UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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. ☐
EXPLANATORY NOTE
This Current Report on Form 8-K is being filed to provide the pro forma financial statements and the adjustments of the number of shares of Common Stock underlying outstanding awards and authorized for future issuance under certain plans required under Items 2.01, 5.01 and 9.01 of Form 8-K in connection with the separation (the “Separation”) from Resideo Technologies, Inc. (the “Company”) of its ADI Global Distribution business into an independent, publicly traded company, ADI Global Distribution Inc. (NYSE:ADIG). The Separation was completed on August 3, 2026.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In connection with the separation by Resideo Technologies, Inc. (the “Company”) of the ADI Global Distribution business from the Company's remaining businesses, effective as of August 3, 2026, the transfer of the ADI Global Distribution business from the Company to ADI Global Distribution Inc. (“ADI”) and the distribution on a pro rata basis by the Company of all of the outstanding shares of ADI's common stock, $0.001 par value per share, to holders of the Company's common stock, $0.001 par value per share (the “Common Stock”), the number of shares of Common Stock underlying outstanding awards and authorized for future issuance under the (i) Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Stock Incentive Plan”), (ii) 2018 Stock Plan for Non-Employee Directors of Resideo Technologies, Inc. (the “Director Equity Plan”), and (iii) the Resideo Employee Stock Purchase Plan (the “Employee Stock Purchase Plan” and, together with the Stock Incentive Plan and the Director Equity Plan, the “Plans”), were adjusted to their current forms pursuant to the anti-dilution provisions of such plans, effective as of August 7, 2026 and each of the Plans was amended in connection therewith to reflect the anti-dilution adjustment pursuant to each such Plan.
The above summary does not purport to be complete and is qualified in its entirety by reference to the Stock Incentive Plan, the Director Equity Plan and the Employee Stock Purchase Plan, which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K, respectively, and are incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The Company’s unaudited pro forma condensed consolidated financial statements and related notes thereto, giving effect to the Separation, are filed as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference.
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SIGNATURE
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.
| RESIDEO TECHNOLOGIES, INC. | ||
| By: | /s/ Joshua Foster | |
| Name: | Joshua Foster | |
| Title: | Senior Vice President, General Counsel and Corporate Secretary | |
Date: August 7, 2026
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Exhibit 10.1
Amended and Restated
2018 Stock Incentive Plan
of
Resideo Technologies, Inc.
and Its Affiliates
Article
I
Establishment and Purpose
1.1 Purpose. The purpose of this Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (as amended and restated, the “Plan”) is to enable the Company to achieve superior financial performance, as reflected in the performance of its Common Stock and other key financial or operating indicators by (a) providing incentives and rewards to certain Employees and Other Service Providers who are in a position to contribute materially to the success and long-term objectives of the Company, (b) aiding in the recruitment and retention of Employees and Other Service Providers of exceptional ability, (c) providing Employees and Other Service Providers an opportunity to acquire or expand equity interests in the Company, and (d) promoting the growth and success of the Company’s business by aligning the financial interests of Employees and Other Service Providers with that of the other stockholders of the Company. Towards these objectives, the Plan provides for the grant of Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock, Other Stock-Based Awards and Cash-Based Awards.
1.2 Original Plan; Effective Date. The original 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Original Plan”) was effective as of the effective date of the Company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission in connection with the distribution of its Shares by Honeywell International Inc. (the “Effective Date”). The Board has from time to time adopted amendments and restatements of the Plan, including an amendment restatement adopted on December 21, 2018 (the “Initial Restatement Date”) and April 12, 2023 (the “Second Restatement Date”). The Board adopted this further amendment and restatement of the Plan on April 15, 2024, subject to stockholder approval, which date of stockholder approval is referred to as the “Restatement Date”. The Board further amended and restated the Plan, effective as of August 7, 2026, to adjust the Share limitations under the Plan in accordance with Section 5.3 of the Plan, in connection with the separation of the ADI Global Distribution business from the Company’s remaining businesses and the distribution on a pro rata basis by the Company of all of the outstanding shares of common stock of ADI Global Distribution Inc. to the Company’s common stockholders, which date of further amendment and restatement is referred to as the “Third Restatement Date”. References contained herein to the “Plan” shall refer to the Original Plan, as previously amended and restated and as further amended and restated hereby, effective as of the Third Restatement Date.
Article II
Definitions
For purposes of the Plan, the following terms have the following meanings:
2.1 “1933 Act” means the Securities Act of 1933, as amended, and the regulations and interpretations thereunder.
2.2 “Affiliate” means (a) any subsidiary of the Company of which at least 50 percent of the aggregate outstanding voting common stock or capital stock is owned directly or indirectly by the Company, (b) any other parent of a subsidiary described in clause (a), or (c) any other entity in which the Company has a substantial ownership interest and which has been designated as an Affiliate by the Committee in its sole discretion.
2.3 “Award” means any form of incentive or performance award granted under the Plan, whether singly or in combination, to a Participant by the Committee pursuant to any terms and conditions that the Committee may establish and set forth in the applicable Award Agreement. Awards granted under the Plan may consist of: (a) “Stock Options” awarded pursuant to Section 4.3; (b) “Stock Appreciation Rights” awarded pursuant to Section 4.3; (c) “Restricted Stock Units” awarded pursuant to Section 4.4; (d) “Restricted Stock” awarded pursuant to Section 4.4; (e) “Other Stock-Based Awards” awarded pursuant to Section 4.5; and (f) “Cash-Based Awards” awarded pursuant to Section 4.6.
2.4 “Award Agreement” means the document issued, either in writing or an electronic medium, to a Participant evidencing the grant of an Award and that sets out the terms and conditions of such Award.
2.5 “Board” means the Board of Directors of the Company.
2.6 “Cash-Based Award” means an award issued pursuant to Section 4.6.
2.7 “Cause” has the meaning assigned to such term in any severance plan of the Company or an Affiliate, in each case, that is applicable to such Participant as of immediately prior to the Termination of Service; provided, that if no such agreement exists, or if such term is not defined in such agreement, “Cause” means any of the following: (i) clear evidence of a significant violation of the Company’s Code of Business Conduct; (ii) a fraud committed against the Company; (iii) the misappropriation, embezzlement or reckless or willful destruction of Company property; (iv) the willful failure to perform, or gross negligence in the performance of, duties; (v) the conviction (treating a nolo contendere plea as a conviction) of a felony (whether or not any right to appeal has been or may be exercised); (vi) the knowing falsification of any records or documents of the Company; (vii) a significant breach of any statutory or common law duty of loyalty to the Company; (viii) intentional and improper conduct significantly prejudicial to the business of the Company; (ix) the failure to cooperate fully in a Company investigation or the failure to be fully truthful when providing evidence or testimony in such investigation; or (x) the violation of Company rules and policies that, based on a single occurrence, might not meet the significance thresholds of (i), (vii) or (viii) above, but that shall, for purposes of such significance thresholds, be deemed to constitute a violation thereof in the event any such violation occurs more than once. Cause shall be determined by the Committee for Reporting Persons or by the Company for all other Participants, in its sole and absolute discretion.
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2.8 “Change in Control” means (a) any one person, or more than one person acting as a group (as defined under U.S. Department of Treasury Regulation (“Treasury Regulation”) § 1.409A-3(i)(5)(v)(B)) acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company; or (b) any one person, or more than one person acting as a group (as defined under Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30 percent or more of the total voting power of the stock of the Company; or (c) a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or (d) any one person, or more than one person acting as a group (as defined in Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company and its subsidiaries on a consolidated basis that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company and its subsidiaries on a consolidated basis immediately before such acquisition or acquisitions. For purposes of clause (d), “gross fair market value” means the value of the assets of the Company and its subsidiaries on a consolidated basis, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. The foregoing clauses (a) through (d) shall be interpreted in a manner that is consistent with the Treasury Regulations promulgated pursuant to Section 409A of the Code so that all, and only, such transactions or events that could qualify as a “change in control event” within the meaning of Treasury Regulation § 1.409A-3(i)(5)(i) shall be deemed to be a Change in Control for purposes of this Plan.
2.9 “Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
2.10 “Committee” means the compensation committee of the Board or any successor committee or subcommittee of the Board or other committee or subcommittee designated by the Board, which committee or subcommittee is comprised solely of two or more persons who are Non-Employee Directors within the meaning of Rule 16b-3(b)(3) under the Exchange Act.
2.11 “Common Stock” means the common stock of the Company.
2.12 “Company” means Resideo Technologies, Inc. and its successors.
2.13 “Disabled” and “Disability”, with respect to a Participant, have the meanings assigned to such terms under the long-term disability plan maintained by the Company or an Affiliate in which such Participant is covered at the time the determination is made, and if there is no such plan, mean the permanent inability as a result of accident or sickness to perform any and every duty pertaining to such Participant’s occupation or employment for which the Participant is suited by reason of the Participant’s previous training, education and experience; provided, that, to the extent an Award subject to Section 409A of the Code shall become payable upon a Participant’s Disability, a Disability shall not be deemed to have occurred for such purposes unless the circumstances would also result in a “disability” within the meaning of Section 409A of the Code, unless otherwise provided in an Award Agreement.
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2.14 “Dividend Equivalent” means an Award entitling the grantee to an amount equal to the cash dividend or the Fair Market Value of the stock dividend that would be paid on each Share underlying an Award if the Share were duly issued and outstanding on the date on which the dividend is payable.
2.15 “Employee” means any individual who performs services as an employee of the Company or an Affiliate.
2.16 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the regulations and interpretations thereunder.
2.17 “Executive Level Employee” means any individual who is designated as an officer of the Company by the Board, whether or not that individual is in a direct reporting relationship to the Company’s Chief Executive Officer.
2.18 “Exercise Price” means the price of a Share, as fixed by the Committee, that may be purchased under a Stock Option or with respect to which the amount of any payment pursuant to a Stock Appreciation Right is determined.
2.19 “Fair Market Value” means, except as otherwise provided in the applicable Award Agreement, (a) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee and (b) with respect to Shares, as of any date, (i) the average (mean) of the highest and lowest sales prices of a Share, as reported on the New York Stock Exchange (or any other reporting system selected by the Committee, in its sole discretion) on the date as of which the determination is being made or, if no sale of Shares is reported on this date, on the most recent preceding day on which there were sales of Shares reported or (ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee.
2.20 “Good Reason” has the meaning assigned to such term in any written individual agreement between the Company or an Affiliate and the Participant in which such term is defined and in the absence of any such written agreement, has the meaning assigned to such term in any severance plan of the Company or an Affiliate, in each case, that is applicable to such Participant, in each case, as of immediately prior to the Change in Control (but assuming that a Change in Control has occurred for purposes of such agreement or plan); provided, that if no such agreement exists, or if such term is not defined in such agreement, “Good Reason” means, without the Participant’s consent, (a) a material reduction in the Participant’s base salary and, as to a Participant who is an Executive Level Employee, annual target bonus in effect immediately prior to the Change in Control (other than a reduction that is generally applicable to all salaried and non-union hourly employees of the Company); (b) the permanent elimination of the Participant’s position, not including a transfer pursuant to the sale of a facility or line of business, provided the Participant is offered substantially comparable employment with the successor employer; (c) in the case of a Participant who is an Executive Level Employee, a material adverse change to the Participant’s position, function, responsibilities or reporting level, or in the standard of performance required of the Participant, as determined immediately prior to a Change in Control; (d) a material change in the geographic location at which the Participant must perform his or her services from the location the Participant was required to perform such services immediately prior to a Change in Control; or (e) an action by the Company that under applicable law constitutes constructive discharge. Notwithstanding the foregoing, Good Reason shall not be deemed to have occurred unless the Participant provides written notice to the Company identifying the event or omission constituting the reason for a Good Reason termination within ninety (90) days following the first occurrence of such event or omission. Within thirty (30) days after such notice has been provided to the Company, the Company shall have the opportunity, but shall have no obligation, to cure such event or conditions that give rise to a Good Reason termination. If the Company fails to cure the events or conditions giving rise to a Participant’s Good Reason termination by the end of the thirty (30) day cure period, the Participant’s employment shall be terminated effective as of the expiration of such thirty (30) day cure period unless the Participant has withdrawn such Good Reason termination notice.
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2.21 “Incentive Stock Option” means a Stock Option granted under Section 4.3 of the Plan that meets the requirements of Section 422 of the Code and is designated in the Award Agreement to be an Incentive Stock Option.
2.22 “Non-Employee Director” means any member of the Board, elected or appointed, who is not an Employee. An individual who is elected to the Board at a meeting of the stockholders of the Company shall be deemed to be a member of the Board as of the date of the meeting.
2.23 “Nonqualified Stock Option” means any Stock Option granted under Section 4.3 of the Plan that is not an Incentive Stock Option.
2.24 “Other Service Provider” means an individual providing services to the Company as an independent contractor or consultant and who is not an Employee or a Non-Employee Director.
2.25 “Other Stock-Based Award” means an Award granted under Section 4.5 and denominated in Shares.
2.26 “Participant” means an Employee or Other Service Provider who has been granted an Award under the Plan.
2.27 “Reporting Person” means an Employee who is subject to the reporting requirements of Section 16(a) of the Exchange Act.
2.28 “Restricted Stock” means Shares issued pursuant to Section 4.4 that are subject to any restrictions that the Committee, in its discretion, may impose.
2.29 “Restricted Stock Unit” means a right granted under Section 4.4 to acquire Shares or an equivalent amount in cash that is subject to any restrictions that the Committee, in its discretion, may impose.
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2.30 “Retirement” means, except as otherwise determined by the Committee or as required by local law applicable to a Participant, the Termination of Service on or after attainment of age 55 with 10 years of service with the Company and its Affiliates, other than on account of an involuntary Termination of Service for Cause, provided, however, that the Participant has advised the Company’s corporate secretary in writing no less than six (6) months prior to such Retirement that he or she is considering retirement. For purposes of this Section, “years of service” is determined using the Participant’s most-recent adjusted service date, as reflected at the Participant’s Termination of Service in the Company’s records. Notwithstanding any provision to the contrary in this Plan or any Award Agreement, any continued or extended vesting and/or exercise period that would otherwise be available upon a Participant’s Retirement under an Award granted on or after the Initial Restatement Date shall not apply to any such Awards granted to any Participant resident in any country where a continued or extended vesting and/or exercise period due to Retirement would violate age discrimination rules and regulations.
2.31 “Share” means a share of Common Stock.
2.32 “Stock Appreciation Right” means a right granted under Section 4.3 to an amount in cash or a number of Shares with a Fair Market Value equal to the excess of the Fair Market Value of the Shares on the date on which the Stock Appreciation Right is exercised over the applicable Exercise Price (with any fractional Shares treated in accordance with Section 5.5).
2.33 “Stock Option” means a right granted under Section 4.3 to purchase from the Company a stated number of Shares at the applicable Exercise Price. Stock Options awarded under the Plan may be in the form of Incentive Stock Options or Nonqualified Stock Options.
2.34 “Termination of Service” means the date of cessation of a Participant’s provision of services to the Company and its Affiliates for any reason, with or without Cause, as determined by the Company; provided, that a Participant will be deemed to have incurred a Termination of Service on the date that such Participant provides notice of termination to the Company and its Affiliates. Except as otherwise provided in an Award Agreement, (a) termination of service shall be determined without regard to any statutory or contractual notice periods for termination of employment, dismissal, redundancy, and similar events, and (b) if an Employee’s employment is terminated under circumstances that entitle the Employee to severance benefits pursuant to any applicable severance plan of the Company or an Affiliate in which the Employee participates, the Employee’s employment relationship with the Company and its Affiliates shall cease on the day prior to the date that severance benefits become payable under the terms of the applicable severance plan without regard to any delay in payment required by Section 409A of the Code. Notwithstanding the foregoing, (x) if an Affiliate ceases to be an Affiliate while an Award granted to a Participant who provides services to such Affiliate is outstanding, the Committee may, in its discretion, deem such Participant to have a Termination of Service on the date the Affiliate ceases to be an Affiliate or on a later date specified by the Committee; (y) the Committee shall make any determination described in clause (x) before or not more than a reasonable period after the date the Affiliate ceases to be an Affiliate; and (z) each such Participant’s Termination of Service shall be treated as an involuntary termination not for Cause. For purposes of clarification, any non-qualified deferred compensation (within the meaning of Section 409A of the Code) payable to the Participant upon a Termination of Service pursuant to the terms and conditions of this Plan shall be paid to the Participant upon a “separation from service” as determined in accordance with Section 409A of the Code without the imposition of additional taxes or penalties.
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Article III
Administration
3.1 The Committee. The Plan shall be administered by the Committee.
3.2 Authority of the Committee. The Committee shall have authority, in its sole and absolute discretion and subject to the terms of the Plan, to (a) interpret the Plan; (b) prescribe the rules and regulations that it deems necessary for the proper operation and administration of the Plan, and amend or rescind any existing rules or regulations relating to the Plan; (c) select Employees and Other Service Providers to receive Awards under the Plan; (d) determine the form of Awards, the number of Shares subject to each Award, all the terms and conditions of an Award including, without limitation, the conditions on exercise or vesting, the designation of Stock Options as Incentive Stock Options or Nonqualified Stock Options and the terms of Award Agreements; (e) determine whether Awards shall be granted singly, in combination or in tandem; (f) establish and administer performance criteria in respect of any Awards that are subject to performance-based vesting or settlement; (g) waive or amend any terms, conditions, restrictions or limitations on an Award, except that the prohibition on the repricing of Stock Options and Stock Appreciation Rights, as described in Section 4.3(g), may not be waived; (h) in accordance with Article V, make any adjustments to the Plan (including but not limited to adjustment of the number of Shares available under the Plan or any Award) and any Award granted under the Plan that may be appropriate; (i) provide for the deferred payment of Awards and the extent to which payment shall be credited with Dividend Equivalents; (j) determine whether Awards may be transferable to family members, a family trust, a family partnership or otherwise; (k) determine whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other property; (l) interpret, administer, reconcile any inconsistency in, correct any default in and/or supply any omission in, the Plan and any instrument or agreement relating to (including any Award Agreement), or Award made under, the Plan; (m) waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate any Award; (n) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards if the requirements of Section 4.8 are met, or in accordance with Section 5.4; (o) establish any provisions that the Committee may determine to be necessary in order to implement and administer the Plan in foreign countries; and (p) take any and all other actions it deems necessary or advisable for the proper operation or administration of the Plan.
3.3 Effect of Determinations. All determinations of the Committee shall be final, binding and conclusive on all persons having an interest in the Plan.
3.4 Delegation of Authority. The Committee, in its discretion and consistent with applicable law and regulations, may delegate its authority and duties under the Plan to one or more subcommittees of the Committee or to the Chief Executive Officer of the Company or any other individual or committee as it deems to be advisable, under any conditions and subject to any limitations that the Committee may establish. Only the Committee (or a subset thereof), however, shall have authority to grant and administer Awards to Reporting Persons and any delegate of the Committee.
3.5 Employment of Advisors. The Committee may select and employ attorneys, consultants, accountants and other advisors at the Company’s expense (and may determine the compensation thereof), and the Committee, the Company, and the officers and directors of the Company may rely upon the advice, opinions or valuations of the advisors employed.
3.6 No Liability. No member of the Committee, nor any person acting as a delegate of the Committee with respect to the Plan, shall be liable for any losses resulting from any action taken or omitted to be taken, interpretation or construction made in good faith with respect to the Plan or any Award granted under the Plan.
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Article IV
Awards
4.1 Eligibility. All Employees, and such Other Service Providers as may be designated by the Committee from time to time, are eligible to receive Awards granted under the Plan, except as otherwise provided in this Article IV.
4.2 Form of Awards. Awards shall be in the form determined by the Committee, in its discretion, and shall be evidenced by an Award Agreement. Awards may be granted singly or in combination or in tandem with other Awards.
4.3 Stock Options and Stock Appreciation Rights. The Committee may grant Stock Options and Stock Appreciation Rights under the Plan to those Employees and Other Service Providers whom the Committee may from time to time select, in the amounts and pursuant to the other terms and conditions that the Committee, in its discretion, may determine and set forth in the Award Agreement, subject to the provisions below:
(a) Form. Stock Options granted under the Plan shall, at the discretion of the Committee and as set forth in the Award Agreement, be in the form of Incentive Stock Options, Nonqualified Stock Options, or a combination of the two. If an Incentive Stock Option and a Nonqualified Stock Option are granted to the same Participant under the Plan at the same time, the form of each shall be clearly identified, and they shall be deemed to have been granted in separate grants. In no event shall the exercise of one Award affect the right to exercise the other Award. Stock Appreciation Rights may be granted either alone or in connection with concurrently or previously issued Nonqualified Stock Options.
