Document:

Exhibit 10.7

 

AMERIHOME, INC.

2020 OMNIBUS INCENTIVE PLAN

 

I.  INTRODUCTION

 

1.1          Purposes.  The purposes of the AmeriHome, Inc. 2020 Omnibus Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining Non-Employee Directors, officers, other employees, consultants, independent contractors and agents, and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.

 

1.2          Certain Definitions.

 

“Affiliate” means any entity that, directly or indirectly, is controlled by, controls or is under common control with the Company and/or any entity in which the Company has a significant equity interest, in either case, as determined by the Board.

 

“Agreement” means the written or electronic agreement evidencing an award under this Plan between the Company and the recipient of such award.

 

“Board” means the Board of Directors of the Company.

 

“Change in Control” has the meaning set forth in Section 5.8(b).

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means the committee designated by the Board to administer this Plan, or a subcommittee thereof, in each case, consisting of two or more members of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the New York Stock Exchange, or if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of the principal stock exchange on which the Common Stock is then traded; provided, however, if no committee is designated by the Board to administer this Plan, then the Board shall serve as the Committee.

 

“Common Stock” means the Class A common stock, par value $0.01 per share, of the Company, and all rights appurtenant thereto.

 

“Company” means AmeriHome, Inc., a Delaware corporation, or any successor thereto.

 

“Delay Period” has the meaning set forth in Section 5.17.

 

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

 

“Fair Market Value” means the closing transaction price of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being

 

 

determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there are no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange, or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate with due regard for Section 409A of the Code (to the extent applicable); provided, further, in the case of grants made at the time of pricing the Initial Public Offering, Fair Market Value shall mean the price per share at which the Common Stock is initially offered for sale to the public by the Company’s underwriters in the Initial Public Offering.   Notwithstanding the foregoing, the Committee may, in its sole discretion, determine for any purpose under this Plan that “Fair Market Value” shall be determined based on the opening, actual, high, low, or average selling prices of a share of Common Stock reported on the established securities exchange on which the shares are principally traded on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days.

 

“Free-Standing SAR” means an SAR that is not granted in tandem with, or by reference to, an option, which entitles the holder of such SAR to receive, upon exercise, shares of Common Stock (which may be Restricted Stock), or to the extent set forth in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs that are exercised.

 

“Incentive Stock Option” means an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, that is intended by the Committee to constitute an Incentive Stock Option.

 

“Initial Public Offering” means an initial public offering of the Company registered on Form S-1 (or any successor form under the Securities Act of 1933, as amended).

 

“Investor” means A-A Mortgage Opportunities, L.P., a Delaware limited partnership, and each of its affiliates, and any investment fund or other collective investment vehicle whose investment activities are managed, or which is advised as to its investment activities, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s Affiliates and which invests in the Company (including any successors or assigns of any such manager).  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed Affiliates of the Company and A-A Mortgage Opportunities, L.P. for the purposes of this definition.

 

“IPO Date” has the meaning set forth in Section 5.8(b).

 

“Non-Employee Director” means any director of the Company who is not an officer or employee of the Company or any of its Affiliates.

 

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“Nonqualified Stock Option” means an option to purchase shares of Common Stock that is not an Incentive Stock Option.

 

“Other Constituent Companies” has the meaning set forth in Section 5.8(b).

 

“Other Stock Award” means an award granted pursuant to Section 3.4 of this Plan.

 

“Performance Award” means a right to receive an amount of cash, Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.

 

“Performance Measures” means the criteria and objectives, established by the Committee, that must be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such award, or in the case of a Restricted Stock Unit Award, Other Stock Award, or Performance Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award.   Such criteria and objectives may include one or more of the following company-wide or Affiliate, division, operating unit, line of business, project, geographic or individual measures: the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time; increase in stockholder value; earnings per share; return on or net assets; return on equity; return on investments; return on capital or invested capital; total stockholder return; earnings or income before or after taxes and/or interest; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA margin; operating income; revenues; billings; operating expenses, attainment of expense levels or cost reduction goals; market share; cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic value created; gross profit or margin (correspondent or consumer direct margins); operating profit or margin (correspondent or consumer direct margins); net cash provided by operations; price-to-earnings growth; mortgage servicing rights; loan sales; recapture rate and strategic business criteria, consisting of one or more objectives based on meeting specified goals relating to market penetration, customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation, supervision of information technology, quality and quality audit scores, efficiency, and acquisitions or divestitures, any combination of the foregoing or any other goal selected by the Committee, whether or not listed herein.  Each such goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more Affiliates, divisions, or operating units) or the past or current performance of other companies or market indices (or a combination of such past and current performance). In addition to the ratios specifically enumerated above, performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), stockholders’ equity, shares outstanding, assets or net assets, sales, or any combination thereof.  The applicable performance measures may be applied on a pre- or post-tax basis and may be adjusted to include or exclude components of any performance measure, including, without limitation, foreign exchange gains and losses, asset writedowns, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as

 

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restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles (“Adjustment Events”). In the sole discretion of the Committee, the Committee may amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of any Adjustment Events. Performance goals and measures shall be subject to such other special rules and conditions as the Committee may establish at any time.

 

“Performance Period” means any period designated by the Committee during which (i) the Performance Measures applicable to an award are measured and (ii) the conditions to vesting applicable to an award remain in effect.

 

“Restricted Stock” means shares of Common Stock that are subject to a Restriction Period and that may additionally be subject to the attainment of specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Award” means an award of Restricted Stock under this Plan.

 

“Restricted Stock Unit” means a right to receive one share of Common Stock, or in lieu thereof and to the extent set forth in the applicable Agreement, the Fair Market Value of such Common Stock in cash, that is contingent upon the expiration of a specified Restriction Period and that may additionally be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Unit Award” means an award of Restricted Stock Units under this Plan.

 

“Restriction Period” means any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated, or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award or Other Stock Award remain in effect.

 

“SAR” means a stock appreciation right, which may be a Free-Standing SAR or a Tandem SAR.

 

“Stock Award” means a Restricted Stock Award, Restricted Stock Unit Award, or Other Stock Award.

 

“Stockholders Agreement” means the Stockholders Agreement, dated as of the closing of the Initial Public Offering, as amended from time to time.

 

“Substitute Award” means an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation, or acquisition of property or shares.

 

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“Tandem SAR” means an SAR that is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder of such SAR to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock), or to the extent set forth in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, that is surrendered.

 

“Tax Date” has the meaning set forth in Section 5.5.

 

“Ten Percent Holder” has the meaning set forth in Section 2.1(a).

 

1.3          Administration.  This Plan shall be administered by the Committee.  Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free-Standing SARs; (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units or Other Stock Awards; and (iv) Performance Awards.  The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount, and timing of each award to such persons, and if applicable, the number of shares of Common Stock subject to an award, the number of SARs, the number of Restricted Stock Units, the dollar value subject to a Performance Award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award, and all other terms and conditions of the award, including without limitation the form of the Agreement evidencing the award.  The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become exercisable in part or in full; (ii) all or a portion of the Restriction Period applicable to any outstanding awards shall lapse; (iii) all or a portion of the Performance Period applicable to any outstanding awards shall lapse; and (iv) the Performance Measures (if any) applicable to any outstanding awards shall be deemed to be satisfied at the target, maximum, or any other level.  The Committee shall have discretionary authority to, subject to the express terms of this Plan, interpret this Plan and any award, establish rules and regulations it deems necessary or desirable for the administration of this Plan or any award, and otherwise do all things necessary or desirable with respect to this Plan or any award.  Without limiting the foregoing, the Committee may impose, incidental to the grant of an award, terms and conditions with respect to the award, such as limitations or requirements in the event of competitive employment or other activities.  All interpretations, rules, regulations, and determinations made by the Committee with respect to this Plan or any award shall be conclusive and binding on all parties.

 

The Committee may delegate some or all of its power and authority under this Plan to the Board (or any members of the Board), or subject to applicable law, to a subcommittee of the Board or the Committee, a member of the Board or Committee, the Chief Executive Officer or other executive officer of the Company, or other persons, in each case, as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to a member of the Board, the Chief Executive Officer, or other executive officer of the Company

 

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with regard to the selection for participation in this Plan of an officer, director, or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing, or amount of an award to such an officer, director, or other person.

