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): February 3, 2016
ADAPTIVE
MEDIAS, INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
000-54074 |
|
26-0685980 |
(State
or Other Jurisdiction
of
Incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
Number) |
47
Discovery Suite 220
Irvine,
CA 92618
(Address
of principal executive offices) (zip code)
949-525-4466
(Registrant’s
telephone number, including area code)
N/A
(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 (see General Instruction A.2. below):
[ ] |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
[ ] |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
[ ] |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
[ ] |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Effective
February 3, 2016 (the “Effective Date”), Adaptive Medias, Inc. (the “Company”) entered into an executive
employment agreement (the “Agreement”) with the Company’s current Chairman and Chief Executive Officer, John
B. Strong (“Executive”). Pursuant to the Agreement, the term of Executive’s employment shall continue until
the third (3rd) anniversary of the Effective Date, unless terminated earlier pursuant to the terms and conditions thereof.
The
Company will initially pay Executive an annual base salary of $72,000 as compensation for Executive’s services. On January
1, 2017, pursuant to the Agreement, Executive’s annual base salary will increase to $225,000. The Company will pay Executive’s
base salary periodically in accordance with the Company’s normal payroll practices and be subject to required withholdings.
In
connection with the execution of the Agreement, the Company will recommend to the Board of Directors of the Company that the Company
grant Executive an aggregate of 2,250,000 shares of the Company’s common stock (the “Shares”) pursuant to the
terms and conditions of a restricted stock award agreement (the “Award Agreement”). The Shares shall vest as follows:
(i) two-thirds (⅔) of the aggregate number of Shares shall vest as of the Effective Date and (ii) the remaining Shares (the
“Unreleased Shares”) shall vest in three equal annual installments on each anniversary of the Effective Date, subject
to Executive’s continuing to provide services to the Company through each such date.
Additionally,
if Executive’s employment is terminated by the Company without cause or by Executive for good reason (including in connection
with a change of control of the Company that occurs within ninety (90) days of such termination), Executive will be entitled to
(i) all accrued salary and benefits through the date of termination, (ii) a lump-sum payment equal to the greater of (A) the product
of (x) Executive’s then-current base salary and (y) a fraction, the numerator of which is the number of days remaining in
Executive’s three-year employment term after the effective date of termination and the denominator of which is 365 and (B)
twelve (12) months of Executive’s then-current base salary, and (iii) accelerated vesting with respect to any remaining
Unreleased Shares.
The
foregoing descriptions of the Agreement and the Award Agreement are qualified in their entirety by reference to the full text
of the Agreement and the Award Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form
8-K and are incorporated by reference herein.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
10.1
|
Executive
Employment Agreement effective as of February 3, 2016 between the Company and John B. Strong. |
|
|
10.2
|
Restricted
Stock Award Agreement effective as of February 3, 2016 between the Company and John B. Strong. |
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
|
ADAPTIVE
MEDIAS, INC. |
|
|
Date:
February 5, 2016 |
By: |
/s/
Omar Akram |
|
Name: |
Omar
Akram |
|
Title:
|
President |
EXHIBIT
INDEX
Exhibit
No. |
|
Description
|
|
|
|
10.1 |
|
Executive
Employment Agreement effective as of February 1, 2016 between the Company and John B. Strong. |
|
|
|
10.2
|
|
Restricted
Stock Award Agreement effective as of [February 1, 2016] between the Company and John B. Strong.[1] |
[1]
Note to Company: Please confirm the effective date of the Restricted Stock Award Agreement and file such agreement as Exhibit
10.2 to the 8-K.
ADAPTIVE
MEDIAS, INC.
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of February 3, 2016, by and between Adaptive
Medias, Inc., a Nevada corporation (the “Company”), and John Strong (“Executive”).
WHEREAS,
the Company desires to employ Executive on the terms and subject to the conditions set forth herein; and
WHEREAS,
Executive desires to be employed by the Company on such terms and subject to such conditions.
NOW,
THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the parties agree as follows:
1. Duties
and Scope of Employment.
(a) Term.
Executive’s employment hereunder shall be effective as of February 3, 2016 (the “Effective Date”) and
shall continue until the third (3rd) anniversary thereof, unless terminated earlier pursuant to Section 4 of this Agreement.
The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”
(b) Position
and Duties. During the Employment Term, Executive shall serve as the Chief Executive Officer of the Company and shall report
to the Company’s Board of Directors (the “Board”). In such position, Executive shall have the duties,
authority and responsibility as are determined from time to time by the Board, which duties, authority and responsibility are
consistent with the Executive’s position.
(c) Obligations.
During the Employment Term, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability.
For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting
activity for any direct or indirect remuneration without the prior approval of the Board.
2. At-Will
Employment. The parties agree that Executive’s employment with the Company will be “at-will” employment
and may be terminated at any time with or without Cause or notice. Executive understands and agrees that neither Executive’s
job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis
for modification, amendment, or extension, by implication or otherwise, of Executive’s employment with the Company. However,
as described in this Agreement, Executive may be entitled to severance benefits depending on the circumstances of Executive’s
termination of employment with the Company.
3. Compensation.
(a)
Base Salary. The Company will initially pay Executive an annual base salary of $72,000 as compensation for Executive’s
services. On January 1, 2017, Executive’s annual base salary shall be increased to $225,000. Executive’s annual base
salary, as in effect from time to time, is referred to herein as Executive’s “Base Salary”. Executive’s
Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to required
withholdings.
(b) Restricted
Stock. In connection with the execution of this Agreement, the Company will recommend that the Board grant Executive 2,250,000
shares of the Company’s common stock (the “Shares”) at the fair market value per share of the common
stock on the date of this agreement and the execution of a restricted stock award agreement (the “Award Agreement”)
on the Company’s standard form. Two-thirds (%) of the total number of shares Shares (the “Released Shares”)
shall vest (as defined in the Award Agreement) as of the Effective Date (the “Vesting Commencement Date”)
and will not be subject to the Company’s repurchase option set forth in the Award Agreement. One-third (A3) of the remaining
Shares (the “Unreleased Shares”) shall vest on the first anniversary of the Vesting Commencement Date, and
an additional one-third (A) of the Unreleased Shares shall vest each year thereafter on the same day and month as the Vesting
Commencement Date, subject to Executive’s continuing to provide services to the Company through each such date and the accelerated
vesting provisions set forth herein.
(c) Change
of Control. In the event that a Change of Control (as defined below) occurs during the Employment Term or during the ninety
(90) day period following the effective date of any termination of Executive’s employment pursuant to Section 4(a), then:
(i) Executive shall be entitled to receive a lump-sum cash bonus payment (the “Change of Control Bonus”) in
an amount equal to the greater of (A) the product of (x) Executive’s Base Salary, as then in effect, and (y) a fraction,
the numerator of which is the number of days remaining in the Employment Term after the effective date of termination and the
denominator of which is 365 (less applicable withholdings) and (B) twenty four (24) months of Executive’s Base Salary, as
then in effect (less applicable withholdings); and (ii) Executive will be entitled to accelerated vesting with respect to 100%
of the Unreleased Shares, subject to Executive’s continuing to provide services to the Company through such date. As used
in this Agreement, “Change of Control” means (A) any transaction or series of transactions whereby all, or
substantially all, of the assets of the Company are sold, leased, exchanged or transferred, or (B) any person or entity, or group
of affiliated persons or entities, becomes, directly or indirectly, the owner of securities of the Company which represent fifty
percent (50%) or more of the combined voting power or equity of the Company’s then-outstanding securities. This Section
3(c) shall terminate upon the first occurrence of a Change of Control.
(d) Employee
Benefits. During the Employment Term, Executive will be entitled to participate in the employee benefit plans currently and
hereafter maintained by the Company of general applicability to members of senior management of the Company. The Company reserves
the right to cancel or change the benefit plans and programs it offers to its employees at any time.
(e) Expenses.
The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense
reimbursement policies and procedures, as in effect from time to time. All such expenses incurred by Executive in one calendar
year must be reimbursed no later than the last day of the next calendar year. Executive’s right to reimbursement is not
subject to liquidation or exchange for any other benefit.
4.
Termination. The Employment Term and Executive’s employment hereunder may be terminated by either the Company or
Executive at any time and for any reason; provided, however, that, unless otherwise provided herein, Executive shall be required
to give the Company at least one (1) month prior written notice of any termination of Executive’s employment by Executive.
Upon termination of the Executive’s employment during the Employment Term, Executive shall be entitled to the compensation
and benefits described in this Section 4 and shall have no further rights to any compensation or any other benefits from the Company
or any of its affiliates.
(a) Termination
for Reasons other than Cause, Death or Disability or Resignation with Good Reason. If (i) the Company (or any parent or subsidiary
or successor of the Company) terminates Executive’s employment with the Company other than for Cause, death or Disability,
or (ii) Executive resigns from such employment for Good Reason, then, subject to Section 5, Executive will be entitled to the
following:
(i) Severance
Benefits. Executive will be entitled to (A) a lump-sum payment of severance pay equal to the greater of (I) the product of
(x) Executive’s Base Salary, as then in effect, and (y) a fraction, the numerator of which is the number of days remaining
in the Employment Term after the effective date of termination and the denominator of which is 365 (less applicable withholdings)
and (II) twelve (12) months of Executive’s Base Salary, as then in effect (less applicable withholdings); and (B) provided
that Executive timely elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) for Executive and Executive’s eligible dependents, reimbursement from the Company for
the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to her termination) for up to Twenty
Four (24) months following the termination date, as long as Executive remains eligible for COBRA; provided, however, that if the
Company determines that reimbursed COBRA premiums would be deemed to be discriminatory or to otherwise violate the then-applicable
provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, and
the guidance and regulations issued thereunder, the Company will in lieu thereof provide to Executive a taxable monthly payment,
payable on the last day of a given month, in an amount equal to the monthly COBRA premium that Executive would be required to
pay to continue Executive’s group health coverage in effect on the termination of employment date (which amount will be
based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether Executive elects
COBRA continuation coverage and will commence on the month following Executive’s termination of employment and will end
on the earlier of (x) the date upon which Executive obtains other employment or (y) the date the Company has paid an amount equal
to twenty four (24) such monthly payments. For the avoidance of doubt, the taxable payments in lieu of COBRA reimbursements may
be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to all applicable
tax withholding.
(ii) Accelerated
Vesting. Executive will be entitled to accelerated vesting with respect to 100% of the Unreleased Shares.
(b) Termination
for Cause, Death or Disability; Resignation without Good Reason. If Executive’s employment with the Company (or any
parent or subsidiary or successor of the Company) terminates voluntarily by Executive (except upon resignation for Good Reason),
for Cause by the Company or due to Executive’s death or disability, then all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to amounts already earned), and Executive will only be eligible for
severance benefits in accordance with the Company’s established policies, if any, as then in effect.
(c)
Exclusive Remedy. In the event of a termination of Executive’s employment with the Company (or any parent or successor
of the Company), the provisions of this Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies
to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement.
Executive will be entitled to no severance or other benefits upon termination of employment other than those benefits expressly
set forth in this Section 4.
5. Conditions
to Receipt of Severance; No Duty to Mitigate.
(a) Separation
Agreement and Release of Claims. The receipt of any severance pursuant to Section 4(a) will be subject to Executive signing
and not revoking a separation agreement and release of claims in a form reasonably satisfactory to the Company (the “Release”)
and provided that such Release becomes effective and irrevocable no later than sixty (60) days following the termination date
(such deadline, the “Release Deadline”). The Release will be provided to Executive within five (5) days of
Executive’s termination of employment and the Release will provide Executive with twenty-one (21) or forty-five (45) days,
depending on the circumstances, to consider whether to sign the Release. If the Release does not become effective and irrevocable
by the Release Deadline, Executive will forfeit any rights to severance or benefits under this Agreement. In no event will severance
payments or benefits be paid or provided until the Release becomes effective and irrevocable.
