Document:

Exhibit 10.3

 

TREVENA, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Agreement is entered into as of March 24, 2015 by and between Trevena, Inc. (the “Company”), a Delaware corporation, and Carrie L. Bourdow (“Executive”) and will become effective as of May 4, 2015 (the “Effective Date”).

 

WHEREAS, the Company desires to employ Executive to provide personal services to the Company, and Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits.

 

Accordingly, in consideration of the mutual promises and covenants contained herein, the parties agree to the following:

 

1.              Duties and Scope of Employment.

 

(a)                                 Positions and Duties.  Effective as of the Effective Date and subject to the satisfaction of each of the Pre-employment Conditions, Executive will serve as Senior Vice President, Chief Commercial Officer of the Company.  Executive will render such business and professional services in the performance of Executive’s duties, consistent with Executive’s position within the Company, as will reasonably be assigned to Executive by the Company’s CEO, to whom Executive will report.  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”  As used herein, the term “Pre-employment Conditions” means (i) the Executive’s execution and delivery to the Company of the Company’s Employee Proprietary Information, Inventions and Non-Solicitation Agreement in substantially the form attached hereto as EXHIBIT A on or prior to the Effective Date; (ii) the Executive’s satisfaction of the eligibility requirements for employment in the United States; (iii) the Company’s receipt of employment and education references that meet its standards of acceptability; and (iv) the satisfactory completion of a pre-employment background investigation, credit check (in compliance with the Fair Credit Reporting Act) and drug screen.

 

(b)                                 Obligations.  During the Employment Term, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote Executive’s full business efforts and time to the Company.  For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Company’s Board of Directors (the “Board”).  Nothing in this Agreement or elsewhere shall prevent Executive from managing her personal investment and affairs, or from engaging in charitable and community affairs, so long as such activities do not either individually or in the aggregate interfere with the performance of her duties for the Company.

 

2.              At-Will Employment.  The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or notice.  Executive’s at-will employment status may not be changed except by way of written agreement signed by Executive and an authorized officer of the Company.

 

 

3.              Compensation.

 

(a)                                 Base Salary.  During the Employment Term, the Company will pay Executive an initial annualized salary of $325,000 as compensation for services (the “Base Salary”).  The Base Salary shall be paid in equal installments in accordance with the Company’s normal payroll practices and subject to required withholding and deductions.  The Base Salary will be subject to review and adjustments will be made based upon the Company’s normal performance review practices.

 

(b)                                 Signing Bonus.  The Company will pay Executive a signing bonus of $15,000 on the first payroll date after the Effective Date, which amount Executive will repay to Company in full if Executive’s employment with the Company terminates within one year after the Effective Date for any reason other than a termination (i) by the Executive for Good Reason (as defined below), (ii) by the Company for other than Cause (as defined below) or pursuant to Section 7.b. below or (iii) as a result of the death or disability of the Executive.

 

(c)                                  Bonus.  Subject to the terms and conditions set forth in the Trevena, Inc. Incentive Compensation Plan (the “ICP”), Executive may be eligible to receive an annual bonus in a target amount of 35% of the Base Salary, subject to, among other things, the achievement of corporate and individual performance objectives, which shall be established and assessed by the Company (the “Target Bonus”).  For 2015, such objectives will be established within the first thirty (30) days after the Effective Date.  For each subsequent calendar year, these objectives generally will be established within 90 days after the start of such calendar year.  For 2015, Executive shall be eligible for a pro rated bonus based on the Effective Date.  The Company reserves the right to modify the terms of the ICP, the Target Bonus and other components of bonus compensation and criteria from year to year.

 

(d)                                 Equity Award. Upon the approval of the Board or the Compensation Committee of the Board (the “Compensation Committee”), the Executive will receive an initial award of 125,000 stock options under the Trevena, Inc. 2013 Equity Incentive Plan, as amended (the “Plan”), to purchase the Company’s common stock upon terms established by the Board or the Compensation Committee and dated as of the Effective Date.  Following the Effective Date, Executive will be eligible to receive awards of stock options, restricted stock or other equity awards under the Plan based upon Executive’s performance, as determined by the Board from time to time.  The Board or the Compensation Committee will determine in its discretion the timing and amount, if any, of any grant of such future equity awards to the Executive.

 

4.              Company Policies and Employee Benefits.  During the Employment Term, Executive will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, any such group medical, dental, vision, disability, life insurance, and flexible-spending account plans.  All matters of eligibility for coverage and benefits under any benefit plan shall be determined in accordance with the provisions of such plan.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

 

5.              Vacation.  While employed pursuant to this Agreement, Executive shall be eligible to take vacation subject to the Company’s vacation policy.

 

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6.              Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy.

 

7.              Termination of Employment.  The provisions of this Section 7 govern the amount of compensation or benefit, if any, to be provided to Executive upon termination of employment and do not affect the right of either party to terminate the employment relationship at any time for any reason.

 

(a)                     Termination for other than Cause, Death or Disability.  If at any time (x) the Company terminates Executive’s employment with the Company other than for Cause (as defined below), death or disability, or (y) Executive terminates her employment under this Agreement for Good Reason, then, subject to Section 8, Executive will be entitled to receive, less applicable withholdings and deductions:

 

(i)  an amount equal to nine (9) months of her annualized Base Salary in effect at the time of termination, payable in equal installments on the Company’s regularly scheduled payroll dates beginning with the first payroll date following the effective date of the Release and Waiver;

 

(ii)(A) a pro-rata bonus for the calendar year of termination, determined by multiplying Executive’s Target Bonus for such year (assuming employment for the entire year) by a fraction whose numerator is the number of days that Executive was employed during such year and whose denominator is the total number of days in such year, payable within 60 days following the date of Executive’s termination of employment; and (B) to the extent not already paid, a cash incentive award under the ICP related to the fiscal year immediately preceding the year of termination in an amount as determined by the Company’s Board or the Compensation Committee, as the case may be, in its sole judgment and discretion;

 

(iii) if Executive timely elects continued coverage under COBRA for Executive and Executive’s covered dependents under the Company’s group health plans following such termination of employment, the Company will pay the COBRA premiums necessary to continue Executive’s health insurance coverage in effect for Executive and Executive’s eligible dependents on the termination date, as and when due to the insurance carrier or COBRA administrator (as applicable), until the earliest of (A) nine (9) months from the effective date of such termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period from the termination date through the earliest of (A) through (C), the “COBRA Payment Period”). Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the

 

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Company will instead pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment”), for the remainder of the COBRA Payment Period;

 

and

 

(iv) accelerated vesting as to that number of unvested shares subject to any outstanding equity awards held by Executive at the time of termination that would have otherwise vested if Executive had remained a Company employee for nine (9) months following the termination date.

