Document:

qtnt-ex102_238.htm

Exhibit 10.2

 

QUOTIENT LIMITED

CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT (this "Agreement"), is made on this 1st day of February, 2021, by and between QUOTIENT LIMITED, a public no par value limited liability company incorporated in Jersey, Channel Islands, with registered number 109886 (the "Company") and Vittoria Bonasso (the "Employee").

WHEREAS, the Employee serves as an employee of the Company or an Affiliate of the Company; and

WHEREAS, the Company and the Employee desire to enter into this Agreement to establish certain protections for the Employee in the event of Employee's termination of employment under the circumstances described herein; and 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, and intending to be bound hereby, the parties agree as follows:

Section 1.Definitions.  As used herein:

1.1"Affiliate" means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person; provided that, in any event, any business in which the Company has any direct ownership interest shall be treated as an Affiliate of the Company.

1.2"Base Salary" means, as of any given date, the annual base rate of salary payable to the Employee by the Company; provided, however, that in the case of a resignation by the Employee for the Good Reason described in Section 1.9, "Base Salary" will mean the annual base rate of salary payable to the Employee by the Company as in effect immediately prior to the reduction giving rise to the Good Reason.

1.3"Board" means the Board of Directors of the Company.

1.4"Cause" means (a) gross negligence or willful misconduct by the Employee in the performance of his duties; (b) conviction of or a plea of nolo contendere by the Employee of a felony or act of moral turpitude (or similar local law concepts); or (c) the Employee's fraud, embezzlement or misappropriation relating to material amounts of the Company's assets.  The acts or omissions of the Employee shall not be considered to be willful unless he has no reasonable belief that he is acting in the best interests of the Company.

1.5"Change of Control" means:

1.5.1The acquisition, directly or indirectly, in one transaction or a series of related transactions, by any person or group (within the meaning of Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended) of the beneficial ownership of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company; provided, however, that a Change of Control shall not result upon such acquisition of beneficial ownership if such acquisition occurs as a result of a public offering of the Company's securities or any financing transaction or series of financing transactions;

1.5.2A merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold as a result of holding Company securities prior to such transaction, in the aggregate and in the same proportions, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity (or the parent of the surviving entity) immediately after such merger or consolidation;

	
 
	
 
	
 

 

Exhibit 10.2

 

1.5.3A reverse merger in which the Company is the surviving entity but in which the holders of the outstanding voting securities of the Company immediately prior to such merger hold, in the aggregate securities possessing less than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company or of the acquiring entity immediately after such merger; or

1.5.4The sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company, except for a transaction(s) in which the holders of the outstanding voting securities of the Company immediately prior to such transaction(s) receive as a distribution with respect to securities of the Company, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the acquiring entity immediately after such transaction(s).

1.6"Control" (including, with correlative meanings, the terms "Controlled by" and "under common Control with"), as used with respect to any Person, means the direct or indirect possession of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

1.7"Disability" means a condition entitling the Employee to benefits under the Company's long term disability plan, policy or arrangement; provided, however, that if no such plan, policy or arrangement is then maintained by the Company and applicable to the Employee, "Disability" will mean the Employee's inability, by reason of any physical or mental impairment, to substantially perform Employee's regular duties to the Company, as determined by the Board in its sole discretion (after affording the Employee the opportunity to present Employee's case), which inability is reasonably contemplated to continue for at least one year from its commencement and at least 90 days from the date of such determination.

1.8“Equity Award” means any share option, restricted share unit or other equity-based award originally issued by the Company to the Employee prior to the date of a Change of Control (including any replacement equity-based award issued in exchange therefor on or after the date of a Change of Control).

1.9"Good Reason" means the occurrence of any of the following events, without the Employee's written consent, unless such events are fully corrected in all material respects by the Company within thirty (30) days following written notification by the Employee to the Company of the occurrence of one of the reasons set forth below:

1.9.1A reduction in the Employee's rate of the Base Salary;

1.9.2A material diminution in the Employee's titles, authority or duties; or

1.9.3The Company's relocation of the Employee's principal place of employment to a location more than fifty (50) miles from the Employee's current principal place of employment.

In order to terminate for Good Reason, the Employee must provide the Company with written notice describing the event(s) alleged to constitute Good Reason within sixty (60) days after first becoming aware of the occurrence of such event(s), and the Company will have thirty (30) days to cure such event(s) following receipt of such written notice.  If such event(s) are not so cured, the Employee must actually provide the Company with written notice of Employee's termination of employment for Good Reason within thirty (30) days following the expiration of the Company's cure period and thereafter Employee must terminate employment immediately following the completion of the applicable notice period.  Otherwise, any claim of such circumstances as "Good Reason" will be deemed irrevocably waived by the Employee.

1.10"Person" means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, association, governmental entity, unincorporated entity or other entity.

1.11"Release" means a release substantially identical to the one attached hereto as Exhibit A.

	
 
	
 
	
 

 

Exhibit 10.2

 

Section 2.Certain Terminations.

2.1Severance Events Following a Change of Control.  If the Employee's employment with the Company ceases within the twenty-four (24) month period following the date of a Change of Control as a result of a termination by the Company without Cause or a resignation by the Employee for Good Reason, then the Employee will be entitled to a lump sum payment of the following:

2.1.1(i) any Base Salary earned through the effective date of termination that remains unpaid, with any such amounts paid on the first regularly scheduled payroll date following the effective date of termination; (ii) any bonus payable with respect to any fiscal year which ended prior to the effective date of the Employee's termination of employment, which remains unpaid, with such amount paid in the first regularly scheduled payroll date following the effective date of termination or, if later, at the same time the bonus would have otherwise been payable to the Employee; and (iii) any expense reimbursement due to the Employee on or prior to the date of such termination which remains unpaid to the Employee, with any such reimbursement being made promptly following the effective date of termination (collectively, the "Accrued Obligations"); and

2.1.2a cash payment equal to 150% of the sum of the Employee's Base Salary plus target annual bonus in effect on the date of termination (without taking into effect any reduction described in Section 1.9.1 above).

In addition, immediately prior to the effective date of termination, 100% of the Employee’s then outstanding, unvested Equity Awards will immediately vest and, if applicable, become exercisable (and any rights of repurchase by the Company or restriction on sale on the Employee's then outstanding Equity Awards will lapse), and, following the effective date of termination, the Employee's then outstanding Equity Awards will, if applicable, remain exercisable for a period of 12 months or until the expiration date of the Equity Award, whichever is the shorter period.

