filed with the Securities and Exchange Commission on January 20, 2015
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|(Exact name of registrant as specified in its charter)|
|Grand Duchy of Luxembourg||Not Applicable|
(State or other jurisdiction of
incorporation or organization)
|(I.R.S. Employer Identification No.)|
5 rue Guillaume Kroll
|(Address, including zip code, of Principal Executive Offices)|
GLOBANT S.A. 2014
EQUITY INCENTIVE PLAN
GLOBANT S.A. 2012 EQUITY INCENTIVE PLANS
|(Full title of the plans)|
875 Howard Street, Suite 320
San Francisco, CA 94103
Attn: Andrés Angelani
Tel: +1 877 798 8104 ext. 28127
Christopher C. Paci
DLA Piper LLP (US)
1251 Avenue of the Americas
New York, New York 10020-1104
(Name, address, telephone number,
including area code, of agent for service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
|Large accelerated filer ¨||Accelerated filer ¨||
(Do not check if a smaller reporting company)
|Smaller reporting company ¨|
CALCULATION OF REGISTRATION FEE
of securities to
per share (2)
offering price (2)
|Common Share, $1.20 par value|
|2014 Equity Incentive Plan|
|2012 Equity Incentive Plans||1,059,311||$||3.65||$||3,866,485||$||449|
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, as amended, this Registration Statement also covers an indeterminate number of shares that may be offered or issued by reason of share splits, share dividends or similar transactions.
(2) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) and (h). For shares registered with respect to outstanding options granted under the Globant S.A. 2014 Equity Incentive Plan and the Stock Option Agreements collectively referred to as the Globant S.A. 2012 Equity Incentive Plans, the proposed maximum offering price per share, proposed maximum aggregate offering price and the amount of the registration fee are based on the weighted average exercise price of the options. For shares registered with respect to future awards to be granted under the Globant S.A. 2014 Equity Incentive Plan, the proposed maximum offering price per share, proposed maximum aggregate offering price and the amount of the registration fee are based on the average of the high and low prices of Globant S.A. common shares reported on the New York Stock Exchange on January 16, 2015 (i.e., $14.10).
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Not required to be included in this Form S-8 Registration Statement pursuant to the introductory Note to Part I of Form S-8.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by the Registrant with the Securities and Exchange Commission (the “Commission”) are incorporated herein by reference:
|(a)||Prospectus filed pursuant to Rule 424(b)(4) filed with the Commission on July 18, 2014, which contains the Registrant’s audited consolidated financial statements as of December 31, 2013 and 2012, and for each of the three years in the period ended December 31, 2013;|
|(b)||All other reports filed pursuant to Sections 13(a) or 15(d) of the Exchange Act, since the end of the fiscal year covered by the document referred to in (a) above; and|
|(c)||Description of Common Shares of the Registrant contained or incorporated in the registration statements filed by the Registrant under the Exchange Act, including any amendments or reports filed for the purpose of updating such description.|
All documents subsequently filed by the Registrant with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part of this Registration Statement from the date of filing of such documents.
Item 4. Description of Securities.
Item 5. Interests of Named Experts and Counsel.
Item 6. Indemnification of Directors and Officers.
The Registrant’s directors are not held personally liable for the indebtedness or other obligations of Globant S.A. As agents of Globant S.A., they are responsible for the performance of their duties. Subject to the exceptions and limitations set forth below and mandatory provisions of law, every person who is, or has been, a director or officer of Globant S.A. will be indemnified by Globant S.A. to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding which he or she becomes involved as a party or otherwise by virtue of his or her being or having been such a director or officer and against amounts paid or incurred by him or her in the settlement thereof. The words “claim,” “action,” “suit” or “proceeding” refer to all claims, actions, suits or proceedings (civil, criminal or otherwise including appeals) actual or threatened and the words “liability” and “expenses” include without limitation attorneys’ fees, costs, judgments, amounts paid in settlement and other liabilities.
|- 2 -|
No indemnification, however, will be provided to any director or officer: (i) against any liability to Globant S.A. or its shareholders by reason of willful misconduct, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office; (ii) with respect to any matter as to which he or she shall have been finally adjudicated to have acted in bad faith and not in the interest of Globant S.A.; or (iii) in the event of a settlement, unless the settlement has been approved by a court of competent jurisdiction or by the Registrant’s board of directors.
The rights of indemnification described above are severable, do not affect any other rights to which any director or officer may otherwise be entitled, continue as to a person who has ceased to be such director or officer and inures to the benefit of the heirs, executors and administrators of such a person. Nothing contained in Globant S.A.’s Articles of Association affect any rights to indemnification to which corporate personnel, including directors and officers, may be entitled by contract or otherwise under law.
Expenses in connection with the preparation and representation of a defense of any claim, action, suit or proceeding of the character described above will be advanced by Globant S.A. prior to final disposition thereof upon receipt of any undertaking by or on behalf of the officer or director, who must repay such amount if it is ultimately determined that he is not entitled to indemnification.
The Registrant maintains an insurance policy that protects its directors and officers from liabilities incurred as a result of actions taken in their official capacity.
Item 7. Exemption from Registration Claimed.
Item 8. Exhibits.
See Exhibit Index, which is incorporated here by reference.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (“Securities Act”);
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.
Paragraphs (l)(i) and (l)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
|- 3 -|
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
|- 4 -|
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Buenos Aires, Argentina, on January 20, 2015.
|By:||/s/ Alejandro Scannapieco|
|Chief Financial Officer|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
|January 20, 2015|
Chief Financial Officer
(Principal Financial Officer)
|January 20, 2015|
Chief Accounting Officer
(Principal Accounting Officer)
|January 20, 2015|
|/s/ Guillermo Bodnar|
Authorized Representative in the
|January 20, 2015|
|Martín Gonzalo Umaran||Director and Chief of Staff|
|Guibert Andrés Englebienne||Director and Chief Technology Officer||January 20, 2015|
|Francisco Álvarez-Demalde||Director||January 20, 2015|
|Bradford Eric Bernstein||Director||January 20, 2015|
|Mario Eduardo Vázquez||Director||January 20, 2015|
|Philip A. Odeen||Director|
|- 5 -|
|Robert David Norman||Director||January 20, 2015|
|Marcos Galperin||Director||January 20, 2015|
|Timothy Mott||Director||January 20, 2015|
|*By:||/s/ Alejandro Scannapieco|
For himself and as Attorney-in-Fact
|- 6 -|
|4.1||Form of Articles of Association (incorporated by reference from Exhibit 3.1 of the Registrant’s Registration Statement on Form F-1, dated July 3, 2014 (No. 333-190841))|
|5.1||Opinion of Arendt & Medernach, Luxembourg counsel for the Registrant, regarding the legal validity of the shares of Common Shares being registered on this Registration Statement (filed herewith)|
|23.1||Consent of Counsel (contained in Exhibit 5.1)|
|23.2||Consent of Independent Registered Public Accounting Firm (filed herewith)|
|24.1||Power of Attorney (filed herewith)|
|99.1||Globant S.A. 2014 Equity Incentive Plan (filed herewith)|
|99.2||Form of Globant S.A. 2012 Equity Incentive Plans (filed herewith)|
|- 7 -|
To the Board of Directors
of Globant S.A.
