Exhibit 99.2
H
ORIZON
P
HARMA
P
UBLIC
L
IMITED
C
OMPANY
C
ASH
I
NCENTIVE
P
ROGRAM
E
FFECTIVE
D
ATE
: J
ANUARY
5, 2018
1.
Purpose.
The Horizon Pharma Public Limited Company Cash Incentive Program (the
“
Program
”) is for purposes of providing cash incentive compensation to individuals who make a significant contribution to the performance of Horizon Pharma Public Limited Company (the “
Company
”) and
its Affiliates and who are selected for participation in the Program (the “
Designated Participants
”). The Program objectives are to: (a) provide additional motivation to the Designated Participants to focus on our
corporate performance, (b) provide an additional retention incentive for Designated Participants, and (c) further align the interests of the Designated Participants with those of our shareholders. Certain capitalized terms used in this
Program document are defined on the attached
A
PPENDIX
A
.
2. How Awards Are Earned
Under the Program.
(a)
General Program Description.
The Program provides the opportunity
for the Designated Participants to earn a cash bonus based on the Company’s level of attainment of performance goals approved by the Committee (the “
Performance Goals
”) during the applicable performance period designated
by the Committee (the “
Performance Period
”) subject to satisfaction of any Continuous Service requirements through Service Vesting Dates as designated by the Committee.
(b)
Designated Participants.
The Program’s Designated Participants will be approved by the
Committee for each Performance Period. Except as provided in this Program, no Employee has any right (i) to be a Designated Participant in the Program, (ii) to continue as a Designated Participant, or (iii) to be granted a potential
cash bonus award or to earn an Actual Award under the Program.
(c)
Performance Goals and Performance
Period
. Actual Award amounts will be calculated based upon the Committee’s determination of the Company’s level of attainment of the Performance Goals established for each applicable Performance Period pursuant to the following
criteria:
(i)
The Committee will approve the applicable Performance Goals for each Performance Period,
which may, but are not required to, include a Threshold Goal. The Actual Award amount will be calculated based on level of attainment of the designated Performance Goals during the Performance Period. If a Threshold Goal is applicable to a
Performance Period but is not achieved during such Performance Period, and a Change in Control does not occur prior to expiration of such Performance Period, the Designated Participants will not earn any cash bonus under the Program with respect to
such Performance Period.
(ii)
If a Change in Control occurs before expiration of the Performance Period,
for purposes of calculating the Actual Award for such Performance Period, the Actual Award will be calculated by reference to the greater of: (i) the Target Award amount or, (ii) such cash bonus amount as would have been earned for the
Performance Period if a Change in Control had not occurred prior to expiration of the Performance Period, to the extent reasonably calculable, and as determined by the Committee (as constituted immediately prior to such Change in Control).
(iii)
Any Designated Participant who switches from full-time to part-time employment during the Performance
Period will have his or her Actual Award reduced on a
pro-rata
basis based upon the applicable percentage of full-time equivalent employment that was in effect on an aggregate basis during the Performance
Period. For the avoidance of doubt, no adjustment will be made to the determined amount of an Actual Award for any Designated Participant due to any reduction in the percentage of full-time equivalent
1
employment of a Designated Participant that occurs after expiration of the Performance Period and prior to determination of the Actual Award.
(iv)
The determined Actual Award amount for any Performance Period will become earned by and payable to a
Designated Participant subject to the Designated Participant’s satisfaction of the Continuous Service requirements set forth in Section 2(d) below.
(d)
Continuous Service.
(i)
The Committee will determine the applicable Continuous Service requirements through Service Vesting Dates
that will apply to awards under the Program. Except as otherwise provided below in Section 2(e)(ii) or 2(e)(iii), in order to earn an Actual Award under the Program with respect to any Performance Period, a Designated Participant must remain in
Continuous Service through the earlier of applicable specified Service Vesting Date or the date of a Change in Control. Except as otherwise provided below in Section 2(e)(ii) or 2(e)(iii), if a Designated Participant terminates Continuous
Service for any reason prior to the applicable Service Vesting Date or the date of a Change in Control, the Designated Participant will forfeit the right to any payment under the Program otherwise earned subject to Continuous Service through the
applicable Service Vesting Date.
(ii)
If prior to a Service Vesting Date a Designated Participant
terminates Continuous Service due to: (A) a termination by the Company without Cause after the date a definitive agreement for a Change in Control transaction is executed, or (B) the Designated Participant’s death or Disability, and
in each case the Designated Participant or his or her beneficiaries (as applicable) provide the Company and its Affiliates with an effective release of claims in a form acceptable to the Company (the “
Release
”) no later than
sixty (60) days following the date of such termination, the Designated Participant will still be eligible to earn an Actual Award subject to the Company’s attainment of the Performance Goals during the Performance Period or the earlier
occurrence of a Change in Control. The form of Release will be provided to the Designated Participant no later than five (5) days following such termination. In no event will Plan payments be made prior to the effectiveness of the Release.
3. Other Program Provisions.
(a)
Determination and Payment of Actual Awards.
Assessment of actual performance, determination of
the Actual Awards and any payment in respect of Actual Awards will be subject to: (i) the Committee’s determination that the applicable Performance Goals and other terms of the Program have been met for such Performance Period and
(ii) satisfaction of Continuous Service requirements. Unless otherwise determined by the Committee at the time of grant, all Actual Awards which are earned under the Program will generally be paid to Designated Participants as soon as
administratively practicable following the applicable specified Service Vesting Date (or any later date Actual Award is earned and vested subject to attainment of Performance Goals), but in no event later than December 31
st
of such calendar year. In the event of any Designated Participant’s termination due to death or Disability prior to a Service Vesting Date, Actual Award payments to such Designated Participant
will be made at the same time as payments would have been made if such Designated Participants Continuous Service had not terminated prior to the applicable Service Vesting Date. If a Change in Control occurs during the Performance Period, Actual
Awards earned under the Program will be paid to Designated Participants as soon as practicable but in no event later than sixty (60) days following the Change in Control.
(b)
Withholding.
The Company will withhold from payment of any Actual Award an amount in
satisfaction of any federal, state or local tax withholding obligation relating to the payment of the Actual Award as necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for
federal, state, local and foreign tax purposes, including payroll taxes, as applicable to supplemental taxable income.
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(c)
No Employment or Service Rights.
Nothing in the
Program or any instrument executed pursuant to the Program will (i) confer upon any Designated Participant any right to continue to be retained in the employ or service of the Company or any other Affiliate, (ii) change the
at-will
employment relationship between the Company or any other Affiliate and a Designated Participant, or (iii) interfere with the right of the Company or any other Affiliate to discharge any Designated
Participant or other person at any time, with or without Cause, and with or without advance notice.
(d)
Program Administration.
The Committee will be responsible for all decisions and
recommendations regarding Program administration and retains final authority regarding all aspects of Program administration, interpretation of the Program, the resolution of any disputes, and application of the Program in any respect to a
Designated Participant. All determinations and interpretations made by the Committee in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons. The Committee may, without notice, amend,
suspend or terminate the Program;
provided, however
,
that no such action may adversely affect any Designated Participant unless (i) expressly provided by the Committee; and (ii) with the consent of the Designated Participant,
unless such action is necessary to comply with any applicable law, regulation or rule.
(e)
Recovery
.
Any amounts paid under the Program will be subject to recoupment in
accordance with any clawback policy that the Company adopts, including but not limited to the Company’s Incentive Compensation Recoupment Policy, any clawback policy adopted pursuant to the listing standards of any national securities exchange
or association on which the Company’s securities are listed or as is otherwise adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. No recovery of compensation under such a clawback policy
will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any plan of or agreement with the Company.
(f)
Validity.
