UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January
20, 2016
THE ALKALINE WATER COMPANY
INC.
Exact name of registrant as specified in its
charter)
Nevada |
000-55096 |
EIN 99-0367049 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
7730 E Greenway Road Ste. 203
Scottsdale, AZ
85260
(Address of principal executive offices and Zip
Code)
Registrants telephone number, including area code: (480)
656-2423
Not Applicable
(Former name or former
address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Loan Agreement with Turnstone Capital Inc.
As of January 25, 2016, we entered into a loan agreement (the
Loan Agreement) with Turnstone Capital Inc. (the Lender),
whereby the Lender loaned $750,000 to our company in exchange for a
non-negotiable promissory note in the principal amount of $750,000 (the
Note). The Note bears interest at the rate of 15% per annum and matures
on March 31, 2016.
The Loan Agreement provides that our obligations to the Lender
will be secured by an escrow agreement (the Escrow Agreement), pursuant
to which we will deposit into escrow a certificate representing 1,500,000 shares
of our common stock (the Escrowed Shares). As of January 25, 2016, we
entered into the Escrow Agreement with the Lender and an escrow agent.
Pursuant to the Escrow Agreement, we intend to deposit a share
certificate (the Certificate) representing the Escrowed Shares with the
escrow agent. Pursuant to the Escrow Agreement, (i) in the event that there is
any event of default that is not cured in accordance with the Loan Agreement,
the escrow agent is to deliver the Certificate to the Lender and (ii) in the
event that our company repays the loan pursuant to the Loan Agreement and there
is no event of default that is not cured in accordance with the Loan Agreement
at the time of repayment, the escrow agent is to deliver the Certificate to the
transfer agent of our company and request the transfer agent to cancel the
Escrowed Shares.
Pursuant to the Loan Agreement, we also granted piggyback
registration rights to the Lender with respect to the Escrowed Shares.
We issued these securities to one non-U.S. person (as that term
is defined in Regulation S of the Securities Act of 1933) in an offshore
transaction relying on Regulation S and/or Section 4(a)(2) of the Securities Act
of 1933.
Amendment Agreement with Neil Rogers
On January 25, 2016, we entered into an amendment agreement
with Neil Rogers, whereby the parties agreed to extend the date that:
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(a) |
all sums due and payable under the loan agreement dated
November 30, 2015 are to be paid from 60 days after November 30, 2015 to
March 31, 2016; and |
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(b) |
all outstanding principal and interest under the
non-negotiable promissory note dated November 30, 2015 to be due and
payable from 60 days after November 30, 2015 to March 31,
2016. |
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 of this current report
on Form 8-K is responsive to this item.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this current report
on Form 8-K is responsive to this item.
Item 3.03 Material Modification to Rights of Security
Holders.
The information contained in Item 5.03 of this current report
on Form 8-K is responsive to this item.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On January 20, 2016, we amended our 2013 Equity Incentive Plan
to increase the number of shares of stock of our company available for the grant
of awards under the plan from 700,000 shares (35,000,000 shares prior to the
fifty for one reverse stock split, which became effective as of December 30,
2015) to 7,700,000 shares.
Item 5.03 Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
On January 21, 2016, we amended our articles of incorporation
to increase the number of authorized shares of our common stock from 22,500,000
to 200,000,000 by filing a certificate of amendment to articles of incorporation
with the Secretary of State of the State of Nevada. As a result, the aggregate
number of shares that we have the authority to issue is 300,000,000, of which
200,000,000 shares are common stock, with a par value of $0.001 per share, and
100,000,000 shares are preferred stock, with a par value of $0.001 per share.
On January 22, 2016, we amended the certificate of designation
for our Series A Preferred Stock by filing an amendment to certificate of
designation with the Secretary of State of the State of Nevada. We amended the
certificate of designation for our Series A Preferred Stock by deleting Section
2.2 of the certificate of designation, which proportionately increases or
decreases the number of votes per share of Series A Preferred Stock in the event
of any dividend or other distribution on our common stock payable in our common
stock or a subdivision or consolidation of the outstanding shares of our common
stock. Accordingly, holders of Series A Preferred Stock will have 10 votes per
share of Series A Preferred Stock, instead of 0.2 votes per share of Series A
Preferred Stock.
As a result of the amendment to the certificate of designation
for our Series A Preferred Stock, except with respect to matters which adversely
affect the holders of Series A Preferred Stock, as required by law, or as
required by the articles of incorporation, the holders of Series A Preferred and
the holders of common stock of our company, are entitled to notice of any
stockholders meeting and to vote as a single class upon any matter submitted to
the stockholders for a vote, on the following basis: (a) holders of common stock
will have one vote per share of common stock held by them; and holders of Series
A Preferred Stock will have 10 votes per share of Series A Preferred Stock
(instead of 0.2 votes per share of Series A Preferred Stock, which was lowered
from 10 votes per share of Series A Preferred Stock as a result of the fifty for
one reverse stock split, which became effective as of December 30, 2015).
Item 5.07 Submission of Matters to a Vote of Security
Holders.
On January 21, 2016, stockholders of our company approved, by
written consents, an amendment to the articles of incorporation of our company
to increase the number of authorized shares of our common stock from 22,500,000
to 200,000,000.
We received written consents representing 20,776,000 votes from
the holders of shares of our common stock and our Series A Preferred Stock
voting as a single class, representing approximately 61% of the voting power of
our outstanding common stock and our outstanding Series A Preferred Stock voting
as a single class as of the record date (January 12, 2016). On January 21, 2016,
there were no written consents received by our company representing a vote
against, abstention or broker non-vote with respect to the proposal.
On January 22, 2016, all of holders of our Series A Preferred
Stock approved, by written consents, an amendment to the certificate of
designation for our Series A Preferred Stock to delete Section 2.2 of the
certificate of designation so that holders of Series A Preferred Stock will have
10 votes per share of Series A Preferred Stock.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE ALKALINE WATER COMPANY INC.
/s/ Richard A.
Wright |
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Richard A. Wright |
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Vice-President, Secretary, Treasurer and Director |
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January 25, 2016 |
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THE ALKALINE WATER COMPANY INC.
2013 EQUITY
INCENTIVE PLAN
1. Purpose;
Eligibility.
1.1 General
Purpose. The name of this plan is The Alkaline Water Company Inc. 2013
Equity Incentive Plan (the Plan). The purposes of the Plan are to (a)
enable The Alkaline Water Company Inc., a Nevada corporation (the
Company), and any Affiliate to attract and retain the types of
Employees, Consultants and Directors who will contribute to the Companys long
range success; (b) provide incentives that align the interests of Employees,
Consultants and Directors with those of the shareholders of the Company; and (c)
promote the success of the Companys business.
1.2 Eligible Award
Recipients. The persons eligible to receive Awards are the Employees,
Consultants and Directors of the Company and its Affiliates and such other
individuals designated by the Committee who are reasonably expected to become
Employees, Consultants and Directors after the receipt of Awards.
1.3 Available
Awards. Awards that may be granted under the Plan include: (a) Incentive
Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights,
(d) Restricted Awards and (e) Performance Compensation Awards.
2.
Definitions.
Affiliate means a corporation or other entity that, directly or through
one or more intermediaries, controls, is controlled by or is under common
control with, the Company.
Applicable Laws means the requirements related to or implicated by the
administration of the Plan under applicable state corporate law, United States
federal and state securities laws, the Code, any stock exchange or quotation
system on which the shares of Common Stock are listed or quoted, and the
applicable laws of any foreign country or jurisdiction where Awards are granted
under the Plan.
Award means any right granted under the Plan, including an Incentive
Stock Option, a Non-qualified Stock Option, a Stock Appreciation Right, a
Restricted Award, or a Performance Compensation Award.
Award Agreement means a written agreement, contract, certificate or
other instrument or document evidencing the terms and conditions of an
individual Award granted under the Plan which may, in the discretion of the
Company, be transmitted electronically to any Participant. Each Award Agreement
shall be subject to the terms and conditions of the Plan.
Beneficial Owner has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular person (as that term is used in Section 13(d)(3)
of the Exchange Act), such person shall be deemed to have beneficial ownership
of all securities that such person has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms Beneficially Owns and
Beneficially Owned have a corresponding meaning.
-2-
Board means the Board of Directors of the Company, as constituted at
any time.
Cause means: With respect to any Employee or Consultant:
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(a) |
If the Employee or Consultant is a party to an employment
or service agreement with the Company or its Affiliates and such agreement
provides for a definition of Cause or other similar term, the definition
contained therein; or |
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(b) |
If no such agreement exists, or if such agreement does
not define Cause or other similar term: (i) the commission of, or plea of
guilty or no contest to, a felony or a crime involving moral turpitude or
the commission of any other act involving willful malfeasance or material
fiduciary breach with respect to the Company or an Affiliate; (ii) conduct
that results in or is reasonably likely to result in harm to the
reputation or business of the Company or any of its Affiliates; (iii)
gross negligence or willful misconduct with respect to the Company or an
Affiliate; or (iv) material violation of state or federal securities
laws. |
With respect to any Director, a
determination by a majority of the disinterested Board members that the Director
has engaged in any of the following:
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(a) |
malfeasance in office; |
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(b) |
gross misconduct or neglect; |
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(c) |
false or fraudulent misrepresentation inducing the
directors appointment; |
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(d) |
wilful conversion of corporate funds; or |
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(e) |
repeated failure to participate in Board meetings on a
regular basis despite having received proper notice of the meetings in
advance. |
The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to
whether a Participant has been discharged for Cause.
Change in Control
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(a) |
The direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of the
properties or assets of the Company and its subsidiaries, taken as a
whole, to any Person that is not a subsidiary of the Company; |
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(b) |
The Incumbent Directors cease for any reason to
constitute at least a majority of the Board; |
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(c) |
The date which is 10 business days prior to the
consummation of a complete liquidation or dissolution of the
Company; |
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(d) |
The acquisition by any Person of Beneficial Ownership of
50% or more (on a fully diluted basis) of either (i) the then outstanding
shares of Common Stock of the Company, taking into account as outstanding for this
purpose such Common Stock issuable upon the exercise of options or
warrants, the conversion of convertible stock or debt, and the exercise of
any similar right to acquire such Common Stock (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 Plan, the
following acquisitions shall not constitute a Change in Control: (A) any
acquisition by the Company or any Affiliate, (B) any acquisition by any
employee benefit plan sponsored or maintained by the Company or any
subsidiary, (C) any acquisition which complies with clauses, (i), (ii) and
(iii) of subsection (e) of this definition or (D) in respect of an Award
held by a particular Participant, any acquisition by the Participant or
any group of persons including the Participant (or any entity controlled
by the Participant or any group of persons including the Participant);
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-3-
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(e) |
The consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving the Company that requires the approval of the
Companys shareholders, whether for such transaction or the issuance of
securities in the transaction (a Business Combination), unless
immediately following such Business Combination: (i) more than 50% of the
total voting power of (A) the entity resulting from such Business
Combination (the Surviving Company), or (B) if applicable, the
ultimate parent entity that directly or indirectly has beneficial
ownership of sufficient voting securities eligible to elect a majority of
the members of the board of directors (or the analogous governing body) of
the Surviving Company (the Parent Company), is represented by the
Outstanding Company Voting Securities that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by
shares into which the Outstanding Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the
holders thereof is in substantially the same proportion as the voting
power of the Outstanding Company Voting Securities among the holders
thereof immediately prior to the Business Combination; (ii) no Person
(other than any employee benefit plan sponsored or maintained by the
Surviving Company or the Parent Company) is or becomes the Beneficial
Owner, directly or indirectly, of 50% or more of the total voting power of
the outstanding voting securities eligible to elect members of the board
of directors of the Parent Company (or the analogous governing body) (or,
if there is no Parent Company, the Surviving Company); and (iii) at least
a majority of the members of the board of directors (or the analogous
governing body) of the Parent Company (or, if there is no Parent Company,
the Surviving Company) following the consummation of the Business
Combination were Board members at the time of the Boards approval of the
execution of the initial agreement providing for such Business
Combination. |
Code means the Internal Revenue Code of 1986, as it may be amended from
time to time. Any reference to a section of the Code shall be deemed to include
a reference to any regulations promulgated thereunder.
Committee means the Board or a committee of one or more members of the
Board appointed by the Board to administer the Plan in accordance with Section
3.3 and Section 3.4.
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Common Stock means the common stock, $0.001 par value per share, of the
Company, the preferred stock, $0.001 par value per share, of the Company, or
such other securities of the Company as may be designated by the Committee from
time to time in substitution thereof.
Company means The Alkaline Water Company Inc., a Nevada corporation,
and any successor thereto.
Consultant means any individual who is engaged by the Company or any
Affiliate to render consulting or advisory services.
Continuous Service means that the Participants service with the
Company or an Affiliate, whether as an Employee, Consultant or Director, is not
interrupted or terminated. The Participants Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participants Continuous Service; provided further that if any Award is
subject to Section 409A of the Code, this sentence shall only be given effect to
the extent consistent with Section 409A of the Code. For example, a change in
status from an Employee of the Company to a Director of an Affiliate will not
constitute an interruption of Continuous Service. The Committee or its delegate,
in its sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal or family
leave of absence.
Covered Employee has the same meaning as set forth in Section 162(m)(3)
of the Code, as interpreted by Internal Revenue Service.
Director means a member of the Board.
Disability means that the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment; provided, however, for purposes of determining the term of an
Incentive Stock Option pursuant to Section 6.9 hereof, the term Disability shall
have the meaning ascribed to it under Section 22(e)(3) of the Code. The
determination of whether an individual has a Disability shall be determined
under procedures established by the Committee. Except in situations where the
Committee is determining Disability for purposes of the term of an Incentive
Stock Option pursuant to Section 6.9 hereof within the meaning of Section
22(e)(3) of the Code, the Committee may rely on any determination that a
Participant is disabled for purposes of benefits under any long-term disability
plan maintained by the Company or any Affiliate in which a Participant
participates.
Disqualifying Disposition has the meaning set forth in Section 14.11.
Effective Date shall mean the date as of which this Plan is adopted by
the Board.
Employee means any person, including an Officer or Director, employed
by the Company or an Affiliate; provided, that, for purposes of determining
eligibility to receive Incentive Stock Options, an Employee shall mean an
employee of the Company or a parent or subsidiary corporation within the meaning
of IRC Section 424. Mere service as a Director or payment of a directors fee by
the Company or an Affiliate shall not be sufficient to constitute employment
by the Company or an Affiliate.
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Exchange Act means the Securities Exchange Act of 1934, as amended.