(b) Exercise Price. Other than with respect to Stock Options that are assumed, converted or substituted as a result of the acquisition of another company by the Company or an Affiliate or a combination of the Company or an Affiliate with another company, the Committee shall set the Exercise Price of Stock Options or Stock Appreciation Rights granted under the Plan at a price that is equal to or greater than the Fair Market Value of a Share on the date of grant, subject to adjustment as provided in Section 5.3. The Exercise Price of Incentive Stock Options, however, shall be equal to or greater than 110 percent of the Fair Market Value of a Share on the date of grant if the Participant receiving the Stock Options owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any subsidiary or parent corporation of the Company, as defined in Section 424 of the Code. The Exercise Price of a Stock Appreciation Right granted in tandem with a Stock Option shall be equal to the Exercise Price of the related Stock Option. The Exercise Price of a Stock Option or Stock Appreciation Right shall be set forth in the Award Agreement.
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(c) Term and Timing of Exercise. Except as otherwise provided in an Award Agreement, Stock Options and Stock Appreciation Rights shall lapse not later than 10 years after the date of grant, as determined by the Committee at the time of grant. Except as otherwise provided in an Award Agreement or other subsequent agreement between a Participant and the Company or an Affiliate, each Stock Option or Stock Appreciation Right granted under the Plan shall be exercisable in whole or in part, subject to the following conditions:
(i) The date on which any Award of Stock Options or Stock Appreciation Rights to a Participant vest and may first be exercised shall be set forth in the Award Agreement, which must comply with Section 4.8.
(ii) A Stock Appreciation Right granted in tandem with a Stock Option shall be subject to the same terms and conditions as the related Stock Option and shall be exercisable only to the extent that the related Stock Option is exercisable.
(iii) Stock Options and Stock Appreciation Rights shall vest and remain exercisable as follows, subject to Section 5.4:
|
Event |
Vesting | Exercise Period for Vested Awards |
| Death | Immediate vesting as of death (in the case of Awards made on or after the Initial Restatement Date, including if death occurs during any post-Retirement continued vesting period). | Expires earlier of (i) original expiration date, or (ii) 3 years after death (in the case of Awards made on or after the Initial Restatement Date, clause (ii) shall include instances where death occurs during any post-Retirement continued vesting period). |
| Disability | Immediate vesting as of Termination of Service due to the incurrence of Disability. | Expires earlier of (i) original expiration date, or (ii) 3 years after Termination of Service due to Disability. |
| Retirement (Applicable to Awards granted prior to the Initial Restatement Date) |
Unvested Awards forfeited as of Retirement. | Expires earlier of (i) original expiration date or (ii) 3 years after Retirement. |
| Retirement* (Applicable to Awards granted on or after Initial Restatement Date) |
Unvested Awards continue to vest in accordance with original vesting schedule following Retirement. | Expires on the earlier of (i) original expiration date or (ii) 3 years after Retirement. |
| Voluntary Termination of Service (other than covered by Retirement) | Unvested Awards forfeited as of Termination of Service. | Expires earlier of (i) original expiration date, or (ii) 30 days after Termination of Service. |
| Involuntary Termination of Service not for Cause | Unvested Awards forfeited as of Termination of Service | Expires earlier of (i) original expiration date, or (ii) 1 year after Termination of Service. |
| Involuntary Termination of Service for Cause | Unvested Awards forfeited as of Termination of Service | Vested Awards immediately cancelled. |
| * | Except as otherwise provided in an Award Agreement, if a Participant’s Retirement results in the continued vesting of such Award, as a condition thereof the Participant agrees that for the remainder of any applicable continued vesting period, he or she shall: (x) remain available to provide service to the Company on an as-requested basis (which service, for purposes of compliance with Section 409A of the Code, shall not exceed 20% of the Participant’s pre-Termination of Service level of Service to the Company) and (y) execute, in the discretion of the Company, a non-competition agreement in favor of the Company in the form provided by the Company. |
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(iv) Stock Options and Stock Appreciation Rights of a deceased Participant may be exercised only by the estate of the Participant or by the person given authority to exercise the Stock Options or Stock Appreciation Rights by the Participant’s will or by applicable laws of descent and distribution. If a Stock Option or Stock Appreciation Right is exercised by the executor or administrator of a deceased Participant’s estate, or by the person or persons to whom the Stock Option or Stock Appreciation Right has been transferred by the Participant’s will or the applicable laws of descent and distribution, the Company shall be under no obligation to deliver Shares or cash until the Company is satisfied that the person exercising the Stock Option or Stock Appreciation Right is the duly appointed executor or administrator of the deceased Participant’s estate or the person to whom the Stock Option or Stock Appreciation Right has been transferred by the Participant’s will or by applicable laws of descent and distribution.
(d) Payment of Exercise Price. The Exercise Price of a Stock Option must be paid in full when the Stock Option is exercised. Stock certificates shall be registered and delivered only upon receipt of payment. Payment of the Exercise Price may be made in cash or by certified check, bank draft, wire transfer, or postal or express money order. No portion of the Exercise Price of a Stock Option may be paid from the proceeds of a loan of cash from the Company to the Participant. In addition, the Committee may also permit payment of all or a portion of the Exercise Price to be made by any other method, provided, that, for Awards to Reporting Persons, permissible methods shall be set forth in the applicable Award Agreement, including:
(i) Delivering a properly executed exercise notice to the Company or its agent, together with irrevocable instructions to a broker to deliver promptly to the Company the amount of sale proceeds with respect to the portion of the Shares to be acquired having a Fair Market Value on the date of exercise equal to the sum of the applicable portion of the Exercise Price being so paid; or
(ii) Tendering (actually or by attestation) to the Company previously acquired Shares that have been held by the Participant for at least six months, subject to paragraph (d)(v), and that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise Price being so paid; or
(iii) Instructing the Company to withhold Shares that would otherwise be issued having a Fair Market Value on the date of exercise equal to the applicable portion of the Exercise Price being so paid (provided such withholding has been expressly authorized by the Committee); or
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(iv) Any combination of the methods described in paragraphs (i), (ii), and (iii).
(v) The Committee, in consideration of applicable accounting standards, may waive any holding period on Shares required to tender pursuant to paragraph (d)(ii) or prohibit withholding pursuant to paragraph (d)(iii).
(e) Incentive Stock Options. Incentive Stock Options granted under the Plan shall be subject to the following additional conditions, limitations, and restrictions:
(i) Eligibility. Incentive Stock Options may be granted only to Employees of the Company or an Affiliate that is a subsidiary or parent corporation of the Company, within the meaning of Section 424 of the Code.
(ii) Timing of Grant. No Incentive Stock Option shall be granted under the Plan after the 10-year anniversary of the Restatement Date.
(iii) Amount of Award. The aggregate Fair Market Value as of the date of grant of the Shares with respect to which the Incentive Stock Options awarded to any Participant first become exercisable during any calendar year may not exceed $100,000. For purposes of this $100,000 limit, the Participant’s Incentive Stock Options under this Plan and all other plans maintained by the Company and its Affiliates shall be aggregated. To the extent any Incentive Stock Option would exceed the $100,000 limit, the Incentive Stock Option shall afterwards be treated as a Nonqualified Stock Option for all purposes.
(iv) Timing of Exercise. If the Committee exercises its discretion in the Award Agreement to permit an Incentive Stock Option to be exercised by a Participant more than three months after the Participant has ceased being an Employee (or more than 12 months if the Participant is permanently and totally disabled, within the meaning of Section 22(e) of the Code), the Incentive Stock Option shall be treated as a Nonqualified Stock Option for all purposes following the date that is three months after the Participant has ceased being an Employee (or 12 months after the Participant is determined to be permanently and totally disabled, within the meaning of Section 22(e) of the Code). For purposes of this paragraph (e)(iv), an Employee’s employment relationship shall be treated as continuing intact while the Employee is on military leave, sick leave, or another approved leave of absence if the period of leave does not exceed 90 days, or a longer period to the extent that the Employee’s right to reemployment with the Company or an Affiliate is guaranteed by statute or by contract. Where the period of leave exceeds 90 days and the Employee’s right to reemployment is not guaranteed by statute or contract, the employment relationship shall be deemed to have ceased on the 91st day of the leave.
(v) Transfer Restrictions. In no event shall the Committee permit an Incentive Stock Option to be transferred by a Participant other than by will or the applicable laws of descent and distribution, and any Incentive Stock Option awarded under this Plan shall be exercisable only by the Participant during the Participant’s lifetime.
(f) Exercise of Stock Appreciation Rights. Upon exercise, Stock Appreciation Rights may be redeemed for cash or Shares or a combination of cash and Shares, in the discretion of the Committee, and as described in the Award Agreement. Cash payments shall be equal to the excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price for each Share for which a Stock Appreciation Rights was exercised. If the Stock Appreciation Right is redeemed for Shares, the Participant shall receive a number of Shares equal to the quotient of the cash payment amount divided by the Fair Market Value of a Share on the date of exercise (with any fractional Shares to be treated in accordance with Section 5.5).
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(g) Certain Prohibitions. The following terms or actions shall not be permitted with respect to any Award of Stock Options or Stock Appreciation Rights:
(i) No Repricing. Except as otherwise provided in Section 5.3, in no event shall the Committee decrease the Exercise Price of a Stock Option or Stock Appreciation Right after the date of grant, or cancel outstanding Stock Options or Stock Appreciation Rights and grant replacement Stock Options or Stock Appreciation Rights with a lower Exercise Price than that of the replaced Stock Options or Stock Appreciation Rights or other Awards, or purchase underwater Stock Options from a Participant for cash or replacement Awards without first obtaining the approval of the Company’s stockholders in a manner that complies with the rules of the New York Stock Exchange.
(ii) No Dividends or Dividend Equivalents. The Committee shall not provide for the payment of Dividends or Dividend Equivalents with respect to Stock Options or Stock Appreciation Rights.
(iii) No Reload Options. The Committee shall not grant Stock Options or Stock Appreciation Rights that have reload features under which the exercise of a Stock Option or Stock Appreciation Right by a Participant automatically entitles the Participant to a new Stock Option or Stock Appreciation Right.
(iv) No Additional Deferral Features. The Committee shall not grant Stock Options or Stock Appreciation Rights that have “additional deferral features” as described in Section 409A of the Code, thereby subjecting the Stock Option or Stock Appreciation Right to the requirements of Section 409A.
4.4 Restricted Stock Units and Restricted Stock. The Committee may grant Restricted Stock Units and Restricted Stock under the Plan to those Employees and Other Service Providers whom the Committee may from time to time select, in the amounts and pursuant to the terms and conditions that the Committee, in its discretion, may determine and set forth in the Award Agreement, subject to the provisions below:
(a) Grant of Restricted Stock Units. The Committee may grant Restricted Stock Units to any Employee or Other Service Provider, which are denominated in, valued in whole or in part by reference to, or otherwise related to, Shares. The Committee shall determine, in its discretion, the terms and conditions that apply to Restricted Stock Units granted pursuant to this Section 4.4, including whether and how Dividend Equivalents shall be credited with respect to any Award. The terms and conditions of the Restricted Stock Units shall be set forth in the applicable Award Agreement.
(b) Grant of Restricted Stock. As soon as practicable after Restricted Stock has been granted, certificates for all Shares of Restricted Stock shall be registered in the name of the Participant and held for the Participant by the Company. The Participant shall have all rights of a stockholder with respect to the Shares, including the right to vote and to receive dividends or other distributions, except that the Shares may be subject to a vesting schedule and forfeiture, must comply with Section 4.8 and, except as otherwise provided in Section 7.1, may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed until the restrictions are satisfied or lapse.
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(c) Dividends and Dividend Equivalents. Any dividends or Dividend Equivalents that are paid with respect to Shares or Restricted Stock will be subject to the same vesting restrictions as the Shares to which such dividends or distributions relate. Any dividends, Dividend Equivalents or distributions that are paid with respect to Restricted Stock Units will be subject to the same vesting restrictions as the Shares to which such dividends or distributions relate. Dividends and Dividend Equivalents related to Restricted Stock and Restricted Stock Units subject to performance-based vesting conditions will be subject to the same terms and conditions, including vesting conditions and the achievement of any applicable performance goals, as the original Award. Subject to the vesting restrictions above, the terms of any Dividend Equivalents will be as set forth in the applicable Agreement, including the time and form of payment and whether such Dividend Equivalents will be credited with interest or deemed to be reinvested in additional units or Share equivalents. The Committee may, in its discretion, provide in an Agreement for restrictions on dividends and Dividend Equivalents in addition to those specified in this Section 4.4(c).
(d) Vesting and Forfeiture. The Committee may, in its discretion and as set forth in the Award Agreement, impose any restrictions on Restricted Stock Units and/or their related Dividend Equivalents or Restricted Stock that it deems to be appropriate, including conditioning the vesting or settlement of all or part of any such Awards on the achievement or satisfaction of performance criteria (any such Award, a “Performance Stock Unit” or “Performance Restricted Stock”), which must comply with Section 4.8. Except as otherwise provided in an Award Agreement or other subsequent agreement between a Participant and the Company or an Affiliate, the Restricted Stock Units, related Dividend Equivalents and Restricted Stock granted to Participants shall be subject to the following restrictions:
(i) Vesting and Forfeiture. Subject to Section 5.4, if the restrictions have not lapsed or been satisfied as of the Participant’s Termination of Service, the Restricted Stock Units or Restricted Stock shall be forfeited by the Participant if the termination is for any reason other than death, Disability or, if the Restricted Stock Unit or Restricted Stock Award is granted on or after the Initial Restatement Date, Retirement.
(ii) Death or Disability. Except for Restricted Stock Units and Restricted Stock granted subject to performance-based vesting conditions, all restrictions on Restricted Stock Units and any related Dividend Equivalents or Restricted Stock granted pursuant to this Section 4.4 shall lapse upon the Participant’s death or Termination of Service due to Disability.
(iii) Retirement. Restricted Stock Units and Restricted Stock granted on or after the Initial Restatement Date are subject to the following provisions:
i. Except for Restricted Stock Units and Restricted Stock granted subject to performance-based vesting conditions, upon a Participant’s Retirement, all restrictions on Restricted Stock Units and any related Dividend Equivalents or Restricted Stock granted pursuant to this Section 4.4 shall lapse in accordance with the original vesting schedule of the Award, subject to the immediate lapse of all restrictions upon a Participant’s death.
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ii. With respect to Restricted Stock Units and Restricted Stock granted subject to performance-based vesting conditions, upon a Participant’s Retirement, all restrictions will lapse on a pro rata portion of the Restricted Stock Units and any related Dividend Equivalents or Restricted Stock granted pursuant to this Section 4.4 that would otherwise have been determined by the Committee to have been earned as of the end of the applicable performance period if the Participant’s service had continued, with such pro rata portion determined by dividing the number of days between the first day of the performance period and the Retirement date, by the number of days in the applicable performance period.
iii. Except as otherwise provided in an Award Agreement, if a Participant’s Retirement results in an Award’s continued vesting or pro rata vesting based on the Company’s actual levels of achievement of the applicable performance metrics at the end of the performance period, as a condition thereof the Participant agrees that for the remainder of any applicable continued vesting period or actual performance period, he or she shall:
(x) remain available to provide service to the Company on an as-requested basis (which service, for purposes of compliance with Section 409A of the Code, shall not exceed 20% of the Participant’s pre-Termination of Service level of Service to the Company) and (y) execute, in the discretion of the Company, a non-competition agreement in favor of the Company in the form provided by the Company.
(iv) Legend. To enforce any restrictions that the Committee may impose on Restricted Stock, the Committee shall cause a legend referring to the restrictions to be placed on all certificates for Shares of Restricted Stock. When restrictions lapse or are satisfied, a new certificate, without the legend, for the number of Shares with respect to which restrictions have lapsed or been satisfied shall be issued and delivered to the Participant.
(e) Redemption of Restricted Stock Units. Restricted Stock Units may be redeemed for cash or whole Shares, or a combination of cash and whole Shares, in the discretion of the Committee, when the restrictions lapse and any other conditions set forth in the Award Agreement have been satisfied; provided, that with respect to any Restricted Stock Units subject to Section 409A of the Code such redemption shall occur in a manner that complies with Section 409A of the Code. Each Restricted Stock Unit may be redeemed for one Share or an amount in cash equal to the Fair Market Value of a Share as of the date on which the Restricted Stock Unit vests.
(f) Deferred Units. Subject to Section 7.14 and to the extent determined by the Committee, Participants may be permitted to request the deferral of payment of vested Restricted Stock Units (including the value of related Dividend Equivalents) to a date later than the payment date specified in the Award Agreement, provided, that any such election be made in accordance with Section 409A of the Code. The Committee shall determine any terms and conditions on deferral.
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4.5 Other Stock-Based Awards. The Committee may, from time to time, grant Awards (other than Stock Options, Stock Appreciation Rights, Restricted Stock Units or Restricted Stock) to any Employee or Other Service Provider that consist of, or are denominated in, payable in, valued in whole or in part by reference to, or otherwise related to, Shares. These Awards may include, among other things, phantom or hypothetical Shares. The Committee shall determine, in its discretion and subject to Section 7.14, the terms and conditions that will apply to Other Stock-Based Awards granted pursuant to this Section 4.5, including whether Dividend Equivalents will be credited with respect to any such Award in the event of a payment of dividends on Common Stock, and whether such Awards will be settled in cash or whole Shares, or a combination of cash and whole Shares, when the restrictions lapse and any other conditions set forth in the Award Agreement have been satisfied. The terms and conditions of Other Stock-Based Awards shall be set forth in the applicable Award Agreement and except as otherwise provided in an Award Agreement or other subsequent agreement between a Participant and the Company or an Affiliate, the Other Stock-Based Awards granted to Participants shall be subject to the following restrictions and must comply with Section 4.8:
(a) Vesting. Subject to Section 5.4, if the restrictions on Other Stock-Based Awards have not lapsed or been satisfied as of the Participant’s Termination of Service, the Shares shall be forfeited by the Participant if the termination is for any reason other than death, Disability or, if the Other Stock-Based Award is granted on or after the Initial Restatement Date, Retirement.
(b) Death or Disability. Except for Other Stock-Based Awards granted subject to performance-based vesting conditions, restrictions on Other Stock-Based Awards and any related Dividend Equivalents granted pursuant to this Section 4.5 shall lapse upon the Participant’s death or Termination of Service due to Disability.
(c) Retirement. Other Stock-Based Awards granted on or after the Initial Restatement Date are subject to the following provisions:
(i) Except for Other Stock-Based Awards granted subject to performance-based vesting conditions, upon a Participant’s Retirement, all restrictions on Other Stock-Based Awards and any related Dividend Equivalents granted pursuant to this Section 4.5 shall lapse in accordance with the original vesting schedule of the Award, subject to the immediate lapse of all restrictions upon a Participant’s death.
(ii) With respect to Other Stock-Based Awards granted subject to performance-based vesting conditions, upon a Participant’s Retirement, all restrictions will lapse on a pro rata portion of the Other Stock-Based Awards and any related Dividend Equivalents granted pursuant to this Section 4.5 that would otherwise have been determined by the Committee to have been earned as of the end of the applicable performance period if the Participant’s service had continued, with such pro rata portion determined by dividing the number of days between the first day of the performance period and the Retirement date, by the number of days in the applicable performance period.
(iii) Except as otherwise provided in an Award Agreement, if a Participant’s Retirement results in an Award’s continued vesting or pro rata vesting based on the Company’s actual levels of achievement of the applicable performance metrics at the end of the performance period, as a condition thereof the Participant agrees that for the remainder of any applicable continued vesting period or actual performance period, he or she shall: (x) remain available to provide service to the Company on an as-requested basis (which service, for purposes of compliance with Section 409A of the Code, shall not exceed 20% of the Participant’s pre-Termination of Service level of Service to the Company) and (y) execute, in the discretion of the Company, a non-competition agreement in favor of the Company in the form provided by the Company.