If any provision of the Program is held invalid, void, or unenforceable, the same
will not affect, in any respect whatsoever, the validity of any other provision of the Program.
(g)
Section 280G.
(i)
If any payment or benefit a Designated Participant would receive from the Company pursuant to this Program
or otherwise (“
Payment
”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “
Excise Tax
”), then such Payment shall be equal to the Reduced Amount. The “
Reduced Amount
” shall be either (x) the largest portion of the Payment that would
result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Designated Participant’s receipt, on an
after-tax
basis, of the greater economic benefit
notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. . If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding
sentence, the reduction shall occur in the manner (the “
Reduction Method
”) that results in the greatest economic benefit for the Designated Participant. If more than one method of reduction will result in the same economic
benefit, the items so reduced will be reduced pro rata (the “
Pro Rata Reduction Method
”).
(ii)
Notwithstanding any provision of paragraph (i) to the contrary, if the Reduction Method or the Pro
Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method
and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification shall preserve to the greatest
extent possible, the greatest economic benefit for the Designated Participant as determined on an
after-tax
basis; (B) as a second priority, Payments that are contingent on future events (e.g., being
terminated without cause), shall be reduced (or eliminated) before Payments that are
3
not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A of the Code shall be reduced (or
eliminated) before Payments that are not deferred compensation within the meaning of Section 409A of the Code.
(iii)
In the event it is subsequently determined by the Internal Revenue Service that some portion of the
Reduced Amount as determined pursuant to clause (x) in the preceding paragraph is subject to the Excise Tax, the Designated Participant agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the
Reduced Amount is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount is determined pursuant to clause (y) in the preceding paragraph, the Designated Participant will have no obligation to return any portion of the
Payment pursuant to the preceding sentence.
(iv)
The accounting firm engaged by the Company for general
tax compliance purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations unless otherwise determined by the Company. If the accounting firm so engaged by the Company is serving as accountant
or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.
(v)
The Company shall use
commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, within fifteen (15) calendar days after the date on which
the Designated Participant’s right to a Payment is triggered or such other time as requested by the Company.
(h)
Section 409A.
All Program payments are intended to satisfy the requirements for the
“short-term deferral” exemption from application of Section 409A provided under Treasury Regulations Sections
1.409A-1(b)(4)
to the maximum extent such exemption is available. To the extent
Program payments are subject to Section 409A, Program payments are intended to be paid on the earlier of a “specified date” or upon a Change in Control in compliance with the requirements of Section 409A. The Company reserves the
discretion to provide for acceleration of payment of Actual Awards to the maximum extent permitted by Treasury Regulations
Section 1.409A-3(j)(4),
including in connection with any Change in Control.
Program Payments are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences to the Designated Participants under
Section 409A, and any ambiguities herein shall be interpreted accordingly.
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A
PPENDIX
A
C
ASH
L
ONG
T
ERM
I
NCENTIVE
P
ROGRAM
D
EFINITIONS
(a)
“
Actual Award
” means the amount of any cash bonus awarded to a Designated
Participant under the Program based on the Committee’s determination of the level of achievement of the Performance Goals during the applicable Performance Period.
(b)
“Affiliate”
means, at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act of 1933, as amended.. The Committee shall have the authority to determine the time or times at which “parent” or
“subsidiary” status is determined within the foregoing definition.
(c)
“Cause”
for the Company or an Affiliate to terminate a Designated Participant’s
employment shall mean the occurrence of any of the following events, as determined reasonably and in good faith by the Committee:
(1)
the Designated Participant’s gross negligence or willful failure to substantially perform his duties
and responsibilities to the Company or Affiliate or willful and deliberate violation of a Company or Affiliate policy;
(2)
the Designated Participant’s conviction of a felony or the Designated Participant’s commission of
any act of fraud, embezzlement or dishonesty against the Company or Affiliate or involving moral turpitude that is likely to inflict or has inflicted material injury on the business of the Company or an Affiliate, to be determined by the sole
discretion of the Committee;
(3)
the Designated Participant’s unauthorized use or disclosure of any
proprietary information or trade secrets of the Company or an Affiliate or any other party that the Designated Participant’ owes an obligation of nondisclosure as a result of the Designated Participant’s relationship with the Company or an
Affiliate; and
(4)
the Designated Participant’s willful and deliberate breach of any employment
obligations that causes material injury to the business of the Company or an Affiliate.
(d)
“Change in Control”
means the first to occur of (1) a change in the ownership
of the Company, (2) a change in the effective control of the Company or (3) a change in the ownership of a substantial portion of the Company’s assets as specified below. For such purposes, a change in ownership of the Company occurs
on the date on which any one person or more than one person acting as a group acquires ownership of shares of the Company that, together with shares held by such person or group constitutes more than 50% of the total fair market value or total
voting power of the shares of the Company. A change in the effective control of the Company occurs on the date on which either (i) a person or more than one person acting as a group acquires during any
12-month
period ownership of shares of the Company possessing 50% or more of the total voting power of the shares of the Company or (ii) a majority of members of the Company’s board of directors is
replaced during any
12-month
period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s board of directors prior to the date of the appointment or
election. A change in the ownership of a substantial portion of assets occurs on the date on which any one person or more than one person acting as a group acquires assets from the Company that have a total gross fair market value equal to or more
than 75% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. The determination of whether a Change in Control has occurred will be determined in a manner consistent with the
requirements of Section 409A.
(e)
“
Committee
” means the Compensation
Committee of the Board of Directors. In the event of a Change in Control, “Committee” means the members of the Compensation Committee of the Board of Directors as constituted immediately prior to such Change in Control.
(f)
“Continuous Service”
means that the Designated Participant’s service with the
Company or an Affiliate, whether as an employee, director or consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an employee, consultant or director or a
change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall not terminate a Designated Participant’s
Continuous Service; provided, however, if the entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Committee, in its sole discretion, such Participant’s Continuous Service shall be
considered to have terminated on the date such entity ceases to qualify as an Affiliate. To the extent permitted by law, the Committee in its discretion may determine whether Continuous Service shall be considered interrupted in the case of
(i) any Company approved leave of absence, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence shall
be treated as Continuous Service for purposes of vesting in an Actual Award only to such extent as may be provided in the Company’s (or an Affiliate’s, if applicable) leave of absence policy, in the written terms of any leave of absence
agreement or policy applicable to the Designated Participant, or as otherwise required by law.
(g)
“Disability”
means the Designated Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under
an accident and health plan covering Company employees. The determination of whether a Designated Participant has incurred a Disability will be determined in a manner consistent with the requirements of Section 409A.
(h)
“Threshold Goal”
means any performance goal that may be established by the Committee
for the Performance Period and which is the minimum performance level that must be attained in order to any portion of an Actual Award to be earned for such Performance Period absent a Change in Control prior to expiration of such Performance
Period. The Committee may, but is not required to, establish a Threshold Goal with respect to any designated Performance Period.
(i)
“Section
409A”
means Section 409A of the
Internal Revenue Code of 1986, as amended from time to time, including regulations and other guidance thereunder, and any state law of similar effect.
(j)
“Service Vesting Date”
means the date specified by the Committee through which the
Participant must provide Continuous Service in order to earn a portion of an Actual Award, except as otherwise specified in this Program.
(k)
“Target Award”
means the applicable target award amount approved by the Committee
for payment to a Designated Participant for a Performance Period and which would be payable if the Performance Goals for such Performance Period were attained at exactly 100% of the target level.
