Document:

Exhibit 4.6

 

 

DESCRIPTION OF SECURITIES

 

Authorized Capital Stock

 

Our authorized capital stock consists of 160,000,000 shares of which 150,000,000 shares shall be common stock, par value $0.0001 per share, and 10,000,000 shares shall be preferred stock, par value of $0.0001 per share.

 

Common Stock

 

Pursuant to our amended Certificate of Incorporation, we are authorized to issue three classes of common stock: Class A common stock (125,000,000 shares); Class B common stock (10,000,000 shares); and Class C common stock (15,000,000 shares). The specific rights and preferences are set forth below.

 

Voting Rights

 

Holders of our Class A, Class B, and Class C common stock will have identical rights, except that holders of our Class A common stock are entitled to one vote per share; holders of our Class B common stock will be entitled to ten (10) votes per share; and holders of our Class C common stock will be entitled to five (5) votes per share. Holders of shares of Class A, Class B, and Class C common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law. We have not provided for cumulative voting for the election of directors in our certificate of incorporation.

 

Dividends

 

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of Class A, Class B, and Class C common stock shall be entitled to share equally in any dividends that our board of directors may determine to issue from time to time. In the event a dividend is paid in the form of shares of common stock or rights to acquire shares of common stock, the holders of Class A common stock shall receive Class A common stock, or rights to acquire Class A common stock, as the case may be; the holders of Class B common stock shall receive Class B common stock, or rights to acquire Class B common stock, as the case may be; and the holders of Class C common stock shall receive Class C common stock, or rights to acquire Class C common stock, as the case may be.

 

Liquidation Rights

 

Upon our liquidation, dissolution or winding-up, the holders of Class A, Class B, and Class C common stock shall be entitled to share equally all assets remaining after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock.

 

Conversion

 

Class A Common

 

Our Class A common stock is not convertible into any other shares of our capital stock.

 

Class B Common

 

Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock shall convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our Certificate of Incorporation.

 

Once converted into Class A common stock, the Class B common stock will be classified as authorized and unissued, and may be reissued. No class of common stock may be subdivided or combined unless the other class of common stock concurrently is subdivided or combined in the same proportion and in the same manner.

 

The Amendment also provides that shares of Class B common stock, when converted into Class A common stock, will be deemed to be authorized and unissued shares. The prior version of the Company’s Certificate of Incorporation provided that Class B common stock, when converted into Class A common stock, would be retired and could not be reissued. The Amendment will permit the Company to reissue shares of Class B common stock after their conversion.

 

Class C Common

 

Each share of Class C common stock is convertible as follows:

 

	-

	Between the date of issuance by the Company to the holder (the “Issuance Date”) and the third anniversary of the Issuance Date, the Class C common stock may not be converted into Class A common stock.

	  

	  

	-

	Beginning on the third anniversary of the Issuance Date (the “Initial Conversion Date”), the shareholder may convert up to 25% of the Class C shares owned by such holder into shares of Class A common stock.

	  

	  

	-

	Beginning on the fourth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.

	  

	  

	-

	Beginning on the fifth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.

	  

	  

	-

	Beginning on the sixth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.

	  

	  

	-

	The conversion schedule and limitations above are referred to herein as the “Conversion Schedule.

	  

	  

	-

	As discussed more fully below, any Transfer (as defined in the Amendment) of Class C Common Stock shall result in the Initial Conversion Date being deemed to be reset, and shall be the third anniversary of such Transfer, and the Conversion Schedule shall be reset and calculated from the reset Initial Conversion Date.

 

Once converted into Class A common stock, the Class C common stock shall not be reissued. No class of common stock may be subdivided or combined unless the other class of common stock concurrently is subdivided or combined in the same proportion and in the same manner.

 

Restrictions on Transfer

 

Class A Common

 

There are no restrictions on the transfer of the Class A common stock, other than restrictions required by federal and state securities laws.