Except as otherwise provided in this Section 2, the Company will have no further liability or obligation by reason of such cessation of employment.  The payment described in this Section 2 is in lieu of (and not in addition to) any other severance plan, fund, agreement or other similar arrangement maintained by the Company, including, pursuant to any employment or services agreement between the Company or an Affiliate thereof and the Employee.  Notwithstanding any provision of this Agreement, the payment described in Section 2.1.2 is conditioned on the Employee's execution and delivery to the Company of the Release within the period beginning on the first day of the second calendar month immediately following Employee's termination of employment and ending on the last day of such calendar month.  The payment described in Section 2.1.2 will be made one month after receipt by the Company of the Release.  On and after a Change of Control, subject to the applicable notice period, the Company may terminate Employee without Cause or the Employee may resign for Good Reason in accordance with the provisions of Section 1.9 above.

2.2Other Terminations.  If the Employee's employment with the Company ceases for any reason other than as described in Section 2.1 (including but not limited to (a) termination by the Company for Cause, (b) resignation by the Employee without Good Reason, (c) termination as a result of the Employee's Disability, or (d) the Employee's death), then the Company's obligation to the Employee will be limited solely to the payment of The Accrued Obligations, and the Employee's then outstanding Equity Awards will be treated in accordance with the terms of the applicable award agreements.  All compensation and benefits will cease at the time of such cessation of employment and, except as otherwise provided by applicable law, the Company will have no further liability or obligation by reason of such termination.

Section 3.Miscellaneous.

3.1Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators, heirs and/or permitted assigns; provided, however, that neither Employee nor the Company may make any assignments of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party, except that, without such consent, the Company may assign this Agreement to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise.

	
 
	
 
	
 

 

Exhibit 10.2

 

3.2Governing Law.  This Agreement shall be governed by and construed under and according to the laws of Switzerland without regard to its conflict of laws provisions.

3.3Waivers; Separability.  The waiver by either party hereto of any right hereunder or any failure to perform or breach by the other party hereto shall not be deemed a waiver of any other right hereunder or any other failure or breach by the other party hereto, whether of the same or a similar nature or otherwise.  No waiver shall be deemed to have occurred unless set forth in a writing executed by or on behalf of the waiving party.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived.  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 invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

3.4Notices.  All notices and communications that are required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when delivered personally or upon mailing by registered or certified mail, postage prepaid, return receipt requested, as follows:

If to the Company, to:

Quotient Limited 

PO Box 1075 - JTC House

28 Esplanade

St Helier 

Jersey JE4 2QP 

Channel Islands 

Attn:  Chief Executive Officer
E‐mail:  to the Company’s Chief Executive Officer’s Company e-mail address on Company’s e-mail address book.

If to Employee, to the address on file with the Company,

or to such other address as may be specified in a notice given by one party to the other party hereunder.

3.5Entire Agreement; Amendments.  This Agreement contains the entire agreement and understanding of the parties relating to the provision of severance benefits upon termination in connection with a Change of Control, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to that subject.

3.6Withholding.  The Company will withhold from any payments due to Employee hereunder, all taxes or other amounts required to be withheld pursuant to any applicable law.

3.7Headings Descriptive.  The headings of sections and paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

3.8Counterparts and Facsimiles.  This Agreement may be executed, including execution by electronic or facsimile signature, in one or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument.

3.9Term of Agreement.  This Agreement shall expire, and the Employee will have no rights hereunder, on February 1, 2024 or on each anniversary thereof if and only if the Board provides written notice to the Employee of such expiration at least 90 days prior to February 1,2024 or the applicable anniversary thereof; provided, however, that, notwithstanding the foregoing, the Board shall not be authorized to cause this Agreement to expire, and this Agreement shall not expire, on or after the date of a Change of Control.  Notwithstanding anything in this Agreement 

	
 
	
 
	
 

 

Exhibit 10.2

 

to the contrary, if this Agreement is in effect immediately prior to a Change of Control, thereafter this Agreement shall remain in effect for not less than two years following the date of such Change of Control.

[Signature page follows]

 

	
 
	
 
	
 

 

Exhibit 10.2

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

			
	
 
	
QUOTIENT LIMITED

	
 
	
 
	
 

 

 

	
 
	
By:
	
/s/ Franz Walt 

	
 
	
 
	
Name: Franz Walt

	
 
	
 
	
Title: Chief Executive Officer

	
 
	
 
	
 

 

 

 

	
 
	
/s/ Vittoria Bonasso

	
 
	
Vittoria Bonasso

 

 

	
 
	
 
	
 

 

Exhibit 10.2

 

 

EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

This Release and Waiver of Claims ("Release") is entered into as of this [•] day of [•], 20[•], between QUOTIENT LIMITED and any successor thereto (collectively, the "Company") and [•] (the "Executive").

The Executive and the Company agree as follows:

	
1.
	
The employment relationship between the Executive and the Company, or an affiliate of the Company, was terminated on [•] (the "Termination Date").

	
2.
	
In accordance with the change of control agreement, dated [•], between the Executive and the Company, as it may be amended from time to time (the "Change of Control Agreement"), the Executive is entitled to receive certain payments and benefits after the Termination Date.

	
3.
	
In consideration of the above, the sufficiency of which the Executive hereby acknowledges, the Executive, on behalf of the Executive and the Executive's heirs, executors and assigns, hereby releases and forever discharges the Company and its shareholders, parents, affiliates, subsidiaries, divisions, any and all of its or their current and former directors, officers, employees, agents, and contractors and their heirs and assigns, and any and all employee pension benefit or welfare benefit plans of the Company, including current and former trustees and administrators of such employee pension benefit and welfare benefit plans (the "Released Parties"), from all claims, charges, or demands, in law or in equity, whether known or unknown, which may have existed or which may now exist from the beginning of time to the date of this Release, including, without limitation, any claims the Executive may have arising from or relating to the Executive's employment or termination from employment with the Company and its affiliates.

	
4.
	
The Executive acknowledges that the consideration given for this Release is in addition to anything of value to which the Executive is already entitled.  If the Executive has not returned the signed Release within the time permitted under the Change of Control Agreement, then the offer of payment set forth in the Change of Control Agreement will expire by its own terms at such time.  Except to the extent that Executive is permitted to not disclose information provided to the Securities and Exchange Commission ("SEC") pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 15 U.S.C. §78u‐6 and SEC Regulation 21F promulgated thereunder, or to other regulatory government agencies pursuant to similar whistleblower protection laws, Executive agrees that as of the date set forth below, Executive has not reported information to the SEC concerning, and is not aware of, any securities law compliance failure by the Company by any person that has not been reported in writing to Company's Board of Directors.

	
5.
	
This Release does not release the Released Parties from (i) any obligations due to the Executive under the Change of Control Agreement, or under this Release, (ii) any vested rights the Executive has under the Company's employee benefit plans in which the Executive participated, (iii) any rights or claims that arise from actions or omissions after the date of execution by the Executive of this Release, (iv) any rights that cannot be waived as a matter of applicable law, or (v) any rights to indemnification the Executive may have under any indemnity agreement, applicable law, the by‐laws, certificate of incorporation, or other constituent document of the Company or any of its affiliates or as an insured under any director's and officer's liability insurance policy now or previously in force.

