Document:

Exhibit 10.2

 

 

June 24, 2016

 

STRICTLY CONFIDENTIAL

 

Stephen From

President and Chief Executive Officer

EyeGate Pharmaceuticals, Inc.

271 Waverly Oaks Road

Suite 108

Waltham, MA 02452

 

Dear Mr. From:

 

This letter agreement
(this “Agreement”) constitutes the agreement between EyeGate Pharmaceuticals, Inc.(the “Company”)
and Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (“Rodman”), that Rodman shall serve as the
exclusive agent, advisor or underwriter in any offering (each, an “Offering”) of securities of the Company (“Securities”)
during the Term (as defined below) of this Agreement. The terms of each Offering and the Securities issued in connection therewith
shall be mutually agreed upon by the Company and Rodman and nothing herein implies that Rodman would have the power or authority
to bind the Company and nothing herein implies that the Company shall have an obligation to issue any Securities. It is understood
that Rodman’s assistance in an Offering will be subject to the satisfactory completion of such investigation and inquiry
into the affairs of the Company as Rodman deems appropriate under the circumstances and to the receipt of all internal approvals
of Rodman in connection with the transaction. The Company expressly acknowledges and agrees that Rodman’s involvement in
an Offering is strictly on a reasonable best efforts basis and that the consummation of an Offering will be subject to, among other
things, market conditions. The execution of this Agreement does not constitute a commitment by Rodman to purchase the Securities
and does not ensure a successful Offering of the Securities or the success of Rodman with respect to securing any other financing
on behalf of the Company. Rodman may retain other brokers, dealers, agents or underwriters on its behalf in connection with an
Offering.

 

A.           Compensation;
Reimbursement. At the closing of each Offering (each, a “Closing”), the Company shall compensate Rodman
as follows:

 

1.          Cash
Fee. The Company shall pay to Rodman a cash fee, or as to an underwritten Offering an underwriter discount, equal to 7 % of
the aggregate gross proceeds raised in each Offering.

 

2.          Warrant
Coverage. The Company shall issue to Rodman or its designees at each Closing, warrants (the “Rodman Warrants”)
to purchase that number of shares of common stock of the Company equal to 2.0 % of the aggregate number of shares of Common Stock
placed in each Offering, excluding any shares of Common Stock issuable upon exercise of any warrants placed in each Offering (if
the Securities are convertible or include a “greenshoe” or “additional investment” option component, such
shares of Common Stock underlying such Securities or options are excluded). If the Securities included in an Offering are non-convertible,
the Rodman Warrants shall be determined by dividing the gross proceeds raised in such Offering divided by the then market price
of the Common Stock. The Rodman Warrants shall have the same terms as the warrants issued to investors in the applicable Offering.
If no warrants are issued to investors in an Offering, the Rodman Warrants shall be in a customary form reasonably acceptable to
Rodman, have a term of 5 years and an exercise price equal to 110% of the then market price of the Common Stock.

 

430 Park Avenue | New York, New York 10022
| 212.356.0500

Security services provided by H.C. Wainwright
& Co., LLC | Member: FINRA/SIPC

 

     

     

    

 

3.          Expense
Allowance. Out of the proceeds of each Closing, the Company also agrees to pay Rodman a non-accountable expense allowance of
$50,000 (provided, however, that such reimbursement amount in no way limits or impairs the indemnification and contribution
provisions of this Agreement).

 

4.          Right
of First Refusal. If within the 7.0 month period (7 months) following consummation of each Offering, the Company or any of
its subsidiaries (i) decides to finance or refinance any indebtedness using a manager or agent, Rodman (or any affiliate designated
by Rodman) shall have the right to act as exclusive lead manager, exclusive lead placement agent or exclusive lead agent with respect
to such financing or refinancing; or (ii) decides to raise funds by means of a public offering or a private placement of equity
or debt securities using an underwriter or placement agent, other than sales pursuant to the Company’s existing At The Market
Offering Agreement with H.C. Wainwright & Co. LLC, Rodman (or any affiliate designated by Rodman) shall have the right to act
as exclusive lead underwriter or exclusive lead placement agent for such financing. If Rodman or one of its affiliates decides
to accept any such engagement, the agreement governing such engagement will contain, among other things, provisions for customary
fees for transactions of similar size and nature and the provisions of this Agreement, including indemnification, which are appropriate
to such a transaction. If Rodman should decline such retention or fails
to respond within 7 business days’ notice of the Company, the Company shall have no further obligations to Rodman under this
Section 4 as to such financing.

