Stamps.com Inc. 2018 MetaPack Equity Inducement Plan
EX-10.38 3 ex10-38.htm EXHIBIT 10.38 Exhibit
2018 METAPACK EQUITY INDUCEMENT PLAN
2018 METAPACK EQUITY INDUCEMENT PLAN
The purpose of this Plan is to attract, motivate, and retain Employees of Stamps.com Inc. and its Subsidiaries by offering selected Employees the opportunity to acquire proprietary interests in the Company by purchasing or receiving shares of the Company's Stock or other similar rights and to promote the success of the Company. This Plan specifically is intended to induce employees of MetaPack Limited and its subsidiaries to continue in employment with the Company upon and following the Company’s acquisition of MetaPack Limited, and MetaPack Limited becoming a Subsidiary. This Plan provides for the grant of Options only.
"Applicable Laws" means the requirements relating to the administration of stock plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, the rules and regulations of any stock exchange or quotation system on which the Stock is listed or quoted, and other similar laws.
"Award" means, individually or collectively, a grant under this Plan of Options.
"Award Agreement" means the written agreement setting forth the terms and provisions applicable to each Award granted under this Plan. The Award Agreement is subject to the terms and conditions of this Plan and shall include, among other things, the following information, if applicable to the Award: (i) Exercise Price, (ii) number of shares of Stock, (iii) exercise schedule, (iv) vesting schedule, (v) restrictions, (vi) dates and conditions for lapse of restrictions, and (vii) expiration dates.
"Board" means the Board of Directors of the Company.
"Cause" means (A) if the Participant is a party to an employment or other similar service agreement with the Company (a "Service Agreement"), and "cause" is defined therein, such definition, or (B) if the Participant is not party to a Service Agreement or the Participant's Service Agreement does not define "cause", then Cause means any of the following:
(i) the Participant's material breach of his fiduciary duty to the Company,
(ii) the Participant's indictment (or equivalent) for a felony or other serious crime, or
(iii) the Participant's commission of a wrongful act that would make the continuance of his employment by the Company detrimental to the Company.
"Change in Control" means the first to occur of any of the following events:
(i) The date on which any one person or entity, or more than one person or entity acting as a group, becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the capital stock of the Company entitled to vote in the election of Directors, other than a group of two or more persons or entities not (A) acting in concert for the purpose of acquiring, holding or disposing of such stock or (B) otherwise required to file any form or report with any governmental agency or regulatory authority having jurisdiction over the Company that requires
the reporting of any change in control. The acquisition of additional Stock by any person or entity who immediately prior to such acquisition already is the beneficial owner of more than fifty percent (50%) of the Stock of the Company entitled to vote in the election of Directors is not a Change in Control.
(ii) During any period of not more than twenty four (24) consecutive months during which the Company continues in existence, not including any period prior to the effective date of this Plan, individuals who, at the beginning of such period, constitute the Board, and any new Director (other than a Director designated by a person or entity who has entered into an agreement with the Company to effect a transaction described in clause (i) or (iii) of this definition of "Change in Control") whose appointment to the Board or nomination for election to the Board was approved by a vote of a majority of the Directors then still in office, either were Directors at the beginning of such period or whose appointment or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board.
(iii) The date on which any one person or entity, or more than one person or entity acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person(s) or entity(ies)) assets from the Company that have a total gross fair market value greater than 50% of the total gross fair market value of all of the Company's assets immediately before the acquisition or acquisitions; provided, however, transfer of assets that otherwise would satisfy the requirements of this subsection (iii) will not be treated as a Change in Control if the assets are transferred to:
(A)a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;
(B)an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;
(C)a person or entity, or more than one person or entity acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or
(D)an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly by a person or entity, or more than one person or entity acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company.
If the Change in Control constitutes a payment event with respect to any Award that provides for the deferral of compensation and is subject to Section 409A of the Code, then to the extent required (i) the event constituting a Change in Control is intended to constitute a "change in ownership or effective control" or a "change in the ownership of a substantial portion of the assets" of the Company as such terms are defined for purposes of Section 409A of the Code and (ii) "Change in Control" as used herein shall be interpreted consistently therewith.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means a committee or subcommittee of the Board, described in Section 4.1, or in the absence of such a committee, the Board.
"Company" means Stamps.com Inc., a Delaware corporation.
"Director" means a member of the Board.
"Disability" means a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months and that:
(i) renders the Participant unable to engage in any substantial gainful activity; or
(ii) results in the Participant receiving income replacement benefits for a period of not less than three (3) months under any policy of long-term disability insurance maintained by the Company for the benefit of its employees.
Disability shall be interpreted in a manner consistent with Section 409A of the Code and shall be determined by the Committee in its sole discretion, after consideration of such evidence as it may require, including a report or reports of such physician or physicians as the Committee may designate.
"Domestic Relations Order" means a "domestic relations order" as defined in Section 414(p)(1)(B) of the Code.
"Employee" means any individual employed by the Company or by a Subsidiary and reflected as an employee on a payroll of the Company or of a Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the amount specified per share of Stock, at which Stock may be purchased on exercise of an Option, specified by the Committee in the applicable Award Agreement.
"Fair Market Value" of the Stock on any given date under this Plan shall be determined as follows:
(i) If the Stock is at the time readily tradable on an established securities market, then the fair market value shall be the closing selling price per share of the Stock on the date of determination on the securities market determined by the Committee to be the primary market for the Stock, as such price is officially quoted in the composite tape transactions on such market. If there is no reported sale of the Stock on such market on the date of determination, then the fair market value shall be the closing price on such market on the last preceding date for which such quotation exists; or
(ii) If the Stock is at the time not readily tradable on an established securities market, then the fair market value shall be determined by the Committee by the reasonable application of a reasonable valuation method, taking into account such considerations as may be applicable for purposes of or specified in Section 409A of the Code and Treasury Regulations thereunder.
"Grant Date" means, with respect to an Award, the date of the Committee action granting the Award or such later date as is specified in the Award Agreement.
"Option" means an option granted under this Plan and entitling the holder to purchase shares of Stock.
"Optionee" means an individual or entity that holds an Option.
