IONQ 8-K
IonQ, Inc. (IONQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amended Severance Plan and Amendment to Performance Based Award Agreements
On December 3, 2024, the Board of Directors (the “Board”) of IonQ, Inc. (the “Company”) adopted an amendment to the Company’s Executive Severance Plan (previously named our Change in Control Severance Plan) (the “Plan”) to make certain changes to the Plan which was previously adopted by the Board on July 22, 2021. The Plan provides for certain severance payments and benefits to eligible executives, including each of the Company’s named executive officers, in the event that the Company terminates the employment of an eligible executive without Cause (as defined in the Plan) or if an eligible executive resigns with Good Reason (as defined in the Plan) in qualifying circumstances (such termination or resignation, a “Covered Termination”).
The material terms of the Plan, which is filed as Exhibit 10.36 to the Company’s Registration Statement on Form S-4/A (File No. 333-254840) with the U.S. Securities and Exchange Commission (“SEC”) on August 5, 2021, remain unchanged by the amendment, except that (1) any termination occurring following the Change in Control Period (as defined in the Plan) will not qualify as a Covered Termination; (2) in a Covered Termination occurring prior to a Change in Control, an eligible executive will be eligible to receive his or her target annual bonus and pro-rated target annual bonus for the year in which the Covered Termination occurs and acceleration of his or her unvested time-based vesting equity awards; (3) the mere conversion of the Company to a subsidiary, division or unit of an acquiring entity in connection with a Change in Control (as defined in the Plan), or a change in the eligible executive’s reporting relationships or title following a Change in Control, will continue to not be deemed a material diminution of the duties, authority or responsibilities of an eligible executive in and of itself for the purposes of the definition of Good Reason, except in the case of our Chief Executive Officer; (4) the relocation of an eligible executive’s primary work location will not represent Good Reason if the eligible executive is permitted to work from home; and (5) in a Covered Termination occurring upon or within 12 months following a Change in Control, an eligible executive will be eligible to receive his or her pro-rated target annual bonus for the year in which the Covered Termination occurs.
The foregoing description of the Amended Plan is qualified in its entirety by reference to the Executive Severance Plan and Summary Plan Description, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Additionally, on December 3, 2024, the Board approved an amendment (the “Amendment”) to each of the Company’s outstanding Performance Based Award Agreements, which include agreements with each of the Company’s named executive officers (the “Award Agreements”), to provide that (1) the methodology for determining the number performance stock units (“PSUs”) that will accelerate in the case of an Involuntary Termination (as defined in the Award Agreement) upon or within 12 months following a Change in Control (as defined in the Award Agreement) will be the greater of (x) the target number of PSUs under the award or (y) based on projected performance achievement, provided that the satisfaction of the stock price hurdle will continue to apply, and (2) the definition of Good Reason for the purposes of the Award Agreement will be the same definition used in the Plan.
The foregoing description of the Amendment is qualified in its entirety by reference to the form of Award Agreement (as amended), a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 10.1 | Executive Severance Plan and Summary Plan Description (as amended December 3, 2024) | |
| 10.2* | Form of Performance-Based Award Grant Package (as amended December 3, 2024) | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * | Portions of this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(10)(iv). The Registrant agrees to furnish a copy of an unredacted agreement to the SEC upon its request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| IonQ, Inc. | ||||
| Date: December 6, 2024 | By: | /s/ Stacey Giamalis | ||
| Stacey Giamalis Chief Legal Officer and Corporate Secretary | ||||
Exhibit 10.1
IONQ, INC.
EXECUTIVE SEVERANCE PLAN
AND
SUMMARY PLAN DESCRIPTION
APPROVED BY THE BOARD OF DIRECTORS: July 22, 2021
AS AMENDED: December 3, 2024
1. Introduction. The purpose of this IonQ, Inc. Executive Severance Plan (the “Plan”) is to provide assurances of specified severance benefits to eligible executives of the Company whose employment is terminated by the Company or a successor under certain circumstances. This Plan is an “employee welfare benefit plan,” as defined in Section 3(1) of ERISA (as defined below). With the exception of certain definitions set forth below, this Plan shall supersede any individual agreement between the Company and any Covered Employee (as defined below) and any other plan, policy or practice, whether written or unwritten, maintained by the Company with respect to a Covered Employee, in each case to the extent that such agreement, plan, policy or practice provides for equity acceleration or severance benefits upon the Covered Employee’s separation from the Company. This document constitutes both the written instrument under which the Plan is maintained and the required summary plan description for the Plan.
2. Definitions. For purposes of the Plan, the terms below are defined as follows:
2.1. “Administrator” means the Board or Compensation Committee prior to a Change in Control; or, after a Change in Control, one or more members of the successor Board or Compensation Committee or other persons designated by the Company’s Board or Compensation Committee prior to such Change in Control.
2.2. “Board” means the Board of Directors of the Company.
2.3. “Cause” means with respect to such Covered Employee, the occurrence of any of the following events: (i) such Covered Employee’s material failure to follow any proper and lawful directive of the Board that remains uncured more than thirty (30) days after a written demand is delivered to such Covered Employee that specifically identifies the manner in which the Board believes that such Covered Employee has failed to follow such instructions, provided, that failure to meet performance targets shall not, in and of itself, be deemed a failure to follow any such instructions; (ii) such Covered Employee’s commission of an act of: (a) fraud, embezzlement, or theft; or (b) dishonesty that injures the business, business reputation or business relationships of the Company; (iii) such Covered Employee’s commission or conviction of, or pleading guilty or nolo contendere to, a felony; and (iv) such Covered Employee’s material violation of any agreement between such Covered Employee and Company or of any material Company policy that remains uncured (if curable) more than thirty (30) days after written notice thereof is delivered to such Covered Employee that specifically identities such violation. The determination of whether a termination is for Cause shall be made by the Administrator in its sole and exclusive judgment and discretion.
2.4. “Change in Control” has the meaning ascribed to such term in the Stock Plan, excluding, for the avoidance of doubt, the transactions contemplated by the Agreement and
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Plan of Merger by and among the Company, dMY Technology Group, Inc. III and Ion Trap Acquisition Inc., closing as of the Effective Date.
2.5. “Change in Control Period” means the time period beginning on the date on which a Change in Control becomes effective and ending on the first anniversary of the effective date of such Change in Control (except as otherwise set forth in a Participation Agreement).
2.6. “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
2.7. “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
2.8. “Company” means IonQ, Inc. and any successor.
2.9. “Compensation Committee” means the Compensation Committee of the Board.
2.10. “Covered Employee” means an employee of the Company who (i) is the Company’s Chief Executive Officer or has been designated by the Administrator to participate in the Plan, (ii) has executed the Company’s standard confidentially and inventions assignment agreement, and (iii) has timely and properly executed and delivered a Participation Agreement to the Company.
2.11. “Covered Termination” means a Covered Employee’s termination of employment by the Company (or any parent or subsidiary of the Company) without Cause or as a result of a Covered Employee’s resignation for Good Reason; provided, that, in either case, such termination is not due to the Covered Employee’s death or disability, and, that, in the event of a Change in Control, such termination does not occur beyond the Change in Control Period.
2.12. “Effective Date” means September 30, 2021.
