Document:

ttph-ex107_387.htm

Exhibit 10.7

Tetraphase Pharmaceuticals, Inc.

Restricted Stock Unit Agreement 

Granted Under 2013 Stock Incentive Plan

NOTICE OF GRANT

This Restricted Stock Unit Agreement (this “Agreement”) is made as of the Agreement Date between Tetraphase Pharmaceuticals, Inc. (the “Company”), a Delaware corporation, and the Participant.

 

I.Agreement Date

	
Date:
	
%%OPTION_DATE,’Month DD, YYYY’%-%

 

II.Participant Information

	
Participant:
	
%%FIRST_NAME%-% %%MIDDLE_NAME%-% %%LAST_NAME%-%

	
Participant Address:
	
%%ADDRESS_LINE_1%-%

 %%ADDRESS_LINE_2%-%

 %%ADDRESS_LINE_3%-%

 %%CITY%-% 

%%STATE%-% %%ZIPCODE%-% 

%%COUNTRY%-%

 

III.Grant Information

	
Grant Date:
	
%%OPTION_DATE,’Month DD, YYYY’%-%

	
Number of Restricted Stock Units:
	
%%TOTAL_SHARES_GRANTED,’999,999,999’%-%

 

IV.Vesting Table

	
Vesting Date
	
Number of Restricted Stock Units that Vest

	
%%VEST_DATE_PERIOD1,’MONTH DD, YYYY’%-%
	
%%SHARES_PERIOD1,’999,999,999’%-%

	
%%VEST_DATE_PERIOD2,’MONTH DD, YYYY’%-%
	
%%SHARES_PERIOD1,’999,999,999’%-%

	
%%VEST_DATE_PERIOD3,’MONTH DD, YYYY’%-%
	
%%SHARES_PERIOD1,’999,999,999’%-%

 

This Agreement includes this Notice of Grant and the following Exhibit, which is expressly incorporated by reference in its entirety herein:

 

Exhibit A – General Terms and Conditions

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Agreement Date.

 

 

 

 

			
	
TETRAPHASE PHARMACEUTICALS, INC.

 

________________________________

Name:

Title:
	
 
	
PARTICIPANT

 

__________________________

Name:

 

 

 

 

 

Restricted Stock Unit Agreement

2013 Stock Incentive Plan

EXHIBIT A

GENERAL TERMS AND CONDITIONS

For valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows:

1.Award of Restricted Stock Units.

In consideration of services rendered and to be rendered to the Company by the Participant, the Company has granted to the Participant, subject to the terms and conditions set forth in this Agreement and in the Company’s 2013 Stock Incentive Plan (the “Plan”), an award with respect to the number of restricted shares units (the “RSUs”) set forth in the Notice of Grant that forms part of this Agreement (the “Notice of Grant”).  Each RSU represents the right to receive one share of common stock, $0.001 par value per share, of the Company (the “Common Stock”) upon vesting of the RSU, subject to the terms and conditions set forth herein.  

2.Vesting.

The RSUs shall vest in accordance with the Vesting Table set forth in the Notice of Grant (the “Vesting Table”).  Upon the vesting of the RSU, the Company will deliver to the Participant, for each RSU that becomes vested, one share of Common Stock, subject to the payment of any taxes pursuant to Section 7.  The Common Stock will be delivered to the Participant as soon as practicable following each vesting date, but in any event within 30 days of such date.  

3.Forfeiture of Unvested RSUs Upon Cessation of Service.

In the event that the Participant ceases to perform services to the Company for any reason or no reason, with or without cause, all of the RSUs that are unvested as of the time of such cessation shall be forfeited immediately and automatically to the Company, without the payment of any consideration to the Participant, effective as of such cessation.  The Participant shall have no further rights with respect to the unvested RSUs or any Common Stock that may have been issuable with respect thereto.  If the Participant provides services to a subsidiary of the Company, any references in this Agreement to provision of services to the Company shall instead be deemed to refer to service with such subsidiary.

4.Restrictions on Transfer.

The Participant shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively “transfer”) any RSUs, or any interest therein. The Company shall not be required to treat as the owner of any RSUs or issue any Common Stock to any transferee to whom such RSUs have been transferred in violation of any of the provisions of this Agreement.

 

 

 

5.Rights as a Shareholder.

The Participant shall have no rights as a stockholder of the Company with respect to any shares of Common Stock that may be issuable with respect to the RSUs until the issuance of the shares of Common Stock to the Participant following the vesting of the RSUs.  

6.Provisions of the Plan.

This Agreement is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this Agreement.  