	
6.
	
This Release is not an admission by the Released Parties of any wrongdoing, liability or violation of law.

	
7.
	
The Executive waives any right to reinstatement or future employment with the Company following the Executive's separation from the Company.

	
8.
	
This Release shall be governed by and construed in accordance with the laws of the Switzerland, without regard to conflicts or laws principles thereof.

	
9.
	
This Release and the Change of Control Agreement represent the complete agreement between the Executive and the Company concerning the subject matter in this Release and supersedes all prior agreements or 

	
 
	
Exh. A-1
	
 

 

Exhibit 10.2

 

		
understandings, written or oral.  This Release may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

	
10.
	
Each of the sections contained in this Release shall be enforceable independently of every other section in this Release, and the invalidity or unenforceability of any section shall not invalidate or render unenforceable any other section contained in this Release.

	
11.
	
The Executive acknowledges that the Executive has carefully read and understands this Release, that the Executive has the right to consult an attorney with respect to its provisions and that this Release has been entered into voluntarily.  The Executive acknowledges that no representation, statement, promise, inducement, threat or suggestion has been made by any of the Released Parties to influence the Executive to sign this Release except such statements as are expressly set forth herein or in the Change of Control Agreement.

[The remainder of this page intentionally left blank.]

	
 
	
Exh. A-2
	
 

 

Exhibit 10.2

 

The parties to this Release have executed this Release as of the day and year first written above.

			
	
 
	
QUOTIENT LIMITED

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
 
	
 

	
 
	
[Executive]

 

 

	
 
	
Exh. A-3ex_224239.htm

Exhibit 10.1

 

PROTO LABS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the “Agreement”) is entered into as of January 29, 2021 (the “Effective Date”) by and between Proto Labs, Inc., a Minnesota corporation (the “Company”), and Robert Bodor (“Executive”).

 

Recitals

 

A.     Executive has been employed by the Company.

 

B.     The Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, in accordance with the terms and conditions stated in this Agreement.

 

C.     During employment with the Company Executive has had and will continue to have access to confidential, proprietary and trade secret information of the Company. It is desirable and in the best interests of the Company to protect confidential, proprietary and trade secret information of the Company, to prevent unfair competition by former executives of the Company following separation of their employment with the Company and to secure cooperation from former executives with respect to matters related to their employment with the Company.

 

D.     Executive understands that Executive’s continued employment and receipt of the compensation and benefits provided for in this Agreement depends on, among other things, Executive’s willingness to agree to continue to abide by the non-disclosure, non-competition, non-solicitation, assignment of inventions and other covenants contained in the Proto Labs, Inc. Employee Non-Disclosure and Inventions Assignment Agreement (the “Non-Disclosure Agreement”) and the Proto Labs, Inc. Non-Competition Agreement (the “Non-Competition Agreement”) previously executed by Executive and attached together as Exhibit A to this Agreement. Executive and the Company acknowledge that Executive was provided a copy of the Non-Disclosure Agreement and the Non-Competition Agreement before Executive accepted employment with the Company, and further acknowledges that Executive was provided a copy of Executive’s signed Non-Disclosure Agreement and Executive’s signed Non-Competition Agreement before Executive executed this Agreement.

 

D.     For the reasons set forth above, the Company and Executive desire to enter into this Agreement.

 

Now, Therefore, in consideration of the foregoing and the mutual covenants set forth herein, the Company and Executive, intending to be legally bound, hereby agree as follows:

 

Agreements

 

1.     Term. Executive’s employment with the Company under the terms of this Agreement shall commence on March 1, 2021 (the “Start Date”) and shall continue at will until terminated by either party in accordance with the provisions of Section 6 (the “Term”).

 

 

 

 

2.     Employment and Duties. 

 

A.     Position and Responsibilities. During the Term Executive shall serve as the Company’s President, Chief Executive Officer and shall perform such duties of an executive nature as the Company’s Board of Directors (the “Board”) may assign from time to time. Executive will follow and comply with applicable policies and procedures adopted by the Company from time to time, including without limitation policies relating to business ethics, conflict of interest, non-discrimination, confidentiality and protection of trade secrets, and insider trading. Executive shall devote Executive’s full working time and efforts to the Company’s business, to the exclusion of all other employment or active participation in other material business interests, unless otherwise consented to in writing by the disinterested members of the Board. Executive may not serve as a director on any other board of directors without the unanimous written consent of the Board. Executive hereby represents and confirms that Executive is under no contractual or legal commitments that Executive believes would prevent Executive from fulfilling Executive’s duties and responsibilities as set forth in this Agreement.

 

B.     Board Appointment.    On the Start Date the Board shall appoint Executive as a director of the Company and the Board shall nominate Executive for re-election to the Board at each meeting of shareholders at which directors will be elected during the Term. Executive acknowledges and agrees that Executive is not entitled to any additional compensation in respect of Executive’s appointment as a director of the Company.  If during the Term Executive ceases to be a director of the Company for any reason, Executive’s employment with the Company will continue (unless terminated in accordance with Section 6) and all terms of this Agreement (other than those relating to Executive’s position as a director of the Company) will continue in full force and effect and Executive will have no claims in respect of such cessation of office. Executive agrees to abide by all statutory, fiduciary or common law duties arising under applicable law that apply to Executive as a director of the Company.  Executive further agrees that Executive will not resign as a director of the Company without the prior written consent of the Board and if Executive so resigns or if Executive is disqualified from acting as a director of the Company, then the Company may at its discretion terminate Executive’s employment under this Agreement for Cause (as defined in Section 6.D.).

 

3.     At Will Employment. Executive’s employment with Company is at will and Executive’s employment may be unilaterally terminated by either party at any time for any reason, subject to the terms of Sections 6 and 7. The date upon which Executive’s termination of employment with the Company is effective is the “Termination Date.” For purposes of Section 7 only, with respect to the timing of any severance payments or benefits thereunder, the Termination Date means the date on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (the “Code”). Unless otherwise requested by the Board in writing, upon Executive’s termination of employment with the Company for any reason Executive will automatically resign as of the Termination Date from all non-employee titles, positions and appointments Executive then holds with the Company, whether as an officer, director or trustee (without any claim for compensation related thereto), and Executive hereby agrees to take all actions necessary to effectuate such resignations.