Fair Market Value means, as of any date, the value of the Common Stock
as determined below. If the Common Stock is listed or quoted on any established
stock exchange or public market, including without limitation, the New York
Stock Exchange, the NASDAQ Stock Market, the OTC Bulletin Board operated by the
Financial Industry Regulatory Authority, or one of marketplaces operated by the
OTC Markets Group, the Fair Market Value shall be the closing price of a share
of Common Stock (or if no sales were reported the closing price on the date
immediately preceding such date) as quoted on such exchange or public market on
the day of determination, as reported in the source as the Committee deems
reliable. In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Committee and such
determination shall be conclusive and binding on all persons.
Free Standing Rights has the meaning set forth in Section 7.1(a).
Good Reason means:
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(a) |
If an Employee or Consultant is a party to an employment
or service agreement with the Company or its Affiliates and such agreement
provides for a definition of Good Reason or other similar term, the
definition contained therein; or |
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If no such agreement exists or if such agreement does not
define Good Reason, the occurrence of one or more of the following without
the Participants express written consent, which circumstances are not
remedied by the Company within thirty (30) days of its receipt of a
written notice from the Participant describing the applicable
circumstances (which notice must be provided by the Participant within
ninety (90) days of the Participants knowledge of the applicable
circumstances): (i) any material, adverse change in the Participants
duties, responsibilities, authority, title, status or reporting structure;
(ii) a material reduction in the Participants base salary or bonus
opportunity; or (iii) a geographical relocation of the Participants
principal office location by more than fifty (50)
miles. |
Grant Date means the date on which the Committee adopts a resolution,
or takes other appropriate action, expressly granting an Award to a Participant
that specifies the key terms and conditions of the Award or, if a later date is
set forth in such resolution, then such date as is set forth in such resolution.
Incentive Stock Option means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
Incumbent Directors means individuals who, on the Effective Date,
constitute the Board, provided that any individual becoming a Director
subsequent to the Effective Date whose election or nomination for election to
the Board was approved by a vote of at least two- thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
Director without objection to such nomination) shall be an Incumbent Director.
No individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to Directors or
as a result of any other actual or threatened solicitation of proxies by or on
behalf of any person other than the Board shall be an Incumbent Director.
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Negative Discretion means the discretion authorized by the Plan to be
applied by the Committee to eliminate or reduce the size of a Performance
Compensation Award in accordance with Section 7.3(d)(iv) of the Plan; provided,
that, the exercise of such discretion would not cause the Performance
Compensation Award to fail to qualify as performance- based compensation under
Section 162(m) of the Code.
Non-Employee Director means a Director who is a non-employee director
within the meaning of Rule 16b-3.
Non-qualified Stock Option means an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock Option.
Officer means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
Option means an Incentive Stock Option or a Non-qualified Stock Option
granted pursuant to the Plan.
Optionholder means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.
Option Exercise Price means the price at which a share of Common Stock
may be purchased upon the exercise of an Option.
Outside Director means a Director who is an outside director within
the meaning of Section 162(m) of the Code and Treasury Regulations Section 1.162
-27(e)(3) or any successor to such statute and regulation.
Participant means an eligible person to whom an Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Award.
Performance Compensation Award means any Award designated by the
Committee as a Performance Compensation Award pursuant to Section 7.3 of the
Plan.
Performance Criteria means the criterion or criteria that the Committee
shall select for purposes of establishing the Performance Goal(s) for a
Performance Period with respect to any Performance Compensation Award under the
Plan. The Performance Criteria that will be used to establish the Performance
Goal(s) shall be based on the attainment of specific levels of performance of
the Company (or Affiliate, division, business unit or operational unit of the
Company) and shall be limited to the following:
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net earnings or net income (before or after
taxes); |
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(b) |
basic or diluted earnings per share (before or after
taxes); |
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(c) |
net revenue or net revenue growth; |
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(d) |
gross revenue; |
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(e) |
gross profit or gross profit growth; |
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(f) |
net operating profit (before or after
taxes); |
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return on assets, capital, invested capital, equity, or
sales; |
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(h) |
cash flow (including, but not limited to, operating cash
flow, free cash flow, and cash flow return on capital); |
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earnings before or after taxes, interest, depreciation
and/or amortization; |
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gross or operating margins; |
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improvements in capital structure; |
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budget and expense management; |
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(m) |
productivity ratios; |
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(n) |
economic value added or other value added
measurements; |
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share price (including, but not limited to, growth
measures and total shareholder return); |
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expense targets; |
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margins; |
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operating efficiency; |
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working capital targets; |
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(t) |
enterprise value; |
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(u) |
safety record; and |
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completion of acquisitions or business
expansion. |
Any one or more of the Performance Criteria may be used on an
absolute or relative basis to measure the performance of the Company and/or an
Affiliate as a whole or any division, business unit or operational unit of the
Company and/or an Affiliate or any combination thereof, as the Committee may
deem appropriate, or as compared 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 Committee may select Performance Criterion
(o) above as compared to various stock market indices. The Committee also has
the authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goals pursuant to the Performance Criteria specified
in this paragraph. To the extent required under Section 162 (m) of the Code, the
Committee shall, within the first 90 days of a Performance Period (or, if longer
or shorter, within the maximum period allowed under Section 162(m) of the Code),
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period. In the event that
applicable tax and/or securities laws change to permit the Committee discretion
to alter the governing Performance Criteria without obtaining shareholder
approval of such changes, the Committee shall have sole discretion to make such
changes without obtaining shareholder approval.
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Performance Formula means, for a Performance Period, the one or more
objective formulas applied against the relevant Performance Goal to determine,
with regard to the Performance Compensation Award of a particular Participant,
whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period.
Performance Goals means, for a Performance Period, the one or more
goals established by the Committee for the Performance Period based upon the
Performance Criteria. The Committee is authorized at any time during the first
90 days of a Performance Period (or, if longer or shorter, within the maximum
period allowed under Section 162(m) of the Code), or at any time thereafter (but
only to the extent the exercise of such authority after such period would not
cause the Performance Compensation Awards granted to any Participant for the
Performance Period to fail to qualify as performance-based compensation under
Section 162(m) of the Code), in its sole and absolute discretion, to adjust or
modify the calculation of a Performance Goal for such Performance Period to the
extent permitted under Section 162(m) of the Code in order to prevent the
dilution or enlargement of the rights of Participants based on the following
events:
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asset write-downs; |
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litigation or claim judgments or settlements; |
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the effect of changes in tax laws, accounting principles,
or other laws or regulatory rules affecting reported results; |
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any reorganization and restructuring programs; |
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(e) |
extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 (or any successor or
pronouncement thereto) and/or in managements discussion and analysis of
financial condition and results of operations appearing in the Companys
annual report to shareholders for the applicable year; |
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(f) |
acquisitions or divestitures; |
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(g) |
any other specific unusual or nonrecurring events, or
objectively determinable category thereof; |
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(h) |
foreign exchange gains and losses; and |
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(i) |
a change in the Companys fiscal
year. |
Performance Period means the one or more periods of time not less than
one fiscal quarter in duration, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participants right to and the payment of a Performance
Compensation Award.
Permitted Transferee means:
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(a) |
a member of the Optionholders immediate family (child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister- in-law, including adoptive
relationships), any person sharing the Optionholders household (other
than a tenant or employee), a trust in which these persons have more than
50% of the beneficial interest, a foundation in which these persons (or
the Optionholder) control the management of assets, and any other entity
in which these persons (or the Optionholder) own more than 50% of the
voting interests; |
-9-
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(b) |
third parties designated by the Committee in connection
with a program established and approved by the Committee pursuant to which
Participants may receive a cash payment or other consideration in
consideration for the transfer of a Non-qualified Stock Option;
and |
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(c) |
such other transferees as may be permitted by the
Committee in its sole discretion. |
Plan means this The Alkaline Water Company Inc. 2013 Equity Incentive
Plan, as amended and/or amended and restated from time to time.
Related Rights has the meaning set forth in Section 7.1(a) .
Restricted Award means any Award granted pursuant to Section 7.2(a) .
Restricted Period has the meaning set forth in Section 7.2(a) .
Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.
Securities Act means the Securities Act of 1933, as amended.
Stock Appreciation Right means the right pursuant to an Award granted
under Section 7.1 to receive, upon exercise, an amount payable in cash or shares
equal to the number of shares subject to the Stock Appreciation Right that is
being exercised multiplied by the excess of (a) the Fair Market Value of a share
of Common Stock on the date the Award is exercised, over (b) the exercise price
specified in the Stock Appreciation Right Award Agreement.
Stock for Stock Exchange has the meaning set forth in Section 6.3.
Ten Percent Shareholder means a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates.
-10-
3. Administration.
3.1 Authority of Committee. The Plan shall be administered initially by the
Board, except that the Board may, in its discretion, establish a committee
composed of two (2) or more members of the Board to administer the Plan, which
committee may be an executive, compensation or other committee, including a
separate committee especially created for this purpose. Subject to the terms of
the Plan, the Committees charter and Applicable Laws, and in addition to other express powers and authorization conferred by
the Plan, the Committee shall have the authority:
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(a) |
to construe and interpret the Plan and apply its
provisions; |
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(b) |
to promulgate, amend, and rescind rules and regulations
relating to the administration of the Plan; |
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(c) |
to authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of the
Plan; |
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(d) |
to delegate its authority to one or more Officers of the
Company with respect to Awards that do not involve Covered Employees or
insiders within the meaning of Section 16 of the Exchange Act; |
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(e) |
to determine when Awards are to be granted under the Plan
and the applicable Grant Date; |
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(f) |
from time to time to select, subject to the limitations
set forth in this Plan, those Participants to whom Awards shall be
granted; |
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(g) |
to determine the number of shares of Common Stock to be
made subject to each Award; |
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(h) |
to determine whether each Option is to be an Incentive
Stock Option or a Non- qualified Stock Option; |
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(i) |
to prescribe the terms and conditions of each Award,
including, without limitation, the exercise price and medium of payment
and vesting provisions, and to specify the provisions of the Award
Agreement relating to such grant; |
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(j) |
to designate an Award (including a cash bonus) as a
Performance Compensation Award and to select the Performance Criteria that
will be used to establish the Performance Goals; |
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(k) |
to amend any outstanding Awards, including for the
purpose of modifying the time or manner of vesting, or the term of any
outstanding Award; provided, however, that if any such amendment impairs a
Participants rights or increases a Participants obligations under his or
her Award or creates or increases a Participants federal income tax
liability with respect to an Award, such amendment shall also be subject
to the Participants consent; |
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(l) |
to determine the duration and purpose of leaves of
absences which may be granted to a Participant without constituting
termination of their employment for purposes of the Plan, which periods
shall be no shorter than the periods generally applicable to Employees
under the Companys employment policies; |
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(m) |
to make decisions with respect to outstanding Awards that
may become necessary upon a change in corporate control or an event that
triggers anti- dilution adjustments; |
-11-
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(n) |
to interpret, administer, reconcile any inconsistency in,
correct any defect in and/or supply any omission in the Plan and any
instrument or agreement relating to, or Award granted under, the Plan;
and |
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(o) |
to exercise discretion to make any and all other
determinations which it determines to be necessary or advisable for the
administration of the Plan. |
The Committee also may modify the purchase price or the
exercise price of any outstanding Award, provided that shareholder approval
shall be required before the repricing is effective if such shareholder approval
is necessary to satisfy any Applicable Laws.
3.2 Committee
Decisions Final. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final and binding on the Company and the
Participants, unless such decisions are determined by a court having
jurisdiction to be arbitrary and capricious.
3.3 Delegation.
The Committee, or if no Committee has been appointed, the Board, may delegate
administration of the Plan to a committee or committees of one or more members
of the Board, and the term Committee shall apply to any person or
persons to whom such authority has been delegated. The Committee shall have the
power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to the Board or
the Committee shall thereafter be to the committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.
The members of the Committee shall be appointed by and serve at the pleasure of
the Board. From time to time, the Board may increase or decrease the size of the
Committee, add additional members to, remove members (with or without cause)
from, appoint new members in substitution therefor, and fill vacancies, however
caused, in the Committee. The Committee shall act pursuant to a vote of the
majority of its members or, in the case of a Committee comprised of only two
members, the unanimous consent of its members, whether present or not, or by the
written consent of the majority of its members and minutes shall be kept of all
of its meetings and copies thereof shall be provided to the Board. Subject to
the limitations prescribed by the Plan and the Board, the Committee may
establish and follow such rules and regulations for the conduct of its business
as it may determine to be advisable.
3.4
Committee Composition. If the Board establishes a committee to administer
the Plan, except as otherwise determined by the Board, the Committee shall
consist solely of two or more Non-Employee Directors who are also Outside
Directors. The Board shall have discretion to determine whether or not it
intends to comply with the exemption requirements of Rule 16b-3 and/or Section
162(m) of the Code. However, if the Board intends to satisfy such exemption
requirements, with respect to Awards to any Covered Employee and with respect to
any insider subject to Section 16 of the Exchange Act, the Committee shall be a
compensation committee of the Board that at all times consists solely of two or
more Non-Employee Directors who are also Outside Directors. Within the scope of
such authority, the Board or the Committee may (a) delegate to a committee of
one or more members of the Board who are not Outside Directors the authority to
grant Awards to eligible persons who are either (i) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of
income resulting from such Award or (ii) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code or (b) delegate to a
committee of one or more members of the Board who are not Non-Employee Directors
the authority to grant Awards to eligible persons who are not then subject to
Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted under the Plan
in the event Awards are granted under the Plan by a compensation committee of
the Board that does not at all times consist solely of two or more Non-Employee
Directors who are also Outside Directors.
-12-
3.5
Indemnification. In addition to such other rights of indemnification as
they may have as Directors or members of the Committee, and to the extent
allowed by Applicable Laws, the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys fees, actually incurred in
connection with any action, suit or proceeding or in connection with any appeal
therein, to which the Committee may be party by reason of any action taken or
failure to act under or in connection with the Plan or any Award granted under
the Plan, and against all amounts paid by the Committee in settlement thereof
(provided, however, that the settlement has been approved by the Company, which
approval shall not be unreasonably withheld) or paid by the Committee in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee did not act in good faith and in a manner which
such person reasonably believed to be in the best interests of the Company, or
in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within 60 days after
institution of any such action, suit or proceeding, such Committee shall, in
writing, offer the Company the opportunity at its own expense to handle and
defend such action, suit or proceeding.
4. Shares
Subject to the Plan.
