Retention and Ownership Change Event Agreement, effective as of September 10, 2019, by and between Immersion Corporation and Jared Smith
Contract Categories:
Human Resources
- Retention Agreements
EX-10.31 5 immr12312020form10-kex10.htm EX-10.31 immr12312020form10-kex10
5(7(17,21$1'2:1(56+,3 &+$1*((9(17$*5((0(17 7KLV5HWHQWLRQDQG2ZQHUVKLS&KDQJH(YHQW$JUHHPHQW³$JUHHPHQW´LVPDGH HIIHFWLYHDVRIWKHODVWGDWHVHWIRUWKEHORZE\DQGEHWZHHQ,PPHUVLRQ&RUSRUDWLRQWKH ³&RPSDQ\´DQG-DUHG6PLWK ³([HFXWLYH´ 5(&,7$/6 ,QRUGHUWRPDNHDYDLODEOHFRPSHQVDWLRQSXUVXDQWWRWKLV$JUHHPHQWWKDWZLOOQRWEH VXEMHFWWRWD[DWLRQXQGHU6HFWLRQ $DVGHILQHGEHORZ([HFXWLYHDQGWKH%RDUGRI'LUHFWRUV RIWKH&RPSDQ\WKH³%RDUG´KDYHGHWHUPLQHGWKDWLWLVLQWKHEHVWLQWHUHVWVRIWKH&RPSDQ\DQG ([HFXWLYHWRHQWHULQWRWKLV5HWHQWLRQDQG2ZQHUVKLS&KDQJH(YHQW$JUHHPHQW7KH&RPSDQ\ LQWHQGVWKDWLQFRPHSURYLGHGWR([HFXWLYHSXUVXDQWWRWKLV$JUHHPHQWZLOOQRWEHVXEMHFWWR WD[DWLRQXQGHU 6HFWLRQ $DQGWKHSURYLVLRQVRIWKLV$JUHHPHQWVKDOOEHLQWHUSUHWHGDQG FRQVWUXHGLQIDYRURIVDWLVI\LQJDQ\DSSOLFDEOHUHTXLUHPHQWVRI6HFWLRQ $+RZHYHUWKH &RPSDQ\GRHVQRWJXDUDQWHHDQ\SDUWLFXODUWD[HIIHFWIRULQFRPHSURYLGHGWR([HFXWLYHSXUVXDQW WRWKLV$JUHHPHQW,QDQ\HYHQWH[FHSWIRUWKH&RPSDQ\¶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³&KDQJHLQ&RQWURO´PHDQVWKHRFFXUUHQFHRIDQ\RIWKHIROORZLQJ L DQ\³SHUVRQ´DVVXFKWHUPLVXVHGLQ6HFWLRQV GDQGGRI WKH6HFXULWLHV([FKDQJH$FWRIDVDPHQGHGWKH³([FKDQJH$FW´EHFRPHVWKH³EHQHILFLDO RZQHU´DVGHILQHGLQ5XOH GSURPXOJDWHGXQGHUWKH([FKDQJH$FWGLUHFWO\ RULQGLUHFWO\RI VHFXULWLHVRIWKH&RPSDQ\UHSUHVHQWLQJPRUHWKDQILIW\SHUFHQWRIWKHWRWDOFRPELQHG YRWLQJSRZHURIWKH&RPSDQ\¶VWKHQRXWVWDQGLQJVHFXULWLHVHQWLWOHGWRYRWHJHQHUDOO\LQWKH HOHFWLRQRIWKH&RPSDQ\¶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
