Document:

nvet-ex107_816.htm

 

Exhibit 10.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXVET BIOPHARMA PUBLIC LIMITED COMPANY

 

2015 EQUITY INCENTIVE PLAN

 

 

			

 

 

	
1.
	
Establishment, Purpose and Term of Plan
	
1

	
1.1 
	
Establishment
	
1

	
1.2 
	
Purpose
	
1

	
1.3 
	
Term of Plan
	
1

	
2.
	
Definitions and Construction
	
1

	
2.1 
	
Definitions
	
1

	
2.2 
	
Construction
	
8

	
3. 
	
Administration
	
8

	
3.1 
	
Administration by the Committee
	
8

	
3.2 
	
Authority of Officers
	
8

	
3.3 
	
Administration with Respect to Insiders
	
9

	
3.4 
	
Committee Complying with Section 162(m)
	
9

	
3.5 
	
Powers of the Committee
	
9

	
3.6 
	
Option Repricing
	
10

	
3.7 
	
Indemnification
	
10

	
4. 
	
Shares Subject to Plan
	
10

	
4.1 
	
Maximum Number of Shares Issuable
	
10

	
4.2 
	
Annual Increase in Maximum Number of Shares Issuable
	
11

	
4.3 
	
Share Counting
	
11

	
4.4 
	
Adjustments for Changes in Capital Structure
	
11

	
4.5 
	
Assumption or Substitution of Awards
	
12

	
5. 
	
Eligibility, Participation, Minimum Exercise/Purchase Price, and Incentive Stock Option Limitations
	

12

	
5.1 
	
Persons Eligible for Awards
	
12

	
5.2 
	
Participation in the Plan
	
12

	
5.3 
	
Minimum Exercise/Purchase Price
	
12

	
5.4 
	
Incentive Stock Option Limitations
	
12

	
6. 
	
Share Options
	
13

	
6.1 
	
Exercise Price
	
13

	
6.2 
	
Exercisability and Term of Options
	
13

	
6.3 
	
Payment of Exercise Price
	
14

	
6.4 
	
Effect of Termination of Service
	
15

	
6.5 
	
Transferability of Options
	
16

-i-

 

	
7. 
	
Restricted Share Units
	
16

	
7.1 
	
Grant of Restricted Share Unit Awards
	
16

	
7.2 
	
Purchase Price
	
16

	
7.3 
	
Vesting
	
17

	
7.4 
	
Voting Rights, Dividend Equivalent Rights, and Distributions
	
17

	
7.5 
	
Effect of Termination of Service
	
18

	
7.6 
	
Settlement of Restricted Share Unit Awards
	
18

	
7.7 
	
Nontransferability of Restricted Share Unit Awards
	
18

	
8. 
	
Performance Awards
	
18

	
8.1 
	
Types of Performance Awards Authorized
	
18

	
8.2 
	
Initial Value of Performance Shares and Performance Units
	
18

	
8.3 
	
Establishment of Performance Period, Performance Goals and Performance Award Formula
	

19

	
8.4 
	
Measurement of Performance Goals
	
19

	
8.5 
	
Settlement of Performance Awards
	
20

	
8.6 
	
Voting Rights; Dividend Equivalent Rights and Distributions
	
21

	
8.7 
	
Effect of Termination of Service
	
22

	
8.8 
	
Nontransferability of Performance Awards
	
22

	
9. 
	
Cash-Based Awards and Other Share-Based Awards
	
22

	
9.1 
	
Grant of Cash-Based Awards
	
23

	
9.2 
	
Grant of Other Share-Based Awards
	
23

	
9.3 
	
Value of Cash-Based and Other Share-Based Awards
	
23

	
9.4 
	
Payment or Settlement of Cash-Based Awards and Other Share-Based Awards
	

23

	
9.5 
	
Voting Rights; Dividend Equivalent Rights and Distributions
	
23

	
9.6 
	
Effect of Termination of Service
	
24

	
9.7 
	
Nontransferability of Cash-Based Awards and Other Share-Based Awards
	

24

	
10. 
	
Standard Forms of Award Agreement
	
24

	
10.1 
	
Award Agreements
	
24

	
10.2 
	
Authority to Vary Terms
	
24

	
11. 
	
Change in Control
	
25

	
11.1 
	
Effect of Change in Control on Awards
	
25

-ii-

 

	
11.2 
	
Effect of Change in Control on Nonemployee Director Awards
	
26

	
11.3 
	
Federal Excise Tax Under Section 4999 of the Code
	
26

	
12. 
	
Compliance with Applicable Law
	
27

	
13. 
	
Compliance with Section 409A
	
27

	
13.1 
	
Awards Subject to Section 409A
	
27

	
13.2 
	
Deferral and/or Distribution Elections
	
28

	
13.3 
	
Subsequent Elections
	
28

	
13.4 
	
Payment of Section 409A Deferred Compensation
	
29

	
14. 
	
Tax Withholding
	
31

	
14.1 
	
Tax Withholding in General
	
31

	
14.2 
	
Withholding in or Directed Sale of Shares
	
31

	
15. 
	
Amendment, Suspension or Termination of Plan
	
32

	
16. 
	
Miscellaneous Provisions
	
32

	
16.1 
	
Repurchase Rights
	
32

	
16.2 
	
Forfeiture Events
	
32

	
16.3 
	
Provision of Information
	
33

	
16.4 
	
Rights as Employee, Consultant or Director
	
33

	
16.5 
	
Rights as a Shareholder
	
33

	
16.6 
	
Delivery of Title to Shares
	
33

	
16.7 
	
Fractional Shares
	
33

	
16.8 
	
Retirement and Welfare Plans
	
33

	
16.9 
	
Beneficiary Designation
	
34

	
16.10 
	
Severability
	
34

	
16.11 
	
No Constraint on Corporate Action
	
34

	
16.12 
	
Unfunded Obligation
	
34

	
16.13 
	
No Representations or Covenants with respect to Tax Qualification
	
34

	
16.14
	
Choice of Law
	
35

	
 
	

	

	
 

 

-iii-

 

Nexvet Biopharma Public Limited Company

2015 Equity Incentive Plan

 

 

1.Establishment, Purpose and Term of Plan.

1.1Establishment.  

The Nexvet Biopharma Public Limited Company 2015 Equity Incentive Plan (the “Plan”) is hereby established effective as of the day immediately preceding the effective date of the initial registration by the Company of its Shares under Section 12 of the Securities Act (the “Effective Date”). 

1.2Purpose.  

The purpose of the Plan is to advance the interests of the Participating Company Group and its shareholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the Participating Company Group.  The Plan seeks to achieve this purpose by providing for Awards in the form of Options, Restricted Share Units, Performance Shares, Performance Units, Cash-Based Awards and Other Share-Based Awards. 

1.3Term of Plan.  

The Plan shall continue in effect until its termination by the Committee; provided, however, that all Awards shall be granted, if at all, within ten (10) years from the Effective Date. 

2.Definitions and Construction.

2.1Definitions.  

Whenever used herein, the following terms shall have their respective meanings set forth below: 

(a)“Affiliate” means (i) a parent entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) a subsidiary entity, other than a Subsidiary Corporation, that is controlled by the Company directly or indirectly through one or more intermediary entities.  For this purpose, the terms “parent,” “subsidiary,” “control” and “controlled by” shall have the meanings assigned such terms for the purposes of registration of securities on Form S-8 under the Securities Act.

(b)“Award” means any Option, Restricted Share Unit, Performance Share, Performance Unit, Cash-Based Award, or Other Share-Based Award granted under the Plan.

(c)“Award Agreement” means a written or electronic agreement between the Company and a Participant setting forth the terms, conditions and restrictions applicable to an Award.

(d)“Board” means the Board of Directors of the Company.

(e)“Cash-Based Award” means an Award denominated in cash and granted pursuant to Section 9.

 

 

(f)“Cashless Exercise” means a Cashless Exercise as defined in Section 6.3(b)(i).

(g)“Cause” means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between a Participant and a Participating Company applicable to an Award, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated failure to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition, non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company.

(h)“Change in Control” means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between the Participant and a Participating Company applicable to an Award, the occurrence of any one or a combination of the following:

(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in Rule 13d‐3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of the Company’s then‐outstanding securities entitled to vote generally in the election of Directors; provided, however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A) an acquisition by any person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition directly from the Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any acquisition by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating Company, or (E) any acquisition by an entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; or

(ii)an Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which the shareholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power 

2

 

of the outstanding securities entitled to vote generally in the election of Directors or, in the case of an Ownership Change Event described in Section 2.1(cc)(iii), the entity to which the assets of the Company were transferred (the “Transferee”), as the case may be; or

(iii)a date specified by the Committee following approval by the shareholders of a plan of complete liquidation or dissolution of the Company;

provided, however, that a Change in Control shall be deemed not to include a transaction described in subsections (i) or (ii) of this Section 2.1(h) in which a majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Directors who were Directors of the Company immediately preceding the commencement of the actions leading up to the Change in Control (but excluding a director who was elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company).

For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities.  The Committee shall determine whether multiple events described in subsections (i), (ii) and (iii) of this Section 2.1(h) are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive.

(i)“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations and administrative guidelines promulgated thereunder.

(j)“Committee” means the Compensation Committee of the Board and such other committee or subcommittee of the Board, if any, duly appointed to administer the Plan and having such powers in each instance as shall be specified by the Board.  If, at any time, there is no committee of the Board then authorized or properly constituted to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.

(k)“Company” means Nexvet Biopharma Public Limited Company, a corporation incorporated in Ireland, and any successor corporation thereto.

(l)“Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on Form S‐8 under the Securities Act.

(m)“Covered Employee” means, at any time the Plan is subject to Section 162(m), any Employee who is or may reasonably be expected to become a “covered employee” as defined in Section 162(m), or any successor statute, and who is designated, either as an individual Employee or a member of a class of Employees, by the Committee no later than the earlier of (i) the date that is ninety (90) days after the beginning of the Performance Period, or (ii) 

3

 

the date on which twenty-five percent (25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for such applicable Performance Period.

(n)“Director” means a member of the Board.

(o)“Disability” means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between the Participant and a Participating Company applicable to an Award, the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the Code.

(p)“Dividend Equivalent Right” means the right of a Participant, granted at the discretion of the Committee or as otherwise provided by the Plan, to receive a credit for the account of such Participant in an amount equal to the cash dividends paid on one Share for each Share represented by an Award held by such Participant.

(q)“Employee” means any person treated as an employee (including an Officer or a Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a Director nor payment of a Director’s fee shall be sufficient to constitute employment for purposes of the Plan.  The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be.  For purposes of an individual’s rights, if any, under the terms of the Plan as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.

(r)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s)“Fair Market Value” means, as of any date, the value of a Share or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:

(i)Except as otherwise determined by the Committee, if, on such date, the Shares are listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a Share shall be the closing price of a Share as quoted on the national or regional securities exchange or quotation system constituting the primary market for the Shares, as reported in The Wall Street Journal or such other source as the Company deems reliable.  If the relevant date does not fall on a day on which the Shares have traded on such securities exchange or quotation system, the date on which the Fair Market Value shall be established shall be the last day on which the Shares were so traded or quoted prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion.

4

 

(ii)Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value of a Share on the basis of the opening, closing, or average of the high and low sale prices of a Share on such date or the preceding trading day, the actual sale price of a Share received by a Participant, any other reasonable basis using actual transactions in the Shares as reported on a national or regional securities exchange or quotation system, or on any other basis consistent with the requirements of Section 409A (including, but not limited to, the determination of Fair Market Value based on the average selling price of the Shares during a specified period that is within thirty (30) days before or thirty (30) days after such date, provided that, with respect to the grant of an Option, the commitment to grant such Award based on such valuation method must be irrevocable before the beginning of the specified period).  The Committee may vary its method of determination of the Fair Market Value as provided in this Section for different purposes under the Plan to the extent consistent with the requirements of Section 409A.

(iii)If, on such date, the Shares are not listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a Share shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse, and in a manner consistent with the requirements of Section 409A.

(t)“Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.

(u)“Insider” means an Officer, a Director or other person whose transactions in Shares are subject to Section 16 of the Exchange Act.

(v)“Net Exercise” means a Net Exercise as defined in Section 6.3(b)(iii).

(w)“Nonemployee Director” means a Director who is not an Employee.

(x)“Nonemployee Director Award” means any Award granted to a Nonemployee Director.

(y)“Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Award Agreement) or which does not qualify as an Incentive Stock Option.

(z)“Officer” means any person designated by the Board as an officer of the Company.

(aa)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.

(bb)“Other Share-Based Award” means an Award denominated in Shares and granted pursuant to Section 9.

5

 

(cc)“Ownership Change Event” means the occurrence of any of the following with respect to the Company:  (i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company).

(dd)“Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.

(ee)“Participant” means any eligible person who has been granted one or more Awards.

(ff)“Participating Company” means the Company or any Parent Corporation, Subsidiary Corporation, or Affiliate.

(gg)“Participating Company Group” means, at any point in time, the Company and all other entities collectively which are then Participating Companies.

(hh)“Performance Award” means an Award of Performance Shares or Performance Units.

(ii)“Performance Award Formula” means, for any Performance Award, a formula or table established by the Committee pursuant to Section 8.3 which provides the basis for computing the value of a Performance Award at one or more levels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period.

(jj)“Performance-Based Compensation” means compensation under an Award that satisfies the requirements of Section 162(m) for certain performance-based compensation paid to Covered Employees.

(kk)“Performance Goal” means a performance goal established by the Committee pursuant to Section 8.3.

(ll)“Performance Period” means a period established by the Committee pursuant to Section 10.3 at the end of which one or more Performance Goals are to be measured.

(mm)“Performance Share” means a right granted to a Participant pursuant to Section 8 to receive a payment equal to the value of a Performance Share, as determined by the Committee, based upon attainment of applicable Performance Goal(s).

(nn)“Performance Unit” means a right granted to a Participant pursuant to Section 8 to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon attainment of applicable Performance Goal(s).

6

 

(oo)“Restricted Share Unit” means a right granted to a Participant pursuant to Section 7 to receive on a future date or the occurrence of a future event a Share or cash in lieu thereof, as determined by the Committee.

(pp)“Rule 16b‐3” means Rule 16b‐3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.

(qq)“Section 162(m)” means Section 162(m) of the Code.

(rr)“Section 409A” means Section 409A of the Code.

(ss)“Section 409A Deferred Compensation” means compensation provided pursuant to an Award that constitutes nonqualified deferred compensation within the meaning of Section 409A.

(tt)“Securities Act” means the Securities Act of 1933, as amended.

(uu)“Service” means a Participant’s employment or service with the Participating Company Group, whether as an Employee, a Director or a Consultant.  Unless otherwise provided by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders Service or a change in the Participating Company for which the Participant renders Service, provided that there is no interruption or termination of the Participant’s Service.  Furthermore, a Participant’s Service shall not be deemed to have been interrupted or terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company.  However, unless otherwise provided by the Committee, if any such leave taken by a Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract.  Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, an unpaid leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s Award Agreement.  A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the business entity for which the Participant performs Service ceasing to be a Participating Company.  Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of and reason for such termination.

(vv)“Shares” means the ordinary shares of the Company, as adjusted from time to time in accordance with Section 4.4.

(ww)“Share Tender Exercise” means a Share Tender Exercise as defined in Section 6.3(b)(ii).

(xx)“Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.

(yy)“Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns securities possessing more than ten percent (10%) of the 

7

 

total combined voting power of all classes of securities of a Subsidiary Corporation or a Parent Corporation within the meaning of Section 422(b)(6) of the Code.

(zz)“Trading Compliance Policy” means the written policy of the Company pertaining to the purchase, sale, transfer or other disposition of the Company’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities.

(aaa)“Vesting Conditions” mean those conditions established in accordance with the Plan prior to the satisfaction of which an Award or shares subject to an Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s monetary purchase price, if any, for such shares upon the Participant’s termination of Service or failure of a performance condition to be satisfied.

2.2Construction.  

Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

3.Administration.

3.1Administration by the Committee.  

