1
EXHIBIT 10.6
COMPENSATION AGREEMENT
Agreement made as of the _______ day of ___________, 1998 by
and between ISS Group, Inc., a Georgia corporation (the "Corporation"), and
______________ ("Optionee").
W I T N E S S E T H
WHEREAS, in consideration for services performed by Optionee,
the Corporation granted Optionee a stock option on December 8, 1997 to purchase
20,000 shares of the Corporation's Common Stock (the "Option") upon the terms
and conditions set forth in the documentation evidencing such Option.
NOW, THEREFORE, in consideration of the above premises, the
parties hereto agree as follows:
1. The Corporation and Optionee acknowledge and agree that the
Option is granted solely as compensation for services rendered the Corporation
by Optionee and not for any capital-raising purposes or in connection with any
capital-raising activities.
2. The Option shall not be transferable or assignable except
in connection with Optionee's death.
3. This agreement is intended to constitute a written
compensation contract within the meaning of (i) Rule 701 of the Securities Act
of 1933, as amended and (ii) Rule 405 of Regulation C of the Rules promulgated
under the Securities Act of 1933, as amended.
4. This agreement is intended solely to memorialize the
agreement and understanding which exists between Optionee and the Corporation
concerning the grant of the Option. Nothing herein or in the documentation
evidencing the Option is intended to provide Optionee with the right to remain
in the Corporation's service for any specific period, and Optionee's services
may be terminated at any time by the Corporation, for any reason, with or
without cause.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the date first above written.
ISS GROUP, INC.
By:
---------------------------------- -------------------------
,Optionee Authorized Officer
----------------
8
2
ISS GROUP, INC.
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of ISS Group, Inc. (the
"Corporation"):
Optionee:
Grant Date:
Exercise Price:
Number of Option Shares:
Expiration Date:
Type of Option: Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall initially be
unvested and subject to repurchase by the Corporation at the
Exercise Price paid per share. Optionee shall acquire a vested
interest in, and the Corporation's repurchase right shall
accordingly lapse with respect to, the Option Shares in a
series of four (4) successive equal annual installments upon
Optionee's completion of each year of Advisory Board or Board
service over the four (4)-year period measured from the Grant
Date. In no event shall any additional Option Shares vest
after Optionee's cessation of Advisory Board or Board service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the Stock Option Agreement
attached hereto as Exhibit A.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED
OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE
AND SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE
PAID PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE AS A MEMBER OF THE
CORPORATION'S
3
ADVISORY BOARD OR BOARD OF DIRECTORS PRIOR TO VESTING IN THOSE SHARES. THE TERMS
AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE
AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY
OPTIONEE AT THE TIME OF THE OPTION EXERCISE.
No Impairment of Rights. Nothing in this Notice or in the
attached Stock Option Agreement shall interfere with or otherwise restrict in
any way the rights of the Corporation or the Corporation's stockholders to
remove Optionee from the Board at any time in accordance with the provisions of
applicable law.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
, 199
------------------ --
Date
ISS GROUP, INC.
By:
----------------------------------
Title:
-------------------------------
--------------------------------------
OPTIONEE
Address:
-----------------------------
--------------------------------------
ATTACHMENTS
EXHIBIT A - STOCK OPTION AGREEMENT
2
4
EXHIBIT A
STOCK OPTION AGREEMENT
5
ISS GROUP, INC.
STOCK OPTION AGREEMENT
RECITALS
I. The Corporation wishes to make a stock option grant to Optionee in
order to provide such person with an equity incentive to continue in the
Corporation's service.
A. Optionee is to render valuable services to the Corporation as
a non-employee Board member of Corporation (or a Parent or Subsidiary), and this
Agreement is executed in connection with the option grant made to such
individual to purchase shares of Common Stock.
B. The granted option is issued to Optionee in compensation for
the services which Optionee is to render the Corporation and not for any
capital-raising purposes or in connection with any capital-raising activities.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to
Optionee, as of the Grant Date, a Non-Statutory Option to purchase up to the
number of Option Shares specified in the Grant Notice. The Option Shares shall
be purchasable from time to time during the option term specified in Paragraph 2
at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term
of ten (10) years measured from the Grant Date and shall accordingly expire at
the close of business on the Expiration Date, unless sooner terminated in
accordance with Paragraph 5, 6 or 7.