3DJH LL DQ2ZQHUVKLS&KDQJH(YHQWRUVHULHVRIUHODWHG2ZQHUVKLS &KDQJH(YHQWVFROOHFWLYHO\D³7UDQVDFWLRQ´LQZKLFKWKHVWRFNKROGHUVRIWKH&RPSDQ\ LPPHGLDWHO\EHIRUHWKH7UDQVDFWLRQGRQRWUHWDLQLPPHGLDWHO\DIWHUWKH7UDQVDFWLRQGLUHFWRU LQGLUHFWEHQHILFLDORZQHUVKLSRIPRUHWKDQILIW\SHUFHQWRIWKHWRWDOFRPELQHGYRWLQJ SRZHURIWKHRXWVWDQGLQJVHFXULWLHVHQWLWOHGWRYRWHJHQHUDOO\LQWKHHOHFWLRQRI'LUHFWRUVRULQ WKHFDVHRIDQ2ZQHUVKLS&KDQJH(YHQWGHVFULEHGLQ6HFWLRQ FLLLWKHHQWLW\WRZKLFKWKH DVVHWVRIWKH&RPSDQ\ZHUHWUDQVIHUUHGWKH³7UDQVIHUHH´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³6HFWLRQ$´ ZRXOGEHFRPHSD\DEOHXQGHUWKLV$JUHHPHQWE\UHDVRQRID&KDQJH LQ&RQWUROVXFKDPRXQWVKDOOEHFRPHSD\DEOHRQO\LIWKHHYHQWFRQVWLWXWLQJD&KDQJHLQ&RQWURO ZRXOGDOVRFRQVWLWXWHDFKDQJHLQRZQHUVKLSRUHIIHFWLYHFRQWURORIWKH&RPSDQ\RUDFKDQJHLQ WKHRZQHUVKLSRIDVXEVWDQWLDOSRUWLRQRIWKHDVVHWVRIWKH&RPSDQ\ZLWKLQWKHPHDQLQJRI 6HFWLRQ$ E ³*RRG5HDVRQ´PHDQVDQ\RIWKHIROORZLQJFRQGLWLRQVZKLFKFRQGLWLRQV UHPDLQVLQHIIHFWWKLUW\GD\VDIWHUZULWWHQQRWLFHWRWKH%RDUGRUWKH&RPSDQ\¶V&KLHI ([HFXWLYH2IILFHUIURP([HFXWLYHRIVXFKFRQGLWLRQV L DPDWHULDOGHFUHDVHLQ([HFXWLYH¶VEDVHVDODU\RWKHUWKDQD PDWHULDOGHFUHDVHWKDWDSSOLHV JHQHUDOO\WRRWKHUH[HFXWLYHVRIWKH&RPSDQ\DW([HFXWLYH¶VOHYHO LL DPDWHULDODGYHUVHFKDQJHLQWKH([HFXWLYH¶VWLWOHDXWKRULW\ UHVSRQVLELOLWLHVRUGXWLHVRU LLL WKHUHORFDWLRQRIWKH([HFXWLYH¶VZRUNSODFHIRUWKH&RPSDQ\WRD ORFDWLRQWKDWLVPRUHWKDQIRUW\PLOHVGLVWDQWIURP([HFXWLYH¶VSUHVHQWZRUNORFDWLRQIRUWKH &RPSDQ\ SURYLGHGWKDWVXFKZULWWHQQRWLFHPXVWEHJLYHQZLWKLQWKLUW\GD\VIROORZLQJWKHILUVW RFFXUUHQFHRIDQ\RIWKHJRRGUHDVRQFRQGLWLRQVVHWIRUWKLQWKLVVXEVHFWLRQ E DQGWKH ([HFXWLYH¶VUHVLJQDWLRQPXVWRFFXUZLWKLQVL[PRQWKVIROORZLQJWKHILUVWRFFXUUHQFHRIWKH JRRGUHDVRQFRQGLWLRQ F ³2ZQHUVKLS&KDQJH(YHQW´PHDQVWKHRFFXUUHQFHRIDQ\RIWKHIROORZLQJ ZLWKUHVSHFWWRWKH&RPSDQ\L WKHGLUHFWRULQGLUHFWVDOHRUH[FKDQJHLQDVLQJOHRUVHULHVRI UHODWHGWUDQVDFWLRQVE\WKHVWRFNKROGHUVRIWKH&RPSDQ\RIPRUHWKDQILIW\SHUFHQWRIWKH YRWLQJVWRFNRIWKH&RPSDQ\LL DPHUJHURUFRQVROLGDWLRQLQZKLFKWKH&RPSDQ\LVD SDUW\RU LLL WKHVDOHH[FKDQJHRUWUDQVIHURIDOORUVXEVWDQWLDOO\DOORIWKHDVVHWVRIWKH&RPSDQ\RWKHU WKDQDVDOHH[FKDQJHRUWUDQVIHUWRRQHRUPRUHVXEVLGLDULHVRIWKH&RPSDQ\ G DWHUPLQDWLRQIRU³&DXVH´PHDQV([HFXWLYH¶VWHUPLQDWLRQEDVHGXSRQ ([HFXWLYH¶VWKHIWGLVKRQHVW\PLVFRQGXFWEUHDFKRIILGXFLDU\GXW\RUIDOVLILFDWLRQRIDQ\ 'RFX6LJQ(QYHORSH,''(($$(%'$&(%)%($%$
3DJH &RPSDQ\GRFXPHQWVRUUHFRUGV ([HFXWLYH¶VPDWHULDOIDLOXUHWRDELGHE\WKH&RPSDQ\¶VFRGH RIFRQGXFWRURWKHUSROLFLHVLQFOXGLQJZLWKRXWOLPLWDWLRQSROLFLHVUHODWLQJWRFRQILGHQWLDOLW\ DQG UHDVRQDEOHZRUNSODFHFRQGXFW ([HFXWLYH¶VXQDXWKRUL]HGXVHPLVDSSURSULDWLRQGHVWUXFWLRQ RUGLYHUVLRQRIDQ\WDQJLEOHRULQWDQJLEOHDVVHWRUFRUSRUDWHRSSRUWXQLW\RIWKH&RPSDQ\ LQFOXGLQJZLWKRXWOLPLWDWLRQ([HFXWLYH¶VLPSURSHUXVHRUGLVFORVXUHRIWKH&RPSDQ\¶V FRQILGHQWLDORUSURSULHWDU\LQIRUPDWLRQ DQ\LQWHQWLRQDODFWE\WKH([HFXWLYHWKDWKDVD PDWHULDOGHWULPHQWDOHIIHFWRQWKH&RPSDQ\¶VUHSXWDWLRQRUEXVLQHVV ([HFXWLYH¶VUHSHDWHG IDLOXUHRULQDELOLW\WRSHUIRUPDQ\UHDVRQDEOHDVVLJQHGGXWLHVDIWHUZULWWHQQRWLFHIURPWKH &RPSDQ\RIDQGDUHDVRQDEOHRSSRUWXQLW\WRFXUHVXFKIDLOXUHRULQDELOLW\ ([HFXWLYH¶V FRQYLFWLRQLQFOXGLQJDQ\SOHDRIJXLOW\RUQRORFRQWHQGHUHIRUDQ\FULPLQDODFWWKDWLPSDLUV ([HFXWLYH¶VDELOLW\WRSHUIRUPKLV GXWLHVIRUWKH&RPSDQ\ H ³6HSDUDWLRQIURP6HUYLFH´VKDOOKDYHWKHPHDQLQJGHWHUPLQHGE\7UHDVXU\ 5HJXODWLRQVLVVXHGSXUVXDQWWR6HFWLRQ$ 7HUPLQDWLRQ:LWKRXW&DXVH RU5HVLJQDWLRQIRU*RRG5HDVRQ,QWKHHYHQWWKDW WKH&RPSDQ\RULWV