Form 8-K12B
8-K12B — Gates Industrial Corp plc
Accession: 0001628280-26-048761
Filed: 2026-07-20
Period: 2026-07-20
CIK: 0001718512
SIC: 3560 (GENERAL INDUSTRIAL MACHINERY & EQUIPMENT)
Item: Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Item: Unregistered Sales of Equity Securities
Item: Material Modifications to Rights of Security Holders
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K12B — gtes-20260720.htm (Primary)
EX-3.1 (exhibit312.htm)
EX-3.2 (exhibit32.htm)
EX-3.3 (exhibit33pdf.htm)
EX-4.1 (a41gtes-descriptionofsecur.htm)
EX-10.1 (a101formofindemnificationa.htm)
EX-10.3 (a1032018omnibusinventivepl.htm)
EX-10.4 (a104formofexecutiveseveran.htm)
EX-10.5 (a105formofchangeincontrolp.htm)
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8-K12B
8-K12B (Primary)
Filename: gtes-20260720.htm · Sequence: 1
gtes-20260720
0001718512FALSE12/31Gates Industrial Corporation, plc8-K12B00017185122026-07-202026-07-20
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): July 20, 2026
Gates Industrial Corporation Ltd.
(Exact Name of Registrant as Specified in its Charter)
Bermuda 001-38366 98-1950337
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
1144 Fifteenth Street, Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
(303) 744-1911
(Registrant’s Telephone Number, Including Area Code)
Gates Industrial Corporation plc
(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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares, $0.01 par value per share GTES New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Background Information
Consummation of the Redomiciliation
Gates Industrial Corporation plc (“Old Gates” and together with its subsidiaries, the “Gates Group”) previously announced a plan to change the jurisdiction of incorporation of the parent holding company of the Gates Group from England and Wales to Bermuda through the introduction of a new holding company that will become the holding company of the Gates Group (the “Redomiciliation”). On July 16, 2026, as part of the Redomiciliation, Gates Industrial Corporation Ltd., a Bermuda exempted company limited by shares (“New Gates”), and Old Gates received approval from the High Court of Justice of England and Wales (the “Court”) of a statutory scheme of arrangement under English law (the “Scheme”), which was previously approved by Old Gates’s shareholders. In order to effect the Redomiciliation, as set out below, holders of ordinary shares of US$0.01 nominal value each in Old Gates (collectively, the “Old Gates Shares”) received common shares, par value US$0.01 per share, in New Gates (collectively, the “New Gates Shares”) in exchange for their Old Gates Shares on a one-for-one basis, with each holder of Old Gates Shares receiving the equivalent number of New Gates Shares (and Old Gates becoming a wholly-owned subsidiary of New Gates).
On July 20, 2026 (the “Effective Date”), Old Gates delivered a copy of the order of the Court approving the Scheme to the Registrar of Companies in England and Wales and the Scheme became effective and binding on all Old Gates shareholders as of the record time of the Scheme (5:00 p.m. Eastern Time on July 17, 2026 (the “Scheme Record Time”)), and Old Gates became a wholly-owned subsidiary of New Gates, thereby consummating the Redomiciliation. The amended and restated bye-laws of New Gates (the “New Gates Bye-laws”), in the form attached to the Definitive Proxy Statement of Old Gates filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 27, 2026 in connection with the Redomiciliation, have been adopted, and Old Gates’s Articles of Association were amended on June 25, 2026 to account for the transactions contemplated by the Scheme and on July 20, 2026 to reflect its re-registration as a private limited company.
The Old Gates Shares were previously listed on the New York Stock Exchange (the “NYSE”). In connection with the Old Gates Shares being cancelled and the holders thereof receiving New Gates Shares pursuant to the Scheme, the NYSE removed the Old Gates Shares from listing on the NYSE at the close of trading on July 17, 2026. The listing of the New Gates Shares on the NYSE will become effective on and as of July 20, 2026, and the New Gates Shares will begin trading on the NYSE as of market open on July 20, 2026 under the symbol “GTES”, the same symbol under which the Old Gates Shares traded prior to the Effective Date.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
The information set forth in the “Background Information—Consummation of the Redomiciliation” section of this Current Report on Form 8-K is incorporated by reference into this Item 3.01.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in the “Background Information—Consummation of the Redomiciliation” section of this Current Report on Form 8-K is incorporated by reference herein.
In connection with the Redomiciliation, New Gates issued 253,151,170 New Gates Shares to holders of Old Gates Shares immediately prior to the Scheme Record Time. The terms and conditions of the issuance were sanctioned by the Court after a hearing upon the fairness thereof at which all shareholders of Old Gates had a right to appear and of which adequate notice had been given. The issuance was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 3(a)(10) thereof.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 5.03 is incorporated by reference herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Directors and Officers of New Gates
Effective July 8, 2026 and in connection with the Redomiciliation, the executive officers of Old Gates, who are listed below, became the executive officers of New Gates with the same titles as such executive officers held with Old Gates.
Name Position
Ivo Jurek Chief Executive Officer
Matthew R. A. Heiman Executive Vice President, Chief Legal Officer and Corporate Secretary
L. Brooks Mallard Executive Vice President, Chief Financial Officer
Thomas G. Pitstick Senior Vice President and President Americas
Other than for Mr. Heiman, who joined Old Gates in May 2026 and has served as Old Gates’s Executive Vice President, Chief Legal Officer and Corporate Secretary since June 2026, biographical and other information (including compensation arrangements) concerning the executive officers of New Gates is included in the Definitive Proxy Statement of Old Gates filed with the SEC on April 20, 2026 (the “AGM Proxy”) and is incorporated herein by reference.
Additionally, effective July 8, 2026, John S. Patouhas, Senior Vice President, Chief Accounting Officer, serves as New Gates’s Principal Accounting Officer. Mr. Patouhas, age 59, has served as Old Gates’s Senior Vice President and Chief Accounting Officer since June 2024 and prior to joining Old Gates served as Vice President and Chief Accounting Officer of Tenneco, a designer, manufacturer and marketer of automotive products for original equipment and aftermarket customers from January 2015 to June 2024. From 2015 to 2018, Mr. Patouhas served as Vice President and Chief Accounting Officer at Federal-Mogul Holdings Corporation and Federal-Mogul Motorparts, which Tenneco acquired in 2018. Before joining Tenneco and Federal-Mogul, Mr. Patouhas served in various corporate controller and finance roles of increasing responsibility at Altair Engineering, HHI Group Holdings, TRW Automotive, Hayes Lemmerz International, Collins & Aikman, MCN Energy, and CMS Energy from 1995 to 2015, and as an auditor at Deloitte & Touche from 1991 to 1995. Mr. Patouhas holds an MBA in Finance and a BBA in Accounting, both from Wayne State University. Mr. Patouhas is a CPA and CGMA.
There are no arrangements or understandings with any person pursuant to which the directors or the executive officers of New Gates or Mr. Patouhas were appointed to New Gates. There are no family relationships amongst any of the directors of New Gates, any of the executive officers of New Gates or Mr. Patouhas.
Additionally, the board of directors of New Gates (the “New Gates Board”) and the committees thereof are listed below and consist of the same individuals that made up the Old Gates board of directors and committees thereof.
Board of Directors Audit Committee Compensation Committee Nominating and Governance Committee
Neil P. Simpkins Chair Chair
✓
Ivo Jurek
✓
Joseph S. Cantie
✓
✓
Fredrik Eliasson
✓
Chair
✓
James W. Ireland, III
✓
✓
✓
Stephanie K. Mains
✓
✓
✓
Wilson S. Neely
✓
✓
Chair
Molly P. Zhang
✓
✓
Each director will hold office until the earlier of (1) New Gates’s next annual general meeting, (2) when such director’s successor is elected or appointed and (3) such director’s office is otherwise vacated in accordance with the New Gates Bye-laws. Biographical and other information concerning each of these individuals (including compensation information) is included in the AGM Proxy and is incorporated herein by reference.
In connection with the Redomiciliation, New Gates will enter into indemnification agreements with each of its directors and certain officers under which New Gates will indemnify such director or officer for all expenses, liabilities, losses, judgments, penalties, fines and amounts paid in settlement in respect of any events or occurrences arising out of or in connection with such director’s or officer’s status as a director or officer or by reason of anything done or not done by such director or officer in such capacity. A copy of the form of indemnification agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing summary of such indemnification agreements is qualified in its entirety by reference to the full text thereof set forth in Exhibit 10.1.
Incentive Plans
In connection with the Redomiciliation, on the Effective Date, New Gates will (1) adopt and assume the 2014 Gates Industrial Corporation plc Stock Incentive Plan of Old Gates (the “2014 Equity Incentive Plan”), (2) adopt and assume the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan of Old Gates (the “2018 Equity Incentive Plan” and, together with the 2014 Equity Incentive Plan, the “Old Gates Equity Incentive Plans”) through an amendment and restatement of the 2018 Equity
Incentive Plan (the “2018 A&R Incentive Plan”) and (3) adopt and assume all outstanding equity awards issued under the Old Gates Equity Incentive Plans. All outstanding equity awards granted under the Old Gates Equity Incentive Plans have been converted on a one-for-one basis to become equity awards with respect to New Gates Shares, and all award agreements were deemed amended to reflect this conversion. All other material terms and conditions of the outstanding awards remain the same.
Additionally, Gates Corporation, an indirect wholly-owned subsidiary of New Gates, has adopted the Gates Corporation Executive Severance Plan (the “New Gates Severance Plan”) and the Gates Corporation Executive Change in Control Plan (the “New Gates CIC Plan”) to replace the Gates Industrial Corporation plc Executive Severance Plan and the Gates Industrial Corporation plc Executive Change in Control Plan, respectively, in each case to give effect to the Scheme.
Copies of the 2014 Equity Incentive Plan, the 2018 A&R Incentive Plan, the New Gates Severance Plan and the New Gates CIC Plan are attached hereto as Exhibits 10.2, 10.3, 10.4 and 10.5, respectively, and are incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
In connection with the Redomiciliation, New Gates filed a Memorandum of Association with the Registrar of Companies in Bermuda (the “Registrar”) pursuant to the Companies Act 1981 of Bermuda, as amended, and obtained from the Registrar a Certificate of Deposit of Memorandum of Increase of Share Capital, copies of which are attached hereto as Exhibit 3.1 and Exhibit 3.2, respectively, and incorporated herein by reference. Additionally, in connection with the Redomiciliation, New Gates adopted the New Gates Bye-laws, a copy of which is attached hereto as Exhibit 3.3 and incorporated herein by reference. The summary of the material terms of the New Gates Bye-laws set forth under “Description of the Share Capital of New Gates” in Item 8.01 of this Current Report on Form 8-K is incorporated by reference herein. Such summary does not purport to be complete and is qualified in its entirety by reference to the full text of the New Gates Bye-laws.
Item 8.01 Other Events.
Successor Issuer
Prior to the Redomiciliation, the Old Gates Shares were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and listed on the NYSE under the symbol “GTES”. On July 20, 2026, the NYSE is expected to file with the SEC a Form 25 to remove the Old Gates Shares from listing on the NYSE. After the Form 25 becomes effective, Old Gates will file a Form 15 with the SEC to terminate the registration, and suspend the reporting obligations, of Old Gates with respect to the Old Gates Shares under Sections 13 and 15(d) of the Exchange Act.
Pursuant to Rule 12g-3(a) promulgated under the Exchange Act, New Gates is the successor issuer to Old Gates and the New Gates Shares are deemed to be registered under Section 12(b) of the Exchange Act. The New Gates Shares were approved for listing on the NYSE and will begin trading on July 20, 2026 under the symbol “GTES”, the same symbol under which the Old Gates Shares previously traded. New Gates hereby reports this succession in accordance with Rule 12g-3(f) promulgated under the Exchange Act.
Description of the Share Capital of New Gates
The description of New Gates’s securities registered pursuant to Section 12 of the Exchange Act provided in Exhibit 4.1, which is incorporated by reference herein, modifies and supersedes any prior description of Old Gates’s capital stock in any registration statement or report filed with the SEC and will be available for incorporation by reference into certain of New Gates’s filings with the SEC pursuant to the Securities Act, the Exchange Act and the rules and forms promulgated thereunder.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
3.1
Memorandum of Association of New Gates
3.2
Certificate of Deposit of Memorandum of Increase of Share Capital
3.3
Amended and Restated Bye-laws of New Gates
4.1
Description of Registrant’s Securities
10.1
Form of Indemnification Agreement
10.2
2014 Gates Industrial Corporation plc Stock Incentive Plan (incorporated by reference to Exhibit 10.15 to Gates Industrial Corporation plc’s Annual Report on Form 10-K filed on February 14, 2019)
10.3
Amended and Restated 2018 Omnibus Incentive Plan
10.4
Gates Corporation Executive Severance Plan
10.5
Gates Corporation Executive Change in Control Plan
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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.
GATES INDUSTRIAL CORPORATION LTD.
By: /s/ L. Brooks Mallard
Name: L. Brooks Mallard
Title: Chief Financial Officer
Date: July 20, 2026
EX-3.1
EX-3.1
Filename: exhibit312.htm · Sequence: 2
Document
Exhibit 3.1
FORM No. 2
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES
Section 7(1) and (2)
MEMORANDUM OF ASSOCIATION
OF
Gates Industrial Corporation Ltd.
(hereinafter referred to as the "Company")
1. The liability of the members of the Company is limited to the amount (if any) for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
Name and Address
Bermudian Status (Yes or No)
Nationality
Number of Shares Subscribed
Allison Forte-Holloway
Park Place
55 Par-la-Ville Road
Hamilton HM 11
Bermuda
No
Barbados
1
do hereby respectively agree to take such number of shares of the Company as may be allotted to us respectively by the provisional directors of the Company, not exceeding the number of shares for which we have respectively subscribed, and to satisfy such calls as may be made by the directors, provisional directors or promoters of the Company in respect of the shares allotted to us respectively.
3. The Company is to be a local Company as defined by the Companies Act 1981.
4. The authorised share capital of the Company is US$12,000 divided into 1,200,000 shares of US$0.01each.
5. The Company, with the consent of the Minister of Finance, has the power to hold land situate in Bermuda not exceeding _______ in all, including the following parcels: - N/A
6. Subject to any provision of law, including a provision in the Companies Act or any other act, and any provision of this memorandum, the objects for which the Company is formed and incorporated are unrestricted
7. The Company shall have the capacity, rights, powers and privileges of a natural person and the additional powers set out below:
(a)the power, pursuant to Section 42 of the Companies Act, to issue preference shares which are liable to be redeemed at the option of the holder;
(b)the power, pursuant to Section 42A of the Companies Act, to purchase its own shares; and
(c)the power, pursuant to Section 42B of the Companies Act, to acquire its own shares, to be held as treasury shares, for cash or any other consideration.
Signed by each subscriber in the presence of at least one witness attesting the signature thereof:
/s/ Allison Forte-Holloway /s/ Saeluhn Fray
Allison Forte-Holloway Witness
Subscribed this 13th of May 2026
EX-3.2
EX-3.2
Filename: exhibit32.htm · Sequence: 3
exhibit32
Registration No. 202605878 The Companies Act 1981 CERTIFICATE OF DEPOSIT OF MEMORANDUM OF INCREASE OF SHARE CAPITAL that a Memorandum of Increase of Share Capital THIS IS TO CERTIFY of Gates Industrial Corporation Ltd. was delivered to the Registrar of Companies on the in accordance with29th day of June 2026 section 45(3) of (the "Act").the Companies Act 1981 Kenneth Joaquin Registrar of Companies 29th day of June 2026
EX-3.3
EX-3.3
Filename: exhibit33pdf.htm · Sequence: 4
exhibit33pdf
Exhibit 3.3 AMENDED AND RESTATED BYE-LAWS OF GATES INDUSTRIAL CORPORATION LTD.
TABLE OF CONTENTS INTERPRETATION ....................................................................................................................................... 1 Definitions ........................................................................................................................................ 1 SHARES ........................................................................................................................................................ 3 Power To Issue Shares .................................................................................................................... 3 Power of the Company to Purchase its Shares ............................................................................... 3 Rights Attaching to Shares .............................................................................................................. 3 Share Certificates ............................................................................................................................. 4 Uncertificated Shares ....................................................................................................................... 5 Fractional Shares ............................................................................................................................. 5 REGISTRATION OF SHARES ..................................................................................................................... 5 Register of Shareholders ................................................................................................................. 5 Registered Holder Absolute Owner ................................................................................................. 6 Transfer of Registered Shares ......................................................................................................... 6 Transmission of Registered Shares ................................................................................................. 7 ALTERATION OF SHARE CAPITAL ............................................................................................................ 7 Power to Alter Capital ...................................................................................................................... 7 Variation of Rights Attaching to Shares ........................................................................................... 8 DIVIDENDS AND CAPITALISATION ........................................................................................................... 8 Dividends ......................................................................................................................................... 8 Power to Set Aside Profits ............................................................................................................... 9 Method of Payment .......................................................................................................................... 9 Capitalisation .................................................................................................................................... 9 MEETINGS OF SHAREHOLDERS .............................................................................................................. 9 Annual General Meetings ................................................................................................................ 9 Special General Meetings ................................................................................................................ 9 Notice and Record Date ................................................................................................................. 10 Giving Notice and Access .............................................................................................................. 10 Postponement of General Meeting ................................................................................................ 11 Electronic Participation in General Meetings ................................................................................. 11 Quorum at General Meetings ......................................................................................................... 11 Chair to Preside at General Meetings ............................................................................................ 11 Voting on Resolutions .................................................................................................................... 11 Voting by Joint Holders of Shares .................................................................................................. 12 Instrument of Proxy ........................................................................................................................ 12 Representation of Corporate Shareholder ..................................................................................... 13 Adjournment of General Meeting ................................................................................................... 13 Written Resolutions ........................................................................................................................ 13 Directors' Attendance at General Meetings ................................................................................... 14 Order of Business .......................................................................................................................... 14 Advance Notice of Director Nominations and Other Business ...................................................... 15 Disclosure Requirements ............................................................................................................... 16 DIRECTORS AND OFFICERS ................................................................................................................... 17 Number of Directors ....................................................................................................................... 17 Term of Office of Directors ............................................................................................................. 17
Election of Directors ....................................................................................................................... 17 No Alternate Directors .................................................................................................................... 18 Removal of Directors ...................................................................................................................... 18 Vacancy in the Office of Director ................................................................................................... 18 Directors to Manage Business ....................................................................................................... 19 Powers of the Board of Directors ................................................................................................... 19 Register of Directors and Officers .................................................................................................. 20 Appointment of Officers .................................................................................................................. 20 Appointment of Secretary and Resident Representative ............................................................... 20 Duties of Officers ............................................................................................................................ 20 Duties of the Secretary ................................................................................................................... 21 Remuneration of Officers and Directors ......................................................................................... 21 Conflicts of Interest ........................................................................................................................ 21 Indemnification and Exculpation of Directors and Officers ............................................................ 21 MEETINGS OF THE BOARD OF DIRECTORS ......................................................................................... 23 Board Meetings .............................................................................................................................. 23 Notice of Board Meetings ............................................................................................................... 23 Electronic Participation in Meetings ............................................................................................... 24 Quorum at Board Meetings ............................................................................................................ 24 Board to Continue in the Event of Vacancy ................................................................................... 24 Chair to Preside ............................................................................................................................. 24 Written Resolutions ........................................................................................................................ 24 Validity of Prior Acts of the Board .................................................................................................. 24 CORPORATE RECORDS .......................................................................................................................... 24 Minutes ........................................................................................................................................... 24 Place Where Corporate Records Kept ........................................................................................... 25 Form and Use of Seal .................................................................................................................... 25 ACCOUNTS ................................................................................................................................................ 25 Books of Account ........................................................................................................................... 25 Financial Year End ......................................................................................................................... 25 AUDITS ....................................................................................................................................................... 25 Annual Audit ................................................................................................................................... 25 Appointment of Auditor ................................................................................................................... 26 Remuneration of Auditor ................................................................................................................ 26 Duties of Auditor ............................................................................................................................. 26 Change to the Company’s Auditors ............................................................................................... 26 Access to Records ......................................................................................................................... 26 Financial Statements ...................................................................................................................... 26 Distribution of Auditor’s Report ...................................................................................................... 27 Vacancy in the Office of Auditor ..................................................................................................... 27 VOLUNTARY WINDING UP AND DISSOLUTION ..................................................................................... 27 MERGERS AND AMALGAMATIONS OR COVERED TRANSACTIONS .................................................. 27 CHANGES TO CONSTITUTION ................................................................................................................ 28 Changes to Bye-laws ..................................................................................................................... 28 Changes to the Memorandum of Association ................................................................................ 29
Discontinuance ............................................................................................................................... 29 Forum ............................................................................................................................................. 29
1 INTERPRETATION Definitions 1. In these Bye-laws, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively: "Appointed Stock Exchange" means an appointed stock exchange as defined under the Companies Act. "Auditor" includes a company, an individual or partnership. "Bermuda" means the Islands of Bermuda. "Board" means the board of directors appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Companies Act and these Bye-laws or the directors present at a meeting of directors at which there is a quorum. "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in Bermuda are authorized or required by law to close. "Bye-laws" means these amended and restated bye-laws adopted by the Company with effect on the completion of the share exchange under the Scheme in their present form or as from time to time amended. "Companies Act" means the Companies Act 1981 as amended from time to time. "Company" means the company incorporated in Bermuda under the name of Gates Industrial Corporation Ltd. on May 13, 2026 or such other name as is thereafter adopted in accordance with the Companies Act for which these Bye-laws are approved and confirmed. “Contested Election” has the meaning set forth in Bye-law 96. "Covered Transaction" has the meaning set forth in Bye-law 151. "Director" means a director of the Company for the time being. ”Executive Officer” means any executive officer of the Company. "Hybrid Meeting" has the meaning set forth in Bye-law 61. "indemnitee" has the meaning set forth in Bye-law 116. "Independent Committee" means a committee of the Board of at least three Directors, comprised solely of members of the Board who are independent from both the Company and the proposed Covered Transaction. "notice" means the written notice as further provided in these Bye-laws unless otherwise specifically stated. "Officer" means any person appointed by the Board to hold an office in the Company.
2 "Person" shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, a limited liability partnership, an investment fund, a limited liability company, a company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "Register of Directors and Officers" means the register of directors and officers of the Company. "Register of Shareholders" means the register of members of the Company. "Registered Office" shall be at such place in Bermuda as the Board shall from time to time appoint. "Resident Representative" means any person appointed to act as resident representative and includes any deputy or assistant resident representative. “SEC” means the U.S. Securities and Exchange Commission. "Secretary" means the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary. "Scheme" means the scheme of arrangement to be entered into by Gates Industrial Corporation plc with its shareholders in the United Kingdom. "Shareholder" means the person registered in the Register of Shareholders as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Shareholders as one of such joint holders or all of such persons, as the context so requires. "shares" means a share in the capital of the Company of any class. "Significant Shareholder" means as of the date of the execution of a definitive agreement with respect to a Covered Transaction, a shareholder of the Company who, directly or indirectly, through one or more intermediaries, owns more than 25% of the total voting power of the issued shares entitled to vote at a general meeting of the Company and who is not, as of such date, as reasonably determined by the Company, eligible to make filings on Schedule 13G under the U.S. Exchange Act with respect to the beneficial ownership (as such term is defined under the U.S. Exchange Act) of shares of the Company held by such shareholder. "Treasury Share" means a share of the Company that was or is treated as having been acquired and held by the Company and has been held continuously by the Company since it was so acquired and has not been cancelled. 2. In these Bye-laws, where not inconsistent with the context: (a) words denoting the plural number include the singular number and vice versa; (b) words denoting the masculine gender include the feminine and neuter genders; (c) the word "may" shall be construed as permissive and the word "shall" shall be construed as imperative; and
3 (d) unless otherwise provided herein, words or expressions defined in the Companies Act shall bear the same meaning in these Bye-laws. 3. In these Bye-laws expressions referring to "writing" or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible form. 4. Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof. SHARES Power To Issue Shares 5. Subject to these Bye-laws, the Board shall have the power to issue any authorized but unissued shares on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital. 6. Subject to the Companies Act, any preference shares with nominal value in any currency may be issued or converted into shares that (at a determinable date or at the option of the Company or the holder) are liable to be redeemed on such terms and in such manner as may be determined by the Board (before the issue or conversion). 7. The Company shall not issue any shares unless the consideration for such shares has been fully paid, in cash or otherwise, in accordance with the Companies Act. For avoidance of doubt, no share shall be issued as partly paid or nil paid. Any purported issuance of shares in contravention of this Bye-Law shall be null and void ab initio, and the Company shall not recognize any rights attaching to such shares, including but not limited to voting rights, dividend rights, or rights to participate in the distribution of assets upon liquidation. The Company shall not record in its Register of Shareholders any issuance of shares unless evidence of full payment has been provided and verified by the Board or its authorized representatives. Power of the Company to Purchase its Shares 8. The Company may purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Companies Act on such terms as the Board shall think fit. 9. The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Companies Act. Rights Attaching to Shares 10. Subject to Bye-law 11 or to any other resolution of the Board (and without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares), the share capital shall be divided into shares of a single class the holders of which shall, subject to these Bye-laws: (a) be entitled to one vote per share; (b) be entitled to such dividends as the Board may from time to time declare;
4 (c) not be entitled to any pre-emption rights with respect to the issuance of shares; (d) in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and (e) generally be entitled to enjoy all of the rights attaching to shares. 11. Subject to the Companies Act, the Board shall have the power to issue preference shares in one or more series, which may be so issued with such powers, designations, preferences, voting rights, rights and terms of redemption, denominated in such currencies and with such par values, and with relative participating, optional or other special rights and qualifications, limitations and restrictions attaching thereto as determined by the Board, including rights to (a) receive dividends (which may include rights to receive preferential or cumulative dividends), (b) distributions made on a winding up of the Company and (c) be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of shares, at such price or prices (subject to the Companies Act) or at such rates of exchange and with such adjustments as may be determined by the Board. 12. All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Companies Act, all Treasury Shares shall be excluded from the calculation of any percentage or fraction of the share capital, or shares, of the Company. Share Certificates 13. Every Shareholder shall be entitled to a certificate under the common seal of the Company or bearing the signature of a Director or the Secretary or a person expressly authorised to sign specifying the number and, where appropriate, the class of shares held by such Shareholder. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical or electronic means. 14. The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted. 15. The holder of any shares of the Company shall immediately notify the Company of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to such holder a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or their legal representative to give the Company a bond in such sum and with such surety or sureties as it may direct to indemnify the Company against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. 16. For such time as any shares of the Company are traded on an Appointed Stock Exchange, nothing in these Bye-laws shall prevent title to any shares of the Company from being evidenced and/or transferred without a written instrument in accordance with the rules or regulations applicable to shares listed on any such Appointed Stock Exchange, and the Board shall have the power to implement any arrangements which it may think fit for such evidencing and/or transfer.
5 Uncertificated Shares 17. Any Shares of the Company shall be held by Shareholders in uncertificated form, unless otherwise determined by the Board or requested by a Shareholder under Bye-law 14 and the transfer of title of shares in that class shall be made by means of the relevant system used by any Appointed Stock Exchange on which the Company’s securities are listed or any other relevant system. The Board may determine and implement any arrangements it may, in its absolute discretion, think fit in relation to the evidencing of title to and transfer of certificated shares, subject to the facilities and requirements of any Appointed Stock Exchange on which the Company's securities are listed. 18. Shares in the capital of the Company that fall within a certain class shall not form a separate class of shares from other shares in that class because any share in that class is held in uncertificated form. 19. Where any class of shares is uncertificated and the Company is entitled under any provision of the Companies Act or these Bye-laws to sell, transfer or otherwise dispose of, forfeit, re-allot, accept the surrender of, or otherwise enforce a lien over, a share held in uncertificated form, the Company shall be entitled, subject to the provisions of the Companies Act or these Bye-laws and the facilities and requirements of the relevant system: (a) to require the holder of that uncertificated share by notice to change that share into certificated form within the period specified in the notice and to hold that share in certificated form so long as required by the Company; (b) to require the holder of that uncertificated share by notice to give any instructions necessary to transfer title to that share by means of the relevant system within the period specified in the notice; (c) to require the holder of that uncertificated share by notice to appoint any person to take any step, including, without limitation, the giving of any instructions by means of the relevant system, necessary to transfer the share within the period specified in the notice; and (d) to take any action that the Board considers appropriate to achieve the sale, transfer, disposal, forfeiture, re-allotment or surrender of that share, or otherwise to enforce a lien in respect of that share. Fractional Shares 20. The Company may issue its shares in fractional denominations and deal with such fractions as the Board thinks expedient with respect to the rights attaching thereto, including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding-up. REGISTRATION OF SHARES Register of Shareholders 21. The Board shall cause to be kept in one or more books a Register of Shareholders and shall enter therein the particulars required by the Companies Act. Subject to the provisions of the Companies Act, the Company may keep one or more overseas or branch registers in any place, and the Board may make, amend and revoke any such regulations as it may think fit regarding the keeping of
6 such registers. The Board may authorise any share on the Register of Shareholders to be included in a branch register or any share registered on a branch register to be registered on another branch register, provided that at all times the Register of Shareholders is maintain in accordance with the Companies Act. 22. The Register of Shareholders shall be open to inspection without charge at the Registered Office of the Company on every Business Day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each Business Day be allowed for inspection. The Register of Shareholders may, after notice has been given in accordance with the Companies Act, be closed for any time or times not exceeding in the whole thirty days in each year. Registered Holder Absolute Owner 23. The Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not be bound to recognise any equitable claim or other claim to, or interest in, such share on the part of any other person. Transfer of Registered Shares 24. An instrument of transfer shall be in writing in such form as the Board may accept. 25. Such instrument of transfer shall be signed by or on behalf of the transferor and transferee, provided that the Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee in the Register of Shareholders. 26. The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer. 27. The Board shall refuse to register a transfer unless all applicable notifications, consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained. If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal. 28. The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Shareholder may transfer any such share to the executors or administrators of such deceased Shareholder. 29. Shares may be transferred without a written instrument if transferred by an appointed agent or otherwise in accordance with the Companies Act. 30. Notwithstanding anything to the contrary in these Bye-laws, shares that are listed or admitted to trading on an Appointed Stock Exchange may be transferred in accordance with the rules and regulations of such exchange.
7 Transmission of Registered Shares 31. In the case of the death of a Shareholder, the remaining joint holder or holders where the deceased Shareholder was a joint holder, and the legal personal representatives of the deceased Shareholder where the deceased Shareholder was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Shareholder's interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Shareholder with other persons. Subject to the Companies Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Shareholder or such other person as the Board may, in its absolute discretion, decide as being properly authorised to deal with the shares of a deceased Shareholder. 32. Any person becoming entitled to a share in consequence of the death or bankruptcy of any Shareholder may be registered as a Shareholder upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in such form as the Board may accept. 33. On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Shareholder. 34. Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders. ALTERATION OF SHARE CAPITAL Power to Alter Capital 35. The Company may, if authorised by resolution of the Board and in any manner permitted by the Companies Act: (a) divide the Company’s issued shares into several classes and attach thereto any preferential, deferred, qualified or special rights, privileges or conditions; (b) consolidate all or any of the Company’s share capital into shares of larger par value than its existing shares; (c) subdivide the Company's shares, or any of them, into shares of smaller par value than its existing shares; or (d) make provision for the issue and allotment of Shares which do not carry any voting rights. 36. The Company may, if authorised by resolution of Shareholders at a general meeting, increase, change the currency denomination of, reduce, cancel, diminish or otherwise alter its share capital in any manner permitted by the Companies Act. 37. Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit.