 

B.           Term
and Termination of Engagement; Exclusivity. The term of Rodman’s exclusive engagement will begin on the date hereof and
end 7 days after the date hereof (the “Term”). Notwithstanding anything to the contrary contained herein, the
Company agrees that the provisions relating to the payment of fees, reimbursement of expenses, indemnification and contribution,
confidentiality, conflicts, independent contractor and waiver of the right to trial by jury will survive any termination of this
Agreement. During Rodman’s engagement hereunder: (i) the Company will not, and will not permit its representatives to, other
than in coordination with Rodman, contact or solicit institutions, corporations or other entities or individuals as potential purchasers
of the Securities with respect to the Offering, provided that this clause (i) shall not be construed to limit in any manner the
Company from selling or issuing securities to employees, directors or consultants in the ordinary course of business or pursuant
to agreements currently in place prior to this engagement, and (ii) the Company will not pursue any financing transaction which
would be in lieu of a Offering. Furthermore, the Company agrees that during Rodman’s engagement hereunder, all inquiries,
whether direct or indirect, from prospective investors will be referred to Rodman and will be deemed to have been contacted by
Rodman in connection with an Offering.

 

    	 	2	 

     

    

 

C.           Information;
Reliance. The Company shall furnish, or cause to be furnished, to Rodman all information reasonably requested by Rodman for
the purpose of rendering services hereunder (all such information being the “Information”). In addition, the
Company agrees to make available to Rodman upon request from time to time the officers, directors, accountants, counsel and other
advisors of the Company. The Company recognizes and confirms that Rodman (a) will use and rely on the Information, including any
documents provided to investors in each Offering (the “Offering Documents” which shall include any Purchase
Agreements (as defined below)), and on information available from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the same; (b) does not assume responsibility for the accuracy
or completeness of the Offering Documents or the Information and such other information; and (c) will not make an appraisal of
any of the assets or liabilities of the Company. Upon reasonable request, the Company will meet with Rodman or its representatives
to discuss all information relevant for disclosure in the Offering Documents and will cooperate in any reasonable investigation
undertaken by Rodman thereof, including any document included or incorporated by reference therein. At each Offering, at the request
of Rodman, the Company shall deliver such legal letters, comfort letters and officer’s certificates, all in form and substance
satisfactory to Rodman and its counsel as is customary for such Offering. Rodman shall be a third party beneficiary of any representations,
warranties, covenants and closing conditions made by the Company in any Offering Documents, including representations, warranties,
covenants and closing conditions made to any investor in an Offering.

 

D.           Related
Agreements. At each Offering, the Company shall enter into the following additional agreements:

 

1.          Underwritten
Offering. If an Offering is an underwritten Offering, the Company and Rodman shall enter into a customary underwriting agreement
in form and substance satisfactory to Rodman and its counsel.

 

2.          Best
Efforts Offering. If an Offering is on a best efforts basis, the sale of Securities to the investors in the Offering will be
evidenced by a purchase agreement (“Purchase Agreement”) between the Company and such investors in a form reasonably
satisfactory to the Company and Rodman. Prior to the signing of any Purchase Agreement, officers of the Company with responsibility
for financial affairs will be available to answer inquiries from prospective investors.

 

3.          Escrow
and Settlement. In respect of each Offering, the Company and Rodman shall enter into an escrow agreement with a third party
escrow agent, which may also be Rodman’s clearing agent, pursuant to which Rodman’s compensation and expenses shall
be paid from the gross proceeds of the Securities sold. If the Offering is settled in whole or in part via delivery versus payment
(“DVP”), Rodman shall arrange for its clearing agent to provide the funds to facilitate such settlement. The Company
shall bear the cost of the escrow agent and shall reimburse Rodman for the actual out of pocket cost of such clearing agent settlement
and financing, if any.

