Document:

Exhibit 10.5

Exhibit 10.5

LINN ENERGY, LLC
LONG-TERM INCENTIVE PLAN
EXECUTIVE PHANTOM PERFORMANCE UNIT GRANT AGREEMENT
2015 - 2017 PERFORMANCE PERIOD
This Phantom Performance Unit grant agreement (“Grant Agreement”) is made and entered into effective as of [Grant Date], (the “Grant Date”) by and between LINN ENERGY, LLC, a Delaware limited liability company (together with its subsidiaries, the “Company”), and [Executive] (“Participant”).
WHEREAS, the Company considers it to be in its best interest that Participant be given an added incentive to advance the interests of the Company;
WHEREAS, the Company desires to accomplish such objectives by granting Participant Phantom Performance Units pursuant to the Linn Energy, LLC Amended and Restated Long-Term Incentive Plan, as amended which is attached hereto as Appendix A and incorporated by reference herein (the “Plan”); and
WHEREAS, the Phantom Performance Units shall be subject to vesting based in part on the achievement of certain performance conditions, as set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the parties hereby agree as follows: 
1.    Grant of Phantom Performance Units.  The Company hereby grants to Participant _________ Phantom Performance Units (the “Target Phantom Performance Units”), each Phantom Performance Unit equal to the cash value of a Unit, under and subject to the terms and conditions of this Grant Agreement and the Plan; provided that (except as otherwise provided in this Agreement) the final number of Phantom Performance Units that vest shall be determined in accordance with the performance criteria set forth on Appendix B.  This grant of Phantom Performance Units also includes a tandem grant of DERs (a contingent right to receive an equivalent of any cash distributions made by the Company with respect to Units, as defined in the Plan) with respect to each Phantom Performance Unit.
2.    Payment of DERs.  Upon the payment of any cash distribution on Units of the Company, with respect to each Phantom Performance Unit granted hereunder, the dollar amount of such distributions with respect to the number of Units then underlying the Target Phantom Performance Units shall be increased by a number of Units equal to the value of the cash distribution divided by the Fair Market Value of a Unit on the ex-dividend date and such increased amount of Units shall be deemed the Target Phantom Performance Units.  The number of Target Phantom Performance Units, as so increased, shall be eligible for adjustment based on subsequent dividends or distributions.
3.    Vesting.  On December 31, 2017 (the “Vesting Date”), a number of Phantom Performance Units shall vest based on the extent to which the Company has satisfied the performance condition set forth on Appendix B, provided that, 1) except as otherwise provided herein, the Participant is continuously employed by the Company through the Vesting Date and 

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2) payment of any cash upon vesting shall not made until such time as the Committee has certified the performance conditions in accordance with Appendix B.  For purposes of this paragraph, continued service on the board of directors of the Company or any affiliate or employment with any affiliate of the Company will constitute continued employment with the Company.
4.    General Restrictions.  The Phantom Performance Units shall not be assignable or transferable except as expressly provided in the Plan or by the Committee in its sole discretion. 
5.    Termination by Company other than for Cause or by Participant with Good Reason.
		
	a.
	Participants Not Covered by an Employment Agreement.  In the event the Participant is terminated by the Company other than for Cause (as defined in Section 18 of this Grant Agreement), then within forty-five days of the date of termination, the Committee shall determine, in its sole and absolute discretion, the percentage, if any, of the Target Phantom Performance Units that the Participant shall continue to be eligible to earn at the end of the Performance Period (the “Adjusted Target Phantom Performance Units”) in accordance with the performance criteria set forth on Appendix B.  On the Vesting Date, the Participant shall vest in a number of Phantom Performance Units, determined in accordance with Section 3 had the Participant’s employment not terminated and based on the Adjusted Target Phantom Performance Units determined by the Committee.  Notwithstanding the foregoing, the Committee shall maintain discretion at any time prior to payment of the Phantom Performance Units to reduce or eliminate the amount to which Participant is otherwise due based on Participant’s failure to comply with any post-termination restrictive covenants.

		
	b.
	Participants Covered by an Employment Agreement.  In the event the Participant is terminated by the Company other than for Cause or the Participant terminates Participant’s employment with the Company for Good Reason (as defined in Section 18 of this Grant Agreement), then on the Vesting Date the Participant shall vest in the number of Phantom Performance Units that would have vested as determined in accordance with Section 3 had the Participant’s employment not terminated.