7.Tax Matters.   

(a)Acknowledgments; No Section 83(b) Election.  The Participant acknowledges that he or she is responsible for obtaining the advice of the Participant’s own tax advisors with respect to the award of RSUs and the Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents with respect to the tax consequences relating to the RSUs.  The Participant understands that the Participant (and not the Company) shall be responsible for the Participant’s tax liability that may arise in connection with the acquisition, vesting and/or disposition of the RSUs.  The Participant acknowledges that no election under Section 83(b) of the Internal Revenue Code, as amended, is available with respect to RSUs.   

(b)Withholding.  The Participant acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Participant any federal, state, local or other taxes of any kind required by law to be withheld with respect to the vesting of the RSUs.  At such time as the Participant is not aware of any material nonpublic information about the Company or the Common Stock, the Participant shall execute the instructions set forth in Schedule A attached hereto (the “Automatic Sale Instructions”) as the means of satisfying such tax obligation.  If the Participant does not execute the Automatic Sale Instructions prior to an applicable vesting date, then the Participant agrees that if under applicable law the Participant will owe taxes at such vesting date on the portion of the Award then vested the Company shall be entitled to immediate payment from the Participant of the amount of any tax required to be withheld by the Company.  The Company shall not deliver any shares of Common Stock to the Participant until it is satisfied that all required withholdings have been made.

8.Miscellaneous.

(a)Authority of Compensation Committee.  In making any decisions or taking any actions with respect to the matters covered by this Agreement, the Compensation Committee shall have all of the authority and discretion, and shall be subject to all of the protections, provided for in the Plan.  All decisions and actions by the Compensation Committee with respect to this Agreement shall be made in the Compensation Committee’s discretion and shall be final and binding on the Participant.

(b)No Right to Continued Service.  The Participant acknowledges and agrees that, notwithstanding the fact that the vesting of the RSUs is contingent upon his or her continued service to  the Company, this Agreement does not constitute an express or implied 

 

 

promise of continued service relationship with the Participant or confer upon the Participant any rights with respect to a continued service relationship with the Company.

(c)Section 409A.  The RSUs awarded pursuant to this Agreement are intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code and the Treasury Regulations issued thereunder (“Section 409A”).  The delivery of shares of Common Stock on the vesting of the RSUs may not be accelerated or deferred unless permitted or required by Section 409A.

(d)Participant’s Acknowledgements.  The Participant acknowledges that he or she:  (i) has read this Agreement; (ii) has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of the Participant’s own choice or has voluntarily declined to seek such counsel; (iii) understands the terms and consequences of this Agreement; and (iv) is fully aware of the legal and binding effect of this Agreement.

(e)Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware without regard to any applicable conflicts of laws provisions.

 

I hereby acknowledge that I have read this Agreement, have received and read the Plan, and understand and agree to comply with the terms and conditions of this Agreement and the Plan.

 

 

___________________________

 

PARTICIPANT ACCEPTANCE

 

 

Schedule A

 

Automatic Sale Instructions

 

The undersigned hereby consents and agrees that any taxes due on a vesting date as a result of the vesting of RSUs on such date shall be paid through an automatic sale of shares as follows:

 

(a)Upon any vesting of RSUs pursuant to Section 2 hereof, the Company shall sell, or arrange for the sale of, such number of shares of Common Stock issuable with respect to the RSUs that vest pursuant to Section 2 as is sufficient to generate net proceeds sufficient to satisfy the Company’s minimum statutory withholding obligations with respect to the income recognized by the Participant upon the vesting of the RSUs (based on minimum statutory withholding rates for all tax purposes, including payroll and social security taxes, that are applicable to such income), and the Company shall retain such net proceeds in satisfaction of such tax withholding obligations.

(b)The Participant hereby appoints the Chief Financial Officer and General Counsel of the Company, and either of them acting alone and with full power of substitution, to serve as his or her attorneys in fact to sell the Participant’s Common Stock in accordance with this Schedule A.  The Participant agrees to execute and deliver such documents, instruments and certificates as may reasonably be required in connection with the sale of the Shares pursuant to this Schedule A.

(c)The Participant represents to the Company that, as of the date hereof, he or she is not aware of any material nonpublic information about the Company or the Common Stock.  The Participant and the Company have structured this Agreement, including this Schedule A, to constitute a “binding contract” relating to the sale of Common Stock, consistent with the affirmative defense to liability under Section 10(b) of the Securities Exchange Act of 1934 under Rule 10b5-1(c) promulgated under such Act.