 

4.          FINRA
Amendments. Notwithstanding anything herein to the contrary, in the event that Rodman determines that any of the terms provided
for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to
amend this Agreement (or include such revisions in the final underwriting) in writing upon the request of Rodman to comply with
any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company.

 

E.           Confidentiality.
In the event of the consummation or public announcement of any Offering, Rodman shall have the right to disclose its participation
in such Offering, including, without limitation, the Offering at its cost of “tombstone” advertisements in financial
and other newspapers and journals.

 

    	 	3	 

     

    

 

F.           Indemnity.

 

1.          In
connection with the Company’s engagement of Rodman as Offering agent, the Company hereby agrees to indemnify and hold harmless
Rodman and its affiliates, and the respective controlling persons, directors, officers, members, shareholders, agents and employees
of any of the foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions,
suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the
reasonable fees and expenses of counsel), as incurred, (collectively a “Claim”), that are (A) related to or
arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be
made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s
engagementof Rodman, or (B) otherwise relate to or arise out of Rodman’s activities on the Company’s behalf under Rodman’s
engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses
of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action,
suit or proceedingwhether or not in connection with pending or threatened litigation in which any Indemnified Person is a party.
The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted from the gross
negligence or willful misconduct of any person seeking indemnification for such Claim. The Company further agrees that no Indemnified
Person shall have any liability to the Company for or in connection with the Company’s engagement of Rodman except for any
Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.

 

2.          The
Company further agrees that it will not, without the prior written consent of Rodman, settle, compromise or consent to the entry
of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not
any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes an
unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.

 

3.          Promptly
upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which
indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of
such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have
hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses.
If the Company so elects or is requested by such Indemnified Person, the Company will assume the defense of such Claim, including
the employment of counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel.
In the event, however, that legal counsel to such Indemnified Person reasonably determines that having common counsel would present
such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and
the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it
or other Indemnified Persons different from or in addition to those available to the Company, then such Indemnified Person may
employ its own separate counsel to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable
fees and expenses of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to
defend, contest, or otherwise protect against any Claim, the relevant Indemnified Party shall have the right, but not the obligation,
to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be
fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and
all amounts paid as a result of such Claim or the compromise or settlement thereof. In addition, with respect to any Claim in which
the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her
or its own counsel therefor at his, her or its own expense. Notwithstanding anything to the contrary herein, in no event shall
the Company be required to pay fees and expenses under this indemnity of more than one firm of attorneys (in addition to local
counsel) in any jurisdiction in any one legal action or group of related legal actions.

 

    	 	4	 

     

    

 

4.          The
Company agrees that if any indemnity sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason
then (whether or not Rodman is the Indemnified Person), the Company and Rodman shall contribute to the Claim for which such indemnity
is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and
Rodman on the other, in connection with Rodman’s engagement referred to above, subject to the limitation that in no event
shall the amount of Rodman’s contribution to such Claim exceed the amount of fees actually received by Rodman from the Company
pursuant to Rodman’s engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and
Rodman on the other, with respect to Rodman’s engagement shall be deemed to be in the same proportion as (a) the total value
paid or proposed to be paid or received by the Company pursuant to the applicable Offering (whether or not consummated) for which
Rodman is engaged to render services bears to (b) the fee paid or proposed to be paid to Rodman in connection with such engagement.

 

5.          The
Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall
in no way limit or otherwise adversely affect any rights that any Indemnified Party may have at law or at equity and (b) shall
be effective whether or not the Company is at fault in any way.

 

G.           Limitation
of Engagement to the Company. The Company acknowledges that Rodman has been retained only by the Company, that Rodman is providing
services hereunder as an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement
of Rodman is not deemed to be on behalf of, and is not intended to confer rights upon, any shareholder, owner or partner of the
Company or any other person not a party hereto as against Rodman or any of its affiliates, or any of its or their respective officers,
directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), employees or agents. Unless otherwise expressly agreed in writing
by Rodman, no one other than the Company is authorized to rely upon this Agreement or any other statements or conduct of Rodman,
and no one other than the Company is intended to be a beneficiary of this Agreement. The Company acknowledges that any recommendation
or advice, written or oral, given by Rodman to the Company in connection with Rodman’s engagement is intended solely for
the benefit and use of the Company’s management and directors in considering a possible Offering, and any such recommendation
or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used or relied upon for
any other purpose. Rodman shall not have the authority to make any commitment binding on the Company. The Company, in its sole
discretion, shall have the right to reject any investor introduced to it by Rodman.