 

(b)                                 Termination In Connection With or Following a Change of Control.  In the event that either (x) the Company terminates Executive’s employment with the Company other than for Cause, death or disability (A) within the thirty (30) day period prior to a Change of Control, or (B) within the period between the Company’s execution of a letter of intent for a proposed Change of Control which proposed Change of Control is later consummated (a “Designated Change of Control”) and the consummation of such Designated Change of Control, or (C) within the twelve (12) month period after a Change of Control, or (y) Executive resigns for Good Reason within twelve (12) months after a Change of Control, then, in addition to the payments set forth in Section 7(a) above, and subject to Section 8 below, Executive shall also be entitled to, less applicable withholdings and deductions:

 

(i)  an amount equal to twelve (12) months of Executive’s annualized Base Salary in effect at the time of termination, payable in equal installments on the Company’s regularly scheduled payroll dates beginning with the first payroll date following the effective date of the Release and Waiver;

 

(ii)(A) a pro-rata bonus for the calendar year of termination, determined by multiplying Executive’s Target Bonus for such year (assuming employment for the entire year) by a fraction whose numerator is the number of days that Executive was employed during such year and whose denominator is the total number of days in such year, payable within 60 days following the date of Executive’s termination of employment; and (B) to the extent not already paid, a cash incentive award under the ICP related to the fiscal year immediately preceding the year of termination in an amount as determined by the Company’s Board or the Compensation Committee, as the case may be, in its sole judgment and discretion;

 

(iii) an amount equal to 100% of Executive’s Target Bonus in effect at the time of termination, payable in equal installments on the Company’s regularly scheduled payroll dates beginning with the first payroll date following the effective date of the Release and Waiver;

 

(iv) if Executive timely elects continued coverage under COBRA for Executive and Executive’s covered dependents under the Company’s group health plans following such termination of employment, the Company will pay the COBRA premiums necessary to continue Executive’s health insurance coverage in effect for Executive

 

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and Executive’s eligible dependents on the termination date, as and when due to the insurance carrier or COBRA administrator (as applicable), until the earliest of (A) twelve (12) months from the effective date of such termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period from the termination date through the earliest of (A) through (C), the “COBRA Payment Period”). Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment”), for the remainder of the COBRA Payment Period;

 

and

 

(v) immediate and full accelerated vesting of all unvested shares subject to any outstanding equity awards held by Executive at the time of termination; provided, however, that such acceleration shall not be interpreted to extend the post-termination exercise period of any stock option held by Executive at the time of termination, unless otherwise approved by the Board.

 

(c)                                  Termination for Cause, Death or Disability; Voluntary Termination.  If Executive’s employment with the Company terminates voluntarily by Executive (other than for Good Reason as set forth in the preceding subsection (b)), for Cause by the Company or due to Executive’s death or disability, then (i) all vesting will terminate immediately with respect to Executive’s outstanding equity awards, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned).

 

(d)                                 Termination by Mutual Consent.  If at any time during the course of this Agreement the parties by mutual consent decide to terminate this Agreement, they shall do so by separate agreement setting forth the terms and condition of such termination.

 

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8.              Conditions to Receipt of Benefits under Section 7.

 

(a)                                 Release of Claims.  The receipt of any payment or benefit pursuant to Section 7 will be subject to Executive signing and not revoking a release and waiver of all claims in the form attached hereto as Exhibit B (or in such other form as may be specified by the Company in order to comply with then-existing legal requirements to effect a valid release of claims) (the “Release and Waiver”) within the applicable time period set forth therein, but in no event later than forty-five days following termination of employment.  No payment or benefit pursuant to Section 7 will be paid or provided until the Release and Waiver becomes effective.

 

(b)                                 Other Conditions.  The receipt of any payment or benefits pursuant to Section 7 will be subject to Executive not violating the PIIA (as defined below), returning all Company property, and complying with the Release and Waiver; provided, however, that Company must provide written notice to Executive of the condition under this Section 8(b) that could prevent the disbursement of any payment or benefits under Section (7) within thirty (30) days of the initial existence of such condition and such condition must not have been remedied by Executive within thirty (30) days of such written notice.  Executive understands and agrees that payment or benefits received pursuant to Section 7 are in lieu of and not in addition to any severance or similar benefits that may be provided to other employees of the Company pursuant to a Company policy or plan.

 

(c)                                  Section 409A.  Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under Section 7 above that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax under Section 409A.  Pay pursuant to Section 7 above, to the extent of payments made from the date of termination of Executive’s employment through March 15 of the calendar year following such termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made following said March 15, they are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination of service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, with any excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that, if Executive is a “specified employee” within the meaning of the aforesaid Section of the Code at the time of such termination from employment, payments be delayed until the earlier of six months after termination of employment or Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”).  Notwithstanding any other payment schedule set forth in herein, none of the payments under Section 7 will be paid or otherwise delivered prior to the effective date of the Release and Waiver.  Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding sentence, on the first regular payroll pay day following the effective date of the Release and Waiver, the Company will pay

 

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Executive the payments Executive would otherwise have received under Section 7 on or prior to such date but for the delay in payment related to the effectiveness of the Release and Waiver, with the balance of the payments being paid as originally scheduled.  Notwithstanding anything to the contrary set forth herein, if any of the payments or benefits set forth in Section 7 constitute “deferred compensation” within the meaning of Section 409A of the Code and the period during which Executive may review, execute and revoke the Release and Waiver begins in one taxable year and ends in a second taxable year, such payments and benefits shall commence or be made in the second taxable year.

 

(d)                                 Cooperation With the Company After Termination of Employment. Following termination of the Executive’s employment for any reason, upon request by the Company, Executive will fully cooperate with the Company (at the Company’s reasonable expense) in all matters reasonably relating to the winding up of pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other employees as may be designated by the Company.

 

9.              Definitions.

 

(a)                                 Cause.  For purposes of this Agreement, “Cause” is defined as (i) an act of dishonesty by Executive in connection with Executive’s responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (iii) Executive’s gross misconduct, (iv) Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s relationship with the Company, or (v) Executive’s willful breach of any obligations under any written agreement or covenant with the Company.

 

(b)                                 Change of Control.  For purposes of this Agreement, “Change of Control” of the Company is defined as:

 

(i)                                     any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; provided, however; that sales of equity or debt securities to investors primarily for capital raising purposes shall in no event be deemed a Change of Control; or

 

(ii)                                  a change in the composition of the Board occurring within a two-year period, as a result of which less than a majority of the directors are Incumbent Directors.  “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); provided, however; that no change in the composition of the Board in connection with the sale of equity or debt securities to investors primarily for capital raising purposes shall be deemed a Change of Control; or

 

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(iii)                               the date of the consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or the stockholders of the Company approve a plan of complete liquidation of the Company; or

 

(iv)                              the date of the consummation of the sale or disposition by the Company of all or substantially all the Company’s assets.

 

(c)                                  Good Reason.  For purposes of this Agreement, a resignation for “Good Reason” is defined as the resignation by Executive within thirty (30) days following the end of the Cure Period (defined below), if any of the following events occur without Executive’s express written consent following a Change of Control:  (i) the Company reduces the amount of the Base Salary, other than pursuant to a reduction that also is applied to substantially all other executives of the Company, (ii) the Company fails to pay the Base Salary or other benefits required to be provided by the Company hereunder, (iii) the Company materially reduces Executive’s core functions, duties or responsibilities in a manner that constitutes a demotion, or (iv) any change of Executive’s principal office location to a location more than thirty (30) miles from the Company’s office at 1018 West 8th Avenue, King of Prussia, PA; provided, however, that Executive must provide written notice to the Company of the condition that could constitute “Good Reason” within thirty (30) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days of such written notice (the “Cure Period”).

 

10.       No Conflict with Existing Obligations.  Executive represents that her performance of all the terms of this Agreement and, as an executive officer of the Company, do not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services.  Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith.

