NON-QUALIFIED STOCK OPTION AGREEMENT Under The RINO International Corporation 2009 Stock Incentive Plan
Under
The
RINO
International Corporation 2009 Stock Incentive Plan
AGREEMENT
(“Agreement”),
dated August 12, 2010 by and between RINO International Corporation, a Nevada
corporation (the “Company”), and Yi
(Xxxxx) Xxx (the “Participant”).
Preliminary
Statement
WHEREAS, the Board of
Directors of the Company (the “Board”) has appointed
a committee (the “Committee”) to
administer the RINO International Corporation 2009 Stock Incentive Plan (the
“Plan”). The
Board has authorized this grant of a non-qualified stock option (the “Option”) on June 30,
2009 (the “Grant
Date”) to purchase the number of shares of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”) set
forth below to the Participant, as a Eligible Employee of the Company
(collectively, the Company and all Subsidiaries and Parents of the Company shall
be referred to as the “Company”).
Unless
otherwise indicated, any capitalized term used but not defined herein shall have
the meaning ascribed to such term in the Plan. For the convenience of the
Participant, capitalized terms used but not defined herein and defined in the
Plan have been set forth hereto in Schedule A. A copy of
the Plan has been delivered to the Participant. By signing and returning this
Agreement, the Participant (i) acknowledges having received and read a copy of
the Plan and this Agreement, (ii) agrees to comply with the Plan, this Agreement
and all applicable laws and regulations, (iii) acknowledges that the Company has
not provided any tax advice to the Participant regarding the grant or future
exercise of the Option or the subsequent sale or transfer of shares of Common
Stock issuable hereunder, and (iv) understands that the Participant should
consult with the Participant’s personal financial, accounting and tax advisors
regarding the same to the extent the Participant deems necessary.
WHEREAS, on August 12, 2010,
the Company and the Participant entered into a Separation Agreement, which
amended the terms of the Option that was granted on June 30, 2009 (the
“Separation Agreement”).
NOW THEREFORE BE IT, the
parties hereto agree the terms of the Option be amended in entirety as
follows:
1. Grant of
Option. The Company hereby acknowledges the grant of an Option to
Optionee to purchase 10,000 shares (“Shares”) of its Common Stock on June 30,
2009 in the manner and subject to the conditions provided
hereinafter.
2.
Vesting and
Exercise.
(a) The
Shares underlying the Option shall vest upon the execution of this Agreement and
shall have an exercise price of $6.15 per share, which is the Fair Market Value
or higher of a share of Common Stock on the Grant Date, or 110% of such Fair
Market Value in the case of a Ten Percent Stockholder as provided in Code
Section 422 (the “Option Exercise Price”). To the extent that the Option has
become vested and is exercisable as provided herein, the Option may thereafter
be exercised by the Participant, in whole or in part, at any time or from time
to time prior to the expiration of the Option as provided herein and in
accordance with Sections 6.3(c) and 6.3(d) of the Plan, including, without
limitation, by the filing of any written form of exercise notice as may be
required by the Committee and payment in full of the Option Exercise Price
multiplied by the number of shares of Common Stock underlying the portion of the
Option exercised. Upon expiration of the Option, the Option shall be canceled
and no longer exercisable.
(b) [Intentionally
omitted].
3.
Time of Exercise of
Option. Any portion of the Option which has vested may be exercised;
provided, however, such Option
shall expire and terminate upon the first to occur of any of the following
events (the “Expiration Date”):
(a)
August 12, 2013;
(b) the
dissolution or liquidation of the Company; or
(c) at
the time of a breach by Optionee of any material provision of the Optionee’s
Separation Agreement with the Company or any other written agreement between the
Optionee and the Company.
4.
Method of
Exercise. All or a portion of the Option may be exercised by payment
of the Option Exercise Price in cash by the Optionee, unless another form of
payment is authorized by the Committee. In the event of payment of the Option
Exercise Price by check, the Option shall not be considered exercised until
receipt of cleared funds by the Company upon deposit of the check.
5.
