Exhibit 10.1

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PATHEON N.V.

SHAREHOLDERS’ AGREEMENT

Dated as of July 20, 2016

TABLE OF CONTENTS

 

 

SHAREHOLDERS’ AGREEMENT

This SHAREHOLDERS’ AGREEMENT (this “ Agreement ”), dated as of July 20, 2016, is made and entered into by and among Patheon N.V., a Dutch public limited liability company (the “ Company ”), JLL Patheon Co-Investment Fund, L.P., a Cayman Islands exempted limited partnership (“ JLL ”), Koninklijke DSM N.V., a Dutch public limited company (“ DSM ”) JLL/Delta Patheon Holdings, L.P., a Cayman Islands exempted limited partnership (the “ Partnership ”), Patheon Holdco Coöperatief U.A., a Dutch cooperative with excluded liability (“ Holdco Coop ”), JLL Associates V (Patheon), L.P., a Cayman Islands exempted limited partnership (“ JLL Associates V ”), JLL Partners Fund V (New Patheon), L.P., a Cayman Islands exempted limited partnership (“ JLL Fund V ”), and JLL Partners Fund VI (Patheon), L.P., a Cayman Islands exempted limited partnership (“ JLL Fund VI ”) (JLL, DSM, the Partnership, Holdco Coop, JLL Associates V, JLL Fund V, JLL Fund VI and any other shareholder of the Company who may hereafter become a signatory to this Agreement each being referred to herein as a “ Shareholder ” and collectively being referred to herein as the “ Shareholders ”).

RECITALS

WHEREAS, the Company is currently contemplating an underwritten initial public offering of its Common Stock (as defined herein);

WHEREAS, immediately prior to the consummation of the IPO (as defined herein), the Partnership shall cause the distribution of, and shall distribute to its limited partners, including JLL and DSM, all of the Common Stock previously held by the Partnership or its Subsidiaries (such transactions, collectively, the “ Distributions ”) other than the Common Stock which constitute Delayed Distributions for the benefit of certain holders of Management Units (each as defined in the Fifth Amended and Restated Agreement of Exempted Limited Partnership of the Partnership, dated March 29, 2016 (as the same may be amended from time to time, the “ Partnership Agreement ”));

WHEREAS, after giving effect to the Distributions but prior to giving effect to any sale of shares by DSM in connection with the IPO, as of the Effective Date (as defined herein), the Shareholders shall own the Common Stock set forth opposite their respective names on Schedule I ;

WHEREAS, in connection with the foregoing, the Company and each Shareholder desire to enter into this Agreement to memorialize certain agreements of the parties as to the governance of the Company and certain other matters related to the Company, all in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

Section 1.01     Definitions .  For purposes of this Agreement, terms defined in the preamble, recitals and other Sections of this Agreement shall have the meanings set forth therein, and the following terms shall have the following meanings:

(a)          The term “ Affiliate ” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.  For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

(b)          The term “ Affiliated Entities ” means, with respect to each Shareholder bound by the terms of this Agreement, (i) any Affiliate of such Shareholder, which, for the avoidance of doubt, shall not include (x) any limited partners of any partnership that is solely a limited partner of JLL or (y) any investment partnership or similar Person sponsored, managed or advised by JLL Partners, Inc., a Delaware corporation (“ JLL Partners ”), excluding JLL Fund VI, and any other limited partners of JLL as of June 24, 2014; or (ii) in the event of the dissolution, liquidation or winding up of any Shareholder that is a corporation, a limited liability company or a partnership, a successor partnership all of the partners of which, a successor limited liability company all of the members of which, or a successor corporation all of the shareholders of which, are the Persons who were the partners of such partnership, the members of such limited liability company or the shareholders of such corporation immediately prior to the dissolution, liquidation or winding up of such Shareholder.  If the Shareholder is an individual, the term “ Affiliated Entities ” includes such Shareholder’s immediate Family.  Notwithstanding anything to the contrary herein, neither the Company nor the Partnership shall be deemed to be an Affiliated Entity of either JLL or DSM for purposes of this Agreement.

(c)          The term “ Applicable Securities Exchange ” means the New York Stock Exchange, the NASDAQ Stock Market, or any other national securities exchange which, at the time, is the principal exchange on which or through which Equity Securities of the Company are listed or traded.

(d)          The term “ Board ” means the Board of Directors of the Company.

(e)          The term “ Business Day ” means any calendar day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, or Amsterdam, The Netherlands, are authorized or required to close.

(f)          The term “ Common Stock ” means ordinary shares in the capital of the Company, each with a nominal value of €0.01.

(g)          The term “ Effective Date ” means the consummation of the IPO.

(h)          The term “ Equity Securities ” shall mean, as applicable, (i) any capital stock (including, in the case of the Company, the Common Stock), partnership or membership interests or other share capital, (ii) any securities directly or indirectly convertible into or exchangeable for any capital stock, partnership or membership interests or other share capital or securities containing any profit participation features, (iii) any rights or options directly or indirectly to subscribe for or to purchase any capital stock, partnership or membership interests, other share capital or securities containing any profit participation features or to subscribe for or to purchase any securities directly or indirectly convertible into or exchangeable for any capital stock, partnership or membership interests, other share capital or securities containing any profit participation features, (iv) any share appreciation rights, phantom share rights or other similar rights, or (v) any securities issued or issuable with respect to the securities referred to in clauses (i) through (iv) above in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

(i)          The term “ Exchange Act ” means the United States Securities Exchange Act of 1934 and applicable rules and regulations thereunder, in each case, as amended.  Any reference herein to a specific section, rule or regulation of the Exchange Act shall be deemed to include any corresponding provisions of future law.

(j)          The term “ Family ” means, with respect to each Shareholder that is a natural person, as the case may be, such Shareholder’s spouse, parents, siblings, children (whether natural, step or by adoption), and grandchildren (whether natural, step or by adoption), or any trust or other legal entity the beneficiary of which is such Shareholder or such Shareholder’s spouse, parents, siblings, children (whether natural, step or by adoption), grandchildren (whether natural or by adoption), or their respective lineal descendants and which is controlled by such Shareholder (a trust or other legal entity shall be deemed to be controlled by a Shareholder if such Shareholder has the power to direct the disposition and voting of the Shares transferred to such trust or other legal entity).

(k)          The term “ Governmental Authorization ” means any approval, consent, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under, or any filing or other notice made to, any Governmental Entity or pursuant to any law.

(l)          The term “ Governmental Entity ” means the United States of America or any other nation, any state, territorial, local, municipality or other political subdivision thereof, or any entity, body, agency, tribunal, quasi-governmental entity, judicial or arbitral body, board, bureau, agency or instrumentality, commission or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any executive official thereof.

(m)          The term “ IPO ” means the initial underwritten offering of Common Stock of the Company to the public pursuant to an effective registration statement under the Securities Act.

(n)          The term “ Lien ” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against the seller thereof, any filing or agreement to file a financing statement as a debtor under the Uniform Commercial Code or any similar statute other than to reflect ownership by a third Person of property under a lease that is not in the nature of a conditional sale or title retention agreement, or any subordination arrangement in favor of another Person.

(o)          The term “ Lock-Up Period ” means the period ending one hundred eighty (180) days after the date of the prospectus relating to the IPO or such shorter period of time as the parties to any applicable lock-up agreement entered into relating to the IPO (the “ Lock-Up Agreement ”) shall agree.

(p)          The term “ Person ” means an individual, a partnership (including a limited partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or other entity, or a Governmental Entity.

(q)          The term “ Registrable Securities ” means, as of any date, with respect to any Shareholder, the Equity Securities of the Company that are held by such Shareholder on such date, including Equity Securities held by the Partnership or Holdco Coop on behalf of the Partnership, only to the extent such Equity Securities are no longer the subject of any forfeiture or vesting restrictions; provided that, as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement (other than a registration statement on Form S-8 or any successor form thereto) with respect to the sale or exchange of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement; (ii) a registration statement on Form S-8 or any successor form thereto with respect to such securities shall have become effective under the Securities Act; (iii) such securities are eligible to be sold pursuant to Rule 144 under the Securities Act without restriction as to volume or manner of sale; (iv) such securities shall have been sold in a public offering conducted in any jurisdiction outside the United States; or (v) such securities (once issued) have ceased to be outstanding.

(r)          The term “ SEC ” means the U.S. Securities and Exchange Commission.

(s)          The term “ Securities Act ” means the U.S. Securities Act of 1933, as amended, and applicable rules and regulations thereunder, in each case, as amended.  Any reference herein to a specific section, rule or regulation of the Securities Act shall be deemed to include any corresponding provisions of future law.

(t)          The term “ Shares ” shall mean the Common Stock owned by each Shareholder on the Effective Date, as set forth opposite such Shareholder’s name on Schedule I attached hereto, and all additional Common Stock acquired by any Shareholder after the Effective Date not in contravention of the terms of this Agreement.

(u)          The term “ Subsidiary ” or “ Subsidiaries ” shall mean, with respect to any Person, any corporation, limited liability company, partnership, joint venture, association or other entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, joint venture, association or other entity (other than a corporation), a majority of limited liability company, partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, joint venture, association or other entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, joint venture, association or other entity gains or losses or shall be or control any managing member, general partner or analogous controlling Person of such limited liability company, partnership, joint venture, association or other entity.  For purposes hereof, references to a “ Subsidiary ” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries and, unless otherwise indicated, the term “ Subsidiary ” refers to a Subsidiary of the Company.

(v)          The term “ Transfer ” shall mean any sale, transfer, assignment, pledge, mortgage, exchange, hypothecation, grant of a security interest or other direct or indirect disposition or encumbrance of an interest or a participation therein, including through any swap, structured note or any derivative transaction of the economic interest therein (whether with or without consideration, whether voluntarily or involuntarily or by operation of law).  The terms “ Transferee ,” “ Transferor ,” “ Transferred ,” and other forms of the word “ Transfer ” have correlative meanings.

 

Section 1.03     Interpretation .  In this Agreement, unless otherwise specified or where the context otherwise requires:

(a)          the headings of particular provisions of this Agreement are inserted for convenience only and will not be construed as a part of this Agreement or serve as a limitation or expansion on the scope of any term or provision of this Agreement;

(b)          words importing any gender shall include other genders;

(c)          words importing the singular only shall include the plural and vice versa ;

(d)          the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”;

(e)          the words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement;

(f)          references to “Articles,” “Sections,” “Schedules” or “Exhibits” shall be to Articles, Sections, Schedules of or Exhibits to this Agreement;

(g)          the use of the words “or,” “either” and “any” shall not be exclusive;

(h)          wherever a conflict exists between this Agreement and any other agreement, this Agreement shall control but solely to the extent of such conflict;

(i)          references to “$” or “dollars” means the lawful currency of the United States of America;

(j)          references to any agreement, contract or schedule, unless otherwise stated, are to such agreement, contract or schedule as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; and

(k)          the parties hereto have participated jointly in the negotiation and drafting of this Agreement; accordingly, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES AND COVENANTS

Section 2.01     Representations and Warranties of the Company .  The Company represents and warrants to each Shareholder as follows as of the date of this Agreement:

(a)           Organization; Corporate Authority .  The Company is duly organized and validly existing under the laws of its jurisdiction of organization and has full corporate power and authority to execute, deliver and perform this Agreement;

(b)           Due Authorization .  This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting creditors’ rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought;

(c)           No Conflict .  The execution, delivery and performance of this Agreement by the Company do not violate or conflict with or constitute a breach or default under (i) the amended and restated Articles of Association, as amended by the execution of a notarial deed on the Effective Date, of the Company (the “ Articles of Association ”), (ii) any judgment, order, or decree or statute, law, rule, or regulation of any Governmental Entity applicable to the Company, or (iii) any agreement to which the Company is a party or by which it or its property is bound;

(d)           Capitalization . As of the Effective Date, the authorized capital stock of the Company consists of 700,000,000 shares of Common Stock with a total nominal value of €7,000,000.  Except as provided in the Articles of Association, no other party is entitled to any registration or similar rights, or any preemptive, subscription or similar rights, with respect to any Equity Securities of the Company.  All of the Shares outstanding as of the Effective Date shall have been duly authorized and validly issued and, immediately after giving effect to the Distributions, shall be free and clear of all Liens, other than Liens arising under this Agreement, the Lock-Up Agreement and applicable federal or state securities laws, Liens arising by or on behalf of a Shareholder with respect to Shares held by such Shareholder and, in the case of Shares held by Holdco Coop on behalf of the Partnership, Liens arising under the Partnership Agreement.

(e)           Voting Agreements .  Except as provided herein, there is no voting trust, voting agreement or similar arrangement to which the Company is a party with respect to any of its Equity Securities or any of the other matters covered by this Agreement; and

(f)           Governmental Authorization .  No Governmental Authorization or other consent, approval or authorization of, or notice to, any other Person, is necessary on the part of the Company to perform its obligations hereunder or to authorize the execution, delivery and performance of this Agreement by the Company, except when such Governmental Authorization, consent, approval, authorization or notice would not reasonably be expected to, individually or in the aggregate, have an adverse effect on the Company’s ability to perform its obligations hereunder.

Section 2.02     Representations and Warranties of the Shareholders .  Each Shareholder individually represents and warrants to each other Shareholder and the Company as follows as of the date of this Agreement (or, if later, as of the date such Shareholder becomes a party hereto):

(a)           Organization; Authority .  Such Shareholder (i) if not an individual, is duly organized and validly existing under the laws of its jurisdiction of organization and has full power and authority to execute, deliver and perform this Agreement; and (ii) if an individual, is competent and has all requisite capacity to execute, deliver and perform this Agreement;

(b)           Due Authorization .  This Agreement has been duly and validly authorized, executed and delivered by such Shareholder and constitutes a valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its terms, except that (i) the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting creditors’ rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought;

(c)           No Conflict .  The execution, delivery and performance of this Agreement by such Shareholder do not violate or conflict with or constitute a breach or default under (i) if such Shareholder is not an individual, such Shareholder’s organizational documents, (ii) any judgment, order, or decree or statute, law, rule, or regulation of any Governmental Entity applicable to such Shareholder, or (iii) any contract to which such Shareholder is a party or by which it or its property is bound, except when such violation, conflict, breach or default would not reasonably be expected to, individually or in the aggregate, have an adverse effect on such Shareholder’s ability to perform its obligations hereunder;

(d)           Ownership .  As of such date, such Shareholder has legal and record title to the Shares set forth opposite such Shareholder’s name on Schedule I after giving effect to the Distributions but prior to giving effect to any sale of shares by DSM in connection with the IPO, free and clear of all Liens imposed by or on behalf of such Shareholder (other than Liens arising under this Agreement, the Lock-Up Agreement and applicable federal or state securities laws, Liens arising by or on behalf of such Shareholder with respect to Shares held by such Shareholder and, in the case of Shares held by Holdco Coop on behalf of the Partnership, Liens arising under the Partnership Agreement), it being understood that the only Shares held by Holdco Coop on behalf of the Partnership constitute Delayed Distributions for the benefit of certain holders of Management Units (each as defined in the Partnership Agreement);

(e)           Governmental Authorization .  No Governmental Authorization or other consent, approval or authorization of, or notice to, any other Person, is necessary on the part of such Shareholder to perform its obligations hereunder or to authorize the execution, delivery and performance of this Agreement by such Shareholder, except when such Governmental Authorization, consent, approval, authorization or notice would not reasonably be expected to, individually or in the aggregate, have an adverse effect on such Shareholder’s ability to perform its obligations hereunder; and

(f)           Voting Agreements .  Except as provided herein, there is no voting trust, voting agreement or similar arrangement to which such Shareholder is a party with respect to any of the Shares or any of the other matters covered by this Agreement.

ARTICLE III

GOVERNANCE

Section 3.01     Composition of the Board .