2.13. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
2.14. “Good Reason” means with respect to such Covered Employee, any of the following conditions or actions taken by the Company without Cause and without such Covered Employee’s consent: (i) a material breach by the Company of an agreement between such Covered Employee and the Company; (ii) the Company materially reduces such Covered Employee’s base salary or the target award percentage of salary established for such Covered Employee’s annual bonus, in either case by 10% or more, other than any Company-wide reduction in compensation of employees; (iii) the Company materially reduces such Covered Employee’s duties, authority or responsibilities relative to such Covered Employee’s duties, authority or responsibilities in effect immediately prior to such reduction provided, however, that except in the case of the Chief Executive Officer, the mere conversion of the Company to a subsidiary, division or unit of an acquiring entity in connection with a Change in Control, or a change in the Covered Employee’s reporting relationships or title following a Change in Control, will not be deemed a material diminution in and of itself; or (iv) the Company relocates the facility that is such Covered
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Employee’s primary work location for the Company to a location more than fifty (50) miles from the immediately preceding location (excluding regular travel in the ordinary course of business), provided that in no event will a relocation represent “Good Reason” if the Company permits the Covered Employee to use Covered Employee’s home as Covered Employee’s primary work location following such relocation; provided, further, that in each case above, in order for the Covered Employee’s resignation to be deemed to have been for Good Reason, the Covered Employee must first give the Company written notice of the action or omission giving rise to “Good Reason” within thirty (30) days after the first occurrence thereof; the Company must fail to reasonably cure such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and the Covered Employee’s resignation must be effective not later than thirty (30) days after the expiration of such Cure Period.
2.15. “Participation Agreement” means an agreement between a Covered Employee and the Company in substantially the form of Appendix A attached hereto, and which may include such other terms as the Administrator deems necessary or advisable in the administration of the Plan.
2.16. “Severance Benefits” means the compensation and other benefits the Covered Employee will be provided pursuant to Section 4.
2.17. “Stock Plan” means the Company’s 2021 Equity Incentive Plan, as amended and restated from time to time, or any successor thereto.
2.18. “Termination Date” means the Covered Employee’s last day of employment with the Company.
3. Eligibility for Severance Benefits. An individual is eligible for severance benefits under the Plan, in the amounts set forth in Section 4, only if such individual is a Covered Employee on the date such individual experiences a Covered Termination.
4. Severance Benefits.
4.1. Covered Termination Outside the Change in Control Period. If, at any time prior to the Change in Control Period, a Covered Employee experiences a Covered Termination, then, subject to the Covered Employee’s compliance with Section 5, the Covered Employee shall receive the following Severance Benefits from the Company (the “Standard Severance Benefits”):
4.1.1. Cash Severance Benefits. The Covered Employee shall receive cash severance in an amount equal to the Covered Employee’s base salary (as in effect immediately prior to any reduction giving rise to Good Reason, if applicable) for the number of months set forth in the Covered Employee’s Participation Agreement (the “Standard Severance Period”). The cash amount shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule, provided, that no payment shall be made prior to the first payroll date following the effective date of the Release (the “Initial Payment Date”). On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the cash amount that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for the Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the Release, with the
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balance of the cash amount being paid as originally scheduled. Notwithstanding the foregoing, the Company may pay the cash amount in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.1.2. Target Annual Bonus Entitlement. The Covered Employee will additionally be entitled to a portion of such Covered Employee’s target annual bonus (if any), as established by the Board for the year in which the Covered Termination occurs. Such payment shall be in an amount equal to the product of (i) the Covered Employee’s target annual bonus (if any) and (ii) the applicable multiplier set forth in the Covered Employee’s Participation Agreement. The cash amount shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule, for the Standard Severance Period, provided that no payment shall be made prior to the Initial Payment Date. On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the cash amount that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the Release, with the balance of the cash amount being paid as originally scheduled. Notwithstanding the foregoing, the Company may pay the cash amount in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.1.3. Prorated Target Annual Bonus Entitlement. The Covered Employee will additionally be entitled to the portion of such Covered Employee’s target annual bonus (if any), as established by the Board for the year in which the Covered Termination occurs, prorated for time worked by the Covered Employee in the year in which the Covered Termination occurs. Such payment shall be in an amount equal to: (i) the Covered Employee’s target annual bonus (if any), (ii) divided by 365, and (iii) multiplied by the number of days the Covered Employee was employed in the calendar year in which the Covered Termination occurs. The cash amount shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule, for the Standard Severance Period, provided that no payment shall be made prior to the Initial Payment Date. On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the cash amount that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the Release, with the balance of the cash amount being paid as originally scheduled. Notwithstanding the foregoing, the Company may pay the cash amount in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.1.4. COBRA Premiums. Provided the Covered Employee is eligible for and timely makes the necessary elections for continuation coverage pursuant to COBRA the Company shall pay the applicable premiums (inclusive of premiums for the Covered Employee’s dependents) for such coverage following the date of the Covered Employee’s Covered Termination for the Standard Severance Period (such period of months, the
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“Standard COBRA Payment Period”) (but in no event after such time as the Covered Employee is eligible for coverage under a health, dental or vision insurance plan of a subsequent employer or as the Covered Employee and the Covered Employee’s dependents are no longer eligible for COBRA coverage). The Covered Employee shall notify the Company immediately if the Covered Employee becomes covered by a health, dental, or vision insurance plan of a subsequent employer or if the Covered Employee’s dependents are no longer eligible for COBRA coverage. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums on the Covered Employee’s behalf, the Company will instead pay such Covered Employee on the last day of each remaining month of the Standard COBRA Payment Period a fully taxable cash payment equal to the COBRA premium for that month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to the Covered Employee’s election of COBRA coverage or payment of COBRA premiums and without regard to such Covered Employee’s continued eligibility for COBRA coverage during the Standard COBRA Payment Period. Such Special Severance Payment shall end upon expiration of the Standard COBRA Payment Period.
4.1.5. Equity Vesting. Each of the Covered Employee’s then-outstanding equity awards that are subject to a time-based vesting schedule shall accelerate and become vested and exercisable as to 100% of the unvested shares subject to the equity award, except with respect to any award granted after the Effective Date that explicitly overrides this provision in writing. Subject to Section 5, the accelerated vesting described in this paragraph shall be effective as of the Termination Date. For the avoidance of doubt, any accelerated satisfaction of performance criteria with respect to any outstanding equity award that is to vest and/or the amount of the equity award to vest is to be determined based on the achievement of performance criteria, will be set forth and governed by the award agreement with respect to such equity award. Notwithstanding anything herein to the contrary, nothing in the Plan shall limit the Company’s ability to accelerate vesting and/or exercisability of outstanding equity awards pursuant to the terms of the applicable equity incentive plan of the Company.
4.2. Covered Termination During the Change in Control Period. If, at any time during the Change in Control Period, a Covered Employee experiences a Covered Termination, then, subject to the Covered Employee’s compliance with Section 5, the Covered Employee shall receive the following Severance Benefits from the Company (the “CIC Severance Benefits”):
4.2.1. Cash Severance Benefits. The Covered Employee shall receive cash severance in an amount equal to the Covered Employee’s base salary (as in effect immediately prior to any reduction giving rise to Good Reason, if applicable) for the number of months set forth in the Covered Employee’s Participation Agreement (the “CIC Severance Period”). The cash amount shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule, provided, that no payment shall be made prior to the Initial Payment Date. On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the cash amount that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for the Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the
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Release, with the balance of the cash amount being paid as originally scheduled. Notwithstanding the foregoing, the Company may pay the cash amount in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.2.2. Target Annual Bonus Entitlement. The Covered Employee will additionally be entitled to a portion of such Covered Employee’s target annual bonus (if any), as established by the Board for the year in which the Covered Termination occurs. Such payment shall be in an amount equal to the product of (i) the Covered Employee’s target annual bonus (if any) and (ii) the applicable multiplier set forth in the Covered Employee’s Participation Agreement. The cash amount shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule, for the CIC Severance Period provided, that no payment shall be made prior to the Initial Payment Date. On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the cash amount that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the Release, with the balance of the cash amount being paid as originally scheduled. Notwithstanding the foregoing, the Company may pay the cash amount in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.2.3. Prorated Target Annual Bonus Entitlement. The Covered Employee will additionally be entitled to the portion of such Covered Employee’s target annual bonus (if any), as established by the Board for the year in which the Covered Termination occurs, prorated for time worked by the Covered Employee in the year in which the Covered Termination occurs. Such payment shall be in an amount equal to: (i) the Covered Employee’s target annual bonus (if any), (ii) divided by 365, and (iii) multiplied by the number of days the Covered Employee was employed in the calendar year in which the Covered Termination occurs. The cash amount shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule, for the CIC Severance Period, provided that no payment shall be made prior to the Initial Payment Date. On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the cash amount that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the Release, with the balance of the cash amount being paid as originally scheduled. Notwithstanding the foregoing, the Company may pay the cash amount in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.2.4. COBRA Premiums. Provided the Covered Employee is eligible for and timely makes the necessary elections for continuation coverage pursuant to COBRA the Company shall pay the applicable premiums (inclusive of premiums for the Covered Employee’s dependents) for such coverage following the date of the Covered Employee’s Covered Termination for up to the CIC Severance Period (such period of months, the
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“CIC COBRA Payment Period”) (but in no event after such time as the Covered Employee is eligible for coverage under a health, dental or vision insurance plan of a subsequent employer or as the Covered Employee and the Covered Employee’s dependents are no longer eligible for COBRA coverage). The Covered Employee shall notify the Company immediately if the Covered Employee becomes covered by a health, dental, or vision insurance plan of a subsequent employer or if the Covered Employee’s dependents are no longer eligible for COBRA coverage. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums on the Covered Employee’s behalf, the Company will instead pay such Covered Employee on the last day of each remaining month of the CIC COBRA Payment Period a Special Severance Payment to be made without regard to the Covered Employee’s election of COBRA coverage or payment of COBRA premiums and without regard to such Covered Employee’s continued eligibility for COBRA coverage during the CIC COBRA Payment Period. Such Special Severance Payment shall end upon expiration of the CIC COBRA Payment Period.