 

 

 

 

4.     Compensation, Benefits and Expenses. While employed by the Company during the Term, Executive will be provided with the following compensation and benefits:

 

A.     Base Salary. The Company will pay to Executive for services provided hereunder after the Start Date a base salary at the annualized rate of $500,000.00, which base salary will be paid in accordance with the Company’s normal payroll policies and procedures (“Base Salary”).  Consistent with the charter of the Compensation Committee of the Board (the “Compensation Committee”) and the Company’s Corporate Governance Guidelines, the independent directors will evaluate Executive’s performance on an annual basis and then the Compensation Committee will review this evaluation and determine any adjustments to Executive’s Base Salary, subject to ratification by the Board.

 

B.     Annual Cash Incentive Bonus. Executive will be eligible for an annual target cash incentive bonus equal to one-hundred percent (100%) of Executive’s then-current Base Salary (the “Annual Bonus”), based on achievement of objectives as determined by the Company, payable no later than March 15 of the calendar year following the calendar year for which the bonus was earned.

 

C.     Employee Benefits. Executive will be entitled to participate in all employee benefit plans and programs generally available to executive employees of the Company, as determined by the Company and to the extent that Executive meets the eligibility requirements for each individual plan or program. Executive’s participation in any plan or program will be subject to the provisions, rules, and regulations of, or applicable to, the plan or program. The Company provides no assurance as to the adoption or continuation of any particular employee benefit plan or program.

 

D.     Expenses. The Company will reimburse Executive for all reasonable and necessary out-of-pocket business, travel, and entertainment expenses incurred by Executive in the performance of Executive’s duties and responsibilities to the Company during the Term. Such reimbursement shall be subject to the Company’s normal policies and procedures for expense verification, documentation, and reimbursement.

 

E.     Existing and New Equity Awards. Executive and the Company are parties to certain existing Stock Option Agreements, Restricted Stock Unit Agreements and Performance Stock Unit Agreements (collectively, the “Existing Award Agreements”). Executive will receive an additional equity grant, 50% in the form of stock options and 50% in the form of restricted stock units, with an aggregate fair market value of $1,300,000.00 (as measured on the date of grant and based on the Board’s assessment of the Company’s performance against Executive’s and the Company’s performance objectives). The new equity grant date (the “Grant Date”) shall be the earliest day permitted pursuant to the terms of the Company’s Equity Award Approval Policy following commencement of the Term. These new equity awards will be subject to the terms and conditions of the applicable award agreements between the Company and Executive dated effective as of the Grant Date (the “New Award Agreements”), including such terms and conditions as are incorporated from the Company’s 2012 Long-Term Incentive Plan (the “Plan”).

 

 

 

 

F.     Annual Equity. Executive shall continue to receive an annual equity grant based on terms and conditions that are comparable to those applicable to grants made to other senior executives of the Company, including achievement of personal or Company objectives established by the Board, and on such other terms applicable to other executives as are established by the Board in its reasonable discretion. In accordance with the policies and practices of the Company, some or all of any annual equity grant may be in the form of restricted stock, stock options, stock units or other equity that is an economic equivalent to an option or a restricted stock award; provided, however, that the annual equity grant in 2022 is expected to be 50% in the form of performance stock units, 30% in the form of restricted stock units, and 20% in the form of stock options. It is also expected that Executive’s equity grants received in 2021 will have an aggregate grant date fair value of approximately $2.0 million.

 

5.     Non-Disclosure and Non-Competition. Executive acknowledges entering into the Non-Disclosure Agreement and the Non-Competition Agreement and hereby reaffirms Executive’s commitments and obligations under the Non-Disclosure Agreement and the Non-Competition Agreement. Nothing in this Agreement is intended to modify, amend, cancel or supersede the Non-Disclosure Agreement or the Non-Competition Agreement in any manner.

 

6.     Termination.

 

A.     Voluntary Termination. Except as provided in Sections 6.B., C., D. and E., each party hereto may terminate Executive’s employment by giving to the other party no less than thirty (30) days prior written notice of the party’s intent to terminate. If Executive voluntarily terminates Executive’s employment without Good Reason, then the Company shall have no further liability to Executive for any payment, compensation or benefit whatsoever, other than payment of Executive’s accrued but unpaid salary and benefits through the Termination Date and honoring Executive’s rights under the Existing Award Agreements, New Award Agreements or under any other restricted stock, stock options, stock units or other equity agreement between Executive and the Company (collectively, “Equity Awards”). If the Company voluntarily terminates Executive’s employment without Cause (as set forth in Section 6.D.) and other than as a result of death or Disability (as set forth in Section 6.C.), or if Executive terminates Executive’s employment for Good Reason (as set forth in Section 6.E.) (either such event being a “Qualifying Termination”), and subject to Executive’s compliance with the conditions identified in the first paragraph of Section 7, then Executive shall be entitled to severance payments and benefits as described in and pursuant to the terms and conditions of Section 7 of this Agreement.

 

B.     By Death. Executive’s employment shall be terminated automatically upon the death of Executive. The Company’s total liability in such event shall be limited to payment of Executive’s accrued but unpaid salary and benefits (including Annual Bonus) through the date of Executive’s death, honoring Executive’s rights under any Equity Awards, and paying to Executive’s estate a pro rata portion of Executive’s Annual Bonus equal to one times Executive’s target annual cash incentive bonus for the calendar year in which the death occurs, less deductions and withholding required by law, payable in a lump sum at the same time as other eligible employees under the Company’s annual cash incentive bonus plan for such calendar year are paid their bonuses under such Company’s annual cash incentive bonus plan for such calendar year, but in any event no later than March 15 of the calendar year immediately following the calendar year in which Executive’s death occurs. Such pro rata bonus payment shall be determined by multiplying Executive’s target annual cash incentive bonus for the calendar year in which the death occurs by a fraction, the numerator of which is the number of days Executive was employed by the Company during such calendar year and the denominator is 365.

 

 

 

 

C.     By Disability. The Company may terminate Executive’s employment upon the inability of Executive to perform on a full-time basis the duties and responsibilities of Executive’s employment with the Company, after any reasonable accommodation that may be required under applicable law is made by the Company, by reason of Executive’s illness or other physical or mental impairment or condition, if such inability continues for an uninterrupted period of one hundred and twenty (120) days (a “Disability”). A period of inability shall be “uninterrupted” unless and until Executive returns to full-time work for a continuous period of at least thirty (30) days. The Company shall have no liability for severance pay or benefits following the Termination Date due to Disability, other than payment of Executive’s accrued but unpaid salary and benefits (including Annual Bonus) through the date of Executive’s Disability, honoring Executive’s rights under any Equity Awards, honoring any rights Executive has to disability insurance benefits under applicable law or the Company’s short or long term disability insurance policies as in effect as of the Termination Date, and paying to Executive a pro rata portion of Executive’s Annual Bonus equal to one times Executive’s target annual cash incentive bonus for the calendar year in which the Termination Date due to Disability occurs, less deductions and withholding required by law, payable in a lump sum at the same time as other eligible employees under the Company’s annual cash incentive bonus plan for such calendar year are paid their bonuses under such Company’s annual cash incentive bonus plan for such calendar year, but in any event no later than March 15 of the calendar year immediately following the calendar year in which the Termination Date due to Disability occurs. Such pro rata bonus payment shall be determined by multiplying Executive’s target annual cash incentive bonus for the calendar year in which the Termination Date due to Disability occurs by a fraction, the numerator of which is the number of days Executive was employed by the Company during such calendar year and the denominator is 365.

