Teradata Corp 8-K, filed Jun 2, 2020
Teradata Corp /De/ (TDC)
About this 8-K
Teradata Corp filed this 8-K on June 2, 2020, reporting on events of May 29, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Adoption of Teradata Incentive Stock Purchase Plan; Intent to Commence Offering Thereunder
On May 29, 2020, the Board of Directors (the “Board”) of Teradata Corporation (“Teradata” or the “Company”) adopted the Teradata Incentive Stock Purchase Plan (the “ISPP”), effective as of June 1, 2020. The ISPP provides eligible employees with an opportunity to purchase shares of Teradata common stock, par value $0.01 per share (“Shares”), from the Company at fair market value using cash compensation that is otherwise due under the Company’s annual incentive programs. The ISPP is intended to encourage employee ownership of Shares and to benefit Teradata by improving its financial position during this time of global pandemic. The Compensation and Human Resource Committee of the Board (the “Committee”) shall determine the employees of the Company or a subsidiary of the Company who are eligible to participate in the ISPP.
The aggregate number of Shares which may be purchased under the ISPP shall not exceed a total of 900,000 shares, subject to adjustment as provided in the ISPP. The Shares purchased and issued under the ISPP will consist of authorized and unissued shares. The ISPP is scheduled to terminate on June 1, 2021, unless earlier terminated pursuant to the terms of the ISPP. The Board or the Committee may terminate the ISPP or any offering thereunder at any time.
The ISPP is not intended to be treated as an “equity-compensation plan” within the meaning of Rule 303A.08 of the Listed Company Manual of the New York Stock Exchange (“NYSE”), and, as such, stockholder approval is not required for the ISPP.
On June 3, 2020, Teradata expects to commence an offering under the ISPP pursuant to which U.S.-based employees at director level and above who were participants in the Company’s 2020 Annual Incentive Plan as of June 1, 2020, and members of the Teradata executive leadership team who are participants in the Company’s Management Incentive Plan, including Stephen McMillan, the Company’s incoming President and Chief Executive Officer effective June 8, 2020, will have the opportunity to purchase Shares in lieu of receiving 100% of their cash compensation under the applicable 2020 annual incentive plan. Participation in the offering by eligible employees is voluntary, and the election period shall run from June 3, 2020 through June 15, 2020. Eligible employees may participate in the ISPP by executing and delivering a stock purchase agreement in the form approved by the Committee (the “ISPP Purchase Agreement”). The purchase price of each Share sold to participants in this offering shall be 100% of the closing sale price per Share on the purchase date as reported on the NYSE. The purchase date for the offering shall be the date that annual incentive compensation is otherwise payable in cash to participants, which is expected to be on or about February 25, 2021.
Adoption of Teradata New Employee Stock Inducement Plan
On May 29, 2020, the Board adopted the Teradata New Employee Stock Inducement Plan (the “NESIP”), effective as of June 1, 2020. Pursuant to the NESIP, the Company may grant equity incentive compensation as a material inducement for certain individuals to commence employment with Teradata within the meaning of Rule 303A.08 of the NYSE Listed Company Manual. Awards granted under the NESIP may be in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards or any combination of those awards. The only individuals eligible to receive grants of awards under the NESIP are individuals who satisfy the standards for “inducement awards” under Rule 303A.08 of the NYSE Listed Company Manual.
A total of 550,000 Shares are reserved for grant under the NESIP, subject to adjustment as provided in the NESIP. Shares issued under the NESIP may include authorized but unissued shares, treasury shares, shares purchased in the open market, or a combination of the foregoing. The NESIP shall be administered by the Committee. The NESIP is scheduled to terminate on June 1, 2023, or such earlier date that the Board shall determine.
The NESIP is not intended to be treated as an “equity-compensation plan” within the meaning of Rule 303A.08 of the NYSE Listed Company Manual, and, as such, stockholder approval is not required for the NESIP.
The foregoing is only a brief description of the above-specified compensation arrangements and is qualified in its entirety by reference to the ISPP, the form of ISPP Purchase Agreement and the NESIP, which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements including, but not limited to, the Company’s plans to commence an offering under the ISPP and the timing thereof, the expected benefits to the Company of the offering under the ISPP, and other statements that are not historical facts. These forward-looking statements are based upon current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially, including risks and uncertainties relating to: the Company’s ability to commence and complete the offering under the ISPP and issue Shares to participants on the purchase date, including within the expected timeframe; the level of participation in the offering under the ISPP by eligible employees; the extent to which the Company is able to achieve the intended benefits from the offering under the ISPP, including improvement of the Company’s financial position; and other factors described from time to time in Teradata’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2019 and subsequent quarterly reports on Forms 10-Q, as well as the Company’s annual report to stockholders. Teradata does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
The following exhibits are attached with this Current Report on Form 8-K:
| Exhibit |
Description | |||
| 10.1* |
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| 10.2* |
Form of Teradata Incentive Stock Purchase Plan Stock Purchase Agreement. | |||
| 10.3* |
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| 104 |
Cover Page Interactive Data (embedded within the Inline XBRL document). | |||
| * | Management contracts or compensatory plans, contracts or arrangements. |
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.
| Teradata Corporation | ||
| By: |
/s/ Laura K. Nyquist | |
| Laura K. Nyquist | ||
| General Counsel | ||
Dated: June 2, 2020
Exhibit 10.1
TERADATA INCENTIVE STOCK PURCHASE PLAN
(Effective June 1, 2020)
| 1. | Purpose |
The Teradata Incentive Stock Purchase Plan (“Plan”) provides Eligible Employees with an opportunity to purchase Shares from the Company at current fair market value by electing to forego cash compensation that is otherwise due under certain annual incentive programs. The Plan is not intended to be, and will not be treated as, an “equity-compensation plan” within the meaning of Rule 303A.08 of the NYSE Listed Company Manual. Further, the Plan is not intended to be, and will not be treated as, an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended. This Plan is hereby adopted effective as of June 1, 2020 (the “Effective Date”).
| 2. | Definitions |
2.1 “Annual Incentive Compensation” means the gross amount otherwise payable in cash to a Participant by the Company or a Subsidiary for the 2020 fiscal year under the Teradata Management Incentive Plan, the Teradata Annual Incentive Plan, or any other cash incentive plan or program covering the Participant and designated by the Committee from time-to-time.
2.2 “Board of Directors” means the Board of Directors of the Company.
2.3 “Brokerage Account” has the meaning set forth in Section 10.
2.4 “Committee” means the means the Compensation and Human Resource Committee of the Board of Directors.
2.5 “Company” means Teradata Corporation, a Delaware corporation.
2.6 “Eligible Employees” means only those Employees of the Company or a Subsidiary who are designated by the Committee from time to time as eligible to participate in the Plan. In lieu of expressly selecting Eligible Employees for Plan participation, the Committee may establish eligibility criteria providing for participation of all Eligible Employees who satisfy such criteria.
2.7 “Employees” means all individuals employed by the Company or a Subsidiary.
2.8 “Offering” means the offering of Shares to Eligible Employees pursuant to the Plan.
2.9 “Participant” means an Eligible Employee who elects to participate in the Plan.
2.10 “Plan” means this Teradata Incentive Stock Purchase Plan.
2.11 “Purchase Date” means the date that Annual Incentive Compensation is otherwise payable to a Participant in cash, but for the election made in the Participant’s Stock Purchase Agreement.
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2.12 “Recordkeeper” means the third-party administrator that maintains records for the Plan.
2.13 “Share” means a share of common stock of the Company, $0.01 par value per share, or any security into which such Share may be changed by reason of any transaction or event of the type referred to in Section 16 hereof.
2.14 “Stock Purchase Agreement” means the Participant’s election to use Annual Incentive Compensation otherwise payable to such Participant on a Purchase Date to purchase Shares on such Purchase Date at the Purchase Price set forth in Section 7 of the Plan.