5a, rue Guillaume Kroll,
Grand Duchy of Luxembourg
|Luxembourg, 19 January 2015|
|Your ref. : /|
|Our ref. : 017966-70000/ 11935866v5|
|Tel. : (352) 40 78 78-253|
|Fax : (352) 40 78 04-634|
GLOBANT S.A. – S-8 Registration Statement – Validity of Shares
Dear Madam, dear Sir,
We are acting as Luxembourg counsel for Globant S.A., a société anonyme , having its registered office at 5, rue Guillaume Kroll, L-1882 Luxembourg, Grand Duchy of Luxembourg, registered with the Registre de Commerce et des Sociétés de Luxembourg under number B 173 727 (the “ Company ”), in connection with the Company’s filing of registration statement on Form S-8 with the U.S. Securities and Exchange Commission (the “ Registration Statement ”) relating to the registration of two million seven hundred twenty-five thousand nine hundred seventy-eight (2,725,978) common shares of the Company, with a nominal value of USD 1.20 each (the “ Plan Shares ”), one million fifty-nine thousand three hundred eleven (1,059,311) of which to be issued or delivered under stock options agreements assumed by the Company (the “ 2012 Equity Incentive Plans ”) and one million six hundred sixty-six thousand six hundred sixty-seven (1,666,667) of which to be issued or delivered under the Globant 2014 Equity Incentive Plan (the “ 2014 Equity Incentive Plan ” and together with the 2012 Equity Incentive Plans, the “ Incentive Plans ”).
In arriving to the opinions expressed below, we have examined and relied on the documents identified in Appendix A hereto and on such corporate records as have been disclosed to us and the factual matters contained in certifications made to us or contained in the document reviewed, which we deemed necessary and appropriate as a basis for the opinions hereinafter expressed.
We have assumed for the purposes hereof that the Company will at all times continue to have a sufficient authorised unissued share capital and sufficient authorised unissued common shares with the relevant waivers in force, and that the Company will at all times have sufficient available reserves, to issue the common shares to be issued under the Incentive Plans all or partially as the case may be by way of incorporation of available reserves into the issued share capital. We further assume that the board of directors or its duly authorised delegates will duly pass the relevant resolutions for the issue of the Plan Shares (including all or partially as the case may be by way of incorporation of available reserves into the issued share capital), in accordance with the Consolidated Articles, the terms of the Incentive Plans, the Resolutions and applicable law.
For the purposes of the present opinion we have further assumed (i) the genuineness of all signatures and seals and that all documents reviewed are duly signed by the persons purported to have signed them; (ii) the completeness and conformity to originals of all documents supplied to us as certified, photostatic, scanned, electronically transmitted copies or other copies of the documents reviewed and the authenticity of the originals of such documents and the conformity to originals of the latest drafts reviewed by us; (iii) that there have been no amendments to the documents in the form delivered to us for the purposes of this opinion; (iv) that there is no other resolutions, decisions, agreement or undertaking and no other arrangement (whether legally binding or not) which renders any of the documents or information reviewed or provided to us inaccurate, incomplete or misleading or which affects the conclusions stated in this opinion and that the documents reviewed accurately record the whole of the terms agreed between the parties thereto relevant to this opinion; (v) that no proceedings have been instituted or injunction granted against the Company to restrain it from performing any of its obligations under the Incentive Plans and/or issue the Plan Shares; (vi) that the terms used in the documents reviewed carry the meaning ascribed to them in vernacular English; (vii) that upon issue of any Plan Shares the Company will receive payment in cash of an issue price at least equal to the nominal value thereof or that the relevant Plan Shares will be issued by way of incorporation of available reserves into the issued share capital; (viii) that there will be no amendments to the authorised share capital of the Company which would adversely affect the issue of the Plan Shares and the conclusions stated in this opinion and (ix) that the head office ( administration centrale ), the place of effective management ( siège de direction effective ), and, for the purposes of the Council Regulation (EC) N° 1346/2000 of May 29, 2000 on insolvency proceedings, as amended, the centre of main interests ( centre des intérêts principaux ) of the Company are located at the place of its registered office ( siège statutaire ) in Luxembourg.
This opinion is confined to Luxembourg law and given on the basis that it will be governed by and construed in accordance with Luxembourg law and will be exclusively subject to Luxembourg jurisdiction. We express no opinion with regard to any system of law other than Luxembourg law.
The opinions expressed herein are subject to all limitations by reason of gestion contrôlée, concordat, faillite , bankruptcy, moratorium ( sursis de paiement ) and other, insolvency, moratorium, controlled management, general settlement with creditors, reorganisation or similar laws affecting creditors’ rights generally.
On the basis of the foregoing and subject to any factual matters, documents or events not disclosed to us, we are of the opinion that:
|1)||The Plan Shares, once duly subscribed to, fully paid up and issued in accordance with the Resolutions, the Consolidated Articles and the respective Incentive Plans, will be validly issued, fully paid up and non-assessable (which term means when used herein that no further sums are required to be paid by the holders thereof in connection with the issue of such shares).|
This opinion speaks as of the date hereof and no obligation is assumed to update this opinion occurring after the date hereof.
This opinion is issued by and signed on behalf of Arendt & Medernach SA, admitted to practice in the Grand-Duchy of Luxembourg and registered on the list V of lawyers of the Luxembourg Bar.
This opinion is issued solely for the purposes of the filing of the Registration Statement and the issuance of the Plan Shares by the Company pursuant to the Incentive Plans. It may not be used, circulated, quoted, referred to or relied upon for any other purpose without our written consent in each instance. We hereby consent to filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended.
By and on behalf of Arendt & Medernach SA
/s/ Sophie Wagner-Chartier
APPENDIX A – DOCUMENTS
|1.||A copy of the articles of incorporation of the Company dated 10 December 2012.|
|2.||A copy of the notarial deed on the increase of the share capital of the Company dated 28 January 2013.|
|3.||A copy of the notarial deed on the increase of the share capital of the Company dated 27 March 2013.|
|4.||A copy of the minutes of the extraordinary general meeting of shareholders of the Company dated 16 October 2013.|
|5.||A copy of the notarial deed on the increase of the share capital of the Company dated 29 November 2013.|
|6.||A copy of the minutes of the extraordinary general meeting of shareholders of the Company dated 18 June 2014.|
|7.||A copy of the minutes of the extraordinary general meeting of shareholders of the Company dated 15 July 2014.|
|8.||A copy of the minutes of the annual general meeting of shareholders of the Company dated 3 July 2014.|
|9.||A copy of the notarial deed on the increase of the share capital of the Company dated 23 July 2014.|
|10.||A copy of the notarial deed on the increase of the share capital of the Company dated 31 December 2014.|
|11.||A copy of the consolidated articles of association of the Company dated 23 July 2014 (the “ Consolidated Articles ”).|
|12.||A scanned copy of the written resolutions of the board of directors of the Company dated 10 December 2012 approving, among others, the entry into the assignment and assumption agreement (the “ Resolutions 1 ”).|
|13.||A scanned copy of the written resolutions of the board of directors of the Company dated 2 July 2014 approving, among others, the 2014 Equity Incentive Plan (the “ Resolutions 2 ”).|
|14.||A scanned copy of the written resolutions of the board of directors of the Company dated 28 November 2014 approving, among others, the filing of the Registration Statement (the “ Resolutions 3 ” and together with the Resolutions 1 and the Resolutions 2, the “ Resolutions ”).|
|15.||A scanned copy of the signed assignment and assumption agreement dated 10 December 2012 signed between the Company and Globant S.A. (Spain).|
|16.||A scanned copy of the signed 2014 Equity Incentive Plan dated 2 July 2014.|
|17.||A scanned copy of a certificate dated 15 January 2015 issued by the board of directors of the Company in connection with the filing of the Registration Statement.|
|18.||A copy of an extract from the Luxembourg trade and companies register with respect to the Company dated 19 January 2015.|
|19.||A certificate of non-registration of a judicial decision ( certificat de non-inscription d’une décision judiciaire ) dated 19 January 2015 and issued by the Luxembourg Trade and Companies Register in relation to the Company.|
|Deloitte & Co. S.A.|
|Florida 234, Piso 5°|
|Tel: (54-11) 4320-2700|
|Fax: (54-11) 4325-8081|
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8 of Globant S.A. of our report dated May 26, 2014 (July 15, 2014 as to the effect of the reverse share split described in Note 31.4) relating to the consolidated financial statements of Globant S.A. as of December 31, 2013 and 2012, and for each of the three years in the period ended December 31, 2013, which are included in the Registration Statement No. 333-190841 under Form F-1 of Globant S.A.