(b) Nonsolicitation.
The receipt of any severance benefits pursuant to Section 4(a) will be subject to Executive not violating the obligations of Executive
under Section 14 (Solicitation of Employees). In the event Executive breaches such obligations, all continuing payments and benefits
to which Executive may otherwise be entitled pursuant to Section 4(a) will immediately cease.
(c) Section
409A. Notwithstanding anything in this Agreement to the contrary, no severance payment will be made pursuant to Section 6(a)
prior to Executive’s “separation from service” as defined in Treasury Regulation Section 1.409A-1(h). It is
intended that the payment described in Section 6(a) qualify for the “short-term deferral” exception to Section 409A
of the Code and each provision of this Agreement shall be interpreted, to the extent possible, consistent with that intent. Nevertheless,
the Company cannot, and does not, guarantee any particular tax effect or treatment of the severance amount due pursuant to Section
6(a) of this Agreement. Except for the Company’s responsibility to withhold applicable income and employment taxes from
compensation paid or provided to Executive, the Company will not be responsible for the payment of any applicable taxes on compensation
paid or provided to Executive. The Company and Executive agree to work together in good faith to consider amendments to this Agreement
and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition prior to actual payment to Executive under Section 409A of the Code.
(d) Compliance
with this Agreement. Executive’s receipt of any payments or benefits under Section 4 will be subject to Executive continuing
to comply with the terms of this Agreement.
(e) No
Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor
will any earnings that Executive may receive from any other source reduce any such payment.
6. Definitions.
(a)
Cause. For purposes of this Agreement, “Cause” is defined as: (i) Executive’s conviction of, or
plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude; (ii)
Executive’s gross misconduct; (iii) Executive’s unauthorized use or disclosure of any proprietary information or trade
secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s
relationship with the Company;
(iv)
Executive’s willful breach of any obligations under any written agreement or covenant with the Company; or (v) Executive’s
continued failure to perform Executive’s employment duties after Executive has received a written demand of performance
from the Company which specifically sets forth the factual basis for the Company’s belief that Executive has not substantially
performed Executive’s duties and has failed to cure such non-performance to the Company’s satisfaction within ten
(10) business days after receiving such notice.
(b) Code.
For purposes of this Agreement, “Code” means the Internal Revenue Code of 1986, as amended.
(c) Disability.
For purposes of this Agreement, “Disability” shall be deemed to exist if a medical doctor selected by the Company
certifies that Executive is unable, despite reasonable accommodation, to perform the essential functions of his current position
due to physical or mental illness, injury or other medical condition for a period of not less than six (6) full months in any
twelve (12) month period; provided, however, that in the event the Company temporarily replaces Executive, or transfers
Executive’s duties or responsibilities to another individual on account of Executive’s inability, despite reasonable
accommodation, to perform such functions due to a physical or mental illness, injury or other medical condition that is, or is
reasonably expected to become, a Disability, then Executive’s employment shall not be deemed terminated by the Company and
Executive shall not be able to resign with Good Reason as a result thereof.
(d) Good
Reason. For the purposes of this Agreement, “Good Reason” means Executive’s resignation within thirty
(30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the
following, without Executive’s express written consent: (i) a material reduction of Executive’s authority, duties,
position or responsibilities, or the removal of Executive from such position and responsibilities, either of which results in
a material diminution of Executive’s authority, duties or responsibilities (other than temporarily while Executive is physically
or mentally incapacitated or as required by applicable law); (ii) a material reduction in Executive’s Base Salary other
than a general reduction in Base Salary that affects all similarly situated executives in substantially the same proportions;
or (iii) a material change in the geographic location of Executive’s primary work facility or location; provided, however,
that a relocation of less than forty (40) miles from Executive’s then present location will not be considered a material
change in geographic location. Executive will not resign for Good Reason without first providing the Company with written notice
of the acts or omissions constituting the grounds for “Good Reason” within ninety (90) days of the initial existence
of the grounds for “Good Reason” and a reasonable cure period of not less than thirty (30) days following the date
the Company receives such notice during which such condition must not have been cured.
7.
Limitation on Payments. None of the payments provided by this Agreement are intended to be contingent upon a change in
control event as described in Section 280G of the Code. However, in the unlikely event that the Company concludes, based upon
the advice of counsel, that any payment or benefit hereunder or otherwise payable to Executive constitutes a “parachute
payment” (as defined in Section 280G(b)(2) of the Code), and the net after-tax amount of any such parachute payment
is less than the net after-tax amount if the aggregate payments and benefits to be made to Executive were three times Executive’s
“base amount” (as defined in Section 280G(b)(3) of the Code), less $1.00, then the aggregate of the amounts
constituting the parachute payments shall be reduced to an amount equal to three times Executive’s base amount, less $1.00,
and the following provisions of this Section 7 shall apply :
(a) The
For purposes of determining the “net after-tax amount,” the Company will cause to be taken into account all applicable
federal, state and local income and employment taxes and the excise taxes (all computed at the highest applicable marginal rate,
net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes).
If a reduction pursuant to this Section 7 is to occur, Executive will have no rights to any additional payments and/or benefits
that are being reduced, and (y) reduction in payments and/or benefits will occur in the following order: (i) reduction of cash
payments, if any, which shall occur in reverse chronological order such that the cash payment owed on the latest date following
the occurrence of the event triggering such excise tax will be the first cash payment to be reduced; and (ii) reduction of other
benefits, if any, paid to Executive, which shall occur in reverse chronological order such that the benefit owed on the latest
date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced. Notwithstanding,
any excise tax imposed will be solely the responsibility of Executive. Notwithstanding the foregoing, to the extent the Company
submits any payment or benefit otherwise payable to Executive under this Agreement or otherwise to the Company’s stockholders
for approval in accordance with Treasury Regulation Section 1.280G-1 Q&A 7, the and such payments and benefits will be treated
in accordance with the results of such vote, the foregoing provisions shall not apply following such submission and such payments
and benefits will be treated in accordance with the results of such vote, except that any reduction in, or waiver of, such payments
or benefits required by such vote will be applied without any application of discretion by the Participant and in the order prescribed
by this Section 7. In no event shall the Participant have any discretion with respect to the ordering of Executive’s payment
reductions.
(b) Unless
the Company and Executive otherwise agree in writing, any determination required under this Section 7 will be made in writing
by a nationally recognized firm of independent public accountants selected by the Company, the Company’s legal counsel or
such other person or entity to which the Parties mutually agree (the “Firm”), whose determination will be conclusive
and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section
7, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the
Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The
Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 7.
8.
Confidentiality.
(a)
Definition of Confidential Information. Executive understands that “Company Confidential Information”
means information (including any and all combinations of individual items of information) that the Company has or will develop,
acquire, create, compile, discover or own, that has value in or to the Company’s business which is not generally known and
which the Company wishes to maintain as confidential. Company Confidential Information includes both information disclosed by
the Company to Executive, and information developed or learned by Executive during the course of Executive’s employment
with Company. Company Confidential Information also includes all information of which the unauthorized disclosure could be detrimental
to the interests of Company, whether or not such information is identified as Company Confidential Information. By example, and
without limitation, Company Confidential Information includes any and all non-public information that relates to the actual or
anticipated business and/or products, research or development of the Company, or to the Company’s technical data, trade
secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s
products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company
on which Executive called or with which Executive may become acquainted during the Employment Term), software, developments, inventions,
discoveries, ideas, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing,
finances, and other business information disclosed by the Company either directly or indirectly in writing, orally or by drawings
or inspection of premises, parts, equipment, or other Company property. Notwithstanding the foregoing, Company Confidential Information
shall not include any such information which Executive can establish (i) was publicly known or made generally available prior
to the time of disclosure by Company to Executive; (ii) becomes publicly known or made generally available after disclosure by
Company to me through no wrongful action or omission by Executive; or (iii) is in Executive’s rightful possession, without
confidentiality obligations, at the time of disclosure by Company as shown by Executive’s then-contemporaneous written records;
provided that any combination of individual items of information shall not be deemed to be within any of the foregoing exceptions
merely because one or more of the individual items are within such exception, unless the combination as a whole is within such
exception. Executive understands that nothing in this Agreement is intended to limit employees’ rights to discuss the terms,
wages, and working conditions of their employment, as protected by applicable law.
(b) Nonuse
and Nondisclosure. Executive agrees that during and after Executive’s employment with the Company, Executive will hold
in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Company Confidential
Information, and Executive will not (i) use the Company Confidential Information for any purpose whatsoever other than for the
benefit of the Company in the course of Executive’s employment, or (ii) disclose the Company Confidential Information to
any third party without the prior written authorization of the President of the Company. Prior to disclosure when compelled by
applicable law; Executive shall provide prior written notice to the President of the Company, as applicable. Executive agrees
that Executive obtains no title to any Company Confidential Information, and that as between Company and Executive, the Company
retains all Confidential Information as the sole property of the Company. Executive understands that Executive’s unauthorized
use or disclosure of Company Confidential Information during Executive’s employment may lead to disciplinary action, up
to and including immediate termination and legal action by the Company. Executive understands that Executive’s obligations
under this Section 8(b) shall continue after termination of Executive’s employment.
(c) Former
Employer Confidential Information. Executive agrees that during Executive’s employment with the Company, Executive will
not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former employer
or other person or entity with which Executive has an obligation to keep in confidence. Executive further agrees that Executive
will not bring onto the Company’s premises or transfer onto the Company’s technology systems any unpublished document,
proprietary information, or trade secrets belonging to any such third party unless disclosure to, and use by, the Company has
been consented to in writing by such third party.
(d) Third
Party Information. Executive recognizes that the Company has received and in the future will receive from third parties associated
with the Company, e.g., the Company’s customers, suppliers, licensors, licensees, partners, or collaborators (“Associated
Third Parties”), their confidential or proprietary information (“Associated Third Party Confidential Information”)
subject to a duty on the Company’s part to maintain the confidentiality of such Associated Third Party Confidential
Information and to use it only for certain limited purposes. By way of example, Associated Third Party Confidential Information
may include the habits or practices of Associated Third Parties, the technology of Associated Third Parties, requirements of Associated
Third Parties, and information related to the business conducted between the Company and such Associated Third Parties. Executive
agrees at all times during Executive’s employment with the Company and thereafter, that Executive owes the Company and its
Associated Third Parties a duty to hold all such Associated Third Party Confidential Information in the strictest confidence,
and not to use it or to disclose it to any person, firm, corporation, or other third party except as necessary in carrying out
Executive’s work for the Company consistent with the Company’s agreement with such Associated Third Parties. Executive
further agrees to comply with any and all Company policies and guidelines that may be adopted from time to time regarding Associated
Third Parties and Associated Third Party Confidential Information. Executive understands that Executive’s unauthorized use
or disclosure of Associated Third Party Confidential Information or violation of any Company policies during Executive’s
employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company.
9.
Ownership.
