EXHIBIT 4.1
GPO Plus Inc.
(the “Company”)
2020 INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of the GPO Plus Inc. 2020 Incentive Plan is to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company’s stockholders.
SECTION 2. DEFINITIONS
Certain capitalized terms used in the Plan have the meanings set forth in Appendix A.
SECTION 3. ADMINISTRATION
3.1 Administration of the Plan
The Plan shall be administered by the Board or its Compensation Committee. The Compensation Committee shall be composed of two or more directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission. As used in this Plan, the term “Compensation Committee” shall be construed as if followed by the words “(if any)”; nothing in this Plan requires the Board to have a Compensation Committee.
3.2 Delegation
Notwithstanding the foregoing, the Board may delegate responsibility for administering the Plan with respect to designated classes of Eligible Persons to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate, except with respect to Awards to any Participants who are then subject to Section 16 of the Exchange Act. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board or the Compensation Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person then subject to Section 16 of the Exchange Act. All references in the Plan to the “Committee” shall be, as applicable, to the Board, the Compensation Committee or any other committee or any officer to whom the Board or the Compensation Committee has delegated authority to administer the Plan.
3.3 Administration and Interpretation by Committee
(a) Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to
(i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan;
(ii) determine the type or types of Awards to be granted to each Participant under the Plan;
(iii) determine the number of shares of Common Stock, if any, to be covered by each Award granted under the Plan;
(iv) determine the terms and conditions of any Award granted under the Plan;
(v) approve the forms of notice or agreement for use under the Plan;
(vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended;
(vii) determine whether, to what extent and under what circumstances cash, shares of Common Stock, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant;
(viii) interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan;
(ix) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan;
(x) delegate ministerial duties to such of the Company’s employees as it so determines; and
(xi) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.
(b) The Committee shall have the right, without stockholder approval, to cancel or amend outstanding Options or SARs for the purpose of repricing, replacing or regranting such Options or SARs with Options or SARs that have a purchase or grant price that is less than the purchase or grant price for the original Options or SARs except in connection with adjustments provided in Section 15.
(c) The effect on the vesting of an Award of a Company-approved leave of absence or a Participant’s working less than full-time shall be determined by the Company’s chief human resources officer or other person performing that function or, with respect to directors or executive officers, by the Committee, whose determination shall be final.
(d) Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any stockholder and any Eligible Person. A majority of the members of the Committee may determine its actions.
SECTION 4. SHARES SUBJECT TO THE PLAN
4.1 Authorized Number of Shares
Subject to adjustment from time to time as provided in subsection 15.1, a maximum of 2.2 million shares of Common Stock shall be available for issuance under the Plan. Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.
4.2 Share Usage
(a) Shares of Common Stock covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant. If any Award lapses, expires, terminates or is canceled prior to the issuance of shares thereunder or if shares of Common Stock are issued under the Plan to a Participant and thereafter are forfeited to or otherwise reacquired by the Company, the shares subject to such Awards and the forfeited or reacquired shares shall again be available for issuance under the Plan. Any shares of Common Stock
(i) tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award, or
(ii) covered by an Award that is settled in cash, or in a manner such that some or all of the shares of Common Stock covered by the Award are not issued,
shall be available for Awards under the Plan. The number of shares of Common Stock available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Common Stock or credited as additional shares of Common Stock subject or paid with respect to an Award.
(b) The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.
(c) Notwithstanding anything in the Plan to the contrary, the Committee may grant Substitute Awards under the Plan. Substitute Awards shall not reduce the number of shares authorized for issuance under the Plan. In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in contemplation of such acquisition or combination, then, to the extent determined by the Committee, the shares available for grant pursuant to the terms of such preexisting plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to holders of common stock of the entities that are parties to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or a Related Company prior to such acquisition or combination. In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Board and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants.
(d) Notwithstanding the other provisions in this subsection, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate share number stated in subsection 4.1, subject to adjustment as provided in subsection 15.1.
SECTION 5. ELIGIBILITY
An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time selects. An Award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that:
(a) are not in connection with the offer and sale of the Company’s securities in a capital-raising transaction, and
(b) do not directly or indirectly promote or maintain a market for the Company’s securities.
SECTION 6. AWARDS
6.1 Form, Grant and Settlement of Awards
The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone or in addition to or in tandem with any other type of Award. Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine.
6.2 Evidence of Awards
Awards granted under the Plan shall be evidenced by a written, including an electronic, notice or agreement that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.
6.3 Deferrals
The Committee may permit or require a Participant to defer receipt of the payment of any Award if and to the extent set forth in the instrument evidencing the Award at the time of grant. If any such deferral election is permitted or required, the Committee, in its sole discretion, shall establish rules and procedures for such payment deferrals, which may include the grant of additional Awards or provisions for the payment or crediting of interest or dividend equivalents, including converting such credits to deferred stock unit equivalents; provided, however, that the terms of any deferrals under this subsection shall comply with all applicable law, rules and regulations, including, without limitation, Section 409A of the Code.
6.4 Dividends and Distributions
Participants may, if and to the extent the Committee so determines and sets forth in the instrument evidencing the Award at the time of grant, be credited with dividends paid with respect to shares of Common Stock underlying an Award in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units.
SECTION 7. OPTIONS
7.1 Grant of Options
The Committee may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.
7.2 Option Exercise Price
The exercise price for shares purchased under an Option shall be at least 100% of the Fair Market Value on the Grant Date (and shall not be less than the minimum exercise price required by Section 422 of the Code with respect to Incentive Stock Options), except in the case of Substitute Awards.
7.3 Term of Options
Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of a Nonqualified Stock Option shall be ten years from the Grant Date.
7.4 Exercise of Options
The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time.
To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery to or as directed or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, setting forth the number of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in subsection 7.5 and Section 13. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee.
7.5 Payment of Exercise Price
The exercise price for shares purchased under an Option shall be paid in full to the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid before the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include:
(a) cash;
(b) check or wire transfer;
(c) having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;
(d) tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common Stock owned by the Participant that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;
(e) so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by law, delivery of a properly executed exercise notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or
(f) such other consideration as the Committee may permit.
7.6 Effect of Termination of Service
The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time. If not so established in the instrument evidencing the Option, the Option shall be exercisable according to the following terms and conditions, which may be waived or modified by the Committee at any time:
(a) Any portion of an Option that is not vested and exercisable on the date of a Participant’s Termination of Service shall expire on such date.
(b) Any portion of an Option that is vested and exercisable on the date of a Participant’s Termination of Service shall expire on the earliest to occur of:
(i) if the Participant’s Termination of Service occurs for reasons other than Cause, Retirement, Disability or death, the date that is three months after such Termination of Service;
(ii) if the Participant’s Termination of Service occurs by reason of Retirement, Disability or death, the one-year anniversary of such Termination of Service; and
(iii) the Option Expiration Date.
Notwithstanding the foregoing, if a Participant dies after his or her Termination of Service but while an Option is otherwise exercisable, the portion of the Option that is vested and exercisable on the date of such Termination of Service shall expire upon the earlier to occur of (y) the Option Expiration Date and (z) the one-year anniversary of the date of death, unless the Committee determines otherwise. Also notwithstanding the foregoing, in case a Participant’s Termination of Service occurs for Cause, all Options granted to the Participant shall automatically expire upon first notification to the Participant of such termination, unless the Committee determines otherwise. If a Participant’s employment or service relationship with the Company is suspended pending an investigation of whether the Participant shall be terminated for Cause, all the Participant’s rights under any Option shall likewise be suspended during the period of investigation. If any facts that would constitute termination for Cause are discovered after a Participant’s Termination of Service, any Option then held by the Participant may be immediately terminated by the Committee, in its sole discretion.
(c) If the exercise of the Option following a Participant’s Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate either the registration requirements under the Securities Act or the Company’s insider trading policy, then the Option shall remain exercisable until the earlier of (i) the Option Expiration Date and (ii) the expiration of a period of three months (or such longer period of time as determined by the Committee in its sole discretion) after the Participant’s Termination of Service during which the exercise of the Option would not be in violation of such Securities Act or insider trading policy requirements.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
Notwithstanding any other provisions of the Plan, the terms and conditions of any Incentive Stock Options shall also comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder, including, to the extent required thereunder, the following:
8.1 Dollar Limitation
To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which a Participant’s Incentive Stock Options become exercisable for the first time during any calendar year (under the Plan and all other stock option plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event the Participant holds two or more such Options that become exercisable for the first time in the same calendar year, such limitation shall be applied on the basis of the order in which such Options are granted.
8.2 Eligible Employees.
Individuals who are not employees of the Company or one of its parent or subsidiary corporations may not be granted Incentive Stock Options, except for qualified Independent Contractors which may be classed as non-qualified stock options
8.3 Exercise Price
The exercise price of an Incentive Stock Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, and in the case of an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a “Ten Percent Stockholder”), shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date. The determination of more than 10% ownership shall be made in accordance with Section 422 of the Code.
8.4 Option Term
Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Incentive Stock Option shall not exceed ten years, and in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, shall not exceed five years.
8.5 Exercisability
An Option designated as an Incentive Stock Option shall cease to qualify for favorable tax treatment as an Incentive Stock Option to the extent it is exercised (if permitted by the terms of the Option) (a) more than three months after the date of a Participant’s Termination of Service if termination was for reasons other than death or disability, (b) more than one year after the date of a Participant’s Termination of Service if termination was by reason of disability, or (c) after the Participant has been on leave of absence for more than 90 days, unless the Participant’s reemployment rights are guaranteed by statute or contract.