6.    Death or Disability.  In the case of termination of the Participant’s service relationship with the Company due to death or in the case of the Participant’s Disability (as defined in Section 18 of this Grant Agreement), the Participant shall vest in a number of Phantom Performance Units equal to the Target Phantom Performance Units.  In the event of death following termination of Participant’s service under Section 5 above, the Participant shall vest in a number of units equal to the Target Phantom Performance Units or Adjusted Target Phantom Performance Units, whichever is applicable.
7.    Change of Control.  Notwithstanding anything in the Plan to the contrary, in the event of a Change of Control (as defined in the Plan), the Performance Period shall be treated as 

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ending on the date the Change of Control occurred, the Vesting Date shall be the date the Change of Control occurred, and the number of Phantom Performance Units that vest shall be calculated in accordance with Appendix B, subject to modification as described in this Section 7.
8.    Termination by Company for Cause or by Participant without Good Reason.  In the case of a termination of the Participant’s employment other than as described in Sections 5 and 6, all outstanding Phantom Performance Units granted hereby which have not vested pursuant to any provision of this Grant Agreement shall be automatically and immediately forfeited, and Participant hereby agrees to undertake any action and execute any document, instrument or papers reasonably requested by the Company to effect such forfeiture of Phantom Performance Units resulting from any such termination.
9.    Settlement of Phantom Performance Units.  Any Phantom Performance Units that become payable pursuant to this Grant Agreement (including DER payments, as described above) shall be paid in a single lump sum cash payment (based on the Fair Market Value of a Unit on the day immediately preceding the date of payment, except as provided below) at the times indicated below, and any partial unit shall be rounded up to the next whole unit.
		
	a.
	Section 3 and Section 5.  Phantom Performance Units that become payable pursuant to Section 3 or Section 5 of this Grant Agreement shall be paid to the Participant on March 15 of the calendar year immediately following the end of the Performance Period.

		
	b.
	Section 6.  Phantom Performance Units that become payable pursuant to Section 6 of this Grant Agreement shall be paid to the Participant (or to the Participant’s estate in the event of death) as soon as practicable following the date of the Participant’s death or Disability, as applicable, but in no event later than March 15 of the calendar year immediately following the calendar year in which the Participant’s death or Disability, as applicable, occurred.

		
	c.
	Section 7.  Phantom Performance Units that become payable pursuant to Section 7 of this Grant Agreement shall be paid to the Participant within 60 days after the consummation of the Change of Control.

10.    Plan Controlling Document.  Unless otherwise defined herein (including any attachments hereto), capitalized terms shall have the meaning given such terms in the Plan.  Participant agrees that the Plan is the controlling instrument and that to the extent there is any conflict between the terms of the Plan and this Grant Agreement, the Plan shall control and be the governing document.
11.    Limited Liability Company Agreement.  Participant agrees to be bound by all applicable provisions of the Company’s limited liability company agreement, as it may be amended from time to time.
12.    Taxes.  The Company and any affiliate thereof are authorized to withhold from any payment relating to the Phantom Performance Units granted hereby, or any payroll or other payment to Participant, amounts of withholding and other taxes due or potentially payable in connection with the Phantom Performance Units granted hereby, and to take such other action as 