2.15 “Subsidiary” means any corporation in which the Company, directly or indirectly, owns stock possessing 50% or more of the total combined voting power of all classes of stock.
| 3. | Shares |
The aggregate number of Shares which may be purchased under the Plan shall not exceed a total of 900,000. Notwithstanding the foregoing, the aggregate number of Shares is subject to adjustment in accordance with Section 16 hereof. Shares issued under the Plan will consist of authorized and unissued Shares.
| 4. | Offering |
Each Eligible Employee shall be entitled to purchase, in the manner and on the terms herein provided, Shares at the Purchase Price set forth in Section 7 hereof with the amount of such Eligible Employee’s Annual Incentive Compensation withheld pursuant to Section 6 hereof on the applicable Purchase Date.
| 5. | Participation in the Plan; Stock Purchase Agreements |
Any Eligible Employee may become a Participant in the Plan by filing a stock purchase agreement (a “Stock Purchase Agreement”), in accordance with procedures established by the Company, to purchase Shares under the Plan on the next Purchase Date. The Stock Purchase Agreement must be filed with the Company by, and shall become irrevocable (notwithstanding the subsequent termination of the Participant’s employment or any other event) as of, a date specified by the Company in the Stock Purchase Agreement. The Company shall establish and provide the form of Stock Purchase Agreement.
| 6. | Payment for Shares |
A Participant shall designate in the Stock Purchase Agreement the portion of such Participant’s Annual Incentive Compensation that is to be used to purchase Shares on the next Purchase Date. Unless otherwise determined by the Committee, a Participant electing to purchase Shares under the Plan must authorize the Company to use 100% of such Participant’s Annual Incentive Compensation to purchase Shares on the applicable Purchase Date. Payment for Shares purchased hereunder shall be made by authorized deductions from a Participant’s Annual Incentive Compensation pursuant to this Section 6. No interest shall accrue or be payable to any Participant with respect to any deducted amounts. To the extent required by applicable law, a Participant shall
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be required to satisfy, in a manner satisfactory to the Company or Subsidiary, as applicable, and set forth in the Stock Purchase Agreement, any withholding tax obligations that arise by reason of the Annual Incentive Compensation or the purchase of Shares hereunder.
| 7. | Purchase Price |
The Purchase Price of each Share sold to Participants hereunder shall be 100% of the closing sale price per Share on the applicable Purchase Date as reported on the New York Stock Exchange, if any, or if there are no sales on that date, on the next preceding trading day during which a sale occurred. Anything herein to the contrary notwithstanding, the Purchase Price per Share shall not be less than the par value of a Share.
| 8. | Purchase of Shares |
As of each Purchase Date, each Participant shall be offered the right to purchase, and shall be deemed, without any further action, to have purchased, at the Purchase Price in United States dollars, the number of Shares (including fractions thereof) which can be purchased with the amount of Annual Incentive Compensation that is subject to the Participant’s Stock Purchase Agreement for such Purchase Date. At the time a Participant’s Annual Incentive Compensation is used to purchase Shares, such Participant will have all rights and privileges of a stockholder of the Company with respect to the Shares purchased under the Plan. All such Shares shall be maintained in Brokerage Accounts for the Participants. Any dividends paid with respect to such Shares subsequent to the applicable Purchase Date shall be credited to the Participants’ Brokerage Accounts and will be automatically reinvested in Shares, unless the Participant elects not to have such dividends reinvested.
| 9. | Issuance of Shares |
The Shares purchased by a Participant on a Purchase Date shall, for all purposes, be deemed to have been issued at the close of business on such Purchase Date. Prior to that time, none of the rights or privileges of a stockholder shall exist with respect to such Shares.
As soon as practicable after such Purchase Date, the Company shall cause a book entry to be registered in the street name of the Recordkeeper on behalf of each Participant, for the number of Shares purchased by the Participant on such Purchase Date, pursuant to the Participant’s Stock Purchase Agreement. The Committee shall have sole discretion to adopt rules governing the registration of Shares purchased hereunder and may restrict the types of designations permitted under a Participant’s Stock Purchase Agreement.
| 10. | Brokerage Accounts Maintained by Recordkeeper |
The Recordkeeper shall maintain a Brokerage Account for each Participant with a record of the Shares purchased by the Participant. The Participant may at any time direct the Recordkeeper to (i) sell some or all of the Shares credited to his Brokerage Account and deliver the cash in U.S. currency to the Participant, subject to any applicable delivery or transfer charge or (ii) provide the Participant a notice of issuance of uncertificated Shares reflecting some or all of the Shares credited to his Brokerage Account.
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| 11. | Death |
In the event of a Participant’s death, the Recordkeeper shall transfer the Participant’s Brokerage Account to the executor or administrator of the Participant’s estate or to one or more beneficiaries designated by the Participant in such manner as may be provided by the Company.
| 12. | Procedure if Insufficient Shares Available |
In the event that on any Purchase Date the aggregate funds available for the purchase of Shares pursuant to Section 8 hereof would purchase a number of Shares in excess of the number of Shares then available for purchase under the Plan, the Committee shall proportionately reduce the number of Shares which would otherwise be purchased by each Participant on such Purchase Date in order to eliminate such excess, the Plan shall automatically terminate immediately after such Purchase Date and any Annual Incentive Compensation not used to purchase Shares for a Participant shall be paid to the Participant in cash.
| 13. | Rights not Transferable |
Rights to purchase Shares under the Plan are exercisable only by the Participant during his lifetime and are not transferable by him other than by will or the laws of descent and distribution.
| 14. | Administration of the Plan |
Subject to the general control of, and superseding action by, the Board of Directors, the Committee shall have full authority and discretion to administer the Plan. The Committee may adopt rules not inconsistent with the provisions of the Plan for its administration and shall adopt the form of Stock Purchase Agreement, all notices required hereunder, and any on the registration of certificates for Shares purchased hereunder. All decisions, interpretations and other actions of the Committee shall be final and binding on all Participants and all persons deriving their rights from a Participant. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Committee, the Board of Directors, or the Company, in any case in accordance with the terms and conditions of the Plan.
| 15. | Amendment of the Plan |
The Board of Directors or the Committee may at any time, or from time to time, alter or amend the Plan in any respect, except that no amendment may reduce the Purchase Price per share as defined in Section 7 hereof.
| 16. | Recapitalization; Effect of Certain Transactions |
The aggregate number of Shares reserved for purchase under the Plan as provided in Section 3 hereof and the calculation of the Purchase Price per share as provided in Section 7 hereof shall be appropriately adjusted to reflect a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend, extraordinary cash dividend or other increase or decrease in the number of issued Shares, effected without receipt of consideration by the Company.
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If the Company shall merge or consolidate, whether or not the Company is the surviving or resulting corporation in such merger or consolidation, any Offering hereunder shall pertain to and apply to shares of stock of the Company or any shares issued in connection with such merger or consolidation in exchange for shares of stock of the Company, unless prior to such merger or consolidation, the Board of Directors or the Committee shall, in its discretion, terminate the Plan and/or any Offering hereunder. Notwithstanding the foregoing, a dissolution or liquidation of the Company shall cause the Plan and any Offering hereunder to terminate and any amount of Annual Incentive Compensation not used to purchase Shares for a Participant hereunder shall be paid to such Participant in cash.
| 17. | Expiration and Termination of the Plan |
The Plan shall continue in effect through the first anniversary of the Effective Date unless terminated prior thereto pursuant to Sections 12 or 16 hereof, or pursuant to the next succeeding sentence. The Board of Directors or the Committee shall have the right to terminate the Plan or any Offering hereunder at any time. In the event of the expiration of the Plan or its termination or the termination of any Offering pursuant to the immediately preceding sentence, any amount of Annual Incentive Compensation not used to purchase Shares for a Participant hereunder shall be paid to each such Participant in cash and all Stock Purchase Agreements shall terminate.
