Governing law

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This Award is considered valid when you accept it. This Award will be cancelled unless you accept it by 11:59 p.m. Eastern time two business days prior to the end of the Performance Period in the “Grant” section of this Agreement[; provided, however, if your employment is transferring to Kyndryl, you must accept this award no later than September 28, 2021]. [By pressing the Accept button below to accept your Award, you acknowledge having received and read this Equity Award Agreement, the Terms and Conditions document and the Plan under which this Award was granted and] [To record your acceptance of the Award and your acknowledgment that you have received and read this Equity Award Agreement, the Terms and Conditions document and the Plan under which this Award was granted, you must electronically sign this Agreement via Adobe Sign. Further by accepting this Award] you agree (i) not to hedge the economic risk of this Award or any previously-granted outstanding awards, which includes entering into any derivative transaction on IBM securities (e.g., any short sale, put, swap, forward, option, collar, etc.), (ii) to comply with the terms of the Plan, this Equity Award Agreement and the Terms and Conditions document, including those provisions relating to cancellation and rescission of awards and jurisdiction and governing law, and (iii) that by your acceptance of this Award, all awards previously granted to you under the Plan or other IBM Long-Term Performance Plans are subject to (A) jurisdiction, governing law, expenses, taxes and administration section of the Terms and Conditions document (unless you are, and have been for at least 30 days immediately preceding, a resident of or an employee in Massachusetts at the time of the termination of your employment with IBM, in which case the jurisdiction, governing law, expenses, taxes and administration terms of your previous awards shall apply) and (B) any cancellation, rescission or recovery required by applicable laws, rules, regulations or standards, including without limitation any requirements or standards of the U.S. Securities and Exchange Commission or the New York Stock Exchange.

2. Actions, Suits and Proceedings Other than by or in the Right of the Corporation. The Corporation shall indemnify the Indemnified Party in accordance with the provisions of this Agreement if the Indemnified Party is a party or is threatened to be made a party to any Proceeding (other than an action against the Indemnified Party by or in the right of the Corporation) to the greatest extent permitted by governing law against all Expenses actually and reasonably incurred by the Indemnified Party or on the Indemnified Party’s behalf in connection with such Proceeding and any appeal therefrom, unless it is determined by final, non-appealable order of a court of competent jurisdiction that governing law bars and prohibits the Corporation from providing such indemnification; provided further, that notwithstanding anything herein contained to the contrary, any settlement of a Proceeding must be approved in advance in writing by the Corporation (which approval shall not be unreasonably withheld). The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Corporation is barred and prohibited by governing law from providing indemnification to the Indemnified Party.

3. Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify the Indemnified Party in accordance with the provisions of this Agreement if the Indemnified Party is a party, or is threatened to be made a party, to any Proceeding brought against the Indemnified Party by or in the right of the Corporation, to the greatest extent permitted by governing law, against all Expenses actually and reasonably incurred by the Indemnified Party or on the Indemnified Party’s behalf in connection which such Proceeding and any appeal therefrom, unless it is determined by final, non-appealable order of a court of competent jurisdiction that governing law bars and prohibits the Corporation from providing such indemnification; except that indemnification shall be made in respect of any claim, issue or matter as to which the Indemnified Party shall have been adjudged to be liable to the Corporation by final, non-appealable order of a court of competent jurisdiction only to the extent that it is determined by final, non-appealable order of a court of competent jurisdiction, upon application, that, despite the adjudication of such liability but in view of all the circumstances of the case, the Indemnified Party is fairly and reasonably entitled to indemnity for Expenses in respect of such claim, issue or matter to the extent such court shall deem proper.

7. Procedure for Indemnification. Any indemnification or advancement of expenses pursuant to Sections 2, 3, 4, 5 or 6 of this Agreement shall be made promptly, and in any event within thirty (30) days after receipt by the Corporation of the written request of the Indemnified Party. The right to indemnification or advances as granted by this Agreement shall be enforceable by the Indemnified Party in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the thirty (30) day period referred to above. The Indemnified Party’s costs, charges and expenses (including reasonable attorneys’ fees) incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation. Unless otherwise provided by governing law, the burden of proving that the Indemnified Party is not entitled to indemnification or advancement of expenses under this Agreement shall be on the Corporation.

