Exhibit 10.19
OPTION AGREEMENT
OPTION AGREEMENT (this “
Agreement ”), entered into as of this May 8, 2009
(the “ Grant Date ”), between Intelsat Global,
Ltd. (formerly known as Serafina Holdings Limited and referred to
herein as the “ Company ”), and Thierry
Guillemin, an employee of the Company or one of its Subsidiaries,
(the “ Employee ”);
WHEREAS, Employee has agreed to
perform services for the Company or one or more of its Subsidiaries
(the “ Employer ”);
WHEREAS, the Company wishes to carry
out the Intelsat Global, Ltd. 2008 Share Incentive Plan (as it may
be amended from time to time, the “ Plan ”), the
terms of which are hereby incorporated by reference and made a part
of this Agreement;
WHEREAS, the Committee appointed to
administer the Plan pursuant to Section 3 of the Plan has
determined that it would be to the advantage and in the best
interest of the Company and its shareholders to grant the
Non-Qualified Stock Option provided for herein (the “
Option ”) to the Employee as an inducement to enter
into or remain in the service of the Company (or one of its
Subsidiaries) (the “ Employer ”) and as an
incentive for increased efforts during such service, and has
advised the Company thereof and instructed the undersigned officers
to grant said Option; and
WHEREAS, this Agreement memorializes
certain terms and conditions applicable to the Option;
NOW, THEREFORE, in consideration of
the mutual covenants hereinafter set forth and for other good and
valuable consideration, the parties hereto do hereby agree as
follows:
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1.
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Capitalized
Terms . Capitalized terms
not defined herein shall have the meaning ascribed to such terms in
the Plan.
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(a)
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Genera l. As of the Grant Date, the Company hereby
grants to the Employee the Option to purchase any part or all of an
aggregate of 24,167 Class A Shares. The Employee acknowledges
that the Option will be subject to the terms and conditions set
forth in this Agreement and the Plan, including, without
limitation, Section 6 of the Plan and that as of the Grant
Date the Employee is a party to the Management Shareholders
Agreement.
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(b)
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Exercise
Price . The purchase
price of the Class A Shares covered by the Option shall be
U.S. $100.00 per Class A Share (the “ Exercise
Price ”) (without commission or other charge).
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(c)
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Term .
Unless earlier terminated pursuant to the terms of this Agreement,
the Option shall expire on February 4, 2018, and the Employee
shall thereafter cease to have any rights in respect
thereof.
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3.
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Fair Market
Value; 83(b) Election .
With respect to the exercise of the Option for Class A Shares,
the Employee, in his sole discretion, may make an election with the
Internal Revenue Service (the “ IRS ”) under
Section 83(b) of the Internal Revenue Code of 1986, as amended
(the “ Code ”) and the regulations promulgated
thereunder in the form of Exhibit B attached hereto (the “
83(b) Election ”). The Employee understands that under
applicable law such election must be filed with the IRS no later
than thirty (30) days after the date of purchase of
Class A Shares to be effective. If the Employee files an
effective 83(b) Election, the excess of the fair market value of
the Class A Shares (which the IRS may assert is different from
the Fair Market Value determined by the parties) covered by such
election over the amount paid by the Employee for the shares shall
be treated as ordinary income received by the Employee, and the
Company or one of its Subsidiaries shall withhold from
Employee’s compensation any amounts required to be withheld
under applicable law. If the Employee does not file an 83(b)
Election, future appreciation on the Class A Shares will
generally be taxable as ordinary income at the time or times when
the Company’s repurchase rights with respect to such
Class A Shares (as set forth in this Agreement) lapse. The
foregoing is merely a brief summary of complex tax laws and
regulations, and therefore the Employee is advised to consult with
his own tax advisors regarding his purchase and holding of
Class A Shares.
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4.
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Equity
Plan . The Option and
this Agreement shall be subject to the terms of the Plan, to the
extent the terms of such Plan are not inconsistent with the terms
of this Agreement. In the event of any inconsistency between the
terms of the Plan and the terms of this Agreement, the Plan shall
govern.