Exhibit 99.3
H
ORIZON
P
HARMA
P
UBLIC
L
IMITED
C
OMPANY
2014 E
QUITY
I
NCENTIVE
P
LAN
A
DOPTED
BY
THE
B
OARD
OF
D
IRECTORS
:
M
AY
17, 2014
A
PPROVED
BY
THE
S
HAREHOLDERS
:
S
EPTEMBER
18, 2014
A
MENDED
BY
THE
B
OARD
OF
D
IRECTORS
: M
ARCH
23, 2015
A
PPROVED
BY
THE
S
HAREHOLDERS
: M
AY
6, 2015
A
MENDED
BY
THE
C
OMPENSATION
C
OMMITTEE
: F
EBRUARY
25, 2016
A
PPROVED
BY
THE
S
HAREHOLDERS
: M
AY
3, 2016
A
MENDED
BY
THE
C
OMPENSATION
C
OMMITTEE
:
A
UGUST
29, 2017
A
MENDED
BY
THE
C
OMPENSATION
C
OMMITTEE
: J
ANUARY
5, 2018
T
ERMINATION
D
ATE
:
M
AY
16, 2024
1. G
ENERAL
.
(a)
Relationship to Prior Plans.
This Plan is intended as the successor to the Horizon Pharma, Inc. 2011
Equity Incentive Plan (the “
2011 Plan
”) with respect to grants to Employees. From and after 12:01 a.m. on the Effective Date, all outstanding stock awards granted under the 2011 Plan and the Horizon Pharma, Inc. 2005 Stock
Plan (the “
2005 Plan
”) and, together with the 2011 Plan, the “
Prior Plans
”) shall remain subject to the terms of the 2011 Plan or the 2005 Plan, as applicable;
provided, however
, any Ordinary
Shares subject to outstanding stock awards granted under the Prior Plans that expire, terminate or are forfeited for any reason prior to exercise or settlement, and any Ordinary Shares that are repurchased or redeemed because of the failure to meet
a contingency or condition required to vest such Ordinary Shares (the “
Returning Shares
”) shall immediately be added to the Share Reserve (as described below) as and when such Ordinary Shares become Returning Shares and shall
become available for issuance pursuant to Awards granted hereunder. All Awards granted on or after the Effective Date of this Plan shall be subject to the terms of this Plan.
(b)
Eligible Award Recipients.
The persons eligible to receive Awards are Employees. The persons eligible
to receive Inducement Awards are Employees who meet the criteria set forth in Section 3(f).
(c)
Available Awards.
The Plan provides for the grant of the following Awards: (i) Incentive Stock
Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards,
(viii) Inducement Awards, and (ix) Other Stock Awards.
(d)
Purpose.
The Company, by means
of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Awards as set forth in Section 1(b), to provide incentives for such persons to exert maximum efforts for the success of the Company and any
1
Affiliate and to provide a means by which such eligible recipients may be given an opportunity to benefit from increases in value of the Ordinary Shares through the granting of Awards.
2. A
DMINISTRATION
.
(a)
Administration by Board.
The Board shall administer the Plan unless and until the Board delegates
administration of the Plan to a Committee or Committees, as provided in Section 2(c). Notwithstanding anything to the contrary set forth herein, only an Inducement Committee has the power to grant Inducement Awards.
(b)
Powers of Board.
The Board shall have the power, subject to, and within the limitations of, the
express provisions of the Plan:
(i)
To determine from time to time (A) which of the persons eligible
under the Plan shall be granted Awards; (B) when and how each Award shall be granted; (C) what type or combination of types of Award shall be granted; (D) the provisions of each Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive cash or Ordinary Shares pursuant to a Stock Award; (E) the number of Ordinary Shares with respect to which a Stock Award shall be granted to each such person; and (F) the Fair
Market Value applicable to a Stock Award.
(ii)
To construe and interpret the Plan and Awards granted under
it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement or in the written terms of a
Performance Cash Award, in a manner and to the extent it shall deem necessary or expedient to make the Plan or Award fully effective.
(iii)
To settle all controversies regarding the Plan and Awards granted under it.
(iv)
To accelerate the time at which an Award may first be exercised or the time during which an Award or any
part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
(v)
To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall not impair rights
and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vi)
To amend the Plan in any respect the Board deems necessary or advisable. However, except as provided in
Section 9(a) relating to Capitalization Adjustments, to the extent required by applicable law or listing requirements, shareholder approval shall be required for any amendment of the Plan that either (A) materially increases the number of
Ordinary Shares available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan or materially
reduces the price at which Ordinary Shares may be issued or purchased under the Plan, (D) materially extends the term of the Plan, or (E) expands the types of Awards available for issuance under the Plan. Except as provided above, rights
under any Award granted before amendment of the Plan shall not be impaired by any amendment of the
2
Plan unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
(vii)
To submit any amendment to the Plan for shareholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees,
(B) Section 422 of the Code regarding incentive stock options or (C) Rule
16b-3.
(viii)
To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more
Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion;
provided
however
, that except with respect to amendments that disqualify or impair the status of an Incentive Stock Option, a Participant’s rights under any Award shall not be impaired by any such amendment unless (A) the Company requests the
consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected
Participant’s consent if necessary to maintain the qualified status of the Award as an Incentive Stock Option or to bring the Award into compliance with Section 409A of the Code.
(ix)
Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to
promote the best interests of the Company and any Affiliates and that are not in conflict with the provisions of the Plan or Awards.
(x)
To adopt such procedures and
sub-plans
as are necessary or
appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside the United States.
(c) Delegation to Committee.
(
i
)
General.
The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee,
including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the
subcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
3
(ii)
Section 162(m) and Rule
16b-3
Compliance.
The Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more
Non-Employee
Directors, in accordance with Rule
16b-3.
(iii)
Inducement Awards.
Notwithstanding any other provision of the Plan to the contrary, all Inducement
Awards must be granted by an Inducement Committee.
(d)
Effect of Board’s Decision.
All
determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.
(e)
Cancellation and
Re-Grant
of Stock Awards
. Neither the Board
nor any Committee shall have the authority to: (i) reduce the exercise price of any outstanding Options or Stock Appreciation Rights under the Plan, or (ii) cancel any outstanding Options or Stock Appreciation Rights that have an exercise
price or strike price greater than the current Fair Market Value of the Ordinary Shares in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the Company have approved such an action within twelve (12) months
prior to such an event, provided that the exercise price of any such outstanding Options or Stock Appreciation Rights under the Plan may not be reduced below the nominal value of an Ordinary Share.
3. S
HARES
S
UBJECT
TO
THE
P
LAN
.
(a) Share Reserve.
(i)
Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of Ordinary Shares
of the Company that may be issued pursuant to Stock Awards after the Effective Date shall not exceed 43,252,130 shares, which is the sum of (i) 22,052,130 Ordinary Shares, which is the total reserve that was approved as of the Effective Date in
connection with the adoption of the Plan, including, but not limited to, the shares remaining available for issuance under the Prior Plans and the Returning Shares, (ii) 14,000,000 additional Ordinary Shares approved by the Company’s
shareholders at the 2015 annual general meeting, and (iii) 6,000,000 new Ordinary Shares approved by the Company’s shareholders at the 2016 annual general meeting (the total of (i), (ii) and (iii), the “
Share Reserve
”)
and (iv) 1,200,000 Ordinary Shares that may be issued pursuant to Inducement Awards granted under Section 3(f) of the Plan. For clarity, the limitation in this Section 3(a)(i) is a limitation on the number of Ordinary Shares that may be
issued pursuant to the Plan. Accordingly, this Section 3(a)(i) does not limit the granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by, as applicable,
NASDAQ Marketplace Rule 4350(i)(1)(A)(iii), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable stock exchange rules, and such issuance shall not reduce the number of Ordinary Shares available for
issuance under the Plan. Furthermore, if a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the Ordinary Shares covered by such Stock Award having been issued or (ii) is settled in cash (
i.e.
,
the Participant receives cash rather than Ordinary Shares), such expiration, termination or settlement shall not reduce (or otherwise offset) the number of Ordinary Shares that may be available for issuance under the Plan.