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the Committee may deem advisable to enable the Company, any affiliate, and Participant to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the Phantom Performance Units granted hereby.  This authority shall include authority to withhold cash from the Participant’s payment thereof in satisfaction of Participant’s tax obligations, either on a mandatory or elective basis in the discretion of the Committee.
14.    Notices.  Any notices given in connection with this Grant Agreement shall, if issued to Participant, be delivered to Participant’s current address on file with the Company, or if issued to the Company, be delivered to the Company’s principal offices.
15.    Execution of Receipts and Releases.  Any payment of cash to Participant, or to Participant’s legal representatives, heirs, legatees or distributees, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder.  The Company may require Participant or Participant’s legal representatives, heirs, legatees or distributees, as a condition precedent to such payment, to execute a release and receipt therefor in such form as it shall determine.
16.    Successors.  This Grant Agreement shall be binding upon Participant, Participant’s legal representatives, heirs, legatees and distributees, and upon the Company, its successors and assigns.
17.    Section 409A of the Code.  It is intended that the Phantom Performance Units granted hereby be exempt from or compliant with the requirements of Section 409A of the Code, and this Grant Agreement shall be interpreted and administered accordingly.  For purposes of this Grant Agreement, Participant will be considered to have a termination of Participant’s service relationship with the Company only upon Participant’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A‐1(h), and any successor provision thereto.  If Participant is identified by the Company as a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Phantom Performance Units payable or settled on account of a separation from service that are deferred compensation subject to Section 409A of the Code shall be paid or settled on the earliest of (1) the first business day following the expiration of six months from Participant’s separation from service, (2) the date of Participant’s death, or (3) such earlier date as complies with the requirements of Section 409A of the Code.
18.    Definitions.
		
	a.
	Cause. If Participant is covered by a written employment agreement between the Company and Participant in effect on the date of the Participant’s termination (the “Employment Agreement”) and cause is defined in such Employment Agreement, then Cause shall have the meaning therein.  If Participant is not covered by an Employment Agreement or cause is not defined therein and Participant is covered by a severance arrangement and cause is defined in such severance arrangement, then Cause shall have the meaning therein.  If Participant is not covered by an Employment Agreement or severance arrangement or cause is not defined therein, 

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then Cause shall mean the Company’s termination of Participant’s employment by reason of any of the following:
		
	(i)
	Participant’s conviction of, or plea of nolo contendere to, any felony or to any crime or offense causing substantial harm to any of the Company or its direct or indirect subsidiaries (whether or not for personal gain) or involving acts of theft, fraud, embezzlement, moral turpitude or similar conduct;

		
	(ii)
	Participant’s repeated intoxication by alcohol or drugs during the performance of his or her duties;

		
	(iii)
	Participant’s willful and intentional misuse of any of the funds of the Company or its direct or indirect subsidiaries;

		
	(iv)
	embezzlement by Participant;

		
	(v)
	Participant’s willful and material misrepresentations or concealments on any written reports submitted to any of the Company or its direct or indirect subsidiaries;

		
	(vi)
	Participant’s material failure to follow or comply with the reasonable and lawful written directives of the board of directors of the Company; or

		
	(vii)
	conduct constituting a material breach by Participant of the Company’s then current (A) Code of Business Conduct and Ethics, and any other written policy referenced therein, (B) the Code of Ethics for Chief Executive Officer and senior financial officers, if applicable, provided that in each case Participant knew or should have known such conduct to be a breach.

		
	b.
	Disability.  If Participant is covered by an Employment Agreement and disability is defined in such Employment Agreement, then Disability shall have the meaning therein.  If Participant is not covered by an Employment Agreement or disability is not defined therein, then Disability shall mean the earlier of (a) written determination by a physician selected by the Company that Participant has been unable to perform substantially Participant’s usual and customary duties for a period of at least 120 consecutive days or a non-consecutive period of 180 days during any twelve-month period as a result of incapacity due to mental or physical illness or disease; and (b) “disability” as such term is defined in the Company’s applicable long-term disability insurance plan.  Notwithstanding the foregoing, if the Phantom Performance Units are deferred compensation within the meaning of Section 409A of the Code, then “Disability” shall have the meaning set forth in Treasury Regulation § 1.409A-3(i)(4)(i).

		
	c.
	Good Reason.  If Participant is covered by an Employment Agreement and good reason is defined in such Employment Agreement, then Good Reason shall have 

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the meaning therein.  If Participant is not covered by an Employment Agreement or good reason is not defined therein, then Good Reason shall mean any of the following to which Participant will not consent in writing:
		
	(i)
	a reduction in Participant’s then current base salary;

		
	(ii)
	failure by the Company to pay in full on a current basis any amounts due and owing to Participant under any long-term or short-term or other incentive compensation plans, agreements or awards; or

		
	(iii)
	any material reduction in Participant’s title, authority or responsibilities.