Restrictions on
Exercise and Delivery. Exercise of the Option, or any portion
thereof, shall be subject to the conditions set forth below as determined by the
Committee in its sole and absolute discretion:
(a)
the satisfaction of any withholding tax or other withholding
liabilities, is necessary or desirable as a condition of, or in connection with,
such exercise or the delivery or purchase of Shares pursuant
thereto,
(b)
the listing, registration, or qualification of any Shares deliverable upon
such exercise is desirable or necessary, under any state or federal law, as a
condition of, or in connection with, such exercise or the delivery or purchase
of Shares pursuant thereto, or
(c) the
consent or approval of any regulatory body is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of any Shares pursuant thereto,
then in
any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
Optionee shall execute such documents and take such other actions as are
required by the Committee to enable it to effect or obtain such withholding,
listing, registration, qualification, consent or approval. Neither the Company
nor any officer or director, or member of the Committee, shall have any
liability with respect to the non-issuance of any portion of the Shares on
exercise or failure to sell any Shares as the result of any suspensions of
exercisability imposed pursuant to this Section.
6.
[Intentionally omitted].
7.
[Intentionally omitted].
8.
Assignability. This
Option may not be sold, pledged, assigned or transferred (except by will or the
laws of descent and distribution) unless with the written consent of the
Company.
9.
Representation
Letter. Upon exercise of all or any part of the Option, the Optionee
will deliver to the Company the Exercise Representation Letter substantially the
same as the one set forth on Exhibit A hereto, as such Exhibit may be amended by
the Committee from time to time. Optionee also agrees to make such other
representations as are deemed necessary or appropriate by the Company and its
counsel.
10.
Rights as
Shareholder. Neither Optionee nor his or her executor,
administrator, heirs or legatees, shall be, or have any rights or privileges of
a shareholder of the Company in respect of the Shares unless and until
certificates representing such Shares shall have been issued in Optionee's
name.
11.
No Right of
Employment. Neither the grant nor exercise of any Option nor
anything in the Plan or this Agreement shall impose upon the Company any
obligation to employ or continue to employ any Optionee. The right of the
Company to terminate any employee shall not be diminished or affected because an
Option has been granted to such employee.
12. Mandatory
Arbitration. In the event of any dispute between the Company and
Optionee regarding this Agreement, the dispute and any issue as to the
arbitrability of such dispute, shall be settled to the exclusion of a court of
law, by arbitration in New York City, New York by a panel of three arbitrators
(each party shall choose one arbitrator and the third shall be chosen by the two
arbitrators so selected) in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then in effect. The decision of a majority
of the arbitrators shall be final and binding upon the parties. All costs of the
arbitration and the fees of the arbitrators shall be allocated between the
parties as determined by a majority of the arbitrators, it being the intention
of the parties that the prevailing party in such a proceeding be made whole with
respect to its expenses.
13. The Company’s Rights.
The existence of the Option shall not affect in any way the right or power of
the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or other stocks with preference ahead of
or convertible into, or otherwise affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of the Company's assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
14. Optionee. Whenever
the word “Optionee” is used in any provision of this Agreement under
circumstances where the provision should logically be construed, as determined
by the Committee, to apply to the estate, personal representative, beneficiary
to whom the Option or Shares may be transferred by will or by the laws of
descent and distribution, or another permitted transferee, the word “Optionee”
shall be deemed to include such person.
15. Conformity with Plan.
This Agreement is intended to conform in all respects with, and is subject to
all applicable provisions of, the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved in accordance with the terms of the Plan. In the
event of any ambiguity in this Agreement or any matters as to which this
Agreement is silent, the Plan shall govern. A copy of the Plan is provided
to Optionee with this Agreement as Exhibit B.
16. Section
409A Compliance. To the extent applicable, the Board or the Committee may at any
time and from time to time amend, in whole or in part, any or all of the
provisions of this Agreement (in a manner determined by the Board or Committee
in its sole discretion) solely to comply with Section 409A of the Code and the
regulations promulgated thereunder, subject to the terms and conditions of the
Plan.