 

Class B Common

 

Each share of Class B Common Stock shall automatically, without any further action, convert into one (1) fully paid and non-assessable share of Class A Common Stock upon a Transfer (as defined in the Amendment) of such share, other than a Transfer:

 

	-

	from a Class B Stockholder to any other Class B Stockholder who is a natural person to certain Permitted Entities, and from any of the Permitted Entities back to such Class B Stockholder and/or any other Permitted Entity established by or for such Class B Stockholder:

	  

	  

	  

	 

	 o

	Certain trusts;

	  

	  

	  

	 

	 o

	An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or certain pensions, profit sharing, stock bonus or other type of plans or trusts;

	  

	  

	  

	 

	 o

	Certain entities, including a corporation over which such Class B Stockholder has voting control; a partnership over which such Class B Stockholder has voting control; a limited liability company over which such Class B Stockholder has voting control;

	  

	  

	  

	-

	by a Class B Stockholder that is a partnership, or a nominee for a partnership, or a limited liability company, which partnership or limited liability company beneficially held more than five percent (5%) of the total outstanding shares of Class B Common Stock as of the transfer to certain persons listed in the Amendment;

 

Additionally, each share of Class B Common Stock held of record by a Class B Stockholder who is a natural person, or by such Class B Stockholder’s Permitted Entities, shall automatically, without any further action, convert into one (1) fully paid and non-assessable share of Class A Common Stock upon the death of such Class B Stockholder.

 

Shares of Class B Common Stock that are converted into shares of Class A Common Stock as provided in this section shall be retired and may not be reissued.

 

Class C Common

 

Upon the Transfer (as defined in the Amendment) of any share of Class C Common Stock other than a Transfer:

 

	-

	from a Class C Stockholder to any other Class C Stockholder who is a natural person to certain Permitted Entities, and from any of the Permitted Entities back to such Class C Stockholder and/or any other Permitted Entity established by or for such Class C Stockholder:

	  

	  

	  

	 

	 o

	Certain trusts;

	  

	  

	  

	 

	 o

	An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or certain pensions, profit sharing, stock bonus or other type of plans or trusts;

	  

	  

	  

	 

	 o

	Certain entities, including a corporation over which such Class C Stockholder has voting control; a partnership over which such Class C Stockholder has voting control; a limited liability company over which such Class C Stockholder has voting control;

	  

	  

	  

	-

	by a Class C Stockholder that is a partnership, or a nominee for a partnership, or a limited liability company, which partnership or limited liability company beneficially held more than five percent (5%) of the total outstanding shares of Class C Common Stock as of the transfer to certain persons listed in the Amendment;

 

the Initial Conversion Date shall be deemed to be reset, and shall be the third anniversary of such Transfer, and the Conversion Schedule shall be reset and calculated from the reset Initial Conversion Date.

Additionally, each share of Class C Common Stock held of record by a Class C Stockholder who is a natural person, or by such Class C Stockholder’s Permitted Entities, shall automatically, without any further action, convert into one (1) fully paid and non-assessable share of Class A Common Stock upon the death of such Class C Stockholder.

 

The transfer agent and registrar for our Class A and Class C common stock is VStock Transfer, LLC. The transfer agent’s address is 18 Lafayette Place, Woodmere, NY 11598, and its telephone number is 212.828.8436.

 

Preferred Stock

 

We are authorized by our Certificate of Incorporation to issue one or more series of preferred stock, and our Board of Directors is authorized to determine the rights, preferences, and terms of any such series without being required to seek approval of the shareholders. This is often referred to as having “blank check” preferred stock rights.

 

As of the date of this Prospectus, we had one series of preferred stock outstanding, our Series B Convertible Preferred Stock (the “Series B Preferred Stock”).

 

The terms of the Series B Preferred Stock include the following:

 

	-

	  

	Number of shares: The Company designated 100 shares of Series B Preferred Stock.

	  

	  

	  

	-

	  

	The Stated Value of the Series B Preferred Stock is $1.00 per share.

	  

	  

	  

	-

	  

	No dividends will accrue.

	  

	  

	  

	-

	  

	Voting Rights

	  

	  

	  

	 

	 o

	If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have that number of votes (identical in every other respect to the voting rights of the holders of all classes of Common Stock or series of preferred stock entitled to vote at any regular or special meeting of stockholders) equal to two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock.

	  

	  

	  

	 

	 o

	If more than one share of Series B Preferred Stock is issued and outstanding at any time, then each individual share of Series B Preferred Stock shall have the voting rights equal to:

	  

	  

	  

	 

	 ◾

	Two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock

	  

	  

	  

	 

	  

	Divided by:

	  

	  

	  

	 

	 ◾

	the number of shares of Series B Preferred Stock issued and outstanding at the time of voting.

	  

	  

	  

	-

	  

	Liquidation

	  

	  

	  

	 

	 o

	Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the Holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company for each share of Series B Preferred Stock then held by the Holder an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable before any distribution or payment shall be made to the holders of any Junior Securities.