4.1
Subject to adjustment in accordance with Section 11, a total of 7,700,000 shares
of Common Stock shall be available for the grant of Awards under the Plan.
During the terms of the Awards, the Company shall keep available at all times
the number of shares of Common Stock required to satisfy such Awards.
4.2
Shares of Common Stock available for distribution under the Plan may consist, in
whole or in part, of authorized and unissued shares, treasury shares or shares
reacquired by the Company in any manner.
4.3
Any shares of Common Stock subject to an Award that is canceled, forfeited or
expires prior to exercise or realization, either in full or in part, shall again
become available for issuance under the Plan. Notwithstanding anything to the
contrary contained herein: shares subject to an Award under the Plan shall not
again be made available for issuance or delivery under the Plan if such shares
are (a) shares tendered in payment of an Option, (b) shares delivered or
withheld by the Company to satisfy any tax withholding obligation, or (c) shares
covered by a stock-settled Stock Appreciation Right or other Awards that were
not issued upon the settlement of the Award.
5.
Eligibility.
5.1
Eligibility for Specific Awards. Incentive Stock Options may be granted
only to Employees. Awards other than Incentive Stock Options may be granted to
Employees, Consultants and Directors and those individuals whom the Committee
determines are reasonably expected to become Employees, Consultants and
Directors following the Grant Date.
5.2
Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted
an Incentive Stock Option unless the Option Exercise Price is at least 110% of
the Fair Market Value of the Common Stock at the Grant Date and the Option is
not exercisable after the expiration of five years from the Grant Date.
-13-
6.
Option Provisions.
Each Option granted under the Plan shall be evidenced by an Award Agreement.
Each Option so granted shall be subject to the conditions set forth in this
Section 6, and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement. All Options shall be separately
designated Incentive Stock Options or Non-qualified Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option. Notwithstanding the foregoing, the Company shall have no liability to
any Participant or any other person if an Option designated as an Incentive
Stock Option fails to qualify as such at any time or if an Option is determined
to constitute nonqualified deferred compensation within the meaning of Section
409A of the Code and the terms of such Option do not satisfy the requirements of
Section 409A of the Code. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions: 6.1 Term. Subject to the provisions of Section 5.2
regarding Ten Percent Shareholders, no Incentive Stock Option shall be
exercisable after the expiration of 10 years from the Grant Date. The term of a
Non-qualified Stock Option granted under the Plan shall be determined by the
Committee; provided, however, no Non-qualified Stock Option shall be exercisable
after the expiration of 10 years from the Grant Date.
6.2 Exercise
Price of an Incentive Stock Option. Subject to the provisions of Section 5.2
regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive
Stock Option shall be not less than 100% of the Fair Market Value of the Common
Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an
Incentive Stock Option may be granted with an Option Exercise Price lower than
that set forth in the preceding sentence if such Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.
6.3
Consideration. The Option Exercise Price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (a) in cash or by certified or bank check at
the time the Option is exercised or (b) in the discretion of the Committee, upon
such terms as the Committee shall approve, the Option Exercise Price may be
paid: (i) by delivery to the Company of other Common Stock, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of delivery equal
to the Option Exercise Price (or portion thereof) due for the number of shares
being acquired, or by means of attestation whereby the Participant identifies
for delivery specific shares of Common Stock that have an aggregate Fair Market
Value on the date of attestation equal to the Option Exercise Price (or portion
thereof) and receives a number of shares of Common Stock equal to the difference
between the number of shares thereby purchased and the number of identified
attestation shares of Common Stock (a Stock for Stock Exchange); (ii) a
cashless exercise program established with a broker; (iii) by reduction in the
number of shares of Common Stock otherwise deliverable upon exercise of such
Option with a Fair Market Value equal to the aggregate Option Exercise Price at
the time of exercise; (iv) any combination of the foregoing methods; or (v) in
any other form of legal consideration that may be acceptable to the Committee.
Unless otherwise specifically provided in the Option, the exercise price of
Common Stock acquired pursuant to an Option that is paid by delivery (or
attestation) to the Company of other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the Company that
have been held for more than six months (or such longer or shorter period of
time required to avoid a charge to earnings for financial accounting purposes).
Notwithstanding the foregoing, during any period for which the Common Stock is
publicly traded an exercise by a Director or Officer that involves or may
involve a direct or indirect extension of credit or arrangement of an extension
of credit by the Company, directly or indirectly, in violation of Section 402(a)
of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award
under this Plan.
-14-
6.4 Transferability
of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
6.5
Transferability of a Non-qualified Stock Option. A Non-qualified Stock
Option may, in the sole discretion of the Committee, be transferable to a
Permitted Transferee, upon written approval by the Committee to the extent
provided in the Award Agreement. If the Non- qualified Stock Option does not
provide for transferability, then the Non-qualified Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
6.6
Vesting of Options. Each Option may, but need not, vest and therefore
become exercisable in periodic installments that may, but need not, be equal.
The Option may be subject to such other terms and conditions on the time or
times when it may be exercised (which may be based on performance or other
criteria) as the Committee may deem appropriate. The vesting provisions of
individual Options may vary. No Option may be exercised for a fraction of a
share of Common Stock. The Committee may, but shall not be required to, provide
for an acceleration of vesting and exercisability in the terms of any Award
Agreement upon the occurrence of a specified event.
6.7
Termination of Continuous Service. Unless otherwise provided in an Award
Agreement or in an employment agreement the terms of which have been approved by
the Committee, in the event an Optionholders Continuous Service terminates
(other than upon the Optionholders death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination) but only within such period
of time ending on the earlier of (a) the date three months following the
termination of the Optionholders Continuous Service or (b) the expiration of
the term of the Option as set forth in the Award Agreement; provided that, if
the termination of Continuous Service is by the Company for Cause, all
outstanding Options (whether or not vested) shall immediately terminate and
cease to be exercisable. If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Award Agreement, the
Option shall terminate.
6.8
Extension of Termination Date. An Optionholders Award Agreement may also
provide that if the exercise of the Option following the termination of the
Optionholders Continuous Service for any reason would be prohibited at any time
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act or any other state or federal securities
law or the rules of any securities exchange or interdealer quotation system,
then the Option shall terminate on the earlier of (a) the expiration of the term
of the Option in accordance with Section 6.1 or (b) the expiration of a period
after termination of the Participants Continuous Service that is three months
after the end of the period during which the exercise of the Option would be in
violation of such registration or other securities law requirements.
-15-
6.9
Disability of Optionholder. Unless otherwise provided in an Award
Agreement, in the event that an Optionholders Continuous Service terminates as
a result of the Optionholders Disability, the Optionholder may exercise his or
her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination), but only within such period of time
ending on the earlier of (a) the date 12 months following such termination or
(b) the expiration of the term of the Option as set forth in the Award
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified herein or in the Award Agreement, the Option
shall terminate.
6.10 Death
of Optionholder. Unless otherwise provided in an Award Agreement, in the
event an Optionholders Continuous Service terminates as a result of the
Optionholders death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholders estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholders death, but only within the period ending on the
earlier of (a) the date 12 months following the date of death or (b) the
expiration of the term of such Option as set forth in the Award Agreement. If,
after the Optionholders death, the Option is not exercised within the time
specified herein or in the Award Agreement, the Option shall terminate.
6.11
Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds $100,000, the Options or portions thereof which exceed
such limit (according to the order in which they were granted) shall be treated
as Non-qualified Stock Options.
7.
Provisions of Awards Other Than Options.
7.1 Stock
Appreciation Rights.
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(a) |
General. Each Stock Appreciation Right granted
under the Plan shall be evidenced by an Award Agreement. Each Stock
Appreciation Right so granted shall be subject to the conditions set forth
in this Section 7.1, and to such other conditions not inconsistent with
the Plan as may be reflected in the applicable Award Agreement. Stock
Appreciation Rights may be granted alone (Free Standing Rights)
or in tandem with an Option granted under the Plan (Related
Rights). |
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(b) |
Grant Requirements. Any Related Right that relates
to a Non-qualified Stock Option may be granted at the same time the Option
is granted or at any time thereafter but before the exercise or expiration
of the Option. Any Related Right that relates to an Incentive Stock Option
must be granted at the same time the Incentive Stock Option is
granted. |
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(c) |
Term of Stock Appreciation Rights. The term of a
Stock Appreciation Right granted under the Plan shall be determined by the
Committee; provided, however, no Stock Appreciation Right shall be
exercisable later than the tenth anniversary of the Grant Date. |
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(d) |
Vesting of Stock Appreciation Rights. Each Stock
Appreciation Right may, but need not, vest and therefore become
exercisable in periodic installments that may, but need not, be equal. The
Stock Appreciation Right may be subject to such other terms and conditions
on the time or times when it may be exercised as the Committee may deem
appropriate. The vesting provisions of individual Stock Appreciation
Rights may vary. No Stock Appreciation Right may be exercised for a
fraction of a share of Common Stock. The Committee may, but shall not be
required to, provide for an acceleration of vesting and exercisability in
the terms of any Stock Appreciation Right upon the occurrence of a
specified event. |
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(e) |
Exercise and Payment. Upon exercise of a Stock
Appreciation Right, the holder shall be entitled to receive from the
Company an amount equal to the number of shares of Common Stock subject to
the Stock Appreciation Right that is being exercised multiplied by the
excess of (i) the Fair Market Value of a share of Common Stock on the date
the Award is exercised, over (ii) the exercise price specified in the
Stock Appreciation Right or related Option. Payment with respect to the
exercise of a Stock Appreciation Right shall be made on the date of
exercise. Payment shall be made in the form of shares of Common Stock
(with or without restrictions as to substantial risk of forfeiture and
transferability, as determined by the Committee in its sole discretion),
cash or a combination thereof, as determined by the Committee. |
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(f) |
Exercise Price. The exercise price of a Free
Standing Stock Appreciation Right shall be determined by the Committee. A
Related Right granted simultaneously with or subsequent to the grant of an
Option and in conjunction therewith or in the alternative thereto shall
have the same exercise price as the related Option, shall be transferable
only upon the same terms and conditions as the related Option, and shall
be exercisable only to the same extent as the related Option; provided,
however, that a Stock Appreciation Right, by its terms, shall be
exercisable only when the Fair Market Value per share of Common Stock
subject to the Stock Appreciation Right and related Option exceeds the
exercise price per share thereof and no Stock Appreciation Rights may be
granted in tandem with an Option unless the Committee determines that the
requirements of Section 7.1(b) are satisfied. |
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(g) |
Reduction in the Underlying Option Shares. Upon
any exercise of a Related Right, the number of shares of Common Stock for
which any related Option shall be exercisable shall be reduced by the
number of shares for which the Stock Appreciation Right has been
exercised. The number of shares of Common Stock for which a Related Right
shall be exercisable shall be reduced upon any exercise of any related
Option by the number of shares of Common Stock for which such Option has
been exercised. |
-17-
7.2 Restricted
Awards.
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(a) |
General. A Restricted Award is an Award of actual
shares of Common Stock (Restricted Stock) or hypothetical Common
Stock units (Restricted Stock Units) having a value equal to the
Fair Market Value of an identical number of shares of Common Stock, which
may, but need not, provide that such Restricted Award may not be sold,
assigned, transferred or otherwise disposed of, pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation
or for any other purpose for such period (the Restricted Period)
as the Committee shall determine. Each Restricted Award granted under the
Plan shall be evidenced by an Award Agreement. Each Restricted Award so
granted shall be subject to the conditions set forth in this Section 7.2,
and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement. |
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(b) |
Restricted Stock and Restricted Stock
Units. |
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(i) |
Each Participant granted Restricted Stock shall execute
and deliver to the Company an Award Agreement with respect to the
Restricted Stock setting forth the restrictions and other terms and
conditions applicable to such Restricted Stock. If the Committee
determines that the Restricted Stock shall be held by the Company or in
escrow rather than delivered to the Participant pending the release of the
applicable restrictions, the Committee may require the Participant to
additionally execute and deliver to the Company (A) an escrow agreement
satisfactory to the Committee, if applicable and (B) the appropriate blank
stock power with respect to the Restricted Stock covered by such
agreement. If a Participant fails to execute an agreement evidencing an
Award of Restricted Stock and, if applicable, an escrow agreement and
stock power, the Award shall be null and void. Subject to the restrictions
set forth in the Award, the Participant generally shall have the rights
and privileges of a shareholder as to such Restricted Stock, including the
right to vote such Restricted Stock and the right to receive dividends;
provided that, any cash dividends and stock dividends with respect to the
Restricted Stock shall be withheld by the Company for the Participants
account, and interest may be credited on the amount of the cash dividends
withheld at a rate and subject to such terms as determined by the
Committee. The cash dividends or stock dividends so withheld by the
Committee and attributable to any particular share of Restricted Stock
(and earnings thereon, if applicable) shall be distributed to the
Participant in cash or, at the discretion of the Committee, in shares of
Common Stock having a Fair Market Value equal to the amount of such
dividends, if applicable, upon the release of restrictions on such share
and, if such share is forfeited, the Participant shall have no right to
such dividends. |
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(ii) |
The terms and conditions of a grant of Restricted Stock
Units shall be reflected in an Award Agreement. No shares of Common Stock
shall be issued at the time a Restricted Stock Unit is granted, and the
Company will not be required to set aside a fund for the payment of any
such Award. A Participant shall have no voting rights with respect to any
Restricted Stock Units granted hereunder. At the discretion of
the Committee, each Restricted Stock Unit
(representing one share of Common Stock) may be credited with cash and stock
dividends paid by the Company in respect of one share of Common Stock
(Dividend Equivalents). Dividend Equivalents shall be withheld by the
Company for the Participants account, and interest may be credited on the
amount of cash Dividend Equivalents withheld at a rate and subject to such terms
as determined by the Committee. Dividend Equivalents credited to a Participants
account and attributable to any particular Restricted Stock Unit (and earnings
thereon, if applicable) shall be distributed in cash or, at the discretion of
the Committee, in shares of Common Stock having a Fair Market Value equal to the
amount of such Dividend Equivalents and earnings, if applicable, to the
Participant upon settlement of such Restricted Stock Unit and, if such
Restricted Stock Unit is forfeited, the Participant shall have no right to such
Dividend Equivalents. |
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(i) |
Restricted Stock awarded to a Participant shall be
subject to the following restrictions until the expiration of the
Restricted Period, and to such other terms and conditions as may be set
forth in the applicable Award Agreement: (A) if an escrow arrangement is
used, the Participant shall not be entitled to delivery of the stock
certificate; (B) the shares shall be subject to the restrictions on
transferability set forth in the Award Agreement; (C) the shares shall be
subject to forfeiture to the extent provided in the applicable Award
Agreement; and (D) to the extent such shares are forfeited, the stock
certificates shall be returned to the Company, and all rights of the
Participant to such shares and as a shareholder with respect to such
shares shall terminate without further obligation on the part of the
Company. |
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(ii) |
Restricted Stock Units awarded to any Participant shall
be subject to (A) forfeiture until the expiration of the Restricted
Period, and satisfaction of any applicable Performance Goals during such
period, to the extent provided in the applicable Award Agreement, and to
the extent such Restricted Stock Units are forfeited, all rights of the
Participant to such Restricted Stock Units shall terminate without further
obligation on the part of the Company and (B) such other terms and
conditions as may be set forth in the applicable Award
Agreement. |
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(iii) |
The Committee shall have the authority to remove any or
all of the restrictions on the Restricted Stock and Restricted Stock Units
whenever it may determine that, by reason of changes in Applicable Laws or
other changes in circumstances arising after the date the Restricted Stock
or Restricted Stock Units are granted, such action is
appropriate. |
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(d) |
Restricted Period. With respect to Restricted
Awards, the Restricted Period shall commence on the Grant Date and end at
the time or times set forth on a schedule established by the Committee in
the applicable Award Agreement. |
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No Restricted Award may be granted or settled for a fraction of
a share of Common Stock. The Committee may, but shall not be required to,
provide for an acceleration of vesting in the terms of any Award Agreement upon
the occurrence of a specified event.