18. Treatment of Fractional Shares
The Company shall be permitted to issue or deliver fractional Shares pursuant to the Plan or cash in lieu of fractional Shares.
| 19. | Notices |
Notwithstanding any other provision of the Plan to the contrary, including any provision that requires the use of a written instrument, the Company may establish procedures for the use of electronic or other media in communications and transactions between the Plan or the Company and Participants. Electronic or other media may include, but are not limited to, e-mail, the Internet and intranet systems. By participating in the Plan, each Participant agrees to accept by email all documents relating to the Company, the Plan or any Offering and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The Participant also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by the Recordkeeper. If the Company posts these documents on a website, it shall notify the Participants by email of their availability. This consent shall remain in effect until a Participant gives the Company written notice that it should deliver paper documents.
| 20. | Repurchase of Stock |
The Company shall not be required to repurchase from any Participant Shares which such Participant acquires under the Plan.
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| 21. | Fees |
The Recordkeeper may charge Participants reasonable transaction fees, as agreed by the Company.
| 22. | No Right of Continued Employment; No Guarantee of Annual Incentive Compensation |
The Plan shall not confer upon any Participant any right with respect to continuance of employment with the Company or any Subsidiary, nor shall it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment at any time. No Employee shall have the right to be selected to purchase Shares under the Plan, or, having been so selected, to be selected to receive future opportunities to purchase Shares. Nothing in this Plan shall be construed to provide any Participant with any guarantee or assurance of earning or receiving any Annual Incentive Compensation amount whatsoever.
| 23. | Choice of Law |
The obligations of the Company with respect to the Plan shall be subject to all applicable laws (and the rules of any stock exchange or quotation system on which the Shares are listed or quoted) and such approvals by any governmental agencies as the Committee determines may be required. The Plan and each Stock Purchase Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.
[END OF DOCUMENT]
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Exhibit 10.2
TERADATA INCENTIVE STOCK PURCHASE PLAN
Stock Purchase Agreement
By electing to participate in the Teradata Incentive Stock Purchase Plan (the “Plan”), I acknowledge that I have read and accept this agreement (this “Stock Purchase Agreement”), and I understand and agree to the following conditions:
| 1. | AUTHORIZATION |
I hereby authorize Teradata Corporation (the “Company”) to enroll me in the Plan. Capitalized terms used but not defined in this Stock Purchase Agreement shall have the meaning ascribed to them in the Plan.
I also acknowledge that a copy of the Plan, Plan Summary and Prospectus, and the Company’s most recent Annual Report and Proxy Statement (the “Prospectus Information”) have been received by me via email.
I understand that I may, at any time, withdraw the consents set forth in this document in any case without cost, by contacting in writing my local human resources representative on or before 5:00 p.m. PST on June 15, 2020 (the “Enrollment Deadline”). I understand, however, that on and after the Enrollment deadline, this Stock Purchase Agreement shall become irrevocable and I will no longer have the opportunity to revoke my consents.
| 2. | ELECTION TO PURCHASE SHARES |
I hereby authorize the Company to apply 100% of my Annual Incentive Compensation earned for the 2020 calendar year, if any, to purchase shares of Teradata Common Stock (“Shares”) at the Purchase Price on the date that the Annual Incentive Compensation would otherwise be payable to me (the “Purchase Date”), all as set forth in the Plan.
| 3. | TAX WITHHOLDING |
I acknowledge that, when Shares are purchased under the Plan, I will recognize immediate taxable income equal to the amount of my Annual Incentive Compensation used to purchase Shares, and the Company (or its Subsidiaries) will have certain tax withholding obligations (the “Tax Withholding Obligation”). I acknowledge that the Company will satisfy the Tax Withholding Obligation using the methods summarized below.
Section 16 Officers
I understand that if I am designated as a “Section 16 officer” of the Company, then the Tax Withholding Obligation will be satisfied under the so-called “Net Share Withholding Method”, under which the Company will retain a number of Shares purchased by me under the Plan with a value (based on the prevailing market price) equal to the required Tax Withholding Obligation. I understand that the Tax Withholding Obligation will be based on the maximum statutory tax rates in the applicable taxing jurisdictions.
If I am a Section 16 officer, I expressly consent to the Net Share Withholding Method and agree and acknowledge that I may not satisfy the Tax Withholding Obligation by any other method.
Other Participants
I understand that, if I am not designated as a “Section 16 officer” of the Company, then the Tax Withholding Obligation will be satisfied under a so-called “Sell-to-Cover Method”, under which the Company will arrange a broker-assisted sale of a number of the Shares I purchased under the Plan, promptly after those Shares are credited to the Brokerage Account, with a value (based on the prevailing market price) equal to the Tax Withholding Obligation. The sales proceeds generated under the Sell-to-Cover Method will be remitted to the Company and used to satisfy the Tax Withholding Obligation. I understand that the Tax Withholding Obligation will be based on the minimum statutory tax rates in the applicable taxing jurisdictions.
If I am not a Section 16 officer, I expressly consent to the Sell-to-Cover Method and agree and acknowledge that I may not satisfy the Tax Withholding Obligation by any other method and that I cannot influence how or when the broker-assisted sale will take place.
| 4. | DATA PRIVACY |
I hereby consent to the collection, use and transfer, in electronic or other form, of my personal data as described in this Stock Purchase Agreement by and among, as applicable, the Company, its Plan administrators, and any Subsidiaries for the exclusive purpose of implementing, administering and managing my Plan participation.
I understand that the Company may hold certain personal information about me, including, but not limited to, my name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, and details of all purchase rights, canceled, exercised, vested, unvested or outstanding in my favor, for the purpose of implementing, administering and managing the Plan (“Data”).
I understand that Data will be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in my country or elsewhere, including the United States, and that the recipient’s country may have different data privacy laws and protections than my country. I authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing my participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom I may elect to deposit any Shares purchased under the Plan.
| 5. | ELECTRONIC DELIVERY & ACCEPTANCE |
I agree to accept by email all documents relating to the Company, the Plan, this Stock Purchase Agreement, the Prospectus Information and all other documents
that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). I also agree that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it will notify me by email of their availability. I acknowledge that I may incur costs in connection with electronic delivery, including the cost of accessing the internet and printing fees, and that an interruption of internet access may interfere with my ability to access the documents. This consent shall remain in effect until I notify my local human resources representative in writing that the Company should deliver paper documents.
| 6. | ADDITIONAL ACKNOWLEDGEMENTS |
By electing to participate in the Plan, I understand and acknowledge that:
| • | the Plan is established voluntarily by the Company, my participation in the Plan is voluntary, and the Company makes no promises or representations about the value or returns of any Shares purchased under the Plan; |
| • | my participation in the Plan shall not be construed to provide me with any guarantee or assurance of earning or receiving any Annual Incentive Compensation amount whatsoever; |
| • | the Plan is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan, and all decisions with respect to the Plan and future grants of the right to purchase Shares, if any, will be at the sole discretion of the Company; |
| • | the future value of any Shares purchased or to be purchased under the Plan is unknown and cannot be predicted with certainty; |
| • | if Shares are purchased for me on the Purchase Date, the value of those Shares acquired under the Plan may increase or decrease in value, even below the Purchase Price, and the Company is not liable for any decrease in the value of Shares; |
| • | the Plan is not intended to be, and will not be treated as, an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code; |
| • | on the date of executing this Stock Purchase Agreement, I do not have any material nonpublic information concerning the Company; |
| • | I am hereby advised to consult with my personal tax, legal and financial advisors regarding my participation in the Plan before taking any action related to the Plan; and |
| • | I agree that, where permitted by local law, any controversy or claim arising out of or related to the Plan or this Stock Purchase Agreement or my employment relationship with the Company shall be resolved by first |
| exhausting the Company’s internal dispute resolution process and policy in place when the dispute arose, and then by arbitration pursuant the Mutual Agreement to Arbitrate All Employment Related Claims attached hereto as Exhibit A. |
Please check one of the boxes below and sign and date this Stock Purchase Agreement.
| ☐ | I hereby elect to participate in the Plan on the terms, and subject to the conditions, of the Plan and this Stock Purchase Agreement. |
| ☐ | I hereby decline participation in the Plan and therefore do not agree to the terms of this Stock Purchase Agreement. |
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Full Name |
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Signature |
Date | |||
EXHIBIT A
TERADATA CORPORATION
MUTUAL AGREEMENT TO ARBITRATE ALL EMPLOYMENT RELATED CLAIMS
Teradata Corporation, including its divisions, subsidiaries and related companies (collectively, “Teradata”), believes most employment-related disputes are best resolved through open and honest communication and, when necessary, through the company’s Internal Dispute Resolution Policy (the “IDR Policy”), outlined in detail at CMP 706. If a dispute cannot be resolved informally, and given our desire to establish a speedy, impartial and cost-effective way to resolve disputes, the final stage of the IDR Policy provides the unresolved matter will be submitted to final and binding arbitration. This is Teradata’s and my mutual Arbitration Agreement (“Agreement”).