[FOR ASSOCIATES NOT BASED IN CALIFORNIA, CONNECTICUT, OR MASSACHUSETTS: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, “Restrictions”). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory; and Associate will forfeit, and if previously paid, repay any bonus previously paid by the Company to Associate. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company.]

[IF IN MASSACHUSETTS: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, “Restrictions”). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company.]

[IF IN CALIFORNIA: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, “Restrictions”). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory.]

that the Agreements and the Indenture are legally valid, binding and enforceable under their respective governing law (other than Luxembourg law to the extent opined upon herein), that the choices of such governing law and of the jurisdiction clauses are valid (as a matter of such governing law and all other applicable laws (other than Luxembourg law to the extent opined upon herein)) as the choice of the governing law and the submission to the jurisdiction of the chosen courts for the Agreements and the Indenture;

This Award is considered valid when you accept it. This Award will be cancelled unless you accept it by 11:59 p.m. Eastern time two business days prior to the first vesting date in the “Vesting” section of this Agreement. By pressing the Accept button below to accept your Award, you acknowledge having received and read this Equity Award Agreement, the Terms and Conditions document and the Plan under which this Award was granted and you agree (i) not to hedge the economic risk of this Award or any previously-granted outstanding awards, which includes entering into any derivative transaction on IBM securities (e.g., any short sale, put, swap, forward, option, collar, etc.), (ii) to comply with the terms of the Plan, this Equity Award Agreement and the Terms and Conditions document, including those provisions relating to cancellation and rescission of awards and jurisdiction and governing law, and (iii) that by your acceptance of this Award, all awards previously granted to you under the Plan or other IBM Long-Term Performance Plans are subject to jurisdiction, governing law, expenses, taxes and administration section of the Terms and Conditions document (unless you are, and have been for at least 30 days immediately preceding, a resident of or an employee in Massachusetts at the time of the termination of your employment with IBM, in which case the jurisdiction, governing law, expenses, taxes and administration terms of your previous awards shall apply).

All obligations under the Transaction Documents are valid, legally binding upon, validly perfected where required, and enforceable against, the Parties as a matter of all relevant laws (other than, but only to the extent opined upon herein, the laws of Luxembourg), most notably the expressed governing law, and the choice of such governing law is valid and enforceable as a matter of that governing law and all other laws (other than, but only to the extent opined upon herein, Luxembourg law), and there is no provision of the laws of any relevant jurisdiction (other than, but only to the extent opined upon herein, Luxembourg) that would have a bearing on the foregoing.

15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the Governing Law State for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that, if the Governing Law State is Delaware, any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim.

(b) Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to actions or proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Charter or Bylaws relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under, if Delaware is the Governing Law State, Section 145 of the Delaware General Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance Expense payment or insurance recovery, as the case may be.

(a) Scope. The Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Charter, the Bylaws or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a corporation organized under the laws of the Governing Law State (as defined in Section 17) to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a corporation organized under the laws of the Governing Law State to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 9(a) hereof.

(b) Non-Exclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Charter, the Bylaws, any other agreement, any vote of stockholders or disinterested directors, the laws of the Governing Law State, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.

Section 12.9 of the Indenture governing the Exchange Notes contains consents to, or restrictions upon, governing law and jurisdiction. First, with respect to governing law, a court in the Southern District of New York has stated that, even though by New York statute courts are to enforce the parties’ selection of New York law in commercial transactions of $250,0000 or more, the power of the courts to enforce such an election is subject to constitutional limitations.1 Moreover, a court’s determination as to the unenforceability of the governing law provision in the Indenture would be based on the application of constitutional law. Therefore, we believe our opinion requires an explicit exception beyond the bankruptcy and equitable principles exceptions.

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