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(e) |
Delivery of Restricted Stock and Settlement of
Restricted Stock Units. Upon the expiration of the Restricted Period
with respect to any shares of Restricted Stock, the restrictions set forth
in Section 7.2(c) and the applicable Award Agreement shall be of no
further force or effect with respect to such shares, except as set forth
in the applicable Award Agreement. If an escrow arrangement is used, upon
such expiration, the Company shall deliver to the Participant, or his or
her beneficiary, without charge, the stock certificate evidencing the
shares of Restricted Stock which have not then been forfeited and with
respect to which the Restricted Period has expired (to the nearest full
share) and any cash dividends or stock dividends credited to the
Participants account with respect to such Restricted Stock and the
interest thereon, if any. Upon the expiration of the Restricted Period
with respect to any outstanding Restricted Stock Units, the Company shall
deliver to the Participant, or his or her beneficiary, without charge, one
share of Common Stock for each such outstanding Restricted Stock Unit
(Vested Unit) and cash equal to any Dividend Equivalents credited
with respect to each such Vested Unit in accordance with Section
7.2(b)(ii) hereof and the interest thereon or, at the discretion of the
Committee, in shares of Common Stock having a Fair Market Value equal to
such Dividend Equivalents and the interest thereon, if any; provided,
however, that, if explicitly provided in the applicable Award Agreement,
the Committee may, in its sole discretion, elect to pay cash or part cash
and part Common Stock in lieu of delivering only shares of Common Stock
for Vested Units. If a cash payment is made in lieu of delivering shares
of Common Stock, the amount of such payment shall be equal to the Fair
Market Value of the Common Stock as of the date on which the Restricted
Period lapsed with respect to each Vested Unit. |
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(f) |
Stock Restrictions. Each certificate representing
Restricted Stock awarded under the Plan shall bear a legend in such form
as the Company deems appropriate. |
7.3
Performance Compensation Awards.
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(a) |
General. The Committee shall have the authority,
at the time of grant of any Award described in this Plan (other than
Options and Stock Appreciation Rights granted with an exercise price equal
to or greater than the Fair Market Value per share of Common Stock on the
Grant Date), to designate such Award as a Performance Compensation Award
in order to qualify such Award as performance-based compensation under
Section 162(m) of the Code. In addition, the Committee shall have the
authority to make an Award of a cash bonus to any Participant and
designate such Award as a Performance Compensation Award in order to
qualify such Award as performance-based compensation under Section
162(m) of the Code. |
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(b) |
Eligibility. The Committee will, in its sole
discretion, designate within the first 90 days of a Performance Period
(or, if longer or shorter, within the maximum period allowed under Section
162(m) of the Code) which Participants will be eligible to receive
Performance Compensation Awards in respect of such
Performance Period. However, designation of a Participant eligible to
receive an Award hereunder for a Performance Period shall not in any
manner entitle the Participant to receive payment in respect of any
Performance Compensation Award for such Performance Period. The
determination as to whether or not such Participant becomes entitled to
payment in respect of any Performance Compensation Award shall be decided
solely in accordance with the provisions of this Section 7.3. Moreover,
designation of a Participant eligible to receive an Award hereunder for a
particular Performance Period shall not require designation of such
Participant eligible to receive an Award hereunder in any subsequent
Performance Period and designation of one person as a Participant eligible
to receive an Award hereunder shall not require designation of any other
person as a Participant eligible to receive an Award hereunder in such
period or in any other period. |
-20-
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(c) |
Discretion of Committee with Respect to Performance
Compensation Awards. With regard to a particular Performance Period,
the Committee shall have full discretion to select the length of such
Performance Period (provided any such Performance Period shall be not less
than one fiscal quarter in duration), the type(s) of Performance
Compensation Awards to be issued, the Performance Criteria that will be
used to establish the Performance Goal(s), the kind(s) and/or level(s) of
the Performance Goal(s) that is (are) to apply to the Company and the
Performance Formula. Within the first 90 days of a Performance Period (or,
if longer or shorter, within the maximum period allowed under Section
162(m) of the Code), the Committee shall, with regard to the Performance
Compensation Awards to be issued for such Performance Period, exercise its
discretion with respect to each of the matters enumerated in the
immediately preceding sentence of this Section 7.3(c) and record the same
in writing. |
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(d) |
Payment of Performance Compensation
Awards |
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(i) |
Condition to Receipt of Payment. Unless otherwise
provided in the applicable Award Agreement, a Participant must be employed
by the Company on the last day of a Performance Period to be eligible for
payment in respect of a Performance Compensation Award for such
Performance Period. |
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(ii) |
Limitation. A Participant shall be eligible to
receive payment in respect of a Performance Compensation Award only to the
extent that: (A) the Performance Goals for such period are achieved; and
(B) the Performance Formula as applied against such Performance Goals
determines that all or some portion of such Participants Performance
Compensation Award has been earned for the Performance Period. |
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(iii) |
Certification. Following the completion of a
Performance Period, the Committee shall review and certify in writing
whether, and to what extent, the Performance Goals for the Performance
Period have been achieved and, if so, calculate and certify in writing the
amount of the Performance Compensation Awards earned for the period based
upon the Performance Formula. The Committee shall then determine the
actual size of each Participants Performance Compensation Award for the
Performance Period and, in so doing, may apply Negative Discretion
in accordance with Section 7.3(d)(iv) hereof, if and when it
deems appropriate. |
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(iv) |
Use of Discretion. In determining the actual size
of an individual Performance Compensation Award for a Performance Period,
the Committee may reduce or eliminate the amount of the Performance
Compensation Award earned under the Performance Formula in the Performance
Period through the use of Negative Discretion if, in its sole judgment,
such reduction or elimination is appropriate. The Committee shall not have
the discretion to (A) grant or provide payment in respect of Performance
Compensation Awards for a Performance Period if the Performance Goals for
such Performance Period have not been attained or (B) increase a
Performance Compensation Award above the maximum amount payable under
Section 7.3(d)(i) of the Plan. |
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(v) |
Timing of Award Payments. Performance Compensation
Awards granted for a Performance Period shall be paid to Participants as
soon as administratively practicable following completion of the
certifications required by this Section 7.3. |
8. Securities
Law Compliance.
Each
Award Agreement shall provide that no shares of Common Stock shall be purchased
or sold thereunder unless and until (a) any then applicable requirements of
state or federal laws and regulatory agencies have been fully complied with to
the satisfaction of the Company and its counsel and (b) if required to do so by
the Company, the Participant has executed and delivered to the Company a letter
of investment intent in such form and containing such provisions as the
Committee may require. The Company shall use reasonable efforts to seek to
obtain from each regulatory commission or agency having jurisdiction over the
Plan such authority as may be required to grant Awards and to issue and sell
shares of Common Stock upon exercise of the Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Award or any Common Stock issued or issuable pursuant to any such
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan,
the Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Awards unless and until such authority is
obtained.
9.
Use of Proceeds from Stock.
Proceeds from the sale of Common Stock pursuant to Awards, or
upon exercise thereof, shall constitute general funds of the Company.
10. Miscellaneous.
10.1
Acceleration of Exercisability and Vesting. The Committee shall have the
power to accelerate the time at which an Award may first be exercised or the
time during which an Award or any part thereof will vest in accordance with the
Plan, notwithstanding the provisions in the Award stating the time at which it
may first be exercised or the time during which it will vest.
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10.2
Shareholder Rights. Except as provided in the Plan or an Award Agreement,
no Participant shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares of Common Stock subject to such Award
unless and until such Participant has satisfied all requirements for exercise of
the Award pursuant to its terms and no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions of other rights for which the record date is prior to the date
such Common Stock certificate is issued, except as provided in Section 11
hereof.
10.3
No Employment or Other Service Rights. Nothing in the Plan or any
instrument executed or Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right
of the Company or an Affiliate to terminate (a) the employment of an Employee
with or without notice and with or without Cause or (b) the service of a
Director pursuant to the By-laws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.
10.4
Transfer; Approved Leave of Absence. For purposes of the Plan, no
termination of employment by an Employee shall be deemed to result from either
(a) a transfer to the employment of the Company from an Affiliate or from the
Company to an Affiliate, or from one Affiliate to another, or (b) an approved
leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the Employees right to reemployment is guaranteed
either by a statute or by contract or under the policy pursuant to which the
leave of absence was granted or if the Committee otherwise so provides in
writing, in either case, except to the extent inconsistent with Section 409A of
the Code if the applicable Award is subject thereto.
10.5
Withholding Obligations. To the extent provided by the terms of an Award
Agreement and subject to the discretion of the Committee, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under an Award by any of the following
means (in addition to the Companys right to withhold from any compensation paid
to the Participant by the Company) or by a combination of such means: (a)
tendering a cash payment; (b) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under the
Award, provided, however, that no shares of Common Stock are withheld with a
value exceeding the minimum amount of tax required to be withheld by law; or (c)
delivering to the Company previously owned and unencumbered shares of Common
Stock of the Company.
11. Adjustments
Upon Changes in Stock.
In the event of changes in the outstanding Common Stock or in the capital
structure of the Company by reason of any stock or extraordinary cash dividend,
stock split, reverse stock split, an extraordinary corporate transaction such as
any recapitalization, reorganization, merger, consolidation, combination,
exchange, or other relevant change in capitalization occurring after the Grant
Date of any Award, Awards granted under the Plan and any Award Agreements, the
exercise price of Options and Stock Appreciation Rights and the maximum number
of shares of Common Stock subject to all Awards stated in Section 4 will be
equitably adjusted or substituted, as to the number, price or kind of a share of
Common Stock or other consideration subject to such Awards to the extent
necessary to preserve the economic intent of such Award. In the case of
adjustments made pursuant to this Section 11, unless the Committee specifically determines that such adjustment is in
the best interests of the Company or its Affiliates, the Committee shall, in the
case of Incentive Stock Options, ensure that any adjustments under this Section
11 will not constitute a modification, extension or renewal of the Incentive
Stock Options within the meaning of Section 424(h)(3) of the Code and in the
case of Non-qualified Stock Options, ensure that any adjustments under this
Section 11 will not constitute a modification of such Non-qualified Stock
Options within the meaning of Section 409A of the Code. Any adjustments made
under this Section 11 shall be made in a manner which does not adversely affect
the exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further,
with respect to Awards intended to qualify as performance-based compensation
under Section 162(m) of the Code, any adjustments or substitutions will not
cause the Company to be denied a tax deduction on account of Section 162(m) of
the Code. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
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12. Effect
of Change in Control.
12.1 Unless
otherwise provided in an Award Agreement, notwithstanding any provision of the
Plan to the contrary:
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(a) |
In the event of a Change in Control, all Options and
Stock Appreciation Rights shall become immediately exercisable with
respect to 100% of the shares subject to such Options or Stock
Appreciation Rights, and/or the Restricted Period shall expire immediately
with respect to 100% of the shares of Restricted Stock or Restricted Stock
Units. |
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(b) |
With respect to Performance Compensation Awards, in the
event of a Change in Control, all Performance Goals or other vesting
criteria will be deemed achieved at 100% of target levels and all other
terms and conditions will be deemed met. |
To the extent practicable, any actions taken by the Committee
under the immediately preceding clauses (a) and (b) shall occur in a manner and
at a time which allows affected Participants the ability to participate in the
Change in Control with respect to the shares of Common Stock subject to their
Awards.
12.2
In addition, in the event of a Change in Control, the Committee may in its
discretion and upon at least 10 days advance notice to the affected persons,
cancel any outstanding Awards and pay to the holders thereof, in cash or stock,
or any combination thereof, the value of such Awards based upon the price per
share of Common Stock received or to be received by other shareholders of the
Company in the event. In the case of any Option or Stock Appreciation Right with
an exercise price (or SAR Exercise Price in the case of a Stock Appreciation
Right) that equals or exceeds the price paid for a share of Common Stock in
connection with the Change in Control, the Committee may cancel the Option or
Stock Appreciation Right without the payment of consideration therefor.
12.3
The obligations of the Company under the Plan shall be binding upon any
successor corporation or organization resulting from the merger, consolidation
or other reorganization of the Company, or upon any successor corporation or
organization succeeding to all or substantially all of the assets and business
of the Company and its Affiliates, taken as a whole.
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13. Amendment
of the Plan and Awards.
13.1
Amendment of Plan. The Board at any time, and from time to time, may
amend or terminate the Plan. However, except as provided in Section 11 relating
to adjustments upon changes in Common Stock and Section 13.3, no amendment shall
be effective unless approved by the shareholders of the Company to the extent
shareholder approval is necessary to satisfy any Applicable Laws. At the time of
such amendment, the Board shall determine, upon advice from counsel, whether
such amendment will be contingent on shareholder approval.
13.2
Shareholder Approval. The Board may, in its sole discretion, submit any
other amendment to the Plan for shareholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
13.3
Contemplated Amendments. It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to provide
eligible Employees, Consultants and Directors with the maximum benefits provided
or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options or to the
nonqualified deferred compensation provisions of Section 409A of the Code and/or
to bring the Plan and/or Awards granted under it into compliance therewith.