3. LIMITED TRANSFERABILITY. This option may, in
connection with the Optionee's estate plan, be assigned in whole or in part
during Optionee's lifetime to one or more members of the Optionee's immediate
family or to a trust established for the exclusive benefit of one or more such
family members. The assigned portion shall be exercisable only by the person or
persons who acquire a proprietary interest in the option pursuant to such
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Corporation may
deem appropriate. Should the Optionee die while holding this option, then this
option shall be transferred in accordance with Optionee's will or the laws of
descent and distribution.
6
4. EXERCISABILITY/VESTING.
(a) This option shall be immediately exercisable
for any or all of the Option Shares, whether or not the Option Shares are vested
in accordance with the Vesting Schedule set forth on the Grant Notice, and shall
remain so exercisable until the Expiration Date or the sooner termination of the
option term under Paragraph 5, 6 or 7.
(b) Optionee shall, in accordance with the
Vesting Schedule set forth in the Grant Notice, vest in the Option Shares in a
series of installments over his or her period of Board service. Vesting in the
Option Shares may be accelerated pursuant to the provisions of Paragraph 5, 6 or
7. In no event, however, shall any additional Option Shares vest following
Optionee's cessation of service as a Board member.
5. CESSATION OF BOARD SERVICE. Should Optionee's service
as a Board member cease while this option remains outstanding, then the option
term specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:
(i) Should Optionee cease to serve as a Board
member for any reason (other than death or Permanent Disability) while
holding this option, then the period for exercising this option shall
be reduced to a twelve (12)-month period commencing with the date of
such cessation of Board service, but in no event shall this option be
exercisable at any time after the Expiration Date. During such limited
period of exercisability, this option may not be exercised in the
aggregate for more than the number of Option Shares (if any) in which
Optionee is vested on the date Optionee ceases service as a Board
member. Upon the earlier of (i) the expiration of such twelve
(12)-month period or (ii) the specified Expiration Date, the option
shall terminate and cease to be exercisable with respect to any vested
Option Shares for which the option has not been exercised.
(ii) Should Optionee die during the twelve (12)-
month period following his or her cessation of Board service, then the
personal representative of Optionee's estate or the person or persons
to whom the option is transferred pursuant to Optionee's will or in
accordance with the laws of descent and distribution shall have the
right to exercise this option for any or all of the Option Shares in
which Optionee is vested at the time of Optionee's cessation of Board
service (less any Option Shares purchased by Optionee after such
cessation of Board service but prior to death). Such right of exercise
shall terminate, and this option shall accordingly cease to be
exercisable for such vested Option Shares, upon the earlier of (i) the
expiration of the twelve (12)-month period measured from the date of
Optionee's cessation of Board service or (ii) the specified Expiration
Date of the option term.
(iii) Should Optionee cease service as a Board
member by reason of death or Permanent Disability, then all Option
Shares at the time subject to this option but
2.
7
not otherwise vested shall immediately vest in full so that Optionee
(or the personal representative of Optionee's estate or the person or
persons to whom the option is transferred upon Optionee's death) shall
have the right to exercise this option for any or all of the Option
Shares as fully-vested shares of Common Stock at any time prior to the
earlier of (i) the expiration of the twelve (12)-month period measured
from the date of Optionee's cessation of Board service or (ii) the
specified Expiration Date.
(iv) Upon Optionee's cessation of Board service
for any reason other than death or Permanent Disability, this option
shall immediately terminate and cease to be outstanding with respect to
any and all Option Shares in which Optionee is not otherwise at that
time vested in accordance with the normal Vesting Schedule set forth in
the Grant Notice or the special vesting acceleration provisions of
Paragraph 6 or 7 below.
6. CORPORATE TRANSACTION.
(a) In the event of a Corporate Transaction,
all Option Shares at the time subject to this option but not otherwise vested
shall automatically vest so that this option shall, immediately prior to the
specified effective date for the Corporate Transaction, become fully exercisable
for all of the Option Shares at the time subject to this option and may be
exercised for all or any portion of such shares as fully-vested shares of Common
Stock. Immediately following the consummation of the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation or its parent company.
