EX-10.5 4 exhibit1052024stockoptiona.htm EX-10.5
Exhibit 10.5
L3HAR R IS TECHN O LO G I E S, IN C. S TOCK O PT I ON AW A RD AGRE E M ENT TER M S A N D C ONDITIONS
(A s of Fe b r u a r y 13, 2024)
1. S tock Option A wa rd – T e rms a nd Condi t ion s; A cce ptan c e of A wa r d. P ursu a nt to the w r i t ten not i c e or lett e r of a w a rd (w h i c h may be in e le c tronic f o rm) (the “A w a r d No t i c e”) f rom L3 Ha r r is T e c hnolog i e s, I n c. (t h e “Co mp a n y”) to the e mp l oy e e sp ec ifi e d in the A w a rd Notice (the “E mp loye e”), the Company h a s gr a nted to t h e Employ ee, on the g r a nt d a te s e t fo r t h in the A w a rd Notice (t he “Grant Da t e”) a nd on the te r ms a nd c ond i t i ons s e t fo r th in the A wa rd Notice a nd h e r e in (th e se “T e r m s a n d Con d itio ns” a nd togeth e r with the A wa rd Noti c e, the “Ag r e e m e n t”), a nd und e r a nd othe r wi s e subj ec t t o the p r ovis i ons of the Company’s 2015 Equity I n ce nt i ve P lan (a s may be a mend e d f r om t i me to t i me, the “Pla n”), a S tock Option A wa rd (the “A w a r d”) c onsist i ng of a n on-qu a l i fi e d sto c k opt i on (the “O p tio n”) to p u r c h a se su c h a gg r e g a te number of sh a r e s of c o m m on stock, $1.00 p a r v a lue p e r sh a re (the “C o mm o n S to c k”), of the C ompany (a “Sh a r e”) is s u a ble upon e x e r c ise of the Option a t su c h d e si g n a ted e x e r c ise pri c e p e r S h a re a s e a c h is s e t fo r th in the A w a rd Notic e. The A w a rd must be a cc e pted by the Employ e e using the acce p t a n c e m e thod sp ec ifi e d by the Company (w hich may be in e le c tronic fo r m) with i n ninety (90) d a ys following the Gr a nt D a te (o r, if the Employ e e is on a Compan y-a ppro v e d le a ve of a bs e n c e f r om the Company a t a ny t i me during su c h 90-d a y p e riod, then with i n ninety (90) d a ys following the Employ ee’s r e turn to ac t i ve s e rvi c e with t he Company f rom s u c h le a v e of a bs e n c e), a n d if not so a cce pted, the A wa rd a nd the Option sh a ll be a uto m a t i ca l l y fo r f e i t e d.
2. V e st i ng a nd Ex e r c isabil i t y; I mp a c t of T e rmin a t i on of Employment
(a) Ex ce pt a s s e t fo r th in S ec t ion 2(d) a nd S ec t i on 2(f), the Option sh a ll not v e st or be e x e r c i s a ble to a ny e xtent unless the Emp l oy e e sh a ll h a v e r e main e d c o n t i nuously in the e mp l oy of the Company f r om the G r a nt D a te thr o ugh the d a te that is one (1) y e a r following the G ra nt D a te (t h e “M i n imum V e sti n g P er io d”) a n d if su c h c ont i nuous e m ploy m e nt through the Min i mum V e st i ng P e rio d:
(i) I s not s a t i sfi e d, then the Option sh a ll te r m i n a te i m m e diat e ly upon
the E mp l oy ee’s t e rmin a t i on of e mp l oyment with t he Company.
(ii) I s s a t i sfi e d, then e x ce pt a s othe r wise provid e d in t he A w a rd Notice a nd subj ec t to S ec t i on 2(d) a nd S ec t i on 2(f), the Opti o n sh a ll v e st a nd b e c ome e x e r c isable a t the following t i mes a s to t h e following number of S h a r e s, provid e d that t h e Employ e e sh a ll h a ve r e main e d c ont i nuously in the e mp l oy of the Co m p a ny unt i l the a ppl i ca ble t i me for the Option t o v e st and b ec ome e x e r c is a b l e:
(A) A f ter t h e e nd of o n e (1) y ea r following the Gr a nt D a te a nd prior to the e nd of two (2) y ea rs following the G r a n t D a te, not more than o ne-th i rd of the a ggr e g a te number of S h a r e s s e t fo r t h in t he A wa rd Noti c e;
(B) A f ter t h e e nd of two (2) y ea rs following the G r a n t D a te a nd prior to the e nd of thr e e (3) y ea rs following the Gr a nt D a te, not more than tw o-th i rds of the a ggr e g a t e number of Sh a r e s set f orth in the A w a rd Notic e; and
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(C) A f ter the e nd of thr e e (3) y ea rs f ol l owing the Gr a nt D a te, the a ggr e g a t e number of Sh a r e s set f orth in the A w a rd Notic e.
During the l i f e t i me of t h e Employ ee, the Option sh a ll be e x e r c isable only by the Employ e e a nd, e x ce pt a s othe r wise provi d e d in the A w a rd Noti c e a nd subj ec t to S ec t i on
2(d) a nd S ec t i on 2(f), o nly while the Employ e e c ont i nu e s a s a n Employ e e of the Company. Notwithstanding a ny o t h e r provision o f these T e rms a nd Condi t ions a nd the Ag r ee ment, the Option sh a ll e xpire no lat e r than the Expir a t i on D a t e (a s d e fi n e d b e low) a nd s h a ll not be e x e r c isable the re a ft e r.
(b) Qualifying Retirement. If, after the Employee satisfies continuous employment through the Minimum Vesting Period, the Employee ceases to be an employee of the Company due to:
(i)a Qualifying Early Retirement (as defined below), then the Option (A) to the extent unvested, shall immediately expire and be forfeited and (B) to the extent vested, may be exercised by the Employee but only until the Expiration Date; and
(ii)a Qualifying Full Retirement (as defined below), then the Option (A) to the extent unvested, shall continue to vest and become exercisable as specified in the Plan and the Award Notice as though the Employee continued employment through the applicable vesting date(s), and (B) to the extent vested, may be exercised by the Employee but only until the Expiration Date.
(c) Other Voluntary Termination; Involuntary Termination Other Than for C a us e. I f, a f t e r the Employ e e s a t i sfi e s c ont i nuous e mp l oyment through the Min i mum V e st i ng P e riod a nd b e fo r e a n e v e nt d e s c rib e d in S ec t i on 2(f), t h e Employ e e c ea s e s to be a n e mp l oy e e o f the Company due to (i) volun t a ry t e rminat i on by the Employ e e for a ny re a son (oth e r than Qu a l i fying Early R e t i r e ment or Qualifying Full Retirement, in each case p u rsu a nt to a nd in a c c ord a n c e with S ec t i on 2(b)) or (ii) i nvolun t a ry te r m i n a t i on by the Company other th a n for C a use (a s d e fin e d b e low), but excluding an involuntary termination that would be deemed to fall within the definition of a Qualifying Early R e t i r e ment or Qualifying Full Retirement, then the Option (x) t o the e xtent unv e sted, sh a ll i m medi a tely e xpire a nd be f o r fe i t e d a nd (y) to the e xtent v e sted, m a y be e x e r c ised by the Employ e e but only unt i l the e a rli e r of (A) the d a t e that is ninety (90) d a ys following the d a t e of the E mp l oy e e so c e a sing t o be a n e mp l oy e e o f the Company or (B) the Exp i r a t i on D a t e.
(d) D ea th or Dis a bi l i ty. If, ir re sp ec t i ve of the Min i mum V e st i ng P e riod, the Employ e e c ea s e s to be a n e mp l oy e e o f the Compa n y due to the Employ ee’s d ea th or Disabil i ty (a s d e fin e d b e low), then the Option (i) sh a ll i m medi a tely b ec o m e fully v e sted a nd e x e r c i s a ble a s to the a gg r e g a te number of S h a r e s set fo r th i n the A w a rd Notice (to the e xte n t not pr e viously ves t e d a nd e x e r c isab l e a s to a n y or a ll of s u c h S h a r e s) a nd (ii) may b e e x e r c i s e d by the Employ e e’s B e n e fi c ia r y (a s d e fin e d b e low) or the Employ ee, a s a ppl i ca ble, but only un t il the ea rli e r of (A) the d a te that is one (1) y ea r f ol l owing the d a te of the Employ e e so cea sing to be a n e mp l oy e e of the Company or (B) the Exp i r a t i on D a te.