	  

	  

	  

	-

	  

	Conversion: The Series B Preferred Stock shall be convertible into shares of the Company's Class A Common Stock only as follows:

	  

	  

	  

	 

	 o

	In the event that the Holder of Series B Preferred Stock ceases to be a director of the Company, upon such director's resignation or removal from the board by any means, the shares of Series B Preferred Stock held by such resigning or removed director shall convert automatically into that same number of shares of Class A Common Stock (i.e. on a one-for-one share basis).

	  

	  

	  

	 

	 o

	Shares of Series B Preferred Stock converted into Class A Common Stock, canceled, or redeemed, shall be canceled and shall have the status of authorized but unissued shares of undesignated preferred stock.Exhibit

May 28, 2020                                    Exhibit 10.4
Abhi Khandelwal
5865 Teal Lane
Long Grove, Illinois 60047

Dear Abhi,

I am pleased to offer you the position of Chief Financial Officer for CIRCOR International.  We have discussed the opportunities at CIRCOR and I am enthusiastic about the contributions I believe you will make to the Company's success.  In this role, you will report directly to Scott Buckhout, President and CEO.  
    
Your ‘total rewards and compensation’ for this position will include the following components:  

		
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	Base salary:  USD 400,000 annually, as earned, which is paid on a bi-weekly basis (subject to all applicable federal, state, and local withholding). 

   
		
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	Vacation:  You will be eligible for four (4) weeks of annual vacation, accrued on a per pay period basis beginning immediately, with accrued balance available for use in accordance with provisions of the prevailing policy.

		
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	Benefits:  You will be eligible to participate in the CIRCOR benefit plans (medical, dental, vision) effective as of your date of hire.  Additional details about CIRCOR’s benefits programs can be found in the enclosed Executive Benefits Guide.  Please note for any benefits governed by formal plan documents and summary plan descriptions, the terms of those documents govern.  To the extent that any information regarding benefits in this letter conflicts with the actual plan documents and summary plan descriptions, those documents control.  The Company reserves the right to modify, amend, or terminate any benefit plan or its contributions to any benefit plan at any time.  

 
		
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	Short Term Incentive (STI):  Beginning in 2020, you will be eligible to participate in the Company's Short-Term Incentive Plan ("STI Plan").  Your target bonus will be 60% of your annual base salary and will be pro-rated from your date of hire.  More information about your specific STI Plan design will be provided to you separately.

		
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	Car Allowance:  You will be eligible to receive a car allowance of USD 12,000 per year which will be paid out bi-weekly to compensate for using your personal vehicle for business purposes (subject to all applicable federal, state and local withholding).

		
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	Sign-on Cash Bonus:  You will be eligible to receive a lump sum sign-on bonus of USD 150,000 to be paid in your first paycheck following 30 days of employment (subject to all applicable federal, state and local withholding).  Should you voluntarily terminate from the Company prior to completion of one year of employment, you will be responsible to pay back all of this bonus upon your termination.

		
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	Sign-on Equity Grant:  Upon commencement of your employment, you would receive an LTI Award valued at USD 750,000 comprised of Time-Based Restricted Stock Unit Award ("RSUs").  The grant date will within 2 days of your start date.  The RSUs will vest one-third per year over a three-year period.  

		
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	Relocation Expenses:  You will be provided benefits to assist with your relocation.  Specific policy guidelines and level of benefit are attached in the CIRCOR Homeowner A policy.  Relocation assistance is contingent upon your acceptance of the Repayment Agreement.

		
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	Long Term Incentive (LTI):  Beginning in 2021, you will be eligible to participate in the Company's Long- Term Incentive Plan ("LTI Plan").  Your LTI target will be USD 360,000.  Under the LTI Plan, the Compensation Committee typically makes annual equity awards in the first quarter.  Your actual grant can vary based on individual performance.  The total LTI award value has two components, a Time-Based Restricted Stock Unit Award (“RSUs”), and a Performance-based Restricted Stock Unit Award ("Performance RSUs").  The RSUs constitute 50% of the award and vest in equal amounts annually over a three-year vesting period.  The Performance RSUs constitute 50% of the award and vest at the end of a three-year performance cycle.  The number of Performance RSUs that vest is based on achieving yearly cumulative goals for specific pre-established levels of Company performance.  The number of Performance RSUs that vest may range from 0% to 200% of the original shares granted depending on results relative to targets.  