8.6 Taxation of Incentive Stock Options
In order to obtain certain tax benefits afforded to Incentive Stock Options under Section 422 of the Code, the Participant must hold the shares acquired upon the exercise of an Incentive Stock Option for two years after the Grant Date and one year after the date of exercise.
A Participant may be subject to the alternative minimum tax at the time of exercise of an Incentive Stock Option. The Participant shall give the Company prompt notice of any disposition of shares acquired on the exercise of an Incentive Stock Option prior to the expiration of such holding periods.
8.7 Code Definitions
For the purposes of this Section, “disability” “parent corporation” and “subsidiary corporation” shall have the meanings attributed to those terms for purposes of Section 422 of the Code.
SECTION 9. STOCK APPRECIATION RIGHTS
9.1 Grant of Stock Appreciation Rights
The Committee may grant Stock Appreciation Rights to Participants at any time on such terms and conditions as the Committee shall determine in its sole discretion. An SAR may be granted in tandem with an Option or alone (“freestanding”). The grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in subsection 7.2. An SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be ten years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.
9.2 Payment of SAR Amount
Upon the exercise of an SAR, a Participant shall be entitled to receive payment in an amount determined by multiplying:
(a) the difference between the Fair Market Value of the Common Stock on the date of exercise over the grant price of the SAR by
(b) the number of shares with respect to which the SAR is exercised.
At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in shares, in some combination thereof or in any other manner approved by the Committee in its sole discretion.
9.3 Waiver of Restrictions
Subject to subsection 18.5, the Committee, in its sole discretion, may waive any other terms, conditions or restrictions on any SAR under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.
SECTION 10. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS
10.1 Grant of Stock Awards, Restricted Stock and Stock Units
The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award.
10.2 Vesting of Restricted Stock and Stock Units
Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant’s release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee, and subject to the provisions of Section 13:
(a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and
(b) Stock Units shall be paid in shares of Common Stock or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock.
Any fractional shares subject to such Awards shall be paid to the Participant in cash.
10.3 Waiver of Restrictions
Subject to subsection 18.5, the Committee, in its sole discretion, may waive the repurchase or forfeiture period and any other terms, conditions or restrictions on any Restricted Stock or Stock Unit under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.
SECTION 11. PERFORMANCE AWARDS
11.1 Performance Shares
The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit valued by reference to a designated number of shares of Common Stock, the value of which may be paid to the Participant by delivery of shares of Common Stock or, if set forth in the instrument evidencing the Award, of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Subject to subsection 18.5, the amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.
11.2 Performance Units
The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a unit valued by reference to a designated amount of property other than shares of Common Stock, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Subject to subsection 18.5, the amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.
SECTION 12. OTHER STOCK OR CASH-BASED AWARDS
Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan.
SECTION 13. WITHHOLDING
The Company may require the Participant to pay to the Company the amount of:
(a) any taxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”); and
(b) any amounts due from the Participant to the Company or to any Related Company (“other obligations”).
The Company shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan until such tax withholding obligations and other obligations are satisfied. The Committee may permit or require a Participant to satisfy all or part of the Participant’s tax withholding obligations and other obligations by:
(i) paying cash to the Company,
(ii) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant,
(iii) having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, or
(iv) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations.
The value of the shares so withheld or tendered may not exceed the employer’s minimum required tax withholding rate.
SECTION 14. ASSIGNABILITY
No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except to the extent the Participant designates one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant’s death. During a Participant’s lifetime, an Award may be exercised only by the Participant. Notwithstanding the foregoing and to the extent permitted by Section 422 of the Code, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify.
SECTION 15. ADJUSTMENTS
15.1 Adjustment of Shares
In the event, at any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company’s corporate or capital structure results in
(a) the outstanding shares of Common Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of the Company or
(b) new, different or additional securities of the Company or any other company being received by the holders of shares of Common Stock,
then the Committee shall make proportional adjustments in
(i) the maximum number and kind of securities available for issuance under the Plan;
(ii) the maximum number and kind of securities issuable as Incentive Stock Options as set forth in subsection 4.2; and
(iii) the number and kind of securities that are subject to any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor.
The determination by the Committee, as to the terms of any of the foregoing adjustments shall be conclusive and binding. Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the foregoing, a dissolution or liquidation of the Company or a Company Transaction shall not be governed by this subsection but shall be governed by subsections 15.2 and 15.3, respectively.
15.2 Dissolution or Liquidation
To the extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. To the extent a vesting condition, forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.
15.3 Change in Control
Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Change in Control:
(a) All outstanding Awards, other than Performance Shares and Performance Units, shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Change in Control; provided, however, that with respect to a Change in Control that is a Company Transaction, such Awards shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company. For the purposes of this paragraph, an Award shall be considered converted, assumed or replaced by the Successor Company if following the Company Transaction the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Company Transaction, the consideration (whether stock, cash or other securities or property) received in the Company Transaction by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Company Transaction is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Option, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per share consideration received by holders of Common Stock in the Company Transaction. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.
(b) All Performance Shares or Performance Units earned and outstanding as of the date the Change in Control is determined to have occurred shall be payable in full at the target level in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any remaining Performance Shares or Performance Units (including any applicable performance period) for which the payout level has not been determined shall be prorated at the target payout level up to and including the date of such Change in Control and shall be payable in full at the target level in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any existing deferrals or other restrictions not waived by the Committee in its sole discretion shall remain in effect.
(c) Notwithstanding paragraphs 15.3(a) and 15.3(b), the Committee, in its sole discretion, may (unless otherwise provided in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company) instead provide in the event of a Change in Control that is a Company Transaction
(i) for adjustments to the Plan and outstanding Awards as contemplated by subsection 15.1 or
(ii) that a Participant’s outstanding Awards shall terminate upon or immediately prior to such Company Transaction and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per share consideration received by holders of Common Stock in the Company Transaction, or, if the Company Transaction is a sale of assets or otherwise does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the number of shares of Common Stock subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.
15.4 Further Adjustment of Awards
Subject to subsections 15.2 and 15.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation, dissolution or change in control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation, dissolution or change in control that is the reason for such action.
15.5 No Limitations
The grant of Awards shall in no way affect the Company’s right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
15.6 Fractional Shares
In the event of any adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment.
15.7 Section 409A of the Code
Notwithstanding anything in this Plan to the contrary,
(a) any adjustments made pursuant to this Section 15 or any other amendments to Awards that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code and
(b) any adjustments made pursuant to this Section 15 or any other amendments to Awards that are not considered “deferred compensation” subject to Section 409A of the Code
shall be made in such a manner as to ensure that after such adjustment or amendment the Awards either
(i) continue not to be subject to Section 409A of the Code or
(ii) comply with the requirements of Section 409A of the Code.
SECTION 16. MARKET STANDOFF
In the event of an underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, no person may sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose of or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to any shares issued pursuant to an Award granted under the Plan without the prior written consent of the Company or its underwriters. Such limitations shall be in effect for such period of time as may be requested by the Company or such underwriters; provided, however, that in no event shall such period exceed
(a) 180 days after the effective date of the registration statement for such public offering or
(b) such longer period requested by the underwriter as is necessary to comply with regulatory restrictions on the publication of research reports (including, but not limited to, NYSE Rule 472 or NASD Conduct Rule 2711).
In the event of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the Company’s outstanding Common Stock effected as a class without the Company’s receipt of consideration, any new, substituted or additional securities distributed with respect to any shares issued as or pursuant to an Award under the Plan shall be immediately subject to the provisions of this Section 16, to the same extent such shares are at such time covered by such provisions. In order to enforce the limitations of this Section 16, the Company may impose stop-transfer instructions with respect to the purchased shares until the end of the applicable standoff period.
SECTION 17. AMENDMENT AND TERMINATION
17.1 Amendment, Suspension or Termination
The Board or the Compensation Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires stockholder approval may be made only by the Board and not by the Compensation Committee. Subject to subsection 17.3, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.
17.2 Term of the Plan
Unless sooner terminated as provided herein, the Plan shall terminate 10 years from the Effective Date. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than 10 years after the later of:
(a) the adoption of the Plan by the Board and
(b) the adoption by the Board of any amendment to the Plan that constitutes the adoption of a new plan for purposes of Section 422 of the Code.
17.3 Consent of Participant
The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant’s consent, materially adversely affect any rights under any Award theretofore granted to a Participant under the Plan. Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a “modification” that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Section 15 shall not be subject to these restrictions.
SECTION 18. GENERAL
18.1 No Individual Rights
No individual or Eligible Person shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Eligible Persons or Participants under the Plan. Furthermore, nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant’s employment or other relationship at any time, with or without cause.
18.2 Issuance of Shares
Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company’s counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity. The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made. As a condition to the exercise of an Option or any other receipt of Common Stock pursuant to an Award under the Plan, the Company may require:
(a) the Participant to represent and warrant at the time of any such exercise or receipt that such shares are being purchased or received only for the Participant’s own account and without any present intention to sell or distribute such shares and
(b) such other action or agreement by the Participant as may from time to time be necessary to comply with the federal, state and foreign securities laws.