(e) T e rmin a t i on for C a us e. If the Employ e e c ea s e s to be a n e mp l oy e e of t h e Company due to a t e rmin a t i on of the Employ ee’s e mp l oyment for C a us e, then the Option sh a ll
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i m medi a tely e xpire a nd be fo r f e i t e d in i t s e nt i r e ty a nd sh a ll n o t be e x e r c isable to a ny e xtent, ir re sp ec t i ve o f wh e t h e r it pr e viously m a y h a ve v e sted a nd b ec o m e e x e r c is a ble.
(f) Ch a nge in Contro l. I f, ir re sp ec t i ve of the Mi n i m um V e st i ng P e riod, a
C h a nge in Control of t h e Company o cc urs foll o wing the Gr a nt D a te a n d the Employ e e cea s e s the re a ft e r to b e a n e mp l o y e e of the Comp a ny p rior to t he Option o t h e r w ise v e st i ng a nd b e c om i ng e x e r c i s a ble a s to the a g gr e g a te number o f S h a r e s s e t f o rth in the A w ar d N ot i c e d u e to e i t h e r invo l unta r y te r m i n a t i on of e mp l oyment of the E m ployee by the Company other than f or C a use or volun t a ry t e rmin a t i on of e mp l oyment by the E mp l oy e e for Good R ea son (as d e fin e d b e low), then the Option (i) sh a ll i m medi a tely b ec o m e fully v e sted a nd e x e r c i s a ble a s to t he a gg r e g a te numb e r of S h a r e s s e t fo r th in the A wa rd Notice (to the e xtent not pr e viously v e sted a nd e x e r c isable a s to a ny or a ll of su c h S h a res) a nd (ii) m a y be e x e rcised by (A) the Emplo y ee, but only unt i l the Expir a t i on D a te or (B) f o l l owing the d ea th of the Employ ee, by the Employ ee’s B e n e fi c ia r y, but only unt i l the ea rli e r of (x) the d a te that is one (1) y ea r f ol l owing the d a te of the d ea th of t h e Employ e e or (y) t h e Expir a t i on D a t e.
Notwithstanding a nyth i ng in the s e T e rms a nd C o ndi t ions or the Ag r ee m e nt to the c ontr a ry, (x) if t h e Empl o y ee’s e mp l oyment is te r m i n a ted by the Company other than for C a u s e or Dis a bi l i t y with i n six t y (6 0) d a ys prior to a Ch a nge in Control of the Company that o cc urs following the Gr a nt D a t e, a nd t h e E mp l oy e e re a son a bly d e monstr a tes that su c h te r m i n a t i on w a s a t the r e qu e st or sugg e st i on of a th i rd p a rty who h a s ind ic a ted a n in t e nt i on or tak e n steps r e a so n a bly ca lcu l a ted to e f f e c t su c h a Ch a n g e in Control (a “T h ird Pa r t y”) a nd su c h a Ch a nge i n Control invo l ving su c h Third P a rty o cc u rs, then for a ll purp o s e s o f these T e rms a nd Condi t ions a nd the Ag r e e ment, the d a te of s u c h Ch a n g e in Control sh a ll me a n the d a te i m medi a tely p rior to the d a te of s u c h te r m i n a t i on of e mp l oym e n t; a nd (y) if a Ch a n g e in Control of the Company o cc urs following the Gr a nt D a te a nd the Company or i t s su cce ssor do e s not a ssu m e or c ont i nu e, or subs t i t ute e quival e nt s ec urities fo r, the Opti o n, or if f o r a ny other re a son the Option would not c ont i nue a ft e r su c h Ch a nge in Control, then upon su c h Ch a nge in C o ntrol, the Option (i) sh a ll i m medi a tely b ec ome fully v e sted a nd e x e r c is a ble a s to the a gg r e g a te n u mber of S h a r e s s e t fo r th i n the A w a rd Noti c e (to the e xtent not p r e viously v e sted a nd e x e r c isable a s to a ny or a ll of s u c h S h a r e s) a nd (ii) if not e x e r c i s e d (f ol l owing su c h acce l e r a ted or p r e vio u s v e st i ng) prior to su c h Ch a nge in Control, t h e Board Com m i t tee may provide for the s e t t lem e nt in ca sh of the Option, ca lcul a ted a s though the Option w a s e x e r c ised si m ul t a n e ously with su c h Ch a nge in Control a nd b a s e d o n the then F a ir M a rk e t V a lue of a S h a r e, a nd if s o s e t t led by the Board Com m i t t ee, the Option sh a ll a ut o matic a l l y te r m i n a te. I f, in su c h c ir c ums t a n ce s, t h e Board Com m i t tee do e s not p r ovide for the ca sh s e t t le m e nt of the Option, then the Opt i on sh a ll te r m i n a te upon su c h Ch a nge in Contro l, subj ec t to a ny provision that h a s b e e n made by the Board Com m i t tee through a plan of r e org a n i za t i on or othe r wise for t h e surviv a l, subs t i t ut i o n or e x c h a nge of t h e Option; provid e d that the Em p loyee sh a ll be giv e n r e a s on a ble not i c e of s u c h in t e nd e d te r m i n a t i on a nd a n oppo r tun i ty to e x e r c ise the Option prior to or upon su c h Ch a nge in Control. The Board Co m m i t t e e may make a djus t ments p ursu a nt to the P lan a nd/or d ee m a n ac c e le ra t i on of v e st i ng of the Option pursu a nt to t h is p a r a g r a ph to o cc ur suf f i c iently prior to a n e v e nt i f n ece ss a ry or d e e med a p prop r iate to p e rmit the Employ e e to r ea l iz e the b e n e fits in t e nd e d to be c onv e y e d with r e s p ec t to the S h a r e s und e rlying the Option; provid e d, how e v e r, that, the Board Com m i t tee may r e i n state the origin a l te r ms of t h e Option if the r e lat e d e v e nt do e s not ac tually o cc ur. The provisions in th i s p a r a gr a ph f o r the e ar ly te r m i n a t i on of the Opt i on in c onn ec t i on with a Ch a nge in Control of t he Company sup e rs e d e a ny other provision h e r e o f that o the r wise would a l l ow f or a long e r t e rm o f the Option.
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(g) F or p u rpo s e s of t h e Ag re e men t:
(i) “Caus e” sh a ll h a v e the me a ning assigned to su c h te r m i n the P l a n.
Any ac t, or f a i l u r e to ac t, b a s e d upon a uthority giv e n pursu a nt to a r e solu t ion duly a dopted by the Bo a r d or b a s e d on the a dvice o f c ouns e l for t h e Company sh a ll be c on c lus i v e ly pr e sumed to be don e, or om i t t e d to be don e, by the Employ e e in good f a i t h a nd in the b e st i n te re sts of the Company. A f t e r a Ch a nge in Control of the Company that o cc u rs fol l owing the G r a nt D a t e, (A) in the ca s e of a n e mp l oy e e who is a ppoin t e d or e le c t e d by the Bo a rd a s a n o f fi c e r of the Company (a n “Of f i c er”), C a use sh a ll not e xist un l e ss a nd unt i l the Compa n y h a s d e l i v e r e d to the Employ e e a c opy of a r e solu t ion duly a dopted by thr e e-qu a rt e rs (3/4) o f the e nt i re Bo a rd a t a me e t i ng of t h e Bo a rd c a l l e d a nd h e ld for s u c h purp o se (aft e r th i rty (3 0) d a ys’ not i c e to the Employ e e a nd a n o p portunity for the Employ ee, togeth e r with c ouns e l, to be h ea rd b e fo r e the Bo a rd), finding that in t h e good f a i t h opin i on of t he Bo a rd a n e v e nt s e t fo r th in the d e fini t ion of “C a us e” in the P lan h a s o cc u r r e d a nd s p ec ifyi n g the p a rti c ula r s t h e r e o f in d e tai l; a nd (B) the Company must not i fy t h e Employ e e of a ny e v e nt c onsti t ut i ng C a use with i n ninety (90) d a ys following the Company’s knowl e dge of i t s e xis t e n c e or su c h e v e nt sh a ll not c onsti t ute C a use und e r the Ag ree m e nt.