13.4
No Impairment of Rights. Rights under any Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (a) the
Company requests the consent of the Participant and (b) the Participant consents
in writing.
13.5
Amendment of Awards. The Committee at any time, and from time to time,
may amend the terms of any one or more Awards; provided, however, that the
Committee may not affect any amendment which would otherwise constitute an
impairment of the rights under any Award unless (a) the Company requests the
consent of the Participant and (b) the Participant consents in writing.
14.
General Provisions.
14.1
Forfeiture Events. The Committee may specify in an Award Agreement that
the Participants rights, payments and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain events, in addition to applicable vesting conditions of an
Award. Such events may include, without limitation, breach of non-competition,
non-solicitation, confidentiality, or other restrictive covenants that are
contained in the Award Agreement or otherwise applicable to the Participant, a
termination of the Participants Continuous Service for Cause, or other conduct
by the Participant that is detrimental to the business or reputation of the
Company and/or its Affiliates. 14.2 Clawback. Notwithstanding any other
provisions in this Plan, any Award which is subject to recovery under any law,
government regulation or stock exchange listing requirement, will be subject to
such deductions and clawback as may be required to be made pursuant to such law,
government regulation or stock exchange listing requirement (or any policy
adopted by the Company pursuant to any such law, government regulation or stock
exchange listing requirement).
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14.3
Other Compensation Arrangements. Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific
cases.
14.4
Sub-plans. The Committee may from time to time establish sub-plans under
the Plan for purposes of satisfying blue sky, securities, tax or other laws of
various jurisdictions in which the Company intends to grant Awards. Any
sub-plans shall contain such limitations and other terms and conditions as the
Committee determines are necessary or desirable. All sub- plans shall be deemed
a part of the Plan, but each sub-plan shall apply only to the Participants in
the jurisdiction for which the sub-plan was designed.
14.5
Deferral of Awards. The Committee may establish one or more programs
under the Plan to permit selected Participants the opportunity to elect to defer
receipt of consideration upon exercise of an Award, satisfaction of performance
criteria, or other event that absent the election would entitle the Participant
to payment or receipt of shares of Common Stock or other consideration under an
Award. The Committee may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Committee deems
advisable for the administration of any such deferral program.
14.6
Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board
nor the Committee shall be required to establish any special or separate fund or
to segregate any assets to assure the performance of its obligations under the
Plan.
14.7
Delivery. Upon exercise of a right granted under this Plan, the Company
shall issue Common Stock or pay any amounts due within a reasonable period of
time thereafter. Subject to any statutory or regulatory obligations the Company
may otherwise have, for purposes of this Plan, 30 days shall be considered a
reasonable period of time.
14.8
No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan. The Committee shall determine whether
cash, additional Awards or other securities or property shall be issued or paid
in lieu of fractional shares of Common Stock or whether any fractional shares
should be rounded, forfeited or otherwise eliminated. 14.9 Other
Provisions. The Award Agreements authorized under the Plan may contain such
other provisions not inconsistent with this Plan, including, without limitation,
restrictions upon the exercise of the Awards, as the Committee may deem
advisable.
14.10
Section 409A. The Plan is intended to comply with Section 409A of the
Code to the extent subject thereto, and, accordingly, to the maximum extent
permitted, the Plan shall be interpreted and administered to be in compliance
therewith. Any payments described in the Plan that are due within the
short-term deferral period as defined in Section 409A of the Code shall not be
treated as deferred compensation unless Applicable Laws require otherwise.
Notwithstanding anything to the contrary in the Plan, to the extent required to
avoid accelerated taxation and tax penalties under Section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to the Plan during the six (6) month period immediately
following the Participants termination of Continuous Service shall instead be
paid on the first payroll date after the six-month anniversary of the
Participants separation from service (or the Participants death, if earlier).
Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation
to take any action to prevent the assessment of any excise tax or penalty on any
Participant under Section 409A of the Code and neither the Company nor the
Committee will have any liability to any Participant for such tax or penalty.
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14.11
Disqualifying Dispositions. Any Participant who shall make a
disposition (as defined in Section 424 of the Code) of all or any portion of
shares of Common Stock acquired upon exercise of an Incentive Stock Option
within two years from the Grant Date of such Incentive Stock Option or within
one year after the issuance of the shares of Common Stock acquired upon exercise
of such Incentive Stock Option (a Disqualifying Disposition) shall be
required to immediately advise the Company in writing as to the occurrence of
the sale and the price realized upon the sale of such shares of Common Stock.
14.12
Section 16. It is the intent of the Company that the Plan satisfy,
and be interpreted in a manner that satisfies, the applicable requirements of
Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that
Participants will be entitled to the benefit of Rule 16b-3, or any other rule
promulgated under Section 16 of the Exchange Act, and will not be subject to
short-swing liability under Section 16 of the Exchange Act. Accordingly, if the
operation of any provision of the Plan would conflict with the intent expressed
in this Section 14.12, such provision to the extent possible shall be
interpreted and/or deemed amended so as to avoid such conflict.
14.13
Section 162(m). To the extent the Committee issues any Award that
is intended to be exempt from the deduction limitation of Section 162(m) of the
Code, the Committee may, without shareholder or grantee approval, amend the Plan
or the relevant Award Agreement retroactively or prospectively to the extent it
determines necessary in order to comply with any subsequent clarification of
Section 162(m) of the Code required to preserve the Companys federal income tax
deduction for compensation paid pursuant to any such Award.
14.14
Beneficiary Designation. Each Participant under the Plan may from time to
time name any beneficiary or beneficiaries by whom any right under the Plan is
to be exercised in case of such Participants death. Each designation will
revoke all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Committee and shall be effective only when filed by
the Participant in writing with the Company during the Participants lifetime.
14.15 Expenses. The costs of administering the Plan shall be paid by the
Company. 14.16 Severability. If any of the provisions of the Plan or any
Award Agreement is held to be invalid, illegal or unenforceable, whether in
whole or in part, such provision shall be deemed modified to the extent, but
only to the extent, of such invalidity, illegality or unenforceability and the
remaining provisions shall not be affected thereby.
14.17
Plan Headings. The headings in the Plan are for purposes of convenience
only and are not intended to define or limit the construction of the provisions
hereof.
14.18
Non-Uniform Treatment. The Committees determinations under the Plan need
not be uniform and may be made by it selectively among persons who are eligible
to receive, or actually receive, Awards. Without limiting the generality of the
foregoing, the Committee shall be entitled to make non-uniform and selective
determinations, amendments and adjustments, and to enter into non-uniform and
selective Award Agreements.
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15.
Effective Date of Plan.
The Plan shall become effective as of the Effective
Date, but no Award shall be exercised (or, in the case of a stock Award, shall
be granted) unless and until the Plan has been approved by the shareholders of
the Company, which approval shall be within twelve (12) months before or after
the date the Plan is adopted by the Board.
16.
Termination or Suspension of the Plan.
The Plan shall terminate automatically on October 7, 2023. No Award shall be
granted pursuant to the Plan after such date, but Awards theretofore granted may
extend beyond that date. The Board may suspend or terminate the Plan at any
earlier date pursuant to Section 13.1 hereof. No Awards may be granted under the
Plan while the Plan is suspended or after it is terminated. Unless the Company
determines to submit Section 7.3 of the Plan and the definition of Performance
Goal and Performance Criteria to the Companys shareholders at the first
shareholder meeting that occurs in the fifth year following the year in which
the Plan was last approved by shareholders (or any earlier meeting designated by
the Board), in accordance with the requirements of Section 162(m) of the Code,
and such shareholder approval is obtained, then no further Performance
Compensation Awards shall be made to Covered Employees under Section 7.3 after
the date of such annual meeting, but the Plan may continue in effect for Awards
to Participants not in accordance with Section 162(m) of the Code.
17.
Choice of Law.
The law of the State of Nevada shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
states conflict of law rules.
As adopted by the Board of Directors of The Alkaline Water
Company Inc. on October 7, 2013.
As approved by the shareholders of The Alkaline Water Company
Inc. on October 7, 2013.
As amended by the Board of Directors of The Alkaline Water
Company Inc. on October 31, 2014 and January 20, 2016.
LOAN AGREEMENT
THIS
LOAN AGREEMENT (the Agreement) is made
and entered into this 25th day of January, 2016 (the Effective Date),
by and between THE ALKALINE WATER
COMPANY INC. (the Borrower) and
TURNSTONE CAPITAL INC. (the
Lender).
RECITALS:
WHEREAS:
A.
The Borrower has applied to the Lender for a loan in the principal amount of
$750,000.00 (the Loan);
B.
The Loan is evidenced by a non-negotiable promissory note in the principal
amount of $750,000.00 of even date herewith (the Note) executed by the
Borrower and delivered to the Lender. The purpose of the Loan is to provide the
Borrower with the monetary funds needed to fund the Borrowers operations, and
the Loan is to be unsecured except pursuant to an Escrow Agreement (the
Escrow Agreement), pursuant to which a certificate representing the
Escrowed Shares (as defined below) will be held in escrow; and
C.
As an inducement for the Lender to enter into this Loan Agreement, the Borrower
has agreed to issue to the Lender 1.5 million shares of common stock in the
capital of the Company (the Escrowed Shares), a certificate of which
will be held in escrow by Clark Wilson LLP pursuant to the Escrow Agreement and
the Borrower hereby executes and delivers to the Lender this Agreement, the Note
and the Escrow Agreement and the Lender hereby executes and delivers to the
Borrower this Agreement and the Escrow Agreement. The Note, the Escrow
Agreement, this Agreement, and all other documents executed in connection with
the Loan and this Agreement are sometimes referred to herein as the Loan
Documents.
AGREEMENT:
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein, it is agreed:
1.
Loan. Subject to the terms and conditions hereof, the
Lender agrees to loan to or for the benefit of the Borrower, in the manner and
upon the terms and conditions set out in this Agreement, the principal amount of
$750,000.00. Interest shall accrue on the foregoing principal amount at the rate
of 15% per annum until paid in full.
2.
Term. All sums due and payable under this Agreement shall be paid
by the Borrower to the Lender on or before March 31, 2016 or such other later
date as is mutually agreed upon by the Borrower and the Lender.
3.
Conditions Precedent. The Lenders obligation under this Agreement
are subject to the following conditions precedent:
1
(a)
the Lender shall have received from the Borrower, in a form and substance
satisfactory to the Lender, the duly executed documents, instruments,
information, agreements, notes, guarantees, certificates, orders,
authorizations, financing statements, and other such documents that the Lender
may reasonably request;
(b)
will not incur any other indebtedness other than in the ordinary course of its
business;
(c)
the representations and warranties of the Borrower set forth in Section 9 of
this Agreement shall be true and correct in all material respects as of the date
hereof;
(d)
the Lender shall have received, in form and substance satisfactory to the
Lender, all information which the Lender has reasonably requested to conduct its
due diligence on the Borrower; and
(e)
there shall not be pending or, to the best knowledge of the Borrower,
threatened, any litigation, action, charge, claim, demand, suit, proceeding,
petition, governmental investigation, or arbitration by, against, or affecting
the Borrower or any of its subsidiaries or any property of the Borrower or any
of its subsidiaries that has not been disclosed by the Borrower to the Lender in
writing, and there shall have occurred no development in any such action,
charge, claim, demand, suit, proceeding, petition, governmental investigation,
or arbitration that, in the Lenders opinion, would reasonably be expected to
have a materially adverse effect upon the Borrower.
4.
Covenants. The Borrower expressly covenants that, on the
Effective Date and continuing at all times during the term of the Note, the
Borrower:
(a)
will not be in default of any loans, notes or other indebtedness to any third
party(ies);
(b)
will not be insolvent or otherwise preparing for nor intending to file a
petition for bankruptcy under any chapter of the U.S. Bankruptcy Code; and
(c)
will not materially alter or change its current business organization, current
business purpose nor otherwise amend or alter its corporate existence without
the express written consent of the Lender, which consent shall be in the
Lenders sole and absolute discretion.
5.
Escrow Agreement. The obligations of the Borrower to the Lender as
evidenced by or provided for in the Loan Documents, and specifically including,
without limitation, the obligations under the Note and this Agreement, shall be
secured by the Escrow Agreement pursuant to which the Borrower shall deposit
into escrow a certificate (the Certificate) representing 1.5 million
shares of common stock in the capital of the Company issued in the name of the
Lender. The Lender expressly covenants that unless the Certificate is released
from escrow and delivered to the Lender in accordance with the Escrow Agreement,
the Lender will not assign, transfer, hypothecate or grant any interest of any
nature whatsoever to any Escrowed Shares to any third party(ies) without the express written
consent of the Borrower, which consent shall be in the Borrowers sole and
absolute discretion
2
6.
Securities Law. The Lender acknowledges that the Borrower
has advised the Lender that the Borrower is issuing the Escrowed Shares to the
Lender under exemptions from the registration requirements of the applicable
federal and state securities laws of the United States. To evidence, among other
things, the Lenders eligibility for such exemption, the Lender shall deliver a
fully completed and executed Certificate of Subscriber in the form attached
hereto as Schedule A to the Company on the date of the execution of this
Agreement and such certificate will be incorporated and form part of this
Agreement.
7. Piggyback
Registrations.
(a)
If the Certificate is released from escrow and delivered to the Lender in
accordance with the Escrow Agreement and the Borrower determines to proceed with
the preparation and filing with the Securities and Exchange Commission (the
SEC) of a registration statement (the Registration Statement)
relating to an offering for its own account or the account of others under the
Securities Act of 1933 (the 1933 Act) of any of its shares of common
stock, other than on Form S-4 or Form S-8 (each as promulgated under the 1933
Act) or its then equivalents, the Borrower shall send to the Lender written
notice of such determination and, if within ten (10) days after receipt of such
notice, the Lender shall so request in writing, the Borrower will cause the
registration under the 1933 Act of the Escrowed Shares and (the Registrable
Securities), provided that if at any time after giving written notice of
its intention to register any of its shares of common stock and prior to the
effective date of the registration statement filed in connection with such
registration, the Borrower shall determine for any reason not to register or to
delay registration of such shares of common stock, the Borrower may, at its
election, give written notice of such determination to the Lender and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register the Registrable Securities in connection with such
registration, and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering the Registrable Securities for the same
period as the delay in registering such other shares of common stock. The
Borrower shall include in such registration statement all or any part of the
Registrable Securities provided however that the Borrower shall not be required
to register any Escrowed Shares that are eligible for sale pursuant to Rule 144
of the 1933 Act. Notwithstanding any other provision in this Section 7, if the
Borrower receives a comment from the SEC which effectively results in the
Borrower having to reduce the number of Registrable Securities included on such
Registration Statement, then the Borrower may, in its sole discretion, reduce on
a pro rata basis the number of Registrable Securities to be included in such
Registration Statement.