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5.
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Vesting . The Option shall initially be unvested with
respect to all Class A Shares covered thereby.
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(a)
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Performance
Option . Subject to
Section 7, the Option to purchase up to 13,182 of the
Class A Shares subject to the Option (the “
Performance Option ”) shall be eligible to become
vested and exercisable as set forth on Exhibit A , subject
to the Employee’s continued employment on the applicable
vesting date.
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(b)
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Performance
Exit Option . Subject to
Section 7 below, the Option to purchase up to 10,985 of the
Class A Shares subject to the Option (the “
Performance Exit Option ”) shall be eligible to become
vested and exercisable as set forth on Exhibit A , subject
to the Employee’s continued employment on the applicable
vesting date.
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(a)
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The portion of
the Option as to which the Employee is vested shall be exercisable
by delivery to the Company of a written notice stating the number
of Class A Shares to be purchased pursuant to this Agreement
and accompanied by payment in full of the exercise price of the
Class A Shares to be purchased. Anything to the contrary
herein notwithstanding, the Company shall not be obligated to issue
any Class A Shares hereunder if the issuance of such
Class A Shares would violate the provision of any law, in
which event the Company shall, as soon as practicable, take
whatever action it reasonably can so that such Class A Shares
may be issued without resulting in such violations of
law.
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(b)
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The exercise
price of an Option shall be paid: (i) in cash or by certified
check or bank draft payable to the order of the Company;
(ii) if permitted by the Committee, by reducing the number of
Class A Shares otherwise deliverable pursuant to the Option by
the number of such Class A Shares having a Fair Market Value
on the date of exercise equal to the exercise price of the
Class A Shares to be purchased; (iii) if permitted by the
Committee, by exchange of unrestricted Class A Shares of the
Company already owned by the Employee and having an aggregate Fair
Market Value equal to the aggregate exercise price, provided
that the Employee represents and warrants to the Company that the
Employee has held such Class A Shares free and clear of liens
and encumbrances; (iv) if permitted by the Committee, by
delivering, along with a properly executed exercise notice to the
Company, a copy of irrevocable instructions to a broker to deliver
promptly to the Company the aggregate exercise price and, if
requested by the Employee, the amount of any applicable federal,
state, local or foreign withholding taxes required to be withheld
by the Company, provided , however , that such
exercise may be implemented solely under a program or arrangement
established and approved by the Company with a brokerage firm
selected by the Company; or (v) by any other procedure
approved by the Committee, or by a combination of the foregoing (to
the extent permitted by the Committee).
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7.
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Termination
of Employment .
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(a)
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Termination
without Cause or for Good Reason . In the event of a Termination of Employment by
the Employer without Cause or by the Employee for Good Reason (as
defined in Section 7(a)(iv), below):
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(i)
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Treatment . Any unvested portion of the Option shall be
immediately forfeited, and subject to Section 8 hereof and
Section 12 of the Plan, any vested and exercisable portion of
the Option as of the date of such Termination of Employment may be
exercised only prior to the earlier of (A) ninety
(90) days following such Termination of Employment and
(B) the scheduled expiration date of the Option.
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(A)
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To the extent
vested, outstanding and unexercised as of the date of a Termination
of Employment without Cause or for Good Reason, the Option may be
cancelled by the Company at any time following the date of such
Termination of Employment prior to its exercise in exchange for a
payment to the Employee in an amount equal to the excess, if any,
of (x) the Fair Market Value of a Class A Share as of the
date of repurchase over (y) the exercise price of such Option
(the “ Option Repurchase Price ”).
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(B)
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Subject to
Sections 7(e) and 8 hereof, any Class A Shares
held by the Employee as a result of the exercise of the Option may
be repurchased by the Company at any time and from time to time
following (x) the date of Termination of Employment without
Cause or for Good Reason in the event such Class A Shares were
held as of such Termination of Employment and (y) the exercise
of the Option in the event such exercise occurred after the date of
such Termination of Employment, each at a purchase price per
Class A Share equal to the Fair Market Value of such
Class A Share as of the date of repurchase.