 

11.       Parachute Payments.

 

(a)                                 If any payment or benefit Executive would receive pursuant to a Change of Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that

 

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the Payment equals the Reduced Amount, reduction shall occur in the following order unless Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payment occurs):  reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.  In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s stock awards unless Executive elects in writing a different order for cancellation.

 

(b)                                 The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group affecting the Change of Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

 

(c)                                  The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.  If the accounting firm determines that no Excise Tax is payable with respect to a Payment, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

12.       Assignment.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

 

13.       Notices.  All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a nationally recognized commercial overnight service, specifying next day delivery, with written verification of receipt, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

 

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If to the Company:

 

1018 West 8th Avenue, Suite A, King of Prussia, PA 19406

 

If to Executive:

 

at the last residential address known by the Company.

 

14.       Severability.  In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

 

15.       Arbitration.

 

(a)                                 Arbitration.  In consideration of Executive’s employment with the Company, the Company and Executive agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive’s employment with the Company or the termination of Executive’s employment with the Company, including any breach of this Agreement, but not including those arising out of, relating to, or resulting from the PIAA, will be subject to binding arbitration.  Disputes which Executive agrees to arbitrate, and thereby agrees to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, discrimination or wrongful termination and any statutory claims.  Executive further understands that this Agreement to arbitrate also applies to any disputes that the Company may have with Executive.

 

(b)                                 Procedure.  Executive agrees that any arbitration will be administered by the American Arbitration Association (“AAA”) and that the neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes (“the Rules”).  Executive agrees that the arbitrator will administer and conduct any arbitration in a manner consistent with the Rules.

 

(c)                                  Remedy.  Except as provided by this Agreement and by the Rules, including any provisional relief offered therein, arbitration will be the sole, exclusive and final remedy for any dispute between Executive and the Company.  Accordingly, except as provided for by the Rules and this Agreement, neither Executive nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.

 

(d)                                 Administrative Relief.  Executive understands that this Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Equal Employment Opportunity Commission or the workers’ compensation board.  This Agreement does, however, preclude Executive from pursuing court action regarding any such claim.

 

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(e)                                  Voluntary Nature of Agreement.  Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that Executive is waiving Executive’s right to a jury trial.  Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement.

 

16.       Integration.  This Agreement, together with the PIIA and the other documents referred to in this Agreement, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral.  This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement.

 

17.       Waiver of Breach.  The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

 

18.       Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

19.       Governing Law.  This Agreement will be governed by the laws of the Commonwealth of Pennsylvania.

 

20.       Acknowledgment.  Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from Executive’s private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

 

21.       Counterparts.  This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

 

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

 

COMPANY:

 

	
TREVENA, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   John M. Limongelli
    	
 
    
	
Name:
    	
John   M. Limongelli
    	
 
    
	
Title:
    	
Senior   Vice President, General Counsel & Corporate Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
EXECUTIVE:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Carrie L. Bourdow
    	
 
    
	
Carrie   L. Bourdow
    	
 
    

 

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EXHIBIT A

 

PIIA

 

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EXHIBIT B

Release and Waiver

 

TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY

 

In consideration of the payments and other benefits set forth in the Employment Agreement of March 24, 2015, to which this form is attached, I, Carrie L. Bourdow, hereby furnish TREVENA, INC. (the “Company”), with the following release and waiver of claims (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date that I sign this Agreement (collectively, the “Released Claims”).  The Released Claims include, but are not limited to:  (a) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, misclassification, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance, including, but not limited to, the State of Pennsylvania or any subdivision thereof; and any public policy, contract, tort, or common law.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

 

In granting the release herein, which includes claims that may be unknown to me at present, I acknowledge that I expressly waive and relinquish any and all rights and benefits under any applicable law or statute providing, in substance, that a general release does not extend to claims which a party does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her would have materially affected the terms of such release.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an

 

14

 

attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired without my having previously revoked this Release and Waiver.

 

I acknowledge my continuing obligations under my Employee Proprietary Information, Inventions and Non-Solicitation Agreement (the “PIIA”).  Pursuant to the PIIA I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance benefits I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my PIIA.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Carrie   L. Bourdow
    

 

15DST EX 10.1 - 3.31.2015

Exhibit 10.1
(Effective 2/15)

PERFORMANCE STOCK UNIT AGREEMENT  
_____________________________

DST SYSTEMS, INC. 2005 EQUITY INCENTIVE PLAN  
_____________________

THIS AGREEMENT is made and entered into as of the "Grant Date" (see Paragraph 1(a)), by and between DST SYSTEMS, INC. ("Company") and recipient ("Employee") of an Award under the DST Systems, Inc. 2005 Equity Incentive Plan, as amended and interpreted from time to time (the "Plan").  
    
WHEREAS, Awards under the Plan, including Awards relating to Company common stock ("Shares"), are administered by the Compensation Committee of Company’s Board of Directors or other committee designated by the Board (the "Committee") or Company officer to which the Committee delegates authority as provided in the Plan;   

WHEREAS, the Committee has made Performance Unit Awards under the Plan that are referred to herein as "Performance Stock Units" or "PSUs" and that, subject to the forfeiture and other terms and conditions of this Agreement, confer a right to receive Shares on a certain date ("Vesting Date") for all, or a lesser or greater percentage, of the target number of PSUs granted, but only provided that some portion of the PSUs "Vest" pursuant to the terms and conditions of this Agreement, becoming "Vested PSUs;"  

WHEREAS, the Vesting of the PSUs requires the satisfaction of certain conditions generally including continued "Employment" (as defined in Paragraph 3(i)) and the satisfaction of pre-established performance goals set forth in Appendix A; 

WHEREAS, Company, in its discretion, may allow Employee the potential tax benefit of deferring the issuance of Shares beyond the Vesting Date as provided in Paragraph 3(g), and, therefore, a Vesting Date may not be the same date as the issuance of the Shares underlying the Vested PSUs; and 

WHEREAS, participants in the Company's Executive Severance Plan and executive officers of the Company with active employment agreements providing protection in the event of a Company change in control have been designated by the Committee as "Executive Group Employees" to whom special "Change in Control" (as defined in Paragraph 6(a)) Vesting terms and conditions apply as provided in Paragraph 3(c)(ii).   

The parties agree as follows:
    
1.    GRANT OF PSU.

a.    PSU Grant.  The Grant Date and the target number of PSUs granted in this Award are shown in the online or other grant communication to which this Agreement is attached.  

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Appendix A to this Agreement (available to Employee with the grant posting on the administrator's system) gives performance goal and performance Vesting details, including the potential Vesting date, as further described in Paragraphs 3(a) and (b) of this Agreement.  Vesting of each PSU as provided in Section 3 entitles Employee to the issuance of a percentage of a Share (the "Payout Percentage," which may be less than, equal to, or greater than 100%), subject to the other terms and conditions of the Plan and this Agreement.  In no event, however, may the Payout Percentage ever exceed 150%.  In order for the grant to be effective, Employee must timely confirm acceptance of the terms and conditions of this Agreement pursuant to the instructions in the communication.  

b.    Administration.  Company’s Chief Financial Officer may adopt Administrative Procedures for PSUs and the Committee may maintain rules for Awards issued under the Plan.  As amended from time to time, such procedures and rules (collectively, the "Rules") shall apply to all actions taken with respect to this Agreement.  The Committee or its delegate may take any action deemed necessary or appropriate to administer this Agreement and the issuance of Shares attributable to Vested PSUs in accordance and consistent with Internal Revenue Code ("Code") Section 409A and regulations and guidance issued thereunder ("409A").  

