5(7(17,21$1'2:1(56+,3 &+$1*((9(17$*5((0(17 7KLV5HWHQWLRQDQG2ZQHUVKLS&KDQJH(YHQW$JUHHPHQW³$JUHHPHQW´ LVPDGH HIIHFWLYHDVRI0D\E\DQGEHWZHHQ,PPHUVLRQ&RUSRUDWLRQWKH³&RPSDQ\´ DQG )UDQFLV-RVH ³([HFXWLYH´ 5(&,7$/6 ,QRUGHUWRPDNHDYDLODEOHFRPSHQVDWLRQSXUVXDQWWRWKLV$JUHHPHQWWKDWZLOOQRWEH VXEMHFWWRWD[DWLRQXQGHU6HFWLRQ $DVGHILQHGEHORZ ([HFXWLYHDQGWKH%RDUGRI'LUHFWRUV RIWKH&RPSDQ\WKH³%RDUG´ KDYHGHWHUPLQHGWKDWLWLVLQWKHEHVWLQWHUHVWVRIWKH&RPSDQ\DQG ([HFXWLYHWRHQWHULQWRWKLV5HWHQWLRQDQG2ZQHUVKLS&KDQJH(YHQW$JUHHPHQW7KH&RPSDQ\ LQWHQGVWKDWLQFRPHSURYLGHGWR([HFXWLYHSXUVXDQWWRWKLV$JUHHPHQWZLOOQRWEHVXEMHFWWR WD[DWLRQXQGHU6HFWLRQ $DQGWKHSURYLVLRQVRIWKLV$JUHHPHQWVKDOOEHLQWHUSUHWHGDQG FRQVWUXHGLQIDYRURIVDWLVI\LQJDQ\DSSOLFDEOHUHTXLUHPHQWVRI6HFWLRQ $+RZHYHUWKH &RPSDQ\GRHVQRWJXDUDQWHHDQ\SDUWLFXODUWD[HIIHFWIRULQFRPHSURYLGHGWR([HFXWLYHSXUVXDQW WRWKLV$JUHHPHQW,QDQ\HYHQWH[FHSWIRUWKH&RPSDQ\¶VUHVSRQVLELOLW\WRZLWKKROGDSSOLFDEOH LQFRPHDQGHPSOR\PHQWWD[HVIURPFRPSHQVDWLRQSDLGRUSURYLGHGWR([HFXWLYHWKH&RPSDQ\ VKDOOQRW EHUHVSRQVLEOHIRUWKHSD\PHQWRIDQ\DSSOLFDEOHWD[HVRQFRPSHQVDWLRQSDLGRU SURYLGHGWR([HFXWLYHSXUVXDQWWRWKLV$JUHHPHQW 7KH%RDUGKDVGHWHUPLQHGWKDWLWLVLQWKHEHVWLQWHUHVWVRIWKH&RPSDQ\WRDVVXUHWKDW WKH&RPSDQ\ZLOOKDYHWKHFRQWLQXHGGHGLFDWLRQDQGVHUYLFHRIWKH([HFXWLYHQRWZLWKVWDQGLQJ WKHSRVVLELOLW\RURFFXUUHQFHRID&KDQJHLQ&RQWURODVGHILQHGEHORZ RIWKH&RPSDQ\ $*5((0(17 ,QUHFRJQLWLRQWKHUHRIWKHSDUWLHVQRZDJUHHDVIROORZV 'HILQLWLRQV)RUSXUSRVHVRIWKLV$JUHHPHQW D ³&KDQJHLQ&RQWURO´PHDQVWKHRFFXUUHQFHRIDQ\RIWKHIROORZLQJ L DQ\³SHUVRQ´DVVXFKWHUPLVXVHGLQ6HFWLRQV G DQGG RI WKH6HFXULWLHV([FKDQJH$FWRIDVDPHQGHGWKH³([FKDQJH$FW´ EHFRPHVWKH³EHQHILFLDO RZQHU´DVGHILQHGLQ5XOH GSURPXOJDWHGXQGHUWKH([FKDQJH$FW GLUHFWO\RULQGLUHFWO\RI VHFXULWLHVRIWKH&RPSDQ\UHSUHVHQWLQJPRUHWKDQILIW\SHUFHQW RIWKHWRWDOFRPELQHG YRWLQJSRZHURIWKH&RPSDQ\¶VWKHQRXWVWDQGLQJVHFXULWLHVHQWLWOHGWRYRWHJHQHUDOO\LQWKH HOHFWLRQRIWKH&RPSDQ\¶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