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(iii)
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Notwithstanding
the foregoing, if the Company consummates an acquisition by or
merger of the Company through a transaction or series of
transactions with any of those certain Person(s) described in the
resolutions of the Compensation Committee of the Board dated
December 29, 2008 but after which the Sponsor Shareholders do
not in the aggregate possess beneficial ownership of more than
fifty percent (50%) of the voting securities (for the election
of directors) of the Company or its successor (a “
Significant Corporate Event ”), then if on or
following such Significant Corporate Event (i) (A) the
affirmative written consent of the Sponsor Shareholders or a
representative thereof is not required for the Company to terminate
the Employee’s employment at the time of such termination and
(B) the Employee’s employment with the Company is
terminated by the Company without Cause or by the Employee for Good
Reason, then the applicable vesting provisions shall apply as if a
Change in Control had occurred immediately prior to such
termination of employment, or (ii) (A) the affirmative
written consent of the Sponsor Shareholders or a representative
thereof is required for the Company to terminate the
Employee’s employment at the time of such termination and at
all times thereto, and (B) the Employee’s employment
with the Company is terminated by the Company without Cause or by
the Employee for Good Reason on or after the date that is eighteen
(18) months following the date of such Significant Corporate
Event, then the applicable vesting provisions shall apply as if a
Change in Control had occurred immediately prior to such
termination of employment.
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(iv)
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For purposes of this Agreement,
“ Good Reason ” shall mean the occurrence,
without the Employee’s consent, of a material diminution of
the Employee’s responsibilities as of the Grant Date, other
than as a result of a Change in Control, Significant Corporate
Event or Company expansion, where the Employee remains in a
position with the Company or its successor (or any other entity
that owns substantially all of the Company’s business after
such Change in Control or Significant Corporate Event) that is
substantially equivalent in responsibilities to the
Employee’s position as of the Grant Date, solely as such
responsibilities relate to the Company’s business as of the
Grant Date (and not taking into account any such Change in Control,
Significant Corporate Event or
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Company expansion);
provided that the Employee has given the Company written
notice of, and thirty (30) business days’ opportunity to
cure, such violation(s); and provided , further ,
that such termination of employment for Good Reason shall occur
within one hundred and eighty (180) days of the occurrence of
the Good Reason event.
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(b)
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Resignation
by the Employee .
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(i)
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Treatment . In the event of a Termination of Employment by
the Employee for any reason other than due to death or Disability,
any unvested portion of the Option shall be immediately forfeited,
and subject to Section 8 hereof and Section 12 of the
Plan, any vested and exercisable portion of the Option as of the
date of such Termination of Employment may be exercised only prior
to the earlier of (A) ninety (90) days following such
Termination of Employment and (B) the scheduled expiration
date of the Option.
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(A)
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To the extent
vested, outstanding and unexercised as of the date of a Termination
of Employment, the Option may be cancelled by the Company at any
time following the date of Termination of Employment prior to its
exercise in exchange for a payment to the Employee in an amount
equal to the excess, if any, of the (x) lesser of (A) the
Fair Market Value of such Class A Share on the date of such
Termination of Employment, or (B) (i) the Fair Market
Value of such Class A Share on the Grant Date minus
(ii) the value of any dividends, distributions, or dividend
equivalents previously paid to the Employee in respect of such
Class A Share (subject to equitable adjustment in the
Committee’s good faith discretion to reflect dividends,
distributions, corporate transactions, or similar events, to the
extent not reflected in (ii)) over (y) the exercise price of
such Option.