 

D.     For Cause. The employment relationship between Executive and the Company created hereunder shall automatically and immediately terminate upon receipt by Executive of notice of termination for Cause after the occurrence of any one of the following events:

 

(i)     Executive’s intentional and knowing failure or refusal to perform satisfactorily the material duties reasonably required of Executive by the Board (other than by reason of Disability);

 

(ii)     Executive’s material and knowing violation of any law, rule, regulation, court order or regulatory directive (other than traffic violations, misdemeanors or other minor offenses);

 

(iii)     Executive’s material breach of the Non-Disclosure Agreement, the Non-Competition Agreement, or any Company code of conduct and Executive’s failure to cure such material breach (if curable) within ten (10) days of receipt of notice of such material breach;

 

 

 

 

(iv)     Executive engaging in any act or practice that involves personal dishonesty on the part of Executive or demonstrates a willful and continuing disregard for the best interests of the Company or its affiliates; or

 

(v)     While performing corporate duties and responsibilities, Executive engaging in conduct that would be reasonably expected to harm or bring disrepute to the Company or any of its affiliates.

 

E.     Good Reason. Executive’s voluntary resignation of Executive’s employment under this Agreement will be considered to be with “Good Reason” if, following the occurrence of one or more of the events listed below, Executive (1) provides written notice to the Board of the event(s) constituting Good Reason within sixty (60) days after the first occurrence of such event(s), (2) the Company fails to reasonably cure such event(s) within thirty (30) days after receiving such notice, and (3) the Termination Date is not later than thirty (30) days after the end of the period in which the Board may cure the event(s). For the avoidance of doubt, Executive will not be entitled to any compensation or benefits pursuant to this Agreement if Executive voluntarily resigns from Executive’s employment without Good Reason. The following events will give rise to Good Reason, unless Executive has consented thereto in writing:

 

(i)     a material reduction in Executive’s total compensation, which is comprised of base salary, target incentive bonus and annual equity grants, other than a reduction that is part of and proportionally consistent with a broad-based reduction in base compensation, target incentive bonus or annual equity grants applicable to the Company’s senior executives (provided, however, that any reduction in Executive’s Base Salary below $400,000.00 for any year during the Term without Executive’s consent will constitute a material reduction for purposes of this Good Reason definition);

 

(ii)     a material diminution in Executive’s authority, duties or responsibilities;

 

(iii)     a change in the location of the Company facility or office where Executive is based to a location more than fifty (50) miles from the Company facility or office where Executive is based as of the Start Date; or

 

(iv)     a material breach by the Company of any terms or conditions of this Agreement or any other agreement between Executive and the Company, which breach has not been cured by the Company within fifteen (15) days after written notice thereof to the Company from Executive.

 

 

 

 

7.     Severance. If there is a Qualifying Termination, provided that Executive’s termination of employment constitutes an involuntary “separation from service” under Section 409A of the Code (“Section 409A”), and provided that Executive signs and does not rescind a general waiver and release of claims in favor of the Company and its affiliates in a form to be prescribed by the Company (the “Release”) (with such Release carving out typical post-termination matters from such Release, including but not limited to any severance obligations and vested rights of Executive and/or obligations of the Company to indemnify Executive for claims arising out of or related to service as an officer or director of the Company), and provided further that Executive is in compliance with Executive’s continuing obligations to the Company (including but not limited to those in the Non-Disclosure Agreement and the Non-Competition Agreement), then Executive will receive the severance payments and benefits identified in this Section 7. If Executive becomes eligible to receive any severance payments or benefits under this Section 7 then Executive will not be eligible to receive any severance payments or benefits under any other agreement between Executive and the Company or under any severance plan or program adopted by the Company. Notwithstanding any provisions in this Agreement to the contrary, if any severance plan or program adopted by the Company (“Other Severance Plan”) permits Executive to receive greater severance benefits than contemplated under this Agreement, then Executive may, in Executive’s sole discretion, elect to receive the severance benefits permitted under the Other Severance Plan in lieu of all severance benefits payable to Executive under this Agreement; provided, however, any such election by Executive shall be made at least twelve (12) months prior to the Termination Date and may not otherwise violate any applicable restrictions under Section 409A.

 

A.     Payments Upon Qualifying Termination Prior to a Change in Control or After the Expiration of the Transition Period.

 

(i)     Qualifying Termination (Other than During the Transition Period). If the Termination Date occurs during the Term and is prior to any Change in Control (as defined below) or after the Transition Period (as defined below), and if such termination is a Qualifying Termination, then, in addition to such base salary, bonus and benefits that have been earned but not paid to Executive as of the Termination Date, and subject to Executive satisfying the conditions identified in the first paragraph of this Section 7, the Company shall provide to Executive the following severance payments and benefits:

 

(a)     Base Salary Cash Severance. The Company shall pay to Executive an amount equal to one times Executive’s annualized Base Salary as of the Termination Date (or, if Executive’s resignation is for Good Reason because the Company materially reduced Executive’s Base Salary, one times Executive’s annualized Base Salary as of immediately before such material reduction), less deductions and withholding required by law, payable in substantially equal installments in accordance with the Company’s regular payroll practices over the 12-month period immediately following the Termination Date; provided, however that any installments that otherwise would be payable within the 60-day period immediately following the Termination Date shall be delayed and payable with the installment that is payable on the Company’s first payroll date following the 60th day after the Termination Date. Notwithstanding anything above to the contrary, in no event will the amount paid under the first sentence of this Section 7.A.(i)(a) exceed the lesser of two times (I) the limit of compensation set forth in section 401(a)(17) of the Code as in effect for the year in which the Termination Date occurs, or (II) Executive’s annualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if Executive had not separated from service). If Executive’s severance pay as calculated under the first sentence of this Section 7.A.(i)(a) is limited by application of clause (I) or (II) of the second sentence of this Section 7.A.(i)(a), then the Company shall make an additional separate lump sum payment to Executive equal to the difference between (x) the amount payable to Executive under the first sentence of this Section 7.A.(i)(a) but for the application of clause (I) or (II) of the second sentence of this Section 7.A.(i)(a), and (y) the amount payable to Executive under the second sentence of this Section 7.A.(i)(a) as a result of the application of clause (I) or (II) of the second sentence of this Section 7.A.(i)(a). Such lump sum payment shall be a separate payment from the installment payments provided under this Section 7.A.(i)(a) and shall be paid to Executive on the Company’s first payroll date following the 60th day after the Termination Date but in no event later than 75 days after the Termination Date.