 

H.           Limitation
of Rodman’s Liability to the Company. Rodman and the Company further agree that neither Rodman nor any of its affiliates
or any of its their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), employees or agents shall have any liability to the Company, its security holders or creditors,
or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for
an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out
of or relating to this Agreement or the services rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses
that arise out of or are based on any action of or failure to act by Rodman and that are finally judicially determined to have
resulted solely from the gross negligence or willful misconduct of Rodman.

 

I.           Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements
made and to be fully performed therein. Any disputes that arise under this Agreement, even after the termination of this Agreement,
will be heard only in the state or federal courts located in the City of New York, State of New York. The parties hereto expressly
agree to submit themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties
hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City
and State of New York. In the event Rodman or any Indemnified Person is successful in any action, or suit against the Company,
arising out of or relating to this Agreement, the final judgment or award entered shall be entitled to have and recover from the
Company the costs and expenses incurred in connection therewith, including its reasonable attorneys’ fees. In the event the
Company is successful in any action, or suit against Rodman, arising out of or relating to this Agreement, the final judgment or
award entered shall be entitled to have and recover from the Rodman the costs and expenses incurred in connection therewith, including
its reasonable attorneys’ fees. Any rights to trial by jury with respect to any such action, proceeding or suit are hereby
waived by Rodman and the Company.

 

    	 	5	 

     

    

 

J.           Notices.
All notices hereunder will be in writing and sent by certified mail, hand delivery, overnight delivery or email, if sent to Rodman,
at the address set forth on the first page hereof, e-mail: notices@rodm.com, Attention: Head of Investment Banking, and if sent
to the Company, to the address set forth on the first page hereof, email: sfrom@eyegatepharma.com and rbrenneman@eyegatepharma.com
Attention: Chief Executive Officer. Notices sent by certified mail shall be deemed received five days thereafter, notices sent
by hand delivery or overnight delivery shall be deemed received on the date of the relevant written record of receipt, and notices
delivered by email shall be deemed received as of the date delivered (provided confirmation of email receipt is obtained).

 

K.          Conflicts.
The Company acknowledges that Rodman and its affiliates may have and may continue to have investment banking and other relationships
with parties other than the Company pursuant to which Rodman may acquire information of interest to the Company. Rodman shall have
no obligation to disclose such information to the Company or to use such information in connection with any contemplated transaction.

 

L.           Anti-Money
Laundering. To help the United States government fight the funding of terrorism and money laundering, the federal laws of the
United States requires all financial institutions to obtain, verify and record information that identifies each person with whom
they do business. This means we must ask you for certain identifying information, including a government-issued identification
number (e.g., a U.S. taxpayer identification number) and such other information or documents that we consider appropriate to verify
your identity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a
trust instrument.

 

M.          Miscellaneous.
The Company represents and warrants that it has all requisite power and authority to enter into and carry out the terms and provisions
of this Agreement and the execution, delivery and performance of this Agreement does not breach or conflict with any agreement,
document or instrument to which it is a party or bound. This Agreement shall not be modified or amended except in writing signed
by Rodman and the Company. This Agreement shall be binding upon and inure to the benefit of both Rodman and the Company and their
respective assigns, successors, and legal representatives. This Agreement constitutes the entire agreement of Rodman and the Company
with respect to this Offering and supersedes any prior agreements with respect to the subject matter hereof. If any provision of
this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in
any other respect, and the remainder of the Agreement shall remain in full force and effect. This Agreement may be executed in
counterparts (including facsimile counterparts), each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 

*********************

 

    	 	6	 

     

    

 

In acknowledgment that
the foregoing correctly sets forth the understanding reached by Rodman and the Company, please sign in the space provided below,
whereupon this letter shall constitute a binding Agreement as of the date indicated above.