City of Buenos Aires, Argentina
January 20, 2015
Deloitte & Co. S.A.
/s/ Daniel S. Vardé
Daniel S. Vardé
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors of Globant S.A., a corporation ( société anonyme ) formed under the laws of the Grand Duchy of Luxembourg (the “Corporation”), hereby constitute and appoint Martín Migoya and Alejandro Scannapieco and each of them, the true and lawful agents and attorneys-in-fact of the undersigned with full power and authority in said agents and attorneys-in-fact, and in any one or more of them, to sign for the undersigned and in their respective names as officers and as Directors of the Corporation, a registration statement on Form S-8 (or other appropriate form) (the “Registration Statement”) relating to the proposed issuance of Common Shares, par value $1.20, of the Corporation and other securities pursuant to the Globant S.A. 2014 Equity Incentive Plan and the Globant S.A. Stock Option Agreements (or any and all amendments, including post-effective amendments, to such Registration Statement) and file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and with full power of substitution; hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
|/s/ Martín Migoya|
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
|November 18, 2014|
|/s/ Alejandro Scannapieco|
Chief Financial Officer
(Principal Financial Officer)
|November 18, 2014|
|/s/ Natalia Kanefsck|
Chief Accounting Officer
(Principal Accounting Officer)
|November 18, 2014|
|Martín Gonzalo Umaran||Director and Chief of Staff|
|/s/ Guibert Andrés Englebienne|
|Guibert Andrés Englebienne||Director and Chief Technology Officer||November 18, 2014|
|/s/ Francisco Álvarez-Demalde|
|Francisco Álvarez-Demalde||Director||November 18, 2014|
|/s/ Bradford Eric Bernstein|
|Bradford Eric Bernstein||Director||November 18, 2014|
|/s/ Mario Eduardo Vázquez|
|Mario Eduardo Vázquez||Director||November 18, 2014|
|Philip A. Odeen||Director|
|/s/ Robert David Norman|
|Robert David Norman||Director||November 18, 2014|
|/s/ Marcos Galperin|
|Marcos Galperin||Director||November 18, 2014|
|/s/ Timothy Mott|
|Timothy Mott||Director||November 18, 2014|
2014 EQUITY INCENTIVE PLAN
1. Establishment, Purpose and Types of Awards
GLOBANT S.A., a société anonyme incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 5, rue Guillaume Kroll, L-1882 Luxembourg, registered with the Luxembourg trade and companies register under number B 173 727 (the “ Company ”), hereby establishes the GLOBANT S.A. 2014 EQUITY INCENTIVE PLAN (the “ Plan ”). The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing key people with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain and reward the best-available personnel.
The Plan permits the granting of stock options (including incentive stock options qualifying under Code section 422 and nonstatutory stock options), stock appreciation rights, restricted or unrestricted stock awards, restricted stock units, performance awards, other stock-based awards, or any combination of the foregoing.
Under this Plan, except where the context otherwise indicates, the following definitions apply:
(a) “Administrator” means the Board or the committee(s) or officer(s) appointed by the Board from time to time that have authority to administer the Plan as provided in Section 3 hereof.
(b) “ Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, “ control ” shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity, or the power to direct the management and policies of the entity, by contract or otherwise.
(c) “Award” means any stock option, stock appreciation right, stock award, restricted stock unit award, performance award, or other stock-based award.
(d) “Board” means the board of directors of the Company as composed from time to time.
(e) “Change in Control” means: (i) the acquisition (other than from the Company) in one or more transactions by any Person, as defined in this Section 2(e), of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of more than 50% of (A) the then outstanding shares of the Company, or (B) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “ Company Voting Stock ”); (ii) the closing of a sale or other conveyance of all or substantially all of the assets of the Company; or (iii) the effective time of any merger, share exchange, consolidation, or other business combination involving the Company if immediately after such transaction persons who hold a majority of the outstanding voting securities entitled to vote generally in the election of directors of the surviving entity (or the entity owning 100% of such surviving entity) are not persons who, immediately prior to such transaction, held the Company Voting Stock; provided , however , that a Change in Control shall not include any consolidation or merger effected exclusively to change the domicile of the Company or a public offering of capital stock of the Company, and provided also that that for purposes of any Award or subplan that constitutes a “nonqualified deferred compensation plan,” within the meaning of Code section 409A, the Administrator, in its discretion, may specify a different definition of Change in Control in order to comply with the provisions of Code section 409A. For purposes of this Section 2(e), a “ Person ” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than: employee benefit plans sponsored or maintained by the Company and by entities controlled by the Company or an underwriter of the Common Shares in a registered public offering.
(f) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.
(g) “Common Shares” means the common shares of the Company at Par Value.
(h) “Fair Market Value” means, with respect to the Common Shares, as of any date:
(i) if the principal market for the Common Shares (as determined by the Administrator if the Common Shares is listed or admitted to trading on more than one exchange or market) is a national securities exchange or an established securities market, the official closing price per Common Share for the regular market session on that date on the principal exchange or market on which the Common Shares are then listed or admitted to trading or, if no sale is reported for that date, on the last preceding day on which a sale was reported;
(ii) if the principal market for the Common Shares is not a national securities exchange or an established securities market, the average of the highest bid and lowest asked prices for the Common Shares on that date as reported on a national quotation system or, if no prices are reported for that date, on the last preceding day on which prices were reported; or
(iii) if the Common Shares are neither listed or admitted to trading on a national securities exchange or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator in good faith by reasonable application of a reasonable valuation method.
(i) “Grant Agreement” means a written document, including an electronic writing acceptable to the Administrator, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.
(j) “ Par Value ” means the par value of the Common Shares from time to time, being currently $1.20 per share.