"Participant" means the holder of an outstanding Award.
"Plan" means this Stamps.com Inc. 2018 MetaPack Equity Inducement Plan, as it may be amended from time to time.
"Stock" means the common stock of the Company.
"Subsidiary" means any corporation in which the Company and/or one or more other Subsidiaries own fifty percent (50%) or more of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of this Plan shall be considered a Subsidiary commencing as of the date such status is attained.
"Termination of Service" means a cessation of the employee-employer relationship between the Employee and the Company or a Subsidiary for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, or the disaffiliation of a Subsidiary from the Company. A transfer in employment relationship from the Company to a Subsidiary or from a Subsidiary to the Company, or from one Subsidiary to another shall not be considered a Termination of Service. With respect to any Award that may provide for nonqualified deferred compensation subject to Section 409A of the Code, whether Termination of Service has occurred shall be determined based on whether the facts and circumstances indicate that the Company and the Employee reasonably anticipate that no further services will be performed after a certain date or that the level of bona fide services the Employee would perform after such date would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding 36 months (or the full period of service if less than thirty six (36) months), and such determination shall be made in accordance with Section 409A of the Code and the Treasury Regulations thereunder.
3.STOCK SUBJECT TO PLAN; LIMITATIONS.
3.1. Maximum Plan Shares. The maximum aggregate number of shares of Stock reserved and available for the grant of Awards under this Plan is three hundred twenty thousand two hundred fifty (320,250) shares. For purposes of this limitation, the shares of Stock underlying any Awards that expire unexercised or that are forfeited, canceled, reacquired by the Company at cost, satisfied without the issuance of Stock or payment of cash, or otherwise terminated shall not be added back to the shares of Stock available for grant under this Plan. Shares of Stock (i) tendered by a Participant to pay the exercise price of an Award, (ii) withheld by the Company for taxes or (iii) repurchased by the Company with any cash proceeds from option exercises shall not be added back to the shares of Stock available for grant under this Plan. The shares of Stock available for issuance under this Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.
4.1. Establishment of Committee. The Board shall have the authority to administer this Plan, but may delegate its administrative powers under this Plan, in whole or in part, to a committee of the Board or to a subcommittee of any such committee of the Board.
4.2. Committee Procedures. The Board (or in absence of action by the Board, the Committee) shall designate one of the members of each Committee as chairman. Any such Committee may hold meetings at such times and places as its chairman or a majority of the members of the Committee shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee.
4.3. Rule 16b-3 Committee. Any Awards to Participants who are subject to Section 16 of the Exchange Act shall be granted and, as it relates to such Awards, this Plan shall be administered by a Committee of two or more members of the Board who qualify as "Non-Employee Directors" as defined in Rule 16b-3 under the Exchange Act, and such Awards shall be structured to satisfy the requirements for exemption under Rule 16b-3 under the Exchange Act.
4.4. Committee Responsibilities. Subject to the provisions of this Plan, the Committee shall have full authority and discretion to take the following actions:
To interpret this Plan and to apply its provisions;
To adopt, amend, or rescind rules, procedures, agreements and forms relating to this Plan;
To adopt, amend, or rescind rules, procedures, agreements and forms establishing or relating to any subplan or subplans to the Plan, including without limitation, any subplan or subplans that are necessary to comply with the laws of any country in which the Company or any Subsidiary operates;
To authorize any person to execute, on behalf of the Company, any instrument (including, but not limited to any Award Agreement) required to carry out the purposes of this Plan;
To determine when Awards are to be granted under this Plan;
To select the Participants;
To determine the number of shares of Stock to be made subject to each Award;
To prescribe the terms and conditions (including vesting and acceleration) of each Option on the Grant Date, including (without limitation) the Exercise Price, and to specify the provisions of the Award Agreement relating to such Option;
To amend any outstanding Award Agreement (including vesting and acceleration), subject to applicable legal restrictions, the provisions of this Plan and the terms and conditions of such Award Agreement;
To prescribe the consideration for the grant of each Award under this Plan and to determine the sufficiency of such consideration; and
To take any other actions deemed necessary or advisable for the administration of this Plan.
4.5. Indemnification. Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company, to the fullest extent permitted by law, against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan or any Award Agreement, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
5.1. General Rules. Employees shall be eligible for the grant of Awards as designated by the Committee.
6.MODIFICATIONS AND RESTRICTIONS.
6.1. Amendment, Modification, Extension and Renewal of Awards. Within the limitations of this Plan, and subject to Section 6.2 and Nasdaq listing requirements for inducement awards, the Committee may amend or modify outstanding Awards or may cancel or accept the cancellation of outstanding Awards in return for the grant of new awards under another equity incentive compensation plan maintained by the Company at the same or a different price. The foregoing notwithstanding, no amendment or modification of an Award shall, without the consent of the Participant, impair the Participant's rights or increase his or her obligations under such Award. A change in the tax consequences of an Award shall not be considered an impairment of rights or an increase in obligations under the Award.
6.2. Restriction on Repricing of Options. Subject to Section 10.1, no outstanding Option shall be amended to reduce its Exercise Price or cancelled and replaced with a new Award (of the same type or of any different type) having a lower Exercise Price (or other purchase price) for any reason, and no outstanding Option that has an Exercise Price greater than the current Fair Market Value of the Stock shall be cancelled or replaced in exchange for cash or any other property (except in connection with a Covered Transaction), in each case unless the Company's stockholders entitled to vote at a meeting of stockholders have approved such action within twelve (12) months prior to such event.
6.3. No Reload Options. No Option shall provide for the automatic grant of replacement or reload Options upon the Optionee exercising the Option and paying the Exercise Price by tendering shares of Stock, net exercise or otherwise.
7.1. Nature of Options. An Option is an Award entitling the Participant to purchase shares of Stock at the Exercise Price set on the Grant Date. Options may be based, at the discretion of the Committee, on continuing employment with the Company and its Subsidiaries and/or achievement of pre-established performance goals. Options granted under the Plan will not qualify as “incentive stock options” for purposes of Section 422 of the Code.
7.2. Exercise Price. The Exercise Price of an Option shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Stock on the Grant Date.