3DJH LL DQ2ZQHUVKLS&KDQJH (YHQWRUVHULHVRIUHODWHG2ZQHUVKLS &KDQJH(YHQWVFROOHFWLYHO\D³7UDQVDFWLRQ´ LQZKLFKWKHVWRFNKROGHUVRIWKH&RPSDQ\ LPPHGLDWHO\EHIRUHWKH7UDQVDFWLRQGRQRWUHWDLQLPPHGLDWHO\DIWHUWKH7UDQVDFWLRQGLUHFWRU LQGLUHFWEHQHILFLDORZQHUVKLSRIPRUHWKDQILIW\SHUFHQW RIWKHWRWDOFRPELQHGYRWLQJ SRZHURIWKHRXWVWDQGLQJVHFXULWLHVHQWLWOHGWRYRWHJHQHUDOO\LQWKHHOHFWLRQRI'LUHFWRUVRULQ WKHFDVHRIDQ2ZQHUVKLS&KDQJH(YHQWGHVFULEHGLQ6HFWLRQ F LLL WKHHQWLW\WRZKLFKWKH DVVHWVRI WKH&RPSDQ\ZHUHWUDQVIHUUHGWKH³7UDQVIHUHH´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³6HFWLRQ$´ ZRXOGEHFRPHSD\DEOHXQGHUWKLV$JUHHPHQWE\UHDVRQRID&KDQJH LQ&RQWUROVXFKDPRXQWVKDOOEHFRPHSD\DEOHRQO\LIWKHHYHQWFRQVWLWXWLQJD&KDQJHLQ&RQWURO ZRXOGDOVRFRQVWLWXWHDFKDQJHLQRZQHUVKLSRUHIIHFWLYHFRQWURORIWKH&RPSDQ\RUDFKDQJHLQ WKHRZQHUVKLSRIDVXEVWDQWLDOSRUWLRQRIWKHDVVHWVRIWKH&RPSDQ\ZLWKLQWKHPHDQLQJRI 6HFWLRQ$ E ³*RRG5HDVRQ´PHDQVDQ\RIWKHIROORZLQJFRQGLWLRQVZKLFKFRQGLWLRQV UHPDLQV LQ HIIHFWWKLUW\ GD\VDIWHUZULWWHQQRWLFHWRWKH%RDUGRUWKH&RPSDQ\¶V&KLHI ([HFXWLYH2IILFHUIURP([HFXWLYHRIVXFKFRQGLWLRQV L DPDWHULDOGHFUHDVHLQ([HFXWLYH¶VEDVHVDODU\RWKHUWKDQD PDWHULDOGHFUHDVHWKDWDSSOLHVJHQHUDOO\WRRWKHUH[HFXWLYHVRIWKH&RPSDQ\DW([HFXWLYH¶VOHYHO LL DPDWHULDODGYHUVHFKDQJHLQWKH([HFXWLYH¶VWLWOHDXWKRULW\ UHVSRQVLELOLWLHVRUGXWLHVRU LLL WKHUHORFDWLRQRIWKH([HFXWLYH¶VZRUNSODFHIRUWKH&RPSDQ\WRD ORFDWLRQWKDWLVPRUHWKDQIRUW\ PLOHVGLVWDQWIURP([HFXWLYH¶VSUHVHQWZRUNORFDWLRQIRUWKH &RPSDQ\ SURYLGHGWKDWVXFKZULWWHQQRWLFHPXVWEHJLYHQZLWKLQWKLUW\ GD\VIROORZLQJWKHILUVW RFFXUUHQFHRIDQ\RIWKHJRRGUHDVRQFRQGLWLRQVVHWIRUWKLQWKLVVXEVHFWLRQ E DQGWKH ([HFXWLYH¶VUHVLJQDWLRQPXVWRFFXUZLWKLQVL[ PRQWKVIROORZLQJWKHILUVWRFFXUUHQFHRIWKH JRRGUHDVRQFRQGLWLRQ F ³2ZQHUVKLS&KDQJH(YHQW´PHDQVWKHRFFXUUHQFHRIDQ\RIWKHIROORZLQJ ZLWKUHVSHFWWRWKH&RPSDQ\L WKHGLUHFWRULQGLUHFWVDOHRUH[FKDQJHLQDVLQJOHRUVHULHVRI UHODWHGWUDQVDFWLRQVE\WKHVWRFNKROGHUVRIWKH&RPSDQ\RIPRUHWKDQILIW\SHUFHQW RIWKH YRWLQJVWRFNRIWKH&RPSDQ\LL DPHUJHURUFRQVROLGDWLRQLQZKLFKWKH&RPSDQ\LVDSDUW\RU LLL WKHVDOHH[FKDQJHRUWUDQVIHURIDOORUVXEVWDQWLDOO\DOORIWKHDVVHWVRIWKH&RPSDQ\RWKHU WKDQDVDOHH[FKDQJHRUWUDQVIHUWRRQHRUPRUHVXEVLGLDULHVRIWKH&RPSDQ\ G DWHUPLQDWLRQIRU³&DXVH´PHDQV([HFXWLYH¶VWHUPLQDWLRQEDVHGXSRQ ([HFXWLYH¶VWKHIWGLVKRQHVW\PLVFRQGXFWEUHDFKRIILGXFLDU\GXW\RUIDOVLILFDWLRQRIDQ\
3DJH &RPSDQ\GRFXPHQWVRUUHFRUGV ([HFXWLYH¶VPDWHULDOIDLOXUHWRDELGHE\WKH&RPSDQ\¶VFRGH RIFRQGXFWRURWKHUSROLFLHVLQFOXGLQJZLWKRXWOLPLWDWLRQSROLFLHVUHODWLQJWRFRQILGHQWLDOLW\DQG UHDVRQDEOHZRUNSODFHFRQGXFW ([HFXWLYH¶VXQDXWKRUL]HGXVHPLVDSSURSULDWLRQGHVWUXFWLRQ RUGLYHUVLRQRIDQ\WDQJLEOHRULQWDQJLEOHDVVHWRUFRUSRUDWHRSSRUWXQLW\RIWKH&RPSDQ\ LQFOXGLQJZLWKRXWOLPLWDWLRQ([HFXWLYH¶VLPSURSHUXVHRUGLVFORVXUHRIWKH&RPSDQ\¶V FRQILGHQWLDORUSURSULHWDU\LQIRUPDWLRQEXWH[FOXGLQJLPPDWHULDORULQDGYHUWHQWDFWVE\ ([HFXWLYHWDNHQLQJRRGIDLWKWKDWDSURIHVVLRQDOLQ([HFXWLYH¶VSRVLWLRQZLWKVXEVWDQWLDOO\WKH VDPHVNLOODQGH[SHULHQFHDV([HFXWLYHUHDVRQDEO\FRXOGKDYHWDNHQLQJRRGIDLWKDQGSURPSWO\ FXUHGDIWHUGLVFRYHU\RUQRWLFH DQ\LQWHQWLRQDODFWE\WKH([HFXWLYHWKDWKDVDPDWHULDO GHWULPHQWDOHIIHFWRQWKH&RPSDQ\¶VUHSXWDWLRQRUEXVLQHVVEXWH[FOXGLQJDQ\DFWWKDWLVWDNHQ E\WKH([HFXWLYHGXULQJWKHH[HFXWLRQRIWKH([HFXWLYH¶VGXWLHVRUUHVSRQVLELOLWLHVZKLFKDFWWKH ([HFXWLYHEHOLHYHGLQJRRGIDLWKZDVLQWKHLQWHUHVWVRIWKH&RPSDQ\DQGRULWVVWRFNKROGHUVDQG ZKLFKDUHDVRQDEOHSURIHVVLRQDOLQ([HFXWLYH¶VSRVLWLRQZLWKVXEVWDQWLDOO\WKHVDPHVNLOODQG H[SHULHQFHDV ([HFXWLYHUHDVRQDEO\FRXOGKDYHWDNHQDQGEHOLHYHGLQJRRGIDLWKZDVLQWKH LQWHUHVWVRIWKH&RPSDQ\DQGRULWVVWRFNKROGHUV ([HFXWLYH¶VUHSHDWHGIDLOXUHRULQDELOLW\WR SHUIRUPDQ\UHDVRQDEOHDVVLJQHGGXWLHVDIWHUZULWWHQQRWLFHIURPWKH&RPSDQ\RIDQGD UHDVRQDEOHRSSRUWXQLW\WRFXUHVXFKIDLOXUHRULQDELOLW\EXWH[FOXGLQJDQ\IDLOXUHRULQDELOLW\ GXHWRWKH([HFXWLYH¶VGHDWKRUGLVDELOLW\ ([HFXWLYH¶VFRQYLFWLRQLQFOXGLQJDQ\SOHDRI JXLOW\RUQRORFRQWHQGHUH IRUDQ\FULPLQDODFWWKDWLPSDLUV([HFXWLYH¶VDELOLW\WRSHUIRUPKLV GXWLHVIRUWKH&RPSDQ\ H ³6HSDUDWLRQIURP6HUYLFH´VKDOOKDYHWKHPHDQLQJGHWHUPLQHGE\7UHDVXU\ 5HJXODWLRQVLVVXHGSXUVXDQWWR6HFWLRQ$ 7HUPLQDWLRQ:LWKRXW&DXVHRU5HVLJQDWLRQIRU*RRG5HDVRQ,QWKHHYHQWWKDW WKH&RPSDQ\RULWVVXFFHVVRUWHUPLQDWHV([HFXWLYH¶VHPSOR\PHQWZLWKRXW&DXVHRU([HFXWLYH UHVLJQVIRU*RRG5HDVRQDQG([HFXWLYHLVQRWHQWLWOHGWRUHFHLYHWKHVHYHUDQFHSD\DQGEHQHILWV GHVFULEHGLQ6HFWLRQEHORZ([HFXWLYHZLOOEHHQWLWOHGWRUHFHLYHWKHIROORZLQJSD\PHQWDQG EHQHILWVSURYLGHGWKDWSULRUWRWKHVL[WLHWKWK GD\IROORZLQJWKHGDWHRIVXFKWHUPLQDWLRQ ([HFXWLYHKDVVLJQHGDJHQHUDOUHOHDVHRINQRZQDQGXQNQRZQFODLPVLQDIRUPVDWLVIDFWRU\WR WKH&RPSDQ\DQGWKHSHULRGIRUUHYRFDWLRQKDVODSVHGZLWKRXWWKHJHQHUDOUHOHDVHKDYLQJEHHQ UHYRNHG D SD\PHQWLQDOXPSVXPRQWKHVL[WLHWKWK GD\IROORZLQJ([HFXWLYH¶V WHUPLQDWLRQRIHPSOR\PHQWRIDQDPRXQWHTXDOWRVL[ PRQWKV¶EDVHVDODU\DW([HFXWLYH¶VILQDO EDVHVDODU\UDWHVXEMHFWWRDSSOLFDEOHZLWKKROGLQJDQG E FRPPHQFLQJRQWKHVL[WLHWKWK GD\IROORZLQJ([HFXWLYH¶VWHUPLQDWLRQ RIHPSOR\PHQWSD\PHQWRIWKHSUHPLXPVLQFOXGLQJUHLPEXUVHPHQWWR([HFXWLYHRIDQ\VXFK