(k) “Performance Measures” mean criteria established by the Administrator relating to any of the following, as it may apply to an individual, one or more business units, divisions or subsidiaries, or on a Company-wide basis, and in either absolute terms or relative to the performance of one or more comparable companies or an index covering multiple companies: revenue; earnings before interest, taxes, depreciation and amortization (EBITDA); operating income; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings per share; price-to-earnings ratio; return on equity; return on invested capital; return on assets; growth in assets; share price performance; economic value added; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; relative performance to a group of companies comparable to the Company, and strategic business criteria consisting of one or more objectives based on the Company’s meeting specified goals relating to revenue, market penetration, business expansion, costs or acquisitions or divestitures.
(a) Administration of the Plan. The Plan shall be administered by the Board or by such committee or committees as may be appointed by the Board from time to time. To the extent allowed by applicable laws, the Board by resolution may authorize an officer or officers to grant Awards (other than stock Awards) to other officers and employees of the Company and its Affiliates, and, to the extent of such authorization, such officer or officers shall be the Administrator.
(b) Powers of the Administrator . The Administrator shall have all the powers vested in it by the terms of the Plan and the resolution of the Board, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards.
The Administrator shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to: (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii) determine the number of shares to be covered by or used for reference purposes for each Award; (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Administrator shall deem appropriate; (v) modify, amend, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards ( provided however, that, except as provided in Section 7 of the Plan, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the holder and no such modification, amendment or substitution that results in repricing the Award shall be made without prior stockholder approval); (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, including, but not limited to, any restriction or condition with respect to the vesting or exercisability of an Award following termination of any grantee’s employment or other relationship with the Company; provided , however , that no such waiver or acceleration of lapse restrictions shall be made with respect to a performance-based stock award granted to an executive officer of the Company if such waiver or acceleration is inconsistent with Code section 162(m); (vii) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid with respect to a performance period; and (viii) for any purpose, including but not limited to, qualifying for preferred tax treatment under foreign tax laws or otherwise complying with the regulatory requirements of local or foreign jurisdictions, to establish, amend, modify, administer or terminate sub-plans, and prescribe, amend and rescind rules and regulations relating to such sub-plans.
The Administrator shall have full power and authority, in its sole and absolute discretion, to administer, construe and interpret the Plan, Grant Agreements and all other documents relevant to the Plan and Awards issued thereunder, to establish, amend, rescind and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable, and to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Administrator shall deem it desirable to carry it into effect.
(c) Non-Uniform Determinations . The Administrator’s determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Grant Agreements evidencing such Awards, and the ramifications of a Change in Control upon outstanding Awards) need not be uniform and may be made by the Administrator selectively among Awards or persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.
(d) Limited Liability. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder.
(e) Indemnification . To the maximum extent permitted by law and by the Company’s articles of association, the members of the Administrator shall be indemnified by the Company in respect of all their activities under the Plan except in the case of gross negligence or willful misconduct.
(f) Effect of Administrator’s Decision . All actions taken and decisions and determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any participants in the Plan and any other employee, consultant, or director of the Company, and their respective successors in interest.
4. Shares Available for the Plan
Subject to adjustments as provided in Section 7(d) of the Plan, the Common Shares that may be issued with respect to Awards granted under the Plan shall not exceed an aggregate of 1,666,667 shares, and of those the maximum number of shares that may be issued under this Plan pursuant to incentive stock options intended to qualify under Code section 422 is 1,666,667. Subject to the provisions of the law, the Company shall maintain an authorized capital comprising such number of shares for Awards under the Plan, subject to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable, is settled in cash without delivery of Common Shares, or is forfeited or otherwise terminated or canceled as to any shares, the shares subject to such Award shall thereafter be available for further Awards under the Plan. Notwithstanding anything herein to the contrary, shares used to pay the exercise price of an Award or tax obligations shall not be available again for other Awards under the Plan.
Subject to adjustments as provided in Section 7(d) of the Plan, the maximum number of Common Shares subject to Awards of any combination that may be granted during any one fiscal year of the Company to any one individual under this Plan shall be limited to 666,667 shares. Such per-individual limit shall not be adjusted to effect a restoration of Common Shares with respect to which the related Award is terminated, surrendered or canceled. Notwithstanding the foregoing, the restriction contained in this paragraph shall not apply until the earliest of: (1) the first material modification of the Plan (including any increase in the number of Common Shares reserved for issuance hereunder); (2) the issuance of all of the Common Shares reserved for issuance under the Plan; (3) the expiration of the Plan; (4) the first meeting of stockholders at which directors are to be elected that occurs after the close of the third (3rd) calendar year following the calendar year in which occurred the first registration of an equity security by the Company under Section 12 of the Securities Act of 1934, as amended; or (5) such other date required by Section 162(m) of the Code.
Participation in the Plan shall be open to all employees, officers, and directors of, and other individuals providing bona fide services to or for, the Company, or of any Affiliate of the Company, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to individuals in connection with hiring, recruiting or otherwise, prior to the date the individual first performs services for the Company or an Affiliate, provided that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.
The Administrator, in its sole discretion, establishes the terms of all Awards granted under the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to outstanding Awards. All Awards are subject to the terms and conditions provided in the Grant Agreement.
(a) Stock Options. The Administrator may from time to time grant to eligible participants Awards of incentive stock options as that term is defined in Code section 422 or nonstatutory stock options; provided , however , that Awards of incentive stock options shall be limited to employees of the Company or of any current or hereafter existing “ parent corporation ” or “ subsidiary corporation ,” as defined in Code sections 424(e) and (f), respectively, of the Company and any other individuals who are eligible to receive incentive stock options under the provisions of Code section 422. Options must have an exercise price at least equal to Fair Market Value as of the date of grant and not lower than Par Value and may not have a term in excess of ten years’ duration. No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option.
(b) Stock Appreciation Rights. The Administrator may from time to time grant to eligible participants Awards of Stock Appreciation Rights (“ SAR ”). An SAR entitles the grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one Common Share over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. The base price per share specified in the Grant Agreement shall not be less than the lower of the Fair Market Value on the grant date (but in no case lower than Par Value) or the exercise price of any tandem stock option Award to which the SAR is related. No SAR shall have a term longer than ten years’ duration. Payment by the Company of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Shares or cash, or any combination of Common Shares and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is to receive a portion of such payment in Common Shares, the number of shares shall be determined by dividing such portion by the Fair Market Value of a Common Share on the exercise date, it being understood that no Common Shares shall be issued below Par Value. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated. The Administrator shall obtain a report from an independent auditor ( réviseur d’entreprises agréé ) confirming that the in-kind consideration upon exercise of a SAR has a value at least equivalent to the number and value of Shares issued in counterpart.
(c) Stock Awards.
(i) The Administrator may from time to time grant stock awards to eligible participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. A stock award may be denominated in Common Shares or other securities, stock-equivalent units or restricted stock units, securities or debentures convertible into Common Shares, or any combination of the foregoing and may be paid in Common Shares or other securities, in cash, or in a combination of Common Shares or other securities and cash, all as determined in the sole discretion of the Administrator.