7.3. Exercisability. The exercise schedule of each Option shall be determined by the Committee in its sole discretion and shall be set forth in the Award Agreement; provided however, that in the event of the Optionee's Termination of Service, the Option shall be exercisable only to the extent the Option was exercisable on the date of such Termination of Service, unless otherwise specified in the Award Agreement.
7.4. Term. The term of each Option shall not exceed ten (10) years from the Grant Date. Subject to the preceding sentence, the Committee in its sole discretion shall determine and specify in the Award Agreement the date on which an Option is to expire. In the event of an Optionee's Termination of Service:
As a result of such Optionee's death or Disability, the Option shall expire twelve (12) months (or such other period specified in the Award Agreement) after such death or Disability, but not later than the original expiration date specified in the Award Agreement.
By the Company for Cause, the Option shall expire immediately after the Company's notice or advice of such Termination of Service is dispatched to the Optionee, but not later than the original expiration date specified in the Award Agreement.
For any reason other than the Optionee's death or Disability or by the Company for Cause (except in connection with the events specified in Section 11, which will be governed by that section), the Option shall expire ninety (90) calendar days (or such other period specified in the Award Agreement) after such Termination of Service, but not later than the original expiration date specified in the Award Agreement.
7.5. No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any shares of Stock covered by his or her Option until the issuance of a stock certificate for such shares of Stock.
8.NON-TRANSFERABILITY OF AWARDS.
All Awards under this Plan shall be nontransferable and shall not be assignable, alienable, saleable, or otherwise transferable by the Participant other than by will or the laws of descent and distribution or pursuant to a Domestic Relations Order. During the lifetime of a Participant, Options granted to him or her under this Plan shall be exercisable only by him or her except as otherwise determined by the Committee and specified in the Award Agreement. Notwithstanding the forgoing, the Committee may provide in an Award Agreement that a Participant may transfer, without consideration for the transfer, such Award to the Participant's immediate family members, to trusts for the benefit of the Participant and such immediate family members, to partnerships in which the Participant and such immediate family members are the only partners, or to charitable organizations, provided that transferee agrees in writing to be bound by all of the terms and conditions of this Plan and the applicable Award Agreement.
9.PAYMENT FOR SHARES OF STOCK.
9.1. General Rule. The entire consideration for shares of Stock issued under this Plan shall be payable in lawful money of the United States of America at the time when such shares of Stock are purchased. Payment of the Exercise Price of an Option shall be made pursuant to the express provisions of the applicable Award Agreement. However, the Committee (in its sole discretion) may specify in the Award Agreement that payment may (either with or without Committee approval) be made pursuant to Sections 9.2, 9.3 or 9.4, or any combination thereof.
9.2. Surrender of Stock. To the extent that this Section 9.2 is applicable, payment may be made all or in part with shares of Stock that are owned by the Optionee or his or her representative and
that are surrendered to the Company in good form for transfer. Such shares of Stock shall be valued at their Fair Market Value on the date when the new shares of Stock are purchased under this Plan.
9.3. Exercise/Sale ("Cashless Exercise"). To the extent that this Section 9.3 is applicable, payment may be made by the delivery of an irrevocable direction to a securities broker, acceptable to the Company, to sell shares of Stock and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price of the Option.
9.4. Net Share Exercise. To the extent that this Section 9.4 is applicable, payment may be made by holding back from the shares of Stock to be issued upon exercise of an Option that number of shares of Stock having a Fair Market Value equal to the minimum amount required to satisfy the Exercise Price (the Fair Market Value of the shares of Stock to be held back shall be determined on the date that the Option is exercised by the Optionee).
10.ADJUSTMENT OF STOCK.
10.1. General. In the event of: a subdivision of the outstanding Stock; a declaration of a dividend payable in shares of Stock; a declaration of a dividend payable in a form other than shares of Stock in an amount that has a material effect on the value of shares of Stock (a "Material Dividend"); a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of shares of Stock; a recapitalization; a spinoff; a merger, consolidation, or other reorganization involving the Company that would not constitute a Change in Control; or any similar occurrence, then the Committee shall make appropriate adjustments (which adjustments shall be final, binding and conclusive on all parties) in one or more of:
The maximum number of shares of Stock available under Section 3.1 for future grants of Awards and of specified types of Awards;
The number and kind of shares of Stock (or other securities) covered by each outstanding Award;
The Exercise Price under each outstanding Option, but without changing the aggregate Exercise Price (i.e., the Exercise Price multiplied by the number of shares of Stock subject to the Option) as to which such Option remain exercisable; and
In the event of a Material Dividend, (A) the Exercise Price, including the aggregate Exercise Price (i.e., the Exercise Price multiplied by the number of shares of Stock subject to the Option), under each outstanding Option necessary to compensate for the loss of intrinsic value of such Award as a result of the Material Dividend and (B) other adjustments or actions appropriate to compensate for the loss of intrinsic value of such Award as a result of the Material Dividend; provided that any such adjustments or other actions described in subsections (A) or (B) shall be made in compliance with the Code (including Section 409A thereof) and the Treasury Regulations thereunder and any other applicable tax laws or regulations.
10.2. Reservation of Rights. Except as provided in this Section 10, a Participant shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise
Price of shares of Stock subject to an Option. The grant of an Option pursuant to this Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.
11.LIQUIDATION; CHANGE IN CONTROL AND OTHER TRANSACTIONS.