SUHPLXPVSDLGE\([HFXWLYHGXULQJVXFKVL[W\ GD\SHULRG QHFHVVDU\WRFRQWLQXH ([HFXWLYH¶VDQG([HFXWLYH¶VGHSHQGHQWVJURXSKHDOWKLQVXUDQFHFRYHUDJHXQGHU&2%5$XQWLO WKHHDUOLHURIL VL[ PRQWKVIROORZLQJ([HFXWLYH¶VWHUPLQDWLRQGDWHRULL WKHGDWHRQZKLFK ([HFXWLYHILUVWEHFRPHVHOLJLEOHWRREWDLQRWKHUJURXSKHDOWKLQVXUDQFHFRYHUDJH7KHUHDIWHU ([HFXWLYHPD\HOHFWWRSXUFKDVHFRQWLQXHGJURXSKHDOWKLQVXUDQFHFRYHUDJHDWKLV RZQH[SHQVH LQDFFRUGDQFHZLWK&2%5$1RWZLWKVWDQGLQJWKHIRUHJRLQJSD\PHQWRIVXFKSUHPLXPVVKDOO QRWFRPPHQFHXQOHVVDQG XQWLO([HFXWLYHKDVLQFXUUHGD6HSDUDWLRQIURP6HUYLFH ,QWKHHYHQWWKDWD&KDQJHLQ&RQWUROFRQVWLWXWLQJDFKDQJHLQRZQHUVKLSRUHIIHFWLYH FRQWURORIWKH&RPSDQ\RUDFKDQJHLQWKHRZQHUVKLSRIDVXEVWDQWLDOSRUWLRQRIWKHDVVHWVRIWKH
3DJH &RPSDQ\ZLWKLQWKHPHDQLQJRI6HFWLRQ$ D³6HFWLRQ$&KDQJHLQ&RQWURO(YHQW´ RFFXUVRQRUEHIRUHWKHQLQHWLHWKWK GD\IROORZLQJDGDWHRQZKLFK([HFXWLYHH[SHULHQFHVD WHUPLQDWLRQRIHPSOR\PHQWLQFRQQHFWLRQZLWKZKLFK([HFXWLYHLVHQWLWOHGWRUHFHLYHWKH SD\PHQWSURYLGHGE\6HFWLRQ D ([HFXWLYHZLOOEHHQWLWOHGWRUHFHLYHWKHIROORZLQJDGGLWLRQDO SD\PHQWDQGEHQHILWV D SD\PHQWRQWKHVL[WLHWKWK GD\IROORZLQJWKH6HFWLRQ$&KDQJHLQ &RQWURO(YHQWRIDQDPRXQWHTXDOWRVL[ PRQWKV¶EDVHVDODU\DW([HFXWLYH¶VILQDOEDVHVDODU\ UDWHVXEMHFWWRDSSOLFDEOHZLWKKROGLQJDQG E FRPPHQFLQJZLWKWKHVHYHQWKWK PRQWKIROORZLQJ([HFXWLYH¶V WHUPLQDWLRQRIHPSOR\PHQWSD\PHQWRIWKHSUHPLXPVQHFHVVDU\WRFRQWLQXH([HFXWLYH¶VDQG ([HFXWLYH¶VGHSHQGHQWV JURXSKHDOWKLQVXUDQFHFRYHUDJHXQGHU&2%5$XQWLOWKHHDUOLHURIL WZHOYH PRQWKVIROORZLQJ([HFXWLYH¶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¶VHPSOR\PHQWZLWKRXW&DXVHRU([HFXWLYHUHVLJQVIRU*RRG 5HDVRQ([HFXWLYHZLOOEHHQWLWOHGWRUHFHLYHWKHIROORZLQJSD\PHQWDQGEHQHILWVSURYLGHGWKDW SULRUWRWKHVL[WLHWKWK