17. Notices. All notices
and other communications made or given pursuant to this Agreement shall be in
writing and shall be sufficiently made or given if hand delivered or mailed by
certified mail, addressed to the Optionee at the address contained in the
records of the Company, or addressed to the Committee, care of the Company to
the attention of its Corporate Secretary at its principal office or, if the
receiving party consents in advance, transmitted and received via telecopy or
via such other electronic transmission mechanism as may be available to the
parties.
18. Binding Effect. This
Agreement shall be binding upon and inure to the benefit of Optionee, his heirs
and successors, and of the Company, its successors and assigns.
19. Governing Law. This
Agreement shall be governed by the laws of the State of New York, without giving
effect to principles of conflicts of laws.
20. Descriptive
Headings. Titles to Sections are solely for informational
purposes.
IN
WITNESS WHEREOF, this Agreement is effective as of, and the date of grant shall
be August 12, 2010.
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RINO
INTERNATIONAL
CORPORATION
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a
Nevada corporation
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By:
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/s/ Xxxxx Xxx | ||
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Its:
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President
and Chief Executive Officer
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OPTIONEE
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/s/
Yi (Xxxxx) Liu
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Print
Name Yi (Xxxxx) Xxx
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EXHIBIT
A
______________,
20___
RINO
International Corporation
Re: Stock
Option Exercise
To Whom It May Concern:
I (the
“Optionee”) hereby exercise my right to purchase ________ shares of common stock
(the “Shares”) of RINO International Corporation, a Nevada Company (the
“Company”), pursuant to, and in accordance with, an option agreement dated
_______________, 20__ (the “Agreement”). As provided in such Agreement, I
deliver herewith payment as set forth in the Agreement in the amount of the
aggregate option exercise price. Please deliver to me at my address as set forth
above stock certificates representing the subject shares registered in my
name.
The
Optionee hereby represents and agrees as follows:
1. The
Optionee acknowledges receipt of a copy of the Agreement. The Optionee has
carefully reviewed the Agreement.
2. The
Optionee is a resident of __________.
3. The
Optionee represents and agrees that if the Optionee is an “affiliate” (as
defined in Rule 144 under the Securities Act of 1933) of the Company at the time
the Optionee desires to sell any of the Shares, the Optionee will be subject to
certain restrictions under, and will comply with all of the requirements of,
applicable federal and state securities laws.
The
foregoing representations and warranties are given on ________ at
_____________________.
___
Optionee encloses a check in the amount of $ ______________ for the payment of
the aggregate amount of the Option Exercise Price.
___
Optionee elects a Cashless Exercise for __________Option Shares.
OPTIONEE:
_____________________________
Exhibit
B
RINO
International 2009 Stock Incentive Plan
SCHEDULE
A
The
following terms used but not defined in the Agreement and defined in the Plan
have been provided below for the convenience of the Participant but are
qualified in their entirety by the full text of such terms in the
Plan.
A.
“Acquisition
Event” means a
merger or consolidation in which the Company is not the surviving entity, any
transaction that results in the acquisition of all or substantially all of the
Company’s outstanding Common Stock by a single person or entity or by a group of
persons and/or entities acting in concert, or the sale or transfer of all or
substantially all of the Company’s assets.
B.
“Affiliate” means each of the following:
(a) any Subsidiary; (b) any Parent; (c) any corporation, trade or
business (including, without limitation, a partnership or limited liability
company) which is directly or indirectly controlled 50% or more (whether by
ownership of stock, assets or an equivalent ownership interest or voting
interest) by the Company; (d) any corporation, trade or business (including,
without limitation, a partnership or limited liability company) which directly
or indirectly controls 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) of the Company; and
(e) any other entity in which the Company or any of its Affiliates has a
material equity interest and which is designated as an “Affiliate” by resolution
of the Committee; provided that the Common Stock subject to any Award
constitutes “service recipient stock” for purposes of Section 409A of the Code
or otherwise does not subject the Award to Section 409A of the
Code.