(i i) “Disa b i l ity” me a ns a to t a l a nd p e rm a n e nt disabi l i t y during whi c h the Employ e e b ec omes e nt i t l e d to a dis a bi l i t y b e n e fit und e r Title II o f the Fe d e r a l S o c ial Se c urity A c t, a s a mend e d f r om t i me to t i m e, or a to t a l a nd p e rm a n e nt disabili t y dur i ng whi c h the Employ e e is e nt i t l e d to r ece ive dis a bi l i t y b e n e fits und e r the Company’s a ppl i ca b l e l o n g-te r m disabili t y plan or would h a v e b e e n e nt i t l e d to re ce ive disabili t y b e n e fits und e r su c h lon g-te r m disabili t y plan h a d the E mp l oy e e p a rti c ipa t e d in su c h plan.
(ii i) “E mp loye e’s B e n e fi c i a r y” m e a ns a b e n e fi c i a r y or b e n e fi c i a ri e s d e signat e d in w r i t ing by t he Employ e e.
(iv) “Expiration Date” m e a ns the date that is ten year following the Grant Date.
(v) “Good Reason” m e a ns, without the Employ ee’s e xpr e ss w r i t ten c ons e nt, the o cc u r r e n c e o f a ny o f the following e v e nts a ft e r a Ch a nge in C o ntrol of the Company that o cc urs following the Gr a nt D a t e: (A) if t h e E mp l oy e e is a n O f fi ce r i m medi a tely p r ior to such Ch a nge in Con t rol, (1) a ny mat e ri a l l y a dv e r s e di m inu t ion of the Employ e e’s posit i on(s), dut i e s, r e spons i bi l i t ies or status with the Company a s i n e f fec t i m medi a tely prior to su c h Ch a nge i n Control or (2) a mat e ri a l a dv e rse c h a n g e in the Employ ee’s r e p o rting respons i bi l i t i e s, t i t l e s or of f ic e s with the Company a s in e f f e c t i m medi a tely prior to su c h Ch a nge in Control; (B) a r e du c t i on by the Company in the E mp l oy ee’s r a t e of a nnu a l b a se s a l a ry, a nn u a l ta r g e t ca sh in c e nt i ve bonus oppo r tun i ty or a nnu a l ta r g e t lon g-te r m inc e nt i ve oppo r tun i ty (including a ny a dv e rse c h a nge in the fo r mu l a for su c h a nnu a l ta r g e t ca sh in c e nt i ve bo n us oppo r tun i ty a nd/or a nnu a l ta r g e t lon g-te r m inc e nt i ve oppo r tun i t y) a s in e f fec t i m medi a tely pr i or to su c h Ch a nge in Control or a s the s a me may be inc rea s e d f r om t i me to t i me the rea ft e r; or (C) a ny r e quir e ment of t he Company that the Employ e e (1) b e b a s e d a nywh e re m o re than fi f ty (50) m i les f r om the f a c i l i ty wh e re the Employ e e is loc a ted a t the t i me of su c h Ch a nge in Control or (2) tr a v e l on Company busin e ss to a n e xtent subs t a nt i a l l y gr e a t e r than the tr a v e l obl i g a t i ons of t he Employ e e i m medi a te l y prior to su c h Ch a n g e in C ontrol.
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Any e v e nt or c ondi t ion d e s c rib e d in th i s S ec t i on 2(g)(v) whi c h o c c urs prior to a Ch a nge in Control of the Company that o c c urs following the G r a nt D a te, but w a s a t the r e qu e st or sugg e st i on of a Third P a rty who e f fec tuat e s s u c h Ch a nge in Control, sh a ll c onsti t ute Good R ea son following su c h Ch a nge in Con t rol for p urpos e s of the s e T e rms a nd Condi t ions a nd the Ag ree ment notwi t hstanding that it o cc u r re d pr i or to su c h Ch a nge in Control. An iso l a ted, insubstantial a nd inadv er tent ac t i on ta k e n in good f a i t h a n d whi c h is r e m e died by the Company with i n fi f te e n (15) d a ys a ft e r r e c e ipt of not i c e t h e r e of given by t h e Emplo y e e s h a ll not c onsti t ute Good R ea son. The Employ e e must provide not ic e of t e rmin a t i on of e mp l oyment with i n ninety (90) d a ys of the Employ e e’s kno w ledge of a n e v e n t constitu t ing Good R ea s on or su c h e v e nt shall not consti t ute G ood R ea son und e r th e se T e rms a n d Condi t ions and the Ag ree ment.
Notwithstanding the f o r e going, in the e v e nt of a M e rger of Equ a ls T ra ns ac t i on that othe r wi s e c onsti t utes a Ch a nge in Control, the Bo a rd C om m i t t e e may d e te r m i ne prior to the c onsummati o n of su c h tr a ns ac t i on to n a r r ow or e l i m i n a te the G ood R ea son trigg e rs s e t fo r th a bov e. F or th i s pu r pos e, a “Mer g e r o f E qu als T r a n sa c tio n” me a ns a me r g e r, c onsolidation, sh a re e x c h a nge or si m i la r fo r m of c orpo r a te r e or g a niz a t i on of the C ompa n y or a ny su c h type of tr a ns ac t i on invo l ving the Company or a ny of i t s S ubsidia r ies that r e qui r e s the a p p rov a l of the Company’s sh a r e holde r s (w h e ther f o r su c h tr a n s ac t i on or the is s u a n c e of s ec urities in the tr a ns ac t i on or othe r wis e) (a “B u si n e ss C o mb i n a tio n”) wh e re (A) more t h a n 40% of the to t a l vot i ng pow e r of t h e c o mpany r e sul t ing f r om s u c h Business Comb i n a t i on (in c lud i ng, without l i m i tation, a ny c ompany whi c h dir ec t l y or ind i re c t l y h a s b e n e fi c i a l own e rship of 100% of the Company’s then-outs t a nding s ec urities e l i gib l e to vote for the e le c t i on of the Bo a rd (the “Co mp a n y Vo t i n g S ec u r iti e s”)) e l i gib l e to e l e c t dir ec tors o f su c h c ompany is r e p r e s e nted by sh a r e s t h a t w e re Comp a ny Voting S ec urities i m medi a tely prior to su c h Business Comb i n a t i on (e i t h e r by re maining outs t a nding or b e ing c onv e rt e d), a nd su c h vot i ng pow e r is in subs t a n t ially the s a me prop o rtion a s the v o t i ng pow e r of su c h Company Voting S ec urities i m medi a tely prior to su c h Business Comb i n a t i on, (B) no p e rson (oth e r than a ny publ i c ly tr a d e d hol d ing c ompany r e sul t ing f r om su c h Business Co m bination, or a ny e mp l oy e e b e n e fit plan sponsor e d or maintain e d by the Company (or t h e c om p a ny r e sul t ing f r om su c h Business Comb i n a t i on)) b ec omes the b e n e fi c ial own e r, dir ec t l y or ind i re c t l y, of 20% or more of t he to t a l vot i ng pow e r of the outs t a nding vot i n g s ec urities e l i gib l e to e le c t dir ec tors of the c ompany r e sul t ing f r om su c h Business Comb i n a t i on, a nd (C) a t l ea st 50% of the m e mbe r s of the bo a rd of di rec tors of the c omp a ny r e sul t ing f r om su c h B usiness Comb i n a t i on w e re In c umbent Dir e c t o rs (a s d e fin e d in the following c laus e) a t the t i me of the Bo a r d’s a ppro v a l of the e x ec ut i on of t h e in i t i a l a gr e e ment p roviding for su c h Business Comb i n a t i on; a nd “I n cu mb e n t Di rec to r s” m ea ns ind i viduals who, on J a n u a ry 1, 2020, c onsti t ute the Bo a rd, p rovid e d that a ny p e rson b ec om i ng a dir ec tor sub s e qu e nt to J a nu a ry 1, 2020, whose a ppoin t ment, e le c t i on or nom i n a t i on for e l e c t i on w a s a p p rov e d by a vote of a t l e a st tw o-th i rds of the I n c um b e nt Dir e c tors who r e main on the Bo a rd (e i t h e r by a sp ec ific vote or by a ppro va l of the proxy stat e ment of the C ompany in whi c h su c h p e rson is n a med a s a nom i n e e for dir ec t o r, without obje c t i on to su c h nom i n a t i on) sh a ll a lso be d e e med to be a n I n c umb e nt Dir e c tor; provi d e d, how e v er, t h a t no ind i vidual in i t i a l l y e le c ted, a ppo i nted or nom i n a ted a s a d i r e c tor o f the Company a s a r e sult of a n ac tual or publ i c ly thr ea ten e d e le c t i on c ontest with r e sp ec t to dir ec tors or a ny other ac tual or publ i c ly thr e a t e n e d sol i c i t a t i on of proxi e s or c ons e nts b y or on b e h a lf of a ny p e rson other than the Bo a rd sh a ll be d ee med to be a n I n c umb e nt Dir ec tor.