4.2.5. Equity Vesting. Each of the Covered Employee’s then-outstanding equity awards that are subject to a time-based vesting schedule shall accelerate and become vested and exercisable as to 100% of the unvested shares subject to the equity award, except with respect to any award granted after the Effective Date that explicitly overrides this provision in writing. Subject to Section 5, the accelerated vesting described in this paragraph shall be effective as of the Termination Date. For the avoidance of doubt, any accelerated satisfaction of performance criteria with respect to any outstanding equity award that is to vest and/or the amount of the equity award to vest is to be determined based on the achievement of performance criteria, will be set forth and governed by the award agreement with respect to such equity award. Notwithstanding anything herein to the contrary, nothing in the Plan shall limit the Company’s ability to accelerate vesting and/or exercisability of outstanding equity awards pursuant to the terms of the applicable equity incentive plan of the Company.
5. Conditions to Receipt of Severance.
5.1. Release Agreement. As a condition to receiving the Severance Benefits, a Covered Employee must sign a release of all claims in favor of the Company and its subsidiaries and affiliates (the “Release”) in such form as may be provided by the Company. The Release must become effective in accordance with its terms, which must occur in no event more than 60 days following the date of the applicable Covered Termination. In no event shall payment of any benefits under the Plan be made prior to a Covered Employee’s Termination Date or prior to the effective date of the Release. If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, and the Covered Employee’s Termination Date occurs at a time during the calendar year when the Release could become effective in the calendar year following the calendar year in which the Covered Employee’s “separation from service” within the meaning of Section 409A of the Code and the final regulations and any guidance promulgated thereunder (“Section 409A”) occurs, then regardless of when the Release is returned to the Company and becomes effective, the Release will not be deemed effective any earlier than the latest permitted effective date; provided, that except to the extent that payments may be delayed in accordance with Section 8, on the first regular
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payroll date following the effective date of a Covered Employee’s Release, the Company shall (i) pay the Covered Employee a lump sum amount equal to the sum of the Severance Benefits that the Covered Employee would otherwise have received through such payroll date but for the delay in payment related to the effectiveness of the Release and (ii) commence paying the balance, if any, of the Severance Benefits in accordance with the applicable payment schedule.
5.2. Other Requirements. A Covered Employee’s receipt of Severance Benefits pursuant to Section 4 will be subject to such Covered Employee continued material compliance with the terms of the Release, the Participation Agreement, the non-disparagement provisions of a separation agreement provided by the Company, and any confidential information agreement, proprietary information and inventions agreement and any other agreement between the Covered Employee and the Company. Severance Benefits under this Plan shall terminate immediately for a Covered Employee if such Covered Employee is in material violation, at any time, of any legal or contractual obligation owed to the Company.
5.3. Section 280G. Any provision of the Plan to the contrary notwithstanding, if any payment or benefit a Covered Employee would receive from the Company and its subsidiaries or an acquiror pursuant to the Plan or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Higher Amount (defined below). The “Higher Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Covered Employee’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” within the meaning of Section 280G of the Code is necessary so that the Payment equals the Higher Amount, reduction will occur in the manner that results in the greatest economic benefit for a Covered Employee and, to the extent applicable, complies with Section 409A. In no event will the Company, any subsidiary or any stockholder be liable to any Covered Employee for any amounts not paid as a result of the operation of this Section 5.3. The Company will use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to a Covered Employee and the Company within 15 calendar days after the date on which such Covered Employee’s right to a Payment is triggered (if requested at that time by such Covered Employee or the Company) or such other time as requested by such Covered Employee or the Company.
6. Non-Duplication of Benefits. Notwithstanding any other provision in the Plan to the contrary, the Severance Benefits provided to a Covered Employee are intended to be and are exclusive and in lieu of any other severance benefits or payments to which such Covered Employee may otherwise be entitled, either at law, tort, or contract, in equity, or under the Plan, in the event of any termination of such Covered Employee’s employment. Except as otherwise set forth under an effective Participation Agreement, the Covered Employee will be entitled to no severance benefits or payments upon a termination of employment that constitutes a Covered Termination other than those benefits expressly set forth herein and those benefits required to be provided by
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applicable law or as negotiated in accordance with applicable law (including any severance benefits that may be included in a severance agreement, employment agreement or similar contract between the Company or a subsidiary of the Company and the Covered Employee). Notwithstanding the foregoing, if a Covered Employee is entitled to any benefits other than the benefits under the Plan by operation of applicable law or as negotiated in accordance with applicable law, such Covered Employee’s benefits under the Plan shall be provided only to the extent more favorable than such other arrangement. The Administrator, in its sole discretion, shall have the authority to reduce or otherwise adjust a Covered Employee’s benefits under the Plan, in whole or in part, by any other severance benefits, pay and benefits in lieu of notice, or other similar benefits payable to such Covered Employee under the Plan that become payable in connection with the Covered Employee’s termination of employment pursuant to (i) any applicable legal requirement, including the Worker Adjustment and Retraining Notification Act (the “WARN Act”), the California Plant Closing Act or any other similar state law, or (ii) any policy or practice of the Company providing for the Covered Employee to remain on payroll for a limited period of time after being given notice of termination. The benefits provided under the Plan are intended to satisfy, in whole or in part, any and all statutory obligations of the Company that may arise out of a Covered Employee’s termination of employment, and the Administrator shall so construe and implement the terms of the Plan.
7. Clawback; Recovery. All payments and severance benefits provided under the Plan will be subject to any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Administrator may impose such other clawback, recovery or recoupment provisions as the Administrator determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of common stock of the Company or other cash or property upon the occurrence of a termination of employment for Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for Good Reason, constructive termination, or any similar term under any plan of or agreement with the Company.