 

No member of the Board or Committee, and neither the Chief Executive Officer nor any other person to whom the Committee delegates any of its power and authority under this Plan, shall be liable for any act, omission, interpretation, construction, or determination made in connection with this Plan or any award, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company with respect to any claim, loss, damage, or expense (including attorneys’ fees) arising therefrom, including, without limitation, by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of an award to satisfy the requirements of Section 409A of the Code or by reason of Section 4999 of the Code, in each case, to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

 

1.4          Eligibility.  Participants in this Plan shall consist of such officers, other employees, Non-Employee Directors, consultants, independent contractors, agents, and persons expected to become officers, other employees, Non-Employee Directors, consultants, independent contractors, and agents of the Company and its Affiliates as the Committee in its sole discretion may select from time to time.  Eligibility for Incentive Stock Options is limited to individuals described in the first sentence of this Section 1.4 who are employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code.  The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time.  Except as otherwise provided for in an Agreement, for purposes of this Plan, references to employment by the Company also mean employment by an Affiliate, and references to employment include service as a Non-Employee Director, consultant, independent contractor, or agent.  The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during an approved leave of absence.  Notwithstanding anything in this Plan to the contrary, the aggregate value of cash compensation and the grant date fair value of shares of Common Stock that may be paid or granted during any fiscal year of the Company to any Non-Employee Director in respect of his or her service as a director shall not exceed $1,000,000, determined without regard to any distributions of deferred compensation in accordance with any deferred compensation arrangement of the Company or any of its Affiliates; provided, however, for the first calendar year in which the Non-Employee Director joins the Board, the limit set forth in this sentence shall be multiplied by two.

 

1.5          Shares Available.  Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Plan, 10,000,000 shares of Common Stock shall initially be available for all awards under this Plan, other than Substitute Awards.  Subject to adjustment as provided in Section 5.7, no more than 10,000,000 shares of Common Stock in the aggregate may be issued under this Plan in connection with Incentive Stock Options.  The number of shares of Common Stock available under this Plan shall increase annually on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021, and continuing until (and including) the fiscal year ending December 31, 2030, with such annual increase equal to the lesser of (i) 5%

 

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of the number of shares of Common Stock outstanding as of the last day of the preceding fiscal year and (ii) an amount determined by the Board.  The number of shares of Common Stock that remain available for future grants under this Plan at any given time shall be reduced by the sum of the aggregate number of shares of Common Stock which become subject to outstanding options, outstanding Free-Standing SARs, outstanding Stock Awards and outstanding Performance Awards denominated in Common Stock, in each case, assuming maximum payout levels and not including Substitute Awards.   For the avoidance of doubt, the number of shares available under the Plan shall not be reduced by shares of Common Stock granted in substitution for profits interests in Aris Mortgage Holding Company, LLC in connection with the transactions relating to the Initial Public Offering.

 

To the extent that shares of Common Stock subject to an outstanding option, SAR, Stock Award or Performance Award granted under this Plan, other than Substitute Awards, are not issued or delivered by reason of (i) the expiration, termination, cancellation, or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related Tandem SAR or shares subject to a Tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock shall be made available under this Plan.  In addition, shares of Common Stock subject to an award under this Plan shall be made available for issuance under this Plan if such shares (or, if applicable, such units) are (x) shares that were subject to an option or stock-settled SAR to the extent not issued or delivered due to the net settlement or net exercise of such option or SAR or (y) shares (or such units) delivered to or withheld by the Company or one its Affiliates to pay the withholding taxes related to an outstanding award.   Shares of Common Stock subject to an award under this Plan shall not again be available for issuance under this Plan if such shares are repurchased by the Company on the open market with the proceeds of an option exercise.

 

The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder-approved plan of a company or other entity that was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) that become subject to awards granted under this Plan (subject to applicable stock exchange requirements).

 

Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

 

II.  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1          Stock Options.  The Committee may grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee.  Each option, or portion thereof, that is not an Incentive Stock Option shall be a Nonqualified Stock Option.  To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or subsidiary) exceeds the amount (currently $100,000) established by and measured in accordance with the Code, such options shall constitute Nonqualified Stock Options.

 

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Options are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable:

 

(a)           Number of Shares and Purchase Price.  The number of shares of Common Stock subject to an option, and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided further, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

 

Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price of the shares subject to the Substitute Award does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate purchase price of such shares.

 

(b)           Option Period and Exercisability.  The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than 10 years after its date of grant; provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant.  The Committee may, in its discretion, establish Performance Measures that must be satisfied or met as a condition to the grant of an option or to the exercisability of all or a portion of an option.  The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

 

(c)           Method of Exercise.  An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either in cash (or cash equivalent) or, if permitted by the Committee and if legally permissible: (A) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise; (B) authorizing the Company to withhold whole shares of Common Stock that would otherwise be delivered having an aggregate Fair Market Value, determined as

 

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of the date of exercise, equal to the amount necessary to satisfy such obligation; (C) in cash by a broker-dealer acceptable to the Company to whom the participant has submitted an irrevocable notice of exercise; or (D) a combination of cash (or cash equivalents) and/or (A), (B), and (C), in each case to the extent set forth in the Agreement relating to the option; (ii) if applicable, by surrendering to the Company any Tandem SARs that are cancelled by reason of the exercise of the option; and (iii) by executing such documents as the Company may reasonably request.  The Committee may limit exercisability of any option at any time, including, without limitation, in connection with any blackout periods, market limitations or corporate transactions or events.  Any fraction of a share of Common Stock that would be required to pay such purchase price shall be disregarded, and the remaining amount due shall be paid in cash (or cash equivalent) by the participant.  No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

 

2.2          Stock Appreciation Rights.  The Committee may grant SARs to such eligible persons as may be selected by the Committee.  The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

 

SARs are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable:

 

(a)           Number of SARs and Base Price.  The number of SARs subject to an award shall be determined by the Committee.  Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted.  The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option.  The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR (or if earlier, the date of grant of the option for which the SAR is exchanged or substituted).

 

Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price of the shares subject to the Substitute Award does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.

 

(b)           Exercise Period and Exercisability.  The period for the exercise of an SAR shall be determined by the Committee; provided, however, that (i) no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture, or other termination of the related option and (ii) no Free-Standing SAR shall be exercised later than 10 years after its date of grant.  The

 

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Committee may, in its discretion, establish Performance Measures that must be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR.  The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock, and in the case of a Free-Standing SAR, only with respect to a whole number of SARs.  If an SAR is exercised for Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d).  Prior to the exercise of a stock-settled SAR, the holder of such SAR has no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.

 

(c)           Method of Exercise.  A Tandem SAR may be exercised by (i) giving written notice to the Company specifying the number of whole SARs that are being exercised, (ii) surrendering to the Company any options that are cancelled by reason of the exercise of the Tandem SAR, and (iii) executing such documents as the Company may reasonably request.  A Free-Standing SAR may be exercised by (A) giving written notice to the Company specifying the whole number of SARs that are being exercised and (B) executing such documents as the Company may reasonably request.  The Committee may limit exercisability of any SAR at any time, including, without limitation, in connection with any blackout periods, market limitations or corporate transactions or events.  No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

 

2.3          Termination of Employment or Service.  All of the terms relating to the exercise, cancellation, or other disposition of an option or SAR (i) upon a termination of employment with or service to the Company of the holder of such option or SAR, as the case may be, whether by reason of disability, retirement, death, or any other reason; or (ii) during a paid or unpaid leave of absence, in each case, shall be determined by the Committee and set forth in the applicable Agreement.

 

2.4          Repricing.  The Committee may, at any time in its discretion and without stockholder approval, (i) reduce the purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower purchase price or base price, or (iii) cancel any previously granted option or SAR in exchange for cash or another award if the purchase price of such option or the base price of such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation.

 

III.  STOCK AWARDS

 

3.1          Stock Awards.  The Committee may grant Stock Awards to such eligible persons as may be selected by the Committee.  The Agreement relating to a Stock Award shall specify whether

 

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the Stock Award is a Restricted Stock Award, a Restricted Stock Unit Award, or in the case of an Other Stock Award, the type of award being granted.

 

3.2          Terms of Restricted Stock Awards.  Restricted Stock Awards are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable.

 

(a)           Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any), and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

 

(b)           Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

 

(c)           Stock Issuance.  During the Restriction Period, the Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted, or alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend that may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms, and conditions of this Plan and the Agreement relating to the Restricted Stock Award.  All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part.  Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the requirement to pay any applicable taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award.

 

(d)           Rights with Respect to Restricted Stock Awards.  Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends, and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that (i) a distribution with respect to shares of Common Stock, other than a regular cash dividend, and (ii) a regular cash dividend with respect to shares of Common Stock that are subject to performance-based vesting conditions, in each case, shall be deposited with the

 

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Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.  In the case of a regular cash dividend, the applicable Agreement shall specify whether such dividend shall be paid on a current basis or shall be subject to the same restrictions as the shares of Common Stock with respect to which such dividend was made.