(a) Assignment
of Inventions. As between the Company and Executive, Executive agrees that all right, title, and interest in and to any and
all copyrightable material, notes, records, drawings, designs, logos, inventions, improvements, developments, discoveries, ideas
and trade secrets conceived, discovered, authored, invented, developed or reduced to practice by Executive, solely or in collaboration
with others, during the period of time Executive is in the employ of the Company (including during Executive’s off-duty
hours), or with the use of Company’s equipment, supplies, facilities, or Company Confidential Information, and any copyrights,
patents, trade secrets, mask work rights or other intellectual property rights relating to the foregoing (collectively, “Inventions”),
are the sole property of the Company. Executive also agrees to promptly make full written disclosure to the Company of any
Inventions, and to deliver and assign and hereby irrevocably assign fully to the Company all of Executive’s right, title
and interest in and to Inventions. Executive agrees that this assignment includes a present conveyance to the Company of ownership
of Inventions that are not yet in existence. Executive further acknowledges that all original works of authorship that are made
by Executive (solely or jointly with others) within the scope of and during the period of Executive’s employment with the
Company and that are protectable by copyright are “works made for hire,” as that term is defined in the United States
Copyright Act. Executive understands and agree that the decision whether or not to commercialize or market any Inventions is within
the Company’s sole discretion and for the Company’s sole benefit, and that no royalty or other consideration will
be due to Executive as a result of the Company’s efforts to commercialize or market any such Inventions.
(b) Pre-Existing
Materials. Executive will inform the Company in writing before incorporating any inventions, discoveries, ideas, original
works of authorship, developments, improvements, trade secrets and other proprietary information or intellectual property rights
owned by Executive or in which Executive has an interest prior to, or separate from, Executive’s employment with the Company,
including, without limitation, any such inventions that are subject to the California Labor Code Section 2870 (attached hereto
as Exhibit B) (“Prior Inventions”) into any Invention or otherwise utilizing any such Prior Invention
in the course of Executive’s employment with the Company; and the Company is hereby granted a nonexclusive, royalty-free,
perpetual, irrevocable, transferable worldwide license (with the right to grant and authorize sublicenses) to make, have made,
use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise
exploit such Prior Inventions, without restriction, including, without limitation, as part of or in connection with such Invention,
and to practice any method related thereto. Executive will not incorporate any inventions, discoveries, ideas, original works
of authorship, developments, improvements, trade secrets and other proprietary information or intellectual property rights owned
by any third party into any Invention without the Company’s prior written permission. Executive has attached hereto as Exhibit
A, a list describing all Prior Inventions or, if no such list is attached, Executive represents and warrants that there are
no such Prior Inventions. Furthermore, Executive represents and warrants that if any Prior Inventions are included on Exhibit
A, they will not materially affect Executive’s ability to perform Executive’s obligations under this Agreement.
(c) Moral
Rights. Any assignment to the Company of Inventions includes all rights of attribution, paternity, integrity, modification,
disclosure and withdrawal, and any other rights throughout the world that may be known as or referred to as “moral rights,”
“artist’s rights,” “droit moral,” or the like (collectively, “Moral Rights”).
To the extent that Moral Rights cannot be assigned under applicable law, Executive hereby waives and agrees not to enforce any
and all Moral Rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under
applicable law.
(d) Maintenance
of Records. Executive agrees to keep and maintain adequate, current, accurate, and authentic written records of all Inventions
made by Executive (solely or jointly with others) during the Employment Term. The records will be in the form of notes, sketches,
drawings, electronic files, reports, or any other format that may be specified by the Company. As between Company and Executive,
the records are and will be available to and remain the sole property of the Company at all times.
(e) Further
Assurances. Executive agrees to assist the Company, or its designee, at the Company’s expense, in every proper way to
secure the Company’s rights in the Inventions in any and all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, and all other
instruments that the Company shall deem proper or necessary in order to apply for, register, obtain, maintain, defend, and enforce
such rights, and in order to deliver, assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive
rights, title, and interest in and to all Inventions, and testifying in a suit or other proceeding relating to such Inventions.
Executive further agrees that Executive’s obligations under this Section 9(e) shall continue after the termination of this
Agreement.
(f) Attorney-in-Fact.
Executive agrees that, if the Company is unable because of Executive’s unavailability, mental or physical incapacity, or
for any other reason to secure Executive’s signature with respect to any Inventions, including, without limitation, for
the purpose of applying for or pursuing any application for any United States or foreign patents or mask work or copyright registrations
covering the Inventions assigned to the Company in Section 9(a), then Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact, to act for and on Executive’s
behalf to execute and file any papers and oaths, and to do all other lawfully permitted acts with respect to such Inventions to
further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as
if executed by Executive. This power of attorney shall be deemed coupled with an interest, and shall be irrevocable.
10.
Conflicting Obligations.
(a) Current
Obligations. Executive agrees that during the Employment Term, Executive will not engage in or undertake any other employment,
occupation, consulting relationship, or commitment that is directly related to the business in which the Company is now involved
or becomes involved or has plans to become involved, nor will Executive engage in any other activities that conflict with Executive’s
obligations to the Company.
(b) Prior
Relationships. Without limiting Section 10(a), Executive represents and warrants that Executive has no other agreements, relationships,
or commitments to any other person or entity that conflict with the provisions of this Agreement, Executive’s obligations
to the Company under this Agreement, or Executive’s ability to become employed and perform the services for which Executive
is being hired by the Company. Executive further agrees that if Executive has signed a confidentiality agreement or similar type
of agreement with any former employer or other entity, Executive will comply with the terms of any such agreement to the extent
that its terms are lawful under applicable law. Executive represents and warrants that after undertaking a careful search (including
searches of Executive’s computers, cell phones, electronic devices, and documents), Executive has returned all property
and confidential information belonging to all prior employers (and/or other third parties Executive has performed services for
in accordance with the terms of Executive’ applicable agreement). Moreover, Executive agrees to fully indemnify the Company,
its directors, officers, agents, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor
and successor corporations, and assigns for all verdicts, judgments, settlements, and other losses incurred by any of them resulting
from Executive’s breach of Executive’s obligations under any agreement with a third party to which Executive is a
party or obligation to which Executive is bound, as well as any reasonable attorneys’ fees and costs if the plaintiff is
the prevailing party in such an action, except as prohibited by law.
11.
Return of Company Materials.
(a) Definition
of Electronic Media Equipment and Electronic Media Systems. Executive understands that “Electronic Media Equipment”
includes, but is not limited to, computers, external storage devices, thumb drives, handheld electronic devices, telephone
equipment, and other electronic media devices. Executive understands that “Electronic Media Systems” includes,
but is not limited to, computer servers, messaging and email systems or accounts, and web-based services (including cloud-based
information storage accounts), whether provided for Executive’s use directly by the company or by third-party providers
on behalf of the Company.
(b) Return
of Company Property. Executive understands that anything that Executive created or worked on for the Company while working
for the Company belongs solely to the Company and that Executive cannot remove, retain, or use such information without the Company’s
express written permission. Accordingly, upon separation from employment with the Company or upon the Company’s request
at any other time, Executive will immediately deliver to the Company, and will not keep in Executive’s possession, recreate,
or deliver to anyone else, any and all Company property, including, but not limited to, Company Confidential Information, Associated
Third Party Confidential Information, all Company equipment including all Company Electronic Media Equipment, all tangible embodiments
of the Inventions, all electronically stored information and passwords to access such property, Company credit cards, records,
data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials,
photographs, charts, any other documents and property, and reproductions of any of the foregoing items, including, without limitation,
those records maintained pursuant to Section 9(d).
(c) Return
of Company Information on Company Electronic Media Equipment. In connection with Executive’s obligation to return information
to the Company, Executive agrees that Executive will not copy, delete, or alter any information, including personal information
voluntarily created or stored, contained upon Executive’s Company Electronic Media Equipment before Executive returns the
information to the Company.
(d) Return
of Company Information on Personal Electronic Media Equipment. In addition, if Executive has used any personal Electronic
Media Equipment or personal Electronic Media Systems to create, receive, store, review, prepare or transmit any Company information,
including but not limited to, Company Confidential Information, Executive agrees to make a prompt and reasonable search for such
information in good faith, including reviewing any personal Electronic Media Equipment or personal Electronic Media Systems to
locate such information and if Executive locates such information, Executive agrees to notify the Company of that fact and then
provide the Company with a computer- useable copy of all such Company information from those equipment and systems; and Executive
agrees to cooperate reasonably with the Company to verify that the necessary copying is completed (including upon request providing
a sworn declaration confirming the return of property and deletion of information), and, upon confirmation of compliance by the
Company, Executive agrees to delete and expunge all Company information.
(e) No
Expectation of Privacy in Company Property. Executive understands that Executive has no expectation of privacy in Company
property, and Executive agrees that any Company property situated on Company premises, or held by third-party providers for the
benefit of the Company, is subject to inspection by Company personnel at any time with or without further notice. Executive also
understands and agrees that as it relates to the Company’s desire to protect its confidential and proprietary information,
Executive has no expectation of privacy as to any personal Electronic Media Equipment or personal Electronic Media Systems that
Executive has used for Company purposes. Executive further agrees that the Company, at its sole discretion, may have access to
such personal Electronic Media Equipment or personal Electronic Media Systems to retrieve, destroy, or ensure the permanent deletion
of Company information from such equipment or systems. Executive also consents to an exit interview and an audit to confirm Executive’s
compliance with this Section 11, and Executive will certify in writing that Executive has complied with the requirements of this
Section 11.
(f) Exception
to Assignments. I UNDERSTAND THAT THE PROVISIONS OF THIS AGREEMENT REQUIRING ASSIGNMENT OF INVENTIONS (AS DEFINED UNDER SECTION
9(a) ABOVE) TO THE COMPANY DO NOT APPLY TO ANY INVENTION THAT QUALIFIES FULLY UNDER THE PROVISIONS OF CALIFORNIA LABOR CODE SECTION
2870 (ATTACHED HERETO AS EXHIBIT B). I WILL ADVISE THE COMPANY PROMPTLY IN WRITING OF ANY INVENTIONS THAT I BELIEVE MEET
THE CRITERIA IN CALIFORNIA LABOR CODE SECTION 2870 AND ARE NOT OTHERWISE DISCLOSED ON EXHIBIT A TO PERMIT A DETERMINATION
OF OWNERSHIP BY THE COMPANY. ANY SUCH DISCLOSURE WILL BE RECEIVED IN CONFIDENCE.
12. Termination
Certification. Upon separation from employment with the Company, Executive agrees to immediately sign and deliver to the Company
the termination certification attached hereto as Exhibit C. Executive also agrees to keep the Company advised of Executive’s
home and business address for a period of three (3) years after termination of Executive’s employment with the Company,
so that the Company can contact Executive regarding Executive’s continuing obligations under by this Agreement.
13. Notification
of New Employer. In the event that Executive leaves the employ of the Company, Executive hereby grants consent to notification
by the Company to Executive’s new employer about Executive’s obligations under this Agreement.
14. Solicitation
of Employees. To the fullest extent permitted under applicable law, Executive agrees that during Executive’s employment
and for a period of twelve (12) months immediately following the termination of Executive’s relationship with the Company
for any reason, whether voluntary or involuntary, with or without cause, Executive will not directly or indirectly solicit any
of the Company’s employees to leave their employment at the Company. Executive agrees that nothing in this Section 14 shall
affect Executive’s continuing obligations under this Agreement during and after this twelve (12) month period, including,
without limitation, Executive’s obligations under Section 8.
15. Company
Policies. Executive agrees to diligently adhere to all policies of the Company, including the Company’s as may be in
effect from time to time during the Employment Term.
16. Representations.
Without limiting Executive’s obligations under Section 9(e) above, Executive agrees to execute any proper oath or verify
any proper document required to carry out the terms of this Agreement. Executive represents and warrants that Executive’s
performance of all the terms of this Agreement will not breach any agreement to keep in confidence information acquired by Executive
in confidence or in trust prior to Executive’s employment by the Company. Executive hereby represents and warrants that
Executive has not entered into, and Executive will not enter into, any oral or written agreement in conflict herewith.