(a)           Controlled Company Director Designees .  As of the Effective Date, and for so long as the Company is a “controlled company” under the rules of the Applicable Securities Exchange (a “ Controlled Company ”), at each general meeting of the Company or any other meeting of the Company called for the purpose of electing directors during the term of this Agreement, or in any other circumstances upon which a vote or other approval with respect to the election of directors is sought, each Shareholder shall vote (or cause to be voted) the Shares held beneficially or of record by such Shareholder (and its Affiliated Entities) in favor of a Board consisting of twelve (12) directors, comprised of:

(i)          five (5) individuals designated by JLL for appointment as non-executive director of the Board, who may be independent directors as determined in accordance with the applicable rules of the Applicable Securities Exchange (each such director, a “ JLL Director ”), who initially shall be Paul S. Levy, Daniel Agroskin, Jeffrey P. McMullen, Gary Pisano and one individual to be identified by JLL;

(ii)         three (3) individuals designated by DSM for appointment as non-executive director of the Board, who may be independent directors as determined in accordance with the applicable rules of the Applicable Securities Exchange (each such director, a “ DSM Director ”), who initially shall be Stephan Tanda, Hugh Welsh and Philip Eykerman;

(iii)        the Chief Executive Officer of the Company, who initially shall be James Mullen; and

(iv)        three (3) individuals for appointment as non-executive director of the Board, who shall be independent directors (as determined in accordance with the applicable rules of the Applicable Securities Exchange) not affiliated with either JLL or DSM, who initially shall be William B. Hayes, Hans Peter Hasler and Pamela Daley, and thereafter who are nominated by the Board or any nominating committee thereof in accordance with applicable rules of the Applicable Securities Exchange (the “ Independent Director Designees ”);

provided, however, that if any time following the Effective Date, JLL and its Affiliated Entities, on the one hand, or DSM and its Affiliated Entities, on the other hand (the “ Selling Shareholder ”), Transfers a number of Shares such that it and its Affiliated Entities beneficially own a number of Common Stock that is at least 10% of the aggregate number of Common Stock owned by JLL, DSM and their respective Affiliated Entities less than the other Shareholder and its Affiliated Entities (the “ Other Shareholder ”), then (at the Other Shareholder’s sole election) the number of the Selling Shareholder’s designees set forth in Section 3.01(a)(i) or (ii) , as applicable, will be decreased by one (1) and the number of the Other Shareholder’s designees will be increased by one (1); and such modification to the number of each Shareholder’s designees will be effected for each 10% relative difference in ownership of Common Stock between the Selling Shareholder and the Other Shareholder.

(b)           Director Designees Following Termination of Controlled Company Status .  At such time as the Company ceases to qualify as a Controlled Company, the Board shall be required to consist of a majority of independent directors as determined by, and in accordance with the time periods for compliance set forth under, the applicable rules of the Applicable Securities Exchange, and the Company shall use its reasonable best efforts, to the fullest extent permitted under applicable law, to cause to be nominated for election to the Board and elected to the Board the following designees:

(i)          Until the Shareholders and their respective Affiliated Entities collectively own less than twenty percent (20%) of the issued and outstanding Common Stock, three (3) designees (or, if the Board is comprised of more than twelve (12) directors, such greater number of designees that represent at least twenty-five percent (25%) of the then total number of directors constituting the Board), of which two (2) (or such greater number as is proportionate to such larger board) will be designated by whichever of JLL and its Affiliated Entities, on the one hand, or DSM and its Affiliated Entities, on the other hand, then beneficially owns a greater percentage of the issued and outstanding Common Stock, and one (1) (or such greater number as is proportionate to such larger board) will be designated by whichever of JLL and its Affiliated Entities, on the one hand, or DSM and its Affiliated Entities, on the other hand, then beneficially owns a smaller percentage of the issued and outstanding Common Stock; and

(ii)         until the Shareholders and their respective Affiliated Entities collectively own less than ten percent (10%) of the issued and outstanding Common Stock, two (2) designees, consisting of one (1) designee of each of JLL and DSM (it being understood that, in each case of this Section 3.01 , each of JLL and DSM shall have the right to designate an independent director as its designee);

provided, however , that at such time as JLL and its Affiliated Entities, on the one hand, or DSM and its Affiliated Entities, on the other hand, own less than five percent (5%) of the issued and outstanding Common Stock, such party’s designees pursuant to this Section 3.01(b) shall be allocated to the other party, as the case may be.

(c)           Nominations .  The Company and each of the Shareholders shall use their respective reasonable best efforts, to the fullest extent permitted under applicable law, to cause to be nominated for election and to be elected or appointed, as the case may be, as directors of the Company a slate of directors consisting of individuals meeting the requirements of this Section 3.01 .  For purposes of this Agreement, “ reasonable best efforts ” shall include, without limitation, voting (or causing to be voted) all Shares held beneficially or of record by such Shareholder (and its Affiliated Entities) in accordance with the terms hereof, at each general meeting of the Company or any other meeting of the Company called for the purpose of electing directors during the term of this Agreement, or in any other circumstances upon which a vote or other approval with respect to the election of directors is sought, as well as the Board of the Company nominating individuals meeting the requirements of this Section 3.01 , in accordance with the terms hereof, at any applicable meetings of the Board.

(d)           Reduction in Number of Director Designees .  If at any time, the number of directors a Shareholder is entitled to designate is decreased in accordance with Section 3.01(a) , such Shareholder shall use its reasonable best efforts to cause the applicable number of its designees to resign from the Board as promptly as practicable and, if needed, exercise all authority under applicable law to have such applicable number of designees removed from the Board, and to take all action to cause to be nominated for election and to be elected or appointed, as the case may be, as directors or temporary directors of the Company, the applicable number of the other party’s director designees as determined in accordance with Section 3.01(a) to serve for the remainder of the terms of such vacating directors.

(e)           Indemnification .  At the request of any director of the Company, the Company shall enter into an indemnification agreement, substantially in the form attached hereto as Exhibit A , with such person.

(f)           Subsidiary Boards .  To the extent requested by JLL or DSM the Company shall use its reasonable best efforts, to the fullest extent permitted under applicable law, (i) to cause the board of directors (or similar governing bodies) of each of the Company’s wholly owned Subsidiaries to be composed of the same individuals who constitute the Board and (ii) to the extent practicable, to cause the board of directors (or similar governing bodies) of each of the Company’s less than wholly owned Subsidiaries to be composed of the same individuals who constitute the Board, but in any event of clause (i) or (ii), to cause the board of directors of any such Subsidiary to include at least one (1) designee of each of JLL and DSM for so long as each of JLL and DSM, respectively, is entitled pursuant to this Agreement to designate at least one (1) director to the Board.

(g)           Classified Board .  From and after the Effective Date, the Board shall be comprised of three (3) classes of directors, each serving a staggered three (3) year term (with each class comprised, as nearly as possible, of an equal number of directors, including, as nearly as possible, a number of JLL Directors and DSM Directors equal to their respective proportionate share of the total number of designees to which JLL and DSM are then entitled).  As of the Effective Date, each director of the Company shall be assigned to a class and shall serve for a term expiring at the end of the annual general meeting of shareholders of the Company held in the first, second or third year following the Effective Date, subject to any earlier resignation or removal in accordance with the terms of this Agreement and the Articles of Association.

(h)           Chairman of the Board .  For so long as JLL and its Affiliated Entities collectively own at least twenty percent (20%) of the issued and outstanding Common Stock, the Company and each of the Shareholders shall use their respective reasonable best efforts, to the fullest extent permitted under applicable law, to cause the Chairman of the Board to be Paul S. Levy, or such other member of the Board designated by JLL, provided such individual has agreed to so serve.  For so long as the Company is a Controlled Company, the Chairman of the Board shall be entitled to cast a decisive vote on all matters presented to the Board that result in a tied vote on the Board.  For so long as (i) JLL and its Affiliated Entities collectively own less than twenty percent (20%) of the issued and outstanding Common Stock and (ii) DSM and its Affiliated Entities collectively own at least twenty percent (20%) of the issued and outstanding Common Stock, each of the Shareholders shall use their respective reasonable best efforts, to the fullest extent permitted under applicable law, to cause the Chairman of the Board to be an member of the Board designated by DSM, provided such individual has agreed to so serve.

Section 3.02     Committees of the Board .  The Board may designate one or more committees and delegate thereto such power and authority as is permitted by law and is set forth in the resolutions creating any such committee.  Subject to the applicable rules of the Applicable Securities Exchange at such time, the Company shall use its reasonable best efforts, to the fullest extent permitted under applicable law, to cause each such committee to consist of a number of JLL Directors and DSM Directors proportional to the number of JLL Directors and DSM Directors then members of the full Board, but in any event to include at least one (1) JLL Director and one (1) DSM Director for so long as each of JLL and DSM, respectively, is entitled pursuant to this Agreement to designate at least one (1) director to the Board.

Section 3.03     Removal .  No Shareholder shall take any action in its capacity as a shareholder of the Company to cause the removal of any director designated by any other Shareholder without the consent of such Shareholder that had designated such director.  Notwithstanding the foregoing, upon the request of any Shareholder having the right to designate one or more members of the Board pursuant to Section 3.01 , which request shall be made in writing to each other Shareholder, each Shareholder receiving such a request shall use its reasonable best efforts and exercise all authority under applicable law to cause any or all of the designees of the requesting Shareholder to be removed from the Board, as and to the extent requested by the requesting Shareholder.

Section 3.04     Vacancies .  If at any time a vacancy is created on the Board by reason of the death, removal or resignation of any director who was designated by any Shareholder pursuant to Section 3.01 (other than a vacancy arising from a Shareholder’s loss of a director designation right in accordance with Section 3.01 (b)), the Company and the Shareholders shall, as soon as practicable, use their respective reasonable best efforts, to the fullest extent permitted under applicable law, to cause the election of the individual designated to fill such vacancy by the applicable Shareholder in order to fill such vacancy for the unexpired term of the director whom such individual is replacing.

 

Section 3.05     Voting Agreement .

(a)          Each Shareholder agrees that, during the term of this Agreement, (i) such Shareholder shall be present, in person or represented by proxy, at all general meetings of the Company for the election of directors, so that all Shares held beneficially or of record by such Shareholder shall be counted for the purpose of determining the presence of a quorum for the election of directors at such meetings, (ii) such Shareholder shall vote, or act by written consent with respect to, all Shares held beneficially or of record by such Shareholder for the election of the nominees for the Board nominated by the Board, so long as such nominees consist of individuals meeting the requirements of this Article III , and (iii) such Shareholder shall vote, or act by written consent with respect to, all Shares held beneficially or of record by such Shareholder in favor of any action or proposal that has been approved by the Board and which requires approval of the general meeting of the Company in accordance with article 2:107a(1) of the Dutch Civil Code, as the same may be amended, modified or replaced from time to time.

(b)          The Company and each of the Shareholders shall, during the term of this Agreement, use their respective reasonable best efforts, to the fullest extent permitted under applicable law, to ensure the Articles of Association and the Company's Board Rules are consistent with, and to take such other actions as are necessary to satisfy, the requirements of this Article III .

(c)          Except as specifically set forth in Section 3.05 above, each Shareholder shall be entitled to vote its Common Stock on all matters as such Shareholder deems fit.

(d)          The Partnership shall, and each of JLL and DSM shall, to the fullest extent permitted under applicable law, cause the general partner of the Partnership or any applicable subsidiary of the Partnership, including Holdco Coop, to, vote all of the Common Stock (including any Shares which constitute Delayed Distributions for the benefit of certain holders of Management Units (each as defined in the Partnership Agreement)) held beneficially or of record by the Partnership or Holdco Coop, in its capacity as a Shareholder as set forth in Section 3.05(a) above and on such matters, other than those set forth in Section 3.05(a) above, as directed by JLL and DSM respectively, in accordance with their and their respective Affiliated Entities’ proportional ownership of the Company as of the record date for such vote; provided , however , that this Section 3.05 shall cease to apply to the parties in the event that either JLL and its Affiliates or DSM and its Affiliates, in either case own less than seven and one-half percent (7.5%) of the issued and outstanding shares of Common Stock.

Section 3.06     Obligations of Directors and Officers .  Nothing in this Agreement shall be deemed to limit or restrict any director or officer of the Company from exercising his or her fiduciary duties and responsibilities under applicable law; it being agreed and understood that this Agreement shall apply to each Shareholder solely in his or its capacity as a shareholder of the Company and shall not apply to the actions, judgments, or decisions of any individual designated by such Shareholder to be a director of the Company in his or her capacity as a director.

Section 3.07     Compensation of Directors .  Employees of JLL, DSM or their respective Affiliates, in each case, who are serving as directors of the Company, shall not receive any salary or other compensation from the Company or its Subsidiaries for their service as directors.  The Company shall reimburse, or cause to be reimbursed, each director for reasonable travel and other incidental expenses incurred by such director in connection with such director’s service on the Board, on any committee of the Board and on the board of directors (or similar governing body) of each of the Company’s Subsidiaries, as applicable.  The foregoing notwithstanding, nothing contained in this Section 3.07 shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation for such service.

ARTICLE IV

TRANSFER

Section 4.01     General .  Following the expiration of the Lock-Up Period, a Shareholder may Transfer, directly or indirectly, any Equity Securities of the Company held by such Shareholder in accordance with the terms of this Agreement; provided , however , that prior to any such Transfer of Equity Securities of the Company to an Affiliated Entity, the Affiliated Entity to whom the Equity Securities of the Company are being Transferred shall, as a condition precedent to such Transfer, agree in writing (in a form acceptable to each of JLL and DSM) to take such Equity Securities subject to, and to comply with, all of the provisions of this Agreement, a copy of which agreement shall be filed with the Secretary of the Company and shall include the name and address of the Person to whom such Equity Securities are being Transferred to which notices hereunder shall be sent.  Each Shareholder agrees that it shall provide the Board with no less than five (5) Business Days’ prior written notice of any proposed Transfer of Equity Securities of the Company.  The parties hereto acknowledge and agree that the rights of JLL and DSM to designate directors pursuant to Section 3.01 and to exercise a Demand pursuant to Section 5.01 shall not be transferrable other than in connection with the Transfer of Equity Securities of the Company by JLL or DSM to one or more of its Affiliated Entities (or, subsequent to such initial Transfer, by one of its Affiliated Entities to another of its Affiliated Entities); provided that such transfer of rights (but not Equity Securities) shall cease to be effective, and such rights shall immediately revert to the transferor, without any action by any Person, upon such transferee ceasing to be an Affiliated Entity of the transferor.

Section 4.02     Compliance with Securities Laws .  Each Shareholder agrees that any Transfer of Equity Securities of the Company permitted hereunder and engaged in by such Shareholder shall be required to comply with all federal and state securities laws and any securities laws of The Netherlands applicable to such transaction.  At the request of the Company, the transferring Shareholder shall deliver to the Company an opinion of counsel, which counsel and opinion shall be reasonably satisfactory to the general counsel of the Company, to the effect that the Transfer satisfies this Section 4.02 .  Each book entry position or certificate representing Shares issued to a Shareholder shall bear a notation or legend on the reverse side thereof substantially in the following form in addition to any other legend as required by applicable law or by agreement with the Company:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE (AND, IN SUCH CASE, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY MAY BE REQUESTED BY THE COMPANY TO THE EFFECT THAT SUCH OFFER OR SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE SECURITIES ACT).

THIS SECURITY MAY BE SUBJECT TO CERTAIN TERMS AND CONDITIONS SET FORTH IN A SHAREHOLDERS’ AGREEMENT, DATED AS OF JULY 20, 2016 (AS MAY BE AMENDED OR RESTATED FROM TIME TO TIME), A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.

Section 4.03     Transfers Not in Compliance .  Any purported or attempted Transfer of Equity Securities of the Company by a Shareholder that does not comply with this Agreement shall be void ab initio and the purported Transferee or successor by operation of law shall not be deemed to be a shareholder of the Company for any purpose and shall not be entitled to any of the rights of a shareholder, including the right to vote such Equity Securities or to receive a certificate for such Equity Securities or any dividends or other distribution on or with respect to such Equity Securities.

Section 4.04     Tag-Along Rights .