 

 

 

 

(b)     Cash Bonus Payment. The Company shall pay to Executive an amount equal to one times Executive’s target annual cash incentive bonus for the calendar year in which the Termination Date occurs, less deductions and withholding required by law, payable in a lump sum at the same time as other eligible employees under the Company’s annual cash incentive bonus plan for such calendar year are paid their bonuses under such Company’s annual cash incentive bonus plan for such calendar year, but in any event no later than March 15 of the calendar year immediately following the calendar year in which the Termination Date occurs.

 

(c)     Benefits Continuation. If Executive was enrolled in a group health plan (e.g., medical, dental, or vision plan) sponsored by the Company immediately prior to the Termination Date, and if Executive (or Executive’s eligible dependents) timely elects to continue such coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (together with any state law of similar effect, “COBRA”), then the Company will pay to the insurance carrier(s) its share of the premiums due for Executive and Executive’s eligible dependents for the first twelve (12) months of such coverage under COBRA (or until such earlier time as Executive and/or Executive’s eligible dependents are no longer eligible for COBRA coverage).

 

(d)     Pro Rata Accelerated Vesting of Equity. Notwithstanding any language in any Equity Award or in the Plan to the contrary, if Executive has an unvested option to purchase Shares (as defined in the Plan) or any unvested Stock Units (as defined in the Plan) under any Equity Award under the Plan addressing Executive’s option to purchase or right or have vest Shares, then a pro rata portion of any such time-based award scheduled to vest on the next anniversary of the grant date for such award will vest as of the Termination Date and a pro rata portion of any such performance-based award will vest as provided below. In the case of time-based awards, the number of additional Shares that Executive will have the option to purchase or will have vest as a result of such pro rata vesting will be determined by multiplying the total number of additional Shares Executive would have had the option to purchase, or have had vest, as of the next anniversary of the grant date for such award assuming Executive would have remained employed through such anniversary by a fraction, the numerator of which is the number of days Executive was employed by the Company during the then-current vesting year through and including the Termination Date and the denominator is 365. For performance-based awards, the number of additional Shares that Executive will have vest as a result of such pro rata vesting will be determined by multiplying the total number of additional Shares that would otherwise have been determined to have been earned had Executive remained employed through the end of the applicable performance period by a fraction, the numerator of which is the number of days Executive was employed by the Company during the performance period and the denominator is the number of days in the performance period (e.g., 1,095 days in the case of a three-year performance period).

 

 

 

 

(ii)     Other Termination (Other Than During the Transition Period). If the Termination Date occurs for any reason after expiration of the Term (subject to Section 7.C.), or if the Termination Date occurs during the Term and is prior to any Change in Control or after the Transition Period for any of the following reasons: (a) Executive’s abandonment of or resignation from employment for any reason other than Good Reason; (b) termination of Executive’s employment by the Company for Cause; or (c) due to Executive’s death or Disability, then the Company shall pay to Executive, or Executive’s beneficiary or estate, as the case may be, such base salary, bonus and benefits (including Annual Bonus) that have been earned but not paid to Executive as of the Termination Date, payable pursuant to the Company’s normal payroll practices and procedures and to the extent and in the manner provided in any applicable plans or programs, pay any additional amount that may be payable under Section 6.B. Section 6.C. (as applicable) and honor Executive’s rights under any Equity Awards, and Executive shall not be entitled to any additional compensation or benefits.

 

B.     Payments Upon Termination During the Transition Period.

 

(i)     Qualifying Termination During the Transition Period. If a Change in Control occurs during the Term and Executive’s Termination Date occurs on the date of the Change in Control or prior to the 18-month anniversary of the Change in Control (such 18-month period, the “Transition Period”), and if such termination is a Qualifying Termination, then, in addition to such base salary, bonus and benefits that have been earned but not paid to Executive as of the Termination Date, and subject to Executive satisfying the conditions identified in the first paragraph of this Section 7, the Company shall provide to Executive the following severance payments and benefits:

 

(a)     Base Salary Cash Severance. The Company shall pay to Executive an amount equal to two times Executive’s annualized Base Salary as of the Termination Date (or, if Executive’s resignation is for Good Reason because the Company materially reduced Executive’s Base Salary, two times Executive’s annualized Base Salary as of immediately before such material reduction), less deductions and withholding required by law, payable in substantially equal installments in accordance with the Company’s regular payroll practices over the 24-month period immediately following the Termination Date; provided, however that any installments that otherwise would be payable within the 60-day period immediately following the Termination Date shall be delayed and payable with the installment that is payable on the Company’s first payroll date following the 60th day after the Termination Date. Notwithstanding anything above to the contrary, in no event will the amount paid under the first sentence of this Section 7.B.(i)(a) exceed the lesser of two times (I) the limit of compensation set forth in section 401(a)(17) of the Code as in effect for the year in which the Termination Date occurs, or (II) Executive’s annualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if Executive had not separated from service). If Executive’s severance pay as calculated under the first sentence of this Section 7.B.(i)(a) is limited by application of clause (I) or (II) of the second sentence of this Section 7.B.(i)(a), then the Company shall make an additional lump sum payment to Executive equal to the difference between (x) the amount payable to Executive under the first sentence of this Section 7.B.(i)(a) but for the application of clause (I) or (II) of the second sentence of this Section 7.B.(i)(a), and (y) the amount payable to Executive under the second sentence of this Section 7.B.(i)(a) as a result of the application of clause (I) or (II) of the second sentence of this Section 7.B.(i)(a). Such lump sum payment shall be a separate payment from the installment payments provided under this Section 7.B.(i)(a) and shall be paid to Executive on the Company’s first payroll date following the 60th day after the Termination Date but in no event later than 75 days after the Termination Date.

 

 

 

 

(b)     Cash Bonus Payment. The Company shall pay to Executive an amount equal to two times Executive’s target annual cash incentive bonus for the calendar year in which the Termination Date occurs, less deductions and withholding required by law, payable in a lump sum at the same time as other eligible employees under the Company’s annual cash incentive bonus plan for such calendar year are paid their bonuses under such Company’s annual cash incentive bonus plan for such calendar year, but in any event no later than March 15 of the calendar year immediately following the calendar year in which the Termination Date occurs.

 

(c)     Benefits Continuation. If Executive was enrolled in a group health plan (e.g., medical, dental, or vision plan) sponsored by the Company immediately prior to the Termination Date, and if Executive (or Executive’s eligible dependents) timely elects to continue such coverage under COBRA, then the Company will pay to the insurance carrier(s) its share of the premiums due for Executive and Executive’s eligible dependents for the first eighteen (18) months of such coverage under COBRA (or until such earlier time as Executive and/or Executive’s eligible dependents are no longer eligible for COBRA coverage).