At the option of the Company, a stop-transfer order against any such shares may be placed on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred, unless an opinion of counsel (satisfactory to the Company, in its sole discretion) is provided stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration. The Committee may also require the Participant to execute and deliver to the Company a purchase agreement or such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to the shares. To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.
18.3 Indemnification
Each person who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person’s own behalf. This duty to indemnify shall not apply to the extent that:
(a) such loss, cost, liability or expense is a result of such person’s own willful misconduct or
(b) such indemnification is expressly prohibited by statute.
The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company’s certificate of incorporation or bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.
18.4 No Rights as a Stockholder
Unless otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.
18.5 Compliance with Laws and Regulations
In interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an “incentive stock option” within the meaning of Section 422 of the Code. Any Award granted pursuant to the Plan is intended to comply with the requirements of Section 409A of the Code, including any applicable regulations and guidance issued thereunder, and including transition guidance, to the extent Section 409A of the Code is applicable thereto, and the terms of the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with this intention to the extent the Committee deems necessary or advisable to comply with Section 409A of the Code and any official guidance issued thereunder. Any payment or distribution that is to be made under the Plan (or pursuant to an Award under the Plan) to a Participant who is a “specified employee” of the Company within the meaning of that term under Section 409A of the Code and as determined by the Committee, on account of a “separation from service” within the meaning of that term under Section 409A of the Code, may not be made before the date which is six months after the date of such “separation from service” unless the payment or distribution is exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. Notwithstanding any other provision in the Plan, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Committee makes no representations that Awards granted under the Plan shall 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 Awards granted under the Plan.
18.6 Participants in Other Countries or Jurisdictions
Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Related Company may operate or have employees to ensure the viability of the benefits from Awards granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws or regulations and meet the objectives of the Plan.
18.7 No Trust or Fund
The Plan is intended to constitute an “unfunded” plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.
18.8 Successors
All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.
18.9 Severability
If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.
18.10 Choice of Law and Venue
The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Nevada without giving effect to principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of Nevada.
18.11 Legal Requirements
The granting of Awards and the issuance of shares of Common Stock under the Plan are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
SECTION 19. EFFECTIVE DATE
The effective date (the “Effective Date”) is the date on which the Plan is adopted by the Board. If the stockholders of the Company do not approve the Plan within 12 months after the Board’s adoption of the Plan, any Incentive Stock Options granted under the Plan will be treated as Nonqualified Stock Options.
APPENDIX A
DEFINITIONS
“Acquired Entity” means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.
“Award” means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, or other incentive payable in shares of Common Stock as may be designated by the Committee from time to time.
“Board” means the Board of Directors of the Company.
“Cause” means, unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by law (except minor violations), in each case as determined by the Company’s chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Committee, whose determination shall be conclusive and binding.
“Change in Control” means, unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, the occurrence of any of the following events:
(a) An acquisition by any individual, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either:
(i) the then outstanding shares of Common Stock of the Company (the “Outstanding Common Stock”) or
(ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”);
excluding, however, the following:
(iii) any acquisition directly from the Company, other than an acquisition by virtue of the exercise, exchange or conversion of any Convertible Securities unless such securities were themselves acquired directly from the Company,
(iv) any acquisition by the Company;
(v) any acquisition by any Person pursuant to a transaction which complies with clauses (b)(i), (b)(ii) and (b)(iii) of the definition of Company Transaction; or
(b) Within any period of 24 consecutive months, a change in the composition of the Board such that the individuals who, immediately prior to such period, constituted the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes hereof, that any individual who becomes a member of the Board during such period, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board shall not be so considered as a member of the Incumbent Board; or
(c) A Company Transaction; or
(d) The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, other than to an entity pursuant to a transaction which would comply with clauses (1), (2) and (3) of the definition of “Company Transaction”, assuming for this purpose that such transaction were a Company Transaction.
For purposes of the definition of “Change of Control” and “Company Transaction”, a series of transactions undertaken with a common purpose shall be treated as a single transaction that begins at the consummation of the first transaction in the series and ends at the consummation of the last transaction in the series.
“Company Transaction” means the consummation of
(a) a reorganization, merger or consolidation of the Company or
(b) the sale or other disposition of all or substantially all of the assets of the Company and its direct and indirect subsidiaries taken as a whole, except in each case a transaction pursuant to which
(i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such transaction (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets, either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such transaction, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be,
(ii) no person (other than the Company) will beneficially own, directly or indirectly, more than twenty-five percent (25%) of, respectively, the outstanding shares of common stock of the Company resulting from such transaction or the combined voting power of the outstanding voting securities of such Company entitled to vote generally in the election of directors, except to the extent that such ownership existed with respect to the Company prior to the transaction, and
(iii) individuals who were members of the Board immediately prior to the approval by the stockholders of the Company of such transaction will constitute at least a majority of the members of the board of directors of the Company resulting from such transaction.
“Convertible Security” means any security convertible into or exchangeable for shares of Common Stock of the Company, or any option, warrant or other right to acquire shares of Common Stock of the Company.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Committee” has the meaning set forth in subsection 3.2.
“Common Stock” means the common stock of the Company.
“Company” means GPO Plus Inc., a Nevada corporation
“Compensation Committee” means the Compensation Committee (if any) of the Board.
“Disability” means, unless otherwise defined by the Committee for purposes of the Plan or in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, a mental or physical impairment of the Participant that is expected to result in death or that has lasted or is expected to last for a continuous period of 12 months or more and that causes the Participant to be unable to perform his or her material duties for the Company or a Related Company and to be engaged in any substantial gainful activity, in each case as determined by the Company’s chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Committee, whose determination shall be conclusive and binding.
“Effective Date” has the meaning set forth in Section 19.
“Eligible Person” means any person eligible to receive an Award as set forth in Section 5.
“Entity” means any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act).
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Fair Market Value” means the closing price for the Common Stock on any given date during regular trading, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.
“Grant Date” means the later of:
(c) the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee and
(d) the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.
“Incentive Stock Option” means an Option granted with the intention that it qualify as an “incentive stock option” as that term is defined for purposes of Section 422 of the Code or any successor provision.
“including”, “include”, “includes” and words of similar import shall be construed broadly as if followed by the phrase “without limitation”.
“Nonqualified Stock Option” means an Option other than an Incentive Stock Option.
“Option” means a right to purchase Common Stock granted under Section 7. .
“Option Expiration Date” means the last day of the maximum term of an Option.
“Outstanding Company Common Stock” has the meaning set forth in the definition of “Change in Control.”
“Outstanding Company Voting Securities” has the meaning set forth in the definition of “Change in Control.”
“Parent Company” means a company or other entity which as a result of a Company Transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries.
“Participant” means any Eligible Person to whom an Award is granted.
“Performance Award” means an Award of Performance Shares or Performance Units granted under Section 11.
“Performance Share” means an Award of units denominated in shares of Common Stock granted under subsection 11.1.
“Performance Unit” means an Award of units denominated in cash or property other than shares of Common Stock granted under subsection 11.2.
“Plan” means this GPO Plus Inc. 2020 Incentive Plan.
‘‘Related Company” means any entity that is directly or indirectly controlled by, in control of or under common control with the Company.
“Restricted Stock” means an Award of shares of Common Stock granted under Section 10. , the rights of ownership of which are subject to restrictions prescribed by the Committee.
“Retirement” means, unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, retirement as defined for purposes of the Plan by the Committee or the Company’s chief human resources officer or other person performing that function or, if not so defined, means Termination of Service on or after the date the Participant reaches “normal retirement age” as that term is defined in Section 411(a)(8) of the Code.
“Securities Act” means the Securities Act of 1933, as amended from time to time.
“Stock Appreciation Right” or “SAR” means a right granted under subsection 9.1 to receive the excess of the Fair Market Value of a specified number of shares of Common Stock over the grant price.
“Stock Award” means an Award of shares of Common Stock granted under Section 10, the rights of ownership of which are not subject to restrictions prescribed by the Committee.
“Stock Unit” means an Award denominated in units of Common Stock granted under Section 10.
“Substitute Awards” means Awards granted or shares of Common Stock issued by the Company in substitution or exchange for awards previously granted by an Acquired Entity.
“Successor Company” means the surviving company, the successor company or Parent Company, as applicable, in connection with a Company Transaction.
“Termination of Service” means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability or Retirement. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company’s chief human resources officer or other person performing that function or, with respect to directors and executive officers, by the Committee, whose determination shall be conclusive and binding. Transfer of a Participant’s employment or service relationship between the Company and any Related Company shall not be considered a Termination of Service for purposes of an Award. Unless the Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant’s employment or service relationship is with an entity that has ceased to be a Related Company. A Participant’s change in status from an employee of the Company or a Related Company to a consultant, advisor or independent contractor of the Company or a Related Company or a change in status from a consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.
“Vesting Commencement Date” means the Grant Date or such other date selected by the Committee as the date from which an Award begins to vest.
PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
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Date of Board
Action
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Action
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Section/Effect
of Amendment
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Date of Shareholder
Approval
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November 18, 2020
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Initial Plan Adoption
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November 18, 2020
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EXHIBIT 10.1
DESIGNATED TERRITORY DISTRIBUTION AGREEMENT
THIS DESIGNATED TERRITORY DISTRIBUTION AGREEMENT (“Agreement”) is made as of August 10, 2020 (the “Effective Date”) by and between SafeHandles LLC, a California limited liability company (“Supplier”), whose address is P.O. Box 18, Eureka, CA 95502, and GPO Plus, Inc., a Nevada corporation (“Distributor”), whose address is 1771 E. Flamingo Road, Suite 201, Las Vegas, NV 89119.