2.    RESTRICTIONS.

a.    Non-Transferability.  Except as may be permitted under the Plan with respect to transfers to a Permitted Transferee, the PSUs are not transferable during the "Original Delay Period" (as defined in Paragraph 3(g)) and through any "Extended Issuance Date" (as defined in Paragraph 3(g)), by sale, assignment, disposition, gift, exchange, pledge, hypothecation, or otherwise, other than as provided in Paragraph 3(j) upon Employee’s death.  Any attempted disposition of the PSUs, or the levy of any execution, attachment or similar process upon the PSUs prior to issuance of the Shares, shall be null and void and without effect.  

b.      No Privilege of Stock Ownership; Dividend Equivalents.  Holding PSUs does not give Employee the rights of a shareholder (including without limitation the right to vote or receive dividends or other distributions) with respect to any Shares that Company may issue under the terms and conditions of this Agreement before the date such Shares are issued.  Notwithstanding the foregoing, if Company declares a dividend on Shares, then a "Dividend Equivalent" (as defined in the Plan) in the form of additional PSUs ("Dividend Equivalent PSUs") will be credited on the PSUs (including Dividend Equivalent PSUs) as follows: 

(i)    The crediting of Dividend Equivalent PSUs will occur as of the date the actual dividend is paid to Company shareholders. The number of additional Dividend Equivalent PSUs credited (which may include fractional PSUs) on each dividend payment date shall be the quotient obtained by dividing (A) the aggregate cash amount that would have been paid as a dividend if each PSU then credited to Employee pursuant to this Agreement (whether or not the PSUs have Vested) was one whole Share, by (B) the Fair Market Value of a Share on the date such dividend payment is made to Company shareholders.  

(ii)    If, at the time of Certification (as defined in Paragraph 3(a)):

(A)    the level of Goal achievement described in Paragraph 3(b) and Appendix A is less than target, the number of Dividend Equivalent PSUs determined pursuant 

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to Paragraph 2(b)(i) shall be reduced by a percentage equal to 100% minus the Payout Percentage (as defined in Appendix A).  (For illustration purposes only, if, for example, Goal Achievement is attained at an 80% level, the number of PSUs credited due to the conversion of Dividend Equivalents pursuant to Paragraph 2(b)(i) shall be reduced by 20% (100% - 80%)); or

(B)    the level of Goal achievement described in Paragraph 3(b) and Appendix A is greater than target, the number of Dividend Equivalent PSUs determined pursuant to Paragraph 2(b)(i) shall be increased by a percentage equal to the Payout Percentage minus 100%.  (For illustration purposes only, if, for example, Goal Achievement is attained at an 140% level, the number of PSUs credited due to the conversion of Dividend Equivalents pursuant to Paragraph 2(b)(i) shall be increased by 40% (140% - 100%)). 

(iii)    To the extent that an Extended Issuance Delay (as defined in Paragraph 3(g)) is in effect with respect to any Vested PSUs, Dividend Equivalent PSUs will be determined and credited on such PSUs in accordance with the same rules as set forth above in Paragraph 2(b)(i); provided, however, that no further adjustment pursuant to Paragraph 2(b)(ii) shall be made to such Dividend Equivalent PSUs. 
  
(iv)    All rights to Dividend Equivalent PSUs shall be subject to the restrictions on transferability described in Paragraph 2(a) and shall become null and void upon forfeiture of the PSUs under Paragraph 3(d).  Dividend Equivalent PSUs shall be subject to the same risk of forfeiture and the same terms and conditions, including if applicable Vesting terms and conditions, as the original PSUs. Any Shares relating to Dividend Equivalent PSUs credited to Employee pursuant to this Agreement shall be issued at the same time as the Shares relating to the original underlying PSUs ("Issuance Date"); provided, however, if Company declares a dividend for which the dividend record date is prior to the Issuance Date, but for which the dividend payment date is on or after the Issuance Date (a "Straddle Dividend"), the Shares relating to such Dividend Equivalent PSUs shall be issued within ten (10) business days of such Straddle Dividend payment date, rather than on the Issuance Date.  

3.    VESTING, FORFEITURE, AND SHARE ISSUANCE.

a.    Appendix A Performance Goals.  The performance goals (collectively, the "Goal") that are the pre-established conditions to PSU Vesting are set forth in Appendix A, which is incorporated herein by reference.   By accepting this Agreement in accordance with Paragraph 1(a), Employee shall be deemed to have consented to the Goal and the other terms and conditions of Appendix A.  The level of Goal achievement, as adjusted for certain events set forth in Appendix A that may occur during the period of time set forth therein (the "Performance Period"), is determined on the date (the "Meeting Date") of the "Committee Meeting," which is the meeting following the conclusion of the Performance Period that the Committee determines the level, if any, of Goal achievement and certifies it ("Certification").  Vesting based on Goal achievement occurs after Committee Meeting on the "Scheduled Vesting Date," as explained in Appendix A.     

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b.    Performance Vesting.  If Certification of Goal achievement occurs, the number of PSUs Vesting is based on the applicable "Payout Percentage," which is described in Appendix A, and all remaining PSUs are forfeited.   If Certification does not occur at the Committee Meeting, all PSUs granted under this Agreement shall be forfeited as of the Meeting Date.   

c.      Other Vesting.  

		
	(i)
	Effect of Death, Disability, Business Unit Divestiture, Retirement or Reduction in Force on Vesting

		
	(A)
	If Employee's death, Employee's "Disability" (as defined in the Rules), a "Business Unit Divestiture" (or "BUD"), "Retirement" or a "Reduction in Force" (or "RIF"), each as defined in Paragraph 3(i) and each an "Event", occurs on or after the first anniversary of the Grant Date (in other words, after the "One-Year Holding Period"), then as of the Meeting Date following the end of the Performance Period, a determination shall be made as to the number of PSUs that shall Vest on the Scheduled Vesting Date.  If Certification occurs for the Performance Period, the number of PSUs that would otherwise have Vested (assuming the Event had not occurred and also taking into account any Payout Percentage adjustments based on Goal achievement) shall Vest on the Scheduled Vesting Date.  

		
	(B)
	If the applicable Event occurs prior to the first anniversary of the Grant Date (in other words during the One-Year Holding Period), then, subject to Subparagraph (C) below, the PSUs shall be forfeited as of the date of the Event.  

		
	(C)
	Vesting as provided in Subparagraph (A) above may occur for a BUD even though it occurs during the One-Year Holding Period provided that the Committee, on or prior to the Grant Date, has specifically identified the potential divestiture as one to which the One-Year Holding Period shall not be a precondition to BUD Vesting.    

		
	(D)
	If no PSUs would have Vested due to lack of required Certification, all PSUs shall be forfeited as of the Meeting Date following the end of the Performance Period.  

(ii)    Effect of Change in Control on Vesting  

		
	(A)
	Subject to Section 6 of this Agreement and Section 14 of the Plan, if a Change in Control occurs before the end of the Performance Period, then the Certification requirements set forth in Appendix A shall no longer apply and all PSUs shall Vest, subject to continued Employment and to all other terms and provisions of this Agreement other than the Certification conditions set forth in Appendix A, in 

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one-third (1/3) increments over the immediately following three anniversary dates of the date of the Change in Control.  The number of Shares eligible to be issued on such first, second and third anniversaries shall be one-third of that number of Shares that would have been issued if Certification had occurred at the target level (i.e., a Payout Percentage of 100%).  

		
	(B)
	Notwithstanding the above, upon death, Disability, "Termination Without Cause" (as defined in Paragraph 3(i)), BUD, Retirement, or RIF, in each case that follows a Change in Control, or, for an Executive Group Employee only (as explained in the Preamble to this Agreement), upon a termination of Employment in connection with a "Resignation for Good Reason" (as defined in Paragraph 3(i)) that follows a Change in Control, all PSUs (at a Payout Percentage of 100%) shall become fully Vested.  

    
d.     Forfeiture.  Forfeiture of PSUs shall occur under the circumstances set forth below. Upon any such forfeiture, under no circumstance will Company be obligated to make any payment to Employee, and no Shares shall be issued, as a result of such forfeited PSUs.  Shares previously issued under this Agreement may also be forfeited and transferred to Company as provided in the Company's Compensation Recoupment Policy (as further described in Paragraph 7(b)).    

(i)    Subject to the other provisions of this Section 3, all PSUs shall be forfeited if either (A) Certification does not occur at the Committee Meeting, or (B) Employee ceases Employment during the Original Delay Period, provided however, that Termination Without Cause after Certification but prior to a Scheduled Vesting Date shall not cause a forfeiture of the PSUs scheduled to Vest on such date.

(ii)    Notwithstanding any other provision of this Agreement, Termination With Cause (as defined in Paragraph 3(i)) shall result in forfeiture of the PSUs and all Shares issued pursuant thereto.  Employee acknowledges and agrees that forfeiture as a result of Termination With Cause or the Compensation Recoupment Policy can occur during any Original Delay Period or Extended Delay Period, prior or subsequent to any PSU Vesting or Share issuance and whether or not Employee is eligible for a Retirement.  
 
e.    Share Issuance.  

(i)    Except as otherwise provided herein, upon the Vesting of a specific number of PSUs as provided in Paragraphs 3(a) and (b), Company shall issue a corresponding number of Shares to Employee as soon as administratively practical after the Vesting Date; provided that tax withholding obligations have been satisfied as provided in Section 4.  The preceding sentence notwithstanding, 

		
	(A) 
	if the Vesting event is a BUD, Retirement, RIF, Termination Without Cause or (for Executive Group Employees) Resignation for Good Reason, no issuance of Shares is to occur with respect to such Vesting event unless it is also a 409A Separation; 

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	(B)
	if the Vesting event is a BUD, Retirement, RIF, Termination Without Cause or (for Executive Group Employees) Resignation for Good Reason but such Vesting event is not a 409A Separation, issuance of Shares shall not occur until Employee's 409A Separation;

		
	(C) 
	if the Vesting event is a Change in Control and the PSUs are subject to 409A, no issuance of Shares is to occur unless that Change in Control is also a 409A Change in Control; and 

		
	(D)
	if the Vesting event is a Change in Control but such Change in Control is not a 409A Change in Control, no issuance of Shares is to occur until the first to occur of Employee's 409A Separation or a 409A Change in Control. 

(ii)    Company will not issue Shares upon a Vesting Date to the extent that either Employee has elected an "Extended Issuance Delay" (as defined in Paragraph 3(g)) and/or the issuance of Shares is subject to the six-month delay period required under Section 409A a "409A Issuance Delay" (as defined in Paragraph 3(h)).  Employee acknowledges and agrees that Company will not issue any Shares pursuant to this Agreement any earlier than the first business day after the Vesting Date nor any later than ninety days after such Vesting Date.  If one or both of an Extended Issuance Delay or a 409A Issuance Delay applies, Company shall issue the Shares as soon as administratively practical (but no earlier than one business day and no later than ninety days) after expiration of the latest ending applicable period.  Company’s transfer agent may issue Shares in certificate or book entry form as determined by Company’s Corporate Secretary.  

(iii)    Upon issuance of the Shares, Employee shall have all rights of a shareholder with respect thereto including the right to vote and receive all dividends or other distributions made or paid with respect to the Shares.  The number of Shares issuable in any circumstance shall be reduced by the number of Shares withheld for taxes as provided in Section 4.

(iv)     Except as otherwise expressly provided in this Agreement, at any time a fractional Share would otherwise be issued pursuant to this Agreement, such fraction shall be rounded up or down to the nearest whole Share in accordance with the applicable rounding methodology set forth in the Rules or other applicable rules or procedures. 

f.      Limited Accelerated Issuance of Shares for FICA Related Taxes.  Paragraph 4(b) governs the limited accelerated payment of Shares underlying PSUs for the satisfaction of "FICA Related Taxes" (as defined in Paragraph 4(b)) if those should occur for any reason prior to the Vesting Date.   

g.    Extended Issuance Delays.  The period from the Grant Date to a Vesting Date is the "Original Delay Period."  In circumstances allowed by the Rules and where a valid and timely Section 409A deferral election has been made (an "Extended Issuance Delay"), Shares that Company would otherwise issue after the Original Delay Period may be issued on the Extended Issuance Date 

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timely elected by Employee.  The period from the Vesting Date to the Extended Issuance Date is the "Extended Delay Period."

h.     Section 409A Issuance Delays.  To the extent that a PSU is or becomes subject to 409A and Employee is a "specified employee" under Company’s Specified Employee Identification Procedures, then, notwithstanding any other provision of this Agreement or the Rules and for the avoidance of negative tax consequences to Employee, any issuance of Shares or cash pursuant to this Agreement on account of Employee's 409A Separation shall be delayed until the first day after six-months following such 409A Separation, as required for the avoidance of penalties and/or excise taxes under 409A ("409A Issuance Delay").

i.      Definitions.  For purposes of this Agreement, the following terms have the meanings set forth below:

(i)    A "409A Change in Control" is a Change in Control that also qualifies as a change in control under 409A(a)(2)(A)(v).  

(ii)    A "409A Separation" is Employee’s separation from service with Company as determined under 409A(a)(2)(A)(i).  A 409A Separation may occur on account of any separation from service including separation due to death, disability, resignation, or termination of employment by Company with or without Cause.

(iii)    A "Business Unit Divestiture" or "BUD" is Employee's termination of Employment in connection with the consummation of a merger, reorganization, consolidation, or sale of assets or stock, or any other similar transaction that the Committee determines is a business unit divestiture event, that involves a Subsidiary (as defined in Subparagraph 3(i)(v)(B)), joint venture, division or other business unit, and that results in a group of employees of such business unit being employed by an acquiring company and no longer having employment with Company.  

(iv)    "Cause" means a violation of Section 5 or any noncompete agreement to which Employee is subject; an act of dishonesty, willful misconduct, intentional or conscious abandonment or neglect of duty; criminal activity, fraud or embezzlement; or non-compliance with any Company ethics policy that is significant in terms of the type of violation, Employee’s service, a business objective, or the Company’s reputation.  