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(v i) “Q u al i fying Early R e ti re m e nt” me a ns an Employee’s retirement or involuntary termination of employment by the Company for a reason other than Cause, in either case after the Employee has attained age sixty (60) with five (5) or more years of full-time service with the Company but prior to being eligible for a Qualifying Full Retirement; prov i d e d, that in order for an Employee’s retirement (but not involuntary termination) to be a Qualifying Early Retirement, the Employ e e (A) h a s given w r i t ten no t ic e, in fo r m r e a so n a bly s a t i sf ac tory to the Company, to the Employ ee’s sup e rviso r, with a c opy to the Vi c e P r e sident, Chief Hum a n R e sour c e s O f fi ce r of the Company (o r, if the Employ e e is t h e Vi c e P r e si d e nt, Chief H uman R e sour c e s O f f i c e r of the Company, to the Chief Ex ec ut i ve O f fi c e r of the Company) that sp ec ifi e s the Employ ee’s in t e nt to r e t i re f r om the Comp a ny a nd the p a rti c ular in t e nd e d d a te of such r e t i r e ment, whi c h must be a t l ea st s ix (6) mon t h s a ft e r the d a t e su c h w r i t t e n no t ice is given; a nd (B) h a s r e main e d e mp l oy e d by the Company un ti l the ea rli e r of (1) the p a rti c ular in t e nd e d d a te of such r e t i r e ment sp e c ifi e d i n su c h not i c e (or su c h o ther d a te a s h a s b ee n mu t u a l l y a gr e e d in w riting b e tw e e n the Company a nd the Employ ee) or (2) the d a te on wh i c h the Employ e e c e a s e s to b e a n e mp l oy e e o f the Co m p a ny due to d ea th or D i s a bi l i t y or invo l unta r y te r m i n a t i on of e mp l oyment of the E mp l oy e e by t h e Company other than f o r C a use, in each case following the delivery of such notice.
(v i) “Q u al i fying Full R e ti re m e nt” me a ns an Employee’s retirement or involuntary termination of employment by the Company for a reason other than Cause, in either case after the Employee has attained age six t y-five (65) with ten (10) or more years of full-time service with the Company; prov i d e d, that in order for an Employee’s retirement (but not involuntary termination) to be a Qualifying Full Retirement, the Employ e e (A) h a s given w r i t ten no t ic e, in fo r m r e a so n a bly s a t i sf ac tory to the Company, to the Employ ee’s sup e rviso r, with a c opy to the Vi c e P r e sident, Chief Hum a n R e sour c e s O f fi ce r of the Company (o r, if the Employ e e is t h e Vi c e P r e si d e nt, Chief H uman R e sour c e s O f f i c e r of the Company, to the Chief Ex ec ut i ve O f fi c e r of the Company) that sp ec ifi e s the Employ ee’s in t e nt to r e t i re f r om the Comp a ny a nd the p a rti c ular in t e nd e d d a te of such r e t i r e ment, whi c h must be a t l ea st s ix (6) mon t h s a ft e r the d a t e su c h w r i t t e n no t ice is given; a nd (B) h a s r e main e d e mp l oy e d by the Company un ti l the ea rli e r of (1) the p a rti c ular in t e nd e d d a te of such r e t i r e ment sp e c ifi e d i n su c h not i c e (or su c h o ther d a te a s h a s b ee n mu t u a l l y a gr e e d in w riting b e tw e e n the Company a nd the Employ ee) or (2) the d a te on wh i c h the Employ e e c e a s e s to b e a n e mp l oy e e o f the Co m p a ny due to d ea th or D i s a bi l i t y or invo l unta r y te r m i n a t i on of e mp l oyment of the E mp l oy e e by t h e Company other than f o r C a use, in each case following the delivery of such notice.
3. Ex e r c ise of Optio n. The Option may be e x e r c ised by d e l i v e ring to the Company a t the of f ice of S tock P lan Admin i str a t i on (a) a w r i t ten not i ce, signed by t he p e rson e nt i t l e d to e x e r c i s e the Option, stating the d e signat e d numb e r of S h a r e s s u c h p e rson then e le c ts to pu r c h a s e; provid e d, ho w e v e r, that in the dis c r e t i on of t h e Company, not ic e s e nt through a n a p p rov e d e le c tronic m e a ns may be subs t i t uted for a signed, w r i t ten not i ce, (b) p a y m e nt in a n a mount e qu a l to the full e x e r c ise pri c e for the S h a r e s to be pur c h a s e d, a nd (c) if the Option is e x e r c ised by a ny p e rson oth e r than the E m ploye e, su c h a s the Employ ee’s Be n e fi c i a ry, e vi d e n c e s a t i s f ac tory to the Company that su c h p e rs o n h a s the right to e x e r c ise the Option. P a yment o f t he e x e r c ise pri c e s h a ll be made (x) in ca sh, (y) in pr e viously ac quir e d S h a r e s, or (z) in a ny c o mb i n a t i on of ca sh a nd S h a r e s. I n a ddi t ion to the fo re going, subj e c t to the c ons e nt of the Company a t the t i me of e x e r c ise in a mann e r c onsistent with P lan, the Option may be e x e r c i s e d in a “n e t e x e r c is e”, purs u a nt to whi c h the Company s h a ll r e du c e the number o f S h a r e s is s u a ble upon e x e r c ise of the Option by the la r g e st whole number of S h a r e s with a n a ggr e g a te Fa ir M a r k e t V a lue that do e s not e x cee d su c h
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e x e r c i s e pri c e a nd sh a ll acce pt a ca sh or other p a y ment f r om the und e rsign e d to the e xtent of a ny r e maining b a la n c e o f su c h e x e r c ise p ri c e not s a t i sfi e d by su c h r e du c t ion in the number of whole S h a r e s to be is s u e d (provid e d, how e v e r, that S h a r e s will no longer be outs t a n ding und e r the Option to the e xtent of s u c h r e d u c t i on in the numb e r o f w h ole S h a r e s to be is s u e d t h a t a r e us e d to p a y su c h e x e r c i s e pri c e p u rsu a nt t o s u c h “n e t e x e r c is e”). S h a r e s ten d e r e d in p a y m e nt of the e x e r c ise pri c e that h a ve b e e n ac qui r e d t hrou g h a n e x e r c ise o f a s tock opt i on must h a ve b ee n h e ld a t le a st six (6) mon t hs prior to ex e r c ise of the Option and sh a ll be v a lued a t t he Fa ir M a r k e t V a lue on the d a te o f su c h e x e r c ise. Upon the e x e r c i s e of t h e Option, t h e Company sh a ll c a use t h e S h a r e s in r e s p ec t of whi c h the Option sh a ll h a ve b ee n so e x e r c ised to be is s u e d a nd d e l i v e r e d by c r e di t ing su c h S h a r e s without r e striction on t r a nsf e r to a book-e ntry a cc ount for the b e n e fit of the Employ e e or the Employ ee’s B e n e fi c i a ry maintain e d by the Comp a n y’s stock tr a nsf e r a g e nt or i t s d e signee, subj ec t to a ppl i ca ble withho l dings a nd s a t i sf ac t i on the r e o f (in c lud i n g, if the Company e le c ts, through the Company r e taining S h a r e s othe r wi s e is s u a ble or ca sh oth e r w ise to be d e l i v e r e d) a s provid e d i n S ec t i on 13.2 of the P lan. The Employ e e do e s n o t h a ve a ny rights a s a s h a r e hold e r in r e sp ec t of a ny S h a r e s a s to whi c h the Option sh a ll not h a ve b ee n duly e x e r c ised a nd no rights a s a s h a r e hold e r sh a ll e xist prior to t he pro pe r e x e r c ise o f su c h Op t ion.