RECITALS
A. Supplier has created certain products known as SafeHandles® antimicrobial sleeves, Ster-Roll™ Tape, ADA adhesive products, and other related accessories which are proprietary to and patented by Supplier (Patent No. US8,551,398 B1 and other worldwide patents pending).
B. Subject to the exceptions to exclusivity and potential exclusivity revocation recited in Section 1.2 of this Agreement, below, Supplier and Distributor desire to appoint Distributor as Supplier’s exclusive distributor in the geographical territory described as: Nevada, Colorado, Texas, Florida, Mississippi and the “Gaming Industry” (as defined herein), for the distribution and sale of the products manufactured by Supplier to accounts developed by Distributor subject to terms and limitations stated herein.
C. Supplier and Distributor also desire that Distributor utilize specific agreed channels of distribution as more particularly set forth herein and as explicitly outlined in Section 3 of the Agreement, below.
D. Supplier also desires to compensate Distributor for booked sales of Products to all customers procured through Distributor including but not limited to retail and chain accounts outside of the Distributor's territory inasmuch as those sales do not infringe on other exclusive or nonexclusive territories, and that the Purchase Orders are accepted by Supplier subject to terms stated in Section 2.3, below.
NOW, THEREFORE, in consideration of their mutual promises set forth below and other valuable consideration, the parties agree as follows:
1. SCOPE OF AGREEMENT.
1.1 Definitions. As used in this Agreement, the following terms shall have the following meanings (additional terms are defined in the succeeding Sections of this Agreement where/as introduced):
(a) “Contract Year 1” means the Effective Date through and including December 31, 2021. “Contract Year”, thereafter, means any given twelve month period ending on an anniversary of the December 31, 2021, through the expiration of the Initial Term and/or Option Term (as each is defined in Section 9 below).
(b) “Product(s)” means Supplier’s product(s) known as SafeHandles® antimicrobial sleeves, Ster-Roll™ Tape, ADA adhesive die cut covers, installation steamer, and any improved versions of the product(s) introduced by Supplier from time to time. Supplier reserves the right to unilaterally delete products no longer supplied by Supplier, to modify the specification, style, or design of any products, and to add new products, in each case, such change is to be effective without prior notice to Distributor.
(c) “Purchase Order” means a written order from Distributor to Supplier for the purchase and sale of Supplier’s Products drawn in conformance with and subject to the terms and conditions of this Agreement. Purchase Orders shall be in the form specified by Supplier, as the same may be amended from time to time in Supplier’s reasonable discretion, and designate, at a minimum: (1) the type and quantity of Supplier’s Products to be purchased; and (2) the designated delivery location for the Products purchased, which shall be within Distributor’s Territory (as defined below).
(d) “Supplier Trademarks” means each of the trademarks, service marks, trade names, logos, or other identifying indicia of Supplier for Supplier’s Products as specified to Distributor and held by Supplier.
(e) “Territory” means the geographic territory described as the following: (i) the following states, all within the United States of America: Nevada, Colorado, Texas, Florida and Mississippi; (ii) sales to all of the companies and customers of Distributor listed on Exhibit A (“Distributor’s Customer List”), attached and incorporated herein by reference; and (iii) sales to all casinos and hotels affiliated with the gaming industry, defined as casinos and companies engaged in gambling operations and auxiliary restaurant and hotel services including stand-alone casinos, casino hotels, riverboat casinos, bingo halls, gambling machine manufacturers and horse and dog racing tracks (collectively “Gaming Industry”). As used in this Agreement, the Gaming Industry excludes, without limitation, cruise lines and cruise ships, except where they constitute a Distributor serviced customer as described in Section 1.2, below.
(f) “Key Accounts” means accounts with the following individuals, businesses, entities, or industries, all of whom constitute existing clients and/or distributors of Supplier’s Products: See list of exhibits clients and/or distributors appended hereto as Exhibit B and incorporated by reference.
1.2 Exclusivity, Exceptions to Exclusivity. Subject to the exceptions stated in Subsections (a) and (b), below, Supplier hereby appoints Distributor as Supplier’s exclusive distributor in the Territory. This Agreement does not grant to Distributor any exclusivity rights with respect to the distribution and sale of the Products in any market other than the Territory, except as described herein. The right(s) granted Distributor to distribute and sell Products both within and outside the Territory is expressly made subject to Section 1.2(a), below. Although no rights of exclusivity are granted to Distributor for area(s) outside of the Territory, Distributor may also prospect and seek to sell Products outside of the Territory, subject to the prior written approval of Supplier, which may be granted or denied in Supplier’s sole discretion.
(a) Distributor acknowledges and agrees that Supplier has retained for itself and/or granted to others the rights to distribute and sell the Products in markets both inside and outside the Territory. Distributor acknowledges that one or more of the existing distributors listed on the list of Key Accounts may make regular or occasional Product sales in the Territory. Except for continued Products sales by distributors listed on the Key Accounts list, Supplier will not grant further rights to distribute Products in the Territory to additional distributors during the Term of this Agreement, as defined in Section 9.1, below. Furthermore, during the Term of this Agreement, Supplier will direct all new inquiries from customers located in the Territory to Distributor to facilitate Product sales by Distributor, as further described in Section 1.6(i), below. Although Supplier will not actively restrict the activities of any distributors listed on the Key Accounts list, during the Term of this Agreement, Supplier will not direct any customer inquiries from persons or entities within the Territory to the distributors on the Key Accounts list.
(b) In order to maintain the right(s) of qualified exclusivity described in this Section 1.2 and elsewhere in this Agreement, Distributor must satisfy each and all of the following conditions: (Redacted Gross Product Sales Number);
(ii) in order to maintain the right(s) to exclusively service the Gaming Industry, for each Contract Year during the Initial Term of this Agreement, Distributor must demonstrate no less than : (Redacted Gross Product Sales Number);; (iii) for each Contract Year during the Option Term of this Agreement if exercised, Distributor must demonstrate no less than : (Redacted Gross Product Sales Number); and (iv) in order to maintain the right(s) to exclusively service the Gaming Industry, for each Contract Year during the Option Term of this Agreement if exercised, Distributor must demonstrate no less than: (Redacted Gross Product Sales Number);.
If Distributor fails to meet its minimums to qualify for exclusivity in any Territory this Agreement shall not be terminated, but at Supplier’s option to be exercised in Supplier’s sole discretion, the Distributor’s exclusivity can be terminated in each portion of the Territory in which Distributor fails to meet the minimum sales requirements.
Accordingly, other than as stated herein, Distributor agrees (i) to not distribute Products, sell Products, or solicit sales of Products except to accounts in the Territory and other accounts as deemed acceptable by Supplier, and through Distributor’s agreed distribution channels; (ii) to require that each Distributor contractor, agent, representative, and/or sub-distributor selling or handling Products (“Sub-distributors”) will comply with the limitations and restrictions imposed by this Section 1.2 and this Agreement; (iii) to take all reasonable steps to enforce such limitations and restrictions on the Sub-distributors; (iv) to not modify the Products without the consent of Supplier; and (v) to not distribute the Products in other than Supplier’s original packaging or with other than Supplier’s Trademarks without the consent of Supplier.
Distributor’s failure to comply with any of the provisions of this Section 1.2 shall be a material breach of this Agreement and shall be grounds for termination of the Agreement pursuant to provision 9.2 of the Agreement, in addition to any and all other remedies available to Supplier at law or in equity.
1.3 Independent Contractors. Neither party shall, for any purpose, be deemed to be an agent of the other party and the relationship between the parties shall only be that of independent contractors. Distributor expressly understands and agrees that this Agreement does not make Distributor an agent or local representative of Supplier for any purpose whatsoever and that the sale relationship between Supplier and Distributor is that of independent contractors, and is not an agency, partnership, joint venture, or franchise. Distributor is not granted by this Agreement or otherwise any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of Supplier, or to bind Supplier in any manner whatsoever.
1.4 Key Accounts. Supplier reserves the right to supply, service, and fulfill all orders related to the Key Accounts as defined in section 1.1(f) of this Agreement. Supplier has no obligation to Distributor regarding the Key Accounts, and Distributor shall not make any attempt to do business with or contract with the existing Key Account customers. Additionally, where Supplier has a customer who has purchased Products directly from Supplier for delivery and use outside the Territory and the customer subsequently orders Products for delivery and/or use within the Territory, Supplier reserves the right to supply said customer and fulfill these orders directly without involving Distributor. Supplier has no obligation to Distributor with regard to the delivery of Products to such a customer within the Territory.
1.5 Distributor Duties and Obligations. During the Term of this Agreement Distributor shall perform the following duties and obligations and agrees as follows:
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(a)
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Distributor shall diligently and proactively serve existing customers and search and prospect to secure new and additional customers to purchase Supplier’s Products and develop accounts within the Territory.
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(b)
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Distributor shall keep itself informed of Supplier’s Product information and tutorials, and Distributor shall conduct competent and thorough presentations and demonstrations of Supplier’s Products with existing and potential customers/clients and review Supplier’s Product program offerings and present them to customers/clients.
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(c)
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Distributor shall proactively communicate with clients/customers to assist them in maintaining adequate inventories of Supplier’s Products and facilitate additional sales.