17. Assignment.
This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted
for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any
person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly
acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form
of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.
Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other
benefits will be null and void.
18. Notices.
All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on
the date of delivery if delivered personally, (ii) one (1) day after being sent by a well-established commercial overnight service,
or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to
the parties or their successors, if to the Company, to the attention of the President at the address set forth on the signature
page hereto, and if to Executive, at the address set forth on the signature page hereto, or, in either case, at such other addresses
as the parties may later designate in writing.
19. Severability.
In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement will continue in full force and effect without said provision.
20. Arbitration.
Executive agrees that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer,
director, stockholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting
from Executive’s service to the Company, shall be subject to arbitration in accordance with the provisions of the Confidentiality
Agreement incorporated herein by this reference as though fully set forth herein.
21. Integration.
This Agreement, together with the Award Agreement, represents the entire agreement and understanding between the parties as to
the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. This Agreement may be
modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to
this Agreement.
22. Waiver
of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as
or be construed to be a waiver of any other previous or subsequent breach of this Agreement.
23. Headings.
All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.
24. Tax
Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.
25. Governing
Law; Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of California
without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this Agreement shall
be brought only in a state or federal court located in Orange County, California. The parties hereby irrevocably submit to the
exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding
in such venue.
26. Acknowledgment.
Executive acknowledges that Executive has had the opportunity to discuss this matter with and obtain advice from Executive’s
private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement,
and is knowingly and voluntarily entering into this Agreement.
27. Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be
deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[Remainder
of page intentionally left blank.]
IN
WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first written above.
|
“COMPANY” |
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ADAPTIVE
MEDIAS, INC.,
a
Nevada corporation |
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By: |
/s/
Omar Akram |
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Name: |
Omar
Akram |
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Title: |
President |
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Address: |
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Adaptive
Medias, Inc. |
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47
Discovery, Suite 220 |
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Irvine,
California 92618 |
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Attention:
President |
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“EXECUTIVE” |
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/s/
John Strong |
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John
Strong |
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Address: |
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123
15th street |
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Albuquerque,
NM 87104 |
[Signature
page to Executive Employment Agreement]
Exhibit
A
LIST
OF PRIOR INVENTIONS
AND
ORIGINAL WORKS OF AUTHORSHIP
EXCLUDED
UNDER SECTION 9
Title
of Invention |
|
Date |
|
Identifying
Number
or
Brief Description |
|
|
|
|
|
[X]
No prior inventions, original works of authorship or improvements.
[ ]
Additional sheets attached
Date: |
1-29-16 |
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/s/
John Strong |
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John
Strong |
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|
|
|
Address: |
|
|
|
123
15th street |
|
|
|
Albuquerque,
NM 87104 |
Exhibit
B
CALIFORNIA
LABOR CODE SECTION 2870
INVENTION
ON OWN TIME-EXEMPTION FROM AGREEMENT
“(a)
Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own
time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions
that either:
(1) relate
at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably
anticipated research or development of the employer; or
(2) result
from any work performed by the employee for the employer.
(b)
To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded
from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”
Exhibit
C
ADAPTIVE
MEDIAS, INC.
TERMINATION
CERTIFICATION
This
certification is delivered pursuant to the terms of an Executive Employment Agreement (the “Executive Employment Agreement”)
entered into between Adaptive Medias, Inc., a Nevada corporation (the “Company”), and John Strong (“Executive”).
Executive
hereby certifies that Executive does not have in Executive’s possession, nor has Executive failed to return, any devices,
records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment,
any other documents or property, or reproductions of any and all aforementioned items belonging to the Company or its subsidiaries,
affiliates, successors or assigns (together, the “Company”).
Executive
further certifies that Executive has complied with all the terms of the Executive Employment Agreement, including the reporting
of any inventions and original works of authorship (as defined therein) conceived or made by Executive (solely or jointly with
others), as covered by the Executive Employment Agreement.
Executive
further agrees that, in compliance with the Executive Employment Agreement, Executive will preserve as confidential all Company
Confidential Information and Associated Third Party Confidential Information, including trade secrets, confidential knowledge,
data, or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental
work, computer programs, databases, other original works of authorship, customer lists, business plans, financial information,
or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants, or licensees.
Executive
also agrees that for twelve (12) months from this date, Executive will not directly or indirectly solicit any of the Company’s
employees to leave their employment at the Company. Executive agree that nothing in this paragraph shall affect Executive’s
continuing obligations under the Executive Employment Agreement during and after this twelve (12) month period, including, without
limitation, Executive’s obligations under Section 8 (Confidentiality) thereof.
After
leaving the Company’s employment, Executive will be employed by in
the position of .
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“EXECUTIVE” |
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Date: |
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John
Strong |
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Address: |
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ADAPTIVE
MEDIAS, INC.
RESTRICTED
STOCK GRANT NOTICE AND AGREEMENT
ADAPTIVE
MEDIAS, INC., a Nevada corporation (the “Company”), pursuant to its 2010 Stock Incentive Plan, as amended from time
to time (the “Plan”), hereby grants to the participant listed below (the “Grant Recipient”), the number
of shares of the Company’s Common Stock set forth below. This Grant is governed by the Plan and the Restricted Stock Grant
Agreement (the “Agreement”) which are incorporated by reference.
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Grant
Recipient: |
John
B. Strong |
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Grant
Date: |
02/03/2016 |
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Vesting
Commencement Date: |
02/03/2016 |
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Number
of Restricted Shares: |
1,500,000
common shares |
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Vesting
Schedule: |
The
Restricted shares shall vest as follows: |
|
Date:
02/03/2016 |
1,500,000 |
Shares |
ADAPTIVE
MEDIAS, INC.
By: |
/s/
Mohammad Omar Akram |
|
|
Mohammad
Omar Akram |
|
|
President |
|
Note:
If the Grant Recipient does not sign and return the Acceptance and Acknowledgement form below within 30 days of the Grant Notice
receipt the Grant will be forfeited.
Acceptance
and Acknowledgement
By
signing below, Grant Recipient acknowledges that they have received, read, understand and agree to be bound by the terms of i)
the attached Restricted Stock Grant Agreement and ii) the underlying Adaptive Medias, Inc. 2010 Stock Incentive Plan (Amended
and Restated Effective October 5, 2012) (the “Plan”).as it currently exists and as may be subsequently amended. Furthermore,
Grant Recipient accepts the Grant and agrees to be bound by these terms outlined in these Agreements.
Grant
Recipient
/s/
John B Strong |
|
Signature |
|
|
|
John
B Strong |
|
Printed
Name |
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|
123
15th St SW |
|
Albuquerque,
NM 87104 |
|
Address |
|
ADAPTIVE
MEDIAS, INC.
RESTRICTED STOCK GRANT AGREEMENT
ADAPTIVE
MEDIAS, INC., a Nevada corporation (the “Company”), pursuant to its 2010 Stock Incentive Plan, as amended from time
to time (the “Plan”), hereby grants to the participant (the “Grant Recipient”), the number of shares of
the Company’s Common Stock set forth in the Restricted Stock Grant Notice (The “Grant Notice”).
THIS
RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the Grant Date in the Restricted Stock Grant Notice and
is effective as of September 9, 2014 (the “Effective Date”) between Adaptive Medias, Inc. (the “Company”)
and the Grant Recipient (the “Grant Recipient”).
WHEREAS,
the Company and Grant Recipient pursuant to the Stock Option Agreement and the Company’s Amended and Restated 2010 Stock
Incentive Plan, as amended, for the benefit of its employees, directors, consultants, and other individuals who provide services
to the Company (the “Plan”);
WHEREAS,
the Plan permits the award of shares of the Company’s common stock (the “Common Stock”), subject to certain
restrictions; and
WHEREAS,
to compensate the Grant Recipient for his/her service to the Company and to further align the Grant Recipient’s personal
financial interests with those of the Company’s stockholders, the Company desires to grant the Grant Recipient to a number
of shares of Common Stock, subject to the restrictions and on the terms and conditions contained in the Plan and this Agreement.
NOW,
THEREFORE, in consideration of these premises and the agreements set forth herein, the parties, intending to be legally bound
hereby, agree as follows:
Grant
of Restricted Stock Award
As
of the Effective Date, the Company hereby grants the Grant Recipient the Number of Restricted Shares, as listed in the Grant Notice
of Common Stock (the “Shares”) at a par value of $0,001, subject to the restrictions and on the terms and conditions
set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated into this Agreement by reference, as though
fully set forth herein. Capitalized terms used but not defined herein will have the same meaning as defined in the Plan.
Vesting
of Shares
The
Shares are subject to forfeiture to the Company until they become vested.
Notwithstanding
the foregoing, if a Change in Control occurs and the Grant Recipient remains in continuous service to the Company through the
date of that Change in Control, all of the Shares will be subject to the actions taken by the Board under Section 3(d) of the
Plan.
All
unvested shares are forfeited upon cessation of service. Upon cessation of Grant Recipient’s service to the Company for
any reason or for no reason (and whether such cessation is initiated by the Company, the Grant Recipient or otherwise): (i) any
Shares that have not, prior to the effective date of such cessation, become nonforfeitable will immediately and automatically,
without any action on the part of the Company, be forfeited, (ii) the Company will return to the Grant Recipient, without interest,
the lesser of (A) the Purchase Price that is attributable to those forfeited Shares or (B) the Fair Market Value of those forfeited
Shares, and (iii) the Grant Recipient will have no further rights with respect to those Shares. Any Shares that have become non-forfeitable
will be subject to repurchase in accordance with Section 0.
Solely
for purposes of this Agreement, service to the Company will be deemed to include service to any Subsidiary or Affiliate of the
Company (for only so long as such entity remains a Subsidiary or Affiliate).
Escrow
of Shares.
The
Company will cause the Shares to be issued in the Grant Recipient’s name either by book-entry registration or issuance of
a stock certificate or certificates.
While
Shares remain forfeitable, they will be non-transferable and the Company will hold the certificates representing such Shares in
escrow until such time as they become non-forfeitable (or are forfeited). The Company will cause an appropriate stop-transfer
order to be issued and to remain in effect with respect to such Shares. As soon as practicable following the time that any Awarded
Share becomes non-forfeitable (and provided that appropriate arrangements have been made with the Company for the withholding
or payment of any taxes that may be due with respect to such Awarded Share), the Company will cause that stop-transfer order to
be removed and such Awarded Share will become transferable subject to limitations on transfer set forth in the Stockholders Agreement.
The Company may also condition deliver}’ of certificates for Shares upon receipt from the Grant Recipient of any undertakings
that it may determine are appropriate to facilitate compliance with federal and state securities laws.
If
any certificate is issued in respect of Shares, that certificate will have a legend as described in the Plan and the Stockholders
Agreement and held in escrow by the Company’s secretary or his designee. In addition, the Grant Recipient may be required
to execute and deliver to the Company a stock power with respect to those Shares. At such time as those Shares become non-forfeitable,
the Company will cause a new certificate to be issued without that portion of the legend referencing the previously applicable
forfeiture conditions and will cause that new certificate to be delivered to the Grant Recipient (again, provided that appropriate
arrangements have been made with the Company for the withholding or payment of any taxes that may be due with respect to such
Shares).
Stock
Splits, etc.
If,
while any of the Shares remain subject to forfeiture, there occurs any merger, consolidation, reorganization, reclassification,
recapitalization, stock split, stock dividend, or other similar change in the Common Stock, then any and all new, substituted
or additional securities or other consideration to which the Grant Recipient is entitled by reason of the Grant Recipient’s
ownership of the Shares will be immediately subject to the escrow contemplated by Section 3, deposited with the Escrow Holder
and will thereafter be included in the term “Shares” for all purposes of the Plan and this Agreement.