11.1. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Committee shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The Committee in its discretion may provide for a Participant to have the right to exercise his or her Award until ten (10) days prior to such transaction as to all of the Stock covered thereby, including Stock as to which the Award would not otherwise be exercisable. In addition, the Committee may provide that any Company repurchase option or forfeiture rights applicable to any Award shall lapse as to all such Stock covered thereby, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
11.2. Change in Control and Other Corporate Transactions. In the event of a Change in Control, a merger or consolidation of the Company with or into another corporation, the sale of substantially all of the assets of the Company or other reorganization of the Company (each, a "Covered Transaction"), if the successor corporation, or a parent of the successor corporation, does not assume each outstanding Award or substitute the Award with an equivalent option or right (or if the Company is the surviving entity in the Covered Transaction, the Covered Transaction does not result in a continuation of the Award by the Company), any of the foregoing of which may be done on an Award-by-Award basis, then a Participant shall fully vest in and have the right to exercise the Award as to all of the Stock as to which it would not otherwise be vested or exercisable, and all restrictions and conditions outstanding on the Award shall be met. If an Award becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Covered Transaction (or in lieu of continuation of the outstanding Award by the Company if the Company is the surviving entity in the Covered Transaction), then the Committee shall notify the Participant in writing or electronically that the Award shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Award shall terminate upon the expiration of such period. For purposes of this Section 11.2, the Award shall be considered assumed if, following the Covered Transaction, the option or right confers the right to purchase or receive, for each share of Stock subject to the Award immediately prior to the Covered Transaction, the consideration (whether stock, cash, or other securities or property) received in the Covered Transaction for each share of Stock held on the effective date of the Covered Transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Stock); provided, however, that if such consideration received in the Covered Transaction is not solely common stock of the successor corporation or its parent, then the Committee may, with the consent of the successor corporation or its parent, provide for the consideration to be received upon the exercise of the Award, for each share of Stock subject to the Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Stock in the Covered Transaction.
11.3. Involuntary Termination upon Change in Control. For purposes of clarification, the Committee shall have the full power and authority to provide in an Award Agreement that the Award shall become fully vested and exercisable in any Covered Transaction, including in the event of a Participant's Termination of Service without Cause or for Good Reason within a designated period (not to exceed eighteen (18) months) following the effective date of any Covered Transaction in which the Award does
not otherwise accelerate. For purposes hereof, "Good Reason" shall mean a voluntary resignation by the Participant after any of the following effected without the Participant's consent: (A) a change in his or her position with the Company that materially reduces his or her duties and responsibilities or the level of management to which her or she reports, (B) a reduction in his her level of compensation (including base salary, fringe benefits and target bonus under any corporate performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of his or her place of employment by more than fifty (50) miles.
12.1. Payment by Participant; Deduction by Company. As a condition to the exercise of any Option, and no later than the date as of which the value of any other Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the Participant for Federal, state, or local income tax purposes, the Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such income. The Company and its Subsidiaries shall have the right, to the extent permitted by law, to deduct any such taxes from any payment of any kind otherwise due to the Participant, including any payment or release of cash or shares of Stock under the applicable Award or any other Award.
12.2. Payment in Stock. With the permission of the Committee, or as specified in the Award Agreement, a Participant may elect to have such tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due, or (ii) transferring to the Company shares of Stock owned by the Participant with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due. If shares of Stock that otherwise would be issued to the Participant are withheld by the Company to satisfy a tax withholding obligation, the shares applied to such tax withholding shall have a Fair Market Value that is no greater than the maximum statutory federal, state or local tax rates that could apply to the Award in the jurisdictions applicable to the Participant on the date that the amount of tax to be withheld is to be determined, or such other limitation as may be required by then applicable accounting rules and regulations to maintain favorable equity accounting treatment for the Award.
Shares of Stock shall not be issued under this Plan unless the issuance and delivery of such shares of Stock complies with (or is exempt from) all requirements of Applicable Laws, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange on which the Company's securities may then be listed.
14.NO EMPLOYMENT RIGHTS.
Neither this Plan nor any Award shall give any person any right to be or remain an Employee of the Company or of any Subsidiary. The Company and its Subsidiaries reserve the right to terminate the service of any Employee at any time, with or without Cause, subject to applicable laws and written agreements (if any).
15.DURATION, AMENDMENTS, AND TERMINATION.
15.1. Term of this Plan. This Plan shall terminate automatically on December 31, 2018. No Award of any type may be granted under this Plan after such date. This Plan may be terminated on any earlier date pursuant to Section 15.2.
15.2. Right to Amend or Terminate this Plan. The Board may amend, suspend, or terminate this Plan at any time and for any reason. An amendment of this Plan shall be subject to the approval of the Company's stockholders only to the extent provided herein or required by Applicable Laws.
15.3. Effect of Plan Amendment or Termination. No amendment, suspension, or termination of this Plan (including at the end of the term specified in Section 15.1) shall impair the rights of any Participant with respect to any Award then outstanding, which shall continue in effect in accordance with the terms of the Award Agreement (as it may be amended from time to time) and of this Plan on the Grant Date until its expiration or earlier termination as specified in the Award Agreement. The termination of this Plan shall not affect the Committee's rights or obligations with respect to the continued exercise of its powers under this Plan regarding Awards that are outstanding at the time of termination.
16.1. Investment Representations. As a condition to the receipt of an Award or to the purchase or other receipt of shares of Stock pursuant to an Award, the Company may require the person receiving such Award or shares to represent and warrant that the Award or the shares of Stock being purchased or otherwise received are only for investment and without any present intention to sell or distribute such Award or shares of Stock if, in the opinion of counsel for the Company, such a representation is required.
16.2. Nonexclusivity of this Plan. Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
16.3. Successors. All obligations of the Company under this Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.
16.4. Accounting Terms. Except as otherwise expressly provided or the context otherwise requires, financial and accounting terms are used as defined for purposes of, and shall be determined in accordance with, generally accepted accounting principles, as from time to time in effect, as applied and included in the consolidated financial statements of the Company prepared in the ordinary course of business.
16.5. Stock Certificates. Notwithstanding anything in this Plan to the contrary, to the extent this Plan provides for the issuance of stock certificates to reflect the ownership of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by Applicable Laws.
16.6. Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
16.7. Severability. In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
16.8. Governing Law. This Plan, the Award Agreements, and all actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to such state's or any other jurisdiction's conflicts of law principles.