The Board has delegated the administration of the Plan to the Committee including the authority to grant one or more Awards without the further approval of the Board.  The Plan shall be administered by the Committee.  All questions of interpretation of the Plan, of any Award Agreement or of any other form of agreement or other document employed by the Company in the administration of the Plan or of any Award shall be determined by the Committee, and such determinations shall be final, binding and conclusive upon all persons having an interest in the Plan or such Award, unless fraudulent or made in bad faith.  Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or Award Agreement or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest therein.  All expenses incurred in connection with the administration of the Plan shall be paid by the Company.

3.2Authority of Officers.  

Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the Officer has apparent authority with respect to such matter, right, obligation, determination or election.  To the extent permitted by applicable law, the Board or the Committee may, in its discretion, delegate to a committee comprised of one or more Officers and/or Directors the authority to grant one or more Awards of Options or Restricted Share Units, without further approval of the Board or the Committee, to any Employee, other than an Employee who, at the time of such grant, is an Insider or a Covered Employee, and to exercise such other powers under the Plan as the Board or the Committee may determine; provided, however, that (a) the Board and/or the Committee shall fix the maximum number of shares subject to Awards that may be granted by such Officers and/or Directors, (b) each such Award shall be subject to the terms and conditions of the appropriate 

8

 

standard form of Award Agreement approved by the Board or the Committee and shall conform to the provisions of the Plan, and (c) each such Award shall conform to such other limits and guidelines as may be established from time to time by the Board and/or the Committee.

3.3Administration with Respect to Insiders.  

With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b‐3.

3.4Committee Complying with Section 162(m).  

If the Company is a “publicly held corporation” within the meaning of Section 162(m), the Board may establish a Committee of “outside directors” within the meaning of Section 162(m) to approve the grant of any Award intended to result in the payment of Performance-Based Compensation.

3.5Powers of the Committee.  

In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee shall have the full and final power and authority, in its discretion:

(a)to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of Shares, units or monetary value to be subject to each Award;

(b)to determine the type of Award granted;

(c)to determine the Fair Market Value of Shares or other property;

(d)to determine whether an Award shall be intended to result in Performance-Based Compensation; 

(e)to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares pursuant to any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding obligation arising in connection with any Award, including by the withholding or delivery of Shares, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the Performance Measures, Performance Period, Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (vi) the time of expiration of any Award, (vii) the effect of any Participant’s termination of Service on any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan;

(f)to determine whether an Award will be settled in Shares, cash, other property or in any combination thereof;

(g)to approve one or more forms of Award Agreement;

(h)to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares acquired pursuant thereto;

9

 

(i)to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including with respect to the period following a Participant’s termination of Service;

(j)to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee deems necessary or desirable to comply with the laws of, or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose residents may be granted Awards; and

(k)to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law.

3.6Option Repricing.  

The Committee shall have the authority, without additional approval by the shareholders of the Company, to approve a program providing for either (a) the cancellation of outstanding Options having exercise prices per share greater than the then Fair Market Value of a Share (“Underwater Awards”) and the grant in substitution for Underwater Awards of new Options covering the same or a different number of shares but having a lower exercise price per share then on the original grant date, or payments in cash, or (b) the substitution of other Awards for Underwater Awards.

3.7Indemnification.  

In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

4.Shares Subject to Plan.

4.1Maximum Number of Shares Issuable.  

Subject to adjustment as provided in Sections 4.2, 4.3, and 4.4, the maximum aggregate number of Shares that may be issued under the Plan shall be equal to 1,280,000 Shares and shall consist of authorized but unissued or reacquired Shares or any combination thereof.  Notwithstanding the forgoing, and subject to adjustment pursuant to Section 4.4, the maximum aggregate number of Shares that may be subject 

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to issuance at any given time in connection with outstanding Awards granted under the Plan shall not exceed a number equal to ten percent (10%) of the total number of issued and outstanding Shares (calculated on a non-diluted basis).  One million two hundred eighty thousand (1,280,000) Shares, subject to adjustment under Section 4.4,may be  issued as Incentive Stock Options.

4.2Annual Increase in Maximum Number of Shares Issuable.  

Subject to adjustment as provided in Section 4.4, the maximum aggregate number of Shares that may be issued under the Plan as set forth in Section 4.1 shall be cumulatively increased on July 1, 2015 and on each subsequent July 1 through and including July 1, 2024, by a number of shares (the “Annual Increase”) equal to the smaller of (a) four percent (4%) of the number of Shares of the Company issued and outstanding on the immediately preceding June 30, or (b) an amount determined by the Board.  

4.3Share Counting.  If an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if Shares acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company for an amount not greater than the Participant’s purchase price, the Shares allocable to the terminated portion of such Award or such forfeited or repurchased Shares shall again be available for issuance under the Plan.  Shares shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash.  Shares withheld or reacquired by the Company in satisfaction of tax withholding obligations pursuant to Section 14.2 with respect to Options shall not be available for issuance under the Plan, however, shares withheld for such basis on other Awards shall again be available for issuance under the Plan.  If the exercise price of an Option is paid by means of a Net Exercise, then the number of Shares available for issuance under the Plan shall be reduced by the gross number of shares subject to the Option exercise.  If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of Shares owned by the Participant, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised.

4.4Adjustments for Changes in Capital Structure.  

Subject to any required action by the shareholders of the Company and the requirements of Sections 409A and 424 of the Code to the extent applicable, in the event of any change in the Shares effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, share dividend, share split, reverse share split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the shareholders of the Company in a form other than Shares (excepting regular, periodic cash dividends) that has a material effect on the Fair Market Value of Shares, appropriate and proportionate adjustments shall be made in the number and kind of shares subject to the Plan and to any outstanding Awards, the Annual Increase, and in the exercise or purchase price per share under any outstanding Award in order to prevent dilution or enlargement of Participants’ rights under the Plan.  For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.”  If a majority of the shares which are of the same class as the shares that are subject to outstanding Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the “New Shares”), the Committee may unilaterally amend the outstanding Awards to provide that such Awards are for New Shares.  In 

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the event of any such amendment, the number of shares subject to, and the exercise or purchase price per share of, the outstanding Awards shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion.  Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number and the exercise or purchase price per share shall be rounded up to the nearest whole cent, and in no event may the exercise or purchase price, if any, under any Award be decreased to an amount less than the nominal value, if any, of the Shares subject to such Award.  The Committee in its discretion, may also make such adjustments in the terms of any Award to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate, including modification of Performance Goals, Performance Award Formulas and Performance Periods.  The adjustments determined by the Committee pursuant to this Section shall be final, binding and conclusive.  

4.5Assumption or Substitution of Awards.  

The Committee may, without affecting the number of Shares reserved or available hereunder, authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or Shares, or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with Section 409A, any other applicable provisions of the Code and/or applicable laws.

	
 
	
5.
	
Eligibility, Participation, Minimum Exercise/Purchase Price, and Incentive Stock Option Limitations.

5.1Persons Eligible for Awards.  

Awards may be granted only to Employees, Consultants and Directors.

5.2Participation in the Plan.  

Awards are granted solely at the discretion of the Committee.  Eligible persons may be granted more than one Award.  However, eligibility in accordance with this Section shall not entitle any person to be granted an Award, or, having been granted an Award, to be granted an additional Award.

5.3Minimum Exercise/Purchase Price.  Notwithstanding anything in this Plan to the contrary, to the extent required by applicable law, the minimum exercise or purchase price for a Share shall, after taking into account any adjustment pursuant to Section 4.4, assumption or substitution pursuant to Section 4.5, or any other provisions in the Plan impacting the exercise or purchase price for a Share not be less than the nominal value of a Share.

5.4Incentive Stock Option Limitations.  

 

(a)Persons Eligible.  An Incentive Stock Option may be granted only to a person who, on the effective date of grant, is an Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation”).  Any person who is not an Employee of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option.

(b)Fair Market Value Limitation.  To the extent that options designated as Incentive Stock Options (granted under all equity plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during any calendar year for Shares having a Fair Market Value greater than One Hundred Thousand Dollars 

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($100,000), the portion of such options which exceeds such amount shall be treated as Nonstatutory Stock Options.  For purposes of this Section, options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of Shares shall be determined as of the time the option with respect to such Shares are granted.  If the Code is amended to provide for a limitation different from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code.  If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising.  In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first.  Upon exercise of the Option, shares issued pursuant to each such portion of the Option shall be separately identified.

6.Share Options.

Options shall be evidenced by Award Agreements specifying the number of Shares covered thereby, in such form as the Committee shall establish.  Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

6.1Exercise Price.  

The exercise price for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share shall be not less than the Fair Market Value of a Share on the effective date of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a Share on the effective date of grant of the Option.  Notwithstanding the foregoing, subject to Section 5.3, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner that would qualify under the provisions of Sections 409A or 424(a) of the Code.

6.2Exercisability and Term of Options.  

Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of seven (7) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option and (c) no Option granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable until at least six (6) months following the date of grant of such Option (except in the event of such Employee’s death, disability or retirement, upon a Change in Control, or as otherwise permitted by the Worker Economic Opportunity Act).  Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, each Option shall terminate seven (7) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions.

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6.3Payment of Exercise Price.

(a)Forms of Consideration Authorized.  Except as otherwise provided below, payment of the exercise price for the number of Shares being purchased pursuant to any Option shall be made (i) in cash, by check or in cash equivalent; (ii) if permitted by the Committee and subject to the limitations contained in Section 6.3(b), by means of (1) a Cashless Exercise, (2) a Share Tender Exercise or (3) a Net Exercise; (iii) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (iv) by any combination thereof.  The Committee may at any time or from time to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration, taking into account such considerations as it deems advisable, including, without limitation, the permissibility of such provisions under applicable law.

(b)Limitations on Forms of Consideration.

(i)Cashless Exercise.  A “Cashless Exercise” means the delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System).  The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise, including with respect to one or more Participants specified by the Company notwithstanding that such program or procedures may be available to other Participants.

(ii)Share Tender Exercise.  A “Share Tender Exercise” means the delivery of a properly executed exercise notice accompanied by a Participant’s tender to the Company, or attestation to the ownership, in a form acceptable to the Company of whole Shares owned by the Participant having a Fair Market Value that does not exceed the aggregate exercise price for the shares with respect to which the Option is exercised.  A Share Tender Exercise shall not be permitted if it would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s Shares.  If required by the Company, an Option may not be exercised by tender to the Company, or attestation to the ownership, of Shares unless such shares either have been owned by the Participant for a period of time required by the Company (and not used for another option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.

(iii)Net Exercise.  A “Net Exercise” means the delivery of a properly executed exercise notice followed by a procedure pursuant to which (1) the Company will reduce the number of shares otherwise issuable to a Participant upon the exercise of an Option by the largest whole number of shares having a Fair Market Value that does not exceed the aggregate exercise price for the shares with respect to which the Option is exercised, and (2) the Participant shall pay to the Company in cash the remaining balance of such aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued.

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(iv)Minimum payment Required.  If any of the foregoing exercise methods are implemented, the Company shall establish procedures, if required by applicable law, for the payment of a Share’s nominal value in a form acceptable under applicable law.

6.4Effect of Termination of Service.

(a)Option Exercisability.  Subject to earlier termination of the Option as otherwise provided by this Plan and unless otherwise provided by the Committee, an Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable time period determined in accordance with this Section and thereafter shall terminate.

(i)Disability.  If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months (or such longer or shorter period provided by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the Award Agreement evidencing such Option (the “Option Expiration Date”).

(ii)Death.  If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the expiration of twelve (12) months (or such longer or shorter period provided by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.  The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months (or such longer or shorter period provided by the Award Agreement) after the Participant’s termination of Service.

(iii)Termination for Cause.  Notwithstanding any other provision of the Plan to the contrary, if the Participant’s Service is terminated for Cause or if, following the Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act.

(iv)Other Termination of Service.  If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months (or such longer or shorter period provided by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

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(b)Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, other than termination of Service for Cause, if the exercise of an Option within the applicable time periods set forth in Section 6.4(a) is prevented by the provisions of Section 14 below, the Option shall remain exercisable until the later of (i) thirty (30) days after the date such exercise first would no longer be prevented by such provisions or (ii) the end of the applicable time period under Section 6.4(a), but in any event no later than the Option Expiration Date.

6.5Transferability of Options.  

During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative.  An Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S‐8 under the Securities Act.  An Incentive Stock shall not be assignable or transferable.

7.Restricted Share Units.

Restricted Share Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Share Units subject to the Award, in such form as the Committee shall establish.  Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

7.1Grant of Restricted Share Unit Awards.  

Restricted Share Unit Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 8.4.  If either the grant of a Restricted Share Unit Award or the Vesting Conditions with respect to such Award is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 8.3 through 8.5(a).

7.2Purchase Price.  

No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of receiving a Restricted Share Unit Award, the consideration for which shall be services actually rendered to a Participating Company or for its benefit.  

7.3Vesting.  

Restricted Share Unit Awards may (but need not) be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 8.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award.  The Committee, in its discretion, may provide in any Award Agreement evidencing a Restricted Share Unit Award that, if the satisfaction of Vesting Conditions with respect to any shares subject to the Award would otherwise occur on a day on which the sale of such shares would violate the provisions of the Trading Compliance Policy, then the satisfaction of the Vesting Conditions automatically shall be determined on the first to occur of (a) the next 

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trading day on which the sale of such shares would not violate the Trading Compliance Policy; and (b) the last day of the calendar year in which the original vesting date occurred.

7.4Voting Rights, Dividend Equivalent Rights, and Distributions.  Participants shall have no voting rights with respect to Shares represented by Restricted Share Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Restricted Share Unit Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Shares during the period beginning on the date such Award is granted and ending, with respect to each share subject to the Award, on the earlier of the date the Award is settled or the date on which it is terminated.  Dividend Equivalent Rights, if any, shall be paid by crediting the Participant with a cash amount or with additional whole Restricted Share Units as of the date of payment of such cash dividends on Shares, as determined by the Committee.  The number of additional Restricted Share Units (rounded down to the nearest whole number), if any, to be credited shall be determined by dividing (a) the amount of cash dividends paid on the dividend payment date with respect to the number of Shares represented by the Restricted Share Units previously credited to the Participant by (b) the Fair Market Value per Share on such date.  Unless otherwise determined by the Committee and provided by the Award Agreement, such cash amount or additional Restricted Share Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time as the Restricted Share Units originally subject to the Restricted Share Unit Award.  In the event of a dividend or distribution paid in Shares or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, appropriate adjustments shall be made in the Participant’s Restricted Share Unit Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant would be entitled by reason of the Shares issuable upon settlement of the Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Vesting Conditions as are applicable to the Award.

7.5Effect of Termination of Service.  

Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Restricted Share Unit Award, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Share Units pursuant to the Award which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service.

7.6Settlement of Restricted Share Unit Awards.  

The Company shall issue to a Participant on the date on which Restricted Share Units subject to the Participant’s Restricted Share Unit Award vest or on such other date determined by the Committee in compliance with Section 409A, if applicable, and set forth in the Award Agreement one (1) Share (and/or any other new, substituted or additional securities or other property pursuant to an adjustment described in Section 7.4) for each Restricted Share Unit then becoming vested or otherwise to be settled on such date, subject to the withholding of applicable taxes, if any, and payment to the Company, in accordance with the conditions set out in the applicable Award Agreement, of an amount not less than the nominal value of each Share.  If permitted by the Committee, the Participant may elect, 

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consistent with the requirements of Section 409A, to defer receipt of all or any portion of the Shares or other property otherwise issuable to the Participant pursuant to this Section, and such deferred issuance date(s) and amount(s) elected by the Participant shall be set forth in the Award Agreement.  Notwithstanding the foregoing, the Committee, in its discretion, may provide for settlement of any Restricted Share Unit Award by payment to the Participant in cash of an amount equal to the Fair Market Value on the payment date of the Shares or other property otherwise issuable to the Participant pursuant to this Section.

7.7Nontransferability of Restricted Share Unit Awards.  

The right to receive shares pursuant to a Restricted Share Unit Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to a Restricted Share Unit Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

8.Performance Awards.

Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall establish.  Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

8.1Types of Performance Awards Authorized.  