VXFFHVVRUWHUPLQDWHV([HFXWLYH¶VHPSOR\PHQWZLWKRXW&DXVHRU([HFXWLYH UHVLJQVIRU*RRG5HDVRQDQG([HFXWLYHLVQRWHQWLWOHGWRUHFHLYHWKHVHYHUDQFHSD\DQGEHQHILWV GHVFULEHGLQ6HFWLRQ EHORZ([HFXWLYHZLOOEHHQWLWOHGWRUHFHLYHWKHIROORZLQJSD\PHQWDQG EHQHILWVSURYLGHGWKDWSULRUWRWKHVL[WLHWKWKGD\IROORZLQJWKHGDWHRIVXFKWHUPLQDWLRQ ([HFXWLYHKDVVLJQHGDJHQHUDOUHOHDVHRINQRZQDQGXQNQRZQFODLPV LQDIRUPVDWLVIDFWRU\WR WKH&RPSDQ\ DQGWKHSHULRGIRUUHYRFDWLRQKDVODSVHGZLWKRXW WKHJHQHUDOUHOHDVHKDYLQJEHHQ UHYRNHG D SD\PHQWLQDOXPSVXPRQWKHVL[WLHWKWKGD\IROORZLQJ([HFXWLYH¶V WHUPLQDWLRQRIHPSOR\PHQWRIDQDPRXQWHTXDOWRVL[ PRQWKV¶EDVHVDODU\DW([HFXWLYH¶VILQDO EDVHVDODU\UDWHVXEMHFWWRDSSOLFDEOHZLWKKROGLQJDQG E FRPPHQFLQJRQWKHVL[WLHWKWKGD\IROORZLQJ([HFXWLYH¶VWHUPLQDWLRQ RIHPSOR\PHQWSD\PHQWRIWKHSUHPLXPVLQFOXGLQJUHLPEXUVHPHQWWR([HFXWLYHRIDQ\VXFK SUHPLXPVSDLGE\([HFXWLYHGXULQJVXFKVL[W\GD\SHULRGQHFHVVDU\WRFRQWLQXH ([HFXWLYH¶VDQG([HFXWLYH¶VGHSHQGHQWVJURXSKHDOWKLQVXUDQFHFRYHUDJHXQGHU&2%5$XQWLO WKHHDUOLHURILVL[ PRQWKVIROORZLQJ([HFXWLYH¶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³6HFWLRQ$&KDQJHLQ&RQWURO(YHQW´ RFFXUVRQRUEHIRUHWKHQLQHWLHWKWKGD\IROORZLQJDGDWHRQZKLFK([HFXWLYHH[SHULHQFHVD WHUPLQDWLRQRIHPSOR\PHQWLQFRQQHFWLRQZLWKZKLFK([HFXWLYHLVHQWLWOHGWRUHFHLYHWKH SD\PHQWSURYLGHGE\6HFWLRQ D([HFXWLYHZLOOEHHQWLWOHGWRUHFHLYHWKHIROORZLQJDGGLWLRQDO SD\PHQWDQGEHQHILWV D SD\PHQWRQWKHVL[WLHWKWKGD\IROORZLQJWKH6HFWLRQ$&KDQJHLQ &RQWURO(YHQWRIDQDPRXQWHTXDOWRVL[PRQWKV¶EDVHVDODU\DW([HFXWLYH¶VILQDOEDVHVDODU\ UDWHVXEMHFWWRDSSOLFDEOHZLWKKROGLQJDQG 'RFX6LJQ(QYHORSH,''(($$(%'$&(%)%($%$