8. Section 409A. Notwithstanding anything to the contrary in the Plan, no severance payments or benefits will become payable until the Covered Employee has a “separation from service” within the meaning of Section 409A. Further, if some or all of the Covered Employee’s Severance Benefits are subject to Section 409A and such Covered Employee is a “specified employee” within the meaning of Section 409A at the time of such Covered Employee’s separation from service (other than due to death), then such Severance Benefits otherwise due to such Covered Employee on or within the six-month period following such Covered Employee’s separation from service will accrue during such six-month period and will become payable in a lump sum payment (less applicable withholding taxes) on the date six months and one day following the date of the Covered Employee’s separation from service if necessary to avoid adverse taxation under Section 409A. All subsequent payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if the Covered Employee dies following such Covered Employee’s separation from service but prior to the six-month anniversary of such Covered Employee’s date of separation, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less applicable withholding taxes) to the Covered Employee’s estate as soon as administratively practicable after
9
the date of such Covered Employee’s death and all other benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under the Plan is intended to constitute a separate payment for purposes of Section 409A. It is the intent of this Plan to comply with or be exempt from the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under the Plan comply with Section 409A, and in no event shall the Company or any of its representatives be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Covered Employee on account of non-compliance with Section 409A.
9. Withholding. The Company will withhold from any Severance Benefits all federal, state, local and other taxes required to be withheld therefrom and any other required payroll deductions.
10. Administration. The Plan will be administered and interpreted by the Administrator (in the Administrator’s sole discretion). The Administrator is the “named fiduciary” of the Plan for purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity. Any decision made or other action taken by the Administrator with respect to the Plan, and any interpretation by the Administrator of any term or condition of the Plan, or any related document, will be conclusive and binding on all persons and be given the maximum possible deference allowed by law. Any decision made or other action taken by the Administrator with respect to the Plan, and any interpretation by the Administrator of any term or condition of the Plan, or any related document that (i) does not affect the benefits payable under the Plan shall not be subject to review unless found to be arbitrary and capricious or (ii) does affect the benefits payable under the Plan shall not be subject to review unless found to be unreasonable or not to have been made in good faith.
11. Amendment or Termination. The Company, by action of the Administrator, reserves the right to amend or terminate the Plan at any time, without advance notice to any Covered Employee and without regard to the effect of the amendment or termination on any Covered Employee or on any other individual. Any amendment or termination of the Plan will be in writing. Notwithstanding the foregoing, a Covered Employee’s rights to receive payments and benefits pursuant to this Plan under an effective Participation Agreement may not be adversely affected, without the Covered Employee’s written consent, by an amendment or termination of this Plan.
12. Claims Procedure. Claims for benefits under the Plan shall be administered in accordance with Section 503 of ERISA and the Department of Labor Regulations thereunder. Any employee or other person who believes they are entitled to any payment under the Plan (a “claimant”) may submit a claim in writing to the Administrator within 90 days of the earlier of (i) the date the claimant learned the amount of such claimant’s severance benefits under the Plan or (ii) the date the claimant learned that they will not be entitled to any benefits under the Plan. In determining claims for benefits, the Administrator or its delegate has the authority to interpret the Plan, to resolve ambiguities, to make factual determinations, and to resolve questions relating to eligibility for and amount of benefits. If the claim is denied (in full or in part), the claimant will
10
be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice will also describe any additional information or material that the Administrator needs to complete the review and an explanation of why such information or material is necessary and the Plan’s procedures for appealing the denial (including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described below). The denial notice will be provided within 90 days after the claim is received. If special circumstances require an extension of time (up to 90 days), written notice of the extension will be given to the claimant (or representative) within the initial 90-day period. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the claim. If the extension is provided due to a claimant’s failure to provide sufficient information, the time frame for rendering the decision will be tolled from the date the notification is sent to the claimant about the failure to the date on which the claimant responds to the request for additional information. The Administrator has delegated the claims review responsibility to the Company’s Chief Financial Officer or such other individual designated by the Administrator, except in the case of a claim filed by or on behalf of the Company’s Chief Financial Officer or such other individual designated by the Administrator, in which case, the claim will be reviewed by the Company’s Chief Executive Officer.
13. Appeal Procedure. If the claimant’s claim is denied, the claimant (or such claimant’s authorized representative) may apply in writing to an appeals official appointed by the Administrator (which may be a person, committee or other entity) for a review of the decision denying the claim. Review must be requested within 60 days following the date the claimant received the written notice of a claim denial or else the claimant will lose the right to such review. A request for review must set forth all the grounds on which such request is based, all facts in support of the request, and any other matters that the claimant feels are pertinent. In connection with the request for review, the claimant (or representative) has the right to review and obtain copies of all documents and other information relevant to the claim, upon request and at no charge, and to submit written comments, documents, records and other information relating to such claimant’s claim. The review shall take into account all comments, documents, records and other information submitted by the claimant (or representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The appeals official will provide written notice of its decision on review within 60 days after it receives a review request. If special circumstances require an extension of time (up to 60 days), written notice of the extension will be given to the claimant (or representative) within the initial 60-day period. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the appeals official expects to render its decision. If the extension is provided due to a claimant’s failure to provide sufficient information, the time frame for rendering the decision on review is tolled from the date the notification is sent to the claimant about the failure to the date on which the claimant responds to the request for additional information. If the claim is denied (in full or in part) upon review, the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice shall also include a statement that the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant to the claim and a statement regarding the claimant’s right to bring an action under Section 502(a) of ERISA. The Administrator has delegated the appeals review responsibility to the Company’s Chief Financial Officer, except in the case of an appeal filed by
11
or on behalf of the Company’s Chief Financial Officer, in which case, the appeal will be reviewed by the Company’s Chief Executive Officer.
14. Arbitration. No arbitration proceeding shall be brought to recover benefits under the Plan until the claims procedures described in Sections 12 and 13 have been exhausted and the Plan benefits requested have been denied in whole or in part. Notwithstanding any other provision of the Plan, to ensure the timely and economical resolution of disputes, all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance or interpretation of this Plan will be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in Delaware, conducted by JAMS, Inc. (“JAMS”) under the then-applicable JAMS rules (available at the following web address: https://www.jamsadr.com/rules-employment). By agreeing to this arbitration procedure, each Covered Employee and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. Covered Employees will have the right to be represented by legal counsel at any arbitration proceeding. In addition, all claims, disputes, or causes of action under this section, whether by a Covered Employee or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies that a Covered Employee or the Company would be entitled to seek in a court of law. The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required of a Covered Employee if the dispute were decided in a court of law. Nothing in this paragraph is intended to prevent either a Covered Employee or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. Any arbitration must be commenced within one year after the Covered Employee’s receipt of notification that their appeal was denied. The foregoing provisions shall apply to the extent consistent with and permitted by ERISA.
15. Source of Payments. All severance benefits will be paid in cash from the general funds of the Company; no separate fund will be established under the Plan, and the Plan will have no assets. No right of any person to receive any payment under the Plan will be any greater than the right of any other general unsecured creditor of the Company.
16. Inalienability. In no event may any current or former employee of the Company or any of its subsidiaries or affiliates sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan. At no time will any such right or interest be subject to the claims of creditors nor liable to attachment, execution or other legal process.
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17. No Enlargement of Employment Rights. Neither the establishment nor maintenance of the Plan, any amendment of the Plan, nor the making of any benefit payment hereunder, will be construed to confer upon any individual any right to be continued as an employee of the Company. The Company expressly reserves the right to discharge any of its employees at any time, with or without cause. However, as described in the Plan, a Covered Employee may be entitled to benefits under the Plan depending upon the circumstances of such Covered Employee’s termination of employment.
18. Successors. Any successor to the Company of all or substantially all of the Company’s business or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) will assume the obligations under the Plan and agree expressly to perform the obligations under the Plan in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under the Plan, the term “Company” will include any successor to the Company’s business or assets which become bound by the terms of the Plan by operation of law, or otherwise.
19. Applicable Law. The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable, the internal substantive laws of the State of Maryland (except its conflict of laws provisions).
20. Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.