Performance Awards may be granted in the form of either Performance Shares or Performance Units.  Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Units subject thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other terms, conditions and restrictions of the Award.

8.2Initial Value of Performance Shares and Performance Units.  

Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall have an initial monetary value equal to the Fair Market Value of one (1) Share, subject to adjustment as provided in Section 4.4, on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial monetary value established by the Committee at the time of grant.  The final value payable to the Participant in settlement of a Performance Award determined on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the Committee.

8.3Establishment of Performance Period, Performance Goals and Performance Award Formula.  

In granting each Performance Award, the Committee shall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, when measured at the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of the Performance Award to be paid to the Participant.  Unless otherwise permitted in compliance with the requirements under Section 162(m) with respect to each Performance Award intended to result in the payment of Performance-Based Compensation, the Committee shall establish the Performance 

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Goal(s) and Performance Award Formula applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period or (b) the date on which 25% of the Performance Period has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain.  Once established, the Performance Goals and Performance Award Formula applicable to a Performance Award intended to result in the payment of Performance-Based Compensation to a Covered Employee shall not be changed during the Performance Period.  The Company shall notify each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula.

8.4Measurement of Performance Goals.  

Performance Goals shall be established by the Committee on the basis of targets to be attained (“Performance Targets”) with respect to one or more measures of business or financial performance (each, a “Performance Measure”), subject to the following:

(a)Performance Measures.  Performance Measures shall be calculated in accordance with the Company’s financial statements, or, if such measures are not reported in the Company’s financial statements, they shall be calculated in accordance with generally accepted accounting principles, a method used generally in the Company’s industry, or in accordance with a methodology established by the Committee prior to the grant of the Performance Award.  As specified by the Committee, Performance Measures shall be calculated with respect to the Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes, one or more Subsidiary Corporations or such division or other business unit of any of them selected by the Committee.  Unless otherwise determined by the Committee prior to the grant of the Performance Award, the Performance Measures applicable to the Performance Award shall be calculated prior to the accrual of expense for any Performance Award for the same Performance Period and excluding the effect (whether positive or negative) on the Performance Measures of any change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after the establishment of the Performance Goals applicable to the Performance Award.  Each such adjustment, if any, shall be made solely for the purpose of providing a consistent basis from period to period for the calculation of Performance Measures in order to prevent the dilution or enlargement of the Participant’s rights with respect to a Performance Award.  Performance Measures may be based upon one or more of the following, as determined by the Committee: (i) revenue; (ii) sales; (iii) expenses; (iv) operating income; (v) gross margin; (vi) operating margin; (vii) earnings before any one or more of: share-based compensation expense, interest, taxes, depreciation and amortization; (viii) pre-tax profit; (ix) net operating income; (x) net income; (xi) economic value added; (xii) free cash flow; (xiii) operating cash flow; (xiv) balance of cash, cash equivalents and marketable securities; (xv) Share price; (xvi) earnings per share; (xvii) return on shareholder equity; (xviii) return on capital; (xix) return on assets; (xx) return on investment; (xxi) total shareholder return; (xxii) employee satisfaction; (xxiii) employee retention; (xxiv) market share; (xxv) customer satisfaction; (xxvi) product development; (xxvii) research and development expenses; (xxviii) completion of an identified special project; and (xxix) completion of a joint venture or other corporate transaction.

(b)Performance Targets.  Performance Targets may include a minimum, maximum, target level and intermediate levels of performance, with the final value of a Performance Award determined under the applicable Performance Award Formula by the 

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Performance Target level attained during the applicable Performance Period.  A Performance Target may be stated as an absolute value, an increase or decrease in a value, or as a value determined relative to an index, budget or other standard selected by the Committee.

8.5Settlement of Performance Awards.

(a)Determination of Final Value.  As soon as practicable following the completion of the Performance Period applicable to a Performance Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the Participant and to be paid upon its settlement in accordance with the applicable Performance Award Formula.

(b)Discretionary Adjustment of Award Formula.  In its discretion, the Committee may, either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award Formula applicable to a Performance Award granted to any Participant who is not a Covered Employee to reflect such Participant’s individual performance in his or her position with the Company or such other factors as the Committee may determine.  If permitted under a Covered Employee’s Award Agreement, the Committee shall have the discretion, on the basis of such criteria as may be established by the Committee, to reduce some or all of the value of the Performance Award that would otherwise be paid to the Covered Employee upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value of the Performance Award determined in accordance with the Performance Award Formula.  No such reduction may result in an increase in the amount payable upon settlement of another Participant’s Performance Award that is intended to result in Performance-Based Compensation.

(c)Effect of Leaves of Absence.  Unless otherwise required by law or a Participant’s Award Agreement, payment of the final value, if any, of a Performance Award held by a Participant who has taken in excess of thirty (30) days in unpaid leaves of absence during a Performance Period shall be prorated on the basis of the number of days of the Participant’s Service during the Performance Period during which the Participant was not on an unpaid leave of absence.

(d)Notice to Participants.  As soon as practicable following the Committee’s determination and certification in accordance with Sections 8.5(a) and (b), the Company shall notify each Participant of the determination of the Committee.

(e)Payment in Settlement of Performance Awards.  As soon as practicable following the Committee’s determination and certification in accordance with Sections 8.5(a) and (b), but in any event within the Short-Term Deferral Period described in Section 13.1 (except as otherwise provided below or consistent with the requirements of Section 409A), payment shall be made to each eligible Participant (or such Participant’s legal representative or other person who acquired the right to receive such payment by reason of the Participant’s death) of the final value of the Participant’s Performance Award.  Payment of such amount shall be made in cash, Shares, or a combination thereof as determined by the Committee.  Unless otherwise provided in the Award Agreement evidencing a Performance Award, payment shall be made in a lump sum.  If permitted by the Committee, the Participant may elect, consistent with the requirements of Section 409A, to defer receipt of all or any portion of the payment to be 

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made to the Participant pursuant to this Section, and such deferred payment date(s) elected by the Participant shall be set forth in the Award Agreement.  If any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period of Dividend Equivalent Rights or interest.

(f)Provisions Applicable to Payment in Shares.  If payment is to be made in Shares, the number of such shares shall be determined by dividing the final value of the Performance Award by the Fair Market Value of a Share determined by the method specified in the Award Agreement.  Shares issued in payment of any Performance Award may be fully vested and freely transferable shares or may be Shares subject to Vesting Conditions.

8.6Voting Rights; Dividend Equivalent Rights and Distributions.  Participants shall have no voting rights with respect to Shares represented by Performance Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Shares during the period beginning on the date the Award is granted and ending, with respect to each share subject to the Award, on the earlier of the date on which the Performance Shares are settled or the date on which they are forfeited.  Such Dividend Equivalent Rights, if any, shall be credited to the Participant either in cash or in the form of additional whole Performance Shares as of the date of payment of such cash dividends on Shares, as determined by the Committee.  The number of additional Performance Shares (rounded down to the nearest whole number), if any, to be so credited shall be determined by dividing (a) the amount of cash dividends paid on the dividend payment date with respect to the number of Shares represented by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per Share on such date.  Dividend Equivalent Rights may be paid currently or may be accumulated and paid to the extent that Performance Shares become nonforfeitable, as determined by the Committee.  Settlement of Dividend Equivalent Rights may be made in cash, Shares, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in Section 8.5.  Dividend Equivalent Rights shall not be paid with respect to Performance Units.  In the event of a dividend or distribution paid in Shares or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, appropriate adjustments shall be made in the Participant’s Performance Share Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant would be entitled by reason of the Shares issuable upon settlement of the Performance Share Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Performance Goals as are applicable to the Award.

8.7Effect of Termination of Service.  

Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Performance Award, the effect of a Participant’s termination of Service on the Performance Award shall be as follows:

(a)Death or Disability.  If the Participant’s Service terminates because of the death or Disability of the Participant before the completion of the Performance Period 

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applicable to the Performance Award, the final value of the Participant’s Performance Award shall be determined by the extent to which the applicable Performance Goals have been attained with respect to the entire Performance Period and shall be prorated based on the number of months of the Participant’s Service during the Performance Period.  Payment shall be made following the end of the Performance Period in any manner permitted by Section 8.5.

(b)Other Termination of Service.  If the Participant’s Service terminates for any reason except death or Disability before the completion of the Performance Period applicable to the Performance Award, such Award shall be forfeited in its entirety; provided, however, that in the event of an involuntary termination of the Participant’s Service, the Committee, in its discretion, may waive the automatic forfeiture of all or any portion of any such Award and determine the final value of the Performance Award in the manner provided by Section 8.7(a).  Payment of any amount pursuant to this Section shall be made following the end of the Performance Period in any manner permitted by Section 8.5.

8.8Nontransferability of Performance Awards.  

Prior to settlement in accordance with the provisions of the Plan, no Performance Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to a Performance Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

9.Cash-Based Awards and Other Share-Based Awards.

Cash-Based Awards and Other Share-Based Awards shall be evidenced by Award Agreements in such form as the Committee shall establish.  Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

9.1Grant of Cash-Based Awards.  

Subject to the provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such amounts and upon such terms and conditions, including the achievement of performance criteria, as the Committee may determine.

9.2Grant of Other Share-Based Awards.  

The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted securities, share-equivalent units, stock appreciation units, securities or debentures convertible into Shares or other forms determined by the Committee) in such amounts and subject to such terms and conditions as the Committee shall determine.  Other Share-Based Awards may be made available as a form of payment in the settlement of other Awards or as payment in lieu of compensation to which a Participant is otherwise entitled.  Other Share-Based Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws.

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9.3Value of Cash-Based and Other Share-Based Awards.  

Each Cash-Based Award shall specify a monetary payment amount or payment range as determined by the Committee.  Each Other Share-Based Award shall be expressed in terms of Shares or units based on such Shares, as determined by the Committee.  The Committee may require the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 8.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award.  If the Committee exercises its discretion to establish performance criteria, the final value of Cash-Based Awards or Other Share-Based Awards that will be paid to the Participant will depend on the extent to which the performance criteria are met.  The establishment of performance criteria with respect to the grant or vesting of any Cash-Based Award or Other Share-Based Award intended to result in Performance-Based Compensation shall follow procedures substantially equivalent to those applicable to Performance Awards set forth in Section 8.

9.4Payment or Settlement of Cash-Based Awards and Other Share-Based Awards.  

Payment or settlement, if any, with respect to a Cash-Based Award or an Other Share-Based Award shall be made in accordance with the terms of the Award, in cash, Shares or other securities or any combination thereof as the Committee determines.  The determination and certification of the final value with respect to any Cash-Based Award or Other Share-Based Award intended to result in Performance-Based Compensation shall comply with the requirements applicable to Performance Awards set forth in Section 8.  To the extent applicable, payment or settlement with respect to each Cash-Based Award and Other Share-Based Award shall be made in compliance with the requirements of Section 409A.

9.5Voting Rights; Dividend Equivalent Rights and Distributions. 

 Participants shall have no voting rights with respect to Shares represented by Other Share-Based Awards until the date of the issuance of such Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), if any, in settlement of such Award.  However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Other Share-Based Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Shares during the period beginning on the date such Award is granted and ending, with respect to each Share subject to the Award, on the earlier of the date the Award is settled or the date on which it is terminated.  Such Dividend Equivalent Rights, if any, shall be paid in accordance with the provisions set forth in Section 7.4.  Dividend Equivalent Rights shall not be granted with respect to Cash-Based Awards.  In the event of a dividend or distribution paid in Shares or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, appropriate adjustments shall be made in the Participant’s Other Share-Based Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant would be entitled by reason of the Shares issuable upon settlement of such Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Vesting Conditions and performance criteria, if any, as are applicable to the Award.

9.6Effect of Termination of Service.  

Each Award Agreement evidencing a Cash-Based Award or Other Share-Based Award shall set forth the extent to which the Participant shall have the right to retain such Award following termination of the Participant’s 

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Service.  Such provisions shall be determined in the discretion of the Committee, need not be uniform among all Cash-Based Awards or Other Share-Based Awards, and may reflect distinctions based on the reasons for termination, subject to the requirements of Section 409A, if applicable.

9.7Nontransferability of Cash-Based Awards and Other Share-Based Awards.  

Prior to the payment or settlement of a Cash-Based Award or Other Share-Based Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  The Committee may impose such additional restrictions on any Shares issued in settlement of Cash-Based Awards and Other Share-Based Awards as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, or under any state securities laws or foreign law applicable to such Shares.

10.Standard Forms of Award Agreement.

10.1Award Agreements.  

Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreement approved by the Committee and as amended from time to time.  No Award or purported Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement, which execution may be evidenced by electronic means.

10.2Authority to Vary Terms.  

The Committee shall have the authority from time to time to vary the terms of any standard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan.

11.Change in Control.

11.1Effect of Change in Control on Awards.  

Subject to the requirements and limitations of Section 409A, if applicable, the Committee may provide for any one or more of the following:

(a)Accelerated Vesting.  In its discretion, the Committee may provide in the grant of any Award or at any other time may take action it deems appropriate to provide for acceleration of the exercisability, settlement, and/or vesting in connection with a Change in Control of each or any outstanding Award or portion thereof and shares acquired pursuant thereto upon such conditions, including termination of the Participant’s Service prior to, upon, or following the Change in Control, and to such extent as the Committee determines.  Further, unless otherwise provided by the applicable Award Agreement or determined by the Committee and subject to Section 13.4(f), in the event that the Acquiror (as defined below) elects not to assume, continue or substitute for, in accordance with Section 11.1(b), any portion of an Award outstanding immediately prior to the Change in Control, the exercisability and/or vesting of such portion of the 

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Award held by a Participant whose Service has not terminated prior to the Change in Control shall be accelerated in full effective as of a date prior to, but conditioned upon, the consummation of the Change in Control as determined by the Committee.

(b)Assumption, Continuation or Substitution.  In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, assume, substitute for,  or continue the Company’s rights and obligations under each or any Award or portion thereof outstanding immediately prior to the Change in Control or substitute for each or any such outstanding Award or portion thereof a substantially equivalent award with respect to the Acquiror’s shares, as applicable.  For purposes of this Section, if so determined by the Committee in its discretion, an Award denominated in Shares shall be deemed assumed if, following the Change in Control, the Award confers the right to receive, subject to the terms and conditions of the Plan and the applicable Award Agreement, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether shares, cash, other securities or property or a combination thereof) to which a holder of a Share on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise or settlement of the Award, for each Share subject to the Award, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Shares pursuant to the Change in Control.  Any Award or portion thereof which is neither assumed or continued by the Acquiror in connection with the Change in Control nor exercised or settled as of the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control.

(c)Cash-Out of Outstanding Share-Based Awards.  The Committee may, in its discretion and without the consent of any Participant, determine that, upon the occurrence of a Change in Control, each or any Award denominated in Shares or portion thereof outstanding immediately prior to the Change in Control and not previously exercised or settled shall be canceled in exchange for a payment with respect to each vested share (and each unvested share, if so determined by the Committee) of Shares subject to such canceled Award in (i) cash, (ii) Shares or of a corporation or other business entity a party to the Change in Control, or (iii) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per Share in the Change in Control, reduced (but not below zero) by the exercise or purchase price per share, if any, under such Award.  In the event such determination is made by the Committee, an Award having an exercise or purchase price per share equal to or greater than the Fair Market Value of the consideration to be paid per Share in the Change in Control may be canceled without payment of consideration to the holder thereof.  Payment pursuant to this Section (reduced by applicable withholding taxes, if any) shall be made to Participants in respect of the vested portions of their canceled Awards as soon as practicable following the date of the Change in Control and in respect of the unvested portions of their canceled Awards in accordance with the vesting schedules applicable to such Awards.

11.2Effect of Change in Control on Nonemployee Director Awards.  

Subject to the requirements and limitations of Section 409A, if applicable, including as provided 

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by Section 13.4(f), in the event of a Change in Control, each outstanding Nonemployee Director Award shall become immediately exercisable and vested in full and, except to the extent assumed, continued or substituted for pursuant to Section 11.1(b), shall be settled effective immediately prior to the time of consummation of the Change in Control.

11.3Federal Excise Tax Under Section 4999 of the Code.  