Dividends
and Distributions during the Restricted Period.
The
Grant Recipient will have the right to receive dividends and distributions with respect to the Shares; provided, however, that
any cash dividends or distributions paid in respect of the Shares while those Shares remain subject to forfeiture will be held
by the Company and delivered to the Grant Recipient (without interest) only if and when the Shares giving rise to such dividends
or distributions become non-forfeitable.
Tax
Consequences.
The
Grant Recipient acknowledges that the Company has not advised the Grant Recipient regarding the Grant Recipient’s income
tax liability in connection with the award or vesting of the Shares. The Grant Recipient has reviewed with the Grant Recipient’s
own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by
this Agreement. The Grant Recipient is relying solely on such advisors and not on any statements or representations of the Company
or any of its agents. The Grant Recipient understands that the Grant Recipient (and not the Company) shall be responsible for
the Grant Recipient’s own tax liability that may arise as a result of the transactions contemplated by this Agreement.
Additional
Documents.
As
a condition to the effectiveness of the purchase of Shares hereby made:
The
Grant Recipient shall file timely an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the
granted Shares (a form of Section 83(b) election that is attached; and
The
Grant Recipient’s spouse, if any, shall execute and deliver to the Company the “Consent of Spouse” that is attached;
The
Grant Recipient shall, upon request of the Company, execute any further documents or instruments necessary or desirable to carry
out the purposes or intent of this Agreement.
Restriction
on Transfer of Unvested Shares.
Except
for the escrow described in Section 3 and the Company’s right to repurchase the Shares under certain circumstances, the
Grant Recipient may not sell, pledge, assign, encumber, hypothecate, gift, transfer, bequeath, devise, donate or otherwise dispose
of, in any way or manner whatsoever, whether voluntarily or involuntarily, any legal or beneficial interest in any of the Shares
until the Shares become non-forfeitable in accordance with Section 0.
Call
Upon Cessation of Service.
If
the Grant Recipient’s service with the Company ceases for any reason, the Company or its assignee may repurchase up to all
the Shares that have become non-forfeitable in accordance with Section 0 and that the Grant Recipient (including, for purposes
of this Section 9, any permitted transferee(s)) then hold(s). The price payable by the Company or its assignee to repurchase Shares
pursuant to this Section 0 will be the Fair Market Value of those Shares at the time the right described in this Section 0 is
exercised (which exercise is deemed to occur upon notice being given). Such price may be paid (i) in cash; (ii) by offset of any
obligation of the Grant Recipient to the Company or its affiliates; or (iii) to the extent that payment in cash would give rise
to an “event of default” under the Company’s or any of its Affiliates’ principal credit agreement then
in effect, by delivery of a promissory with interest accruing at the then-current rate of U.S. Treasury Notes with a comparable
duration, which interest will be paid annually in arrears through maturity. Such note will mature and the Company shall make reasonable
efforts to pay promptly following the date upon which such payment would not give rise to an “event of default” under
the Company’s principal credit agreement then in effect, and in any event no longer than five years from such date.
With
respect to each Share subject to repurchase pursuant to this Section 0, the Company (or its assignee) may exercise its repurchase
right by delivery of written notice to the holder of such Shares at any time during the ninety (90) day period beginning on the
later of (i) the date the Grant Recipient’s employment or engagement with the Company ceases, or (ii) the date six months
following the date such Share became non-forfeitable in accordance with Section 0. All the rights of the holder of any such Shares,
other than the right to receive payment in the manner described in this Section 0, will terminate as of the date of delivery by
the Company of the written notice described in this paragraph. The only representation, warranty or covenant which the holder
of such shares will be required to make in connection with a sale pursuant to this Section 0 is a representation and warranty
with respect to his or her ownership of the shares and his or her ability to convey title thereto free and clear of liens, claims
or encumbrances.
Upon
delivery of the notice described above in Section 0, full right, title and interest in such shares will pass to the Company or
its assignee. If a holder of Shares becomes obligated to transfer any or all of such Shares to the Company or its assignee pursuant
to this Agreement, that holder will endorse in blank the certificates evidencing the Shares being repurchased and deliver those
certificates to the Company or its assignee within fifteen (15) days after receipt of the notice described above. Upon the delivery
of those Shares, the Company will deliver the repurchase price for the Shares in the manner described above in Section 0. If a
holder of Shares fails to deliver those Shares in accordance with the terms of this Agreement, the Company or its assignee may,
at its option, in addition to all other remedies it may have, either (i) send to that holder the purchase price for such Shares,
as herein specified, or (ii) deposit such amount with a trustee or escrow agent for the benefit of that holder for release upon
delivery of Shares in accordance with the terms of this Agreement. Thereupon, the Company or its assignee, upon written notice
to the holder, will (x) cancel on its books the certificate or certificates representing the Shares required to be transferred,
and (y) issue, in lieu thereof, in the name of the Company (or its assignee) a new certificate or certificates representing such
Shares.
Representations
and Warranties.
By
executing this Acknowledgement and Acceptance of this Agreement, the Grant Recipient hereby represents, warrants, covenants, acknowledges
and/or agrees that:
The
Grant Recipient has received a copy of the Plan, has read the Plan and is familiar with its terms, and hereby accepts the Shares
subject to the terms and provisions of the Plan, as amended from time to time.
The
Shares are being acquired for the Grant Recipient’s own account, for investment purposes only, and not for the account of
any other person, and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended
(the “Securities Act”);
No
other person (other than the Grant Recipient and the Company) has or will have a direct or indirect beneficial interest in the
Shares as of the Effective Date;
The
Shares have not been registered or qualified under the Securities Act or any state securities laws, the offering and sale of the
Shares is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) of, or Rule 701 promulgated
under the Securities Act, and reliance on that exemption is predicated in part on the accuracy of these representations and warranties;
The
Grant Recipient has a preexisting business relationship with the Company, has such knowledge and experience in financial and business
matters in order to be able to evaluate the merits and risks of an investment in the Company, and is not utilizing any other person
as a purchaser representative to evaluate such merits and risks;
The
Grant Recipient has been provided reasonable access to all relevant information in order to be able to evaluate an investment
in the Company and has had an opportunity to discuss with management of the Company the business and financial affairs of the
Company;
The
Grant Recipient understands and acknowledges that investment in the Company is speculative and involves a high degree of risk,
the Grant Recipient has no present need for liquidity in his investment in the Company and is able to bear the risk of that investment
for an indefinite period and to afford a complete loss thereof;
The
Grant Recipient understands and acknowledges that there is no public market for the Shares, there can be no assurance that any
such market will ever develop and, therefore, the Grant Recipient may be required to hold the Shares indefinitely;
In
addition to complying with other similar restrictions contained herein, the Grant Recipient will not sell, transfer, pledge, hypothecate
or otherwise dispose of any interest in the Shares unless such interest is registered in accordance with the Securities Act and
applicable state securities laws or an exemption from such registration is available and, if required by the Company, an opinion
of counsel is delivered to the Company, in a form satisfactory to the Company, that such registration is unnecessary; and
The
Grant Recipient acknowledges and agrees that the Company is under no obligation to register the Shares on behalf of the Grant
Recipient or to assist the Grant Recipient in complying with any exemption from registration.
General
Provisions:
This
Agreement, together with the Plan and the Stockholders Agreement, represents the entire agreement between the parties with respect
to the grant of the Shares and merges and supersedes all prior and contemporaneous discussions, agreements and understandings
of every nature relating to the Grant Recipient’s equity incentive compensation from the Company and any of its affiliates
or subsidiaries or any of their predecessors. This Agreement may only be modified or amended in a writing signed by both parties.
Neither
this Agreement nor any rights or interest hereunder shall be assignable by the Grant Recipient, his beneficiaries or legal representatives,
nor shall any purported assignment be null and void.
Either
party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement.
The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert
all other legal remedies available to it under the circumstances.
The
Grant of Shares hereunder will not confer upon the Grant Recipient any right to continue in service with the Company or any of
its subsidiaries or affiliates.
This
Agreement shall be governed by, and enforced in accordance with, the laws of the State of Nevada, without regard to the application
of the principles of conflicts or choice of laws.
This
Agreement may be executed, including execution by facsimile signature, in one or more counterparts, each of which shall be deemed
an original, and all of which together shall be deemed to be one and the same instrument.
Exhibit
B
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR
VALUE RECEIVED ________________ hereby sell(s), assign(s) and transfer(s) unto ADAPTIVE MEDIAS, INC., a Nevada corporation (the
“Company”), ___________ (_____) of the Common Stock of the Company standing in his or her name on the books of
the Company represented by Certificate No. ___________ herewith and do(es) hereby irrevocably constitute and appoint __________
Attorney to transfer the said stock on the books of the Company with full power of substitution in the premises.
Dated:_________________ |
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Print
Name |
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Signature |
Instruction:
Please do not fill in any blanks other than the signature line. Please sign exactly as you would like your name to appear
on the issued stock certificate. The purpose of this assignment is to enable the Company to exercise the Repurchase Right without
requiring additional signatures on the part of Grant Recipient.
Exhibit
C
CONSENT
OF SPOUSE
I,
,
spouse of the Grant Recipient have read and approve the foregoing Restricted Stock Grant Agreement (the “Agreement”).
In consideration of the grant of shares of Adaptive Medias, Inc. (the “Company”) as set forth in that Agreement, I
hereby appoint my spouse as my attorney-in-fact with respect to the exercise of any rights under the Agreement and agree to be
bound by the provisions of the Agreement and the Stockholders Agreement insofar as I may have any rights in said Agreement or
any shares issued pursuant thereto under the community property laws or similar laws relating to marital property.
In
addition, I am aware that, among other things, under the Agreement and the Stockholders Agreement, my spouse agrees to sell certain
of his shares of the capital stock of the Company, including my community property or other interest therein (if any), upon certain
events and that transfer of such shares is otherwise restricted. I hereby consent to such sale and to such restrictions, approve
of the provisions of the Agreement and the Stockholders Agreement, and agree that if I predecease my spouse, the successors of
my community property or other interest (if any) in such shares will hold such shares subject to the provisions of the Agreement
and the Stockholders Agreement.
Dated:
_______________________, __________ |
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(Signature
of Spouse) |
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(Printed Name of Spouse) |
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(Signature
of Grant Recipient) |
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(Printed
Name of Grant Recipient) |
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Check this box if you don’t have a spouse |
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Exhibit
D
ADAPTIVE
MEDIAS, INC.
2010
STOCK INCENTIVE PLAN
(Amended and Restated Effective October 5, 2012)
1.
Purposes of the Plan. The purposes of the Adaptive Medias, Inc. 2010 Stock Incentive Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional incentive to persons who are selected to be participants
in the Plan, and to promote the success of the Company’s business. This Plan permits the grant of Non-qualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards, each
of which shall be subject to such conditions based upon continued employment with or service to the Company or its Subsidiaries,
passage of time or satisfaction of performance criteria as shall be specified pursuant to the Plan.
2.
Definitions. In addition to the terms defined elsewhere in this Plan, as used herein, the following terms shall have the following
meanings:
(a)
“Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance
with Section 4 of the Plan.
(b)
“Award” means a Stock Option, Stock Appreciation Right, Restricted Stock or Restricted Stock Unit, or Other
Stock-Based Award granted to a Participant pursuant to the Plan, as such terms are defined in Section 7(a) herein.
(c)
“Board’ means the Board of Directors of the Company.
(d)
“Code” means the Internal Revenue Code of 1986, and the regulations promulgated thereunder, as such is amended
from time to time, and any reference to a section of the Code shall include any successor provision of the Code.