GD\IROORZLQJWKHGDWHRIVXFKWHUPLQDWLRQ([HFXWLYHKDVVLJQHGD JHQHUDOUHOHDVHRINQRZQDQGXQNQRZQFODLPVLQDIRUPVDWLVIDFWRU\WRWKH&RPSDQ\DQGWKH SHULRGIRUUHYRFDWLRQKDVODSVHGZLWKRXWWKHJHQHUDOUHOHDVHKDYLQJEHHQUHYRNHG D SD\PHQWLQDOXPSVXPRQWKHVL[WLHWKWK GD\IROORZLQJ([HFXWLYH¶V WHUPLQDWLRQRIHPSOR\PHQWRIDQDPRXQWHTXDOWRWZHOYH PRQWKV¶EDVHVDODU\DW([HFXWLYH¶V ILQDOEDVH VDODU\UDWHVXEMHFWWRDSSOLFDEOHZLWKKROGLQJ E FRPPHQFLQJRQWKHVL[WLHWKWK GD\IROORZLQJ([HFXWLYH¶VWHUPLQDWLRQ RIHPSOR\PHQWSD\PHQWRIWKHSUHPLXPVLQFOXGLQJUHLPEXUVHPHQWWR([HFXWLYHRIDQ\VXFK SUHPLXPVSDLGE\([HFXWLYHGXULQJVXFKVL[W\ GD\SHULRG QHFHVVDU\WRFRQWLQXH ([HFXWLYH¶VDQG ([HFXWLYH¶V GHSHQGHQWVJURXSKHDOWKLQVXUDQFHFRYHUDJHXQGHU&2%5$XQWLO WKHHDUOLHURIL WZHOYH PRQWKVIROORZLQJ([HFXWLYH¶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¶VHPSOR\PHQWWHUPLQDWHVDW DQ\WLPHDVDUHVXOWRIKLV GHDWKRUGLVDELOLW\ PHDQLQJ([HFXWLYHLVXQDEOH WRSHUIRUPKLV GXWLHV
3DJH IRUDQ\FRQVHFXWLYHVL[ PRQWKSHULRGZLWKRUZLWKRXWUHDVRQDEOHDFFRPPRGDWLRQDVDUHVXOW RIDSK\VLFDODQGRUPHQWDOLPSDLUPHQW ([HFXWLYHZLOOEHHQWLWOHGWRQRFRPSHQVDWLRQRU EHQHILWVIURPWKH&RPSDQ\RWKHUWKDQWKRVHHDUQHGWKURXJKWKHGDWHRI([HFXWLYH¶VWHUPLQDWLRQ ([HFXWLYHDJUHHVWKDWLIKH UHVLJQVIURPKLV HPSOR\PHQWZLWKWKH&RPSDQ\KH ZLOOSURYLGHWKH &RPSDQ\ZLWKFDOHQGDU GD\V¶ZULWWHQQRWLFHRIVXFKUHVLJQDWLRQ7KH&RPSDQ\PD\LQLWV VROHGLVFUHWLRQHOHFWWRZDLYHDOORUDQ\SDUWRIVXFKQRWLFHSHULRGDQGDFFHSWWKH([HFXWLYH¶V UHVLJQDWLRQDWDQHDUOLHUGDWH 7HUPLQDWLRQIRU&DXVH,I([HFXWLYH¶VHPSOR\PHQWLVWHUPLQDWHGE\WKH&RPSDQ\ DWDQ\WLPHIRU&DXVHDVGHILQHGDERYHLQSDUDJUDSK ([HFXWLYHZLOOEHHQWLWOHGWRQR FRPSHQVDWLRQRUEHQHILWVIURPWKH&RPSDQ\RWKHUWKDQWKRVHHDUQHGWKURXJKWKHGDWHRIKLV WHUPLQDWLRQIRU&DXVH &RPSOLDQFH:LWK6HFWLRQ$ D 