 

(a)Excess Parachute Payment.  If any acceleration of vesting pursuant to an Award and any other payment or benefit received or to be received by a Participant would subject the Participant to any excise tax pursuant to Section 4999 of the Code due to the characterization of such acceleration of vesting, payment or benefit as an “excess parachute payment” under Section 280G of the Code, or if such actions would result in the loss of a corporate tax deduction under Section 280G, then, provided such election would not subject the Participant to taxation under Section 409A, the Participant shall elect to reduce the amount of any acceleration of vesting called for under the Award in order to avoid such characterization.  Unless the Participant is subject to a written agreement between the Participant and a Participating Company governing the order of reduction, to the extent amounts are to be reduced, then payments shall be accomplished by reducing or eliminating severance payments that the Participant may become entitled to, then reducing or eliminating cash bonus payments, then by the reduction, or elimination of equity awards which are valued in full for purposes of Section 280G of the Code, then the reduction or elimination of accelerated vesting or settlement of other equity awards and finally the reduction or elimination of other compensatory payments.  Such reductions shall first come from each category to the extent such amounts constitute Section 409A Deferred Compensation and with respect to any category in which there are multiple awards or grants, in reverse chronological order (i.e. with the most recent grant or award reduced or eliminated first).

(b)Determination by Independent Accountants.  To aid the Participant in making any election called for under Section 11.3(a), no later than the date of the occurrence of any event that might reasonably be anticipated to result in an “excess parachute payment” to the Participant as described in Section 11.3(a), the Company shall request a determination in writing by the professional firm engaged by the Company for general tax purposes, or, if the tax firm so engaged by the Company is serving as accountant or auditor for the Acquiror, the Company will appoint a nationally recognized tax firm to make the determinations required by this Section. (the “Tax Firm”).  As soon as practicable thereafter, the Tax Firm shall determine and report to the Company and the Participant the amount of such acceleration of vesting, payments and benefits which would produce the greatest after-tax benefit to the Participant.  For the purposes of such determination, the Tax Firm may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Participant shall furnish to the Tax Firm such information and documents as the Tax Firm may reasonably request in order to make its required determination.  The Company shall bear all fees and expenses the Tax Firm charge in connection with its services contemplated by this Section.

12.Compliance with Applicable Law.

The grant of Awards and the issuance of Shares or other property pursuant to any Award shall be subject to compliance with all requirements of all applicable securities and other applicable laws rules and regulations, approvals by government agencies as may be required or as 

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the Company deems necessary or advisable, and the requirements of any stock exchange or market system upon which the Shares may then be listed.  In addition, no Award may be exercised or shares issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award, or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to issuance of any Shares, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

13.Compliance with Section 409A.

13.1Awards Subject to Section 409A. 

 With respect to Awards granted to Participants who are, or become, subject to taxation under the Code, the Company intends that Awards granted pursuant to the Plan shall either be exempt from or comply with Section 409A, and the Plan shall be so construed.  The provisions of this Section 13 shall apply to any Award or portion thereof that constitutes or provides for payment of Section 409A Deferred Compensation.  Such Awards may include, without limitation:

(a)An Option that includes any feature for the deferral of compensation other than the deferral of recognition of income until the later of (i) the exercise or disposition of the Award or (ii) the time the Shares acquired pursuant to the exercise of the Award first becomes substantially vested.

(b)Any Restricted Share Unit Award, Performance Award, Cash-Based Award or Other Share-Based Award that either (i) provides by its terms for settlement of all or any portion of the Award at a time or upon an event that will or may occur later than the end of the Short-Term Deferral Period (as defined below) or (ii) permits the Participant granted the Award to elect one or more dates or events upon which the Award will be settled after the end of the Short-Term Deferral Period.

Subject to the provisions of Section 409A, the term “Short-Term Deferral Period” means the 21⁄2 month period ending on the later of (i) the 15th day of the third month following the end of the Participant’s taxable year in which the right to payment under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture or (ii) the 15th day of the third month following the end of the Company’s taxable year in which the right to payment under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture.  For this purpose, the term “substantial risk of forfeiture” shall have the meaning provided by Section 409A.

13.2Deferral and/or Distribution Elections.  

Except as otherwise permitted or required by Section 409A, the following rules shall apply to any compensation deferral and/or 

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payment elections (each, an “Election”) that may be permitted or required by the Committee pursuant to an Award providing Section 409A Deferred Compensation:

(a)Elections must be in writing and specify the amount of the payment in settlement of an Award being deferred, as well as the time and form of payment as permitted by this Plan.

(b)Elections shall be made by the end of the Participant’s taxable year prior to the year in which services commence for which an Award may be granted to the Participant.

(c)Elections shall continue in effect until a written revocation or change in Election is received by the Company, except that a written revocation or change in Election must be received by the Company prior to the last day for making the Election determined in accordance with paragraph (b) above or as permitted by Section 13.3.

13.3Subsequent Elections.  

Except as otherwise permitted or required by Section 409A, any Award providing Section 409A Deferred Compensation which permits a subsequent Election to delay the payment or change the form of payment in settlement of such Award shall comply with the following requirements:

(a)No subsequent Election may take effect until at least twelve (12) months after the date on which the subsequent Election is made.

(b)Each subsequent Election related to a payment in settlement of an Award not described in Section 13.4(a)(ii), 13.4(a)(iii) or 13.4(a)(vi) must result in a delay of the payment for a period of not less than five (5) years from the date on which such payment would otherwise have been made.

(c)No subsequent Election related to a payment pursuant to Section 13.4(a)(iv) shall be made less than twelve (12) months before the date on which such payment would otherwise have been made.

(d)Subsequent Elections shall continue in effect until a written revocation or change in the subsequent Election is received by the Company, except that a written revocation or change in a subsequent Election must be received by the Company prior to the last day for making the subsequent Election determined in accordance the preceding paragraphs of this Section 13.3.

13.4Payment of Section 409A Deferred Compensation.

(a)Permissible Payments.  Except as otherwise permitted or required by Section 409A, an Award providing Section 409A Deferred Compensation must provide for payment in settlement of the Award only upon one or more of the following:

(i)The Participant’s “separation from service” (as defined by Section 409A); 

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(ii)The Participant’s becoming “disabled” (as defined by Section 409A); 

(iii)The Participant’s death; 

(iv)A time or fixed schedule that is either (i) specified by the Committee upon the grant of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified by the Participant in an Election complying with the requirements of Section 13.2 or 13.3, as applicable; 

(v)A change in the ownership or effective control or the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 409A; or

(vi)The occurrence of an “unforeseeable emergency” (as defined by Section 409A).

(b)Installment Payments.  It is the intent of this Plan that any right of a Participant to receive installment payments (within the meaning of Section 409A) shall, for all purposes of Section 409A, be treated as a right to a series of separate payments.

(c)Required Delay in Payment to Specified Employee Pursuant to Separation from Service.  Notwithstanding any provision of the Plan or an Award Agreement to the contrary, except as otherwise permitted by Section 409A, no payment pursuant to Section 13.4(a)(i) in settlement of an Award providing for Section 409A Deferred Compensation may be made to a Participant who is a “specified employee” (as defined by Section 409A) as of the date of the Participant’s separation from service before the date (the “Delayed Payment Date”) that is six (6) months after the date of such Participant’s separation from service, or, if earlier, the date of the Participant’s death.  All such amounts that would, but for this paragraph, become payable prior to the Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.

(d)Payment Upon Disability.  All distributions of Section 409A Deferred Compensation payable pursuant to Section 13.4(a)(ii) by reason of a Participant becoming disabled shall be paid in a lump sum or in periodic installments as established by the Participant’s Election.  If the Participant has made no Election with respect to distributions of Section 409A Deferred Compensation upon becoming disabled, all such distributions shall be paid in a lump sum upon the determination that the Participant has become disabled.

(e)Payment Upon Death.  If a Participant dies before complete distribution of amounts payable upon settlement of an Award subject to Section 409A, such undistributed amounts shall be distributed to his or her beneficiary under the distribution method for death established by the Participant’s Election upon receipt by the Committee of satisfactory notice and confirmation of the Participant’s death.  If the Participant has made no Election with respect to distributions of Section 409A Deferred Compensation upon death, all such distributions shall be paid in a lump sum upon receipt by the Committee of satisfactory notice and confirmation of the Participant’s death.

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(f)Payment Upon Change in Control.  Notwithstanding any provision of the Plan or an Award Agreement to the contrary, to the extent that any amount constituting Section 409A Deferred Compensation would become payable under this Plan by reason of a Change in Control, such amount shall become payable only if the event constituting a Change in Control would also constitute a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A.  Any Award which constitutes Section 409A Deferred Compensation and which would vest and otherwise become payable upon a Change in Control as a result of the failure of the Acquiror to assume, continue or substitute for such Award in accordance with Section 11.1(b) shall vest to the extent provided by such Award but shall be converted automatically at the effective time of such Change in Control into a right to receive, in cash on the date or dates such award would have been settled in accordance with its then existing settlement schedule (or as required by Section 13.4(c)), an amount or amounts equal in the aggregate to the intrinsic value of the Award at the time of the Change in Control.

(g)Payment Upon Unforeseeable Emergency.  The Committee shall have the authority to provide in the Award Agreement evidencing any Award providing for Section 409A Deferred Compensation for payment pursuant to Section 13.4(a)(vi) in settlement of all or a portion of such Award in the event that a Participant establishes, to the satisfaction of the Committee, the occurrence of an unforeseeable emergency.  In such event, the amount(s) distributed with respect to such unforeseeable emergency cannot exceed the amounts reasonably necessary to satisfy the emergency need plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution(s), after taking into account the extent to which such emergency need is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) or by cessation of deferrals under the Award.  All distributions with respect to an unforeseeable emergency shall be made in a lump sum upon the Committee’s determination that an unforeseeable emergency has occurred.  The Committee’s decision with respect to whether an unforeseeable emergency has occurred and the manner in which, if at all, the payment in settlement of an Award shall be altered or modified, shall be final, conclusive, and not subject to approval or appeal.

(h)Prohibition of Acceleration of Payments.  Notwithstanding any provision of the Plan or an Award Agreement to the contrary, this Plan does not permit the acceleration of the time or schedule of any payment under an Award providing Section 409A Deferred Compensation, except as permitted by Section 409A.

(i)No Representation Regarding Section 409A Compliance.  Notwithstanding any other provision of the Plan, the Company makes no representation that Awards shall be exempt from or comply with Section 409A.  No Participating Company shall be liable for any tax, penalty or interest imposed on a Participant by Section 409A.

14.Tax Withholding.

14.1Tax Withholding in General.  

The Company shall have the right to deduct from any and all payments made under the Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local 

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and foreign taxes (including social insurance), if any, required by law to be withheld by any Participating Company with respect to an Award or the shares acquired pursuant thereto.  The Company shall have no obligation to deliver Shares, to release Shares from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been satisfied by the Participant.

14.2Withholding in or Directed Sale of Shares.  

The Company shall have the right, but not the obligation, to deduct from the Shares issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole Shares having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of any Participating Company.  The Fair Market Value of any Shares withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates.  The Company may require a Participant to direct a broker, upon the vesting, exercise or settlement of an Award, to sell a portion of the shares subject to the Award determined by the Company in its discretion to be sufficient to cover the tax withholding obligations of any Participating Company and to remit an amount equal to such tax withholding obligations to such Participating Company in cash.

15.Amendment, Suspension or Termination of Plan.

The Committee may amend, suspend or terminate the Plan at any time.  However, without the approval of the Company’s shareholders, there shall be (a) no increase in the maximum aggregate number of Shares that may be issued under the Plan (except by operation of the provisions of Sections 4.2, 4.3, and 4.4), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders under any applicable law, regulation or rule, including the rules of any stock exchange or quotation system upon which the Shares may then be listed or quoted.  No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expressly provided by the Committee.  Except as provided by the next sentence, no amendment, suspension or termination of the Plan may have a materially adverse effect on any then outstanding Award without the consent of the Participant.  Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, the Committee may, in its sole and absolute discretion and without the consent of any Participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Section 409A.

16.Miscellaneous Provisions.

16.1Repurchase Rights.  

Shares issued under the Plan may be subject to one or more repurchase options, or other conditions and restrictions as determined by the Committee in its discretion at the time the Award is granted.  The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company.  Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of Shares hereunder and shall promptly present to the Company any and all certificates representing Shares acquired 

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hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.

16.2Forfeiture Events.

(a)The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance conditions of an Award.  Such events may include, but shall not be limited to, termination of Service for Cause or any act by a Participant, whether before or after termination of Service, that would constitute Cause for termination of Service, or any accounting restatement due to material noncompliance of the Company with any financial reporting requirements of securities laws as a result of which, and to the extent that, such reduction, cancellation, forfeiture, or recoupment is required by applicable securities laws.

(b)If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, any Participant who knowingly or through gross negligence engaged in the misconduct, or who knowingly or through gross negligence failed to prevent the misconduct, and any Participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, shall reimburse the Company for (i) the amount of any payment in settlement of an Award received by such Participant during the twelve- (12-) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document embodying such financial reporting requirement, and (ii) any profits realized by such Participant from the sale of securities of the Company during such twelve- (12-) month period.

16.3Provision of Information.  

Each Participant shall be given access to information concerning the Company equivalent to that information generally made available to the Company’s ordinary shareholders.

16.4Rights as Employee, Consultant or Director.  

No person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant.  Nothing in the Plan or any Award granted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with or limit in any way any right of a Participating Company to terminate the Participant’s Service at any time.  To the extent that an Employee of a Participating Company other than the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that the Company is the Employee’s employer or that the Employee has an employment relationship with the Company.

16.5Rights as a Shareholder.  

A Participant shall have no rights as a shareholder with respect to any Shares covered by an Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.4 or another provision of the Plan.

32

 

16.6Delivery of Title to Shares.  

Subject to any governing rules or regulations, the Company shall issue or cause to be issued the Shares acquired pursuant to an Award and shall deliver such shares to or for the benefit of the Participant by means of one or more of the following: (a) by delivering to the Participant evidence of book entry Shares credited to the account of the Participant, (b) by depositing such Shares for the benefit of the Participant with any broker with which the Participant has an account relationship, or (c) by delivering such Shares to the Participant in certificate form.

16.7Fractional Shares.  

The Company shall not be required to issue fractional shares upon the exercise or settlement of any Award.

16.8Retirement and Welfare Plans.  

Neither Awards made under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under any Participating Company’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.

16.9Beneficiary Designation.  

Subject to local laws and procedures, each Participant may file with the Company a written designation of a beneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she receives any or all of such benefit.  Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.  If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse.  If a Participant dies without an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any remaining unpaid benefits to the Participant’s legal representative.

16.10Severability.  

If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.

16.11No Constraint on Corporate Action.  

Nothing in this Plan shall be construed to: (a) limit, impair, or otherwise affect the Company’s or another Participating Company’s right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or (b) limit the right or power of the Company or another Participating Company to take any action which such entity deems to be necessary or appropriate.

16.12Unfunded Obligation.  

Participants shall have the status of general unsecured creditors of the Company.  Any amounts payable to Participants pursuant to the Plan shall be considered unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974.  No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, 

33

 

or establish any special accounts with respect to such obligations.  The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company.  The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to the Plan.

16.13No Representations or Covenants with respect to Tax Qualification. 

 Although the Company may endeavor to (a) qualify an Award for favorable tax treatment under the laws of the United States or jurisdictions outside of the United States (e.g., incentive stock options under Section 422 of the Code) or (b) avoid adverse tax treatment (e.g., under Section 409A), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment, anything to the contrary in this Plan, including Section 13 hereof, notwithstanding.  The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan.

16.14Choice of Law.  

Except to the extent governed by applicable federal law, the validity, interpretation, construction and performance of the Plan and each Award Agreement shall be governed by the laws of Ireland, without regard to its conflict of law rules.

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing sets forth the Nexvet Biopharma Public Limited Company 2015 Equity Incentive Plan as duly adopted by the Board on October 14, 2014, as amended by the Board on January 16, 2015, and as further amended by the Compensation Committee on 2 September 2015.