8 Variation of Rights Attaching to Shares 38. If, at any time, the share capital is divided into different classes of shares, the rights attached to any class of shares (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing or with the sanction of a resolution passed by holders representing at least seventy five percent (75%) of the issued shares of such class at a separate meeting of the holders of such class of shares at which meeting the necessary quorum shall be one or more persons holding or representing by proxy at least one-third in nominal value of the issued shares of the relevant class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied or abrogated by: (a) the creation or issue of further shares ranking in priority to, pari passu therewith, or subsequent to any existing share or class of shares (including, without limitation, any preference shares issued); (b) the purchase, redemption, or other repurchase of any shares by the Company; (c) any alteration of the Company's share capital in accordance with the Companies Act and these Bye-laws; (d) the adoption, implementation, amendment, operation, or effects of any shareholder rights plan in accordance with these Bye-laws, including the issuance of rights, shares, or other securities in connection therewith. DIVIDENDS AND CAPITALISATION Dividends 39. The Board may, subject to these Bye-laws and in accordance with the Companies Act, declare a dividend or a distribution out of contributed surplus to be paid or distributed to the Shareholders, in proportion to the number of shares held by them, and such dividend or distribution may be paid or distributed in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets. The Board may, subject to these Bye-laws and in accordance with the Companies Act, pay preferential or cumulative dividends to holders of preference shares. 40. The Board may fix any date as the record date for determining the Shareholders entitled to receive any dividend. 41. Each share is entitled to the same dividend per share if any are declared with respect to such class. 42. The Board may declare and make such other distributions (in cash or in specie) to the Shareholders as may be lawfully made out of the assets of the Company and of paid-up shares or debentures of any other company, and where any difficulty arises in regard to such distribution or dividend, the Board may settle it as it thinks expedient, and in particular, may authorise any person to sell and transfer any fractions or may ignore fractions altogether, and may fix the value for distribution or dividend purposes of any such specific assets and may determine that cash payments shall be made to any Shareholders upon the footing of the values so fixed in order to secure equality of distribution and may vest any such specific assets in trustees as may seem expedient to the Board.
9 43. Unless otherwise specified in the terms and conditions of issue of the relevant class of shares, no unpaid dividend or distribution shall bear interest as against the Company. Power to Set Aside Profits 44. The Board may, before declaring a dividend or distribution, set aside out of the surplus or profits of the Company, such amount as it thinks proper as a reserve to be used to meet contingencies or for equalising dividends or distributions or for any other purpose. Method of Payment 45. Any dividend, interest, or other moneys payable in cash in respect of the shares may be paid by cheque or draft sent through the post directed to the Shareholder at such Shareholder’s address in the Register of Shareholders, or to such person and to such address as the holder may in writing direct. 46. In the case of joint holders of shares, any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Shareholders, or to such person and to such address as the joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one of the joint holders can give an effectual receipt for any dividend paid in respect of such shares. 47. The Board may deduct from the dividends or distributions payable to any Shareholder all moneys due from such Shareholder to the Company on account of calls or otherwise. Capitalisation 48. The Board may capitalise any amount for the time being standing to the credit of any of the Company’s share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Shareholders. MEETINGS OF SHAREHOLDERS Annual General Meetings 49. Subject to any rights to waive the annual general meeting pursuant to the Companies Act, the annual general meeting shall be held in each year (other than the year of incorporation) at such place, date and hour as shall be fixed by the Board. Special General Meetings 50. The Board may convene a special general meeting whenever in their judgment they shall think fit to be held at such place, date and hour as fixed by the Board. The Board shall, on the requisition of Shareholders holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up share capital of the Company as at the date of the deposit carries the right to vote at general meetings, forthwith proceed duly to convene a special general meeting and the provisions of the Companies Act shall apply.
10 Notice and Record Date 51. At least 10 clear days but no more than 60 clear days' notice of an annual general meeting shall be given to each Shareholder entitled to attend and vote thereat, stating the place, date and hour at which the meeting is to be held and the general nature of the business to be considered. 52. At least 10 clear days but no more than 60 clear days' notice of a special general meeting shall be given to each Shareholder entitled to attend and vote thereat, stating the date, time, place and the general nature of the business to be considered at the meeting. 53. The Board may fix any date as the record date for determining the Shareholders entitled to receive notice of and to vote at any general meeting. 54. A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by: (i) in the case of an annual general meeting, all the Shareholders entitled to attend and vote thereat; and (ii) in the case of a special general meeting, by a majority in number of the Shareholders having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares having a right to attend and vote thereat or one Shareholder if there is only one Shareholder. 55. The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting. Giving Notice and Access 56. A notice may be given by the Company to a Shareholder: (a) by delivering it to such Shareholder in person; or (b) by sending it by letter mail or courier to such Shareholder’s address in the Register of Shareholders; or (c) by transmitting it by electronic means (including facsimile and electronic mail, but not telephone) in accordance with such directions as may be given by such Shareholder to the Company for such purpose; or (d) by delivering it in accordance with the provisions of the Companies Act pertaining to the delivery of electronic records by publication on a website. 57. Any notice required to be given to a Shareholder shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Shareholders and notice so given shall be sufficient notice to all the holders of such shares. 58. Any notice (save for one delivered in accordance with Bye-law 56(d) shall be deemed to have been served at the time when the same would be delivered in the ordinary course of transmission and, in proving such service, it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted, and the time when it was posted, delivered to the courier, or transmitted by electronic means.
11 59. In the case of information or documents delivered in accordance with Bye-law 56(d) service shall be deemed to have occurred when the requirements of the Companies Act in that regard have been met. Postponement of General Meeting 60. The Secretary may postpone any general meeting called in accordance with these Bye-laws (other than a meeting requisitioned under these Bye-laws) provided that notice of postponement is given to the Shareholders before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Shareholder in accordance with these Bye-laws. Electronic Participation in General Meetings 61. The Board may, in its sole discretion, determine that any general meeting may be held as (a) an in-person meeting; (b) a combined in-person and virtual general meeting (a “Hybrid Meeting”); or (c) a fully virtual meeting and Shareholders participation in any such a meeting shall constitute presence in person at such meeting. Quorum at General Meetings 62. At any general meeting a quorum shall be present if at least one Shareholder representing at least the majority of the voting rights of all the Shareholders entitled to vote at the relevant meeting is present at the general meeting or represented by proxy, and such Shareholder shall form a quorum for the transaction of business at any general meeting held during such time. 63. If at the time appointed for any general meeting a quorum is not present, then the meeting shall stand adjourned to the same day one week later, at the same time and place or to such other day, time or place as the Secretary may determine, or may be cancelled at the discretion of the Secretary. Unless the meeting is adjourned to a specific date, time and place announced at the meeting being adjourned, fresh notice of the resumption of the meeting shall be given to each Shareholder entitled to attend and vote thereat in accordance with these Bye-laws. Chair to Preside at General Meetings 64. The chair of the Board or a delegee of the chair of the Board shall act as chair of the meeting at all general meetings. If there is no such chair of the Board, or if at any meeting the chair or their delegee is not present within five minutes after the time appointed for holding the meeting or is unwilling to act as chair of the meeting, the Board may designate any Director or Officer to act as chair of any general meeting, and only the Board may further provide for determining who shall act as chair of any general meeting of shareholders in the absence of the chair of the Board and such designee. The Board may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board, and in accordance with the Companies Act, the chair of any general meeting shall have the right and authority to convene and (for any or no reason) to recess or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chair, are necessary, appropriate or convenient for the proper conduct of the meeting. Voting on Resolutions 65. Subject to the Companies Act and these Bye-laws, any question proposed for the consideration of the Shareholders at any general meeting shall be decided by the affirmative votes of a majority of
12 the votes cast by Shareholders entitled to vote thereon, and in the case of an equality of votes the proposed resolution shall fail. 66. At any general meeting a resolution put to the vote of the meeting shall be voted on by way of a poll. Subject to any rights or restrictions for the time being lawfully attached to any class of shares, and subject to these Bye-laws, every person present at such meeting shall have one vote for each share of which such person is the holder or for which such person holds a proxy. Such vote shall be counted (a) by ballot, as described herein, or (b) in the case of a general meeting at which one or more Shareholders are present by telephone, electronically or by other communication facilities or means, in such manner as the chair of the meeting may direct. The result of such poll shall be deemed to be the resolution of the meeting. 67. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way. 68. At any general meeting if an amendment is proposed to any resolution under consideration and the chair of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. 69. In the case of an in-person meeting or Hybrid Meeting, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record their vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. Each person present by telephone, electronic or other communication facilities or means shall cast their vote in such manner as the chair of the meeting shall direct. At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by an independent inspector appointed by the Board or the chair of the meeting for the purpose and the result of the poll shall be declared by the chair of the meeting. Voting by Joint Holders of Shares 70. In the case of joint holders, the vote of the senior who tenders a vote (whether in person or by proxy) shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Shareholders. Instrument of Proxy 71. An instrument appointing a proxy shall be in writing in such form as the chair of the meeting or, in the case of a written resolution, the Board shall accept. 72. The instrument appointing a proxy must be received by the Company at the Registered Office or at such other place or in such manner as is specified in the notice convening the meeting or sent with the written resolution, or in any instrument of proxy sent out by the Company in relation to the meeting or written resolution on which the person named in the instrument appointing a proxy proposes to vote, and an instrument appointing a proxy which is not received in the manner so prescribed shall be invalid. 73. A Shareholder who is the holder of two or more shares may appoint more than one proxy to represent such Shareholder and vote on such Shareholder's behalf in respect of different shares.
13 74. The decision of the chair of any general meeting or, in the case of a written resolution, the Board as to the validity of any appointment of a proxy shall be final. Representation of Corporate Shareholder 75. A corporation which is a Shareholder may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Shareholder, and that Shareholder shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives. 76. Notwithstanding the foregoing, the chair of the meeting may accept such assurances as they think fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Shareholder. Adjournment of General Meeting 77. The chair of a general meeting may adjourn the meeting at any time if: (a) a quorum is not present, in which case Bye-law 63 shall apply; or (b) it is likely to be impractical to hold or continue that meeting because of the number of Shareholders wishing to attend who are not present; or (c) the unruly conduct of persons attending the meeting prevents, or is likely to prevent, the orderly continuation of the business of the meeting; or (d) an adjournment is otherwise necessary so that the business of the meeting may be properly conducted; or (e) the chair of the meeting considers, in good faith, any other reason to warrant an adjournment. Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, fresh notice of the date, place and time for the resumption of the adjourned meeting shall be given to each Shareholder entitled to attend and vote thereat in accordance with these Bye-laws. Written Resolutions 78. Subject to these Bye-laws, anything which may be done by resolution of the Company in a general meeting or by resolution of a meeting of any class of the Shareholders may, without a meeting, be done by unanimous written resolution in accordance with this Bye-law. Such written resolution may be signed by each Shareholder or its proxy, or in the case of a Shareholder that is a corporation by its representative on behalf of such Shareholder. 79. Notice of a proposed written resolution shall be given, and a copy of the proposed written resolution shall be circulated to all Shareholders who would be entitled to attend a meeting and vote thereon. The accidental omission to give notice to, or the non-receipt of a notice by, any Shareholder does not invalidate the passing of a written resolution.
14 80. A written resolution is passed when it is signed by (or, in the case of a Shareholder that is a corporation, on behalf of), the Shareholders who at the date that the notice is given represent all of the total voting power of the issued shares entitled to vote on such matter. 81. A written resolution may be signed in any number of counterparts. 82. A written resolution made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Shareholders, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Shareholders voting in favour of a resolution shall be construed accordingly. 83. A written resolution made in accordance with this Bye-law shall constitute minutes for the purposes of the Companies Act. 84. Bye-laws 78 to 83 shall not apply to: (a) a resolution passed to remove an Auditor from office before the expiration of such Auditor's term of office; or (b) a resolution passed for the purpose of removing a Director before the expiration of such Director's term of office. 85. For the purposes of Bye-laws 78 to 83, the effective date of the resolution is the date when the resolution is signed by (or in the case of a Shareholder that is a corporation whether or not a company within the meaning of the Companies Act, on behalf of) the last Shareholder whose signature results in all of the total voting power of the issued shares entitled to vote on such matter being achieved and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with Bye-laws 78 to 83, a reference to such date. Directors' Attendance at General Meetings 86. The Directors shall be entitled to receive notice of, attend, and be heard at any general meeting. Order of Business 87. At any annual general meeting, only such nominations of persons for election to the Board shall be made, and only such other business shall be conducted or considered, as shall have been properly brought before the meeting. For nominations to be properly made at an annual general meeting, and proposals of other business to be properly brought before an annual general meeting, nominations and proposals of other business must be (i) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly made at the annual general meeting, by or at the direction of the Board, or (iii) otherwise properly requested to be brought before the annual general meeting by a Shareholder in accordance with the applicable provisions of Bye-laws 90, 91 and 92. For nominations of persons for election to the Board or proposals of other business to be properly requested by a Shareholder to be made at an annual general meeting, a Shareholder must be a Shareholder of record at the time of giving of notice of such annual general meeting by or at the direction of the Board and at the time of the annual general meeting, be entitled to vote at such annual general meeting, and comply with the procedures set forth in Bye-laws 90, 91 and 92 as to such nomination or business.
15 88. At any special general meeting, only such business shall be conducted or considered as shall have been properly brought before the meeting pursuant to the Company’s notice of meeting (or any supplement thereto). To be properly brought before a special general meeting, proposals of business must be (i) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the special general meeting, by or at the direction of the Board, or (iii) otherwise properly requested to be brought before the special general meeting by a Shareholder who must be a Shareholder of record at the time of giving of notice of such special general meeting and at the time of the special general meeting, be entitled to vote at such special general meeting, and comply with the procedures set forth in Bye-laws 90, 91 and 92 as to such business. At any special general meeting, only such nominations of persons for election to the Board may be made at a special general meeting at which directors are to be elected, as shall have been properly brought before the meeting. For nominations to be properly made at a special general meeting, nominations must be (i) specified in the Company’s notice of meeting (or any supplement thereto), by or at the direction of the Board, or (ii) provided that the Board has determined that directors shall be elected at such meeting, by any Shareholder who is a Shareholder of record at the time of giving of notice of such special general meeting and at the time of the special general meeting, is entitled to vote at the meeting and complies with the procedures set forth in Bye-laws 90, 91 and 92 as to such nomination. 89. If the chair of the Board (or other person presiding over the relevant general meeting) determines that a nomination or any business brought before a general meeting was not made in accordance with these Bye-laws, the chair of the Board (or such other person presiding over the relevant general meeting) shall declare to the meeting that the nomination or business brought before the general meeting was defective and same shall be disregarded. Advance Notice of Director Nominations and Other Business 90. Without qualification or limitation, for any nominations or any other business to be properly brought before a general meeting by a Shareholder pursuant to Bye-laws 87 or 88, as applicable, the Shareholder must have given timely notice thereof in writing to the Secretary and such other business must otherwise be a proper matter for Shareholder action. (a) To be timely, a Shareholder’s notice with respect to an annual general meeting shall be delivered to the Secretary at the Registered Office not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual general meeting; provided, however, that if the date of the annual general meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the Shareholder must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual general meeting and not later than the close of business on the later of the 90th day prior to the date of such annual general meeting, or, if the first public announcement of the date of such annual general meeting is less than 100 days prior to the date of such annual general meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. In no event shall any adjournment or postponement of an annual general meeting, or the public announcement thereof, commence a new time period for the giving of a Shareholder’s notice as described above. (b) To be timely, a Shareholder’s notice with respect to a special general meeting shall be delivered to the Secretary at the Registered Office not earlier than the close of business on the 120th day prior to the date of such special general meeting and not later than the
16 close of business on the later of the 90th day prior to the date of such special general meeting or, if the first public announcement of the date of such special general meeting is less than 100 days prior to the date of such special general meeting, the 10th day following the day on which public announcement is first made of the date of the special general meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall any adjournment or postponement of a special general meeting, or the public announcement thereof, commence a new time period for the giving of a Shareholder’s notice as described above. Disclosure Requirements 91. To be in proper form, a Shareholder’s notice (whether given pursuant to Bye-laws 87 or 88) to the Secretary must include the following, as applicable. (a) As to the Shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, a Shareholder’s notice must set forth: (i) the name and address (x) of such Shareholder, as they appear on the Company’s books, (y) of such beneficial owner, if any, and (z) of their respective affiliates or associates; (ii) a representation that the Shareholder is a holder of shares in the Company and that the Shareholder intends to vote such shares at such meeting, including the class, series and number of shares of each class or series of shares (if any) of the Company that are, directly or indirectly, owned beneficially or of record (specifying the type of ownership) by such Shareholder (including any right to acquire beneficial ownership at any time in the future, whether such right is exercisable immediately or only after the passage of time or the fulfilment of a condition) and the date or dates on which such shares were acquired; and (iii) any other information relating to such Shareholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a Contested Election pursuant to Section 14 of the U.S. Exchange Act and the rules and regulations promulgated thereunder. (b) As to each person, if any, whom the Shareholder proposes to nominate for election or re- election to the Board, a Shareholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a Contested Election pursuant to Section 14 of the U.S. Exchange Act and the rules and regulations promulgated thereunder; and (ii) the nominee’s written consent to being named as a nominee in the proxy statement or meeting notice and serving as a director if elected (or re-elected).
17 (c) If the notice relates to any other business that the Shareholder proposes to bring before the meeting, a Shareholder’s notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such Shareholder and beneficial owner, if any, in such business; (ii) the full text of the proposal or business (including the text of any resolutions proposed for consideration); and (iii) a description of all agreements, arrangements and understandings between such Shareholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such Shareholder. 92. Notwithstanding the provisions of Bye-laws 87, 88, 90, or 91, a Shareholder shall also comply with all applicable requirements of the Companies Act and of the U.S. Exchange Act with respect to the matters set forth in Bye-laws 87, 88, 90, or 91. Nothing in Bye-laws 87, 88, 90, or 91 shall be deemed to affect any rights of Shareholders to request inclusion of proposals in, nor the right of the Company to omit proposals from, the Company’s proxy statement pursuant to Rule 14a-8 (or any successor provision) under the U.S. Exchange Act, subject in each case to compliance with the U.S. Exchange Act. DIRECTORS AND OFFICERS Number of Directors 93. The number of directors that shall constitute the entire Board shall be fixed, from time to time, exclusively by the Board, subject to the rights of the holders of any series of preference shares with respect to the election of directors, if any. The Board shall consist of a minimum of two directors and such maximum number as the Board may from time to time determine. Term of Office of Directors 94. Directors shall hold office for such term as the Shareholders may determine or, in the absence of such determination, until the earlier of the next annual general meeting; when their successors are elected or appointed; or their office is otherwise vacated in accordance with these Bye-laws. Election of Directors 95. The Board of Directors shall be elected or appointed in the first place at the statutory meeting of the Company and thereafter, except in the case of a casual vacancy, at the annual general meeting or at any special general meeting called for that purpose. 96. At any general meeting duly called and held for the election or re-election of directors at which a quorum is present, directors shall be elected by a resolution passed by the affirmative votes of a majority of the votes cast by Shareholders entitled to vote on the election of directors. If the total number of director nominees properly nominated in accordance with these Bye-laws exceeds the number of directors to be elected as of the record date for such general meeting (a “Contested Election”), the directors with the greatest number of votes are elected in descending order until the
18 number of directors to be elected at such meeting is satisfied. Following their election, all Directors, upon election or appointment (except upon re-election at an annual general meeting), must provide written acceptance of their appointment in such form as the Board may think fit, by notice in writing to the Registered Office within 30 days of their appointment. No Alternate Directors 97. No Director may appoint an alternate director to act in their place, and any purported appointment of an alternate director shall be void and of no force or effect. Removal of Directors 98. Subject to any provision to the contrary in these Bye-laws, the Shareholders entitled to vote for the election of Directors may, at any special general meeting called for such purpose and convened and held in accordance with these Bye-laws, remove a Director with or without cause upon the affirmative votes of a majority of the votes cast by Shareholders entitled to vote thereon at a general meeting provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director no fewer than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director’s removal. 99. If a Director is removed from the Board under this Bye-law, any vacancies in the Board shall be filled in accordance with Bye-law 101. A Director so appointed shall hold office for a term that shall coincide with the remaining term of the Director whose vacancy such Director was appointed to fill in accordance with Bye-law 94. Vacancy in the Office of Director 100. The office of Director shall be vacated if the Director: (a) is removed from office pursuant to these Bye-laws or is prohibited from being a Director by applicable law, rule or listing regulations; (b) is or becomes bankrupt or insolvent; (c) is or becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to mental health and the Board resolves that such Director's office is vacated, or dies; (d) resigns their office by notice to the Company; or (e) does not receive the requisite approval of Shareholders for their re-election pursuant to Bye-law 96. 101. The Board, by the affirmative vote of a majority of the remaining Directors then in office (even if less than a quorum) shall have the power to appoint any person as a Director to fill a vacancy on the Board for any reason including as a result of the death, disability, disqualification or resignation of any Director or as a result of an increase in the size of the Board. Any Director appointed in accordance with the preceding sentence shall hold office for the remainder of the term of the Director whose vacancy such Director was appointed to fill, and until such Director's successor shall have been elected and qualified. No decrease in the number of Directors
19 constituting the Board shall shorten the term of any incumbent Director. In case the entire Board shall die or resign, the Secretary may call and cause notice to be given for a special general meeting of Shareholders in the same manner that the chair of the Board may call such a meeting, and Directors for the unexpired terms may be elected at such special general meeting. 102. The Shareholders in general meeting shall have the power to appoint any person as a Director to fill a vacancy on the Board occurring for any reason including as a result of the death, disability, disqualification or resignation of any Director or as a result of an increase in the size of the Board. Directors to Manage Business 103. The business of the Company shall be managed and conducted by the Board. In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by the Companies Act or by these Bye-laws, required to be exercised by the Company in any general meeting. Powers of the Board of Directors 104. The Board may: (a) appoint, suspend, or remove any manager, chief financial officer, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties; (b) exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party; (c) appoint, suspend, or remove one or more person(s) (who may or may not be a Director) to the office of managing director or chief executive officer of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company, and may fix their remuneration; (d) appoint a person to act as manager of the Company’s day-to-day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business; (e) by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney; (f) procure that the Company pays all expenses incurred in promoting and incorporating the Company;
20 (g) designate one or more committees, such committee or committees to have such name or names as may be determined from time to time by resolution adopted by the Board, and each such committee to consist of one or more directors of the Company, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board as may be delegated to such committee in the management of the business and affairs of the Company; provided further that the meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board. A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time; (h) delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board may see fit; (i) present any petition and make any application in connection with the liquidation or reorganisation of the Company; (j) in connection with the issue of any share, pay such commission and brokerage as may be permitted by law; and (k) authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any deed, agreement, document or instrument on behalf of the Company. Register of Directors and Officers 105. The Secretary shall establish and maintain a Register of the Directors and Officers of the Company as required by the Companies Act. The Register of the Directors and Officers shall be open to inspection without charge at the Registered Office of the Company on every Business Day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each Business Day be allowed for inspection. The Register of the Directors and Officers may, after notice has been given in accordance with the Companies Act, be closed for any time or times not exceeding in the whole thirty days in each year. Appointment of Officers 106. The Board may appoint such officers (who may or may not be Directors) as the Board may determine. Appointment of Secretary and Resident Representative 107. The Secretary and Resident Representative, if necessary, shall be appointed by the Board at such remuneration (if any) and upon such terms as it may think fit and any Secretary and Resident Representative so appointed may be removed by the Board. Duties of Officers 108. The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.
21 Duties of the Secretary 109. The duties of the Secretary shall be those prescribed by the Companies Act together with such other duties as shall from time to time be prescribed by the Board. Remuneration of Officers and Directors 110. The Officers shall receive such remuneration as the Board or a committee of the Board may determine. The Directors shall receive such remuneration as the Board or a committee of the Board may determine. Conflicts of Interest 111. Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director’s firm, partner or company shall be entitled to remuneration as if such Director were not a Director. Nothing herein contained shall authorise a Director or Director’s firm, partner or company to act as Auditor to the Company. 112. A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall not be permitted to vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may not be counted in the quorum for such meeting. 113. For the purposes of these Bye-laws, in addition to any interests they would be deemed to be interested in under the provisions of the Companies Act, a Director shall be considered to be interested in a contract or proposed contract or arrangement with the Company if such contract, proposed contract or arrangement is between any member of a Director's immediate family and the Company (where "immediate family" shall mean father, mother, step-father, step-mother, sibling (including stepsiblings and adopted siblings), spouse, domestic partner, child (including step-child or adopted child) or grandchild). 114. Subject to the Companies Act and any further disclosure required thereby, a general notice to the Directors by a Director or Officer declaring that they are a director or officer or have an interest in any business entity and is to be regarded as interested in any transaction or arrangement made with that business entity shall be sufficient declaration of interest in relation to any transaction or arrangement so made. Indemnification and Exculpation of Directors and Officers 115. To the fullest extent permitted by the Companies Act, a Director of the Company shall not be liable to the Company or its Shareholders for monetary damages for breach of fiduciary duty as a Director. Any repeal or modification of this Bye-law 115 shall be prospective only and shall not adversely affect any limitation, right or protection of a Director existing at the time of such repeal or modification. 116. Without limitation of any right conferred by Bye-law 115, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative
22 (hereinafter a "proceeding"), by reason of the fact that such person is or was a Director, Officer or Resident Representative of the Company, or is or was serving at the request of the Company as a director, officer, Resident Representative, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, and regardless of whether there is found to be any potential defect in their appointment or election and is thereby acting under the reasonable belief that the director or officer was properly appointed or elected (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity while serving as a director, officer, Resident Representative, employee or agent or in any other capacity while serving as a director, officer, Resident Representative, employee or agent, shall be indemnified and held harmless by the Company to the fullest extent authorized by the Companies Act against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith, provided always that the indemnity contained in this Bye- Law shall not extend to any matter which would render it void pursuant to the Companies Act or other applicable law, rule or listing regulations and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, Resident Representative, employee or agent, as applicable, and shall inure to the benefit of the indemnitee’s heirs, testators, intestates, executors and administrators; provided, however, except as provided in Bye-law 117 with respect to proceedings to enforce rights to indemnification, the Company shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) initiated by such indemnitee was authorized by the Board. An indemnitee shall not be liable for actions or omissions or otherwise of any other indemnitees. The right to indemnification conferred in this Bye-law 116 shall be a contract right and shall include the right to be paid by the Company, the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however that the advancement of expenses is authorized by the Board, and only upon delivery to the Company of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that any allegation of fraud or dishonesty is proved against the indemnitee. The advancement of expenses would not be paid unless the advancement was duly authorized upon a determination that the indemnification of the indemnitee was appropriate because the indemnitee had met the standard of conduct which would entitle the indemnitee to indemnification and further the determination referred to above must be made by a majority vote of the Board at a meeting duly constituted by a quorum of Directors not party to the proceedings in respect of which the indemnification is, or would be, claimed; or, in the case such meeting cannot be constituted by lack of disinterested quorum by an independent third party. 117. If a claim under Bye-law 116 is not paid in full by the Company within 60 days after a written claim has been received by the Company, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 30 days, the indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an advancement of expenses pursuant to the terms of any undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met the applicable standard of conduct set forth in the Companies Act. In any suit by the Company to recover an advancement of expenses pursuant to the terms of an undertaking, the Company shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met the applicable standard of conduct set forth in the Companies Act. Neither the failure of the Company (including the Board, independent legal counsel, or the Shareholders) to have made a
23 determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Companies Act, nor an actual determination by the Company (including the Board, independent legal counsel or the Shareholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Company to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Bye-law or otherwise shall be on the Company. 118. Each Shareholder agrees to waive any claim or right of action such Shareholder might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his duties with or for the Company or any subsidiary thereof, provided that such waiver shall not extend to any matter in respect of any fraud or dishonesty which may attach to such Director or Officer, nor shall such waiver extend to any claims of violations of the Securities Act of 1933 (the “U.S. Securities Act”) or the U.S. Exchange Act which waiver would be prohibited by Sections 14 of the U.S. Securities Act and 29(a) of the U.S. Exchange Act. 119. The rights to indemnification and to the advancement of expenses conferred in Bye-law 116 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of these Bye-laws, agreement, vote of Shareholders or disinterested Directors, or otherwise. 120. The Company may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a Director, Officer, Resident Representative, employee or agent of the Company or any person who is or was serving at the request of the Company as a director, officer, Resident Representative, employer or agent of another company, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Companies Act. MEETINGS OF THE BOARD OF DIRECTORS Board Meetings 121. The Board may meet for the transaction of business, adjourn and otherwise regulate its meetings as it sees fit. A resolution put to the vote at a meeting of the Board shall be carried by the affirmative votes of a majority of the Directors and in the case of an equality of votes of the Directors the resolution shall fail. Notice of Board Meetings 122. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Board. Notice of a meeting of the Board shall be deemed to be duly given to a Director if it is given to such Director orally (including in person or by telephone) or otherwise communicated or sent to such Director by post, electronic means or other mode of representing words in a visible form at such Director's last known address or in accordance with any other instructions given by such Director to the Company for this purpose.
24 Electronic Participation in Meetings 123. Directors may participate in any meeting by such telephonic, electronic or other communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting. Quorum at Board Meetings 124. At all meetings of the Board, a majority of Directors constituting the Board shall constitute a quorum for the transaction of business. Board to Continue in the Event of Vacancy 125. The Board may act notwithstanding any vacancy in its number but, subject to Bye-law 101, if and so long as its number is reduced below the minimum number fixed by these Bye-laws as the quorum necessary for the transaction of business at meetings of the Board, the continuing Director may act for the purpose of (i) summoning a general meeting; or (ii) preserving the assets of the Company. Chair to Preside 126. Unless otherwise agreed by a majority of the Directors attending, the chair of the Board, if there be one, and if not, the chief executive officer or president of the Company, if there be one, shall act as chair at all meetings of the Board at which such person is present. In their absence, a chair shall be appointed or elected by the Directors present at the meeting. Written Resolutions 127. A written resolution signed by all the Directors, which may be in counterparts, shall be as valid as if it had been passed at a meeting of the Board duly called and constituted, such resolution to be effective on the date on which the resolution is signed by the last Director. Validity of Prior Acts of the Board 128. No regulation or alteration to these Bye-laws made by the Company in a general meeting shall invalidate any prior act of the Board which would have been valid if that regulation or alteration had not been made. CORPORATE RECORDS Minutes 129. The Board shall cause minutes to be duly entered in books provided for the purpose: (a) of all elections and appointments of Officers; (b) of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and
25 (c) of all resolutions and proceedings of general meetings of the Shareholders, meetings of the Board, meetings of managers and meetings of committees appointed by the Board. Place Where Corporate Records Kept 130. Minutes prepared in accordance with the Companies Act and these Bye-laws shall be kept by the Secretary at the Registered Office of the Company. Form and Use of Seal 131. The Company may adopt a seal in such form as the Board may determine. The Board may adopt one or more duplicate seals for use in or outside Bermuda. 132. A seal may, but need not, be affixed to any deed, instrument, share certificate or document, and if the seal is to be affixed thereto, it shall be attested by the signature of: (i) any Director; (ii) any Officer; (iii) the Secretary; or (iv) any person authorised by the Board for that purpose. 133. A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any copies of documents. ACCOUNTS Books of Account 134. The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to: (a) all amounts of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates; (b) all sales and purchases of goods by the Company; and (c) all assets and liabilities of the Company. 135. Such records of account shall be kept at the Registered Office of the Company, or subject to the Companies Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours. Financial Year End 136. The financial year end of the Company may be determined by resolution of the Board and failing such resolution shall be 31 December in each year. AUDITS Annual Audit 137. Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to the Companies Act, the accounts of the Company shall be audited at least once in every year.
26 Appointment of Auditor 138. If an Auditor is not otherwise appointed under these Bye-laws, subject to any waiver of the requirement to appoint an auditor pursuant to the Companies Act, at the annual general meeting or at a subsequent special general meeting in each year, an independent representative of the Shareholders shall be appointed by them as Auditor of the accounts of the Company. 139. The Auditor may be a Shareholder but no Director, Officer or employee of the Company shall, during their continuance in office, be eligible to act as an Auditor of the Company. Remuneration of Auditor 140. Save in the case of an Auditor appointed pursuant to Bye-law 147, the remuneration of the Auditor shall be fixed by the Company in a general meeting or in such manner as the Shareholders may determine. In the case of an Auditor appointed pursuant to Bye-law 147, the remuneration of the Auditor shall be fixed by the Board. Duties of Auditor 141. The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards. 142. The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Companies Act. If so, the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used. Change to the Company’s Auditors 143. Subject to Bye-law 147, no change to the Company’s Auditors may be made save in accordance with the Companies Act and until the same has been approved by a unanimous resolution of the Board and by the Shareholders at a general meeting with the requisite approval threshold in accordance with the Companies Act. Access to Records 144. The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers of the Company for any information in their possession relating to the books or affairs of the Company. Financial Statements 145. Subject to any rights to waive laying of accounts pursuant to the Companies Act, financial statements as required by the Companies Act shall be laid before the Shareholders in a general meeting. A resolution in writing made in accordance with Bye-law 78 receiving, accepting, adopting, approving or otherwise acknowledging financial statements shall be deemed to be the laying of such statements before the Shareholders in a general meeting.