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(d) Dividends and Dividend Equivalents. Any dividends, Dividend Equivalents or distributions that are paid with respect to Other Stock-Based Awards will be subject to the same vesting restrictions as the Shares to which such dividends or distributions relate. Dividends and Dividend Equivalents related to Other Stock-Based Awards subject to performance-based vesting conditions will be subject to the same terms and conditions, including vesting conditions and the achievement of any applicable performance goals, as the original Award. Subject to the vesting restrictions above, the terms of any Dividend Equivalents will be as set forth in the applicable Agreement, including the time and form of payment and whether such Dividend Equivalents will be credited with interest or deemed to be reinvested in additional units or Share equivalents. The Committee may, in its discretion, provide in an Agreement for restrictions on dividends and Dividend Equivalents in addition to those specified in this Section 4.5(d).
4.6 Cash-Based Awards. The Committee may, from time to time, grant Awards to any Employee or Other Service Provider that are designated as Cash-Based Awards, with the expectation that these Awards will be settled in cash, however, such Cash-Based Awards may be settled in cash or whole Shares or a combination of cash and whole Shares, as determined by the Committee. The value of these Awards may be based in whole or in part or by reference to, or otherwise related to, Shares, and may be granted subject to the achievement of one or more performance goals as determined by the Committee from time to time. The Committee shall determine, in its discretion and subject to Section 7.14, the terms and conditions that will apply to Cash-Based Awards granted pursuant to this Section 4.6. The terms and conditions of Cash-Based Awards shall be set forth in the applicable Award Agreement and except as otherwise provided in an Award Agreement or other subsequent agreement between a Participant and the Company or an Affiliate, the Cash-Based Awards granted to Participants shall be subject to the following restrictions:
(a) Vesting. Subject to Section 5.4, if the restrictions on Cash-Based Awards have not lapsed or been satisfied as of the Participant’s Termination of Service, the Cash-Based Awards shall be forfeited by the Participant if the termination is for any reason other than death, Disability or, if the Cash-Based Award is granted on or after the Initial Restatement Date, Retirement.
(b) Death or Disability. Except for Cash-Based Awards granted subject to performance-based vesting conditions, restrictions on Cash-Based Awards and any related Dividend Equivalents granted pursuant to this Section 4.6 shall lapse upon the Participant’s death or Termination of Service due to Disability.
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(c) Retirement. Cash-Based Awards granted on or after the Initial Restatement Date are subject to the following provisions:
(i) Except for Cash-Based Awards granted subject to performance-based vesting conditions, upon a Participant’s Retirement, all restrictions on Cash-Based Awards and any related Dividend Equivalents granted pursuant to this Section 4.5 shall lapse in accordance with the original vesting schedule of the Award, subject to the immediate lapse of all restrictions upon a Participant’s death.
(ii) With respect to Cash-Based Awards granted subject to performance-based vesting conditions, upon a Participant’s Retirement, all restrictions will lapse on a pro rata portion of the Cash-Based Awards and any related Dividend Equivalents granted pursuant to this Section 4.5 that would otherwise have been determined by the Committee to have been earned as of the end of the applicable performance period if the Participant’s service had continued, with such pro rata portion determined by dividing the number of days between the first day of the performance period and the Retirement date, by the number of days in the applicable performance period.
(iii) Except as otherwise provided in an Award Agreement, if a Participant’s Retirement results in an Award’s continued vesting or pro rata vesting based on the Company’s actual levels of achievement of the applicable performance metrics at the end of the performance period, as a condition thereof the Participant agrees that for the remainder of any applicable continued vesting period or actual performance period, he or she shall: (x) remain available to provide service to the Company on an as-requested basis (which service, for purposes of compliance with Section 409A of the Code, shall not exceed 20% of the Participant’s pre-Termination of Service level of Service to the Company) and (y) execute, in the discretion of the Company, a non-competition agreement in favor of the Company in the form provided by the Company.
4.7 Termination for Cause. If a Participant incurs a Termination of Service for Cause, then all outstanding Awards shall immediately be cancelled, except as otherwise provided in an Award Agreement.
4.8 Minimum Vesting Requirements. Notwithstanding any other provision of the Plan, no portion of an Award granted on or after the Second Restatement Date may vest before the first anniversary of the date of grant, and with respect to Awards whose grant or vesting is subject to the satisfaction of performance goals over a performance period, each Award shall be subject to a performance period of not less than one year. The foregoing minimum vesting and performance periods will not, however, apply in connection with: (i) accelerated vesting in the event of death or Disability, (ii) Awards made in payment or exchange for other compensation already earned and payable, (iii) Awards granted in connection with assumption or substitution of awards as part of a transaction as contemplated under Section 5.2(a)(iii) that does not reduce the vesting period of the award being replaced, and (iv) accelerated vesting as contemplated under Section 5.4; provided, however, that the Company may grant Awards with respect to up to five percent (5%) of the number of Shares reserved under Section 5.1 as of the Restatement Date without regard to the minimum vesting period set forth in this Section 4.8.
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Article V
Shares Subject to the Plan; Adjustments
5.1 Shares Available. The Shares issuable under the Plan shall be authorized but unissued Shares or Shares held in the Company’s treasury. The total number of Shares with respect to which Awards may be issued under the Plan may equal but may not exceed 28,758,170, subject to adjustment in accordance with Section 5.3; provided, however, that from the aggregate limit, no more than 9,803,922 Shares may be available for grant in the form of Incentive Stock Options. In addition, and subject to adjustment in accordance with Section 5.3, effective as of June 14, 2024, an additional 6,310,657 Shares may be issued pursuant to Awards to Employees and Other Service Providers other than any such Employee or Other Service Provider who was employed or retained by the Company or its Affiliates (other than Snap One Holdings Corp. and its subsidiaries as of June 14, 2024) immediately prior to June 14, 2024, which includes 2,671,118 Shares attributable to restricted stock units (including those subject to performance vesting conditions) that were granted pursuant to the Snap One Holdings Corp. 2021 Equity Incentive Plan and assumed by the Company on June 14, 2024 as new Awards under the Plan; provided, however, that no more than 6,310,657 Shares of such additional Shares may be available for grant in the form of Incentive Stock Options to such eligible Employees and Other Service Providers.
5.2 Counting Rules.
(a) The following Shares related to Awards to be issued under this Plan shall not count against the limits set forth in Section 5.1:
(i) Shares related to Awards paid in cash; and
(ii) Shares related to Awards that expire, are forfeited or cancelled or terminate for any other reason without issuance of Shares; and
(iii) Any Shares issued in connection with Awards that are assumed, converted or substituted as a result of the acquisition of another company by the Company or an Affiliate or a combination of the Company or an Affiliate with another company.
(b) For purposes of clarity, Shares that are tendered or withheld in payment of all or part of the Exercise Price of an Award or in satisfaction of withholding tax obligations, and Shares that are repurchased with cash proceeds from the payment of the Exercise Price of an Award, shall not be reincluded in or added back to the number of Shares available for issuance under the Plan. Upon the settlement of any Stock Appreciation Right issued under the Plan, the gross number of Shares issued to the Participant will count against the number of Shares available for issuance under the Plan.
5.3 Adjustment Upon Certain Changes.
(a) Adjustments. In the event of any change in corporate structure affecting outstanding Shares or the value thereof, including any dividend or distribution (whether in cash, Shares or other property), stock split, reverse stock split, spin-off, recapitalization, merger, reorganization, consolidation, combination or exchange of shares or similar transaction, such adjustments and other substitutions shall be made to the Plan and to outstanding Awards as the Committee, in its sole discretion, deems equitable or appropriate, including such adjustments in (i) the limitations set forth in Section 5.1, including the maximum aggregate number, class and kind of securities that may be delivered under the Plan, and (ii) the number, class, kind and Exercise Price of securities subject to outstanding Awards granted under the Plan (including, if the Committee deems appropriate, the full or partial substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company).
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(b) Other Changes. The Committee may make other adjustments in the terms and conditions of Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 5.3(a)) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits to be made available under the Plan.
(c) No Other Rights or Changes. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation. Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to, or the terms related to, any Award. Except as expressly provided by this Section 5.3, and without limiting the generality of Section 6.1, no material adverse change may be made to the terms of an Award granted to a Participant as a result of an event described in this Section 5.3 without the consent of the Participant.
5.4 Change in Control.
(a) Assumption Upon Change in Control; Accelerated Vesting Upon Certain Termination Events. Unless otherwise provided in the applicable Award Agreement, in the event of a Change in Control, if the successor company assumes or substitutes for an outstanding Award (or in which the Company is the ultimate parent corporation and continues the Award), then such Award shall be continued in accordance with its applicable terms and vesting shall not be accelerated as described in Section 5.4(b). For the purposes of this Section 5.4(a), an Award shall be considered assumed or substituted for if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an Award, for each Share subject thereto, will be solely common stock of the successor company or cash, in each case, substantially equal in fair market value (determined as of the date of the Change in Control) to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. Notwithstanding the foregoing, in the event of a Participant’s Termination of Service involuntarily without Cause or voluntarily by the Participant for Good Reason in such successor company within two years following such Change in Control, the vesting and exercisability of each Award, whether time-based or performance based, held by such Participant at the time of the Change in Control shall be accelerated as described in Section 5.4(b) at the time of the Termination of Service. Notwithstanding the foregoing, no Award shall be assumed or substituted pursuant to this Section 5.4(a) to the extent such action would cause an Award not otherwise “deferred compensation” within the meaning of Section 409A of the Code to become “deferred compensation” within the meaning of Section 409A of the Code.
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(b) Acceleration of Vesting Upon Change in Control. In the event of a Change in Control after the date of the adoption of the Plan, unless provision is made in connection with the Change in Control for the assumption, substitution or continuation of an outstanding Award in accordance with Section 5.4(a), then the vesting of such Award, whether time-based or performance-based, shall accelerate and all restrictions shall lapse as of immediately prior to the Change in Control, and (i) in the case of an outstanding Stock Option or Stock Appreciation Right, such Award shall be exercisable as of immediately prior to such Change in Control, or (ii) in the case of an Award other than a Stock Option or a Stock Appreciation Right, such Award shall be settled or otherwise paid to the applicable Participant as soon as practicable following such vesting. For purposes of determining the amount of the Award considered vested and paid for performance-based awards under this Section 5.4(b), all performance criteria (i) if the performance period has been completed, shall be deemed achieved at actual levels of achievement determined by the Committee in its sole discretion as of the date of the Change in Control and (ii) otherwise, shall be deemed achieved at the target level of achievement. Notwithstanding any provision of this Section 5.4(b), unless otherwise provided in the applicable Award Agreement, if any amount payable pursuant to an Award constitutes deferred compensation within the meaning of Section 409A of the Code, in the event of a Change in Control that does not qualify as an event described in Section 409A(a)(2)(A)(v) of the Code, such Award (and any other Awards that constitute deferred compensation that vested prior to the date of such Change in Control but are outstanding as of such date) shall vest and cease to be forfeitable but shall not be settled until the earliest permissible payment event under Section 409A of the Code following such Change in Control. Notwithstanding any other provision of the Plan, the Committee, in its discretion, may determine that, upon the occurrence of a Change in Control, (i) each Stock Option and Stock Appreciation Right outstanding shall terminate within a specified number of days after notice to the Participant, and such Participant shall receive, with respect to each vested Share subject to such Stock Option or Stock Appreciation Right, an amount equal to the excess of the fair market value (as determined by the Committee, in its discretion, in a manner that complies with Section 409A of the Code) of such Share immediately prior to the occurrence of such Change in Control over the Exercise Price, as applicable, per Share of such Stock Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property (including the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine and (ii) each Stock Option and Stock Appreciation Right outstanding at such time with an Exercise Price per Share that exceeds the fair market value (as determined by the Committee, in its discretion, in a manner that complies with Section 409A of the Code) of such Share immediately prior to the occurrence of such Change in Control shall be canceled for no consideration.
5.5 Fractional Shares. No fractional Shares shall be issued under the Plan, and unless the Committee determines otherwise, an amount in cash equal to the Fair Market Value of any fractional Shares that would otherwise be issuable shall be paid in lieu of such fractional Shares. The Committee may, in its sole discretion, cancel, terminate, otherwise eliminate or transfer or pay other securities or other property in lieu of issuing any fractional Shares.
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Article VI
Amendment and Termination
6.1 Amendment. The Plan may be amended at any time and from time to time by the Board without the approval of stockholders of the Company, except that no revision to the terms of the Plan shall be effective until the amendment is approved by the stockholders of the Company if such approval is required by the rules of the New York Stock Exchange or such amendment materially increases the number of Shares that may be issued under the Plan (other than an increase pursuant to Section 5.3 of the Plan). No amendment of the Plan made without the Participant’s written consent may materially adversely affect any right of a Participant with respect to an outstanding Award unless such amendment is necessary to comply with applicable law. The Plan may not be amended in any manner adverse to the interests of Participants during the two-year period following a Change in Control, unless such amendment is necessary to comply with applicable law.
6.2 Termination. The Plan shall remain in effect until all Shares subject to it are distributed, all Awards have expired or terminated, the Plan is terminated pursuant to the adoption of a resolution of the Board terminating the Plan, or the tenth anniversary of the Restatement Date, whichever occurs first.
No Awards shall be granted under the Plan after it has terminated. The termination of the Plan, however, shall not alter or impair any of the rights or obligations of any Participant without such Participant’s written consent under any Award previously granted under the Plan. After the termination of the Plan, any previously granted Awards shall remain in effect and shall continue to be governed by the terms of the Plan and the applicable Award Agreement.
Article VII
General Provisions
7.1 Nontransferability of Awards. No Award under the Plan shall be subject in any manner to alienation, anticipation, sale, assignment, pledge, encumbrance or transfer, and no other persons shall otherwise acquire any rights therein, except as provided below.
(a) Any Award may be transferred by will or by the applicable laws of descent or distribution.
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(b) The Committee may provide in the applicable Award Agreement that all or any part of an Award (other than an Incentive Stock Option) may, subject to the prior written consent of the Committee, be transferred to one or more of the following classes of donees: a family member; a trust for the benefit of a family member; a limited partnership whose partners are solely family members; or any other legal entity set up for the benefit of family members. For purposes of this Section 7.1(b), a family member means a Participant and/or the Participant’s spouse, children, grandchildren, parents, grandparents, siblings, nieces, nephews and grandnieces and grandnephews, including adopted, in-laws and step family members.
(c) Except as otherwise provided in the applicable Award Agreement, any Nonqualified Stock Option or Stock Appreciation Right transferred by a Participant pursuant to Section 7.1(b) may be exercised by the transferee only to the extent that the Award would have been exercisable by the Participant had no transfer occurred. Any transferred Award shall be subject to all of the same terms and conditions as provided in the Plan and in the applicable Award Agreement. The Participant or the Participant’s estate shall remain liable for any withholding tax that may be imposed by any federal, state or local tax authority, and the transfer of Shares upon exercise of the Award shall be conditioned on the payment of any withholding tax. The Committee may, in its discretion, disallow all or a part of any transfer of an Award pursuant to Section 7.1(b) unless and until the Participant makes arrangements satisfactory to the Committee for the payment of any withholding tax. The Participant must immediately notify the Committee, in the form and manner required by the Committee, of any proposed transfer of an Award pursuant to Section 7.1(b). No transfer shall be effective until the Committee consents to the transfer in writing.
(d) Unless otherwise restricted by Company policy for Reporting Persons, Restricted Stock may be freely transferred after the restrictions lapse or are satisfied and the Shares are delivered; provided, however, that Restricted Stock awarded to an affiliate of the Company may be transferred only pursuant to Rule 144 under the 1933 Act, or pursuant to an effective registration for resale under the 1933 Act. For purposes of this Section 7.1(d), “affiliate” shall have the meaning assigned to that term under Rule 144.
(e) In no event may a Participant transfer an Incentive Stock Option other than by will or the applicable laws of descent and distribution.
7.2 Withholding of Taxes.
(a) Stock Options and Stock Appreciation Rights. Subject to Section 7.2(d), as a condition to the delivery of Shares pursuant to the exercise of a Stock Option or Stock Appreciation Right, the Committee may require that the Participant, at the time of exercise, pay to the Company by cash, certified check, bank draft, wire transfer or postal or express money order an amount sufficient to satisfy any applicable tax withholding obligations. The Committee may also, in its discretion, accept payment of tax withholding obligations through any of the Exercise Price payment methods described in Section 4.3(d).
(b) Other Awards Payable in Shares. Subject to Section 7.2(d), the Company shall satisfy a Participant’s tax withholding obligations arising in connection with the release of restrictions on Restricted Stock Units, Restricted Stock and Other Stock-Based Awards by withholding Shares that would otherwise be available for delivery. The Company may also allow the Participant to satisfy the Participant’s tax withholding obligations by payment to the Company in cash or by certified check, bank draft, wire transfer, or postal or express money order.
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(c) Cash Awards. The Company shall satisfy a Participant’s tax withholding obligation arising in connection with the payment of any Award in cash by withholding cash from such payment.
(d) Withholding Amount. The Committee, in consideration of applicable accounting standards, has full discretion to either (i) allow Participants to elect, or (ii) otherwise direct as a general rule, to have the Company withhold Shares for taxes at an amount that is not less than the applicable minimum statutory amount and not more than the applicable maximum statutory amount.
7.3 Forfeiture Provisions.
(a) The Committee may, in its discretion, provide in an Award Agreement that an Award granted thereunder shall be canceled if the Participant, without the consent of the Company, while employed by or providing services to the Company or any Affiliate or for a period after Termination of Service, (i) violates a noncompetition, non-solicitation, non-disclosure, confidentiality, or non-disparagement covenant or agreement, or (ii) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion. The Committee may also provide in an Award Agreement that (iii) a Participant will forfeit any gain realized on the vesting or exercise of such Award if the Participant engages in any activity referred to in the preceding sentence, or (iv) a Participant must repay the gain to the Company realized under a previously paid Award if the Participant engages in any activity referred to in the preceding sentence. Notwithstanding the foregoing, none of the non-disclosure restrictions in this Section 7.3 or in any Award Agreement shall, or shall be interpreted to, impair the Participant from exercising any legally protected whistleblower rights (including under Rule 21F under the Exchange Act).
(b) Awards and any compensation associated therewith are subject to forfeiture, recovery by the Company or other action pursuant to any compensation recovery policy adopted by the Board or the Committee at any time, as amended from time to time, which includes but is not limited to any compensation recovery policy adopted by the Board or the Committee including in response to the requirements of Section 10D of the Exchange Act, the SEC’s final rules thereunder, and applicable listing rules or other rules and regulations implementing the foregoing or as otherwise required by law or stock exchange. Any Award Agreement will be automatically unilaterally amended to comply with any such compensation recovery policy.
7.4 Code Section 83(b) Elections. The Company, the Affiliates, and the Committee have no responsibility for a Participant’s election, attempt to elect or failure to elect to include the value of an Award of Restricted Stock or other Award subject to Section 83 of the Code in the Participant’s gross income for the year of grant pursuant to Section 83(b) of the Code. Any Participant who makes an election pursuant to Section 83(b) of the Code shall promptly provide the Committee with a copy of the election form.
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7.5 No Implied Rights. The establishment and operation of the Plan, including the eligibility of a Participant to participate in the Plan, shall not be construed as conferring any legal or other right upon any Participant for the continuation of service through the end of any vesting period or other applicable period. The Company and the Affiliates expressly reserve the right, which may be exercised at any time and in the Company’s or an Affiliate’s sole discretion, to discharge any individual or treat him or her without regard to the effect that discharge might have upon him or her as a Participant in the Plan. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated.
7.6 No Obligation to Exercise Awards; No Right to Notice of Expiration Date. The grant of a Stock Option or Stock Appreciation Right shall impose no obligation upon the Participant to exercise the Award. The Company, the Affiliates, and the Committee have no obligation to inform a Participant of the date on which a Stock Option or Stock Appreciation Right lapses except in the Award Agreement.
7.7 No Rights as Stockholders. A Participant granted an Award under the Plan shall have no rights as a stockholder of the Company with respect to the Award unless and until certificates for the Shares underlying the Award are registered in the Participant’s name and delivered to the Participant. The right of any Participant to receive an Award by virtue of participation in the Plan shall be no greater than the right of any unsecured general creditor of the Company.