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(B)
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Subject to Sections 7(e)
and 8 hereof, any Class A Shares held by the Employee
as a result of the exercise of the Option may be repurchased by the
Company at any time and from time to time following (x) the
date of a Termination of Employment in the event such Class A
Shares were held as of such Termination of Employment and
(y) the exercise of the Option in the event such exercise
occurred after the date of Termination of Employment, at a purchase
price per Class A Share equal to the lesser of (A) the
Fair Market Value of such Class A Share on the date of such
Termination of Employment, or (B) (x) the Fair Market
Value of such Class A Share on the Grant Date minus
(y) the value of any dividends, distributions, or dividend
equivalents previously paid to the Employee in respect of such
Class A Share (subject to
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equitable adjustment in the
Committee’s good faith discretion to reflect dividends,
distributions, corporate transactions, or similar events, to the
extent not reflected in (y)) but in no event less than the par
value of such Class A Share.
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(c)
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Death and
Disability .
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(i)
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Treatment . In the event of a Termination of Employment by
reason of the Employee’s death or Disability, any unvested
portion of the Option shall be immediately forfeited and, subject
to Section 8 hereof and Section 12 of the Plan, any
portion of the Option that is vested as of the date of such
Termination of Employment shall be exercised by the Employee, the
Employee’s guardian or legal representative, or the
Employee’s estate or by a person who acquired the right to
exercise such Option by bequest or inheritance or otherwise by
reason of the death of the Employee (the “
Employee’s Representative ”) prior to the
earlier of (x) the first anniversary of such Termination of
Employment and (y) the scheduled expiration date of the
Option.
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(A)
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To the extent
vested, outstanding and unexercised as of the date of a Termination
of Employment due to death or Disability, the Option may be
cancelled by the Company at any time following the date of such
Termination of Employment prior to its expiration in exchange for a
payment to the Employee in an amount per Option equal to the Option
Repurchase Price.
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(B)
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Subject to
Sections 7(e) and 8 hereof, following the Termination
of Employment due to death or Disability described above, any
Class A Shares held by the Employee as a result of the
exercise of the Option may be repurchased by the Company at any
time and from time to time following (x) the date of a
Termination of Employment in the event such Class A Shares
were held as of such Termination of Employment and (y) the
exercise of the Option in the event such exercise occurred after
the date of Termination of Employment, each at a purchase price per
share equal to the Fair Market Value of such Class A Share on
the date of repurchase.
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(d)
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Termination
for Cause .
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(i)
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Treatment . In the event of the Employee’s
Termination of Employment by the Employer for Cause, to the extent
outstanding and unexercised as of the date of Termination of
Employment, the Option shall be forfeited as of the date of
termination.
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(ii)
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Repurchase Right
. Subject to Sections 7(e)
and 8 , from and after the date of such Termination of
Employment, the Company may repurchase any or
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all of Class A Shares held by
the Employee as a result of the exercise of the Option at any time
and from time to time after the date of such Termination of
Employment for a purchase price per Class A Share equal to the
lesser of (1) (A) the exercise price per Class A
Share of such Option minus (B) the value of any dividends,
distributions or dividend equivalents previously paid to the
Employee in respect of such Class A Share, subject to
equitable adjustment in the Company’s discretion to reflect
dividends, Corporate Transactions, or similar events, to the extent
not otherwise reflected in this clause (B), but in no event less
than $0, and (2) (A) the Fair Market Value of such
Class A Share as of the date of such Termination of Employment
for Cause minus (B) the value of any dividends, distributions
or dividend equivalents previously paid to the Employee in respect
of such share, subject to equitable adjustment in the
Company’s discretion to reflect dividends, Corporate
Transactions, or similar events, to the extent not reflected in
this clause (B), but in no event less than $0.
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(e)
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Expiration
of Repurchase Rights .
Notwithstanding any other provision of this Section 7, the
Company’s repurchase rights set forth in this Section 7
with respect to the Option and the Class A Shares held by the
Employee shall expire immediately prior to the occurrence of an
Initial Public Offering (subject to the consummation of such
Initial Public Offering).