(v)    "Employment" means Employee is regularly and continuously employed, for more than fifty percent (50%) of the number of hours designated for base salary purposes as full-time employment, by: 

		
	(A) 
	Company; 

		
	(B) 
	any corporation in an unbroken chain of corporations beginning with Company or in an unbroken chain of corporations ending with Company if, on the Grant Date, each corporation other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of 

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stock in one of the other corporations in such chain or any entity in which Company has a direct or indirect equity interest of at least fifty percent (50%) ("Subsidiary"); 

		
	(C) 
	any individual or entity that directly or through one or more intermediaries controls or is controlled by or under common control with Company ("Affiliate"); or

		
	(D) 
	any entity in which Company directly or indirectly owns stock possessing such minimum percentage (at least twenty percent (20%)) of the total combined voting power of all classes of stock or owns such minimum percentage (at least twenty percent 20%)) of the capital interests or profit interests as the Committee from time to time determines for purposes of this Subparagraph 3(i)(v) (also an "Affiliate").  

Employee is not deemed to have terminated Employment through, and the PSUs shall not be forfeited solely as a result of, any change in Employee’s duties or position or Employee’s temporary leave of absence approved by Company.  

(vi)    The "Extended Issuance Date" is (a) if a Retirement Installment applies, each date during an Extended Delay Period that Employee shall receive an issuance of Shares in an installment, or if earlier, the date of death following Retirement; or (b) if a Retirement Installment does not apply, the earlier of (i) the Extended Issuance Date elected by Employee pursuant to the Rules or (ii) the date of a 409A Separation during the Extended Delay Period.  

(vii)    A "Reduction in Force" or "RIF" means a termination of Employee's Employment with Company during the Original Delay Period as part of Company’s termination of the employment of at least ten (10) employees within a business unit in connection with a single plan of reduction to occur within a rolling 90-day period or longer period incorporated into a specific plan of reduction.

(viii)    A "Resignation for Good Reason" means an Executive Group Employee's resignation for good reason (as defined below) subsequent to the date of a Change in Control during the three-year period following such date if: (x) such Employee provides written notice to the Company Secretary within ninety (90) days after the initial occurrence of a good reason event describing in detail the event and stating that Employee's employment will terminate upon a specified date in such notice (the "Good Reason Termination Date"), which date is not earlier than thirty (30) days after the date such notice is provided to Company (the "Notice Delivery Date") and not later than ninety (90) days after the Notice Delivery Date, and (y) Company does not remedy the event prior to the Good Reason Termination Date.  In no event shall there be a Resignation for Good Reason unless such resignation also constitutes a 409A Separation.  For purposes of this Agreement, an Executive Group Employee shall have "good reason" if there occurs without such Employee's consent: 

		
	 (A)
	a material diminution in Employee's authority, duties or responsibilities, or a change in Employee's supervisory reporting 

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relationship within the Company that materially and negatively alters Employee's ability to perform his or her duties and responsibilities (other than pursuant to a transfer or promotion to a position of equal or enhanced responsibility or authority); 

		
	(B)
	a change, caused by the Employer (as defined in Paragraph 5(g)), in geographic location of greater than fifty (50) miles of the location at which Employee primarily performs services for the Company or Employer; 

		
	(C)
	a reduction of more than 10% in Employee's annual target total direct compensation (the aggregate of Employee's annual base salary, annual incentive valued at the target level, and long-term incentives annualized if grants are not occurring annually and valued at the target level with respect to performance vesting components), exclusive of any across-the-board reduction similarly affecting all or substantially all similarly-situated employees; or 

		
	(D)
	any material breach by Employer (as defined in Paragraph 5(g)) of an employment agreement between Employer or its successor and Employee; provided, however, that Employee shall not have "good reason" on account of any alleged breach of an employment agreement based on a material reduction in employee benefits as of a Change in Control that is immaterial or where benefits to Employee from participation in such employee benefit plans are not reduced by more than ten percent (10%) in the aggregate.   

 (ix)    A "Retirement" means, notwithstanding the definition of "Retirement" under the Plan, a termination of Employee's Employment (either by Employee voluntarily or by Company as a Termination Without Cause) that is at age 55 or older with no less than 10 years of service.   
(x)      A "Scheduled Vesting Date" shall mean the second Friday in March following the Meeting Date.  

(xi)    A "Termination Without Cause" means Company’s termination of Employee’s Employment that is not for Cause.  A "Termination With Cause" means Company's termination of Employee's Employment that is for Cause.  

(xii)      A "Retirement Installment" is an election made pursuant to the Rules to receive, after Retirement and prior to death, any Share issuance amounts in incremental installments over the number of years elected by Employee as allowed by the Rules.  

j.    Payments to Third Party.  Upon death of Employee followed by a valid written request for payment, the Shares shall be issued as soon as administratively practical to Employee’s beneficiary named in a written beneficiary designation filed with Company’s Corporate Secretary on a form for the Plan or, if there is no such designated beneficiary, to Employee’s executor or administrator or other personal representative acceptable to the Corporate Secretary.  Any request 

9

     

to pay any person or persons other than Employee shall be accompanied by such documentation as Company may reasonably require, including without limitation, evidence satisfactory to Company of the authority of such person or persons to receive the payment. 

4.    TAXES.  

a.    Tax Withholding; Valuation.  Employee understands and agrees that, at the time any tax withholding obligation arises in connection with (i) a Share issuance, (ii) Retirement-eligibility, or (iii) a PSU Vesting, Company may withhold, in Shares if Company requires or a valid election applies under this Section 4, or in cash from payroll or other amounts Company owes or will owe Employee, any applicable withholding, payroll and other required tax amounts due upon Vesting, issuance of Shares, Retirement-eligibility, or any other applicable event.  Tax Withholding may be made by any means permitted under the Plan, as approved by the Committee, and as permitted under the law.  The valuation of the PSUs, and any Shares that Company may issue attributable to Vested PSUs, for tax and other purposes shall be as set forth in the Rules and in applicable laws and regulations ("Valuation Rules").  In the absence of the satisfaction of tax obligations, Company may refuse to issue the Shares.    

b.    Acceleration of Share Issuance to Cover Employment Tax Liabilities.  Employee understands and agrees that certain tax withholding amounts may be due prior to an issuance of Shares.  For instance, withholding amounts for the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) or 3121(v)(2) ("FICA Tax") may be due upon Employee meeting Retirement-eligibility requirements during an Original Delay Period subsequent to a Change in Control.  If Shares are issued on an accelerated basis to satisfy the FICA Tax as provided in this Paragraph, then Employee may have income tax at source on wages imposed under Code Section 3401 or the corresponding withholding provisions of applicable state, local, or foreign tax laws (together with the FICA Tax, the "FICA Related Taxes").  When and in the manner permitted by the Committee or its delegate in their sole discretion and unless otherwise prohibited by law, Company may satisfy (or may allow Employee to elect to satisfy) the FICA Related Taxes through the accelerated issuance of Shares (including the accelerated issuance of Shares for which a Vesting Date may not have yet occurred but for which the underlying PSU is no longer subject to substantial risk of forfeiture).  In no event, however, may the value (determined under the Valuation Rules) of the total accelerated Share issuance exceed the aggregate amount of the FICA Related Taxes.  

c.    Satisfaction in Share Retention.  Subject to the requirements of the Committee or its delegate in their sole discretion and unless otherwise prohibited by law, Company may require Employee to satisfy, or may allow Employee (or his or her guardian, legal representative or successor) to irrevocably elect in writing on a Company designated form to satisfy, any income tax withholding obligation in connection with the PSUs through the retention of whole Shares which would otherwise have been issued, which Shares shall not belong to Employee upon such retention.  

d.    Remedies.  If withholding is not effected by Company for any reason at the time of the taxation event, then Employee agrees to pay Company any withholding amounts due within the deadline imposed by Company.  If, within the deadline imposed by Company, Employee has not paid any withholding amounts due or, subject to compliance with Treasury Regulations § 1.409A-3(j)(4), has not elected, if allowed by the Committee or its delegate in their sole discretion, whether to have Shares retained for taxes or to pay cash for the tax withholding, then Company may, at its 

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sole discretion (a) retain whole Shares which would otherwise have been issued (including without limitation withdrawal of Shares that had previously been placed into Employee’s book entry account), (b) deduct such amounts in cash from payroll or other amounts Company owes or will owe Employee, or (c) effect some combination of Share retention and cash deduction (collectively, “Remedies for Amounts Owed”).  