 

3.3          Terms of Restricted Stock Unit Awards.  Restricted Stock Unit Awards are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable.

 

(a)           Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Unit Award, including the number of shares that are earned upon the attainment of any specified Performance Measures, and the Restriction Period, Performance Period (if any), and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

 

(b)           Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

 

(c)           Settlement of Vested Restricted Stock Unit Awards.  The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder of such Restricted Stock Unit Award shall be entitled to receive, on a current or deferred basis, dividend equivalents, and if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents with respect to Restricted Stock Units that are subject to performance-based vesting conditions shall be subject to the same restrictions as such Restricted Stock Units.  Prior to the settlement of a Restricted Stock Unit Award, the holder of such award has no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.

 

3.4          Other Stock Awards.  Subject to the limitations set forth in this Plan, the Committee is authorized to grant other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock, including without limitation shares of Common Stock granted as a bonus and not subject to any vesting conditions, dividend equivalents, deferred stock units, stock purchase rights, and shares of Common Stock issued in lieu of obligations of the Company to pay cash under any compensatory plan or arrangement, subject to such terms as shall be determined by the Committee (“Other Stock Awards”).  The Committee shall determine the terms and conditions of such awards, which may include the right to elective deferral of such awards, subject to such

 

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terms and conditions as the Committee may specify in its discretion. Any dividends or dividend equivalents constituting or with respect to Other Stock Awards that are subject to performance-based vesting conditions shall be subject to the same restrictions as such Other Stock Awards.

 

3.5          Termination of Employment or Service.  All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death, or any other reason; or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable Agreement.

 

IV.  PERFORMANCE AWARDS

 

4.1          Performance Awards.  The Committee may grant Performance Awards to such eligible persons as may be selected by the Committee.

 

4.2          Terms of Performance Awards.  Performance Awards are subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee deems advisable.

 

(a)           Value of Performance Awards and Performance Measures.  The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee.

 

(b)           Vesting and Forfeiture.  Except to the extent otherwise provided by the Agreement relating to a Performance Award, as determined by the Committee in its discretion, and subject to the provisions of this Plan, such Performance Award shall vest if the specified Performance Measures are satisfied during the specified Performance Period and such award shall be forfeited if the specified Performance Measures are not satisfied or met during the specified Performance Period.

 

(c)           Settlement of Vested Performance Awards.  The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including Restricted Stock) or cash or a combination thereof.  If a Performance Award is settled in Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form, or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.2(d).  Any dividends or dividend equivalents with respect to a Performance Award shall be subject to the same performance-based vesting restrictions as such Performance Award. Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award has no rights as a stockholder of the Company.

 

4.3          Termination of Employment or Service.  All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability,

 

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retirement, death, or any other reason; or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable Agreement.

 

V.  GENERAL

 

5.1          Effective Date and Term of Plan.  This Plan shall be submitted to the stockholders of the Company for approval, and if approved, shall become effective as of the date on which this Plan was approved by stockholders.  This Plan shall terminate as of the tenth anniversary of the effective date, unless terminated earlier by the Board.  Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination.

 

Awards under this Plan may be made at any time prior to the termination of this Plan, provided that no Incentive Stock Option may be granted later than 10 years after the date on which this Plan was approved by the Board.  In the event that this Plan is not approved by the stockholders of the Company, this Plan and any awards under this Plan shall be void and of no force or effect.

 

5.2          Amendments.  The Board may amend this Plan as it deems advisable; provided, however, that no amendment to this Plan shall be effective without the approval of the Company’s stockholders if (i) stockholder approval is required by applicable law, rule, or regulation, including any rule of the New York Stock Exchange or any other stock exchange on which the Common Stock is then traded or (ii) such amendment seeks to modify the Non-Employee Director compensation limit set forth in Section 1.4; provided further, that no amendment may materially impair the rights of a holder of an outstanding award without the consent of such holder.  For the avoidance of doubt, the exercise of any powers of the Committee under this Plan, including any adjustment under Section 5.7 or any action taken in connection with a Change in Control under Section 5.8, shall not be treated as an amendment that requires any holder’s consent.

 

5.3          Agreement.  Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award.  To the extent required by the Company, no award shall be valid until executed or electronically accepted by the recipient of such award.  Upon such execution or acceptance and delivery of the Agreement to the Company within the time period specified by the Company, such award shall be effective as of the effective date set forth in the Agreement.

 

5.4          Non-Transferability.  No award shall be transferable other than by will, the laws of descent and distribution, or pursuant to beneficiary designation procedures approved by the Company, or to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes, a charitable organization designated by the holder, or pursuant to a domestic relations order, in each case without consideration.  Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime by only the holder or the holder’s legal representative or similar person.  Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered, or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment, or similar process.  Upon any attempt to so

 

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sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of any award, such award and all rights under such award shall immediately become null and void.

 

5.5          Tax Withholding.  All awards and stock issued, and all payments made, under this Plan will be reduced by all tax and other amounts required to be withheld with respect to the payment (or, if determined by the Company, other satisfactory arrangements as described below will be made in order to satisfy such withholding requirements).  Any amounts withheld pursuant to this Section 5.5 will be treated as though such payment had been made directly to the applicable participant. In furtherance of the foregoing, the Company has the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made under this Plan, payment by the holder of such award of any federal, state, local, or other taxes that may be required to be withheld or paid in connection with such award.  An Agreement may provide that the Company shall withhold whole shares of Common Stock that would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash that would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation; or the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company (or, if directed by the Company or an Affiliate), including, if permitted by the Company, through an instruction to a broker-dealer acceptable to the Company to deliver proceeds following a sale of share of Common Stocks subject to or deliverable under an award on such terms and conditions as are specified by the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole shares of Common Stock that would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash that would otherwise be payable to a holder, in either case equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of an option or a SAR, a cash payment by a broker-dealer acceptable to the Company to whom the participant has submitted an irrevocable notice of exercise; or (E) any combination of (A), (B), and (C), in each case to the extent set forth in the Agreement relating to the award.  Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate (or if permitted by the Company, such other rate as will not cause adverse accounting consequences under the accounting rules then in effect).  Any fraction of a share of Common Stock that would be required to satisfy such an obligation shall be disregarded, and the remaining amount due shall be paid in cash by the holder.

 

5.6          Restrictions on Shares.  Each award made under this Plan shall be subject to the requirement that if at any time the Company determines that the listing, registration, or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares under such award, such shares shall not be delivered unless such listing, registration, qualification, consent, approval, or other action shall have been effected or obtained, free of any conditions not acceptable to the Company.  The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made under this Plan bear

 

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a legend indicating that the sale, transfer, or other disposition of such award by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

5.7          Adjustment.   In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation or any successor or replacement accounting standard), such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through an extraordinary cash dividend, then the number and class of securities available under this Plan, the terms and conditions of any outstanding option and SAR (including the number and class of securities subject to any outstanding option or SAR and the purchase price or base price per share), the terms and conditions of any outstanding Stock Award (including the number and class of securities subject thereto) and the terms and conditions of any outstanding Performance Award (including the number and class of securities subject thereto, if applicable), shall be appropriately adjusted, as determined by the Committee in its discretion.  In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee in its discretion to prevent dilution or enlargement of rights of participants. In the event of an equity restructuring or change in corporate capitalization described herein, the Committee may, in its discretion, provide for such adjustments to the Performance Measures applicable to one or more awards as it deems appropriate. In any such case, the decision of the Committee regarding any such adjustment shall be final, binding, and conclusive.

 

5.8          Change in Control.

 

(a)           Subject to the terms of the applicable Agreements, in the event of a Change in Control, the Board, as constituted prior to the Change in Control, shall, in its discretion, determine the effect of the Change in Control on outstanding awards.  Without limiting the foregoing, the Board, as constituted prior to the Change in Control, may, in its discretion, with respect to some or all awards (which determination need not be uniform as to all awards of the same type):

 

(1)  require that (i) some or all outstanding options and SARs (or any portion thereof) shall become exercisable in full or in part, (ii) the Restriction Period applicable to some or all outstanding Stock Awards (or any portion thereof) shall lapse in full or in part, (iii) the Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (iv) the Performance Measures applicable to some or all outstanding awards shall be deemed to be satisfied at the target, maximum or any other level, in each case, on such terms and conditions and at such time or times as the Committee shall determine;

 

(2)  require that any outstanding award shall be assumed or continued or that shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, or other property be substituted for some or all of the

 

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shares of Common Stock subject to any outstanding award (or any portion thereof), with such appropriate adjustments to such award as determined by the Board; and/or

 

(3)  require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (i) a cash payment in an amount equal to (A) in the case of an option or an SAR, the aggregate number of shares of Common Stock then subject to the portion of such option or SAR surrendered, whether or not vested or exercisable, multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (B) in the case of a Stock Award or a Performance Award denominated in shares of Common Stock, the number of shares of Common Stock then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(1)(iv), whether or not vested, multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (C) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(1)(iv); (ii) shares of capital stock, other securities of, or rights with respect to, the corporation (or an affiliate of such corporation) resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, or other property having a fair market value not less than the amount determined under clause (i) above; or (iii) a combination of the payment of cash pursuant to clause (i) above and the issuance of shares or other property pursuant to clause (ii) above, in each case, on such payment and other terms and conditions (which need not be the same as the terms and conditions applicable to holders of Common Stock generally) as the Committee determines, including that any amounts paid in respect of such award be placed in escrow or otherwise made subject to such restrictions as the Committee deems appropriate.  For the avoidance of doubt, if the per share purchase price, exercise price, or base price of an award or portion thereof is equal to or greater than the fair market value of one share of Common Stock, such award or portion may be cancelled with no payment due hereunder or otherwise in respect thereof.

 

(b)           For purposes of this Plan, “Change in Control” means the occurrence of any of the following events or series of related events after the date hereof:

 

(1)  any person, or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the combined

 

17

 

voting power of the Company’s then-outstanding voting securities), but excluding any acquisition by the Company or any of its Affiliates, the Investor or any of its Affiliates, or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates;

 

(2)  there is consummated a merger, consolidation or similar business transaction involving the Company with any other person or persons, and, either (x) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) immediately after the consummation of such transaction, the voting securities of the Company immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof;

 

(3)  there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Company of all or substantially all of the Company’s assets, other than such sale or other disposition by the Company of all or substantially all of the Company’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale; or

 

(4)  the following individuals cease for any reason to constitute a majority of the number of directors of the Board of the Company then serving: individuals who were directors of the Company on the date on which the Initial Public Offering is consummated (the “IPO Date”) and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election to the Board or nomination for election by the Company’s stockholders was made pursuant to the Stockholders Agreement or was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors of the Company on the IPO Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (4).

 

Notwithstanding the foregoing, except with respect to clause (3) above, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the ultimate beneficial owners of the Class A Common Stock and Class B Common Stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in and voting control over, and own substantially all of the shares or equity of, an

 

18

 

entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.  In addition, with respect to any payment considered to be nonqualified deferred compensation under Section 409A of the Code, to the extent applicable, that is payable upon a Change in Control or other similar event, to the extent required to avoid the imposition of any additional tax, interest or penalty under Section 409A of the Code, no amount will be payable upon such Change in Control unless such Change in Control or other event constitutes a “change in control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.

 

5.9          Deferrals.  The Committee may determine that the delivery of shares of Common Stock, the payment of cash, or a combination thereof, upon the settlement of all or a portion of any award made under this Plan shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards.  Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion.

 

5.10        No Right of Participation, Employment or Service.  No person shall have any right to participate in this Plan.  Neither this Plan nor any award made under this Plan shall confer upon any person any right to continued employment by or service with the Company or any Affiliate or affect in any manner the right of the Company or any Affiliate to terminate the employment or service of any person at any time without liability under this Plan.

 

5.11        Rights as Stockholder.  No person has any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company that is subject to an award under this Plan unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

 

5.12        Designation of Beneficiary.  To the extent permitted by the Company, a holder of an award may file with the Company a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity.  To the extent an outstanding option or SAR granted under this Plan is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Company.  Each beneficiary designation shall become effective only when filed in writing with the Company during the holder’s lifetime on a form prescribed by the Company.  The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse.  The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary designations.  If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative, or similar person.

 

5.13        Awards Subject to Clawback.  The awards granted under this Plan and any cash payment or shares of Common Stock delivered pursuant to such an award are subject to forfeiture, recovery by the Company, or other action, in each case pursuant to the applicable Agreement, or any clawback or recoupment policy that the Company may adopt from time to time, including without limitation any such policy that the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules

 

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and regulations thereunder, or as otherwise required by law or applicable stock exchange listing standards.

 

5.14        Governing Law.  This Plan, each award under this Plan and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws, except as otherwise expressly provided by any Agreement or applicable subplan.  By accepting (or being deemed to have accepted) an award, each participant agrees or will be deemed to have agreed to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Plan or any award, (ii) not commence any suit, action or other proceeding arising out of or based upon this Plan or any award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware, and (iii) waive, and not assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Plan or any award or the subject matter thereof may not be enforced in or by such court.  Further, by accepting or being deemed to have accepted an award under this Plan, each participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under this Plan or any award, or under any amendment, subplan, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury.  By accepting or being deemed to have accepted an award under this Plan, each participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding, or counterclaim, seek to enforce the foregoing waivers.  Notwithstanding anything to the contrary in this Plan, nothing herein is to be construed as limiting the ability (i) of the Company and a participant to agree to submit any dispute arising under the terms of this Plan or any award to binding arbitration or (ii) the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an award hereunder.

 

5.15        Foreign Employees.  Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals and/or reside outside of the United States on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan, and in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans, and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Affiliates operates or has employees.  Any such awards, amendments, procedures or subplans may contain such additional or different terms and conditions as the Committee deems necessary or desirable and will be deemed to be part of this Plan but will apply only to participants within the group to

 

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which the awards, amendments, procedures or subplans applies (as determined by the Committee).

 

5.16        Section 409A.  Each award under this Plan will be construed and administered in a manner such that the award either qualifies for an exemption from the applicable requirements of Section 409A or satisfies such requirements.  If a participant is determined on the date of the participant’s termination of employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment under this Plan or any award that is considered nonqualified deferred compensation under Section 409A, to the extent applicable, payable on account of a “separation from service”, such payment will be made or provided on the date that is the earlier of (i) the first business day following the expiration of the six-month period measured from the date of such “separation from service” and (ii) the date of the participant’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 5.16 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) will be paid, without interest, on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the award will be paid in accordance with the normal payment dates specified for them in the applicable Agreement.  For purposes of Section 409A, each payment made under this Plan or any award will be treated as a separate payment.

 

21Exhibit 10.48

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”), by and between Aris Mortgage Holding Company, LLC, a Delaware limited liability company (the “Parent”) and AmeriHome Mortgage Company, LLC, a Delaware limited liability company (the “Company”) (the Parent and the Company, together, the “Employers”), and [             ] (the “Executive”), is to be effective as of [             ], 2020 (the “Effective Date”).  Effective upon the initial public offering of the Company or any parent of the Company, references to Parent herein shall refer to the publicly-held parent of the Company.

 

W I T N E S S E T H:

 

WHEREAS, the Executive is employed by the Company; and

 

WHEREAS, the Employers and the Executive desire to enter into this Agreement to, among other things, set forth the benefits to be provided to the Executive in the event that his or her employment terminates under the circumstances described herein.

 

NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:

 

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

 

(a)                                 Affiliate.  “Affiliate” shall mean, with respect to any Person, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Person.  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed affiliates of the Parent, the Company and A-A Mortgage Opportunities, L.P. for the purposes of this definition.

 

(b)                                 Board.  “Board” shall mean the Board of Managers of the Parent; provided, however, following the initial public offering of the Company or any parent of the Company, the Board shall mean the Board of Directors of the publicly held parent of the Company.