4
(ii)
Subject to subsection 3(b) and except with respect to
Inducement Awards, the number of Ordinary Shares available for issuance under the Plan shall be reduced by: (i) one (1) Ordinary Share for each Ordinary Share issued pursuant to (A) an Option granted under Section 5, or (B) a
Stock Appreciation Right granted under Section 5 with respect to which the strike price is at least one hundred percent (100%) of the Fair Market Value of the underlying Ordinary Shares on the date of grant; and (ii) 1.29 Ordinary Shares for
each Ordinary Share issued pursuant to a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, Other Stock Award or any other stock award granted under the Plan that is not described in subsection (i) above.
(b) Reversion of Shares to the Share Reserve.
(
i
)
Shares Available For Subsequent Issuance.
If any Stock Award is forfeited back to the
Company or Ordinary Shares are redeemed or repurchased by the Company or any Affiliate (in accordance with applicable Irish law) because of the failure to meet a contingency or condition required to vest such Ordinary Shares, then the Ordinary
Shares that are forfeited, redeemed or repurchased shall revert to and again become available for issuance under the Plan. Notwithstanding the provisions of this Section 3(b)(i), to the extent (i) there is issued an Ordinary Share pursuant
to a Stock Award under the Plan (other than an Option or Stock Appreciation Right), and (ii) there are any Returning Shares granted under the Prior Plans pursuant to an award other than an Option or Stock Appreciation Right, and such Ordinary
Share becomes available for issuance under the Plan pursuant to Section 1(a), Section 3(a)(i) or this Section 3(b)(i), then the number of Ordinary Shares available for issuance under the Plan shall increase by 1.29 shares for each
such Ordinary Share. Notwithstanding the foregoing, any Inducement Shares that become available for issuance under the Plan pursuant to this subsection 3(b)(i) will only become available for issuance pursuant to Inducement Awards.
(ii)
Shares Not Available For Subsequent Issuance.
If any Ordinary Shares subject to a Stock Award are
not delivered to a Participant because the Stock Award is exercised through a reduction of Ordinary Shares subject to the Stock Award (
i.e
., “net exercised”), the number of Ordinary Shares that are not delivered to the Participant
shall not remain available for issuance under the Plan. Also, any Ordinary Shares withheld by the Company pursuant to Section 8(g) or withheld or tendered as consideration for the exercise of an Option or purchase of any other Stock Award shall
not again become available for issuance under the Plan.
(c)
Incentive Stock Option Limit.
Notwithstanding anything to the contrary in this Section 3 and, subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of Ordinary Shares that may be issued pursuant to the
exercise of Incentive Stock Options shall be the number of shares subject to the Plan’s Share Reserve.
(d)
Section 162(m) Limitation on Annual Grants
. Subject to the provisions of Section 9(a) relating
to Capitalization Adjustments and except with respect to Inducement Awards, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, a maximum of three million (3,000,000)
Ordinary Shares
subject to Options, Stock Appreciation Rights and Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date any such Stock
Award is granted may be granted to any
5
Participant during any calendar year. Notwithstanding the foregoing, if any additional Options, Stock Appreciation Rights or Other Stock Awards whose value is determined by reference to an
increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock Awards are granted to any Participant during any calendar year, compensation attributable to the exercise of such
additional Stock Awards shall not satisfy the requirements to be considered “qualified performance-based compensation” under Section 162(m) of the Code unless such additional Stock Award is approved by the Company’s shareholders.
(e)
Source of Shares.
The Ordinary Shares issuable under the Plan shall be authorized but unissued
or reacquired Ordinary Shares, including Ordinary Shares redeemed or repurchased by the Company or any Affiliate on the open market or otherwise, in accordance with applicable Irish Law.
(f)
Inducement Shares.
This subsection 3(f) will apply with respect to the 2,000,000 Ordinary Shares
reserved under this Plan by action of the Board (or a committee thereof) to be used exclusively for the grant of Inducement Awards in compliance with NASDAQ Listing Rule 5635(c)(4) (the “Inducement Shares”). Notwithstanding anything to the
contrary in this Plan, an Inducement Award may be granted only to an Employee who has not previously been an Employee or a
non-Employee
Director of the Company or an Affiliate, or following a bona fide period
of
non-employment,
as an inducement material to the individual’s entering into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules.
4. E
LIGIBILITY
.
(a)
Eligibility for Specific Stock Awards
. Incentive Stock Options may be granted only to employees of the
Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees;
provided, however
, that Nonstatutory Stock Options and SARs may not be granted to Employees who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 promulgated under the
Securities Act, unless the Ordinary Shares underlying such Stock Awards are treated as “service recipient stock” under Section 409A of the Code because the Stock Awards are granted pursuant to a corporate transaction (such as a spin
off transaction) or unless such Stock Awards comply with the distribution requirements of Section 409A of the Code.
(b)
Ten Percent Shareholders.
A Ten Percent Shareholder shall not be granted an Incentive Stock Option
unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.
5. P
ROVISIONS
RELATING
TO
O
PTIONS
AND
S
TOCK
A
PPRECIATION
R
IGHTS
.
Each Option or SAR shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a
6
separate certificate or certificates shall be issued for Ordinary Shares purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option,
then the Option shall be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical;
provided, however
, that each Option Agreement or Stock Appreciation Right Agreement shall conform to (through
incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:
(a)
Term.
Subject to the provisions of Section 4(b) regarding Ten Percent Shareholders, no Option or
SAR shall be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the Award Agreement.
(b)
Exercise Price.
Subject to the provisions of Section 4(b) regarding Ten Percent Shareholders,
the exercise price (or strike price) of each Option or SAR shall be not less than one hundred percent (100%) of the Fair Market Value of the Ordinary Shares subject to the Option or SAR on the date the Option or SAR is granted. Notwithstanding the
foregoing, an Option or SAR may be granted with an exercise price (or strike price) lower than one hundred percent (100%) of the Fair Market Value of the Ordinary Shares subject to the Option or SAR if such Option or SAR is granted pursuant to an
assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code, provided that in all cases the
exercise price is not less than the nominal value of an Ordinary Share. Each SAR will be denominated in Ordinary Shares equivalents.
(c)
Purchase Price for Options.
The purchase price of Ordinary Shares acquired pursuant to the exercise
of an Option shall be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below;
provided, however,
that where Ordinary Shares are
issued pursuant to the exercise of an Option, the nominal value of each newly issued Ordinary Share is fully paid up. The Board shall have the authority to grant Options that do not permit all of the following methods of payment (or otherwise
restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The permitted methods of payment are as follows:
(i)
by cash, check, bank draft or money order payable to the Company;
(ii)
pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior
to the issuance of Ordinary Shares subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;
(iii)
if the option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which
the Company will reduce the number of Ordinary Shares issuable upon exercise by the largest whole number of Ordinary Shares with a Fair Market Value that does not exceed the aggregate exercise price;
provided, however
, that:
7
(1)
the Company shall accept a cash or other payment from the
Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole Ordinary Shares to be issued;
(2)
irrespective of whether a “net exercise” arrangement is used, the nominal value of each newly
issued Ordinary Shares will be fully paid up in cash; and
(3)
Ordinary Shares will no longer be subject to
an Option and will not be exercisable thereafter to the extent that (A) Ordinary Shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net exercise,” (B) Ordinary Shares are delivered to the Participant
as a result of such exercise, and (C) Ordinary Shares are withheld to satisfy tax withholding obligations;
(iv)
deduction from salary due and payable to an Employee by the Company or any Affiliate; or
(v)
in any other form of legal consideration that may be acceptable to the Board and permissible under
applicable law.
(d)
Exercise and Payment of a SAR.