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(f)
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Claw-Back . If, during his employment or at any time prior
to the first anniversary of the Employee’s Termination of
Employment for any reason, the Employee (i) directly or
indirectly provides services to, or manages or operates any person,
firm, corporation, partnership or business (whether as director,
officer, employee, agent, representative, partner, security holder,
consultant or otherwise) that engages in any business or activity
which competes with any product or service of the Company or any of
its Subsidiaries or affiliates; or (ii) otherwise violates any
non-compete, non-solicit, confidentiality or non-disparagement
covenant set forth in any applicable written agreement or policy
governing the Employee’s services with the Company (or any of
its Subsidiaries or affiliates), then the Employee shall, in
addition to any other remedy which may be available at law or in
equity, be required to pay to the Company a cash amount equal to
the product of (x) the number of Class A Shares purchased
upon the exercise of the Option during the 24-month period
immediately preceding (or at any time after) the date that the
Employee first breaches such covenant and (y) the excess of
(A) the fair market value per Class A Share as of the
date of such exercise over (B) the exercise price per
Class A Share.
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8.
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Non-transferability; Other
Restrictions . In order
to receive any Class A Shares pursuant to the exercise of the
Option hereunder, the Employee must be or become party to the
Management Shareholders Agreement and must execute and deliver to
the Company the proxy attached hereto as Exhibit C of this
Agreement. The transferability of Class A Shares held by the
Employee as a result of the exercise of the Option shall be
governed by the Management Shareholders Agreement. The Option is
not transferable by the
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Employee other than by will or
the laws of descent and distribution or pursuant to a qualified
domestic relations order, and the Option may be exercised, during
the lifetime of the Employee, only by the Employee or by the
Employee’s guardian or legal representative or any transferee
described above. The exercise of the Option shall be subject to the
requirement that, if at any time the Committee shall determine that
(a) the listing, registration or qualification of the
Class A Shares subject or related thereto upon any securities
exchange or under any state or federal law, or (b) the consent
or approval of any government regulatory body or (c) an
agreement by the Employee with respect to the disposition of
Class A Shares is necessary or desirable as a condition of, or
in connection with, such exercise or the delivery or purchase of
Class A Shares pursuant thereto, then in any such event, such
exercise shall not be effective unless such listing, registration,
qualification, consent, or approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the
Committee. Any transferee of Class A Shares from the Employee
(and any subsequent transferee) shall be required to execute the
proxy attached hereto as Exhibit C of this Agreement and become a
party to the Management Shareholders Agreement.
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9.
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Rights as a
Shareholder . Prior to
the exercise of the Option and the entry in the Register of Members
of the Employee in respect of the Class A Shares issued
pursuant to the Option, Employee shall have no rights as a
Shareholder with respect to any Class A Shares covered by such
outstanding Option. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities, or other
property) or distribution of other rights for which the record date
is prior to the date of entry in the Register of Members, except as
provided in the Plan.
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10.
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Changes in
Shares . In the event of
any share split, reverse share split, dividend, merger,
amalgamation, consolidation, recapitalization or similar event
affecting the capital structure of the Company, the number and kind
of shares (or other property, including without limitation cash)
subject to this Agreement and the exercise price thereof shall be
equitably adjusted by the Committee as it in good faith deems
appropriate to prevent the dilution or enlargement of the value of
the Employee’s Option and in accordance with
Section 409A of the Code.
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11.
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Taxes . No later than the date as of which an amount
first becomes includible in the gross income of the Employee for
federal income tax purposes with respect to the Option, the
Employee shall pay to the Company in cash (or such other form of
payment as may be approved by the Committee consistent with the
Plan), or make arrangements satisfactory to the Company regarding
the payment of, all federal, state, local and foreign taxes that
are required by applicable laws and regulations to be withheld with
respect to such amount, provided , that the Company may
require the deduction of any such taxes from any payment otherwise
due to the Employee, including any amounts required by law to be
withheld upon the exercise of such Option.
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12.
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Section 409A
. To the extent applicable, this
Agreement shall be interpreted in accordance with Section 409A
of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder. Notwithstanding any
provision of this Agreement to the contrary, if the Comp
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