		
	
 
	

	
 
	
Geraldine Farrell, Secretary

 

34

 

PLAN HISTORY AND NOTES TO COMPANY1

		
	
October 14, 2014
	
Board adopts Plan with a reserve of 1,600,000 shares (subject to increases and other adjustments as provided by the Plan), subject to approval by the shareholders of the Company.

	
November 17, 2014
	
Plan approved by the shareholders of the Company.

	
November 17, 2014
	
Number of shares reserved under the Plan adjusted to 1,280,000 in order to reflect 5-for-4 forward split approved by Board and shareholders of the Company. 

	
 
	
IMPORTANT NOTE – Initial IRC 162(m) approval:

At first annual shareholders meeting following close of 3rd calendar year following the calendar year of IPO (unless plan is materially amended at an earlier date), obtain public company shareholder approval of amendment to plan to add Section 162(m) grant limits as described in sample Section 5.5 and to approve the material terms of the performance goals as required by Treas. Reg. 1.162-27(e)(4).  See Treas. Reg. 1.162-27(f) (private to public company transition rule).  Proposed IRS regulations (6/24/2011) state that this transitional exemption applies only to stock options, SARs and performance-vesting restricted stock.  It does not apply to performance-based RSUs or performance shares or units.  If these regulations are finalized, post-IPO shareholder approval will be required before the company can grant IRC 162(m) exempt performance-based RSUs, performance shares or performance units.

“5.5Section 162(m) Award Limits.  Subject to adjustment as provided in Section 4.4, no Covered Employee shall be granted within any fiscal year of the Company one or more Awards intended to qualify for treatment as Performance-Based Compensation which in the aggregate are for more than [●] shares or, if applicable, which could result in such Covered Employee receiving more than $[●] for each full fiscal year of the Company contained in the Performance Period for such Award.”

	
 
	
IMPORTANT NOTE - IRC 162(m) 5 year reapproval of performance goals: 

Because the Committee may change the targets under performance goals, Section 162(m) requires shareholder reapproval of the material terms of performance goals no later than the annual meeting in the 5th year following the year in which the public company shareholders initially approved such material terms.  See Treas. Reg. 1.162-27(e)(4)(vi).  In addition, at this time, the Company may wish to consider increasing ISO limit.nvet-ex1010_784.htm

 

 

Exhibit 10.10

 

Employment agreement

 

 

Nexvet Ireland Ltd

Company number: 550752

 

and

 

 

Jürgen Horn

 

 

 

Table of contents

 

			
	
1.
	
Definitions and interpretation
	
4

	
1.1
	
Definitions
	
4

	
1.2
	
Interpretation
	
6

	
2
	
Pre-Conditions
	
7

	
2.1
	
Skills
	
7

	
2.2
	
Restrictive Covenants
	
7

	
2.3
	
Right to Work
	
7

	
3.
	
Position
	
7

	
4.
	
Commencement and term
	
7

	
5.
	
Probation Period
	
8

	
6.
	
Duties and Obligations
	
8

	
6.1
	
Duties
	
8

	
6.2
	
Obligations
	
8

	
6.3
	
Other appointments
	
8

	
6.4
	
Conflict of interest
	
9

	
6.5
	
Company policies
	
9

	
6.6
	
Statutory and implied duties
	
9

	
7.
	
Employment locations
	
9

	
8.
	
Hours of work
	
10

	
9.
	
Remuneration and other benefits
	
10

	
9.1
	
Remuneration
	
10

	
9.2
	
Sign-on Options
	
10

	
9.3
	
Employee Incentive Plan
	
11

	
9.4
	
Annual performance bonus
	
11

	
9.5
	
Additional benefits
	
11

	
9.6
	
Annual review
	
12

	
9.7
	
Legislative benefits
	
12

	
9.8
	
Expenses
	
12

	
9.9
	
Deductions
	
12

	
9.10
	
Confidentiality of remuneration and other benefits
	
12

	
9.11
	
Irish taxes
	
12

	
10.
	
Company Property
	
12

	
10.1
	
Return of Company Property
	
12

	
11.
	
Leave
	
13

	
11.1
	
Taking Leave
	
13

	
11.2
	
Annual leave
	
13

	
11.3
	
Public Holidays
	
13

	
11.4
	
Sick Leave, Accidents and other Absences
	
13

	
12.
	
Termination of Employment
	
14

	
12.1
	
Termination by the Company
	
14

	
12.2
	
Notice period by the Employee
	
14

	
12.3
	
Garden Leave
	
15

	
12.4
	
Dismissal for cause and summary dismissal
	
15

	
12.5
	
Accrued Entitlements on Termination
	
15

	
12.6
	
Directorships and Offices
	
15

			

 

	
13.
	
Confidential Information
	
16

	
13.1
	
Acknowledgment of Employee
	
16

	
13.2
	
Obligations of the Employee
	
16

	
13.3
	
Unauthorised disclosure
	
16

	
13.4
	
Confidentiality Agreement
	
16

	
13.5
	
Survival
	
17

	
14.
	
Intellectual Property
	
17

	
15.
	
Moral Rights
	
18

	
16.
	
Non-Competition
	
18

	
16.1
	
Obligations of the Employee
	
18

	
16.2
	
General
	
19

	
16.3
	
Survival
	
19

	
17.
	
Changes to position, duties, remuneration, or location
	
19

	
18.
	
Companies Acts
	
20

	
19.
	
Assignment
	
20

	
19.1
	
Successors of Company
	
20

	
19.2
	
Assignment for reconstruction or amalgamation
	
20

	
19.3
	
References to Company to be references to assignee
	
20

	
20.
	
General
	
20

	
20.1
	
Entire understanding
	
20

	
20.2
	
No adverse construction
	
20

	
20.3
	
Further assurances
	
20

	
20.4
	
No waiver
	
21

	
20.5
	
Severability
	
21

	
20.6
	
Consents and approvals
	
21

	
20.7
	
No variation
	
21

	
20.8
	
Governing law and jurisdiction
	
21

	
20.9
	
Counterparts
	
21

	
20.10
	
Conflicting provisions
	
21

	
Annexure A – Confidentiality Agreement
	
29

 

 

 

Employment agreement

Date       29 April 2015

Parties

 

Nexvet Ireland Limited (Company number 550752) c/- National Institute for Bioprocessing Research and Training (NIBRT), Fosters Avenue, Mount Merrion, Blackrock, Co. Dublin, Ireland (Company).

 

and

 

Jürgen Horn of Bündtenweg 24 4102 Binningen, Switzerland (Employee).

 

 

Operative provisions

	
 
	
1.
	
Definitions and interpretation

	
 
	
1.1
	
Definitions

In this agreement:

Annual Equity Award means the annual equity award that may be made to the Employee pursuant to clause 9.3 and item 5 of Schedule 1.

Associated Company means any undertaking which from time to time is a subsidiary undertaking of the Company or is a parent undertaking of the Company or a subsidiary undertaking of any such parent undertaking and for the purposes of this definition “Subsidiary Undertaking” and “Parent Undertaking” shall have the meanings respectively given to them by Regulations 4 and 3 of the European Communities (Companies: Group Accounts) Regulations 1992.

Base Salary means the amount specified in Item 4 of Schedule 1.

Business means the business conducted by the Company from time to time, including the discovery, development and commercialisation of biopharmaceutical products, such as companion animal (dog, cat and horse) monoclonal antibodies and therapeutic proteins, any products in any species derived from the patented PETizationTM platform technology, and any diagnostic products for use in animals.

Change in Control means:

	
 
	
(a)
	
a merger or consolidation or the sale, or exchange by the stockholders of the Parent Company of all or substantially all of the capital stock of the Parent Company, where the stockholders of the Parent Company immediately before such transaction do not obtain or retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock or other voting equity of the surviving or acquiring corporation or other surviving or acquiring entity, in substantially the same proportion as before such transaction;
	
 

	
 
	
(b)
	
any transaction or series of related transactions to which the Parent Company is a party in which in excess of fifty percent (50%) of its voting power is transferred, other than any such transfer in which the stockholders of the Parent Company immediately before such transfer obtain or retain, directly or indirectly, more than fifty percent (50%) of the beneficial interest in the voting power of the voting stock or other voting equity of the corporation or other entity to which the voting power of the Parent Company was transferred, or
	
 

 

4

Employment agreement for Jürgen Horn

 

	
 
	
(c)
	
the sale or exchange of all or substantially all of the Parent Company’s assets, other than a sale or transfer to a subsidiary of the Parent Company in which the stockholders of the Parent Company immediately before such sale or exchange do not obtain or retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock or other voting equity of the corporation or other entity acquiring the Parent Company’s assets, in substantially the same proportion as before such transaction.
	
 

Commencement Date means the date specified in Item 1 of Schedule 1.

Companies Acts means the Companies Acts 1963-2012 of Ireland or any successor legislation, including the Companies Act 2014 which is scheduled to come into force on 1 June 2015.

Confidential Information means:

	
 
	
(a)
	
all Information and know how regarding the current Business or future business interests, methodology or affairs of the Company or any Associated Company;
	
 

	
 
	
(b)
	
all other Information and know how belonging or relating to the Company or any Associated Company;
	
 

	
 
	
(c)
	
all Information and know-how which the Employee knows, or ought reasonably to be expected to know, is confidential to the Company or any Associated Company;
	
 

but excludes:

	
 
	
(d)
	
any Information which is lawfully already in the public domain, or becomes part of the public domain other than due to the fault of the Employee or any person for whom the Employee is responsible;
	
 

	
 
	
(e)
	
any Information which is required to be disclosed by Law; and
	
 

	
 
	
(f)
	
any knowledge and Information that the Employee has been aware of before the commencement date of this agreement, except for that Information of the Company that has been disclosed to the Employee by or on behalf of the Company as part of any interview process for the Employment or the negotiation of this agreement.
	
 

Duties means the duties as set out in Schedule 2.

EI Plan means the 2015 Employee Incentive Plan of the Parent Company, or  any successor to that plan, a copy of which has been provided to the Employee.

Employment means the employment by the Company of the Employee pursuant to this agreement.

Existing Engagements means the existing engagements between the Employee and third parties, as further detailed in Item 10 of Schedule 1.

Information means any information, whether oral, graphic, electronic, written or in any other form, including:

	
 
	
(a)
	
forms, memoranda, letters, specifications, processes, procedures, statements, formulae, technology, inventions, trade secrets, research and development information, know how, designs, plans, photographs, microfiche, business records, notes, accounting procedures or financial information, sales and marketing information, names and details of customers, suppliers and agents,  employee details, reports, drawings and data; and
	
 

	
 
	
(b)
	
copies and extracts made of or from that information and data, whether translated from the original form, recompiled, partially copied, modified, updated or otherwise altered.
	
 

Intellectual Property Rights means all present and future intellectual and industrial property rights conferred by statute, at common law or in equity, including (without 

 

5

Employment agreement for Jürgen Horn

 

limitation):

	
 
	
(a)
	
patents, designs, copyright, rights in circuit layouts, plant breeder's rights, trade marks, know how, brand names, domain names, inventions, product names, trade secrets, the right to have confidential information kept confidential and other results of intellectual effort in the scientific, technological, bio-technological,  industrial, literary or artistic and commercial fields, whether or not registered or capable of registration;
	
 

	
 
	
(b)
	
any application or right to apply for registration of any of those rights;

	
 
	
(c)
	
any registration of any of those rights or any registration of any application referred to in paragraph (b); and
	
 

	
 
	
(d)
	
all renewals and extensions of these rights.

Law means any:

	
 
	
(a)
	
principles of law or equity established by decisions of courts;

	
 
	
(b)
	
statutes, regulations or other legislation of Ireland or Switzerland; and

	
 
	
(c)
	
requirements and approvals (including conditions) of Ireland that have the force of law;
	
 

Parent Company means Nexvet Biopharma plc, the parent company of the Company, being a company organised in the Republic of Ireland with its registered office at NIBRT, Fosters Avenue, Mount Merrion, Blackrock, Co. Dublin, Ireland.

Position means the position in Item 2 of Schedule 1.

Probation Period means the period specified in Item 8 of Schedule 1.

Restraint Area means Switzerland, the island of Ireland, the United Kingdom, Australia, the United States and Europe.

Restrained Duties means duties the same or similar to those performed by the Employee in the six months prior to Termination.

Restraint Period is the period referred to in clause 16.1 and is the Term.

Sign-on Options means the sign-on options to purchase shares in the Parent Company that are to be allocated to the Employee by the Parent Company’s compensation committee as soon as practicable after the Commencement Date, as otherwise detailed in clause 9.2.

Term means the term of this agreement, starting on the Commencement Date and ending on the Termination Date.

Termination Date or Termination means the date of termination or expiry of this agreement for any reason.

	
 
	
1.2
	
Interpretation
	
 

In this agreement, unless the context requires otherwise:

	
 
	
(a)
	
the singular includes the plural and vice versa;

	
 
	
(b)
	
a gender includes the other genders;

	
 
	
(c)
	
the headings are used for convenience only and do not affect the interpretation of this agreement;
	
 

	
 
	
(d)
	
other grammatical forms of defined words or expressions have corresponding meanings;
	
 

	
 
	
(e)
	
a reference to a document includes the document as modified from time to time and any document replacing it;
	
 

	
 
	
(f)
	
the word "person" includes a natural person and any body or entity whether 
	
 

 

6

Employment agreement for Jürgen Horn

 

	
 
		
incorporated or not;
	
 

	
 
	
(g)
	
the word "month" means calendar month and the word "year" means 12 months;
	
 

	
 
	
(h)
	
the words "in writing" include any communication sent by letter, facsimile transmission or email or any other form of communication capable of being read by the recipient;
	
 

	
 
	
(i)
	
a reference to a thing includes a part of that thing;
	
 

	
 
	
(j)
	
a reference to all or any part of a statute, rule, regulation or ordinance (statute) includes that statute as amended, consolidated, re-enacted or replaced from time to time;
	
 

	
 
	
(k)
	
wherever "include" or any form of that word is used, it must be construed as if it were followed by "(without being limited to)";
	
 

	
 
	
(l)
	
money amounts are stated in Euro currency unless otherwise specified; and
	
 

	
 
	
(m)
	
a reference to any agency or body, if that agency or body ceases to exist or is reconstituted, renamed or replaced or has its powers or functions removed (defunct body), means the agency or body which performs most closely the functions of the defunct body.
	
 

	
 
	
2.
	
Pre-Conditions
	
 

This agreement is subject to the following pre-conditions:

	
 
	
2.1
	
Skills
	
 

The Employee warrants that the skills, qualifications and experience as represented by the Employee to the Company are true and accurate and that the Employee has the necessary skills to perform the Duties.

	
 
	
2.2
	
Restrictive Covenants
	
 

The Employee warrants that he is free from any obligations owed to a third party which might prevent him from starting work on the date mentioned below or from properly performing the duties of the position.

 

	
 
	
2.3
	
Right to Work
	
 

The Employee will provide documentary evidence of his right to work and live  in Switzerland.

 

	
 
	
3.
	
Position
	
 

	
 
	
(a)
	
The Employee will be employed by the Company on the terms and conditions set out in this agreement.
	
 

	
 
	
(b)
	
The Employee will be employed by the Company in the Position and on the basis specified in Item 2 of Schedule 1.
	
 

	
 
	
(c)
	
The Employee will report to the person named in Item 2 of Schedule 1.
	
 

	
 
	
(d)
	
The Company may require the Employee to perform suitable alternative roles and may change the Employee’s reporting lines.
	
 

	
 
	
4.
	
Commencement and term
	
 

The Employment commences on the Commencement Date and will continue unless and until terminated in accordance with clause 5 or clause 12.

 

7

Employment agreement for Jürgen Horn

 

	
 
	
5.
	
Probation Period
	
 

The parties agree that the Employment will be subject to the Probation Period, during which time the Employment may be terminated by either party giving one month’s written notice or, in the case of the Company, making one month’s payment in lieu of notice. During the Probation Period, the Employee’s performance will be reviewed and discussed with the Employee. At the expiry of the Probation Period, unless notified otherwise in writing, the Employee will be deemed to be employed by the Company on a permanent basis, on the terms of this agreement.

 

	
 
	
6.
	