27 Distribution of Auditor’s Report 146. The report of the Auditor shall be submitted to the Shareholders in a general meeting. Vacancy in the Office of Auditor 147. The Board may fill any casual vacancy in the office of the Auditor. VOLUNTARY WINDING UP AND DISSOLUTION 148. If the Company shall be wound up, the liquidator may, with the sanction of a resolution of the Shareholders at a general meeting, divide amongst the Shareholders in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as they deem fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the like sanction, vest the whole or any part of such assets in the trustees upon such trusts for the benefit of the Shareholders as the liquidator shall think fit, but so that no Shareholder shall be compelled to accept any shares or other securities or assets whereon there is any liability. MERGERS AND AMALGAMATIONS OR COVERED TRANSACTIONS 149. The Company may merge or amalgamate in accordance with the Companies Act, upon the approval of: (a) at least two-thirds (66.67%) of the Board and the affirmative vote of greater than fifty percent (50%) of the votes cast by Shareholders entitled to vote thereon at a general meeting of the Shareholders; or (b) less than two-thirds (66.67%) but greater than fifty percent (50%) of the Board and the affirmative vote of at least seventy-five percent (75%) of the votes cast by Shareholders entitled to vote thereon at a general meeting of the Shareholders. 150. Notwithstanding Bye-law 149, in order to authorise a Covered Transaction, the following procedures must be followed for a Covered Transaction to be validly authorised: (a) if the Board determines, acting reasonably, that a proposed transaction may constitute a Covered Transaction, the Board must form an Independent Committee with such determination of independence to be made pursuant to a resolution of the Board after consultation with counsel selected by the Board, and such determination(s) shall be final; (b) the Independent Committee shall be granted the authority, on behalf of the Board, to determine whether a proposed transaction is a Covered Transaction and to negotiate the terms and conditions of the Covered Transaction and to determine whether to recommend such proposed Covered Transaction, and such determination(s) will be final; provided that if the Independent Committee concludes that the proposed transaction is not a Covered Transaction, the provisions of this Bye-law shall not apply to such proposed transaction; and (c) after determination by the Independent Committee that a transaction is a Covered Transaction, the proposed Covered Transaction must be approved by:
28 (i) at least two-thirds of the members of the Independent Committee, (ii) a majority of the members of the Board, and (iii) a majority of the votes cast by Shareholders entitled to vote thereon; provided that any Shares held, directly or indirectly, by the Controlled Acquiror proposing the Covered Transaction will not count towards quorum, will not be entitled to vote and will be excluded from determining the requisite majority and the shares entitled to vote but Shares held by a Significant Shareholder or any Director or Executive Officer that owns an interest in any such Controlled Acquiror may be voted and will be included in determining the requisite majority and the shares entitled to vote. 151. "Controlled Acquiror" means a Person, other than the Company or one of its subsidiaries, in which (x) a Director, (y) an Executive Officer or (z) a Significant Shareholder, in each case, owns, individually or together with one or more other Directors, Executive Officers or Significant Shareholders, more than 25% of the total voting power of the issued shares of such Person entitled to vote at a general meeting and who is not, as of such date, as reasonably determined by the Company, eligible to make filings on Schedule 13G under the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”), with respect to the beneficial ownership (as such term is defined under the U.S. Exchange Act) of shares of the Company held by the Controlled Acquiror. A "Covered Transaction" in the context of these Bye-laws means (x) a merger or amalgamation, in each case, proposed by a Controlled Acquiror pursuant to Section 104, 104A, 104B or 104H of the Companies Act, as a result of which the shareholders of the Company immediately prior to the consummation of such Covered Transaction cease to own, immediately following the consummation of such Covered Transaction a majority of the total voting power of (1) the surviving or amalgamated company or the Company, as the case may be, or (2) if the surviving or amalgamated company or the Company, as the case may be, is a wholly owned subsidiary of another corporation immediately following such merger or amalgamation, the ultimate parent corporation of such surviving or amalgamated corporation or the Company, as the case may be, in such Covered Transaction; provided that any voting power held, directly or indirectly, by any Significant Shareholder and any Director or Executive Officer, in each case, whose ownership of voting power of a Person results in such Person becoming the Controlled Acquiror shall be taken into account in determining whether the shareholders of the Company hold a majority of the total voting power of the applicable Person immediately following the consummation of the Covered Transaction or (y) the sale, lease, transfer, conveyance or other disposition (other than by way of a merger or amalgamation) in one or a series of related transactions, of substantially all of the assets of the Company to a Controlled Acquiror. CHANGES TO CONSTITUTION Changes to Bye-laws 152. No Bye-law may be rescinded, altered or amended and no new Bye-law may be made save in accordance with the Companies Act and until the same has been approved by a resolution of the Board and by the Shareholders at a general meeting.
29 Changes to the Memorandum of Association 153. No alteration or amendment to the Memorandum of Association may be made save in accordance with the Companies Act and until same has been approved by a resolution of the Board and by the Shareholders at a general meeting. Discontinuance 154. The Board may exercise all the powers of the Company to discontinue the Company to a jurisdiction outside Bermuda pursuant to the Companies Act. Forum 155. In the event that any dispute arises concerning the Companies Act or out of or in connection with these Bye-laws, including any question regarding the existence and scope of any Bye-law and/or whether there has been any breach of the Companies Act or these Bye-laws by an Officer or Director (whether or not such a claim is brought in the name of a shareholder or in the name of the Company), any such dispute shall be subject to the exclusive jurisdiction of the Supreme Court of Bermuda.
EX-4.1
EX-4.1
Filename: a41gtes-descriptionofsecur.htm · Sequence: 5
Document
Exhibit 4.1
DESCRIPTION OF REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF
THE SECURITIES EXCHANGE ACT OF 1934
The following is a brief description of the securities of Gates Industrial Corporation Ltd., a Bermuda exempted company limited by shares (“Gates”), registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This description of the terms of our common shares, par value US$0.01 per share (“Common Shares”), does not purport to be complete and is subject to and qualified in its entirety by reference to the applicable provisions of the Companies Act 1981, as amended or replaced from time to time (the “Bermuda Companies Act”) and the full text of Gates’ Memorandum of Association (“Memorandum of Association”) and Amended and Restated Bye-laws (the “Bye-laws”). As used herein, the term “we,” “us” and “our” to refer to Gates and not to any of its subsidiaries.
Issued Share Capital
Common Shares
On July 20, 2026 (the “Effective Date”), Gates’ predecessor, Gates Industrial Corporation plc, a public limited company incorporated in England and Wales (“Old Gates” and together with its subsidiaries, the “Gates Group”), effected a redomiciliation of the parent holding company of the Gates Group from England and Wales to Bermuda by way of a U.K. scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006 (the “Redomiciliation”). As a result of the Redomiciliation, Gates became the parent holding company of the Gates Group, all Old Gates ordinary shares of US$0.01 nominal value each (“Old Gates Shares”) outstanding as of 5:00 p.m. Eastern Time on July 17, 2026 (the “Scheme Record Time”) were cancelled, and Gates issued one Common Share for each Old Gates Share, for an aggregate of 253,151,170 Common Shares, to holders of Old Gates Shares at the Scheme Record Time.
On the Effective Date, Gates had an authorized share capital of $30,000,000.00 of 3,000,000,000 Common Shares of par value of US$0.01 each, of which $2,531,511.70 was utilized to issue approximately 253,151,170 Common Shares on the Effective Date.
Pursuant to the Bye-laws, all of Gates’s issued Common Shares must be issued as fully paid, in cash or otherwise, and Gates may not issue any shares partly paid or nil paid. Subject to the requirements of any stock exchange on which Gates’s shares are listed and to any resolution of Gates’ shareholders to the contrary, Gates’ Board of Directors (the “Board”) is authorized to issue any of Gates’s authorized but unissued shares under the Bye-laws.
Preference Shares
Subject to the Bermuda Companies Act, the Board has the power to issue preference shares in one or more series, which may be so issued with such powers, designations, preferences, voting rights, rights and terms of redemption, denominated in such currencies and with such par values, and with relative participating, optional or other special rights and qualifications, limitations and restrictions attaching thereto as determined by the Board, including rights to (a) receive
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dividends (which may include rights to receive preferential or cumulative dividends), (b) distributions made on a winding up of Gates and (c) be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of shares, at such price or prices (subject to the Bermuda Companies Act) or at such rates of exchange and with such adjustments as may be determined by the Board. Gates currently has no preference shares outstanding.
The possible future issuance of a new class or classes of shares could affect holders of our Common Shares in a number of ways. Upon conversion into Common Shares, shares issued with conversion rights could cause dilution of the ownership interests and the voting power of existing holders of our Common Shares. Issuance of a new class or classes of shares may also affect the number of dividends, if any, paid to such shareholders and may reduce the share of the proceeds they would receive upon the future liquidation, if any, of Gates. In addition, the availability of a new class of shares, including preference shares, could enable the Board to issue shares defensively in response to a takeover attempt or to make an attempt to gain control of Gates by means of a merger, tender offer, proxy contest or otherwise more difficult or time-consuming.
Key Provisions of Our Bye-laws and Bermuda Law Considerations
Directors
Subject to the Bermuda Companies Act and the Bye-laws, the business and affairs of Gates is managed and conducted by the Board, which may exercise all the powers of Gates except those that are required by the Bermuda Companies Act or the Bye-laws to be exercised by the shareholders of Gates. No alteration of the Bye-laws made by Gates in a general meeting invalidates any prior act of the Board that would have been valid if that alteration had not been made.
Conflicts of Interest
A director who is directly or indirectly interested in a contract or proposed contract or arrangement with Gates is not permitted to vote in respect of any contract or proposed contract or arrangement in which such director is interested and may not be counted in the quorum for the relevant meeting. For these purposes, a director is considered to be interested in a contract or arrangement with Gates if it is between Gates and a member of the director’s immediate family. Under Bermuda law, a director who discloses a direct or indirect interest in a contract or arrangement would otherwise be entitled to vote in respect of it, unless the company’s bye-laws provide otherwise, as the Bye-laws do.
Subject to the Bermuda Companies Act and any further disclosure required thereby, a general notice to the directors by a director or officer declaring that he or she is a director or officer of, or has an interest in, any business entity and is to be regarded as interested in any transaction or arrangement made with that entity is a sufficient declaration of interest. Any director, or a director’s firm, partner or any company with which a director is associated, may act in any capacity for, be employed by or render services to Gates (other than as auditor) and is entitled to remuneration as if such director were not a director. Notwithstanding the foregoing, related party
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transactions remain primarily governed by the New York Stock Exchange (“NYSE”) shareholder approval rules, SEC disclosure requirements and the Bye-laws.
Number of Directors
The number of directors that constitutes the entire Board is fixed from time to time exclusively by the Board, subject to the rights of the holders of any series of preference shares with respect to the election of directors, if any. The Board consists of a minimum of two directors and such maximum number as the Board may from time to time determine.
Term of Office of Directors
Directors hold office for such term as the shareholders may determine or, in the absence of such determination, until the earlier of the next annual general meeting, the election or appointment of their successors, or their office being otherwise vacated in accordance with the Bye-laws. The Board is not divided into classes, and holders of Common Shares are not entitled to cumulative voting in the election of directors.
Election and Removal of Directors
At any general meeting duly called and held for the election or re-election of directors at which a quorum is present, directors are elected by a resolution passed by the affirmative vote of a majority of the votes cast by shareholders entitled to vote on the election of directors. Where the election of a director is contested (that is, the number of nominees properly nominated in accordance with the Bye-laws exceeds the number of directors to be elected as of the record date for such general meeting), directors are elected using a form of “plurality voting,” under which the nominees with the greatest number of votes are elected in descending order until the number of directors to be elected is satisfied. Following their election or appointment (except upon re-election at an annual general meeting), each director must provide written acceptance of their appointment within 30 days.
A director may be removed from office by the shareholders, with or without cause, at a special general meeting called for that purpose, upon the affirmative vote of a majority of the votes cast by shareholders entitled to vote thereon. Notice of any such meeting convened to remove a director must contain a statement of the intention to do so and be served on the director not fewer than 14 days before the meeting, and the director is entitled to be heard on the motion for his or her removal.
Shareholders are also permitted to act by unanimous written consent to elect a director.
Vacancies
The Board, by the affirmative vote of a majority of the remaining directors in office (even if less than a quorum), has the power to appoint any person as a director to fill a vacancy on the Board for any reason, including a vacancy resulting from death, disability, disqualification or resignation or from an increase in the size of the Board. Any director so appointed holds office
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for the remainder of the term of the director whose vacancy such director was appointed to fill and until his or her successor is elected and qualified. The shareholders in general meeting also have the power to appoint any person as a director to fill a vacancy on the Board.
Dividends and Distributions
Under Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that: (a) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the realizable value of its assets would thereby be less than its liabilities.
Under the Bye-laws, each Common Share is entitled to the same dividend per share if any are declared. The Board may satisfy any dividend or distribution by way of shares or debentures of any other company, and where any difficulty arises with regard to any such distribution or dividend, the Board may settle it as it thinks expedient, including by authorizing any person to sell and transfer any fractions or ignore fractions altogether and may fix the value for distribution or dividend purposes of any specific assets and may determine that cash payments be made to any shareholder in order to secure equality of distribution. The Board may deduct from any dividend or distribution payable to a shareholder all moneys due from that shareholder to Gates on account of calls or otherwise.
Before declaring a dividend or distribution, the Board may set aside out of the surplus or profits of Gates such amounts as it thinks proper as a reserve. The Board may also capitalize any amount standing to the credit of Gates’ reserves or otherwise available for distribution by applying it in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the shareholders.
Preemptive Rights
Bermuda law does not impose statutory pre-emption rights on the allotment and issue of shares, and under the Bye-laws shareholders are not entitled to any pre-emption rights with respect to any issuance of shares by Gates.
Conversion
The issued Common Shares are not convertible into shares of any other class.
Redemption
The issued Common Shares are not redeemable.
Sinking Fund Provisions
There are no sinking fund provisions relating to the Common Shares.
Repurchase of Shares
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Subject to the Bermuda Companies Act, Gates may purchase its own shares for cancellation or acquire them as treasury shares on such terms as the Board thinks fit, and the Board may exercise all the powers of Gates to purchase or acquire all or any part of its own shares. Bermuda law does not require shareholder approval of a company’s purchases of its own shares or impose any stamp duties or tax on such purchases. All the rights attaching to a treasury share are suspended and may not be exercised by Gates while it holds the share and, except where required by the Bermuda Companies Act, treasury shares are excluded from the calculation of any percentage or fraction of the share capital of Gates.
Liability to Further Calls or Assessment
All of Gates’ issued Common Shares are fully paid and are not subject to any further calls or assessment by Gates. The Bye-laws provide that Gates may not issue any shares unless the consideration for such shares has been fully paid, in cash or otherwise, and that no share(s) may be issued as partly paid or nil paid.
Variation of Rights
If at any time the share capital of Gates is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not Gates is being wound up, be varied with the consent in writing, or with the sanction of a resolution passed, by holders representing at least 75% of the issued shares of such class at a separate meeting of the holders of such class, at which the necessary quorum is one or more persons holding or representing by proxy at least one-third in nominal value of the issued shares of the relevant class.
Unless otherwise expressly provided by the rights attached to any share or class of shares, the rights conferred upon the holders of any shares are deemed not to be varied or abrogated by: (a) the creation or issue of further shares ranking in priority to, pari passu with, or subsequent to, any existing share or class of shares (including, without limitation, any preference shares); (b) the purchase, redemption or other repurchase by Gates of any of its own shares; (c) any alteration of Gates’ share capital in accordance with the Bermuda Companies Act and the Bye-laws; or (d) the adoption, implementation, amendment, operation or effects of any shareholder rights plan in accordance with the Bye-laws, including the issuance of rights, shares, or other securities in connection therewith.
Winding Up
If Gates is wound up, the liquidator may, with the sanction of a resolution of the shareholders at a general meeting, divide among the shareholders in specie or in kind the whole or any part of the assets of Gates (whether or not they consist of property of the same kind) and may, for that purpose, set such value as it deems fair on any property to be divided and determine how the division is carried out as between the shareholders or different classes of shareholders. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the shareholders as the liquidator thinks fit, but no shareholder may be compelled to accept any shares or other securities or assets on which there is any liability.
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Subject to these provisions and to the rights of any preference shares then in issue, each Common Share is entitled to participate equally in the surplus assets of Gates on a winding-up.
General Meetings
Under Bermuda law, Gates is required to convene at least one general meeting of shareholders each calendar year (the annual general meeting). Under the Bye-laws, the Board must convene an annual general meeting and may convene a special general meeting whenever it thinks fit, and is required to convene a special general meeting on the requisition of shareholders holding not less than 10% of the paid-up share capital of Gates carrying the right to vote at general meetings. At least 10 clear days’ but no more than 60 clear days’ notice of an annual general meeting or a special general meeting must be given to each shareholder entitled to attend and vote, stating the place, date and time of the meeting and the general nature of the business to be considered. The accidental omission to give notice to, or the non-receipt of notice by, any person does not invalidate the proceedings at a meeting.
The Board may, in its sole discretion, determine that any general meeting be held as an in-person meeting, a combined in-person and virtual meeting, or a fully virtual meeting, and participation in any such meeting by the means determined by the Board constitutes presence in person at the meeting.
Quorum
A quorum for a general meeting is present if at least one shareholder representing at least the majority of the voting rights of all the shareholders entitled to vote at the relevant meeting is present in person or represented by proxy.
Voting Rights
Holders of Common Shares are entitled to one vote per Common Share. Unless otherwise specified by the Bye-laws or the Bermuda Companies Act, at any general meeting duly called and held at which a quorum is present, a resolution of shareholders requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote. The Bye-laws require that any resolution put to a vote at a general meeting be decided on a poll. In the case of joint holders, the vote of the senior holder who tenders a vote (whether in person or by proxy) is accepted to the exclusion of the votes of the other joint holders, seniority being determined by the order in which the names stand in the register of shareholders. Cumulative voting is not permitted.
Advance Notice Procedures
The Bye-laws establish an advance notice procedure for shareholders to make nominations of candidates for election as directors and to bring other business before an annual general meeting or a special general meeting. All such nominations or other business must be made pursuant to timely notice in proper written form to the company secretary of Gates and must include, among other information, the name and address of the shareholder giving the notice, certain information relating to each proposed nominee, and a brief description of any business the shareholder
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proposes to bring before the meeting, together with the information required under Regulation 14A under the Exchange Act. To be timely with respect to an annual general meeting, a shareholder’s notice generally must be delivered not earlier than the close of business on the 120th calendar day, and not later than the close of business on the 90th calendar day, prior to the first anniversary of the preceding year’s annual general meeting, subject to adjustment in the circumstances described in the Bye-laws.
Action by Written Consent
Subject to the Bermuda Companies Act, anything which may be done by resolution of the shareholders in a general meeting, or by resolution of any class of shareholders in a separate general meeting, may be done by unanimous written consent signed by all the shareholders (or the holders of such class of shares) who would be entitled to attend a meeting and vote on the resolution. This does not apply to a resolution to remove the auditor before the expiration of the auditor’s term of office or a resolution to remove a director before the expiration of the director’s term of office.
Amendments to Memorandum of Association and Bye-laws
Bermuda law provides that the memorandum of association of a company may be amended by a resolution passed at a general meeting of shareholders, and that a company’s bye-laws may be amended by a resolution of its board and a resolution passed at a general meeting of shareholders. Under the Bye-laws, the affirmative vote of a majority of the directors of Gates and the affirmative vote of a majority of the votes cast by shareholders entitled to vote are required in order for Gates to amend the Bye-laws or the Memorandum of Association.
Under Bermuda law, the holders of an aggregate of not less than 20% in par value of Gates’ issued share capital or any class thereof have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment of the Memorandum of Association adopted by shareholders at any general meeting, other than an amendment that alters or reduces Gates’ share capital as provided in the Bermuda Companies Act. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the Supreme Court of Bermuda. Such an application must be made within 21 days after the date on which the resolution altering the Memorandum of Association is passed and may not be made by any shareholder who voted in favor of the amendment.
Mergers and Amalgamations
Gates may merge or amalgamate in accordance with the Bermuda Companies Act. Under the Bye-laws, if at least two-thirds of Gates’ directors then in office vote affirmatively to approve a merger or amalgamation, the affirmative vote of greater than 50% of the votes cast by holders of the issued Common Shares entitled to vote at a general meeting is required to approve the merger or amalgamation. If less than two-thirds but at least a majority of Gates’ directors then in office vote affirmatively to approve a merger or amalgamation, the affirmative vote of at least 75% of the votes cast by holders of the issued Common Shares entitled to vote at a general meeting is required to approve the merger or amalgamation.
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These thresholds do not apply to a “Covered Transaction” (as defined in the Bye-laws), which is generally, a merger or amalgamation proposed by a Controlled Acquiror (as defined in the Bye-laws), or a disposition of substantially all of Gates’ assets to a Controlled Acquiror. If the Board determines, acting reasonably, that a proposed transaction may constitute a Covered Transaction, it must form an independent committee of at least three directors who are independent from both the Company and the proposed Covered Transaction. The independent committee is granted the authority to determine whether the proposed transaction is a Covered Transaction and to negotiate the terms and conditions of, and determine whether to recommend, the Covered Transaction, and such determinations are final; provided that if the independent committee concludes that the proposed transaction is not a Covered Transaction, the Covered Transaction procedures described in this paragraph shall not apply to such proposed transaction. A Covered Transaction must be approved by at least two-thirds of the members of the independent committee, a majority of the members of the Board and a majority of the votes cast by shareholders entitled to vote thereon, and any shares held, directly or indirectly, by the Controlled Acquiror proposing the Covered Transaction are excluded from the quorum, are not entitled to vote and are excluded from the determination of the requisite majority, provided that shares held by a Significant Shareholder (as defined in the Bye-laws) or any director or executive officer that owns an interest in such Controlled Acquiror may be voted and will be included in determining the requisite majority and the shares entitled to vote.
Takeovers
Under Bermuda law, an acquiring party is generally able to acquire all of the issued shares of a company (a) by a scheme of arrangement under the Bermuda Companies Act, effected by obtaining the agreement of the company and of holders of shares representing in the aggregate a majority in number and at least 75% in par value of the shareholders present and voting at a court-ordered meeting, which must then be sanctioned by the Supreme Court of Bermuda; (b) by acquiring, pursuant to a tender offer, 90% of the shares (or class of shares) not already owned by the offeror or its subsidiaries, following which the offeror may, within the period prescribed by the Bermuda Companies Act, compulsorily acquire the shares of non-tendering shareholders on the same terms, unless the Supreme Court of Bermuda orders otherwise; or (c) where the acquiring party holds not less than 95% of the shares (or class of shares), by giving notice to the remaining shareholders, who may within one month apply to the Supreme Court of Bermuda for an appraisal of the value of their shares. Provision (c) only applies where the acquiring party offers the same terms to all holders of shares whose shares are being acquired.
Anti-Takeover Provisions
Certain provisions of the Bye-laws and Bermuda law could have the effect of delaying, deferring or preventing a change in control of Gates in the context of an extraordinary corporate transaction, such as a merger, amalgamation, tender offer, sale or transfer of substantially all of our assets or liquidation. In particular: the Board is authorized to issue preference shares in one or more series, and to fix their rights, preferences and privileges, without further action by the shareholders, which could be used to make more difficult an attempt to obtain control of Gates; the advance notice procedures govern shareholder nominations and proposals; director and
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shareholder approval thresholds (including a greater-than-50% shareholder vote where at least two-thirds of directors approve, or a 75% shareholder vote where less than two-thirds but at least a majority of directors approve) apply to certain mergers and amalgamations and a separate approval process applies to Covered Transactions; and directors may be removed only as described above. As of the Effective Dates, Gates does not have a shareholder rights plan, or “poison pill,” and any rights plan adopted by the Board without prior shareholder approval will automatically terminate one year after its adoption unless approved by shareholders before that time.
Transfers of Shares
Where the Common Shares are listed or admitted to trading on an appointed stock exchange, such as the NYSE, they may be transferred in accordance with the rules and regulations of that exchange. The Board may refuse to recognize an instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer, and must refuse to register a transfer unless all applicable notifications, consents, authorizations and permissions of any governmental body or agency in Bermuda have been obtained. If the Board refuses to register a transfer, the secretary must, within three months after the date on which the transfer was lodged, send notice of the refusal to the transferor and the transferee.
Any holder of book-entry interests in the Common Shares through the facilities of The Depository Trust Company (“DTC”) will not be the holder of record of those shares. Instead, Cede & Co. (“Cede”), as nominee for DTC, will be the holder of record. Accordingly, a transfer of book-entry interests in the Common Shares from one person to another through the facilities of DTC will not be registered in our register of shareholders, as Cede (as nominee for DTC) will remain the holder of record.
Share Certificates
Every shareholder is entitled to a certificate, under the common seal of Gates or bearing the signature of a director, the secretary or a person expressly authorized to sign, specifying the number and, where appropriate, the class of shares held; however, Gates is under no obligation to complete and deliver a share certificate unless specifically called upon to do so. Where a shareholder is acting in a special capacity (for example, as a trustee), the certificate may, at the shareholder’s request, record that capacity, but Gates is not bound to investigate or see to the execution of any such trust.
Access to Books and Records
Members of the general public have the right to inspect the public documents of Gates available at the office of the Registrar of Companies in Bermuda, which include the Memorandum of Association. The shareholders have the additional right to inspect the Bye-laws, minutes of general meetings and Gates’ audited financial statements, which must be presented at the annual general meeting. The register of shareholders is also open to inspection, and Gates is required to maintain its register of shareholders in Bermuda, although it may, subject to the Bermuda
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Companies Act, establish a branch register outside Bermuda. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.
Limitations on the Rights to Own Securities
There are no limitations imposed by Bermuda law or the Bye-laws on the rights of persons who are neither residents nor nationals of Bermuda to hold or exercise voting rights in respect of Common Shares in the same manner and on the same terms as residents or nationals of Bermuda.
Certain Provisions of Bermuda Law
Gates has been designated by the Bermuda Monetary Authority as a non-resident of Bermuda. This designation allows Gates to engage in transactions denominated in currencies other than the Bermuda dollar, and there are no restrictions on Gates’ ability to transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to residents and non-residents of Bermuda who are holders of Common Shares.
Provided the Gates Common Shares remain listed on an appointed stock exchange, which includes the NYSE, Gates will be exempted from certain reporting obligations under the Bermuda Beneficial Ownership Act 2025.
Forum
The Bye-laws provide that, in the event any dispute arises concerning the Bermuda Companies Act or out of or in connection with the Bye-laws — including any question regarding the existence and scope of any Bye-law and whether there has been any breach of the Bermuda Companies Act or the Bye-laws by an officer or director (whether or not such a claim is brought in the name of a shareholder or in the name of Gates) — such dispute is subject to the exclusive jurisdiction of the Supreme Court of Bermuda. Any person or entity purchasing or otherwise acquiring any interest in the Common Shares is deemed to have notice of and to have consented to these provisions. It is possible, however, that a court could find this forum selection provision to be inapplicable or unenforceable.
Register of Holders and Transfer Agent
A register of holders of the Common Shares is kept, and made available for inspection, by Walkers Corporate (Bermuda) Limited in Bermuda, and is maintained in the United States by Computershare Trust Company, N.A., which serves as transfer agent for the Common Shares.
Listing
The Common Shares are listed on the NYSE under the symbol “GTES.”
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EX-10.1
EX-10.1
Filename: a101formofindemnificationa.htm · Sequence: 6
Document
Exhibit 10.1
Dated this _____________ __, 2026
B E T W E E N:
GATES INDUSTRIAL CORPORATION LTD.
and
[DIRECTOR/OFFICER NAME]
INDEMNIFICATION AGREEMENT
TABLE OF CONTENTS
1. INTERPRETATION
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2. AGREEMENT TO SERVE
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3. INDEMNITY
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4. INDEMNIFICATION FOR EXPENSE AS A WITNESS
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5. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
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6. ADVANCEMENT OF EXPENSES
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7. REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES
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8. OTHER RIGHTS TO INDEMNIFICATION
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9. ATTORNEYS’ FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT
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10. LIMITATION OF INDEMNIFICATION
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11. LIABILITY INSURANCE
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12. DURATION OF AGREEMENT
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13. NOTICE OF PROCEEDINGS BY INDEMNITEE
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14. GROSSING UP
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15. MISCELLANEOUS
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16. NOTICES
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17. HEADINGS
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18. COUNTERPARTS
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19. GOVERNING LAW
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INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made the ___ day of ___________ 202_
BETWEEN:
GATES INDUSTRIAL CORPORATION LTD., an exempted company limited by shares incorporated under the laws of Bermuda with its registered office located at Park Place, 55 Par la Ville Road, Third Floor, Hamilton, HM 11, Bermuda (the “Company”); and
[NAME] of c/o Gates Industrial Corporation Ltd., 1144 15th Street, Denver, Colorado 80202 (the “Indemnitee”).
WHEREAS, the Indemnitee is [an officer / a director] of the Company; and
WHEREAS, the Company has agreed, subject to the terms of this Agreement, and in consideration for the Indemnitee’s service as [an officer / a director] of the Company, to provide indemnification and the advancement of expenses to the Indemnitee in respect of certain personal liabilities arising from the Indemnitee’s Corporate Status (as defined below).
IT IS HEREBY AGREED as follows:
1.INTERPRETATION
1.1.In this Agreement, unless the context otherwise requires, the following words and expressions shall have the following meanings:
“Agreement”
means this Indemnification Agreement, as it may be amended or modified in accordance with the terms hereof;
“Agreement Proceedings”
means any dispute, suit, action, arbitration or proceeding that may arise out of or in connection with this Agreement;
“Board”
means the board of directors of the Company or any committee thereof;
“Business Day”
“Bye-laws”
means any day other than a Saturday, Sunday or public holiday in the State of New York;
means the bye-laws of the Company, as adopted, amended or amended and restated from time to time;
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“Change in Control”
means, the earliest occurrence after the date of this Agreement, of
any of the following events:
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a body corporate owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of securities of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the voting power represented by the Company’s then outstanding Voting Securities;
(ii) any person that has the right to, and does, appoint or remove, at one or more meetings of the Company’s shareholders, directors on the Board holding a majority of the voting rights at meetings of the Board on all or substantially all matters;
(iii) there occurs any acquisition or arrangement involving the Company which would result in the shareholders holding or controlling Voting Securities of the Company outstanding immediately prior thereto ceasing to hold or control more than 50% of the total voting power represented by the Voting Securities of the Company outstanding immediately after the completion of such acquisition or arrangement, or the shareholders of the Company approve a member’s voluntary liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all the Company’s assets; or
(iv) there occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement;
“Companies Act”
means the Companies Act 1981, as amended;
“Corporate Status”
means the status of a person who is or was a director or officer of the Company, or is or was serving at the request of the Company as a director, officer, Resident Representative, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, and regardless of whether there is found to be any potential defect in their appointment or election and such person is thereby acting under the reasonable belief that the director or officer was properly appointed or elected (and a reference to “Corporate Status” in this Agreement shall be construed consistently with the definition of “indemnitee” in bye-law 116 of the Bye-laws in effect on the date hereof);
“Court”
means the Supreme Court of Bermuda;
“Disinterested Director”
means a director of the Company who is not or was not a party to a Proceeding in respect of which indemnification is sought by the Indemnitee;
“Exchange Act”
means the U.S. Securities Exchange Act of 1934, as amended;
“Indemnifiable Event”
means any event or occurrence arising out of or in connection with the Indemnitee’s Corporate Status, or by reason of anything done or not done by Indemnitee in any such capacity and, furthermore, Indemnifiable Events include all such events that take place either before or after the execution of this Agreement;
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“Independent Counsel”
means a (i) law firm or member(s) of a law firm; or (ii) King’s Counsel, in either case selected in accordance with the terms of this Agreement that neither is presently nor in the past three years has been retained to represent: (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to matters concerning the rights of Indemnitee under this Agreement or of other directors or officers under similar indemnification agreements); or (ii) any other party to a Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right to indemnification under this Agreement;
“Parties”
means the parties to this Agreement collectively, and “Party” means any one of them;
“Prior Agreement”
means that certain Deed of Indemnity, by and between Gates Industrial Corporation plc and Indemnitee, dated as of [●], as amended.