(b) If this option is assumed in connection
with a Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.
7. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
(a) All Option Shares subject to this option at
the time of a Change in Control but not otherwise vested shall automatically
vest so that this option shall, immediately prior to the effective date of such
Change in Control, become fully exercisable for all of the Option Shares at the
time subject to this option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock. This option shall remain
exercisable for such fully-vested Option Shares until the earliest to occur of
(i) the specified Expiration Date, (ii) the sooner termination of this option in
accordance with Paragraph 5 or 6 or (iii) the surrender of this option under
Paragraph 7(b).
3.
8
(b) Optionee shall have an unconditional right
(exercisable during the thirty (30)-day period immediately following the
consummation of a Hostile Take-Over) to surrender this option to the Corporation
in exchange for a cash distribution from the Corporation in an amount equal to
the excess of (i) the Take-Over Price of the Option Shares at the time subject
to the surrendered option (whether or not those Option Shares are otherwise at
the time vested) over (ii) the aggregate Exercise Price payable for such shares.
This Paragraph 7(b) limited stock appreciation right shall in all events
terminate upon the expiration or sooner termination of the option term and may
not be assigned or transferred by Optionee.
(c) To exercise the Paragraph 7(b) limited stock
appreciation right, Optionee must, during the applicable thirty (30)-day
exercise period, provide the Corporation with written notice of the option
surrender in which there is specified the number of Option Shares as to which
the option is being surrendered. Such notice must be accompanied by the return
of Optionee's copy of this Agreement, together with any written amendments to
such Agreement. The cash distribution shall be paid to Optionee within five (5)
business days following such delivery date, and the consent of the Board shall
not be required in connection with such option surrender and cash distribution.
Upon receipt of such cash distribution, this option shall be cancelled with
respect to the shares subject to the surrendered option (or the surrendered
portion), and Optionee shall cease to have any further right to acquire those
Option Shares under this Agreement. The option shall, however, remain
outstanding for the balance of the Option Shares (if any) in accordance with the
terms and provisions of this Agreement, and the Corporation shall accordingly
issue a new stock option agreement (substantially in the same form as this
Agreement) for those remaining Option Shares.
8. ADJUSTMENT IN OPTION SHARES. Should any change be
made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made to (i) the
number and/or class of securities subject to this option and (ii) the Exercise
Price in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder; provided, however, that the aggregate
Exercise Price shall remain the same.
9. STOCKHOLDER RIGHTS. The holder of this option
shall not have any stockholder rights with respect to the Option Shares until
such person shall have exercised the option, paid the Exercise Price and become
a holder of record of the purchased shares.
4.
9
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option for all or
any part of the Option Shares for which the option is at the time exercisable,
Optionee or, in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be, must take the
following actions:
(i) To the extent the option is
exercised for vested Option Shares, the Secretary of the Corporation
shall be provided with written notice of the option exercise (the
"Exercise Notice") in substantially the form of Exhibit I attached
hereto, in which there is specified the number of vested Option Shares
to be purchased under the exercised option. To the extent that the
option is exercised for one or more unvested Option Shares, Optionee
(or other person exercising the option) shall deliver to the Secretary
of the Corporation a Purchase Agreement for those unvested Option
Shares.
(ii) The Exercise Price for the
purchased shares shall be paid in one or more of the following
alternative forms:
- cash or check made payable to the
Corporation's order; or
- shares of Common Stock held by
Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date; or
- to the extent the option is
exercised for vested Option Shares, through a special sale and
remittance procedure pursuant to which Optionee shall provide
irrevocable written instructions (A) to a
Corporation-designated brokerage firm to effect the immediate
sale of the vested shares purchased under the option and remit
to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate
Exercise Price payable for those shares plus the applicable
Federal, state and local income taxes required to be withheld
by the Corporation by reason of such exercise and (B) to the
Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete
the sale.
5.
10
(iii) Appropriate documentation
evidencing the right to exercise this option shall be furnished the
Corporation if the person or persons exercising the option is other
than Optionee.