The Company shall not deliver any shares of Common Stock to the Participant until it is satisfied that all required withholdings have been made. 

 

 

 

			
	
 
	
 
	
_______________________________

 

Participant Name:  ________________

 

Date:  __________________________ttph-ex1012_386.htm

Exhibit 10.12

	

	
Tetraphase Pharmaceuticals, Inc.

480 Arsenal Street, Suite 110

Watertown, MA 02472

 

June 11, 2015

Jacques Dumas

32 Suffolk Lane, 

Carlisle, MA 01741 

 

Dear Jacques:

On behalf of Tetraphase Pharmaceuticals, Inc. (the "Company"), I am very pleased to offer you employment with the Company.  The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer.

1.Employment.  You will be employed to serve in the position of Chief Scientific Officer, reporting directly to me as President and Chief Executive Officer of Tetraphase Pharmaceuticals, Inc. Your agreed-upon start date will be July 13, 2015.  As Chief Scientific Officer, you will have such duties and responsibilities as are customarily assigned to an employee with such title and such other duties and responsibilities as may be assigned to you by the Company.  You agree to devote your full business time, best efforts, skill, knowledge, attention, and energies to the advancement of the Company's business and interests and to the performance of your duties and responsibilities as an employee of the Company.  

2.Compensation.  Your base salary will be at the rate of $13,461.54 per biweekly pay period (which if annualized equals $350,000), less all applicable federal, state and local taxes and withholdings, such base salary to be paid in installments in accordance with the Company’s standard payroll practices.  Such base salary may be adjusted from time to time in accordance with normal business practices and in the sole discretion of the Company.

3.Bonus.  If the Board of Directors approves an annual bonus in any fiscal year you may be eligible for a discretionary award of up to 35% of your annualized base salary in such year.  The bonus award, if any, will be based on both individual and corporate performance and will be determined by the Board of Directors of the Company in its sole discretion.  In order to be eligible for a bonus, if any, you must complete three months of continuous service and be an active employee of the Company on the date such bonus is distributed, as it also serves as an incentive to remain employed by the Company.  Any bonus payable for fiscal year 2015 will be prorated.

4.Sign on Bonus. We will pay you a sign on bonus of $30,000 in the event your current employer does not provide you compensation in connection with your separation. This bonus, if applicable, will be paid in one lump sum, less applicable withholdings within your first 30 days of employment with Tetraphase Pharmaceuticals. In the event that you terminate your employment without Good Reason or your employment is terminated for Cause within 12 months of your date of hire, you will be responsible for reimbursing the company for the entire signing bonus. 

5.Benefits.  You shall be eligible to participate in any and all bonus and benefit programs that the Company establishes and makes available to its employees from time to time, provided that you 

 

 

 

are eligible under (and subject to all provisions of) the plan documents governing those programs.  Such benefits may include: participation in group medical and dental insurance programs, term life insurance, long-term disability insurance and participation in the Company's 401(k) plan.  The benefits made available by the Company, the rules, terms, and conditions for participation in such benefit plans may be changed by the Company at any time and from time to time without advance notice.  With respect to vacation time, you will accrue vacation at 1.67 days/month or the equivalent of 4 weeks per year.

6.Stock Incentive Program.  You will be eligible to participate in the Company's stock incentive program.  Upon commencement of your employment with the Company, the Company will grant to you a nonstatutory stock option to purchase 125,000 shares of the Company's Common Stock, which option is granted pursuant to the inducement grant exception under NASDAQ Rule 5635(c)[4] and not pursuant to the Company’s 2013 Stock Incentive Plan (the “Plan”) or any equity incentive plan of the Company.  The inducement grant shall have an exercise price equal to the closing price of the Company’s common stock on the Nasdaq Global Select Market on your start date and shall vest over four years, with 25% of the original number of shares on the first anniversary of your first day of employment and the balance vesting in equal quarterly installments thereafter, and shall be subject to such other terms as are customary for the Company’s options under the Plan.

7.At-Will Employment.  

(a) At-Will Employment. Your employment with the Company will be on an “at-will” basis, meaning that either you or the Company may terminate the employment relationship at any time, for any reason, with or without cause and with or without notice. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at-will” nature of your employment may only be changed by a written agreement signed by you and the Company, which expressly states the intention to modify the at-will nature of your employment. Notwithstanding the foregoing, however, and subject to Section 7(b), if the Company terminates your employment without Cause, (i) you will receive as severance pay an amount equal to twelve (12) months of your then-current base salary (subject to all applicable federal, state and local taxes and withholdings, and payable over a twelve-month period in accordance with the Company’s regular payroll practices) and (ii) provided that you are eligible for and elect COBRA coverage, the Company will pay the amount of premiums it pays for active employees with similar coverage for you and your covered beneficiaries but not more each month than the monthly amount it was paying for your coverage when your employment ended until the earlier of twelve (12) months after your employment ends or the date you (or, as applicable, your beneficiaries) become eligible for coverage at a new employer, provided that if the Company’s paying such premiums violates nondiscrimination laws, the payments will cease. 