 

(d)     Full Accelerated Vesting of Equity. Notwithstanding any language in any Equity Award or in the Plan to the contrary, if Executive has any unvested awards of restricted stock units, options or other equity-based awards with respect to the Company as of the Termination Date, then any such unvested awards will vest immediately as of the Termination Date. In the case of performance-based awards, the number of Shares subject to such accelerated vesting shall be based on a determination by the Board of the degree to which any performance-based vesting conditions will be deemed satisfied.

 

(ii)     Other Termination During the Transition Period. If the Termination Date occurs during the Transition Period for any of the following reasons: (a) Executive’s abandonment of or resignation from employment for any reason other than Good Reason; (b) termination of Executive’s employment by the Company for Cause; or (c) due to Executive’s death or Disability, then the Company shall pay to Executive, or Executive’s beneficiary or estate, as the case may be, such base salary, bonus and benefits (including Annual Bonus) that have been earned but not paid to Executive as of the Termination Date, payable pursuant to the Company’s normal payroll practices and procedures and to the extent and in the manner provided in any applicable plans or programs, pay any additional amount that may be payable under Section 6.B. or Section 6.C. (as applicable) and honor Executive’s rights under any Equity Awards, and Executive shall not be entitled to any additional compensation or benefits.

 

C.     Additional Payments Upon or Following a Change in Control. If the Termination Date occurs during the Term and within ninety (90) days prior to a Change in Control, and if such termination is a Qualifying Termination and Executive reasonably demonstrates within thirty (30) days after the Change in Control that such Qualifying Termination arose in connection with or in anticipation of the Change in Control, then the Company shall provide to Executive the following severance payments and benefits (in addition to the severance payments and benefits Executive is eligible to receive under Section 7.A.), each of which shall be considered a separate payment:

 

 

 

 

(i)     The Company shall pay to Executive an amount equal to one times Executive’s annualized Base Salary as of the Termination Date (or, if Executive’s resignation was for Good Reason because the Company materially reduced Executive’s Base Salary, one times Executive’s annualized Base Salary as of immediately before such material reduction), less deductions and withholding required by law, payable in a lump sum on the Company’s first payroll date following the 60th day after the Termination Date but in no event later than 75 days after the Termination Date. Such lump sum payment shall be a separate payment from any payments under Section 7.A.(i)(a).

 

(ii)      The Company shall pay to Executive an amount equal to one times Executive’s target annual cash incentive bonus for the calendar year in which the Termination Date occurred, less deductions and withholding required by law, payable as follows: (a) if the Change in Control and the Termination Date occur in the same calendar year, then in a lump sum at the same time as other eligible employees under the Company’s annual cash incentive bonus plan for such calendar year are paid their bonuses under such Company’s annual cash incentive bonus plan for such calendar year, but in any event no later than March 15 of the calendar year immediately following the calendar year in which the Termination Date occurred, or (b) if the Change in Control occurs in the calendar year following the year in which the Termination Date occurred, then in a lump sum not later than 60 days after the Change in Control.

 

(iii)     If Executive was enrolled in a group health plan (e.g., medical, dental, or vision plan) sponsored by the Company immediately prior to the Termination Date, and if Executive (or Executive’s eligible dependents) timely elects to continue such coverage under COBRA, then the Company will pay to the insurance carrier(s) its share of the premiums due for Executive and Executive’s eligible dependents for six (6) months of such coverage under COBRA after the initial 12-month COBRA coverage period under Section 7.A.(i)(c) ends (or until such earlier time as Executive and/or Executive’s eligible dependents are no longer eligible for COBRA coverage).

 

(iv)      The Company shall pay to Executive an amount equal to the intrinsic value of any unvested restricted stock units, options or other equity-based awards held by Executive as of the Termination Date that were forfeited as of the Termination Date, with such intrinsic value to be determined based on the per share price paid by the buyer for the Company’s common stock in connection with the Change in Control, or, if no per share price is paid by a buyer in connection with such Change in Control, the per share value of the Company’s common stock at the time of such Change in Control as determined in good faith by the Board as it exists prior to the consummation of the Change in Control, in each case, less any exercise price or other amount that would have been owed to the Company by Executive in order to realize the value of such awards. In the case of forfeited performance-based awards, the intrinsic value shall be based on the number of Shares subject to an award based on a determination by the Board of the degree to which any performance-based vesting or payment conditions will be deemed satisfied. Any amount payable under this Section 7.C.(iv) will be subject to deductions and withholding required by law and payable in a lump sum within the 30-day period immediately following the Change in Control.

 

 

 

 

D.     Change in Control. For purposes of this Agreement, “Change in Control” has the meaning ascribed to such term in the Plan (as such document may be amended from time to time).

 

E.     Section 409A; Conditional Six-Month Delay. Any payments under this Section 7 (the “Payments”) are intended to be exempt from or satisfy the requirements for deferred compensation under Section 409A, including current and future guidance and regulations interpreting Section 409A, and should be interpreted and administered accordingly. However, if the Company (or, if applicable, the successor entity thereto) determines that the Payments (or any portion of the Payments) constitute “deferred compensation” under Section 409A and Executive is a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) (a “Specified Employee”), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Payments shall be delayed as follows: on the earliest to occur of (i) the date that is six months and one day after the Termination Date, (ii) the date of the Specified Employee’s death, or (iii) such earlier date, as reasonably determined in good faith by the Company (or any successor entity thereto), as would not result in any of the Payments being subject to adverse personal tax consequences under Section 409A (such earliest date, the “Delayed Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the Payments that Executive would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the Payments had not been delayed pursuant to this Section 7.E. and (B) commence paying the balance of the Payments in accordance with the applicable payment schedules set forth in Section 7 above. For the avoidance of doubt, it is intended that (1) each installment of the Payments is a separate “payment” for purposes of Section 409A, (2) all Payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under of Treasury Regulation 1.409A-1(b)(4)-(6), and 1.409A-1(b)(9)(iii), and (3) the Payments consisting of COBRA premiums also satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation 1.409A-1(b)(9)(v).

 

F.     280G Limitations. In the event that the severance pay and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) would be subject to the excise tax imposed by Code Section 4999, then such benefits shall be either be: (A) delivered in full, or (B) delivered as to such lesser extent which would result in no portion of such severance pay and other benefits being subject to excise tax under Code Section 4999, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Code Section 4999, results in the receipt by Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be subject to excise tax under Code Section 4999. Any determination required under this Section 7.F. will be made in writing by an accounting firm selected by the Company or such other person or entity to which the parties mutually agree (the “Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 7.F., the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 7.F. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 7.F. Any reduction in payments and/or benefits required by this Section 7.F. shall occur in the following order: (i) cash payments shall be reduced first and in reverse chronological order such that the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will be the first cash payment to be reduced; (ii) accelerated vesting of restricted stock units, options or other equity-based awards, if any, shall be cancelled/reduced next and in the reverse order of the date of grant for such restricted stock units, options or other equity-based awards (i.e., the vesting of the most recently granted stock awards will be reduced first), with full-value awards reversed before any restricted stock units, options or other equity-based awards are reduced; and (iii) deferred compensation amounts subject to Section 409A shall be reduced last.