(a)          If JLL or its Affiliated Entities, on the one hand, or DSM or its Affiliated Entities, on the other hand (such proposed Transferor, the “ Tag-Along Seller ”) proposes to Transfer, directly or indirectly (including pursuant to a merger), in one transaction or a series of related transactions, Common Stock or other Equity Securities of the Company (“ Tag-Along Securities ”) constituting an aggregate of more than one percent (1%) of the Common Stock or other Equity Securities of the Company issued and outstanding at such time to any Person (the “ Tag-Along Sale ”), then the Tag-Along Seller shall, at least fifteen (15) Business Days prior to any such proposed Transfer, furnish a written notice (the “ Tag-Along Notice ”) to the other Shareholders (including the Partnership, with respect to any Common Stock then held by the Partnership that are no longer the subject of any forfeiture or vesting restrictions and may be sold in accordance with the Partnership Agreement) at the address of each such other Shareholder set forth herein (such person entitled to notice from the Tag-Along Seller, a “ Tag-Along Holder ”).  The Tag-Along Notice shall include:

(i)     (A) the number of Tag-Along Securities proposed to be sold in the Tag-Along Sale, (B) the aggregate purchase price (and per Tag-Along Security purchase price) proposed to be paid in the Tag-Along Sale, (C) the fraction expressed as a percentage determined by dividing (x) the aggregate number of Tag-Along Securities proposed to be included in a Tag-Along Sale by the Tag-Along Seller and its Affiliated Entities by (y) the total number of Tag-Along Securities held by such Tag-Along Seller and its Affiliated Entities (the “ Tag-Along Sale Percentage ”), (D) the maximum number of Tag-Along Securities that may be sold by such Tag-Along Holder (or, if the Tag-Along Sale Percentage is equal to 100%, the amount of the aggregate purchase price that is allocable to such Tag-Along Holder (determined by multiplying (i) the per-Tag-Along Security purchase price by (ii) the maximum number of Tag-Along Securities that may be sold by such Tag-Along Holder)) (such maximum number or maximum amount, the “ Maximum Amount ”), (E) the name and address of the proposed purchaser, (F) any other material terms offered by such purchaser, (G) if known, the proposed Transfer date, and (H) a representation that the proposed purchaser has been informed of the Tag-Along Holders’ rights under this Section 4.04 ; and

(ii)    an invitation to each Tag-Along Holder to make an offer to include in the proposed Tag-Along Sale to the proposed purchaser a number of Tag-Along Securities not to exceed the Maximum Amount on equivalent terms and conditions and for the applicable portion of the aggregate purchase price to be given and paid to the Tag-Along Seller (the “ Tag-Along Right ”), provided , however , that Tag-Along Securities may not include any Equity Securities that remain subject to forfeiture or vesting restrictions at the time the Tag-Along Notice is delivered in accordance with this Section 4.04(a) .

(b)          Each Tag-Along Holder shall have ten (10) Business Days following receipt of the Tag-Along Notice to exercise the Tag-Along Right provided pursuant to this Section 4.04 by giving written notice to the Tag-Along Seller (with a copy to the Company) indicating whether such Tag-Along Holder desires to exercise, in whole or in part, its Tag-Along Right and specifying the number (or aggregate value) of Tag-Along Securities to be sold by such Tag-Along Holder in the Tag-Along Sale.

(c)           Conditions to Tag-Along Sale .  The rights and obligations of each Tag-Along Holder pursuant to this Section 4.04 are subject to the satisfaction of the following conditions:

(i)     A Tag-Along Holder who participates in a Tag-Along Sale shall agree to make the same representations, warranties, covenants, and agreements in connection with a Tag-Along Sale as the Tag-Along Seller; provided that (A) no such Tag-Along Holder shall be required, subject to Section 4.04(c)(i)(C) and Section 4.04(c)(ii) below, to provide indemnities, and no such Tag-Along Holder shall be required to make any representations and warranties about the business of the Company or its Subsidiaries and will not be required to provide any new non-competition or non-solicitation agreement; (B) no such Tag-Along Holder shall be liable for the breach of any representation, warranty or covenant made by any other Tag-Along Holder or the Tag-Along Seller; and (C) notwithstanding anything in this Section 4.04 to the contrary, any liability relating to representations, warranties and covenants (and related indemnities) and other indemnification obligations entered into in connection with the Tag-Along Sale shall be shared by all Tag-Along Holders who elect to sell Tag-Along Securities and the Tag-Along Seller pro rata based on their respective gross proceeds to be received in respect of Tag-Along Securities Transferred in the Tag-Along Sale (except with respect to representations and warranties or covenants or indemnities as to any specific Shareholder, for which only such Shareholder shall be responsible) and in any event shall not exceed the total proceeds actually received by such Tag-Along Holder as consideration for its Tag-Along Securities in such Tag-Along Sale.  Each Tag-Along Holder participating in such Tag-Along Sale and the Tag-Along Seller will be responsible for its proportionate share of the costs of the proposed Tag-Along Sale incurred for the benefit of the Tag-Along Seller and all participating Tag-Along Holders to the extent not paid or reimbursed by the proposed purchaser or the Company; provided that no Tag-Along Holder shall be required to pay (x) any expenses incurred individually by any other Tag-Along Holder or any of the Tag-Along Seller for its own benefit or (y) any portion of a break-up or termination fee payable in connection with such Tag-Along Sale.

(ii)    In the event that the Tag-Along Seller is required to provide representations, warranties or indemnities in connection with the Tag-Along Sale (other than representations, warranties or indemnities concerning the Tag-Along Seller’s valid ownership of its Tag-Along Securities free of all Liens, the Tag-Along Seller’s authority, power and right to enter into and consummate the sale without violating any other agreement, and the Tag-Along Seller’s due execution and delivery of the documents related to the sale and the enforceability of such documents) and the Tag-Along Seller is required to indemnify the proposed purchaser in such Tag-Along Sale, then each Tag-Along Holder shall indemnify the Tag-Along Seller (or shall provide the same indemnity as the Tag-Along Seller to the proposed purchaser in the Tag-Along Sale) to the extent of the lesser of (A) its pro rata share of such indemnification payments (based upon the total consideration received by such Tag-Along Holder divided by the total consideration received by all sellers in such Tag-Along Sale) and (B) the total proceeds actually received by such Tag-Along Holder as consideration for its Tag-Along Securities in such Tag-Along Sale.  In any such event, such liability shall be several and not joint with any other Person.

(d)          For the avoidance of doubt and notwithstanding anything to the contrary herein, the requirements of this Section 4.04 shall not apply (i) to Transfers to an Affiliated Entity in accordance with the terms hereof, (ii) to any offering or sale of Equity Securities pursuant to Article V hereof, or (iii) to any distribution of Equity Securities in accordance with Section 4.05 hereof.  For the avoidance of doubt and notwithstanding anything to the contrary herein, the requirements of this Section 4.04 shall apply to Transfers of Equity Securities of the Company to the Company or the Partnership or any of their respective Subsidiaries.

(e)          If a Tag-Along Holder exercises its Tag-Along Rights under this Section 4.04 , (i) the Tag-Along Seller shall use commercially reasonable efforts to cause the closing of the purchase of the Tag-Along Securities with respect to which such rights have been exercised to take place concurrently with the closing of the sale of the Tag-Along Seller’s Tag-Along Securities; and (ii) such Tag-Along Holder shall use reasonable best efforts to secure any Governmental Authorization required to be obtained by such Tag-Along Holder and shall provide any information that may be needed from such Tag-Along Holder in connection therewith, to comply as soon as reasonably practicable with all applicable laws and to take all such other actions and to execute such additional documents as are necessary or appropriate in order to consummate the sale of such Tag-Along Holder’s Tag-Along Securities in the Tag-Along Sale.

(f)          If the proposed purchaser elects to purchase only such aggregate number of Tag-Along Securities as originally agreed with the Tag-Along Seller, then the number of Tag-Along Securities to be sold by the Tag-Along Seller and all Tag-Along Holders electing to participate in the Tag-Along Sale shall be reduced pro rata to such aggregate number.  In the event that no Tag-Along Holders exercise their rights to participate in a Tag-Along Sale, the Tag-Along Seller shall have sixty (60) days from the date of such Tag-Along Notice to consummate the transaction on terms, including price, no more favorable to the Tag-Along Seller than those set forth in the Tag-Along Notice (provided that such transaction includes the sale of that number of Tag-Along Securities proposed to be sold by the Tag-Along Seller in the Tag-Along Notice) without being required to provide an additional Tag-Along Notice to the Tag-Along Holders.  Any Tag-Along Securities not sold within such period of sixty (60) days shall continue to be subject to the requirements of this Section 4.04 .

Section 4.05     Permitted Distributions .  Notwithstanding anything to the contrary in this Agreement or the Partnership Agreement, each of JLL and its Affiliated Entities that is a partnership shall be entitled to make (i) a pro rata distribution of its Shares to its limited partners and (ii) a non pro rata distribution of its Shares to its general partner and its limited partners that are controlled by JLL Partners or its Affiliates, in each case, from time to time in its sole discretion, in accordance with applicable law and its limited partnership agreement.  Any such Shares distributed to JLL’s Affiliated Entities shall remain subject to the terms and conditions of this Agreement until such time as such Shares have been distributed or otherwise Transferred to entities which are not Affiliated Entities of JLL.  Notwithstanding anything to the contrary in this Agreement, the Partnership may distribute Shares held by the Partnership or Holdco Coop on behalf of the Partnership to its partners in accordance with applicable law and the Partnership Agreement, as such Shares become free of any applicable forfeiture or vesting restrictions.

ARTICLE V

REGISTRATION RIGHTS

Section 5.01     Demand Registrations .

(a)          At any time after the expiration of the Lock-Up Period, each of JLL and DSM shall be entitled to make a written request of the Company (a “ Demand ”), for registration under the Securities Act of the applicable Registrable Securities held by JLL or its Affiliated Entities, on the one hand, or DSM or its Affiliated Entities, on the other hand (each, a “ Demand Registration ”).  The Shareholder making such Demand (the “ Demanding Shareholder ”) shall specify (i) the aggregate number of Registrable Securities held by it or its Affiliated Entities requested to be registered and (ii) the intended method of distribution in connection with such Demand Registration to the extent then known.  Within three (3) Business Days of receipt of a Demand, the Company shall give written notice of such Demand to all other Shareholders, which notice shall include the material terms and conditions of the registration, to the extent then known; provided that, if such terms are not then known, the Demanding Shareholder shall promptly notify the Company and the other Shareholders when such information becomes available.  Subject to Section 5.01(f) , the Company shall include in such registration all Registrable Securities with respect to which it has received a written request for inclusion therein (a “ Demand Participation Notice ”) within ten (10) Business Days (five (5) Business Days in the case of a short-form registration) after the receipt by such Shareholder of the Company’s notice required by this paragraph.  The Company shall not be required to file any registration statement covering Registrable Securities with an aggregate fair market value less than $50 million.  The Demanding Shareholder, together with all holders participating in any Demand Registration following notice thereof pursuant to this Section 5.01(a) are collectively referred to herein as the “ Demanding Holders .”

(b)           Number of Demand Registrations .  JLL and DSM shall each be entitled to five (5) Demand Registrations.  Participation by JLL or DSM in a Demand Registration pursuant to a Demand Participation Notice (rather than as the Demanding Shareholder) shall not be counted as a Demand of such Shareholder.  The IPO shall not be counted as a Demand of either JLL or DSM.

(c)           Satisfaction of Obligations .  A registration in respect of a Demand shall not be treated as a Demand Registration until (i) the applicable registration statement under the Securities Act has been filed with the SEC with respect to such Demand Registration (which shall include any registration statement that is not withdrawn by holders of Registrable Securities in the circumstances contemplated by Section 5.02(c) ), and (ii) such registration statement shall have been maintained continuously effective for a period of at least one hundred eighty (180) days until such time as the Company is entitled to use a short form registration statement pursuant to the Securities Act, in which case such Demand Registration shall be maintained continuously effective for a period of three years or such shorter period during which all Registrable Securities included therein have been disposed of thereunder in accordance with the method of distribution set forth in such registration statement, subject in each case, to black-out periods or other restrictions imposed by the Company as required by applicable federal or state securities laws.

(d)           Availability of Short Form Registrations .  The Company shall use reasonable best efforts to comply with the requirements for use of short-form registrations for the sale of Registrable Securities under the Securities Act.

(e)           Restrictions on Demand Registrations .  The Company shall not be obligated to effect any Demand Registration within ninety (90) days of the effective date of (A) a “firm commitment” underwritten registration in which all Shareholders were given “ piggyback ” rights pursuant to Section 5.02 or (B) any other Demand Registration.  In addition, the Company shall be entitled to postpone (upon written notice to all Shareholders) for up to ninety (90) days the filing or the effectiveness of a registration statement in respect of a Demand (but no more than once in any period of twelve (12) consecutive months) if the Board determines in good faith and in its reasonable judgment that effecting the Demand Registration in respect of such Demand would have a material adverse effect on the Company or any of its Subsidiaries, any pending transaction involving the Company or any of its Subsidiaries, or any transaction then under consideration by the Company or any of its Subsidiaries.  In the event of a postponement by the Company of the filing or effectiveness or a registration statement in respect of a Demand, the Demanding Holders shall have the right to withdraw such Demand in accordance with Section 5.03 .

(f)           Participation in Demand Registrations .  The Company shall not include any Equity Securities other than Registrable Securities in a Demand Registration, except with the written consent of the Demanding Shareholder(s).  If, in connection with a Demand Registration, any managing underwriter (or, if such Demand Registration is not an underwritten offering, a nationally recognized independent underwriter (which underwriter shall be reasonably acceptable to the Company and whose fees and expenses shall be borne solely by the Company, except that each Person selling securities in any secondary offering shall bear their proportionate share of any underwriter’s discounts, commissions and similar amounts)) selected by the Demanding Shareholder advises the Company and the Demanding Shareholder that, in its opinion, the inclusion of all the Registrable Securities sought to be registered in connection with such Demand Registration would adversely affect the marketability of the Registrable Securities sought to be sold pursuant thereto, then the Company shall include in the registration statement applicable to such Demand Registration only such securities as the Company and the Demanding Shareholder are advised by such underwriter can be sold without such an effect (the “ Maximum Demand Number ”), as follows and in the following order of priority:

(i)     first, the number of Registrable Securities sought to be registered by each Demanding Holder, pro rata in proportion to the number of Registrable Securities sought to be registered by all such Demanding Holders; and

(ii)    second, and only if the number of Registrable Securities to be included under clause (i) above is less than the Maximum Demand Number, the number of securities sought to be included by the Company and any other Person for which the Company is obligated to register securities pursuant to written contractual arrangements with such Person, pro rata in proportion to the number of securities sought to be sold by all such other sellers, which in the aggregate, when added to the number of securities to be included pursuant to clause (i) above, equals the Maximum Demand Number.

(g)           Selection of Underwriters .  If the Demanding Shareholder requests that such Demand Registration be an underwritten offering, then the Demanding Shareholder shall select a nationally recognized underwriter or underwriters to manage and administer such offering, such underwriter or underwriters, as the case may be, to be subject to approval by the Company, which approval shall not be unreasonably withheld, conditioned or delayed; provided that JLL or DSM (whichever is not such Demanding Shareholder) shall be entitled to participate in all discussions relating thereto and shall be consulted prior to the making of any such selection by the Demanding Shareholder.

(h)           Other Registrations .  If the Company has received a Demand, and if the applicable registration statement in respect of such Demand has not been withdrawn or abandoned, the Company shall not file or cause to be effected any other registration of any of its Equity Securities under the Securities Act (other than a registration relating to the Company’s employee benefit plans, exchange offers by the Company, or a merger or acquisition of a business or assets by the Company, including a registration on Form S-4 or Form S-8 or any successor form), whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least ninety (90) days has elapsed from the effective date of any Demand Registration, unless a shorter period of time is approved by the Board in good faith.  Notwithstanding the foregoing, the Company shall be entitled to postpone any such Demand Registration and may file or cause to be effected such other registration in accordance with the terms of Section 5.01(e) .