(b)
In connection with each Registration Statement described in this Section 7, the
Lender will furnish to the Borrower in writing such information and
representation letters with respect to itself and the proposed distribution by
it as reasonably shall be necessary in order to assure compliance with federal
and applicable state securities laws. The Borrower may require the Lender to
furnish to the Borrower a certified statement as to the number of shares of
common stock beneficially owned by the Lender and the name of the natural person
thereof that has voting and dispositive control over the Escrowed Shares.
3
(c)
All fees and expenses incident to the performance of or compliance with the
filing of the Registration Statement shall be borne by the Borrower whether or
not any Registrable Securities are sold pursuant to the Registration Statement.
In no event shall the Borrower be responsible for any broker or similar
commissions or, except to the extent provided for hereunder, any legal fees or
other costs of the Lender.
(d)
The Borrower shall indemnify and hold harmless the Lender, its officers,
directors, agents and employees, and each person who controls the Lender (within
the meaning of Section 15 of the 1933 Act or Section 20 of the Securities
Exchange Act of 1934) and the officers, directors, agents and employees of each
such controlling person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys fees) and expenses (collectively,
Losses), as incurred, arising out of or relating to any untrue or
alleged untrue statement of a material fact contained in the Registration
Statement, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding the Lender furnished in writing to the Borrower by the Lender
expressly for use therein, or to the extent that such information relates to the
Lender or the Lenders proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by the Lender expressly for
use in the Registration Statement, or in any amendment or supplement thereto or
(ii) the use by the Lender of an outdated or defective Registration Statement
after the Borrower has notified the Lender in writing that the Registration
Statement is outdated or defective.
(e)
The Lender shall indemnify and hold harmless the Borrower, its directors,
officers, agents and employees, each person who controls the Borrower (within
the meaning of Section 15 of the 1933 Act and Section 20 of the Securities
Exchange Act of 1934), and the directors, officers, agents or employees of such
controlling persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, to the extent arising out of or based solely
upon: (x) the Lenders failure to comply with the prospectus delivery
requirements of the 1933 Act or (y) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading (i) to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by the Lender to the
Borrower specifically for inclusion in the Registration Statement or (ii) to the
extent that such untrue statements or omissions are based solely upon
information regarding the Lender furnished in writing to the Borrower by the
Lender expressly for use therein, or (iii) to the extent that such information
relates to the Lender or the Lenders proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by the
Lender expressly for use in the Registration Statement or in any amendment or
supplement thereto or (z) the use by the Lender of an outdated or defective
Registration Statement after the Borrower has notified the Lender in writing
that the Registration Statement is outdated or defective. In no event shall the
liability of the Lender hereunder be greater in amount than the dollar amount of
the net proceeds received by the Lender upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
4
(f)
If a claim for indemnification hereunder is unavailable to either the Borrower
or the Lender (in each case, an Indemnified Party or Indemnified
Parties, as applicable) (by reason of public policy or otherwise), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys or other reasonable fees or
expenses incurred by such party in connection with any proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this section was available to such party in
accordance with its terms. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this section were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this section, the Lender shall not
be required to contribute amount greater than the dollar amount of the net
proceeds received by the Lender upon the sale of the Registrable Securities
giving rise to such contribution obligation.
8.
Indemnity. The Borrower agrees to fully indemnify, defend
and hold the Lender harmless from any and all losses, costs, charges, damages,
penalties or expenses, of any nature whatsoever, that the Lender may suffer,
sustain or incur as a consequence of any Event of Default (as defined in the
Note).
9.
Representations and Warranties. The Borrower represents and
warrants to the Lender and agrees on the Effective Date as follows:
(a)
that the Borrower is a corporation duly organized, validly existing under the
laws of the State of Nevada and has the power and authority to enter this
Agreement and to conduct the business in which it is currently engaged and as
contemplated by this Agreement;
(b)
that the Borrower shall do all things necessary to remain duly organized,
validly existing and in good standing as a domestic corporation in its
jurisdiction of organization and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted except where
the failure to do so would not have a material adverse effect on the ability of
the Borrower to perform its obligations hereunder;
5
(c)
that the Borrower has the power and authority and all licenses or permits
necessary to execute, deliver and perform the transactions as contemplated by
this Agreement;
(d)
that there is no known litigation or other proceeding pending or threatened
against the Borrower before any court or administrative agency that might result
in any material, adverse change in the condition of the Borrower;
(e)
that this Agreement and all other documents that are to be executed in
connection with the transactions contemplated hereby have been duly authorized,
executed and delivered and to the best of the Borrowers knowledge constitute
binding obligations enforceable in accordance with their respective terms,
except to the extent that their enforcement may be limited by bankruptcy,
reorganization, moratorium, insolvency or other similar laws affecting
creditors rights generally, or be limited by the application by a court of
equitable principals if equitable remedies are sought;
(f)
that to the best of the Borrowers knowledge, the Loan Documents are not
usurious under applicable law;
(g)
that no statement or information contained in this Agreement, or any other
document, certificate or statement furnished or delivered by the Borrower to the
Lender for use in connection with the transactions contemplated by this
Agreement contained as of the date of such statement, information, document or
certificate was so furnished, any untrue statement of a material fact or omitted
to state a material fact necessary to make any statements contained herein or
therein not materially misleading; and
(h)
that all of the representations and warranties of the Borrower contained in the
Loan Documents remain true, correct and complete as of the date hereof.
10.
Events of Default. Upon any Event of Default, then the
Lender may, at its option, regard the same as a breach of the conditions of the
Loan Documents and upon or after ten (10) days written notice to cure such
event(s) of default to the Borrower, declare the indebtedness evidenced by the
Loan Documents immediately due and payable, without further notice or demand,
and the Lender shall be entitled to exercise remedies thereunder, and may,
additionally or alternatively, avail itself of any other relief to which the
Lender may be legally or equitably entitled. Upon any default under this Section
10 of this Agreement, the Lender shall be entitled to specific performance in
addition to any other remedies as may be available to the Lender at law or in
equity.
11.
Attorneys Fees. If it becomes necessary for the Lender or
the Borrower to engage legal counsel or to bring an action at law or other
proceedings to enforce any of the terms, covenants or conditions of this
Agreement or the Loan Documents, the non-prevailing party in such action shall
pay all reasonable attorneys fees, as well as all cost and expenses, so
incurred by the prevailing party.
6
12. Beneficiary. This Agreement is made for the sole protection and
benefit of the Borrower and the Lender, and no other person or persons
whomsoever shall have any right or action hereon. It is expressly intended that no broker or agent
shall be a third party beneficiary of this Agreement. There are no
representations, promises, warranties, understandings or agreements, express or
implied, oral or otherwise, in relation thereto, except those expressly referred
to or set forth herein. The Borrower acknowledges that the execution and
delivery of this Agreement is its voluntary act and deed and that said execution
and delivery have not been induced by, nor done in reliance upon, any
representations, promises, warranties, understandings or agreements made by the
Lender, its agents, officers, employees or representatives. No promise,
representation, warranty or agreement made subsequent to the execution and
delivery hereof by either party hereto, and no revocation, partial or otherwise,
change, amendment, addition, alteration or modification of this Agreement, shall
be valid unless the same shall be in writing signed by all of the parties hereto
or by their duly authorized agent.
13.
Governing Law; Jurisdiction and Venue. This Agreement and
the Note and the rights and obligation of the parties hereunder and there under
shall be construed in accordance with and be governed by the law of the State of
Nevada, without regard to principles of conflicts of laws. Any legal action or
proceeding against the Borrower with respect to this Agreement or the Note may
be brought in the courts of the State of Arizona located in Maricopa County or
in the United States Federal courts located in Maricopa County, and, by
execution and delivery of this Agreement, each of the Borrower and the Lender
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts.
14.
Waiver of Jury Trial. THE LENDER AND THE BORROWER EACH
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT EACH OF THEM
MAY HAVE TO A TRIAL BY JURY OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE
NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AGREEMENT.
15.
No Waiver. No failure to exercise and no delay in exercising, on
the part of the Lender, any right, remedy, power or privilege hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
16.
Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Lender.
7
17.
Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
18. Notices.
Any notice required or permitted to be given under this Agreement will be in
writing and may be given by delivering, sending by email or other means of
electronic communication capable of producing a printed copy, or sending by
prepaid registered mail, the notice to the following address or number:
If to The Lender: |
Turnstone Capital Inc. |
|
25 Mason Complex, Stoney Ground |
|
PO Box 193 |
|
Stoney Ground The Valley, British Anguilla
|
|
|
|
|
If to The Borrower: |
The Alkaline Water Company Inc. |
|
Attn: Richard A. Wright |
|
7730 E. Greenway Road, Suite 203 |
|
Scottsdale, Arizona 85260 |
Any notice delivered or sent by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy on a business day will be deemed conclusively to have been
effectively given on the day the notice was delivered, or the transmission was
sent successfully to the number set out above, as the case may be. Any notice
sent by prepaid registered mail will be deemed conclusively to have been
effectively given on the third business day after posting; but if at the time of
posting or between the time of posting and the third business day thereafter
there is a strike, lockout, or other labour disturbance affecting postal
service, then the notice will not be effectively given until actually delivered.
18. Amendment or Waiver.
Neither this Agreement nor any other Loan Document nor any terms hereof or
thereof may be changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the Lender and the
Borrower.
19.
Entire Agreement. This Agreement, together with the other
Loan Documents and all related exhibits and schedules, constitutes the sole and
entire agreement of the parties to this Agreement with respect to the subject
matter contained herein and therein, and supersedes all prior and
contemporaneous understandings, agreements, representations and warranties, both
written and oral, with respect to such subject matter. Each of the parties
hereby acknowledges that this Agreement and other Agreements are each the result
of mutual negotiation and therefore any ambiguity in their respective terms
shall not be construed against the drafting party.
8
IN
WITNESS WHEREOF, the parties hereto have
executed this Loan Agreement as of the day and year first above written.
THE LENDER:
Turnstone Capital Inc.
By: /s/Yenny
Martinez
Its: Director
THE BORROWER:
The Alkaline Water Company Inc.
By: /s/Richard
A.Wright
Its: Vice-President, Secretary, Treasurer and Director
9
SCHEDULE A
CERTIFICATE OF SUBSCRIBER
Capitalized terms used but not otherwise defined in this
certificate (the Certificate) shall have the meanings given to such
terms in that certain loan agreement (the Agreement) between the
undersigned and The Alkaline Water Company Inc. (the Company). In
connection with the issuance of the Escrowed Shares to the undersigned, the
undersigned hereby agrees, acknowledges, represents, warrants and covenants, as
an integral part of the Agreement, that:
1. the undersigned is not
a U.S. Person as such term is defined by Rule 902 of Regulation S under the
1933 Act (the definition of which includes, but is not limited to, an individual
resident in the U.S. and an estate or trust of which any executor or
administrator or trust, respectively is a U.S. Person and any partnership or
corporation organized or incorporated under the laws of the U.S.);
2. none of the Escrowed
Shares have been or will be registered under the 1933 Act, or under any state
securities or blue sky laws of any state of the United States, and may not be
offered or sold in the United States or, directly or indirectly, to U.S.
Persons, as that term is defined in Regulation S, except in accordance with the
provisions of Regulation S or pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the 1933 Act and in compliance
with any applicable state and foreign securities laws;
3. the undersigned
understands and agrees that offers and sales of any of the Escrowed Shares prior
to the expiration of a period of six months after the date of original issuance
of the Escrowed Shares (the six month period hereinafter referred to as the
Distribution Compliance Period) shall only be made in compliance with
the safe harbor provisions set forth in Regulation S, pursuant to the
registration provisions of the 1933 Act or an exemption therefrom, and that all
offers and sales after the Distribution Compliance Period shall be made only in
compliance with the registration provisions of the 1933 Act or an exemption
therefrom and in each case only in accordance with applicable state and foreign
securities laws;
4.
the undersigned understands and agrees not to engage in any hedging transactions
involving any of the Escrowed Shares unless such transactions are in compliance
with the provisions of the 1933 Act and in each case only in accordance with
applicable state and provincial securities laws;
5.
the undersigned is acquiring the Escrowed Shares for investment only and
not with a view to resale or distribution and, in particular, it has no
intention to distribute either directly or indirectly any of the Shares in the
United States or to U.S. Persons;
6.
the undersigned has not acquired the Escrowed Shares as a
result of, and will not itself engage in, any directed selling efforts (as
defined in Regulation S under the 1933 Act) in the United States in respect of
the Escrowed Shares which would include any activities undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of any of the
Escrowed Shares; provided, however, that the undersigned may sell or otherwise
dispose of the Escrowed Shares pursuant to registration thereof under the 1933 Act and any
applicable state and provincial securities laws or under an exemption from such
registration requirements;
10
7.
the Shares are not being acquired, directly or indirectly, for the account or
benefit of a U.S. Person or a person in the United States;
8.
the undersigned was outside the United States when receiving and executing the
agreement in connection with the issuance of the Escrowed Shares;
9.
the undersigned understands and agrees that offers and sales of any of the
Escrowed Shares shall be made only in compliance with the registration
provisions of the 1933 Act or an exemption therefrom and in each case only in
accordance with applicable state securities laws;
11.
except as set out in the Agreement, the Company has not undertaken, and will
have no obligation, to register any of the Escrowed Shares under the 1933;
12.
the Company is entitled to rely on the acknowledgements, agreements,
representations and warranties and the statements and answers of the undersigned
contained in the Agreement and this Certificate, and the undersigned will hold
harmless the Company from any loss or damage either one may suffer as a result
of any such acknowledgements, agreements, statements, representations and/or
warranties made by the undersigned not being true and correct;
13.
the undersigned has been advised to consult its own respective legal, tax and
other advisors with respect to the merits and risks of an investment in the
Escrowed Shares and, with respect to applicable resale restrictions, is solely
responsible (and the Company is not in any way responsible) for compliance with
applicable resale restrictions;
14.
the undersigned and the undersigneds advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from the Company in
connection with the acquisition of the Escrowed Shares under the Agreement, and
to obtain additional information, to the extent possessed or obtainable by the
Company without unreasonable effort or expense;
15.