To exercise any outstanding Stock Appreciation
Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. The appreciation distribution payable on the exercise
of a Stock Appreciation Right will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation Right) of a number of Ordinary Shares equal to the number of
Ordinary Shares equivalents in which the Participant is vested under such Stock Appreciation Right, and with respect to which the Participant is exercising the Stock Appreciation Right on such date, over (B) the strike price that will be
determined by the Board at the time of grant of the Stock Appreciation Right. The appreciation distribution in respect to a Stock Appreciation Right may be paid in Ordinary Shares, in cash, in any combination of the two or in any other form of
consideration, as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right,
provided, however,
that where Ordinary Shares are issued pursuant to a Stock Appreciation Right, the
nominal value of each newly issued Ordinary Share is fully paid up.
(e)
Transferability of Options and
SARs.
The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the
transferability of Options and SARs shall apply:
(i)
Restrictions on Transfer.
An Option or SAR
shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant;
provided, however
, that the Board may, in its sole discretion, permit
transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.
8
(ii)
Domestic Relations Orders.
Notwithstanding the
foregoing, an Option or SAR may be transferred pursuant to a domestic relations order;
provided, however
, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such
transfer.
(iii)
Beneficiary Designation.
Notwithstanding the foregoing, the Participant may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect Option exercises, designate a third party who, in the event of the death of the Participant,
shall thereafter be entitled to exercise the Option or SAR and receive the Ordinary Shares or other consideration resulting from such exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate
shall be entitled to exercise the Option or SAR and receive the Ordinary Shares or other consideration resulting from such exercise.
(f)
Vesting Generally.
The total number of Ordinary Shares subject to an Option or SAR may vest and
therefore become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction
of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum
number of Ordinary Shares as to which an Option or SAR may be exercised.
(g)
Termination of Continuous
Service.
Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company or any Affiliate, if a Participant’s Continuous Service terminates (other than for Cause or upon the
Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) but only within such period
of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Award Agreement), or (ii) the
expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the time specified herein or in the Award Agreement (as
applicable), the Option or SAR shall terminate.
(h)
Extension of Termination Date.
If the exercise
of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause or upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of Ordinary Shares would
violate the registration requirements under the Securities Act, then the Option or SAR shall terminate on the earlier of (i) the expiration of a total period of three (3) months (that need not be consecutive) after the termination of the
Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award
Agreement. In addition, unless otherwise provided in a Participant’s Award Agreement, if the immediate sale of any Ordinary Shares received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service
(other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR shall
9
terminate on the earlier of (i) the expiration of a period equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during
which the sale of the Ordinary Shares received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable
Award Agreement.
(
i
)
Disability of Participant.
Except as otherwise provided in the
applicable Award Agreement or other agreement between the Participant and the Company or any Affiliate, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her
Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date twelve
(12) months following such termination of Continuous Service (or such longer or shorter period specified in the Award Agreement), or (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after
termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the time specified herein or in the Award Agreement (as applicable), the Option or SAR (as applicable) shall terminate.
(j)
Death of Participant.
Except as otherwise provided in the applicable Award Agreement or other
agreement between the Participant and the Company or any Affiliate, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in
the Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or
SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but
only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Award Agreement), or (ii) the expiration of the term of such Option or
SAR as set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the time specified herein or in the Award Agreement (as applicable), the Option or SAR shall terminate.
(k)
Termination for Cause.
Except as explicitly provided otherwise in a Participant’s Award
Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR shall terminate immediately upon such Participant’s
termination of Continuous Service, and the Participant shall be prohibited from exercising his or her Option or SAR from and after the time of such termination of Continuous Service.
(l)
Non-Exempt
Employees
. No Option or SAR, whether or not
vested, granted to an Employee who is a
non-exempt
employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable for any Ordinary Shares until at least six months
following the date of grant of the Option or SAR. Notwithstanding the foregoing, consistent with the provisions of the Worker Economic Opportunity Act, (i) in the event of the Participant’s death or Disability, (ii) upon a Corporate
Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s
10
retirement (as such term may be defined in the Participant’s Award Agreement or in another applicable agreement or in accordance with the Company’s (or Affiliates, if applicable) then
current employment policies and guidelines), any such vested Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a
non-exempt
employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.
6. P
ROVISIONS
OF
S
TOCK
A
WARDS
OTHER
THAN
O
PTIONS
AND
SAR
S
.
(a)
Restricted Stock Awards.
Each
Restricted Stock Award Agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. To the extent consistent with the Company’s Bylaws, at the Board’s election, Ordinary Shares may be
(i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical;
provided, however
, that
each Restricted Stock Award Agreement shall conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
(i)
Consideration.
A Restricted Stock Award may be awarded in consideration for (A) cash, check,
bank draft or money order payable to the Company, (B) services to the Company or an Affiliate or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and
permissible under applicable law,
provided however
, that where Ordinary Shares are issued pursuant to a Restricted Stock Award the nominal value of each newly issued Ordinary Share is fully paid up.
(ii)
Vesting.
Ordinary Shares awarded under a Restricted Stock Award Agreement may be subject to
forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.
(iii)
Termination of Participant’s Continuous Service.
If a Participant’s Continuous Service
terminates, the Company or any Affiliate may receive through a forfeiture condition or a repurchase right any or all of the Ordinary Shares held by the Participant that have not vested as of the date of termination of Continuous Service under the
terms of the Restricted Stock Award Agreement.
(iv)
Transferability.
Rights to acquire Ordinary
Shares under the Restricted Stock Award Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole discretion, so long as
Ordinary Shares awarded under the Restricted Stock Award Agreement remain subject to the terms of the Restricted Stock Award Agreement.
(v)
Dividends.
A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock
will be subject to the same vesting and forfeiture restrictions as apply to the Ordinary Shares subject to the Restricted Stock Award to which they relate.
11
(
b
)
Restricted Stock Unit Awards.
Each
Restricted Stock Unit Award Agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical;
provided, however
,
that each Restricted Stock Unit Award Agreement shall conform to (through incorporation of the provisions hereof by
reference in the Agreement or otherwise) the substance of each of the following provisions:
(
i
)
Consideration.
At the time of grant of a Restricted Stock Unit Award, the Board will
determine the consideration, if any, to be paid by the Participant upon delivery of each share of Ordinary Shares subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Ordinary Shares
subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law,
provided, however,
that where Ordinary Shares are
issued pursuant to a Restricted Stock Unit Award, the nominal value of each newly issued Ordinary Share is fully paid up.
(ii)
Vesting.
At the time of the grant of a Restricted Stock Unit Award, the Board may impose such
restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(iii)
Payment
. A Restricted Stock Unit Award may be settled by the delivery of Ordinary Shares, their
cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv)
Additional
Restrictions.
At the time of the grant of a Restricted Stock Unit Award, the
Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the Ordinary Shares (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit
Award.
(v)
Dividend Equivalents.
Dividend equivalents may be credited in respect of Ordinary Shares
covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional Ordinary Shares covered
by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional Ordinary Shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and
conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.
(vi)
Termination
of Participant
’
s Continuous Service.
Except as otherwise
provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.
12
(c)
Performance Awards
.
(
i
)
Performance Stock Awards
. A Performance Stock Award is a Stock Award that may vest or
may be exercised contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require the completion of a specified period of Continuous Service. The length of any Performance
Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Committee, in its sole discretion. Except
with respect to Inducement Awards, the maximum number of shares covered by an Award that may be granted to any Participant in a calendar year attributable to Stock Awards described in this Section 6(c)(i) (whether the grant, vesting or exercise
is contingent upon the attainment during a Performance Period of the Performance Goals) shall not exceed three million (3,000,000) Ordinary Shares. The Board may provide for or, subject to such terms and conditions as the Board may specify, may
permit a Participant to elect for, the payment of any Performance Stock Award to be deferred to a specified date or event. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash
may be used in payment of Performance Stock Awards.