Section 5.02     Piggyback Registrations .

(a)           Right to Piggyback .  Except with respect to the IPO and except to the extent provided in Section 5.01 with respect to Demand Registrations, and subject to the conditions set forth herein, whenever the Company proposes to register under the Securities Act any of its Equity Securities (other than a registration relating to the Company’s employee benefit plans or management incentive plans, exchange offers by the Company, or a merger or acquisition of a business or assets by the Company, including a registration on Form S-4 or Form S-8 or any successor form) (a “ Piggyback Registration ”), the Company shall give all Shareholders holding Registrable Securities prompt written notice thereof (but not less than fifteen (15) Business Days prior to the filing by the Company with the SEC of any registration statement with respect thereto).  Such notice (a “ Piggyback Notice ”) shall specify, at a minimum, the number of securities proposed to be registered, the proposed date of filing of such registration statement with the SEC, the proposed method of distribution, the proposed managing underwriter or underwriters (if any and if known), and a good faith estimate by the Company of the proposed minimum offering price of such securities.  Upon the written request of a Shareholder given within ten (10) Business Days of such Shareholder’s receipt of the Piggyback Notice (which written request shall specify the number of Registrable Securities intended to be disposed of by such Shareholder and the intended method of distribution thereof), the Company shall, subject to Section 5.02(b) , include in such registration all Registrable Securities with respect to which the Company has received such written requests for inclusion.

(b)           Priority on Piggyback Registrations .  If, in connection with a Piggyback Registration, any managing underwriter (or, if such Piggyback Registration is not an underwritten offering, a nationally recognized independent underwriter selected by the Company (which shall be reasonably acceptable to the holders of a majority of the Registrable Securities sought to be included in such Piggyback Registration and whose fees and expenses shall be borne solely by the Company, except that each Person selling securities in any secondary offering shall bear their proportionate share of any underwriter’s discounts, commissions and similar amounts)) advises the Company and the holders of the Registrable Securities sought to be included in such Piggyback Registration, that, in its opinion, the inclusion of all the securities sought to be included in such Piggyback Registration by the Company, any Persons who have sought to have securities registered thereunder pursuant to rights to demand other than pursuant to “piggyback” or other incidental or participatory registration rights (such demand rights being “ Other Demand Rights ” and such Persons being “ Other Demanding Sellers ”), any holders of Registrable Securities seeking to sell such securities in such Piggyback Registration (“ Piggyback Sellers ”) and any other proposed sellers, in each case, if any, would adversely affect the marketability of the securities sought to be sold pursuant thereto, then the Company shall include in the registration statement applicable to such Piggyback Registration only such securities as the Company, the Other Demanding Sellers, and the Piggyback Sellers are so advised by such underwriter can be sold without such an effect (the “ Maximum Piggyback Number ”), as follows and in the following order of priority:

(i)     if the Piggyback Registration is an offering on behalf of the Company and not any Person exercising Other Demand Rights (whether or not other Persons seek to include securities therein pursuant to “piggyback” or other incidental or participatory registration rights) (a “ Primary Offering ”), then (A) first, such number of securities to be sold by the Company as the Company, in its reasonable judgment and acting in good faith, shall have determined, (B) second, if the number of securities to be included under clause (A) above is less than the Maximum Piggyback Number, the number of Registrable Securities sought to be registered by each Piggyback Seller, pro rata in proportion to the number of Registrable Securities sought to be registered by all the Piggyback Sellers, which in the aggregate, when added to the number of securities to be registered under clause (A) above, equals or is less than the Maximum Piggyback Number, and (C) third, if the number of securities to be included under clauses (A) and (B) above is less than the Maximum Piggyback Number, the number of securities sought to be registered by each Other Demanding Seller and all other proposed sellers, pro rata in proportion to the number of securities sought to be registered by all the Other Demanding Sellers and other proposed sellers, which in the aggregate, when added to the number of securities to be registered under clauses (A) and (B) above, equals the Maximum Piggyback Number; and

(ii)    if the Piggyback Registration is an offering other than a Primary Offering, then (A) first, such number of securities sought to be registered by the Company and each Other Demanding Seller, pro rata in proportion to the number of securities sought to be registered by the Company and all such Other Demanding Sellers, (B) second, if the number of securities to be included under clause (A) above is less than the Maximum Piggyback Number, the number of Registrable Securities sought to be registered by each Piggyback Seller, pro rata in proportion to the number of Registrable Securities sought to be registered by all the Piggyback Sellers, which in the aggregate, when added to the number of securities to be registered under clause (A) above, equals or is less than the Maximum Piggyback Number, and (C) third, if the number of securities to be included under clauses (A) and (B) above is less than the Maximum Piggyback Number, the number of securities sought to be registered by all other proposed sellers, pro rata in proportion to the number of securities sought to be registered by all other proposed sellers, which in the aggregate, when added to the number of securities to be registered under clauses (A) and (B) above, equals the Maximum Piggyback Number.

(c)           Withdrawal by the Company .  If, at any time after giving written notice of its intention to register any of its securities as set forth in this Section 5.02 and prior to the time the registration statement filed in connection with such registration is declared effective, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Shareholder and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with such particular withdrawn or abandoned registration (but not from its obligation to pay the Registration Expenses (as defined below) in connection therewith as provided herein).  In the event that a Demanding Shareholder or any of its Affiliates is a Piggyback Seller, such Demanding Shareholder, by notice to the Company, may continue such registration as a Demand Registration.  The continuation of such registration shall be counted as a Demand for such Demanding Shareholder.

Section 5.03     Withdrawal Rights .  Any Shareholder that has notified or directed the Company to include any or all of its Registrable Securities in a registration statement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of its Registrable Securities designated for registration thereby by giving written notice to such effect to the Company at least two (2) Business Days prior to the effective date of such registration statement.  In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shall continue to be Registrable Securities hereunder.  No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn; provided that, in the case of a Demand Registration, if such withdrawal shall reduce the number of Registrable Securities sought to be included in such registration below $50 million of aggregate market value as of such date, then the Company shall as promptly as practicable give each holder of Registrable Securities sought to be registered notice to such effect, referring to this Agreement and summarizing this Section 5.03 , and within five (5) Business Days following the effectiveness of such notice, either the Company or the holders of a majority of the remaining Registrable Securities sought to be registered may, by written notices made to each holder of remaining Registrable Securities sought to be registered and the Company, elect that such registration statement not be filed or, if theretofore filed, be withdrawn.  During such period of five (5) Business Days, the Company shall not file such registration statement if not theretofore filed or, if such registration statement has been theretofore filed, the Company shall not seek, and shall use its reasonable best efforts to prevent, the effectiveness thereof.  Any registration statement withdrawn or not filed in accordance with (i) an election by the Company, (ii) an election by the holders of the majority of the Registrable Securities of Demanding Holders sought to be registered pursuant to a Demand Registration pursuant to Section 5.01(e) , (iii) an election by the holders of the majority of the Registrable Securities of Demanding Holders sought to be registered pursuant to such Demand Registration prior to the effectiveness of the applicable Demand Registration Statement, (iv) in accordance with an election by the holders of the majority of the Registrable Securities of Demanding Holders sought to be registered pursuant to such Demand Registration subsequent to the effectiveness of the applicable Demand Registration Statement, if any post-effective amendment or supplement to the applicable Demand Registration Statement contains adverse information regarding the Company or any of its Subsidiaries or (v) an election by the holders of a majority of the remaining Registrable Securities sought to be registered following a withdrawal by other holders of Registrable Securities that reduces the number of Registrable Securities sought to be included in such registration below $50 million of aggregate market value, shall not, in each case, be counted as a Demand.

Section 5.04     Holdback Agreements .

(a)          Each Shareholder agrees not to effect any public or private sale or distribution of (including sales pursuant to Rule 144 (or any successor provision promulgated under the Securities Act) or any hedging or other derivatives transactions with respect to) Equity Securities of the Company during the ten (10) day period prior to the date which the Company intends, or in the case of a Demand Registration, the Demanding Holders intend, to commence a public offering pursuant to Section 5.01 or Section 5.02 hereof (as set forth in the notice thereof provided by the Company or the Demanding Holders, as applicable) through the ninety (90) day period immediately following the effective date of such public offering (except as part of such registration), or, in each case, if later, the date of any underwriting agreement with respect thereto, or such shorter period of time included in any applicable lock-up agreement entered into relating to such public offering; provided , however , that the Shareholders shall not be obligated to comply with this Section 5.04 on more than one (1) occasion in any nine (9) month period.

(b)          If so requested (pursuant to a timely written notice) by the managing underwriter for any Piggyback Registration or Demand Registration, the Company shall not affect any public or private sale or distribution of (including any hedging or other derivatives transactions with respect to) Equity Securities of the Company during the ten (10) day period prior to the date which the Company intends, or in the case of a Demand Registration or a Piggyback Registration other than a Primary Offering, the Demanding Holders or other selling securityholders intend, to commence a public offering (as set forth in the notice thereof provided by the Demanding Holders or other securityholders) through the ninety (90) day period immediately following the effective date of any Demand Registration (except as part of such registration), or, if later, the date of any underwriting agreement with respect thereto.

Section 5.05     Registration Procedures .

(a)          Whenever the Shareholders have requested that any Registrable Securities be registered pursuant to this Agreement (whether pursuant to a Demand Registration or Piggyback Registration), the Company (subject to its right to withdraw such registration as contemplated by Section 5.02(c) ) shall use reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof and, in connection therewith, the Company shall as expeditiously as possible:

(i)     prepare and file with the SEC a registration statement with respect to such Registrable Securities on any form for which the Company then qualifies and is available for the sale of Registrable Securities to be registered thereunder in accordance with the intended method of distribution and use reasonable best efforts to cause such registration statement to become effective within one hundred twenty (120) days (thirty (30) days in the case of a short-form registration) of the date thereof;

(ii)    prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a continuous period of not less than one hundred eighty (180) days (or, if earlier, until all Registrable Securities included in such registration statement have been sold thereunder in accordance with the method of distribution set forth therein) until such time as the Company is entitled to use a short form registration statement pursuant to the Securities Act, in which case such registration statement shall be maintained continuously effective for a period of three years (or such shorter period during which all Registrable Securities included therein have been disposed of thereunder in accordance with the method of distribution set forth therein), subject in each case, to black-out periods or other restrictions imposed by the Company as required by applicable federal or state securities laws, and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof as set forth in such registration statement (including by incorporating in a prospectus supplement or post-effective amendment, at the request of a seller of Registrable Securities, the terms of the sale of such Registrable Securities);

(iii)   before filing with the SEC any such registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish to counsel selected by the Demanding Shareholder (in the event of a Demand Registration), counsel for the underwriter or sales or placement agent, if any, and any other counsel for holders of Registrable Securities, if any, in connection therewith, drafts of all such documents proposed to be filed and provide such counsel with a reasonable opportunity for review thereof and comment thereon, such review to be conducted and such comments to be delivered with reasonable promptness;

(iv)   promptly (A) notify each seller of Registrable Securities of each of (x) the filing and effectiveness of the registration statement and prospectus and any amendment or supplements thereto, (y) the receipt of any comments from the SEC or any state securities law authorities or any other Governmental Entities with respect to any such registration statement or prospectus or any amendments or supplements thereto, and (z) any oral or written stop order with respect to such registration, any suspension of the registration or qualification of the sale of such Registrable Securities in any jurisdiction or any initiation or threat of any proceedings with respect to any of the foregoing and (B) use its reasonable best efforts to obtain the withdrawal of any order suspending the registration or qualification (or the effectiveness thereof) or suspending or preventing the use of any related prospectus in any jurisdiction with respect thereto;

(v)     furnish to each seller of Registrable Securities, the underwriters and the sales or placement agent, if any, and counsel for each of the foregoing, a conformed copy of such registration statement and each amendment and supplement thereto (in each case, including all exhibits thereto and documents incorporated by reference therein) and such additional number of copies of such registration statement, each amendment and supplement thereto (in such case without such exhibits and documents), the prospectus (including each preliminary prospectus) included in such registration statement and prospectus supplements and all exhibits thereto and documents incorporated by reference therein and such other documents as such seller, underwriter, agent or counsel may reasonably request in order to facilitate the disposition of the Registrable Securities owned by each such seller;

(vi)    if requested by the managing underwriter or underwriters of any registration or by Demanding Holders holding a majority of the Registrable Securities sought to be registered by all the Demanding Holders pursuant to such Demand Registration, subject to approval of counsel to the Company in its reasonable judgment, promptly incorporate in a prospectus, supplement or post-effective amendment to the registration statement such information concerning underwriters and the plan of distribution of the Registrable Securities as such managing underwriter or underwriters or such holders shall reasonably furnish to the Company in writing and request be included therein, including with respect to the number of Registrable Securities being sold by such holders to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus, supplement or post-effective amendment as soon as possible after being notified of the matters to be incorporated in such prospectus, supplement or post-effective amendment;

(vii)   use its reasonable best efforts to register or qualify such Registrable Securities under such securities or “blue sky” laws of such jurisdictions as the holders of a majority of Registrable Securities sought to be registered reasonably request, notify the holders of Registrable Securities sought to be registered when any registration or qualification has become effective under such securities or “blue sky” laws or any exemption therefrom has been obtained and do any and all other acts and things which may be reasonably necessary or advisable to enable the holders of a majority of Registrable Securities sought to be registered to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holders and keep such registration or qualification in effect for so long as the registration statement remains effective under the Securities Act (provided that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph, (y) subject itself to taxation in any such jurisdiction where it would not otherwise be subject to taxation but for this paragraph, or (z) consent to the general service of process in any jurisdiction where it would not otherwise be subject to general service of process but for this paragraph);

(viii)  notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon the discovery that, or of the happening of any event as a result of which, the registration statement covering such Registrable Securities, as then in effect, contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or any fact necessary to make the statements therein not misleading, and promptly prepare and furnish to each such seller a supplement or amendment to the prospectus contained in such registration statement (and prepare and file and cause to become effective a post-effective amendment to such registration statement) so that such registration statement shall not, and such prospectus as thereafter delivered to the purchasers of such Registrable Securities shall not, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or any fact necessary to make the statements therein not misleading;

(ix)    cause all such Registrable Securities to be listed on the Applicable Securities Exchange;

(x)     make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such seller or underwriter all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees, attorneys and independent accountants to supply all information reasonably requested by any such sellers, underwriters, attorneys, accountants or agents in connection with such registration statement.  Each seller of Registrable Securities agrees, on its own behalf and on behalf of all its underwriters, accountants, attorneys and agents, that the information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally available to the public.  Each seller of Registrable Securities further agrees, on its own behalf and on behalf of all its underwriters, accountants, attorneys and agents, that it will, upon learning that disclosure of such information is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the information deemed confidential;

(xi)    use its reasonable best efforts to comply with all applicable laws related to such registration statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in connection therewith (including the Securities Act and the Exchange Act) and make generally available to its security holders as soon as practicable (but in any event not later than fifteen (15) months after the effectiveness of such registration statement) an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act and Rule 158;

(xii)   permit any Shareholder, which Shareholder, in its sole and exclusive judgment, might be deemed to be an underwriter or controlling person of the Company, to participate in the preparation of such registration statement and to require the insertion therein of material furnished to the Company in writing, which in the reasonable judgment of such holder and such holder’s counsel should be included;

(xiii)  use reasonable best efforts to furnish to each seller of Registrable Securities a signed counterpart of (x) an opinion of outside counsel for the Company and (y) a comfort letter signed by the independent certified public accountants who have certified the Company’s financial statements included or incorporated by reference in such registration statement (and, if necessary, any other independent certified public accountants of any Subsidiary of the Company or any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the registration statement), covering such matters with respect to such registration statement and, in the case of the accountants’ comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ comfort letters delivered to the underwriters in underwritten public offerings of securities for the account of, or on behalf of, an issuer of common stock, such opinion and comfort letters to be dated the date such opinions and comfort letters are customarily dated in such transactions, and covering in the case of such legal opinion, such other legal matters and, in the case of such comfort letter, such other financial matters, as the holders of a majority of the Registrable Securities being sold may reasonably request;

(xiv)   take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; and

(xv)    use reasonable best efforts to have appropriate officers of the Company participate in “road shows” for any Demand Registration and analyst or investor presentations and such other selling or informational activities as are customary for transactions similar to the planned disposition of securities requested by the Demanding Holders or the managing underwriter for such offerings.