Duties and Obligations
	
 

	
 
	
6.1
	
Duties
	
 

During the Employment, the Employee is to perform the Duties as well as any additional duties required by the Company from time to time. The duties may be altered by the Company from time to time to reflect changed business conditions. The Company may also require the Employee to perform duties for any Associated Company.

	
 
	
6.2
	
Obligations
	
 

At all times during the Employment, the Employee must:

	
 
	
(a)
	
show the utmost good faith and devote the whole of the Employee’s working time and attention to the business of the Company and, if the Company so directs, to the business of any Associated Company of the Company;
	
 

	
 
	
(b)
	
use the Employee’s best endeavours at all times to promote the  interests and welfare of the Company and any Connected Person or Associated Company of the Company;
	
 

	
 
	
(c)
	
honestly, faithfully and diligently obey and perform all lawful orders and instructions of the Company or the person to whom the Employee reports;
	
 

	
 
	
(d)
	
honestly, faithfully and diligently perform the duties and exercise the powers which from time to time may be assigned to the Employee by the Company or by the person to whom the Employee reports;
	
 

	
 
	
(e)
	
act in the best interests of the Company and any Connected Person or Associated Company of the Company at all times;
	
 

	
 
	
(f)
	
use the Employee’s best endeavours to promote the development, profitability, interests and welfare of the Company and any Associated Company of  the Company;
	
 

	
 
	
(g)
	
not misuse the Company’s property or services, or allow such misuse by other persons;
	
 

	
 
	
(h)
	
as soon as practicable upon becoming aware thereof inform the Company of any act of dishonesty pertaining to the business, property or transactions of the Company on the part of any person which may have come to the Employee’s knowledge; and
	
 

	
 
	
(i)
	
keep the terms of the Employee’s remuneration confidential.

	
 
	
6.3
	
Other appointments
	
 

	
 
	
(a)
	
Subject to clause 6.3(b), during the Employment, the Employee may not take up any other employment or engagement (including public office) or Directorship (paid or unpaid) without the prior written consent of the Chief Executive Officer of the Company.
	
 

(b)The Company acknowledges that, as at the date of this agreement, the Existing Engagements are in place between the Employee and third parties. The 

 

8

Employment agreement for Jürgen Horn

 

Company hereby expressly agrees to the Employee continuing with the Existing Engagements,subject to clause 6.3(c), and provided that at no time under any of the Existing Engagements will the Employee work on, or otherwise provide assistance, advice or guidance in relation to any monoclonal antibodies in companion animals.

	
 
	
(c)
	
Without limiting clauses 6.3(a) and 6.3(b), the Employee will not, during the Employment, without the prior written consent of the Company, undertake any appointment, position or work that:
	
 

	
 
	
(i)
	
results in the Employee competing with the Company;

	
 
	
(ii)
	
otherwise adversely affects the Company; or

	
 
	
(iii)
	
hinders the Employee’s performance of duties owed to the Company.

	
 
	
6.4
	
Conflict of interest
	
 

	
 
	
(a)
	
The Employee will ensure that there is no conflict between the Company’s interests and the Employee’s personal interests.
	
 

	
 
	
(b)
	
The Employee will make full and complete disclosure to the Company of the existence, nature and extent of any conflict or potential conflict of interest that the Employee may have in any manner or capacity whatever with the Employee's duties or obligations under this agreement.
	
 

	
 
	
(c)
	
The Employee must not solicit or accept from any person any remuneration or benefit in excess of the Employee's official remuneration with the Company for the discharge of the Employee’s duties.
	
 

	
 
	
(d)
	
The Employee must immediately report to the Company any remuneration or benefit the Employee receives from another person in connection with the Employment and the Employee must not deal with or otherwise dispose of any such remuneration or benefit without the prior written consent of the Company.
	
 

	
 
	
(e)
	
The Employee must avoid any circumstance where a person or persons can improperly influence or receive unduly favourable treatment from the Company.
	
 

	
 
	
6.5
	
Company policies
	
 

	
 
	
(a)
	
The Employee must comply with all policies and procedures of the Company.

	
 
	
(b)
	
Notwithstanding clause 6.5(a), the policies and procedures of the Company:

	
 
	
(i)
	
are for the benefit of the Company and do not impose any contractual obligations on the Company; and
	
 

	
 
	
(ii)
	
are not incorporated into and do not form part of this agreement.

	
 
	
6.6
	
Statutory and implied duties
	
 

Nothing in this agreement is intended to limit the Employee’s duties of good faith and fidelity to the Company or any other duties implied at law.

 

	
 
	
7.
	
Employment locations
	
 

The Employee’s primary place of work will be as specified in Item 3 of Schedule 1. However, the Employee may be required to work at other locations as reasonably directed by the Company. The Employee may also be required to travel to such places (whether inside or outside Switzerland) as the Company may from time to time require in pursuance of his duties hereunder.

It is the Company’s intention to relocate the Employee and the Employee’s position to the United States at the earliest possible time in line with the Parent Company’s strategy, for a duration of 2 to 3 years or as mutually agreed. At such time, it is the intention that this agreement will be replaced with a new agreement between the Employee and the 

 

9

Employment agreement for Jürgen Horn

 

Company’s US affiliate. Any new agreement would have comparable or better conditions in respect of remuneration, and the Employee will be eligible for the same employee benefitssuch as holiday leave, paid sick leave etc. as other Company executives, as governed by the US employee benefit plan.

	
 
	
8.
	
Hours of work
	
 

The Employee’s normal hours of work will be 9 AM – 5.30 PM, Monday to Friday with one hour for lunch each day. However, as a senior member of staff, the Employee agrees to work appropriate hours in order to fully carry out his responsibilities and acknowledges that this may include additional evening and / or weekend work where necessary.  The Employee will not be entitled to any additional remuneration for any additional hours worked as the Employee’s Base Salary and any other benefits have been set to compensate the Employee for these additional hours.

The Employee acknowledges that he is responsible for determining the duration of his own working time and that pursuant to Art. 3 letter d Employment Act, the Swiss Federal Employment Act does not apply to his employment under this agreement.

 

	
 
	
9.
	
Remuneration and other benefits
	
 

	
 
	
9.1
	
Remuneration
	
 

	
 
	
(a)
	
In consideration of the duties provided and to be provided by the Employee, the Company will pay to the Employee the Base Salary, as set out in Item 4 of Schedule 1, less the statutory employer contributions to the statutory pension fund and less the employee contributions to the statutory pension fund (currently the "Stiftung Auffangeinrichtung BVG", of Erlenring 2, 6343 Risch, Switzerland). If applicable, the required deductions for income tax (withholding tax) will be made. The premiums for the following other social insurances will be borne by the Company:
	
 

	
 
	
(i)
	
AHV (old age and survivor's);
	
 

	
 
	
(ii)
	
IV (disability);
	
 

	
 
	
(iii)
	
EO (income compensation);
	
 

	
 
	
(iv)
	
ALV (unemployment);
	
 

	
 
	
(v)
	
Family Allowance contributions;
	
 

	
 
	
(vi)
	
BU (work related accidents insurance); and
	
 

	
 
	
(vii)
	
NBU (non-work related accidents insurance).
	
 

If the Company subscribes to a daily sickness allowance (loss of income) insurance, the premiums will be borne by the Company.

	
 
	
(b)
	
The Company will pay to the Employee 80 % of the cost of a suitable health care plan to a maximum cost to the Company of CHF 500 per month. The Employee shall provide documentary evidence of the premiums to be paid.
	
 

	
 
	
9.2
	
Sign-on Options
	
 

	
 
	
(a)
	
As soon as practicable after the Commencement Date, the  Compensation Committee of the Parent Board will grant to the Employee the Sign-on Options pursuant to the EI Plan to purchase 60,000 ordinary shares in the Parent Company. Unless otherwise required by applicable law, the exercise price per share for those shares that are the subject of the Sign-on Option will be the market price on the day of the granting of the Sign-on Options.
	
 

	
 
	
(b)
	
The Sign-on Option will vest and become exercisable as follows:

	
 
	
(i)
	
With respect to 20% of the Sign-on Options, on the date on which the 
	
 

 

10

Employment agreement for Jürgen Horn

 

	
 
		
Compensation Committee of the Parent Board grants the Sign-on Options; and
	
 

	
 
	
(ii)
	
With respect to the remaining 80% thereof, in 16 substantially equal instalments on the last day of each of the 16 consecutive calendar quarters commencing after the Commencement Date,
	
 

provided however that the Sign-on Option will become vested and exercisable in full as of the date specified by the Parent Board prior to the consummation of a Change in Control, provide that the Employee’s service with the Company has not terminated prior to such date. The Sign-on Option will be subject to the terms and conditions of the appropriate form of option agreement approved by the Parent Board’s compensation committee for use under the EI Plan, which the Employee will be required to execute.

	
 
	
9.3
	
Employee Incentive Plan
	
 

	
 
	
(a)
	
The Employee will in general be entitled to participate in the Parent Company’s EI Plan via an Annual Equity Award. The Employee may be allocated an amount as the Annual Equity Award to be determined by the Compensation Committee of between US$0 and US$400,000 under the Share Plan each year, as further specified in Item 5 of Schedule 1.
	
 

The terms of grant and any allocation there under of any Annual Equity Award will be subject to the terms of the EI Plan and clause 12.1 of this agreement.

	
 
	
(b)
	
The Employee’s participation in the EI Plan shall be subject at all times to the rules of the EI Plan, as may be amended from time to time. The Company reserves the right to amend the EI Plan, from time to time and in accordance with the needs of the business.
	
 

	
 
	
9.4
	
Annual performance bonus
	
 

Each financial year, provided the Employee remains employed by the Company, at the Company’s complete discretion, the Employee may be eligible for the payment of an annual performance bonus, specified in Item 7 of Schedule 1, subject to the Employee’s level of achievement of certain personal and Company key performance indicators (KPIs). The first set of KPIs must be agreed upon in writing between the Company and the Employee within three months of the Commencement Date, and otherwise for each subsequent year at the time of the annual review of the Employee’s Base Salary and any other benefits. If the Employee commences the Employment during a financial year, the Employee may, subject to the requisites above, be eligible for a pro-rata bonus in the year of commencement. Any bonus paid under this clause 9.4 shall not constitute an entitlement to a bonus payment in any subsequent year. Subject to the remainder of this clause 9.4, payment of any bonus under this clause 9.4 shall be conditional on the Employee being in the employment of the Company (and not under notice of termination) on the date that such bonus would normally be paid. If the Employment is terminated by the Company under clause 12.1 (and not by reason of clause 12.4 (dismissal for cause and summary dismissal)) during a financial year, the Employee may, subject to the requisites above, be eligible for a pro-rata bonus in the year of termination.

	
 
	
9.5
	
Additional benefits
	
 

The Employee may in general be entitled to additional benefits, as described in Item 6 of Schedule 1, or as may be notified to him, subject at all times to the rules of the relevant schemes as may be amended from time to time. The Company reserves the right at any time to withdraw these entitlements or any one of them, or to amend the terms on which they are provided.

 

 

11

Employment agreement for Jürgen Horn

 

	
 
	
9.6
	
Annual review
	
 

The Company will review the Employee’s Base Salary and any other benefits annually in accordance with the Company’s remuneration policy and consult with the Employee regarding any proposed increase, No review will take place where notice of termination of this agreement has been served by either party.   The Company shall not be under anyobligation to make any increase in Base Salary or any other benefit, and any increase in previous years shall not give rise to an entitlement to an increase in the relevant review period. Any changes to the Base Salary and any other benefits will take effect on 1 July each year.

	
 
	
9.7
	
Legislative benefits
	
 

The Employee acknowledges that the Base Salary and any other benefits are (to the extent not prohibited by law) deemed inclusive of an allowance in favour of the Employee for all additional employee benefits and allowances (not otherwise specified in this agreement) required by applicable legislation to be provided by an employer if favour of, or for the benefit of, an employee employed to provide the Duties.

	
 
	
9.8
	
Expenses
	
 

Except as expressly provided for in this agreement, the Employee will be reimbursed for all expenses which are in the Company’s opinion reasonably incurred by the Employee in the course of the Employment, subject to provision of receipts or other documentary  evidence to the Company’s satisfaction, within one (1) month of incurring such expenses.

The Company shall reimburse the Employee for hard cash costs already incurred by his current employer that he must repay that are associated with moving to Indianapolis. These expenses shall be reimbursed upon presentation of receipts to the Company's satisfaction, up to a maximum of USD 50,000.00 by way of an expense claim.

	
 
	
9.9
	
Deductions
	
 

Subject to any applicable laws, the Employee hereby authorises the Company to make deductions from any payments owing to the Employee to recover any debt owed by the Employee to the Company or any Associated Company (to the fullest extent permitted by law), including as a result of previous over-payment to the Employee. Claims of the Company due to breach of contract can be deducted without restriction.

 

	
 
	
9.10
	
Confidentiality of remuneration and other benefits
	
 

The Employee may discuss the Employee’s Base Salary and other benefits with family members, financial or legal advisors, creditors or debtors, or where required to do so by law or in the context of the Duties. Save as provided, the Employee agrees not to disclose to any other person details of the Employee’s Base Salary and other benefits.

 

	
 
	
9.11
	
Irish taxes
	
 

To the extent that any remuneration paid to the Employee is subject to taxes or social security/pension scheme contributions in the Republic of Ireland (such as Irish payroll tax and the universal social charge, or such), the Company hereby agrees to indemnify the Employee in relation to such taxes or contributions.

 

	
 
	
10.
	
Company Property
	
 

	
 
	
10.1
	
Return of Company Property
	
 

On or before termination of the Employment, or at any time when requested, the Employee must as soon as practicable return to the Company all property, materials and items belonging to the Company or any Associated Company in the Employee’s possession custody or control.

 

12

Employment agreement for Jürgen Horn

 

In the event that such property is not returned to the Company, the Company reserves the right (and the Employee hereby permits the Company) to deduct the equivalent monetary value of such property from the Employee’s final monthly salary payment.

	
 
	
11.
	
Leave
	
 

	
 
	
11.1
	
Taking Leave
	
 

The Employee is entitled to leave, in accordance with the Swiss Code of Obligations and the following provisions. Approval for leave is subject to the Employee complying with the Company’s policies and procedures in relation to application/notification, supporting documentation, timing and approval of leave.

Subject to clauses 11.2 to 11.4 below, all other types of leave to which the Employee may be entitled are detailed in the Company handbook, a copy of which will be provided.

	
 
	
11.2
	
Annual leave
	
 

	
 
	
(a)
	
The Employee will be entitled to 25 working days of annual leave per year, or a pro- rata amount if the Employee is employed part-time, in addition to the statutory public holidays at the place of work in Switzerland. .
	
 

	
 
	
(b)
	
The Employee must submit his annual leave requests to his manager at least 10 working days before he proposes to take such leave, and his manager will have ultimate sign off on such requests, taking into consideration the needs of the business at that time and the Employee’s personal circumstances.
	
 

	
 
	
(c)
	
When the Employee ceases to be employed by the Company, the Employee will be paid out any accrued but untaken annual leave. If the Employee is released from the duty to work during the termination period (Garden Leave), accrued but untaken annual leave shall be considered taken.
	
 

	
 
	
(d)
	
In the event of a closedown of the Company’s enterprise, or if the Employee accrues excessive annual leave, the Company can direct the Employee to take a period of annual leave.
	
 

	
 
	
(e)
	
A maximum of (5) days of annual leave can be carried forward from one year to the next.
	
 

	
 
	
11.3
	
Public Holidays
	
 

The Employee will be entitled to paid leave on the statutory public holidays at the place of work in Switzerland.

In the event that the Employee is required to work on a public holiday, he shall be entitled to receive whichever one of the following the Company determines, namely:

	
 
	
(a)
	
a paid day off within a month;
	
 

	
 
	
(b)
	
an additional day of annual leave; or
	
 

	
 
	
(c)
	
an additional days’ pay.
	
 

	
 
	
11.4
	
Sick Leave, Accidents and other Absences
	
 

	
 
	
(a)
	
If the Employee is unable to attend work due to sickness or injury or for any other reason the Employee must notify his line manager as soon as possible on the first day of absence.
	