7.8 Indemnification of Committee. The Company shall indemnify, to the fullest extent permitted by law, each person made or threatened to be made a party to any civil or criminal action or proceeding by reason of the fact that the person, or the executor or administrator of the person’s estate, is or was a member of the Committee or a delegate of the Committee.
7.9 No Required Segregation of Assets. Neither the Company nor any Affiliate shall be required to segregate any assets that may at any time be represented by Awards granted pursuant to the Plan.
7.10 Nature of Payments. All Awards made pursuant to the Plan are in consideration of services for the Company or an Affiliate. Any gain realized pursuant to Awards under the Plan constitutes a special incentive payment to the Participant and shall not be taken into account as compensation for purposes of any other employee benefit plan of the Company or any Affiliate, except as the employee benefit plan otherwise provides. The adoption of the Plan shall have no effect on Awards made or to be made under any other benefit plan covering an employee of the Company or an Affiliate or any predecessor or successor of the Company or an Affiliate.
7.11 Awards in Foreign Countries. The Committee has the authority to grant Awards to Employees and Other Service Providers who are foreign nationals or employed outside the United States on any different terms and conditions than those specified in the Plan that the Committee, in its discretion, believes to be necessary or desirable to accommodate differences in applicable law, tax policy, or custom, while furthering the purposes of the Plan. The Committee may also approve any supplements to the Plan or alternative versions of the Plan as it believes to be necessary or appropriate for these purposes without altering the terms of the Plan in effect for other Participants; provided, however, that the Committee may not make any supplemental or alternative version that (a) increases limitations contained in Section 4.3(e); (b) increases the number of Shares available under the Plan, as set forth in Section 5.1; (c) causes the Plan to cease to satisfy any conditions under Rule 16b-3 under the Exchange Act or (d) otherwise contains terms that would require approval by the stockholders of the Company under the rules of the New York Stock Exchange.
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7.12 Securities Matters.
(a) The Company shall be under no obligation to effect the registration pursuant to the 1933 Act of any Shares to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing Shares pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which Shares are traded. The Committee may require, as a condition to the issuance and delivery of certificates evidencing Shares pursuant to the terms hereof, that the recipient of such Shares make such covenants, agreements and representations, and that such certificates bear such legends, as the Committee deems necessary or desirable.
(b) The exercise of any Award granted hereunder shall only be effective at such time as counsel to the Company shall have determined that the issuance and delivery of Shares pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which Shares are traded. The Company may, in its sole discretion, defer the effectiveness of an exercise of an Award hereunder or the issuance or transfer of Shares pursuant to any Award pending or to ensure compliance under federal or state securities laws. The Company shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of an Award or the issuance or transfer of Shares pursuant to any Award. During the period that the effectiveness of the exercise of an Award has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.
7.13 Governing Law; Severability. The Plan and all determinations made and actions taken under the Plan shall be governed by the internal substantive laws, and not the choice of law rules, of the State of Delaware and construed accordingly, to the extent not superseded by applicable U.S. federal law. If any provision of the Plan is held unlawful or otherwise invalid or unenforceable in whole or in part, the unlawfulness, invalidity or unenforceability shall not affect any other parts of the Plan, which shall remain in full force and effect.
7.14 Section 409A of the Code. With respect to Awards subject to Section 409A of the Code, this Plan is intended to comply with the requirements of such Section, and the provisions hereof shall be interpreted in a manner that satisfies the requirements of such Section, and the Plan shall be operated accordingly. If any provision of this Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition shall be interpreted and deemed amended so as to avoid this conflict. Any reservation of rights or discretion by the Company or the Committee hereunder affecting the timing of payment of any Award subject to Section 409A of the Code shall only be as broad as is permitted by Section 409A of the Code.
7.15 Payments to Specified Employees. Notwithstanding anything herein or in any Award Agreement to the contrary, if a Participant is a “specified employee” (within the meaning of Section 409A(2)(B) of the Code) as of the date of such Participant’s separation from service (as determined pursuant to Section 409A of the Code), any Awards subject to Section 409A of the Code payable to such Participant as a result of his or her separation from service, shall be paid on the first business day of the first calendar month that begins after the six-month anniversary of the date of the separation from service, or, if earlier, the date of the Participant’s death.
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Exhibit 10.2
2018 Stock Plan
for
Non-Employee Directors of
Resideo Technologies, Inc.
| 1. | Purpose. |
| (a) | Purpose. The purpose of this 2018 Stock Plan for Non-Employee Directors of Resideo Technologies, Inc. (the “Plan”) is to provide certain compensation to eligible directors of the Company and to encourage the highest level of director performance by providing such directors with a proprietary interest in the Company’s success and progress by granting them stock-based awards. |
| (b) | Effective Date; Stockholder Approval. The Plan is effective as of the effective date of the Company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission in connection with the distribution of its Shares by Honeywell International Inc. (the “Effective Date”), provided, that the Plan shall have been adopted by the Board and approved by the Company’s sole stockholder in accordance with the requirements of the General Corporation Law of the State of Delaware and the rules of the New York Stock Exchange. |
The Board amended the Plan, effective as of August 7, 2026, to adjust the Share limitation under the Plan in accordance with Section 9(a) of the Plan, in connection with the separation of the ADI Global Distribution business from the Company’s remaining businesses and the distribution on a pro rata basis by the Company of all of the outstanding shares of common stock of ADI Global Distribution Inc. to the Company’s common stockholders.
| 2. | Definitions. |
| (a) | “1933 Act” means the Securities Act of 1933, as amended, and the regulations and interpretations thereunder. |
| (b) | “Award” means any form of award granted under the Plan, whether singly or in combination, to a Participant by the Committee pursuant to any terms and conditions that the Committee may establish and set forth in the applicable Award Agreement. Awards granted under the Plan may consist of: (i) Restricted Stock awarded pursuant to Section 6; (ii) Restricted Stock Units awarded pursuant to Section 6; (iii) Stock Options awarded pursuant to Section 7; and (iv) Stock Appreciation Rights awarded pursuant to Section 7. |
| (c) | “Award Agreement” means the document issued, either in writing or an electronic medium, to a Participant evidencing the grant of an Award and that sets out the terms and conditions of such Award. |
| (d) | “Board” means the Board of Directors of the Company. |
| (e) | “Change in Control” means (a) any one person, or more than one person acting as a group (as defined under U.S. Department of Treasury Regulation (“Treasury Regulation”) § 1.409A-3(i)(5)(v)(B)) acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company; or (b) any one person, or more than one person acting as a group (as defined under Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30 percent or more of the total voting power of the stock of the Company; or (c) a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or (d) any one person, or more than one person acting as a group (as defined in Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company and its subsidiaries on a consolidated basis that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company and its subsidiaries on a consolidated basis immediately before such acquisition or acquisitions. For purposes of clause (d), “gross fair market value” means the value of the assets of the Company and its subsidiaries on a consolidated basis, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. The foregoing clauses (a) through (d) shall be interpreted in a manner that is consistent with the Treasury Regulations promulgated pursuant to Section 409A of the Code so that all, and only, such transactions or events that could qualify as a “change in control event” within the meaning of Treasury Regulation § 1.409A-3(i)(5)(i) shall be deemed to be a Change in Control for purposes of this Plan. |
| (f) | “Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. |
| (g) | “Committee” means the nominating and governance committee of the Board or any successor committee or subcommittee of the Board or other committee or subcommittee designated by the Board, which committee or subcommittee is comprised solely of two or more persons who are Non-Employee Directors within the meaning of Rule 16b-3(b)(3) under the Exchange Act. |
| (h) | “Common Stock” means the common stock of the Company. |
| (i) | “Company” means Resideo Technologies, Inc. and its successors. |
| (j) | “Dividend Equivalent” means an amount equal to the cash dividend or the Fair Market Value of the stock dividend that would be paid on each Share underlying an Award if the Share were duly issued and outstanding on the date on which the dividend is payable. |
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| (k) | “Eligible Director” means a member of the Board, elected or appointed, who is not also an employee. An individual who is elected to the Board at a meeting of the stockholders of the Company shall be deemed to be a member of the Board as of the date of such meeting. |
| (l) | “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the regulations and interpretations thereunder. |
| (m) | “Exercise Price” means the price of a Share, as fixed by the Committee, that may be purchased under a Stock Option or with respect to which the amount of any payment pursuant to a Stock Appreciation Right is determined. |
| (n) | “Fair Market Value” means, except as otherwise provided in the applicable Award Agreement, (a) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee and (b) with respect to Shares, as of any date, (i) the average (mean) of the highest and lowest sales prices of a Share, as reported on the New York Stock Exchange (or any other reporting system selected by the Committee, in its sole discretion) on the date as of which the determination is being made or, if no sale of Shares is reported on this date, on the most recent preceding day on which there were sales of Shares reported or (ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee. |
| (o) | “Nonqualified Stock Option” means a Stock Option that is not intended to meet the requirements of Section 422 of the Code or that otherwise does not meet such requirements. |
| (p) | “Participant” means an Eligible Director who has been granted an Award under the Plan. |
| (q) | “Restricted Stock” means Shares issued pursuant to Section 6 that are subject to any restrictions that the Committee, in its discretion, may impose. |
| (r) | “Restricted Stock Unit” means a right granted under Section 6 to acquire Shares or an equivalent amount in cash that is subject to any restrictions that the Committee, in its discretion, may impose. |
| (s) | “Share” means a share of Common Stock. |
| (t) | “Stock Appreciation Right” means a right granted under Section 7 to an amount in cash or a number of Shares with a Fair Market Value equal to the excess of the Fair Market Value of the Shares on the date on which the Stock Appreciation Right is exercised over the applicable Exercise Price. |
| (u) | “Stock Option” means a right granted under Section 7 to purchase from the Company a stated number of Shares at the applicable Exercise Price. |
| (v) | “Unit” means the potential right to acquire one Share. |
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| 3. | Administration. |
| (a) | The Committee. The Plan shall be administered by the Committee. |
| (b) | Authority of the Committee. The Committee shall have authority, in its sole and absolute discretion and subject to the terms of the Plan, to (i) interpret the Plan; (ii) prescribe the rules and regulations that it deems necessary for the proper operation and administration of the Plan, and amend or rescind any existing rules or regulations relating to the Plan; (iii) determine eligibility for the grant of Awards under the Plan; (iv) determine the form of Awards, the number of Shares subject to each Award, all terms and conditions of an Award, including, without limitation, the conditions on exercise or vesting and the terms of Award Agreements; (v) determine whether Awards shall be granted singly, in combination or in tandem; (vi) waive or amend any terms, conditions, restrictions or limitations on an Award, to the extent permissible under applicable law including without limitation Section 409A of the Code; (vii) in accordance with Section 9, make any adjustments to the Plan, any Award Agreement and any Award that it deems appropriate (including but not limited to adjustment of the number of Shares available under the Plan or any Award); (viii) provide for the deferred payment of Awards and the extent to which payment shall be credited with Dividend Equivalents; (ix) determine whether Awards may be transferable to family members, a family trust, a family partnership, or otherwise; (x) determine whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other property; (xi) interpret, administer, reconcile any inconsistency in, correct any default in and/or supply any omission in, the Plan and any instrument or agreement relating to (including any Award Agreement), or Award made under, the Plan; (xii) waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate any Award; (xiii) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards; (xiv) establish any provisions that the Committee may determine to be necessary in order to implement and administer the Plan in foreign countries; and (xv) take any and all other actions it deems necessary or advisable for the proper operation or administration of the Plan. |
| (c) | Effect of Determinations. All determinations of the Committee shall be final, binding and conclusive on all persons having an interest in the Plan. |
| (d) | Delegation of Authority. The Committee, in its discretion and consistent with applicable law and regulations, may delegate its authority and duties under the Plan to one or more subcommittees of the Committee or to the Chief Executive Officer of the Company or any other individual or committee as it deems to be advisable, under any conditions and subject to any limitations that the Committee may establish. |
| (e) | Employment of Advisors. The Committee may select and employ attorneys, consultants, accountants and other advisors at the Company’s expense (and may determine the compensation thereof), and the Committee, the Company and the officers and directors of the Company may rely upon the advice, opinions or valuations of the advisors employed. |
| (f) | No Liability. No member of the Committee, nor any person acting as a delegate of the Committee with respect to the Plan, shall be liable for any losses resulting from any action taken or omitted to be taken, interpretation or construction made in good faith with respect to the Plan, any Award Agreement, or any Award granted under the Plan. |
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| 4. | Eligibility and Grants. |
| (a) | Eligibility. All Eligible Directors are eligible to receive Awards granted under the Plan. |
| (b) | Grants. Subject to the terms and provisions of the Plan, the Committee may grant Awards to Eligible Directors upon such terms and conditions as the Committee may determine in its sole discretion. All Awards shall be evidenced by an Award Agreement. Awards may be granted singly or in combination or in tandem with other Awards. |
| 5. | Share Limits. |
| (a) | Share Limits. Subject to adjustment as provided in Section 9, the maximum aggregate number of Shares with respect to which Awards may be granted under the Plan shall be 1,307,190, and the maximum number of Shares with respect to which Awards may be granted to an independent director under the Plan in a year shall be 20,000. Each Share issued pursuant to the Plan shall count as one Share against such share limit. If an Award terminates, expires or is forfeited or cancelled for any reason without the issuance of Shares, or is settled in cash, the Shares underlying such Award shall be available for future Awards under the Plan. Shares that are tendered or withheld in payment of all or part of the Exercise Price of an Award or in satisfaction of withholding tax obligations, and Shares that are reacquired with cash tendered in payment of the Exercise Price of an Award, shall not be included in or added to the number of Shares available for issuance under the Plan. Upon the settlement of any Stock Appreciation Right issued under the Plan, the gross number of Shares used to determine the settlement value will count against the number of Shares available for issuance under the Plan. Shares utilized under the Plan may be either authorized but unissued Shares or issued Shares reacquired by the Company, as determined by the Board from time to time |
| 6. | Restricted Stock Units and Restricted Stock. |
| (a) | General. Subject to the terms and provisions of the Plan, the Committee may grant Restricted Stock Units and Restricted Stock under the Plan pursuant to the terms and conditions that the Committee, in its sole discretion, may determine and set forth in the applicable Award Agreement (including, without limitation, the periods of restriction, the date of grant and the effect, if any, of a Change in Control, death, disability or retirement, or other termination of a Participant’s directorship on such Restricted Stock Units or Restricted Stock). As soon as practicable after Restricted Stock has been granted, certificates for all Shares of Restricted Stock shall be registered in the name of the Participant and held for the Participant by the Company. |
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| (b) | Voting and Dividend Rights. Unless otherwise determined by the Committee and set forth in a Participant’s Award Agreement, such Participant shall have (i) no voting rights or dividend or dividend equivalent rights with respect to any Restricted Stock Units granted hereunder, and (ii) the right to exercise full voting rights, and to receive all dividends and other distributions paid, with respect to any Shares of Restricted Stock granted hereunder. |
| (c) | Dividends and Dividend Equivalents. At the discretion of the Committee determined at the time of grant and as set forth in the applicable Award Agreement, dividends issued on Shares of Restricted Stock or Dividend Equivalents credited with respect to Restricted Stock Units, may be paid immediately or withheld and deferred in the Participant’s account; provided, however, that with respect to any Restricted Stock Units subject to Section 409A of the Code, the payment of such dividends or Dividend Equivalents shall comply with Section 409A of the Code. The Committee shall determine any terms and conditions on deferral, including the rate of interest to be credited on deferrals and whether interest will be compounded. |
| (d) | Other Restrictions. The Committee may, in its sole discretion and as set forth in the applicable Award Agreement, impose any other conditions and/or restrictions on Restricted Stock Units or Restricted Stock granted pursuant to the Plan that it deems appropriate, including any vesting schedule or forfeiture conditions. The Committee has discretion to provide for an incremental lapse of restrictions or for a lapse of restrictions upon satisfaction of certain conditions. |
| (e) | Delivery of Restricted Stock. When restrictions lapse or are satisfied, a stock certificate for the number of Shares of Restricted Stock with respect to which the restrictions have lapsed shall be delivered, free of all such restrictions, to the Participant or the Participant’s beneficiary or estate, as the case may be. |
| (f) | Redemption of Restricted Stock Units. Restricted Stock Units may be redeemed for cash or whole Shares or a combination of cash and whole Shares, in the sole discretion of the Committee, when the restrictions lapse and any other conditions set forth in the applicable Award Agreement have been satisfied; provided, however, that with respect to any Restricted Stock Units subject to Section 409A of the Code such redemption shall occur in a manner that complies with Section 409A of the Code. Each Restricted Stock Unit may be redeemed for one Share or an amount in cash equal to the Fair Market Value of a Share as of the date on which the Restricted Stock Unit vests. |
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| (g) | Deferred Units. Subject to Section 13(j) hereof and to the extent determined by the Committee, Participants may be permitted to request the deferral of payment of vested Restricted Stock Units (and related Dividend Equivalents) to a date later than the payment date specified in the Award Agreement; provided, however, that any such election be made in accordance with Section 409A of the Code. |
| (h) | Fractional Shares. No fractional Shares shall be issued under the Plan. If a Participant acquires the right to receive a fractional Share under the Plan, the Participant will receive either cash in lieu of the fractional Share in an amount equal to the Fair Market Value of the fractional Share as of the date of settlement or the next highest whole number of Shares, as set forth in the applicable Award Agreement. |
| 7. | Stock Options and Stock Appreciation Rights. |
| (a) | General. Subject to the terms and provisions of the Plan, the Committee may grant Stock Options and/or Stock Appreciation Rights under the Plan pursuant to the other terms and conditions that the Committee, in its sole discretion, may determine and set forth in the Award Agreement (including, without limitation, the Exercise Price, the maximum duration of the Stock Option or Stock Appreciation Right, the conditions upon which a Stock Option or Stock Appreciation Right shall vest and become exercisable, the date of grant, and the effect, if any, of a Change in Control, death, disability or retirement, or other termination of a Participant’s directorship on such Stock Options or Stock Appreciation Rights). |
| (b) | Form. Each Stock Option granted under the Plan shall be a Nonqualified Stock Option. Stock Appreciation Rights may be granted either alone or in connection with concurrently or previously issued Stock Options. |
| (c) | Exercise Price. The Committee shall set the Exercise Price of Stock Options or Stock Appreciation Rights granted under the Plan at a price that is equal to or greater than the Fair Market Value of a Share on the date of grant, subject to adjustment as provided in Section 9. The Exercise Price of a Stock Appreciation Right granted in tandem with a Stock Option shall be equal to the Exercise Price of the related Stock Option. The Committee shall set forth the Exercise Price of a Stock Option or Stock Appreciation Right in the Award Agreement. |
| (d) | Duration of Stock Options. Each Stock Option and Stock Appreciation Right granted to a Participant shall expire at such time as the Committee shall determine at the time of grant and set forth in the Award Agreement; provided, however, that no Stock Option or Stock Appreciation Right shall be exercisable later than the tenth (10th) anniversary of its date of grant. |
| (e) | Timing of Exercise. Each Stock Option or Stock Appreciation Right granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which terms and restrictions shall be set forth in the applicable Award Agreement and need not be the same for each grant or for each Participant. |
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| (f) | Payment of Stock Option Exercise Price. The Exercise Price of a Stock Option must be paid in full when the Stock Option is exercised. Share certificates shall be registered and delivered only upon receipt of payment. Payment of the Exercise Price may be made in cash or by certified check, bank draft, wire transfer, postal or express money order, or other instrument acceptable to the Company. In addition, unless the Committee determines otherwise, payment of all or a portion of the Exercise Price may be made by: |
| i | Delivering a properly executed exercise notice to the Company or its agent, together with irrevocable instructions to a broker to deliver promptly to the Company the amount of sale proceeds with respect to the portion of the Shares to be acquired having a Fair Market Value on the date of exercise equal to the sum of the applicable portion of the Exercise Price being so paid; or |
| ii | Tendering (actually or by attestation) to the Company previously acquired Shares that have been held by the Participant for at least six (6) months, subject to Section 7(f)(v), and that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise Price being so paid; or |
| iii | Instructing the Company to withhold Shares that would otherwise be issued having a Fair Market Value on the date of exercise equal to the applicable portion of the Exercise Price being so paid (provided such withholding has been expressly authorized by the Committee); or |
| iv | Any combination of the methods described in Sections 7(f)(i), (ii), and (iii). |