 

(c)                                  Cause.  “Cause” shall mean:

 

(i)                                     the Executive’s act(s) of gross negligence or willful misconduct in the course of the Executive’s employment that is or could reasonably be expected to be materially injurious to the business or assets of the Company or any of its Affiliates;

 

(ii)                                  the Executive’s willful failure or refusal by the Executive to perform in any material respect the Executive’s duties or responsibilities after written notice and a reasonable opportunity to cure (to the extent curable);

 

 

(iii)                               misappropriation, fraud or embezzlement by the Executive (or at his or her direction) of any assets or business opportunities of the Company or any of its Affiliates;

 

(iv)                              the Executive’s conviction of, indictment for, or pleading “guilty” or “no contest” to (x) a felony or a crime of moral turpitude, or (y) any misdemeanor charge, that has, or could be reasonably expected to have, an adverse impact on the performance of the Executive’s duties to the Company or any of its Affiliates or otherwise result in material injury to the reputation or business of the Company or any of its Affiliates;

 

(v)                                 the Executive’s breach in any material respect of any material agreement between the Company or any of its Affiliates and the Executive (after written notice and a reasonable opportunity to cure during the thirty (30) days after such notice, to the extent curable);

 

(vi)                              the Executive’s commission of a willful and material act of dishonesty involving the Company or its Affiliates;

 

(vii)                           the Executive’s breach of any of the Company’s material policies or procedures (or the material policies or procedures of its Affiliates which are applicable to the Executive) that causes material harm to the Company or its Affiliates or its or their business reputation (after written notice and a reasonable opportunity to cure during the thirty (30) days after such notice, to the extent curable);

 

(viii)                        the Executive’s violation of a fiduciary duty of loyalty to the Company or its Affiliates;

 

(ix)                              the Executive’s knowing attempt to obstruct or failure to cooperate with any investigation authorized by the Company or its Affiliates or any governmental or self-regulatory entity;

 

(x)                                 the Executive’s disqualification or bar by any governmental or self-regulatory authority or the Executive’s loss of any governmental or self-regulatory license that is reasonably necessary for the Executive to perform his duties to the Company or its Affiliates;

 

(xi)                              any directive has been made by any governmental or self-regulatory authority to terminate the Executive;

 

(xii)                           the Executive’s unlawful and habitual use (including being under the influence) or possession of illegal drugs, or habitual use or impairment under the influence of alcohol, in each case, on the premises of the Company or its Affiliates or while performing the Executive’s duties and responsibilities; or

 

(xiii)                        the Executive’s engaging in any act of sexual harassment.

 

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(d)                                 Change in Control.  A “Change in Control” shall mean the occurrence of any of the following events or series of related events after the Effective Date:

 

(i)                                     any person, or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities of the Parent representing more than 50% of the combined voting power of the Parent’s then-outstanding voting securities), but excluding any acquisition by the Company or any of its Affiliates, the Investor or any of its Affiliates, or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates;

 

(ii)                                  there is consummated a merger, consolidation or similar business transaction involving the Parent with any other person or persons, and, either (x) the members of the Board immediately prior to the merger or consolidation do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) immediately after the consummation of such transaction, the voting securities of the Parent immediately prior to such transaction do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the person resulting from such transaction or, if the surviving company is a subsidiary, the ultimate parent thereof;

 

(iii)                               there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Parent of all or substantially all of the Parent’s assets, other than such sale or other disposition by the Parent of all or substantially all of the Parent’s assets to an entity at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Parent in substantially the same proportions as their ownership of the Parent immediately prior to such sale; or

 

(iv)                              the following individuals cease for any reason to constitute a majority of the number of directors of the Board then serving: individuals who were directors of the Parent on the Effective Date and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Parent) whose appointment or election to the Board or nomination for election by the Parent’s stockholders was made pursuant to the Stockholders Agreement or was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors of the Parent on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (iv).

 

Notwithstanding the foregoing, except with respect to clause (iii) above, a “Change in Control” shall not be deemed to have occurred by virtue of the

 

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consummation of any transaction or series of integrated transactions immediately following which the ultimate beneficial owners of the Class A Common Stock and Class B Common Stock of the Parent immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in and voting control over, and own substantially all of the shares or equity of, an entity which owns all or substantially all of the assets of the Parent immediately following such transaction or series of transactions.  In addition, with respect to any payment considered to be nonqualified deferred compensation under Section 409A of the Code, to the extent applicable, that is payable upon a Change in Control or other similar event, to the extent required to avoid the imposition of any additional tax, interest or penalty under Section 409A of the Code, no amount will be payable upon such Change in Control unless such Change in Control or other event constitutes a “change in control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.

 

(e)                                  Code.  “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(f)                                   Disability.  “Disability” shall mean a physical or mental impairment which, as reasonably determined by the Company, renders the Executive unable to perform the essential functions of his employment with the Company and its Affiliates, even with reasonable accommodation that does not impose an undue hardship on his or her employer, for more than ninety (90) days in any one hundred and eighty (180) day period, unless a longer period is required by federal or state law, in which case that longer period would apply.

 

(g)                                  Good Reason.  “Good Reason” shall mean, without the Executive’s consent:

 

(i)                                     a material diminution in the Executive’s title or duties or responsibilities;

 

(ii)                                  a material reduction in the Executive’s base salary or the Executive’s annual cash bonus opportunity (other than an across-the-board reduction of ten percent (10%) or less applicable to all similarly situated employees); or

 

(iii)                               a requirement by an Employer to relocate the Executive’s principal office to an office more than 50 miles from the Executive’s current principal office located in Thousand Oaks, California;

 

provided, further, that the Executive must provide written notice to the Employers of the existence of Good Reason no later than thirty (30) days after the initial occurrence of such event and the Company shall have a period of sixty (60) days following its receipt of such written notice during which it may remedy in all material respects the Good Reason condition identified in such written notice.  Notwithstanding the foregoing, (A) in the event that the Employers reasonably believe that the Executive may have engaged in conduct that could constitute Cause hereunder, the Employers may, in their sole and absolute discretion, suspend the Executive from

 

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performing the Executive’s duties with pay hereunder for a period of up to sixty (60) days, and in no event shall any such suspension constitute an event pursuant to which the Executive may terminate employment with Good Reason; provided, that, no such suspension shall alter the Employer’s obligations under this Agreement during such period of suspension and (B) the following shall not in and of themselves constitute “Good Reason”:  (I) the transactions contemplated by a definitive agreement entered into in order to consummate a Change in Control, (II) the Parent or any of its Affiliates becoming a subsidiary in connection with a Change in Control, (III) any changes pursuant to which “back office” functions or administrative support (such as human resources and finance) are provided by employees that are not dedicated solely to, not reporting directly to, or not reporting directly within the Employers or their respective subsidiaries, (IV) any changes in reporting structure that would require the Executive to report to a new supervisor (such as a committee or a general manager) in connection with a Change in Control, (V) changes to the Executive’s authority, reporting responsibilities, or duties arising solely by reason of the Parent or any of its Affiliates ceasing to be a public company in connection with a Change in Control, or (VI) changes resulting from the Executive’s acceptance in writing of new employment terms and conditions or compensation or benefits in connection with a Change in Control.

 

(h)                                 Investor. “Investor” shall mean A-A Mortgage Opportunities, L.P., a Delaware limited partnership, and each of its Affiliates, and any investment fund or other collective investment vehicle whose investment activities are managed, or which is advised as to its investment activities, directly or indirectly, by Apollo Global Management, Inc. or by one or more of Apollo Global Management, Inc.’s Affiliates and which invests in the Company (including any successors or assigns of any such manager).  For the avoidance of doubt, Athene Holding Ltd. and Athora Holdings, Ltd. and each of their respective subsidiaries and controlled affiliates shall be deemed Affiliates of the Company and A-A Mortgage Opportunities, L.P. for the purposes of this definition.

 

(i)                                     Notice of Termination.  “Notice of Termination” shall mean a written notice sent by the Executive or the Company to the other party, describing the reasons for the termination of the Executive’s employment and including specific reference to the provision(s) of this Agreement at issue.

 

(j)                                    Person.  “Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(k)                                 Termination Date.  “Termination Date” shall mean:

 

(i)                                     in the case of Disability, thirty (30) days after Notice of Termination is given, provided that the Executive shall not have returned to the performance of his or her duties on a full-time basis during such thirty (30) day period;

 

(ii)                                  in the case of Cause, the date on which Notice of Termination is given;

 

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(iii)                               in the case of Good Reason, the date on which the Executive ceases to perform his or her duties for the Company and its Affiliates, provided that the Executive has complied with the procedural requirements set forth in Section 1(g) of this Agreement and provided the Executive terminates employment no later than thirty (30) days following the end of the period during which the Company could have cured the Good Reason condition identified in the Executive’s written notice to the Company; and

 

(iv)                              in the event that employment is terminated for any other reason, the date on which the Executive ceases to perform his or her duties for the Company and its Affiliates.

 

(l)                                     “Stockholders Agreement” means the Stockholders Agreement, entered into between the publicly-held parent of the Company and A-A Mortgage Opportunities, L.P., as amended from time to time.

 

(m)                             “Transaction Bonus Agreement” means that certain transaction bonus agreement by and between Parent and the Executive, dated as of the date hereof, as amended from time to time.