(ii) The Administrator may grant stock awards in a manner constituting “qualified performance-based compensation” within the meaning of Code section 162(m). The grant of, or lapse of restrictions with respect to, such performance-based stock awards shall be based upon one or more Performance Measures and objective performance targets to be attained relative to those Performance Measures, all as determined by the Administrator. Performance targets may include minimum, maximum, intermediate and target levels of performance, with the size of the performance-based stock award or the lapse of restrictions with respect thereto based on the level attained. A performance target may be stated as an absolute value or as a value determined relative to prior performance, one or more indices, budget, one or more peer group companies, any other standard selected by the Administrator, or any combination thereof. The Administrator shall be authorized to make adjustments in the method of calculating attainment of Performance Measures and performance targets in recognition of: (A) extraordinary or non-recurring items; (B) changes in tax laws; (C) changes in generally accepted accounting principles or changes in accounting policies; (D) charges related to restructured or discontinued operations; (E) restatement of prior period financial results; and (F) any other unusual, non-recurring gain or loss that is separately identified and quantified in the Company’s financial statements; provided that the Administrator’s decision as to whether such adjustments will be made with respect to any “covered employee,” within the meaning of Code section 162(m), is determined when the performance targets are established for the applicable performance period. Notwithstanding the foregoing, the Administrator may, at its sole discretion, modify the performance results upon which Awards are based under the Plan to offset any unintended results arising from events not anticipated when the Performance Measures and performance targets were established; provided, that such modifications may be made with respect to an Award granted to any “covered employee,” within the meaning of Code section 162(m), only to the extent permitted by Code section 162(m) if the Award was intended to constitute “qualified performance-based compensation” within the meaning of Code section 162(m). Notwithstanding anything in the Plan to the contrary, the Administrator is not authorized to waive or accelerate the lapse of restrictions on a performance-based stock award granted to any “covered employee,” within the meaning of Code section 162(m), except upon death, disability or a change of ownership or control of the Company. In the event that a Change in Control occurs after a performance-based stock award has been granted but before completion of the applicable performance period, a pro rata portion of such Award shall become payable (or a pro rata portion of the lapse restrictions shall lapse, as applicable) as of the date of the Change in Control to the extent otherwise earned on the basis of achievement of the pro rata portion of the Performance Measures and performance targets relating to the portion of the performance period completed as of the date of the Change in Control.
(a) Withholding of Taxes . Grantees and holders of Awards shall pay to the Company or its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company or its Affiliate may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the grantee or holder of an Award. In the event that payment to the Company or its Affiliate of such tax obligations is made in Common Shares, such shares shall be valued at Fair Market Value on the applicable date for such purposes and shall not exceed in amount the minimum statutory tax withholding obligation.
(b) Loans . To the extent otherwise permitted by law, the Company or its Affiliate may make or guarantee loans to grantees to assist grantees in exercising Awards and satisfying any withholding tax obligations.
(c) Transferability . Except as otherwise determined by the Administrator, and in any event in the case of an incentive stock option or a stock appreciation right granted with respect to an incentive stock option, no Award granted under the Plan shall be transferable by a grantee otherwise than by will or the laws of descent and distribution. Unless otherwise determined by the Administrator in accord with the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime of the grantee, only by the grantee or, during the period the grantee is under a legal disability, by the grantee’s guardian or legal representative.
(d) Adjustments for Corporate Transactions and Other Events .
|(i)||Stock Dividend, Stock Split and Reverse Stock Split. In the event of a stock dividend of, or stock split or reverse stock split affecting, the Common Shares, (A) the maximum number of shares of such Common Shares as to which Awards may be granted under this Plan and the maximum number of shares with respect to which Awards may be granted during any one fiscal year of the Company to any individual, as provided in Section 4 of the Plan, and (B) the number of shares covered by and the exercise price and other terms of outstanding Awards, shall, without further action of the Board, be adjusted to reflect such event. The Administrator may make adjustments, in its discretion, to address the treatment of fractional shares and fractional cents that arise with respect to outstanding Awards as a result of the stock dividend, stock split or reverse stock split.|
|(ii)||Non-Change in Control Transactions. Except with respect to the transactions set forth in Section 7(d)(i), in the event of any change affecting the Common Shares, the Company or its capitalization, by reason of a spin-off, split-up, dividend, recapitalization, merger, consolidation or share exchange, other than any such change that is part of a transaction resulting in a Change in Control of the Company, the Administrator, in its discretion and without the consent of the holders of the Awards, may make (A) appropriate adjustments to the maximum number and kind of shares reserved for issuance or with respect to which Awards may be granted under the Plan, in the aggregate and with respect to any individual during any one fiscal year of the Company, as provided in Section 4 of the Plan; and (B) any adjustments in outstanding Awards, including but not limited to modifying the number, kind and price of securities subject to Awards as the Administrator determines to be appropriate and equitable.|
|(iii)||Change in Control Transactions. In the event of any transaction resulting in a Change in Control of the Company, outstanding stock options and other Awards that are payable in or convertible into Common Shares under this Plan will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the substitution of the equivalent awards, as determined in the sole discretion of the Administrator, of, the surviving or successor entity or a parent thereof. In the event of such termination, the holders of stock options and other Awards under the Plan will be permitted, immediately before the Change in Control, to exercise or convert all portions of such stock options or other Awards under the Plan that are then exercisable or convertible or which become exercisable or convertible upon or prior to the effective time of the Change in Control.|
|(iv)||Unusual or Nonrecurring Events. The Administrator is authorized to make, in its discretion and without the consent of holders of Awards, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.|
(e) Substitution of Awards in Mergers and Acquisitions. Awards may be granted under the Plan from time to time in substitution for awards held by employees, officers, consultants or directors of entities who become or are about to become employees, officers, consultants or directors of the Company or an Affiliate as the result of a merger or consolidation of the employing entity with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets or stock of the employing entity. The terms and conditions of any substitute Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the substitute Awards to the provisions of the awards for which they are substituted.
(f) Other Agreements. As a condition precedent to the grant of any Award under the Plan, the exercise pursuant to such an Award, or to the delivery of certificates for shares issued pursuant to any Award, the Administrator may require the grantee or the grantee’s successor or permitted transferee, as the case may be, to become a party to a stock restriction agreement, shareholders’ agreement, voting trust agreement or other agreements regarding the Common Shares of the Company in such form(s) as the Administrator may determine from time to time.
(g) Termination, Amendment and Modification of the Plan . The Board may terminate, amend or modify the Plan or any portion thereof at any time. Except as otherwise determined by the Board, termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
(h) Non-Guarantee of Employment or Service . Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Company or shall interfere in any way with the right of the Company to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual’s interests under the Plan.
(i) Compliance with Securities Laws; Listing and Registration . If at any time the Administrator determines that the delivery of Common Shares under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or foreign securities laws, the right to exercise an Award or receive Common Shares pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Common Shares under the Plan is or may violate the rules of the national exchange on which the shares are then listed for trade, the right to exercise an Award or receive Common Shares pursuant to an Award shall be suspended until the Administrator determines that such delivery would not violate such rules. The Company shall have no obligation to effect any registration or qualification of the Common Shares under Federal, state or foreign laws.
The Company may require that a grantee, as a condition to exercise of an Award, and as a condition to the delivery of any share certificate, make such written representations (including representations to the effect that such person will not dispose of the Common Shares so acquired in violation of Federal, state or foreign securities laws) and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Shares in compliance with applicable Federal, state or foreign securities laws. The stock certificates for any Common Shares issued pursuant to this Plan may bear a legend restricting transferability of the Common Shares unless such shares are registered or an exemption from registration is available under the Securities Act of 1933, as amended, and applicable state or foreign securities laws.