 

 

 

 

8.     Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction in accordance with Section 12 for injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement.

 

9.     Attorney Fees. If any action at law or in equity, including any action for declaratory or injunctive relief, is brought which arises out of this Agreement or the termination of Executive’s employment, or which seeks to enforce or interpret this Agreement or to seek damages for its breach, the prevailing party shall be entitled to recover reasonable attorney fees from the non-prevailing party, which fees may be set by the court or arbitrator in the trial of such action, or may be enforced in a separate action brought for that purpose, and which fees shall be in addition to any other relief which may be awarded.

 

10.     Assignment. This Agreement shall not be assignable, in whole or in part, by either party without the written consent of the other party, except that the Company may, without the consent of Executive, assign or delegate all or any portion of its rights and obligations under this Agreement to any corporation or other business entity (i) with which the Company may merge or consolidate, or (ii) to which the Company may sell or transfer all or substantially all of its assets or capital stock. Notwithstanding the Company’s right to assign this Agreement contemplated herein, Executive’s restrictive covenants set forth in the Non-Competition Agreement shall not expand in scope as a result of such assignment in connection with a Change in Control without Executive’s prior written consent if Executive is not employed by the Company as of the date of and immediately following such assignment in connection with a Change in Control (for example, Executive shall not be prohibited from competing against products or services of the acquiring or surviving entity in the event of a Change in Control if the Company did not sell such services or product lines prior to such Change in Control if Executive is not employed by the Company as of the date of and immediately following the Change in Control).  Any such current or future successor to which any right or obligation has been assigned or delegated shall be deemed to be the “Company” for purposes of such rights or obligations of this Agreement. The rights and, obligations under this Agreement shall inure to the benefit of and shall be binding upon the heirs, legatees, administrators and personal representatives of Executive and upon the successors, affiliates, representatives and assigns of the Company.

 

 

 

 

11.     Severability and Reformation. The parties hereto intend all provisions of this Agreement to be enforced to the fullest extent permitted by law, and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid, or unenforceable under present or future law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance.

 

12.     Notices. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, mailed by certified mail (return receipt requested) or sent by overnight delivery service, cable, telegram, facsimile transmission or telex to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice:

 

If to the Company:

Proto Labs, Inc.

5540 Pioneer Creek Drive

Maple Plain, MN 55359

Attention: Board Chair

 

If to Executive:

 

Robert Bodor

 

The last known address on file with the Company.

 

Notice so given shall, in the case of notice so given by mail, be deemed to be given and received on the fourth calendar day after posting, in the case of notice so given by overnight delivery service, on the date of actual delivery and, in the case of notice so given by cable, telegram, facsimile transmission, telex or personal delivery, on the date of actual transmission or, as the case may be, personal delivery.

 

13.     Further Actions. Whether or not specifically required under the terms of this Agreement, each party hereto shall execute and deliver such documents and take such further actions as shall be necessary in order for such party to perform all of the party’s obligations specified herein or reasonably implied from the terms hereof.

 

 

 

 

14.     Taxes.      The Company may withhold from any amounts payable under this Agreement such federal, state and local income and employment taxes as the Company determines are required or authorized to be withheld pursuant to any applicable law or regulation. Except for any tax amounts withheld by the Company from any compensation that Executive may receive in connection with Executive’s employment with the Company and any employer taxes required to be paid by the Company under applicable laws or regulations, Executive is solely responsible for payment of any and all taxes owed in connection with any compensation, benefits, reimbursement amounts or other payments Executive receives from the Company under this Agreement or otherwise in connection with Executive’s employment with the Company. The Company does not guarantee any particular tax consequence or result with respect to any payment made by the Company. In no event should this Section 14 or any other provision of this Agreement be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or payments under, this Agreement, and the Company has no responsibility for tax or legal consequences to Executive resulting from the terms or operation of this Agreement; provided, however, to the extent that any post-termination COBRA premiums paid by the Company under Section 7 of this Agreement shall be taxable at the Termination Date or during the period for which such COBRA premiums are provided, then the Company shall pay to Executive an additional amount for each such month that the COBRA premiums are taxable.  The monthly amount will equal 15% of the applicable COBRA premium for that month and such amount will be paid to Executive within two and one half months after the month to which they relate, provided that the aggregate amount payable to Executive under this provision will not exceed the dollar limit in effect under Code section 402(g)(1)(B) for the year of the Termination Date, as provided in Treasury Regulations section 1.409A-1(b)(9)(v)(D).

 

15.     Indemnification. At all times while Executive is employed by the Company, and at all times following the Termination Date with respect to matters relating to Executive’s employment with the Company, the Company shall continue to provide to Executive indemnification, director’s and officer’s liability insurance and other protection from personal liability with respect to Executive’s employment with the Company in accordance with applicable law, the Company’s by-laws and governance documents, and applicable insurance policies as may be in place from time to time.

 

16.     Governing Law and Venue. This Agreement is to be governed by and construed in accordance with the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any jurisdiction other than the State of Minnesota. The parties agree that any dispute concerning this Agreement is to be brought in the District Court in Hennepin County, Minnesota and consent to jurisdiction and venue therein.

 

17.     Entire Agreement. This Agreement, the Non-Disclosure Agreement, the Non-Competition Agreement, the Existing Award Agreements, the New Award Agreements and the Plan contain the entire understanding and agreement between the parties, except as otherwise specified herein, and supersede any other agreement between Executive and the Company, whether oral or in writing, with respect to the same subject matter; provided, however, that nothing herein shall supersede or replace any of the Company’s equity-based compensation plans and any award agreements with the Executive entered into thereunder.

 

18.     No Waiver. No term or condition of this Agreement shall be deemed to have been waived, except by a statement in writing signed by the party against whom enforcement of the waiver is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived, and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

 

 

 

19.     Counterparts. This Agreement may be executed in counterparts, with the same effect as if both parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

 

[signature page follows]

 

 

 

 

In Witness Whereof, the parties have executed this Agreement as of the Effective Date first above written.

 

 

THE COMPANY: 

 

Proto Labs, Inc.

 

By /s/ John Way                                                      

 

                                                                           

 

 

EXECUTIVE:

 

 

/s/ Robert Bodor                                                      

Robert Bodor

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