 

	 	 	Very truly yours,
	 	 	 
	 	 	RODMAN & RENSHAW, A UNIT OF H.C.
	 	 	WAINWRIGHT & CO., LLC
	 	 	 
	 	 	By	/s/ Edward Silvera
	 	 	 	Name: Edward Silvera
	 	 	 	Title:  Head of Investment Banking

 

	Accepted and Agreed:	 	 
	 	 	 
	EYEGATE PHARMACEUTICALS, INC.	 	 
	 	 	 	 
	By	/s/ Stephen From	 	 
	 	Name: Stephen From	 	 
	 	Title: President & CEO	 	 

 

    	 	7Exhibit

Exhibit 10.1

KIMBALL ELECTRONICS, INC.

LONG-TERM PERFORMANCE SHARE AWARD

This Long-Term Performance Share Award (“LTPSA”) dated June 29, 2016, is awarded by Kimball Electronics, Inc. (“Company”), an Indiana corporation, to ______________ (“Recipient”) pursuant to the terms of the Company’s 2014 Stock Option and Incentive Plan (“Plan”).

WHEREAS the Compensation & Governance Committee of the Company (“Committee”) believes it to be in the best interests of the Company and its shareowners for its employees to obtain or increase their shareowner interests in the Company in order that they will have a greater incentive to work for and manage the Company’s affairs in such a way that its shares may become more valuable, thereby aligning the personal interests of employees to the Company shareowners; and 

WHEREAS the Recipient is employed by the Company or one of its subsidiaries;

Now therefore, in consideration of these premises and of services to be performed by the Recipient, the Company hereby makes this LTPSA to the Recipient on the following terms and conditions hereafter expressed and subject to the terms of the Plan.

AWARD

The Company hereby awards to the Recipient a total of ______ (_________________) shares of Common Stock (“Common Stock”) of the Company, to be awarded in equal installments over the succeeding three (3) fiscal years of the Company (“Annual Installment”) based upon the following schedule:
____ shares for the fiscal year ending June 30, 2017
____ shares for the fiscal year ending June 30, 2018
____ shares for the fiscal year ending June 30, 2019

EXPIRATION OF AWARD

The LTPSA expires upon the final grant of shares or forfeiture of award, as the case may be, pursuant to the terms of this Agreement.

SHARES OF AWARD

Shares of the Annual Installment to be granted will be determined by a combination of the three (3) year average Worldwide Category 1 bonus percentage computed under the Company’s Profit Sharing Incentive Bonus Plan (“Bonus Plan”) for the applicable fiscal years ended June 30 (“Bonus Percent”) and the company’s growth based on comparison of the three (3) year Compounded Annual Growth Rate (“CAGR”) as compared to the Electronics Manufacturing Services (“EMS”) Industry three year CAGR.  Total shares granted are determined by a formula computed as follows:
		
	•
	Profitability Attainment - computing a percentage based upon a ratio, the numerator of which will be the average of the Bonus Percent for the Company’s last three (3) fiscal years, divided by a denominator of 40% (“Profitability Grant Percentage”).  The Profitability Grant Percentage may not exceed 100%.  The Grant Percentage is then multiplied by sixty percent (60%) of the Annual Installment to determine the shares to be granted. 

		
	•
	Growth Attainment - computing a percentage based upon a ratio, the numerator of which will be the three (3) year CAGR of the Company’s fiscal year sales revenue, divided by a denominator of the three (3) year CAGR of the EMS industry total calendar year sales revenue as reported by the Manufacturing Market Insider EMS industry trade publication (“Growth Grant Percentage”).  The Growth Grant Percentage may not exceed 100%.  The Growth Grant Percentage is then multiplied by forty percent (40%) the Annual Installment to determine the shares to be granted.

In computing the shares received, the shares will be rounded down to a full share excluding any fractional shares.  The resulting shares will be granted within 2 1⁄2 months after the end of the applicable Company fiscal year.