IN WITNESS WHEREOF, the parties hereto have executed this Grant Agreement to be effective as of the day and year first above written.
	
			
	 
	LINN ENERGY, LLC

	 
	 

	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

	 
	 

	 
	PARTICIPANT:

	 
	 

	 
	 

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APPENDIX A
Linn Energy, LLC Amended and Restated Long-Term Incentive Plan

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APPENDIX B
		
	1.
	Definitions.

		
	(i)
	“Comparison Companies” means a set of peer companies, determined by the Committee at the beginning of a Performance Period, as updated on Appendix C on an annual basis.  In the event a peer company ceases to be publicly traded company on a national securities exchange during the Performance Period for one of the following reasons defined below, they shall be treated as follows:

		
	1)
	Acquisition or Merger.  If a company is acquired or merged into another company and ceases to be publicly traded under the same ticker symbol on a national securities exchange during the Performance Period, the company will remain on the list.  Stock price performance for the period will be determined using the peer company’s actual stock price performance through the day before the date of announcement of the acquisition/merger and the average return of the SIG Oil Exploration & Production Index (ticker symbol EPX) for the remainder of the Performance Period.

		
	2)
	Bankruptcy.  If a company becomes Bankrupt during the Performance Period, such company will remain on the list but shall be deemed the bottom performer.  “Bankrupt” shall mean that the company ceases to be publicly traded on a national securities exchange as of the end of the Performance Period as a result of a liquidation commenced under Chapter 7 of the Bankruptcy Code, an assignment of the company’s assets for the benefit of creditors under applicable state law, or the commencement of a reorganization proceeding under Chapter 11 of the Bankruptcy Code.

		
	(ii)
	“Beginning Price” means the average per share closing unit price for the 20 trading days preceding the first day of the Performance Period.

		
	(iii)
	“Ending Price” means the average per share closing price for the last 20 trading days of the Performance Period.

		
	(iv)
	“Multiplier” means the multiplier determined in accordance with Section 2 of this Appendix B.

		
	(v)
	 “Performance Period” means the period between January 1, 2015 and December 31, 2017.

		
	(vi)
	“Total Unitholder Return” is defined as the Ending Price minus the Beginning Price plus any distributions (cash or unit based on ex-distribution date) paid per unit over the Performance Period, with such distributions assumed to be reinvested in units on the ex-distribution date, the total of which is divided by the Beginning Price.

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	2.
	Calculation of Multiplier.  The Total Unitholder Return of the Company and of the Comparison Companies shall be calculated and certified by the Committee.  The percentile ranking of the Company’s Total Unitholder Return as compared to the Total Unitholder Return of each Comparison Company shall determine the Multiplier using the chart below.  The Committee will make the final determination as to the amount paid, notwithstanding the chart below.

	
			
	Rank
	Percentile Ranking
	Multiplier

	1
	100th percentile
	200%

	2
	92nd percentile
	200%

	3
	85th percentile
	187%

	4
	77th percentile
	167%

	5
	69th  percentile
	148%

	6
	62nd percentile
	129%

	7
	54th percentile
	110%

	8
	46th percentile
	90%

	9
	38th percentile
	71%

	10
	31st percentile
	52%

	11
	23rd percentile
	33%

	12
	15th percentile
	0%

	13
	8th percentile
	0%

	14
	0 percentile
	0%

		
	3.
	Calculation of Vested Phantom Performance Units.  The number of Phantom Performance Units that shall vest as of the Vesting Date (and paid upon certification by the Committee) shall be equal to the product of (i) the Target Phantom Performance Units or Adjusted Target Phantom Performance Units, if terminated under Section 5.a. and (ii) the Multiplier (with any fractional units rounded up to the next whole unit).