C. “Appreciation
Award” means any
Award under this Plan of any Stock Option, Stock Appreciation Right or Other
Stock-Based Award, provided that such Other Stock-Based Award is based on the
appreciation in value of a share of Common Stock in excess of an amount equal to
at least the Fair Market Value of the Common Stock on the date such Other
Stock-Based Award is granted.
D.
“Award” means any award under this
Plan of any Stock Option, Stock Appreciation Right, Restricted Stock,
Performance Share, Other Stock-Based Award or Performance-Based Cash Awards. All
Awards shall be granted by, confirmed by, and subject to the terms of, a written
agreement executed by the Company and the Participant.
E. “Board” means the Board of Directors
of the Company.
F.
“Cause” means with respect to a
Participant’s Termination of Employment or Termination of Consultancy from and
after the date hereof, the following: (a) in the case where there is no
employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award (or where there is such an
agreement but it does not define “cause” (or words of like import)), termination
due to: (i) a Participant’s conviction of, or plea of guilty or nolo contendere
to, a felony; (ii) perpetration by a Participant of an illegal act, or fraud
which could cause significant economic injury to the Company; (iii) continuing
willful and deliberate failure by the Participant to perform the Participant’s
duties in any material respect, provided that the Participant is given notice
and an opportunity to effectuate a cure as determined by the Committee; or (iv)
a Participant’s willful misconduct with regard to the Company that could have a
material adverse effect on the Company; or (b) in the case where there is an
employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award that defines “cause” (or words
of like import), “cause” as defined under such agreement; provided, however,
that with regard to any agreement under which the definition of “cause” only
applies on occurrence of a change in control, such definition of “cause” shall
not apply until a change in control actually takes place and then only with
regard to a termination thereafter. With respect to a Participant’s Termination
of Directorship, “cause” means an act or failure to act that constitutes cause
for removal of a director under applicable Nevada law.
G.
“Change in
Control” has the
meaning set forth in Section 13.2 of the Plan.
H.
“Change in
Control Price”
has the meaning set forth in Section 13.1 of the Plan.
I.
“Code” means the Internal Revenue
Code of 1986, as amended. Any reference to any section of the Code shall also be
a reference to any successor provision and any Treasury Regulation promulgated
thereunder.
J.
“Committee”
means: (a) with respect to the application of this Plan to Eligible
Employees and Consultants, a committee or subcommittee of the Board appointed
from time to time by the Board, which committee or subcommittee shall consist of
two or more non-employee directors, each of whom shall be (i) a “non-employee
director” as defined in Rule 16b-3; (ii) to the extent required by Section
162(m) of the Code, an “outside director” as defined under Section 162(m) of the
Code; and (iii) an “independent director” for purposes of the applicable stock
exchange rules; and (b) with respect to the application of this Plan to
Non-Employee Directors, the Board. To the extent that no Committee exists that
has the authority to administer this Plan, the functions of the Committee shall
be exercised by the Board. If for any reason the appointed Committee does not
meet the requirements of Rule 16b-3 or Section 162(m) of the Code, such
noncompliance shall not affect the validity of Awards, grants, interpretations
or other actions of the Committee.
K.
“Common
Stock” means the
common stock, $0.0001 par value per share, of the Company.
L.
“Company” means RINO International
Corporation, a Nevada Corporation, and its successors by operation of
law.
M.
“Consultant” means any individual or
entity who provides bona fide consulting or advisory services to the Company or
its Affiliates pursuant to a written agreement, which are not in connection with
the offer and sale of securities in a capital-raising transaction.
N. “Disability” means with respect to a
Participant’s Termination, a permanent and total disability as defined in
Section 22(e)(3) of the Code. A Disability shall only be deemed to occur at the
time of the determination by the Committee of the Disability. Notwithstanding
the foregoing, for Awards that are subject to Section 409A of the Code,
Disability shall mean that a Participant is disabled under Section
409A(a)(2)(C)(i) or (ii) of the Code.
O.
“Effective
Date” means the
effective date of this Plan as defined in Article XVII.