(e)
“Committee” means a committee appointed by the Board from among its members to administer the Plan in accordance
with Section 4.
(f)
“Common Stock” means the common stock, par value S0.001 per share, of the Company.
(g)
“Company” means Adaptive Medias, Inc., a Nevada corporation.
(h)
“Consultant” means any person, including an advisor, engaged by the Company or a Subsidiary to render services
and who is compensated for such services; provided such services are not in connection with the offer or sale of securities in
a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities;
and provided further that the term “Consultant” shall not include Directors who are paid only a director’s fee
by the Company or who are not otherwise compensated by the Company for their services as Directors.
(i)
“Director” means a member of the Board.
(j)
“Employee” means any person, including Officers and Directors, employed by the Company or any Subsidiary
of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.
(k)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(l)
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.
(m)
“Participant” means any Employee, Director or Consultant selected by the Administrator to receive Awards.
(n)
“Plan” means this 2010 Stock Incentive Plan, as amended from time to time.
(o)
“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.
(p)
“Section 162(m)” means Section 162(m) of the Code and the regulations thereunder, as amended.
(q)
“Share” means a share of Common Stock, as adjusted in accordance with Section 10 of the Plan.
(r)
“Subsidiary” means any corporation or entity in which the Company owns or controls, directly or indirectly,
fifty percent (50%) or more of the voting power or economic interests of such corporation or entity.
3.
Shares Subject to the Plan.
(a)
Aggregate Limits. Subject to the provisions of Section 10 of the Plan, the maximum aggregate number of Shares which may be issued
pursuant to Awards granted under the Plan is Thirty Million (30,000,000) Shares (the “Fungible Pool Limit”).
The Shares subject to the Plan may be either Shares reacquired by the Company, including Shares purchased in the open
market, or authorized but unissued Shares. Any Shares subject to an Award which for any reason expires or terminates unexercised
or is not earned in full shall be added back to the Fungible Pool Limit and may again be made subject to an Award under the Plan.
The following Shares shall not be added back to the Fungible Pool Limit and shall not again be made available for issuance as
Awards under the Plan: (i) Shares not issued or delivered as a result of the net settlement of an outstanding Stock Appreciation
Right, (ii) Shares used to pay the exercise price or withholding taxes related to an outstanding Award, or (iii) Shares repurchased
on the open market with the exercise price proceeds received by the Company upon the exercise of an Award.
(b)
Treatment of Awards. Each Share issued or to be issued in connection with any Award shall be counted against the Fungible Pool
Limit as one (1) Share. For these purposes, the number of Shares taken into account with respect to a SAR shall be the number
of Shares underlying the SAR at grant, and not the final number of Shares delivered upon exercise of the SAR. Any Shares previously
the subject of an Award that again become available for grant pursuant to Section 3(a) shall be added back to the Fungible Pool
Limit in the same proportion, and using the same multiplier, pursuant to which such Awards reduced the Shares in the Fungible
Pool Limit. The Administrator shall determine the appropriate methodology for calculating the number of Shares issued pursuant
to the Plan.
4.
Administration of the Plan.
(a)
Procedure.
(i)
Multiple Administrative Bodies. If permitted by Rule 16b-3, the Plan may be administered by different bodies with respect to Directors,
Officers who are not Directors, and Employees who are neither Directors nor Officers.
(ii)
Administration with Respect to Directors and Officers Subject to Section 16(b). With respect to Awards granted to Directors or
to Employees who are also Officers or Directors subject to Section 16(b) of the Exchange Act, the Plan shall be administered by
(A) the Board, if the Board may administer the Plan in compliance with the requirements for grants under the Plan to be exempt
acquisitions under Rule 16b-3, or (B) a committee designated by the Board to administer the Plan, which committee shall consist
of “Non-Employee Directors” within the meaning of Rule 16b-3. Once appointed, such Committee shall continue to serve
in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee
and appoint additional members, remove members (with or without cause) and substitute new members, fill vacancies (however caused),
and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the requirements
for grants under the Plan to be exempt acquisitions under Rule 16b-3.
(iii)
Administration with Respect to Covered Employees Subject to Section 162(m) of the Code. With respect to Awards granted to Employees
who are also “covered employees” within the meaning of Section 162(m) of the Code and the regulations thereunder,
as amended, the Plan shall be administered by a committee designated by the Board to administer the Plan, which committee shall
be constituted to satisfy the requirements applicable to Awards intended to qualify as “performance-based compensation”
under Section 162(m). Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed
by the Board. From time to time the Board may increase the size of the Committee and appoint additional members, remove members
(with or without cause) and substitute new members, fill vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the rules applicable to Awards intended to qualify as
“performance-based compensation” under Section 162(m).
(iv)
Administration with Respect to Other Persons. With respect to Awards granted to Employees or Consultants who are neither Directors
nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a committee designated by the Board, which
committee may be constituted to satisfy the legal requirements relating to the administration of stock option plans under state
corporate and securities laws and the Code. Once appointed, such Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee and appoint additional members, remove members (with or
without cause) and substitute new members, fill vacancies (however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by applicable laws.
(b)
Powers of the Administrator. Subject to the express provisions and limitations set forth in this Plan, and in the case of a Committee,
subject to the specific duties delegated by the Board to such Committee, the Administrator shall be authorized and empowered to
do all things necessary or desirable, in its sole discretion, in connection with the administration of this Plan, including, without
limitation, the following:
(i)
to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein;
(ii)
to determine which persons are eligible to be Participants, to which of such persons, if any, Awards shall be granted hereunder
and the timing of any such Awards, and to grant Awards;
(iii)
to grant Awards to Participants and determine the terms and conditions thereof, including the number of Shares subject to Awards
and the exercise or purchase price of such Shares and the circumstances under which Awards become exercisable or vested or are
forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction
of performance criteria, the occurrence of certain events, or other factors;
(iv)
to establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance,
exercisability, vesting and/or ability to retain any Award;
(v)
to prescribe and amend the terms of the agreements or other documents evidencing Awards made under this Plan (which need not be
identical);
(vi)
to determine whether, and the extent to which, adjustments are required pursuant to Section 10;
(vii)
to interpret and construe this Plan, any rules and regulations under this Plan and the terms and conditions of any Award granted
hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Corporation; and
(viii)
to make all other determinations deemed necessary or advisable for the administration of this Plan.
(c)
Delegation and Administration. The Administrator may delegate to one or more separate committees (any such committee a “Subcommittee”)
composed of one or more directors of the Company (who may but need not be members of any Committee comprising the Administrator)
the ability to grant Awards and take the other actions described in Section 4(b) with respect to Participants who are not Officers,
and such actions shall be treated for all purposes as if taken by the Administrator. The Administrator may delegate to a Subcommittee
of one or more officers of the Company the ability to grant Awards and take the other actions described in Section 4(b) with respect
to Participants (other than any such officers themselves) who are not directors or Officers, provided, however, that the
resolution so authorizing such officer(s) shall specify the total number of rights or options such Subcommittee may so award,
and such actions shall be treated for all purposes as if taken by the Administrator. Any action by any such Subcommittee within
the scope of such delegation shall be deemed for all purposes to have been taken by the Administrator, and references in this
Plan to the Administrator shall include any such Subcommittee. The Administrator may delegate the administration of the Plan to
an officer or officers of the Company, and such administrator(s) may have the authority to execute and distribute agreements or
other documents evidencing or relating to Awards granted by the Administrator under this Plan, to maintain records relating to
the grant, vesting, exercise, forfeiture or expiration of Awards, to process or oversee the issuance of Shares upon the exercise,
vesting and/or settlement of an Award, to interpret the terms of Awards and to take such other actions as the Administrator may
specify. Any action by any such administrator within the scope of its delegation shall be deemed for all purposes to have been
taken by the Administrator and references in this Plan to the Administrator shall include any such administrator, provided that
the actions and interpretations of any such administrator shall be subject to review and approval, disapproval or modification
by the Administrator.
(d)
Effect of Change in Status. The Committee shall have the discretion to determine the effect upon an Award and upon an individual’s
status as an employee under the Plan (including whether a Participant shall be deemed to have experienced a termination of employment
or other change in status) and upon the vesting, expiration or forfeiture of an Award in the case of (i) any individual who is
employed by an entity that ceases to be a Subsidiary of the Corporation, (ii) any leave of absence approved by the Corporation
or a Subsidiary, (iii) any transfer between locations of employment with the Corporation or a Subsidiary or between the Corporation
and any Subsidiary or between any Subsidiaries, (iv) any change in the Participant’s status from an employee to a consultant
or member of the Board, or vice versa, and (v) any employee who becomes employed by any partnership, joint venture, corporation
or other entity not meeting the requirements of a Subsidiary.
(e)
Determinations of the Administrator. All decisions, determinations and interpretations by the Administrator regarding this Plan
shall be final and binding on all Participants or other persons claiming rights under the Plan or any Award, unless any such decision,
determination or interpretation is otherwise determined by the Board in which case the Board’s determination shall be final
and binding. The Administrator shall consider such factors as it deems relevant to making such decisions, determinations and interpretations
including, without limitation, the recommendations or advice of any director, officer or employee of the Company and such attorneys,
consultants and accountants as it may select. A Participant or other holder of an Award may contest a decision or action by the
Administrator with respect to such person or Award only on the grounds that such decision or action was arbitrary or capricious
or was unlawful, and any review of such decision or action shall be limited to determining whether the Administrator’s decision
or action was arbitrary or capricious or was unlawful.
5.
Eligibility. Awards may be granted to any person who is a Participant under this Plan; provided that ISOs may be granted only
to employees eligible under applicable Code provisions. If otherwise eligible, a Participant who has been granted an Award may
be granted additional Awards.
6.
Term of the Plan. The Plan was approved by the Board and became effective on November 2, 2010, and was approved by the Company’s
stockholders on November 2, 2010. The Plan shall remain available for the grant of Awards until November 2, 2020 or such earlier
date as the Board may determine. The expiration of the Administrator’s authority to grant Awards under the Plan will not
affect the operation of the terms of the Plan or the Company’s and Participants’ rights and obligations with respect
to Awards granted on or prior to the expiration date of the Plan.
7.
Plan Awards.
(a)
Award Types. The Administrator, on behalf of the Company, is authorized under this Plan to grant, award and enter into the following
arrangements or benefits under the Plan provided that their terms and conditions are not inconsistent with the provisions of the
Plan: Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards. The Administrator,
in its discretion, may determine that any Award granted hereunder shall be a performance Award the grant, issuance, retention,
vesting and/or settlement of which is subject to satisfaction of one or more of the Qualifying Performance Criteria specified
in Section 8(e).
(i)
Stock Options. A “Stock Option” is a right to purchase a number of Shares at such exercise price, at
such times, and on such other terms and conditions as are specified in or determined pursuant to the document(s) evidencing the
Award (the “Option Agreement”). The Committee may grant Stock Options intended to be eligible to qualify
as incentive stock options (“ISOs”) pursuant to Section 422 of the Code and Stock Options that are not
intended to qualify as ISOs ^ Non-qualified Stock Options”), as it, in its sole discretion, shall determine.
(ii)
Stock Appreciation Rights. A “Stock Appreciation Right” or “SAR” is a right
to receive, in cash or stock (as determined by the Administrator), value with respect to a specific number of Shares equal to
or otherwise based on the excess of (i) the market value of a Share at the time of exercise over (ii) the exercise price of the
right, subject to such terms and conditions as are expressed in the document(s) evidencing the Award (the “SAR Agreement”).