5.    VIOLATION OF NON-SOLICITATION, NONUSE AND NONDISCLOSURE PROVISIONS.  Employee acknowledges that Employee’s agreement to this Section 5 is a key consideration for the grant of the PSUs.  Employee hereby agrees with Company as follows:

a.    Non-Solicitation of Employees, Customers and Prospective Customers.  Employee agrees that during the twelve (12) month period subsequent to termination of employment with “Employer” (as defined in Paragraph 5(g)), Employee will not solicit any employee of Employer or of any “Applicable Company Entity” (as defined in Paragraph 5(g)) to leave such employment to become employed by a competitor of Employer or of any Applicable Company Entity.  Employee further agrees that, during the twelve (12) month period subsequent to termination of employment with Employer, Employee will not solicit or contact any person, business or entity which was a “Customer” or “Prospective Customer” (each as defined in Paragraph 5(g)) for purposes of selling goods or services of the type sold or rendered by Employer or any Applicable Company Entity.

b.    Ownership of Confidential Information, and Inventions and Works.  All "Confidential Information,"  "Inventions" and "Works" (each as defined in Paragraph 5(g)) and documents and other materials containing Confidential Information, Inventions and Works are the exclusive property of Employer.  Employee shall make full and prompt disclosure to Employer of all Inventions.  Employee assigns and agrees to assign to Employer all of Employee’s right, title and interest in Inventions.  Employee acknowledges and agrees that all Works are "works made for hire" under the United States copyright laws and that all ownership rights vest exclusively in Employer from the time each Work is created.  Should a court of competent jurisdiction hold that a Work is not a "work made for hire," Employee agrees to assign and hereby assigns to Employer all of Employee’s right, title and interest in the Work.  In the event any Invention or Work may be construed to be non-assignable, Employee hereby grants to Employer a perpetual, royalty-free, non-exclusive license to make, use, sell, have made, and/or sublicense such non-assignable Invention or Work.  Employee agrees to assist Employer to obtain and vest its title to all Inventions and Works, including any patent or copyright applications or patents or copyrights in any country, by executing all necessary or desirable documents, including applications for patent or copyright and assignments thereof, during and after employment, without charge to Employer, at the request and expense of Employer.

c.    Recordkeeping and Return of Confidential Information, Inventions and Works. Employee agrees to maintain regular records of all Inventions and Works developed or written while employed with Employer.  Employee agrees to comply with any procedures disseminated by Employer with respect to such recordkeeping.  Employee agrees to provide such records to Employer periodically and/or upon request by Employer.  Employee agrees to return to Employer all Confidential Information, Inventions and Works in any tangible form, and copies thereof in the custody or possession of Employee, and all originals and copies of analyses, compilations, studies or documents pertaining to any Confidential Information, Inventions and  Works, in whatever form or medium, upon a request by Employer, or upon termination of employment.  

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d.    Nonuse and Nondisclosure.  Employee shall not, either during or after Employee’s employment by Employer, disclose any Confidential Information, Inventions or Works to any other person or entity outside of his employment, or use any Confidential Information, Inventions or Works for any purpose without the prior written approval of an officer of Employer, except to the extent required to discharge Employee’s duties assigned by Employer.

e.    Subsequent Employer Notice. During the term of Employee’s employment with Employer and for the longer of one year thereafter, or any period in which the non-solicitation obligation set forth herein applies (the "Identification Period"), Employee agrees to identify to potential subsequent employer(s), partner(s) or business associate(s) Employee’s obligations under this Agreement prior to committing to a position with the employer(s), partner(s), or business associate(s).  Employee agrees that Employer may, at its discretion, provide a copy of Section 5 of this Agreement to any of Employee’s subsequent employer(s), partner(s), or business associate(s), and may notify any or all of them of Employee’s obligations under this Agreement.  During the Identification Period, Employee shall give written notice to Employer’s Human Resources Department identifying any subsequent employer(s), partner(s), or business associate(s) of Employee.  

f.    Remedies.  Employee agrees that the provisions of Section 5 hereof are necessary for protection of the business of Company and that violation of such provisions is cause for termination of employment and would cause irreparable injury to Company not adequately remediable in damages.  Employee agrees that any breach of its obligations under Section 5 shall, in addition to any other relief to which Company may be entitled, including without limitation relief under the Company's Compensation Recoupment Policy described in Section 7, entitle Company to temporary, preliminary and final injunctive relief against further breach of such obligations, along with attorneys’ fees and other costs incurred by Company in connection with such action.  Employee agrees to the waiver of any requirement for the posting of any bond as a condition to such equitable relief.  For any non-equitable relief to which the Company is entitled, Company may apply all or any of the Remedies for Amounts Owed, as described in Paragraph 4(d).

g.    Section 5 Definitions.  For purposes of Section 5, the following terms have the meanings set forth below:

(i)    “Applicable Company Entity”  means Company, a Subsidiary (as defined in Paragraph 3(i)), or Affiliate (as defined in Paragraph 3(i) and also as defined in Paragraph 5(g)(iv)) with which Employee worked or was involved during the course of his employment with Employer or about which Employee gained Confidential Information during the course of Employee’s employment with Employer.   

(ii)    “Confidential Information” means non-public information about Company, its Subsidiaries and Affiliates, including without limitation:

		
	(A)
	inventions not disclosed to the public by Company, its Subsidiary or Affiliate, products, designs, prototypes, data, models, file formats, interface protocols, documentation, formulas, improvements, discoveries, methods, computer hardware, firmware and software, source code, object code, programming sequences, algorithms, flow 

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charts, test results, program formats and other works of authorship relating to or used in the current or prospective business or operations of Company, Subsidiaries and Affiliates, all of which is Confidential Information, whether or not patentable or made on Employer premises or during normal working hours; and

		
	(B) 
	business strategies, trade secrets, pending contracts, unannounced services and products, financial projections, customer lists, information about real estate Company, its Subsidiary or Affiliate is interested in acquiring, and non-public information about others obtained as a consequence of employment by Employer, including without limitation information about customers and their services and products, the account holders or shareholders of customers of Company, Subsidiaries and Affiliates, and associates, suppliers or competitors of Company, Subsidiaries and Affiliates. 

(iii)    “Customer” means any person, business or entity that has done business with Employer or any Applicable Company Entity at any time during the twelve (12) month period prior to the date of termination of Employee’s employment.  

