons detailed under Voluntary Termination,  all outstanding restricted stock grants and options under any Company stock plan that the Executive Employee holds on the date of his termination shall continue to vest in accordance with the vesting schedule of the applicable plan during the twenty four (24) month period following the Executive Employee’s date of termination unless the Executive Employee commences 

 

Page 14 of 16

 

Employment prior to the end of the twenty four (24) month period, in which case, such continued vesting shall end on the date of his new Employment. 

 

Termination for Cause 

 

Cause shall mean: 

(i) the Executive Employee’s material fraud, malfeasance, gross negligence, or wilful misconduct with respect to business affairs of the Company that is directly or materially harmful to the business or reputation of the Company or any subsidiary of the Company, or 

 

(ii) Executive Employee’s conviction of or failure to contest prosecution for a felony or a crime involving moral turpitude. 

 

A termination of Executive Employee for “Cause” based on clause (i) or (ii) of the preceding sentences shall take effect thirty (30) days after the Company gives written notice of such termination to Executive Employee specifying the conduct deemed to qualify as Cause, unless Executive Employee shall, during such 30-day period, remedy the events or circumstances constituting cause to the reasonable satisfaction of the Company. 

 

Voluntary Termination shall mean termination of employment that is voluntary on the part of the Executive Employee but is due to: 

 

(i) a significant reduction of the Executive Employee’s responsibilities, title or status resulting from a formal change in such title or status, or from the assignment to the Executive Employee of any duties inconsistent with his title, duties, or responsibilities; 

 

(ii) a reduction in the Executive Employee’s compensation, remuneration or benefits; or 

 

(iii) a Company-required involuntary relocation of Executive Employee’s place of residence or a significant increase in the Executive Employee’s travel requirements. 

 

A termination shall not be considered voluntary within the meaning of this Agreement if such termination is the result of Cause, Disability, or death of the Executive Employee. 

 

Involuntary Termination shall mean termination of employment that is the decision of the Company for reasons other than Cause. 

 

Change in Control shall mean: 

 

(i) An acquisition by any Person or Group wherein that Person or Group end up beneficially owning fifty percent (50%) or more of the Company Shares Outstanding or fifty percent (50%) or more of the combined voting power of the Company. or

 

(ii) The approval of the shareholders of the Company of a reorganization, merger, consolidation, complete liquidation, or dissolution of the Company, the sale or disposition of all or substantially all of the assets of the Company or any similar corporate transaction. 

 

Page 15 of 16

 

Stock Option Grant

 

The number of options issued annually (on the anniversary of the Effective Date) to Executive Employee shall be equal to the amount of the Executive Employee’s annual salary divided by average bid price of the Company’s common stock, on whichever exchange the Company’s common stock is then trading on, for the five trading day period immediately preceding the anniversary date of employment with the Company.  However, the number of stock options issued shall not be less than thirty-six-thousand (36,000). The exercise (or grant) price of the options shall be  equal to the average bid price of the Company’s common stock for the five trading day period immediately preceding the anniversary date of  employment with the Company. 

 

Options vest over three years, exercisable within five years of full vesting.

 

 

	
             
 	
            Percentage of Shares
 
	
            Number of Full Years
 	
            That May be Purchased
 
	
            Less than1 year
 	
            0%
 
	
            1 year
 	
            33
 
	
            2 years
 	
            67%
 
	
            3 years
 	
            100%
 

 

At the Company’s discretion you will also be considered for additional discretionary stock option grants determined by the Compensation Committee or in the absence of a Compensation Committee the Board of Directors. 

 

In witness hereof the parties hereto have executed this Agreement the day and year above first written.

 

For Executive Employee

 

For Company  

 

 

Page 16 of 16

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