the books and records of the Company were available upon reasonable notice for
inspection, subject to certain confidentiality restrictions, by the undersigned
during reasonable business hours at its principal place of business and that all
documents, records and books in connection with the acquisition of the Escrowed
Shares under the Agreement have been made available for inspection by the
undersigned, the undersigneds attorney and/or advisor(s);
16.
the undersigned (i) is able to fend for itself in connection with the
acquisition of the Escrowed Shares; (ii) has such knowledge and experience in
business matters as to be capable of evaluating the merits and risks of its
prospective investment in the Escrowed Shares; and (iii) has the ability to bear
the economic risks of its prospective investment and can afford the complete
loss of such investment;
17.
the undersigned has a pre-existing, substantive relationship with the Company
(or a person acting on its behalf) that is sufficient to enable the Company (or
a person acting on its behalf) to be aware of the undersigneds financial
circumstances or sophistication. This substantive relationship with the Company
(or a person acting on its behalf) through which the undersigned is acquiring
the Escrowed Shares predates the contact between the Company (or a person acting
on its behalf) and the undersigned regarding the acquisition of the Escrowed
Shares;
11
18.
the undersigned is not aware of any advertisement of any of the Escrowed Shares
and is not acquiring the Escrowed Shares as a result of any form of general
solicitation or general advertising including advertisements, articles, notices
or other communications published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising;
19. no person has made to the
undersigned any written or oral representations:
|
(a) |
that any person will resell or repurchase any of the
Escrowed Shares; |
|
|
|
|
(b) |
that any person will refund the purchase price of any of
the Escrowed Shares; |
|
|
|
|
(c) |
as to the future price or value of any of the Escrowed
Shares; or |
|
|
|
|
(d) |
that any of the Escrowed Shares will be listed and posted
for trading on any stock exchange or automated dealer quotation system or
that application has been made to list and post any of the Escrowed Shares
on any stock exchange or automated dealer quotation system, except that
currently certain market makers make market in the common shares of the
Company on the OTCQB operated by OTC Markets
Group; |
20.
the undersigned is acquiring the Escrowed Shares as principal for their own
account, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, and no other
person has a direct or indirect beneficial interest in the Escrowed Shares;
21. neither the SEC nor any other
securities commission or similar regulatory authority has reviewed or passed on
the merits of the Escrowed Shares;
22. the Company shall refuse to
register any transfer of Escrowed Shares not made in accordance with the
provisions of Regulation S, pursuant to registration under the 1933 Act, or
pursuant to an available exemption from registration under the 1933 Act;
23. the Escrowed Shares issued to the
undersigned will bear the following legend:
NONE OF THE SECURITIES REPRESENTED
HEREBY HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE 1933 ACT), OR ANY U.S. STATE SECURITIES LAWS, AND,
UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE
UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. UNITED STATES AND U.S.
PERSON ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.;
12
24.
the address of the undersigned included herein is the sole address of the
undersigned as of the date of this Certificate;
25. there are no written instruments,
buy-sell agreements, registration rights or agreements, voting agreements or
other agreements by and between or among the undersigned and any other person or
company, imposing any restrictions upon the transfer, prohibiting the transfer
of or otherwise pertaining to the Escrowed Shares or the ownership thereof; and
26. no person or company has or will
have any agreement or option or any right capable at any time of becoming an
agreement to purchase or otherwise acquire the Escrowed Shares or require the
undersigned to sell, transfer, assign, pledge, charge, mortgage or in any other
way dispose of or encumber any of the Escrowed Shares other than under the
Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
13
Date:________________________
IN WITNESS WHEREOF, the undersigned have executed
this Certificate of Subscriber.
Subscriber Information |
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Registration Instruction |
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Turnstone Capital
Inc. |
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(Name of subscriber) |
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(Name to appear on the share certificate)
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X /s/ Yenny
Martinez |
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(Signature of authorized signatory) |
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(Address, including city and postal code)
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Yenny Martinez,
Director |
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(Name and title of authorized signatory) |
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2353194 |
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(SSN, incorporation # or other tax identification #) |
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25 Mason Complex,
Stoney Ground, PO Box 193 |
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(Address, including city and postal code) |
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Stoney Ground The
Valley, British Anguilla |
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+41 76 380 5466
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(Telephone number) |
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14
NON-NEGOTIABLE
PROMISSORY NOTE
$750,000.00 |
January 25, 2016 |
|
Scottsdale, AZ |
For value received THE
ALKALINE WATER COMPANY INC.,
a Nevada Corporation (the Payor) promises to pay to
TURNSTONE CAPITAL INC. (the
Holder) the principal sum of $750,000.00 together with simple
interest on the outstanding principal amount at the rate of fifteen percent
(15%) per annum. Interest shall commence on the date that this Note is issued
(the Effective Date) by the Holder to the Payor and shall continue on
the full outstanding principal until paid in full. Interest shall be computed on
the basis of a year of three hundred sixty-five (365) days for the actual number
of days elapsed.
1.
Term. Unless otherwise converted as set forth below, all
outstanding principal and interest shall be due and payable on or before March
31, 2016 or such date as is mutually agreed upon by the Payor and the Holder.
2.
Payments. All payments of interest and advanced principal shall
be in lawful money of the United States of America.
3.
Prepayment. The Payor may prepay this Note, in full or in part,
at any time, without penalty.
4.
Restrictions on Transfer. The Holder shall not sell, transfer,
pledge, negotiate or otherwise dispose of this Note.
5.
Default. If there shall be any Event of Default (as defined
below) hereunder, at the option and upon the declaration of the Holder and upon
written notice to the Payor (which election and notice shall not be required in
the case of an Event of Default under Section 5.2 or 5.3 below), this Note shall
accelerate and all principal and unpaid accrued interest shall become due,
payable and collectible. The occurrence of any one or more of the following
shall constitute an Event of Default hereunder:
5.1
the Payor fails to pay timely any of the principal amount due under
this Note on the date the same becomes due and payable or any accrued interest
or other amounts due under this Note on the date the same becomes due;
5.2 the Payor files
any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or relating to,
debtors, now or hereafter in effect, or makes any assignment for the benefit of
creditors or takes any corporate action in furtherance of any of the foregoing;
or
5.3
an involuntary petition is filed against the Payor (unless such
petition is dismissed or discharged within sixty (60) days) under any bankruptcy
statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the
benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of the Payor.
1
6.
Attorneys Fees. In any litigation or other proceeding in
connection with the interpretation of this Note, or the exercise or enforcement
of any right under this Note, the non-prevailing party shall pay or reimburse
the prevailing party for all expenses, including court costs and attorneys
fees, incurred by the prevailing party in connection with such litigation or
proceeding (whether incurred at the trial, appellate, or administrative levels,
and in any bankruptcy case, arbitration or other proceeding), all of which may
be incorporated into and be a part of any judgment or decision rendered in such
proceeding.
7.
Waiver of Notice. The Payor hereby waives demand, notice,
presentment, protest and notice of dishonor.
8.
Governing Law. This Note shall be governed by construed under
the laws of the State of Nevada, without giving effect to conflicts of laws
principles.
9.
Lost, Stolen, Destroyed or Mutilated Note. In case this Note
shall be mutilated, lost, stolen or destroyed, the Payor shall issue a new Note
of like date, tenor and denomination and deliver the same in exchange and
substitution for and upon surrender and cancellation of any mutilated Note, or
in lieu of any Note lost, stolen or destroyed, upon receipt of evidence
satisfactory to the Payor of the loss, theft or destruction of such Note.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
2
10. Amendment;
Waiver. Any term of this Note may be amended and the observance of any
term of this Note may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Payor and the Holder.
|
THE ALKALINE WATER COMPANY INC. A
Nevada corporation |
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By: /s/Richard A.
Wright
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Name: Richard A.
Wright
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Title:Vice-President, Secretary, Treasurer
and Director |
AGREED TO AND ACCEPTED: |
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TURNSTONE CAPITAL INC. |
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By:/s/Yenny
Martinez
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Name: Yenny
Martinez
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Title:
Director
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3
ESCROW AGREEMENT
THIS AGREEMENT made as of the 25th day of January, 2016.
BETWEEN:
TURNSTONE CAPITAL INC., having
an address at 25 Mason Complex, Stoney Ground, PO Box 193, Stoney Ground The
Valley, British Anguilla
(the Lender)
AND:
CLARK WILSON LLP, having an
address at Suite 900 885 Georgia Street W., Vancouver, British Columbia V6C
3H1, Canada
(the Escrow Agent)
AND:
THE ALKALINE WATER COMPANY
INC., having an address at 7730 E. Greenway Road, Suite 203, Scottsdale,
Arizona 85260, U.S.A.
(the Company)
WHEREAS:
A.
Pursuant to the terms and conditions of a Loan Agreement of even date herewith
between the Company and the Lender (the Loan Agreement) and the terms
and conditions of this Agreement, the Company has agreed to issue 1.5 million
shares of common stock in the capital of the Company (the Shares) to
the Lender; and
B.
The Lender and the Company wish to appoint the Escrow Agent to accept, hold and
release the Shares pursuant to the terms of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that for and in
consideration of the terms and conditions set out herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1.
DEPOSIT INTO ESCROW
1.1
The Company will, upon the closing of the Loan Agreement, deliver one (1) share
certificate representing the Shares (the Certificate) and a
cancellation resolution (the Cancellation Resolution) to effect the
cancellation of the Shares, substantially in the form set out in Schedule A,
to the Escrow Agent.
1.2
The Lender will, upon the closing of the Loan Agreement, deliver a duly executed
and medallion guaranteed stock power of attorney (the Stock Power) to
effect the cancellation of the Shares, substantially in the form set out in
Schedule B, to the Escrow Agent.
- 2 -
1.3
The Escrow Agent will hold the Certificate, the Cancellation Resolution, and the
Stock Power (collectively, the Stock Cancellation Documents) in escrow
subject to the terms and conditions of this Agreement.
1.4
The Company and the Lender hereby appoint the Escrow Agent as the agent for and
on behalf of the Company and the Lender in respect of the Stock Cancellation
Documents, on the terms and subject to the conditions set forth in this
Agreement.
2.
ESCROW PROVISIONS
2.1
The Lender and the Company hereby direct the Escrow Agent to retain the Stock
Cancellation Documents and not to cause anything to be done to release the same
from escrow except in accordance with this Agreement.
2.2
In the event that there is any Event of Default (as defined in the promissory
note issued pursuant to the Loan Agreement) that is not cured in accordance with
the Loan Agreement, the Lender will deliver a written notice to the Company and
the Escrow Agent acknowledging such event, and if the Company does not object
within five (5) business days, the Escrow Agent will deliver the Certificate and
Stock Power to the Lender.
2.3
In the event that the Company repays the loan pursuant to the Loan Agreement and
there is no Event of Default that is not cured in accordance with the Loan
Agreement at the time of repayment, the Company will deliver a written notice to
the Lender and the Escrow Agent acknowledging such event, and if the Lender does
not object within five (5) business days, the Escrow Agent will deliver the
Stock Cancellation Documents to the transfer agent of the Company (the
Transfer Agent) and request the Transfer Agent to cancel the Shares.
2.4
If either of the Company or the Lender objects to the deliveries contemplated in
Section 2.2 or 2.3, then the Escrow Agent will continue to retain the Stock
Cancellation Documents until such objection is resolved between the Lender and
the Company. Notwithstanding this Section 2.4, the Escrow Argent will still be
able to deliver and interplead the Stock Cancellation Documents in accordance
with Section 4.12 of this Agreement.
2.5
The Escrow Agent is authorized by each of the Company and the Lender to make the
deliveries required by this Section 2.
2.6
In the event the Escrow Agent has not received any written notices pursuant to
this Section 2 by the end of the fourth (4th) month (or such other longer time
as is determined by the Company in its sole discretion) from the date hereof,
the Escrow Agent will deliver the Stock Cancellation Documents to the Transfer
Agent and request the Transfer Agent to cancel the Shares.
3.
INDEPENDENT LEGAL ADVICE
3.1
With respect to the preparation of this Agreement and the rights and obligations
herein, each of the Lender and Company acknowledge that each has been advised to
seek independent legal advice with respect to this Agreement and the documents
delivered pursuant hereto and that Clark Wilson LLP is not protecting the rights
and interests of any party to this Agreement.
- 3 -
4.
ESCROW AGENT
4.1
In exercising the rights, duties and obligations prescribed or confirmed by this
Agreement, the Escrow Agent will act honestly and in good faith and will
exercise that degree of care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances.
4.2
The Company and the Lender agree from time to time and at all times hereafter to
save, defend, hold harmless and fully indemnify the Escrow Agent, its successors
and assigns from and against all loss, costs, charges, suits, demands, claims,
damages and expenses which the Escrow Agent, its successors or assigns may at
any time or times hereafter bear, sustain, suffer or be put unto for or by
reason or on account of its acting pursuant to this Agreement or anything in any
manner relating thereto or by reason of the Escrow Agents compliance in good
faith with the terms hereof.
4.3
In case proceedings should hereafter be taken in any court respecting the Stock
Cancellation Documents, the Escrow Agent will not be obliged to defend any such
action or submit its rights to the court until it has been indemnified by other
good and sufficient security in addition to the indemnity given in Section 4.2
against its costs of such proceedings.
4.4
The Escrow Agent will have no responsibility in respect of loss of the Stock
Cancellation Documents except the duty to exercise such care in the safekeeping
thereof as it would exercise if the Stock Cancellation Documents belonged to the
Escrow Agent. The Escrow Agent may act on the advice of counsel but will not be
responsible for acting or failing to act on the advice of counsel.
4.5
The Escrow Agent will not be bound in any way by any contract between the other
parties hereto whether or not it has notice thereof or of its terms and
conditions and the only duty, liability and responsibility of the Escrow Agent
will be to hold the Stock Cancellation Documents as herein directed and to
deliver the same to such persons and to comply with other such conditions as are
herein set forth. The Escrow Agent will not be required to pass upon the
sufficiency of any of the written notices pursuant to Section 2 or the Stock
Cancellation Documents to ascertain whether or not the person or persons who
have executed, signed or otherwise issued or authenticated the said documents
have authority to so execute, sign or otherwise authorize, issue or authenticate
the said documents or any of them, or that they are the same persons named
therein or otherwise to pass upon any requirement of such instruments that may
be essential for their validity, but it shall be sufficient for all purposes
under this Agreement insofar as the Escrow Agent is concerned that the said
documents are deposited with the Escrow Agent as specified in this Agreement.