4. P rohibition Ag a inst T ra nsf e r; D e signation of B e n e fi c ia r y. T h e O pt i on a n d rights gr a nted by the Company und e r the s e T e rms a nd C ondi t ions a nd the Ag r ee m e nt a r e not t r a nsf e r a ble e x ce pt by will or by the l a ws of d e s ce nt a nd dis t ribution in the e v e nt of the Employ ee’s d ea t h. The Employ ee’s B e n e fi c i a ry may e x e r c i s e a ny ri g h t s or r e c e ive a ny b e n e fi t s und e r Se c t i on 2(d) following the Employ e e’s d ea th. To b e e f f ec t i v e, su c h d e signation must b e made in acc o rd a n c e with su c h rul e s a nd on su c h fo r m a s p r e s c ri b e d by t he Company f o r su c h pu r pos e, whi c h c omp l e ted fo r m must be r e ce i v e d b y the of f ice of S tock P lan Admin i str a t i on prior to the Employ ee’s d ea th. If the Employ e e f a i l s to d e signate a b e n e fi c i a ry, or if no d e signat e d b e n e fi c ia r y surviv e s the Employ ee’s d e a th, the E mp l oy ee’s e sta t e sh a ll b e d ee med the Employ e e’s B e n e fi c i a ry. W i t hout l i m i t i ng the g e n e r a l i ty of the fo re going, e x c e p t a s a fo re s a i d, the Option may not b e sold, e x c h a n g e d, a ss i gn e d, tr a nsf e r r e d, pled g e d, hypo t h eca ted, e n c umbe re d or othe r wise dispos e d of, sh a ll not be a ss i gn a ble by op e r a t i on of la w, a nd sh a ll not be subj ec t to e x ec ut i on, a t t ac hmen t, c h a rg e, a l i e n a t i on o r sim i lar proc e ss. Any a t t e mpt to e f f ec t any of the fo r e g oing sh a ll be null a nd void and w i t hout e f fe c t.
5. P rot ec t i ve Cov e n a nt s. In c onsid e r a t i on of, a mong other th i ngs, the g r a n t of the Option t o the E mp l oy ee, the E mp l oy e e ac know l e d g e s a nd a g r ee s, by a c ce p t a n c e of the Option, t o the f ol l owing p r ovis i ons:
(a) Non-S ol i c i t a t i o n. Du r i n g the P rot ec t i ve Cov e n a nt P e rio d, the Em p loyee sh a ll not, dir ec t l y or in d ir ec t l y, ind i vidually or on b e h a lf of a ny o t h e r e mp l oy e r or a ny oth e r busin e ss, p e rson or e nt i t y: (i) r e c ruit, induc e, S ol i c it or a t t e mpt to r e c ruit, induce or S ol i c it a ny I ndiv i du a l Employ e d by the Company to te r m i n a te, a b a ndon o r othe r wi s e le a ve o r discontinue e mp l oyment with the Company; or (ii) hi r e or c a use or a ss i st a ny I ndiv i d u a l Employ e d by the Company to b ec ome e m ployed by or provide s e rvi ce s to a ny ot h e r bus i n e ss, p e rson or e nt i ty wh e ther a s a n e mp l oy e e, c onsultant, c ontr ac tor o r othe r wis e.
(b) Custo m e r a nd P otential Custo m e r Non-I n t e r f e r e n c e. Du r ing t he P rot ec t i ve Cov e n a nt P e riod, the Employ e e sh a ll not, dir ec t l y or ind i r e c t l y, ind i vidually or (i) on b e h a lf of a ny other e mp l oy e r or a ny other busin e ss, p e rson o r e nt i ty, e nt i ce, induc e, S ol i c it or a t t e mpt or p a rti c ipate in e nt i c ing, i n du c ing or S ol i c i t ing, a ny Custo m e r or P otential Custo m e r of the Company
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to cea se o r r e d u c e or ref ra in f r om doing busin e ss with the Company; o r (ii) on b e h a lf o f a ny Competi t ive Business, e nt i ce, induc e, S ol i c i t, or a t t e mpt or p a rti c ipate i n e nt i c ing, inducing o r S ol i c i t ing or acce pt or a t t e mpt or p a rti c ipate in a cc e pt i ng, busin e ss f r om a ny Custo m e r or P otential Custo m e r of the Cov e r e d Unit(s).
(c) Non-Competi t io n. Du r i ng the P rot ec t i ve Cov e n a nt P e riod, the Employ e e sh a ll not, dir ec t l y or i n dir ec t l y, a s a n e mp l oy ee, indep e nd e nt c ontr a c tor, c onsultant, of f ic e r, dir ec tor, ma n a g e r, prin c i p a l, lend e r or investor e ng a ge or othe r wise p a rt i c ipate in a ny ac t i vi t ies with, or provide s e rvi c e s to, a Competi t ive Busin e ss, without the prior w r i t ten c ons e nt of the V i c e P r e sident, Chief Hum a n R e sour ce s O f f i c e r of the Company or other d e signat e d e x ec ut i ve o f fi c e r of the Company (w h i c h c ons e nt sh a ll be a t su c h o f fi ce r’s disc r e t i on to give or withho l d). Nothing in th i s S ec t i on 5(c) sh a ll p r e c lude t h e Employ e e f r o m owning up to 1% of t h e e qui t y in a ny publ i c ly tr a d e d c ompany.
(d) No Disp a r a g e ment or D e triment a l Com m e nt s. Du r ing the Employ e e’s e mp l oyment with the C o mpany a nd the re a ft e r, the Employ e e sh a ll not, dir e c t l y or ind i r e c t l y, make or publ i sh, or ca use to b e made or publ i sh e d, a ny s t a tem e nt, obs e r v a t i on or o pin i on, wh e ther v e r b a l or w r i t ten, t h a t c ritici ze s, dispa ra g e s, d e f a mes or othe r wi s e i m pugns o r re a son a bly may be in t e rp re ted to c ritici ze, d i sp a r a g e, d e f a me or i m pugn, the c h a r a c t e r, in t e gri t y or r e pu t a t i on of the Company or i t s prod uc ts, goods, sys t e ms or s e rvi ce s, or i t s c ur re nt or f or mer dir ec tors, o f fi ce rs, e mp l oy ee s, a g e nts, su c ce ssors or a ss i gn s. Nothi n g in th i s S ec t i on 5(d) is in t e nd e d or should be c onstru e d to pr e v e nt the Employ e e f r om providing truthful testi m ony or i n fo r mation to a ny p e rson or e nt i ty a s r e qu i r e d b y l a w or fidu c i a ry dut i e s or a s may be n e ce ssa r y in t he p e r f orm a n c e of t h e Employ ee’s duties in co n n ec t i on with the E mp l oy ee’s e mp l oyment with t h e Company.
(e) Confid e nt i a l i t y. Du r ing the Employ ee’s e mp l oyment with the Company a nd the r ea ft e r, the Employ e e s h a ll not u s e or d i s c lose, e x ce pt on b e h a lf of the Company a nd pursu a nt to a nd in c omp l ian c e with i t s dir ec t i on a nd pol i c ies, a ny Confid e nt i a l I nfo r mation of (i) the Company or (ii) a ny t hird p a rty re ce ived by t h e Company wh i c h the Company is obl i g a ted to k ee p c onfid e nt i a l. This S ec t i on 5(e) will a pply in a ddi t ion to, a nd not in d e rog a t i on of, a ny other c onfid e nt i a l i ty or no n-disclosure a g r ee ment that may e xis t, now or in t h e futu re, b e t w ee n the Employ e e a nd the Com p a n y.