21. Headings. Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning hereof.
22. Additional Information.
| Plan Name: | IonQ, Inc. Executive Severance Plan | |
| Plan Sponsor: | IonQ, Inc. | |
| Plan Year: | Fiscal year ending December 31 | |
| Plan Administrator: | ||
| IonQ, Inc. Attention: Administrator of the IonQ, Inc. Executive Severance Plan | ||
| Agent for Service of Legal Process: | IonQ, Inc. Attention: Administrator of the IonQ, Inc. Executive Severance Plan | |
| Service of process may also be made upon the Administrator. | ||
| Type of Plan: | Severance Plan/Employee Welfare Benefit Plan | |
| Plan Costs: | The cost of the Plan is paid by the Company. |
23. Statement of ERISA Rights.
As a Covered Employee under the Plan, you have certain rights and protections under ERISA:
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(a) You may examine (without charge) all Plan documents, including any amendments and copies of all documents filed with the U.S. Department of Labor. These documents are available for your review in the office of the Company’s Chief Legal Officer.
(b) You may obtain copies of all Plan documents and other Plan information upon written request to the Administrator. A reasonable charge may be made for such copies.
In addition to creating rights for Covered Employees, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan (called “fiduciaries”) have a duty to do so prudently and in the interests of you and the other Covered Employees. No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit under the Plan or exercising your rights under ERISA. If your claim for a severance benefit is denied, in whole or in part, you have a right to know why it was denied, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. The claim review procedure is explained in Sections 12 and 13, above.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Administrator to provide the materials and to pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim which is denied or ignored, in whole or in part, you may file suit in a federal court. If it should happen that you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions regarding the Plan, please contact the Administrator. If you have any questions about this statement or about your rights under ERISA, you may contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at 1-866-444-3272.
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APPENDIX A
IONQ, INC.
EXECUTIVE SEVERANCE PLAN
Participation Agreement
IonQ, Inc. (the “Company”) is pleased to inform you, [name], that you have been selected to participate in the Company’s Executive Severance Plan (the “Plan”) as a Covered Employee. A copy of the Plan was delivered to you with this Participation Agreement. Your participation in the Plan is subject to all of the terms and conditions of the Plan. The capitalized terms used but not defined herein will have the meanings ascribed to them in the Plan.
In order to become a Covered Employee under the Plan, you must complete and sign this Participation Agreement and return it to [name] no later than [date].
The Plan describes in detail certain circumstances under which you may become eligible for Severance Benefits and the amount of those benefits. As described more fully in the Plan, you may become eligible for certain Severance Benefits if you experience a Covered Termination.
If you become eligible for Standard Severance Benefits under Section 4.1 of the Plan, then subject to the terms and conditions of the Plan, you will receive:
| Cash Severance Benefits |
[ ] months | |
| Target Annual Bonus Entitlement |
[ ]x | |
| Prorated Target Annual Bonus Entitlement |
As set forth in Section 4.1.3. | |
| Accelerated Equity Vesting |
As set forth in Section 4.1.5. | |
| COBRA Premiums |
[ ] months |
If you become eligible for CIC Severance Benefits under Section 4.2 of the Plan, then subject to the terms and conditions of the Plan, you will receive:
| Cash Severance Benefits |
[ ] months | |
| Target Annual Bonus Entitlement |
[ ]x | |
| Prorated Target Annual Bonus Entitlement |
As set forth in Section 4.2.3. | |
| Accelerated Equity Vesting |
As set forth in Section 4.2.5. | |
| COBRA Premiums |
[ ] months |
In order to receive any Severance Benefits for which you otherwise become eligible under the Plan, you must sign and deliver to the Company the Release, which must have become effective and irrevocable, and otherwise comply with the requirements under Section 5 of the Plan.
In accordance with Section 6 of the Plan, the benefits, if any, provided under the Plan are intended to be the exclusive benefits for you related to your termination of employment with the Company and will supersede and replace any severance benefits to which you otherwise would eligible to participate in any other Company severance policy, plan, agreement or other arrangement (whether or not subject to ERISA), provided that, any accelerated satisfaction of performance criteria with respect to any outstanding equity award that is to vest and/or the amount of the Equity Award to vest is to be determined based on the achievement of performance criteria, will be set forth and governed by the award agreement with respect to such equity award (the “Performance Award Carveout”).
By your signature below, you and the Company agree that your participation in the Plan is governed by this Participation Agreement and the provisions of the Plan. Your signature below confirms that: (i) you have received a copy of the Plan; (ii) you have carefully read this Participation Agreement and the Plan and you acknowledge and agree to its terms, including, but not limited to, Section 6 of the Plan; (iii) you agree that this Participation Agreement and the provisions of the Plan supersede any individual agreement between you and the Company and any other plan, policy or practice, whether written or unwritten, maintained by the Company with respect to equity acceleration or severance benefits upon your separation from the Company, subject to the Performance Award Carveout; and (iv) decisions and determinations by the Administrator under the Plan will be final and binding on you and your successors.
| IONQ, INC. | COVERED EMPLOYEE | |||||
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Signature |
Signature | |||||
| Name: |
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Name: |
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| Title: |
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Title: |
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| Date: |
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Date: |
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Attachment: IonQ, Inc. Executive Severance Plan
[SIGNATURE PAGE TO IONQ, INC. CHANGE IN CONTROL SEVERANCE PLAN]
Exhibit 10.2
Certain identified information marked with [***] has been excluded from the exhibit because it is both not material and is the type that the registrant treats as private or confidential.
IONQ, INC.
PERFORMANCE-BASED AWARD GRANT NOTICE
(2021 EQUITY INCENTIVE PLAN)
IonQ, Inc. (the “Company”) has awarded to you (the “Participant”) the number of performance-based restricted stock units (“PSUs”) specified and on the terms set forth below in consideration of your services (the “PSU Award”). Your PSU Award is subject to all of the terms and conditions as set forth in this PSU Award Grant Notice (including Exhibit A attached hereto) (the “Grant Notice”) and in the IonQ, Inc. 2021 Equity Incentive Plan (the “Plan”) and the Award Agreement (the “Agreement”), which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Agreement shall have the meanings set forth in the Plan or the Agreement.
| Participant: |
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| Date of Grant: |
|
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| Target Number of PSUs (“Target PSUs”): |
|
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| Maximum Number of PSUs (“Maximum PSUs”): |
|
| Vesting Schedule: | This PSU Award shall vest in accordance with the vesting conditions provided in Exhibit A attached hereto. Participant acknowledges and agrees that the Vesting Schedule may change prospectively in the event Participant’s service status changes between full- and part-time status and/or in the event Participant is on an approved leave of absence in accordance with the Company’s policies relating to work schedules and vesting of awards or as determined by the Board. | |
| Issuance Schedule: | One share of Common Stock will be issued at the time set forth in Section 5 of the Agreement for each PSU that vests. | |
Participant Acknowledgements: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:
| • | The PSU Award is governed by this Grant Notice, and the provisions of the Plan and the Agreement, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice (including Exhibit A attached hereto) and the Agreement (together, the “PSU Award Agreement”) may not be modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company. |
| • | To the fullest extent permitted under the Plan and applicable law, any Withholding Taxes (as defined in the Agreement) applicable to the PSU Award will be satisfied through the sale of a number of the shares of Common Stock issuable in settlement of the PSU Award as determined in accordance with Section 4 of the Agreement and the remittance of the cash proceeds to the Company. Under the Agreement, the Company or, if different, your employer is authorized and directed by you to make payment from the cash proceeds of this sale directly to the appropriate tax or social security authorities in an amount equal to the taxes required to be remitted. You acknowledge and agree that, as a result of your authorization, the Company will have the authority to administer the Mandatory Sell to Cover (as defined in the Agreement) in connection with your receipt of this PSU Award. |
| • | You acknowledge that you are familiar with and agree to continued compliance with the mutual promises and covenants contained in the Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement that you were required, as a condition of your employment by the Company, to execute. |
| • | The PSU Award Agreement sets forth the entire understanding between you and the Company regarding the acquisition of Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of: (i) other equity awards previously granted to you, and (ii) any written employment agreement, offer letter, severance agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this PSU Award. |
By accepting this PSU Award, the Participant acknowledges having received and read the Grant Notice, the Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. The Participant consents to receive the Plan and related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
| IONQ, INC.: | PARTICIPANT: | |||||||
| By: |
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| Signature | Signature | |||||||
| Title: |
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Date: |
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| Date: |
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| ATTACHMENTS: | Exhibit A, Award Agreement, IonQ, Inc. 2021 Equity Incentive Plan |
EXHIBIT A
This Exhibit A forms part of the PSU Award Grant Notice to which it is attached and all references to “Grant Notice” in the PSU Award Grant Notice and the Agreement shall include both the PSU Award Grant Notice and this Exhibit A.