3DJH E FRPPHQFLQJZLWKWKHVHYHQWKWKPRQWKIROORZLQJ([HFXWLYH¶V WHUPLQDWLRQRIHPSOR\PHQWSD\PHQWRIWKHSUHPLXPVQHFHVVDU\WRFRQWLQXH([HFXWLYH¶VDQG ([HFXWLYH¶VGHSHQGHQWV JURXSKHDOWKLQVXUDQFHFRYHUDJHXQGHU&2%5$XQWLOWKHHDUOLHURIL WZHOYHPRQWKVIROORZLQJ([HFXWLYH¶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¶VHPSOR\PHQWZLWKRXW&DXVHRU([HFXWLYHUHVLJQVIRU*RRG 5HDVRQ([HFXWLYHZLOOEHHQWLWOHGWRUHFHLYHWKHIROORZLQJSD\PHQWDQGEHQHILWVSURYLGHG WKDW SULRUWRWKHVL[WLHWKWKGD\IROORZLQJWKHGDWHRIVXFKWHUPLQDWLRQ([HFXWLYHKDVVLJQHGD JHQHUDOUHOHDVHRINQRZQDQGXQNQRZQFODLPVLQDIRUPVDWLVIDFWRU\WRWKH&RPSDQ\ DQGWKH SHULRGIRUUHYRFDWLRQKDVODSVHGZLWKRXWWKHJHQHUDOUHOHDVHKDYLQJEHHQUHYRNHG D SD\PHQWLQDOXPSVXPRQWKHVL[WLHWKWKGD\IROORZLQJ([HFXWLYH¶V WHUPLQDWLRQRIHPSOR\PHQWRIDQDPRXQWHTXDOWRWZHOYHPRQWKV¶EDVHVDODU\DW([HFXWLYH¶V ILQDOEDVHVDODU\UDWHVXEMHFWWRDSSOLFDEOHZLWKKROGLQJ E FRPPHQFLQJRQWKHVL[WLHWKWKGD\IROORZLQJ([HFXWLYH¶VWHUPLQDWLRQ RIHPSOR\PHQWSD\PHQWRIWKHSUHPLXPVLQFOXGLQJUHLPEXUVHPHQWWR([HFXWLYHRIDQ\VXFK SUHPLXPVSDLGE\([HFXWLYHGXULQJVXFKVL[W\GD\SHULRGQHFHVVDU\WRFRQWLQXH ([HFXWLYH¶VDQG ([HFXWLYH¶V GHSHQGHQWVJURXSKHDOWKLQVXUDQFHFRYHUDJHXQGHU&2%5$XQWLO WKHHDUOLHURILWZHOYHPRQWKVIROORZLQJ([HFXWLYH¶VWHUPLQDWLRQGDWHRULLWKHGDWHRQ ZKLFK([HFXWLYHILUVWEHFRPHVHOLJLEOHWRREWDLQRWKHUJURXS KHDOWKLQVXUDQFHFRYHUDJH 7KHUHDIWHU([HFXWLYHPD\HOHFWWRSXUFKDVHFRQWLQXHGJURXSKHDOWKLQVXUDQFHFRYHUDJHDWKLV RZQH[SHQVHLQDFFRUGDQFHZLWK&2%5$1RWZLWKVWDQGLQJWKHIRUHJRLQJSD\PHQWRIVXFK SUHPLXPVVKDOOQRWFRPPHQFHXQOHVVDQGXQWLO([HFXWLYHKDVLQFXUUHGD6HSDUDWLRQIURP 6HUYLFHDQG D ,PPHGLDWH YHVWLQJ LQ RQHKXQGUHG SHUFHQW RI KLV WKHQXQYHVWHG &RPSDQ\HTXLW\DZDUGV 9ROXQWDU\7HUPLQDWLRQ,QWKHHYHQWWKDW([HFXWLYHUHVLJQVIURPKLV HPSOR\PHQW ZLWKWKH&RPSDQ\DWDQ\WLPHRWKHUWKDQDUHVLJQDWLRQIRU*RRG 5HDVRQGXULQJWKHSHULRG FRYHUHGE\ 6HFWLRQRU 6HFWLRQ RULQWKHHYHQWWKDW([HFXWLYH¶VHPSOR\PHQWWHUPLQDWHVDW DQ\WLPHDVDUHVXOWRIKLV