This Agreement to arbitrate includes every possible claim, dispute, or cause of action, in law or equity, arising out of or relating in any way to my employment with Teradata or the termination of my employment, to the maximum extent permitted by law, whether asserted during my employment with Teradata or after it has ended, including claims that I or my heirs, successors, administrators, and assigns may have against Teradata or against any of its current and former officers, directors, employees, representatives, contractors, owners, shareholders, or agents in their capacity as such, and all successors and assigns of any of them, or claims that Teradata may have against me (collectively, “Claims”).
Claims subject to this Agreement include, but are not limited to, claims pursuant to any federal, state or local law or statute including (without limitation) the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act of 1990, the Family and Medical Leave Act, the Fair Labor Standards Act, the federal Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Uniform Service Employment and Reemployment Rights Act, the Genetic Information Nondiscrimination Act, the California Fair Employment and Housing Act, the California Labor Code, the California Equal Pay Act, and the California Family Rights Act, all as amended; Claims for wages, overtime, or other compensation due; Claims involving meal and rest breaks; Claims for benefits (except where an employee benefit plan specifies that its claim procedure shall culminate in an arbitration procedure different from this one); Claims for breach of contract or other promise (oral or written, express or implied); Claims for any form of illegal discrimination or harassment under state or federal law; Claims for wrongful termination or discharge (constructive or actual); Claims for violation of any public policy; Claims for improper, unfair, and/or retaliatory treatment or dismissal; and all tort Claims. Claims not covered by this Agreement are claims for workers’ compensation benefits, unemployment compensation benefits, claims governed by ERISA or other claims that, as a matter of law, the parties cannot agree to arbitrate. I understand that while I still have a right to file a charge with a state or federal agency, I will submit the final resolution of any Claim to an arbitrator instead of a court or jury. Teradata and I acknowledge that, by entering into this Agreement, we both waive the right to resolve any Claims through a trial by jury, in exchange for the benefits of a speedy and less expensive dispute resolution procedure.
Teradata and I agree that we will resolve our disputes on an individual basis only. Except for representative claims under California’s Private Attorneys General Act, which cannot be waived under applicable law and which are therefore excluded from this Agreement, Teradata and I expressly intend and agree that: (a) class action and representative action procedures are hereby waived and shall not be asserted, nor will they apply, in any arbitration pursuant to this Agreement; (b) we will not assert class action or representative action claims in arbitration or otherwise; and (c) we shall submit only our own, individual Claims in arbitration.
The arbitrator may not consolidate more than one person’s Claims and may not otherwise preside over any form of a representative or class proceeding. This Agreement also prevents me from participating in a class action (existing or future) that is brought by any other party.
The arbitration shall be governed by the Federal Arbitration Act. The hearing will be conducted by the American Arbitration Association (the “AAA”) under the AAA’s then applicable employment arbitration rules (except as those rules are modified by this Agreement) and presided over by a sole arbitrator. The AAA rules are available online at https://www.adr.org/Rules. To file a claim, I will only be required to pay the equivalent of the fee to file a complaint in a court of local jurisdiction. Teradata will pay any remaining fees that are specific to arbitration, including the arbitrator’s fees and expenses. However, Teradata and I will each pay our own attorneys’ fees and our own standard litigation costs. If we cannot mutually agree on an arbitrator, the arbitrator will be selected according to the AAA’s rules and procedures. The arbitrator shall have the exclusive authority to rule on any challenge to his or her own jurisdiction or to the validity, enforceability, or formation of any portion of this Agreement to arbitrate.
The arbitration hearing will be held in or near the city where I worked with Teradata, or as otherwise mutually agreed to by me and Teradata. To prepare for the hearing, both Teradata and I have the right to take the sworn deposition statements of two individuals and, in addition, any expert witness expected to testify at the hearing. All documents to be used as exhibits and a list of all potential witnesses will be exchanged at least two weeks in advance of the hearing. No other discovery will be permitted unless the arbitrator finds there is a compelling need to do so and this need outweighs our desire for a quick and inexpensive resolution of the dispute. The arbitrator may consider and grant prehearing dispositive motions as he/she deems appropriate. The arbitrator will make a decision using the substantive law of the state where the claim arose or federal law where applicable. The arbitrator shall: (a) have the same full authority to order relief as would a court or a jury (including but not limited to an award of attorneys’ fees or costs under any applicable statute or written agreement); and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator’s award may be entered and enforced by any court with jurisdiction.
This Agreement is not an employment contract and does not alter the terms of my at-will employment relationship with Teradata. Our mutual willingness to submit all disputes to arbitration is consideration for this Agreement. As additional consideration, I understand Teradata requires me to sign this Agreement as a condition of the compensation and benefits provided to me now and during my employment with Teradata.
This is the entire Agreement between Teradata and me relating to arbitration and supersedes any other written or oral agreement relating to arbitration, except for the IDR Policy which remains in full force and effect (however, in the event this Agreement and the IDR Policy conflict, this Agreement shall govern). This Agreement to arbitrate shall survive termination of my employment at Teradata. I have had a full opportunity to review this Agreement and I understand and agree to its terms. This Agreement can only be revoked or modified by a writing signed by both me and an officer of Teradata. If any portion of this Agreement is held to be void or unenforceable under any federal, state, or local law, the rest of the Agreement will remain in full force and effect.
Exhibit 10.3
TERADATA NEW EMPLOYEE STOCK INDUCEMENT PLAN
(Effective June 1, 2020)
| 1. | Establishment, Purpose, Duration. |
(a) Establishment. Teradata Corporation (the “Company”) hereby establishes the Teradata New Employee Stock Inducement Plan (the “Plan”), effective as of June 1, 2020 (the “Effective Date”). Definitions of capitalized terms used in the Plan are contained in Section 2 of the Plan.
(b) Purpose. The purpose of the Plan is to (i) provide a material inducement for certain individuals to commence employment with the Company within the meaning of Rule 303A.08 of the NYSE Listed Company Manual and (ii) provide such individuals incentives and rewards for superior performance.
(c) Duration. No Award may be granted under the Plan after the day immediately preceding the third (3rd) anniversary of the Effective Date, or such earlier date as the Board (via action by a majority of the “independent directors” within the meaning of applicable rules of any securities exchange upon which Shares are listed) shall determine. The Plan will remain in effect with respect to outstanding Awards until no Awards remain outstanding.
| 2. | Definitions. As used in the Plan, the following definitions shall apply. |
“Applicable Laws” means the applicable requirements relating to the administration of equity-based compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, the rules of any stock exchange or quotation system on which the Shares are listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan.
“Award” means a Stock Option, Stock Appreciation Right, Restricted Share, Restricted Share Unit or Other Share-Based Award granted pursuant to the terms and conditions of the Plan.
“Award Agreement” means either: (a) an agreement, either in written or electronic format, entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award; or (b) a statement, either in written or electronic format, issued by the Company to a Participant describing the terms and provisions of such Award, which need not be signed by the Participant.
“Board” means the Board of Directors of the Company.