		
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	Management Stock Purchase Plan (MSPP):  You will be eligible to participate in the CIRCOR International, Inc. Management Stock Purchase Plan ("MSPP").  Within 30 days of your date of hire and annually going forward, you may pre-select to defer up to 100% of the amount of your actual annual STI bonus into the receipt of RSUs.  The number of RSUs granted is calculated based on the amount of bonus deferred divided by that number which represents a discount of 33% from the fair market value of the Company's common stock on the date of the grant (typically at the conclusion of two days from the date on which the Company releases its previous year's financial results).  These RSUs vest at the end of a three-year period from the date of grant provided you are still employed by the Company at that time.  In addition, you can elect to defer the receipt of the actual shares of CIRCOR stock until a future date. Please complete the enclosed form within 30 days to advise whether or not you intend to pre-select to defer at this time and return to Human Resources.

		
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	Nonqualified Deferred Compensation (NQDC) Plan:  You will be eligible to participate in the CIRCOR 

Nonqualified Deferred Compensation (NQDC) Plan, a nonqualified plan under federal tax law and IRS regulations that allows you to save above and beyond the limits in place for the 401(k) plan.

		
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	Severance: The Company will enter into a Severance Agreement with you under which, in the event that your employment is terminated without “cause” or you resign for “good reason” you will be entitled to a severance payment equal to one (1) times your base annual salary plus pro-rated short-term incentive bonus.  The Severance Agreement would also provide for continued proportionate health and dental coverage contributions for a twelve (12) month period if you elect COBRA benefits. 

		
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	Change of Control:  The Company will enter into a Change of Control agreement with you.  A draft of this document is provided under separate cover.

		
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	Life Insurance, Accidental Death & Dismemberment (AD&D) and Long-Term Disability Benefits: The Company provides you with life insurance and AD&D insurance equal to 2 times your annual base salary.  The Company provides you with an enhanced long-term disability benefit, which provides 60% of your monthly pre-disability earnings, up to a maximum of USD15,000, less deductible sources of income.  

		
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	Tax Assistance Benefit:  You will be eligible for the Tax Assistance Benefit, which will provide reimbursement for expenses incurred for financial planning and/or tax preparation.  More information about this benefit in included in the Executive Benefits Guide.

		
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	Executive Physical Benefit:  You will be eligible for the Executive Physical Benefit, which will provide you with the opportunity to have an executive physical done at a nearby hospital.  More information about this benefit is included in the Executive Benefits Guide.

This offer is contingent upon your ability to provide the proper documentation to establish your identity and eligibility for employment required under the Immigration Reform & Control Act of 1986, the satisfactory results of requisite background/reference checks, passing a drug screen, and acceptance of a proprietary information/non-solicit agreement.  We recommend that you wait until the required checks and screenings listed have been completed and satisfactory results have been obtained, before you resign from your current employer.  You will be required to sign the Code of Conduct and Business Ethics and the Invention and Trade Secret and the Insider Trading agreements.  As an employee of CIRCOR, your employment will be on an “at will” basis.  There is no expressed or implied contract for any specific or definite period of employment.  You and the Company are free to terminate your employment for any or no reason, with or without cause or notice.  Neither this offer letter nor any other written or verbal communications create a contract of employment or a promise of employment for any specific or definite duration.  “At will” employment permits the Company to change the terms and conditions of employment at any time with or without cause or notice, including but not limited to termination, demotion, promotion, transfer, compensation, benefits, duties, and location of work.  While supervisors and managers have certain hiring authority, no supervisor or manager of the Company except the Company’s President and Chief Executive Officer has authority to alter the “at-will relationship” or to bind the Company to any employment contract for any specified period of time with any employee.  

Abhi, I am looking forward to having you join our team.  You will be an asset as we move forward in the continued growth of the organization.  The start date for this position will be on a mutually agreed upon date no later than April 6, 2020.  Please confirm your acceptance of this offer by signing and returning one copy each of this offer and the proprietary information/non-solicit agreement by scan and email to me and Andrew.Farnsworth@circor.com.  This offer of employment is valid through Monday, March 10th 2020 unless other arrangements are made.  Please do not hesitate to contact me if you have questions and/or points of clarification.

Very truly yours,

Andrew Farnsworth
CHRO

I accept your offer of employment based on the terms and conditions set forth above.

/s/ Abhi Khandelwal                March 28, 2020            
Abhi Khandelwal                    Date

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