P. “Eligible
Employees” means
each employee of the Company or an Affiliate.
Q.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended. Any references to any section of
the Exchange Act shall also be a reference to any successor
provision.
R.
“Fair
Market Value”
means, unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, as of any date and except as provided below, the
last sales price reported for the Common Stock on the applicable date: (a) as
reported on the principal national securities exchange in the United States on
which it is then traded, or (b) if the Common Stock is not traded, listed or
otherwise reported or quoted, the Committee shall determine in good faith the
Fair Market Value in whatever manner it considers appropriate taking into
account the requirements of Section 409A of the Code. For purposes of the grant
of any Award, the applicable date shall be the trading day immediately prior to
the date on which the Award is granted. For purposes of the exercise of any
Award, the applicable date shall be the date a notice of exercise is received by
the Committee or, if not a day on which the applicable market is open, the next
day that it is open.
S.
“Family
Member” means
“family member” as defined in Section A.1.(5) of the general instructions of
Form S-8.
T.
“GAAP” has the meaning set forth in
Section 11.2(c)(ii).
U.
“Incentive
Stock Option”
means any Stock Option awarded to an Eligible Employee of the Company, its
Subsidiaries and its Parent (if any) under this Plan intended to be and
designated as an “Incentive Stock Option” within the meaning of Section 422 of
the Code.
V.
“Non-Employee
Director” means a
director of the Company who is not an active employee of the Company or an
Affiliate.
W.
“Non-Qualified
Stock Option”
means any Stock Option awarded under this Plan that is not an Incentive Stock
Option.
X.
“Other
Stock-Based Award” means an Award under Article
X of this Plan that is valued in whole or in part by reference to, or is payable
in or otherwise based on, Common Stock, including, without limitation, a
restricted stock unit or an Award valued by reference to an
Affiliate.
Y.
“Parent” means any parent corporation
of the Company within the meaning of Section 424(e) of the Code.
Z.
“Participant” means an Eligible Employee,
Non-Employee Director or Consultant to whom an Award has been granted pursuant
to the Plan.
AA. “Performance-Based
Cash Award” means
a cash Award under Article XI of this Plan that is payable or otherwise based on
the attainment of certain pre-established performance goals during a Performance
Period.
BB.
“Performance
Goals” mean such performance goals as determined in writing by the
Committee.
CC.
“Performance
Period” means the
duration of the period during which receipt of an Award is subject to the
satisfaction of performance criteria, such period as determined by the Committee
in its sole discretion.
DD.
“Performance
Share” means an
Award made pursuant to Article IX of this Plan of the right to receive Common
Stock or cash of an equivalent value at the end of a specified Performance
Period.
EE.
“Person” means any individual,
corporation, partnership, limited liability company, firm, joint venture,
association, joint-stock company, trust, incorporated organization, governmental
or regulatory or other entity.
FF.
“Plan” means this RINO
International Corporation 2009 Stock Incentive Plan, as amended from time to
time.
GG.
“Reference
Stock Option” has
the meaning set forth in Section 7.1 of the Plan.
HH. “Restricted
Stock” means an
Award of shares of Common Stock under this Plan that is subject to restrictions
under Article VIII.
II.
“Restriction
Period” has the
meaning set forth in Subsection 8.3(a) of the Plan.
JJ.
“Rule
16b-3” means Rule
16b-3 under Section 16(b) of the Exchange Act as then in effect or any successor
provision.
KK.
“Section
162(m) of the Code” means the exception for
performance-based compensation under Section 162(m) of the Code and any
applicable Treasury regulations thereunder.
LL.
“Section
409A of the Code”
means the nonqualified deferred compensation rules under Section 409A of the
Code and any applicable Treasury regulations thereunder.
MM. “Securities
Act” means the
Securities Act of 1933, as amended and all rules and regulations promulgated
thereunder. Any reference to any section of the Securities Act shall also be a
reference to any successor provision.
NN.