(j) No Trust or Fund Created . Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.
(k) Governing Law . The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable United States federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles. Any dispute arising from the interpretation, validity or performance of this Plan or any Grant Agreement or any of their terms and provisions shall be submitted to the courts of the State of Delaware in the United States.
(l) Section 409A . The Plan and all Awards granted hereunder are intended to comply with, or otherwise be exempt from, Code section 409A. The Plan and all Awards granted under the Plan shall be administered, interpreted, and construed in a manner consistent with Code section 409A to the extent necessary to avoid the imposition of additional taxes under Code section 409A(a)(1)(B). Should any provision of the Plan, any Award Agreement, or any other agreement or arrangement contemplated by the Plan be found not to comply with, or otherwise be exempt from, the provisions of Code section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Administrator, and without the consent of the holder of the Award, in such manner as the Administrator determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code section 409A. Notwithstanding anything in the Plan to the contrary, in no event shall the Administrator exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4) or any successor provision.
(m) Effective Date; Termination Date . The Plan is effective as of the date on which the Plan is adopted by the Board, subject to approval of the stockholders within twelve months before or after such date. No Award shall be granted under the Plan after the close of business on the day immediately preceding the tenth anniversary of the effective date of the Plan, or if earlier, the tenth anniversary of the date this Plan is approved by the stockholders. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards.
PROVISIONS FOR CALIFORNIA RESIDENTS
With respect to Awards granted to California residents prior to a public offering of capital stock of the Company that is effected pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act of 1933, as amended, and only to the extent required by applicable law, the following provisions shall apply notwithstanding anything in the Plan or a Grant Agreement to the contrary:
1. With respect to any Award granted in the form of a stock option pursuant to Section 6(a) of the Plan:
(a) The exercise period shall be no more than 120 months from the date the option is granted.
(b) The options shall be non-transferable other than by will, by the laws of descent and distribution, or, if and to the extent permitted under the Grant Agreement, to a revocable trust or as permitted by Rule 701 of the Securities Act of 1933, as amended (17 C.F.R. 230.701).
(c) Unless employment is terminated for “cause” as defined by applicable law, the terms of the Plan or Grant Agreement, or a contract of employment, the right to exercise the option in the event of termination of employment, to the extent that the Award recipient is entitled to exercise on the date employment terminates, will continue until the earlier of the option expiration date, or:
(1) At least 6 months from the date of termination if termination was caused by death or disability.
(2) At least 30 days from the date of termination if termination was caused by other than death or disability.
2. With respect to an Award, granted pursuant to Section 6(c) of the Plan, that provides the Award recipient the right to purchase stock, the Award shall be non-transferable other than by will, by the laws of descent and distribution, or, if and to the extent permitted under the Grant Agreement, to a revocable trust or as permitted by Rule 701 of the Securities Act of 1933, as amended (17 C.F.R. 230.701).
3. The Plan shall have a termination date of not more than 10 years from the date the Plan is adopted by the Board or the date the Plan is approved by the security holders, whichever is earlier.
4. Security holders representing a majority of the Company’s outstanding securities entitled to vote must approve the Plan by the later of (a) 12 months after the date the Plan is adopted or (b) 12 months after the granting of any Award to a resident of California. Any option exercised or any securities purchased before security holder approval is obtained must be rescinded if security holder approval is not obtained within the period described in the preceding sentence. Such securities shall not be counted in determining whether such approval is obtained.
5. The Company will provide financial statements to each Award recipient annually during the period such individual has Awards outstanding, or as otherwise required under Section 260.140.46 of Title 10 of the California Code of Regulations. Notwithstanding the foregoing, the Company will not be required to provide such financial statements to Award recipients when the Plan complies with all conditions of Rule 701 of the Securities Act of 1933, as amended (17 C.F.R. 230.701); provided that for purposes of determining such compliance, any registered domestic partner shall be considered a “family member” as that term is defined in Rule 701.
6. The Plan is intended to comply with Section 25102(o) of the California Corporations Code. Any provision of this Plan which is inconsistent with Section 25102(o), including without limitation any provision of this Plan that is more restrictive than would be permitted by Section 25102(o) as amended from time to time, shall, without further act or amendment by the Board, be reformed to comply with the provisions of Section 25102(o). If at any time the Administrator determines that the delivery of Common Shares under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or federal or state securities laws, the right to exercise an Award or receive shares of Common Shares pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. The Company shall have no obligation to effect any registration or qualification of the Common Shares under federal or state laws.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this “ Agreement ”) is hereby entered into as of this ______ day of _____, 2013 (the “ Effective Date ”), by and among “Globant S.A.”, a société anonyme incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 5, rue Guillaume Kroll, L-1882 Luxembourg, registered with the Luxembourg trade and companies register under number B 173 727 (the “ Company ”); “[name of original employer].”, a _________ organized under the laws of ______________ which is an indirectly owned subsidiary of the Company (the “ Employer ”), and [Name of Beneficiary] (hereinafter, the “ Beneficiary ” and, together with the Company and the Employer, the “ Parties ”).
WHEREAS, Beneficiary is an employee of the Employer;
WHEREAS, the Employer is an indirectly owned subsidiary of the Company;
WHEREAS, the Company desires to grant the Beneficiary an option to acquire the Company´s Equity Interests upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option . The Company herby grants to the Beneficiary an option (the “ Stock Option ”) to acquire ______ Equity Interests (as adjusted for any applicable share splits, combinations, subdivisions, recapitalization or the like) on the terms and subject to the conditions of this Agreement.
3. Vesting of Stock Option . The Stock Option will become vested as set forth on Schedule A ; provided, however, that the Beneficiary is in the continuous employ of the Globant Group from the date on which this Agreement is entered into through the applicable date upon which vesting is scheduled to occur.
3. Exercisability of Stock Option . To the extent vested, the Stock Option shall become exercisable subject to the terms of this Agreement upon the earliest of the following dates: (a) an Event of Liquidity and/or (b) an IPO, provided that the Beneficiary has been in the continuous employ of the Globant Group through such date. Unless earlier terminated as a result of the Beneficiary’s termination of employment as provided in Section 4, below, this Stock Option shall terminate and shall not be exercisable after June 30, 2019 (the “ Expiration Date ”).