(b)           Underwriting .  Without limiting any of the foregoing, in the event that any offering of Registrable Securities is to be made by or through an underwriter, the Company shall enter into an underwriting agreement with a managing underwriter or underwriters containing representations, warranties, indemnities and agreements customarily included (but not inconsistent with the agreements contained herein) by an issuer of common stock in underwriting agreements with respect to underwritten public offerings of common stock for the account of, or on behalf of, such issuers.  In connection with the sale of Registrable Securities hereunder, any seller of such Registrable Securities may, at its option, require that any and all representations and warranties by, and indemnities and agreements of, the Company to or for the benefit of such underwriter or underwriters (or which would be made to or for the benefit of such an underwriter or underwriter if such sale of Registrable Securities were pursuant to a customary underwritten offering) be made to and for the benefit of such seller and that any or all of the conditions precedent to the obligations of such underwriter or underwriters (or which would be so for the benefit of such underwriter or underwriters under a customary underwriting agreement) be conditions precedent to the obligations of such seller in connection with the disposition of its securities pursuant to the terms hereof (it being agreed that in connection with any Demand Registration, without limiting any rights or remedies of the Shareholders, in the event any such condition precedent shall not be satisfied and, if not so satisfied, shall not be waived by the holders of a majority of the Registrable Securities to be included in such Demand Registration, such Demand Registration shall not be counted as a permitted Demand hereunder).  In connection with any offering of Registrable Securities registered pursuant to this Agreement, the Company shall (x) furnish to the underwriter, if any (or, if no underwriter, the sellers of such Registrable Securities), unlegended certificates representing ownership of the Registrable Securities being sold, in such denominations as requested and (y) instruct any transfer agent and registrar of the Registrable Securities to release any stop transfer order with respect thereto.

(c)           Return of Prospectuses .  Each seller of Registrable Securities hereunder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.05(a)(viii) , such seller shall forthwith discontinue such seller’s disposition of Registrable Securities pursuant to the applicable registration statement and prospectus relating thereto until such seller’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 5.05(a)(viii) and, if so directed by the Company, deliver to the Company all copies, other than permanent file copies, then in such seller’s possession of the prospectus current at the time of receipt of such notice relating to such Registrable Securities.  In the event that the Company shall give such notice, the period during which such registration statement must remain effective pursuant to this Agreement shall be extended by the number of days during the period from the date of giving of a notice regarding the happening of an event of the kind described in Section 5.05(a)(viii) to the date when all such sellers shall receive such a supplemented or amended prospectus and such prospectus shall have been filed with the SEC.

Section 5.06     Registration Expenses .  All expenses incident to the Company’s performance of, or compliance with, its obligations under this Agreement, including all registration and filing fees, all fees and expenses of compliance with securities and “blue sky” laws (including the fees and expenses of counsel for underwriters or placement or sales agents, if any, in connection therewith), all printing and copying expenses, all messenger and delivery expenses, all fees and expenses of underwriters and sales and placement agents, if any, in connection therewith (excluding discounts and commissions), all fees and expenses of the Company’s independent certified public accountants and counsel (including with respect to “comfort” letters and opinions) and all expenses related to “road shows”, including the cost of any aircraft chartered for such purpose (collectively, the “ Registration Expenses ”) shall be borne by the Company.  The Company shall bear the fees and expenses of one (1) firm of attorneys retained by the Demanding Shareholder in connection with a Demand Registration, and the fees and expenses (subject to a maximum amount of $50,000) of one (1) firm of attorneys retained by the Demanding Holders other than the Demanding Shareholder in connection with a Demand Registration.  Notwithstanding the foregoing, the Company shall not be responsible for the fees and expenses of any other counsel, or any of the accountants, agents or experts retained by the Shareholders in connection with the sale of Registrable Securities or any underwriting discounts or commissions payable by the Shareholders in respect of the sale of their Registrable Securities.  The Company will pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties, the expense of any annual audit or quarterly review and the expense of any liability insurance) and, except as otherwise provided in this Section 5.06 , the expenses and fees for listing the securities to be registered on the Applicable Securities Exchange.

Section 5.07     Indemnification .

(a)           By the Company .  The Company agrees to indemnify, to the fullest extent permitted by law, each holder of Registrable Securities being sold, such holder’s officers, directors, managers, partners, shareholders, members, employees and agents and each Person who controls (within the meaning of the Securities Act) such holder or such other indemnified Person against all losses, claims, damages, liabilities and expenses (including with respect to actions or proceedings, whether commenced or threatened, and including reasonable attorney fees and expenses) (collectively, the “ Losses ”) caused by, resulting from or relating to: (i) any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus, free writing prospectus or preliminary prospectus or any amendment thereof or supplement thereto; (ii) any omission or alleged omission of a material fact required to be stated therein or a fact necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished to the Company in writing by or on behalf of such holder expressly for use therein; or (iii) any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company .  In connection with an underwritten offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of the Securities Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities being sold.

(b)           By Shareholders .  In connection with any registration statement in which a holder of Registrable Securities is participating, each such holder will furnish, or cause to be furnished, to the Company in writing information regarding such holder’s ownership of Registrable Securities and its intended method of distribution thereof and, to the extent permitted by law, shall indemnify, on a several and not joint basis, the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of the Securities Act) the Company or such other indemnified Person against all Losses caused by, resulting from or relating to any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus, free writing prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is caused by and contained in such information so furnished in writing by or on behalf of such holder and such information was actually used by the Company in a prospectus or amendment or supplement thereto and such untrue statement or omission was not corrected in writing prior to use in such registration statement, prospectus or preliminary prospectus; provided , however , that no holder of Registrable Securities shall be liable to the Company in excess of the net proceeds received by such holder from the sale of its Registrable Securities.

(c)           Notice .  Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided , however , that the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been prejudiced by such failure to provide such notice.

(d)           Defense of Actions .  In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party, in which event the indemnified party shall be reimbursed by the indemnifying party for the expenses incurred in connection with retaining separate legal counsel).  An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent (which consent shall not be unreasonably withheld, conditioned or delayed).  The indemnifying party shall lose its right to defend, contest, litigate and settle a matter if it shall fail diligently to contest such matter (except to the extent settled in accordance with the next following sentence).  No matter shall be settled by an indemnifying party without the consent of the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed).

(e)           Survival .  The indemnification obligations of the Company and the Shareholders selling Registrable Securities under this Section 5.07 shall survive until the first anniversary of the expiration of all applicable statutes of limitation or extensions of such statutes.  The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified Person and will survive the transfer of the Registrable Securities and the termination of this Agreement.

(f)           Contribution .  If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons.  In determining the amount of contribution to which the respective Persons are entitled, there shall be considered the Persons’ relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances.  It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by a pro rata or per capita allocation.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.  Notwithstanding the foregoing, no Shareholder shall be required to make a contribution in excess of the net proceeds received by such Shareholder from the sale of Registrable Securities.

ARTICLE VI

CERTAIN OTHER AGREEMENTS

Section 6.01     [Reserved] .

Section 6.02     Conflicts; Privilege .  Each of the parties hereto acknowledges that (a) the Company, JLL and certain of their Affiliates retained Skadden, Arps, Slate, Meagher & Flom LLP (“ Skadden ”) to act as counsel to the Company, JLL and certain of their Affiliates in connection with the transactions contemplated hereby, Skadden has not acted as counsel for any other Person in connection with the transactions contemplated hereby, and no other Person has the status of a client of Skadden for conflict of interest or any other purposes in connection with such transactions; and (b) DSM and certain of its Affiliates have retained Latham & Watkins LLP (“ Latham & Watkins ”) to act as counsel to DSM and its Affiliates in connection with the transactions contemplated hereby, Latham & Watkins has not acted as counsel for any other Person in connection with the transactions contemplated hereby, and no other Person has the status of a client of Latham & Watkins for conflict of interest or any other purposes in connection with such transactions.  Each of the parties hereto further acknowledges that after the Effective Date, Skadden may act as counsel to the Company or its Subsidiaries in connection with matters arising out of or related to this Agreement, the transactions contemplated hereby and the business activities of the Company and its Subsidiaries and that neither Skadden’s prior representation of the Company, JLL and certain of their Affiliates shall be deemed to be a disabling conflict with respect to such representation.  Each of the parties hereto hereby waives any conflict of interest resulting from the foregoing.  The parties hereto further agree that, as to all communications, whether written or electronic, (i) among Skadden, JLL, the Company or any of their respective Affiliates, and all of their files, attorney notes, drafts or other documents, that relate in any way to the transactions contemplated by this Agreement, that predate the Effective Date and that are protected by the attorney-client privilege, the expectation of client confidence or any other rights to any evidentiary privilege, such protections belong to JLL Partners and may be controlled by JLL Partners and shall not pass to or be claimed by the Company or any of its respective Affiliates; and (ii) among Latham & Watkins, DSM or any of their respective Affiliates, and all of their files, attorney notes, drafts or other documents, that relate in any way to the transactions contemplated by this Agreement, that predate the Effective Date and that are protected by the attorney-client privilege, the expectation of client confidence or any other rights to any evidentiary privilege, such protections belong to DSM and may be controlled by DSM and shall not pass to or be claimed by the Company or any of its respective Affiliates.  The parties agree to take, and to cause their respective Affiliates to take, all steps necessary to implement the intent of this Section 6.02 .  The parties further agree that Skadden and Latham & Watkins and their respective partners and employees are third party beneficiaries of this Section 6.02 .

Section 6.03     Corporate Opportunities .  Subject to applicable law in each case:

(a)           Certain Acknowledgments .  In recognition and anticipation that:  (i) partners, principals, directors, officers, members, managers and employees of JLL, DSM and their respective Affiliates (collectively, the “ Corporate Opportunity Entities ”) may serve as directors or officers of the Company and its Subsidiaries, (ii) the Corporate Opportunity Entities may engage in the same or similar activities or related lines of business as those in which the Company or its Subsidiaries, directly or indirectly, may engage or other business activities that overlap with or compete with those in which the Company or its Subsidiaries, directly or indirectly, may engage, and (iii) the Company and its Subsidiaries may engage in material business transactions with the Corporate Opportunity Entities and that the Company and its Subsidiaries are expected to benefit therefrom, the provisions of this Section 6.03 are set forth to regulate and define the conduct of certain affairs of the Company and its Subsidiaries as they may involve the Corporate Opportunity Entities and their partners, principals, directors, officers, members, managers and employees and the powers, rights, duties and liabilities of the Company, the Company’s Subsidiaries and their respective officers, directors, members, managers and shareholders in connection therewith.

(b)           Competition and Corporate Opportunities .  Without limiting or otherwise affecting what may otherwise be provided in any written agreement between a Corporate Opportunity Entity and the Company or one or more of its Subsidiaries (it being understood that no such agreement exists as of the date hereof between DSM or JLL, on the one hand, and the Company or any of its Subsidiaries, on the other hand), the Corporate Opportunity Entities shall not have any duty to refrain from engaging, directly or indirectly, in the same or similar business activities or lines of business as the Company or its Subsidiaries.  In the event that any Corporate Opportunity Entity acquires knowledge of a potential transaction or matter that may be a corporate opportunity for itself and the Company or any of its Subsidiaries, neither the Company nor any of its Subsidiaries shall, except as otherwise provided in Section 6.03(c) below, have any expectancy in such corporate opportunity, and the Corporate Opportunity Entity shall not have any duty to communicate or offer such corporate opportunity to the Company or any of its Subsidiaries and, without limiting or otherwise affecting what may otherwise be provided in any written agreement between a Corporate Opportunity Entity and the Company or one or more of its Subsidiaries, may pursue or acquire such corporate opportunity for itself or direct such corporate opportunity to another Person, including one of its Affiliates.

(c)           Allocation of Corporate Opportunities .  In the event that a director of the Company or any of its Subsidiaries who is also a partner, principal, director, officer, member, manager or employee of a Corporate Opportunity Entity acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company or any of its Subsidiaries and any Corporate Opportunity Entity, neither the Company nor any of its Subsidiaries shall have any expectancy in such corporate opportunity, unless such corporate opportunity is expressly offered to such person in his or her capacity as a director of the Company or as a director of such Company Subsidiary.

(d)           Certain Matters Deemed Not Corporate Opportunities .  In addition to and notwithstanding the foregoing provisions of this Section 6.03 , a corporate opportunity shall not be deemed to belong to the Company or any of its Subsidiaries if it is a business opportunity that the Company and its Subsidiaries are not financially able or contractually permitted or legally able to undertake, or that is, by its nature, not in the line of business of the Company and its Subsidiaries or is of no practical advantage to the Company and its Subsidiaries or is one in which the Company and its Subsidiaries have no interest or reasonable expectancy; provided that the determination of whether any corporate opportunity belongs to the Company or any of its Subsidiaries shall be made by the members of the Board who were not designated by the Corporate Opportunity Entity that acquired knowledge of such corporate opportunity or any of such Corporate Opportunity Entity’s Affiliates.

(e)          For purposes of this Section 6.03 , no member of senior management of the Company or any of its Subsidiaries shall be considered an affiliate of JLL or DSM as a result of his or her involvement in any way with the Company or any of its Subsidiaries or by virtue of holding equity in JLL, DSM or the Partnership.

ARTICLE VII

MISCELLANEOUS

Section 7.01     Specific Performance .  Each of the parties acknowledges and agrees that in the event of any breach or threatened breach of this Agreement, the non-breaching party or parties would be irreparably harmed and could not be made whole by monetary damages.  The parties hereby agree that in addition to any other remedy to which they may be entitled at law or in equity, they shall be entitled to compel specific performance of this Agreement in any action instituted in any court set forth in Section 7.05 .

Section 7.02     Entire Agreement .  This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and there are no restrictions, promises, representations, warranties, covenants, conditions or undertakings with respect to the subject matter hereof, other than those expressly set forth or referred to herein.  This Agreement supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof.

Section 7.03     Notices .  All notices and other communications hereunder shall be in writing and shall be delivered personally or by next-day courier or telecopied with confirmation of receipt to the parties at the addresses specified below (or at such other address for a party as shall be specified by like notice; provided that notices of change of address shall be effective only upon receipt thereof).  Any such notice shall be effective upon receipt, if personally delivered, or telecopied, or one (1) day after delivery to a courier for next-day delivery.

If to the Company, to:

Patheon N.V.

111 Speen St, Suite 550

Framingham, Massachusetts 01701

Attention:  Eric Sherbet, General Counsel and Secretary

and:

JLL Partners, Inc.

450 Lexington Avenue, 31 ^st Floor

New York, New York  10017

Attention:  Dan Agroskin

Facsimile: (212) 286-8626

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

920 North King Street

Wilmington, Delaware  19801

Attention:  Robert B. Pincus

Facsimile:  (302) 434-3090

If to any Shareholder:

To the address(es) set forth below such Shareholder’s name on Schedule I attached hereto.

Section 7.04     Applicable Law .  The substantive laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement, regardless of the law that might be applied under applicable principles of conflicts of laws.

