EXHIBIT 10.1

 

TRANSBIOTEC, INC.

2019 EQUITY INCENTIVE PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS: SEPTEMBER 10, 2019

APPROVED BY THE STOCKHOLDERS: SEPTEMBER 10, 2019

EFFECTIVE DATE OF PLAN: OCTOBER 25, 2019

 

TABLE OF CONTENTS

 

Page

 

1.

General

 

1

 

2.

Shares Subject to the Plan

 

1

 

3.

Eligibility and Limitations

 

2

 

4.

Options and Stock Appreciation Rights

 

2

 

5.

Awards Other Than Options and Stock Appreciation Rights

 

5

 

6.

Adjustments upon Changes in Common Stock; Other Corporate Events

 

6

 

7.

Administration

 

7

 

8.

Tax Withholding

 

9

 

9.

Miscellaneous

 

10

 

10.

Covenants of the Company

 

12

 

11.

Additional Rules for Awards Subject to Section 409A

 

12

 

12.

Severability

 

14

 

13.

Termination of the Plan

 

14

 

14.

Definitions

 

15

 

 

i

  

 

 

1. GENERAL.

 

(a) 2019 Equity Incentive Plan. The 2019 Equity Incentive Plan shall become
effective after such time as it is has been approved by the Board of Directors
and ratified or approved by the shareholders of the Company and on the effective
date listed above (the “Adoptive Date”).

 

(b) Plan Purpose. The Company, by means of the Plan, seeks to secure and retain
the services of Employees, Directors and Consultants, to provide incentives for
such persons to exert maximum efforts for the success of the Company and any
Affiliate and to provide a means by which such persons may be given an
opportunity to benefit from increases in value of the Common Stock through the
granting of Awards.

 

(c) Available Awards. The Plan provides for the grant of the following Awards:
(i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv)
Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii)
Other Awards.

 

(d) Adoption Date; Effective Date. The Plan will come into existence on the
Adoption Date, but no Award may be granted prior to the Effective Date.

 

2. SHARES SUBJECT TO THE PLAN.

 

(a) Share Reserve. Subject to adjustment in accordance with Section 2(c) and any
adjustments as necessary to implement any Capitalization Adjustments, the
aggregate number of shares of Common Stock that may be issued pursuant to Awards
will not exceed 128,000,000 shares.

 

In addition, subject to any adjustments as necessary to implement any
Capitalization Adjustments, such aggregate number of shares of Common Stock will
automatically increase on February 1 of each fiscal year for a period of ten
years commencing on February 1, 2020 and ending on (and including) February 1,
2029, in a number of shares of Common Stock equal to 5% of the total number of
shares of Capital Stock outstanding on December 31 of the preceding fiscal year;
provided, however that the Board may act prior to February 1 of a given fiscal
year to provide that the increase for such year will be a lesser number of
shares of Common Stock.

 

(b) Aggregate Incentive Stock Option Limit. Notwithstanding anything to the
contrary in Section 2(a) and subject to any adjustments as necessary to
implement any Capitalization Adjustments, the aggregate maximum number of shares
of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options is 128,000,000 shares.

 

(c) Share Reserve Operation.

 

(i) Limit Applies to Common Stock Issued Pursuant to Awards. For clarity, the
Share Reserve is a limit on the number of shares of Common Stock that may be
issued pursuant to Awards and does not limit the granting of Awards, except that
the Company will keep available at all times the number of shares of Common
Stock reasonably required to satisfy its obligations to issue shares pursuant to
such Awards. Shares may be issued in connection with a merger or acquisition as
permitted by, as applicable, NASDAQ Listing Rule 5635(c), NYSE Listed Company
Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule,
and such issuance will not reduce the number of shares available for issuance
under the Plan.

 

(ii) Actions that Do Not Constitute Issuance of Common Stock and Do Not Reduce
Share Reserve. The following actions do not result in an issuance of shares
under the Plan and accordingly do not reduce the number of shares subject to the
Share Reserve and available for issuance under the Plan: (a) the expiration or
termination of any portion of an Award without the shares covered by such
portion of the Award having been issued, (b) the settlement of any portion of an
Award in cash (i.e., the Participant receives cash rather than Common Stock),
(c) the withholding of shares that would otherwise be issued by the Company to
satisfy the exercise, strike or purchase price of an Award; (d) the withholding
of shares that would otherwise be issued by the Company to satisfy a tax
withholding obligation in connection with an Award.