GHDWKRUGLVDELOLW\ PHDQLQJ([HFXWLYHLVXQDEOHWRSHUIRUPKLV GXWLHV IRUDQ\ FRQVHFXWLYHVL[PRQWKSHULRGZLWKRUZLWKRXWUHDVRQDEOHDFFRPPRGDWLRQDVDUHVXOW RIDSK\VLFDODQGRUPHQWDOLPSDLUPHQW([HFXWLYHZLOOEHHQWLWOHGWRQRFRPSHQVDWLRQRU EHQHILWVIURPWKH&RPSDQ\RWKHUWKDQWKRVHHDUQHGWKURXJKWKHGDWHRI([HFXWLYH¶VWHUPLQDWLRQ ([HFXWLYHDJUHHVWKDWLIKH UHVLJQVIURPKLV HPSOR\PHQWZLWKWKH&RPSDQ\KH ZLOOSURYLGHWKH &RPSDQ\ZLWKFDOHQGDU GD\V¶ZULWWHQQRWLFHRIVXFKUHVLJQDWLRQ7KH&RPSDQ\PD\LQLWV VROHGLVFUHWLRQHOHFWWRZDLYHDOORUDQ\SDUWRIVXFKQRWLFHSHULRGDQGDFFHSWWKH([HFXWLYH¶V UHVLJQDWLRQDWDQHDUOLHUGDWH 7HUPLQDWLRQIRU&DXVH,I([HFXWLYH¶VHPSOR\PHQWLVWHUPLQDWHGE\WKH&RPSDQ\ DWDQ\WLPHIRU&DXVHDVGHILQHGDERYHLQSDUDJUDSK ([HFXWLYHZLOOEHHQWLWOHGWRQR 'RFX6LJQ(QYHORSH,''(($$(%'$&(%)%($%$
3DJH FRPSHQVDWLRQRUEHQHILWVIURPWKH&RPSDQ\RWKHUWKDQWKRVHHDUQHGWKURXJKWKHGDWHRIKLV WHUPLQDWLRQIRU&DXVH &RPSOLDQFH:LWK6HFWLRQ$ D 1RWZLWKVWDQGLQJDQ\WKLQJVHWIRUWKKHUHLQWRWKHFRQWUDU\QRDPRXQW SD\DEOHSXUVXDQWWR6HFWLRQRU6HFWLRQRIWKLV $JUHHPHQWZKLFKFRQVWLWXWHVD³GHIHUUDORI FRPSHQVDWLRQ´ZLWKLQWKHPHDQLQJRI7UHDVXU\5HJXODWLRQVSURPXOJDWHGSXUVXDQWWR6HFWLRQ $WKH³6HFWLRQ$5HJXODWLRQV´VKDOOEH SDLGXQOHVVDQGXQWLO([HFXWLYHKDVLQFXUUHGD 6HSDUDWLRQIURP6HUYLFH)XUWKHUPRUHWRWKHH[WHQWWKDW([HFXWLYHLVD³VSHFLILHGHPSOR\HH´RI WKH&RPSDQ\DVRIWKHGDWHRI([HFXWLYH¶V6HSDUDWLRQIURP6HUYLFHDQGWRWKHH[WHQWUHTXLUHGE\ WKH6HFWLRQ$5HJXODWLRQVQRDPRXQWWKDWFRQVWLWXWHVDGHIHUUDORIFRPSHQVDWLRQZKLFKLV SD\DEOHRQDFFRXQWRIWKH(PSOR\HH¶V6HSDUDWLRQIURP6HUYLFHVKDOOEHSDLGWR([HFXWLYHEHIRUH WKHGDWHWKH³'HOD\HG3D\PHQW'DWH´ZKLFKLVWKHILUVWGD\RIWKHVHYHQWKPRQWKDIWHUWKHGDWH RI([HFXWLYH¶V6HSDUDWLRQIURP6HUYLFHRULIHDUOLHUWKHGDWHRI([HFXWLYH¶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¶VHPSOR\PHQWZLWKWKH&RPSDQ\LVDQGVKDOO