UK Schedule – Schedule 4 CSOP Scheme
ADDITIONAL DEFINITIONS AND INTERPRETATION
The definitions set out in Section 2 of the Plan shall apply in this Schedule 1 unless otherwise specified. Additional definitions used in this Schedule 1 have the meanings given below:-
means any company which, in relation to the Company, is an associated company as that term is defined in paragraph 35 of Schedule 4 to ITEPA
has the same meaning as in Chapter 2 of Part 10 of the Corporation Tax Act 2010 EXCEPT THAT in determining whether a company is a close company for the purposes of this Schedule 1, sections 442(a), 446 and 447 of that Act shall be disregarded
means the Companies Act 2006
means Stamps.com Inc.
means Metapack Limited or any subsidiary of Metapack Limited from time to time
has the meaning given in section 719 of ITEPA
has the meaning given in section 521(3) of ITEPA
means a right to acquire Shares granted in accordance with, and subject to, the paragraphs of this Schedule 1
"Date of Grant"
means the date on which a CSOP Option is granted in accordance with this Schedule 1, being the date of the Committee action granting the CSOP Option or as otherwise stated
(a) an employee (other than a director) of a Constituent Company; or
(b) an executive director of a Constituent Company who is required by the terms of his contract of office or employment to devote not less than 25 hours per week (excluding meal breaks and disregarding normal holiday entitlement) to his duties
means any secondary class I NICs for which the Optionholder's Employer is primarily liable to account
means the price per Share payable on the exercise of a CSOP Option
means the Company and any company of which the Company for the time has, or is treated as having, Control (including a Jointly-Owned Company provided that such company is not excluded by paragraph 34(4) of Schedule 4 to ITEPA)
means Her Majesty's Revenue & Customs
means the Income Tax (Earnings and Pensions) Act 2003
has the meaning given in paragraph 34(5) of Schedule 4 to ITEPA and includes any other company Controlled by that jointly-owned company
means a provision of this Schedule 1 which is necessary in order for the requirements of Parts 2 to 6 of Schedule 4 to ITEPA to be met in relation to Schedule 1
means, unless otherwise required to be in accordance with paragraph 36(1) of Schedule 4 to ITEPA:
(a) where Shares are listed on the Nasdaq Stock Market, the closing price of a Share on the Date of Grant of a CSOP Option; or
(b) where the Shares are not listed on the Nasdaq Stock Market, the market value as determined in accordance with Part VIII of the TCGA and, if not listed on any recognised stock exchange, agreed in advance with HMRC Shares and Assets Valuation or, if greater, the par value of a Share
PROVIDED THAT (in either case) the Market Value of Shares subject to any Restriction shall be determined as if they were not subject to such Restriction
has the meaning given in paragraphs 10 and 11 of Schedule 4 to ITEPA for the purposes of paragraph 9 of Schedule 4 to ITEPA
means the laws, regulations and practices currently in force relating to liability for, and the collection of, NICs
"NIC Option Gain"
means a gain realised on the exercise of, or acquisition of Shares pursuant to a CSOP Option, being a gain treated as remuneration derived from the Optionholder's employment by virtue of section 4(4)(a) of the Social Security Contributions and Benefits Act 1992
"Non-UK Company Reorganisation Arrangement"
has the meaning given in paragraph 35ZA of Schedule 4 to ITEPA
"Notice of Exercise"
means a notice of exercise of a CSOP Option given in accordance with paragraph 11
means a person who has been granted a CSOP Option or, if that person has died and where the context requires, his Personal Representatives
means such member of the Group as is an Optionholder's employer or, if he has ceased to be employed within the Group, was his employer or such other member of the Group, or such other person as, under the PAYE Regulations or, as the case may be, the N.I. Regulations, or any other statutory or regulatory enactment (whether in the United Kingdom or otherwise) is obliged to account for any Option Tax Liability
means the Shares over which a CSOP Option subsists
"Option Tax Liability"
means, in relation to an Optionholder, any liability of an Optionholder's Employer to account to HMRC or other tax authority for any amount of, or representing, income tax or NICs (which shall, to the extent provided for in paragraph 5.2.10, include Employer's NICs) or any equivalent charge in the nature of tax or social security contributions (whether under the laws of the United Kingdom or of any other jurisdiction) which may arise on the exercise of, or the acquisition of Shares pursuant to, a CSOP Option
"Ordinary Share Capital"
means the issued ordinary share capital of the Company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the Company's profits
means the regulations made under section 684 of ITEPA
means the condition or conditions which may be imposed on the exercise of a CSOP Option pursuant to paragraph 4.4 and/or that may provide the extent to which a CSOP Option becomes capable of being exercised, in either case as amended from time to time
means the personal representatives of an Optionholder, being either:
(a) the executors of his will; or
(b) if he dies intestate, the duly appointed administrator(s) of his estate,
who have produced to the Company evidence of their appointment as such
means The Stamps.com Inc. 2018 Metapack Equity Inducement Plan (as amended from time to time)
has the meaning given in paragraph 36(3) of Schedule 4 to ITEPA
"Schedule 4 CSOP Scheme"
means a CSOP scheme which is taken to be a Schedule 4 CSOP scheme as referred to in paragraph 1(A1) of Schedule 4 to ITEPA and for the purposes of the CSOP Code
means fully-paid shares of common stock in the capital of the Company which (other than as specified in paragraph 25A of Schedule 4 to ITEPA CSOP) satisfy the requirements of paragraphs 16-18 (inclusive) and 20 of Schedule 4 to ITEPA
means the Taxation of Chargeable Gains Act 1992
means the timing for vesting of a CSOP Option which shall be set out in each relevant Award Agreement
Any reference in this Schedule 1 to any enactment is a reference to a statute or statutory instrument of the United Kingdom and includes a reference to that enactment as from time to time modified, extended or re-enacted and shall include all subordinate legislation made from time to time under that statute or statutory provision.
PURPOSE AND ADMINISTRATION
This Schedule 1 shall provide, in accordance with Schedule 4 to ITEPA, benefits for employees and directors of Constituent Companies in the form of share options and shall not provide benefits to such employees and directors otherwise than in accordance with Schedule 4 to ITEPA.
Optionholders shall have no rights to compensation or damages on account of any loss in respect of any CSOP Option or this Schedule 1 where such loss arises (or is claimed to arise), in whole or in part, as a result of this Schedule 1 not being taken to be a Schedule 4 CSOP Scheme, however so caused.
For so long as it is intended that this Schedule 1 shall continue to be a Schedule 4 CSOP Scheme, the applicable provisions set out in the Plan and this Schedule 1 shall be interpreted in a manner so as to be consistent with Schedule 4 to ITEPA.