 

(n)                                 “2015 PUP” means the Aris Mortgage Holding Company, LLC 2015 Profits Units Plan, as amended from time to time.

 

2.                                      Entitlement to Benefits.  The Executive shall be entitled to the benefits described in Section 3 below if:

 

(a)                                 during the eighteen (18) month period following a Change in Control, the Executive’s employment is terminated by (i) the Company or one of its Affiliates for reasons other than Disability, death or Cause or (ii) the Executive for Good Reason.

 

(b)                                 the Executive’s Termination Date occurs during the Term (as defined below); and

 

(c)                                  in the case of a termination by the Executive for Good Reason, a Notice of Termination is provided in a timely manner (as described in Section 1(g)) prior to the Executive’s Termination Date.

 

The Executive’s employment shall be deemed to have terminated for Cause if, after the Executive’s Termination Date, facts and circumstances are discovered that would have justified a termination for Cause.  In such event, the Company shall immediately cease any and all payments and benefits being paid or provided to the Executive under Section 3(b) and (c), and the Executive shall repay to the Company within thirty (30) days all amounts previously paid to him or her pursuant to Section 3(b) and 3(c) but net of any U.S. federal or state income tax liability of the Executive in respect of such amounts.

 

Nothing in this Agreement is intended to create or imply a promise or contract of employment for a specified term and either the Executive, the Company, the Parent or any of their respective Affiliates may terminate the employment relationship at any time, with or without Cause or

 

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Good Reason, and with or without notice; provided, however, that the Executive shall not be entitled to any benefits under this Agreement in the event his or her employment is terminated by Parent, the Company or any of their respective Affiliates for Disability or Cause, by the Executive other than for Good Reason or following the Executive’s death or the expiration of this Agreement.  This Agreement shall have no effect on any obligations that the Employers may have to the Executive if his or her employment terminates under circumstances not described herein.

 

3.                                      Benefits Upon Termination of Employment.  Notwithstanding the provisions of Section 2 above, in order to receive the benefits described in paragraphs (b) and (c) below, the Executive must timely deliver and not revoke an executed release of legal claims against the Employers and their Affiliates (in a form reasonably satisfactory to the Employers and which, for the avoidance of doubt, does not require the Executive to release any economic entitlement under, and which become payable, due or owing in accordance with the terms of, the Transaction Bonus Agreement, the 2015 PUP, any deferred bonuses arrangements or any other compensatory, equity incentive or other similar agreement or arrangement) within the timelines set forth therein.

 

(a)                                 Accrued Pay.  The Company shall pay to the Executive any base salary or vacation accrued but unpaid through his or her Termination Date.

 

(b)                                 Annual Incentive Compensation.  The following amounts shall become payable to the Executive following his or her Termination Date, as of the date that annual incentive awards are paid by the Company and its Affiliates to similarly situated active employees (in each case, during the year following the year to which such annual incentive compensation relates):

 

(i)                                     any unpaid amounts awarded to the Executive as incentive compensation under the annual incentive plan in which the Executive participates immediately prior to the Termination Date for the calendar year immediately preceding the year in which the Termination Date occurs; and

 

(ii)                                  an amount equal to the award the Executive would have received under the annual incentive plan in which the Executive participates immediately prior to the Termination Date based upon actual performance for the calendar year in which the Termination Date occurs, prorated for the portion of the calendar year during which the Executive was employed.

 

(c)                                  Severance Pay.  The Company shall pay severance benefits to the Executive as follows:

 

(i)                                     an amount equal to the product of two (2) times the sum of the following amounts: (x) the Executive’s annual base salary as in effect on the Termination Date plus (y) the Executive’s target annual bonus effect in the calendar year in which the Termination Date occurs; provided, however, that if the Executive’s annual base salary or target annual bonus were reduced and such reduction constituted “Good Reason” for purposes of this Agreement, the

 

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Executive’s annual base salary and target annual bonus, as applicable, for purposes of this Section (3)(c)(i) shall be the Executive’s annual base salary and target annual bonus in effect immediately prior to any such reduction; and

 

(ii)                                  if the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, the Executive shall pay and the Company shall reimburse the Executive for the cost of such health insurance coverage through the earlier of (x) the second anniversary of the Termination Date or (y) the Executive becoming eligible for health insurance coverage under another employer’s plan (whether through the Executive or as a dependent) at the same rate as it pays for health insurance coverage for its active employees (with the Executive required to pay for any employee-paid portion of such coverage).

 

Such severance amounts described above shall be paid to the Executive in regular installments for twenty-four (24) months through the Company’s or its Affiliate’s, as applicable, normal payroll process and on the Company’s or its Affiliate’s, as applicable, normal payroll dates commencing within sixty (60) days following his or her Termination Date; provided, however, that if the amounts payable hereunder constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and such sixty (60) day period begins in a first taxable year and ends in a second taxable year, such severance amounts shall commence no earlier than the first payroll date of the second taxable year.

 

(d)                                 Existing Arrangements.  To the extent required by such arrangements and in each case subject to and in accordance with the terms thereof, the Company or Parent, as applicable, shall pay to the Executive, following his or her Termination Date, any amounts which become due, payable, and owing to the Executive pursuant to the Transaction Bonus Agreement, the 2015 PUP, any deferred bonus arrangements and all other compensatory, equity incentive and other similar agreements and arrangements (if any) (including as any such payments relate to termination of the Executive’s employment).

 

(e)                                  Tax Withholding.  The Company or its Affiliates shall withhold from any benefits payable under this Agreement any applicable federal, state, city or other taxes as required by law.

 

(f)                                   No Other Severance Benefits.  This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of the Parent, Company, or their respective Affiliates or any of their predecessors, including but not limited to any severance pay program or other documents covering employees generally maintained by Parent, Company, or their respective Affiliates.  To the extent severance payments or benefits are required under any applicable local law or otherwise, benefits payable under this Agreement shall be reduced to the extent of any such severance payments or benefits (including, but not limited to, any laws requiring payment in lieu of notice upon the Executive’s termination of employment).

 

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4.                                      Section 280G.  Notwithstanding anything to the contrary in this Agreement, the Executive expressly agrees that if all or a portion of the payments and benefits provided for in this Agreement or any other payments and benefits which the Executive has the right to receive from the Employers and their Affiliates (collectively, the “Payments”), would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the Payments shall be either (a) reduced (but not below zero) so that the present value of the Payments will be one dollar ($1.00) less than three times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of the Payments received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Executive. The reduction of Payments, if any, shall be made by reducing first any Payments that are exempt from Section 409A of the Code and then reducing any Payments subject to Section 409A of the Code in the reverse order in which such Payments would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time). The determination as to whether any such reduction in the Payments is necessary shall be made by the Board in good faith. If a reduced Payment is made or provided and, through error or otherwise, that Payment, when aggregated with other payments and benefits from the Employers (or their Affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company.

 

5.                                      Section 409A.  This Agreement is intended to comply with the requirements of Section 409A of the Code and shall be interpreted and construed consistently with such intent.  The payments to the Executive pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible, under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and for this purpose each payment shall constitute a “separately identified” amount within the meaning of Treasury Regulation §1.409A-2(b)(2).  Notwithstanding anything in this Agreement to the contrary, in the event that any amounts payable (or benefits provided) under this Agreement are subject to the provisions of Section 409A of the Code, to the extent determined necessary, the parties agree to amend this Agreement in the least restrictive manner necessary to avoid imposition of any additional tax or income recognition on the Executive under Section 409A of the Code, the final Treasury Regulations and other Internal Revenue Service guidance thereunder (“409A Penalties”); provided, that in no event shall the Company be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement.  In addition, to the extent necessary to comply with Section 409A of the Code, references to termination of employment (and similar phrases) in this Agreement shall be interpreted in a manner that is consistent with the term “separation from service” under Section 409A(a)(2)(A)(i) of the Code and final Treasury Regulations and other Internal Revenue Service guidance thereunder. Notwithstanding any other provision in this Agreement, to the extent any payments made or contemplated hereunder constitute nonqualified deferred compensation, within the meaning of Section 409A of the Code, if the Executive is a specified employee (within the meaning of Section 409A of the Code) as of the date of the Executive’s separation from service, each such payment that is payable upon the Executive’s separation from service and would have been paid prior to the six-month anniversary of the Executive’s separation from service, shall be delayed until the earlier to occur of (A) the

 

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first day of the seventh month following the Executive’s separation from service or (B) the date of the Executive’s death.