| v | Notwithstanding the foregoing, the Committee, in consideration of applicable accounting standards, may waive any holding period on Shares required to tender pursuant to Section 7(f)(ii) or prohibit withholding pursuant to Section 7(f)(iii). |
| (g) | Exercise of Stock Appreciation Rights. Upon exercise, Stock Appreciation Rights may be redeemed for cash or Shares or a combination of cash and Shares, in the discretion of the Committee, and as described in the Award Agreement. Cash payments shall be equal to the excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price, for each Share for which a Stock Appreciation Right was exercised. If the Stock Appreciation Right is redeemed for Shares, the Participant shall receive a number of whole Shares equal to the quotient of the cash payment amount divided by the Fair Market Value of a Share on the date of exercise. |
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| (h) | Certain Prohibitions. The following terms or actions shall not be permitted with respect to any Award of Stock Options or Stock Appreciation Rights: |
| i | No Repricing. Except as otherwise provided in Section 9, in no event shall the Committee decrease the Exercise Price of a Stock Option or Stock Appreciation Right after the date of grant or cancel outstanding Stock Options or Stock Appreciation Rights and grant replacement Stock Options or Stock Appreciation Rights with a lower Exercise Price than that of the replaced Stock Options or Stock Appreciation Rights or other Awards, or purchase underwater Stock Options from a Participant for cash or replacement Awards without first obtaining the approval of the Company’s stockholders in a manner that complies with the rules of the New York Stock Exchange. |
| ii | No Dividend Equivalents. The Committee shall not provide for the payment of Dividend Equivalents with respect to Stock Options or Stock Appreciation Rights. |
| iii | No Reload Options. The Committee shall not grant Stock Options or Stock Appreciation Rights that have reload features under which the exercise of a Stock Option or Stock Appreciation Right by a Participant automatically entitles the Participant to a new Stock Option or Stock Appreciation Right. |
| iv | No Additional Deferral Features. The Committee shall not grant Stock Options or Stock Appreciation Rights that have “additional deferral features” as described in Section 409A of the Code, thereby subjecting the Stock Option or Stock Appreciation Right to the requirements of Section 409A of the Code. |
| (i) | Termination of Directorship. Each Participant’s Award Agreement shall set forth the extent to which the Participant shall have the right to exercise a Stock Option or Stock Appreciation Right following termination of the Participant’s service as a director of the Company (whether by death, disability, retirement, or any other reason). Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement subject to Section 3(b)(v), need not be uniform among all Stock Options or Stock Appreciation Rights granted, and may reflect distinctions based on the reasons for termination. |
| 8. | Regulatory Compliance and Listing. The issuance or delivery of any Shares in settlement of an Award may be postponed by the Company for such period as may be required to comply with any applicable requirements under the Federal securities laws, any applicable listing requirements of any national securities exchange and requirements under any other law or regulation applicable to the issuance or delivery of such Shares, and the Company shall not be obligated to issue or deliver any Shares if the issuance or delivery of such Shares shall constitute a violation of any provision of any law or of any regulation of any governmental authority or any national securities exchange. |
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| 9. | Adjustment Upon Certain Changes. |
| (a) | Adjustments. In the event of any change in corporate structure affecting outstanding Shares or the value thereof, including any dividend or distribution (whether in cash, Shares or other property), stock split, reverse stock split, spin-off, recapitalization, merger, reorganization, consolidation, combination or exchange of shares or similar transaction, such adjustments and other substitutions shall be made to the Plan and to outstanding Awards as the Committee, in its sole discretion, deems equitable or appropriate, including such adjustments in (i) the maximum aggregate number, class and kind of securities that may be delivered under the Plan, and (ii) the number, class, kind and Exercise Price of securities subject to outstanding Awards granted under the Plan (including, if the Committee deems appropriate, the full or partial substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company). |
| (b) | Other Changes. The Committee may make other adjustments in the terms and conditions of Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 9(a)) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits to be made available under the Plan. |
| (c) | No Other Rights or Changes. Except as expressly provided in the Plan, no Participant or Eligible Director shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation. Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to, or the terms related to, any Award. Except as expressly provided by this Section 9, and without limiting the generality of Section 11, no adverse change may be made to the terms of an Award granted to a Participant as a result of an event described in this Section 9 without the consent of the Participant. |
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| (d) | Certain Other Transactions. In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or substantially all of the Company’s assets (on a consolidated basis), (iii) a merger, consolidation or similar transaction involving the Company in which the Company is not the surviving corporation or (iv) a merger, consolidation or similar transaction involving the Company in which the Company is the surviving corporation but the holders of Shares receive securities of another corporation and/or other property, including cash, the Committee shall, subject to Section 409A of the Code to the extent applicable and otherwise in its sole discretion, have the power to: |
| i | cancel, effective immediately prior to the occurrence of such event, each Award (whether or not then exercisable), and, in full consideration of such cancellation, pay to the Participant to whom such Award was granted an amount in cash, for each Share subject to such Award equal to the value, as determined by the Committee in its reasonable discretion, of such Award; provided, however, that with respect to any outstanding Stock Option or Stock Appreciation Right such value shall be equal to the excess of (x) the value, as determined by the Committee in its reasonable discretion, of the property (including cash) received by the holder of a Share as a result of such event over (y) the Exercise Price of such Stock Option or Stock Appreciation Right; or |
| ii | provide for the exchange of each Award (whether or not then exercisable or vested) for an Award with respect to, as appropriate, some or all of the property which a holder of the number of Shares subject to such Award would have received in such transaction and, incident thereto, make an equitable adjustment in accordance with U.S. Department of Treasury Regulation §1.409A-1(b)(5)(v)(D) and as determined by the Committee in its reasonable discretion in the Exercise Price of the Award, or the number of Shares or amount of property subject to the Award or, if appropriate, provide for a cash payment to the Participant to whom such Award was granted in partial consideration for the exchange of the Award. |
| 10. | Change in Control. |
| (a) | Assumption Upon Change in Control. Unless otherwise provided in the applicable Award Agreement, in the event of a Change in Control, if the successor company assumes or substitutes for an outstanding Award (or in which the Company is the ultimate parent corporation and continues the Award), then such Award shall be continued in accordance with its applicable terms and vesting shall not be accelerated as described in Section 10(b). For the purposes of this Section 10(a), an Award shall be considered assumed or substituted for if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an Award, for each Share subject thereto, will be solely common stock of the successor company or cash, in each case, substantially equal in fair market value (determined as of the date of the Change in Control) to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. Notwithstanding the foregoing, no Award shall be assumed or substituted pursuant to this Section 10(a) to the extent such action would cause an Award not otherwise “deferred compensation” within the meaning of Section 409A of the Code to become “deferred compensation” within the meaning of Section 409A of the Code. |
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| (b) | Acceleration of Vesting Upon Change in Control. In the event of a Change in Control after the date of the adoption of the Plan, unless provision is made in connection with the Change in Control for the assumption, substitution or continuation of an outstanding Award in accordance with Section 10(a), then the vesting of such Award shall accelerate and all restrictions shall lapse as of immediately prior to the Change in Control, and (i) in the case of an outstanding Stock Option or Stock Appreciation Right, such Award shall be exercisable as of immediately prior to such Change in Control, or (ii) in the case of an Award other than a Stock Option or a Stock Appreciation Right, such Award shall be settled or otherwise paid to the applicable Participant as soon as practicable following such vesting. Notwithstanding any provision of this Section 10(b), unless otherwise provided in the applicable Award Agreement, if any amount payable pursuant to an Award constitutes deferred compensation within the meaning of Section 409A of the Code, in the event of a Change in Control that does not qualify as an event described in Section 409A(a)(2)(A)(v) of the Code, such Award (and any other Awards that constitute deferred compensation that vested prior to the date of such Change in Control but are outstanding as of such date) shall vest and cease to be forfeitable but shall not be settled until the earliest permissible payment event under Section 409A of the Code following such Change in Control. Notwithstanding any other provision of the Plan, the Committee, in its discretion, may determine that, upon the occurrence of a Change in Control, (i) each Stock Option and Stock Appreciation Right outstanding shall terminate within a specified number of days after notice to the Participant, and such Participant shall receive, with respect to each Share subject to such Stock Option or Stock Appreciation Right, an amount equal to the excess of the fair market value (as determined by the Committee, in its discretion, in a manner that complies with Section 409A of the Code) of such Share immediately prior to the occurrence of such Change in Control over the Exercise Price, as applicable, per Share of such Stock Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property (including the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine and (ii) each Stock Option and Stock Appreciation Right outstanding at such time with an Exercise Price per Share that exceeds the fair market value (as determined by the Committee, in its discretion, in a manner that complies with Section 409A of the Code) of such Share immediately prior to the occurrence of such Change in Control shall be canceled for no consideration. |
| 11. | Termination or Amendment of the Plan. |
| (a) | Amendment. The Board may at any time and from time to time alter or amend the Plan or any part thereof (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement referred to in Section 8); provided, however, that, (i) unless otherwise necessary to comply with applicable law, the rights of a Participant with respect to Awards granted prior to such alteration or amendment may not be impaired without the consent of such Participant, and (ii) without the approval of the Company’s stockholders, no amendment shall be made if (A) stockholder approval is required by applicable law or in order to comply with the rules of the New York Stock Exchange, or (B) such amendment materially increases the number of Shares that may be issued under the Plan (other than an increase pursuant to Section 9 |
| (b) | Termination. The Plan shall terminate upon the adoption of a resolution of the Board terminating the Plan. No Awards shall be granted under the Plan after it has terminated. The termination of the Plan, however, shall not alter or impair any of the rights or obligations of any person without consent under any Award previously granted under the Plan. After the termination of the Plan, any previously granted Awards shall remain in effect and shall continue to be governed by the terms of the Plan and the applicable Award Agreement. |
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| 12. | Nontransferability of Awards. |
| (a) | No Award under the Plan shall be subject in any manner to alienation, anticipation, sale, assignment, pledge, encumbrance or transfer, and no other persons shall otherwise acquire any rights therein, except as provided below: |
| i | Any Award may be transferred by will or by the applicable laws of descent or distribution; or |
| ii | The Committee may provide in the applicable Award Agreement that all or any part of an Award may, subject to the prior written consent of the Committee, be transferred to one or more of the following classes of transferees: (i) a family member; (ii) a trust for the benefit of a family member; (iii) a limited partnership whose partners are solely family members; or (iv) any other legal entity set up for the benefit of family members. For purposes of this paragraph, with respect to a Participant, “family member” means the Participant and/or the Participant’s spouse, children, grandchildren, parents, grandparents, siblings, nieces, nephews and grandnieces and grandnephews, including adopted, in-laws and step family members; or |
| iii | With respect to Restricted Stock, Shares of Restricted Stock may be freely transferred after the restrictions lapse or are satisfied and the Shares are delivered; provided, however, that Restricted Stock awarded to an affiliate of the Company may be transferred only pursuant to Rule 144 under the Securities Act, or pursuant to an effective registration for resale under the Securities Act. For purposes of this paragraph, “affiliate” shall have the meaning assigned to that term under Rule 144 of the Securities Act. |
| (b) | Except as otherwise provided in the applicable Award Agreement, any Stock Option or Stock Appreciation Right transferred by a Participant pursuant to Section 12(a)(ii) may be exercised by the transferee only to the extent that the Award would have been exercisable by the Participant had no transfer occurred. Any transferred Award shall be subject to all of the same terms and conditions as provided in the Plan and in the applicable Award Agreement. The Participant or the Participant’s estate shall remain liable for any withholding tax that may be imposed by any federal, state, or local tax authority, and the transfer of Shares upon exercise of the Award shall be conditioned on the payment of any withholding tax. The Committee may, in its sole discretion, disallow all or a part of any transfer of an Award pursuant to Section 12(a)(ii) unless and until the Participant makes arrangements satisfactory to the Committee for the payment of any withholding tax. The Participant must immediately notify the Committee, in the form and manner required by the Committee, of any proposed transfer of an Award pursuant to Section 12(a)(ii) and no such transfer shall be effective until the Committee consents to the transfer in writing. |
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| 13. | Miscellaneous. |
| (a) | No Implied Rights. Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any director for reelection by the Company’s stockholders. |
| (b) | Withholding of Taxes. The Company shall have the right to require, prior to the issuance or delivery of Shares in settlement of any Award, payment by the Participant of any taxes required by law with respect to the issuance or delivery of such Shares. Such amount may be paid in cash, in Shares previously owned by the Participant, by withholding a portion of the Shares that otherwise would be distributed to such Participant upon settlement of the Award or a combination of cash and Shares. |
| (c) | Code Section 83(b) Elections. The Company and the Committee have no responsibility for a Participant’s election, attempt to elect or failure to elect to include the value of an Award of Restricted Stock or other Award subject to Section 83 of the Code in the Participant’s gross income for the year of grant pursuant to Section 83(b) of the Code. Any Participant who makes an election pursuant to Section 83(b) of the Code shall promptly provide the Committee with a copy of the election form. |
| (d) | No Obligation to Exercise Awards; No Right to Notice of Expiration Date. The grant of a Stock Option or Stock Appreciation Right shall impose no obligation upon the Participant to exercise the Award. The Company and the Committee have no obligation to inform a Participant of the date on which a Stock Option or Stock Appreciation Right lapses except in the Award Agreement. |
| (e) | No Rights as Stockholders. Except as expressly set forth in the Plan or the applicable Award Agreement, a Participant granted an Award under the Plan shall have no rights as a stockholder of the Company with respect to the Award unless and until certificates for the Shares underlying the Award are registered in the Participant’s name and delivered to the Participant. The right of any Participant to receive an Award by virtue of participation in the Plan shall be no greater than the right of any unsecured general creditor of the Company. |
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| (f) | Indemnification of Committee. The Company shall indemnify, to the fullest extent permitted by law, each person made or threatened to be made a party to any civil or criminal action or proceeding by reason of the fact that the person, or the executor or administrator of the person’s estate, is or was a member of the Committee or a delegate of the Committee. |
| (g) | No Required Segregation of Assets. The Company shall not be required to segregate any assets that may at any time be represented by Awards granted pursuant to the Plan. |
| (h) | Governing Law. The Plan and all determinations made and actions taken under the Plan shall be governed by the internal substantive laws, and not the choice of law rules, of the State of Delaware and construed accordingly, to the extent not superseded by applicable U.S. federal law. |
| (i) | Severability. If any provision of the Plan is held unlawful or otherwise invalid or unenforceable in whole or in part, the unlawfulness, invalidity or unenforceability shall not affect any other parts of the Plan, which shall remain in full force and effect. |
| (j) | Section 409A of the Code. With respect to Awards subject to Section 409A of the Code, this Plan is intended to comply with the requirements of such Section, and the provisions hereof shall be interpreted in a manner that satisfies the requirements of such Section and the related regulations, and the Plan shall be operated accordingly. If any provision of this Plan or any term or condition of any Award Agreement or Award would otherwise frustrate or conflict with this intent, the provision, term or condition shall be interpreted and deemed amended so as to avoid this conflict. Any reservation of rights or discretion by the Company or Committee hereunder affecting the payment of any Award subject to Section 409A of the Code shall only be as broad as is permitted by Section 409A of the Code. |
| (k) | Forfeiture Provisions. The Committee may, in its discretion, provide in an Award Agreement that an Award granted thereunder shall be canceled if the Participant, without the consent of the Company, while providing services to the Company or for a period after termination of such service, (a) violates a noncompetition, non-solicitation, non-disclosure, confidentiality, or non-disparagement covenant or agreement, (b) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any subsidiary or affiliate, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion or (c) to the extent applicable to the Participant, otherwise violates any policy adopted by the Company or any subsidiary or affiliate relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to any Participant by the Company or any subsidiary or affiliate as such policy is in effect on the date of grant of the applicable Award or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time. The Committee may also provide in an Award Agreement that (i) a Participant will forfeit any gain realized on the vesting or exercise of such Award if the Participant engages in any activity referred to in the preceding sentence, or (ii) a Participant must repay the gain to the Company realized under a previously paid Award if the Participant engages in any activity referred to in the preceding sentence or a financial restatement reduces the amount that would have been earned under such Award. Notwithstanding the foregoing, none of the non-disclosure restrictions in this Section 13(k) or in any Award Agreement shall, or shall be interpreted to, impair the Participant from exercising any legally protected whistleblower rights (including under Rule 21F under the Exchange Act). |
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Exhibit 10.3
RESIDEO EMPLOYEE STOCK
PURCHASE PLAN
1. Purpose of the Plan. The purpose of this Resideo Employee Stock Purchase Plan (the “Plan”) is to provide the employees of Resideo Technologies, Inc. (“Resideo”) and its participating subsidiaries with a convenient means of purchasing shares of Resideo common stock from time to time at a discount to market prices through the use of payroll deductions. Resideo intends that the Plan shall qualify as an “employee stock purchase plan” under Code § 423. Accordingly, the Plan will be construed so as to extend and limit Plan participation in any Offering subject to Code § 423 in a uniform and nondiscriminatory basis consistent with the requirements of Code § 423.
The Board amended the Plan, effective as of August 7, 2026, to adjust the Share limitations under the Plan in accordance with Section 14.1 of the Plan, in connection with the separation of the ADI Global Distribution business from the Company’s remaining businesses and the distribution on a pro rata basis by the Company of all of the outstanding shares of common stock of ADI Global Distribution Inc. to the Company’s common stockholders.
2. Definitions. The terms defined in this section are used (and capitalized) elsewhere in this Plan.
2.1. “Affiliate” means each domestic or foreign entity that is a “parent corporation” or “subsidiary corporation” of Resideo, as defined in Code §§ 424(e) and 424(f) or any successor provisions.
2.2. “Board” means the Board of Directors of Resideo.
2.3. “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time. For purposes of the Plan, references to sections of the Code shall be deemed to include any applicable regulations thereunder and any successor or similar statutory provisions.
2.4. “Committee” means the Compensation Committee of the Board (or such successor committee responsible for executive compensation matters).
2.5. “Common Stock” means the common stock, par value $0.001 per share, of Resideo.
2.6. “Corporate Transaction” means (i) a merger, consolidation or other reorganization of Resideo with or into another corporation, or (ii) the sale of all or substantially all of the assets of Resideo.
2.7. “Designated Affiliate” means any Affiliate which has been expressly designated by the Committee as a corporation whose Eligible Employees may participate in the Plan.
2.8. “Eligible Compensation” shall be defined from time to time by the Committee in its sole discretion with respect to any Offering and Purchase Period. Except as otherwise defined by the Committee from time to time in its sole discretion, (i) Eligible Compensation means the cash compensation (including wages, salary, commissions, and overtime earnings) paid by Resideo or any Designated Affiliate to a Participant in accordance with the Participant’s terms of employment, (ii) Eligible Compensation includes contributions made by the Participant by payroll deduction to any qualified cash or deferred arrangement that forms part of a plan maintained by Resideo or an Affiliate (while it is an Affiliate), or to a cafeteria plan maintained by Resideo or an Affiliate (while it is an Affiliate), or under any qualified transportation fringe benefit plan, and (iii) Eligible Compensation shall not include any bonuses, employer contributions to a 401(k) or other retirement plan, amounts deferred to a non-qualified deferred compensation plan, any expense reimbursements or allowances, vacation pay in lieu of time off, coverage provided or amounts paid under any welfare benefit plan (unless provided above), amounts paid by an insurance company, amounts paid in a form other than cash and other fringe benefits, or any income (whether paid in Shares or cash) realized by the Participant as a result of participation in any equity-based compensation plan of Resideo or an Affiliate.
2.9. “Eligible Employee” means any employee of Resideo or a Designated Affiliate, except for any employee who, immediately after a right to purchase is granted under the Plan, would be deemed, for purposes of Code § 423(b)(3), to own stock possessing 5% or more of the total combined voting power or value of all classes of stock of Resideo or any Affiliate. Notwithstanding the foregoing, with respect to any Offering, the Committee may provide for the exclusion of certain employees within the limitations described in Treasury Regulations §1.423-2(e)(1), (2) and (3).
2.10. “Enrollment Period” means the period of time prior to a Purchase Period during which Eligible Employees may elect to participate in the Plan as determined by the Committee for an Offering.
2.11. “Fair Market Value” of a Share of Common Stock as of any date means the closing sale price for a Share on the principal securities market on which the Shares trade on the last preceding day on which any sale shall have been made.