1RWZLWKVWDQGLQJDQ\WKLQJVHWIRUWKKHUHLQWRWKHFRQWUDU\QRDPRXQW SD\DEOHSXUVXDQWWR6HFWLRQRU6HFWLRQRIWKLV $JUHHPHQWZKLFKFRQVWLWXWHVD³GHIHUUDORI FRPSHQVDWLRQ´ZLWKLQWKHPHDQLQJRI7UHDVXU\5HJXODWLRQVSURPXOJDWHGSXUVXDQWWR6HFWLRQ $WKH³6HFWLRQ$5HJXODWLRQV´ VKDOOEHSDLGXQOHVVDQGXQWLO([HFXWLYHKDVLQFXUUHGD 6HSDUDWLRQIURP6HUYLFH)XUWKHUPRUHWRWKHH[WHQWWKDW([HFXWLYHLVD³VSHFLILHGHPSOR\HH´RI WKH&RPSDQ\DVRIWKHGDWHRI([HFXWLYH¶V6HSDUDWLRQIURP6HUYLFHDQGWRWKHH[WHQWUHTXLUHGE\ WKH6HFWLRQ$5HJXODWLRQVQRDPRXQWWKDWFRQVWLWXWHVDGHIHUUDORIFRPSHQVDWLRQZKLFKLV SD\DEOHRQDFFRXQWRIWKH(PSOR\HH¶V6HSDUDWLRQIURP6HUYLFHVKDOOEHSDLGWR([HFXWLYHEHIRUH WKHGDWHWKH³'HOD\HG3D\PHQW'DWH´ ZKLFKLVWKHILUVWGD\RIWKHVHYHQWKPRQWKDIWHUWKHGDWH RI([HFXWLYH¶V6HSDUDWLRQIURP6HUYLFHRULIHDUOLHUWKHGDWHRI([HFXWLYH¶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¶VHPSOR\PHQWZLWKWKH&RPSDQ\LVDQGVKDOO FRQWLQXHWREH³DWZLOO´ 'LVSXWH5HVROXWLRQ,QWKHHYHQWRIDQ\GLVSXWHRUFODLPEHWZHHQWKHSDUWLHV LQFOXGLQJDQ\FODLPVUHODWLQJWRRUDULVLQJRXWRIWKLV$JUHHPHQWRUWKHWHUPLQDWLRQRI ([HFXWLYH¶VHPSOR\PHQWZLWKWKH&RPSDQ\IRUDQ\UHDVRQ([HFXWLYHDQGWKH&RPSDQ\DJUHH WKDWDOOVXFKGLVSXWHVVKDOOEHIXOO\UHVROYHGE\ELQGLQJDUELWUDWLRQFRQGXFWHGE\WKH$PHULFDQ $UELWUDWLRQ$VVRFLDWLRQ³$$$´ LQ6DQWD&ODUD&RXQW\XQGHUWKH$$$¶V1DWLRQDO5XOHVIRUWKH
3DJH 5HVROXWLRQRI(PSOR\PHQW'LVSXWHVWKHQLQHIIHFWZKLFKDUHDYDLODEOHRQOLQHDWWKH$$$¶V ZHEVLWHDWZZZDGURUJ([HFXWLYHDQGWKH&RPSDQ\HDFKDFNQRZOHGJHDQGDJUHHWKDWWKH\DUH ZDLYLQJWKHLUUHVSHFWLYHULJKWVWRKDYHDQ\VXFKGLVSXWHVRUFODLPVWULHGE\DMXGJHRUMXU\ 1RWLFHV1RWLFHVDQGDOORWKHUFRPPXQLFDWLRQVFRQWHPSODWHGE\WKLV$JUHHPHQW VKDOOEHLQZULWLQJDQGVKDOOEHGHHPHGWRKDYHEHHQGXO\JLYHQZKHQSHUVRQDOO\GHOLYHUHGRU ZKHQUHFHLYHGLIPDLOHGE\86UHJLVWHUHGRUFHUWLILHGPDLOUHWXUQUHFHLSWUHTXHVWHGDQGSRVWDJH