4. Termination of Employment . If the Beneficiary’s employment by the Globant Group terminates on account of the Beneficiary’s resignation or termination of the Beneficiary’s employment with Justified Cause, then: a) this Stock Option will terminate immediately upon such termination of employment, whether any portion has been vested or not; and b) the Company shall have the right to repurchase from the Beneficiary any Globant stock issued to the Beneficiary under the Stock Option, at a price equal to the Exercise Price paid by the Beneficiary for such stock, plus interest accrued at 6-month LIBOR plus 3% (the “Repurchase Price”). The repurchase shall be effective, and the Globant stock repurchased shall be recorded in the name of the Company as treasury stock, upon the Company’s delivery of a notice of repurchase to the Beneficiary to its domicile of record and transfer of the Repurchase Price to the Beneficiary or, in the absence of a valid or current bank account in the name of the Beneficiary on record with the Company, upon further delivery of notice requesting the Beneficiary to provide the wire transfer details of a valid and current bank account opened in the name of the Beneficiary. If the Beneficiary fails to respond within 30 days of notice to such effect, indicating in writing to the Company the wire transfer instructions of a bank account opened in its name for the transfer of the Repurchase Price, then the Company may choose to pay the Repurchase Price by transferring the corresponding amount to any bank account of the Beneficiary that is on record with any Affiliate of the Company, or by delivering a check to the domicile of record the Beneficiary. In the case of the Beneficiary’s resignation, this Stock Option shall terminate, and the right of the Company to repurchase the Beneficiary’s issued Globant shares shall become executable, upon the communication, by any means, of the Beneficiary’s intention to resign or leave its employment with the Globant Group. This right of repurchase by the Company shall not be exercisable after the occurrence of an IPO of Globant stock. If the Beneficiary’s employment by the Globant Group terminates for any reason other than the Beneficiary’s resignation or termination for Justified Cause, the portion of this Stock Option that is vested upon such termination of employment will be exercisable subject to the terms of this Agreement as if the Beneficiary had remained in the employ of the Globant Group during the one-year period following such termination, but in no event after the Expiration Date.
5. Exercise Procedure . Subject to the conditions set forth in this Agreement, the vested portion of this Stock Option may be exercised by delivery of written notice of exercise on any business day to the Company’s Corporate Secretary, in such form as the Company may require from time to time. Such notice shall specify the number of shares in respect of which the Stock Option is being exercised and shall be accompanied by full payment of the Exercise Price for such shares in accordance with Section 6 of this Agreement. The exercise will be effective upon receipt by the Company’s Corporate Secretary of such written notice accompanied by the required payment or properly executed, irrevocable instructions to effectuate a broker-assisted cashless exercise or net exercise as provided in Section 6 below. The Stock Option may be exercised only in multiples of whole shares.
6. Payment of Exercise Price . Payment of the Exercise Price may be made by (i) delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable in the Company’s discretion, (ii) following an IPO, by a broker-assisted cashless exercise through a brokerage firm approved by the Company, or, (iii) to the extent allowed by applicable law, by withholding of Option Shares otherwise issuable pursuant to the exercise which have a Fair Market Value on the date of exercise equal to the Exercise Price, or a combination of the foregoing.
7. Delivery of Shares upon Exercise . Upon due exercise of the Stock Option, in whole or in part, in accordance with the terms of this Agreement, the Company will deliver to the beneficiary, the brokerage firm specified in the Beneficiary’s delivery instructions pursuant to a broker-assisted cashless exercise, or such other person exercising the Stock Option following the Beneficiary’s death, as the case may be, the number of shares of Stock so paid for, in the form of fully paid and nonassessable Stock. The Stock certificates delivered hereunder will, unless such shares are registered or an exemption from registration is available under applicable law, bear a legend restricting transferability of such shares, and if such shares are subject to restrictions pursuant to Section 9 hereof, will bear a legend referencing such restrictions. No fractional shares will be delivered pursuant to this Stock Option.
8. Adjustments and Business Combinations .
(a) Adjustments for Events Affecting the Company or the Stock . In the event of changes affecting the Company, the capitalization of the Company or the Stock of the Company by reason of any stock dividend, spin-off, split-up, recapitalization, merger, reorganization, consolidation, business combination or exchange of shares and the like, the Company may, in its discretion and without the consent of the Beneficiary, either (i) cancel the Stock Option in exchange for a payment to the Beneficiary for each Stock Option outstanding equal the excess, if any, of the Fair Market Value of the Shares subject to the vested portion of the Stock Option over the Exercise Price, or (ii) make appropriate adjustments to the number, kind and exercise price of shares covered by the Stock Option, preserving the terms and benefits provided hereunder, and will, in its discretion and without the consent of the Beneficiary, make any other adjustments in this Stock Option, including but not limited to mandating alternative settlement methods such as settlement of the Stock Option in cash or in other securities of the Company or of any other entity, as the Company, in its sole discretion, determines to be necessary or appropriate. Appropriate adjustments to the number, kind and exercise price of shares covered by the Stock Option as described above shall be made in a manner consistent with United States Treasury Regulation Section 409A-1(b)(5)(v)(D), which sets forth rules regarding the substitution of new stock options for an existing stock options pursuant to a corporate transaction, including rules that govern the aggregate value of the new stock options and the ratio of the exercise price to the value of the stock subject to the new stock options.
(b) Adjustments for Unusual Events . The Company is authorized to make, in its discretion and without the consent of the Beneficiary, equitable adjustments in the terms and conditions of, and the criteria included in, the Stock Option in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Company determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Stock Option.
(c) Binding Nature of Adjustments . Adjustments under this Section 8 will be made by the Company, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive without any action or consent by the Beneficiary or any other person. No fractional shares will be issued pursuant to this Stock Option on account of any such adjustments.
9. Agreement to Execute Other Agreements . As a condition to the receipt of this Stock Option, the Beneficiary hereby agrees to execute and abide by the terms of (i) any “lock-up” or similar agreement required by the Company that restricts the Beneficiary’s right to exercise the Stock Option or sell Shares during any lock-up period either in connection with an IPO or as otherwise necessary to comply with any applicable laws governing the Stock Option, the Stock, or the Company, and, (ii) if the Stock Option is exercised before an IPO, the shareholders agreement of the Company titled " Convenio de Socios ", dated as of February 23, 2011 (as amended and supplemented from time to time) and/or a voting trust agreement, copies of which are available from the Company’s Corporate Secretary.
10. Non-Guarantee of Employment . Nothing in this Agreement will alter the Beneficiary’s employment status with the Employer or any member of the Globant Group, nor be construed as a contract of employment or service relationship between the Beneficiary and the Employer or any member of the Globant Group, or as a contractual right for the Beneficiary to continue in the employ of, or in a service relationship with, the Employer or any member of the Globant Group for any period of time, or as a limitation of the right of the Employer or any member of the Globant Group to discharge the Beneficiary at any time with or without Justified Cause or notice and whether or not such discharge results in the failure of any of the Stock Options to become exercisable.
11. No Rights as a Stockholder . The Beneficiary shall not have any of the rights of a stockholder with respect to the Shares until such Shares have been issued to upon the due exercise of the Stock Options. No adjustment will be made for dividends or distributions or other rights for which the record date is prior to the date such Shares are issued.
12. Nontransferability. The Stock Options and, before exercise, the underlying Option Shares, are nontransferable otherwise than by will or the laws of descent and distribution and, during the Beneficiary’s lifetime, the Stock Options may be exercised only by the Beneficiary. Except as provided above, the Stock Options and, before exercise, the underlying Option Shares, may not be assigned, transferred, pledged, hypothecated, or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.
13. The Company’s Rights . The existence of the Stock Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company's assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. Any reference herein to the Company shall include any successor to the rights of Company hereunder.
14. Entire Agreement . This Agreement contains the entire agreement between the Beneficiary, Employer and the Company with respect to the Stock Options. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Stock Options shall be void and ineffective for all purposes.
15. Amendment . This Agreement may be amended from time to time by the Company in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a materially adverse effect on the Stock Options or Shares, except as provided in a written document signed by the Beneficiary and the Company.