(iii)
Restricted Stock. A “Restricted Stock” Award is an award of Shares, the grant, issuance, retention and/or
vesting of which is subject to such conditions as are expressed in the document(s) evidencing the Award (the “Restricted
Stock Agreement”‘).
(iv)
Restricted Stock Unit. A “Restricted Stock Unit’ Award is an award of a right to receive, in cash or
stock (as determined by the Administrator) the market value of one Share, the grant, issuance, retention and/or vesting of which
is subject to such conditions as are expressed in the document(s) evidencing the Award (the “Restricted Stock Unit
Agreement’).
(v)
Other Stock-Based Awards. An “Other Stock-Based Award’ is an award other than those described in subsections
(i) - (iv) above, that is denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related
to, Common Stock or factors that may influence the value of Common Stock, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Common Stock, purchase rights for Common Stock, Awards with value
and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Administrator,
and Awards valued by reference to the book value of Common Stock or the value of securities of or the performance of specified
Subsidiaries or other business units. The Administrator shall determine the terms and conditions of such Awards, which shall be
expressed in the document(s) evidencing the Award (the “Other Stock-Based Award Agreement’).
(b)
Grants of Awards. An Award may consist of one of the foregoing arrangements or benefits or two or more of them in tandem or in
the alternative.
8.
Terms of Awards.
(a)
Grant, Terms and Conditions of Stock Options and SARs. The Administrator may grant Stock Options or SARs at any time and from
time to time prior to the expiration of the Plan to eligible Participants selected by the Administrator. No Participant shall
have any rights as a stockholder with respect to any Shares subject to Stock Options or SARs hereunder until said Shares have
been issued. Each Stock Option or SAR shall be evidenced only by such agreements, notices and/or terms or conditions documented
in such form (including by electronic communications) as may be approved by the Administrator. Each Stock Option grant will expressly
identify the Stock Option as an ISO or as a Non-qualified Stock Option. In the absence of a designation, a Stock Option shall
be treated as a Non-qualified Stock Option. Stock Options or SARs granted pursuant to the Plan need not be identical but each
must contain or be subject to the following terms and conditions:
(i)
Price. The purchase price (also referred to as the exercise price) under each Stock Option or SAR granted hereunder shall be established
by the Administrator. The purchase price per Share shall not be less than 100% of the market value of a Share on the date of grant.
For purposes of the Plan, “market value” shall mean the fair market value of the Company’s common
stock determined in good faith by the Administrator in a manner consistent with the requirements of Section 409A of the Code.
The exercise price of a Stock Option shall be paid in cash or in such other form if and to the extent permitted by the Administrator,
including without limitation by delivery of already owned Shares, withholding (either actually or by attestation) of Shares otherwise
issuable under such Stock Option and/or by payment under a broker-assisted sale and remittance program acceptable to the Administrator.
(ii) Duration, Exercise and Termination of Stock Options and SARs. Each Stock Option or SAR shall be exercisable at such time
and in such installments during the period prior to the expiration of the Stock Option or SAR as determined by the Administrator.
The Administrator shall have the right to make the timing of the ability to exercise any Stock Option or SAR subject to continued
employment, the passage of time and/or such performance requirements as deemed appropriate by the Administrator. At any time after
the grant of a Stock Option, the Administrator may reduce or eliminate any restrictions on the Participant’s right to exercise
all or part of the Stock Option. Each Stock Option or SAR must expire within a period of not more than ten (10) years from the
grant date. The Option Agreement or SAR Agreement may provide for expiration prior to the end of the stated term of the Award
in the event of the termination of employment or service of the Participant to whom it was granted.
(iii)
Conditions and Restrictions Upon Securities Subject to Stock Options or SARs. Subject to the express provisions of the Plan, the
Administrator may provide that the Shares issued upon exercise of a Stock Option or SAR shall be subject to such further conditions
or agreements as the Administrator in its discretion may specify prior to the exercise of such Stock Option or SAR, including,
without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions. The obligation to make payments
with respect to SARs may be satisfied through cash payments or the delivery of Shares, or a combination thereof as the Administrator
shall determine. The Administrator may establish rules for the deferred delivery of Common Stock upon exercise of a Stock Option
or SAR with the deferral evidenced by use of Restricted Stock Units equal in number to the number of Shares whose delivery is
so deferred.
(iv)
Other Terms and Conditions. Stock Options and SARs may also contain such other provisions, which shall not be inconsistent with
any of the foregoing terms, as the Administrator shall deem appropriate.
(v)
ISOs. Stock Options intending to qualify as ISOs may only be granted to employees of the Company or its related entities as who
are eligible under applicable Code provisions, as determined by the Administrator. If then required by the Code for ISO treatment,
an ISO granted to an Employee who, at the time the ISO is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or of its parent or subsidiary corporation, must have an exercise price that
is not less than 110% of the market value of the Shares subject to the ISO, determined as of the date of grant and a term not
exceeding five (5) years. To the extent that the Option Agreement specifies that a Stock Option is intended to be treated as an
ISO, the Stock Option is intended to qualify to the greatest extent possible as an “incentive stock option” within
the meaning of Section 422 of the Code, and shall be so construed; provided, however, that any such designation shall not
be interpreted as a representation, guarantee or other undertaking on the part of the Company that the Stock Option is or will
be determined to qualify as an ISO. If and to the extent that any Shares are issued under a portion of any Stock Option that exceeds
the 5100,000 limitation of Section 422 of the Code, such Shares shall not be treated as issued under an ISO notwithstanding any
designation otherwise. Certain decisions, amendments, interpretations and actions by the Administrator and certain actions by
a Participant may cause a Stock Option to cease to qualify for the tax treatment applicable to ISOs pursuant to the Code and by
accepting a Stock Option the Participant agrees in advance to such disqualifying action.
(b)
Grant, Terms and Conditions of Restricted Stock and Restricted Stock Units. The Administrator may grant Restricted Stock or Restricted
Stock Units at any time and from time to time prior to the expiration of the Plan to eligible Participants selected by the Administrator.
A Participant shall have rights as a stockholder with respect to any Shares subject to a Restricted Stock Award hereunder only
to the extent specified in this Plan or the Restricted Stock Agreement evidencing such Award. Awards of Restricted Stock or Restricted
Stock Units shall be evidenced only by such agreements, notices and/or terms or conditions documented in such form (including
by electronic communications) as may be approved by the Administrator. Awards of Restricted Stock or Restricted Stock Units granted
pursuant to the Plan need not be identical but each must contain or be subject to the following terms and conditions:
(i)
Terms and Conditions. Each Restricted Stock Agreement and each Restricted Stock Unit Agreement shall contain provisions regarding
(a) the number of Shares subject to such Award or a formula for determining such, (b) the purchase price of the Shares, if any,
and the means of payment for the Shares, (c) the performance criteria, if any, and level of achievement versus these criteria
that shall determine the number of Shares granted, issued, retainable and/or vested, (d) such terms and conditions on the grant,
issuance, vesting and/or forfeiture of the Shares as may be determined from time to time by the Administrator, (e) restrictions
on the transferability of the Shares and (f) such further terms and conditions as may be determined from time to time by the Administrator,
in each case not inconsistent with this Plan.
(ii)
Sale Price. Subject to the requirements of applicable law, the Administrator shall determine the price, if any, at which Shares
of Restricted Stock or Restricted Stock Units shall be sold or awarded to a Participant, which may vary from time to time and
among Participants and which may be below the market value of such Shares at the date of grant or issuance.
(iii)
Share Vesting. The grant, issuance, retention and/or vesting of Shares under Restricted Stock or Restricted Stock Unit Awards
shall be at such time and in such installments as determined by the Administrator or under criteria established by the Administrator.
The Administrator shall have the right to make the timing of the grant and/or the issuance, ability to retain and/or vesting of
Shares under Restricted Stock or Restricted Stock Unit Awards subject to continued employment, passage of time and/or such performance
criteria and level of achievement versus these criteria as deemed appropriate by the Administrator, which criteria may be based
on financial performance and/or personal performance evaluations. Notwithstanding anything to the contrary herein, the performance
criteria for any Restricted Stock or Restricted Stock Unit that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be a measure based on one or more Qualifying Performance Criteria selected
by the Administrator and specified at the time the Restricted Stock or Restricted Stock Unit Award is granted.
(iv)
Termination of Employment. The Restricted Stock or Restricted Stock Unit Agreement may provide for the forfeiture or cancellation
of the Restricted Stock or Restricted Stock Unit Award, in whole or in part, in the event of the termination of employment or
service of the Participant to whom it was granted.
(v)
Restricted Stock Units. Except to the extent this Plan or the Administrator specifies otherwise, Restricted Stock Units represent
an unfunded and unsecured obligation of the Company and do not confer any of the rights of a stockholder until Shares are issued
thereunder. Settlement of Restricted Stock Units upon expiration of the deferral or vesting period shall be made in Shares or
otherwise as determined by the Administrator. Dividends or dividend equivalent rights shall be payable in cash or in additional
shares with respect to Restricted Stock Units only to the extent specifically provided for by the Administrator. Until a Restricted
Stock Unit is settled, the number of Shares represented by a Restricted Stock Unit shall be subject to adjustment pursuant to
Section 10. Any Restricted Stock Units that are settled after the Participant’s death shall be distributed to the Participant’s
designated beneficiary (ies) or, if none was designated, the Participant’s estate.
(c)
Suspension or Termination of Awards. If at any time (including with respect to Stock Options or SARs after a notice of exercise
has been delivered) the Administrator reasonably believes that a Participant has committed an act of misconduct as described in
this Section, the Administrator may suspend the Participant’s right to exercise any Stock Option or SAR or suspend the vesting
of Shares under the Participant’s Restricted Stock or Restricted Stock Unit Awards, as the case may be, pending a determination
of whether an act of misconduct has been committed. If the Administrator determines a Participant has committed an act of embezzlement,
fraud, dishonesty, nonpayment of any obligation owed to the Company, breach of fiduciary duty or deliberate disregard of Company
rules resulting in loss, damage or injury to the Company, or if a Participant makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting unfair competition, induces any customer to breach
a contract with the Company or induces any principal for whom the Company acts as agent to terminate such agency relationship,
the Administrator may prohibit or restrict the Participant and his or her successor(s) in interest from exercising any Stock Option
or SAR and may cause the Participant’s Restricted Stock or Restricted Stock Unit Agreement to be restricted or forfeited
and cancelled. Any determination by the Administrator with respect to the foregoing shall be final, conclusive and binding on
all interested parties, unless any such determination is otherwise determined by the Board in which case the Board’s determination
shall be final and binding.
(d)
Transferability. Unless the agreement or other document evidencing an Award (or an amendment thereto authorized by the Administrator)
expressly states that the Award is otherwise transferable as provided hereunder, no Award granted under this Plan, nor any interest
in such Award, may be sold, signed, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner, other than
by will or the laws of descent and distribution. The Administrator may grant an Award that is, or amend an outstanding Award to
provide that the Award is, transferable or assignable to the extent that, following a transfer or assignment, exercise of the
Award or resale of underlying securities by the transferee could be registered under the Securities Act of 1933, as amended (the
“Securities Act”) on Form S-8 (or any successor form used for employee benefit plan registrations) under the
Securities Act, as such form may be amended from time to time, provided that following any such transfer or assignment
the Award will remain subject to substantially the same terms applicable to the Award while held by the Participant to whom it
was granted, as modified as the Administrator shall determine appropriate, and as a condition to such transfer the transferee
shall execute an agreement agreeing to be bound by such terms; provided, further, that an ISO may be transferred or assigned
only to the extent consistent with Section 422 of the Code. Any purported assignment, transfer or encumbrance that does not qualify
under this Section 8(d) shall be void and unenforceable against the Company.