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(d)
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Distributor shall assist clients/customers with Product implementation and diligently and promptly respond to client/customer inquiries and questions about the Products.
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(e)
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Distributor shall diligently manage its accounts and follow-up with its clients/customers to help ensure positive experiences with the Products.
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(f)
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Distributor shall promptly execute any order and/or re-order requests from clients/customers and ensure prompt order responsiveness and Product delivery.
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(g)
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Distributor shall develop a comprehensive and secure internet/web platform and support to facilitate client/customer Purchase Orders by email and/or website/webstore.
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(h)
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Distributor shall use commercially reasonable best efforts to achieve, at least, one million, five hundred thousand dollars ($1,500,000.00) in Product gross sales for each full Contract Year during the Initial Term and at least two million dollars ($2,000,000) in Product gross sales for each full Contract Year during the Option Term, if exercised. The first year will start on the Effective Date of this Agreement and end on December, 31, 2021, for each state in the Territory, respectively, to keep the exclusivity in those states.
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1.6 Supplier Duties and Obligations. During the Term of this Agreement Distributor shall perform the following duties and obligations and agrees as follows:
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(a)
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Supplier shall provide Distributor with Product information and sales and marketing materials and tools.
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(b)
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Supplier shall provide Distributor with technical assistance to aid Distributor in explaining and marketing the Products to Distributor’s customers/clients.
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(c)
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Supplier shall provide forms and process Distributor’s Purchase Orders with commercially reasonable diligence so that Distributor may execute and fill customer orders.
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(d)
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Subject to Product availability and material constraints and Force Majeure events (as defined in Section 15.7, below), Supplier shall maintain inventory and execute shipment and support implementation of Product sales associated with Distributor’s Purchaser Orders. As a component of an approved Purchase Order, at Distributor’s cost pursuant to Section 2, below, Supplier will drop ship Products to Distributor’s customers/clients in the Territory and any other location Distributor secures a sale.
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(e)
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Subject to the terms and conditions of this Agreement, Supplier shall provide warranty support to Distributor’s customers for claims approved by Supplier.
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(f)
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Subject to the exceptions recited in Section 1.2 of this Agreement, above, Supplier shall observe the exclusivity pledges made to Distributor to sell Products in the Territory and with Distributor’s current customer base.
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(g)
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Supplier shall ensure that all Purchase Orders placed by Distributor are treated on a priority basis with first call on available (unpledged) inventory at the time of Purchase Order placement.
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(h)
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During the Term of this Agreement and subject to Supplier’s rights to remove items from its production line as discussed in Section 1.1(b), above, Supplier shall make certain that Distributor is allowed to sell all Products available produced by Supplier.
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(i)
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Supplier shall use commercially reasonable best efforts to insure that all customer leads that are located in Distributor’s Territory and in the Gaming Industry are directed to Distributor.
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(j)
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Supplier shall provide all of the following to assist Distributor’s Product marketing and sale efforts: (1) Supplier shall provide in person, onsite training at the following location(s) and interval(s): at a mutually agreed location at least once a year: (2) Supplier shall provide off-site training to Distributor by electronic meeting (Zoom or equivalent) at the following interval(s): as reasonably necessary; (3) Supplier shall provide point of purchase and point of sale informational materials (both hard copy and electronically) to Distributor as needed, and provide sufficient Product samples for Distributor and its affiliates to facilitate marketing and sales efforts.
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(k)
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Subject to Product availability and material constraints and Force Majeure events (as defined in Section 15.7, below), Supplier shall deliver to Distributor all Products ordered no later than twelve (12) weeks after Distributor places the Purchase Order and it is approved by Supplier.
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(l)
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Supplier shall support Distributor’s exclusivity rights during the Term of this Agreement by not allowing others to sell Supplier’s Products to any customer that Distributor has previously sold Supplier’s Products to first. Once Distributor has established a relationship with a new customer, that new customer shall become the Distributor’s customer from that point forward and can only be sold, serviced and supported by Distributor during the Term of this Agreement. Once this Agreement terminates, for any reason, Supplier may then directly sell Products to and service Distributor’s previously procured customers and/or direct those customers to other distributors of Supplier’s Products.
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1.7 No Other Terms and Conditions. The parties acknowledge and agree that any terms and conditions of any Purchase Order, sales acknowledgement or other document submitted to the other by either party which conflict with the terms and conditions of this Agreement shall be of no force or effect, and the terms and conditions hereof control and supersede such conflicting documents and any course of conduct or usage of the trade inconsistent with any of the terms and conditions hereof. This Section 1.7 shall not limit Supplier’s right(s) to approve or reject any individual Purchase Order in accord with Section 2, below.
2. PURCHASE AND SALE OF PRODUCT.
2.1 Purchase and Sale. Subject to the terms and conditions set forth herein, Supplier agrees to sell and Distributor agrees to purchase Products in accordance with Distributor’s Purchase Orders and this Agreement and at the fixed price recited in Section 4, below. In this regard:
(a) Distributor agrees to purchase and take delivery of not less than the following minimum quantity of Products during each Contract Year during the Term as follows:
(ai) From the Effective Date of this Agreement through December 31, 2020: In order to maintain the exclusivity Territory right(s) granted to Distributor in this Agreement, Distributor shall secure sales and issue Purchase Orders in an amount no less than (Redacted Gross Product Sales Number Requirement).
(aii) Total Sales calendar years 2021 through 2025: In order to maintain the exclusivity right(s) granted to Distributor in this Agreement, Distributor shall secure sales and issue Purchase Orders in an amount no less than (Redacted Gross Product Sales Number Requirement).
(aiii) During the Contract Years in the Option Term (i.e., calendar years 2026 through 2030): In order to maintain the exclusivity right(s) granted to Distributor in this Agreement for the Option Term (if exercised by Distributor), Distributor shall secure sales and issue Purchase Orders in an amount no less than (Redacted Gross Product Sales Number Requirement).
The foregoing minimum purchase requirements will be satisfied for any given Contract Year if Distributor’s purchases of Product “units” results in gross sales equal to or in excess the total gross sales of the Products for the Contract Year in the respective Territory states, as stated above. If Distributor fails to meet or exceed the foregoing minimum purchase requirements in any given Contract Year, then, as Supplier’s sole remedy, Supplier may elect, by written notice to Distributor, to rescind Distributor’s rights of exclusivity and if Supplier elects to do so Supplier must first give sixty (60) days written notice of default and intention to rescind exclusivity to Distributor.
(b) All Products will be sold under Supplier’s Trademarks and only, using Supplier’s trade dress, and Supplier will retain all proprietary rights in and to the same.
2.2 Purchase Orders and Forecasts. On or before September 30, 2020, Distributor shall provide Supplier with an initial six (6) months Purchase Order for the amount of Products that Distributor believes Distributor’s Brokers, Wholesalers and Customers will be buying from Distributor, in the form attached hereto as Exhibit C. On or before October 31, 2020, Distributor shall provide Supplier with a forecast of its Product requirements for the seventh (7th) through twelfth (12th) months thereafter divided on a monthly basis in the form attached hereto as Exhibit D. Commencing on April 1, 2021 and continuing quarterly thereafter, Distributor will provide Supplier, on or before the last day of each quarter during the term of this Agreement, an additional firm Purchase Order for Products, it being the intent that in general, Distributor will provide three (3) months Purchase Orders and six (6) months forecasts on a rolling monthly basis during the term of this Agreement. Distributor’s Purchase Orders for a given quarter, in order to be conforming, must specify only delivery dates during that quarter. Distributor’s forecasts are non-binding but shall be Distributor’s reasonable best estimate of its future Product requirements.
2.3 Acceptance of Purchase Orders. Within ten (10) days of receipt of a Purchase Order from Distributor, Supplier may request in writing a modification of the Product designations, quantities, delivery dates, and special shipment instructions specified thereon. Supplier shall have the right, in Supplier’s commercially reasonable discretion, to reject or seek modification of a Purchase Order from Distributor any time that Supplier determines it cannot fill/comply with the Purchase Order due to a lack of supplies to manufacture Products, a lack of personnel to assemble and/or process Purchase Orders and/or in the event of any Force Majeure event pursuant to Section 15.7, below. Supplier’s failure to reject or request a modification or to reject a Purchase Order within the ten (10) day period shall be deemed an acceptance thereof. Upon actual or deemed acceptance of a Purchase Order by Supplier, a binding contract for the sale and purchase of Product shall exist between Supplier and Distributor in accordance with this Agreement and Distributor’s Purchase Order. If Supplier requests modification of any of the aforementioned terms of Distributor’s Purchase Order, then Distributor shall have ten (10) days following receipt of the request to accept or reject Supplier’s modifications. If Distributor does not respond or object to Supplier’s request within ten (10) days of receipt, the modifications specified thereon shall be deemed accepted by Distributor. Upon Distributor’s actual or deemed acceptance of Purchase Order modifications by Supplier, a binding contract for the sale and purchase of Products shall exist between Supplier and Distributor in accordance with this Agreement and Distributor’s Purchase Order as so modified. The foregoing modification procedure shall apply only with the regard to Product designations, language markings, quantities, delivery dates, and special shipment instructions. With respect to all other terms, Supplier and Distributor agree that the terms and conditions of this Agreement shall apply to the sale of Product hereunder and cannot be modified or amended except as provided in Section 15.11.
2.4 Non-Conforming Orders. Supplier will use reasonable commercial efforts to fill non-conforming Purchase Orders for Products in accordance with Distributor’s commercially reasonable requests.