SUHSDLG,QWKHFDVHRIWKH([HFXWLYHPDLOHGQRWLFHVVKDOOEHDGGUHVVHGWRWKH([HFXWLYHDWWKH KRPHDGGUHVVZKLFKWKH([HFXWLYHPRVWUHFHQWO\FRPPXQLFDWHGWRWKH&RPSDQ\LQZULWLQJ,Q WKHFDVHRIWKH&RPSDQ\PDLOHGQRWLFHVVKDOOEHDGGUHVVHGWRLWVFRUSRUDWHKHDGTXDUWHUVDQGDOO QRWLFHVVKDOOEHGLUHFWHGWRWKHDWWHQWLRQRILWV&KLHI([HFXWLYH2IILFHU 6XFFHVVRUV D &RPSDQ\¶V6XFFHVVRUV$Q\VXFFHVVRUWRWKH&RPSDQ\ZKHWKHUGLUHFWRU LQGLUHFWDQGZKHWKHUE\SXUFKDVHOHDVHPHUJHUFRQVROLGDWLRQOLTXLGDWLRQRUSXUFKDVH RIDOORU VXEVWDQWLDOO\DOORIWKH&RPSDQ\¶VEXVLQHVVDQGRUDVVHWV VKDOODVVXPHWKH&RPSDQ\¶V REOLJDWLRQVXQGHUWKLV$JUHHPHQWLQZULWLQJDQGDJUHHH[SUHVVO\WRSHUIRUPWKH&RPSDQ\¶V REOLJDWLRQVXQGHUWKLV$JUHHPHQWLQWKHVDPHPDQQHUDQGWRWKHVDPHH[WHQWWKDWWKH&RPSDQ\ ZRXOGEHUHTXLUHGWRSHUIRUPVXFKREOLJDWLRQVLQWKHDEVHQFHRIDVXFFHVVLRQ)RUDOOSXUSRVHV XQGHUWKLV$JUHHPHQWWKHWHUP³&RPSDQ\´VKDOOLQFOXGHDQ\VXFFHVVRUWRWKH&RPSDQ\¶V EXVLQHVVDQGRUDVVHWVZKLFKH[HFXWHVDQGGHOLYHUVWKHDVVXPSWLRQDJUHHPHQWGHVFULEHGLQWKLV VXEVHFWLRQ D RUZKLFKEHFRPHVERXQGE\WKHWHUPVRIWKLV$JUHHPHQWE\RSHUDWLRQRIODZ E ([HFXWLYH¶V6XFFHVVRUV:LWKRXWWKHZULWWHQFRQVHQWRIWKH&RPSDQ\WKH ([HFXWLYHVKDOOQRWDVVLJQRUWUDQVIHUWKLV$JUHHPHQWRUDQ\ULJKWRUREOLJDWLRQXQGHUWKLV $JUHHPHQWWRDQ\RWKHUSHUVRQRUHQWLW\1RWZLWKVWDQGLQJWKHIRUHJRLQJWKHWHUPVRIWKLV $JUHHPHQWDQGDOOULJKWVRIWKH([HFXWLYHKHUHXQGHUVKDOOLQXUHWRWKHEHQHILWRIDQGEH HQIRUFHDEOHE\WKH([HFXWLYH¶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¶VUHWHQWLRQDQGVHYHUDQFHEHQHILWVDQG LW
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
3DJH 7+(3$57,(66,*1,1*%(/2:+$9(5($'7+()25(*2,1*$*5((0(17$1' )8//<81'(567$1'$1'$*5((72($&+$1'(9(5<3529,6,21&217$,1(' +(5(,1 'DWHG )UDQFLV-RVH ,PPHUVLRQ&RUSRUDWLRQ 'DWHG %\ 1DPH 7LWOH
3DJH