For the purposes of this Schedule 1, the Committee shall exercise its discretion in a manner which is fair and reasonable.
APPLICATION OF THE PLAN
The Plan shall apply equally to any CSOP Option granted pursuant to this Schedule 1, with references to the "Plan" being read to include this Schedule 1, except as set out below in the remainder of this Schedule 1.
Section 1 – Purpose
Paragraph 2.1 shall define the purpose of this Schedule 1 and shall qualify Section 1 to that extent.
Section 2 – Definitions
Section 2 is amended by paragraph 1 above.
Section 4 – Administration
Section 4 shall apply provided that if it is intended that this Schedule 1 shall continue to be a Schedule 4 CSOP Scheme, any actions or determinations by the Committee shall be taken so as to be consistent with the requirements of Schedule 4 to ITEPA.
Section 5 – Eligibility
Section 5 shall be restated as follows for the purposes of this Schedule 1:
"The Committee may grant a CSOP Option to any Eligible Employee designated by it to receive an Award."
Section 6 – Modifications and Restrictions
Section 6 shall apply provided that:
if it is intended that this Schedule 1 shall continue to be a Schedule 4 CSOP Scheme, no modification or addition to a Key Feature shall take effect which would result in the requirements of Schedule 4 to ITEPA not being met in relation to a CSOP Option, any modification shall comply with the requirements of paragraph 22 of Schedule 4 to ITEPA and no adjustment shall be made which would result in the requirements of Schedule 4 to ITEPA not being met in relation to a CSOP Option; and
paragraphs 21A(2) and 21A(3) of Schedule 4 to ITEPA shall apply (i.e., terms stated at grant can only be varied in certain specified circumstances).
Section 7 – Options
The Committee may determine that an Award may be granted as a CSOP Option. Should the Committee determine to grant a CSOP Option in accordance with Section 7, the CSOP Option shall be independent of any other Award.
The subsections of Section 7 shall not apply and shall be replaced instead by this Schedule 1.
Section 8 – Non-transferability of Awards
Section 8 shall not apply and is replaced by paragraph 4.6 of this Schedule 1.
Section 9 – Payment for Shares of Stock
Section 9 shall not apply in relation to CSOP Options. Payment of the Exercise Price shall be made as set out in paragraph 11.1 of this Schedule 1.
Section 10 – Adjustment of Stock
Section 10 shall apply in relation to CSOP Options, subject to the following additional conditions:
no adjustment may be made to a CSOP Option other than in accordance with paragraph 22 of Schedule 4 to ITEPA;
no adjustment may be made to a CSOP Option in the event of a demerger or payment of a capital dividend or similar event;
where an adjustment to a CSOP Option is made, the total Market Value of the Shares subject to the CSOP Option and the total amount payable on the exercise of the CSOP Option before and after the adjustment must be the same.
Section 12 – Withholding Taxes
Section 12 shall not apply and is replaced by paragraph 12.
Section 15 – Duration, Amendments, and Termination
Section 15 shall apply provided that:
if it is intended that this Schedule 1 shall continue to be a Schedule 4 CSOP Scheme, no modification or addition to a Key Feature shall take effect which would result in the requirements of Schedule 4 to ITEPA not being met in relation to a CSOP Option, any
modification shall comply with the requirements of paragraph 22 of Schedule 4 to ITEPA and no adjustment shall be made which would result in the requirements of Schedule 4 to ITEPA not being met in relation to a CSOP Option; and
paragraphs 21A(2) and 21A(3) of Schedule 4 to ITEPA shall apply (i.e., terms stated at grant can only be varied in certain specified circumstances).
Section 16 – Miscellaneous
Section 16 shall apply provided that:
Section 16.3 shall not bind any successor to grant CSOP Options, or to assume any obligations other than where it can do so in accordance with Schedule 4 to ITEPA;
notwithstanding Section 16.8, this Schedule 1 shall be governed by and construed in accordance with the laws of England, except that any matters relating to the internal governance of the Company shall be governed by the laws of the state of Delaware.
TERMS OF A CSOP OPTION
A CSOP Option shall not be granted to any individual at any time when he has, or has within the preceding 12 months had, a Material Interest in a Close Company being either the Company or a company which has Control of the Company or is a member of a consortium which owns either the Company or a company which has Control of the Company. For the purposes of this paragraph 4.1, any interest of an individual's associates (as defined in paragraph 12 of Schedule 4 to ITEPA (read with paragraphs 13 and 14 of Schedule 4 to ITEPA)) at the relevant time shall be treated as belonging, of having belonged, at that time, to the individual.
The Exercise Price shall be determined by the Committee but shall not be manifestly less than Market Value of the Option Shares.
A CSOP Option may not be exercised later than the day before the tenth anniversary of the Date of Grant and any outstanding CSOP Option shall lapse and cease to be exercisable on such date.
A CSOP Option shall vest and become exercisable in accordance with the Vesting Schedule and any Performance Target set out in the relevant Award Agreement.
Any Performance Target shall be objective and may be amended only if:
an event has occurred, or events have occurred, in consequence of which the Committee reasonably considers the performance criteria should be amended;
the Committee (acting fairly and reasonably) considers the amended performance criteria will be a fairer measure of performance and offers a more effective incentive to the Optionholder; and
the amended performance criteria will be no more difficult to satisfy than the original performance criteria when first set.
During his lifetime, only the person to whom a CSOP Option is granted may exercise that CSOP Option. A CSOP Option is not transferrable than by will or by the laws of descent and distribution. Any purported sale, pledge, assignment, hypothecation, transfer or disposal of or dealing with a CSOP Option shall cause it to lapse and cease to be exercisable.
GRANT OF A CSOP OPTION
Where an Award is granted as a CSOP Option, that CSOP Option shall be constituted by the parties entering into an Award Agreement. For the avoidance of doubt, the common stock over which the CSOP Option is granted must meet the definition of "Shares" in paragraph 1.1 of this Schedule 1.