2.5 Shipment. Supplier will ship Products to Distributor’s customers to the delivery destination(s) specified in Distributor’s Purchase Orders, but in no event may Supplier be required to ship to more than one location within the Territory for any one Purchase Order without additional shipping charges being applied to the Purchase Order. All deliveries must be to location(s) within the Territory unless Supplier, in Supplier’s sole discretion, agrees to ship Products outside Distributor’s Territory. Supplier shall arrange and be responsible for transportation of the Products in accordance with Distributor’s instructions, at Distributor’s sole cost and expense. All shipping costs and expenses shall be charged to Distributor and allocated to each Purchase Order at the actual cost of shipping/transport incurred by Supplier. Supplier may not under-ship or over-ship Products by more than ten percent (10%) of the allocation in any Purchase Order without Distributor’s prior written consent.
2.6 Delivery, Title and Risk of Loss. For purposes of this Agreement, delivery to Distributor’s customers will occur when the Products are placed in the possession of the common carrier by Supplier. Title and risk of loss or damage with respect to the Products shall pass to Distributor’s and/or Distributor’s customers immediately and automatically upon being placed in the possession of the common carrier by Supplier.
2.7 Packaging for Shipment. Unless otherwise agreed in advance, all Products shall be packed by Supplier as Supplier reasonably deems appropriate to minimize risk of loss or damage in transit. Special instruction for the shipping and/or importation of Products by Distributor must be specified and supplied at time of order, with any additional costs attendant to the instructions paid by Distributor.
3. CHANNELS OF DISTRIBUTION.
3.1 Agreed channels of distribution. For the Term of this Agreement, to include all extensions thereof, the parties specifically agree that Supplier shall have the unqualified right to approve or disapprove the channels of Product distribution as proposed by the Distributor.
Within twenty-one (21) days of the execution of this Agreement and prior to the delivery of any Product to Distributor’s customers, Distributor shall submit to Supplier a “Proposed Plan of Distribution” of the Products. Within twenty-one (21) days of receipt, Supplier shall approve or disapprove the “Proposed Plan of Distribution”. Although it is agreed that Supplier’s approval shall not be unreasonably withheld, if the Supplier disapproves a “Proposed Plan of Distribution”, the Supplier shall specify the basis of its disapproval and shall cooperate in reaching agreement as to a “Plan of Distribution”.
4. PRICES AND PAYMENT.
4.1 Price. The prices for the Products (including volume discounts) for the first twelve
(12) months of this Agreement (i.e., the first Contract Year) are as set forth on Exhibit E, which is attached hereto and incorporated by reference and Distributor’s prices will always be at least (Redacted Percentage off) off of Supplier’s Manufacturer’s Suggested Retail Price (“MSRP”) except on any items not manufactured by Supplier like cross-sale items and component products incorporated in Supplier’s Products which cost shall be included in the Product unit prices at Supplier’s cost of acquisition plus (Redacted Percentage). Prices do not include applicable sales or use taxes, importation costs, and shipping costs (freight and insurance), which shall be separately stated on Supplier’s invoices and born by Distributor as a cost attendant to each Purchase Order. Logistics and distribution of Products by Supplier are the sole and exclusive responsibility of Supplier.
4.2 Price Changes. The prices set forth on Exhibit E shall be revised annually, commencing January 1, 2021 and thereafter revised on or before the start of each Contract Year, to reflect any increase or decrease in manufacturing costs for the Products reasonably projected by Supplier for the next Contract Year (in each case, determined in accordance with generally accepted accounting principles, consistently applied), with the first pricing review occurring six (6) months after the Effective Date of this Agreement. Price changes are not effective unless mutually agreed to in writing (agreement not to be unreasonably withheld if consistent with this Section 4.2), with the change being effective with respect to invoices for shipments during the next ensuing Contract Year. Although Supplier will have substantial discretion to annually adjust Supplier’s MSRP for all of Supplier’s Products, Distributor’s prices will always be set at least (Redacted Percentage) off Supplier’s adjusted MSRP. Commercially reasonably price increases in the base price for Supplier’s Products are fully anticipated by both Supplier and Distributor during the Term of this Agreement and are expected annually during each Contract Year of the Term and Option Term (if exercised by Distributor). Additionally, prices may be adjusted by Supplier more frequently in the event of fluctuations in the manufacturing, labor, and currency exchange costs associated with Products. Supplier will provide Distributor with no less than thirty (30) days’ notice of such price adjustments, after which the new prices will go into effect. Distributor’s approval of this type of price adjustment is not required. Distributor shall be entitled to the bulk purchase price discounts recited in this Section 4.2 and Exhibit E if Distributor achieves the Product gross sales benchmarks as stated therein.
4.3 Taxes. Distributor will be responsible for payment of all VAT (if applicable), sales, import, use, and other similar taxes (other than taxes based on Supplier’s income), fees, duties, and other governmental charges, and any related penalties and interest, arising from the payment of any amounts to Supplier under this Agreement, or the manufacture or distribution of the Products under this Agreement. Supplier will make all payments of amounts due under this Agreement to Supplier free and clear of, and without reduction for, any withholding taxes; any such taxes imposed on payments of such amounts to Supplier will be Distributor’s sole responsibility, and Distributor will provide Supplier with official receipts issued by the appropriate taxing authority, or such other evidence as Supplier may reasonably request, to establish that such taxes have been paid. Distributor will indemnify Supplier from and against any failure by Distributor to comply with this Section 4.3.
4.4 Payment. Distributor’s initial order will be 100% payment prior to shipping. On subsequent shipments, Supplier shall issue invoices for Products on or after the date of shipment. Payment shall be due within thirty (30) days from the date of invoice in accord with the pricing schedule recited in Exhibit E. A late charge at the rate of one and one-half percent (1.5 %) per month or the highest rate allowed by law, whichever is lower, shall be applied to the total invoice price for payments not received within sixty (60) days after the date of invoice.
4.5 Failure to Pay. If Distributor fails to fulfill any condition of its payment obligations, Supplier may (i) withhold deliveries and suspend performance; (ii) continue performance if Supplier deems it reasonable to do so; or (iii) place in storage Products that have been accepted for shipment by Supplier. In any event, the costs incurred by Supplier as a result of Distributor’s nonfulfillment shall be payable by Distributor upon submission of Supplier’s invoices therefor.
5. QUALITY CONTROL AND ACCEPTANCE.
5.1 Quality Assurance. Supplier shall be responsible for ensuring that the Products meet Supplier’s internal quality assurance tests and procedures prior to shipment hereunder.
5.2 Acceptance. Products shipped hereunder shall be subject to acceptance by Distributor within fifteen (15) days of receipt. Distributor shall promptly inform Supplier of any Product rejected as non-conforming and at Supplier’s request shall return non-conforming Products to Supplier, at Supplier’s risk of loss and expense. Products as to which no rejection has occurred within fifteen (15) days shall be deemed accepted.
6. PRODUCT WARRANTY, DISCLAIMER OF WARRANTIES & LIMITATION OF LIABILITY.
6.1 Product Warranty. Supplier warrants to Distributor and Distributor can pass it on to Distributor’s customers that the Products purchased hereunder shall be free from defects in materials and workmanship for a period of ninety (90) days from the date of delivery thereof, provided the Product in question has been stored and used in accordance with ordinary industry practices and conditions. SUPPLIER DOES NOT WARRANT THAT THE OPERATION OF THE PRODUCTS WILL BE UNINTERRUPTED OR ERROR FREE.
6.2 Remedies. In the event that a Product does not comply with the Product Warranty set out in Section 6.1, Supplier’s obligation under this Agreement is limited to replacing or repairing, at Supplier’s option, Products or parts thereof determined by Supplier to be defective. Replacement Product shall be supplied by Supplier at no additional charge to Distributor. The replacement Product will be shipped to Distributor’s customer, freight prepaid.
6.3 Disclaimer of Warranties. The foregoing express warranties are limited to Distributor and are not transferrable and are in lieu of any other warranty by Supplier with respect to Products furnished hereunder. SUPPLIER GRANTS NO OTHER WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.4 Limitation of Liability. SUPPLIER SHALL IN NO EVENT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THE SALE OR USE OF ITS PRODUCTS, WHETHER OR NOT SUPPLIER HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. IF SUPPLIER BREACHES ANY PROVISION OF THIS AGREEMENT, SUPPLIER’S SOLE AND EXCLUSIVE MAXIMUM LIABILITY, WHETHER BASED IN CONTRACT, TORT, OR OTHERWISE, SHALL NOT IN ANY EVENT EXCEED THE CONTRACT PRICE FOR THE PARTICULAR PRODUCTS. The foregoing limitation of liability will not apply to the payment of costs and damage awards referred to in Section 7, Indemnification.
6.5 Distributor assumes full responsibility for its selection of the Products specified herein and any other equipment, programs, or services used with the Products, their use, and results obtained therefrom.
6.6 Within twenty-one (21) days of the execution of this Agreement and prior to the delivery of any Product to Distributor, Distributor shall submit to Supplier a certificate of liability insurance with policy limits of at least $1,000,000.00 US dollars for general and products liability in full force and effect for a period of one year with the Supplier named as a co-insured and providing for notice to Supplier in the event the policy is canceled for any reason. Said policy shall provide primary insurance coverage for any claims covered by the policy. Said policy shall be renewed each Contract Year and remain in effect until Contract is terminated.
