EQUITY PARTICIPATION AGREEMENT
Exhibit 10.4
EQUITY PARTICIPATION AGREEMENT
Equity Participation Agreement made as of the 2nd day of June, 2014 between DavidsTea Inc. (“Corporation” or “DTI”) and Xxxxxxx Xxxxxxx (“Awardholder”).
RECITALS:
(a) Corporation has adopted an Amended and Restated Equity Incentive Plan (the “Plan”) which provides for the granting of Options and Restricted Shares to key Employees (all as defined in the Plan) of Corporation;
(b) Awardholder is a key Employee of Corporation and will render faithful and efficient service to Corporation in the capacity of Chief Executive Officer of the Corporation;
(c) Corporation desires to receive the benefit of the services of Awardholder and to more fully identify his interest with Corporation’s future and success; and
(d) Corporation, acting through its Board, approved the granting of Awards to Awardholder upon the terms and conditions hereinafter provided.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
DEFINED TERMS
Section 1.01 Defined Terms
Unless otherwise defined herein, defined terms shall have the meaning ascribed to such terms in the Plan.
For the purposes hereby, “Cause” shall have the meaning set forth in the Executive Employment Agreement between the Corporation and the Awardholder signed on April 28, 2014 and on April 29, 2014 (the “Employment Agreement”).
ARTICLE 2
GRANT OF OPTIONS
Section 2.01 Option to Purchase
Corporation hereby grants to Awardholder the number of options set out beside Awardholder’s name in Schedule 1 attached hereto (“Options”) to purchase from Corporation the number of Shares set out beside Awardholder’s name in Schedule I attached hereto (the “Optioned Shares”) at a price of $5.07 per Share (the “Option Price”), upon the terms and conditions contained herein and in the Plan. The number of Optioned Shares which may be acquired pursuant to the Options shall be those which vest in accordance with Section 2.03 hereof.
Section 2.02 Basic Term of Options
Unless earlier terminated in accordance with the Plan, the Options shall no longer be exercisable and shall expire on the seventh (7th) anniversary of the date hereof, unless indicated otherwise on Schedule I attached hereto.
Section 2.03 Vesting
(a) Subject to the remaining provisions of this Agreement, the Options shall vest in accordance with Schedule I attached hereto, and shall be exercisable to the extent this Option has vested.
In addition, the Options shall vest and become exercisable in full immediately prior to the occurrence of a Trigger Event.
(b) In the event that Awardholder ceases to be employed by the Corporation, the portion of the award that remains unvested at the date of Termination of employment shall be forfeited; provided, however, that if a Trigger Event occurs within 180 days following the Termination of Awardholder’s employment by the Corporation without Cause, the unvested portion of the Options as the date of Termination would become fully vested.
Section 2.04 Subject to the Plan
Unless otherwise specified or modified herein, the Options are subject in all respects to the provisions of the Plan and compliance by Awardholder or his legal representative (the “Representative”) with the terms thereof. A copy of the Plan shall be provided to Awardholder or his Representative upon request from time to time. Awardholder acknowledges having read a copy of the Plan in effect on the date hereof.
Section 2.05 Transferability
The Options shall not be assignable or transferable, except in accordance with the terms of the Plan.
Section 2.06 Right of a Shareholder
Awardholder shall have no rights as a shareholder with respect to the Optioned Shares until after (i) payment in full of the Option Price for the Optioned Shares for which the Options are being exercised and (ii) the execution by Awardholder of a counterpart to each of the Agreements (if Awardholder is not already a party thereto) and any other agreement reasonably requested by Corporation in order to ensure that upon issuance of the Optioned Shares to Awardholder that Awardholder be bound by the terms and conditions of each of the Agreements. Awardholder shall have no right as a shareholder with respect to such Optioned Shares until the issuance of such Shares and no adjustment shall be made for dividends or other rights for which the record date is prior to the time such Shares are issued. Corporation shall issue such Optioned Shares so purchased within ten (10) Business Days after the conditions set out in the first sentence of this paragraph have been met and deliver share certificates in respect of such Optioned Shares as soon as practicable thereafter.
Section 2.07 Notice of Exercise of Option
Notwithstanding anything to the contrary in the Plan, Corporation shall notify Awardholder at least ten Business Days prior to the occurrence of a Trigger Event. The Options shall be exercised in whole or in part upon Awardholder providing not less than three Business Days written notice prior to the Trigger Event (the “Exercise Date”) and any Option not exercised by the Exercise Date shall terminate and expire at the end of the day on the Exercise Date.