“Stock
Appreciation Right” means the right pursuant to
an Award granted under Article VII. A Tandem Stock Appreciation Right shall mean
the right to surrender to the Company all (or a portion) of a Stock Option in
exchange for cash or a number of shares of Common Stock (as determined by the
Committee, in its sole discretion, on the date of grant) equal to the difference
between (a) the Fair Market Value on the date such Stock Option (or such
portion thereof) is surrendered, of the Common Stock covered by such Stock
Option (or such portion thereof), and (b) the aggregate exercise price of
such Stock Option (or such portion thereof). A Non-Tandem Stock Appreciation
Right shall mean the right to receive cash or a number of shares of Common Stock
(as determined by the Committee, in its sole discretion, on the date of grant)
equal to the difference between (i) the Fair Market Value of a share of
Common Stock on the date such right is exercised, and (ii) the aggregate
exercise price of such right, otherwise than on surrender of a Stock
Option.
OO. “Stock
Option” or “Option” means any option to purchase
shares of Common Stock granted to Eligible Employees, Non-Employee Directors or
Consultants granted pursuant to Article VI of the Plan.
PP.
“Subsidiary” means any subsidiary
corporation of the Company within the meaning of Section 424(f) of the
Code.
QQ. “Ten
Percent Stockholder” means a person owning stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, its Subsidiaries or its Parent.
RR. “Termination” means a Termination of
Consultancy, Termination of Directorship or Termination of Employment, as
applicable.
SS.
“Termination
of Consultancy”
means: (a) that the Consultant is no longer acting as a consultant to the
Company or an Affiliate; or (b) when an entity which is retaining a Participant
as a Consultant ceases to be an Affiliate unless the Participant otherwise is,
or thereupon becomes, a Consultant to the Company or another Affiliate at the
time the entity ceases to be an Affiliate. In the event that a Consultant
becomes an Eligible Employee or a Non-Employee Director upon the termination of
his or her consultancy, unless otherwise determined by the Committee, in its
sole discretion, no Termination of Consultancy shall be deemed to occur until
such time as such Consultant is no longer a Consultant, an Eligible Employee or
a Non-Employee Director. Notwithstanding the foregoing, the Committee may, in
its sole discretion, otherwise define Termination of Consultancy in the Award
agreement or, if no rights of a Participant are reduced, may otherwise define
Termination of Consultancy thereafter.
TT.
“Termination
of Directorship”
means that the Non-Employee Director has ceased to be a director of the Company;
except that if a Non-Employee Director becomes an Eligible Employee or a
Consultant upon the termination of his or her directorship, his or her ceasing
to be a director of the Company shall not be treated as a Termination of
Directorship unless and until the Participant has a Termination of Employment or
Termination of Consultancy, as the case may be.
UU.
“Termination
of Employment”
means: (a) a termination of employment (for reasons other than a military
or personal leave of absence granted by the Company) of a Participant from the
Company and its Affiliates; or (b) when an entity which is employing a
Participant ceases to be an Affiliate, unless the Participant otherwise is, or
thereupon becomes, employed by the Company or another Affiliate at the time the
entity ceases to be an Affiliate. In the event that an Eligible Employee becomes
a Consultant or a Non-Employee Director upon the termination of his or her
employment, unless otherwise determined by the Committee, in its sole
discretion, no Termination of Employment shall be deemed to occur until such
time as such Eligible Employee is no longer an Eligible Employee, a Consultant
or a Non-Employee Director. Notwithstanding the foregoing, the Committee may, in
its sole discretion, otherwise define Termination of Employment in the Award
agreement or, if no rights of a Participant are reduced, may otherwise define
Termination of Employment thereafter.
VV.
“Transfer” means: (a) when used as a
noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation,
encumbrance or other disposition (including the issuance of equity in a Person),
whether for value or no value and whether voluntary or involuntary (including by
operation of law), and (b) when used as a verb, to directly or indirectly
transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise
dispose of (including the issuance of equity in a Person) whether for value or
for no value and whether voluntarily or involuntarily (including by operation of
law). “Transferred” and “Transferrable” shall have a correlative
meaning