(ii)
Performance Cash Awards
. A Performance Cash
Award is a cash award that may be paid contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous Service. At the time of
grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be
conclusively determined by the Committee, in its sole discretion. In any calendar year, the Committee may not grant a Performance Cash Award that has a maximum value that may be paid to any Participant in excess of three million dollars
($3,000,000). The Board may provide for or, subject to such terms and conditions as the Board may specify, may permit a Participant to elect for, the payment of any Performance Cash Award to be deferred to a specified date or event. The Committee
may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid
in whole or in part in cash or other property.
(iii)
Board Discretion
. The Board retains the
discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period.
(iv)
Section 162(m) Compliance
. Unless otherwise permitted in compliance with the requirements of
Section 162(m) of the Code with respect to an Award intended to qualify as “performance-based compensation” thereunder, the Committee shall establish the Performance Goals applicable to, and the formula for calculating the amount
payable under, the Award no later than the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period, or (b) the date on which twenty-five percent (25%) of the Performance Period has elapsed,
and in either event at a time when the achievement of the applicable Performance Goals remains substantially uncertain. Prior to the payment of any
13
compensation under an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall certify the extent to which any
Performance Goals and any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in the value of the Ordinary Shares). Notwithstanding satisfaction or completion of any Performance
Goals, to the extent specified at the time of grant of an Award to “covered employees” within the meaning of Section 162(m) of the Code, the number of Ordinary Shares, Options, cash or other benefits granted, issued, retainable and/or
vested under an Award on account of satisfaction of such Performance Goals may be reduced by the Committee on the basis of such further considerations as the Committee, in its sole discretion, shall determine.
(d)
Other Stock Awards
. Other forms of Stock Awards valued in whole or in part by reference to, or
otherwise based on, Ordinary Shares, including the appreciation in value thereof (e.g., options or share rights with an exercise price or strike price less than 100% of the Fair Market Value of the Ordinary Shares at the time of grant) may be
granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board shall have sole and complete authority to determine the
persons to whom and the time or times at which such Other Stock Awards will be granted, the number of Ordinary Shares (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other
Stock Awards;
provided, however,
that where Ordinary Shares are issued pursuant to any Other Stock Award, the nominal value of each newly issued Ordinary Share is fully paid up.
7. C
OVENANTS
OF
THE
C
OMPANY
.
(a)
Availability of Shares.
During the terms of the Stock Awards, the Company shall keep available at all
times the authorized but unissued Ordinary Shares reasonably required to satisfy such Stock Awards.
(b)
Securities Law Compliance.
The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell Ordinary Shares upon exercise of the Stock Awards;
provided, however
, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Stock Award or any Ordinary Shares issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the
authority that counsel for the Company deems necessary for the lawful issuance and sale of Ordinary Shares under the Plan, the Company shall be relieved from any liability for failure to issue and sell Ordinary Shares upon exercise of such Stock
Awards unless and until such authority is obtained. A Participant shall not be eligible for the grant of a Stock Award or the subsequent issuance of Ordinary Shares pursuant to the Stock Award if such grant or issuance would be in violation of any
applicable securities law.
(c)
No Obligation to Notify or Minimize Taxes.
The Company and its
Affiliates shall have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company and its Affiliates shall have no duty or obligation to warn or otherwise advise
such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company
14
and its Affiliates have no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.
8. M
ISCELLANEOUS
.
(a)
Use of Proceeds from Sales of Ordinary Shares.
Proceeds from the sale of Ordinary Shares pursuant to
Stock Awards shall constitute general funds of the Company.
(b)
Corporate Action Constituting Grant of
Stock Awards.
Corporate action constituting a grant by the Company of a Stock Award to any Participant shall be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the
instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant.
(c)
Shareholder Rights.
No Participant shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any Ordinary Shares subject to such Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms, if applicable, and (ii) the issuance
of the Ordinary Shares subject to such Stock Award has been entered into the books and records of the Company.
(d)
No Employment or Other Service Rights.
Nothing in the Plan, any Stock Award Agreement or any other
instrument executed thereunder or in connection with any Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or
shall affect the right of the Company or an Affiliate to terminate the employment of an Employee with or without notice and with or without cause.
(e)
Incentive Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market Value
(determined at the time of grant) of Ordinary Shares with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable
Option Agreement(s).
(f)
Investment Assurances.
The Company may require a Participant, as a
condition of exercising or acquiring Ordinary Shares under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Ordinary Shares subject to the Stock Award for the Participant’s own account and not with any
present intention of selling or otherwise distributing the Ordinary Shares. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise or
acquisition of Ordinary Shares under the Stock Award has been registered under a
15
then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement
need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on share certificates issued under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Ordinary Shares.
(g)
Withholding Obligations.
Unless prohibited by the terms of a Stock Award Agreement, the Company or
any Affiliate may, in its sole discretion, satisfy any federal, state, local or foreign tax withholding obligation, or levies or social security deduction obligation relating to an Award by any of the following means or by a combination of such
means: (i) causing the Participant to tender a cash payment; (ii) withholding Ordinary Shares from the Ordinary Shares issued or otherwise issuable to the Participant in connection with the Award;
provided, however,
that no Ordinary
Shares are withheld with a value exceeding the minimum amount of tax, levies and social security contribution required to be withheld by law or the practice of any revenue authority (or such lesser amount as may be necessary to avoid classification
of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may
be set forth in the Award Agreement.
(h)
Electronic Delivery
. Any reference herein to a
“written” agreement or document shall include any agreement or document delivered electronically or posted on the Company’s (or Affiliate’s, if applicable) intranet (or other shared electronic medium controlled by the Company or
any Affiliate to which the Participant has access).
(i)
Deferrals.
To the extent permitted by
applicable law, the Board, in its sole discretion, may determine that the delivery of Ordinary Shares or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and
procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a
Participant is still an employee or otherwise providing services to the Company or an Affiliate. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including
lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.
(j)
Compliance with Section
409A.
To the extent that the Board determines that any
Award granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the
extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the
Ordinary Shares are publicly traded and a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no
distribution or payment of
16
any amount shall be made upon a “separation from service” before a date that is six (6) months following the date of such Participant’s “separation from service” (as
defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death.
(k)
Personal Data.
It shall be a term and condition of every Award that a Participant agrees and consents
to:
(i)
the collection, use and processing of his Personal Data by the Company or any Subsidiary and the
transfer of his Personal Data to any third party administrator of the Plan and any broker through whom Shares are to be sold on behalf of a Participant;
(ii)
the Company, its Subsidiaries or any third party administrator of the Plan, transferring the
Participant’s Personal Data amongst themselves for the purposes of implementing, administering and managing the Plan and the issue of Awards and the acquisition of Ordinary Shares pursuant to Awards;
(iii)
the use of Personal Data by any such person for any such purposes; and
(iv)
the transfer to and retention of Personal Data by third parties (including any situated outside the
European Economic Area) for or in connection with such purposes.
9. A
DJUSTMENTS
UPON
C
HANGES
IN
O
RDINARY
S
HARES
; O
THER
C
ORPORATE
E
VENTS
.
(a)
Capitalization Adjustments
. In the event of a Capitalization Adjustment, the Board shall appropriately
and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a)(i) and 3(f), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of
Incentive Stock Options pursuant to Section 3(a)(ii), (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Sections 3(d) and 6(c)(i), and (iv) the class(es) and number of securities and price
per Ordinary Share subject to outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive.