“Cause” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in the employment, severance or similar agreement or plan, if any, between (or covering) the Participant and the Company or Subsidiary. If the Participant is not a party to or covered by an employment, severance or similar agreement or plan with the Company or a Subsidiary in which such term is defined, then unless otherwise defined in the applicable Award Agreement, “Cause” shall mean (a) conviction of the Participant for committing a felony under
federal law or the law of the state in which such action occurred, (b) dishonesty in the course of fulfilling the Participant’s duties to the Company or a Subsidiary, (c) failure on the part of the Participant to perform substantially such Participant’s duties to the Company or a Subsidiary in any material respect, (d) a material violation of the Company’s ethics and compliance program, or (e) before a Change in Control, such other events as shall be determined by the Committee and set forth in a Participant’s Award Agreement. Notwithstanding any other provision of the Plan to the contrary, following a Change in Control, any determination by the Committee as to whether “Cause” exists shall be subject to de novo review.
“Change in Control” means, unless otherwise provided in the applicable Award Agreement, the occurrence of any of the following events:
(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this paragraph (a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of below; or
(b) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds (2/3) of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another entity (a “Corporate Transaction”), in each case, unless, following such Corporate Transaction, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or
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through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Corporate Transaction) beneficially owns, directly or indirectly, fifty percent (50%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Corporate Transaction; and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction; or
(d) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
“CIC Severance Plan” means the Teradata Change in Control Severance Plan, as the same may be amended from time to time, or any successor plan thereto.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Compensation and Human Resource Committee of the Board or its successor. The Committee shall consist of two or more members of the Board, each of whom is a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act and an “independent director” within the meaning of applicable rules of any securities exchange upon which Shares are listed.
“Company” has the meaning given such term in Section 1(a) and any successor thereto.
“Date of Grant” means the date as of which an Award is determined to be effective and designated in a resolution by the Committee and is granted pursuant to the Plan. The Date of Grant shall not be earlier than the date of the resolution and action therein by the Committee. In no event shall the Date of Grant be earlier than the Effective Date.
“Effective Date” has the meaning given such term in Section 1(a).
“Employee” means any employee of the Company or a Subsidiary.
“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
“Fair Market Value” means the value of one Share on any relevant date, determined under the following rules: (a) the closing sale price per Share on that date as reported on the NYSE or other principal exchange on which Shares are then trading, if any, or if there are no sales on that date, on the next preceding trading day during which a sale occurred; (b) if the Shares are not reported on a principal exchange or national market system, the average of the closing bid and
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asked prices last quoted on that date by an established quotation service for over-the-counter securities; or (c) if neither (a) nor (b) applies, (i) with respect to Stock Options, Stock Appreciation Rights and any Award of stock rights that is subject to Section 409A of the Code, the value as determined by the Committee through the reasonable application of a reasonable valuation method, taking into account all information material to the value of the Company, within the meaning of Section 409A of the Code, and (ii) with respect to all other Awards, the fair market value as determined by the Committee in good faith.
“Good Reason” means, if the Participant is a participant in the CIC Severance Plan or is subject to a Severance Policy that defines “Good Reason”, “Good Reason” as defined in the CIC Severance Plan or the Severance Policy, as applicable, or, if the Participant is not a participant in the CIC Severance Plan or a Severance Policy that defines “Good Reason”, “Good Reason” as defined in any employment, severance or other agreement with the Company or a Subsidiary to which the applicable Participant is a party. If “Good Reason” is not defined in accordance with the foregoing sentence, “Good Reason” shall have no application in this Plan.
“Nonqualified Stock Option” means a Stock Option that is not intended to meet the requirements of Section 422 of the Code or otherwise does not meet such requirements.
“NYSE” means the New York Stock Exchange.
“Other Share-Based Award” means an equity-based or equity-related Award not otherwise described by the terms of the Plan, granted in accordance with the terms and conditions set forth in Section 10.
“Participant” means any Employee who meets the eligibility requirements set forth in Section 5 and who holds one or more outstanding Awards.
“Performance Objectives” means the performance objective or objectives established by the Committee pursuant to the Plan. Any Performance Objectives may relate to the performance of the Company or one or more of its Subsidiaries, divisions, departments, units, functions, partnerships, joint ventures or minority investments, product lines or products, or the performance of the individual Participant. The Performance Objectives may be made relative to the performance of a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Objectives as compared to various stock market indices. Performance Objectives may be stated as a combination of the listed factors. Any Performance Objectives that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), if applicable, or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP.
“Plan” has the meaning given such term in Section 1(a).
“Restricted Shares” means Shares granted or sold pursuant to Section 8 as to which neither the substantial risk of forfeiture nor the prohibition on transfers referred to in such Section 8 has expired.
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“Restricted Share Unit” means a grant or sale of the right to receive Shares or cash at the end of a specified restricted period made pursuant to Section 9.
“SEC” means the United States Securities and Exchange Commission.
“Severance Policy” means a severance policy maintained by the Company or a Subsidiary.
“Share” means a share of common stock of the Company, $0.01 par value per share, or any security into which such Share may be changed by reason of any transaction or event of the type referred to in Section 15.
“Stock Appreciation Right” means a right granted pursuant to Section 7.
“Stock Option” means a right to purchase a Share granted to a Participant under the Plan in accordance with the terms and conditions set forth in Section 6. Stock Options shall be Nonqualified Stock Options.
“Subsidiary” means any corporation or other entity in which the Company owns, directly or indirectly, a proprietary interest of more than fifty percent (50%) by reason of stock ownership or otherwise.
“Substitute Awards” means Awards that are granted in assumption of, or in substitution or exchange for, outstanding awards previously granted by an entity acquired directly or indirectly by the Company or with which the Company directly or indirectly combines.
| 3. | Shares Available Under the Plan. |
(a) Shares Available for Awards. The maximum number of Shares that may be issued or delivered pursuant to Awards under the Plan shall be 550,000. Shares issued or delivered pursuant to an Award may be authorized but unissued Shares, treasury Shares, including Shares purchased in the open market, or a combination of the foregoing. The aggregate number of Shares available for issuance or delivery under the Plan shall be subject to adjustment as provided in Section 15.
(b) Share Usage. In addition to the number of Shares provided for in Section 3(a), the following Shares shall be available for Awards under the Plan: (i) Shares covered by an Award that expires or is forfeited, canceled, surrendered or otherwise terminated without the issuance of such Shares and the release of the “substantial risk of forfeiture” under Section 83 of the Code, if applicable; (ii) Shares covered by an Award that is settled only in cash, and (iii) Shares withheld by the Company or any Subsidiary to satisfy a tax withholding obligation.
(c) Prohibition of Share Recycling. Notwithstanding the foregoing, the following Shares issued or delivered under this Plan shall not again be available for grant as described above: (i) Shares tendered in payment of the exercise price of a Stock Option; and (ii) Shares that are repurchased by the Company with Stock Option proceeds. Without limiting the
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foregoing, with respect to any Stock Appreciation Right that is settled in Shares, the full number of Shares subject to the Award shall count against the number of Shares available for Awards under the Plan regardless of the number of Shares used to settle the Stock Appreciation Right upon exercise.
| 4. | Administration of the Plan. |
(a) In General. The Plan shall be administered by the Committee. Except as otherwise provided by the Board, the Committee shall have full and final authority in its discretion to take all actions determined by the Committee to be necessary in the administration of the Plan, including, without limitation, discretion to: select Award recipients; determine the sizes and types of Awards; determine the terms and conditions of Awards in a manner consistent with the Plan; grant waivers of terms, conditions, restrictions and limitations applicable to any Award, or accelerate the vesting or exercisability of any Award, in a manner consistent with the Plan; construe and interpret the Plan and any Award Agreement or other agreement or instrument entered into under the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; and take such other action, not inconsistent with the terms of the Plan, as the Committee deems appropriate.
(b) Determinations. The Committee shall have no obligation to treat Participants or eligible Participants uniformly, and the Committee may make determinations under the Plan selectively among Participants who receive, or Employees who are eligible to receive, Awards (whether or not such Participants or eligible Employees are similarly situated). All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Committee shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries, its stockholders, Employees, Participants and their estates and beneficiaries.