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Appendix C

2015 – 2017 Comparison Companies

	
		
	Upstream E&P MLP’s
	Upstream E&P C-Corps

	Breitburn Energy Partners LP
	Chesapeake Energy Corp.

	Eagle Rock Energy Partners LP
	Denbury Resources Inc.

	EV Energy Partners LP
	Encana Corp

	Legacy Reserves LP
	EP Energy Corp.

	Memorial Production Partners LP
	Newfield Exploration Co.

	Vanguard Natural Resources
	QEP Resources Inc.

	 
	Whiting Petroleum Corp.

Active 17894677.5Exhibit 4.7

 

Agreement for Subscription for the Eleventh Share Option Offering

 

This Agreement is made and entered into by and between UBIC, Inc. (hereinafter referred to as the “Company”) and (hereinafter referred to as the Subscriber”) with respect to the subscription for the eleventh share option offering.

 

Article 1 (Subscription for Share Options)

 

In accordance with the resolution of the eleventh annual shareholders’ meeting held on June 24, 2014 and the resolution of the board meeting held on May 28, 2015, the Company has determined the following requirements for the eleventh share option offering (hereinafter referred to as the “Share Options”), of which the Subscriber subscribes for options. Since this Agreement shall be made integrally at the same time with other subscribers in accordance with Article 244 of the Companies Act of Japan, the Subscriber shall subscribe for the Share Options simultaneously with the other subscribers collectively for the total number of Share Options.

 

Description

 

Requirements for the offering of Share Options

 

(1)                    Class and number of shares covered by the Share Options

 

200,000 Class A common shares, which, in case of adjustment set forth below, shall be revised to the number of granted shares after adjustment multiplied by the total number of Share Options.

 

Number of shares covered by one (1) Share Option (hereinafter referred to as the “Number of Granted Shares”) shall be 100 class A common shares. In the event of a stock split (including a gratis allotment of common stock and this being applicable hereinafter, as well) or a reverse split by the Company after the day when the Share Options are allotted (hereinafter referred to as the “Date of Allotment”), the following formula shall be used to adjust the Number of Granted Shares covered by the Share Options that have not been exercised at the time of adjustment. Fractional share resulting from adjustment shall be discarded.

 

Number of Granted Shares after adjustment = Number of Granted Shares before adjustment × ratio of split or reverse split

 

Any adjustment of the Number of Granted Shares which may be required in other situations shall be made to a reasonable extent.

 

(2)                    Total number of Share Options

 

2,000

 

(3)                    Amount payable in exchange of the Share Options

 

No payment is required in exchange of the Share Options

 

(4)                    Manner of calculating the value of assets contributed in exercising the Share Options

 

102,900 yen for one (1) Share Option

 

Value of assets contributed in exercising one (1) Share Option shall be obtained by multiplying the amount paid per share for the shares delivered upon exercise of the Share Option (hereinafter referred to as the “Exercise Price”) by the Number of Granted Shares.

 

The Exercise Price shall be 1,029 yen

 

If any of the following events occurs on or after the Date of Allotment, the Exercise Price shall be adjusted as follows.

 

1

 

(i)             For the share split or reverse split by the Company, the Exercise Price shall be adjusted in accordance with the formula stated below and fractional yen resulting from the adjustment shall be rounded up to the nearest yen.

 

	
Exercise Price after 
    	
 
    	
=
    	
 
    	
Exercise Price before
    	
 
    	
×
    	
 
    	
1
    
	
adjustment
    	
 
    	
 
    	
adjustment
    	
 
    	
 
    	
ratio of share split or   reverse split
    

 

(ii)          If the Company issues new shares at a price below the market price or dispose of the treasury stock, the Exercise Price shall be adjusted in accordance with the formula stated below and fractional yen resulting from the adjustment shall be rounded up to the nearest yen.