(f) Consid e r a t i on a nd A c k n owl e dgmen t. The Employ e e a c knowl e dg e s a nd a gr e e s to eac h o f the f o l l owing: (i) the Employ ee’s a c c e ptan c e o f the A wa rd a nd Option a nd p a rti c ipation in the P lan is volun t a ry; (ii) the b e n e fits a nd rights provid e d by the Ag r ee ment a nd P lan a re wholly disc re t i o n a ry a nd, a l though prov i d e d by the Company, do not c onsti t ute r e gular or p e riodic p a yments; (iii) the b e n e fits a nd c om p e ns a t i on provid e d und e r the Ag ree m e nt a re in a ddi t ion to the b e n e fits a n d c ompens a t i on that othe r wise a re or would be a v a i lable to the Employ e e in c onn ec t i on with t h e E mp l oy ee’s e mp l oyment with the Company a nd the gr a nt of the Option is e xpr e ss l y c ont i ng e nt upon the Employ ee’s a gr e e ment with the C o mpany c ontain e d in S ec t i o n s 5 a nd 6; (iv) the s c ope a nd dur a t i on of t h e r e strictions in S ec t i on 5 a re f a ir a nd r e a so n a ble; (v) if a ny provisions of S ec t i o n s 5(a), (b), (c), (d) or (e), or a ny p a rt th e r e of, a r e h e ld to be un e nf o r c e a ble, the c ourt making su c h d e te r m i n a t i on sh a ll h a ve t he pow e r to r e vise or m odify su c h p rovision to make it e nf o rc ea ble to the maximum e xtent p e r m i t t e d by a ppl i ca ble l a w a nd, in i t s r e vised or mod i fi e d fo r m, su c h pr o vis i on sh a ll then be e nfo rcea b l e, a nd if the prov i sion is not ca p a ble of b e ing mod i fi e d or r e vi s e d s o that it is e nfo rce a ble, it sh a ll be e x c ised f r om these T e rms a nd Condi t ions witho u t a f f e c t i ng the e nfo r c ea bi l i t y of the r e maining provisions; a nd (vi) the t i me
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p e riod of the Employ ee’s obl i g a t i ons und e r S ec t i o n s 5(a), (b) a nd (c) sh a ll be e xtend e d by a pe riod e qu a l to the length o f a n y bre ac h o f those obl i g a t i ons by the Employ ee, in a ddi t ion to a ny a nd a ll other r e m e dies provi d e d by these T e rms a nd Con d i t ions or othe r wise a v a i la ble to the Company at law or in e qui t y. The Employ e e fu r ther un d e rst a nds a nd ac knowl e d g e s that noth i ng c ontain e d in the Ag r e e ment l i m i ts the Employ ee’s a bi l i t y (1) t o r e port poss i ble vio l a t i o ns of law o r r e gu l a t i on to, or file a c h a r g e or c omp l a int with, the S ec urities a nd Ex c h a nge C om m is s ion, the Equ a l Employment Oppo r tun i t y Com m i s sion, the N a t i on a l L a bor R e lations B o a rd, the O cc up a t i on a l S a f e ty a nd H e a l t h Admin i str a t i on, the D e p a rtm e nt of Jus t ic e, the Congr e ss, a ny I nsp ec tor G e n e r a l, or a ny other F e d e r a l, state or l o ca l go v e rn m e ntal a g e n c y o r c om m is s ion (“Gove r nm e n t Ag e n c ies”); (2) to c om m unic a te with a ny Gov e r n ment Ag e n c ies or othe r wise p a rti c ipate in a ny investig a t i on or pro c ee d ing that may be c ondu c ted by a ny Gov e rn m e nt Ag e n c y, including providing do c uments or other info r mation, without not i c e to the Company; o r (3) und e r a ppl i ca ble
United S tat e s F e d e r a l l a w to (x) disclose in c on f iden c e t r a de s ec r e ts to F e d e r a l, s t a te, a nd loc a l gov e rnm e nt of f ici a ls, or to a n a t t orn e y, for the sole purp o se of r e porting or investig a t i ng a suspe c ted vio l a t i on of law or (y) disclose tr a d e s ec r e ts i n a do c ument fil e d in a la w suit or other pro c ee ding, but only i f t h e filing is made und e r s e a l and p r ote c t e d f r om p u bl i c disclosur e.
(g) D e finit i on s. F or purp o s e s of S ec t i on 5 of these T e rms a nd Condi t ions, the following d e finit i ons shall apply:
(1) “Co mp e ti t i v e B u si n e s s” me a ns a ny busin e ss, p e r son or e nt i ty that is e ng a g e d, or planning or c ontemplating to e ng a ge with i n a p e riod of tw e lve (12) mon t hs, in a ny busin e ss ac t i vi t y that is c ompeti t ive with the bu s iness a nd busin e ss ac t i v i t i e s e ng a g e d in by the Cov e r e d Unit(s).
(2) “Confi d e n tial I n fo r m atio n” me a ns c onfid e nt i a l, prop r iet a ry o r tr a de s ec r e t info r mation, wh e ther or not ma r k e d o r othe r wi s e d e signa t e d a s c onfid e nt i a l, wh e th e r in do c ument, e le c tronic or other fo r m, a nd includ e s, but is n o t l i m i t e d to, i n f orm a t i on that is n o t publ i c ly known r e g a rd i ng fin a n ce s, busin e ss a nd ma r k e t i ng plans, prop o s a ls, proj ec t i ons, fo re c a st s, e xis t ing a nd p rosp ec t i ve c usto m e rs, v e ndor identi t ies, e mp l oy e e s a nd c ompens a t i on, dr a wings, manu a ls, inventions, p a tent a ppl i ca t i o n s, pro c e ss a nd f a bri c a t i on info r mation, r e s ea rch plans a nd r e sul t s, c omp u ter prog r a ms, d a ta b a s e s, softw a re flow c h a rts, s p ec ifi ca t i ons, t e c hnic a l d a ta, s c ientific a n d te c hn i ca l i nfo r mation, t e st r e su l ts and m a rk e t s t udies.
(3) “Company” me a ns, and shall be deemed to include, the Company and any Subsidiary.
(4) “Cov e r e d Un i t(s)” m e a n s: (i) during the p e riod o f the Employ ee’s e mp l oyment with the C ompany, eac h busin e ss unit of the Company; a nd (ii) following the Employment T e rmin a t i on D a t e, eac h busin e ss un i t of the C ompany in o r f o r w hich the Employ e e w a s e mp l oy e d or to whi c h the Employ e e provid e d s e rvi ce s or a bout whi c h the Employ e e obtain e d or h a d ac c e ss to Confid e nt i a l I n fo r mation, in e a c h ca se of th i s c l a use (ii) a t a ny t i me with i n the tw e nty-four (2 4)-mon t h p e riod prior to the Employment T e rmin a t i on D a t e. The Employ e e ac knowl e d g e s a nd a g r e e s that if the Emp l oy e e is or w a s e mp l oy e d a t a s e gment lev e l, the Employ e e is providing o r h a s provi d e d s e rvi ce s to a nd fo r, a nd h a s ob t a ined a nd h a s or h a d a c ce ss to Confid e n t ial I nfo r mat i on a bout, e ac h busin e ss unit of su c h s e g m e nt; a n d if the Employ e e is or w a s e mp l oy e d a t the c o r por a te/h ea dq u a rt e rs lev e l, the Employ e e is providing or h a s provid e d
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s e rvi ce s to a nd fo r, a nd h a s obtain e d a nd h a s or h a d acce ss to Confid e nt i a l Info r mation a bout, eac h busin e ss un i t of the Company.
(5) “Custo m er” me a ns, with r e sp ec t to the Compa n y or the C ov e r e d Unit(s), a s the c a se may b e, a ny busin e ss, p e rson or e nt i ty who pur c h a s e d a ny prod uc ts, goods, sys t e ms or s e rvi ce s f r om the Company o r s u c h C o v e r e d Unit(s) a t a ny t i me during t h e p r e c e ding tw e nty-four (24) mon t hs (o r, if a ft e r the Emp l oyment T e rmin a t i on D a te, the last tw e nt y-four (2 4) mon t hs of the Employ ee’s e mp l oyment with the Company) a nd e i t h e r with whom the Employ e e d ea lt in the c our s e o f p er fo r m i ng the Employ e e’s job dut i e s for the Comp a ny or a bout whom t h e Employ e e h a s or h a d C o nfid e nt i a l I nfo r mation.
(6) “E mp lo y m e n t T er m i n a tion Da t e” me a ns the d a te of t e rmin a t i on of the Employ ee’s e mp l oyment with the Comp a n y, volun t a rily or invo l u nta r i l y, for a ny r e a so n, with or without C a use or G ood R ea so n.
(7) “I nd iv i d u al E m p loyed b y the Co m p a n y” me a ns a ny e mp l oy e e of the C ompany with whom the Employ e e d ea lt in the c ourse of p e r f o rming the Employ ee’s job dut i e s a t a ny t i me dur i ng the pr e ce ding tw e l v e (12) mon t hs (o r, if a ft e r the Employment T e rmin a t i on D a te, the l a st tw e lve (12) mon t hs of t h e Employ ee’s e mp l oym e nt with the C ompany).