(c) Authority of the Board. The Board (via action by a majority of the “independent directors” within the meaning of applicable rules of any securities exchange upon which Shares are listed) may reserve to itself any or all of the authority or responsibility of the Committee under the Plan or may act as the administrator of the Plan for any and all purposes. To the extent the Board has reserved any such authority or responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4(c)) shall include the Board.
5. Eligibility and Participation. The only individuals eligible to receive grants of Awards under this Plan are individuals who satisfy the standards for “inducement awards” under Rule 303A.08 of the NYSE Listed Company Manual. Specifically, each Employee is eligible to participate in the Plan only if (a) the Employee has not previously been an Employee, or is commencing employment with the Company or a Subsidiary following a bona fide period of non-employment by the Company or a Subsidiary, (b) he or she is granted an Award in connection with his or her commencement of employment with the Company or a Subsidiary and (c) such grant is a material inducement to his or her entering into employment with the Company or a Subsidiary. Subject to the provisions of the Plan, the Committee may, from time to time, select
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from all eligible Employees those to whom Awards shall be granted and shall determine, in its sole discretion, the nature of any and all terms permissible by Applicable Law and the amount of each Award. Promptly following the grant of any Award under the Plan, the Company will (x) notify the NYSE in writing of the use of the “inducement award” exemption under Rule 303A.08 of the NYSE Listed Company Manual with respect to the Award, and (y) disclose in a press release the material terms of the Award, including each Participant who received the Award and the number of Shares involved.
6. Stock Options. Subject to the terms and conditions of the Plan, Stock Options may be granted to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.
(a) Award Agreement. Each Stock Option shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock Option, the number of Shares covered by the Stock Option, the conditions upon which the Stock Option shall become vested and exercisable and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan.
(b) Exercise Price. The exercise price per Share of a Stock Option shall be determined by the Committee at the time the Stock Option is granted and shall be specified in the related Award Agreement; provided, however, that in no event shall the exercise price per Share of any Stock Option (other than a Substitute Award) be less than one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant.
(c) Term. The term of a Stock Option shall be determined by the Committee and set forth in the related Award Agreement; provided, however, that in no event shall the term of any Stock Option exceed ten (10) years from its Date of Grant.
(d) Exercisability. Stock Options shall become vested and exercisable at such times and upon such terms and conditions as shall be determined by the Committee and set forth in the related Award Agreement. Such terms and conditions may include, without limitation, the satisfaction of (i) performance goals based on one or more Performance Objectives, and (ii) time-based vesting requirements.
(e) Exercise of Stock Options. Except as otherwise provided in the Plan or in a related Award Agreement, a Stock Option may be exercised for all or any portion of the Shares for which it is then exercisable. A Stock Option shall be exercised by the delivery of a notice of exercise to the Company or its designee in a form specified by the Company which sets forth the number of Shares with respect to which the Stock Option is to be exercised and full payment of the exercise price for such Shares. The exercise price of a Stock Option may be paid: (i) in cash or its equivalent; (ii) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the aggregate exercise price; (iii) by a cashless exercise (including by withholding Shares deliverable upon exercise and through a broker-assisted arrangement to the extent permitted by Applicable Laws); (iv) by a combination of the methods described in clauses (i), (ii) and/or (iii); or (v) through any other method approved by the Committee in its sole discretion. As soon as practicable after receipt of the notification of exercise and full payment of the exercise price, the Company shall cause the appropriate number of Shares to be issued to the Participant.
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7. Stock Appreciation Rights. Subject to the terms and conditions of the Plan, Stock Appreciation Rights may be granted to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.
(a) Award Agreement. Each Stock Appreciation Right shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock Appreciation Right, the number of Shares covered by the Stock Appreciation Right, the conditions upon which the Stock Appreciation Right shall become vested and exercisable and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan.
(b) Exercise Price. The exercise price per Share of a Stock Appreciation Right shall be determined by the Committee at the time the Stock Appreciation Right is granted and shall be specified in the related Award Agreement; provided, however, that in no event shall the exercise price per Share of any Stock Appreciation Right (other than a Substitute Award) be less than one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant.
(c) Term. The term of a Stock Appreciation Right shall be determined by the Committee and set forth in the related Award Agreement; provided, however, that in no event shall the term of any Stock Appreciation Right exceed ten (10) years from its Date of Grant.
(d) Exercisability of Stock Appreciation Rights. A Stock Appreciation Right shall become vested and exercisable at such times and upon such terms and conditions as may be determined by the Committee and set forth in the related Award Agreement. Such terms and conditions may include, without limitation, the satisfaction of (i) performance goals based on one or more Performance Objectives, and (ii) time-based vesting requirements.
(e) Exercise of Stock Appreciation Rights. Except as otherwise provided in the Plan or in a related Award Agreement, a Stock Appreciation Right may be exercised for all or any portion of the Shares for which it is then exercisable. A Stock Appreciation Right shall be exercised by the delivery of a notice of exercise to the Company or its designee in a form specified by the Company which sets forth the number of Shares with respect to which the Stock Appreciation Right is to be exercised. Upon exercise, a Stock Appreciation Right shall entitle a Participant to an amount equal to (a) the excess of (i) the Fair Market Value of a Share on the exercise date over (ii) the exercise price per Share, multiplied by (b) the number of Shares with respect to which the Stock Appreciation Right is exercised. A Stock Appreciation Right may be settled in whole Shares, cash or a combination thereof, as specified by the Committee in the related Award Agreement.
8. Restricted Shares. Subject to the terms and conditions of the Plan, Restricted Shares may be granted or sold to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.
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(a) Award Agreement. Each Restricted Shares Award shall be evidenced by an Award Agreement that shall specify the number of Restricted Shares, the restricted period(s) applicable to the Restricted Shares, the conditions upon which the restrictions on the Restricted Shares will lapse and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan.
(b) Terms, Conditions and Restrictions. The Committee shall impose such other terms, conditions and/or restrictions on any Restricted Shares as it may deem advisable, including, without limitation, a requirement that the Participant pay a purchase price for each Restricted Share, restrictions based on the achievement of specific Performance Objectives, time-based restrictions or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Shares. Unless otherwise provided in the related Award Agreement or required by Applicable Law, the restrictions imposed on Restricted Shares shall lapse upon the expiration or termination of the applicable restricted period and the satisfaction of any other applicable terms and conditions.
(c) Custody of Certificates. To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Restricted Shares in the Company’s possession until such time as all terms, conditions and/or restrictions applicable to such Shares have been satisfied or lapse.
(d) Rights Associated with Restricted Shares during Restricted Period. During any restricted period applicable to Restricted Shares: (i) the Restricted Shares may not be sold, transferred, pledged, assigned or otherwise alienated; (ii) unless otherwise provided in the related Award Agreement, the Participant shall be entitled to exercise full voting rights associated with such Restricted Shares; and (iii) the Participant shall be entitled to all dividends and other distributions paid with respect to such Restricted Shares during the restricted period; provided, however, that that any dividends with respect to unvested Restricted Shares shall be accumulated or deemed reinvested in additional Restricted Shares until such Award is earned and vested, and shall be subject to the same terms and conditions as the original Award (including service-based vesting conditions and the achievement of any Performance Objectives).
9. Restricted Share Units. Subject to the terms and conditions of the Plan, Restricted Share Units may be granted or sold to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.
(a) Award Agreement. Each Restricted Share Unit Award shall be evidenced by an Award Agreement that shall specify the number of units, the restricted period(s) applicable to the Restricted Share Units, the conditions upon which the restrictions on the Restricted Share Units will lapse, the time and method of payment of the Restricted Share Units, and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan.
(b) Terms, Conditions and Restrictions. The Committee shall impose such other terms, conditions and/or restrictions on any Restricted Share Units as it may deem advisable, including, without limitation, a requirement that the Participant pay a purchase price for each Restricted Share Unit, restrictions based on the achievement of specific Performance Objectives or time-based restrictions or holding requirements.
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(c) Form of Settlement. Restricted Share Units may be settled in whole Shares, cash or a combination thereof, as specified by the Committee in the related Award Agreement.