 

	
 
	
(b)
	
The Employee is required to provide a medical certificate if the Employee is out for more than three days’ sick leave.
	
 

	
 
	
(c)
	
In the event the Employee is absent from work due to sickness, injury or other incapacity during the probationary period the Employee is not entitled to any form of sick pay.
	
 

 

13

Employment agreement for Jürgen Horn

 

	
 
	
(d)
	
Following the probationary period, the Employee may be entitled to receive sick pay in accordance with the Bernese scale from the Company provided that the Employee is eligible for payment and has complied with all the statutory rules (including the requirement for notification of absence). If the Company subscribes to a daily sickness allowance (loss of income) insurance, the Employee will receive the daily sickness allowance in accordance with the terms and conditions of the daily sickness allowance insurance. In the event that the benefits are delayed by a waiting period, the Company shall pay four fifths of the insured salary for that period.
	
 

	
 
	
(e)
	
If the Employee is unable to work due to injury or accident he will receive the accident benefits in accordance with the terms and conditions of the accident insurance. In the event that the accident benefits are delayed by a waiting period, the Company shall pay four fifths of the insured salary for that period.
	
 

	
 
	
12.
	
Termination of Employment
	
 

	
 
	
12.1
	
Termination by the Company
	
 

	
 
	
(a)
	
Subject to clause 5 (Probation Period) and clause 12.3 (Garden Leave), and without prejudice to clause 12.4 (Dismissal for cause and Summary dismissal), the Company may terminate the Employment at any time by giving the Employee six (6) month’s written notice.
	
 

	
 
	
(b)
	
The notice in (a) above will be increased to 12 months if the Company terminates the Employment immediately prior to, upon, or within 12 months following a Change in Control as defined in clause 1.1.
	
 

	
 
	
(c)
	
If the Employment is terminated by the Company under this clause 12.1 (and not by reason of clause 12.4) and such termination occurs after the first day of a given fiscal year of the Parent Company, and if the Parent Company has not yet granted the Employee’s Annual Equity Award in the fiscal year that the Employee’s termination occurs, the Company shall, acting in good faith, pay the Employee an amount of cash (Annual Equity Award Benefit) equal to the product determined by multiplying
	
 

(A) the greater of (x) the Award Value of the Annual Equity Award that the Employee otherwise would have received for the fiscal year of the Employee’s termination of employment and (y) the Award Value of the Annual Equity Award granted to the Employee during the immediately preceding fiscal year, by (B) a ratio, the numerator of which equals the number of days elapsed from the beginning of the immediately preceding fiscal year to the date of the Employee’s termination of employment, and the denominator of which equals the total number of days contained in the current fiscal year.

	
 
	
(d)
	
If the Employment is terminated by the Company under this clause 12.1 (and not by reason of clause 12.4) then any portions of the Annual Equity Awards or Sign-on Options granted to the Employee prior to the termination of Employment that remain unvested as of the Termination Date will become 100% vested and exercisable in full for the remainder of the option term as if the Employee’s Employment had not terminated (if applicable) as of the Termination Date.
	
 

	
 
	
12.2
	
Notice period by the Employee
	
 

	
 
	
(a)
	
Subject to clause 5 (Probation Period) the Employment may be terminated by the Employee by giving the Company three (3) month’s written notice.
	
 

	
 
	
(b)
	
If the Employee does not give the Company the period of notice referred to in this clause in writing or the Employee leaves the Employment during the period of notice, the Employee agrees that the Company is entitled to withhold (to the fullest extent permitted by law) from any monies owing to the Employee an amount representing that portion of the Base Salary the Employee would have earned for the number of 
	
 

 

14

Employment agreement for Jürgen Horn

 

	
 
		
weeks or days of the notice period that the Employee did not work.
	
 

	
 
	
(c)
	
If the Employment is terminated by the Employee then any portions of the Annual Equity Awards or Sign-on Options granted to the Employee prior to the termination of Employment that remain unvested as of the Termination Date shall not vest and shall not be exercisable.
	
 

	
 
	
12.3
	
Garden Leave
	
 

If notice is given by the Company (under clause 12.1) or the Employee (under clause 12.2) the Company may, at any time after notice of termination at its sole discretion, release the Employee from the obligation to work for the duration or a portion of the notice period (Garden Leave), suspend all or any of the Employee’s duties and powers that the Company considers appropriate, or require the Employee to perform duties at any place, including, without limitation, the Employee’s home. The Employee will be entitled to the Base Salary for the duration of the Garden Leave. All accrued but untaken annual leave will be considered taken during the period of Garden Leave.

	
 
	
12.4
	
Dismissal for cause and summary dismissal
	
 

	
 
	
(a)
	
The Company may terminate the Employment at any time (i) for cause with a notice period of three months or (ii) immediately without notice or any payment in lieu of notice in the event that continuation of the employment relationship in good faith is unconscionable if the Employee:
	
 

	
 
	
(i)
	
engages in serious misconduct;
	
 

	
 
	
(ii)
	
commits a serious or persistent breach of any material term or condition of this agreement;
	
 

	
 
	
(iii)
	
breaches any Company policy in place from time to time including, without limitation, any policies relating to anti-discrimination, sexual harassment and usage of technology, including the internet;
	
 

	
 
	
(iv)
	
refuses or fails to comply with a lawful and reasonable directive of the Company;
	
 

	
 
	
(v)
	
engages in any fraudulent or dishonest conduct;
	
 

	
 
	
(vi)
	
is intoxicated at work to the extent that the Employee cannot perform the Employee's duties;
	
 

	
 
	
(vii)
	
is convicted of any serious or indictable criminal offence;
	
 

	
 
	
(viii)
	
engages in any conduct which brings or may bring the Company into disrepute, regardless of whether the conduct is during work hours or not; or
	
 

	
 
	
(ix)
	
is prohibited by Law from taking part in the management of the Company.
	
 

	
 
	
12.5
	
Accrued Entitlements on Termination
	
 

Any payment by the Company in respect of accrued but unpaid or untaken annual leave on termination of the Employment, will be calculated on the basis of the Base Salary.

	
 
	
12.6
	
Directorships and Offices
	
 

The Employee hereby agrees to resign upon request from any directorship or other offices held by him in the Company, or on behalf of the Company or any Associated Company, upon giving or receiving notice of termination of employment pursuant to this Agreement, or upon termination of his employment howsoever arising.

 

15

Employment agreement for Jürgen Horn

 

	
 
	
13.
	
Confidential Information
	
 

	
 
	
13.1
	
Acknowledgment of Employee
	
 

The Employee acknowledges that through the course of the Employment or otherwise, the Employee may obtain access to, or become aware of, Confidential Information which is of commercial value to the Company and which is owned by and will at all times remain the property of the Company or an Associated Company.

	
 
	
13.2
	
Obligations of the Employee
	
 

The Employee must:

	
 
	
(a)
	
only use the Confidential Information for the purposes of performing, and to the extent necessary to perform, the Employee’s duties in the course of employment with the Company;
	
 

	
 
	
(b)
	
not memorise, modify, reverse engineer or make copies, notes or records of the Confidential Information for any purpose other than in connection with the performance of the Employee’s duties;
	
 

	
 
	
(c)
	
keep in the strictest confidence all Confidential Information and not disclose to any person at any time any Confidential Information without the consent of the Company, whether during the course of employment with Nexvet or at any time thereafter;
	
 

	
 
	
(d)
	
not use, or modify any Confidential Information for the Employee’s own  use or benefit or the use or benefit of any third party, whether during the course of employment with Nexvet or at any time thereafter; and
	
 

	
 
	
(e)
	
promptly, at the request of the Company at any time, disclose and deliver up to the Company, all Confidential Information including copies in the Employee’s possession, custody or control.
	
 

	
 
	
13.3
	
Unauthorised disclosure
	
 

The Employee must take all reasonable precautions to prevent any unauthorised disclosure of Confidential Information, including the following precautions:

	
 
	
(a)
	
the Employee must at all times store all Confidential Information safely and securely;

	
 
	
(b)
	
except with the prior written authority of the Company, the Employee must not remove any Confidential Information from the premises at which it is stored except where it is necessary to do so for the sole purpose of performing their Duties under this agreement;
	
 

	
 
	
(c)
	
the Employee must immediately notify the Company in writing of any actual, threatened or suspected unauthorised disclosure of any Confidential Information; and
	
 

	
 
	
(d)
	
the Employee must take all reasonable measures to minimise any unauthorised dissemination of any Confidential Information which is in any way related to or resulting from an act or failure to act by the Employee.
	
 

	
 
	
13.4
	
Confidentiality Agreement
	
 

The Employee will be requested to enter into a separate Confidentiality Agreement in the form attached at Annexure A in relation to the Company’s Confidential Information at or about the same time as entering into this agreement. The Employee further agrees that he shall at the request (and cost) of the Company enter into further Agreements or deeds with the Company or any Associated company whereby he shall accept restrictions corresponding to the restrictions in this Agreement and annexed thereto.

 

 

16

Employment agreement for Jürgen Horn

 

	
 
	
13.5
	
Survival
	
 

The Employee’s obligations under this clause 13 survive the termination of the Employment for any reason for the duration of 5 years.

	
 
	
14.
	
Intellectual Property
	
 

	
 
	
(a)
	
The Employee hereby assigns as a present and future assignment to the Company absolutely and beneficially the whole of the Employee's right, title and interest in the world, whether presently existing or which arises at a date after the date of this agreement in and to all Intellectual Property Rights acquired, developed or created by the Employee:
	
 

	
 
	
(i)
	
in the course of their employment with the Company (whether or not during working hours) in the course of their work and in performance of their contractual obligations;
	
 

	
 
	
(ii)
	
prior to the date of this Agreement, where the Employee was providing services for the Company or Business (which includes in anticipation of the incorporation of the Company), the shareholders of the Company or for the benefit of any of the Company, its shareholders or the Business;
	
 

	
 
	
(iii)
	
which in any way affect, relate to or are connected with the Business; or
	
 

	
 
	
(iv)
	
with the use of any of the Company’s or any Associated Company’s computer/s or other information technology equipment, and laboratory  or other research and development facilities or premises,
	
 

(collectively, the Assigned Intellectual Property Rights).

	
 
	
(b)
	
The Employee hereby agrees and undertakes to promptly disclose to the Company any Assigned Intellectual Property Rights upon acquisition, registration, creation or development.
	
 

	
 
	
(c)
	
The Employee acknowledges and agrees that the Company will own all right, title and interest in and to all of the Assigned Intellectual Property Rights immediately upon creation, acquisition, registration or development of the Assigned Intellectual Property Rights.
	
 

	
 
	
(d)
	
The Employee irrevocably agrees to promptly execute all documents, forms and authorisations and do all acts and things that the Company considers to be necessary or desirable to give effect to this agreement and to absolutely vest in the Company full right, title and interest in and to all of the Assigned Intellectual Property Rights.
	
 

	
 
	
(e)
	
At the Company’s request and expense, the Employee undertakes to assist the Company, whether during the course of or subsequent to the termination of the Employment, in connection with any controversy or legal proceeding relating to such Intellectual Property rights and in obtaining domestic or foreign patent or other protection covering the same.
	
 

	
 
	
(f)
	
The Employee hereby irrevocably appoints the Company and each of its directors severally as and to be the attorney of the Employee to do anything and execute any document which the Employee is required to do or execute pursuant to or in connection with the assignment of Intellectual Property Rights under this agreement and which the Employee has failed to do or execute. This power of attorney is granted to secure the performance of the Employee’s obligations to the Company in relation to the assignment of Intellectual Property Rights under this agreement.
	
 

	
 
	
(g)
	
To the extent that any Intellectual Property Rights cannot be assigned under applicable law, the Employee hereby grants to the Company an exclusive, fully paid- up, royalty free, perpetual, world-wide license with the right to transfer and to sub- 
	
 

 

17

Employment agreement for Jürgen Horn

 

	
 
		
license, to practice and exploit such Intellectual Property Rights and to make, have made, copy, modify, make derivative works of, use, sell, import, and otherwise distribute such Intellectual Property Rights for all purposes under all applicable intellectual property laws.
	
 

	
 
	
(h)
	
The Employee shall be deemed fully compensated by his Base Salary for such assigned Intellectual Property Rights including those that were produced in the course of his work for the Company but not in performance of his contractual obligations.
	
 

	
 
	
(i)
	
Excluded from this section are any Intellectual Property rights that the Employee has developed independently (and not using any of the Company’s property or resources) outside his duties of work for the Company and outside of working hours. The Employee will own any Intellectual Property rights that are developed by him in such circumstances.
	
 

	
 
	
15.
	
Moral Rights
	
 

To the extent that the Employee has any moral rights in any work (whether or not currently in existence) created, made, delivered, produced, contributed to or otherwise provided by the Employee to the Company in the course of the Employment and in context with the Employment (se above) (collectively Works), then the Employee hereby irrevocably and unconditionally waives all rights granted by the Swiss Federal Copyright Act, Chapter 7 of the Copyright and Related Rights Act 2000 of Ireland or any equivalent law in any jurisdiction that vest in the Employee (whether before, on or after the date of  this agreement) in connection with the authorship of any Works created in the course of their employment with the Company, wherever in the world enforceable, including without limitation, the right to be identified as the author of any such Works and the right not to have any such Works subjected to derogatory treatment.

	
 
	
16.
	
Non-Competition
	
 

	
 
	
16.1
	
Obligations of the Employee
	
 

The Employee must not, in any capacity including on their own account or as a member, shareholder, unit holder, director, partner, joint venturer, employee, trustee, beneficiary, principal, agent, adviser, contractor, consultant, manager, associate, representative or financier or in any other way or by any other means:

	
 
	
(a)
	
during the Restraint Period and in the Restraint Area, perform the Restrained Duties for a business, activity or operation which is the same as, substantially similar to, or competitive with the Business carried on by the Company or any material part of that Business;
	
 

	
 
	
(b)
	
during the Restraint Period, solicit, canvas, approach or accept an approach from any person who was at any time during the period commencing 6 months prior to the Termination, a customer or supplier of the Business or the Company, and with whom the Employee had regular or material dealings during that period with any purpose of, or having the effect of, obtaining the custom or services of that person in a Restrained Business;
	
 

	
 
	
(c)
	
during the Restraint Period, represent itself as being in any way connected with, interested in or associated with the Business or the Company;
	
 

	
 
	
(d)
	
during the Restraint Period, solicit, canvas, encourage, or induce, or endeavour to do so, any person who is at Completion, or who was at any time during the period commencing 6 months prior to the Termination, a director, employee, agent, associate, contractor or advisor of the Company, to leave the office, employment or agency of, or association with, the Company;
	
 

 

18

Employment agreement for Jürgen Horn

 

	
 
	
(e)
	
during the Restraint Period, interfere with the business of the Company or divulge to any person any information concerning the business of the Company or any of its dealings, transactions or affairs; or
	
 

	
 
	
(f)
	
during the Restraint Period, interfere to the detriment of the Company with the relationship between the Company and its clients, customers, employees or suppliers.
	
 

	
 
	
16.2
	
General
	
 

	
 
	
(a)
	
Nothing in this clause 16 prevents the Employee from holding in aggregate less than 5% of the issued shares of a body corporate, or interests in a registered managed investment scheme, included on the official list of any recognised stock exchange.
	
 

	
 
	
(b)
	
Each covenant in this clause, each area set out in the Restraint Area definition and each paragraph of the Restraint Period definition is a separate and independent covenant by the Employee. They can be combined and each combination is a separate covenant and restriction, although they are cumulative in effect.
	
 

	
 
	
(c)
	
For the avoidance of any doubt, if any of the separate and independent covenants or restrictions set out in this clause is or becomes invalid or unenforceable for any reason:
	
 

	
 
	
(i)
	
where the offending provision can be read down so as to give it a valid and enforceable operation of a partial nature, it must be read down to  the minimum extent necessary to achieve that result;
	
 

	
 
	
(ii)
	
in any other case the offending provision must be severed from these terms, in which event the remaining provisions of these terms operate as if the severed provision had not been included; and
	
 

	
 
	
(iii)
	
without limiting the above, if the covenant or restriction in question would be valid or enforceable if any activity was deleted or the area or time was reduced, then that provision must be read down by deleting that activity, or reducing that period or area, to the minimum extent necessary to achieve that result.
	