 

	
Exercise
    	
 
    	
Exercise
    	
 
    	
number of
    	
+
    	
number of   newly issued shares × amount paid per share
    
	
Price after
    	
=
    	
Price before
    	
×
    	
 issued shares
    	
market   price per share
    
	
adjustment
    	
 
    	
adjustment
    	
 
    	
number of issued   shares + number of newly issued shares
    

 

In the above formula, the “number of issued shares” means the total number of shares issued by the Company less the number of treasury stock in the possession of the Company. In case of the disposition of treasury stock, the “number of newly issued shares” shall read “number of treasury stock disposed of.”

 

(iii)       In case of other inevitable situations which require the adjustment of the Exercise Price, the adjustment shall be made to a reasonable extent taking into account the conditions.

 

(5)              Period during which the Share Options can be exercised

 

From May 29, 2018 to May 28, 2021

 

(6)              Conditions to exercise the Share Options

 

(i)                   Person to whom the Share Options are allotted (hereinafter referred to as the “Share Option Holder”) must be either a director, statutory auditor, executive officer or employee of the Company or its subsidiary at the time of exercising the option, except if such person resigns due to expiry of term of office, retires by age limit or terminates employment due to a company’s reason or if otherwise justified by the board of directors.

 

(ii)                No Share Option shall be inherited.

 

(iii)             No fractional Share Option shall be exercised.

 

(iv)            All other conditions shall be as set forth in the “Agreement for Share Options Allotment” to be entered into between the Company and the Share Option Holder pursuant to the relevant resolution of the board meeting.

 

(7)              Reason and conditions for acquisition of the Share Options

 

In the event that a proposal to approve a merger agreement where the Company is to be extinguished is approved at the shareholders’ meeting of the Company or that a proposal to approve either a stock swap agreement or a stock transfer plan where the Company is to be wholly owned is approved at the shareholders’ meeting of the Company (or, if a resolution of the shareholders’ meeting is not required, is resolved by the board meeting of the Company), the Company may acquire the Share Options at free on the day separately designated by the board of directors.

 

(8)              Restriction on acquisition of the Share Options by assignment

 

Acquisition of the Share Options by assignment shall require an approval of the board of directors of the Company.

 

2

 

(9)    Conditions for the capital and capital reserve increase by issuance of shares upon exercise of the Share Options

 

(i)             Amount of capital increase when the shares are issued upon exercise of the Share Options shall be one half of the maximum capital increase calculated in accordance with paragraph 1, Article 17 of the Ordinance on Company Accounting and fractional yen resulting from the calculation shall be rounded up to the nearest yen.

 

(ii)          Amount of capital reserve increase when the shares are issued upon exercise of the Share Options shall be the maximum capital increase referred to in the item (i) above less the amount of capital increase obtained under the item (i) above.

 

(10)        Handling of the Share Options in case of corporate reorganization

 

In the event of a merger (limited to the cases where the Company is to be extinguished), absorption-type company split or incorporation-type company split (limited to the cases where the Company is to be split), or stock swap or stock transfer (limited to the cases where the Company is to be a wholly-owned subsidiary) (hereinafter collectively referred to as the “Corporate Reorganization”), the Company shall deliver the share options of a stock company prescribed in Section 236.1.8 (a) to (e) of the Companies Act of Japan (hereinafter referred to as the “Reorganized Company”) to the Share Option Holder who has the Share Options remaining (hereinafter referred to as the “Remaining Share Options”) immediately prior to the day when the Corporate Reorganization comes into effect (that is, for a absorption-type merger, the day when the absorption-type merger comes into effect; for a consolidation-type merger, the day when a stock company is incorporated through consolidation; for an absorption-type company split, the day when the absorption-type company split comes into effect; for an incorporation-type company split, a stock company is incorporated from the incorporation-type company split; for a stock swap, the day when the stock swap comes into effect; and for a stock transfer, the day when a wholly owning parent company incorporated through stock transfer, and these being applicable hereinafter, as well). In this case, the Remaining Share Options shall be extinguished and the Reorganized Company shall newly issue the share options, provided that the absorption-type merger agreement, consolidation-type merger agreement, absorption-type company split agreement, incorporation-type company split plan, stock swap agreement or stock transfer plan shall contain the statement that the Reorganized Company will deliver the share options in accordance with the following provisions.