Section 7.05     Jurisdiction; Service of Process .  JURISDICTION AND VENUE IN ANY SUIT, ACTION OR PROCEEDING (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE (INCLUDING, FOR THE AVOIDANCE OF DOUBT, ANY SEEKING EQUITABLE RELIEF), SHALL PROPERLY AND EXCLUSIVELY LIE IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE (THE “ COURT OF CHANCERY ”) OR, TO THE EXTENT THE COURT OF CHANCERY DOES NOT HAVE SUBJECT MATTER JURISDICTION, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE (THE ” DELAWARE FEDERAL COURT ”) OR, TO THE EXTENT NEITHER THE COURT OF CHANCERY NOR THE DELAWARE FEDERAL COURT HAS SUBJECT MATTER JURISDICTION, THE SUPERIOR COURT OF THE STATE OF DELAWARE AND THE APPELLATE COURTS HAVING JURISDICTION OF APPEALS IN SUCH COURTS (COLLECTIVELY, THE “ CHOSEN COURTS ”).  NO PARTY HERETO SHALL BRING ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY JURISDICTION, VENUE OR OTHER FORUM OTHER THAN THE CHOSEN COURTS PURSUANT TO THE FOREGOING SENTENCE.  BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE CHOSEN COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH SUIT, ACTION OR PROCEEDING.  THE PARTIES HERETO IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN EACH OF THE CHOSEN COURTS, AND HEREBY WAIVE ANY OBJECTION THAT ANY SUCH CHOSEN COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH SUIT, ACTION OR PROCEEDING.  DELIVERY OF ANY PROCESS REQUIRED BY ANY SUCH CHOSEN COURT IN ACCORDANCE WITH SECTION 7.03 SHALL CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS AGAINST EACH PARTY HERETO, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT.

Section 7.06     Waiver of Jury Trial

.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED OR INCIDENTAL TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.07     Severability .  The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

Section 7.08     Successors; Assigns .  The provisions of this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns, and no provision of this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.  Neither this Agreement nor the rights or obligations of any Shareholder hereunder may be assigned, except in connection with the Transfer of Equity Securities of the Company by a Shareholder in accordance with Section 4.01 , but subject to the limitations and requirements contained therein and in Section 4.02 .  Any such attempted assignment in contravention of this Agreement shall be void and of no effect.

Section 7.09     Amendments .  This Agreement may not be amended, modified or supplemented unless such modification is in writing and signed by the holders of more than fifty percent (50%) of the Equity Securities of the Company then owned by the Shareholders and their respective Affiliated Entities; provided , however , that, (a) for so long as JLL and its Affiliated Entities own any Registrable Securities, no amendment, modification, or supplement to this Agreement shall be effective without the approval of JLL; and (b) so long as DSM and its Affiliated Entities own any Registrable Securities, no amendment, modification, or supplement to this Agreement shall be effective without the approval of DSM.

Section 7.10     Waiver .  Any waiver (express or implied) of any default or breach of this Agreement must be in writing and shall not constitute a waiver of any other or subsequent default or breach.

Section 7.11     Proxy; Further Assurances .  Subject to the provisions of the Articles of Association, if any Shareholder fails or refuses to vote that Shareholder’s Shares as required pursuant to Article III of this Agreement, then, without further action by such Shareholder, the General Counsel of the Company shall have an irrevocable proxy coupled with an interest to vote such Shareholder’s Shares in accordance with Article III of this Agreement, and each Shareholder, upon such failure or refusal to vote, hereby grants to the General Counsel of the Company such irrevocable proxy coupled with an interest.  In connection with this Agreement and the transactions contemplated hereby, each Shareholder shall execute and deliver any additional documents and instruments and perform any additional acts that the other Shareholder determines to be necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions.

Section 7.12     Recapitalization; After Acquired Securities .  In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Shares by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to Shareholders or combination of the Shares or any other change in the Company’s capital structure, appropriate adjustments shall be made to the terms hereof, if necessary, to fairly and equitably preserve the original rights and obligations of the parties hereto under this Agreement.  Each Shareholder agrees that, except as otherwise provided herein, all of the provisions of this Agreement shall apply to all of the Shares owned beneficially or of record by such Shareholder (and its Affiliates) as of the Effective Date and all Shares that are acquired (beneficially or of record) by such Shareholder (or any of its Affiliates) after the Effective Date.

Section 7.13     Term .  This Agreement shall terminate automatically if the Effective Date does not occur prior to December 31, 2016.  This Agreement shall terminate on the date that neither JLL nor its Affiliated Entities, on the one hand, and neither DSM nor its Affiliated Entities, on the other hand, owns any Registrable Securities; provided , however , that to the extent that any Demand Registration or Piggyback Registration has commenced as of such time, this Agreement shall remain in effect until the termination or expiration of the Demand Registration or Piggyback Registration, as the case may be, and the Shareholders’ obligations pursuant to Section 5.04 hereof shall continue until ninety (90) days following the effectiveness of the registration statement related thereto.  From and after the date of the termination of this Agreement in accordance with the foregoing, each Shareholder shall no longer be bound by any obligations, or be entitled to any benefits, under this Agreement (other than those of its rights that have accrued prior to such date or that arise thereafter under Section 5.07 or this Article VII ).

Section 7.14     Counterparts .  This Agreement may be executed in two or more counterparts (including by facsimile or other electronic means such as portable document format (.pdf)), each of which shall be deemed an original but all of which shall constitute one and the same Agreement.

Section 7.15     Code of Conduct .  As of the Effective Date, the Company shall have adopted a code of business conduct that is substantially consistent with DSM’s Code of Business Conduct in effect on the date of this Agreement.

[SIGNATURE PAGES FOLLOW.]

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Shareholders’ Agreement as of the date first above written.

	PATHEON N.V.
	By:	/s/ Daniel Agroskin
	Name:	Daniel Agroskin
	Title:	Director
	JLL PATHEON CO-INVESTMENT FUND, L.P.
	By its general partner,
	JLL Associates V (Patheon), L.P.
	By its general partner,
	JLL Associates G.P. V (Patheon), Ltd.
	By:	/s/ Paul Levy
	Name:	Paul S. Levy
	Title:	Managing Director

 

	KONINKLIJKE DSM N.V.
	By:	/s/ Michael Wahl
	Name:	Michael Wahl
	Title:
	By:	/s/ Hugh Welsh
	Name:	Hugh C. Welsh
	Title:
	JLL/DELTA PATHEON HOLDINGS, L.P.
	By: JLL/Delta Patheon GP, Ltd., its General Partner
	By:	/s/ Daniel Agroskin
	Name:	Daniel Agroskin
	Title:	President

 

	PATHEON HOLDCO COÖPERATIEF U.A.
	By:	/s/ Daniel Agroskin
	Name:	Daniel Agroskin
	Title:	Director
	By:	/s/ Eric Sherbet
	Name:	Eric Sherbet
	Title:	Director
	JLL ASSOCIATES V (PATHEON), L.P.
	By its general partner,
	JLL Associates G.P. V (Patheon), Ltd.
	By:	/s/ Paul Levy
	Name:	Paul S. Levy
	Title:	Managing Director
	JLL PARTNERS FUND V (NEW PATHEON), L.P.
	By its general partner,
	JLL Associates V (New Patheon), L.P.
	By its general partner,
	JLL Associates G.P. V (Patheon), Ltd.
	By:	/s/ Paul Levy
	Name:	Paul S. Levy
	Title:	Managing Director
	JLL PARTNERS FUND VI (PATHEON), L.P.
	By its general partner,
	JLL Associates VI (Patheon), L.P.
	By its general partner,
	JLL Associates G.P. V (Patheon), Ltd.
	By:	/s/ Paul Levy
	Name:	Paul S. Levy
	Title:	Managing Director

 

---

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Exhibit 10.2

 

PATHEON N.V.
2016 OMNIBUS INCENTIVE PLAN

Section 1.            Purpose of Plan.

 

The name of the Plan is the Patheon N.V. 2016 Omnibus Incentive Plan (the “ Plan ”).  The purposes of the Plan are to provide an incentive to selected officers, employees, non-employee directors, and consultants of the Company or its Affiliates (as hereinafter defined) whose contributions are essential to the growth and success of the business of the Company and its Affiliates, in order to align the long-term financial interests of such persons with those of the Company’s shareholders, strengthen the commitment of such persons to the Company and its Affiliates and attract and retain competent and dedicated persons whose efforts will result in the long-term growth and profitability of the Company and its Affiliates.  To accomplish such purposes, the Plan provides that the Company may grant Options, Share Appreciation Rights, Restricted Shares, Restricted Share Units, Share Bonuses, Other Share-Based Awards, Cash Awards or any combination of the foregoing.

 

Section 2.            Definitions.

For purposes of the Plan, the following terms shall be defined as set forth below:

 

“ Administrator ” means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 3 hereof.

 

“ Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

 

“ Award ” means any Option, Share Appreciation Right, Restricted Shares, Restricted Share Unit, Share Bonus, Other Share-Based Award or Cash Award granted under the Plan.

 

“ Award Agreement ” means any written or electronic agreement, contract or other instrument or document evidencing an Award.

 

“ Base Price ” has the meaning set forth in Section 8(b) hereof.

 

“ Beneficial Owner ” (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.

 

“ Board ” means the Board of Directors of the Company.

 

“ Cash Award ” means an Award granted pursuant to Section 12 hereof.

 

“ Cause ” has the meaning assigned to such term in any individual employment or severance agreement with the Participant unless otherwise set forth in the Award Agreement, or if no such agreement defines “Cause,” Cause means the determination by the Company that one or more of the following events has occurred: (i) the Participant has failed to perform his or her material duties, and such failure has not been cured after a period of thirty (30) days’ notice from the Company; (ii) any reckless or grossly negligent act by the Participant having the effect of injuring the interest, business, or reputation of the Company or any of its Affiliates in any material respect; (iii) the Participant’s commission of any felony (including entry of a nolo contendere plea); or (iv) any misappropriation or embezzlement of the property of the Company or any of its Affiliates.

“ Change in Capitalization ” means any (1) merger, amalgamation, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, (2) special or extraordinary dividend or other extraordinary distribution (whether in the form of cash, Common Shares, or other property), share split, reverse share split, subdivision or consolidation, (3) combination or exchange of shares, or (4) other change in corporate structure, which, in any such case, the Committee determines, in its sole discretion, affects the Common Shares such that an adjustment pursuant to Section 5 hereof is appropriate.

 

“ Change in Control ” means an event set forth in any one of the following paragraphs shall have occurred:

 

(1)            any Person (other than JLL, DSM or their respective Affiliates) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person or any securities acquired directly from the Company or any Affiliate thereof) representing 50% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (I) of paragraph (3) below; or

 

(2)            the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the date hereof, constitute the Board and any new director whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended (“ Incumbent Directors ”); or

 

(3)            there is consummated a merger or amalgamation or consolidation of the Company or any direct or indirect Subsidiary with any other corporation or other entity, other than (I) a merger or amalgamation or consolidation which results in (A) the voting securities of the Company outstanding immediately prior to such merger or amalgamation or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, 50% or more of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or amalgamation or consolidation and (B) the Incumbent Directors continuing immediately thereafter to represent at least a majority of the board of directors of the Company, the entity surviving such merger or amalgamation or consolidation or, if the Company or the entity surviving such merger or amalgamation or consolidation is then a Subsidiary, the ultimate parent thereof, or (II) a merger or amalgamation or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

(4)            the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (B) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.

 

Notwithstanding the foregoing, (i) a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of Common Shares immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions and (ii) for each Award that constitutes deferred compensation under Section 409A of the Code, and to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, a Change in Control shall be deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code.

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.

 

“ Committee ” means any committee or subcommittee the Board may appoint to administer the Plan.  Subject to the discretion of the Board, the Committee shall be composed entirely of individuals who meet the qualifications of (i) an “outside director” within the meaning of Section 162(m) of the Code (but only to the extent necessary and desirable to maintain qualification of Awards as “performance-based compensation” under Section 162(m) of the Code), (ii) a “non-employee director” within the meaning of Rule 16b-3 and (iii) any other qualifications required by the applicable stock exchange on which the Common Shares are traded.  If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee.  Except as otherwise provided in the Company’s articles of association, as amended from time to time, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members.

“ Common Shares ” means the ordinary shares, par value €0.01 per share, in the share capital of the Company.

 

“ Company ” means Patheon N.V., a Dutch public limited company (or any successor company, except as the term “Company” is used in the definition of “Change in Control” above).

 

“ Covered Employee ” has the meaning ascribed to the term “covered employee” set forth in Section 162(m) of the Code.

 

“ Disability ” has the meaning assigned to such term in the Award Agreement or in any individual employment or severance agreement with the Participant for the purpose of identifying disability as the reason for the termination of the Participant's employment or, if any such agreement does not define “Disability,” Disability means, with respect to any Participant, that such Participant, as determined by the Administrator in its sole discretion, is unable to perform the duties of his or her position for at least ninety (90) consecutive business days as a result of physical or mental illness or injury; provided, that, if applicable to the Award, “Disability” shall be determined in a manner consistent with Section 409A of the Code.

 

“ DSM ” means Koninklijke DSM N.V.

 

“ Effective Date ” has the meaning set forth in Section 20 hereof.

 

“ Eligible Recipient ” means an officer, employee, non-employee director, independent contractor or consultant of the Company or any Affiliate of the Company who has been selected as an eligible participant by the Administrator; provided , however , to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, an Eligible Recipient of an Option or a Share Appreciation Right means an employee, non-employee director, independent contractor or consultant of the Company or any Affiliate of the Company with respect to whom the Company is an “eligible issuer of service recipient stock” within the meaning of Section 409A of the Code.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.

 

“ Exercise Price ” means, with respect to any Option, the per share price at which a holder of such Option may acquire Common Shares to be issued by the Company or, if Common Shares held by the Company are used, to be transferred by the Company upon the exercise of such Option, as set forth in the applicable Award Agreement.

 

“ Fair Market Value ” of a Common Share or another security as of a particular date shall mean the fair market value as determined by the Administrator in its sole discretion; provided , however , (i) if the Common Share or other security is admitted to trading on a national securities exchange, the fair market value on any date shall be the closing sale price reported on the last preceding date on which there was a sale of such share on such exchange, or (ii) if the Common Share or other security is then traded in an over-the-counter market, the fair market value on any date shall be the average of the closing bid and asked prices for such share in such over-the-counter market for the last preceding date on which there was a sale of such share in such market.

“ Free Standing Right ” has the meaning set forth in Section 8(a) hereof.

 

“ Good Reason ” has the meaning assigned to such term in any individual employment or severance agreement with the Participant unless otherwise set forth in the Award Agreement, provided that if no such agreement defines “Good Reason,” Good Reason and any provision of this Plan that refers to Good Reason shall not be applicable to such Participant.

 

“ ISO ” means an Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code.

 

“ JLL ” means JLL Patheon Co-Investment Fund, L.P., a Cayman Islands exempted limited partnership, and any of its Affiliates.

 

“ Nonqualified Stock Option ” shall mean an Option that is not designated as an ISO.

 

“ Option ” means an option to acquire Common Shares granted pursuant to Section 7 hereof. The term “Option” as used in the Plan includes the terms “Nonqualified Stock Option” and “ISO.”

 

“ Other Share-Based Award ” means an Award granted pursuant to Section 10 hereof.

 

“ Participant ” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority provided for in Section 3 below, to receive grants of Awards, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.

 

“ Performance Goals ” means performance goals based on one or more of the following criteria: (i) earnings, including one or more of operating income, net operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) share price appreciation; (x) cash flow, cash flow per share, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) market value, enterprise growth or growth in market cap; (xv) operating margin or profit margin; (xvi) share price or total shareholder return; (xvii) cost targets, reductions and savings, productivity and efficiencies; (xviii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xix) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and (xx) any combination of, or a specified increase in, any of the foregoing. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or any Affiliate thereof, or a division or strategic business unit of the Company or any Affiliate thereof, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Administrator.  The Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur).  Each of the foregoing Performance Goals may be determined in accordance with generally accepted accounting principles (to the extent determined by the Administrator to be desirable) and shall be subject to certification by the Administrator; provided , that, to the extent permitted by Section 162(m) of the Code to the extent applicable, the Administrator shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or infrequently occurring events affecting the Company or any Affiliate thereof or the financial statements of the Company or any Affiliate thereof, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles.  Notwithstanding the foregoing, the Committee shall take any actions pursuant to this paragraph to the extent necessary and desirable to maintain qualification of Awards as performance-based compensation under Section 162(m) of the Code.