“Proceeding”
“Resident Representative”
means any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative and whether formal or informal;
shall have the same definition as “Resident Representative” in the Bye-laws in effect on the date hereof; and
“Voting Securities”
means shares of any series or class of common shares or preferred shares of the Company in each case entitled to vote generally upon all matters that may be submitted to a vote of shareholders of the Company at any annual or special meeting thereof.
1.2.In this Agreement unless the context otherwise requires:
(a)references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification) and regulations and other statutory instruments issued thereunder;
(b)references to Sections and schedules are references to Sections hereof and schedules hereto; references to sub-sections are, unless otherwise stated, references to sub-sections of the clause of the schedule in which the reference appears;
(c)references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine and/or neuter and vice versa;
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(d)references to persons shall include companies, partnerships, associations and bodies of persons, whether incorporated or unincorporated; and
(e)in the instance where there is an inconsistency between any of the provisions of this Agreement and the provisions of the Bye-laws, the provisions of the Bye-laws shall prevail.
2.AGREEMENT TO SERVE
In consideration of the indemnification provided hereby, the Indemnitee has agreed to serve as a director or officer (as applicable) of the Company or otherwise has a Corporate Status entitling the Indemnitee to indemnification hereunder; provided, however, that this Agreement does not create or otherwise establish any right on the part of the Indemnitee to be and continue to be elected or appointed a director or officer of the Company or maintain Corporate Status and does not create an employment contract between the Company and the Indemnitee.
3.INDEMNITY
3.1.Subject to Section 10, the Company will, to the fullest extent permitted by applicable law, indemnify the Indemnitee with respect to any Indemnifiable Event if the Indemnitee is a party or is threatened to be made a party to any threatened or pending Proceeding, including a Proceeding brought by or in the right of the Company, by reason of (or arising in part out of) Indemnitee’s Corporate Status or by reason of anything done or not done by the Indemnitee in any capacity giving rise to their Corporate Status. Notwithstanding any other provision of this Agreement, other than Section 10, the Indemnitee shall, to the fullest extent permitted by applicable law, be indemnified against all expenses (including attorneys’ fees and disbursements), liabilities, losses, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection therewith) actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection with any Proceeding (including, but not limited to, the investigation, defense, settlement or appeal thereof). For the avoidance of doubt, such indemnification shall apply to any such Proceeding where judgment is given in Indemnitee’s favor, those in which Indemnitee is acquitted, or in respect of those in which relief is granted to Indemnitee by the Court under section 281 of the Companies Act. Payment for indemnification under this Section 3 shall, unless otherwise stated herein, be made as soon as practicable, but in no event later than 60 calendar days after written demand is presented to the Company by Indemnitee in a manner reasonably satisfactory to the Company.
3.2.Subject to Section 10, the Company shall indemnify the Indemnitee for such portion of the expenses (including attorneys’ fees and disbursements), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that the Indemnitee becomes legally obligated to pay in connection with any Proceeding referred to in Section 3.1 in respect of which the Indemnitee is entitled to indemnification hereunder; provided, however, that, notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any or all Proceedings relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, the Indemnitee shall, subject to Section 10, be indemnified against all expenses actually and reasonably incurred in connection therewith.
3.3.Without limiting the scope of the indemnity provided under any other provision of this Agreement, if the Indemnitee has reason to apprehend that any claim will or might be made against such Indemnitee in respect of any negligence, default, breach of duty or
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breach of trust, Indemnitee may apply to the Court for relief pursuant to section 281 of the Companies Act and, to the extent that the Court relieves such Indemnitee, either wholly or partly, from such Indemnitee’s liability in accordance with section 281 of the Companies Act, the Indemnitee shall be indemnified against any liability incurred by such Indemnitee in defending any Proceedings in accordance with paragraph 98(2)(b) of the Companies Act.
3.4.In accordance with Section 8, the rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under or pursuant to the Bye-laws or under applicable law, or otherwise. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under or pursuant to the Bye-laws or this Agreement, it is the intent of the Parties that Indemnitee shall enjoy by this Agreement, the greater benefits so afforded by such change without a formal amendment hereto.
4.INDEMNIFICATION FOR EXPENSE AS A WITNESS
Subject to Section 10, to the extent that the Indemnitee is, by reason of the Indemnitee’s Corporate Status, a witness in any Proceeding, the Indemnitee shall be indemnified by the Company against all expenses actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith, including in any investigation related thereto (including attorneys’ fees and disbursements).
5.DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
5.1.The Indemnitee shall request indemnification pursuant to this Agreement by notice in writing to the [chief legal officer or equivalent position (“CLO”)][head of human resources or equivalent position (“HR Head”)] of the Company (the “Indemnity Notice”). The [CLO][HR Head] shall, promptly upon receipt of the Indemnity Notice, advise the Board in writing that the Indemnitee has made such request for indemnification. Upon making such request for indemnification, the Indemnitee shall be presumed by the person or persons or entity making such determination in accordance with Section 5.2 to be entitled to indemnification hereunder, and the Company shall have the burden of proof in the making of any determination contrary to such presumption.
5.2.Upon written request by the Indemnitee for indemnification pursuant to the terms and conditions of this Agreement, the entitlement of the Indemnitee to such indemnification shall be determined by the following person or persons who shall be empowered to make such determination:
(a)the Board, by a majority vote of the Disinterested Directors;
(b)a committee of Disinterested Directors, by a majority vote of the Disinterested Directors; or
(c)in the event that (i) a meeting of the Board or a committee of Disinterested Directors as contemplated by clauses (a) and (b) of this Section 5.2, respectively, cannot be duly constituted due to there being insufficient Disinterested Directors to form a quorum in accordance with
the Bye-laws or the committee’s rules, respectively, (ii) there are no Disinterested Directors or (iii) a Change in Control shall have occurred, then by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, and, if it is so determined that Indemnitee is entitled
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to indemnification pursuant to this Agreement, payment to Indemnitee shall be made in accordance with the timing set out in Section 3.1.
5.3.For purposes of Section 5.2, Independent Counsel shall be selected by the Board and reasonably approved by the Indemnitee; provided, that following a Change in Control, Independent Counsel will be selected by the Indemnitee and reasonably approved by the Disinterested Directors (or, if there are no Disinterested Directors, by the Board). Upon any failure of Independent Counsel to be selected and approved as aforesaid within ten calendar days of the date of receipt of the Indemnity Notice, such Independent Counsel shall be selected by a single arbitrator pursuant to the rules of the American Arbitration Association. Such determination of entitlement to indemnification shall be made not later than 30 calendar days after receipt by the Company of the Indemnity Notice. Such request shall include documentation or information which is necessary for such determination, and which is reasonably available to the Indemnitee. Any expenses (including attorneys’ fees) incurred by the Indemnitee in connection with the Indemnitee’s request for indemnification hereunder shall be borne by the Company irrespective of the outcome of the determination of the Indemnitee’s entitlement to indemnification. If the person or persons making such determination shall determine that the Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such persons may reasonably prorate such partial indemnification among such claims, issues or matters in respect of which indemnification is requested.
6.ADVANCEMENT OF EXPENSES
6.1.Subject to Section 6.2, all expenses actually and reasonably incurred by the Indemnitee (including attorneys’ fees, retainers and advances of disbursements required of the Indemnitee) shall be paid by the Company in advance of the final disposition of any Proceeding at the request of the Indemnitee, after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, provided that: (1) the advancement of expenses has been duly authorized by the Board in accordance with Section 6.2; and (2) the Indemnitee has delivered to the Company an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that any allegation of fraud or dishonesty is proved against the Indemnitee (such undertaking being consistent with bye-law 116 of the Bye-laws in effect on the date hereof). The Indemnitee’s entitlement to such expenses shall include those incurred in connection with any Proceeding by the Indemnitee seeking an adjudication or award in arbitration pursuant to this Agreement. Such statement or statements from the Indemnitee to the Company shall reasonably evidence the expenses incurred by the Indemnitee in connection therewith. The Company shall have the burden of proof in any determination under this Section 6. No amounts advanced hereunder shall be deemed an extension of credit by the Company to the Indemnitee.
6.2.In accordance with bye-law 116 of the Bye-laws in effect on the date hereof, the advancement of expenses contemplated by Section 6.1 of this Agreement shall not be paid unless the advancement was duly authorized upon a determination that the indemnification of the Indemnitee was appropriate because the Indemnitee had met the standard of conduct which would entitle the Indemnitee to indemnification. Such determination must be made by a majority vote of the Board at a meeting duly constituted at which a quorum is present in accordance with bye-law 124 of the Bye-laws in effect on the date hereof, or, in the case such meeting cannot be constituted due
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to lack of a disinterested quorum, by Independent Counsel selected by the Board and reasonably approved by the Indemnitee. The Company shall pay advancement of expenses as soon as practicable following such authorization and in any event within 30 calendar days of such authorization.
7.REMEDIES OF INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE EXPENSES
7.1.In the event that: (a) a determination is made that the Indemnitee is not entitled to indemnification hereunder; (b) payment has not been timely made following a determination of entitlement to indemnification pursuant to Section 5; or (c) expenses are not advanced pursuant to Section 6, the Indemnitee shall be entitled to apply to the Court or any other court of competent jurisdiction for a determination of the Indemnitee’s entitlement to such indemnification or advance.
7.2.In the alternative to Section 7.1, the Indemnitee, at the Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association, such award to be made within 60 days following the filing of the demand for arbitration. The Company shall not oppose the Indemnitee’s right to seek any such adjudication or award in arbitration or any other claim.
7.3.A judicial proceeding or arbitration pursuant to this Section 7 shall be made de novo and the Indemnitee shall not be prejudiced by reason of a determination otherwise made hereunder (if so made) that the Indemnitee is not entitled to indemnification. Subject to Section 10, if a determination is made pursuant to the terms of Section 5 that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination and is precluded from asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding and enforceable. If the court or arbitrator shall determine that the Indemnitee is entitled to any indemnification hereunder, the Company shall pay all or such portion as the court or arbitrator determines of the reasonable expenses (including attorneys’ fees and disbursements) actually incurred by the Indemnitee in connection with such adjudication or award in arbitration (including, but not limited to, any appellate proceedings).
7.4.Notwithstanding anything herein to the contrary, in any Agreement Proceeding brought by the Indemnitee to enforce a right to indemnification hereunder (but not in an Agreement Proceeding brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the Indemnitee has not met the applicable standard of conduct set forth in the Companies Act.
8.OTHER RIGHTS TO INDEMNIFICATION
The indemnification and advancement of expenses (including attorneys’ fees and disbursements) provided by this Agreement shall not be deemed exclusive of any other right to which the Indemnitee may now or in the future be entitled under any provision of the Bye-laws, any agreement, vote of shareholders, the Board or Disinterested Directors, provision of law, or otherwise; provided, however, that: (a) this Agreement supersedes any other agreement that has been entered into by the Company with the Indemnitee which has as its principal purpose the indemnification of the Indemnitee; and (b) where the Company may indemnify the Indemnitee pursuant to either this Agreement or the Bye-laws, the Company may indemnify the Indemnitee under either this Agreement or the Bye-laws but the Indemnitee shall, in no case, be indemnified by the Company in respect of any expense, liability or cost of any type for which
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payment is or has been actually made to the Indemnitee under any insurance policy, indemnity clause, bye-law or agreement, except in respect of any excess beyond such payment.
9.ATTORNEYS’ FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT
In the event that the Indemnitee is subject to or intervenes in any Proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication or award in arbitration to enforce the Indemnitee’s rights under, or to recover damages for breach of, this Agreement, the Indemnitee, if the Indemnitee prevails in whole or in part in such action, shall be entitled to recover from the Company and shall be indemnified by the Company against, any expenses actually and reasonably incurred for attorneys’ fees and other disbursements actually and reasonably incurred by the Indemnitee.
10.LIMITATION OF INDEMNIFICATION
10.1.Notwithstanding any other terms of this Agreement, the Company shall not be obligated pursuant to this Agreement:
10.1.(a) to indemnify the Indemnitee against, or exempt the Indemnitee from, any liability in respect of any matter which would render such indemnification void pursuant to the Companies Act or any other applicable law, rule or regulation (including securities laws, rules or regulations) and listing standards (including, for the avoidance of doubt, any liability arising from the Indemnitee’s fraud or dishonesty, consistent with bye-law 116 of the Bye-laws in effect on the date hereof); or (b) to indemnify the Indemnitee on account of any reimbursement owed to the Company by the Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or any duly authorized committee of the Board, including but not limited to, any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act (any such policy, a “Clawback Policy”).
10.2.In furtherance of clause (b) of Section 10.1, the Indemnitee hereby agrees to abide by the terms of any Clawback Policy, including, without limitation, by returning any compensation to the Company to the extent required by, and in a manner permitted by, such Clawback Policy, and hereby understands and agrees that the Indemnitee shall not be entitled to any (x) indemnification for any liability (including any amounts owed by the Indemnitee in a judgment or settlement of any proceeding relating to such Clawback Policy (a “Clawback Proceeding”)) or loss (including judgments, fines, taxes, penalties or amounts paid in settlement by or on behalf of the Indemnitee) incurred by the Indemnitee in connection with any Clawback Proceeding or (y) indemnification or advancement of expenses (including attorneys’ fees and expenses) from the Company and or any subsidiary of the Company incurred by the Indemnitee in connection with any Clawback Proceeding; provided, however, if the Indemnitee is successful on the merits in the defense of any claim asserted against the Indemnitee in a Clawback Proceeding, the Indemnitee shall be indemnified for the expenses (including attorneys’ fees and disbursements) the Indemnitee actually and reasonably incurred to defend such claim
11.LIABILITY INSURANCE
To the extent the Company maintains an insurance policy or policies for directors’ and officers’ liability insurance, the Indemnitee shall be covered by such policy or policies, in accordance with its or their terms.
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12.DURATION OF AGREEMENT
This Agreement shall apply to any request or claim for indemnification made hereunder by the Indemnitee, even if the Indemnitee is no longer a director or officer of the Company.
13.NOTICE OF PROCEEDINGS BY INDEMNITEE
13.1.The Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding which may be subject to indemnification hereunder; provided, however, that the failure to so notify the Company will not relieve the Company from any liability it may have to the Indemnitee except to the extent that such failure materially prejudices the Company’s ability to defend such claim. With respect to any such Proceeding as to which the Indemnitee notifies the Company of the commencement thereof:
(a)the Company will be entitled to participate therein at its own expense; and
(b)except as otherwise provided below, the Company jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee. After notice from the Company to the Indemnitee of its election so to assume the defense thereof, the Company will not be liable to the Indemnitee under this Agreement for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided herein. The Indemnitee shall have the right to employ the Indemnitee’s own counsel in such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of the Indemnitee and not subject to indemnification hereunder unless: (a) the employment of counsel by the Indemnitee has been authorized by the Company; (b) in the reasonable opinion of counsel to the Indemnitee there is or may be a conflict of interest between the Company and the Indemnitee in the conduct of the defense of such Proceeding; or (c) the Company shall not in fact have employed counsel to assume the defense of such action, in each of which cases, subject to Section 10, the actual and reasonable fees and expenses of such counsel shall be at the expense of the Company. If, however, the Company provides notice to the Indemnitee of the Company’s election not to assume the defense thereof, the Indemnitee shall have the right to employ counsel, which is reasonably acceptable to the Company, in such Proceeding and to control the defense thereof with the actual and reasonable fees and expenses of such counsel to be at the expense of the Company, subject to Section 10.
13.2.Neither the Company nor the Indemnitee shall settle or compromise or consent to entry of judgment with respect to any claim without the prior written consent of the other (which shall not be unreasonably withheld); provided, however, that if the Company has assumed the defense in a Proceeding and has acknowledged that Indemnitee is entitled to indemnity hereunder, the Company may settle or compromise a claim or consent to entry of judgment without the Indemnitee’s consent so long as such settlement, compromise or judgment (x) only involves the payment of money damages, and the Company has acknowledged its obligation to pay such amount in full and (y) includes an unconditional written release of Indemnitee by the claimant.
14.GROSSING UP
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14.1.If any deductions or withholdings are required by law, or any payments due from the Company under this Agreement are liable for taxation in the hands of the Indemnitee, the Company shall be liable to pay to the Indemnitee such further sums as shall be required to ensure that the net amount received by the Indemnitee will equal the full amount which would have been received under this Agreement in the absence of any such deductions or withholdings.
14.2.In the event that any amounts are paid to the Indemnitee under Section 14.1 but a tax deduction, credit or relief is or becomes available to the Indemnitee in respect of the relevant payment under this indemnity received by the Indemnitee or any payment made by the Indemnitee to a third party in respect of the relevant expense, liability, loss, judgment, penalty, fine or amount paid in settlement which was not taken into account in calculating the amount payable under Section 14.1, the Indemnitee shall make a payment to the Company of such an amount as is equal to the benefit of such deduction, credit or relief which was not taken into account.
15.MISCELLANEOUS
15.1.This Agreement shall become effective on [●], 2026.
15.2.Notwithstanding the expiration or termination of this Agreement howsoever arising, such expiration or termination shall not operate to affect such of the provisions hereof as are expressed or intended to remain in full force and effect.
15.3.If any of the sections, conditions, covenants or restrictions of this Agreement or any deed or document emanating from it shall be found to be void but would be valid if some part thereof were deleted or modified, then such section, condition, covenant or restriction shall apply with such deletion or modification as may be necessary to make it valid and effective so as to give effect as nearly as possible to the intent manifested by such section, condition, covenant or restriction.
15.4.This Agreement shall be binding upon the Company and its successors and assigns (including any transferee of all or substantially all of its assets and any successor or resulting company by merger, amalgamation or operation of law) and shall inure to the benefit of the Indemnitee and the Indemnitee’s spouse, assigns, heirs, estate, devises, executors, administrators or other legal representatives.
15.5.This Agreement, together with any documents referred to herein, contains the whole agreement between the Parties in respect of the subject matter of this Agreement and supersedes and replaces any prior indemnification arrangement between the Company and the Indemnitee, and any prior written or oral agreements, representations or understandings between them relating to such subject matter. The Parties confirm that they have not entered into this Agreement on the basis of any representation that is not expressly incorporated in this Agreement. Without limiting the generality of the foregoing, neither Party shall have any remedy in respect of any untrue statement made to such Party upon which such Party may have relied in entering into this Agreement, and a Party’s only remedy is for breach of contract. However, nothing in this Agreement purports to exclude liability for any fraudulent statement or act.
15.6.No provision in this Agreement may be amended unless such amendment is agreed to in writing, signed by the Indemnitee and by a duly authorized officer of the Company. No waiver by either Party of any breach by the other Party of any condition or provision of this Agreement to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by the Indemnitee or a duly authorized officer of the Company, as the case may be.
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15.7.The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, by law or otherwise) of the amounts otherwise indemnifiable hereunder.
15.8.In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring action to enforce such rights.
15.9.Indemnitee agrees and acknowledges that, in consideration of such agreements and covenants of Company contained herein, the Prior Agreement is hereby superseded in its entirety by this Agreement, and Indemnitee agrees to waive any and all such rights under the Prior Agreement; provided that, for purposes of this Agreement, all references to the Indemnitee serving as a director or officer of the Company shall be deemed to include the Indemnitee serving as a director or officer of Gates Industrial Corporation plc (“Gates plc”) prior to the date hereof. For the avoidance of doubt, the Indemnitee shall be deemed to have Corporate Status by virtue of serving as a director or officer of Gates plc prior to the date hereof and all references to Corporate Status hereunder shall be construed accordingly, including (without limitation) all obligations of the Company to indemnify or advance expenses to the Indemnitee.
16.NOTICES
Any notice required to be given hereunder shall be in writing in the English language and shall be served by sending the same by prepaid recorded post, national overnight courier, electronic mail or by delivering the same by hand to the address of the Party or Parties in question as set out below (or such other address as such Party or Parties shall notify the other Parties of in accordance with this section). Any notice sent by (i) post as provided in this section shall be deemed to have been served five Business Days after dispatch, (ii) national overnight courier as provided in this section shall be deemed to have been served on the next Business Day following dispatch, and (iii) or electronic mail as provided in this section shall be deemed to have been served at the time of dispatch, and in proving the service of the same it will be sufficient to prove in the case of a letter or overnight courier package, that it was properly stamped, addressed and placed in the post or delivered to such courier service, as applicable; and in the case of an electronic mail that such electronic mail was duly dispatched to a current electronic mail address, as applicable, of the addressee. Notice delivered by hand will be deemed duly given upon delivery.
COMPANY
Gates Industrial Corporation Ltd.
1144 Fifteenth Street, Suite 1400
Denver, Colorado 80202
Attention: [Chief Legal Officer][Head of HR]
Email: [●][●]
INDEMNITEE
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[NAME]
Email: [●]
17.HEADINGS
The headings in this Agreement are inserted for convenience only and shall not affect the construction of this Agreement.
18.COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which when executed shall be deemed an original but all such counterparts shall constitute one and the same instrument. Delivery of a counterpart signature page by facsimile transmission or by e-mail transmission of .PDF (or similar electronic record) shall be effective as delivery of an executed counterpart signature page.
19.GOVERNING LAW
The terms and conditions of this Agreement and the rights of the parties hereunder shall be governed by and construed in all respects in accordance with the laws of the Islands of Bermuda. The parties to this Agreement hereby irrevocably agree that the courts of Bermuda shall have non-exclusive jurisdiction in respect of any Agreement Proceedings and waive any objection to Agreement Proceedings in the courts of Bermuda on the grounds of venue or on the basis that the Agreement Proceedings have been brought in an inconvenient forum.
[Remainder of page intentionally left blank]
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AGREED by the Parties through their authorized signatories on the date first above written:
GATES INDUSTRIAL CORPORATION LTD.
By:
Name: [●]
Title: [●]
INDEMNITEE
By:
[DIRECTOR/OFFICER NAME]
EX-10.3
EX-10.3
Filename: a1032018omnibusinventivepl.htm · Sequence: 7
Document
Exhibit 10.3
GATES INDUSTRIAL CORPORATION LTD.
AMENDED AND RESTATED 2018 OMNIBUS INCENTIVE PLAN
1. History and Purpose.
(a) History. Gates Industrial Corporation plc (“Old Gates”) previously adopted and maintained the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (“2018 Plan”). On July 20, 2026, Old Gates was redomiciled from England and Wales to Bermuda (the “Redomiciliation”), which resulted in the formation of Gates Industrial Corporation Ltd. (the “Company”), a new parent holding company formed as an exempted company limited by shares incorporated under the Bermuda Companies Act 1981 (as amended). In connection with the Redomiciliation, the Company has assumed outstanding awards granted under the 2018 Plan and has amended and restated the 2018 Plan (the 2018 Plan, as amended and restated, the “Plan”) to reflect the impact of the Redomiciliation, including the new parent holding company (i.e., the Company).
(b) Purpose. The purpose of the Plan is to provide a means through which the Company and the other members of the Company Group may attract and retain key personnel and to provide a means whereby directors, officers, employees, consultants, and advisors of the Company and the other members of the Company Group can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Common Shares, thereby strengthening their commitment to the welfare of the Company Group and aligning their interests with those of the Company’s shareholders.
2. Definitions. The following definitions shall be applicable throughout the Plan.
(a) “Absolute Share Limit” has the meaning given to such term in Section 5(b) of the Plan.
(b) “Adjustment Event” has the meaning given to such term in Section 11(a) of the Plan.
(c) “Affiliate” means any Person that directly or indirectly controls, is controlled by, or is under common control with the Company. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract, or otherwise.
(d) “Award” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Equity-Based Award, and Other Cash-Based Award granted under the Plan.
(e) “Award Agreement” means the document or documents by which each Award (other than an Other Cash-Based Award) is evidenced, which may be in written or electronic form.
(f) “Board” means the Board of Directors of the Company.
(g) “Cause” means, as to any Participant, unless the applicable Award Agreement states otherwise, (i) “Cause,” as defined in any employment or consulting agreement between the Participant and the Service Recipient or as defined in the Executive Severance Plan of a member of the Company Group to the extent the Participant participates in such plan, in each case, in effect at the time of such Termination; or (ii) in the absence of any such employment or consulting agreement (or the
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absence of any definition of “Cause” contained therein), the Participant’s (A) willful neglect in the performance of the Participant’s duties for the Service Recipient or willful or repeated failure or refusal to perform such duties; (B) engagement in conduct in connection with the Participant’s employment or service with the Service Recipient, which results in, or could reasonably be expected to result in, material harm to the business or reputation of the Service Recipient or any other member of the Company Group; (C) conviction of, or plea of guilty or no contest to, (I) any felony or (II) any other crime that results in, or could reasonably be expected to result in, material harm to the business or reputation of the Service Recipient or any other member of the Company Group; (D) material violation of the written policies of the Service Recipient, including, but not limited to, those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in the manuals or statements of policy of the Service Recipient; (E) fraud or misappropriation, embezzlement, or misuse of funds or property belonging to the Service Recipient or any other member of the Company Group; or (F) act of personal dishonesty that involves personal profit in connection with the Participant’s employment or service to the Service Recipient; provided, in any case, a Participant’s resignation after an event that would be grounds for a Termination for Cause will be treated as a Termination for Cause hereunder.
(h) “Change in Control” means:
i. the acquisition (whether by purchase, merger, amalgamation, consolidation, combination, or other similar transaction) by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% (on a fully diluted basis) of either (A) the then-issued and outstanding Common Shares, taking into account as issued and outstanding for this purpose such Common Shares issuable upon the exercise of options or warrants, the conversion of convertible shares, stock or debt, and the exercise of any similar right to acquire such Common Shares; or (B) the combined voting power of the then-issued and outstanding voting shares of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of the Plan, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by the Company or any Affiliate; (II) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate; or (III) 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);
ii. during any period of 12 months, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, that any person becoming a director subsequent to the Effective Date, whose election or nomination for election 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 written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; or
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iii. the sale, transfer, or other disposition of all or substantially all of the assets of the Company Group (taken as a whole) to any Person that is not an Affiliate of the Company.
(i) “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto. Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations, or guidance.
(j) “Committee” means the Compensation Committee of the Board or any properly delegated subcommittee thereof or, if no such Compensation Committee or subcommittee thereof exists, the Board.
(k) “Common Share” means a common share of the Company, par value $0.01 per share (and any shares, stocks or other securities into which such Common Share may be converted or into which it may be exchanged).
(l) “Company” means Gates Industrial Corporation Ltd., an exempted company limited by shares incorporated in Bermuda.
(m) “Company Group” means, collectively, the Company and its Subsidiaries.
(n) “Date of Grant” means the date on which the granting of an Award is authorized, or such other date as may be specified in such authorization.
(o) “Designated Foreign Subsidiaries” means all members of the Company Group that are organized under the laws of any jurisdiction other than the United States of America that may be designated by the Board or the Committee from time to time.
(p) “Detrimental Activity” means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of any member of the Company Group; (ii) any activity that would be grounds to terminate the Participant’s employment or service with the Service Recipient for Cause; (iii) a breach by the Participant of any restrictive covenant by which such Participant is bound, including, without limitation, any covenant not to compete or not to solicit, in any agreement with any member of the Company Group; or (iv) fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion. Notwithstanding the above, it shall not be considered a Detrimental Activity for a Participant to communicate, cooperate, or file a complaint of possible violations of U.S. federal, state, or local law or regulations to or with any governmental agency or regulatory authority, including, but not limited to, the Securities and Exchange Commission, Financial Industry Regulatory Authority, Equal Employment Opportunity Commission, or National Labor Relations Board, or from making other disclosures to any governmental entity that are protected under the whistleblower provisions of U.S. federal, state, or local law or regulation.
(q) “Disability” means, as to any Participant, unless the applicable Award Agreement states otherwise, (i) “Disability,” as defined in any employment or consulting agreement between the Participant and the Service Recipient in effect at the time of such Termination; or (ii) in the absence of any such employment or consulting agreement (or the absence of any definition of “Disability” contained therein), a condition entitling the Participant to receive benefits under a long-term disability plan of the Service Recipient or other member of the Company Group in which such Participant is eligible to participate, or, in the absence of such a plan, the complete and
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permanent inability of the Participant by reason of illness or accident to perform the duties of the position at which the Participant was employed or served when such disability commenced. Any determination of whether Disability exists in the absence of a long-term disability plan shall be made by the Company (or its designee) in its sole and absolute discretion.
(r) “Effective Date” means January 24, 2018.
(s) “Eligible Person” means any (i) individual employed by any member of the Company Group; provided, however, that no such employee covered by a collective bargaining agreement shall be an Eligible Person unless and to the extent that such eligibility is set forth in such collective bargaining agreement or in an agreement or instrument relating thereto; (ii) director or officer of any member of the Company Group; or (iii) consultant or advisor to any member of the Company Group who may be offered securities registrable pursuant to a registration statement on Form S-8 under the Securities Act, who, in the case of each of clauses (i) through (iii) above, has entered into an Award Agreement or who has received written notification from the Committee or its designee that they have been selected to participate in the Plan.
(t) “Employee Benefit Trust” means any employee benefit trust established for the benefit of most or all of the employees or former employees of the Company Group or certain of their relatives.
(u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto. Reference in the Plan to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations, or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations, or guidance.
(v) “Exercise Price” has the meaning given to such term in Section 7(b) of the Plan.
(w) “Fair Market Value” means, on a given date, (i) if the Common Shares are listed on a national securities exchange, the closing sales price of the Common Shares reported on the primary exchange on which the Common Shares are listed and traded on such date, or, if there are no such sales on that date, then on the last preceding date on which such sales were reported; (ii) if the Common Shares are not listed on any national securities exchange but is quoted in an inter-dealer quotation system on a last-sale basis, the average between the closing bid price and ask price reported on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported; or (iii) if the Common Shares are not listed on a national securities exchange or quoted in an inter-dealer quotation system on a last-sale basis, the amount determined by the Committee in good faith to be the fair market value of the Common Shares; provided, however, as to any Awards granted on or with a Date of Grant of the date of the pricing of the Company’s initial public offering, “Fair Market Value” shall be equal to the per share price at which the Common Shares are offered to the public in connection with such initial public offering.
(x) “GAAP” has the meaning given to such term in Section 7(d) of the Plan.
(y) “Immediate Family Members” has the meaning given to such term in Section 13(b) of the Plan.
(z) “Incentive Stock Option” means an Option which is designated by the Committee as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in the Plan.
(aa) “Indemnifiable Person” has the meaning given to such term in Section 4(e) of the Plan.
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(bb) “Nonqualified Stock Option” means an Option which is not designated by the Committee as an Incentive Stock Option.
(cc) “Non-Employee Director” means a member of the Board who is not an employee of any member of the Company Group.
(dd) “Option” means an Award granted under Section 7 of the Plan.
(ee) “Option Period” has the meaning given to such term in Section 7(c) of the Plan.
(ff) “Other Cash-Based Award” means an Award that is not a Stock Appreciation Right granted under Section 10 of the Plan that is denominated and/or payable in cash.
(gg) “Other Equity-Based Award” means an Award that is not an Option, Stock Appreciation Right, Restricted Stock, or Restricted Stock Unit that is granted under Section 10 of the Plan and is (i) payable by delivery of Common Shares and/or (ii) measured by reference to the value of Common Shares.
(hh) “Participant” means an Eligible Person who has been selected by the Committee to participate in the Plan and to receive an Award pursuant to the Plan.
(ii) “Performance Conditions” means specific levels of performance of the Company (and/or one or more members of the Company Group, divisions or operational and/or business units, product lines, brands, business segments, administrative departments, or any combination of the foregoing), which may be determined in accordance with GAAP or on a non-GAAP basis on the following measures: (i) net earnings, net income (before or after taxes), or consolidated net income; (ii) basic or diluted earnings per share (before or after taxes); (iii) net revenue or net revenue growth; (iv) gross revenue or gross revenue growth, gross profit or gross profit growth; (v) net operating profit (before or after taxes); (vi) return measures (including, but not limited to, return on investment, assets, capital, employed capital, invested capital, equity, or sales); (vii) cash flow measures (including, but not limited to, operating cash flow, free cash flow, or cash flow return on capital), which may be but are not required to be measured on a per share basis; (viii) actual or adjusted earnings before or after interest, taxes, depreciation, and/or amortization (including EBIT and EBITDA); (ix) gross or net operating margins; (x) productivity ratios; (xi) share price (including, but not limited to, growth measures and total shareholder return); (xii) expense targets or cost reduction goals, general and administrative expense savings; (xiii) operating efficiency; (xiv) objective measures of customer/client satisfaction; (xv) working capital targets; (xvi) measures of economic value added or other ‘value creation’ metrics; (xvii) enterprise value; (xviii) sales; (xix) shareholder return; (xx) customer/client retention; (xxi) competitive market metrics; (xxii) employee retention; (xxiii) objective measures of personal targets, goals, or completion of projects (including, but not limited to, succession and hiring projects, completion of specific acquisitions, dispositions, reorganizations, or other corporate transactions or capital-raising transactions, expansions of specific business operations, and meeting divisional or project budgets); (xxiv) comparisons of continuing operations to other operations; (xxv) market share; (xxvi) cost of capital, debt leverage, year-end cash position or book value; (xxvii) strategic objectives; or (xxviii) any combination of the foregoing. Any one or more of the aforementioned performance criteria may be stated as a percentage of another performance criteria, or used on an absolute or relative basis to measure the performance of one or more members of the Company Group as a whole or any divisions or operational and/or business units, product lines, brands,
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business segments, or administrative departments of the Company and/or one or more members of the Company Group or any combination thereof, as the Committee may deem appropriate, or any of the above performance criteria may be compared to the performance of a selected group of comparison companies, or a published or special index that the Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices.