(b)
Dissolution or Liquidation
. Except as otherwise provided in a Stock Award Agreement, in the event of
a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding Ordinary Shares not subject to a forfeiture condition or the Company’s or any Affiliate’s right of
repurchase) shall terminate immediately prior to the completion of such dissolution or liquidation, and any Ordinary Shares subject to the Company’s or any Affiliate’s repurchase rights or subject to a forfeiture condition may be
repurchased or reacquired by the Company or an Affiliate notwithstanding the fact that the holder of such Stock Award is providing Continuous Service,
provided, however
, that the Board may, in its sole discretion, cause some or all Stock
Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its
completion.
(c)
Corporate Transaction.
The following provisions shall apply to Stock Awards in the
event of a Corporate Transaction unless otherwise provided in the instrument evidencing
17
the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award.
(i)
Stock Awards May Be Assumed.
In the event of a Corporate Transaction, any surviving corporation
or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding under the Plan
(including but not limited to, awards to acquire the same consideration paid to the shareholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Ordinary Shares
issued pursuant to Stock Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any) in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its
parent) may choose to assume or continue only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award, or may choose to assume or continue the Stock Awards held by some, but not all Participants. The terms
of any assumption, continuation or substitution shall be set by the Board.
(ii)
Stock Awards Held by
Current Participants.
In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute similar stock awards for
such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate
Transaction (referred to as the “
Current Participants
”), the vesting of such Stock Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Stock Awards may be exercised) shall be accelerated in
full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five
(5) days prior to the effective time of the Corporate Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase
rights held by the Company with respect to such Stock Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction).
(iii)
Stock Awards Held by Persons other than Current Participants.
In the event of a Corporate
Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards, then with respect to
Stock Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, such Stock Awards shall terminate if not exercised (if applicable) prior to the effective time of the Corporate
Transaction;
provided, however
, that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
(iv)
Payment for Stock Awards in Lieu of Exercise.
Notwithstanding the foregoing, in the event a Stock
Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such
18
Stock Award may not exercise such Stock Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of
(A) the value of the property the Participant would have received upon the exercise of the Stock Award (including, at the discretion of the Board, any unvested portion of such Stock Award), over (B) any exercise price payable by such
holder in connection with such exercise.
(d)
Change in Control.
A Stock Award may be subject to
additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate
and the Participant, but in the absence of such provision, no such acceleration shall occur.
10. T
ERMINATION
OR
S
USPENSION
OF
THE
P
LAN
.
(a)
Plan Term.
The Board may suspend or terminate the Plan at any time. Unless terminated sooner by the
Board, the Plan shall automatically terminate on the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the shareholders of the Company. No
Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
(b)
No
Impairment of Rights.
Suspension or termination of the Plan shall not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
11. E
FFECTIVE
D
ATE
OF
P
LAN
.
The Plan shall become effective on the Effective Date.
12. C
HOICE
OF
L
AW
.
The laws of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without
regard to that state’s conflict of laws rules.
13.
D
EFINITIONS
.
As used in the Plan, the
following definitions shall apply to the capitalized terms indicated below:
(a)
“2011 Plan
Available Reserve”
means the number of shares of common available for issuance pursuant to the grant of future awards under the 2011 Plan determined as of immediately prior to the Effective Date.
(b)
“
Affiliate
” means, at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board shall have the authority to determine the time or times at which “parent” or “subsidiary” status is
determined within the foregoing definition.
(c)
“
Award
” means a Stock Award or a
Performance Cash Award.
19
(d)
“
Award Agreement
” means a written
agreement between the Company and a Participant evidencing the terms and conditions of an Award.
(e)
“
Board
” means the Board of Directors of the Company.
(f)
“
Capitalization Adjustment
” means any change that is made in, or other events that
occur with respect to, the Ordinary Shares subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization,
reincorporation, share dividend, dividend in property other than cash, large nonrecurring cash dividend, share split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring
transaction, as that term is used in Statement of Financial Accounting Standards No. 123 (revised). Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a Capitalization Adjustment.
(g)
“
Cause
”
shall have the meaning ascribed to such term in any
written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term shall mean, with respect to a Participant, the occurrence of any of the following events that has a material negative
impact on the business or reputation of the Company: (i) such Participant’s repeated failure to perform one or more essential duties and responsibilities to the Company; (ii) such Participant’s failure to follow the lawful
directives of manager(s); (iii) such Participant’s material violation of any Company policy; (iv) such Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct or gross misconduct;
(v) such Participant’s unauthorized use or disclosure of any proprietary information, confidential information or trade secrets of the Company or any other party to whom he or she owes an obligation of nondisclosure as a result of his or
her relationship with the Company; or (vi) such Participant’s willful breach of any of obligations under any written agreement or covenant with the Company or violation of any statutory duty owed to the Company. The determination that a
termination of the Participant’s Continuous Service is either for Cause or without Cause shall be made by the Company (or an Affiliate, if applicable), in its sole discretion. Any determination by the Company (or an Affiliate, if applicable)
that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant shall have no effect upon any determination of the rights or obligations of the Company or Affiliate or
such Participant for any other purpose.
(h)
“
Change in Control
” means the
occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person
that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because
20
the level of Ownership held by any Exchange Act Person (the “
Subject Person
”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a
repurchase or other acquisition of voting securities by the Company or any Affiliate reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition
of voting securities by the Company or any Affiliate, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger, consolidation or similar transaction, the shareholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities
representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of
the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii)
the shareholders of the Company approve or the Board approves a plan of complete dissolution or
liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation;
(iv)
there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of
the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent
(50%) of the combined voting power of the voting securities of which are Owned by shareholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such
sale, lease, license or other disposition; or
(v)
individuals who, on the date the Plan is adopted by the
Board, are members of the Board (the “
Incumbent Board
”) cease for any reason to constitute at least a majority of the members of the Board;
provided, however
, that if the appointment or election (or nomination for
election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
For the avoidance of doubt, any one or more of the above events may be effected pursuant to (i) a compromise or arrangement sanctioned by
the Irish courts under section 201 of the Companies Act 1963 (as may be amended, updated or replaced from time to time) (the “
1963 Act
”) or (ii) a scheme, contract or offer which has become binding on all shareholders pursuant
to Section 204 of the 1963 Act, or (iii) a bid pursuant to Regulation 23 or 24 of the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006.
21
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in
Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement;
provided, however
, that if no definition of Change in Control or any analogous term
is set forth in such an individual written agreement, the foregoing definition shall apply.
(i)
“
Code
” means the Internal Revenue Code of 1986, as amended, including any applicable
regulations and guidance thereunder.
(j)
“
Committee
” means a committee of one or
more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).
(k)
“
Company
” means Horizon Pharma Public Limited Company, a company incorporated under
the laws of Ireland.
(l)
“
Consultant
” means any person, including an advisor, who
is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services.
However, service solely as a
Non-employee
Director, or payment of a fee for such service, shall not cause a
Non-employee
Director to be considered a
“Consultant” for purposes of the Plan.
Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form
S-8
Registration Statement under the Securities
Act is available to register either the offer or the sale of the Company’s securities to such person.
(m)
“
Continuous Service
” means that the Participant’s service with the Company or
an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in
the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service;
provided, however,
if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous Service shall be considered to have
terminated on the date such Entity ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer of the Company (or an Affiliate, if applicable), in that party’s sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer of the Company (or an Affiliate, if applicable), including sick leave, military leave or any
other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such
extent as may be provided in the Company’s (or an Affiliate’s, if applicable) leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.
22
(n)
“
Corporate Transaction
” means the
consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)
a sale
or other disposition of all or substantially all, as determined by the Board, in its sole
discretion, of the consolidated assets of the Company and its Subsidiaries;
(ii)
a sale or other
disposition of at least ninety percent (90%) of the outstanding securities of the Company;
(iii)
a merger,
consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv)
a merger, consolidation or similar transaction following which the Company is the surviving corporation but
the Ordinary Shares outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities,
cash or otherwise.