FORFEITURE OF AWARD

To be granted shares under the terms of this LTPSA, the Recipient must be a full time and eligible employee of the Company at the time shares are granted, except for: 
		
	•
	Death

		
	•
	Permanent Disability

		
	•
	Retirement after attaining the minimum retirement age under the governmental retirement system for the applicable country (age 62 in the U.S.) 

		
	•
	Determination of Ineligibility by the Company

If, during any fiscal year, a Recipient’s employment is terminated because of Death, Permanent Disability, or Retirement, or Ineligibility is Determined, the Recipient’s shares are determined by multiplying the Annual Installment shares computed for the applicable fiscal year by a fraction determined by:
		
	•
	Numerator = number of months in the current fiscal year that the Recipient was a full time and eligible employee, including the month in which the termination of employment or eligibility ends, which shall be considered a full month.

		
	•
	Denominator = 12 months.

In such cases, the Recipient’s (or beneficiary, in the event of Recipient’s death) shares will be granted within 2 1⁄2 months after the end of the Company’s fiscal year.  Any Annual Installments for future fiscal years are forfeited.

TAXES

The taxable value of the shares granted will be the number of shares received multiplied by the share price (determined under the applicable tax regulations) as of the date of the issuance.

Taxes due will be satisfied by having shares withheld equal in value to the minimum amount of federal, state and local taxes required by the taxing authorities.

The value of the shares withheld will be determined by using the appropriate method under applicable tax regulations. 

RESTRICTIONS ON GRANTED SHARES

There will be no restrictions on the shares of Common Stock granted under the LTPSA.

NON-TRANSFERABILITY – DEATH

This LTPSA is not transferable by the Recipient otherwise than by will or the laws of descent and distribution.

SHARE CHANGES

If the Company shall at any time change the number of shares of its Common Stock without new consideration to the Company (such as by stock dividend or stock split), the total number of shares subject to the LTPSA hereunder shall be changed in proportion to the change in issued shares.  If, during the term of this LTPSA, the Common Stock of the Company shall be changed into another kind of securities of the Company, or into cash, securities, or evidences of indebtedness of another corporation, other property, or any combination thereof, whether as a result of reorganization, sale, merger, consolidation, or other similar transaction, the Company shall cause adequate provision to be made whereby the Recipient shall thereafter be entitled to receive upon expiration of the LTPSA, the cash, securities, evidences of indebtedness, other property or any combination thereof, the Recipient would have been entitled to receive for Common Stock acquired through this LTPSA immediately prior to the effective date of such transaction.  If appropriate, the number of shares of this LTPSA following such reorganization, sale, merger, consolidation, or other similar transaction may be adjusted, in each case in such equitable manner as the Committee may select.

AMENDMENT

In the event any new modifications or changes are made to existing laws that render any or all of this Agreement illegal or unenforceable, this Agreement may be amended to the extent necessary in order to carry out the intention of the Award to the Recipient.  The Committee may amend this Agreement in other respects, without the 

Participant’s consent, if the amendment will not have an adverse effect on the Participant’s rights under this Agreement as in effect immediately before the amendment.

PLAN CONTROLLING

The LTPSA is subject to all of the terms and conditions of the Plan except to the extent that those terms and conditions are supplemented or modified by this Agreement, as authorized by the Plan.  Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Plan.  All determinations and interpretations of the Committee shall be binding and conclusive upon the Recipient and his or her legal representatives.

QUALIFICATION OF RIGHTS

Neither this Agreement nor the existence of the LTPSA shall be construed as giving the Recipient any right (a) to be retained as an employee of the Company; or (b) as a shareholder with respect to the shares of Common Stock underlying the LTPSA until the certificates for the Common Stock have been issued and delivered to the Recipient.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana.

SUCCESSORS AND ASSIGNS

This agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties, subject to the other provisions hereof.

WAIVER

The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

TITLES

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Agreement.  

IN WITNESS WHEREOF, the Company and the Recipient have agreed to the terms and conditions of this Award all as of the day and date first above written.

	
					
	 
	 
	 

	 
	 
	 
	 
	 

	By:
	/s/ John H. Kahle
	 
	By:
	 

	 
	The Company
John H. Kahle
Vice President,
General Counsel, Secretary
Kimball Electronics, Inc.
	 
	 
	Recipient

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