(jj) “Permitted Transferee” has the meaning given to such term in Section 13(b) of the Plan.
(kk) “Person” means any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
(ll) “Plan” means this Gates Industrial Corporation Ltd. Amended and Restated 2018 Omnibus Incentive Plan, as it may be amended and/or restated from time to time.
(mm) “Qualifying Director” means a person who is, with respect to actions intended to obtain an exemption from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 under the Exchange Act, a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.
(nn) “Restricted Period” means the period of time determined by the Committee during which an Award is subject to restrictions, including vesting conditions.
(oo) “Restricted Stock” means Common Shares, subject to certain specified restrictions (which may include, without limitation, a requirement that the Participant remain continuously employed or provide continuous services for a specified period of time), granted under Section 9 of the Plan.
(pp) “Restricted Stock Unit” means an unfunded and unsecured promise to deliver Common Shares, cash, other securities, or other property, subject to certain restrictions (which may include, without limitation, a requirement that the Participant remain continuously employed or provide continuous services for a specified period of time), granted under Section 9 of the Plan.
(qq) “SAR Period” has the meaning given to such term in Section 8(c) of the Plan.
(rr) “Securities Act” means the Securities Act of 1933, as amended, and any successor thereto. Reference in the Plan to any section of (or rule promulgated under) the Securities Act shall be deemed to include any rules, regulations, or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations, or guidance.
(ss) “Service Recipient” means, with respect to a Participant holding a given Award, the member of the Company Group by which the original recipient of such Award is, or following a Termination was most recently, principally employed or to which such original recipient provides, or following a Termination was most recently providing, services, as applicable.
(tt) “Stock Appreciation Right” or “SAR” means an Award granted under Section 8 of the Plan.
(uu) “Strike Price” has the meaning given to such term in Section 8(b) of the Plan.
(vv) “Subsidiary” means, with respect to any specified Person:
i. any corporation, association, or other business entity of which more than 50% of the total voting power of shares of such entity’s voting securities (without regard to the occurrence of any contingency and after giving effect to any voting agreement or shareholders’ agreement that effectively transfers voting power) is at the time owned or controlled,
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directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
ii. any partnership (or any comparable foreign entity) (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is such Person or Subsidiary of such Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).
(ww) “Substitute Award” has the meaning given to such term in Section 5(e) of the Plan.
(xx) “Sub-Plans” means any sub-plan to the Plan that has been adopted by the Board or the Committee for the purpose of permitting the offering of Awards to employees of certain Designated Foreign Subsidiaries or otherwise outside the jurisdiction of the United States of America, with each such sub-plan designed to comply with local laws applicable to offerings in such foreign jurisdictions. Although any Sub-Plan may be designated a separate and independent plan from the Plan in order to comply with applicable local laws, the Absolute Share Limit and the other limits specified in Section 5(b) shall apply in the aggregate to the Plan and any Sub-Plan adopted hereunder.
(yy) “Termination” means the termination of a Participant’s employment or service, as applicable, with the Service Recipient for any reason (including death).
(zz) “Trustee” means the trustee or trustees of any Employee Benefit Trust from time to time.
3. Effective Date; Duration. The Plan shall be effective as of the Effective Date. The expiration date of the Plan, on and after which date no Awards may be granted hereunder, shall be the 10th anniversary of the Effective Date; provided, however, that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards.
4. Administration.
(a) General. The Committee shall administer the Plan. To the extent required to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is not acting as the Committee under the Plan), it is intended that each member of the Committee shall, at the time such member takes any action with respect to an Award under the Plan that is intended to qualify for the exemptions provided by Rule 16b-3 promulgated under the Exchange Act, be a Qualifying Director. However, the fact that a Committee member shall fail to qualify as a Qualifying Director shall not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.
(b) Committee Authority. Subject to the provisions of the Plan and applicable law, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by the Plan, to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Common Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled in, or exercised for, cash, Common Shares, other securities, other Awards, or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances the
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delivery of cash, Common Shares, other securities, other Awards, or other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant or of the Committee; (vii) 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; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan; (ix) adopt Sub-Plans; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
(c) Delegation. Except to the extent prohibited by applicable law or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. Without limiting the generality of the foregoing, the Committee may delegate to one or more officers of any member of the Company Group the authority to act on behalf of the Committee with respect to any matter, right, obligation, or election which is the responsibility of, or which is allocated to, the Committee herein, and which may be so delegated as a matter of law, except for grants of Awards to Non-Employee Directors. Notwithstanding the foregoing in this Section 4(c), it is intended that any action under the Plan intended to qualify for an exemption provided by Rule 16b-3 promulgated under the Exchange Act related to persons who are subject to Section 16 of the Exchange Act will be taken only by the Board or by a committee or subcommittee of two or more Qualifying Directors. However, the fact that any member of such committee or subcommittee shall fail to qualify as a Qualifying Director shall not invalidate any action that is otherwise valid under the Plan.
(d) Finality of Decisions. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan, any Award or any Award Agreement shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including, without limitation, any member of the Company Group, any Participant, any holder or beneficiary of any Award, and any shareholder of the Company.
(e) Indemnification. To the maximum extent permitted by applicable law, no member of the Board, the Committee or any employee or agent of any member of the Company Group (each such Person, an “Indemnifiable Person”) shall be liable for any action taken or omitted to be taken or any determination made with respect to the Plan or any Award hereunder (unless constituting fraud or a willful criminal act or omission). Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit, or proceeding to which such Indemnifiable Person may be a party or in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken or determination made with respect to the Plan or any Award hereunder and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit, or proceeding against such Indemnifiable Person, and the Company shall advance to such Indemnifiable Person any such expenses promptly upon written
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request (which request shall include an undertaking by the Indemnifiable Person to repay the amount of such advance if it shall ultimately be determined, as provided below, that the Indemnifiable Person is not entitled to be indemnified); provided, that the Company shall have the right, at its own expense, to assume and defend any such action, suit, or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts, omissions, or determinations of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the organizational documents of any member of the Company Group. The foregoing right of indemnification shall not be exclusive of or otherwise supersede any other rights of indemnification to which such Indemnifiable Persons may be entitled under the organizational documents of any member of the Company Group, as a matter of law, under an individual indemnification agreement or contract, or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold such Indemnifiable Persons harmless.
(f) Board Authority. Notwithstanding anything to the contrary contained in the Plan, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer the Plan with respect to such Awards. Any such actions by the Board shall be subject to the applicable rules of the securities exchange or inter-dealer quotation system on which the Common Shares are listed or quoted. In any such case, the Board shall have all the authority granted to the Committee under the Plan.
5. Grant of Awards; Shares Subject to the Plan; Limitations.
(a) Grants. The Committee may, from time to time, grant Awards to one or more Eligible Persons. All Awards granted under the Plan shall vest and become exercisable in such manner and on such date or dates or upon such event or events as determined by the Committee, including, without limitation, attainment of Performance Conditions.
(b) Share Reserve and Limits. Awards granted under the Plan shall be subject to the following limitations: (i) subject to Section 11 of the Plan, no more than 12,500,000 Common Shares (the “Absolute Share Limit”) shall be available for Awards under the Plan; provided, however, that the Absolute Share Limit shall be increased on the first day of each fiscal year beginning with the 2019 fiscal year in an amount equal to the least of (x) 6,500,000 Common Shares, (y) 2.5% of the total number of Common Shares issued and outstanding on the last day of the immediately preceding fiscal year, and (z) a lower number of Common Shares as determined by the Board; (ii) subject to Section 11 of the Plan, no more than the number of Common Shares equal to the 12,500,000 may be issued in the aggregate pursuant to the exercise of Incentive Stock Options granted under the Plan; and (iii) during a single fiscal year, each Non-Employee Director shall be granted a number of Common Shares subject to Awards, taken together with any cash fees paid to such Non-Employee Director during the fiscal year, equal to a total value of $1,000,000 (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes) or such lower amount as determined by the Board; provided, however, that this limit shall not apply to amounts distributed pursuant to a deferred compensation plan maintained by the Company or any of its Affiliates.
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(c) Share Counting. Other than with respect to Substitute Awards, to the extent that an Award expires or is canceled, forfeited, or terminated without issuance to the Participant of the full number of Common Shares to which the Award related, the unissued shares will again be available for grant under the Plan. Common Shares shall be deemed to have been issued in settlement of Awards if the Fair Market Value equivalent of such shares is paid in cash in connection with such settlement; provided, however, that no shares shall be deemed to have been issued in settlement of a SAR or Restricted Stock Unit that provides for settlement only in cash and settles only in cash or in respect of any Other Cash-Based Awards. In no event shall (i) shares tendered or withheld on exercise of Options or other Award for the payment of the exercise or purchase price or withholding taxes, (ii) shares not issued upon the settlement of a SAR that by the terms of the Award Agreement would settle in Common Shares (or could settle in Common Shares), or (iii) shares purchased on the open market with cash proceeds from the exercise of Options, again become available for other Awards under the Plan.
(d) Source of Shares. Common Shares issued by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.
(e) Substitute Awards. Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity directly or indirectly acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the Absolute Share Limit; provided, that Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding Options intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code shall be counted against the aggregate number of Common Shares available for Awards of Incentive Stock Options under the Plan. Subject to applicable stock exchange requirements, available shares under a shareholder-approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect the acquisition or combination transaction) may be used for Awards under the Plan and shall not reduce the number of Common Shares available for issuance under the Plan.
(f) Holding of Shares. Notwithstanding any other provision of the Plan, all Common Shares acquired pursuant to the Plan will be held in the facilities of the Depositary Trust Company (the “DTC”). This means that the Common Shares will be held by Cede & Co as nominee for the DTC and that when Common Shares are allocated to a Participant under the Plan, their DTC participant account will be credited with a book entry interest in the relevant Common Shares. It is a condition to any Common Shares being acquired under the Plan that they should be held through the facilities of the DTC in this way. No Participant in the Plan will be entitled to withdraw their Common Shares from the facilities of the DTC without the prior agreement of the Committee and for the avoidance of doubt, any stamp duty or stamp duty reserve tax arising as a result of or in connection with such withdrawal shall be for the account of the relevant Participant and the Company and the Committee take no responsibility for any effect on the value of any Common Shares or ability to trade in it as a result of any withdrawal from the facilities of the DTC.
6. Eligibility. Participation in the Plan shall be limited to Eligible Persons.
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7. Options.
(a) General. Each Option granted under the Plan shall be evidenced by an Award Agreement, which agreement need not be the same for each Participant. Each Option so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock Option. Incentive Stock Options shall be granted only to Eligible Persons who are employees of a member of the Company Group, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the shareholders of the Company in a manner intended to comply with the shareholder approval requirements of Section 422(b)(1) of the Code; provided, that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of such grant shall be subject to, and comply with, such rules as may be prescribed by Section 422 of the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.
(b) Exercise Price. Except as otherwise provided by the Committee in the case of Substitute Awards, the exercise price (“Exercise Price”) per Common Share for each Option shall not be less than 100% of the Fair Market Value of such share (determined as of the Date of Grant); provided, however, that in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns shares and/or stock representing more than 10% of the voting power of all classes of shares and/or stock of any member of the Company Group, the Exercise Price per share shall be no less than 110% of the Fair Market Value per share on the Date of Grant. Notwithstanding the foregoing, if the Fair Market Value of a Share is less than its par value the Exercise Price in respect of an Option to subscribe for Common Shares shall not be less than such par value.
(c) Vesting and Expiration.
i. Options shall vest and become exercisable in such manner and on such date or dates or upon such event or events as determined by the Committee including, without limitation, those set forth in Section 5(a) of the Plan; provided, however, that notwithstanding any such vesting dates or events, the Committee may in its sole discretion accelerate the vesting of any Options at any time and for any reason. Options shall expire upon a date determined by the Committee, not to exceed 10 years from the Date of Grant (the “Option Period”); provided, that if the Option Period (other than in the case of an Incentive Stock Option) would expire at a time when trading in the Common Shares is prohibited by the Company’s insider trading policy (or Company-imposed “blackout period”), then the Option Period shall be automatically extended until the 30th day following the expiration of such prohibition to the extent compliant with Section 409A of the Code. Notwithstanding the foregoing, in no event shall the Option Period exceed five years from the Date of Grant in the case of an Incentive Stock Option granted to a
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Participant who on the Date of Grant owns shares representing more than 10% of the voting power of all classes of shares and/or stock of any member of the Company Group.
ii. Unless otherwise provided by the Committee, whether in an Award Agreement or otherwise, in the event of: (A) a Participant’s Termination by the Service Recipient for Cause, all outstanding Options granted to such Participant shall immediately terminate and expire; (B) a Participant’s Termination due to death or Disability, each outstanding unvested Option granted to such Participant shall immediately terminate and expire, and each outstanding vested Option shall remain exercisable for one year thereafter (but in no event beyond the expiration of the Option Period); and (C) a Participant’s Termination for any other reason, each outstanding unvested Option granted to such Participant shall immediately terminate and expire, and each outstanding vested Option shall remain exercisable for 90 days thereafter (but in no event beyond the expiration of the Option Period).
(d) Method of Exercise and Form of Payment. No Common Shares shall be issued pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal to any Federal, state, local, and non-U.S. income, employment, and any other applicable taxes required to be withheld. Options which have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company (or telephonic instructions to the extent provided by the Committee) in accordance with the terms of the Option accompanied by payment of the Exercise Price. The Exercise Price shall be payable: (i) in cash, or (ii) by such other method as the Committee may permit in its sole discretion, including, without limitation: (A) if there is a public market for the Common Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered (including telephonically to the extent permitted by the Committee) a copy of irrevocable instructions to a stockbroker to sell the Common Shares otherwise issuable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price; or (B) a “net exercise” procedure effected by the settlement of the Award in a combination of: (i) Common Shares; and (ii) cash, where the amount of cash is sufficient to pay the Exercise Price and all applicable required withholding and any other applicable taxes required to be withheld. Any fractional Common Shares shall be settled in cash.
(e) Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date the Participant makes a disqualifying disposition of any Common Shares acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of such Common Shares before the later of (i) the date that is two years after the Date of Grant of the Incentive Stock Option or (ii) the date that is one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession, as agent for the applicable Participant, of any Common Shares acquired pursuant to the exercise of an Incentive Stock Option until the end of the period described in the preceding sentence, subject to complying with any instructions from such Participant as to the sale of such Common Shares.
(f) Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a manner which the Committee determines would violate the
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Sarbanes-Oxley Act of 2002, as it may be amended from time to time, or any other applicable law or the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.
8. Stock Appreciation Rights.
(a) General. Each SAR granted under the Plan shall be evidenced by an Award Agreement. Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Any Option granted under the Plan may include tandem SARs. The Committee also may award SARs to Eligible Persons independent of any Option.
(b) Strike Price. Except as otherwise provided by the Committee in the case of Substitute Awards, the strike price (“Strike Price”) per Common Share for each SAR shall not be less than 100% of the Fair Market Value of such share (determined as of the Date of Grant). Notwithstanding the foregoing, a SAR granted in tandem with (or in substitution for) an Option previously granted shall have a Strike Price equal to the Exercise Price of the corresponding Option.
(c) Vesting and Expiration; Termination.
i. A SAR granted in connection with an Option shall become exercisable and shall expire according to the same vesting schedule and expiration provisions as the corresponding Option. A SAR granted independent of an Option shall vest and become exercisable in such manner and on such date or dates or upon such event or events as determined by the Committee including, without limitation, those set forth in Section 5(a) of the Plan; provided, however, that notwithstanding any such vesting dates or events, the Committee may, in its sole discretion, accelerate the vesting of any SAR at any time and for any reason. SARs shall expire upon a date determined by the Committee, not to exceed 10 years from the Date of Grant (the “SAR Period”); provided, that if the SAR Period would expire at a time when trading in the Common Shares is prohibited by the Company’s insider trading policy (or Company-imposed “blackout period”), then the SAR Period shall be automatically extended until the 30th day following the expiration of such prohibition to the extent compliant with Section 409A of the Code.
ii. Unless otherwise provided by the Committee, whether in an Award Agreement or otherwise, in the event of: (A) a Participant’s Termination by the Service Recipient for Cause, all outstanding SARs granted to such Participant shall immediately terminate and expire; (B) a Participant’s Termination due to death or Disability, each outstanding unvested SAR granted to such Participant shall immediately terminate and expire, and each outstanding vested SAR shall remain exercisable for one year thereafter (but in no event beyond the expiration of the SAR Period); and (C) a Participant’s Termination for any other reason, each outstanding unvested SAR granted to such Participant shall immediately terminate and expire, and each outstanding vested SAR shall remain exercisable for 90 days thereafter (but in no event beyond the expiration of the SAR Period).
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(d) Method of Exercise. SARs which have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such SARs were awarded.
(e) Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares subject to the SAR that is being exercised multiplied by the excess of the Fair Market Value of one Common Share on the exercise date over the Strike Price, less an amount equal to any Federal, state, local, and non-U.S. income, employment, and any other applicable taxes and employee and, if applicable, employer social security contributions required to be withheld. The Company shall pay, or procure the payment of, such amount in cash, in Common Shares valued at Fair Market Value, or any combination thereof, as determined by the Committee. Any fractional Common Shares shall be settled in cash. Where payment is made in Common Shares, such payment may be satisfied by the transfer of Common Shares by the Trustee to the Participant.
9. Restricted Stock and Restricted Stock Units.
(a) General. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement. Each Restricted Stock and Restricted Stock Unit so granted shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
(b) Share Certificates and Book-Entry; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, the Committee shall cause a share certificate registered in the name of the Participant to be issued or shall cause Common Shares to be registered in the name of the Participant and held in book-entry form subject to the Company’s directions and, if the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than issued to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to the Restricted Stock covered by such agreement. If a Participant shall fail to execute and deliver (in a manner permitted under Section 13(a) of the Plan or as otherwise determined by the Committee) an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and blank stock power within the amount of time specified by the Committee, the Award shall be null and void. Subject to the restrictions set forth in this Section 9, Section 13(c) of the Plan, and the applicable Award Agreement, a Participant generally shall have the rights and privileges of a shareholder as to shares of Restricted Stock, including, without limitation, the right to vote such Restricted Stock; provided, that if the lapsing of restrictions with respect to any grant of Restricted Stock is contingent on satisfaction of Performance Conditions (other than, or in addition to, the passage of time), any dividends payable on such shares of Restricted Stock shall be held by the Company and delivered (without interest) to the Participant within 15 days following the date on which the restrictions on such Restricted Stock lapse (and the right to any such accumulated dividends shall be forfeited upon the forfeiture of the Restricted Stock to which such dividends relate). To the extent shares of Restricted Stock are forfeited, any share certificates issued to the Participant evidencing such shares shall be returned to the Company. The Participant shall transfer such shares to such Person (including but not limited to the Trustee) as the Company shall direct, and all rights of the Participant to such shares and as a shareholder with respect
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thereto shall terminate without further obligation on the part of the Company. A Participant shall have no rights or privileges as a shareholder as to Restricted Stock Units.
(c) Vesting; Termination.
i. Restricted Stock and Restricted Stock Units shall vest, and any applicable Restricted Period shall lapse, in such manner and on such date or dates or upon such event or events as determined by the Committee, including, without limitation, those set forth in Section 5(a) of the Plan; provided, however, that, notwithstanding any such dates or events, the Committee may, in its sole discretion, accelerate the vesting of any Restricted Stock or Restricted Stock Unit or the lapsing of any applicable Restricted Period at any time and for any reason.
ii. Unless otherwise provided by the Committee, whether in an Award Agreement or otherwise, in the event of a Participant’s Termination for any reason prior to the time that such Participant’s Restricted Stock or Restricted Stock Units, as applicable, have vested, (A) all vesting with respect to such Participant’s Restricted Stock or Restricted Stock Units, as applicable, shall cease and (B) unvested shares of Restricted Stock and unvested Restricted Stock Units, as applicable, shall be forfeited to the Company and the Participant shall transfer such shares to such Person (including but not limited to the Trustee) as the Company shall direct, by the Participant for no consideration as of the date of such Termination.
(d) Issuance of Restricted Stock and Settlement of Restricted Stock Units.
i. Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in 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 issue to the Participant, or the Participant’s beneficiary, without charge, the stock certificate (or, if applicable, a notice evidencing a book-entry notation) evidencing the shares of Restricted Stock which have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, in the sole discretion of the Committee, in Common Shares having a Fair Market Value (on the date of distribution) equal to the amount of such dividends, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.
ii. Unless otherwise provided by the Committee in an Award Agreement or otherwise, upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall issue or procure the transfer, to the Participant or the Participant’s beneficiary, without charge, one Common Share (or other securities or other property, as applicable) for each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its sole discretion, elect to (A) pay cash or part cash and part Common Shares in lieu of issuing only Common Shares in respect of such Restricted Stock Units; or (B) defer the issuance of Common Shares (or cash or part cash and part Common Shares, as the case may be) beyond the expiration of the Restricted
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Period if such extension would not cause adverse tax consequences under Sections 409A and 457A of the Code. If a cash payment is made in lieu of issuing Common Shares in respect of such Restricted Stock Units, the amount of such payment shall be equal to the Fair Market Value per Common Share as of the date on which the Restricted Period lapsed with respect to such Restricted Stock Units.
(e) Legends on Restricted Stock. Each certificate, if any, or book entry representing Restricted Stock awarded under the Plan, if any, shall bear a legend or book entry notation substantially in the form of the following, in addition to any other information the Company deems appropriate, until the lapse of all restrictions with respect to such Common Shares:
TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE GATES INDUSTRIAL CORPORATION LTD. AMENDED AND RESTATED 2018 OMNIBUS INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT BETWEEN GATES INDUSTRIAL CORPORATION LTD. AND THE PARTICIPANT. A COPY OF SUCH PLAN AND AWARD AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF GATES INDUSTRIAL CORPORATION LTD.
10. Other Equity-Based Awards and Other Cash-Based Awards. The Committee may grant Other Equity-Based Awards and Other Cash-Based Awards under the Plan to Eligible Persons, alone or in tandem with other Awards, in such amounts and dependent on such conditions as the Committee shall from time to time in its sole discretion determine, including, without limitation, those set forth in Section 5(a) of the Plan. Each Other Equity-Based Award granted under the Plan shall be evidenced by an Award Agreement and each Other Cash-Based Award granted under the Plan shall be evidenced in such form as the Committee may determine from time to time. Each Other Equity-Based Award or Other Cash-Based Award, as applicable, so granted shall be subject to such conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement or other form evidencing such Award, including, without limitation, those set forth in Section 13(a) of the Plan.
11. Changes in Capital Structure and Similar Events. Notwithstanding any other provision in the Plan to the contrary, the following provisions shall apply to all Awards granted hereunder (other than Other Cash-Based Awards):
(a) General. In the event of (i) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, Common Shares, other securities, or other property), recapitalization, share split, reverse share split, sub-division, reorganization, merger, amalgamation, consolidation, split-up, split-off, spin-off, combination, repurchase, or exchange of Common Shares or other securities of the Company, issuance of warrants or other rights to acquire Common Shares or other securities of the Company, or other similar corporate transaction or event that affects the Common Shares (including a Change in Control), or (ii) unusual or nonrecurring events affecting the Company, including changes in applicable rules, rulings, regulations, or other requirements, that the Committee determines, in its sole discretion, could result in substantial dilution or enlargement of the rights intended to be granted to, or available for, Participants (any event in (i) or (ii), an “Adjustment Event”), the Committee shall, in respect of any such Adjustment Event, make such proportionate substitution or adjustment, if any, as it deems equitable, to any or all of (A) the Absolute Share Limit, or any other limit applicable under the Plan with respect to the number of Awards which may be granted hereunder, (B) the number of Common Shares or other securities of the Company (or number and kind of other securities or other property) which may be issued in respect of Awards or with respect to which Awards may be granted under the Plan or any Sub-
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Plan, and (C) the terms of any outstanding Award, including, without limitation, (I) the number of Common Shares or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (II) the Exercise Price or Strike Price with respect to any Award, or (III) any applicable performance measures; provided, that in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor pronouncement thereto)), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring; and provided, further, that, except as otherwise provided by the Committee, whether in an Award Agreement or otherwise, in the event of a Participant’s Termination within the two-year period following a Change in Control by the Service Recipient without Cause (excluding, for the avoidance of doubt, a Termination due to death or Disability or any voluntary Termination by the Participant), all Awards held by the Participant shall become fully vested upon such Termination, with level of achievement with respect to any performance-based equity awards, as determined in accordance with the terms of the applicable Award Agreement. Any adjustment under this Section 11 shall be conclusive and binding for all purposes.
(b) Adjustment Events. Without limiting the foregoing, except as may otherwise be provided in an Award Agreement, in connection with any Adjustment Event, the Committee may, in its sole discretion, provide for any one or more of the following:
i. substitution or assumption of Awards (or awards of an acquiring company), acceleration of the exercisability of, lapse of restrictions on, or termination of Awards, or a period of time (which shall not be required to be more than 10 days) for Participants to exercise outstanding Awards prior to the occurrence of such event (and any such Award not so exercised shall terminate upon the occurrence of such event); and
ii. subject to any limitations or reductions as may be necessary to comply with Section 409A of the Code, cancellation of any one or more outstanding Awards and payment to the holders of such Awards that are vested as of such cancellation (including, without limitation, any Awards that would vest as a result of the occurrence of such event but for such cancellation or for which vesting is accelerated by the Committee in connection with such event) the value of such Awards, if any, as determined by the Committee (which value, if applicable, may be based upon the price per Common Share received or to be received by other shareholders of the Company in such event), including, without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Common Shares subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR (it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value of an Common Share subject thereto may be canceled and terminated without any payment or consideration therefor), or, in the case of Restricted Stock, Restricted Stock Units, or Other Equity-Based Awards that are not vested as of such cancellation, a cash payment or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Restricted Stock, Restricted Stock Units, or Other Equity-Based Awards prior to cancellation, or the underlying shares in respect thereof.
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Payments to holders pursuant to clause (ii) above shall be made in cash or, in the sole discretion of the Committee, in the form of such other consideration necessary for a Participant to receive property, cash, or securities (or combination thereof) as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction, the holder of the number of Common Shares covered by the Award at such time (less any applicable Exercise Price or Strike Price).
(c) Other Requirements. Prior to any payment or adjustment contemplated under this Section 11, the Committee may require a Participant to (i) represent and warrant as to the unencumbered title to the Participant’s Awards, (ii) bear such Participant’s pro rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Common Shares, subject to any limitations or reductions as may be necessary to comply with Sections 409A and 457A of the Code, and (iii) deliver customary transfer documentation as reasonably determined by the Committee.
(d) Fractional Shares. Any adjustment provided under this Section 11 may provide for the elimination of any fractional share that might otherwise become subject to an Award.
(e) Binding Effect. Any adjustment, substitution, determination of value or other action taken by the Committee under this Section 11 shall be conclusive and binding for all purposes.
12. Amendments and Termination.
(a) Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided, that no such amendment, alteration, suspension, discontinuance, or termination shall be made without shareholder approval if: (i) such approval is necessary to comply with any regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company may be listed or quoted) or for changes in GAAP to new accounting standards; (ii) it would materially increase the number of securities which may be issued under the Plan (except for increases pursuant to Section 5 or 11 of the Plan) or (iii) it would materially modify the requirements for participation in the Plan; provided, further, that any such amendment, alteration, suspension, discontinuance, or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder, or beneficiary. Notwithstanding the foregoing, no amendment shall be made to Section 13(c) of the Plan without shareholder approval.
(b) Amendment of Award Agreements. The Committee may, to the extent consistent with the terms of the Plan and any applicable Award Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel, or terminate, any Award theretofore granted or the associated Award Agreement, prospectively or retroactively (including after a Participant’s Termination); provided, that, other than pursuant to Section 11, any such waiver, amendment, alteration, suspension, discontinuance, cancellation, or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant.
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(c) No Repricing. Notwithstanding anything in the Plan to the contrary, without shareholder approval, except as otherwise permitted under Section 11 of the Plan, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike Price of any SAR; (ii) the Committee may not cancel any outstanding Option or SAR and replace it with a new Option or SAR (with a lower Exercise Price or Strike Price, as the case may be) or other Award or cash payment that is greater than the intrinsic value (if any) of the cancelled Option or SAR; and (iii) the Committee may not take any other action which is considered a “repricing” for purposes of the shareholder approval rules of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or quoted.
13. General.
(a) Award Agreements. Each Award (other than an Other Cash-Based Award) under the Plan shall be evidenced by an Award Agreement, which shall be delivered to the Participant to whom such Award was granted and shall specify the terms and conditions of the Award and any rules applicable thereto, including, without limitation, the effect on such Award of the death, Disability, or Termination of a Participant, or of such other events as may be determined by the Committee. For purposes of the Plan, an Award Agreement may be in any such form (written or electronic) as determined by the Committee (including, without limitation, a Board or Committee resolution, an employment agreement, a notice, a certificate, or a letter) evidencing the Award. The Committee need not require an Award Agreement to be signed by the Participant or a duly authorized representative of the Company.
(b) Nontransferability.
i. Each Award shall be exercisable only by such Participant to whom such Award was granted during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by a Participant (unless such transfer is specifically required pursuant to a domestic relations order or by applicable law) other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer, or encumbrance shall be void and unenforceable against any member of the Company Group; provided, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer, or encumbrance.
ii. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred by a Participant, without consideration, subject to such rules as the Committee may adopt consistent with any applicable Award Agreement to preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act or any successor form of registration statement promulgated by the Securities and Exchange Commission (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant and the Participant’s Immediate Family Members; (C) a partnership or limited liability company whose only partners or shareholders are the Participant and the Participant’s Immediate Family Members; or (D) a beneficiary to whom donations are eligible to be treated as “charitable contributions” for federal income tax purposes (each transferee described in
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clauses (A), (B), (C), and (D) above is hereinafter referred to as a “Permitted Transferee”); provided, that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.
iii. The terms of any Award transferred in accordance with clause (ii) above shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award Agreement, to a Participant shall be deemed to refer to the Permitted Transferee, except that: (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be in effect a registration statement on an appropriate form covering the Common Shares to be acquired pursuant to the exercise of such Option if the Committee determines, consistent with any applicable Award Agreement, that such a registration statement is necessary or appropriate; (C) neither the Committee nor the Company shall be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise; and (D) the consequences of a Participant’s Termination under the terms of the Plan and the applicable Award Agreement shall continue to be applied with respect to the Participant, including, without limitation, that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award Agreement.
(c) Dividends and Dividend Equivalents. The Committee may, in its sole discretion, provide a Participant as part of an Award with dividends, dividend equivalents, or similar payments in respect of Awards, payable in cash, Common Shares, other securities, other Awards, or other property, on a current or deferred basis, on such terms and conditions as may be determined by the Committee in its sole discretion, including, without limitation, payment directly to the Participant, the transfer of Common Shares from, including but not limited to, the Trustee to the Participant, withholding of such amounts by the Company subject to vesting of the Award, or reinvestment in additional Common Shares, Restricted Stock, or other Awards; provided, that no dividends, dividend equivalents, or other similar payments shall be payable in respect of outstanding (i) Options or SARs or (ii) other unearned Awards subject to Performance Conditions (other than, or in addition to, the passage of time) (although dividends, dividend equivalents, or other similar payments may be accumulated in respect of unearned Awards and paid within 15 days after such Awards are earned and become payable or distributable). Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, in the sole discretion of the Committee, in Common Shares having a Fair Market Value (on the date of distribution) equal to the amount of such dividends, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends. Where payment is made in Common Shares, such payment may be satisfied by the transfer of Common Shares by the Trustee to the Participant.