6.7 Within twenty-one (21) days of the execution of this Agreement and prior to the delivery of any Product to Distributor, Supplier shall submit to Distributor a certificate of liability insurance with policy limits of at least $1,000,000.00 US dollars for general and products liability in full force and effect for a period of one year with the Distributor named as a co-insured and providing for notice to Distributor in the event the policy is canceled for any reason. Said policy shall provide primary insurance coverage for any claims covered by the policy. Said policy shall be renewed each Contract Year and remain in effect until Contract is terminated.
7. INDEMNIFICATION.
7.1 Each Party shall promptly notify the other of any information coming to its attention that the use or sale of Products may infringe on the patents, designs, trademarks, service marks, copyrights, or any other rights of third parties. The parties expressly recognize, however, the Products are sold without any warranty that they do not infringe the patents, designs, trademarks, service marks, copyrights, or any other rights of third parties and that Supplier shall not be responsible for any claim of such infringement or alleged infringement except as herein provided.
7.2 If a claim is made that the sale or use of Products infringes the patents, designs, trademarks, service marks, copyrights, or any other rights of a third party, Supplier has the obligation to defend or settle the case on behalf of Distributor and Distributor shall give Supplier sole control of the defense and settlement thereof. Supplier may, in its sole discretion, defend the claim on its own behalf and on behalf of Distributor in the courts, before administrative agencies, or otherwise. If Supplier decides to defend such claim, Distributor shall at no cost to Supplier cooperate fully with Supplier in the defense, including the making available of files and personnel, and shall respond promptly to all reasonable requests of Supplier for assistance. If any Product is finally adjudged to so infringe, or in Supplier’s opinion is likely to become the subject of such a claim, Supplier shall, at its option, either: (i) procure for Distributor the right to continue using and distributing the Product, (ii) modify or replace the Product to make it non-infringing, or (iii) refund the price paid upon return of the Product. Supplier shall have no liability regarding any claim arising out of: (w) use of other than a current, unaltered release of the Product unless the infringing portion is also in the then current, unaltered release, (x) use of the Product in combination with non-Supplier products, data, or equipment if the infringement was caused by such use or combination, (y) any modification or derivation of the Products not specifically authorized in writing by Supplier, or (z) use of third party products.
THE FOREGOING STATES THE ENTIRE LIABILITY OF SUPPLIER AND THE EXCLUSIVE REMEDY FOR DISTRIBUTOR RELATING TO INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY COPYRIGHT OR OTHER PROPRIETARY RIGHT BY THE PRODUCTS.
7.3 Compliance. Supplier designs and manufactures Products in a manner to comply with known national commercial codes and retail requirements, but in no way warrants the Products as compliant to any particular consumer application, use or combination thereof. Distributor is responsible for fully understanding codes and restrictions concerning the sale, use, and application of Products pertaining to the Territory, as stated in 6.4 Limitation of Liability.
THE FOREGOING STATES THE ENTIRE LIABILITY OF SUPPLIER AND THE EXCLUSIVE REMEDY FOR DISTRIBUTOR RELATING TO NON-COMPLIANCE OR CLAIMS OF NON-COMPLIANCE OF ANY PRODUCT TO SPECIFIC LOCAL OR MUNICIPAL CODES KNOWN OR UNKNOWN.
8. PROPRIETARY INFORMATION.
8.1 Protection of Proprietary Information. Supplier and Distributor agree to keep in confidence and not disclose to others all knowledge, information, and data furnished to either by the other party and claimed by the other party to be proprietary, provided such information is given in writing or, if oral, is reduced to writing within thirty (30) days and such writing is marked to indicate the claims of ownership and/or secrecy. Supplier and Distributor agree that neither shall use, nor reproduce for use in any way, any proprietary information of the other except in furtherance of the relationship set forth herein. Supplier and Distributor agree to protect the proprietary information of the other with the same standard of care and procedures used by each to protect its own proprietary information of similar importance but at all times using at least a reasonable degree of care.
8.2 Limitations. Section 8.1 shall not be applicable and shall impose no obligation on a party with respect to any portion of proprietary information which:
(a) Was at the time received or which thereafter becomes, through no act or failure on the part of such party, generally known or available to the public;
(b) Is known to such party at the time of receiving such information as evidenced by documentation then rightfully in the possession of either party;
(c) Is furnished to others by the other party without restriction of disclosure;
(d) Is thereafter rightfully furnished to such party by a third party without restriction by that third party on disclosure; or
(e) Has been disclosed pursuant to the requirements of law or court order without restrictions or other protection against public disclosure; provided, however, that the other party shall have been given a reasonable opportunity to resist disclosure and/or to obtain a suitable protective order.
8.3 Survival. The covenants of confidentiality set forth herein shall survive and continue and be maintained from the Effective Date hereof until two (2) years after termination of this Agreement.
9. TERM AND TERMINATION.
9.1 Term. The initial term of this Agreement shall commence upon the Effective Date and shall continue through December 31, 2026 (the “Initial Term”), measured from the Effective Date and terminating on said date, unless terminated earlier for any reason pursuant to this Agreement. Contract Year 1 of the Initial Term shall be deemed to include all months between the Effective Date through December 31, 2021. Thereafter, each additional Contract Year of the Initial Term shall be measured by the following twelve (12) month period (i.e., Contract Year 2 shall span January 1, 2022 through December 31, 2022, and continuing). So long as Distributor is not in breach of this Agreement at the end of the Initial Term (i.e., December 31, 2025,) and the Agreement has not been earlier terminated for any reason, Distributor shall have the right, but not the obligation, to extend this Agreement for an additional five (5) year term (the “Option Term”) by providing Supplier written notice of Distributor’s election to exercise the Option Term no less than one-hundred and eighty (180) days prior to expiration of the Initial Term. The Initial Term and the Option Term, if exercised, shall be referred to in this Agreement as the “Term”.
9.2 Termination. In addition to expiration of the Term in accord with Section 9.1, above, this Agreement may be terminated as follows:
(a) At any time upon mutual written agreement of the parties;
(b) By Supplier upon fifteen (15) days written notice to Distributor for failure by Distributor to make payment for Products when due, unless such failure is cured within the fifteen (15) day period; or
(c) By either party if (i) the other party is in material breach of its obligations hereunder and such breach continues uncured for a period of thirty (30) days after written notice to the defaulting party, or (ii) the other party makes a general assignment for the benefit of its creditors, appoints or has appointed a receiver, trustee in bankruptcy or similar officer to take charge of all or part of its property, files or has a petition filed against it in any bankruptcy (unless such petition is dismissed within sixty (60) days of its filing), and/or is adjudged insolvent or bankrupt.
9.3 Effect. In the event of the expiration or termination of this Agreement, the rights and licenses granted pursuant to this Agreement shall be automatically revoked, and Distributor shall cease using and distributing the Products, confidential information, and Supplier’s Trademarks covered by this Agreement and each party shall promptly return to the other party (or at the other party’s request, destroy) at the other party’s expense all documents and materials containing any of the confidential information or the Supplier’s trademarks; provided, however, so long as Distributor has paid for all Products ordered, Distributor may, during the thirty day period after termination, sell such Products in its possession to its customers in the Territory so long as such sales are in accordance with this Agreement, and at the end of such thirty day period, Distributor shall destroy any remaining Products in its possession. Expiration or termination of this Agreement shall not release either party to this Agreement from any liability or obligation which at the time of expiration or termination is already accrued to the other party or which thereafter may accrue with respect to an act or omission arising either prior to such expiration or termination or after such expiration or termination when there is a continuing obligation.
10. EXPORT REQUIREMENTS.
10.1 The Products and any documentation and all related technical information or materials are subject to export controls and are licensable under the U.S. Government export regulations. Distributor will comply strictly with all legal requirements established under these controls and will not export, divert, transfer or disclose, directly or indirectly, the Products, documentation and any related technical information or materials without the prior approval of the U.S. Department of Commerce.
11. INSPECTION.
11.1 In order to ensure Distributor’s compliance with the terms of this Agreement, Distributor hereby agrees that Supplier shall have the right, at Supplier’s expense, to inspect, at reasonable times, either itself or through its duly authorized representatives, all or any portion of Distributor’s facilities with regard to (i) the use of the Products, confidential information, and Supplier Trademarks, (ii) the storage, marketing, sale, and distribution of the Products, and (iii) Distributor’s compliance with this Agreement.
11.2 Records. Distributor agrees to maintain, and make available to Supplier upon its reasonable request for inspection records of advertising and promotional campaigns with respect to the Products, and records of all damaged or non-conforming Products, returns, and disposals. Distributor shall preserve all such records for a period of seven years. Furthermore, Distributor agrees to maintain and make available to Supplier all books and records necessary for Supplier to audit and confirm Distributor’s compliance with the Product gross sales requirements Distributor must achieve to maintain the Territory exclusivity rights created by this Agreement. Distributor shall maintain and make available books and records with sufficient specificity to document all sales within each state included in the Territory.
12. TRADEMARK LICENSE.
12.1 Subject to the terms of this Agreement, Supplier hereby grants to Distributor during the term of this Agreement, a non-exclusive, non-transferable, royalty-free, right and limited use license to the Supplier Trademarks and the goodwill related thereto in the Territory for the limited use only of building brand awareness and of marketing and distributing in the Territory the Products to Distributor’s customers in the Territory pursuant to this Agreement.