10. Other Share-Based Awards. Subject to the terms and conditions of the Plan, Other Share-Based Awards may be granted to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion. Other Share-Based Awards are Awards that are valued in whole or in part by reference to, or otherwise based on the Fair Market Value of, Shares, and shall be in such form as the Committee shall determine, including without limitation, unrestricted Shares or time-based or performance-based units that are settled in Shares and/or cash.
(a) Award Agreement. Each Other Share-Based Award shall be evidenced by an Award Agreement that shall specify the terms and conditions upon which the Other Share-Based Award shall become vested, if applicable, the time and method of settlement, the form of settlement and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan.
(b) Form of Settlement. An Other Share-Based Award may be settled in whole Shares, cash or a combination thereof, as specified by the Committee in the related Award Agreement.
11. Dividend Equivalents. Awards may provide the Participant with dividend equivalents, on a contingent basis and either in cash or in additional Shares, as determined by the Committee in its sole discretion and set forth in the related Award Agreement; provided, however, that that any dividend equivalents with respect to an unvested Award shall be accumulated or deemed reinvested until such Award is earned and vested, and shall be subject to the same terms and conditions as the original Award (including service-based vesting conditions and the achievement of any Performance Objectives). Notwithstanding the foregoing, no dividend equivalents shall be granted with respect to Shares underlying a Stock Option or Stock Appreciation Right.
12. Compliance with Section 409A. Awards shall be designed and administered in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Code. To the extent that the Committee determines that any Award is subject to Section 409A of the Code, the Award Agreement shall incorporate the terms and conditions necessary to avoid the imposition of an additional tax under Section 409A of the Code upon a Participant. Notwithstanding any other provision of the Plan or any Award Agreement (unless the Award Agreement provides otherwise with specific reference to this Section 12): (a) an Award shall not be granted, deferred, accelerated, extended, paid out, settled, substituted or modified under the Plan in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon a Participant; and (b) if an Award is subject to Section 409A of the Code, and if the Participant holding the award is a “specified employee” (as defined in Section 409A of the Code, with such classification to be determined in accordance with the methodology
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established by the Company), then, to the extent required to avoid the imposition of an additional tax under Section 409A of the Code upon a Participant, no distribution or payment of any amount shall be made before the date that is six (6) months following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code) or, if earlier, the date of the Participant’s death. Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local, or non-United States law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.
13. [Reserved]
14. Transferability. Except as otherwise determined by the Committee, no Award or dividend equivalents paid with respect to any Award shall be transferable by the Participant except by will or the laws of descent and distribution; provided, that if so determined by the Committee, each Participant may, in a manner established by the Committee, designate a beneficiary to exercise the rights of the Participant with respect to any Award upon the death of the Participant and to receive Shares or other property issued or delivered under such Award. Except as otherwise determined by the Committee, Stock Options and Stock Appreciation Rights will be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity to do so, by the Participant’s guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law and/or court supervision.
15. Adjustments. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation), such as a stock dividend, stock split, reverse stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend, the Committee shall cause there to be an equitable adjustment in the numbers of Shares specified in Section 3 of the Plan and, with respect to outstanding Awards, in the number and kind of Shares subject to outstanding Awards, and the exercise price or other price of Shares subject to outstanding Awards, in each case to prevent dilution or enlargement of the rights of Participants. In the event of any other change in corporate capitalization, or in the event of a merger, consolidation, liquidation, or similar transaction, the Committee may, in its sole discretion, cause there to be an equitable adjustment as described in the foregoing sentence, to prevent dilution or enlargement of rights; provided, however, that, unless otherwise determined by the Committee, the number of Shares subject to any Award shall always be rounded down to a whole number. Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding Awards such alternative consideration (including cash) as it, in good faith, may determine to be equitable in the circumstances and may require in connection therewith the surrender of all Awards so replaced. Notwithstanding the foregoing, the Committee shall not make any adjustment pursuant to this Section 15 that would (a) cause an Award that is otherwise exempt from Section 409A of the Code to become subject to Section 409A of the Code or (b) cause an Award that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A of the Code. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on all Participants and any other persons claiming under or through any Participant.
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16. Fractional Shares. The Company shall not be required to issue or deliver any fractional Shares pursuant to the Plan and, unless otherwise provided by the Committee, fractional shares shall be settled in cash.
17. Withholding Taxes. To the extent required by Applicable Law, a Participant shall be required to satisfy, in a manner satisfactory to the Company or Subsidiary, as applicable, any withholding tax obligations that arise by reason of a Stock Option or Stock Appreciation Right exercise, the vesting of or settlement of Shares under an Award, an election pursuant to Section 83(b) of the Code or otherwise with respect to an Award. The Company and its Subsidiaries shall not be required to issue or deliver Shares, make any payment or to recognize the transfer or disposition of Shares until such obligations are satisfied. The Committee may permit or require these obligations to be satisfied by having the Company withhold a portion of the Shares that otherwise would be issued or delivered to a Participant upon exercise of a Stock Option or Stock Appreciation Right or upon the vesting or settlement of an Award, or by tendering Shares previously acquired, in each case having a value (as determined by the Company) equal to the minimum amount required by Applicable Law to be withheld or paid (or such other amount that will not result in adverse accounting consequences for the Company or a Subsidiary). Any such elections are subject to such conditions or procedures as may be established by the Committee and may be subject to disapproval by the Committee.
18. Foreign Employees. Without amending the Plan, the Committee may grant Awards to Participants who are foreign nationals, or who are subject to Applicable Laws of one or more non-United States jurisdictions, on such terms and conditions different from those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, and the like as may be necessary or advisable to comply with provisions of Applicable Laws of other countries in which the Company or its Subsidiaries operate or have employees.
19. Termination for Cause; Forfeiture of Awards.
(a) Termination for Cause. If a Participant’s employment is terminated by the Company or a Subsidiary for Cause, as determined by the Committee in its sole discretion, then, promptly upon receiving notice of the Committee’s determination, the Participant shall: (i) forfeit all Awards to the extent then held by the Participant; and (ii) to the extent demanded by the Committee in its sole discretion, (A) return to the Company or the Subsidiary all Shares that the Participant has not disposed of that had been acquired, pursuant to Awards within 2 years prior to the Participant’s date of termination in exchange for payment by the Company or the Subsidiary of any amount actually paid therefor by the Participant; and (B) with respect to any Shares acquired pursuant to an Award within 2 years prior to the Participant’s date of termination that were disposed of, pay to the Company or the Subsidiary, in cash, the excess, if any, of: (x) the Fair Market Value of the Shares on the date acquired, over (y) any amount actually paid by the Participant for the Shares.
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(b) Compensation Recovery Policy. Any Award granted to a Participant or amounts paid thereunder shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery policy adopted by the Company, including any such policy that may be adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities and Exchange Commission rule or applicable securities exchange.
(c) Set-Off and Other Remedies. To the extent that amounts are not immediately returned or paid to the Company as provided in this Section 19, the Company may, to the extent permitted by Applicable Laws, seek other remedies, including a set off of the amounts so payable to it against any amounts that may be owing from time to time by the Company or a Subsidiary to the Participant for any reason, including, without limitation, wages, or vacation pay or other benefits; provided, however, that, except to the extent permitted by Treasury Regulation Section 1.409A-3(j)(4), such offset shall not apply to amounts that are “deferred compensation” within the meaning of Section 409A of the Code.
| 20. | Change in Control. |
(a) Committee Discretion Regarding Assumption of Awards. The Committee may, in its sole discretion and without the consent of Participants, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of a Change in Control, determine whether and to what extent outstanding Awards under the Plan shall be assumed, converted or replaced by the resulting entity in connection with the Change in Control (or, if the Company is the resulting entity, whether such Awards shall be continued by the Company), in each case subject to equitable adjustments in accordance with Section 15 of the Plan.