(e)
Qualifying Performance Criteria. For purposes of this Plan, the term “Qualifying Performance Criteria”
shall mean any one or more of the following performance criteria, either individually, alternatively or in any combination, applied
to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination,
and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target,
to previous years’ results or to a designated comparison group, in each case as specified by the Administrator in the Award:
(a) cash flow, (b) earnings per share, (c) earnings before interest, taxes and amortization, (d) return on equity, (e) total stockholder
return, (f) share price performance, (g) return on capital, (h) return on assets or net assets, (i) revenue, (j) income or net
income, (k) operating income or net operating income, (1) operating profit or net operating profit, (m) operating margin or profit
margin, (n) return on operating revenue, (o) return on invested capital, (p) market segment share, (q) product release schedules,
(r) new product innovation, (s) product cost reduction through advanced technology, (t) brand recognition/acceptance, (u) product
ship targets, (v) customer satisfaction, (w) strategic initiatives, or (x) acquisitions. The Administrator may appropriately adjust
any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occurs during
a performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in
or provisions under tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals
for reorganization and restructuring programs, and (v) any extraordinary non-recurring items as described in Accounting Principles
Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing
in the Company’s annual report to stockholders for the applicable year. Notwithstanding satisfaction of any completion of
any Qualifying Performance Criteria, to the extent specified at the time of grant of an Award, the number of Shares, Stock Options,
SARs, Restricted Stock Units or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction
of such Qualifying Performance Criteria may be reduced by the Administrator on the basis of such further considerations as the
Administrator in its sole discretion shall determine.
(f)
Dividends. Unless otherwise provided by the Administrator, no adjustment shall be made in Shares issuable under Awards on account
of cash dividends that may be paid or other rights that may be issued to the holders of Shares prior to their issuance under any
Award. The Administrator shall specify whether dividends or dividend equivalent amounts shall be paid to any Participant with
respect to the Shares subject to any Award that have not vested or been issued or that are subject to any restrictions or conditions
on the record date for dividends.
(g)
Documents Evidencing Awards. The Administrator shall, subject to applicable law, determine the date an Award is deemed to be granted.
The Administrator or, except to the extent prohibited under applicable law, its delegate(s) may establish the terms of agreements
or other documents evidencing Awards under this Plan and may, but need not, require as a condition to any such agreement’s
or document’s effectiveness that such agreement or document be executed by the Participant, including by electronic signature
or other electronic indication of acceptance, and that such Participant agree to such further terms and conditions as specified
in such agreement or document. The grant of an Award under this Plan shall not confer any rights upon the Participant holding
such Award other than such terms, and subject to such conditions, as are specified in this Plan as being applicable to such type
of Award (or to all Awards) or as are expressly set forth in the agreement or other document evidencing such Award.
(h)
Additional Restrictions on Awards. Either at the time an Award is granted or by subsequent action, the Administrator may, but
need not, impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any
resales by a Participant or other subsequent transfers by a Participant of any Shares issued under an Award, including without
limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and
manner of sales by the Participant or Participants, and (c) restrictions as to the use of a specified brokerage firm for receipt,
resales or other transfers of such Shares.
(i)
Subsidiary Awards. In the case of a grant of an Award to any Participant employed by a Subsidiary, such grant may, if the Administrator
so directs, be implemented by the Company issuing any subject Shares to the Subsidiary, for such lawful consideration as the Administrator
may determine, upon the condition or understanding that the Subsidiary will transfer the Shares to the Participant in accordance
with the terms of the Award specified by the Administrator pursuant to the provisions of the Plan. Notwithstanding any other provision
hereof, such Award may be issued by and in the name of the Subsidiary and shall be deemed granted on such date as the Administrator
shall determine.
9.
Withholding Taxes. To the extent required by applicable federal, state, local or foreign law, the Administrator may and/or
a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that
arise with respect to any Stock Option, SAR, Restricted Stock or Restricted Stock Unit Award, or any sale of Shares. The Company
shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied. To
the extent permitted or required by the Administrator, these obligations may or shall be satisfied by having the Company withhold
a portion of the Shares of stock that otherwise would be issued to a Participant under such Award or by tendering Shares previously
acquired by the Participant.
10.
Adjustments of and Changes in the Common Stock.
(a)
The existence of outstanding Awards shall not affect in any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations, exchanges, or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company or any issuance of Shares or other securities or subscription
rights thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Shares or
other securities of the Company or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
Further, except as expressly provided herein or by the Administrator, (i) the issuance by the Company of shares of stock or any
class of securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, (ii) the payment of a dividend in property other than Shares, or (iii) the occurrence of
any similar transaction, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of Shares subject to Stock Options or other Awards theretofore granted or the purchase
price per Share, unless the Administrator shall determine, in its sole discretion, that an adjustment is necessary or appropriate.
(b)
If the number of outstanding Shares or other securities of the Company, or both, for which Awards are then exercisable or as to
which Awards may be granted or settled shall at any time be increased or decreased by declaration of a stock dividend, a stock
split, a reverse stock split, a combination of shares or a similar transaction, or if the outstanding Shares or other such securities
are changed or exchanged for a different kind of securities of the Company by a recapitalization, reorganization or any similar
equity restructuring transaction affecting the Shares or such other securities of the Company, the Administrator shall make appropriate
adjustments to the number and kind of Shares or other securities that are subject to this Plan and that are subject to or issuable
upon exercises of any Awards theretofore granted, and to the exercise or settlement prices of such Awards. Any such adjustments
shall appropriately maintain the proportionate numbers of Shares or other securities subject to this Plan or outstanding Awards.
Any such adjustment to an outstanding Award generally shall be made without changing the aggregate exercise or settlement price,
if any.
(c)
As used in this paragraph, an “Acquisition” shall mean (i) a reorganization, merger or consolidation
(not covered by Section 10(b)) as a result of which the Company is not the surviving entity or as a result of which the outstanding
Shares are changed into or exchanged for cash, property or securities not of the Company’s issue, or a combination thereof,
except for a merger or consolidation with a wholly-owned subsidiary of the Company or a transaction effected primarily to change
the state of the Company’s incorporation, or (ii) a sale or exchange, or series of related sales or exchanges, by the Company
of all or substantially all of its assets, or by one or more of the Company’s Subsidiaries of all or substantially all of
the consolidated assets of the Company and its Subsidiaries, or (iii) the acquisition in a single transaction (including without
limitation a merger, sale or exchange), or series of related transactions, of outstanding Shares representing more than 80% in
voting power of the then outstanding Shares (assuming full conversion of all then convertible securities of the Company and full
cashless exercises of all warrants or options which can then be exercised by cashless exercises). Subject to the following sentence,
upon the closing of such an Acquisition, or upon the dissolution and liquidation of the Company, each outstanding Stock Option
or SAR shall terminate and each holder of an outstanding Stock Option or SAR shall, notwithstanding any unfulfilled vesting requirement,
be entitled prior to such closing or liquidation to exercise the unexercised portion of such Stock Option or SAR. The preceding
sentence shall be subject to any different terms contained in the grant of or agreement governing such Award and shall not be
applicable with respect to a Stock Option or SAR if provision shall be made in connection with such Acquisition for the assumption
of the Stock Option or SAR by, or the substitution for such Stock Option or SAR of a new option or stock appreciation right covering
the stock of the surviving, successor or purchasing corporation or a parent or subsidiary thereof with appropriate adjustments
as to the number and kind of shares or other property to be issued upon exercise of the Stock Option or SAR and the exercise price,
provided that with respect to an Incentive Option such assumption or substitution is permitted (to preserve the applicability
to the Incentive Option of Section 421 (a) of the Code) by Sections 422 and 424 of the Code. The grant or instrument evidencing
any Option, SAR or other Award may also provide for other accelerations of vesting requirements or its exercise or settlement.
(d)
Subject to the requirements of Section 155 of the Nevada General Corporation Law, unless otherwise determined by the Administrator,
no right to purchase or receive fractional Shares shall result from any adjustment in a Stock Option, SAR or other Award pursuant
to this Section 10 and, in case of any such adjustment, the Shares subject to the Stock Option, SAR or Award shall be rounded
down to the nearest whole share.
11.
Amendment and Termination of the Plan. The Board may amend, alter or discontinue the Plan and the Administrator may to the
extent permitted by the Plan amend any agreement or other document evidencing an Award made under this Plan; provided, however,
that the Company shall submit for stockholder approval any amendment (other than an amendment pursuant to the adjustment provisions
of Section 10) that otherwise would:
(a)
Increase the maximum number of Shares for which Awards may be granted under this Plan;
(b)
Reduce the price at which Stock Options may be granted below the price provided for in Section 8(a);
(c)
Extend the term of this Plan; or
(d)
Change the class of persons eligible to be Participants.
In
addition, no such amendment or alteration shall be made which would impair the rights of any Participant, without such Participant’s
consent, under any Award theretofore granted; provided that no such consent shall be required with respect to any amendment
or alteration if the Administrator reasonably determines that such amendment or alteration is not reasonably likely to significantly
diminish the benefits provided under such Award, or that any such diminishment has been adequately compensated.
12.
Compliance with Applicable Law. This Plan, the grant and exercise of Awards hereunder, and the obligation of the Company to
sell, issue or deliver Shares under such Awards, shall be subject to all applicable federal, state and local laws, rules and regulations
and to such approvals by any governmental or regulatory agency as may be required. If the Company shall use reasonable efforts
to satisfy such related requirements: the Company shall not be required to register in a Participant’s name or deliver any
Shares prior to the completion of any registration or qualification of such Shares under any federal, state or local law or any
ruling or regulation of any government body which shall be necessary; to the extent the Company is unable to or the Administrator
reasonably deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by
the Company’s counsel to be necessary or advisable for the lawful issuance and sale of any Shares hereunder, the Company
shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained; and no Stock Option shall be exercisable and no Shares shall be issued and/or transferable under
any other Award unless a registration statement with respect to the Shares underlying such Stock Option is effective and current
or the Company has determined that such registration is unnecessary.
13.
Liability of Company. The Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale
of Shares as to which the Company, despite its reasonably efforts, has been unable to obtain from any regulatory body having jurisdiction
the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder; and
(b) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement
of any Stock Option or other Award granted hereunder.
14.
Non-Exclusivity of Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders
of the Company for approval shall be construed as creating any limitations on the power of the Board or the Administrator to adopt
such other incentive arrangements as either may deem desirable, including, without limitation, the granting of Stock Options,
Stock Appreciation Rights, Restricted Stock or Restricted Stock Units otherwise than under this Plan, and such arrangements may
be either generally applicable or applicable only in specific cases.
15.
Unfunded Plan. Insofar as it provides for Awards, the Plan shall be unfunded. Although bookkeeping accounts may be established
with respect to Participants who are granted Awards under this Plan, any such accounts will be used merely as a bookkeeping convenience.
The Company shall not be required to segregate any assets which may at any time be represented by Awards, nor shall this Plan
be construed as providing for such segregation, nor shall the Company or the Administrator be deemed to be a trustee of stock
or cash to be awarded under the Plan.
16.
Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number
of Shares as shall be sufficient to satisfy the requirements of the Plan.
17.
Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of Nevada (without giving
effect to conflicts of law principles).
18.
Section 409A of the Code. To the extent applicable, the Plan is intended to comply with Section 409A of the Code. Unless the
Administrator determines otherwise, the Administrator shall interpret and administer the Plan in accordance with Section 409A.
The Administrator shall have the authority unilaterally to accelerate or delay a payment to which the holder of any Award may
be entitled to the extent necessary or desirable to comply with, or avoid adverse consequences under, Section 409A.
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