12.2 Distributor hereby agrees (i) not to directly or indirectly use the Supplier Trademarks (or any translation or transliteration thereof) in any manner or for any products or services as expressly permitted by this Agreement, (ii) not to directly or indirectly create any translation or transliteration of the Supplier Trademarks without the consent of Supplier Trademarks without the consent of Supplier (and Distributor hereby agrees that if it does, then Supplier shall be deemed the owner of such translation or transliteration), (iii) that Supplier is the owner of the Supplier Trademarks (and of any translation or transliteration thereof), and that Distributor has no ownership or beneficial right or interest in or to the Supplier Trademarks (or in any translation or transliteration thereof), (iv) not to directly or indirectly register, challenge, or take any action with regard to the Supplier Trademark (or any translation or transliteration thereof), (v) not to directly or indirectly confuse, mislead, or deceive the public in connection with the Products, (vi) not to directly or indirectly sell or distribute any knockoff or counterfeit goods, and (vii) to cease all use of the Supplier Trademarks (and any translation or transliteration thereof) upon termination of this Agreement. Distributor hereby irrevocably assigns to Supplier any and all ownership, beneficial and other rights or interests that Distributor has, or may have at any point in time, in any of the Supplier Trademarks (and in any translation or transliteration thereof) or in any confusingly similar mark or brand. All of the obligations under this section shall survive any expiration or termination of this Agreement.
13. GOOD FAITH EFFORTS.
13.1 Promotion and Sales. Distributor agrees to vigorously and diligently market and promote the distribution and sale of and to sell the full range of Products in the Territory to Distributor’s customers in the Territory.
13.2 Policing. Distributor agrees (i) to make vigorous, good faith efforts to ensure compliance by its customers with the relevant terms of this Agreement, and (ii) to stop distribution of Products to its customers whose actions violate the limited rights granted in this Agreement.
14. DISTRIBUTOR WARRANTIES.
14.1 Compliance with Law. In carrying out its obligations under this Agreement, Distributor agrees to comply with all applicable laws and regulations and other orders in the Territory. Supplier shall be responsible for the Products’ conformance with the relevant products liability legislation in the Territory.
14.2 No Competing Products or Brands. Except upon the written consent of Supplier, during the term of this Agreement Distributor shall not (i) distribute, sell, or promote any products, new or used, or brands which are in direct competition with the Products, or (ii) distribute the Products to any person or entity which Distributor has a reasonable basis to believe will directly or indirectly distribute the Products outside of the Territory or modify the Products or distribute the Products in other than Supplier’s original packaging or with other than the Supplier Trademarks. For clarity, Distributor shall not be prevented from distributing, selling, or promoting products or brands that it already distributed prior to Supplier’s development of a competing Product or Products. In addition, for a period of one year after the termination of the Agreement for material breach without cure prior to termination, Distributor shall not engage in any of the activities described in this paragraph in the Territory.
14.3 Unethical Conduct. Distributor agrees that Distributor will refrain from any unethical conduct or conduct that tends to damage the reputation of Supplier or Products. Distributor agrees that Distributor will make no false or misleading representations or statements concerning Supplier or Products.
14.4 Distributor Warranties. Distributor will be solely responsible for any representations, warranties, or guarantees made or published concerning Products by or on behalf of Distributor to the extent that such representations, warranties, or guarantees are inconsistent with any warranties in this Agreement.
15. MISCELLANEOUS.
15.1 Successors and Assigns. Each party represents that it is acting on its own behalf and is not acting as an agent for or on behalf of any third party. The rights and obligations of either party shall not be transferable without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. All obligations of the parties herein shall be binding upon their respective successors or assigns.
15.2 Choice of Laws. This Agreement shall be governed in all respects by, and its terms shall be construed in accordance with the laws of the State of California, United States, as if this Agreement were executed in and to be wholly performed in the State of California. In construing this Agreement, none of the parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.
15.3 Venue. The parties agree that the Superior Court of California, County of Humboldt shall constitute the designated venue and court with jurisdiction for the resolution of all litigation and/or disputes concerning this Agreement.
15.4 Attorneys’ Fees. The prevailing party in any litigation or dispute shall have the right to collect from the other party its reasonable costs and necessary disbursements and attorneys’ fees incurred in enforcing this Agreement. Prior to bringing an action over any dispute, the parties shall participate in mediation in good faith, with the mediation venue located in Humboldt County, California. If a party brings an action without first seeking mediation, the Court shall, upon the request of the adverse party, compel the parties to proceed first with mediation and the party commencing the litigation without first seeking mediation shall pay all costs and attorneys’ fees incurred by the adverse party in compelling the mediation.
15.5 Waiver. No waiver or breach of any term or condition of this Agreement shall operate as a waiver of any other breach of such term or condition, or of any other term or condition, nor shall any failure to enforce any provisions hereunder operate as a waiver of such provision or any other provision hereunder.
15.6 Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, except in those instances where removal or elimination of such invalid, illegal, or unenforceable provision or provisions would result in a failure of consideration under this Agreement, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had never been contained herein.
15.7 Force Majeure. Other than obligations to make payments hereunder, the fulfillment of any obligation under this Agreement is subject to strikes, lockouts, accidents, fires, floods, or other acts of God, embargoes, government actions, or any other cause beyond the control of either party; provided that the affected party shall promptly notify the other party of the occurrence of any such event and the affected party shall use its reasonable commercial efforts to overcome the event of force majeure, provided neither party shall be obligated to settle any labor dispute on terms not satisfactory to such party in its sole discretion. If a party is prevented from fulfilling its obligations under this Agreement because of such a force majeure event for a period of two (2) months or more, the other party may at any time thereafter terminate this Agreement by written notice to the affected party without any further obligation (except for the obligations surviving termination as provided in this Agreement).
15.8. Notices, Defaults & Cure Periods. All notices hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, one day after delivery to a nationally recognized overnight delivery service, charges prepaid, three (3) days after being sent by registered or certified mail, postage prepaid, to the parties at their respective addresses set forth above and:
If to Distributor, with a copy as follows:
Company: GPO Plus, Inc
Address: 1771 E. Flamingo Road, Suite 201A,
Las Vegas, NV 89119.
Attn: Brett Pojunis, CEO
Phone: 702 972 4580
Fax: n/a
Website: www.gpoplus.com
Email contact:Brett@gpoplus.com
If to Supplier, with a copy as follows:
SafeHandles®
P.O. Box 18 Eureka, CA 95502
Attn: Steve Strombeck Phone:707 822 1234
Fax: (707) 822-4525
Website: www.safehandles.com
Email contact:steve@safehandles.com
or to such other address as any party shall have specified by notice to the other in accordance with this Section. Purchase Orders, forecasts, and other routine business forms and any notices not sent in accordance with the foregoing, shall be effective only upon receipt. Any Default must be brought to the attention of the defaulting party, in writing, and the defaulting party must be provided a thirty (30) calendar day period and opportunity to cure any and all defaults and demonstrate proof of cure to the non-defaulting party.
15.9 Headings. Headings used in this Agreement are for the purpose of reference only and are not to be considered in construction or interpretation of this Agreement.
15.10 Counterparts and Electronic Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument. Facsimile and/or electronic signatures shall be deemed to constitute original signatures.
15.11 Entire Agreement; Amendment. This Agreement, including the Exhibits, contains the entire Agreement between the parties relating to the subject matter hereof. All prior agreements and all prior negotiations, representations and communications relating to the same subject are superseded by this Agreement. This Agreement may not be modified other than by a written document signed by an authorized representative of each party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives the day and year first set forth above:
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Supplier:
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Distributor:
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/s/ Steve Strombeck
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/s/ Brett Pojunis
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By: Steve Strombeck
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By: Brett Pojunis
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Title: Owner
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Title: CEO
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EXHIBIT "A"
Distributor’s (GPO Plus Inc.’s) Current Customer List
(Redacted Current Customer List)
EXHIBIT "B"
Supplier’s (SafeHandles, LLC’s) Key Accounts List
(Redacted Key Accounts List)
EXHIBIT “C”
To contain Purchase Order for the amount of Products that Distributor believes their Brokers, Wholesalers and Customers will be buying from Distributor. This order is 50% of the estimated annual order, and can be delivered in split deliveries, and/or drop shipped as specified by Distributor.
Suggested initial (six month demand) order
(To Be Completed by September 30, 2020)
Steamer (Redacted 50% of estimated annual order)
Sleeves (Redacted 50% of estimated annual order)
Ster-Roll™ Tape (Redacted 50% of estimated annual order)
ADA Adhesive (Redacted 50% of estimated annual order)
EXHIBIT "D"
To contain Purchase Forecast for the second six (6) months (To Be Completed by October 31, 2020)
Suggested forecast (Redacted Purchase Forecast)
Steamer (Redacted Purchase Forecast)
Sleeves ( Redacted Purchase Forecast)
Ster-Roll™ Tape (Redacted Purchase Forecast)
ADA Adhesive (Redacted Purchase Forecast)
EXHIBIT "E"
Distributor Pricing for SafeHandles® products (of any variety). All prices in USD.
(Redacted Distributor Pricing)
(Redacted Distributor Price List CONTRACT YEAR 1)
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Minimum order: $5,000.00 (USD)
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Minimum Private Label Order $50,000.00 (USD)
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Prices and Terms Subject to Change as needed
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(Redacted Bulk Pricing Discounts and Terms of Payment)
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