4.6
In the event that the Stock Cancellation Documents are attached, garnished or
levied upon under any court order, or if the delivery of the Stock Cancellation
Documents is stayed or enjoined by any court order or if any court order,
judgment or decree is made or entered affecting the Stock Cancellation Documents
or affecting any act by the Escrow Agent, the Escrow Agent may, in its sole
discretion, obey and comply with all writs, orders, judgments or decrees so
entered or issued, whether with or without jurisdiction, notwithstanding any
provision of this Agreement to the contrary. If the Escrow Agent obeys and
complies with any such writs, orders, judgments or decrees, it will not be
liable to any of the parties hereto or to any other person, firm, corporation or
other entity by reason of such compliance, notwithstanding that such writs,
orders, judgments or decrees may be subsequently reversed, modified, annulled,
set aside or vacated.
4.7
Except as herein otherwise provided, the Escrow Agent is authorized and directed
to disregard, in its sole discretion, any and all notices and warnings which may
be given to it by any of the parties hereto or by any other person, firm, association or
corporation. It will, however, at its sole discretion, obey the order, judgment
or decree of any court of competent jurisdiction, and it is hereby authorized to
comply with and obey such orders, judgments or decrees and, in case of such
compliance, it shall not be liable by reason thereof to any of the parties
hereto or to any other person, firm, association, corporation or other entity,
even if thereafter any such order, judgment or decree may be reversed, modified,
annulled, set aside or vacated.
- 4 -
4.8
If the Escrow Agent receives any valid court order contrary to the instructions
contained in this Agreement, the Escrow Agent may continue to hold the Stock
Cancellation Documents until the lawful determination of the issue between the
parties hereto.
4.9
If written notice of protest is made by either of the Company and/or the Lender
to the Escrow Agent to any action contemplated by the Escrow Agent under this
Agreement, and such notice sets out reasons for such protest, the Escrow Agent
may, at its sole discretion, continue to hold the Stock Cancellation Documents
until the right to the Stock Cancellation Documents is legally determined by a
court of competent jurisdiction or otherwise.
4.10 The
Escrow Agent may resign as Escrow Agent by giving not less than five (5) days
notice thereof to the Company and the Lender. The Company may terminate the
Escrow Agent by giving not less than five (5) days notice to the Escrow Agent.
The resignation or termination of the Escrow Agent will be effective and the
Escrow Agent will cease to be bound by this Agreement on the date that is five
(5) days after the date of receipt of the termination notice given hereunder or
on such other date as the Escrow Agent and/or the Company may agree upon. All
indemnities granted to the Escrow Agent herein will survive the termination of
this Agreement or the termination or resignation of the Escrow Agent. In the
event of termination or resignation of the Escrow Agent for any reason, the
Escrow Agent shall, within that five (5) days notice period, deliver the Stock
Cancellation Documents to the new escrow agent to be named by the Company.
4.11 Notwithstanding
anything herein to the contrary, the Escrow Agent may act upon any written
instructions given jointly by the Company and the Lender.
4.12 Notwithstanding
anything herein to the contrary, in the event of any dispute arising between
either of the Company and/or the Lender pertaining to this Agreement or any
matters arising pursuant hereto, the Escrow Agent may, in its sole discretion,
deliver and interplead the Stock Cancellation Documents into court and such
delivery and interpleading will be an effective discharge to the Escrow Agent.
5.
FEES
5.1
The Company will pay all of the compensation of the Escrow Agent and will
reimburse the Escrow Agent for any and all reasonable expenses, disbursements
and advances made by the Escrow Agent in the performance of its duties
hereunder, including reasonable fees, expenses and disbursements incurred by its
counsel.
6.
GENERAL
6.1
Except as otherwise provided in this Agreement, no alteration, amendment, change
or addition to this Agreement will be binding upon the parties hereto unless
reduced to writing and signed by the parties.
- 5 -
6.2
This Agreement will enure to the benefit of and be binding upon the parties and
their respective heirs, executors, administrators and successors.
6.3
The parties will execute and deliver all such further documents, do or cause to
be done all such further acts and things, and give all such further assurances
as may be necessary to give full effect to the provisions and intent of this
Agreement.
6.4
This Agreement will be governed by and construed in accordance with the laws of
the Province of British Columbia and the federal laws of Canada applicable
therein, and the parties acknowledge that the courts of the Province of British
Columbia shall have exclusive jurisdiction with respect to any matter arising
under or related to this Agreement and the parties to this Agreement hereby
irrevocably attorn and submit to such jurisdiction.
6.5
Any notice required or permitted to be given under this Agreement will be in
writing and may be given by delivering, sending by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy, or sending by prepaid registered mail, the notice to the following
address:
To the Company
7730 E. Greenway Road, Suite 203
Scottsdale, Arizona 85260
Attention:
Richard A. Wright, Vice-President,
Secretary,
Treasurer
and director
Email:
Ricky@wtfcpa.com
To the Lender:
Turnstone Capital Inc.
25 Mason
Complex, Stoney Ground
PO Box 193
Stoney Ground The Valley, British
Anguilla
Email: <>
To the Escrow Agent:
Clark Wilson LLP
900 885 West
Georgia Street
Vancouver, British Columbia
Canada V6C 3H1
Attention:
Virgil Z. Hlus
Email:
VHlus@cwilson.com
Facsimile:
(604) 687-6314
(or to such other address as any party may specify by notice in
writing to another party). Any notice delivered or sent by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy on a business day will be deemed conclusively to have been
effectively given on the day the notice was delivered, or the electronic
communication was successfully transmitted, as the case may be. Any notice sent by prepaid registered mail will be
deemed conclusively to have been effectively given on the third business day
after posting; but if at the time of posting or between the time of posting and
the third business day thereafter there is a strike, lockout, or other labour
disturbance affecting postal service, then the notice will not be effectively
given until actually delivered.
- 6 -
6.6
Time is of the essence of this Agreement.
6.7
It is understood and agreed by the parties to this Agreement that the only
duties and obligations of the Escrow Agent are those specifically stated herein
and no other.
6.8
The parties expressly acknowledge that any previous agreement entered into by
them will terminate and have no further force or effect upon the execution and
delivery of this Agreement by all parties hereto.
6.9
This Agreement may be executed in one or more counterparts, all of which will be
considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart. This Agreement may be executed by delivery of executed signature
pages by fax and such fax execution will be effective for all purposes.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
- 7 -
IN WITNESS WHEREOF the parties have caused this Escrow
Agreement to be executed as of the day and year first written above.
CLARK WILSON LLP
Per: /s/
Signed
Authorized
Signatory
TURNSTONE CAPITAL INC.
Per: /s/ Yenny
Martinez
Director
THE ALKALINE WATER COMPANY INC.
Per: /s/ Richard A.
Wright
Richard A. Wright, Vice-President, Secretary, Treasurer and Director
- 8 -
SCHEDULE A
FORM OF CANCELLATION RESOLUTION
CANCELLATION RESOLUTION
CORPORATE RESOLUTION AUTHORIZING RETIREMENT/OUTRIGHT
CANCELLATION WITHOUT REISSUANCE OF THE
ATTACHED
CERTIFICATES
THE ALKALINE WATER COMPANY INC.
|
COMMON STOCK |
|
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CLASS OF STOCK |
|
RESOLVED, THAT ISLAND STOCK TRANSFER STOCK, TRANSFER AGENT
FOR THE ABOVE CLASS OF STOCK FOR THE ABOVE COMPANY, IS AUTHORIZED BY THE COMPANY
TO CANCEL ALL CERTIFICATE(S) LISTED BELOW, WHICH ARE PRESENTED TO THE STOCK
TRANSFER AGENT FOR OUTRIGHT CANCELLATION, AND DECREASE THE OUTSTANDING SHARES ON
THE BOOKS OF THE COMPANY.
ORIGINAL CERTIFICATE(S) PRESENTED FOR CANCELLATION (PLEASE
TYPE)
Registered |
Certificate |
Number |
Cancellation |
Restricted or |
Name |
Number |
Of Shares |
Date |
Free Trading |
. |
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DECREASING THE NUMBER OF SHARES OUTSTANDING BY
_______________________ SHARES. |
|
(NOTE THIS RESOLUTION IS ONLY
USED TO DECREASE THE CONTROL BOOK, NOT
FOR A CORPORATE STOCK TRANSFER).
|
|
I, THE UNDERSIGNED, QUALIFIED OFFICER OF THE ABOVE
NAMED COMPANY, DO HEREBY INDEMNIFY ISLAND STOCK TRANSFER AND THEIR
EMPLOYEES AGAINST ANY AND ALL ACTIONS TAKEN BY THE ABOVE COMPANY,
AND CERTIFY THAT THIS IS A TRUE COPY OF A RESOLUTION, SET FORTH AND
ADOPTED ON THE BELOW DATE, AND THAT THE SAID RESOLUTION HAS NOT
BEEN IN ANY WAY RESCINDED, ANNULLED OR REVOKED BUT THE SAME IS
STILL IN FULL FORCE AND EFFECT. |
X /s/ Ricky
Wright
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Ricky Wright |
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OFFICERS SIGNATURE |
|
OFFICERS NAME PRINTED
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Vice President |
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January 25, 2016 |
|
TITLE OF OFFICER |
|
DATE |
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TELEPHONE NUMBER |
|
FACSIMILE NUMBER |
|
NOTE
NOTE-ALL CERTIFICATE(S) LISTED ABOVE FOR OUTRIGHT
CANCELLATION MUST BE PRESENTED TO ISLAND STOCK TRANSFER
PRIOR TO THE EXECUTION OF THIS RESOLUTION.
- 9 -
NOTE-IF ANY CERTIFICATE(S) IS (ARE) NOT IN THE
POSSESSION/CONTROL OF THE COMPANY AND THE COMPANY WISHES TO STOP THE TRANSFER OF
THE CERTIFICATE(S), PLEASE HAVE AN OFFICER COMPLETE A STOP TRANSFER RESOLUTION,
NOT A CANCELLATION RESOLUTION.
NOTE-THIS RESOLUTION WILL NOT TAKE THE PLACE OF A STOP
TRANSFER RESOLUTION, IF YOU WISH TO PLACE A STOP ON A CERTIFICATE PLEASE
COMPLETE A STOP TRANSFER RESOLUTION.
- 10 - |
|
SCHEDULE B |
|
FORM OF STOCK POWER OF ATTORNEY |
|
All certificates to be transferred must be enclosed
with this stock power |
The signature to this assignment must correspond with the
name as written upon the face of the certificate in every particular
without alteration or enlargement or any change whatsoever. The signature
of the person executing this power must be guaranteed by an eligible
Guarantor Institution such as a Commercial Bank, Trust Company, Securities
Broker/Dealer, Credit Union, or Savings Association participating in a
Medallion Program approved by the Securities Transfer Association, Inc. No
other form of signature guarantee is acceptable. |
STOCK POWER
For value received I/we hereby sell, assign and transfer unto
The Alkaline
Water Company Inc. |
(Print or Type Name) |
|
7730 E Greenway
Road, Suite 203, Scottsdale, AZ |
(Address of
Transferee) |
SS# or Tax ID
99-0367049_________________________________
<>[Number of Shares] ______________shares of . |
The Alkaline Water Company Inc |
|
(Name of Company) |
Represented by certificate number(s)___ |
<>[Certificate Number]
________________________________ . |
The undersigned does (do) hereby irrevocably constitute and
appoint Island Stock Transfer to transfer the said stock on the books of said
company with full power of substitution in the premises.
(Must check one) Note: If any cost basis
information below is not completed the issuer will be notified and given two
weeks to provide the data. If the data is not provided at the end of the
two weeks, the request will not be processed and will be rejected back to the
issuer.
Original Cost $[Amount] |
Original Issuance/Purchase
Date__<>[Date of Issue] |
|
|
Current Cost for this transaction
$0
|
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Gift____ Purchase/Sell__X__ (Includes
both Private and Public Purchases) Compensation _____ (Includes payment for
services)
Date January 25, 2016
/s/ Turnstone
Capital Inc. |
|
(Signature of Registered Holder completing the stock power) |
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Turnstone
Capital Inc. |
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(Print Name of Registered Holder) |
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(Signature of Joint Registered Holder completing the stock
power) |
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(Print Name of Joint Registered Holder) |
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AMENDMENT AGREEMENT
THIS
AMENDMENT AGREEMENT (the Agreement) is
made and entered into this 25th day of January, 2016 (the Effective
Date), by and between THE ALKALINE
WATER COMPANY INC., a Nevada Corporation
(the Borrower) and NEIL ROGERS
(the Lender).
RECITALS:
WHEREAS:
A.
Pursuant to a Loan Agreement dated November 30, 2015 (the Loan
Agreement), the Borrower borrowed from the Lender an aggregate of
$750,000.00 (the Loan) as is evidenced by a Non-Negotiable Promissory
Note dated November 30, 2015 (the Note);
B.
The Borrower and the Lender wish to extend the maturity date of the Loan to
March 31, 2016.
AGREEMENT:
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein, it is agreed:
1.
Section 2 of the Loan Agreement be deleted in its entirety and replaced with the
following:
2. Term. All sums due
and payable under the Loan Agreement shall be paid by the Borrower to the Lender
on or before March 31, 2016.
2.
Section 1 of the Note be deleted in its entirety and replaced with the
following:
1. Term. All
outstanding principal and interest shall be due and payable on or before March
31, 2016.
3.
Governing Law; Jurisdiction and Venue. This Agreement and the
rights and obligation of the parties hereunder and there under shall be
construed in accordance with and be governed by the law of the State of Nevada,
without regard to principles of conflicts of laws. Any legal action or
proceeding against the Borrower with respect to this Agreement may be brought in
the courts of the State of Arizona located in Maricopa County or in the United
States Federal courts located in Maricopa County, and, by execution and delivery
of this Agreement, each of the Borrower and the Lender hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts.
1
4.
Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Lender.
5.
Amendment or Waiver. This Agreement may not be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Lender and the Borrower.
6.
Effect of Amendments. Except as amended hereby, the Parties agree
that the Loan Agreement and the Note each continue to be binding, unchanged, and
in full force and effect.
IN WITNESS
WHEREOF, the parties hereto have executed this Loan Agreement
as of the day and year first above written.
|
THE LENDER:
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/s/ Neil
Rogers
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Neil Rogers |
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THE
BORROWER: |
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The Alkaline Water Company Inc. |
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By: /s/ Richard A.
Wright
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Its: Vice-President, Secretary, Treasurer and
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Director |
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Alkaline Water (NASDAQ:WTER)
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From Aug 2024 to Sep 2024
Alkaline Water (NASDAQ:WTER)
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From Sep 2023 to Sep 2024