(d) Tax Withholding.
i. A Participant shall be required to pay to the Company or one or more of its Subsidiaries, as applicable, an amount in cash (by check or wire transfer) equal to the aggregate
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amount of any income, employment, and/or other applicable taxes and employee and, if applicable, employer social security contributions that are statutorily required to be withheld in respect of an Award. Alternatively, the Company or any of its Subsidiaries may elect, in its sole discretion, to satisfy this requirement by withholding such amount from any cash compensation or other cash amounts owing to a Participant.
ii. Without limiting the foregoing, the Committee may (but is not obligated to), in its sole discretion, permit or require a Participant to satisfy all or any portion of the minimum income, employment, and/or other applicable taxes and employee and, if applicable, employer social security contributions that are statutorily required to be withheld with respect to an Award by ) way of a settlement procedure effected by the settlement of the Award in (i) Common Shares; (ii) cash, where the amount of cash is sufficient to pay all applicable required withholding and any other applicable taxes required to be withheld; (iii) any other form of permissible payment; or (iv) any combination of the foregoing (i) – (iii), as determined by the Committee.
iii. The Committee, subject to its having considered the applicable accounting impact of any such determination, has full discretion to allow Participants to satisfy, in whole or in part, any additional income, employment, and/or other applicable taxes and employee and, if applicable, employer social security contributions payable by them with respect to an Award by electing to receive part of the Award in cash, where the amount of cash is equal to the income, employment, and/or other applicable taxes and employee and, if applicable, employer social security contributions that have arisen, with the remainder of the Award being settled in Common Shares.
(e) Data Protection. By participating in the Plan or accepting any rights granted under it, each Participant consents to the collection and processing of personal data relating to the Participant so that the Company and its Affiliates can fulfill their obligations and exercise their rights under the Plan and generally administer and manage the Plan. This data will include, but may not be limited to, data about participation in the Plan and shares offered or received, purchased, or sold under the Plan from time to time and other appropriate financial and other data (such as the date on which the Awards were granted) about the Participant and the Participant’s participation in the Plan.
(f) No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of any member of the Company Group, or other Person, shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Service Recipient or any other member of the Company Group, nor shall it be construed as giving any Participant any rights to continued service on the Board. The Service Recipient or any other member of the Company Group may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or any Award Agreement. By accepting an Award under the Plan, a Participant shall thereby be deemed to have waived any claim to continued exercise or vesting of
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an Award or to damages or severance entitlement related to non-continuation of the Award beyond the period provided under the Plan or any Award Agreement, except to the extent of any provision to the contrary in any written employment contract or other agreement between the Service Recipient and/or any member of the Company Group and the Participant, whether any such agreement is executed before, on, or after the Date of Grant.
(g) International Participants. With respect to Participants who reside or work outside of the United States of America, the Committee may, in its sole discretion, amend the terms of the Plan and create or amend Sub-Plans or amend outstanding Awards with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant or any member of the Company Group.
(h) Designation and Change of Beneficiary. Each Participant may file with the Committee a written designation of one or more Persons as the beneficiary or beneficiaries, as applicable, who shall be entitled to receive the amounts payable with respect to an Award, if any, due under the Plan upon the Participant’s death. A Participant may, from time to time, revoke or change the Participant’s beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be the Participant’s spouse or, if the Participant is unmarried at the time of death, the Participant’s estate.
(i) Termination. Except as otherwise provided in an Award Agreement, unless determined otherwise by the Committee at any point following such event: (i) neither a temporary absence from employment or service due to illness, vacation, or leave of absence (including, without limitation, a call to active duty for military service through a Reserve or National Guard unit) nor a transfer from employment or service with one Service Recipient to employment or service with another Service Recipient (or vice-versa) shall be considered a Termination; and (ii) if a Participant undergoes a Termination, but such Participant continues to provide services to the Company Group in a non-employee capacity, such change in status shall not be considered a Termination for purposes of the Plan. Further, unless otherwise determined by the Committee, in the event that any Service Recipient ceases to be a member of the Company Group (by reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s employment or service is transferred to another entity that would constitute a Service Recipient immediately following such transaction, such Participant shall be deemed to have suffered a Termination hereunder as of the date of the consummation of such transaction.
(j) No Rights as a Shareholder. Except as otherwise specifically provided in the Plan or any Award Agreement, no Person shall be entitled to the privileges of ownership in respect of Common Shares which are subject to Awards hereunder until such shares have been issued or delivered to such Person.
(k) Government and Other Regulations.
i. The obligation of the Company to settle Awards in Common Shares or other consideration shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or
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conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Common Shares pursuant to an Award unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel (if the Company has requested such an opinion), satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any of the Common Shares to be offered or sold under the Plan. The Committee shall have the authority to provide that all Common Shares or other securities of any member of the Company Group issued under the Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award Agreement, the Federal securities laws, or the rules, regulations, and other requirements of the Securities and Exchange Commission and any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or quoted, and any other applicable Federal, state, local, or non-U.S. laws, rules, regulations, and other requirements, and, without limiting the generality of Section 9 of the Plan, the Committee may cause a legend or legends to be put on certificates representing Common Shares or other securities of any member of the Company Group issued under the Plan to make appropriate reference to such restrictions or may cause such Common Share or other securities of any member of the Company Group issued under the Plan in book-entry form to be held subject to the Company’s instructions or subject to appropriate stop-transfer orders. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to, at any time, add any additional terms or provisions to any Award granted under the Plan that the Committee, in its sole discretion, deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.
ii. The Committee may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Common Shares from the public markets, the Company’s issuance of Common Shares to the Participant, the Participant’s acquisition of Common Shares from the Company, and/or the Participant’s sale of Common Shares to the public markets, illegal, impracticable, or inadvisable. If the Committee determines to cancel all or any portion of an Award in accordance with the foregoing, the Company shall, subject to any limitations or reductions as may be necessary to comply with Section 409A of the Code, (A) pay to the Participant an amount equal to the excess of (I) the aggregate Fair Market Value of the Common Shares subject to such Award or portion thereof canceled (determined as of the applicable exercise date, or the date that the shares would have been vested or issued, as applicable), over (II) the aggregate Exercise Price or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a condition of issuance of Common Shares (in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof, or (B) in the case of Restricted Stock, Restricted Stock Units, or Other Equity-Based Awards, provide the Participant with a cash payment or equity subject to deferred vesting and delivery
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consistent with the vesting restrictions applicable to such Restricted Stock, Restricted Stock Units, or Other Equity-Based Awards, or the underlying shares in respect thereof.
(l) No Section 83(b) Elections Without Consent of Company. No election under Section 83(b) of the Code or under a similar provision of law may be made unless expressly permitted by the terms of the applicable Award Agreement or by action of the Company in writing prior to the making of such election. If a Participant, in connection with the acquisition of Common Shares under the Plan or otherwise, is expressly permitted to make such election and the Participant makes the election, the Participant shall notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to Section 83(b) of the Code or other applicable provision.
(m) Payments to Persons Other Than Participants. If the Committee shall find that any Person to whom any amount is payable under the Plan is unable to care for the Participant’s affairs because of illness or accident, or is a minor, or has died, then any payment due to such Person or the Participant’s estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to the Participant’s spouse, child, relative, an institution maintaining or having custody of such Person, or any other Person deemed by the Committee to be a proper recipient on behalf of such Person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
(n) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of equity-based awards otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.
(o) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between any member of the Company Group, on the one hand, and a Participant or other Person, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company be obligated to maintain separate bank accounts, books, records, or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other service providers under general law.
(p) Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accountant of any member of the Company Group and/or any other information furnished in connection with the Plan by any agent of the Company or the Committee or the Board, including any compensation consultant, other than himself or herself.
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(q) Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance, or other benefit plan of the Company except as otherwise specifically provided in such other plan or as required by applicable law.
(r) Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Colorado applicable to contracts made and performed wholly within the State of Colorado, without giving effect to the conflict of laws’ provisions thereof. EACH PARTICIPANT WHO ACCEPTS AN AWARD IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF THE PARTICIPANT’S RIGHTS OR OBLIGATIONS HEREUNDER.
(s) Severability. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, Person, or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(t) Obligations Binding on Successors. 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 substantially all of the assets and business of the Company.
(u) Section 409A.
i. Notwithstanding any provision of the Plan to the contrary, it is intended that the provisions of the Plan comply with Section 409A of the Code, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. Each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or in respect of such Participant in connection with the Plan (including any taxes and penalties under Section 409A of the Code), and neither the Service Recipient nor any other member of the Company Group shall have any obligation to indemnify or otherwise hold such Participant (or any beneficiary) harmless from any or all of such taxes or penalties. With respect to any Award that is considered “deferred compensation” subject to Section 409A of the Code, references in the Plan to “termination of employment” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A of the Code. For purposes of Section 409A of the Code, each of the payments that may be made in respect of any Award granted under the Plan is designated as a separate payment.
ii. Notwithstanding anything in the Plan to the contrary, if a Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments in respect of any Awards that are “deferred compensation” subject to Section 409A of the
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Code and which would otherwise be payable upon the Participant’s “separation from service” (as defined in Section 409A of the Code) shall be made to such Participant prior to the date that is six months after the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death. Following any applicable six-month delay, all such delayed payments will be paid in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.
iii. Unless otherwise provided by the Committee in an Award Agreement or otherwise, in the event that the timing of payments in respect of any Award (that would otherwise be considered “deferred compensation” subject to Section 409A of the Code) would be accelerated upon the occurrence of (A) a Change in Control, no such acceleration shall be permitted unless the event giving rise to the Change in Control satisfies the definition of a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation pursuant to Section 409A of the Code or (B) a Disability, no such acceleration shall be permitted unless the Disability also satisfies the definition of “Disability” pursuant to Section 409A of the Code.
(v) Section 457A. This Plan is intended to comply with the requirements of Section 457A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 457A of the Code, it is intended that this Plan be administered in all respects in accordance with Section 457A of the Code.
(w) Clawback/Repayment. All Awards shall be subject to reduction, cancellation, forfeiture, or recoupment to the extent necessary to comply with (A) any clawback, forfeiture, or other similar policy adopted by the Board or the Committee and as in effect from time to time, and (B) applicable law. Further, to the extent that the Participant receives any amount in excess of the amount that the Participant should otherwise have received under the terms of the Award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations, or other administrative error), the Participant shall be required to repay any such excess amount to the Company.
(x) Detrimental Activity. Notwithstanding anything to the contrary contained herein, if a Participant has engaged in any Detrimental Activity, as determined by the Committee, the Committee may, in its sole discretion, provide for one or more of the following:
i. cancellation of any or all of such Participant’s outstanding Awards; or
ii. forfeiture by the Participant of any gain realized on the vesting or exercise of Awards, and repayment of any such gain promptly to the Company.
(y) Right of Offset. The Company will have the right to offset against its obligation to deliver Common Shares (or other property or cash) under the Plan or any Award Agreement any outstanding amounts (including, without limitation, travel and entertainment or advance account balances, loans, repayment obligations under any Awards, or amounts repayable to the Company pursuant to tax equalization, housing, automobile, or other employee programs) that the Participant then owes to any member of the Company Group and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement. Notwithstanding the foregoing, if an Award is “deferred compensation” subject to Section 409A
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of the Code, the Committee will have no right to offset against its obligation to deliver Common Shares (or other property or cash) under the Plan or any Award Agreement if such offset could subject the Participant to the additional tax imposed under Section 409A of the Code in respect of an outstanding Award.
(z) Expenses; Titles and Headings. The expenses of administering the Plan shall be borne by the Company Group. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
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United Kingdom Employee Sub-Plan (the “UK Sub-Plan”) to the Gates Industrial Corporation Ltd. Amended and Restated 2018 Omnibus Incentive Plan (the “Plan”) established in accordance with Section 13(g) of the Plan
The purpose of the UK Sub-Plan is to provide for alterations and amendments to the Plan in respect of its operation in the United Kingdom so as to facilitate the grant of Awards thereunder to Eligible Persons in the United Kingdom.
Words and expressions defined in the Plan shall have the same meaning when used in the UK Sub-Plan, unless otherwise stated herein. The provisions of the Plan shall apply to the provisions of the UK Sub-Plan except where expressly varied herein. References to Sections in the UK Sub-Plan are references to Sections of the Plan. In the event of any discrepancy between the provisions of the Plan and the provisions of the UK Sub-Plan, the provisions of the UK Sub-Plan shall take precedence.
Awards may be granted in accordance with such provisions as would be applicable if the provisions of the Plan were here set out in full, subject to the following modifications:
1. Section 1(b) – Purpose
Section 1 shall be amended by the removal of the words shown underlined below and the addition of the words in italics:
Purpose. The purpose of the Gates Industrial Corporation Ltd. Amended and Restated 2018 Omnibus Incentive Plan is to provide a means through which the Company and the other members of the Company Group may attract and retain key personnel and to provide a means whereby bona fide employees (including directors, and officers), and employees, consultants and advisors of the Company and the other members of the Company Group can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Common Shares, thereby strengthening their commitment to the welfare of the Company Group and aligning their interests with those of the Company’s shareholders.
2. Section 2 – Definitions
Section 2(g) shall be amended by the removal of the words shown underlined below:
“Cause” means, as to any Participant, unless the applicable Award Agreement states otherwise, (i) “Cause,” as defined in any employment or consulting agreement between the Participant and the Service Recipient or as defined in the Executive Severance Plan of any member of the Company Group to the extent the Participant participates in such plan, in each case, in effect at the time of such Termination; or (ii) in the absence of any such employment or consulting agreement (or the absence of any definition of “Cause” contained therein), the Participant’s (A) willful neglect in the performance of the Participant’s duties for the Service Recipient or willful or repeated failure or refusal to perform such duties; (B) engagement in conduct in connection with the Participant’s employment or service with the Service Recipient, which results in, or could reasonably be expected to result in, material harm to the business or reputation of the Service Recipient or any other member of the Company Group; (C) conviction of, or plea of guilty or no contest to, (I) any felony or (II) any other crime that results in, or could reasonably be expected to result in, material harm to the business or reputation of the Service Recipient or any other member of the Company Group; (D) material violation of the written policies of the Service Recipient, including, but not limited to, those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in the manuals or statements of policy of the Service Recipient; (E) fraud or misappropriation, embezzlement, or misuse of funds or property belonging to the Service Recipient or any other member of the Company Group; or (F) act of personal dishonesty that involves personal profit in connection with the Participant’s employment or service to the Service Recipient; provided, in
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any case, a Participant’s resignation after an event that would be grounds for a Termination for Cause will be treated as a Termination for Cause hereunder.
Section 2(q) shall be amended by the removal of the words shown underlined below:
“Disability” means, as to any Participant, unless the applicable Award Agreement states otherwise, (i) “Disability,” as defined in any employment or consulting agreement between the Participant and the Service Recipient in effect at the time of such Termination; or (ii) in the absence of any such employment or consulting agreement (or the absence of any definition of “Disability” contained therein), a condition entitling the Participant to receive benefits under a long-term disability plan of the Service Recipient or other member of the Company Group in which such Participant is eligible to participate, or, in the absence of such a plan, the complete and permanent inability of the Participant by reason of illness or accident to perform the duties of the position at which the Participant was employed or served when such disability commenced. Any determination of whether Disability exists in the absence of a long-term disability plan shall be made by the Company (or its designee) in its sole and absolute discretion.
Section 2(s) shall be amended by the removal of the words shown underlined and the addition of the words shown in italics below:
“Eligible Person” means any (i) individual who is a bona fide employee employed by any member of the Company Group; provided, however, that no such employee covered by a collective bargaining agreement shall be an Eligible Person unless and to the extent that such eligibility is set forth in such collective bargaining agreement or in an agreement or instrument relating thereto; (ii) director or officer of any member of the Company Group who is a bona fide employee; or (iii) consultant or advisor to any member of the Company Group who may be offered securities registrable pursuant to a registration statement on Form S-8 under the Securities Act, who, in the case of each of clauses (i) through (iii) and (ii) above, has entered into an Award Agreement or who has received written notification from the Committee or its designee that they have been selected to participate in the Plan.
Section 2(vv) shall be amended by the addition of the words shown in italics below:
“Subsidiary” means, with respect to any specified Person:
i. any corporation, association, or other business entity of which more than 50% of the total voting power of shares of such entity’s voting securities (without regard to the occurrence of any contingency and after giving effect to any voting agreement or shareholders’ agreement that effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
ii. any partnership (or any comparable foreign entity) (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is such Person or Subsidiary of such Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof), provided always that such corporation, association, other business entity or partnership would fall within the definition of a subsidiary under Section 1159 of the Companies Act 2006.
3. Section 13 – General
Section 13(b)(ii) shall be amended by the removal of the words shown underlined and the addition of the words shown in italics below:
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Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred by a Participant, without consideration, subject to such rules as the Committee may adopt consistent with any applicable Award Agreement to preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant being the spouses, civil partners, surviving spouses, surviving civil partners, or minor children or step-children of the Participant (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant and the Participant’s Immediate Family Members; (C) a partnership or limited liability company whose only partners or shareholders are the Participant and the Participant’s Immediate Family Members; or (D) a beneficiary to whom donations are eligible to be treated as “charitable contributions” for federal income tax purposes (each transferee described in clauses (A), (B), (C), and (D) above is hereinafter referred to as a “Permitted Transferee”); provided, that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.
The words shown in italics below shall be inserted as a new Section 13(d)(iv):
In the event that at any relevant time a Participant is resident for tax purposes in the United Kingdom and any of the Common Shares to be acquired by, delivered, issued or awarded to such Participant pursuant to an Award fall within the meaning of 'restricted securities' for the purposes of Chapter 2 of Part 7 of the United Kingdom Income Tax (Earnings & Pensions) Act 2003 (“ITEPA”), it shall be a condition of such acquisition, delivery, issue or award that the Participant shall, unless the Committee directs otherwise, and no later than 14 days after the acquisition, delivery, issue or award of such Common Shares (or such longer period as Her Majesty's Revenue & Customs in the United Kingdom (“HMRC”) may direct), enter into a joint election with the Company (or the Participant's employer company, if different) under section 431(1) of ITEPA (in the form prescribed or agreed by HMRC in order to: (a) disapply all restrictions attaching to such Common Share; and (b) elect to pay income tax (if any) computed by reference to the ‘unrestricted market value’ of the Common Share (as defined in ITEPA).
The words shown in italics below shall be inserted as a new Section 13(f):
FATCA. Each Award shall include a requirement that the Participant irrevocably (i) agrees to give all such assistance and representations and supply or procure to be supplied (including by way of updates) all such information and execute and deliver (or procure the execution and delivery of) all such documents that the Company or any member of the Company Group requests in writing for the purpose of enabling any of the Company or any member of the Company Group to comply with the Foreign Account Tax Compliance Act (“FATCA”), any exchange of information agreement (“IGA”) or any similar, equivalent or related applicable laws, rules or regulations in any jurisdiction and (ii) authorizes any of the Company or any member of the Company Group to disclose such information to any governmental authorities (including, but not limited to, HMRC in the United Kingdom and the Internal Revenue Service in the USA) if it is required to be disclosed pursuant to FATCA, any IGA or any similar, equivalent or related applicable laws, rules or regulations.
Section 13(f) shall be renumbered as Section 13(g).
The words shown in italics below shall be inserted as a new section 13(h).
Without limiting the generality of Section 13(g), any Participant who leaves the employment or service of a Service Recipient or who otherwise ceases to be a Participant shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Plan which he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise howsoever. This exclusion applies equally
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(and without limitation) to any loss arising from the way in which discretion is (or is not) exercised under the Plan.
Section 13(g) shall be renumbered as Section 13(i).
Section 13(h) shall be renumbered as Section 13(j).
Section 13(i) shall be renumbered as Section 13(k).
Section 13(j) shall be renumbered as Section 13(l).
Section 13(k) shall be renumbered as Section 13(m).
Section 13(l) shall be renumbered as Section 13(n).
Section 13(m) shall be renumbered as Section 13(o).
Section 13(n) shall be renumbered as Section 13(p).
Section 13(o) shall be renumbered as Section 13(q).
Section 13(p) shall be renumbered as Section 13(r).
Section 13(q) shall be renumbered as Section 13(s).
Section 13(r) shall be renumbered as Section 13(t).
Section 13(s) shall be renumbered as Section 13(u).
Section 13(t) shall be renumbered as Section 13(v).
Section 13(u) shall be renumbered as Section 13(w).
Section 13(v) shall be renumbered as Section 13(x).
Section 13(w) shall be renumbered as Section 13(y).
Section 13(x) shall be renumbered as Section 13(z).
Section 13(y) shall be renumbered as Section 13(aa).
Section 13(z) shall be renumbered as Section 13(bb).
The words shown in italics below shall be inserted as a new Section 13(cc):
Rights of Third Parties. It is not intended that any of the terms of this Plan should be enforceable by any third party pursuant to the UK Contract (Rights of Third Parties) Act 1999.
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EX-10.4
EX-10.4
Filename: a104formofexecutiveseveran.htm · Sequence: 8
Document
Exhibit 10.4
GATES CORPORATION
EXECUTIVE SEVERANCE PLAN
(Effective July 20, 2026)
Gates Corporation (the “Company”) has adopted this Executive Severance Plan (the “Plan”) for the benefit of certain management employees of the Company and its Subsidiaries on the terms and conditions hereinafter stated. Participation in the Plan is generally intended to be limited to those management employees designated as eligible for the Plan by the Committee who receive and return a Participation Notice and Agreement.
The Plan supersedes, solely for the Participants, the Gates Industrial Corporation plc Executive Severance Plan and any other prior plans, policies, guidelines, arrangements, agreements, letters, and/or other communication, whether formal or informal, written or oral sponsored by any member of the Company Group and/or entered into by any representative of the Company Group that might otherwise provide severance benefits to the Participants (or for the Participants’ benefit) outside of the context of a change in control, which, for the avoidance of doubt, includes change in control severance benefits provided pursuant to the Company’s Executive Change in Control Plan (collectively, “Other Severance Arrangements”). As such, the Plan represents the exclusive severance benefit provided to Participants, and such individuals shall not be eligible for any other severance benefits provided in any Other Severance Arrangements. For the avoidance of doubt, Other Severance Arrangements shall not include any Awards (as defined in the Incentive Plans), which Awards shall be governed by the terms and conditions of the Incentive Plans and the applicable Award agreements thereunder.
1. Definitions.
(a) “2018 Omnibus Plan” means the Parent’s Amended and Restated 2018 Omnibus Incentive Plan, as amended from time to time (and/or the most recent successor plan thereto adopted by the Parent for the purpose of providing equity and other incentive compensation to the employees and other service providers of the Company Group, if any).
(b) “Accrued Obligations” means (i) all accrued but unpaid Base Salary through the date of Termination, (ii) any unpaid or unreimbursed expenses incurred in accordance with the policies of the Employer through the date of Termination, and (iii) any benefits provided under the employee benefit plans and programs of the Company Group in which the Participant participates immediately prior to, and is due upon or continues after, a Termination (including, where applicable, death or Disability), including rights with respect to Parent equity (or equity derivatives) or equity-based incentive awards, but excluding any Other Severance Arrangements, in accordance with the terms contained therein.
(c) “Affiliate” has the meaning set forth in the 2018 Omnibus Plan.
(d) “Annual Bonus Program” means the annual cash incentive bonus program in which the Participant participates immediately prior to such Participant’s Termination.
(e) “Base Salary” means the Participant’s then-current annual base salary rate immediately prior to the Participant’s Termination (or, if higher, the annual base salary rate
immediately prior to an event that constitutes a Constructive Termination hereunder), exclusive of any bonus payments or additional payments, unpaid or unreimbursed expenses, or benefits provided under any benefit plan sponsored by any member the Company Group, including, but not limited to, any ERISA plans, stock plans, incentive and deferred compensation plans, or insurance coverage or medical benefits, and without regard to any salary deferrals under the benefit or deferred compensation plans or programs of any member of the Company Group.
(f) “Board” means the board of directors of the Parent.
(g) “Cause” means as to any Participant, unless such Participant’s Participation Notice and Agreement states otherwise, (i) “Cause,” as defined in any employment or consulting agreement between the Participant and any member of the Company Group in effect at the time of such Termination; or (ii) (A) the willful and continued failure by the Participant to substantially perform duties consistent with the Participant’s position with the Company or any of its U.S. Subsidiaries (other than any such failure resulting from death, incapacity due to physical or mental illness or Termination by the Participant for Constructive Termination), (B) the willful engaging by the Participant in illegal conduct or gross misconduct that is demonstrably and materially injurious to the Company Group, monetarily or otherwise or (C) the Participant’s conviction of a felony, or conviction of a misdemeanor involving assets of the Company Group. For purposes of this definition, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company Group.
(h) “Change in Control” has the meaning set forth in the 2018 Omnibus Plan.
(i) “Claims Administrator” means the Committee or such other individual or group of individuals as may be appointed as the claims administrator under the Plan by the Committee from time to time.
(j) “Code” means the Internal Revenue Code of 1986, as amended, and the rules, regulations, and other interpretative guidance promulgated thereunder, as well as any successor laws in replacement thereof.
(k) “Committee” means the compensation committee of the Board or any properly delegated subcommittee thereof.
(l) “Company Group” means, collectively, the Company and its Affiliates.
(m) “Constructive Termination” shall have the meaning set forth in any employment agreement entered into by and between a Participant and any member of the Company Group or, in the absence of any such employment or consulting agreement (or the absence of any definition of “good reason” contained therein), any of the following, without the Participant’s prior written consent: (i) a material diminution in the Participant’s Base Salary or Target Bonus Amount; (ii) a material diminution in the Participant’s authority or duties; (iii) a material diminution in the authority or duties of the supervisor to whom the Participant is required to report; (iv) a material change in the geographic location at which the Participant must perform the services; or (v) any other
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action or inaction that constitutes a material breach by the applicable member of the Company Group of the agreement under which the Participant provides services; provided, that any event described in the foregoing clauses (i) through (v) shall constitute a Constructive Termination only if the Company (or the applicable member of the Company Group) fails to cure such event within 30 days after receipt from the Participant of written notice of the event which constitutes such Constructive Termination; provided, further, that a “Constructive Termination” shall cease to exist for an event on the 60th day following the later of its occurrence or the Participant’s knowledge thereof, unless the Participant has given the Company written notice thereof prior to such date.
(n) “Disability” shall have the meaning set forth in the 2018 Omnibus Plan.
(o) “Employer” means, with respect to any Participant, (i) prior to a Change in Control, the Company or U.S. Subsidiary of the Company by which such Participant is employed, and (ii) following a Change in Control, the entity that the Participant is employed by immediately after such Change in Control.
(p) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules, regulations, and other interpretive guidance promulgated thereunder, as well as any successor laws in replacement thereof.
(q) “Incentive Plans” means the 2018 Omnibus Plan andthe Parent’s 2014 Stock Incentive Plan, each as amended from time to time (and/or the most recent successor plan thereto adopted by the Parent for the purpose of providing equity and other incentive compensation to the employees and other service providers of the Company Group, if any).
(r) “Parent” means Gates Industrial Corporation Ltd.
(s) “Participant” means any management employee designated as eligible for the Plan by the Committee who is selected by the Committee to participate in the Plan and returns to the Company an executed Participation Notice and Agreement.
(t) “Participation Notice and Agreement” means the form of participation notice and agreement to the terms of the Plan, substantially in the form set forth as Exhibit A hereto.
(u) “Person” means any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, and any successor thereto).
(v) “Qualifying Termination” means a Participant’s Termination by the Employer without Cause (and other than as a result of the Participant’s death or during the Participant’s Disability) or by the Participant as a result of a Constructive Termination; provided, however, it shall not be considered a Qualifying Termination if:
(i) such Participant’s Termination upon the expiration of a leave of absence by reason of the Participant’s failure to return to work at such time;
(ii) such Participant’s Termination in connection with the sale, transfer, or other disposition of assets or a business segment of the Parent to any Person that is not an Affiliate of the Parent, but only if the Committee determines in its sole discretion that,
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in connection with such sale, transfer, or other disposition, either (A) such Participant was offered employment with the purchaser (or an affiliate thereof) (x) in a position of comparable authority and duties to those as in effect immediately prior to such sale, transfer, or other disposition, and (y) at the same or greater Base Salary and Target Bonus Amount opportunity, as in effect immediately prior to such sale, transfer, or other disposition, or (B) such Participant voluntarily elected not to participate in the purchaser’s selection process for employment with the purchaser (or affiliate thereof) following such sale, transfer, or other disposition; or
(iii) prior to the Participant’s Termination, the Participant has delivered written notice of the Participant’s intent to voluntarily resign under circumstances that constitute a retirement for the purposes of any Award granted under the Incentive Plans.
(w) “Release Agreement” means a release of claims in a form provided by the Claims Administrator to the Participant, pursuant to which a Participant may be required to (i) acknowledge the receipt of the severance payment and other benefits and (ii) release the Company and its Affiliates (including the Employer) and other Persons and entities designated by the Company from any liability arising from such Participant’s employment or Termination (other than with respect to the Participant’s rights under the Plan).
(x) “Release Effectiveness Date” means the date the Release Agreement becomes effective and irrevocable.
(y) “Severance Factor” means, as to any Participant, the Severance Factor set forth on Exhibit B applicable to such Participant’s position as of immediately prior to such Participant’s Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in such Participant’s Participation Notice and Agreement.
(z) “Severance Multiple” means, as to any Participant, the Severance Multiple set forth in Exhibit B applicable to such Participant’s position as of immediately prior to such Participant’s Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in such Participant’s Participation Notice and Agreement.
(aa) “Severance Payment Period” means, as to any Participant, the Severance Payment Period set forth in Exhibit B applicable to the Participant’s position as of the date of such Participant’s Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in the Participant’s Participation Notice and Agreement.
(bb) “Subsidiary” has the meaning set forth in the 2018 Omnibus Plan.
(cc) “Target Bonus Amount” means the Participant’s target annual bonus under the Annual Bonus Program immediately prior to such Participant’s Termination.
(dd) “Termination” means the termination of the Participant’s employment or service, as applicable, with all members of the Company Group for any reason (including death),
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other than any Termination of such Participant by reason of a transfer to the employ of another member of the Company Group.
(ee) “Welfare Continuation Period” means, as to any Participant, the Welfare Continuation Period set forth in Exhibit B applicable to the Participant’s position as of immediately prior to such Participant’s Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in the Participant’s Participation Notice and Agreement; provided, however, that the Welfare Continuation Period shall terminate earlier as of the date on which the Participant becomes eligible to receive any health benefits as a result of subsequent employment or service.
2. Eligibility. Eligibility to participate in the Plan shall be limited to any employee of the Company or its U.S. Subsidiaries that is designated as a Participant by the Committee; provided, that, as a condition of participation in the Plan, the Participant must execute and submit a Participation Notice and Agreement, and following the Participant’s Termination, execute, deliver and not revoke a Release Agreement.
3. Termination of Employment.
(a) Payments upon a Qualifying Termination. If the Participant’s Termination is a Qualifying Termination, in addition to any Accrued Obligations, subject to such Participant’s execution, delivery to the Company, and non-revocation of the Release Agreement and the expiration of any revocation period contained in such Release Agreement, as contemplated in Section 3(d) below, and continued compliance with the Restrictive Covenants set forth in Appendix A of the Participation Notice and Agreement, the Participant shall be entitled to the following payments and benefits:
(i) Prorated/Prior Year Bonuses. (A) To the extent not previously paid, the bonus amount otherwise payable under the Annual Bonus Program for the fiscal year immediately preceding the fiscal year in which the Participant’s Termination occurs, based on actual performance for such immediately preceding fiscal year (with any individual performance factor as such term is defined in the Annual Bonus Program set at 1, if applicable), payable concurrently with cash bonus payments to other employees under the applicable cash bonus plan and (B) the bonus amount otherwise payable under the Annual Bonus Program for the fiscal year in which the Participant’s Termination occurs, prorated for the days of service in such fiscal year up to and including the date of Termination and based on actual performance for such fiscal year (with any individual performance factor as such term is defined in the Annual Bonus Program set at 1, if applicable), payable concurrently with cash bonus payments to other employees under the applicable cash bonus plan (but in all events prior to March 15 of the fiscal year immediately following the fiscal year in which such Termination occurs);
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(ii) COBRA Continuation Payment. A cash payment in an amount equal to the amount of the Company Group’s portion of the monthly COBRA insurance premiums for participation in the health and dental benefit programs of the Company or any of its U.S. Subsidiaries in which the Participant participated immediately prior to such Participant’s Termination as if such Participant remained employed by the Company Group (or if such coverage cannot be provided, then an amount equal to the Employer’s portion of the monthly premiums that would be paid on behalf of such Participant if such Participant would have remained employed by the Employer), payable monthly for each month of the Welfare Continuation Period in accordance with the Employer’s payroll practices, with the first such payment in respect of any completed months prior to the Release Effectiveness Date to occur as soon as practicable after the Release Effectiveness Date;
(iii) Cash Severance. An amount equal to (A) such Participant’s applicable Severance Multiple multiplied by (B) such Participant’s Severance Factor, such amount to be paid in equal installments no less frequently than monthly over the applicable Severance Payment Period beginning with the first payroll period after the Release Effectiveness Date; and
(iv) Outplacement Services. Reimbursement for reasonable outplacement services actually incurred by such Participant which are directly related to such Participant’s Termination and which are incurred only during a six-consecutive month period that ends within or with the 12-month period following the Participant’s Termination.