(b) Termination Following Change in Control. If, upon or during the twelve month period commencing upon a Change in Control Event, your employment with the Company or the acquiring or succeeding company is terminated by the Company or the acquiring or succeeding company without Cause or, upon or during the twelve month period commencing upon the Change in Control Event, you terminate your employment with the Company or the acquiring or 

succeeding company for Good Reason (as defined in Exhibit A), then, in lieu of the severance and other benefits provided for in Section 7(a), to the extent applicable, (i) you will receive as severance pay (x) an amount equal to twelve (12) months of your then-current base salary (subject to all applicable federal, state and local taxes and withholdings and payable over a twelve-month period in accordance with the 

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Company’s regular payroll practices) and (y) an amount equal to 100% of your then-current annual target bonus (subject to all applicable federal, state and local taxes and withholdings and payable in a lump sum), (ii) provided that you are eligible for and elect COBRA coverage, the Company will pay the amount of premiums it pays for active employees with similar coverage for you and your covered beneficiaries but not more each month than the monthly amount it was paying for your coverage when your employment ended until the earlier of twelve (12) months after your employment ends or the date you (or, as applicable, your beneficiaries) become eligible for coverage at a new employer, provided that if the Company’s paying such premiums violates nondiscrimination laws, the payments will cease, and (iii) the vesting of all stock options held by you on the date of termination shall be automatically accelerated, effective as of the date of termination, such that such stock options shall become 100% fully vested and exercisable. 

(c) Conditions of Severance Benefits. Your receipt of severance pay and the other benefits as set forth in Sections 7(a) and 7(b) of this letter (other than the acceleration of options set forth in subsection (iii) of Section 7(b)) is conditioned upon your execution of an agreement containing a comprehensive release of claims prepared by and satisfactory to the Company (the “Release”) and any applicable revocation period with respect to the Release expiring within 60 days (or such shorter period as the Company determines) following your termination date (such period, the “Release Period”), and is conditioned on your full compliance with the Non-Competition, Non-Solicitation and Non-Disclosure Agreement (the “Non-Competition Agreement”) described in Section 8 below. If the Release has been executed and any applicable revocation period has expired prior to the 60th day (or such shorter period) following your termination, then the severance payments and benefits shall commence (or in the case of any lump sum payment, be paid) on the first regular pay date after the applicable revocation period has expired (but no earlier than the 30th day following your termination date); provided, however, that if the 60th day following your termination occurs in the calendar year following the calendar year during which your termination occurs, then the severance payments and benefits shall commence (or in the case of any lump sum payment, be paid) no earlier than January 1 of such subsequent calendar year. The provision of severance pay and benefits hereunder shall be subject to the terms and conditions set forth in Section 11 hereto. In the event you breach your obligations under the Release or the Non-Competition Agreement, you will have no right to receive, and the Company shall not provide to you, any severance pay or benefit following the date of such breach; provided, however, that if any provision of such Non-Competition Agreement is adjudged by a court of competent jurisdiction to be unenforceable, you will have the right to receive full severance benefits hereunder irrespective of any such alleged breach of that provision. Such cessation of payments and benefits shall be in addition to, and not in lieu of, any and all other remedies, whether at law or in equity, available to the Company for such breach.

 

8.Non-Competition, Non-Solicitation and Non-Disclosure Agreement.  

As a condition of your employment, you will be required to execute the Company's Non-Competition, Non-Solicitation and Non-Disclosure Agreement (the “Non-Competition Agreement”), a copy of which is enclosed with this letter.

9.Proof of Legal Right to Work.  For purposes of federal immigration law, you will be required to provide the Company with documentary evidence of your identity and eligibility for employment in the United States.  Such documentation must be provided to the Company within three (3) business days of your date of hire, or our employment relationship with you may be terminated.  You 

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may need to obtain a work visa in order to be eligible to work in the United States.  If that is the case, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.  

10.Company Policies and Procedures.  As an employee of the Company, you will be required to comply with all Company policies and procedures.  Violations of the Company's policies may lead to immediate termination of your employment.  Further, the Company's premises, including all workspaces, furniture, documents, and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all internet and email) are subject to oversight and inspection by the Company at any time.  Company employees should have no expectation of privacy with regard to any Company premises, materials, resources, or information.