1. DEFINITIONS.
(i) [***]
(ii) “Certified PSUs” means the sum of the following: (A) the [***] Earned PSUs (as defined and determined in accordance with Section 3(c) of this Exhibit A) plus (B) the [***] Earned PSUs (as defined and determined in accordance with Section 4(c) of this Exhibit A), subject to the terms of Section 2 of this Exhibit A.
(iii) “Committee” has the meaning ascribed to the term in the Plan, except that after a Change in Control, it shall refer to one or more members of the successor board of directors or other persons designated by the Board or Compensation Committee prior to such Change in Control.
(iv) “Employee Service” means your Continuous Service as an Employee to the Company (and any successor) or an Affiliate.
(v) “Fiscal Year” means the applicable fiscal year of the Company and its consolidated subsidiaries, which period shall be the 12-month period ending on December 31 of such year. Accordingly, references herein to a Fiscal Year (e.g., “Fiscal Year 2023”) refer to the Fiscal Year ending on December 31 of such year.
(vi) “Good Reason” means with respect to you, any of the following conditions or actions taken by the Company without Cause and without such your consent: (i) a material breach by the Company of an agreement between you and the Company; (ii) the Company materially reduces your base salary or the target award percentage of salary established for your annual bonus, in either case by 10% or more, other than any Company-wide reduction in compensation of employees; (iii) the Company materially reduces your duties, authority or responsibilities relative to your duties, authority or responsibilities in effect immediately prior to such reduction provided, however, that except in the case of the Chief Executive Officer, the mere conversion of the Company to a subsidiary, division or unit of an acquiring entity in connection with a Change in Control, or a change in your reporting relationships or title following a Change in Control, will not be deemed a material diminution in and of itself; or (iv) the Company relocates the facility that is your primary work location for the Company to a location more than fifty (50) miles from the immediately preceding location (excluding regular travel in the ordinary course of business), provided that in no event will a relocation represent “Good Reason” if the Company permits you to use your home as your primary work location following such relocation; provided, further, that in each case above, in order for your resignation to be deemed to have been for Good Reason, you must first give the Company written notice of the action or omission giving rise to “Good Reason” within thirty (30) days after the first occurrence thereof; the Company must fail to reasonably cure such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and your resignation must be effective not later than thirty (30) days after the expiration of such Cure Period.
(vii) “Involuntary Termination” means the termination of your Employee Service by the Company without Cause or as a result of your resignation for Good Reason (and, in either case, not due to your death or Disability).
(viii) “Performance Metric” means, as applicable, each of the following: (A) the [***] Performance Metric (as defined in Section 3(a) of this Exhibit A) and (B) the [***] Performance Metric (as defined in Section 4(a) of this Exhibit A).
(ix) “Performance Period” means the period commencing on (and including) January 1, 2023, and ending on (and including) December 31, 2026, except as otherwise provided herein.
1.
(x) “Release Condition” means the requirement that you (or your personal representative, if applicable) execute a general waiver and release, in such a form as provided by the Company (the “Release”), within the applicable time period set forth therein, and such Release must become effective in accordance with its terms, which must occur in no event more than 60 days following the applicable termination date.
(xi) [***]
(xii) “Stock Price Hurdle” means $[***] per share (subject to any adjustment as provided in the Plan).
(xiii) “Trading Day” means any day on which the stock exchange or market on which shares of Common Stock are listed is open for trading.
2. NUMBER OF CERTIFIED PSUS AND VESTING DATE.
(a) Number of Certified PSUs.
(i) The Committee shall determine and certify the number of Certified PSUs in accordance with this Section 2; provided, however, that in the event of a Change in Control, the Committee shall make any adjustments to the applicable time period and/or method of calculation that it deems appropriate for purposes of such measurement, including but not limited to adjusting for any ratio due to a Change in Control and any related conversion of Common Stock.
(ii) If (A) the number of Certified PSUs is determined to be less than the Maximum PSUs or (B) either or both of the Performance Metrics are achieved below the threshold levels provided in Sections 3 and 4 below, respectively, you shall have no further right, title or interest in such unvested PSUs or the Common Stock theretofore issuable in respect of such portion of the PSU Award.
(b) Certification Date. The Committee shall determine the number of Certified PSUs as soon as administratively practicable and in no event later than 60 days following the end of the Performance Period (or earlier as otherwise provided herein) (such date of determination and certification, the “Certification Date”).
(c) Vesting Dates. Certified PSUs shall vest in full on the Certification Date. The shares of Common Stock in respect of the vested Certified PSUs shall be issued to you in accordance with the Agreement.
(d) Satisfaction of Stock Price Hurdle. The 60-Trading Day average closing price per share of the Common Stock for the period ending on (and including) the last Trading Day of the Performance Period (the “60-Day Average”) must equal or exceed the Stock Price Hurdle. Notwithstanding the foregoing, in the event that the Performance Period ends prior to December 31, 2026, the 60-Day Average shall instead be calculated based on the 60-Trading Day average closing price per share of the Common Stock for the period ending on (and including) the last Trading Day of such shortened Performance Period, as provided herein. If the 60-Day Average does not equal or exceed the Stock Price Hurdle, the maximum number of PSUs that may be Certified PSUs shall be the number of Target PSUs as listed on the Grant Notice, irrespective of actual Performance Metric achievement levels, except as otherwise provided herein. You shall have no further right, title or interest in such remaining PSUs or the Common Stock theretofore issuable in respect of such portion of the PSU Award.
(e) Acceleration Due to Performance. If the Performance Metrics are both achieved at the maximum achievement levels provided in Sections 3 and 4 below, respectively, on or prior to December 31, 2025, the vesting of the Certified PSUs shall accelerate, such that the Certified PSUs shall fully vest on the Certification Date, which shall occur as soon as practicable and in no event later than 60 days following December 31, 2025. For purposes of determining whether the Stock Price Hurdle has been satisfied, the 60-Day Average shall be calculated based on the 60-Trading Day average closing price per share of the Common Stock for the period ending on (and including) December 31, 2025.
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(f) Additional Limitations. If any of the following limitations apply, you shall have no further right, title or interest in such remaining PSUs or the Common Stock issuable in respect of such portion of the PSU Award.
(i) The number of Certified PSUs may not exceed the Maximum PSUs as listed on the Grant Notice.
(ii) If the conditions provided in Section 2(e) are not met such that the acceleration described therein does not apply, the maximum number of PSUs that may be Certified PSUs shall be 2.5 times the number of Target PSUs as listed on the Grant Notice, irrespective of actual Performance Metric achievement levels unless [***], as determined in the sole discretion of the Committee.
3. PERFORMANCE METRIC – [***].
(a) Performance Metric. For purposes of this Section 3, the Performance Metric is [***] (the “[***] Performance Metric”).
(b) Weighting. 50% of the number of PSUs subject to the PSU Award shall be eligible to vest based on the level of achievement of the [***] Performance Metric.