(b) Treatment of Equity Awards. For the avoidance of doubt, in the event of a Participant’s Termination, including, without limitation, a Participant’s Qualifying Termination, the Participant’s outstanding Awards, if any, shall be governed by the terms and conditions of the Incentive Plans and the applicable Award agreements thereunder.
(c) Other Termination Events. If a Participant experiences a Termination which does not constitute a Qualifying Termination, the Participant shall not be entitled to the payment of any severance or other benefits under the Plan and shall only be entitled to receive the Accrued Obligations.
(d) Release Agreement. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to Section 3(a) above (other than the Accrued Obligations) shall be conditioned upon a Participant’s execution, delivery to the Company, and non-revocation of the Release Agreement and the expiration of any revocation period contained in such Release Agreement within 60 days following the date of Termination. If a Participant fails to execute the Release Agreement in such a timely manner so as to permit any revocation period to expire prior to the end of such 60-day period, or timely revokes such Participant’s acceptance of such release following its execution, such Participant
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shall not be entitled to payment of any severance or other benefits under the Plan. Further, to the extent that any of the payments hereunder constitute “nonqualified deferred compensation” for purposes of Code Section 409A, any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the 60th day following the date of such Termination, but for the condition on executing the Release Agreement as set forth herein, shall not be made until the first regularly scheduled payroll date following such 60th day (but in any event no later than 74 days following the Participant’s Termination), after which any remaining payments shall thereafter be provided to the Participant according to the applicable schedule set forth herein.
4. Additional Terms.
(a) Taxes. Severance and other payments and benefits under the Plan will be subject to all required federal, state, and local taxes and may be affected by any legally required withholdings.
(b) Other Benefit Plans. Payments under the Plan are not deemed “compensation” for purposes of calculating any contributions or accruals under the retirement plans, savings plans, and incentive plans of any member of the Company Group. Accordingly, no contributions to the retirement and savings plans of the Company Group will be made from the severance payments and other payments and benefits under the Plan, and such plans will not accrue any benefits attributable to payments under the Plan.
(c) Specified Employees. Notwithstanding anything herein to the contrary, (i) if, at the time of a Participant’s Termination, such Participant is a “specified employee” as defined in Code Section 409A, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such Termination is necessary in order to prevent the imposition of any accelerated or additional tax under Code Section 409A, then the commencement of the payment of any such payments or benefits hereunder will be deferred (without any decrease or increase in such payments or benefits ultimately paid or provided to the Participant) until the date that is six months following such Participant’s Termination (or the earliest date that is permitted under Code Section 409A); and (ii) if any other payments of money or other benefits due to the Participant hereunder would cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by or at the direction of the Committee, that does not cause such an accelerated or additional tax or result in additional material cost to the Company. The Company shall consult with its legal counsel and tax advisors in good faith regarding the implementation of this Section 4(c); provided, however, that none of the Company, any other member of the Company Group, or any of their respective employees or representatives shall have any liability to the Participant with respect thereto. For
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the purposes of Code Section 409A, each payment made under the Plan, including each installment payment, shall be treated as a separate payment.
5. Termination or Amendment of the Plan. Except as otherwise set forth in a Participation Notice and Agreement, the Plan may be amended, terminated, or discontinued in whole or in part, at any time and from time to time at the discretion of the Board or the Committee; provided, however, that no amendment, termination, or discontinuance of either the Plan or any provision of the Plan that has the effect of reducing or diminishing the potential benefits a Participant may receive under the Plan shall be effective with respect to the Participant until the first anniversary of such amendment, termination, or discontinuance (except for an amendment to the administrative provisions of the Plan that is considered by counsel to be required pursuant to applicable law); provided, however, that if prior to such termination date a Participant has undergone a Qualifying Termination (or such Participant has delivered notice of a Constructive Termination), then the Plan shall remain in effect with respect to such Participant in accordance with its terms.
6. Limitation of Certain Payments. If any payment, benefit or distribution of any type to or for the benefit of a Participant, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of the Plan or otherwise by the Company or any of its Affiliates (collectively, the “Parachute Payments”) would subject a Participant to the excise tax imposed under Code Section 4999 (the “Excise Tax”), the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided, however, that the Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by a Participant after application of the above reduction would exceed the after-tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise taxes applicable to such amount. Unless a Participant has given prior written notice to the Company to effectuate a reduction in the Parachute Payments if such a reduction is required (any such notice being compliant with the requirements of Code Section 409A to avoid the imputation of any tax, penalty or interest thereunder and, if not compliant, shall be disregarded), the Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Parachute Payments, in each case, with the Parachute Payments to be made furthest in the future being reduced first; provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Code Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in a manner that does not comply with Code Section 409A.
7. Claims Procedure.
8
(a) Processing Claims. The processing of claims for benefits and payments under the Plan will be carried out as quickly as possible. If an individual is not selected for participation in the Plan or does not satisfy the conditions for eligibility in the Plan, such individual is not entitled to benefits and/or payments under the Plan.
(b) Decision. If a Participant’s claim for benefits under the Plan is denied, the Participant will receive a written notice within 90 days (in special circumstances, the Claims Administrator may determine that an extension of this initial 90-day period is required, and in such event a notice of extension stating the special circumstances requiring the extension and the date by which the Claims Administrator expects to render the benefit determination will be provided to the Participant within the initial 90-day period; provided, however, that in no event shall such extension exceed a period of 90 days from the end of such initial period):
(i) requesting additional material or information to further support the claim and the reasons why these are necessary;
(ii) setting forth specific reasons as to why the claim was denied;
(iii) setting forth clear reference to the Plan provisions upon which the denial is based; and
(iv) providing notice of the Participant’s right to have the denial reviewed (as explained below), which shall include a statement of the Plan’s review procedures and the time limits applicable to such procedures.
(c) Request for Review of Denial of Benefits. The Participant or the Participant’s authorized representative may request a review of the Participant’s claim by giving written notice to the Claims Administrator. Each Participant has the right to have representation, review pertinent documents, and present written documents and comments pertinent to the claim. A Participant’s request must be made not later than 60 days after the Participant receives the notice of denial. If a Participant fails to act within the 60-day limit, the Participant loses the right to have the Participant’s claim reviewed.
(d) Decision on Review. Upon receipt of a request for review from Participant, the Claims Administrator shall make a full and fair evaluation and may require additional documents necessary for such a review. The Claims Administrator shall make a decision within 60 days from receipt of the Participant’s request. In special circumstances, the Claims Administrator may determine that an extension of this initial 60-day period is required, and in such event a notice of extension stating the special circumstances requiring the extension and the date by which the Claims Administrator expects to render the benefit determination will be provided to the Participant within the initial 60-day period; provided, however, that in no event shall such extension exceed a period of 60 days from the end of such initial period. The decision on the review shall be in writing and shall include specific reasons for
9
the decision. The final decision of the Claims Administrator shall be subject to review by any court of competent jurisdiction.
(e) In Case of Clerical Error. If any information regarding a Participant is incorrect as reasonably determined by the Claims Administrator, and the error affects the Participant’s benefits, the correct information will determine the extent, if any, of the Participant’s benefits under the Plan.
(f) No Limitation of Rights. Nothing in this Section 7 shall limit the Participant’s ability to file or bring a claim, proceeding, or legal action for relief with respect to any right or claim for payments or benefits under the Plan.
8. General Information.
(a) No Right to Continued Employment. Nothing contained in the Plan shall confer upon any Participant any right to continue in the employ of any member of the Company Group or interfere in any way with the right of any member of the Company Group to terminate the Participant’s employment, with or without cause.
(b) Plan Not Funded. Amounts payable under the Plan shall be payable from the general assets of the Company, and no special or separate reserve, fund, or deposit shall be made to assure payment of such amounts. No Participant, beneficiary, or other Person shall have any right, title, or interest in any fund or in any specific asset of any member of the Company Group by reason of participation hereunder. None of (i) the provisions of the Plan, (ii) the creation or adoption of the Plan, or (iii) any action taken pursuant to the provisions of the Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company or any other member of the Company Group and any Participant, beneficiary, or other Person. To the extent that a Participant, beneficiary, or other Person acquires a right to receive payment under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations under the Plan.
(c) Non-Transferability of Benefits and Interests. All amounts payable under the Plan are non-transferable, and no amount payable under the Plan shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance, or charge. This Section 8(c) shall not apply to an assignment of a contingency or payment due: (i) after the death of a Participant, to the deceased Participant’s legal representative or beneficiary; or (ii) after the disability of a Participant, to the disabled Participant’s personal representative.
(d) Discretion of the Company Group, Board, Committee, and Claims Administrator. Any decision made or action taken by, or inaction of, any member of the Company Group, the Board, the Committee, or the Claims Administrator arising out of or in connection with the creation, amendment, construction, administration, interpretation, and effect of the Plan that is within its authority hereunder or applicable law shall be within the absolute discretion of such entity and shall be
10
conclusive and binding upon all Persons. In the case of any conflict, the decision made or action taken by, or inaction of, the Claims Administrator will control. However, with respect to the authorized officers and senior executives, as designated by the Board in its resolutions, any decision made or action taken by, or inaction of, the Committee will control.
(e) Indemnification. None of the Board, the Committee, any employee of any member of the Company Group, or any Person acting at the direction thereof (each such Person, an “Affected Person”) shall have any liability to any Person (including, without limitation, any Participant), for any act, omission, interpretation, construction, or determination made in connection with the Plan (or any payment made under the Plan). Each Affected Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Affected Person in connection with or resulting from any action, suit, or proceeding to which such Affected Person may be a party or in which such Affected Person may be involved by reason of any action taken or omitted to be taken under the Plan and against and from any and all amounts paid by such Affected Person, with the Company’s approval, in settlement thereof, or paid by such Affected Person in satisfaction of any judgment in any such action, suit, or proceeding against such Affected Person; provided, that, the Company shall have the right, at its own expense, to assume and defend any such action, suit, or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Affected Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case, not subject to further appeal, determines that the acts or omissions of such Affected Person giving rise to the indemnification claim resulted from such Affected Person’s bad faith, fraud, or willful wrongful act or omission. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Affected Persons may be entitled under the Company’s organizational documents, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Person or hold them harmless.
(f) Code Section 409A. To the extent applicable, it is intended that portions of the Plan either comply with or be exempt from the provisions of Code Section 409A. Notwithstanding any provision of the Plan to the contrary, if any benefit provided under the Plan is subject to the provisions of Code Section 409A, the provisions of the Plan will be administered, interpreted, and construed in a manner necessary to comply with Code Section 409A or an exemption thereto and any provision that would cause the Plan to fail to comply with or be exempt from Code Section 409A, as the case may be, shall have no force and effect. Notwithstanding any provision of the Plan to the contrary, in no event shall any member of the Company Group (or any of their employees, officers, or directors) have any liability to any
11
Participant (or any other Person) due to the failure of the Plan to satisfy the requirements of Code Section 409A or any other applicable law.
(g) Code Section 457A. To the extent applicable, it is intended that portions of the Plan either comply with or be exempt from the provisions of Code Section 457A. Notwithstanding any provision of the Plan to the contrary, if any benefit provided under the Plan is subject to the provisions of Code Section 457A, the provisions of the Plan will be administered, interpreted, and construed in a manner necessary to comply with Code Section 457A or an exemption thereto and any provision that would cause the Plan to fail to comply with or be exempt from Code Section 457A, as the case may be, shall have no force and effect. Notwithstanding any provision of the Plan to the contrary, in no event shall any member of the Company Group (or any of their employees, officers, or directors) have any liability to any Participant (or any other Person) due to the failure of the Plan to satisfy the requirements of Code Section 457A or any other applicable law.
(h) No Duplication. The benefits under the Plan replace and supersede any severance benefits payable upon a Termination previously established under any Other Severance Arrangement outside the context of a change in control. In no event shall any Participant receive more than the severance benefits provided for herein, and any severance benefits provided under any Other Severance Arrangement or otherwise, to the extent paid, shall reduce the amounts to be paid hereunder.
(i) Governing Law. All questions pertaining to the construction, regulation, validity, and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Colorado (other than to the extent set forth in the Participation Notice and Agreement).
(j) Notice. Any notice or other communication required or which may be given pursuant to the Plan shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or two days after it has been mailed by United States express or registered mail, return receipt requested, postage prepaid, addressed to the (i) Company, at 1144 Fifteenth Street, Suite 1400, Denver CO, 80202, Attention: Chief Legal Officer, or (ii) Participant, at the Participant’s most recent address on file with the Company.
(k) Captions. Captions and headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such captions and headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
(l) Successors. The Plan shall inure to the benefit of and be binding upon the Company and its successors.
12
Exhibit A
GATES CORPORATION
EXECUTIVE SEVERANCE PLAN
Participation Notice and Agreement
Participant:
Qualifying Termination
Severance Multiple:
[•]x
Severance Factor
[•]
Welfare Continuation Period:
[•] months
Severance Payment Period:
[•] months
I hereby agree to the terms and conditions of the Gates Corporation Executive Severance Plan (as amended from time to time, the “Plan”) to which this Participation Notice and Agreement is attached as Exhibit A, including the terms set forth in this Participation Notice and Agreement and the Restrictive Covenants (as defined below) incorporated hereinto. Capitalized terms used but not defined in this Participation Notice and Agreement shall have the meanings given to such terms in the Plan.
I understand that as a Participant under the Plan (a “Participant”), the terms of the Plan will exclusively govern all subject matters addressed by the Plan and I understand that, except as expressly provided in the Plan, the Plan supersedes and replaces, as applicable, any and all agreements (including any prior employment agreement), plans, policies, guidelines, and other arrangements, including any Other Severance Arrangements, with respect to all subject matters covered under the Plan and my rights, if any, to severance upon my Termination for any reason.
The Company and I further agree that:
I acknowledge and recognize the highly competitive nature of the businesses of the Company Group, and that I will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients, and partners involved in those businesses, and the goodwill associated with the Company Group.
Exhibit A-1
Accordingly, I agree to be bound by the provisions of Appendix A to this Participation Notice and Agreement, which provisions are incorporated into this Participation Notice and Agreement and made a part hereof.
Dated:
PARTICIPANT
_____________________________
[Type participant name]
Exhibit A-2
APPENDIX A
Restrictive Covenants
The Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company, that the Participant will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients, and partners involved in those businesses, and the goodwill associated with the Company. The Participant accordingly agrees to the provisions of this Appendix A to the Participant’s Participation Notice and Agreement under the Gates Corporation Executive Severance Plan (as amended from time to time, the “Plan”) (such provisions, the “Restrictive Covenants”). For the avoidance of doubt, the Restrictive Covenants contained herein are in addition to, and not in lieu of, any other restrictive covenants or similar covenants or agreements between the Participant and any member of the Company Group. For the purposes of this Appendix A, any reference to the “Company” shall mean the Parent, the Company and/or its Affiliates (as applicable), collectively, and any reference to “Subsidiary” shall mean any corporation, limited liability company, partnership or other entity with respect to which another specified entity has the power to vote or direct the voting of sufficient securities to elect directors (or comparable authorized persons of such entity) having a majority of the voting power of the board of directors (or comparable governing body) of such entity.
1. General Terms.
(a) The terms of this Appendix A constitute confidential information, which the Participant shall not disclose to anyone other than the Participant’s spouse, attorneys, tax advisors, or as required by law. The Company may disclose the terms of this Appendix A subject to applicable law. The terms of this Appendix A shall supplement, but not supersede or replace, any similar restrictive covenants to which the Participant has otherwise agreed to be bound.
2. Company Property.
(a) All written materials, records, data, and other documents prepared or possessed by the Participant during the Participant’s Employment are the Company’s property. All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps, and all other documents, data, or materials of any type embodying such information, ideas, concepts, improvements, discoveries, and inventions are the Company’s property. For purposes of this Appendix A, the term “Employment” shall mean a Participant’s employment as an employee of the Company or any of its Subsidiaries.
(i) All information, ideas, concepts, improvements, discoveries, and inventions that are conceived, made, developed, or acquired by the Participant individually or in conjunction with others during the Participant’s Employment (whether during business hours and whether on the Company’s or any of its Subsidiaries’ premises or otherwise) which relate to the Company’s or any of its Subsidiaries’ business, products, or services are the
Exhibit A-3
Company’s property. The Participant agrees to make prompt and full disclosure to the Company or its Subsidiaries, as the case may be, of all ideas, discoveries, trade secrets, inventions, innovations, improvements, developments, methods of doing business, processes, programs, designs, analyses, drawings, reports, data, software, firmware, logos and all similar or related information (whether or not patentable and whether or not reduced to practice) that relate to the Company’s or its Subsidiaries’ actual or anticipated business, research and development, or existing or future products or services and that are conceived, developed, acquired, contributed to, made, or reduced to practice by the Participant (either solely or jointly with others) during the Participant’s Employment and for a period of one (1) year thereafter (collectively, “Work Product”). Any copyrightable work falling within the definition of Work Product shall be deemed a “work made for hire” under the copyright laws of the United States, and ownership of all rights therein shall vest in the Company or one or more of its Subsidiaries. To the extent that any Work Product is not deemed to be a “work made for hire,” the Participant hereby assigns and agrees to assign to the Company or such Subsidiary all right, title and interest, including without limitation, the intellectual property rights that the Participant may have in and to such Work Product. The Participant shall promptly perform all actions reasonably requested by the Committee (whether during or after the Employment period) to establish and confirm the Company’s or such Subsidiary’s ownership (including, without limitation, providing testimony and executing assignments, consents, powers of attorney, and other instruments).
(ii) At the termination of the Participant’s Employment with the Company or any of its Subsidiaries for any reason, the Participant shall return all of the Company’s or any of its Subsidiaries’ property to the Company.
3. Confidential Information; Non-Disclosure.
(a) The Participant acknowledges that the business of the Company and its Subsidiaries is highly competitive and that the Company has provided and will provide the Participant with access to Confidential Information relating to the business of the Company and its Subsidiaries. For the purposes of this Appendix A, “Confidential Information” means and includes the Company’s confidential and/or proprietary information and/or trade secrets that have been developed or used and/or will be developed and that cannot be obtained readily by third parties from outside sources. Confidential Information includes, by way of example and without limitation, the following: information regarding customers, employees, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services, and processes; procurement procedures and pricing techniques; the names of and other information concerning customers, investors, and business affiliates (such as contact name, service provided, pricing for that customer, amount of services used, credit and financial data, and/or other information relating to the Company’s relationship with
Exhibit A-4
that customer); pricing strategies and price curves; plans and strategies for expansion or acquisitions; budgets; customer lists; research; weather data; financial and sales data; trading terms; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques; prospective customers’ names and marks; grids and maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company; bids or proposals submitted to any third party; technologies and methods; training methods and training processes; organizational structure; salaries of personnel; payment amounts or rates paid to consultants or other service providers; and other such confidential or proprietary information. The Participant acknowledges that this Confidential Information constitutes a valuable, special, and unique asset used by the Company or its Subsidiaries in their business to obtain a competitive advantage over their competitors. The Participant further acknowledges that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to the Company and its Subsidiaries in maintaining their competitive position.
(i) The Participant also will have access to, or knowledge of, Confidential Information of third parties, such as actual and potential customers, suppliers, partners, joint venturers, investors, financing sources and the like, of the Company and its Subsidiaries.
(ii) The Participant agrees that the Participant will not, at any time during or after the Participant’s Employment with the Company, make any unauthorized disclosure of any Confidential Information of the Company or its Subsidiaries, or make any use thereof, except in the carrying out responsibilities related to the Participant’s Employment or as may be lawfully required by a court or other governmental authority. The Participant also agrees to preserve and protect the confidentiality of third party Confidential Information to the same extent, and on the same basis, as the Company’s Confidential Information.
4. Non-Competition Obligations.
(a) The Participant acknowledges that the Company is providing the Participant with access to Confidential Information. The Participant’s non-competition obligations are ancillary to the Participant’s Employment, this Appendix A and agreement to disclose Confidential Information to the Participant. In order to protect the Confidential Information described above, and in consideration for the Participant’s receiving access to this Confidential Information and receiving the Options and other related benefits provided in this Appendix A and elsewhere, the Company and the Participant agree to the following non-competition provisions:
(i) During the Participant’s Employment and during the 12-month period following the Participant’s date of termination of Employment for any reason (or such longer period as the Participant is eligible to receive severance payments pursuant to any other written agreement with the Company or its Affiliates) (the “Post-Termination Period”), the Participant shall not, directly or indirectly, in any capacity, compete with, be employed or engaged
Exhibit A-5
by, have a financial interest in any capacity other than as a passive investor of less than 5% of the outstanding stock of any public corporation, advise, lend Participant’s name to or otherwise be involved in, provide services to or participate in any business which competes with the businesses of the Company and its Subsidiaries within the geographic areas in which business is conducted by the Company or its Subsidiaries (including, without limitation, North America, Europe, Russia, the Middle East, Africa, China, India, Japan, Korea, Thailand, Indonesia, Singapore, Australia and South America and businesses and geographies which the Company or its Subsidiaries have specific plans to conduct in the future and as to which the Participant is aware of such planning).
(ii) The terms of this Appendix A shall not apply to any Participant whose primary place of Employment is located in the State of California (or any other jurisdiction in which such terms are unlawful).
5. Non-Solicitation of Customers. During the Participant’s Employment and during the Post-Termination Period following the termination of such Employment for any reason, the Participant shall not, directly or indirectly, solicit, attempt to solicit, call upon or accept the business of any firm, person or company who is or was a customer, client or supplier of any business of the Company and its Affiliates in respect of which the Participant had received proprietary or confidential information if such solicitation or acceptance of business could result in the diversion of business away from the Company or any such Affiliate or operate to prejudice the Company or any such Affiliate.
6. Non-Solicitation of Employees. During the Participant’s Employment and during the Post-Termination Period following the termination of such Employment for any reason, the Participant shall not solicit, attempt to solicit or communicate in any way with employees of the Company or any of its Subsidiaries for the purpose of having such employees employed or in any way engaged by another person, firm, corporation or other entity.
7. Non-Disparagement. The Participant agrees that during the Participant’s Employment with the Company and after termination of that Employment for any reason, the Participant shall not make public statements or public comments intended to be (or having the effect of being) of defamatory or disparaging nature (including any statements or comments likely to be harmful to the business, business reputation or personal reputation of) regarding the Company or any of their Subsidiaries or Affiliates or any such Person’s businesses, shareholders, agents, officers, directors or contractors (it being understood that comments made in the Participant’s good faith performance of his duties hereunder shall not be deemed disparaging or defamatory for purposes of this Appendix A); provided that the Participant shall be permitted to make truthful disclosures that are required by applicable law, regulations or order of a court or government agency.
8. Specific Performance; Survival.
(a) The Participant acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of this Appendix A would be inadequate and the Company would suffer irreparable damages as a result of such
Exhibit A-6
breach or threatened breach. In recognition of this fact, the Participant agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to suspend making any payments or providing any benefit otherwise required by the Plan or any Participation Notice and Agreement thereunder and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.
(b) The provisions of this Appendix A shall survive the Participant’s Termination.
9. Protected Activities.
(a) Nothing in this Appendix A shall prohibit or impede the Participant from communicating, cooperating, or filing a complaint on possible violations of U.S. federal, state, or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not limited to, the Securities and Exchange Commission, Financial Industry Regulatory Authority, Equal Employment Opportunity Commission, or National Labor Relations Board, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state, or local law or regulation; provided, that, in each case, such communications and disclosures are consistent with applicable law. The Participant shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. Moreover, the Participant shall not be required to give prior notice to (or get prior authorization from) the Company regarding any such communication or disclosure.
(b) Except as otherwise provided in Paragraph 9(a) of this Appendix A or under applicable law, under no circumstance is the Participant authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without the prior written consent of the Company.
Exhibit A-7
Exhibit B
Benefit Tiers - Qualifying Termination
With respect to any Participant, unless otherwise set forth in a Participation Notice and Agreement, the following Severance Multiples, Welfare Continuation Periods, and Severance Payment Periods shall apply in the event of a Qualifying Termination. Capitalized terms used but not defined herein have the meaning given to such terms in the Gates Corporation Executive Severance Plan, as amended from time to time, to which this Benefit Tiers summary is attached as Exhibit B.
Benefit Tier
Eligible Positions and Titles
Tier 1
Chief Executive Officer
Tier 2
Executive Vice President
Tier 3
Senior Vice President and other elected officers
Tier 4
Vice President
Benefit
Tier 1
Tier 2
Tier 3
Tier 41
Severance Multiple [•]x [•]x [•]x [•]x
Severance Factor [•] [•] [•] [•]
Welfare Continuation Period (months) [•] [•] [•] [•]
Severance Payment Period (months) [•] [•] [•] [•]
1 Tier 4 Participants may receive an additional six months of welfare and salary continuation contingent upon CEO approval.
Exhibit B-1
EX-10.5
EX-10.5
Filename: a105formofchangeincontrolp.htm · Sequence: 9
Document
Exhibit 10.5
GATES CORPORATION
EXECUTIVE CHANGE IN CONTROL PLAN
(Effective July 20, 2026)
Gates Corporation (the “Company”) has adopted this Executive Change in Control Plan (the “Plan”) for the benefit of certain management employees of the Company or one of its U.S. Subsidiaries on the terms and conditions hereinafter stated. Participation in the Plan is generally intended to be limited to those management employees designated as eligible for the Plan by the Committee who receive and return a Participation Notice and Agreement.
The Plan supersedes, solely for the Participants, the Gates Industrial Corporation plc Executive Change in Control Plan and any other prior plans, policies, guidelines, arrangements, agreements, letters, and/or other communication, whether formal or informal, written or oral sponsored by any member of the Company Group and/or entered into by any representative of the Company Group that might otherwise provide severance benefits to the Participants (or for the Participants’ benefit) in connection with a change in control, which, for the avoidance of doubt, does not include severance benefits provided pursuant to the Company’s Executive Severance Plan (collectively, “Other Change in Control Severance Arrangements”). As such, the Plan represents the exclusive severance benefit provided to Participants in connection with a change in control, and such individuals shall not be eligible for any other severance benefits provided in any Other Change in Control Severance Arrangements. For the avoidance of doubt, Other Change in Control Severance Arrangements shall not include any Awards (as defined in the Incentive Plans), which Awards shall be governed by the terms and conditions of the Incentive Plans and the applicable Award agreements thereunder.
1.Definitions.
(a)“2018 Omnibus Plan” means the Parent’s Amended and Restated 2018 Omnibus Incentive Plan, as amended from time to time (and/or the most recent successor plan thereto adopted by the Parent for the purpose of providing equity and other incentive compensation to the employees and other service providers of the Company Group, if any).
(b)“Accrued Obligations” means (i) all accrued but unpaid Base Salary through the date of Termination, (ii) any unpaid or unreimbursed expenses incurred in accordance with the policies of the Employer through the date of Termination, and (iii) any benefits provided under the employee benefit plans and programs of the Company Group in which the Participant participates immediately prior to, and is due upon or continues after, a Termination (including, where applicable, death or Disability), including rights with respect to Parent equity (or equity derivatives) or equity-based incentive awards, but excluding any Other Change in Control Severance Arrangements, in accordance with the terms contained therein.
(c)“Affiliate” has the meaning set forth in the 2018 Omnibus Plan.
(d)“Annual Bonus Program” means the annual cash incentive bonus program in which the Participant participates immediately prior to such Participant’s Termination.
(e)“Asset Sale” means a Change in Control resulting from the sale, transfer, or other disposition of all or substantially all of the assets of the Parent to any Person that is not an Affiliate of the Company.
(f)“Base Salary” means the greater of the Participant’s annual base salary rate (i) immediately prior to a Change in Control and (ii) during the period beginning on a Change in Control and ending on the occurrence of a Qualifying Change in Control Termination, in each case, exclusive of any bonus payments or additional payments, unpaid or unreimbursed expenses, or benefits provided under any benefit plan sponsored by any member the Company Group, including, but not limited to, any ERISA plans, stock plans, incentive and deferred compensation plans, or insurance coverage or medical benefits, and without regard to any salary deferrals under the benefit or deferred compensation plans or programs of any member of the Company Group.
(g)“Board” means the board of directors of the Parent.
(h)“Cause” means as to any Participant, unless such Participant’s Participation Notice and Agreement states otherwise, (i) “Cause,” as defined in any employment or consulting agreement between the Participant and any member of the Company Group in effect at the time of such Termination; or (ii) (A) the willful and continued failure by the Participant to substantially perform duties consistent with the Participant’s position with the Company or any of its U.S. Subsidiaries (other than any such failure resulting from death, incapacity due to physical or mental illness or Termination by the Participant for Constructive Termination), after a demand for substantial performance is delivered to the Participant by the Board, together with a copy of the resolution of the Board that specifically identifies the manner in which the Board believes that the Participant has not substantially performed the Participant’s duties, and the Participant has failed to resume substantial performance of the Participant’s duties on a continuous basis within 14 days of receiving such written demand, (B) the willful engaging by the Participant in illegal conduct or gross misconduct that is demonstrably and materially injurious to the Company Group, monetarily or otherwise or (C) the Participant’s conviction of a felony, or conviction of a misdemeanor involving assets of the Company Group. For purposes of this definition, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company Group.
(i) “Change in Control” has the meaning set forth in the 2018 Omnibus Plan.
(j)“Claims Administrator” means: (i) prior to a Change in Control, the Committee or such other individual or group of individuals as may be appointed as the Claims Administrator under the Plan by the Committee from time to time; and (ii) after a Change in Control, the Committee, or such other individual or group of individuals as were appointed as the Claims Administrator under the Plan by the Committee, as in effect immediately prior to the Change in Control.
(k)“Code” means the Internal Revenue Code of 1986, as amended, and the rules, regulations, and other interpretative guidance promulgated thereunder, as well as any successor laws in replacement thereof.
(l)“Committee” means the compensation committee of the Board or any properly delegated subcommittee thereof.
(m)“Company Group” means, collectively, the Company and its Affiliates.
(n)“Constructive Termination” shall have the meaning set forth in any employment agreement entered into by and between a Participant and any member of the Company Group, or, in the absence of any such employment or consulting agreement (or the absence of any definition of “good reason” contained therein), any of the following, without the Participant’s prior written consent: (i) a reduction in the Participant’s Base Salary or Target Bonus Amount, (ii) a material diminution of the Participant’s title, authority, duties, or reporting responsibilities, (iii) a required relocation of the Participant’s primary place of business by more than 50 miles from its then-current location, (iv) the failure of the Employer to pay or cause to be paid the Participant’s Base Salary or annual bonus when due, (v) any breach by the applicable member of the Company Group of this Plan (including the exhibits thereto) or the Participant’s Participation Notice and Agreement (including Appendix A thereto) or any agreement between a member of the Company Group and the Participant relating to the Participant’s compensation (including any equity awards), (vi) an increase in the business travel required by the Company Group which represents an increase, as compared to immediately prior to such increase, by more than 20% of the Participant’s total business time, or (vii) a material reduction in the employee benefits or perquisites provided to the Participant; provided, that any event described in the foregoing clauses (i) through (vii) shall constitute a Constructive Termination only if the Company (or the applicable member of the Company Group) fails to cure such event within 30 days after receipt from the Participant of written notice of the event which constitutes such Constructive Termination; provided, further, that a “Constructive Termination” shall cease to exist for an event on the 90th day following the later of its occurrence or the Participant’s knowledge thereof, unless the Participant has given the Company written notice thereof prior to such date.