Section 2.08 Schedule
Corporation may, from time to time, update Schedule I attached hereto to reflect any change in the number of Options granted, the Option Price or the number of outstanding Options resulting from any expiration or cancellation of Options pursuant to the Plan.
ARTICLE 3
MISCELLANEOUS
Section 3.01 Severability
If any provision of this Agreement shall be determined by any court of competent jurisdiction to be illegal, invalid or unenforceable, that provision shall be severed from this Agreement and the remaining provisions shall continue in full force and effect.
Section 3.02 Governing Law
This Agreement and the Options granted hereunder shall be governed by and construed in accordance with the laws of the Province of Quebec and the laws of Canada applicable therein.
Section 3.03 Language
The parties hereto have expressly agreed that this Agreement, as well as all documents which relate to it, be drafted in English. Les parties aux présentes ont expressément requis que cette entente ainsi que tous les documents s’y rattachant soient rédigés en anglais.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of the date first above written.
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By: |
/s/ Authorized Person |
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Authorized Signing Officer |
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/s/ Xxxxxx Xxxxxxx |
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XXXXXXX XXXXXXX |
SCHEDULE I
OPTIONS
Aggregate Number of Options: 364,760
Number of Shares Issuable Upon the Exercise of Options: 364,760
Vesting: (i) 25% of the Options shall vest on the first anniversary of the date of this Agreement; and
(ii) the remaining 75% of the Options shall vest in equal monthly installments, on the 2nd day of each month, over the 36-month period following the first anniversary of the date of this Agreement.
AMENDMENT TO THE EQUITY PARTICIPATION AGREEMENT
(the “Amendment Agreement”)
THIS AMENDMENT is made as of this 22 day of December, 2014.
BETWEEN:
DAVIDSTEA INC., a corporation governed by the laws of Canada (the “Corporation”)
- and -
Xxxxxxx Xxxxxxx (the “Awardholder”)
RECITALS:
A. The Corporation and the Awardholder (collectively, the “Parties”) entered into an equity participation agreement (the “Equity Participation Agreement”) dated as of June 2, 2014 (the “Date of Grant”) pursuant to which 364,760 options (the “Options”) were granted to the Awardholder under the terms of the amended and restated equity incentive plan of the Corporation, as amended from time to time (the “Equity Incentive Plan”).
B. The Corporation wishes to amend the Equity Participation Agreement in order to modify the exercise price of the Options to reflect the fair market value of a Common Share of the Corporation on the Date of Grant.
C. Section 12.3 of the Equity Incentive Plan provides that the Equity Participation Agreement may be amended by consent of the Corporation and the Optionholder.
NOW THEREFORE, in consideration of the foregoing, and for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the Parties agree as follows:
1. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to them in the Equity Participation Agreement, as amended herein.
2. Section 2.01 of the Equity Participation Agreement is hereby amended by changing the reference made therein to “5.07” in the fourth line of Section 2.01 to hereafter refer to “6.80”.
3. Except as specifically amended in Section 2 of this Amendment Agreement, the Equity Participation Agreement shall remain in full force and effect, unamended.
4. The Parties agree to sign all other documents and instruments and do all other things as may be required or desirable in order to complete and document the amendments contemplated by the Amendment Agreement.
5. This Amendment shall be governed by, and construed in accordance with, the Laws of the Province of Québec and the federal Laws of Canada applicable in the Province of Québec.
6. This Amendment shall be binding upon and shall enure to the benefit of and be enforceable by each of the Parties hereto and each of their successors and permitted assigns.
7. This Amendment may be executed by the Parties in counterparts and may be executed and delivered by fax or other electronic means, and all such counterparts together constitute one agreement.
8. This Amendment is drawn up in English at the request of all Parties. Les parties aux présentes ont expressément convenu que la présente convention soit rédigée en anglais.
[Signature Pages Follow]
IN WITNESS WHEREOF the Parties have duly executed this Amendment.
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By: |
/s/ Xxxx Xxxxxxxxx |
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Name: Xxxx Xxxxxxxxx | |
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Title: Chief HR Officer | |
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/s/ Xxxxxxx Xxxxxxx |
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XXXXXXX XXXXXXX | |
Amendment to the Equity Participation Agreement