FRQWLQXHWREH³DWZLOO´ 'LVSXWH5HVROXWLRQ,QWKHHYHQWRIDQ\GLVSXWHRUFODLPEHWZHHQWKHSDUWLHV LQFOXGLQJDQ\FODLPVUHODWLQJWRRUDULVLQJRXWRIWKLV$JUHHPHQWRUWKHWHUPLQDWLRQRI ([HFXWLYH¶VHPSOR\PHQWZLWKWKH&RPSDQ\IRUDQ\UHDVRQ([HFXWLYHDQGWKH&RPSDQ\DJUHH WKDWDOOVXFKGLVSXWHVVKDOOEHIXOO\UHVROYHGE\ELQGLQJDUELWUDWLRQFRQGXFWHGE\WKH$PHULFDQ $UELWUDWLRQ$VVRFLDWLRQ³$$$´LQ6DQWD&ODUD&RXQW\XQGHUWKH$$$¶V1DWLRQDO5XOHVIRUWKH 5HVROXWLRQRI(PSOR\PHQW'LVSXWHVWKHQLQHIIHFWZKLFKDUHDYDLODEOHRQOLQHDWWKH$$$¶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
3DJH WKHFDVHRIWKH&RPSDQ\PDLOHG QRWLFHVVKDOOEHDGGUHVVHGWRLWVFRUSRUDWHKHDGTXDUWHUVDQGDOO QRWLFHVVKDOOEHGLUHFWHGWRWKHDWWHQWLRQRILWV&KLHI([HFXWLYH2IILFHU 6XFFHVVRUV D &RPSDQ\¶V6XFFHVVRUV$Q\VXFFHVVRUWRWKH&RPSDQ\ZKHWKHUGLUHFWRU LQGLUHFWDQGZKHWKHUE\SXUFKDVHOHDVHPHUJHUFRQVROLGDWLRQOLTXLGDWLRQRUSXUFKDVHRIDOORU VXEVWDQWLDOO\DOORIWKH&RPSDQ\¶VEXVLQHVVDQGRUDVVHWVVKDOODVVXPHWKH&RPSDQ\¶V REOLJDWLRQVXQGHUWKLV$JUHHPHQWLQZULWLQJDQGDJUHHH[SUHVVO\WRSHUIRUPWKH&RPSDQ\¶V REOLJDWLRQVXQGHUWKLV$JUHHPHQWLQWKHVDPHPDQQHUDQGWRWKHVDPHH[WHQWWKDWWKH&RPSDQ\ ZRXOGEHUHTXLUHGWRSHUIRUPVXFKREOLJDWLRQVLQWKHDEVHQFHRIDVXFFHVVLRQ)RUDOOSXUSRVHV XQGHUWKLV$JUHHPHQWWKHWHUP³&RPSDQ\´VKDOOLQFOXGHDQ\VXFFHVVRUWRWKH&RPSDQ\¶V EXVLQHVVDQGRUDVVHWVZKLFKH[HFXWHVDQGGHOLYHUVWKHDVVXPSWLRQDJUHHPHQWGHVFULEHGLQWKLV VXEVHFWLRQ DRUZKLFKEHFRPHVERXQGE\WKHWHUPVRIWKLV$JUHHPHQWE\RSHUDWLRQRIODZ E ([HFXWLYH¶V6XFFHVVRUV:LWKRXWWKHZULWWHQFRQVHQWRIWKH&RPSDQ\ WKH ([HFXWLYHVKDOOQRWDVVLJQRUWUDQVIHUWKLV$JUHHPHQWRUDQ\ULJKWRUREOLJDWLRQXQGHUWKLV $JUHHPHQWWRDQ\RWKHUSHUVRQRUHQWLW\1RWZLWKVWDQGLQJWKHIRUHJRLQJWKHWHUPVRIWKLV $JUHHPHQWDQGDOOULJKWVRIWKH([HFXWLYHKHUHXQGHUVKDOOLQXUHWRWKHEHQHILWRIDQGEH