 

	
 
	
(d)
	
The Employee acknowledges that each of the restrictions imposed by this clause:
	
 

	
 
	
(i)
	
is reasonable in its extent (as to duration, geographical area and restrained conduct) having regard to the interests of each party to this agreement;
	
 

	
 
	
(ii)
	
extends no further, in any respect, than is reasonably necessary for the maintenance and protection of the business of the Company and its goodwill;
	
 

	
 
	
(iii)
	
is adequately compensated for by the Base Salary; and
	
 

	
 
	
(iv)
	
does not unreasonably restrict the Employee’s right to carry  on the Employee’s profession or trade.
	
 

	
 
	
16.3
	
Survival
	
 

The Employee’s obligations under this clause 16 survive the termination of this agreement for any reason.

	
 
	
17.
	
Changes to position, duties, remuneration, or location
	
 

	
 
	
(a)
	
The Employee’s employment with the Company will continue to be subject to the terms of this agreement, unless varied or replaced by an agreement agreed to by both parties in writing, the Employer as may be required from time to time despite any change to the Employee’s position, duties, remuneration or location.
	
 

	
 
	
(b)
	
This agreement, including this clause, may only be varied by a document in writing signed by or on behalf of each party.
	
 

 

19

Employment agreement for Jürgen Horn

 

	
 
	
18.
	
Companies Acts
	
 

Notwithstanding any provision of this agreement, the Company is not required to pay or provide, or procure the payment or provision of, any monies or benefits to the Employee which do not comply with the provisions of the Companies Acts 1963-2012 or any successor legislation, including the Companies Act 2014, without the need for the Company to obtain shareholder approval. Any such payments or benefits to be provided to the Employee must be reduced to ensure compliance with this clause and the Companies Acts. In the event that the Company pays or provides any monies or benefits to the Employee in excess of the amount permitted to be paid or provided to the Employee under the Companies Acts without shareholder approval, the Employee shall hold such monies or benefits, on trust for the Company and must, on receiving written notice from the Company, immediately repay those monies or benefits to the Company.

	
 
	
19.
	
Assignment
	
 

	
 
	
19.1
	
Successors of Company
	
 

The rights and obligations of the Company under this agreement enure to the benefit of and are binding upon the successors of the Company.

	
 
	
19.2
	
Assignment for reconstruction or amalgamation
	
 

With the prior written agreement of the Employee (such agreement not to be unreasonably withheld or delayed), the Company may assign its rights and obligations under this agreement for all or any part of the term of the Employment, to any other company (including an Associated Company) as part of a reconstruction or amalgamation of the Company, provided that the Employee agrees that the other company could reasonably be expected to undertake the financial obligations of the Company under this agreement that remain outstanding as at the date of the assignment.

	
 
	
19.3
	
References to Company to be references to assignee
	
 

Following an assignment under clause 19.2, references to this agreement to the Company will be to the Company’s assignee.

	
 
	
20.
	
General
	
 

	
 
	
20.1
	
Entire understanding
	
 

	
 
	
(a)
	
This agreement supersedes all prior communications and agreements between the parties as to the terms and conditions of the Employee’s employment, including any prior written or verbal undertakings or statements.
	
 

	
 
	
(b)
	
Each party acknowledges that, except as expressly stated in this agreement, that party has not relied on any representation, warranty or undertaking of any kind made by or on behalf of another party in relation to the subject matter of this agreement.
	
 

	
 
	
20.2
	
No adverse construction
	
 

This agreement is not to be construed to the disadvantage of a party because that party was responsible for its preparation.

	
 
	
20.3
	
Further assurances
	
 

A party, at its own expense and within a reasonable time of being requested by another party to do so, must do all things and execute all documents that are reasonably necessary to give full effect to this agreement.

 

20

Employment agreement for Jürgen Horn

 

	
 
	
20.4
	
No waiver
	
 

	
 
	
(a)
	
A failure, delay, relaxation or indulgence by a party in exercising any power or right conferred on the party by this agreement does not operate as a waiver of the power or right.
	
 

	
 
	
(b)
	
A single or partial exercise of the power or right does not preclude a further exercise of it or the exercise of any other power or right under this agreement.
	
 

	
 
	
(c)
	
A waiver of a breach does not operate as a waiver of any other breach.

	
 
	
20.5
	
Severability
	
 

Any provision of this agreement which is invalid in any jurisdiction must in relation to that jurisdiction:

	
 
	
(a)
	
be read down to the minimum extent necessary to achieve its validity, if applicable; and
	
 

	
 
	
(b)
	
be severed from this agreement in other case,

without invalidating or affecting the remaining provisions of this agreement or the validity of that provision in any other jurisdiction.

 

	
 
	
20.6
	
Consents and approvals
	
 

Where anything in this agreement depends on the consent or approval of a party then, unless this agreement provides otherwise, that consent or approval may be given conditionally or unconditionally or withheld, in the absolute discretion of that party.

	
 
	
20.7
	
No variation
	
 

This agreement, including this clause, cannot be amended or varied except in writing signed by the parties.

	
 
	
20.8
	
Governing law and jurisdiction
	
 

	
 
	
(a)
	
This agreement is governed by and must be construed in accordance with the governing laws as described in Item 9 of Schedule 1.
	
 

	
 
	
(b)
	
In respect of all matters arising out of or relating to this agreement, its performance or subject matter (1) for claims of the Employee the courts have jurisdiction pursuant to Art. 19 Lugano Convention 2007 (i) in the state where the Company is domiciled (Ireland) or (ii) where the Employee habitually carries out his work or (iii) the last place where he did so or (iv) if the Employee does not or did not habitually carry out his work in any one country, in the courts for the place where the business which engaged the Employee is or was situated and (2) for claims of the Company the courts have jurisdiction pursuant to Art. 19 Lugano Convention 2007 in the state in which the Employee is domiciled. In the event that the Lugano Treaty 2007 doesn't apply the parties submit to the exclusive jurisdiction of the courts of the jurisdiction as referred to in clause 20.8(a).
	
 

	
 
	
20.9
	
Counterparts
	
 

If this agreement consists of a number of signed counterparts, each is an original and all of the counterparts together constitute the same document.

	
 
	
20.10
	
Conflicting provisions
	
 

If there is any conflict between the main body of this agreement and any Schedules or annexures comprising it, then the provisions of the main body of this agreement prevail.

 

 

21

Employment agreement for Jürgen Horn

 

Signing page

 

 

23

Employment agreement for Jürgen Horn

 

Schedule 1 – Employee particulars

	
 
	
1.
	
Commencement Date
	
 

 

3rd  August 2015

 

	
 
	
2.
	
Position
	
 

 

Chief Product Development Officer reporting to the Chief Executive Officer. The Employee will be working on a full time basis.

	
 
	
3.
	
Location
	
 

 

The Company will assist the Employee to setup a home office or else secure a local serviced office.

 

	
 
	
4.
	
Base Salary
	
 

 

Base Salary per annum: USD 330,000.00 (gross, including Employer and Employee contributions to the pension fund). The Employer and Employee contributions to the social insurances will be borne by the Company.

 

Base Salary is to be paid monthly in equal instalments on a pro-rata basis; half of which will be paid in arrears and half paid in advance. The Company will deduct appropriate tax and other statutory deductions from the gross figure as outlined in clause 9.1 (a) of this agreement.

 

	
 
	
5.
	
EI Plan
	
 

 

	
 
	
(a)
	
The Employee will have the ability to have an amount between US$0 and US$400,000 allocated as an Annual Equity Award under the EIP each year. The Company will allocate shares or other instruments on the terms and conditions of the EIP, as may be amended from time to time, and any such allocation will be subject to the Parent Company’s Board approved vesting criteria.
	
 

 

	
 
	
(b)
	
Notwithstanding the above, the Annual Equity Award is made at the discretion of the Parent Company’s Compensation Committee. The Annual Equity Grant that the Employee should expect to receive in the event that the Employee achieves his personal KPIs and the Company achieves its KPIs (as determined by the Parent Company’s Compensation Committee) is US$200,000 in value.
	
 

 

	
 
	
6.
	
Additional Benefits
	
 

 

The Employee will also be entitled to the following additional benefits:

 

	
 
	
·
	
Mobile phone, lap top computer, home office equipment and broadband internet connection (unless a serviced office is used).
	
 

 

	
 
	
7.
	
Performance Bonus
	
 

 

The Employee will have the ability to earn up to an equivalent of 40% of Base Salary by way of a cash payment in any one year. The annual performance bonus is awarded at the discretion of the Parent Board’s Compensation Committee.  The bonus the Employee should expect in the event that the Employee achieves his personal KPIs and the Company achieves its KPIs (as determined by the Parent Board’s Compensation Committee) is 25% of the Base Salary.

 

 

24

Employment agreement for Jürgen Horn

 

	
 
	
8.
	
Probation Period
	
 

 

3 months from the Commencement Date.

 

	
 
	
9.
	
Governing Law
	
 

 

The Employee’s employment with the Company is governed by:

 

»the terms of this Agreement;

 

»the Company handbook;

 

»the EIP;

 

»any additional policies and schemes which may be in place from time to time; and

 

»any and all relevant legislation, as governed by the laws of Switzerland.

	
 
	
10.
	
Existing Engagements
	
 

 

The Company acknowledges that, as at the date of this agreement, the following engagements are in place between the Employee and third parties:

 

	
 
	
·
	
Providing advice to Aravis Venture Capital regarding potential animal health applications for platforms, products and technologies of human biotechnology companies in which Aravis has made or is planning to make investments.
	
 

 

	
 
	
·
	
Providing advice to Gour Medical in relation to product development and regulatory strategy for the evaluation of various indications or technologies, in return for a fee and options. The Employee has notified the Company that Gour Medical has a portfolio that includes monoclonal antibodies for companion animals. The Employee has agreed however that, during the Term, he will exclude himself from working or advising Gour Medical in relation to any monoclonal antibodies for companion animals.
	
 

 

	
 
	
·
	
Working with a group of individuals regarding the potential setting up of an institute / foundation and a venture fund with the objective of fostering investment in sustainable food animal technologies and products. This engagement is in an early stage and the Employee has informed the Company that he may be asked to serve on the board of any foundation / institute (if and when it is established) and / or to become a partner or advisor in the venture fund. The Employee has agreed to keep the Company informed of the progression of this engagement.
	
 

 

 

25

Employment agreement for Jürgen Horn

 

Schedule 2 – Employee duties

 

 

Summary of Role

 

	
 
	
·
	
This position has overarching responsibility for achieving Nexvet’s Clinical & Regulatory Development (CARD) goals as approved by the Board on an annual basis
	
 

	
 
	
·
	
The CARD division’s primary responsibility is to progress product candidates developed in concert with the Research and Development (RAD) division through all  stages required to obtain Regulatory approval for sale in global markets
	
 

	
 
	
·
	
The CARD division includes the following functions:

	
 
	
·
	
Clinical Operations

	
 
	
·
	
Regulatory Affairs

	
 
	
·
	
Chemistry, Manufacturing and Controls

	
 
	
·
	
Project and Alliance Management

 

 

Reporting Structure

 

	
 
	
·
	
This position reports to: Chief Executive Officer

	
 
	
·
	
Role/s that report to this position:

	
 
	
·
	
Senior VP Clinical and Regulatory Development

	
 
	
·
	
VP Technical Operations

	
 
	
·
	
Director of Program and Alliance Management

	
 
	
·
	
Director of Alliance Management

 

 

Responsibilities

 

	
 
	
·
	
Design, build and oversee a CARD function to achieve the corporate objectives delegated to you by the CEO
	
 

	
 
	
·
	
Oversee development of Nexvet’s pipeline of development projects to obtain global regulatory approvals, on time and on budget
	
 

	
 
	
·
	
Develop a high-performing team of leaders of the various functions within the CARD division, and work with HR to ensure that appropriate plans are in place for succession and people risk management
	
 

	
 
	
·
	
Develop and implement an effective management system to coordinate internal and external resources (people, financial, material, clinical etc.) necessary to achieve your objectives
	
 

	
 
	
·
	
Build effective relationships with internal and external stakeholders including project teams, external vendors, key opinion leaders, Regulatory Agencies, the senior management team and other relevant stakeholders
	
 

	
 
	
·
	
Work with all other functions, especially Research and Corporate (Marketing & Sales, Legal, Finance) to manage development plans, track progress, track budget,  and develop strategies to deliver activities on time and on budget
	
 

	
 
	
·
	
Establish and implement a strategy based on a forward-looking plan on ways to increase efficiency – whether through remaining virtual or building internal infrastructure. This will include ways to deliver fill/finished biological product through to supply market
	
 

	
 
	
·
	
Work with marketing and sales to maximize impact of product launch and post-launch sales
	
 

	
 
	
·
	
Lead one or more cross-functional drug development teams. To provide leadership in the clinical/ regulatory, manufacturing and project management, for specific development programs/studies
	
 

 

26

Employment agreement for Jürgen Horn

 

 

 

Key Relationships

 

Internal

 

	
 
	
·
	
Executive Officer team
	
 

	
 
	
·
	
VP Clinical and Regulatory Development
	
 

	
 
	
·
	
VP Technical Operations
	
 

 

 

External

 

	
 
	
·
	
External collaborators
	
 

	
 
	
·
	
CROs
	
 

	
 
	
·
	
Investors/Shareholders/Financiers

 

 

Job Environment

 

	
 
	
·
	
Home office / serviced office or corporate office
	
 

	
 
	
·
	
Working hours
	
 

	
 
	
·
	
Attendance at international, local or interstate conferences as required
	
 

	
 
	
·
	
Travel to Nexvet and partner / collaborator facilities and sites, domestically and internationally (AU, IE and USA)
	
 

 

 

Essential Qualifications/Experience:

 

	
 
	
·
	
Doctor of Veterinary Medicine (DVM) or equivalent [essential]
	
 

	
 
	
·
	
PhD in a veterinary discipline [highly regarded]
	
 

	
 
	
·
	
MBA [highly regarded]
	
 

	
 
	
·
	
Minimum of 15 years of pharmaceutical industry experience
	
 

	
 
	
·
	
Minimum of 10 years of animal health experience, with senior management experience
	
 

	
 
	
·
	
Extensive leadership experience and responsibility for all aspects of coordinating the Clinical and Regulatory Development activities for a human or animal health company, for products with global markets
	
 

	
 
	
·
	
Extensive experience in managing the following areas:
	
 

	
 
	
·
	
Clinical Operations and Regulatory Affairs
	
 

	
 
	
·
	
Development planning and management of product development functions
	
 

	
 
	
·
	
Protocol development
	
 

	
 
	
·
	
Liaison and negotiation with Regulatory Agencies
	
 

	
 
	
·
	
Study execution and reporting
	
 

	
 
	
·
	
Preparation of regulatory submissions
	
 

	
 
	
·
	
The selection and management of external contractors for target animal safety and efficacy studies
	
 

	
 
	
·
	
Chemistry, Manufacturing and Controls
	
 

	
 
	
·
	
Project Management
	
 

	
 
	
·
	
A proven track record of managing cross-functional teams
	
 

	
 
	
·
	
Demonstrated success in gaining Regulatory approval for animal health products with global markets
	
 

 

27

Employment agreement for Jürgen Horn

 

Essential Skills, Knowledge & Attributes

 

	
 
	
·
	
Excellent verbal and written communication and interpersonal skills
	
 

	
 
	
·
	
Experience participating within a matrix organization with teams that include cross- functional and cross-country membership
	
 

	
 
	
·
	
Maturity and ability to work remotely and participate effectively in a virtual project team environment
	
 

	
 
	
·
	
Ability to travel on average of 1 week per month (25% of time)
	
 

	
 
	
·
	
Proficient in the use of Microsoft Office programs
	
 

 

 

28

Employment agreement for Jürgen Horn

 

Annexure A – Confidentiality Agreement

 

29

Employment agreement for Jürgen Horn

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