(iv) Appropriate arrangement must be
made with the Corporation for the satisfaction of all Federal, state
and local income tax withholding requirements applicable to the option
exercise.
(b) Except to the extent the sale and remittance
procedure specified above is utilized in connection with the exercise of the
option for vested Option Shares, payment of the Exercise Price for the purchased
shares must accompany the Exercise Notice or Purchase Agreement delivered to the
Corporation in connection with the option exercise.
(c) As soon as practical after the Exercise
Date, the Corporation shall issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate or certificates
representing the purchased Option Shares. To the extent any such Option Shares
are unvested, the certificates for those Option Shares shall be endorsed with an
appropriate legend evidencing the Corporation's repurchase rights and may be
held in escrow with the Corporation until such shares vest.
(d) In no event may this option be exercised for
fractional shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in
any way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets. Nor shall this Agreement in any way be construed or
interpreted so as to affect adversely or otherwise impair the right of the
Corporation or the stockholders to remove Optionee from the Board at any time in
accordance with the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the
issuance of the Option Shares upon such exercise shall be subject to compliance
by the Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. However, the Corporation shall use its best efforts to
obtain all such applicable approvals.
6.
11
13. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3 or 6, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its successors
and assigns and Optionee, Optionee's assigns and the legal representatives,
heirs and legatees of Optionee's estate.
14. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
Georgia without resort to that State's conflict-of-laws rules.
15. NOTICES. Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
7.
12
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify ISS Group, Inc. (the "Corporation") that I
elect to purchase __________ shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $______ per share (the
"Exercise Price") pursuant to that certain option (the "Option") granted to me
on ___________, 199_ .
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the Exercise
Price for the Purchased Shares in accordance with the provisions of my agreement
with the Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
any Purchased Shares in which I am vested at the time of exercise.
__________________________, 199
Date
_____________________________
Optionee
Address:
____________________
_____________________________
Print name in exact manner
it is to appear on the
stock certificate: _____________________________
Address to which certificate
is to be sent, if different
from address above: _____________________________
_____________________________
_____________________________
Social Security Number: _____________________________
13
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors
including the Advisory Board.
C. CHANGE IN CONTROL shall mean a change in ownership or control
of the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the ▇▇▇▇ ▇▇▇) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of
the Board members described in clause (A) who were still in office at
the time the Board approved such election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or
A-1.
14
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
G. CORPORATION shall mean ISS Group, Inc., a Delaware
corporation.
H. EXERCISE DATE shall mean the date on which the option shall
have been exercised in accordance with Paragraph 10 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price payable per share
as specified in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option term
expires as specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as the
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Board to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
▇. ▇▇▇▇▇ DATE shall mean the date of grant of the option as
specified in the Grant Notice.
▇. ▇▇▇▇▇ NOTICE shall mean the Notice of Grant of Stock Option
accompanying this Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls,
A-2.
15
is controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the ▇▇▇▇ ▇▇▇) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders which the Board
does not recommend such stockholders to accept.
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
P. NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.
Q. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.
R. OPTIONEE shall mean the person to whom the option is granted
as specified in the Grant Notice.
S. PERMANENT DISABILITY shall mean the inability of Optionee to
perform his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
T. PURCHASE AGREEMENT shall mean the stock purchase agreement (in
form and substance satisfactory to the Corporation) which must be executed at
the time the option is exercised for unvested Option Shares and which will
accordingly (i) grant the Corporation the right to repurchase, at the Exercise
Price, any and all of those Option Shares in which Optionee is not otherwise
vested at the time of his or her cessation of service as a Board member and (ii)
preclude the sale, transfer or other disposition of any of the Option Shares
purchased under such agreement while those Option Shares remain subject to the
repurchase right.
U. STOCK EXCHANGE shall mean either the American Stock Exchange
or the New York Stock Exchange.
V. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting the
Hostile Take-Over.
▇. ▇▇▇▇▇▇▇ SCHEDULE shall mean the vesting schedule specified in
the Grant Notice, pursuant to which Optionee will vest in the Option Shares in
one or more installments over his or her period of Board service, subject to
acceleration in accordance with the provisions of the Agreement.
A-3