2.12. “Offering” means the right provided to Participants to purchase Shares under the Plan with respect to a Purchase Period.
2.13. “Offering Date” means the first Trading Day of a Purchase Period.
2.14. “Participant” means an Eligible Employee who has elected to participate in the Plan in the manner set forth in Section 4 and whose participation has not ended pursuant to Section 8.1 or Section 9.
2.15. “Plan” means this Resideo Employee Stock Purchase Plan, as it may be amended from time to time.
2.16. “Purchase Date” means the last Trading Day of a Purchase Period.
2.17. “Purchase Period” means a period of time during which offers to purchase Common Stock are outstanding under the Plan. The Committee shall determine the length of each Purchase Period, which need not be uniform; provided that no Purchase Period shall exceed twenty-seven (27) months in length. A Purchase Period shall commence on such date as may be established by the Committee. Unless the Committee determines otherwise, the Purchase Period will be a period of six months beginning either (i) on February 15 of each calendar year and ending on the next August 14, or (ii) on August 15 in each calendar year and ending on the next February 14.
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2.18. “Recordkeeping Account” means the account maintained in the books and records of Resideo (or its agent) recording the amount contributed to the Plan by each Participant through payroll deductions.
2.19. “Resideo” means Resideo Technologies, Inc., a Delaware corporation, or any successor corporation.
2.20. “Shares” means shares of Common Stock.
2.21. “Trading Day” means a day on which the national stock exchanges in the United States are open for trading.
3. Shares Available. Subject to adjustment as provided in Section 14.1, the maximum number of Shares that may be sold by Resideo to Eligible Employees under the Plan shall be 3,921,569 Shares. If the purchases by all Participants in an Offering would otherwise cause the aggregate number of Shares to be sold under the Plan to exceed the number specified in this Section 3, Resideo shall make to each Participant in that Offering a pro rata allocation in a uniform and nondiscriminatory manner of the remaining number of Shares which may be sold under the Plan.
4. Eligibility and Participation. To be eligible to participate in the Plan for a given Purchase Period, an employee must be an Eligible Employee on the first day of such Purchase Period. An Eligible Employee may elect to participate in the Plan by filing an election form with Resideo (or its agent) before the Offering Date for a Purchase Period that authorizes regular payroll deductions from Eligible Compensation beginning with the first payday in such Purchase Period and continuing until the Plan is terminated or the Eligible Employee withdraws from the Plan, modifies his or her authorization, or ceases to be an Eligible Employee, as hereinafter provided.
5. Amount of Common Stock Each Eligible Employee May Purchase.
5.1. Purchase Amounts and Limitations. Subject to the provisions of this Plan, each Participant shall be offered the right to purchase on the Purchase Date the maximum number of whole Shares that can be purchased with the balance in the Participant’s Recordkeeping Account at the per Share price specified in Section 5.2. Notwithstanding the foregoing, no Participant shall be entitled to:
(a) the right to purchase Shares under this Plan and all other employee stock purchase plans (within the meaning of Code § 423(b)), if any, of Resideo and its Affiliates that accrues at a rate which in the aggregate exceeds $25,000 of Fair Market Value (determined on the Offering Date of a Purchase Period when the right is granted) for each calendar year in which such right is outstanding at any time; or
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(b) purchase Shares in excess of 5,000 Shares per Offering (or such other maximum Share limit as established by the Committee in its sole discretion), with such limit subject to adjustment from time to time as provided in Section 14.1.
5.2. Purchase Price. Unless a different purchase price is established by the Committee for an Offering prior to the commencement of the applicable Purchase Period, the purchase price of each Share sold pursuant to this Plan will be the lesser of (i) 90% of the Fair Market Value of such Share on the Offering Date of the applicable Purchase Period, or (ii) 90% of the Fair Market Value of such Share on the Purchase Date. In no event shall the purchase price be less than the lesser of (i) 85% of the Fair Market Value of such Share on the Offering Date of the applicable Purchase Period, or (ii) 85% of the Fair Market Value of such Share on the Purchase Date.
6. Method of Participation.
6.1. Notice and Date of Grant. Resideo shall give notice to each Eligible Employee of the opportunity to purchase Shares pursuant to this Plan and the terms and conditions of such Offering. Resideo contemplates that for tax purposes the Offering Date for a Purchase Period will be considered the date of the grant of the right to purchase such Shares.
6.2. Contribution Elections. Each Eligible Employee who desires to participate in the Plan for a Purchase Period shall signify his or her election to do so by completing an election with Resideo (or its agent) in a manner approved by the Committee. An Eligible Employee may elect to have any whole percent of Eligible Compensation (that is, 1%, 2%, 3%, etc.) withheld as a payroll deduction, but not exceeding 10% per pay period (or such other maximum percentage as the Committee may establish from time to time prior to the commencement of an Offering). An election to participate in the Plan and to authorize payroll deductions as described herein must be made prior to the Offering Date of a Purchase Period in accordance with the rules set by the Committee for the Purchase Period, and shall be effective beginning with the first payday in the Purchase Period immediately following the filing of such election. Any election submitted shall remain in effect until the Plan is terminated or such Participant withdraws from the Plan, modifies his or her authorization, or ceases to be an Eligible Employee, as hereinafter provided.
6.3. Additional Contributions. If specifically provided by the Committee in connection with an Offering (including for purposes of complying with applicable local law), in addition to or instead of making contributions by payroll deductions, a Participant may make additional contributions to his or her Recordkeeping Account through the payment by cash or check prior to a Purchase Date. A Participant may make such additional contributions into his or her Recordkeeping Account only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions, subject to the limitations set forth in Section 5.1.
6.4. Offering Terms and Conditions. Each Offering shall consist of a single Purchase Period and shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate, consistent with the terms of the Plan. The Committee may provide for separate Offerings for different Designated Affiliates, and the terms and conditions of the separate Offerings, including the applicable Purchase Period, need not be consistent. Any Offering shall comply with the requirement of Code § 423 that all Participants shall have the same rights and privileges for such Offering. The terms and conditions of any Offering shall be incorporated by reference into the Plan and treated as part of the Plan.
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7. Recordkeeping Accounts.
7.1. Crediting Payroll Deduction Contributions. Resideo (or its agent) shall maintain a Recordkeeping Account for each Participant. Payroll deductions pursuant to Section 6 will be credited to such Recordkeeping Accounts on or within a reasonable amount of time following each payday.
7.2. No Interest Payable. No interest will be credited to a Participant’s Recordkeeping Account (unless required under local law).
7.3. No Segregation of Accounts. The Recordkeeping Account is established solely for accounting purposes, and all amounts credited to the Recordkeeping Account will remain part of the general assets of Resideo and need not be segregated from other corporate funds (unless required under local law).
7.4. Additional Contributions. A Participant may not make any separate cash payment into a Recordkeeping Account, except as may be permitted in accordance with Section 6.3, and any such additional contributions will be credited to the Recordkeeping Accounts within a reasonable amount of time following receipt by Resideo.
8. Right to Adjust Participation; Withdrawals from Recordkeeping Account.
8.1. Withdrawal from Plan. A Participant may at any time withdraw from the Plan by complying with the rules set by the Committee. If a Participant withdraws from the Plan, Resideo will pay to the Participant in cash the entire balance in such Participant’s Recordkeeping Account and no further deductions will be made from the Participant’s Eligible Compensation during such Purchase Period. A Participant who withdraws from the Plan will not be eligible to reenter the Plan until the next succeeding Purchase Period, and any such reentry shall be through the enrollment process described in Section 6.2.
8.2. Adjusting Level of Participation. A Participant may adjust his or her rate of payroll deduction contributions to the Plan as follows:
(a) A Participant may, by written notice during an Enrollment Period, direct Resideo to increase or decrease his or her rate of payroll deduction contributions, with such change to be effective as of the first day of the next Purchase Period.
(b) A Participant may, by written notice that complies with the rules set by the Committee, direct Resideo to decrease his or her rate of payroll deduction contributions during a Purchase Period to 0%, which shall be considered a suspension of contributions and shall become effective as soon as reasonably practicable. Any Participant who has decreased his or her rate of payroll deductions to 0% and does not increase such rate of payroll deductions from 0% to at least 1% in accordance with Section 8.2(a) during the next Enrollment Period will be withdrawn from the Plan effective as of the first day of that next Purchase Period.
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8.3. Submission of Notices. Notification of a Participant’s election to withdraw from the Plan as provided in Section 8.1 or to change his or her rate of payroll deductions as provided in Section 8.2 shall be made by completing an updated election or notice with Resideo (or its agent) in a manner approved by the Committee. The Committee may promulgate rules regarding the time and manner for submitting any such updated election or notice, which may include a requirement that the election or notice be on file for a reasonable period before it will be effective.
8.4. Adjustments by Resideo. To the extent necessary to comply with Code § 423(b)(8) or Section 5.1, a Participant’s payroll deduction contributions to the Plan may be decreased by Resideo to 0% at any time during a Purchase Period.
9. Termination of Employment.
9.1. Refund of Recordkeeping Account. If the employment of a Participant is terminated for any reason, including death, disability, or retirement, the entire balance in the Participant’s Recordkeeping Account will be refunded in cash to the Participant within 30 days after the date of termination of employment. For purposes of the Plan, a Participant will not be deemed to have terminated employment while the Participant is on sick leave, military leave or other leave of absence approved by the Company. Where the period of leave exceeds 90 days and the Participant’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the ninety-first day of such leave. Unless determined otherwise by the Committee in a manner that is permitted by, and in compliance with Code § 423, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by Resideo or a Designated Affiliate shall not be treated as a termination under the Plan.
9.2. Designation of Beneficiary. If permitted by the Committee, a Participant may file a beneficiary designation for who is to receive the Participant’s Recordkeeping Account or Share subaccount, if any, following the death of a Participant. If no beneficiary is named, the beneficiary shall be the Participant’s spouse, or if none, the Participant’s estate. All beneficiary designations will be in such form and manner as the Committee may designate from time to time.
10. Purchase of Shares.
10.1. Number of Shares Purchased. As of each Purchase Date, the balance in each Participant’s Recordkeeping Account will be used to purchase the maximum number of whole Shares (subject to the limitations of Section 5.1) at the purchase price determined in accordance with Section 5.2, unless the Participant has filed an appropriate form with Resideo in advance of that date to withdraw from the Plan in accordance with Section 8.1. Any amount remaining in a Participant’s Recordkeeping Account that represents the purchase price for any fractional share will be carried over in the Participant’s Recordkeeping Account to the next Purchase Period. Any amount remaining in a Participant’s Recordkeeping Account that represents the purchase price for any whole Shares that could not be purchased by reason of the limitations of Section 5.1 or under the circumstances described in Section 3 will be refunded to the Participant.
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10.2. Conversion of Foreign Currency. In circumstances where payroll deductions have been taken from a Participant’s Eligible Compensation in a currency other than United States dollars, Shares shall be purchased by converting the balance in the Participant’s Recordkeeping Account to United States dollars at the exchange rate in effect for payroll purposes for the month in which the Purchase Date occurs as determined by Resideo’s finance department or at such other exchange rate determined by the Committee or its delegate for this purpose, and such dollar amount shall be used to purchase Shares as of the Purchase Date.
10.3. Crediting of Shares. Promptly after the end of each Purchase Period, the number of Shares purchased by all Participants as of the applicable Purchase Date shall be issued and delivered to an agent selected by Resideo. Delivery of the shares to the agent shall be effected by an appropriate book-entry in the stock register maintained by Resideo’s transfer agent or delivery of a certificate. The agent will hold the Shares for the benefit of all Participants who have purchased Shares and will maintain a Share subaccount for each Participant reflecting the number of Shares credited to each Participant. Each Participant will be entitled to direct the voting by the agent of all Shares credited to such Participant’s Share subaccount, and the agent may reinvest any dividends paid on Shares credited to a Participant’s Share subaccount in additional Shares in accordance with such rules as the Committee may prescribe. Each Participant may also direct the agent to sell any or all of the Shares credited to the Participant’s Share subaccount and distribute the net proceeds of such sale to the Participant.
10.4. Withdrawal of Shares From Share Subaccount. Except for sales through the agent as provided in Section 10.3, a Participant may not withdraw Shares or otherwise transfer Shares from the Participant’s Share subaccount.
11. Rights as a Shareholder. A Participant shall not be entitled to any of the rights or privileges of a shareholder of Resideo with respect to Shares offered for purchase under the Plan, including the right to vote or direct the voting or to receive any dividends that may be declared by Resideo, until (i) the Participant actually has paid the purchase price for such Shares and (ii) such Shares have been issued and delivered, as provided in Section 10.3.
12. Rights Not Transferable. A Participant’s rights under this Plan are exercisable only by the Participant during his or her lifetime, and may not be sold, pledged, assigned, transferred or disposed of in any manner other than by will or the laws of descent and distribution. Any attempt to sell, pledge, assign, transfer or dispose of the same shall be void and without effect. The amounts credited to a Recordkeeping Account may not be sold, pledged, assigned, transferred or disposed of in any way, and any attempted sale, pledge, assignment, transfer or other disposition of such amounts will be void and without effect.
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13. Administration of the Plan.
13.1. Authority of the Committee. This Plan shall be administered by the Committee. Subject to the express provisions of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to:
(a) Determine when each Purchase Period under this Plan shall occur, and the terms and conditions of each related Offering (which need not be identical);
(b) Designate from time to time which Affiliates of Resideo shall be eligible to participate in the Plan;
(c) Construe and interpret the Plan and establish, amend and revoke rules, regulations and procedures for the administration of the Plan. The Committee may, in the exercise of this power, correct any defect, omission or inconsistency in the Plan, in such manner and to the extent it may deem necessary, desirable or appropriate to make the Plan fully effective;
(d) Exercise such powers and perform such acts as the Committee may deem necessary, desirable or appropriate to promote the best interests of Resideo and its Designated Affiliates and to carry out the intent that the Offerings made under the Plan are treated as qualifying under Code § 423(b);
(e) As more fully described in Section 18, to adopt such rules, procedures and sub-plans as may be necessary, desirable or appropriate to permit participation in the Plan by employees who are foreign nationals or employed outside the United States by a non-U.S. Designated Affiliate, and to achieve tax, securities law and other compliance objectives in particular locations outside the United States; and
(f) Adopt and amend, as the Committee deems appropriate, a Plan rule specifying that Shares purchased by a Participant during a Purchase Period may not be sold by the Participant for a specified period of time after the Purchase Date on which the Shares were purchased by the Participant, and establish such procedures as the Committee may deem necessary to implement such rule.
13.2. Interpretations and Decisions by the Committee. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all persons, including Resideo, any Affiliate, any Participant and any Eligible Employee.
13.3. Delegation by the Committee. Subject to the terms of the Plan and applicable law, the Committee may delegate ministerial duties associated with the administration of the Plan to such of Resideo’s officers, employees or agents as the Committee may determine.
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13.4. Indemnification. No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan. In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of Resideo or a Designated Affiliate, members of the Board and Committee and any officers or employees of the Resideo or Designated Affiliate to whom authority to act for the Committee is delegated shall be indemnified by Resideo from and against any and all liabilities, costs and expenses incurred by such persons as a result of any act or omission to act in connection with the performance of such person’s duties, responsibilities and obligations under the Plan if such person has acted in good faith and in a manner that he or she reasonably believes to be in, or not opposed to, the best interests of Resideo.
14. Changes in Capitalization and Corporate Transactions.
14.1. Adjustments. In the event of any change in the Common Stock of Resideo by reason of a stock dividend, stock split, reverse stock split, corporate separation, recapitalization, merger, consolidation, combination, exchange of shares and the like, the Committee shall make such equitable adjustments as it deems appropriate in the aggregate number and class of Shares or other securities available under this Plan, the Share limitation referred to in Section 5.1(b) of the Plan, and the number, class and purchase price of Shares or other securities subject to purchase under any pending Offering.
14.2. Corporate Transactions. In the event of a Corporate Transaction, each right to acquire Shares on any Purchase Date that is scheduled to occur after the date of the consummation of the Corporate Transaction may be continued or assumed or an equivalent right may be substituted by the surviving or successor corporation or a parent or subsidiary of such corporation. If such surviving or successor corporation or parent or subsidiary thereof refuses to continue, assume or substitute for such outstanding rights, then the Board may, in its discretion, either terminate the Plan or shorten the Purchase Period then in progress by setting a new Purchase Date for a specified date before the date of the consummation of the Corporate Transaction. Each Participant shall be notified in writing, prior to any new Purchase Date, that the Purchase Date for the existing Offering has been changed to the new Purchase Date and that the Participant’s right to acquire Shares will be exercised automatically on the new Purchase Date unless prior to such date the Participant’s employment has been terminated or the Participant has withdrawn from the Plan. In the event of a dissolution or liquidation of Resideo, any Offering and Purchase Period then in progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Board.
15. Amendment or Suspension of Plan. The Committee, in its sole discretion, may at any time suspend this Plan or amend it in any respect, but no such amendment may, without shareholder approval, increase the number of shares reserved under this Plan, or effect any other change in the Plan that would require shareholder approval under applicable law or regulations or the rules of any securities exchange on which the Shares may then be listed, or to maintain compliance with Code § 423. No such amendment or suspension shall adversely affect the rights of Participants pursuant to Shares previously acquired under the Plan. During any suspension of the Plan, no new Offering or Purchase Period shall begin and no Eligible Employee shall be offered any new right to purchase Shares under the Plan or any opportunity to elect to participate in the Plan, and any existing payroll deduction authorizations shall be suspended, but any such right to purchase Shares previously granted for a Purchase Period that began prior to the Plan suspension shall remain subject to the other provisions of this Plan and the discretion of the Board and the Committee with respect thereto.
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16. Effective Date and Term of Plan. The Plan will become effective on the date it is approved by the shareholders of Resideo, which approval must be within 12 months of the date the Plan is adopted by the Board. The Plan and all rights of Participants hereunder shall terminate (i) at any time, at the discretion of the Committee, or (ii) upon the completion of any Offering under which the limitation on the total number of Shares to be issued during the entire term of the Plan, as determined in accordance with Section 3, has been reached. Except as otherwise determined by the Board, upon termination of this Plan, Resideo shall pay to each Participant cash in an amount equal to the entire remaining balance in such Participant’s Recordkeeping Account.
17. Governmental Regulations and Listing. All rights granted or to be granted to Eligible Employees under this Plan are expressly subject to all applicable laws and regulations and to the approval of all governmental authorities required in connection with the authorization, issuance, sale or transfer of the Shares reserved for this Plan, including, without limitation, there being a current registration statement of Resideo under the Securities Act of 1933, as amended, covering the Shares purchasable on the Purchase Date applicable to such Shares. If applicable, all such rights hereunder are also similarly subject to effectiveness of an appropriate listing application to a national securities exchange covering the Shares issuable under the Plan upon official notice of issuance.
18. Rules for Foreign Jurisdictions. The Committee may adopt rules, procedures or subplans relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding handling of payroll deductions, payment of interest, conversion of local currency, payroll tax, the definition of Eligible Compensation, withholding procedures and handling of stock certificates that vary with local requirements.
19. Miscellaneous.
19.1. Effect on Employment Status. This Plan shall not be deemed to constitute a contract of employment between Resideo or any Designated Affiliate and any Participant, nor shall it interfere with the right of Resideo (or any Affiliate) to terminate the employment of any Participant and treat him or her without regard to the effect that such treatment might have upon him or her under this Plan.
19.2. Governing Law. This Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.
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19.3. Electronic Documentation and Signatures. Any reference in the Plan to election or enrollment forms, notices, authorizations or any other document to be provided in writing shall include the provision of any such form, notice, authorization or document by electronic means, including through Resideo’s intranet or with Resideo’s agent, and any reference in the Plan to the signing of any document shall include the authentication of any such document provided in electronic form, in each case in accordance with procedures established by the Committee.
19.4. Book-Entry and Electronic Transfer of Shares. Any reference in this Plan to the issuance or transfer of a stock certificate evidencing Shares shall be deemed to include, in the Committee’s discretion, the issuance or transfer of such Shares in book-entry or electronic form. Uncertificated Shares shall be deemed delivered for all purposes of this Plan when Resideo or its agent shall have provided to the recipient of the Shares a notice of issuance or transfer by electronic mail (with proof of receipt) or by United States mail, and have recorded the issuance or transfer in its records.