Upon grant of a CSOP Option and in the Award Agreement, the Company shall specify:
the Date of Grant;
the number and description of Option Shares;
the Exercise Price;
the Performance Target (if any);
the applicable Vesting Schedule;
the times at which the CSOP Option may be exercised (in whole or in part);
whether the Shares are subject to any Restrictions and if so, details of such Restrictions;
the circumstances in which the CSOP Option will lapse or be cancelled (in whole or in part);
that it is a condition of exercise of the CSOP Option that the Optionholder indemnifies the Company and the Optionholder's Employer in respect of any Option Tax Liability; and
(unless the Committee, acting fairly and reasonably otherwise determines) that it is a condition of exercise of the CSOP Option that the Optionholder shall:
agree with and undertake to the Company and any other company which is the Optionholder's Employer that the Optionholder's Employer may recover from the Optionholder, as mentioned in paragraph 12, the whole or such lesser part as the Committee shall determine of any Employer's NICs payable in respect of any NIC Option Gain; and/or
enter into a joint election with the Optionholder's Employer (in a form approved by HMRC) for the transfer to the Optionholder of the whole, or such lesser part as the Committee shall determine, of any liability of the Optionholder's Employer to Employer's NICs on any NIC Option Gain.
STATUTORY LIMIT ON THE HOLDING OF A CSOP OPTION
The number of Shares in respect of which a CSOP Option is granted to an Eligible Employee shall be limited, and the Option shall take effect, so that the aggregate market value of Shares which may be acquired on the exercise of that Option, when added to:
the aggregate market value of Shares in respect of which CSOP Options have previously been granted (and which have not then been exercised nor ceased to be exercisable); and
the aggregate market value of Shares in respect of which rights to acquire such Shares have been obtained by that Eligible Employee under any other Schedule 4 CSOP Scheme established by the Company or by any Associated Company(and have not then been exercised nor ceased to be exercisable),
shall not exceed or further exceed £30,000 or such other limit as may from time to time be specified in paragraph 6 of Schedule 4 to ITEPA.
For the purposes of this paragraph 6:
the market value of a Share in respect of which a CSOP Option has been or is to be granted shall be taken as the Exercise Price or, if less, the minimum price per Share which could have been determined by the Committee to be its Exercise Price under paragraph 4.2;
the market value of Shares in respect of which other rights to acquire Shares have been granted shall have the same meaning as in Part VIII of TCGA and shall be calculated as at the time those rights were granted;
the market value of Shares which are subject to a Restriction shall be determined as if they were not subject to the Restriction; and
For this purpose, the United Kingdom sterling equivalent of the market value of a share on any day shall be determined by taking the spot sterling/dollar exchange rate for that day as shown in the Financial Times.
EXERCISE OF A CSOP OPTION
Subject to the following provisions of this Schedule 1, a CSOP Option which has not lapsed and ceased to be exercisable may only be exercised (in whole or part) after the date on which, and to the extent that, it has vested in accordance with the Vesting Schedule, any applicable Performance Target and the relevant Award Agreement.
Except as mentioned in paragraphs 8 and 9 (inclusive) a CSOP Option may not be exercised at any time unless the Optionholder then holds office or employment with a member of the Group.
A CSOP Option may not be exercised at any time when the Optionholder has, or has within the preceding 12 months had, a Material Interest in a Close Company being either the Company or a company which has Control of the Company or is a member of a consortium which owns either the Company or a company which has Control of the Company. For the purposes of this paragraph 7.3, any interest of an individual's associates (as defined in paragraph 12 of Schedule 4 to ITEPA (read with paragraphs 13 and 14 of Schedule 4 to ITEPA) at the relevant time shall be treated as belonging, or having belonged, to the individual at that time.
A CSOP Option may not be exercised if, having been requested to do so, the Optionholder has failed to enter into a joint election to transfer to him the Optionholder's Employer's liability to Employer's NICs on any NIC Option Gain, as referred to in paragraph 5.2.10(b) (if at all).
If an Optionholder ceases to hold office or employment within the Group he may exercise a CSOP Option if at all, only to the extent determined in accordance with, and during the period set out in, the terms of the applicable Award Agreement.
In particular, an Award Agreement may provide that an Optionholder may exercise a CSOP Option within a period to be specified in the Award Agreement of no more than 6 months following the Optionholder ceasing to be in office or employment for one of the reasons specified below:
injury or disability;
redundancy within the meaning of the Employment Rights Act 1996;
a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006; or
where the office or employment is as a director or employee of a Constituent Company, that Constituent Company ceasing to be controlled by the Company,
as interpreted in accordance with s.524 of ITEPA.
DEATH OF AN OPTIONHOLDER
If an Optionholder dies a CSOP Option granted to him may be exercised by his Personal Representatives (if at all) at any time within the period of 12 months beginning with the date of his death, to the extent determined in accordance with the terms set out in the Award Agreement.
The 12 month period stated in paragraph 9.1 shall apply notwithstanding any other provision of the Plan and/or this Schedule 1.
TIME OF LEAVING
For the purposes of this Schedule 1, an Optionholder shall be treated as having ceased to hold office or employment within the Group only when he no longer holds any office or employment with any member of the Group.
An Optionholder shall not be treated as having ceased to hold office or employment within the Group solely by reason of being absent from work during any period of:
statutory or contractual paternity, maternity, parental or adoption leave; or
compulsory national military service.
MANNER OF EXERCISE OF A CSOP OPTION
To exercise a CSOP Option, the Optionholder shall contact the stock plan administrator in accordance with the provisions for exercise set out in the relevant Award Agreement and the CSOP Option shall be treated as exercised once the Company receives full payment for the Shares over which the Option is exercised or other provision for such payment (in a form compatible with Schedule 4 to ITEPA) is made in accordance with rules and procedures established by the Committee from time to time.
For the avoidance of doubt, at the time of exercise, the common stock in respect of which the Option is exercised must continue to meet the definition of "Shares" in paragraph 1.1 of this Schedule 1.