(c) Earned PSUs. The number of PSUs earned shall be based on the level of achievement of the [***] Performance Metric (the “[***] Earned PSUs”) as determined by the Committee in accordance with the following table and subject to any limitations or adjustments from the preceding Section 2, with linear interpolation used to calculate the number of [***] Earned PSUs between the achievement levels set forth below:
| Achievement Level |
[***] Performance Metric ([***]) |
Payout Percentage | Number of [***] Earned PSUs (% of Target PSUs) |
|||||||
| Less than [***] | 0 | % | 0 | % | ||||||
| Threshold / Target |
[***] | 100 | % | 50 | % | |||||
| Stretch |
[***] | 200 | % | 100 | % | |||||
| Maximum |
Greater than or equal to [***] | 300 | % | 150 | % | |||||
[***]
4. PERFORMANCE METRIC – [***].
(a) Performance Metric. For purposes of this Section 4, the Performance Metric is [***], as determined by the Committee in accordance with the Company’s standard practices (the “[***] Performance Metric”).
(b) Weighting. 50% of the number of PSUs subject to the PSU Award shall be eligible to vest based on the level of achievement of the [***] Performance Metric.
(c) Earned PSUs. The number of PSUs earned shall be based on the level of achievement of the [***] Performance Metric (the “[***] Earned PSUs”) as determined by the Committee in accordance with the following table and subject to any limitations or adjustments from the preceding Section 2, with linear interpolation used to calculate the number of [***] Earned PSUs between the achievement levels set forth below:
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| Achievement Level |
[***] Performance Metric |
Payout Percentage | Number of [***] Earned PSUs (% of Target PSUs) |
|||||||
| Threshold |
Less than or equal to [***] | 0 | % | 0 | % | |||||
| Target |
[***] | 100 | % | 50 | % | |||||
| Stretch |
[***] | 200 | % | 100 | % | |||||
| Maximum |
Greater than or equal to [***] | 300 | % | 150 | % | |||||
5. TERMINATION OF SERVICE.
(a) Employee Service. Except as otherwise provided herein or determined by the Committee, if your Employee Service ceases prior to the Certification Date, you shall not earn or vest in any portion of the PSU Award, including any portion of the [***] Earned PSUs or the [***] Earned PSUs, and you shall have no further right, title or interest in any unvested PSUs or the Common Stock theretofore issuable in respect of such portion of the PSU Award, unless otherwise provided by the Committee.
(b) Involuntary Termination. Subject to Section 6(c) below and to satisfaction of the Release Condition, in the event that your Employee Service ceases due to an Involuntary Termination prior to the Certification Date, then:
(i) the Committee shall determine, in its sole discretion and as soon as practicable but in no event later than 60 days following such Involuntary Termination, the number of Certified PSUs (A) which shall equal (1) the Target PSUs, if such Involuntary Termination occurs during the first three Fiscal Years of the Performance Period or (2) the number of PSUs determined based on the Committee’s assessment of the projected achievement of the Performance Metrics, if such Involuntary Termination occurs during the fourth Fiscal Year of the Performance Period, and (B) which number shall be pro-rated based on a fraction, (1) the numerator of which is the number of months that you provided Employee Service to the Company from the later of (a) January 1, 2023 or (b) your start date of employment with the Company, in each case through the termination date, and (2) the denominator of which is the number of months from the later of (a) January 1, 2023 or (b) your start date of employment with the Company, in each case through December 31, 2026 (except the conditions of Section 2(d) shall apply and such pro-ration shall not be applicable if the conditions provided in Section 2(e) are met, as of the termination date, such that the acceleration described therein applies);
(ii) the Committee shall determine whether the Stock Price Hurdle in Section 2(d) has been satisfied, with the 60-Day Average calculated based on the 60-Trading Day average closing price per share of the Common Stock for the period ending on (and including) the termination date;
(iii) the date of Committee action shall be the Certification Date for these purposes; and
(iv) such Certified PSUs shall be fully vested as of the Certification Date.
(c) Death or Disability. Subject to Section 6(d) below and to satisfaction of the Release Condition, in the event that your Employee Service ceases due to death or Disability prior to the Certification Date, then (A) the number of Certified PSUs shall be determined on the Certification Date following the end of the Performance Period, as set forth in Section 2(b) above (or sooner, as otherwise provided in this Exhibit A); (B) such Certified PSUs shall become fully vested as of the Certification Date; and (C) the shares of Common Stock in respect of the vested Certified PSUs shall be issued to you (or your personal representative, in the event of your death) in accordance with the Agreement.
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6. CHANGE IN CONTROL OF THE COMPANY.
(a) PSU Award Not Assumed. If the surviving corporation or acquiring corporation (or its parent company) in a Change in Control (the “Acquirer”) determines not to assume, substitute for or continue the PSU Award, then (A) the Committee shall determine, in its sole discretion, the number of Certified PSUs which shall equal the greater of (x) the Target PSUs or (y) the number of PSUs determined based on the Committee’s assessment of the projected achievement of the Performance Metrics and satisfaction of the Stock Price Hurdle, with the 60-Day Average calculated based on the 60-Trading Day average closing price per share of the Common Stock for the period ending on (and including) the effective date of the Change in Control, (2) which number shall be pro-rated based on a fraction, (a) the numerator of which is the number of months that you provided Employee Service to the Company from the later of (i) January 1, 2023 or (ii) your start date of employment with the Company, in each case through the effective date of the Change in Control, and (b) the denominator of which is the number of months from the later of (i) January 1, 2023 or (ii) your start date of employment with the Company, in each case through December 31, 2026 (except such pro-ration shall not be applicable if the conditions provided in Section 2(e) are met such that the acceleration described therein applies); and (B) the date of Committee action shall be the Certification Date for these purposes.
(b) PSU Award Assumed. If the Acquirer assumes, substitutes for or continues the PSU Award then the number of Certified PSUs shall be determined by the Committee at the end of the Performance Period or sooner, pursuant to this Exhibit A.
(c) Involuntary Termination in Connection with Change in Control. If you incur an Involuntary Termination immediately prior to or within 12 months following a Change in Control, then (A) the Committee shall determine the number of Certified PSUs which shall equal the greater of (x) the Target PSUs or (y) the number of PSUs determined based on the Committee’s assessment of the projected achievement of the Performance Metrics and satisfaction of the Stock Price Hurdle, with the 60-Day Average calculated based on the 60-Trading Day average closing price per share of the Common Stock for the period ending on (and including) the termination date, (2) which number shall be pro-rated based on a fraction, (a) the numerator of which is the number of months that you provided Employee Service to the Company from the later of (i) January 1, 2023 or (ii) your start date of employment with the Company, in each case through the termination date, and (b) the denominator of which is the number of months from the later of (i) January 1, 2023 or (ii) your start date of employment with the Company, in each case through December 31, 2026 (except such pro-ration shall not be applicable if the conditions provided in Section 2(e) are met such that the acceleration described therein applies); and (B) the date of Committee action shall be the Certification Date for these purposes. The Certified PSUs shall become fully vested as of the Certification Date, subject to satisfaction of the Release Condition.
(d) Death or Disability in Connection with Change in Control. If your Employee Service terminates due to death or Disability immediately prior to or within 12 months following the Change in Control, then (A) the number of Certified PSUs shall be determined in accordance with Section 5(c) above, unless previously determined pursuant to Section 2(a) above, and (B) the Certified PSUs shall fully vest as of the Certification Date, subject to satisfaction of the Release Condition.
5.
ATTACHMENT I
IONQ, INC.
AWARD AGREEMENT
(2021 EQUITY INCENTIVE PLAN)
As reflected by your PSU Award Grant Notice (“Grant Notice”), IonQ, Inc. (the “Company”) has granted you a performance-based restricted stock unit award under the IonQ, Inc. 2021 Equity Incentive Plan (the “Plan”) for the number of performance-based restricted stock units (“PSUs”) as indicated in your Grant Notice (the “PSU Award”). The terms of your PSU Award as specified in this Award Agreement for your PSU Award (this “Agreement”) and the Grant Notice together constitute your “PSU Award Agreement”. Defined terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.