19.5. Registration of Share Accounts and Certificates. Any Share account contemplated by Section 10.3 and certificate to be issued to a Participant shall be registered in the name of the Participant, or jointly in the name of the Participant and another person, as the Participant may direct on an appropriate form filed with Resideo or the agent.
19.6. Code § 409A. The Plan is exempt from the application of Code § 409A and any ambiguities herein will be interpreted to so be exempt from Code § 409A. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Committee determines that an option granted under the Plan may be subject to Code § 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code § 409A, the Committee may amend the terms of the Plan and/or of an outstanding Offering under the Plan, or take such other action as the Committee determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code § 409A, but only to the extent any such amendments or actions by the Committee would not violate Code § 409A. Notwithstanding the foregoing, Resideo and the Committee shall have no liability to a Participant or any other party if the option to purchase Shares under the Plan that is intended to be exempt from or compliant with Code § 409A is not exempt or compliant or for any action taken by the Committee with respect thereto. Resideo makes no representations that the option to purchase Shares under the Plan is compliant with Code § 409A.
19.7. Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
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Exhibit 10.4
RESIDEO TECHNOLOGIES, INC.
RESTRICTED STOCK UNIT ADJUSTMENT NOTICE
Amended and Restated 2018 Stock Incentive Plan
of Resideo Technologies, Inc. and its Affiliates
Dear [____]:
As you know, on August 3, 2026 (the “Spin Date”), the spin-off (the “Spin-Off”) of ADI Global Distribution Inc. (“ADI”) from Resideo Technologies, Inc. (“Resideo”) was completed. On the Spin Date you held outstanding and unvested restricted stock units (“RSUs”) payable in shares of Resideo common stock (“Resideo Stock”) that were previously granted to you under the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Resideo Stock Incentive Plan”) and pursuant to restricted stock unit agreement(s) and any amendments thereto (collectively, the “Resideo RSU Agreement”).
In connection with the Spin-Off, the Compensation and Human Capital Management Committee of the Board of Directors of Resideo determined, pursuant to Section 5.3(a) of the Resideo Stock Incentive Plan, to adjust the number of shares of Resideo Stock underlying your RSUs that were outstanding and unvested as of the Spin Date by the Resideo Adjustment Ratio (as defined in the Employee Matters Agreement entered into between Resideo and ADI in connection with the Spin-Off (the “EMA”)), such that after the Spin-Off, your RSUs will cover an additional number of shares of Resideo Stock as provided herein (the “Adjusted RSUs”).
This Restricted Stock Unit Adjustment Notice (the “Adjustment Notice”) evidences the necessary adjustments of your RSUs that are required by the Spin-Off. Following the Spin Date, your Adjusted RSUs will continue to be governed by the Resideo Stock Incentive Plan and the terms and conditions of your Resideo RSU Agreement.
The table below summarizes your RSUs before and after the Spin-Off, and the material terms applicable to your Adjusted RSUs:
|
Original Resideo RSUs |
| Participant: [____] |
| Date of Grant: [____] |
| Number of RSUs on Date of Grant: [____] |
| Vesting Commencement Date: [____] |
| Number of Unvested RSUs on Spin Date: [____] |
| Adjusted RSUs Following Spin-Off | |
| Resideo Adjustment Ratio: [____] | |
|
Number of Unvested Adjusted RSUs: [____] (this is equal to the Number of Unvested RSUs on the Spin Date, as adjusted based on the Resideo Adjustment Ratio and rounded [up]1 to the nearest whole share of Resideo Stock) | |
|
Remaining Vesting Schedule as of Spin Date: | |
| Scheduled Vesting Dates | Number of Adjusted RSUs that Vest |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
| [____] | [____] |
All of the terms and conditions of your Resideo RSU Agreement as in effect immediately prior to the Spin Date shall continue in full force and effect, except as expressly modified by this Adjustment Notice, the EMA, certain administrative changes, or otherwise in connection with the Spin-Off.
Any capitalized term that is used but not defined in this Adjustment Notice or your Resideo RSU Agreement will have the meaning assigned to it in the Resideo Stock Incentive Plan.
Please follow the instructions below to acknowledge and accept this Adjustment Notice and your Adjusted RSUs. If you would like any further information or have any questions regarding this Adjustment Notice or your Adjusted RSUs, please contact HRAdvisor via email at [email protected].
ACKNOWLEDGMENT
You acknowledge that clicking on the “Accept” button constitutes acceptance of this Adjustment Notice, as well as your understanding and agreement that the terms and conditions of your Adjusted RSUs are set forth in your Resideo RSU Agreement, except as expressly modified by this Adjustment Notice.
| 1 | NTD: For participants in France, this should say “down.” |
Exhibit 10.5
RESIDEO TECHNOLOGIES, INC.
PERFORMANCE STOCK UNIT ADJUSTMENT NOTICE
Amended and Restated 2018 Stock Incentive Plan
of Resideo Technologies, Inc. and its Affiliates
2024 PSUs
Dear [____]:
As you know, on August 3, 2026 (the “Spin Date”), the spin-off (the “Spin-Off”) of ADI Global Distribution Inc. from Resideo Technologies, Inc. (“Resideo”) was completed. On the Spin Date you held outstanding and not yet settled performance stock units (“PSUs”) payable in shares of Resideo common stock (“Resideo Stock”) that were previously granted to you under the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Resideo Stock Incentive Plan”) and pursuant to performance stock unit agreement(s) and any amendments thereto (collectively, the “Resideo PSU Agreement”).
In connection with the Spin-Off, the Compensation and Human Capital Management Committee of the Board of Directors of Resideo (the “CHCMC”) determined, pursuant to Section 5.3(a) of the Resideo Stock Incentive Plan, to adjust the number of shares of Resideo Stock underlying the number of earned PSUs upon completion of the performance cycle ending June 30, 2026, as determined by the CHCMC, as provided herein (the “Adjusted PSUs”).
This Performance Stock Unit Adjustment Notice (the “Adjustment Notice”) evidences the necessary adjustments of your PSUs that are required by the Spin-Off. Following the Spin Date, your Adjusted PSUs will continue to be governed by the Resideo Stock Incentive Plan and the terms and conditions of your Resideo PSU Agreement.
The table below summarizes your PSUs before and after the Spin-Off, and the material terms applicable to your Adjusted PSUs:
| Original Resideo PSUs |
| Participant: [____] |
| Date of Grant: [____] |
| Target Number of PSUs on Date of Grant: [____] |
| Performance Measures: [____] |
| Performance Cycle: [____] |
| Number of Earned PSUs on the Spin Date: [____] |
| Adjusted PSUs Following Spin-Off |
| Resideo Adjustment Ratio: [____] |
| Number of Earned Adjusted PSUs: [____] (this is equal to the Number of Earned PSUs on the Spin Date, divided by the Resideo Adjustment Ratio and rounded up to the nearest whole share of Resideo Stock) |
| Revised Performance Measure: The Earned Adjusted PSUs are no longer subject to any performance-based vesting condition. The Earned Adjusted PSUs are solely time-vested through [Date] |
| Vesting and Settlement: The Earned Adjusted PSUs are subject to your continued service with Resideo through [Date], with settlement on [Date] |
All of the terms and conditions of your Resideo PSU Agreement as in effect immediately prior to the Spin Date shall continue in full force and effect, except as expressly modified by this Adjustment Notice, the resolutions of the CHCMC adopted in connection with the Spin-Off, certain administrative changes, or otherwise in connection with the Spin-Off.
Any capitalized term that is used but not defined in this Adjustment Notice or your Resideo PSU Agreement will have the meaning assigned to it in the Resideo Stock Incentive Plan.
Please follow the instructions below to acknowledge and accept this Adjustment Notice and your Adjusted PSUs. If you would like any further information or have any questions regarding this Adjustment Notice or your Adjusted PSUs, please contact HRAdvisor via email at [email protected].
ACKNOWLEDGMENT
You acknowledge that clicking on the “Accept” button constitutes acceptance of this Adjustment Notice, as well as your understanding and agreement that the terms and conditions of your Adjusted PSUs are set forth in your Resideo PSU Agreement, except as expressly modified by this Adjustment Notice.
Exhibit 10.6
RESIDEO TECHNOLOGIES, INC.
PERFORMANCE STOCK UNIT ADJUSTMENT NOTICE
Amended and Restated 2018 Stock Incentive Plan
of Resideo Technologies, Inc. and its Affiliates
2025 ROIC PSUs
Dear [____]:
As you know, on August 3, 2026 (the “Spin Date”), the spin-off (the “Spin-Off”) of ADI Global Distribution Inc. from Resideo Technologies, Inc. (“Resideo”) was completed. On the Spin Date you held outstanding and not yet settled performance stock units (“PSUs”) payable in shares of Resideo common stock (“Resideo Stock”) that were previously granted to you under the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Resideo Stock Incentive Plan”) and pursuant to performance stock unit agreement(s) and any amendments thereto (collectively, the “Resideo PSU Agreement”).
In connection with the Spin-Off, the Compensation and Human Capital Management Committee of the Board of Directors of Resideo (the “CHCMC”) determined, pursuant to Sections 5.3(a) and (b) of the Resideo Stock Incentive Plan, to adjust the target number of shares of Resideo Stock underlying your outstanding PSU award, or to the extent the performance cycle was completed prior to the Spin Date, the number of earned PSUs, as well as the performance measures applicable to the portion of your award that will remain subject to performance measures following the Spin-Off, in each case, as provided herein (the “Adjusted PSUs”).
With respect to your PSUs granted in 2025 that vest based on return on invested capital (“ROIC”) (the “2025 ROIC PSUs”), the CHCMC determined that (a) 50% of the 2025 ROIC PSUs would be measured based on actual ROIC achieved through December 31, 2025 (the “Earned 2025 ROIC PSUs”), which are now subject solely to time-based vesting; and (b) the remaining 50% of the 2025 ROIC PSUs remain subject to revised performance-based vesting based solely on relative total shareholder return (“rTSR”) performance of Resideo, effective as of the Spin Date.
This Performance Stock Unit Adjustment Notice (the “Adjustment Notice”) evidences the necessary adjustments of your 2025 ROIC PSUs that are required by the Spin-Off. Following the Spin Date, your Adjusted PSUs will continue to be governed by the Resideo Stock Incentive Plan and the terms and conditions of your Resideo PSU Agreement.
The table below summarizes your 2025 ROIC PSUs before and after the Spin-Off, and the material terms applicable to your Adjusted PSUs:
| Original Resideo 2025 ROIC PSUs |
| Participant: [____] |
| Date of Grant: [____] |
| Target Number of 2025 ROIC PSUs on Date of Grant: [____] |
| Performance Measures: [____] |
| Performance Cycle: [____] |
| Number of Earned 2025 ROIC PSUs on the Spin Date: [____] |
| Adjusted 2025 ROIC PSUs Following Spin-Off |
| Resideo Adjustment Ratio: [____] |
| Number of Earned Adjusted 2025 ROIC PSUs: [____] (this is equal to the Number of Earned 2025 ROIC PSUs on the Spin Date, divided by the Resideo Adjustment Ratio and rounded up to the nearest whole share of Resideo Stock) |
| Target
Number of Unvested Adjusted PSUs: [____] (this is equal to 50% of the Target Number of 2025 ROIC PSUs on the Date of Grant, divided by the Resideo Adjustment Ratio and rounded up to the nearest whole share of Resideo Stock) |
| Revised Performance Measures: Earned 2025 ROIC PSUs: Not applicable (subject solely to time-based vesting) Unvested Adjusted PSUs: |
| Performance Cycle: Earned 2025 ROIC PSUs: Not applicable Unvested Adjusted PSUs: |
| Vesting and Settlement: The Adjusted PSUs are subject to your continued service with Resideo through [Date], with settlement on [Date] |
All of the terms and conditions of your Resideo PSU Agreement as in effect immediately prior to the Spin Date shall continue in full force and effect, except as expressly modified by this Adjustment Notice, the resolutions of the CHCMC adopted in connection with the Spin-Off, certain administrative changes, or otherwise in connection with the Spin-Off.
Any capitalized term that is used but not defined in this Adjustment Notice or your Resideo PSU Agreement will have the meaning assigned to it in the Resideo Stock Incentive Plan.
Please follow the instructions below to acknowledge and accept this Adjustment Notice and your Adjusted PSUs. If you would like any further information or have any questions regarding this Adjustment Notice or your Adjusted PSUs, please contact HRAdvisor via email at [email protected].
ACKNOWLEDGMENT
You acknowledge that clicking on the “Accept” button constitutes acceptance of this Adjustment Notice, as well as your understanding and agreement that the terms and conditions of your Adjusted PSUs are set forth in your Resideo PSU Agreement, except as expressly modified by this Adjustment Notice.
Exhibit 10.7
RESIDEO TECHNOLOGIES, INC.
PERFORMANCE STOCK UNIT ADJUSTMENT NOTICE
Amended and Restated 2018 Stock Incentive Plan
of Resideo Technologies, Inc. and its Affiliates
2025 rTSR PSUs
Dear [____]:
As you know, on August 3, 2026 (the “Spin Date”), the spin-off (the “Spin-Off”) of ADI Global Distribution Inc. from Resideo Technologies, Inc. (“Resideo”) was completed. On the Spin Date you held outstanding and not yet settled performance stock units (“PSUs”) payable in shares of Resideo common stock (“Resideo Stock”) that were previously granted to you under the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Resideo Stock Incentive Plan”) and pursuant to performance stock unit agreement(s) and any amendments thereto (collectively, the “Resideo PSU Agreement”).
In connection with the Spin-Off, the Compensation and Human Capital Management Committee of the Board of Directors of Resideo (the “CHCMC”) determined, pursuant to Sections 5.3(a) and (b) of the Resideo Stock Incentive Plan, to adjust the target number of shares of Resideo Stock underlying your outstanding PSU award, or to the extent the performance cycle was completed prior to the Spin Date, the number of earned PSUs, as well as the performance measures applicable to the portion of your award that will remain subject to performance measures following the Spin-Off, in each case, as provided herein (the “Adjusted PSUs”).
With respect to your PSUs granted in 2025 that vest based on relative total shareholder return (“rTSR”) (the “2025 rTSR PSUs”), the CHCMC determined that (a) 50% of the 2025 rTSR PSUs would be measured based on actual rTSR achieved through June 30, 2026, as determined by the CHCMC (the “Earned 2025 rTSR PSUs”), which are now subject solely to time-based vesting; and (b) the remaining 50% of the 2025 rTSR PSUs remain subject to revised performance-based vesting based solely on rTSR performance of Resideo Stock, effective as of the Spin Date.
This Performance Stock Unit Adjustment Notice (the “Adjustment Notice”) evidences the necessary adjustments of your 2025 rTSR PSUs that are required by the Spin-Off. Following the Spin Date, your Adjusted PSUs will continue to be governed by the Resideo Stock Incentive Plan and the terms and conditions of your Resideo PSU Agreement.
The table below summarizes your 2025 rTSR PSUs before and after the Spin-Off, and the material terms applicable to your Adjusted PSUs:
| Original Resideo 2025 rTSR PSUs |
| Participant: [____] |
| Date of Grant: [____] |
| Target Number of 2025 rTSR PSUs on Date of Grant: [____] |
| Performance Measures: [____] |
| Performance Cycle: [____] |
| Number of Earned 2025 rTSR PSUs on the Spin Date: [____] |
| Adjusted PSUs Following Spin-Off |
| Resideo Adjustment Ratio: [____] |
| Number of Earned Adjusted 2025 rTSR PSUs: [____] (this is equal to the Number of Earned 2025 rTSR PSUs on the Spin Date, divided by the Resideo Adjustment Ratio and rounded up to the nearest whole share of Resideo Stock) |
| Target Number of Unvested Adjusted PSUs: [____] (this is equal to 50% of the Target Number of 2025 rTSR PSUs on the Date of Grant, divided by the Resideo Adjustment Ratio and rounded up to the nearest whole share of Resideo Stock) |
| Revised Performance Measures: Earned 2025 rTSR PSUs: Not applicable (subject solely to time-based vesting) Unvested Adjusted PSUs: |
| Performance Cycle: Earned 2025 rTSR PSUs: Not applicable Unvested Adjusted PSUs: |
| Vesting and Settlement: The Adjusted PSUs are subject to your continued service with Resideo through [Date], with settlement on [Date] |
All of the terms and conditions of your Resideo PSU Agreement as in effect immediately prior to the Spin Date shall continue in full force and effect, except as expressly modified by this Adjustment Notice, the resolutions of the CHCMC adopted in connection with the Spin-Off, certain administrative changes, or otherwise in connection with the Spin-Off.
Any capitalized term that is used but not defined in this Adjustment Notice or your Resideo PSU Agreement will have the meaning assigned to it in the Resideo Stock Incentive Plan.
Please follow the instructions below to acknowledge and accept this Adjustment Notice and your Adjusted PSUs. If you would like any further information or have any questions regarding this Adjustment Notice or your Adjusted PSUs, please contact HRAdvisor via email at [email protected].
ACKNOWLEDGMENT
You acknowledge that clicking on the “Accept” button constitutes acceptance of this Adjustment Notice, as well as your understanding and agreement that the terms and conditions of your Adjusted PSUs are set forth in your Resideo PSU Agreement, except as expressly modified by this Adjustment Notice.
Exhibit 10.8
RESIDEO TECHNOLOGIES, INC.
PERFORMANCE STOCK UNIT ADJUSTMENT NOTICE
Amended and Restated 2018 Stock Incentive Plan
of Resideo Technologies, Inc. and its Affiliates
2026 [rTSR] [ROIC] PSUs
Dear [____]:
As you know, on August 3, 2026 (the “Spin Date”), the spin-off (the “Spin-Off”) of ADI Global Distribution Inc. from Resideo Technologies, Inc. (“Resideo”) was completed. On the Spin Date you held outstanding and unvested performance stock units (“PSUs”) payable in shares of Resideo common stock (“Resideo Stock”) that were previously granted to you under the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Resideo Stock Incentive Plan”) and pursuant to performance stock unit agreement(s) and any amendments thereto (collectively, the “Resideo PSU Agreement”).
In connection with the Spin-Off, the Compensation and Human Capital Management Committee of the Board of Directors of Resideo (the “CHCMC”) determined, pursuant to Sections 5.3(a) and (b) of the Resideo Stock Incentive Plan, that it was equitable to adjust 100% of the target number of shares of Resideo Stock subject to your PSU award and to revise the time- and performance-based vesting criteria applicable thereto, in each case, as provided herein (the “Adjusted PSUs”).
This Performance Stock Unit Adjustment Notice (the “Adjustment Notice”) evidences the necessary adjustments of your PSUs that are required by the Spin-Off. Following the Spin Date, your Adjusted PSUs will continue to be governed by the Resideo Stock Incentive Plan and the terms and conditions of your Resideo PSU Agreement.
The table below summarizes your PSUs before and after the Spin-Off, and the material terms applicable to your Adjusted PSUs:
| Original Resideo PSUs |
| Participant: [____] |
| Date of Grant: [____] |
| Target Number of PSUs on Date of Grant: [____] |
| Performance Measures: [____] |
| Performance Cycle: [____] |
| Adjusted PSUs Following Spin-Off |
| Resideo Adjustment Ratio: [____] |
| Target Number of Adjusted PSUs: [____] (this is equal to 100% of the Target Number of PSUs on the Date of Grant, divided by the Resideo Adjustment Ratio and rounded up to the nearest whole share of Resideo Stock) |
| Revised Performance Measure: |
| Performance Cycle: |
| Vesting and Settlement: The Adjusted PSUs are subject to your continued service with Resideo through [Date], with settlement on [Date] |
All of the terms and conditions of your Resideo PSU Agreement as in effect immediately prior to the Spin Date shall continue in full force and effect, except as expressly modified by this Adjustment Notice, the resolutions of the CHCMC adopted in connection with the Spin-Off, certain administrative changes, or otherwise in connection with the Spin-Off.
Any capitalized term that is used but not defined in this Adjustment Notice or your Resideo PSU Agreement will have the meaning assigned to it in the Resideo Stock Incentive Plan.
Please follow the instructions below to acknowledge and accept this Adjustment Notice and your Adjusted PSUs. If you would like any further information or have any questions regarding this Adjustment Notice or your Adjusted PSUs, please contact HRAdvisor via email at [email protected].