 

6.                                      Restrictive Covenants.

 

(a)                                 Subject to Section 7 below, the Executive shall treat all Confidential Information (as defined below) as strictly confidential and will not, except as required in the performance of the Executive’s authorized employment duties to the Employers and their Affiliates or with the written authorization of any of the Employers’ managers, in each instance, directly or indirectly, in whole or in part, access, use, copy, or remove (from the Company’s or its Affiliate’s premises or control), or disclose, publish, communicate, or make available to any entity or person other than to the Company’s and its Affiliates’ employees and consultants having a need to know and who have been authorized by the Company to receive and use, any Confidential Information.  Any authorized disclosure by the Executive of any Third Party Information (as defined below) shall comply with the terms of the Company’s or its Affiliate’s agreement with the applicable third party.  Subject to Section 7 below, the Executive shall promptly notify the Company, in writing, of any unauthorized disclosure, misappropriation, or misuse of Confidential Information that the Executive becomes aware of.  The Executive understands and acknowledges that Confidential Information and the Company’s and its Affiliates’ ability to reserve it for the exclusive knowledge and use of the Company and its Affiliates is of great competitive importance and commercial value to the Company and its Affiliates and improper access, use, copying, removal, or disclosure of Confidential Information or violation of any policy of the Company or any of its Affiliates by the Executive might cause the Company to incur financial costs, loss of business advantage, liability, civil damages, and criminal penalties and may lead to disciplinary action by the Company and its Affiliates, up to and including legal action and the Executive’s immediate termination.  The Executive’s obligations under this Agreement with respect to any particular Confidential Information shall commence immediately upon the Executive’s first access to such Confidential Information (whether before or after the beginning of the Executive’s employment by the Company and its Affiliates) and shall continue during and after the Executive’s employment by the Company and its Affiliates until such time as such Confidential Information has become public knowledge other than as a result of a breach of this Agreement by the Executive or by those acting in concert with the Executive or on the Executive’s behalf.  “Develop” means to create, prepare, produce, author, edit, amend, invent, conceive, develop, assemble, or reduce to practice or, in the case of works of authorship, to fix in a tangible medium of expression.  “Confidential Information” means any and all confidential, secret, proprietary, or otherwise nonpublic documents, materials, and other information, in tangible and intangible form, of and relating to the Company, its Affiliates and their business (including information Developed by the Executive in the course of the Executive’s employment) or third parties associated with the Company and its Affiliates (including existing and prospective customers, suppliers, investors, licensors, licensees, partners, collaborators, vendors, distributors, and buyers) (“Third Party Information”) and includes all information that would appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used; provided, however, that Confidential Information does not include any of the foregoing items to the extent the same became publicly known and made generally available through no wrongful act of the Executive or others nor does it include the Executive’s compensation.

 

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(b)                                 The Executive acknowledges that, Parent, the Company, Aris Mortgage Holding Company, and their respective subsidiaries (the “Protected Companies”) have a protectable interest in their respective trade secrets, Confidential Information and goodwill and that in the course of his or her service with the Protected Companies the Executive will or will have become familiar, with the Protected Companies’ trade secrets and with other Confidential Information concerning the Protected Companies and that the Executive’s services have been and will be of special, unique and extraordinary value to the Protected Companies.  The Executive agrees that if the Executive were to become employed by, or substantially involved in, the business of a competitor of the Protected Companies during the Restricted Period, it would be very difficult for the Executive not to rely on or use the Protected Companies’ trade secrets and Confidential Information.  To protect such trade secrets and Confidential Information and the Protected Companies’ relationships and goodwill with customers, during the Restricted Period, the Executive will not directly or indirectly through any other Person engage in, enter the employ of, render any services to, have any ownership interest in, or participate in the financing, operation, management or control of, any Competing Business.  Nothing herein shall prohibit the Executive from (i) being a passive owner of not more than 1% of the outstanding stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business of such corporation, or (ii) providing services to a subsidiary, division or Affiliate of a Competing Business if such subsidiary, division or Affiliate is not itself engaged in a Competing Business and the Executive does not provide services to, or have any responsibilities regarding, the Competing Business.

 

(c)                                  During the Restricted Period, the Executive shall not, directly or indirectly, whether through a third party or otherwise, recruit, solicit, induce, or otherwise encourage any employee of the Protected Companies who has up to the time of the Termination Date, or within the twelve (12) months prior to the Termination Date, been an employee of the Protected Companies to accept an employment or independent contractor or other business relationship with an employer or entity or Person other than the Protected Companies.

 

(d)                                 During the Restricted Period, the Executive shall not, for his or her own account, or for the account of any other Person, call upon any Person to whom any of the Protected Companies has sold, in the calendar year preceding the year in which the Termination Date occurs, $10,000,000 or more in loans secured by real estate on the secondary mortgage market during the Restricted Period for the purpose of soliciting or selling products or services in competition with the products or services provided by the Protected Companies within the Restricted Area.  In addition, during the Restricted Period, the Executive shall not induce any customer of the Protected Companies who has up to the time of the Termination Date been a customer of the Protected Companies because (i) such Person has purchased, in the calendar year preceding the year in which the Termination Date occurs, a mortgage from any of the Protected Companies, or (ii) any of the Protected Companies has sold, in the calendar year preceding the year in which the Termination Date occurs, $10,000,000 or more in loans secured by real estate on the secondary mortgage market to such Person, in each case, during the Restricted Period within the Restricted Area to cease or refrain from doing business in whole or in part with the Protected Companies.

 

(e)                                  Subject to Section 7 below, during the course of the Executive’s employment, the Executive shall not (i) make, publish, or communicate, to any entity or Person

 

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or in any public forum, any defamatory or disparaging remarks, comments, or statements concerning the Company, its Affiliates or their businesses, products, services, or existing and prospective customers, suppliers, investors, and other associated third parties, (ii) make disparaging remarks which would violate the Executive’s fiduciary duties as an employee of the Company and its Affiliates, or (c) make any maliciously false statements about the officers or employees of the Company or its Affiliates.

 

(f)                                   For purposes of this Agreement, the following phrases and terms have the meanings set forth below:

 

(i)                                     “Competing Business” means a Person that at any time during the Executive’s period of service, or any time during the twelve (12) month period following the Termination Date anywhere in the Restricted Area (i) engages in the business of originating acquiring, holding, selling, transferring, securitizing or hedging loans secured by real estate, (ii) engages in the business of servicing such loans, or acquiring or holding the rights to service such loans, including engaging in such activities with respect to (A) loans transferred to, serviced for, holding servicing rights with respect to, or directly or indirectly insured by, an agency, (B) securitizations or other secondary market activity guaranteed by or otherwise involving a governmental body, including an agency, and (C) private label, non-conforming and other non-agency loans, securitizations and secondary market activity, (iii) engages in any significant business conducted by the Protected Companies as of the Termination Date, or (iv) engages in any significant business the Protected Companies conduct in the twelve (12) month period after the Termination Date (provided that as of the date of the Termination Date, to the Executive’s knowledge, such business has been discussed as a business that the Protected Companies reasonably contemplate engaging in within such twelve (12) month period).

 

(ii)                                  “directly or indirectly through any other Person engage in” shall include, without limitation, any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, member, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, director, officer or licensor of technology.

 

(iii)                               “Restricted Area” means anywhere in the United States and elsewhere in the world where the Protected Companies carry on or engage in business or discussed and prepared to carry on or engage in business as of the Termination Date provided that as of the Termination Date, to the Executive’s knowledge, such area has been discussed as a market that the Protected Companies reasonably contemplate engaging in within the twelve (12) month period following the Termination Date) and provided a Protected Company carries on a like business there.

 

(iv)                              “Restricted Period” means the period beginning on the date the Executive’s employment or service commences and through and including the

 

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date that occurs twelve (12) months following the Termination Date.  In the event that the Executive challenges the validity of the covenant in this Section 6, the Restricted Period shall be automatically extended for a number of days equal to the number of days elapsed during the pendency of litigation challenging the validity of the covenant, provided that the Protected Companies are successful on the merits in any such litigation.

 

(g)                                  The parties agree that in the event any of the prohibitions or restrictions set forth in this Section 6 are found by a court or arbitrator of competent jurisdiction to be unreasonable or otherwise unenforceable, it is the purpose and intent of the parties that any such prohibitions or restrictions be deemed modified or limited so that, as modified or limited, such prohibitions or restrictions may be enforced to the fullest extent possible.