 

(i)                         Number of share options of the Reorganized Company to be delivered

 

The same number as the Remaining Share Options in the possession of the Share Option Holder shall be delivered.

 

(ii)                       Type of stock of the Reorganized Company covered by the share options

 

Common shares of the Reorganized Company

 

(iii)                    Number of shares of the Reorganized Company covered by the share options

 

To be determined in accordance with the above “(1) Class and number of shares covered by the Share Options” taking into account the conditions for Corporate Reorganization.

 

(iv)                   Manner of calculation of the value of assets contributed to exercise the share options

 

Value of assets contributed in exercising one (1) share option to be delivered shall be obtained by multiplying the Exercise Price after adjustment prescribed in the item (4) (iii) above by the number of shares of the Reorganized Company covered by such share option as determined under the item (iii) above.

 

(v)                      Period during which the share options can be exercised

 

From the day when the above “(5) Period during which the Share Options can be exercised” commences or the day when the Corporate Reorganization comes into effect, whichever is the later, to the day when the above “(5) Period during which the Share Options can be exercised” expires

 

(vi)                   Conditions for the capital and capital reserve increase by issuance of shares upon exercise of the share options

 

To be determined in accordance with the above “(9) Conditions for the capital and capital reserve increase by issuance of shares upon exercise of the Share Options”

 

3

 

(vii)                 Restriction on acquisition of the share options by assignment

 

Acquisition of the share options by assignment shall require an approval of the board of directors of the Reorganized Company.

 

(viii)              Reason and conditions for acquisition of the share options

 

To be determined in accordance with the above “(7) Reason and conditions for acquisition of the Share Options”

 

(11)         Fractional share delivered upon exercise of the Share Options

 

Fractional share delivered upon exercise of the Share Options shall be discarded.

 

(12)         Date of Allotment

 

May 28, 2015 (Thursday)

 

Article 2 (Special Provisions for Exercise of Option)

 

1.                    Notwithstanding the provisions of paragraph (8) of Article 1, the Subscriber shall not assign, or place the security right on, the Share Options.

 

2.                    If the Subscriber falls under any of the situations stated below, the Subscriber and its successor shall not exercise the Share Options and loses them.

 

(1)               A petition is filed by third party against the Subscriber for the attachment, provisional attachment, provisional disposition or auction or the commencement of procedures of bankruptcy or civil rehabilitation

 

(2)               A petition is filed by the Subscriber itself for the commencement of procedures of bankruptcy or civil rehabilitation.

 

(3)               There are other reasons that objectively show a significant worsening financial status of the Subscriber.

 

(4)               The Subscriber is sentenced to imprisonment without work or a heavier punishment.

 

(5)               The Subscriber who is an employee of the Company or its subsidiary is punished under the office rules of the Company or its subsidiary as disciplinary dismissal or retirement under instruction.

 

3.                    The Company shall deliver the shares against exercise of option by the Subscriber, including issuing new shares or transferring or assigning existing shares, without violation of the requirements for offering of the Share Options.

 

Article 3 (Manner of Exercising the Option)

 

1.                    In exercising the Share Options, the Subscriber shall transfer the amount paid to the bank account designated by the Company and shall provide the Company with the application (claim) for exercise of the share options in a given form.

 

2.                    To exercise the options in a manner set forth in the preceding paragraph, the Subscriber shall open an account in his name with the Financial Instruments Business Operator in a manner prescribed by the Company.

 

3.                    Immediately after completion of the procedures for the Subscriber to exercise the Share Options, the Company shall take measures required for the entrustment of the entry or registration of the shares acquired by the Subscriber by exercising the Share Options in the account in name of the Subscriber opened with the Financial Instruments Business Operator under the preceding paragraph and the storage at a branch or an office of the Financial Instruments Business Operator or required for the Management Trust.

 

4.                    If the tax exemption measures under Article 29-2 of the Act on Special Measures concerning Taxation are not applied to the exercise of the Share Options, the Subscriber shall pay the amount equal to the withholding income tax imposed on the economic profit from the acquisition of shares by exercising the Share Options together with the amount paid under the paragraph 1.