The general terms applicable to your PSU Award are as follows:
1. GOVERNING PLAN DOCUMENT. Your PSU Award is subject to all the provisions of the Plan, including but not limited to the provisions in:
(a) Section 6 of the Plan regarding the impact of a Capitalization Adjustment, dissolution, liquidation, or Corporate Transaction on your PSU Award;
(b) Section 9(e) of the Plan regarding the Company’s retained rights to terminate your Continuous Service notwithstanding the grant of the PSU Award; and
(c) Section 8 of the Plan regarding the tax consequences of your PSU Award.
Your PSU Award is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the PSU Award Agreement and the provisions of the Plan, the provisions of the Plan shall control.
2. GRANT OF THE PSU AWARD. This PSU Award represents your right to be issued on a future date the number of shares of the Company’s Common Stock that is equal to the number of PSUs indicated in the Grant Notice as modified to reflect any Capitalization Adjustment and subject to your satisfaction of the vesting conditions set forth therein. Any additional PSUs that become subject to the PSU Award pursuant to Capitalization Adjustments as set forth in the Plan and the provisions of Section 3 below, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other PSUs covered by your PSU Award.
3. NO STOCKHOLDER RIGHTS. Unless and until such time as shares of Common Stock are issued in settlement of vested PSUs, you will have no ownership of the shares allocated to the PSUs and will have no right to vote such shares. You shall receive no benefit or adjustment to this PSU Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment; provided, however, that this sentence will not apply with respect to any shares of Common Stock that are delivered to you in connection with your PSU Award after such shares have been delivered to you.
4. WITHHOLDING OBLIGATIONS.
(a) You acknowledge that, regardless of any action taken by the Company, or if different, the Affiliate employing or engaging you (the “Employer”), the ultimate liability for all income tax (including U.S. federal, state, and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (the “Tax-Related Items”)
1.
is and remains your responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSU Award, including, but not limited to, the grant of the PSU Award, the vesting of the PSU Award, the issuance of shares in settlement of vesting of the PSU Award, the subsequent sale of any shares of Common Stock acquired pursuant to the PSU Award and the receipt of any dividends or dividend equivalent; and (ii) do not commit to and are under no obligation to reduce or eliminate your liability for Tax-Related Items. Further, if you become subject to taxation in more than one country, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one country.
(b) On or before the time you receive a distribution of the shares underlying your PSUs, and at any other time as reasonably requested by the Company in accordance with applicable law, you agree to make adequate provision for any sums required to satisfy the withholding obligations of the Company, the Employer or any Affiliate in connection with any Tax-Related Items that arise in connection with the PSU Award (the “Withholding Taxes”). The Company shall arrange a mandatory sale (on your behalf pursuant to your authorization under this section and without further consent) of the shares of Common Stock issued in settlement upon the vesting of your PSUs in an amount necessary to satisfy the Withholding Taxes and shall satisfy the Withholding Taxes by withholding from the proceeds of such sale (the “Mandatory Sell to Cover”). You hereby acknowledge and agree that the Company shall have the authority to administer the Mandatory Sell to Cover arrangement in its sole discretion with a registered broker-dealer that is a member of the Financial Industry Regulatory Authority as the Company may select as the agent (the “Agent”) who will sell on the open market at the then prevailing market price(s), as soon as practicable on or after each date on which your PSUs vest and the shares underlying such PSUs are distributed, the number (rounded up to the next whole number) of the shares of Common Stock to be delivered to you in connection with the vesting and settlement of the PSUs sufficient to generate proceeds to cover (i) the Withholding Taxes that you are required to pay pursuant to the Plan and this Agreement as a result of the vesting and settlement of the PSUs and (ii) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto any remaining funds shall be remitted to you.
(c) If, for any reason, such Mandatory Sell to Cover does not result in sufficient proceeds to satisfy the Withholding Taxes, or if such Mandatory Sell to Cover is not permitted by applicable law, the Company or an Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Taxes relating to the PSU Award by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or the Employer; (ii) causing you to tender a cash payment (which may be in the form of a check, electronic wire transfer or other method permitted by the Company); or (iii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with your PSUs with a fair market value (measured as of the date shares of Common Stock are issued to you) equal to the amount of such Withholding Taxes; provided, however, that shares of Common Stock shall not be withheld with a value exceeding the maximum amount of tax required to be withheld by applicable law (or such lesser amount as may be necessary to avoid classification of the PSU Award as a liability for financial accounting purposes); and to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or Compensation Committee of the Board.
(d) Unless the tax withholding obligations of the Company and/or any Affiliate with respect to the Tax-Related Items are satisfied, the Company shall have no obligation to deliver to you any Common Stock.
(e) In the event the Company’s obligation to withhold arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Tax-Related Items was greater than the amount withheld by the Company or your Employer, you agree to indemnify and hold the Company and your Employer harmless from any failure by the Company or your Employer to withhold the proper amount.
(f) You acknowledge and agree that, as a result of your authorization under this section and without further consent, the Company will have the authority to administer the Mandatory Sell to Cover pursuant to the terms of the PSU Award.
2.
(g) The Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts, or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s). If the maximum rate is used, any over-withheld amount may be refunded to you in cash by the Company or Employer (with no entitlement to the equivalent in shares of Common Stock), or if not refunded, you may seek a refund from the local tax authorities. You must pay to the Company and/or the Employer any amount of Tax-Related Items that the Company and/or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described.
5. DATE OF ISSUANCE.
(a) The issuance of shares in respect of the PSUs is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the Tax-Related Items set forth in Section 4 of this Agreement, in the event one or more PSUs vests, the Company shall issue to you one (1) share of Common Stock for each PSU that vests on the applicable vesting date(s) (subject to any different provisions in the Grant Notice). Each issuance date determined by this paragraph is referred to as an “Original Issuance Date.”
(b) Notwithstanding the foregoing, if (i) selling shares of the Common Stock in the public market on the Original Issuance Date to satisfy your tax withholding obligation in accordance with Section 4 of this Agreement is prohibited for any reason, and (ii) the Company elects not to instead satisfy its tax withholding obligations by withholding shares from your distribution, then such shares shall not be delivered on such Original Issuance Date and shall instead be delivered to you on the earliest of: (1) the first date that you are not prohibited from selling shares of the Common Stock in the open market, or (2) such earlier date that the Company elects to satisfy its tax withholding obligation by withholding shares from your distribution; provided, however, that notwithstanding the foregoing, in no event will the shares be delivered to you any later than: (A) December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or (B) if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this PSU Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).
(c) In addition and notwithstanding the foregoing, no shares of Common Stock issuable to you under this Section 5 as a result of the vesting of one or more PSUs will be delivered to you until any filings that may be required pursuant to the Hart-Scott-Rodino (“HSR”) Act in connection with the issuance of such shares have been filed and any required waiting period under the HSR Act has expired or been terminated (any such filings and/or waiting period required pursuant to HSR, the “HSR Requirements”). If the HSR Requirements apply to the issuance of any shares of Common Stock issuable to you under this Section 5 upon vesting of one or more PSUs, such shares of Common Stock will not be issued on the Original Issuance Date and will instead be issued on the first business day on or following the date when all such HSR Requirements are satisfied and when you are permitted to sell shares of Common Stock on an established stock exchange or stock market, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities. Notwithstanding the foregoing, the issuance date for any shares of Common Stock delayed under this Section 5(c) shall in no event be later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), unless a later issuance date is permitted without incurring adverse tax consequences under Section 409A of the Code or other applicable law.
(d) The form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
6. TRANSFERABILITY. Except as otherwise provided in the Plan, your PSU Award is not transferable, except by will or by the applicable laws of descent and distribution.
7. CORPORATE TRANSACTION. Your PSU Award is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
3.
8. NO LIABILITY FOR TAXES. As a condition to accepting the PSU Award, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the PSU Award or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the PSU Award and have either done so or knowingly and voluntarily declined to do so.
9. SEVERABILITY. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
10. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy.
11. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your PSU Award, including a summary of the applicable federal income tax consequences please see the Prospectus.
4.
Attachment II
2021 EQUITY INCENTIVE PLAN