“ Person ” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.

 

“ Plan ” has the meaning set forth in Section 1 hereof.

 

“ Restricted Period ” has the meaning set forth in Section 9(a) hereof.

 

“ Related Right ” has the meaning set forth in Section 8(a) hereof.

 

“ Restricted Shares ” means Shares granted pursuant to Section 9 below subject to certain restrictions that lapse at the end of a specified period or periods.

 

“ Restricted Share Unit ” means the right, granted pursuant to Section 9 below, to receive a Common Share or a cash payment equal to the Fair Market Value of a Common Share, as determined by the Administrator in connection with the Award.

 

“ Rule 16b-3 ” has the meaning set forth in Section 3(a) hereof.

 

“ Securities Act ” means the Securities Act of 1933, as amended.

 

“ Shares ” means Common Shares to be issued or, if Common Shares held by the Company are used, to be transferred by the Company, for the purpose of the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, amalgamation, consolidation or other reorganization) security.

 

“ Share Appreciation Right ” means the right to receive, upon exercise of the right, the applicable amounts as described in Section 8.

 

“ Share Bonus ” means a bonus payable in fully vested Common Shares granted pursuant to Section 11 hereof.

 

“ Subsidiary ” means, with respect to any Person, as of any date of determination, any other Person as to which such first Person owns or otherwise controls, directly or indirectly, more than 50% of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest of such other Person.

 

“ Transfer ” has the meaning set forth in Section 18 hereof.

Section 3.            Administration.

 

(a)            The Plan shall be administered by the Administrator and shall be administered in accordance with the requirements of Section 162(m) of the Code (but only to the extent necessary and desirable to maintain qualification of Awards as performance-based compensation under Section 162(m) of the Code) and, to the extent applicable, Rule 16b-3 under the Exchange Act (“ Rule 16b-3 ”). 

 

(b)            Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board, shall have the power and authority, without limitation:

 

(1)            to select those Eligible Recipients who shall be Participants;

 

(2)            to determine whether and to what extent Options, Share Appreciation Rights, Restricted Shares, Restricted Share Units, Share Bonuses, Other Share-Based Awards, Cash Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;

 

(3)            to determine the number of Shares to be covered by each Award granted hereunder;

 

(4)             to determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder (including, but not limited to, (i) the restrictions applicable to Restricted Shares or Restricted Share Units and the conditions under which restrictions applicable to such Restricted Shares or Restricted Share Units shall lapse, (ii) the performance goals and periods applicable to Awards, (iii) the Exercise Price of each Option and the Base Price of each Share Appreciation Right, (iv) the vesting schedule applicable to each Award, (v) the number of Shares or amount of cash or other property subject to each Award and (vi) subject to the requirements of Section 409A of the Code (to the extent applicable), any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the vesting schedule of such Awards);

 

(5)             to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing Awards;

(6)            to determine the Fair Market Value in accordance with the terms of the Plan;

 

(7)             to determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the Participant’s employment for purposes of Awards granted under the Plan;

 

(8)            to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable;

 

(9)            to prescribe, amend and rescind rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or qualifying for favorable tax treatment under applicable foreign laws, which rules and regulations may be set forth in an appendix or appendices to the Plan; and

 

(10)             to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and authorities either specifically granted under the Plan or necessary and advisable in the administration of the Plan.

 

(c)            Subject to Section 5, neither the Board nor the Committee shall have the authority to reprice or cancel and regrant any Award at a lower exercise, base or purchase price without first obtaining the approval of the Company’s shareholders.

 

(d)            To the extent permitted by applicable law or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or to one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this Section 3; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees with respect to Awards intended to constitute performance-based compensation under Section 162(m) of the Code, or (c) officers of the Company (or directors) to whom authority to grant or amend Awards has been delegated hereunder; provided further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Section 162(m) of the Code (to the extent applicable) and applicable securities laws or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 3 shall serve in such capacity at the pleasure of the Board and the Committee.

(e)            All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including the Company and the Participants. The exercise of any right or discretion by the Company is in its absolute discretion and is not subject to any implied restrictions.  Any implied contractual duty of the Company to act in good faith or reasonably is expressly excluded from forming part of the Agreement.

 

(f)            No member of the Board or the Committee, nor any officer or employee of the Company or any Subsidiary thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company and of any Subsidiary thereof acting on their behalf shall, to the maximum extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, omission, determination or interpretation.

 

Section 4.            Shares Reserved for Issuance; Certain Limitations.

 

(a)            The maximum number of Common Shares to be issued or, to the extent Common Shares held by the Company are used, to be transferred by the Company, for the purpose of the Plan shall be equal to 12,226,935 Common Shares (subject to adjustment as provided by Section 5). In accordance with the rules promulgated by the applicable national securities exchange on which the Common Shares are traded, the maximum number of Common Shares set forth in this Section 4(a) excludes Common Shares granted in connection with a transaction between the Company or an Affiliate of the Company and another entity or business in substitution or exchange for, or conversion adjustment, assumption or replacement of, awards previously granted by such other entity to any individuals who have become Eligible Recipients as a result of such transaction.

 

(b)            Subject to adjustment as provided by Section 5, the maximum value of Awards granted to a non-employee director in any consecutive twelve month period will be USD$450,000; provided that this maximum value shall exclude the value of cash voluntarily deferred by a non-employee director in exchange for Shares.

 

(c)            Notwithstanding anything in this Plan to the contrary, and subject to adjustment as provided by Section 5, from and after such time, if any, as the Plan is subject to Section 162(m) of the Code:

 

(1)            No individual (including an individual who is likely to be a Covered Employee) will be granted Options or Share Appreciation Rights for more than the number of Common Shares reserved under Section 4(a) during any calendar year.

 

(2)            No individual who is likely to be a Covered Employee with respect to a calendar year will be granted (A) Restricted Shares, Restricted Share Units, a Share Bonus or Other Share-Based Awards for more than the number of Common Shares reserved under Section 4(a) during any calendar year or (B) a Cash Award in cash in excess of USD$5 million during any calendar year.

(d)            Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise.  If any Shares subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of shares to the Participant, the Shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Awards under the Plan.  Notwithstanding the foregoing, Shares that are exchanged by a Participant or withheld by the Company as full or partial payment in connection with any Awards under the Plan, as well as any Shares exchanged by a Participant or withheld by the Company or any Subsidiary to satisfy the tax withholding obligations related to any Awards under the Plan, shall not be available for subsequent Awards under the Plan, and notwithstanding that an Award is settled by the delivery of a net number of Common Shares, the full number of Common Shares underlying such Award shall not be available for subsequent Awards under the Plan. Upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of Shares as to which the Award is exercised and, notwithstanding the foregoing, such number of shares shall no longer be available for Awards under the Plan. In addition, (i) to the extent an Award is denominated in Common Shares, but paid or settled in cash, the number of Common Shares with respect to which such payment or settlement is made shall again be available for grants of Awards pursuant to the Plan and (ii) Common Shares underlying Awards that can only be settled in cash shall not be counted against the aggregate number of Common Shares available for Awards under the Plan.

 

Section 5.            Equitable Adjustments.

(a)            In the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made, in each case, as may be determined by the Administrator, in its sole discretion, in (i) the aggregate number of Common Shares reserved for issuance under the Plan and the maximum number of Common Shares or cash that may be subject to Awards granted to any Participant in any calendar year, (ii) the kind and number of securities subject to, and the Exercise Price or Base Price of, any outstanding Options and Share Appreciation Rights granted under the Plan, and (iii) the kind, number and purchase price of Common Shares, or the amount of cash or amount or type of other property, subject to outstanding Restricted Shares, Restricted Share Units, Share Bonuses and Other Share-Based Awards granted under the Plan; provided , however , that any fractional shares resulting from the adjustment shall be eliminated.  Such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion. Except to the extent determined by the Administrator, any adjustments to ISOs under this Section 5 shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code.

 

(b)            Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Award in exchange for payment in cash or other property having an aggregate Fair Market Value equal to the Fair Market Value of the Common Shares, cash or other property covered by such Award, reduced by the aggregate Exercise Price or Base Price thereof, if any; provided , however , that if the Exercise Price or Base Price of any outstanding Award is equal to or greater than the Fair Market Value of the Common Shares, cash or other property covered by such Award, the Administrator may cancel such Award without the payment of any consideration to the Participant.

 

(c)            The determinations made by the Administrator or the Board, as applicable, pursuant to this Section 5 shall be final, binding and conclusive.

Section 6.            Eligibility.

 

The Participants under the Plan shall be selected from time to time by the Administrator, in its sole discretion, from those individuals that qualify as Eligible Recipients.

 

Section 7.            Options.

 

(a)            General .  Options granted under the Plan shall be designated as Nonqualified Stock Options or ISOs.  Each Participant who is granted an Option shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, which Award Agreement shall set forth, among other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option, and whether the Option is intended to be an ISO or a Nonqualified Stock Option (and in the event the Award Agreement has no such designation, the Option shall be a Nonqualified Stock Option).  The provisions of each Option need not be the same with respect to each Participant.  More than one Option may be granted to the same Participant and be outstanding concurrently hereunder.  Options granted under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement.

 

(b)            Exercise Price .  The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant, but in no event shall the exercise price of an Option be less than one hundred percent (100%) of the Fair Market Value of the related Common Shares on the date of grant.

 

(c)            Option Term .  The maximum term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten (10) years after the date such Option is granted.  Each Option’s term is subject to earlier expiration pursuant to the applicable provisions in the Plan and the Award Agreement.  Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole discretion, deems appropriate.

 

(d)            Exercisability .  Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of pre-established performance goals, as shall be determined by the Administrator in the applicable Award Agreement.  The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion.  Notwithstanding anything to the contrary contained herein, an Option may not be exercised for a fraction of a share.

(e)            Method of Exercise .  Options may be exercised in whole or in part by giving written notice of exercise to the Company (or by other methods authorized by the Administrator) specifying the number of whole Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or its equivalent, as determined by the Administrator.  As determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable or transferrable upon exercise whereby, to the extent required to pay up newly issued Shares to the Participant, the claim of the Participant to receive Shares otherwise issuable upon exercise will be set-off against the claim of the Company to pay up newly issued Shares), (ii) in the form of unrestricted Shares already owned by the Participant which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised (whereby, to the extent required to pay up newly issued Shares to the Participant, the claim of the Participant to receive Shares otherwise issuable upon exercise will be set-off against the claim of the Company to pay up newly issued Shares), (iii) any other form of consideration approved by the Administrator and permitted by applicable law or (iv) any combination of the foregoing.

 

(f)            ISOs .

 

(1)            The terms and conditions of ISOs granted hereunder shall be subject to the provisions of Section 422 of the Code and the terms, conditions, limitations and administrative procedures established by the Administrator from time to time in accordance with the Plan.  At the discretion of the Administrator, ISOs may be granted only to an employee of the Company, its “parent corporation” (as such term is defined in Section 424(e) of the Code) or a Subsidiary.

 

(2)             ISO Grants to 10% Shareholders .  Notwithstanding anything to the contrary in the Plan, if an ISO is granted to a Participant who owns shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company, its “parent corporation” (as such term is defined in Section 424(e) of the Code) or a Subsidiary, the term of the ISO shall not exceed five (5) years from the time of grant of such ISO and the Exercise Price shall be at least one hundred and ten percent (110%) of the Fair Market Value of the Shares on the date of grant.

 

(3)             $100,000 Per Year Limitation For ISOs .  To the extent the aggregate Fair Market Value (determined on the date of grant) of the Shares for which ISOs are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds $100,000, such excess ISOs shall be treated as Nonqualified Stock Options.

 

(4)            Disqualifying Dispositions .  Each Participant awarded an ISO under the Plan shall notify the Company in writing immediately after the date he or she makes a “disqualifying disposition” of any Share acquired pursuant to the exercise of such ISO.  A “disqualifying disposition” is any disposition (including any sale) of such Shares before the later of (i) two years after the date of grant of the ISO and (ii) one year after the date the Participant acquired the Shares by exercising the ISO.  The Company may, if determined by the Administrator and in accordance with procedures established by it, retain possession of any Shares acquired pursuant to the exercise of an ISO as agent for the applicable Participant until the end of the period described in the preceding sentence, subject to complying with any instructions from such Participant as to the sale of such shares.

(g)            Rights as Shareholder .  A Participant shall have no rights to dividends or distributions or any other rights of a shareholder with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, has paid in full for such Shares and has satisfied the requirements of Section 17 hereof.

 

(h)            Termination of Employment or Service . In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Options, such Options shall be exercisable at such time or times and subject to such terms and conditions as set forth in the Award Agreement.

 

(i)            Other Change in Employment Status .  An Option shall be affected, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status of a Participant, in the discretion of the Administrator.

 

Section 8.            Share Appreciation Rights.

 

(a)            General .  Share Appreciation Rights may be granted either alone (“ Free Standing Rights ”) or in conjunction with all or part of any Option granted under the Plan (“ Related Rights ”).  Related Rights may be granted either at or after the time of the grant of such Option.  The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Share Appreciation Rights shall be made, the number of Shares to be awarded, the Base Price, and all other conditions of Share Appreciation Rights.  Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates.  The provisions of Share Appreciation Rights need not be the same with respect to each Participant.  Share Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement.

 

(b)            Base Price .  Each Share Appreciation Right shall be granted with a base price that is not less than one hundred percent (100%) of the Fair Market Value of the related Common Shares on the date of grant (such amount, the “ Base Price ”).

 

(c)            Awards; Rights as Shareholder .  A Participant shall have no rights to dividends or any other rights of a shareholder with respect to the Common Shares, if any, subject to a Share Appreciation Right until the Participant has given written notice of the exercise thereof and has satisfied the requirements of Section 17 hereof.

(d)            Exercisability .

 

(1)            Share Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.

 

(2)            Share Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options to which they relate shall be exercisable in accordance with the provisions of Section 7 hereof and this Section 8 of the Plan.

 

(e)            Consideration Upon Exercise .

 

(1)            Upon the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to (i) the excess of the Fair Market Value as of the date of exercise over the Base Price per share specified in the Free Standing Right, multiplied by (ii) the number of Shares in respect of which the Free Standing Right is being exercised.

 

(2)            A Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option.  Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to (i) the excess of the Fair Market Value as of the date of exercise over the Exercise Price specified in the related Option, multiplied by (ii) the number of Shares in respect of which the Related Right is being exercised.  Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been so exercised.

 

(3)            Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Share Appreciation Right in cash (or in any combination of Shares and cash).

 

(f)            Termination of Employment or Service; Other Change in Employment Status .

 

(1)            In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Free Standing Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as set forth in the Award Agreement.

 

(2)            In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Related Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as set forth in the related Options.

 

(3)            A Share Appreciation Right shall be affected, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status of a Participant, in the discretion of the Administrator.

(g)            Term .

 

(1)            The term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than ten (10) years after the date such right is granted.

 

(2)            The term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten (10) years after the date such right is granted.

 

Section 9.            Restricted Shares and Restricted Share Units.

 

(a)            General .  Restricted Shares and Restricted Share Units may be issued either alone or in addition to other awards granted under the Plan.  The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, Restricted Shares or Restricted Share Units shall be made; the number of Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares or Restricted Share Units; the period of time prior to which Restricted Shares or Restricted Share Units become vested and free of restrictions on Transfer (the “ Restricted Period ”); the performance objectives (if any); and all other conditions of the Restricted Shares and Restricted Share Units.  If the restrictions, performance objectives and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Shares or Restricted Share Units, in accordance with the terms of the grant.  The provisions of Restricted Shares or Restricted Share Units need not be the same with respect to each Participant.

 

(b)            Awards and Certificates .