HQIRUFHDEOHE\WKH([HFXWLYH¶VSHUVRQDORUOHJDOUHSUHVHQWDWLYHVH[HFXWRUVDGPLQLVWUDWRUV VXFFHVVRUVKHLUVGLVWULEXWHHVGHYLVHHVDQGOHJDWHHV 7HUPLQDWLRQ7KLV$JUHHPHQWVKDOOWHUPLQDWHLQWKHHYHQWWKDW([HFXWLYHLVQR ORQJHU SDUWRIWKHH[HFXWLYHWHDPRIWKH&RPSDQ\DVGHWHUPLQHGE\WKH%RDUGRI'LUHFWRUV DQG GRHVQRWWHUPLQDWHVHUYLFHIRU*RRG5HDVRQ 0LVFHOODQHRXV3URYLVLRQV D 1R'XW\WR0LWLJDWH7KH([HFXWLYHVKDOOQRWEHUHTXLUHGWRPLWLJDWHWKH DPRXQWRIDQ\SD\PHQWFRQWHPSODWHGE\WKLV$JUHHPHQWQRUVKDOODQ\VXFKSD\PHQWEHUHGXFHG E\DQ\HDUQLQJVWKDWWKH([HFXWLYHPD\UHFHLYHIURPDQ\RWKHUVRXUFH E 0RGLILFDWLRQ:DLYHU1RSURYLVLRQRIWKLV$JUHHPHQWPD\EHDPHQGHG PRGLILHGZDLYHGRUGLVFKDUJHGXQOHVVWKHDPHQGPHQWPRGLILFDWLRQZDLYHURUGLVFKDUJHLV DJUHHGWRLQZULWLQJDQGVLJQHGE\WKH([HFXWLYHDQGE\DQDXWKRUL]HGRIILFHURIWKH&RPSDQ\ RWKHUWKDQ([HFXWLYH1RZDLYHUE\HLWKHUSDUW\RIDQ\EUHDFKRIRURIFRPSOLDQFHZLWKDQ\ FRQGLWLRQRUSURYLVLRQRIWKLV$JUHHPHQWE\WKHRWKHUSDUW\VKDOOEHFRQVLGHUHGDZDLYHURIDQ\ RWKHUFRQGLWLRQRUSURYLVLRQRURIWKHVDPHFRQGLWLRQRUSURYLVLRQDWDQRWKHUWLPH F ,QWHJUDWLRQ7KLV$JUHHPHQWFRQVWLWXWHVWKHHQWLUHDJUHHPHQWDQG XQGHUVWDQGLQJEHWZHHQWKHSDUWLHVUHJDUGLQJ([HFXWLYH¶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
3DJH I (PSOR\PHQW7D[HV$OOSD\PHQWVPDGHSXUVXDQWWRWKLV$JUHHPHQWVKDOO EHVXEMHFWWRZLWKKROGLQJRIDSSOLFDEOHLQFRPHDQGHPSOR\PHQWWD[HV J &RXQWHUSDUWV7KLV$JUHHPHQWPD\EHH[HFXWHGLQFRXQWHUSDUWVHDFKRI ZKLFKVKDOOEHGHHPHGDQRULJLQDOEXWDOORIZKLFKWRJHWKHUZLOOFRQVWLWXWHRQHDQGWKHVDPH LQVWUXPHQW 'RFX6LJQ(QYHORSH,''(($$(%'$&(%)%($%$
3DJH 7+(3$57,(66,*1,1*%(/2:+$9(5($'7+()25(*2,1*$*5((0(17$1' )8//<81'(567$1'$1'$*5((72($&+$1'(9(5<3529,6,21&217$,1(' +(5(,1 'DWHG -DUHG6PLWK ,PPHUVLRQ&RUSRUDWLRQ 'DWHG %\ ,WV 'RFX6LJQ(QYHORSH,''(($$(%'$&(%)%($%$