 

7.                                      Protected Disclosures.

 

(a)                                 Notwithstanding anything in this Agreement to the contrary, Executive understands and agrees that nothing in this Agreement shall or shall be construed to:

 

(i)                                     prohibit the Executive, confidentially or otherwise, from communicating or filing a charge or complaint with, participating in, or giving other disclosures to a governmental or regulatory entity (including, without limitation, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Justice, the Congress, any Inspector General), in each case without receiving prior authorization from, or having to disclose any such conduct to, the Employers;

 

(ii)                                  prohibit Executive from responding if properly subpoenaed or otherwise required to do so under applicable law, provided that such disclosure does not exceed the extent required by such law and the Executive promptly provides written notice of any such order to the Employers within twenty-four (24) hours of receiving such order and allow the Company and its Affiliates, in their sole discretion, to seek a protective order or other appropriate remedy;

 

(iii)                               limit the Executive’s right to receive an award for information provided to any governmental agency, including under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;

 

(iv)                              prohibit the Executive from testifying in an administrative, legislative, or judicial proceeding regarding alleged criminal conduct or sexual harassment when the Executive has been required or requested to attend a proceeding pursuant to court order, subpoena, or written request from an administrative agency or legislature;

 

(v)                                 prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, harassment or discrimination based on sex, failure to prevent harassment or discrimination based on sex, or retaliation against a person for reporting an act of harassment or discrimination based on sex, as

 

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those claims are defined under the California Fair Employment and Housing Act, to the extent the claims are filed in a civil or administrative action and to the extent such disclosures are protected by law; or

 

(vi)                              restrict or impede the Executive from discussing the terms and conditions of the Executive’s employment or otherwise exercising the Executive’s rights under Section 8 of the National Labor Relations Act.

 

(b)                                 The Employers hereby notify the Executive that U.S. federal law provides that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official (either directly or indirectly) or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Nothing in this Agreement limits or otherwise affects any such rights or creates liability for any such protected conduct.  An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

 

8.                                      Disputes.  In the event that the Executive prevails in any action to obtain or enforce any rights under this Agreement, the Company shall pay the cost of legal fees and expenses incurred by the Executive in such action, which payment shall be made directly to the provider of services within the time period required by Section 409A of the Code; provided, however that the Executive shall be required to deliver and not revoke an executed release of claims (in a form reasonably satisfactory to the Employers and which, for the avoidance of doubt, does not require the Executive to release any economic entitlement under the Transaction Bonus Agreement, the 2015 PUP, deferred bonus arrangements or any other compensatory, equity incentive or other similar agreement or arrangement).

 

9.                                      Successors; Binding Agreement.

 

(a)                                 Upon a Change in Control, the Employers shall require any successor to its business or assets (whether direct or indirect, by purchase, merger, consolidation or otherwise), that employs the Executive and any parent company thereof, to expressly assume and agree to perform the Employer’s obligations under this Agreement.

 

(b)                                 This Agreement shall not be assignable by the Executive except by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive and his or her personal or legal representatives and successors in interest.

 

10.                               Term.  Unless otherwise earlier terminated in writing by both parties, the term of this Agreement (the “Term”) shall be effective for the three (3) year period commencing on the Effective Date; provided, however, that if a Change in Control occurs during such period or the Company executes a definitive agreement which would lead to a Change in Control during such

 

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period, then notwithstanding any other term or provision of this Agreement, this Agreement shall remain in effect through the later of (a) the end of the three (3) year period following the Effective Date and (b) the eighteen (18) month anniversary of the Change in Control (or the date on which such definitive agreement is terminated, if earlier).  The period during which this Agreement is effective shall be referred to herein as the “Term.”  Sections 8 through 12 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination or expiration of this Agreement or the Term.

 

11.                               Notice.  Any notice, demand or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Parent:

 

AmeriHome Mortgage Holding Company, LLC

 

[           ]

 

If to the Company:

 

[           ]

 

If to the Executive:

 

At the address most recently on file with the Company

 

or to such other address as either party may designate by written notice to the other and shall be deemed to have been given as of the date so personally delivered or mailed.

 

12.                               No Conflict. The Executive represents and warrants that the Executive is not bound by any employment contract, restrictive covenant, or other restriction preventing the Executive from carrying out the Executive’s responsibilities for the Employers, or which is in any way inconsistent with the terms of this Agreement. The Executive further represents and warrants that the Executive shall not disclose to the Employers or induce the Employers to use any confidential or proprietary information or material belonging to any previous employer or others.

 

13.                               Clawbacks.  The Executive acknowledges that payments to the Executive from the Employers, including any payments pursuant to this Agreement, are subject to forfeiture or recovery by the Employers or other action pursuant to any clawback or recoupment policy, which (i) in connection with or following the initial public offering of the Company or any parent of the Company, the Employers may adopt from time to time, including without limitation any such policy or provision that the Employers may include in any compensation programs or plans or that they may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law or (ii) prior to the initial public offering of the Company or any parent of the Company, the Employers may adopt to the extent required under applicable law or pursuant to the terms of any settlement agreement, court order, judicial decree or similar document or

 

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decision; provided, however, that in no event shall any amounts due to the Executive under the Transaction Bonus Agreement or the 2015 PUP be subject to such clawback or recoupment policy.

 

14.                               Compliance with Policies. The Executive acknowledges that he or she shall be subject to additional policies of the Employers as they may exist from time-to-time, including policies with regard to stock ownership by senior executives and policies regarding trading of securities.

 

15.                               Miscellaneous.

 

(a)                                 This Agreement cannot be modified or any term or condition waived in whole or in part except by a writing signed by the party against whom enforcement of the modification or waiver is sought or except as set forth in Section 6(g) above.

 

(b)                                 This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  The Executive has been represented by counsel of his or her choice individually and has negotiated this provision regarding choice of law and venue and voluntarily agrees to these terms.

 

(c)                                  Except for any disputes, controversies, or claims under Section 6 or disputes, controversies or claims that are not arbitrable pursuant to applicable law, each party hereto agrees that any disputes, controversies or claims relating to this Agreement shall be submitted for final and binding arbitration in New York, New York and resolved by a single neutral with the American Arbitration Association (the “AAA”) then existing Employment Arbitration Rules and Mediation Procedures (the rules in effect as of the date of this Agreement can be found at this link:  https://www.adr.org/Rules).  Notwithstanding the foregoing, either party may in its, his, or her respective discretion pursue any and all claims arising under any provision of Section 6 in any court of competent jurisdiction in the State of Delaware, without being required to arbitrate such claims (whether they seek monetary damages, any form of injunctive relief or other remedies).

 

(d)                                 EXCEPT AS PROVIDED IN SECTION 11(c), THE COMPANY AND THE EXECUTIVE HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(e)                                  Nothing in this Agreement alters the Executive’s status as an at-will employee which means that either the Executive or the Employers or any of their Affiliates may terminate the Executive’s employment for any or no reason with or without cause or notice.

 

(f)                                   No waiver by either party at any time of any breach of this Agreement by the other party shall be deemed a waiver of such provisions or conditions at any prior or subsequent time.

 

(g)                                  The headings in this Agreement are included for convenience and shall not affect the meaning or interpretation of this Agreement.

 

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(h)                                 Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law (after appropriate modification or limitation pursuant to Section 6(g)), such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision of the remaining provisions of this Agreement.

 

(i)                                     This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and such counterparts will together constitute one Agreement.

 

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IN WITNESS WHEREOF, the Employers have caused this Agreement to be executed by a duly authorized officer and attested to and the Executive acknowledges the Executive’s acceptance of the foregoing terms as of the date shown above.

 

 

AMERIHOME MORTGAGE HOLDING COMPANY, LLC

 

 

	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:    [           ]
    	
 
    	
Date
    
	
 
    	
Title:    [      ]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
AMERIHOME   MORTGAGE COMPANY, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:    [           ]
    	
 
    	
Date
    
	
 
    	
Title:    [      ]
    	
 
    	
 
    

 

 

I HAVE BEEN INDIVIDUALLY REPRESENTED BY COUNSEL OF MY OWN PERSONAL CHOICE IN CONNECTION WITH THE NEGOTIATION OF THIS AGREEMENT AND IN PARTICULAR PARAGRAPHS 12(B) AND 12(C) AND I UNDERSTAND I AM AGREEING TO AN EXCEPTION TO CALIFORNIA LABOR CODE 925 WHICH OTHERWISE WOULD REQUIRE THAT CALIFORNIA LAW APPLY TO THIS AGREEMENT AND THE FORUM OF ANY DISPUTE WOULD BE CALIFORNIA.

 

 

[EXECUTIVE]

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date
    	
 
    

 

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