 

(1)            Except as otherwise provided below in Section 9(b)(3), (i) each Participant who is granted an award of Restricted Shares may, in the Company’s sole discretion, be issued a share certificate in respect of such Restricted Shares; and (ii) any such certificate so issued shall be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to any such Award.  The Company may require that the share certificates, if any, evidencing Restricted Shares be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any award of Restricted Shares, the Participant shall have delivered a share transfer form, endorsed in blank, relating to the Shares covered by such award.  Certificates for unrestricted Common Shares may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in respect of such Restricted Shares.

 

(2)            With respect to Restricted Share Units, at the expiration of the Restricted Period, share certificates in respect of the Common Shares underlying such Restricted Share Units may, in the Company’s sole discretion, be delivered to the Participant, or his legal representative, in a number equal to the number of Common Shares underlying the Restricted Share Units.

 

(3)            Notwithstanding anything in the Plan to the contrary, any Restricted Shares or Restricted Share Units (at the expiration of the Restricted Period) may, in the Company’s sole discretion, be issued in uncertificated form.

(4)            Further, notwithstanding anything in the Plan to the contrary, with respect to Restricted Share Units, at the expiration of the Restricted Period, Shares shall promptly be issued to the Participant, unless otherwise deferred in accordance with procedures established by the Company in accordance with Section 409A of the Code, and such issuance shall be made no later than March 15 ^th of the calendar year following the year of vesting or within other such period as is required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code.

 

(c)            Restrictions and Conditions .  The Restricted Shares and Restricted Share Units granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject to Section 409A of the Code where applicable, thereafter:

 

(1)            The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain performance related goals, the Participant’s termination of employment or service as an officer, director, independent contractor or consultant to the Company or any Affiliate thereof, or the Participant’s death or Disability; provided , however , that this sentence shall not apply to any Award which is intended to qualify as performance-based compensation under Section 162(m) of the Code.  Notwithstanding the foregoing, upon a Change in Control, the outstanding Awards shall be subject to Section 14 hereof.

 

(2)            Except as provided in the applicable Award Agreement, the Participant shall generally have the rights of a shareholder of the Company with respect to Restricted Shares during the Restricted Period, including the right to vote such shares and to receive any dividends declared with respect to such shares.  The Participant shall generally not have the rights of a shareholder with respect to Common Shares subject to Restricted Share Units during the Restricted Period; provided , however , that, subject to Section 409A of the Code, an amount equal to dividends declared during the Restricted Period with respect to the number of Common Shares covered by Restricted Share Units may, to the extent set forth in an Award Agreement, be provided to the Participant. Any dividend or dividend equivalent awarded hereunder shall be subject to the same restrictions, conditions and risks of forfeiture as the underlying Award.

 

(d)            Termination of Employment or Service; Other Change in Employment Status .

 

(1)            The rights of Participants granted Restricted Shares or Restricted Share Units upon termination of employment or service with the Company and all Affiliates thereof for any reason during the Restricted Period shall be set forth in the Award Agreement.

 

(2)            Restricted Shares and Restricted Share Units shall be affected, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status of a Participant, in the discretion of the Administrator.

Section 10.            Other Share-Based Awards.

 

Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Shares, including but not limited to dividend equivalents, may be granted either alone or in addition to other Awards (other than in connection with Options or Share Appreciation Rights) under the Plan. Any dividend or dividend equivalent awarded hereunder shall be subject to the same restrictions, conditions and risks of forfeiture as the underlying Award.  Subject to the provisions of the Plan, the Administrator shall have sole and complete authority to determine the individuals to whom and the time or times at which such Other Share-Based Awards shall be granted, the number of Common Shares to be granted pursuant to such Other Share-Based Awards, or the manner in which such Other Share-Based Awards shall be settled (e.g., in Common Shares, cash or other property), or the conditions to the vesting and/or payment or settlement of such Other Share-Based Awards (which may include, but not be limited to, achievement of performance criteria) and all other terms and conditions of such Other Share-Based Awards.

 

Section 11.            Share Bonuses.

 

In the event that the Administrator grants a Share Bonus, the Shares constituting such Share Bonus shall, as determined by the Administrator, be evidenced in uncertificated form or by a book entry record or a certificate issued in the name of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such Share Bonus is payable.

Section 12.            Cash Awards .

The Administrator may grant awards that are payable solely in cash, as deemed by the Administrator to be consistent with the purposes of the Plan, and such Cash Awards shall be subject to the terms, conditions, restrictions and limitations determined by the Administrator, in its sole discretion, from time to time.  Cash Awards may be granted with value and payment contingent upon the achievement of performance criteria.

Section 13.            Special Provisions Regarding Certain Awards.

The Administrator may make Awards hereunder to Covered Employees (or to individuals whom the Administrator believes may become Covered Employees) that are intended to qualify as performance-based compensation under Section 162(m) of the Code. The exercisability and/or payment of such Awards may, to the extent required to qualify as performance-based compensation under Section 162(m) of the Code, be subject to the achievement of performance criteria based upon one or more Performance Goals and to certification of such achievement in writing by the Committee. The Committee may in its discretion reduce the amount of such Awards that would otherwise become exercisable and/or payable upon achievement of such Performance Goals and the certification in writing of such achievement, but may not increase such amounts. Any such Performance Goals shall be established in writing by the Committee not later than the time period prescribed under Section 162(m) of the Code and the regulations thereunder. Notwithstanding anything set forth in the Plan to contrary, all provisions of such Awards which are intended to qualify as performance-based compensation under Section 162(m) of the Code shall be construed in a manner to so comply .

Section 14.            Change in Control Provisions.

Unless otherwise determined by the Administrator and evidenced in an Award Agreement, the following provisions shall apply to Awards granted hereunder.

(a)            Assumption/Substitution of Awards .  With respect to each outstanding Award that is assumed or substituted in connection with a Change in Control, in the event that (1) a Change in Control occurs and (2) during the twelve (12) month period following such Change in Control a Participant’s employment or service is terminated without Cause by the Company, its successor or any Affiliate or the Participant resigns from employment or service from the Company, its successor or any Affiliate with Good Reason, then:

 

(1)            Any and all Options and Stock Appreciation Rights shall become fully vested and exercisable;

 

(2)            Any and all Restricted Shares, Restricted Share Units, Share Bonuses, Other Share-Based Awards or Cash Awards shall become fully vested and all restrictions, payment conditions and forfeiture conditions applicable to each such Award shall lapse and be settled as soon as reasonable practicable, but in no event later than ten (10) days following such termination of employment;

 

(3)            Any Performance Goals imposed with respect to Awards shall be deemed to be achieved at target levels; and

 

(4)            Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the Company determines any Award constitutes deferred compensation subject to Section 409A of the Code, then the vesting of such Award shall be accelerated as of the date of termination of employment, but the Company shall pay such Award on its scheduled payment date (which may be a “separation from service” within the meaning of Section 409A of the Code), but in no event more than 90 days following the scheduled payment date.

 

(b)            Non-Assumption/Substitution of Awards .  With respect to each outstanding Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control:

 

(1)            Any and all Options and Stock Appreciation Rights shall become fully vested and exercisable;

 

(2)            Any and all Restricted Shares, Restricted Share Units, Share Bonuses, Other Share-Based Awards or Cash Awards shall become fully vested and all restrictions, payment conditions and forfeiture conditions applicable to each such Award shall lapse and be settled as soon as reasonable practicable, but in no event later than ten (10) days following the Change in Control;

(3)            Any Performance Goals imposed with respect to Awards shall be deemed to be achieved at target levels; and

 

(4)            Notwithstanding anything to the contrary, if the Company determines any Award constitutes deferred compensation subject to Section 409A of the Code, then to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the vesting of such Award shall be accelerated as of the effective date of the Change in Control in accordance with this Section 14, but the Company shall pay such Award on its scheduled payment date, but in no event more than 90 days following the scheduled payment date.

 

(c)            Assumed/Substituted . For purposes of this Section 14, an Award shall be considered assumed or substituted for if, following the Change in Control, the Award is of comparable value and remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control except that, if an Award that relates to Shares shall instead relate to the common stock of the acquiring or ultimate parent entity.

 

(d)            Cashout of Awards . Notwithstanding any other provision of the Plan, in the event of a Change in Control, except as would otherwise result in adverse tax consequences under Section 409A of the Code, the Administrator may, in its discretion, provide that each Award shall, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess (if any) of the consideration paid per Share in the Change in Control over the exercise or purchase price per Share subject to the Award multiplied by (ii) the number of Shares granted under the Award.  Without limiting the generality of the foregoing, in the event that the consideration paid per Share in the Change in Control is greater than or equal to the exercise or purchase price per Share subject to the Award, then the Administrator may, in its discretion, cancel such Award without any consideration upon the occurrence of a Change in Control.

 

Section 15.            Amendment and Termination.

 

The Board may amend, alter or terminate the Plan, but no amendment, alteration, or termination shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant’s consent.  The Board shall obtain approval of the Company’s shareholders for any amendment to the Plan that would require such approval in order to satisfy the requirements of Section 162(m) of the Code (but only to the extent necessary and desirable to maintain qualification of Awards as performance-based compensation under Section 162(m) of the Code), any rules of the stock exchange on which the Common Shares are traded or other applicable law.  The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 5 of the Plan and the immediately preceding sentence, no such amendment shall impair the rights of any Participant without his or her consent.

Section 16.            Unfunded Status of Plan.

 

The Plan is intended to constitute an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.

 

Section 17.            Withholding Taxes.

 

Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for purposes of applicable taxes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, such applicable taxes required by law to be withheld with respect to the Award.  The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant.  Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any applicable withholding tax requirements related thereto.  Whenever Shares or property other than cash are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any related taxes to be withheld and applied to the tax obligations; provided , that, with the approval of the Administrator, a Participant may satisfy the foregoing requirement by either (i) electing to have the Company withhold from delivery of Shares or other property, as applicable, or (ii) by delivering already owned unrestricted Common Shares, in each case, up to the employee’s minimum required tax withholding rate or such other rate that will not cause adverse accounting consequences for the Company and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity; provided that to the extent required to pay up newly issued Shares to the Participant, the claim of the Participant to receive Shares otherwise issuable will be set-off against the claim of the Company to pay up newly issued Shares.  Such already owned and unrestricted Common Shares shall be valued at their Fair Market Value on the date on which the amount of tax to be withheld is determined and any fractional share amounts resulting therefrom shall be settled in cash.  Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an award.  The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Award.

 

Section 18.            Transfer of Awards.

 

Until such time as the Awards are fully vested and/or exercisable in accordance with the Plan or an Award Agreement, no purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to do any of the foregoing (each, a “ Transfer ”) by any holder thereof in violation of the provisions of the Plan or an Award Agreement will be valid.  Any purported Transfer of an Award or any economic benefit or interest therein in violation of the Plan or an Award Agreement shall be null and void ab initio , and shall not create any obligation or liability of the Company, and any Person purportedly acquiring any Award or any economic benefit or interest therein transferred in violation of the Plan or an Award Agreement shall not be entitled to be recognized as a holder of any Common Shares or other property underlying such Award.  Notwithstanding the foregoing, the Administrator may, in its sole discretion, permit (on such terms, conditions and limitations as it may establish) Awards (other than ISOs) and/or Shares issued in connection with an Award that are subject to restrictions on transferability, to be transferred to a member of a Participant’s immediate family or to a trust or similar vehicle for the benefit of a Participant’s immediate family members. Unless otherwise determined by the Administrator, an Option or Share Appreciation Right may be exercised, during the lifetime of the Participant, only by the Participant or, during any period during which the Participant is under a legal disability, by the Participant’s guardian or legal representative.

Section 19.            Continued Employment or Service; Termination of Employment or Service

 

(a)            The adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with the Company or any Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or any Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time.  The Plan and the Award Agreements thereunder do not form part of a Participant’s contract of employment.

 

(b)            Except as otherwise expressly provided for by the Company or as required by applicable law, for purposes of Awards granted under the Plan, a Participant’s date of termination of employment or service shall be the last day on which the Participant performs services for the Company and any of its Affiliates (other than as a result of a leave approved by the Participant`s employer or authorized under applicable law), irrespective of any period of statutory, contractual or reasonable notice of termination of employment or any period of suspension, garden leave, salary continuance or deemed employment, whether such date is selected unilaterally by the employer or with the agreement of the Participant, and whether or not advance notice is given.

 

Section 20.            Effective Date.

 

The Plan became effective upon adoption by the Board on June 3, 2016 (the “ Effective Date ”).

Section 21.            Term of Plan.

 

No award shall be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date, but awards theretofore granted may extend beyond that date.

Section 22.            Securities Matters and Regulations.

(a)            Notwithstanding anything herein to the contrary, the obligation of the Company to sell or deliver Common Shares with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. The Administrator may require, as a condition of the issuance and delivery of certificates evidencing Common Shares pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator, in its sole discretion, deems necessary or advisable.

 

(b)            Each Award is subject to the requirement that, if at any time the Administrator determines that the listing, registration or qualification of Common Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Common Shares, no such Award shall be granted or payment made or Common Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.

(c)            In the event that the disposition of Common Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act and is not otherwise exempt from such registration, such Common Shares shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Administrator may require a Participant receiving Common Shares pursuant to the Plan, as a condition precedent to receipt of such Common Shares, to represent to the Company in writing that the Common Shares acquired by such Participant is acquired for investment only and not with a view to distribution.

 

Section 23.            Notification of Election Under Section 83(b) of the Code.

If any Participant shall, in connection with the acquisition of Common Shares under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify the Company of such election within ten (10) days after filing notice of the election with the Internal Revenue Service.

Section 24.            No Fractional Shares.

No fractional Common Shares shall be issued or delivered pursuant to the Plan. The Administrator shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

Section 25.            Beneficiary.

A Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.

 

Section 26.            Paperless Administration.

In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

Section 27.            Severability.

If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.

Section 28.            Clawback.

Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement). In addition, all Awards made under the Plan shall be subject to any clawback or recoupment policies of the Company or its Subsidiaries, as in effect from time to time.

Section 29.            Section 409A of the Code.

The Plan as well as payments and benefits under the Plan are intended to be exempt from, or to the extent subject thereto, to comply with Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted in accordance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Participant shall not be considered to have terminated employment or service with the Company for purposes of the Plan and no payment shall be due to the Participant under the Plan or any Award until the Participant would be considered to have incurred a “separation from service” from the Company and its Affiliates within the meaning of Section 409A of the Code. Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent that any Awards (or any other amounts payable under any plan, program or arrangement of the Company or any of its Affiliates) are payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest charges imposed under Section 409A of the Code, the settlement and payment of such awards (or other amounts) shall instead be made on the first business day after the date that is six (6) months following such separation from service (or death, if earlier). Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code.  The Company makes no representation that any or all of the payments or benefits described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment. The Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A.

Section 30.            Governing Law.

The Plan and all determinations made and actions taken pursuant thereto shall be governed by the laws of the State of New York without giving effect to the conflict of laws principles thereof.

Section 31.            Data Protection and FATCA.

(a)            By participating in the Plan, Participants give their consent to the holding and processing of data relating to them (including personal data) in relation to and as a consequence of their Awards and to the disclosure of data (even outside the European Union, if applicable) to their employer, the Company or its Subsidiaries, to any possible purchaser of their employer or its business or of the Company or its business and its advisers in relation to this Plan for the purposes of administering the Plan, due diligence and compliance with applicable law.

 

(b)            By participating in the Plan, each Participant agrees to give all such assistance and representations and supply or procure to be supplied (including by way of updates) all such information and execute and deliver (or procure the execution and delivery of) all such documents that the Company requests in writing for the purpose of enabling the Company or any of its Subsidiaries (or any external administrator) to comply with the Foreign Account Tax Compliance Act ("FATCA"), any exchange of information agreement ("IGA") or any similar, equivalent or related applicable laws, rules or regulations in any jurisdiction.  Each Participant further agrees and authorizes the Company or any of its Subsidiaries to disclose such information to any governmental authorities if it is required to be disclosed pursuant to FATCA, any IGA or any similar, equivalent or related applicable laws, rules or regulations.