ACKNOWLEDGMENT
You acknowledge that clicking on the “Accept” button constitutes acceptance of this Adjustment Notice, as well as your understanding and agreement that the terms and conditions of your Adjusted PSUs are set forth in your Resideo PSU Agreement, except as expressly modified by this Adjustment Notice.
Exhibit 10.9
RESIDEO TECHNOLOGIES, INC.
STOCK OPTION ADJUSTMENT NOTICE
Amended and Restated 2018 Stock Incentive Plan
of Resideo Technologies, Inc. and its Affiliates
Dear [____]:
As you know, on August 3, 2026 (the “Spin Date”), the spin-off (the “Spin-Off”) of ADI Global Distribution Inc. (“ADI”) from Resideo Technologies, Inc. (“Resideo”) was completed. On the Spin Date you held outstanding options (“Resideo Stock Options”) to purchase shares of Resideo common stock (“Resideo Stock”) that were previously granted to you under the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates (the “Resideo Stock Incentive Plan”) and pursuant to stock option agreement(s) and any amendments thereto (collectively, the “Resideo Option Agreement”).
In connection with the Spin-Off, and pursuant to Section 4.1 of the Employee Matters Agreement entered into between Resideo and ADI in connection with the Spin-Off (the “EMA”), the Compensation and Human Capital Management Committee of the Board of Directors of Resideo determined that it was equitable under the Resideo Stock Incentive Plan to adjust (i) the number of shares of Resideo Stock subject to your Resideo Stock Options and (ii) the per share exercise price of your Resideo Stock Options, in each case that were outstanding as of the Spin Date, such that after the Spin-Off, your Resideo Stock Options will remain options to purchase shares of Resideo Stock, but will cover an additional number of shares of Resideo Stock at a lower exercise price as provided herein (the “Adjusted Options”).
This Stock Option Adjustment Notice (the “Adjustment Notice”) evidences the necessary adjustments of your Resideo Stock Options that are required by the Spin-Off. Following the Spin Date, your Adjusted Options will continue to be governed by the Resideo Stock Incentive Plan and the terms and conditions of your Resideo Option Agreement. [You will not be deemed to have experienced a termination of employment from Resideo as a result of the Spin-Off, and your termination of employment will instead be determined based on when you cease to be employed by ADI.]1
The table below summarizes your Resideo Stock Options before and after the Spin-Off, and the material terms applicable to your Adjusted Options:
|
Original Resideo Stock Options |
| Participant: [____] |
| Date of Grant: [____] |
| Number of Options on Date of Grant: [____] |
| Exercise Price on Date of Grant: [____] |
| Number of Outstanding Options on Spin Date: [____] |
| 1 | To be included only for the applicable ADI employee. |
| Adjusted Options Following Spin-Off |
| Resideo Adjustment Ratio: [____] |
|
Number of Shares Subject to Adjusted Options: [____] (this is equal to the number of shares of Resideo Stock subject to your Resideo Stock Options on the Spin Date, divided by the Resideo Adjustment Ratio and rounded down to the nearest whole share of Resideo Stock) |
| Adjusted Exercise Price: [____] per share (this is equal to the per share exercise price of your Resideo Stock Options on the Spin Date, multiplied by the Resideo Adjustment Ratio and rounded up to the nearest cent) |
All of the terms and conditions of your Resideo Option Agreement and the Resideo Stock Options as in effect immediately prior to the Spin Date shall continue in full force and effect, except as expressly modified by this Adjustment Notice, the EMA, certain administrative changes, or otherwise in connection with the Spin-Off. For the avoidance of doubt, your Resideo Stock Options will remain vested following the Spin Date.
Any capitalized term that is used but not defined in this Adjustment Notice or your Resideo Option Agreement will have the meaning assigned to it in the Resideo Stock Incentive Plan.
Please follow the instructions below to acknowledge and accept this Adjustment Notice and your Adjusted Options. If you would like any further information or have any questions regarding this Adjustment Notice or your Adjusted Options, please contact HRAdvisor via email at [email protected].
ACKNOWLEDGMENT
You acknowledge that clicking on the “Accept” button constitutes acceptance of this Adjustment Notice, as well as your understanding and agreement that the terms and conditions of your Adjusted Options are set forth in your Resideo Option Agreement, except as expressly modified by this Adjustment Notice.
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On August 3, 2026, Resideo Technologies Inc. (“Resideo”, the “Company”, “we”, “our” and “us”) completed the previously announced separation (the “Separation”) of our former wholesale distribution business into a separate, independent publicly traded company, ADI Global Distribution Inc. (“ADI”). The Separation was structured as a tax free spin-off, which occurred by way of a pro rata distribution (the “Distribution”) of 100% of ADI common stock to Resideo common stockholders. Each Resideo common stockholder received one share of ADI common stock for every two shares of Resideo common stock held as of July 20, 2026. ADI is now an independent publicly traded company under the symbol “ADIG” on the New York Stock Exchange.
Resideo entered into various agreements to effect the Separation and provide for the relationship between Resideo and ADI, including, among others, a separation and distribution agreement, tax matters agreement, commercial product purchase agreement, employee matters agreement and transition services agreement.
The unaudited Pro Forma Condensed Consolidated Financial Statements have been derived from the Company’s historical consolidated financial statements and gives effect to the Separation. The following unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended April 4, 2026 and for each of the years ended December 31, 2025, 2024, and 2023 reflect the Company’s results of operations as if the Separation had occurred as of January 1, 2023 in that they reflect the reclassification of ADI as discontinued operations for all periods presented. The adjustments in the “Transaction Accounting Adjustments” column in the unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended April 4, 2026 and for the year ended December 31, 2025 give effect to the Separation and related transactions as if they had occurred as of January 1, 2025. As a result, there are no transaction accounting adjustments for the years ended December 31, 2024 and 2023, respectively. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of April 4, 2026 reflects the Company’s financial position as if the Separation had occurred on April 4, 2026.
After the date of the Separation, Resideo no longer consolidates ADI into its financial results. The historical financial results of ADI will be reflected in the Company’s consolidated financial statements as discontinued operations under U.S. generally accepted accounting principles (“U.S. GAAP”) for all periods.
The unaudited pro forma condensed consolidated financial statements have been prepared based upon management’s estimates and assumptions using the best available information and are subject to adjustments described below and in the accompanying notes. The unaudited pro forma condensed consolidated financial statements are presented for illustrative and informational purposes only and are not necessarily indicative of the financial position or results of operations had the Separation and related transactions been completed on the date assumed, nor are they indicative of the Company’s future financial position or results of operations. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company’s historical consolidated financial statements and accompanying notes. The adjustments included within the “ADI Separation” column are consistent with the guidance for discontinued operations under U.S. GAAP. The Company's current estimates on a discontinued operations basis are preliminary and could change as the Company finalizes discontinued operations accounting to be reported in the Company's 2026 Annual Report on Form 10-K and applicable 2026 Quarterly Reports on Form 10-Q.
The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of April 4, 2026
| ($ in millions) | Historical Resideo (as reported) | ADI Discontinued Operations (Note a) | Transaction Accounting Adjustments | Notes | Pro Forma Resideo | |||||||||||||
| Assets: | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 438 | $ | (135 | ) | $ | (133 | ) | (b) | $ | 170 | |||||||
| Accounts receivable, net | 1,114 | (703 | ) | - | 411 | |||||||||||||
| Inventories, net | 1,357 | (1,036 | ) | - | 321 | |||||||||||||
| Other current assets | 265 | (146 | ) | - | 119 | |||||||||||||
| Total current assets | 3,174 | (2,020 | ) | (133 | ) | 1,021 | ||||||||||||
| Property, plant and equipment, net | 444 | (107 | ) | - | 337 | |||||||||||||
| Goodwill | 3,096 | (1,065 | ) | - | 2,031 | |||||||||||||
| Intangible assets, net | 1,069 | (725 | ) | - | 344 | |||||||||||||
| Other assets | 424 | (173 | ) | - | 251 | |||||||||||||
| Total Assets | $ | 8,207 | $ | (4,090 | ) | $ | (133 | ) | $ | 3,984 | ||||||||
| Liabilities and Stockholders’ equity: | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable | $ | 1,015 | $ | (610 | ) | $ | - | $ | 405 | |||||||||
| Accrued liabilities | 516 | (175 | ) | 54 | (c) | 395 | ||||||||||||
| Total current liabilities | 1,531 | (785 | ) | 54 | 800 | |||||||||||||
| Long-term debt | 3,165 | - | (1,100 | ) | (b) | 2,065 | ||||||||||||
| Other liabilities | 589 | (239 | ) | - | 350 | |||||||||||||
| Total liabilities | 5,285 | (1,024 | ) | (1,046 | ) | 3,215 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||||||
| Preferred stock | 482 | - | - | 482 | ||||||||||||||
| Common stock | - | - | - | - | ||||||||||||||
| Additional paid-in capital | 2,410 | - | - | 2,410 | ||||||||||||||
| Retained earnings | 374 | (3,111 | ) | 913 | (d) | (1,824 | ) | |||||||||||
| Accumulated other comprehensive income/(loss) | (168 | ) | 45 | - | (123 | ) | ||||||||||||
| Treasury stock at cost | (176 | ) | - | - | (176 | ) | ||||||||||||
| Total stockholders’ equity | 2,922 | (3,066 | ) | 913 | 769 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 8,207 | $ | (4,090 | ) | $ | (133 | ) | $ | 3,984 | ||||||||
2
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended April 4, 2026
| ($ in millions except per share amounts) | Historical Resideo (as reported) | ADI Discontinued Operations (Note a) | Transaction Accounting Adjustments | Notes | Pro Forma Resideo | |||||||||||||
| Net revenue | $ | 1,912 | $ | (1,160 | ) | $ | - | $ | 752 | |||||||||
| Cost of goods sold | 1,361 | (904 | ) | - | 457 | |||||||||||||
| Gross profit | 551 | (256 | ) | - | 295 | |||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development expenses | 48 | (11 | ) | - | 37 | |||||||||||||
| Selling, general and administrative expenses | 340 | (190 | ) | - | 150 | |||||||||||||
| Intangible asset amortization | 31 | (24 | ) | - | 7 | |||||||||||||
| Restructuring expenses | 6 | - | - | 6 | ||||||||||||||
| Business separation costs | 24 | (24 | ) | - | - | |||||||||||||
| Total operating expenses | 449 | (249 | ) | - | 200 | |||||||||||||
| Income from operations | 102 | (7 | ) | - | 95 | |||||||||||||
| Interest expense, net | 47 | (14 | ) | (3 | ) | (e) | 30 | |||||||||||
| Net income before taxes | 55 | 7 | 3 | 65 | ||||||||||||||
| Provision for income taxes | 17 | 3 | 1 | (f) | 21 | |||||||||||||
| Net income | 38 | 4 | 2 | 44 | ||||||||||||||
| Less: preferred stock dividends | 9 | - | - | 9 | ||||||||||||||
| Less: undistributed income allocated to preferred stockholders | 3 | - | - | 3 | ||||||||||||||
| Net income available to common stockholders | $ | 26 | $ | 4 | $ | 2 | $ | 32 | ||||||||||
| Earnings per common share: | ||||||||||||||||||
| Basic | $ | 0.17 | $ | 0.21 | ||||||||||||||
| Diluted | $ | 0.17 | $ | 0.21 | ||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||
| Basic | 151 | 151 | ||||||||||||||||
| Diluted | 155 | 155 | ||||||||||||||||
3
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year Ended December 31, 2025
| ($ in millions except per share amounts) | Historical Resideo (as reported) |
ADI Discontinued Operations (Note a) |
Transaction Accounting Adjustments |
Notes | Pro Forma Resideo |
|||||||||||||
| Net revenue | $ | 7,472 | $ | (4,614 | ) | $ | - | $ | 2,858 | |||||||||
| Cost of goods sold | 5,276 | (3,549 | ) | - | 1,727 | |||||||||||||
| Gross profit | 2,196 | (1,065 | ) | - | 1,131 | |||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development expenses | 167 | (39 | ) | - | 128 | |||||||||||||
| Selling, general and administrative expenses | 1,266 | (725 | ) | - | 541 | |||||||||||||
| Intangible asset amortization | 122 | (94 | ) | - | 28 | |||||||||||||
| Restructuring, impairment and extinguishment costs | 16 | (8 | ) | - | 8 | |||||||||||||
| Business separation costs | 18 | (18 | ) | - | - | |||||||||||||
| Total operating expenses | 1,589 | (884 | ) | - | 705 | |||||||||||||
| Income from operations | 607 | (181 | ) | - | 426 | |||||||||||||
| Indemnification Agreement expense | 972 | - | - | 972 | ||||||||||||||
| Other expense (income), net | (43 | ) | 3 | - | (40 | ) | ||||||||||||
| Interest expense, net | 135 | (21 | ) | (5 | ) | (e) | 109 | |||||||||||
| Net income (loss) before taxes | (457 | ) | (163 | ) | 5 | (615 | ) | |||||||||||
| Provision for income taxes | 70 | (51 | ) | 1 | (f) | 20 | ||||||||||||
| Net income (loss) | (527 | ) | (112 | ) | 4 | (635 | ) | |||||||||||
| Less: preferred stock dividends | 35 | - | - | 35 | ||||||||||||||
| Less: undistributed income allocated to preferred stockholders | - | - | - | - | ||||||||||||||
| Net income (loss) available to common stockholders | $ | (562 | ) | $ | (112 | ) | $ | 4 | $ | (670 | ) | |||||||
| Earnings (loss) per common share: | ||||||||||||||||||
| Basic | $ | (3.77 | ) | $ | (4.50 | ) | ||||||||||||
| Diluted | $ | (3.77 | ) | $ | (4.50 | ) | ||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||
| Basic | 149 | 149 | ||||||||||||||||
| Diluted | 149 | 149 | ||||||||||||||||
4
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2024
| ($ in millions except per share amounts) | Historical Resideo (as reported) | ADI Discontinued Operations (Note a) | Pro Forma Resideo | |||||||||
| Net revenue | $ | 6,761 | $ | (4,012 | ) | $ | 2,749 | |||||
| Cost of goods sold | 4,860 | (3,161 | ) | 1,699 | ||||||||
| Gross profit | 1,901 | (851 | ) | 1,050 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development expenses | 111 | (17 | ) | 94 | ||||||||
| Selling, general and administrative expenses | 1,138 | (603 | ) | 535 | ||||||||
| Intangible asset amortization | 80 | (54 | ) | 26 | ||||||||
| Restructuring, impairment and extinguishment costs | 52 | (20 | ) | 32 | ||||||||
| Total operating expenses | 1,381 | (694 | ) | 687 | ||||||||
| Income from operations | 520 | (157 | ) | 363 | ||||||||
| Indemnification Agreement expense | 211 | - | 211 | |||||||||
| Other expense (income), net | 7 | (3 | ) | 4 | ||||||||
| Interest expense, net | 81 | 3 | 84 | |||||||||
| Net income (loss) before taxes | 221 | (157 | ) | 64 | ||||||||
| Provision for income taxes | 105 | (43 | ) | 62 | ||||||||
| Net income (loss) | 116 | (114 | ) | 2 | ||||||||
| Less: preferred stock dividends | 19 | - | 19 | |||||||||
| Less: undistributed income allocated to preferred stockholders | 6 | - | 6 | |||||||||
| Net income (loss) available to common stockholders | $ | 91 | $ | (114 | ) | $ | (23 | ) | ||||
| Earnings (loss) per common share: | ||||||||||||
| Basic | $ | 0.62 | $ | (0.16 | ) | |||||||
| Diluted | $ | 0.61 | $ | (0.16 | ) | |||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 146 | 146 | ||||||||||
| Diluted | 149 | 146 | ||||||||||
5
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2023
| ($ in millions except per share amounts) | Historical Resideo (as reported) |
ADI Discontinued Operations (Note a) |
Pro Forma Resideo |
|||||||||
| Net revenue | $ | 6,242 | $ | (3,275 | ) | $ | 2,967 | |||||
| Cost of goods sold | 4,546 | (2,607 | ) | 1,939 | ||||||||
| Gross profit | 1,696 | (668 | ) | 1,028 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development expenses | 109 | - | 109 | |||||||||
| Selling general and administrative expenses | 960 | (416 | ) | 544 | ||||||||
| Intangible asset amortization | 38 | (11 | ) | 27 | ||||||||
| Restructuring, impairment and extinguishment costs | 42 | (12 | ) | 30 | ||||||||
| Total operating expenses | 1,149 | (439 | ) | 710 | ||||||||
| Income from operations | 547 | (229 | ) | 318 | ||||||||
| Indemnification Agreement expense | 178 | - | 178 | |||||||||
| Other expense (income), net | (9 | ) | 8 | (1 | ) | |||||||
| Interest expense, net | 65 | 2 | 67 | |||||||||
| Net income before taxes | 313 | (239 | ) | 74 | ||||||||
| Provision for income taxes | 103 | (65 | ) | 38 | ||||||||
| Net income | 210 | (174 | ) | 36 | ||||||||
| Earnings per common share: | ||||||||||||
| Basic | $ | 1.43 | $ | 0.24 | ||||||||
| Diluted | $ | 1.42 | $ | 0.24 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 147 | 147 | ||||||||||
| Diluted | 148 | 148 | ||||||||||
6
NOTES TO UNAUDITED PRO FORMA CONDENSED Consolidated FINANCIAL STATEMENTS
ADI Discontinued Operations
| (a) | Reflects the discontinued operations of ADI, including the associated assets, liabilities, equity and results of operations in accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations. The adjustment amounts do not include general corporate overhead costs which were historically allocated, but did not specifically relate to ADI, as they did not meet the discontinued operations criteria. Such allocations include labor and non-labor expenses related to Resideo’s corporate support functions (e.g., information technology, human resources, legal, finance, accounting, insurance, employee benefits, tax, among others) that historically provided support to ADI. |
Transaction Accounting Adjustments
| (b) | Reflects the distribution of $967 million of cash from ADI to Resideo in connection with the Separation, consisting of a $900 million cash dividend and a $67 million cash adjustment pursuant to the Separation Agreement, after retaining $150 million of cash at ADI. The proceeds are expected to be used, together with Resideo's cash on hand, to repay approximately $1.1 billion of Term Loan B facilities. |
| ($ in millions) | As of April 4, 2026 |
|||
| Cash dividend received from ADI | $ | 900 | ||
| Cash adjustment distribution from ADI pursuant to Separation Agreement | 67 | |||
| Less: repayment of Term Loan B facilities | (1,100 | ) | ||
| Total pro forma adjustment to cash and cash equivalents | $ | (133 | ) | |
| (c) | Reflects the accrual for additional estimated costs of $54 million related to transaction advisory and professional services, regulatory filings, separation activities and other costs directly attributable to the Separation that anticipated to be incurred between April 4, 2026 and the distribution date. These costs are reflected as an accrual on the unaudited Pro Forma Condensed Consolidated Balance Sheet, with the offsetting entry recorded to retained earnings. Because these costs will be recognized as a component of discontinued operations when incurred following the Separation, no corresponding adjustment is reflected in the unaudited Pro Forma Condensed Consolidated Statement of Operations. |
| (d) | Reflects the effect on total shareholders' equity of the adjustments described in notes (b) and (c) above. |
| (e) | Reflects the reduction of incremental Term Loan B interest expense of $3 million and $5 million for the three months ended April 4, 2026, and the year ended December 31, 2025, respectively, to give effect to the estimated repayment of the remaining Term Loan B debt described in (b) above. Interest expense and the related amortization of debt issuance costs of $15 million and $23 million for the three months ended April 4, 2026, and the year ended December 31, 2025, respectively, associated with the portion of the Term Loan B required to be repaid in connection with the disposal is reflected in the ADI Discontinued Operations (see note (a) above). |
| (f) | Reflects the income tax effects of the pro forma adjustments for the three months ended April 4, 2026 and the year ended December 31, 2025. The adjustments were calculated using the applicable statutory tax rates. Actual tax effects may differ depending on the legal entity structure and other factors following the Separation. |
Additionally, in connection with the Separation, Resideo and ADI entered into a transition services agreement whereby Resideo and ADI will each provide certain post-closing services to each other on a transitional basis. Such agreements are not expected to have a material impact on the periods presented in these unaudited Pro Forma Condensed Consolidated Financial Statements.
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