(8) “Po te n tial Custo m e r” me a ns, with r e sp e c t to the Company or the Cov e r e d Unit(s), a s the ca se may b e, a ny busin e ss, p e rson or e nt i ty ta r g e ted during the pr e ce ding tw e lve (12) months (o r, i f a ft e r the Employment T e rmin a t i on D a te, the l a st tw e lve (12) months of the Employ ee’s e mp l oyment with the Company) a s a c usto m e r to pur c h a se a ny prod uc ts, goods, sys t e ms or s e rvi ce s f rom the Company or su c h Cov e r e d Unit(s) a nd (i) wi t h whom the Employ e e h a d dir e c t or ind i r e c t c o nta c t, (ii) for whom the Employ e e p a rti c ipat e d i n the d e v e lop m e nt or e x ec ut i on of the plan to s e ll prod uc ts, goods, sys t e ms or s e rvi ce s of the C o mpany or su c h Cov e r e d Unit(s), or (i i i) a bout w h om t he Employ e e othe r w ise h a s or h a d Confid e nt i a l I n fo r mation.
(9) “P r o t ec tive Cov e n a n t P er io d” me a ns the p e riod of the Employ ee’s e mp l oyment with the C ompany a nd t h e tw e l v e (12) mon t h p e riod foll o wing the Employment T e rmin a t i on D a te.
(10) “S o l ici t” a nd “S ol i c i t i ng” me a n a ny dir e c t or ind i r e c t c om m unic a t i on of a ny kind, r e g a rdl e ss of who in i t i a tes i t, that in a ny w a y inv i tes, a dvises, e n c our a g e s or r e q u e sts a n y p e rson to take or r e f r a in f r om taking a ny ac t i ons; provid e d, for purp o s e s of S ec t i on 5(a), the t e r m “S ol i c i t” e x c ludes the pla ce m e nt of g e n e r a l a dv e rtisem e nts inv i t i ng a ppl i ca t i ons for e mp l o y ment that a re not t a rg e t e d to e mp l oy ee s of the C o mpany g e n e r a l l y or a ny sp ec ific e mp l oy e e s of the Company.
6. R e medi e s for Bre ac h of S ec t i on 5.
(a) F o r fe i t u r e a nd C la w b ac k. The Employ e e a g r ee s, by a c ce pta n c e of the A wa rd a nd the Option, that if the Employ e e b r e a c h e s a ny provision of S ec t i ons 5(a), (b), (c), (d) or (e), in a ddi t ion to a ny a nd a ll other r e m e dies a v a i l a b l e to the Company, (i) the Op t ion, wh e ther v e sted o r unv e sted, sh a ll upon w r i t ten not i c e (w hich may b e in e le c tronic fo r m) i m medi a tely te r m i n a te a nd lapse a nd sh a ll no longer be e x e r c isable a s to a ny S h a r e s; a nd (ii) the Emp l oy e e sh a ll with i n five (5) busin e ss d a ys follow i ng r e c e ipt of w r i t ten d e m a nd the r e fo r e p a y to the Company in ca sh, the a mount of the e x ce ss o f the F a ir M a rk e t V a lue o n the e x e r c ise d a te o f a n y S h a r e s the Employ e e
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ac quir e d upon e x e r c ise of the O pt i on (o ther than a ny S h a r e s ac quir e d upon e x e r c i s e of the Option more than t w e lve (1 2) m onths b e fo r e (x) the Emp l oyment T e rmin a t i on D a te in the si t u a t i on w h e re the Employ e e is no long e r e mp l oy e d by the Comp a n y, or (y) the d a te of su c h br e ac h in the si t u a t i on wh e re the Employ e e is e mp l oy e d by the Company), ov e r the e x e r c ise pri c e for su c h S h a r e s.
(b) F orum. The Employ e e a g r e e s, by a c ce pta n c e of the Option, that a ny jud i c ial ac t i on brou g ht with r e sp e c t to the provisions of S e c t i o n s 5 or 6 of these T e r m s a nd Condi t ions may be fil e d in the United S tat e s Distri c t Court for the Middle Distri c t of F lori d a or in the Cir c uit Court
of Br e v a rd County, F lor i da a nd h e r e by c ons e nts t o the jurisd i c t i on of su c h c ourts a nd w a ives a ny obje c t i on h e/she m a y n o w or h e r ea ft e r h a v e to su c h v e nu e.
(c) Ch a nge in Contro l. I f a Ch a nge in Control of the Company o cc u r s following the G ra nt D a te a nd the Employ e e cea s e s the rea ft e r to be a n e mp l oy e e of the Company in a c ir c ums t a n c e s e t f orth in S ec t i on 2(f) h e r e i n, the provisions of Sec t i ons 5 a nd 6 sh a ll i m medi a tely te r m i n a te a n d be of no fu r t h e r f o r c e a nd e f f e c t.
7. S ec urities L a w R e quir e m e n t s. The Company sh a l l not be r e quir e d to is s ue sh a r e s upon e x e r c i s e of the Opt i on unless a nd unt i l: (a) su c h sh a r e s h a ve b e e n duly l i sted upon eac h stock e x c h a n g e on whi c h the Company’s Com m on S t o c k is then r e gis t e r e d; a nd (b) a r e gis tr a t i on stat e ment und e r the S ec uriti e s A c t of 193 3, a s a mend e d, with r e sp ec t to su c h S h a r e s is then e f f e c t i v e.
8. Bo a rd Com m i t tee Admin i str a t i on. The Bo a rd Com m i t tee sh a ll h a ve a uthority, subj ec t to the e xp r e ss pr o vis i ons of the P lan a s in e f fec t f r om t i me to t i me, to c onstrue the s e T e rms a nd Condi t ions a nd the Ag ree m e nt a nd the P l a n, to e stabli s h, a mend a nd r e s c ind rul e s a nd r e gulations r e lating to the P lan, a nd to make a ll ot h e r d e te r m i n a t i ons in the judg m e nt of the Bo a rd Com m i t tee n ece ssa r y or d e sir a ble for the a dm i nis t r a t i on of the P lan. The Bo a rd Com m i t tee may c or r e c t a ny d e f ec t or s u pply a ny om i ss i on or r e c on c i l e a ny inconsis t e n c y in these T e rms a nd Condi t ions a nd the Ag re e ment in the mann e r a nd t o the e xtent it sh a ll d ee m e xp e dient to ca r ry the P lan into e f f e c t, and it s h a ll be the s o le a nd fi n a l j udge of su c h e x p e dien c y.
9. I n c orpo r a t i on of P lan P r o vis i on s. Th e se T e rms a n d Condi t ions a nd the Ag r ee ment a re m a de p u rsu a nt to t h e P lan, the provisions o f whi c h a r e h e r e by i n c o rpo ra ted by r e fer e n c e. C a pi t a l i ze d te r ms not o t h e r w ise d e fin e d h e r e in sh a ll h a ve the m ea nings s e t f orth for su c h te r ms i n the P lan. I n t h e e v e nt o f a c onfli c t b e tw ee n t h e te r ms of these T e rms a n d Condi t ions a nd the Ag ree ment a nd the P l a n, the t e rms of the P l a n sh a l l gove r n.