 

4

 

Article 4 (Manner of Expressing Intention and Giving a Notice)

 

1.                   The Company shall express its intention or give a notice to the Subscriber by sending documents either by mail to the address of the Subscriber recorded in the Share Option Registry or by sending an e-mail to the address preliminarily notified by the Subscriber to the Company.

 

2.                   Any change in any one of the following items must be notified by the Subscriber to the Company.

 

(1)              Name of the Subscriber

 

(2)              Address of the Subscriber

 

(3)              E-mail address for the purpose of the preceding paragraph

 

3.                   If the Subscriber fails to notify as set forth in the preceding paragraph, the address recorded in the Share Option Registry shall be considered as the current address of the Share Option Holder.

 

4.                   The notice set forth in the paragraph 1 shall be deemed to have arrived at the time when it would have ordinarily arrived.

 

5.                   Provisions of the preceding paragraphs shall be applied to the resignation due to expiry of term of office, retirement by age limit or termination of employment by a company’s reason as provided in Article 1(6)(i) and other cases justified by the board of directors.

 

Article 5 (Abandonment of Claim for Damages)

 

The Subscriber shall not hold the Company, its director or any other parties to whom the Company entrusted the business transactions liable for covering losses, adding profits, compensating damages, nor claim or pursue any responsibilities against the parties above in connection with this Agreement irrespective of reasons.

 

Article 6 (Right to Establish Bylaws)

 

1.                   The Company may establish, amend or abolish the “Bylaws to Agreement for Share Options Allotment” (hereinafter referred to as the “Bylaws”) to provide for the rules regarding the enforcement of this Agreement.

 

2.                   The Company must promptly notify the Subscriber of the Bylaws which may be established, amended or abolished under the preceding paragraph.

 

3.                   The Subscriber may request the Company to allow access to the Bylaws during its business hours and may copy the same at the Subscriber’s cost.

 

Article 7 (Amendment to Agreement)

 

1.                   If any provision hereof proves to be incompliant with any provision of the Income Tax Act, Corporation Tax Act or other tax laws or becomes incompliant with the same due to revisions after execution of this Agreement, the Company may amend or abolish such provision by giving a notice to the Subscriber. This rule shall be applied if any provision hereof proves to be or becomes incompliant with the Companies Act, Financial Instruments and Exchange Act or other relevant laws.

 

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2.                    In addition to the preceding paragraph, the Company may make a proposal to the Subscriber to amend this Agreement if deemed necessary.

 

3.                    If the Subscriber does not lodge any objection with the Company in writing stating due reasons within three (3) weeks after the proposal under the preceding paragraph, this Agreement shall be deemed to have been automatically amended as proposed by the Company.

 

Article 8 (Taxation Process)

 

The Subscriber shall pay at his cost and responsibility the income tax and any other taxes and dues imposed as a result of the subscription and exercise of the Share Options and the sale of the Company’s shares acquired upon exercise thereof.

 

Article 9 (Handling of Issues Not Specified)

 

Handling of issues not specified in this Agreement or the Bylaws shall be faithfully negotiated by the Company and the Subscriber and, if the Subscriber does not agree to negotiate or no agreement is reached between both parties after negotiation, shall be determined by the Company.

 

Article 10 (Governing and Jurisdiction)

 

The Company and the Subscriber agree that the Japanese law shall govern this Agreement and any dispute hereunder shall be submitted to the Tokyo District Court which has the exclusive jurisdiction for the first trial.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in two (2) copies with their respective names and seals and the Company and the Subscriber shall retain the original copies, respectively.

 

May 29, 2015

 

	
Company:
    	
UBIC, Inc.
    
	
 
    	
 
    
	
 
    	
Masahiro Morimoto, CEO and Representative   Director
    
	
 
    	
 
    
	
 
    	
2-12-23, Kounan, Minato Ward, Tokyo
    
	
 
    	
 
    
	
Subscriber:
    	
(Address)
    
	
 
    	
 
    
	
 
    	
(Name)
    

 

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