(b) Treatment of Awards that are Assumed. To the extent outstanding Awards granted under the Plan are assumed, converted or replaced by the resulting entity in the event of a Change in Control (or, if the Company is the resulting entity, to the extent such Awards are continued by the Company) as provided in Section 20(a) of the Plan, then, except as otherwise provided in the applicable Award Agreement or in another written agreement with the Participant, or in a Company severance plan applicable to the Participant:
(i) Any such outstanding Awards that are subject to Performance Objectives shall be converted to service-based Awards by the resulting entity (A) as if “target” performance had been achieved, if the Change in Control occurs before the end of the applicable performance period, or (B) based on actual performance for the completed performance period, as determined by the Committee, if the Change in Control occurs after the end of the applicable performance period; and in either case, such converted Awards shall continue to vest and become exercisable (as applicable) based on the Participant’s continued employment during the remaining vesting period;
(ii) All other such outstanding Awards shall continue to vest and become exercisable (as applicable) based on the Participant’s continued employment during the remaining vesting period, if any; and
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(iii) Notwithstanding the foregoing, if the Participant’s employment is terminated during the twenty four (24) months following the Change in Control (A) by the Company without Cause, (B) on account of the Participant’s death or disability (as defined in the Teradata Long-Term Disability Plan or another long-term disability plan sponsored by the Company), or (C) by the Participant for “Good Reason”, if such Participant participates in the Teradata Change in Control Severance Plan, a Teradata Severance Policy or a similar arrangement that defines “Good Reason” in the context of a resignation following a Change in Control (or similar transaction), all such outstanding Awards shall become vested and exercisable (as applicable) in full, effective as of the date of such termination, and any such Awards that are Stock Options or Stock Appreciation Rights shall remain exercisable until the earlier of (x) the first anniversary of such termination of employment, and (y) the expiration of the term of such Stock Option or Stock Appreciation Right.
(c) Treatment of Awards that are not Assumed. To the extent outstanding Awards granted under the Plan are not assumed, converted or replaced by the resulting entity in connection with a Change in Control (or, if the Company is the resulting entity, to the extent such Awards are not continued by the Company) in accordance with Section 20(a) of the Plan, then, except as otherwise provided in the applicable Award Agreement or in another written agreement with the Participant, or in a Company severance plan applicable to the Participant, then, effective immediately prior to the Change in Control:
(i) All service-based and performance-based vesting restrictions with respect to all such outstanding Awards shall lapse, with any applicable Performance Objectives deemed to be satisfied (A) as if “target” performance had been achieved, if the Change in Control occurs before the end of the applicable performance period, or (B) based on actual performance for the completed performance period, as determined by the Committee, if the Change in Control occurs after the end of the applicable performance period; and all such Awards shall become fully vested and exercisable (as applicable), effective as of the date of such Change in Control; and
(iii) Subject to Section 20(d), all such outstanding Awards that are Stock Options or Stock Appreciation Rights shall remain exercisable until the earlier of (A) the first anniversary of such termination of employment, and (B) the expiration of the term of such Stock Option or Stock Appreciation Right.
(d) Cancellation Right. The Committee may, in its sole discretion and without the consent of Participants, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of the Change in Control, provide that any outstanding Award (or a portion thereof) shall, upon the occurrence of such Change in Control, be cancelled in exchange for a payment in cash or other property (including shares of the resulting entity in connection with a Change in Control) in an amount equal to the excess, if any, of the Fair Market Value of the Shares subject to the Award, over any exercise price related to the Award, which amount may be zero if the Fair Market Value of a Share on the date of the Change in Control does not exceed the exercise price per Share of the applicable Awards.
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| 21. | Amendment, Modification and Termination. |
(a) In General. The Board (via action by a majority of the “independent directors” within the meaning of applicable rules of any securities exchange upon which Shares are listed) may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part. The Plan is intended to permit the Company to grant Awards to eligible Employees solely pursuant to the “inducement award” exemption under Rule 303A.08 of the NYSE Listed Company Manual, and the Plan shall be interpreted and administered in accordance with such intent. It is expressly intended that stockholder approval of the Plan is not required.
(b) Adjustments to Outstanding Awards. The Committee may in its sole discretion at any time (i) provide that all or a portion of a Participant’s Stock Options, Stock Appreciation Rights and other Awards in the nature of rights that may be exercised shall become fully or partially exercisable; (ii) provide that all or a part of the time-based vesting restrictions on all or a portion of the outstanding Awards shall lapse, and/or that any Performance Objectives or other performance-based criteria with respect to any Awards shall be deemed to be wholly or partially satisfied; or (iii) waive any other limitation or requirement under any such Award, in each case, as of such date as the Committee may, in its sole discretion, declare. Additionally, the Committee shall not make any adjustment pursuant to this Section 21(b) that would (x) cause any Award to fail to qualify for the “inducement award” exemption under Rule 303A.08 of the NYSE Listed Company Manual, or (y) cause an Award that is otherwise exempt from Section 409A of the Code to become subject to Section 409A of the Code, or that would cause an Award that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A of the Code.
(c) Prohibition on Repricing. Except for adjustments made pursuant to Sections 15 or 20, the Committee will not, without the approval of the stockholders of the Company, authorize the amendment of any outstanding Stock Option or Stock Appreciation Right to reduce the exercise price. No Stock Option or Stock Appreciation Right will be cancelled and replaced with an Award having a lower exercise price, or for another Award, or for cash without approval of the stockholders of the Company, except as provided in Sections 15 or 20. Furthermore, no Stock Option or Stock Appreciation Right will provide for the payment, at the time of exercise, of a cash bonus or grant or sale of another Award without approval of the stockholders of the Company. This Section 21(c) is intended to prohibit the repricing of “underwater” Stock Options or Stock Appreciation Rights without stockholder approval and will not be construed to prohibit the adjustments provided for in Sections 15 or 20.
(d) Effect on Outstanding Awards. Notwithstanding any other provision of the Plan to the contrary (other than Sections 15, 20, 21(b) and 23(e)), no termination, amendment, suspension, or modification of the Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award.
22. Applicable Laws. The obligations of the Company with respect to Awards under the Plan shall be subject to all Applicable Laws and such approvals by any governmental agencies as the Committee determines may be required. The Plan and each Award Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.
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| 23. | Miscellaneous. |
(a) Stock Ownership Guidelines. By accepting any benefit under the Plan, each Participant thereby agrees to comply with the terms and conditions of the Company’s Executive Stock Ownership Guidelines and/or other similar policies, including the retention ratios contained therein, each as in effect from time to time and to the extent applicable to the Participant.
(b) Deferral of Awards. Except with respect to Stock Options, Stock Appreciation Rights and Restricted Shares, the Committee may permit Participants to elect to defer the issuance or delivery of Shares or the settlement of Awards in cash under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of the Plan. The Committee also may provide that deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts. All elections and deferrals permitted under this provision shall comply with Section 409A of the Code, including setting forth the time and manner of the election (including a compliant time and form of payment), the date on which the election is irrevocable, and whether the election can be changed until the date it is irrevocable.
(c) No Right of Continued Employment. The Plan shall not confer upon any Participant any right with respect to continuance of employment with the Company or any Subsidiary, nor shall it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment at any time. No Employee shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to be selected to receive future Awards.
(d) Unfunded, Unsecured Plan. Neither a Participant nor any other person shall, by reason of participation in the Plan, acquire any right or title to any assets, funds or property of the Company or any Subsidiary, including without limitation, any specific funds, assets or other property which the Company or any Subsidiary may set aside in anticipation of any liability under the Plan. A Participant shall have only a contractual right to an Award or the amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.
(e) Severability. If any provision of the Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended or limited in scope to conform to Applicable Laws or, in the discretion of the Committee, it shall be stricken and the remainder of the Plan shall remain in full force and effect.
(f) Acceptance of Plan. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Committee, the Board or the Company, in any case in accordance with the terms and conditions of the Plan.
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(g) Successors. All obligations of the Company under the Plan and with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or other event, or a sale or disposition of all or substantially all of the business and/or assets of the Company and references to the “Company” herein and in any Award Agreements shall be deemed to refer to such successors.
[END OF DOCUMENT]
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