10. Comp l ian c e with S ec t i o n 409A of the C od e. T he Ag r ee ment a nd the P lan a r e in t e nd e d to be e x e mpt fr om the provisions of S e c t i on 409A of the Code to the maximum e xtent p e rmit t e d by a ppl i ca ble la w. To the e xtent a ppl i ca ble, it is in t e nd e d that t he Ag ree ment a nd the P lan c omp l y with the p rovisi o ns of S ec t i on 40 9 A of the Cod e, so that the income inclusion provisions of S ec t i on 4 0 9A(a)(1) of the Code do not a pply to t he Employ e e. The Ag ree ment a nd the P lan sh a ll be a dm i n i ste re d a nd in t e rp r e ted in a mann e r c onsistent with th i s in t e nt, a nd a ny provision that would ca u se the Ag r ee ment o r the P lan to f a il to s a t i sfy S e c t i on 409A of the Code sh a ll h a ve no fo rc e a nd e f f e c t unt i l a mend e d to c omp l y with S ec t i on 40 9 A of the Code (w hich a mendm e nt may be r e tr o ac t i ve to the e xtent p e r m i t ted by S ec t i on 409A of the Code a nd may be made by the Company w i t hout the c ons e nt of the Employ ee). I f t h e A w a r d is subj ec t to S ec t i on
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409A of the Cod e, a r e t i r e ment or t e rmin a t i on of e mp l oyment sh a ll not be d ee m e d to o c c ur f o r purp o s e s of a ny provisi o n of the A g r e e ment p ro v i d ing for the p a yment o f a ny a moun t s upon or following r e t i r e ment or t e rmin a t i on of e mp l oym e nt unless su c h r e t i r e ment or te r m i n a t i on is a lso a “s e p a r a t i on f r om s e rvi c e” with i n the me a ning of S ec t i on 409A of the Cod e, a nd for purp o s e s o f a ny su c h provision in the Ag ree ment, r e fer e n c e s to a “te r m i n a t i on,” “te r m i n a t i on of e mp l oyment,” “r e t i r e,” “r e t ir e ment” or l i ke te r ms sh a ll me a n “s e p a r a t i on f r om s e rv i ce.” Notwithstanding a nyth i ng in the Ag r e e m e nt to the c ontr a ry, if t h e A wa rd is subj ec t to S ec t i on 409A of the Cod e,
a nd if t h e Employ e e is a “S p ec ifi e d Employ e e” (with i n the me a ning of t h e Company’s S p e c ifi e d Employ e e P ol i c y for 40 9 A A r r a ng e ments) a s of t he d a te the Employ e e ce a s e s to be a n e mp l oy e e of the Company, then i f the r e is a p a yout of the A wa rd, su c h p a yout sh a l l be d e l a y e d unt i l a nd made during the s e v e nth ca lend a r mon t h following the ca len d a r mon t h duri n g whi c h the E m ploy e e cea s e d to b e a n e mp l oy e e of the Company (o r, if e a rli e r, the ca l e nd a r mon t h following the ca lend a r mon t h of the Employ e e’s d e a th) to the e xt e nt r e quir e d by Se c t i on 409A of the Co d e. Notwithstanding the fo re going, no p a rti c ular t a x r e sult for the E m ployee with r e sp ec t to a ny income re c ogniz e d by t h e Employ e e in c on n ec t i on with the Ag r e e ment is gu a r a nt e e d, a nd the Employ e e solely sh a ll be r e spons i ble for a ny t a x e s, p e n a l t ies or in t e r e st i m p os e d on the Employ e e in c onn ec t i on with the A gr e e ment. R e f e r e n c e to S ec t i on 409A of t h e Co d e will a lso include a ny prop o s e d, tempo r a ry or f i n a l r e gulations, or a ny o t h e r guida n ce, promulga t e d with r e sp e c t to su c h S ec t i on by the U.S. D e p a rtm e nt of the T re a sury or the I n t e rn a l R e v e nue S e r vic e.
11. D a ta P riv ac y; El ec tronic D e l i v e r y. By acce ptan c e of the A wa rd a nd the Option, the Employ e e ac knowl e dg e s a nd a gre e s that: (a) d a ta, including the Employ ee’s p e rso n a l d a ta, n ece ss a ry to a dm i nis t e r the Ag ree ment may be e x c h a n g e d a mong the Company a nd i t s S ubsidiari e s a nd a f f i l iat e s a s n ece s s a ry, a nd with a ny v e ndor e ng a g e d by t h e Company to a ss i st in the a dm i nis t r a t i on of e q u i t y a w a rds; a nd (b) unl e s s a nd unt i l r e vok e d in w r i t ing by t he Employ ee, info r mation a nd mat e ri a ls in c onn ec t i on with t h e Ag ree ment or a ny a w a rds und e r the P lan, including, but not l i m i ted to, a ny prosp ec tuses a nd plan do c ument, may be provid e d by me a ns of e le c tronic d e l i v e ry (incl u ding by e-mail, by w e b s i te ac c e ss and/or by f ac s i m i le).
12. Mi s ce l l a n e ou s. Th e se T e rms a nd Condi t ions a nd the other portions of the Ag ree ment: (a) sh a ll be bind i ng upon a nd inure t o the b e n e fit of a ny su c c e ssor of the Company; (b) sh a ll be gov e r n e d by the la w s of the S tate of D e la w a re a nd a ny a ppl ic a ble la w s o f the United S tat e s; a nd (c) e x ce pt a s p e rmit t e d und e r S ec t i ons 3.2, 12 a nd 13.6 of the P lan a nd S ec t i on 8 a nd
10 of these T e rms a nd C ondi t ion s, may not be a m e nd e d in a mann e r th a t w ould m a te r ially i mpair the rights of the Employ e e without the w ritten c o ns e nt of both the C omp a ny a nd the Employ e e. The Ag ree m e nt sh a ll n o t in a ny w a y in t e r fe re with or l i m it the right o f the Company or a ny S ubsidia r y to te r m i n a te the Employ ee’s e mp l oyment or s e rvi c e with the Company or a ny S ubsidia r y a t a ny t i me, a nd no c ontr ac t o r right o f e m ploy m e nt sh a ll be i mp l ied by these T e rms a nd Condi t ions a nd the Ag ree ment of whi c h th e y fo r m a p a rt. F or purp o s e s of these T e rms a nd Condi t ions and the Ag r e e ment, (i) e mp l oyment by the Comp a ny or a ny S u bsid i a ry or a su c c e ssor to t he Company sh a ll be c ons i d e r e d e mp l oyment by the Comp a ny; (ii) the c los i ng of a divestiture or other s a le of a s s e ts or a busin e ss of the Company or a ny S ubsidia r y (r e g a rdl e ss of tr a n s ac t i on stru c tur e) t h a t r e sul t s in the Employ e e no lon g e r b e ing e mp l oy e d by t he Company or a ny S ubsid i a ry sh a l l, for pur p os e s of S ec t i on 2(c) a nd S ec t i on 2(f) of the s e T e r ms a nd Condi t ions, be
tr ea ted a s a n invo l unta r y te r m i n a t i on of e mp l oyment of the E mp l oy e e by t h e Company oth e r th a n for C a use (f o r a voidan c e of doubt, e v e n if the E mp l oy e e r e t a ins the s a me e mp l oyment posit i on with the ac quir e r following su c h c los i ng); a nd (iii) r e fer e n ce s to “te r m i n a t ion of e mp l oyment,” “ce ssation of e mp l oym e nt,” “cea s e s to be e mp l oy e d,” “c ea s e s to be a n e mp l oy ee” or si m i l a r phr a s e s s h a ll be d e e med t o h a ve o cc u r r e d a s o f the last d a y a c tually wo r k e d (a s d e t e rmin e d by the
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Company), a nd sh a ll not include a ny not i c e p e riod or a ny p e riod of s e v e r a n c e or s e p a r a t i on p a y or p a y c ont i nu a t i on (w h e t h e r r e qui r e d by law o r c ust o m or othe r wise p rovid e d) following the last d a y ac tually wo r k e d, provid e d, how e v e r, if the A wa r d is subj ec t to S ec t i on 4 09A of the Code a nd fu r ther s u c h d e te r m i n a t i on of the last d a y wo r k e d sh a ll be c onsistent with the a ppl ic a ble
r e quir e ments of S ec t i on 409A of the Code; provid e d, how e v er, that if the Company te r m i n a tes the Employ ee’s e mp l oyment a s a r e sult of t h e Empl o y ee’s D i s a bi l i t y or a s a result of the Employ e e’s f a i l ure to r e turn to wo r k wh e n the Employ e e d o e s not h a v e, or no long e r h a s, a Dis a bi l i t y, then the last d a y ac tually wo r k e d sh a ll me a n t he d a y of su c h te r m i n a t i o n, a nd, if the A wa rd is subj ec t to S ec t i on 409A of the C od e, the d a y of su c h t e rmin a t i on is c onsistent with the a ppl i ca ble r e quir e ments o f S ec t i on 409A of the Cod e. I f the A wa rd is a ssu m e d o r a n e w a w a rd is subs t i t uted the re for in a ny c orp o r a te r e org a n i za t i on (in c lud i n g, but not l i m i ted to, a ny t r a ns ac t i on o f the type r e fer re d to in Se c t i on 424(a) o f the Cod e), e mp l oyment by su c h a s s um i ng or subs t i t ut i ng c orpo ra t i on o r by a p a r e n t c orpo r a t i on or subs i dia r y the re o f sh a ll b e c onsid e r e d f o r a ll purp o s e s o f the A w a rd to b e e mp l oyment by the Comp a ny.
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