(o)
“
Covered Employee
” shall have the meaning provided in
Section 162(m)(3) of the Code.
(p)
“
Director
” means a member of the Board.
(q)
“
Disability
” means, with respect to a Participant, the inability of such
Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(r)
“
Effective Date
” means the effective date of this Plan, which is immediately prior
to the effective time of the merger between Horizon Pharma, Inc. and Horizon Pharma Public Limited Company pursuant to the Transaction Agreement and Plan of Merger dated March 18, 2014, provided that this Plan is approved by the stockholders of
Horizon Pharma, Inc. prior to such merger and such merger is consummated.
(s)
“
Employee
” means any person employed by the Company or an Affiliate. However,
service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for purposes of the Plan.
(t)
“
Entity
” means a corporation, partnership, limited liability company or other
entity.
(u)
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(v)
“
Exchange Act
Person
”
means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person”
23
shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned,
directly or indirectly, by the shareholders of the Company in substantially the same proportions as their Ownership of Ordinary Shares of the Company; or (v) any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.
(w)
“
Fair Market Value
” means, as of any date, the value of
the Ordinary Shares determined as follows:
(i)
If the Ordinary Shares is listed on any established stock
exchange or traded on the NASDAQ Global Market or the NASDAQ Global Select Market, the Fair Market Value of a share of Ordinary Shares, unless otherwise determined by the Board, shall be the closing sales price for such Ordinary Shares as quoted on
such exchange or market (or the exchange or market with the greatest volume of trading in the Ordinary Shares) on the day of determination, as reported in a source the Board deems reliable.
(ii)
Unless otherwise provided by the Board, if there is no closing sales price for the Ordinary Shares on the
day of determination, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(iii)
In the absence of such markets for the Ordinary Shares, the Fair Market Value shall be determined by the
Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(x)
“
Horizon”
means Horizon Pharma, Inc. a Delaware corporation.
(y)
“
Incentive Stock Option
” means an option granted pursuant to Section 5 of the
Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
(z)
“Inducement Award”
means a Stock Award granted pursuant to Section 3(f) of the
Plan.
(aa)
“Inducement Committee”
means a Committee consisting of the majority of
the Company’s independent directors or the Company’s independent compensation committee, in either case in accordance with NASDAQ Listing Rule 5635(c)(4).
(bb)
“
Non-Employee
Director
”
means a
Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation
S-K
promulgated pursuant to the Securities Act (“
Regulation
S-K
”)), does not possess an interest in any other transaction for which disclosure
24
would be required under Item 404(a) of Regulation
S-K,
and is not engaged in a business relationship for which disclosure would be required pursuant to
Item 404(b) of Regulation
S-K;
or (ii) is otherwise considered a
“non-employee
director” for purposes of Rule
16b-3.
(cc)
“
Nonstatutory Stock Option
”
means any option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.
(dd)
“
Officer
” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.
(ee)
“
Option
” means an Incentive Stock Option
or a Nonstatutory Stock Option to purchase Ordinary Shares granted pursuant to the Plan.
(ff)
“
Option Agreement
” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.
(gg)
“
Optionholder
” means a person to whom an Option is granted pursuant to the Plan or,
if applicable, such other person who holds an outstanding Option.
(hh)
“
Ordinary
Shares
” or “
Shares
” means the ordinary shares in the capital of the Company with a nominal value of US$0.0001 per share.
(ii)
“
Other Stock Award
” means an award based in whole or in part by reference to the
Ordinary Shares which is granted pursuant to the terms and conditions of Section 6(d).
(
jj
)
“
Other Stock Award Agreement
”
means a written agreement
between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(kk)
“
Outside Director
” means a Director who either (i) is not a current employee
of the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” who receives
compensation for prior services (other than benefits under a
tax-qualified
retirement plan) during the taxable year, has not been an officer of the Company or an “affiliated corporation,” and does
not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of
Section 162(m) of the Code.
(ll)
“
Own,
”
“
Owned,
”
“
Owner,
”
“
Ownership
”
A person or Entity shall be deemed to “Own,” to have “Owned,” to be the
“Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes
the power to vote or to direct the voting, with respect to such securities.
(mm)
“
Participant
” means a person to whom an Award is granted pursuant to the Plan or,
if applicable, such other person who holds an outstanding Stock Award.
25
(nn)
“
Performance Cash Award
” means an
award of cash granted pursuant to the terms and conditions of Section 6(c)(ii).
(oo)
“
Performance Criteria
” means the one or more criteria that the Board shall select
for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board:
(i) earnings (including earnings per share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total shareholder return; (v) return
on equity or average shareholder’s equity; (vi) return on assets, investment, or capital employed; (vii) share price; (viii) margin (including gross margin); (ix) income (before or after taxes); (x) operating income;
(xi) operating income after taxes;
(xii) pre-tax
profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv) increases in revenue or product revenue; (xvi) expenses
and cost reduction goals; (xvii) improvement in or attainment of working capital levels; (xiii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash flow per share; (xxii) share
price performance; (xxiii) debt reduction; (xxiv) implementation or completion of projects or processes; (xxv) customer satisfaction; (xxvi) shareholders’ equity; (xxvii) capital expenditures; (xxiii) debt levels;
(xxix) operating profit or net operating profit; (xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and (xxxiii) to the extent that an Award is not intended to comply with
Section 162(m) of the Code, other measures of performance selected by the Board.
(pp)
“
Performance Goals
” means, for a Performance Period, the one or more goals
established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either
absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or
(ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board shall appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance
Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects, as applicable, for
non-U.S.
dollar denominated Performance Goals; (3) to
exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; and (5) to exclude the effects of any items that are ‘unusual’ in nature
or that occur ‘infrequently’ as determined under generally accepted accounting principles.
(qq)
“
Performance Period
” means the period of time selected by the Board over which the
attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration,
at the sole discretion of the Board.
(rr)
“
Performance Stock Award
” means a Stock
Award granted under the terms and conditions of Section 6(c)(i).
26
(ss)
“Personal Data”
has the same meaning
as defined in the Data Protection Acts 1988 and 2003.
(tt)
“
Plan
” means this
Horizon Pharma Public Limited Company 2014 Equity Incentive Plan.
(uu)
“
Restricted Stock
Award
” means an award of Ordinary Shares which is granted pursuant to the terms and conditions of Section 6(a).
(vv)
“
Restricted Stock Award Agreement
” means a written agreement between the Company
and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(ww)
“
Restricted Stock Unit Award
”
means a right to receive Ordinary
Shares which is granted pursuant to the terms and conditions of Section 6(b).
(xx)
“
Restricted Stock Unit Award Agreement
”
means a written agreement
between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and conditions of the Plan.
(yy)
“
Rule
16b-3
” means Rule
16b-3
promulgated under the Exchange Act or any successor to Rule
16b-3,
as in effect from time to time.
(zz)
“
Securities Act
” means the Securities Act of 1933, as amended.
(aaa)
“
Stock Appreciation Right
” or “
SAR
”
means a
right to receive the appreciation on Ordinary Shares that is granted pursuant to the terms and conditions of Section 5.
(bbb)
“
Stock Appreciation Right Agreement
” means a written agreement between the Company
and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions of the Plan.
(ccc)
“
Stock Award
” means any right to receive Ordinary Shares granted under the Plan,
including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.
(
ddd
)
“
Stock Award Agreement
” means a written agreement between the
Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(eee)
“
Subsidiary
” means, with respect to the Company, (i) any corporation of which
more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such
corporation shall have or might have voting power by
27
reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the
Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).
(fff)
“
Ten Percent Shareholder
” means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any Affiliate.
28