11.Other Agreements and Governing Law.  You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.  Please note that this offer letter is your formal offer of employment and supersedes any and all prior or contemporaneous agreements, discussions and understandings, whether written or oral, relating to the subject matter of this letter or your employment with the Company.  The resolution of any disputes under this letter will be governed by Massachusetts law.

12.Section 409A of the Code.  

Subject to the provisions in this Section 12, any severance payments or benefits under this letter will begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the date of termination of your employment. The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to you under this letter. 

(a) It is intended that each installment of the severance payments and benefits provided under this letter shall be treated as a separate “payment” for purposes of Section 409A of the Internal Revenue Code and the guidance issued thereunder (“Section 409A”). Neither you nor the Company will have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. 

(b) The determination of whether and when your separation from service from the Company has occurred shall be made and in a manner consistent with and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this paragraph, “Company” shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Internal Revenue Code. 

(c) If, as of the date of your separation from service from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the severance payments and benefits provided under this letter shall be made on the dates and terms set forth in this letter. 

(d) If, as of the date of your separation from service from the Company, you are a “specified employee” (within the meaning of Section 409A), then: 

(i) Each installment of the severance payments and benefits due under this letter that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when your separation 

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from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be paid on the dates and terms set forth in this letter; and 

(ii) Each installment of the severance payments and benefits due under this letter that is not described in Section 12(d)(i) and that would, absent this subsection, be paid within the six-month period following your separation from service from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments or benefits if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the separation from service occurs. 

(e) All reimbursements and in-kind benefits provided under this letter shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in your offer letter), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit. 

(f) Notwithstanding anything herein to the contrary, the Company makes no representation or warranty and shall have no liability to you or to any other person if the payments and benefits provided in this letter are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.

 

If this letter correctly sets forth the initial terms under which you will be employed by the Company, please sign the enclosed duplicate of this letter in the space provided below and return it to my attention at Tetraphase.  This offer is effective through June 16, 2015.  This offer is contingent on satisfactory reference checks.  

On behalf of Tetraphase Pharmaceuticals, Inc.

/s/Guy Macdonald

Guy Macdonald

President and Chief Executive Officer

 

The foregoing correctly sets forth the terms of my at-will employment by the Company.

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    /s/Jacques Dumas                                    
Jacques Dumas
	
 

Date:        June 12, 2015                              

	
 
	
 

EXHIBIT A

Definitions

For the purposes of this Offer Letter:

(1)  “Cause” shall mean (a) a good faith finding by the Board of Directors of the Company that (i) you have failed to substantially perform your assigned duties for the Company, which failure is not cured within 20 days following written notice from the Company to you specifying the duties not performed, (ii) you have engaged in dishonesty, gross negligence or misconduct or (iii) you have breached any employment agreement, confidentiality agreement, non-disclosure agreement or other agreement entered into between you and the Company or (b) your conviction of, or the entry of a pleading of guilty or nolo contendere by you to, any crime involving moral turpitude or any felony.

(2)  “Change in Control Event” shall mean

(a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control Event: (i) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), or (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or 

(b) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership of the Outstanding Company Voting Securities immediately prior to such Business Combination: provided that, where 

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required to avoid additional taxation under Section 409A, the event that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined in Treasury Regulation Section 1.409A-3(i)(5). 

 

(3)  “Good Reason” shall occur if a Cause event has not occurred or has not been cured, to the extent curable, and if (x) you provide written notice to the Company of the event or change you consider to constitute “Good Reason” within 30 calendar days following its occurrence, (y) you provide the Company with a period of at least 30 calendar days to cure the event or change, and (z) the “Good Reason” persists following the cure period, and you actually resign within 60 calendar days following the event or change. An event or change constituting “Good Reason” shall be limited to any of the following that occur without your prior written consent: (a) a material diminution of your duties, authority or responsibilities, provided, however, that the assignment of different duties to you by the Company involving a reasonably comparable level of responsibility shall not, by itself, constitute “Good Reason,” and provided, further, that a change in your duties, authority or responsibilities solely as a result of the Company’s acquisition by or merger with another entity, if you continue to have a comparatively senior role relative to the Company or its successor following such event, shall not, by itself, constitute “Good Reason”; (b) a material diminution in your base compensation, or (c) a material diminution in the authority, duties or responsibilities of the supervisor to whom you are required to report”.  

 

 

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