16. Section 409A . With respect to Beneficiaries who are US Persons subject to United States income tax, this Agreement and the Stock Options granted hereunder are intended to comply with, or otherwise be exempt from, Section 409A of the United States Internal Revenue Code, which governs the taxation of gross income attributable to arrangements that are deemed to be nonqualified deferred compensation plans. Nothing in the Agreement shall be construed as including any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Stock Options. Should any provision of this Agreement be found not to comply with, or otherwise be exempt from, the provisions of Section 409A of the United States Internal Revenue Code, it may be modified and given effect, in the sole discretion of the Company and without requiring the Beneficiary’s consent, in such manner as the Administrator determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A of the United States Internal Revenue Code. The foregoing, however, shall not be construed as a guarantee by the Company of any particular tax effect to the Beneficiary.
17. Electronic Delivery of Documents . By signing this Agreement, the Beneficiary (i) consents to the electronic delivery of this Agreement, all information with respect to the Stock Options, and any reports of the Company provided generally to the Company’s stockholders; (ii) acknowledge that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost by contacting the Company by telephone or in writing; (iii) further acknowledge that he or she may revoke this consent to the electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledge that he or she understands that his or her consent to electronic delivery of documents is not required.
18. Personal Data . For the purpose of implementing, administering and managing these Stock Options, the Beneficiary consents to the collection, receipt, use, retention and transfer, in electronic or other form, of personal data by and among the Company and its third party vendors or any potential party to any transaction or capital raising transaction involving the Company. The Beneficiary understands that personal data (including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, date of birth, nationality, job and payroll location, data for tax withholding purposes and shares awarded, cancelled, exercised, vested and unvested) may be transferred to third parties assisting in the implementation, administration and management of this Stock Option and the Beneficiary expressly authorizes such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). The Beneficiary understands that these recipients may be located in his or her country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Beneficiary’s country. The Beneficiary understands that data will be held only as long as is necessary to implement, administer and manage this Stock Option. The Beneficiary understands that he or she may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Corporate Secretary. The Beneficiary also understands, however, that refusing or withdrawing consent may affect his or her ability to accept or maintain the Stock Option.
19. Risk and Financial Information Disclosure . For purposes of claiming an exemption from registration under Rule 701 under the Securities Act of 1933 (which provides an exemption for offers and sales of securities pursuant to compensatory benefit plans and contracts relating to compensation), the Beneficiary agrees that any information required by that exemption may be provided either by physical or electronic delivery or by written notice of the availability of the information on an Internet site that may be password-protected and of any password needed to access the information. The Beneficiary may be required to execute an agreement to keep the information confidential as a condition precedent to the provision of the information, and any such agreement shall be executed in such manner and form as the Company may require from time to time. Notwithstanding the foregoing, the Company shall have no initial or continuing obligation to provide the Beneficiary with the information described in this Section, except as otherwise required by applicable law.
20. Governing Law . The validity, construction, and effect of this Agreement, and of any determinations or decisions made by the Company relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the Grand Duchy of Luxembourg, without regard to its provisions concerning the applicability of laws of other jurisdictions.
21. Arbitration . The parties hereto agree that all questions or matters in dispute with respect to this Agreement shall be subject to arbitration pursuant to the following terms and conditions: (i) it shall be a condition precedent to the right of any party hereto to submit any matter to arbitration to give prior written notice of its intention to do so to the other party explaining the matter in dispute. After 10 days from the notice the party who gave such notice may proceed to refer the dispute to arbitration; (ii) the party desiring arbitration shall appoint one arbitrator and shall notify the other party of such appointment, and the other party shall, within 15 days after such notice is deemed delivered, appoint an arbitrator, and the two arbitrators so named, before proceeding to act, shall within 30 days of the appointment of the last appointed arbitrator, unanimously agree to appoint a third arbitrator to act with them and be chairman of the arbitration herein provided for. If the other party shall fail to appoint an arbitrator within 15 days after notice of the appointment of the first arbitrator is deemed delivered, the first arbitrator shall be the only arbitrator. If the two arbitrators appointed by the parties by the parties shall be unable to agree on the appointment of the chairman, the chairman shall be appointed under the provisions of the International Chamber of Commerce ("ICC"); and (iii) except as specifically otherwise provided in this Agreement, the arbitration shall be conducted in accordance with the provisions of the ICC. The chairman or the arbitrator as the case may be shall fix a time and place in the city of Luxembourg, for the purpose of hearing the parties. After the hearing the arbitrator or arbitrators shall make an award and deliver a copy to the parties. Each party shall pay its own cost and expenses of the arbitration. The parties agree that the award shall be final and binding upon the parties
22. Taxes . All payments of Stock or cash hereunder shall be subject to such withholding taxes and other taxes as may be provided by law. The Beneficiary shall be responsible for the payment of all taxes attributable to the economic rights provided by this Agreement.
23. Headings . The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
24. Definitions . As used in this Agreement, the following terms shall have the following meanings:
“ Affiliate ” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, “ control ” shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity, or the power to direct the management and policies of the entity, by contract or otherwise.
“ Event of Liquidity ” means the consummation of a merger, sale or transfer for any title, of the assets of the Company by virtue of which the shareholders of the Company receive a payment (other than a payment of dividends) in cash, kind or a combination of both, representing at least fifty-five percent (55%) of the assets of the Company. Notwithstanding the preceding sentence, an IPO shall not be an Event of Liquidity.
“ Fair Market Value ” means, with respect to Stock for any purpose on a particular date, the value determined by the Company pursuant to a reasonable application of a reasonable valuation method. However, if the Common Stock is admitted for trading on a recognized national or regional exchange or market, “Fair Market Value” shall mean, as determined by the Company, (i) the closing price quoted on such exchange or market on the relevant date; (ii) the last sale price on the relevant date quoted on such exchange or market; (iii) the average of the high bid and low asked prices on the relevant date quoted on such exchange or market; or (iv) if the Stock is not quoted by any of the above, the average of the closing bid and asked prices on the relevant date furnished by a professional market maker for the Stock, or by such other source, selected by the Company. If no public trading of the Stock occurs on the relevant date but the shares are so listed, then Fair Market Value shall be determined as of the last date before the relevant date on which trading of the Stock did occur. For all purposes under this Agreement, the term “ relevant date ” as used in this definition means either the date as of which Fair Market Value is to be determined or the next preceding date on which public trading of the Stock occurs, as determined in the Company’s discretion..
“ Globant Group ” means the Company, the Employer and all Affiliates of the Company from time to time.
“ IPO ” shall mean an initial public offering of the equity securities of the Company or any successor corporation in an offering registered under the United States Securities Act of 1933.
“ Stock ” shall mean shares of the Company stock.
“ Justified Cause ” means termination of a Beneficiary’s employment on account of the Beneficiary’s commission of a criminal act, misappropriation of any of the Globant Group’s assets, commission of an intentional or grossly negligent act that has a detrimental effect on the Globant Group’s business, assets or reputation, or Beneficiary’s failure to perform one or more of his duties and responsibilities promptly following receipt of written notice of Beneficiary’s failure to perform such duties and responsibilities, or any other statutory cause or cause pursuant to the law governing the Beneficiary’s employment contract (if any).
IN WITNESS THEREOF, the Parties hereto have read, understood, and voluntary executed this Agreement as of the day and year first above written.
|[NAME OF BENEFICIARY]|
|Vesting Dates||Shares Vested||Exercise Price|