RECOVERY OF TAX
If an Option Tax Liability arises then, unless:
within the period of 30 days beginning with the date on which the Option is exercised, the Optionholder's Employer is able to withhold the amount of the Option Tax Liability from payment of the Optionholder's remuneration;
the Optionholder has indicated (either in the Notice of Exercise or other manner as the Company may specify) that he will pay to the Company the amount of the Option Tax Liability and the Optionholder does, within 14 days of being notified by the Company of that amount, make the payment to the Company; or
the Optionholder has authorised (either in the Notice of Exercise or other manner as the Company may specify) the Company to sell, as agent for the Optionholder (at the best price which can reasonably be expected to be obtained at the time of sale), such number of the Shares acquired on exercise of the Option as is necessary to enable the Company to procure payment to the Optionholder's Employer out of the net proceeds of sale of the Shares (after deducting fees, commissions and expenses incurred in relation to the sale) an amount sufficient to satisfy the Optionholder's indemnity provided by paragraph 5.2.9,
the Company shall have the right to sell (as mentioned in paragraph 12.1.3) such number of the Shares acquired on exercise of the CSOP Option as is necessary to enable the Company to pay to the Optionholder's Employer out of the net proceeds of sale of the Shares (after deducting fees, commissions and expenses incurred in relation to the sale) an amount sufficient to satisfy the Optionholder's indemnity provided by paragraph 5.2.9.
ISSUE OR TRANSFER OF SHARES
Subject to paragraph 12.1, within the period of 30 days beginning with the date on which the Company receives a Notice of Exercise the Company shall issue, transfer or procure the issue or transfer of, the number of Shares specified in the Notice to the Optionholder.
If the Company is restricted from issuing, transferring or procuring the issue or transfer of Shares on the exercise of a CSOP Option by reason of any Applicable Laws, the Company shall not be obliged to issue, transfer or procure the issue or transfer of the Shares until after all such restrictions are lifted and shall then do so within 30 days.
Shares allotted or transferred under this Schedule 1 shall be equal in all respects to other Shares then issued except for any rights attaching to the other Shares by reference to a record date preceding the date of the allotment or transfer of the Shares acquired on the exercise of the CSOP Option.
LIQUIDATION, CHANGE IN CONTROL AND OTHER TRANSACTIONS
Where Section 11 of the Plan applies, CSOP Options may be exercised as set out in that Section. Where the circumstances fall within paragraph 25A(1) to (7D) of Schedule 4 to ITEPA CSOP Options may be exercised in compliance with those provisions.
CHANGE OF CONTROL
CSOP Option Rollover
If any company (in this paragraph referred to as "the acquiring company") obtains Control of the Company as a result of:
making a general offer to acquire the whole of the issued share capital of the Company which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company;
making a general offer to acquire all the shares in the Company that are the same class as the Shares;
the court sanctioning a compromise or arrangement under section 899 of the Companies Act 2006 or shareholders becoming bound by a Non-UK Company Reorganisation Arrangement, that is applicable to or affects:
all the ordinary share capital of the Company or all the shares of the same class as the Shares to which the Option relates; or
all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 4 CSOP Scheme,
an Optionholder may, at any time within the appropriate period (as defined in paragraph 15.2), by agreement with the acquiring company and notwithstanding that any Performance Target subject to which a CSOP Option is then exercisable is not then satisfied, release his rights under his CSOP Option in consideration of the grant to him of rights to acquire shares in the acquiring company or any other company falling within sub-paragraphs (b) or (c) of paragraph 16 of Schedule 4 to ITEPA (read and construed as if references in those provisions to the Company were references to the acquiring company) PROVIDED THAT:
the rights will be exercisable only in accordance with the provisions of this Schedule 1 as it had effect immediately before the release of the rights referred to above (read and construed as mentioned in paragraph 15.3);
the shares to which the new rights relate satisfy the provisions of paragraphs 16 to 18 (inclusive) and 20 of Schedule 4 to ITEPA;
the total market value, immediately before release, of the Option Shares is substantially the same as the total market value, immediately after grant, of the shares over which the new rights are granted to the Optionholder and for these purposes, market value shall be determined using a methodology agreed by HMRC and the market value of shares subject to any Restriction is to be determined as if they were not subject to such Restriction; and
the total amount payable by the Optionholder for the acquisition of shares on exercise of the new rights is substantially the same as the total amount that would have been payable for the acquisition of Shares on exercise of the CSOP Option.
In paragraph 15.1 "the appropriate period" means:
in a case falling within paragraphs 15.1.1 and 15.1.2, the period of 6 months beginning with the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been met; and
in a case falling within paragraph 15.1.3, the period of 6 months beginning with the time when either the court sanctions the compromise or arrangement or in the case of a Non-UK Company Reorganisation Arrangement, such compromise or arrangement becomes binding on the shareholders covered by it.
For the purposes mentioned in paragraph 15.1.3(a) the provisions of this Schedule 1 shall be read and construed as if:
references to "the Company" were references to the company in respect of whose shares the new rights are granted (where applicable and, for the avoidance of doubt, except for those in the definition of "Constituent Company");
references to "Shares" were references to shares in the company in respect of whose shares the new rights are granted;
references to "CSOP Option" were references to such rights;
references to "Optionholder" were references to a person to whom such rights are granted;
references to "Ordinary Share Capital" were references to the ordinary share capital (other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in such company's profits) of such company; and
references to "the Exercise Price" were references to the price per share payable on the exercise of such new rights.
Rights granted pursuant to paragraph 15.1 shall be regarded for the purposes of the CSOP Code and for the purposes of the subsequent application of this Schedule 1 as having been granted on the Date of Grant of the corresponding CSOP Option as mentioned in paragraph 15.1.
Following the occurrence of any of the events described in paragraph 15.1, this Schedule 1 shall remain that of the Company.
Interaction with Section 11.2 of the Plan
Reference in Section 11.2 of the Plan to the assumption or substitution of Options, shall be disapplied for the purposes of this Schedule 1.
In the event that a “Covered Transaction” as referred to in Section 11.2 of the Plan does not fall within paragraph 15.1 above, or where it does, but an Acquiring Company does not agree to grant a New Option, or if a New Option would not be regarded as ‘equivalent’ in accordance with paragraph 15.4 above, the Board may give written notice to the Participants that all Options shall be exercisable in full up to 20 days before such Covered Transaction save that any Option exercised in anticipation of a Covered Transaction that does not take place will be treated as not having been exercised.