(iv)    “Employer” means any Company-related entity that has employed Employee, whether it be Company, its Subsidiary (as defined in Paragraph 3(i)), or Affiliate (as defined in Paragraph 3(i) and also for purposes of this Section 5 including any entity in which Company has a direct or indirect equity interest of at least twenty-five percent (25%)).

(v)    “Inventions” means all discoveries, improvements, and inventions relating to or used in the current or prospective business or operations of Company, Subsidiaries and Affiliates, whether or not patentable, which are created, made, conceived or reduced to practice by Employee or under Employee’s direction or jointly with others during Employee’s employment by Employer, whether or not during normal working hours or on the premises of Employer.

(vi)    “Prospective Customer” means any person, business or entity to whom or to which Employer or any Applicable Company Entity has made, at any time during the twelve (12) month period prior to the date of termination of Employee’s employment, a proposal to do business.   

(vii)    “Works” mean all original works fixed in a tangible medium of expression by Employee or under Employee’s direction or jointly with others during Employee’s employment by Employer, whether or not during normal working hours or on the premises of Employer, and related to or used in the current or prospective business or operations of Employer.

h.    Survival.  Except as limited in time in Paragraph 5(a), Employee’s obligations in this Section 5 shall survive and continue beyond the PSU Vesting or forfeiture dates, the Original Delay Period or an Extended Delay Period, any issuance or transfer of Shares, and any termination or expiration of the Agreement for any reason.

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i.    Competing Obligations.  Employee may have entered or may enter into an agreement that contains an obligation protective of any Company-related entity that is similar to, but more or less restrictive than, an obligation set forth in this Section 5 ("Competing Obligation").  By executing this Agreement, Employee agrees that if any Competing Obligation applies, he shall be bound by the obligation (whether in this Agreement or in a separate agreement) that is the most protective to the Company-related entity.   

j.      Enforceability.  If the final judgment of a court or arbitrator with competent jurisdiction declares that any term or provision of this Section 5 is invalid or unenforceable, Employee agrees that the court or arbitrator making the determination of invalidity or unenforceability will have the power to reduce the scope, duration, or geographic area of the applicable term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and that the terms and provisions of this Section 5 will be enforceable as so modified.  Employee further agrees that if any part of this Section 5 is held by a court or arbitrator with competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part by reason of any rule of law or public policy, and cannot be modified in accordance with this paragraph, such part shall be deemed to be severed from the remainder of this Section 5 for the purpose only of the particular legal proceedings in question, and all other covenants and provisions of this Agreement shall in every other respect continue in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision.

6.    CHANGE IN CONTROL.

a.    Definition of Change in Control.   For purposes of this Agreement, a "Change in Control" shall have the same meaning as the definition of such term in the Plan, as amended and interpreted from time to time, as of the date of the event that may cause a Change in Control.
    
Notwithstanding the occurrence of a Change in Control under the applicable definition, a Change in Control shall not occur with respect to Employee if, in advance of such event, Employee agrees with Company in writing that such event shall not constitute a Change in Control; provided, however, in no event shall Employee's agreement under this paragraph affect a payment subject to 409A from being made where such payment event is a 409A Change in Control.
b.      Committee Action in Connection with Change in Control.  The Committee (as constituted before such Change in Control) has the authority to take the actions set forth in Section 14 of the Plan.  For instance, by way of example and not limitation, the Committee (as constituted before such Change in Control) may determine in its sole discretion that Company, or any successor company in the applicable merger or sale agreement, may pay cash to Employee in an amount equal to the amount (as determined by the Committee) that could have been attained by Employee had the Award been currently payable, in lieu of issuing Shares that would otherwise be issued in connection with Vesting or the termination of an Extended Delay Period on or after the Change in Control.  
 
7.    GENERAL.

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a.    No Employment Contract.  Except to the extent the terms of any separate written employment contract between Employee and Company may expressly provide otherwise, Company shall be under no obligation to continue Employee’s employment with Company for any period of specific duration and may terminate such employment at any time, as a Termination With Cause or as a Termination Without Cause.

b.      Recoupment Policy.  This Award and any resulting delivery of Shares is subject to set-off, recoupment, or other recovery pursuant to the Company's Compensation Recoupment Policy adopted by the Committee effective December 15, 2014 and as amended from time to time (the “Policy”).  By accepting this Award, Employee expressly agrees that the Policy applies to this and any previous Awards Employee has received, and Employee consents to any permissive or mandated "Clawback Actions" (as defined in the Policy) as applied to any such Awards. 

c.    Compliance With Certain Laws and Regulations.  If the Committee determines that the consent or approval of any governmental regulatory body or that any action with respect to the PSUs is necessary or desirable in connection with the granting of the PSUs or the issuance of Shares, Employee shall supply Company with such representations and information as Company may request and shall otherwise cooperate with Company in obtaining any such approval or taking such action.

d.    Construction and No Waiver.  Notwithstanding any provision of this Agreement, the granting of the PSUs and the issuance of the Shares are subject to the provisions of the Plan and any procedures or Rules promulgated thereunder by the Committee or its delegate.  The failure of Company in any instance to exercise any of its rights granted under this Agreement, the Plan or the Rules shall not constitute a waiver of any other rights that may arise under this Agreement.

e.    Notices.  Any notice required to be given or delivered to Company under the terms of this Agreement shall be in writing and addressed to Company in care of its Corporate Secretary at its corporate offices, and such notice shall be deemed given only upon actual receipt by Company.  Any notice required to be given or delivered to Employee shall be in writing and addressed to Employee at the address on file with Company’s Human Resources Department or such other address specified in a written notice given by Employee to Company, and all such notices shall be deemed to have been given or delivered upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

f.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of Delaware without reference to its principles of conflicts of law.

g.    Entire Agreement.  Subject to Paragraph 5(i), this Agreement contains the entire agreement between the parties with respect to the subject matter hereof, and supersedes all prior agreements or understandings between the parties relating thereto.

h.      Amendment.  This Agreement may be amended only in a manner approved by Company evidencing both parties’ agreement to the amendment.  This Agreement may also be amended, without prior notice to Employee and without Employee's consent, (i) prior to any Change in Control by the Committee if the Committee in good faith determines that the amendment does not materially adversely affect any of Employee's rights under this Agreement or (ii) at any time if 

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the Committee deems it necessary or appropriate to ensure that the PSUs either remain exempt from, or compliant with, Internal Revenue Code Section 409A.   
    
i.    Acknowledgement.  The PSU grant and this Agreement are subject to the terms and conditions of the Plan, the Rules, and any other rules or procedures adopted by the Committee or its delegate. The Plan is incorporated in this Agreement by reference and all capitalized terms used in this Agreement have the meaning set forth in the Plan, unless this Agreement specifies a different meaning.  Employee agrees to accept as binding, conclusive and final all decisions and interpretations by the Committee of the Plan, this Agreement, the Rules, and other applicable rules or procedures regarding any issues arising thereunder, including without limitation all decisions and interpretations related to 409A and regulations and guidance issued thereunder.

By accepting the terms and conditions of this Agreement, Employee accepts the PSUs and acknowledges that the PSUs are subject to all the terms and provisions of the Plan (including without limitation the powers of the Committee to make determinations and adjustments as provided in Sections 3, 4.2, 5, 14.1 and 15.1 of the Plan), this Agreement, the Rules, and other applicable rules or procedures.

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