(o)“Disability” shall have the meaning set forth in the 2018 Omnibus Plan.
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(p)“Employer” means, with respect to any Participant, (i) prior to a Change in Control, the Company or U.S. Subsidiary of the Company by which such Participant is employed, and (ii) following a Change in Control, the entity that the Participant is employed by immediately after such Change in Control.
(q)“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules, regulations, and other interpretive guidance promulgated thereunder, as well as any successor laws in replacement thereof.
(r)“Incentive Plans” means the 2018 Omnibus Plan, the Parent’s 2014 Stock Incentive Plan, each as amended from time to time (and/or the most recent successor plan thereto adopted by the Parent for the purpose of providing equity and other incentive compensation to the employees and other service providers of the Company Group, if any).
(s)“Parent” means Gates Industrial Corporation Ltd.
(t)“Participant” means any management employee designated as eligible for the Plan by the Committee who is selected by the Committee to participate in the Plan and returns to the Company an executed Participation Notice and Agreement.
(u)“Participation Notice and Agreement” means the form of participation notice and agreement to the terms of the Plan, substantially in the form set forth as Exhibit A hereto.
(v)“Person” means any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, and any successor thereto).
(w)“Qualifying Change in Control Termination” means a Participant’s Termination by the Employer without Cause (and other than as a result of the Participant’s death or during the Participant’s Disability) or by the Participant as a result of a Constructive Termination, in each case, within the period beginning 90 days prior to the consummation of a Change in Control and ending on the second anniversary of the date of such Change in Control; provided, however, it shall not be considered a Qualifying Change in Control Termination if:
(i) such Participant’s Termination upon the expiration of a leave of absence by reason of the Participant’s failure to return to work at such time;
(ii)such Participant’s Termination in connection with an Asset Sale, but only if the Committee determines in its sole discretion that, in connection with such Asset Sale, either (A) such Participant was offered employment with the purchaser (or an affiliate thereof) (x) in a position of comparable authority and duties, (y) at the same or greater Base Salary and Target Bonus Amount opportunity, and (z) on terms that included an offer to assume the Company’s severance obligations contained herein, or (B) such Participant voluntarily elected not to participate in the purchaser’s selection process for employment with the purchaser (or affiliate thereof) following such Asset Sale; or
(iii)prior to the Participant’s Termination, the Participant has delivered written notice of the Participant’s intent to voluntarily resign under circumstances that constitute a retirement for the purposes of any Award granted under the Incentive Plans.
(x)“Release Agreement” means a release of claims in a form provided by the Claims Administrator to the Participant, pursuant to which a Participant may be required to (i) acknowledge the receipt of the severance payment and other benefits and (ii) release the Company and its Affiliates (including the Employer) and other Persons and entities designated by the Company from any liability arising from such Participant’s employment or Termination (other than with respect to the Participant’s rights under the Plan).
(y)“Release Effectiveness Date” means the date the Release Agreement becomes effective and irrevocable.
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(z)“Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute thereto, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
(aa)“Severance Multiple” means, as to any Participant, the Severance Multiple set forth in Exhibit B applicable to such Participant’s position as of immediately prior to such Participant’s Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in such Participant’s Participation Notice and Agreement.
(ab)Subsidiary” has the meaning set forth in the 2018 Omnibus Plan.
(ac)“Target Bonus Amount” means the greater of the Participant’s target annual bonus (i) immediately prior to a Change in Control and (ii) during the period beginning on a Change in Control and ending on the occurrence of a Qualifying Change in Control Termination.
(ad)“Termination” means the termination of the Participant’s employment or service, as applicable, with all members of the Company Group for any reason (including death), other than any Termination of such Participant by reason of a transfer to the employ of another member of the Company Group.
(ae)“Welfare Continuation Period” means, as to any Participant, the Welfare Continuation Period set forth in Exhibit B applicable to the Participant’s position as of immediately prior to such Participant’s Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in the Participant’s Participation Notice and Agreement.
1.Eligibility. Eligibility to participate in the Plan shall be limited to any employee of the Company or its U.S. Subsidiaries that is designated as a Participant by the Committee; provided, that, as a condition of participation in the Plan, the Participant must execute and submit a Participation Notice and Agreement, and following the Participant’s Termination, execute, deliver and not revoke a Release Agreement.
2.Termination of Employment.
(a)Payments upon a Qualifying Change in Control Termination. If the Participant’s Termination is a Qualifying Change in Control Termination, in addition to any Accrued Obligations, subject to such Participant’s execution, delivery to the Company, and non-revocation of the Release Agreement and the expiration of any revocation period contained in such Release Agreement, as contemplated in Section 3(d) below, and continued compliance with the Restrictive Covenants set forth in Appendix A of the Participation Notice and Agreement, the Participant shall be entitled to the following payments and benefits:
(i)Prorated/Prior Year Bonuses. (A) To the extent not previously paid, the bonus amount otherwise payable under the Annual Bonus Program for the fiscal year immediately preceding the fiscal year in which the Participant’s Termination occurs, based on actual performance (with any individual performance factor as such term is defined in the Annual Bonus Program set at 1, if applicable) for such immediately preceding fiscal year, payable concurrently with cash bonus payments to other employees under the applicable cash bonus plan, payable concurrently with cash bonus payments to other employees under the applicable cash bonus plan (but in all events prior to March 15 of the fiscal year immediately following the fiscal year in which such Termination occurs) and (B) the Target Bonus Amount for the fiscal year in which the Participant’s Termination occurs, prorated for the days of service in such fiscal year up to and including the date of Termination, such amount to be paid in a lump sum no later than the 60th day following the Termination Date;
(ii)COBRA Continuation Payment. A cash payment in an amount equal to the sum of the total amount of the monthly (A) COBRA insurance premiums for participation in the health and dental benefit programs of the Company or its U.S. Subsidiary, as applicable and (B) the Employer-paid portion of the base premium for participation in the life and long-term disability programs of the Company Group and, in each case, in which the Participant participated immediately prior to such Participant’s Termination, payable monthly for each month of the Welfare Continuation Period in accordance with the Employer’s payroll
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practices, with the first such payment in respect of any completed months prior to the Release Effectiveness Date to occur as soon as practicable after the Release Effectiveness Date;
(iii)Cash Severance. An amount equal to (A) such Participant’s applicable Severance Multiple multiplied by (B) the sum of such Participant’s then-current (1) Base Salary and (2) Target Bonus Amount, such amount to be paid in a lump sum no later than the 60th day following the Termination Date; provided, however, if (i) the Qualifying Change in Control Termination occurs within the period beginning 90 days prior to the consummation of a Change in Control or (ii) if the Change in Control is not a “change in control event” within the meaning of Section 409A of the Code, then, to the extent required to comply with Section 409A of the Code, the Cash Severance shall be paid in accordance with the time and form of payment set forth in the Gates Corporation Executive Severance Plan; and
(iv)Outplacement Services. Reimbursement for reasonable outplacement services actually incurred by such Participant which are directly related to such Participant’s Termination and which are incurred only during a six-consecutive month period that ends within or with the 12-month period following the Participant’s Termination.
(b)Treatment of Equity Awards. For the avoidance of doubt, in the event of a Participant’s Termination, including, without limitation, a Participant’s Qualifying Change in Control Termination, the Participant’s outstanding Awards, if any, shall be governed by the terms and conditions of the Incentive Plans and the applicable Award agreements thereunder.
(c)Other Termination Events. If a Participant experiences a Termination which does not constitute a Qualifying Change in Control Termination, the Participant shall not be entitled to the payment of any severance or other benefits under the Plan and shall only be entitled to receive the Accrued Obligations.
(d)Release Agreement. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to Section 3(a) above (other than the Accrued Obligations) shall be conditioned upon a Participant’s execution, delivery to the Company, and non-revocation of the Release Agreement and the expiration of any revocation period contained in such Release Agreement within 60 days following the date of Termination. If a Participant fails to execute the Release Agreement in such a timely manner so as to permit any revocation period to expire prior to the end of such 60-day period, or timely revokes such Participant’s acceptance of such release following its execution, such Participant shall not be entitled to payment of any severance or other benefits under the Plan. Further, to the extent that any of the payments hereunder constitute “nonqualified deferred compensation” for purposes of Code Section 409A, any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the 60th day following the date of such Termination, but for the condition on executing the Release Agreement as set forth herein, shall not be made until the first regularly scheduled payroll date following such 60th day (but in any event no later than 74 days following the Participant’s Termination), after which any remaining payments shall thereafter be provided to the Participant according to the applicable schedule set forth herein.
3.Additional Terms.
(a)Taxes. Severance and other payments and benefits under the Plan will be subject to all required federal, state, and local taxes and may be affected by any legally required withholdings.
(b)Other Benefit Plans. Payments under the Plan are not deemed “compensation” for purposes of calculating any contributions or accruals under the retirement plans, savings plans, and incentive plans of any member of the Company Group. Accordingly, no contributions to the retirement and savings plans of the Company Group will be made from the severance payments and other payments and benefits under the Plan, and such plans will not accrue any benefits attributable to payments under the Plan.
(c)Specified Employees. Notwithstanding anything herein to the contrary, (i) if, at the time of a Participant’s Termination, such Participant is a “specified employee” as defined in Code Section 409A,
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and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such Termination is necessary in order to prevent the imposition of any accelerated or additional tax under Code Section 409A, then the commencement of the payment of any such payments or benefits hereunder will be deferred (without any decrease or increase in such payments or benefits ultimately paid or provided to the Participant) until the date that is six months following such Participant’s Termination (or the earliest date that is permitted under Code Section 409A); and (ii) if any other payments of money or other benefits due to the Participant hereunder would cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by or at the direction of the Committee, that does not cause such an accelerated or additional tax or result in additional material cost to the Company. The Company shall consult with its legal counsel and tax advisors in good faith regarding the implementation of this Section 4(c); provided, however, that none of the Company, any other member of the Company Group, or any of their respective employees or representatives shall have any liability to the Participant with respect thereto. For the purposes of Code Section 409A, each payment made under the Plan, including each installment payment, shall be treated as a separate payment.
4.Termination or Amendment of the Plan. Except as otherwise set forth in a Participation Notice and Agreement, the Plan may be amended, terminated, or discontinued in whole or in part, at any time and from time to time at the discretion of the Board or the Committee; provided, however, that the Plan may not be amended, terminated, or discontinued during the two-year period beginning on a Change in Control (except for an amendment to the administrative provisions of the Plan that is considered by counsel to be required pursuant to applicable law); provided, further, that no amendment, termination, or discontinuance of either the Plan or any provision of the Plan that has the effect of reducing or diminishing the potential benefits a Participant may receive under the Plan shall be effective with respect to the Participant until the first anniversary of such amendment, termination, or discontinuance (except for an amendment to the administrative provisions of the Plan that is considered by counsel to be required pursuant to applicable law). The Plan shall automatically terminate on the second anniversary of a Change in Control; provided, however, that if prior to such termination date a Participant has undergone a Qualifying Change in Control Termination (or such Participant has delivered notice of a Constructive Termination), then the Plan shall remain in effect with respect to such Participant in accordance with its terms.
5.Limitation of Certain Payments. If any payment, benefit or distribution of any type to or for the benefit of a Participant, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of the Plan or otherwise by the Company or any of its Affiliates (collectively, the “Parachute Payments”) would subject a Participant to the excise tax imposed under Code Section 4999 (the “Excise Tax”), the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided, however, that the Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by a Participant after application of the above reduction would exceed the after-tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise taxes applicable to such amount. Unless a Participant has given prior written notice to the Company to effectuate a reduction in the Parachute Payments if such a reduction is required (any such notice being compliant with the requirements of Code Section 409A to avoid the imputation of any tax, penalty or interest thereunder and, if not compliant, shall be disregarded), the Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Parachute Payments, in each case, with the Parachute Payments to be made furthest in the future being reduced first; provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Code Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in a manner that does not comply with Code Section 409A.
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6.Claims Procedure.
(a)Processing Claims. The processing of claims for benefits and payments under the Plan will be carried out as quickly as possible. If an individual is not selected for participation in the Plan or does not satisfy the conditions for eligibility in the Plan, such individual is not entitled to benefits and/or payments under the Plan.
(b)Decision. If a Participant’s claim for benefits under the Plan is denied, the Participant will receive a written notice within 90 days (in special circumstances, the Claims Administrator may determine that an extension of this initial 90-day period is required, and in such event a notice of extension stating the special circumstances requiring the extension and the date by which the Claims Administrator expects to render the benefit determination will be provided to the Participant within the initial 90-day period; provided, however, that in no event shall such extension exceed a period of 90 days from the end of such initial period):
(i) requesting additional material or information to further support the claim and the reasons why these are necessary;
(ii)setting forth specific reasons as to why the claim was denied;
(iii)setting forth clear reference to the Plan provisions upon which the denial is based; and
(iv)providing notice of the Participant’s right to have the denial reviewed (as explained below), which shall include a statement of the Plan’s review procedures and the time limits applicable to such procedures.
(c)Request for Review of Denial of Benefits. The Participant or the Participant’s authorized representative may request a review of the Participant’s claim by giving written notice to the Claims Administrator. Each Participant has the right to have representation, review pertinent documents, and present written documents and comments pertinent to the claim. A Participant’s request must be made not later than 60 days after the Participant receives the notice of denial. If a Participant fails to act within the 60-day limit, the Participant loses the right to have the Participant’s claim reviewed.
(d)Decision on Review. Upon receipt of a request for review from Participant, the Claims Administrator shall make a full and fair evaluation and may require additional documents necessary for such a review. The Claims Administrator shall make a decision within 60 days from receipt of the Participant’s request. In special circumstances, the Claims Administrator may determine that an extension of this initial 60-day period is required, and in such event a notice of extension stating the special circumstances requiring the extension and the date by which the Claims Administrator expects to render the benefit determination will be provided to the Participant within the initial 60-day period; provided, however, that in no event shall such extension exceed a period of 60 days from the end of such initial period. The decision on the review shall be in writing and shall include specific reasons for the decision. The final decision of the Claims Administrator shall be subject to review by any court of competent jurisdiction.
(e)Legal Fees and Expenses. All legal fees and expenses incurred by a Participant in connection with or resulting from any action, suit, or proceeding to which such a Participant may be a party or in which such Participant may be involved in connection with such Participant’s successful enforcement of any rights under the Plan shall be reimbursed as incurred by the Company
(f)In Case of Clerical Error. If any information regarding a Participant is incorrect as reasonably determined by the Claims Administrator, and the error affects the Participant’s benefits, the correct information will determine the extent, if any, of the Participant’s benefits under the Plan.
(g)No Limitation of Rights. Nothing in this Section 7 shall limit the Participant’s ability to file or bring a claim, proceeding, or legal action for relief with respect to any right or claim for payments or benefits under the Plan.
7.General Information.
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(a)No Right to Continued Employment. Nothing contained in the Plan shall confer upon any Participant any right to continue in the employ of any member of the Company Group or interfere in any way with the right of any member of the Company Group to terminate the Participant’s employment, with or without cause.
(b)Plan Not Funded. Amounts payable under the Plan shall be payable from the general assets of the Company, and no special or separate reserve, fund, or deposit shall be made to assure payment of such amounts. No Participant, beneficiary, or other Person shall have any right, title, or interest in any fund or in any specific asset of any member of the Company Group by reason of participation hereunder. None of (i) the provisions of the Plan, (ii) the creation or adoption of the Plan, or (iii) any action taken pursuant to the provisions of the Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company or any other member of the Company Group and any Participant, beneficiary, or other Person. To the extent that a Participant, beneficiary, or other Person acquires a right to receive payment under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations under the Plan.
(c)Non-Transferability of Benefits and Interests. All amounts payable under the Plan are non-transferable, and no amount payable under the Plan shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance, or charge. This Section 8(c) shall not apply to an assignment of a contingency or payment due: (i) after the death of a Participant, to the deceased Participant’s legal representative or beneficiary; or (ii) after the disability of a Participant, to the disabled Participant’s personal representative.
(d)Discretion of the Company Group, Board, Committee, and Claims Administrator. Any decision made or action taken by, or inaction of, any member of the Company Group, the Board, the Committee, or the Claims Administrator arising out of or in connection with the creation, amendment, construction, administration, interpretation, and effect of the Plan that is within its authority hereunder or applicable law shall be within the absolute discretion of such entity and shall be conclusive and binding upon all Persons. In the case of any conflict, the decision made or action taken by, or inaction of, the Claims Administrator will control. However, with respect to the authorized officers and senior executives, as designated by the Board in its resolutions, any decision made or action taken by, or inaction of, the Committee will control.
(e)Indemnification. None of the Board, the Committee, any employee of any member of the Company Group, or any Person acting at the direction thereof (each such Person, an “Affected Person”) shall have any liability to any Person (including, without limitation, any Participant), for any act, omission, interpretation, construction, or determination made in connection with the Plan (or any payment made under the Plan). Each Affected Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Affected Person in connection with or resulting from any action, suit, or proceeding to which such Affected Person may be a party or in which such Affected Person may be involved by reason of any action taken or omitted to be taken under the Plan and against and from any and all amounts paid by such Affected Person, with the Company’s approval, in settlement thereof, or paid by such Affected Person in satisfaction of any judgment in any such action, suit, or proceeding against such Affected Person; provided, that, the Company shall have the right, at its own expense, to assume and defend any such action, suit, or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Affected Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case, not subject to further appeal, determines that the acts or omissions of such Affected Person giving rise to the indemnification claim resulted from such Affected Person’s bad faith, fraud, or willful wrongful act or omission. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Affected Persons may be entitled under the Company’s
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organizational documents, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Person or hold them harmless.
(f)Code Section 409A. To the extent applicable, it is intended that portions of the Plan either comply with or be exempt from the provisions of Code Section 409A. Notwithstanding any provision of the Plan to the contrary, if any benefit provided under the Plan is subject to the provisions of Code Section 409A, the provisions of the Plan will be administered, interpreted, and construed in a manner necessary to comply with Code Section 409A or an exemption thereto and any provision that would cause the Plan to fail to comply with or be exempt from Code Section 409A, as the case may be, shall have no force and effect. Notwithstanding any provision of the Plan to the contrary, in no event shall any member of the Company Group (or any of their employees, officers, or directors) have any liability to any Participant (or any other Person) due to the failure of the Plan to satisfy the requirements of Code Section 409A or any other applicable law.
(g)Code Section 457A. To the extent applicable, it is intended that portions of the Plan either comply with or be exempt from the provisions of Code Section 457A. Notwithstanding any provision of the Plan to the contrary, if any benefit provided under the Plan is subject to the provisions of Code Section 457A, the provisions of the Plan will be administered, interpreted, and construed in a manner necessary to comply with Code Section 457A or an exemption thereto and any provision that would cause the Plan to fail to comply with or be exempt from Code Section 457A, as the case may be, shall have no force and effect. Notwithstanding any provision of the Plan to the contrary, in no event shall any member of the Company Group (or any of their employees, officers, or directors) have any liability to any Participant (or any other Person) due to the failure of the Plan to satisfy the requirements of Code Section 457A or any other applicable law.
(h)No Duplication. The benefits under the Plan replace and supersede any severance benefits payable upon a Termination previously established under any Other Change in Control Severance Arrangement. In no event shall any Participant receive more than the severance benefits provided for herein, and any severance benefits provided under any Other Change in Control Severance Arrangement or otherwise, to the extent paid, shall reduce the amounts to be paid hereunder.
(i)Governing Law. All questions pertaining to the construction, regulation, validity, and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Colorado (other than to the extent set forth in the Participation Notice and Agreement).
(j)Notice. Any notice or other communication required or which may be given pursuant to the Plan shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or two days after it has been mailed by United States express or registered mail, return receipt requested, postage prepaid, addressed to the (i) Company, at 1144 Fifteenth Street, Suite 1400, Denver CO, 80202, Attention: Chief Legal Officer, or (ii) Participant, at the Participant’s most recent address on file with the Company.
(k)Captions. Captions and headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such captions and headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
(l)Successors. The Plan shall inure to the benefit of and be binding upon the Company and its successors.
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Exhibit A
GATES CORPORATION
EXECUTIVE CHANGE IN CONTROL PLAN
Participation Notice and Agreement
Participant:
Qualifying Change in Control Termination
Severance Multiple:
[•]x1
Welfare Continuation Period:
[•] months
I hereby agree to the terms and conditions of the Gates Corporation Executive Change in Control Plan (as amended from time to time, the “Plan”) to which this Participation Notice and Agreement is attached as Exhibit A, including the terms set forth in this Participation Notice and Agreement and the Restrictive Covenants (as defined below) incorporated hereinto. Capitalized terms used but not defined in this Participation Notice and Agreement shall have the meanings given to such terms in the Plan.
I understand that as a Participant under the Plan (a “Participant”), the terms of the Plan will exclusively govern all subject matters addressed by the Plan and I understand that, except as expressly provided in the Plan, the Plan supersedes and replaces, as applicable, any and all agreements (including any prior employment agreement), plans, policies, guidelines, and other arrangements, including any Other Change in Control Severance Arrangements, with respect to all subject matters covered under the Plan and my rights, if any, to severance upon my Termination for any reason.
The Company and I further agree that:
[Effective as of the date hereof, the employment agreement that I entered into with a member of the Company Group or its predecessor, dated as of [Date] (the “Employment Agreement”) shall be terminated in all respects and each party shall have no further rights or obligations with respect thereto, other than any provisions therein which were intended to survive the termination thereof. My waiver of any rights under the Employment Agreement is irrevocable to the fullest extent provided under the laws of the State of Colorado; and] [Bracketed language only to be included for employees currently subject to an employment agreement.]
I acknowledge and recognize the highly competitive nature of the businesses of the Company Group, and that I will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients, and partners involved in those businesses, and the goodwill associated with the Company Group.
Accordingly, I agree to be bound by the provisions of Appendix A to this Participation Notice and Agreement, which provisions are incorporated into this Participation Notice and Agreement and made a part hereof.
Dated:
PARTICIPANT
______________________________
[Type participant name]
1 Individuals with the title “Senior Vice President” may only participate upon CEO and Compensation Committee
approval.
Exhibit A-1
APPENDIX A
Restrictive Covenants
The Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company, that the Participant will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients, and partners involved in those businesses, and the goodwill associated with the Company. The Participant accordingly agrees to the provisions of this Appendix A to the Participant’s Participation Notice and Agreement under the Gates Corporation Executive Change in Control Plan (as amended from time to time, the “Plan”) (such provisions, the “Restrictive Covenants”). For the avoidance of doubt, the Restrictive Covenants contained herein are in addition to, and not in lieu of, any other restrictive covenants or similar covenants or agreements between the Participant and any member of the Company Group. For the purposes of this Appendix A, any reference to the “Company” shall mean the Parent, the Company and/or its Affiliates (as applicable), collectively, and any reference to “Subsidiary” shall mean any corporation, limited liability company, partnership or other entity with respect to which another specified entity has the power to vote or direct the voting of sufficient securities to elect directors (or comparable authorized persons of such entity) having a majority of the voting power of the board of directors (or comparable governing body) of such entity.
1.General Terms.
(a)The terms of this Appendix A constitute confidential information, which the Participant shall not disclose to anyone other than the Participant’s spouse, attorneys, tax advisors, or as required by law. The Company may disclose the terms of this Appendix A subject to applicable law. The terms of this Appendix A shall supplement, but not supersede or replace, any similar restrictive covenants to which the Participant has otherwise agreed to be bound.
2.Company Property.
(a)All written materials, records, data, and other documents prepared or possessed by the Participant during the Participant’s Employment are the Company’s property. All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps, and all other documents, data, or materials of any type embodying such information, ideas, concepts, improvements, discoveries, and inventions are the Company’s property. For purposes of this Appendix A, the term “Employment” shall mean a Participant’s employment as an employee of the Company or any of its Subsidiaries.
(i)All information, ideas, concepts, improvements, discoveries, and inventions that are conceived, made, developed, or acquired by the Participant individually or in conjunction with others during the Participant’s Employment (whether during business hours and whether on the Company’s or any of its Subsidiaries’ premises or otherwise) which relate to the Company’s or any of its Subsidiaries’ business, products, or services are the Company’s property. The Participant agrees to make prompt and full disclosure to the Company or its Subsidiaries, as the case may be, of all ideas, discoveries, trade secrets, inventions, innovations, improvements, developments, methods of doing business, processes, programs, designs, analyses, drawings, reports, data, software, firmware, logos and all similar or related information (whether or not patentable and whether or not reduced to practice) that relate to the Company’s or its Subsidiaries’ actual or anticipated business, research and development, or existing or future products or services and that are conceived, developed, acquired, contributed to, made, or reduced to practice by the Participant (either solely or jointly with others) during the Participant’s Employment and for a period of one (1) year thereafter (collectively, “Work Product”). Any copyrightable work falling within the definition of Work Product shall be deemed a “work made for hire” under the copyright laws of the United States, and ownership of all rights therein shall vest in the Company or one or more of its Subsidiaries. To the extent that any Work Product is not deemed to be a “work made for hire,” the Participant hereby assigns and agrees to assign to the Company or such Subsidiary all right, title and interest, including without limitation, the intellectual property rights that the Participant may have in and to such Work Product. The Participant shall promptly perform all
Appendix A-1
actions reasonably requested by the Committee (whether during or after the Employment period) to establish and confirm the Company’s or such Subsidiary’s ownership (including, without limitation, providing testimony and executing assignments, consents, powers of attorney, and other instruments).
(ii)At the termination of the Participant’s Employment with the Company or any of its Subsidiaries for any reason, the Participant shall return all of the Company’s or any of its Subsidiaries’ property to the Company.
3.Confidential Information; Non-Disclosure.
(a)The Participant acknowledges that the business of the Company and its Subsidiaries is highly competitive and that the Company has provided and will provide the Participant with access to Confidential Information relating to the business of the Company and its Subsidiaries. For the purposes of this Appendix A, “Confidential Information” means and includes the Company’s confidential and/or proprietary information and/or trade secrets that have been developed or used and/or will be developed and that cannot be obtained readily by third parties from outside sources. Confidential Information includes, by way of example and without limitation, the following: information regarding customers, employees, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services, and processes; procurement procedures and pricing techniques; the names of and other information concerning customers, investors, and business affiliates (such as contact name, service provided, pricing for that customer, amount of services used, credit and financial data, and/or other information relating to the Company’s relationship with that customer); pricing strategies and price curves; plans and strategies for expansion or acquisitions; budgets; customer lists; research; weather data; financial and sales data; trading terms; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques; prospective customers’ names and marks; grids and maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company; bids or proposals submitted to any third party; technologies and methods; training methods and training processes; organizational structure; salaries of personnel; payment amounts or rates paid to consultants or other service providers; and other such confidential or proprietary information. The Participant acknowledges that this Confidential Information constitutes a valuable, special, and unique asset used by the Company or its Subsidiaries in their business to obtain a competitive advantage over their competitors. The Participant further acknowledges that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to the Company and its Subsidiaries in maintaining their competitive position.
(i)The Participant also will have access to, or knowledge of, Confidential Information of third parties, such as actual and potential customers, suppliers, partners, joint venturers, investors, financing sources and the like, of the Company and its Subsidiaries.
(ii)The Participant agrees that the Participant will not, at any time during or after the Participant’s Employment with the Company, make any unauthorized disclosure of any Confidential Information of the Company or its Subsidiaries, or make any use thereof, except in the carrying out responsibilities related to the Participant’s Employment or as may be lawfully required by a court or other governmental authority. The Participant also agrees to preserve and protect the confidentiality of third party Confidential Information to the same extent, and on the same basis, as the Company’s Confidential Information.
4.Non-Competition Obligations.
(a)The Participant acknowledges that the Company is providing the Participant with access to Confidential Information. The Participant’s non-competition obligations are ancillary to the Participant’s Employment, this Appendix A and agreement to disclose Confidential Information to the Participant. In order to protect the Confidential Information described above, and in consideration for the Participant’s receiving access to this Confidential Information and receiving the Options and other
Appendix A-2
related benefits provided in this Appendix A and elsewhere, the Company and the Participant agree to the following non-competition provisions:
(i)During the Participant’s Employment and during the 12-month period following the Participant’s date of termination of Employment for any reason (or such longer period as the Participant is eligible to receive severance payments pursuant to any other written agreement with the Company or its Affiliates) (the “Post-Termination Period”), the Participant shall not, directly or indirectly, in any capacity, compete with, be employed or engaged by, have a financial interest in any capacity other than as a passive investor of less than 5% of the outstanding stock of any public corporation, advise, lend Participant’s name to or otherwise be involved in, provide services to or participate in any business which competes with the businesses of the Company and its Subsidiaries within the geographic areas in which business is conducted by the Company or its Subsidiaries (including, without limitation, North America, Europe, Russia, the Middle East, Africa, China, India, Japan, Korea, Thailand, Indonesia, Singapore, Australia and South America and businesses and geographies which the Company or its Subsidiaries have specific plans to conduct in the future and as to which the Participant is aware of such planning).
(ii)The terms of this Appendix A shall not apply to any Participant whose primary place of Employment is located in the State of California (or any other jurisdiction in which such terms are unlawful).
5.Non-Solicitation of Customers. During the Participant’s Employment and during the Post-Termination Period following the termination of such Employment for any reason, the Participant shall not, directly or indirectly, solicit, attempt to solicit, call upon or accept the business of any firm, person or company who is or was a customer, client or supplier of any business of the Company and its Affiliates in respect of which the Participant had received proprietary or confidential information if such solicitation or acceptance of business could result in the diversion of business away from the Company or any such Affiliate or operate to prejudice the Company or any such Affiliate.
6.Non-Solicitation of Employees. During the Participant’s Employment and during the Post-Termination Period following the termination of such Employment for any reason, the Participant shall not solicit, attempt to solicit or communicate in any way with employees of the Company or any of its Subsidiaries for the purpose of having such employees employed or in any way engaged by another person, firm, corporation or other entity.
7.Non-Disparagement. The Participant agrees that during the Participant’s Employment with the Company and after termination of that Employment for any reason, the Participant shall not make public statements or public comments intended to be (or having the effect of being) of defamatory or disparaging nature (including any statements or comments likely to be harmful to the business, business reputation or personal reputation of) regarding the Company or any of its Subsidiaries or Affiliates or any such Person’s businesses, shareholders, agents, officers, directors or contractors (it being understood that comments made in the Participant’s good faith performance of his duties hereunder shall not be deemed disparaging or defamatory for purposes of this Appendix A); provided that the Participant shall be permitted to make truthful disclosures that are required by applicable law, regulations or order of a court or government agency.
8.Specific Performance; Survival.
(a)The Participant acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of this Appendix A would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, the Participant agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to suspend making any payments or providing any benefit otherwise required by the Plan or any Participation Notice and Agreement thereunder and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.
(b)The provisions of this Appendix A shall survive the Participant’s Termination.
Appendix A-3
9.Protected Activities.
(a)Nothing in this Appendix A shall prohibit or impede the Participant from communicating, cooperating, or filing a complaint on possible violations of U.S. federal, state, or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not limited to, the Securities and Exchange Commission, Financial Industry Regulatory Authority, Equal Employment Opportunity Commission, or National Labor Relations Board, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state, or local law or regulation; provided, that, in each case, such communications and disclosures are consistent with applicable law. The Participant shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. Moreover, the Participant shall not be required to give prior notice to (or get prior authorization from) the Company regarding any such communication or disclosure.
(b)Except as otherwise provided in Paragraph 9(a) of this Appendix A or under applicable law, under no circumstance is the Participant authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without the prior written consent of the Company.
Appendix A-4
Exhibit B
Benefit Tiers – Qualifying Change in Control Termination
With respect to any Participant, unless otherwise set forth in a Participation Notice and Agreement, the following Severance Multiples and Welfare Continuation Periods shall apply in the event of a Qualifying Change in Control Termination. Capitalized terms used but not defined herein have the meaning given to such terms in the Gates Corporation Executive Change in Control Plan, as amended from time to time, to which this Benefit Tiers summary is attached as Exhibit B.
Benefit Tier Eligible Positions and Titles
Tier 1 Chief Executive Officer
Tier 2 Executive Officers2
Tier 3 Select Senior Vice President(s)3
Benefit Tier 1 Tier 2 Tier 3
Severance Multiple [•]x [•]x [•]x
Welfare Continuation Period (months) [•] [•] [•]
2 As defined in §240.3b-7 of the Securities Exchange Act.
3 Individuals with the title “Senior Vice President” may only participate upon CEO and Compensation Committee approval.
Exhibit B-1
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duration