 

(iii) Reversion of Previously Issued Shares of Common Stock to Share Reserve.
The following shares of Common Stock previously issued pursuant to an Award and
accordingly initially deducted from the Share Reserve will be added back to the
Share Reserve and again become available for issuance under the Plan: (a) any
shares that are forfeited back to or repurchased by the Company because of a
failure to meet a contingency or condition required for the vesting of such
shares; (b) any shares that are reacquired by the Company to satisfy the
exercise, strike or purchase price of an Award; and (c) any shares that are
reacquired by the Company to satisfy a tax withholding obligation in connection
with an Award.

 

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3. ELIGIBILITY AND LIMITATIONS.

 

(a) Eligible Award Recipients. Subject to the terms of the Plan, Employees,
Directors and Consultants are eligible to receive Awards.

 

(b) Specific Award Limitations.

 

(i) Limitations on Incentive Stock Option Recipients. Incentive Stock Options
may be granted only to Employees of the Company or a “parent corporation” or
“subsidiary corporation” thereof (as such terms are defined in Sections 424(e)
and (f) of the Code).

 

(ii) Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
any Affiliates) exceeds $100,000 (or such other limit established in the Code)
or otherwise does not comply with the rules governing Incentive Stock Options,
the Options or portions thereof that exceed such limit (according to the order
in which they were granted) or otherwise do not comply with such rules will be
treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s).

 

(iii) Limitations on Incentive Stock Options Granted to Ten Percent
Stockholders. A Ten Percent Stockholder may not be granted an Incentive Stock
Option unless (i) the exercise price of such Option is at least 110% of the Fair
Market Value on the date of grant of such Option and (ii) the Option is not
exercisable after the expiration of five years from the date of grant of such
Option.

 

(iv) Limitations on Nonstatutory Stock Options and SARs. Nonstatutory Stock
Options and SARs may not be granted to Employees, Directors and Consultants who
are providing Continuous Service only to any “parent” of the Company (as such
term is defined in Rule 405) unless the stock underlying such Awards is treated
as “service recipient stock” under Section 409A because the Awards are granted
pursuant to a corporate transaction (such as a spin off transaction) or unless
such Awards otherwise comply with the distribution requirements of Section 409A.

 

(c) Aggregate Incentive Stock Option Limit. The aggregate maximum number of
shares of Common Stock that may be issued pursuant to the exercise of Incentive
Stock Options is the number of shares specified in Section 2(b).

 

(d) Non-Employee Director Compensation Limit. The aggregate value of all
compensation granted or paid, as applicable, to any individual for service as a
Non-Employee Director with respect to any calendar year, including Awards
granted and cash fees paid by the Company to such Non-Employee Director, will
not exceed $750,000 in total value, calculating the value of any equity awards
based on the grant date fair value of such equity awards for financial reporting
purposes.

 

4. OPTIONS AND STOCK APPRECIATION RIGHTS.

 

Each Option and SAR will have such terms and conditions as determined by the
Board. Each Option will be designated in writing as an Incentive Stock Option or
Nonstatutory Stock Option at the time of grant; provided, however, that if an
Option is not so designated, then such Option will be a Nonstatutory Stock
Option, and the shares purchased upon exercise of each type of Option will be
separately accounted for. Each SAR will be denominated in shares of Common Stock
equivalents. The terms and conditions of separate Options and SARs need not be
identical; provided, however, that each Option Agreement and SAR Agreement will
conform (through incorporation of provisions hereof by reference in the Award
Agreement or otherwise) to the substance of each of the following provisions:

 

(a) Term. Subject to Section 3(b) regarding Ten Percent Stockholders, no Option
or SAR will be exercisable after the expiration of ten years from the date of
grant of such Award or such shorter period specified in the Award Agreement.

 

(b) Exercise or Strike Price. Subject to Section 3(b) regarding Ten Percent
Stockholders, the exercise or strike price of each Option or SAR will not be
less than 100% of the Fair Market Value on the date of grant of such Award.
Notwithstanding the foregoing, an Option or SAR may be granted with an exercise
or strike price lower than 100% of the Fair Market Value on the date of grant of
such Award if such Award is granted pursuant to an assumption of or substitution
for another option or stock appreciation right pursuant to a Corporate
Transaction and in a manner consistent with the provisions of Sections 409A and,
if applicable, 424(a) of the Code.

 

 2

  

 

(c) Exercise Procedure and Payment of Exercise Price for Options. In order to
exercise an Option, the Participant must provide notice of exercise to the Plan
Administrator in accordance with the procedures specified in the Option
Agreement or otherwise provided by the Company. The Board has the authority to
grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment.
The exercise price of an Option may be paid, to the extent permitted by
Applicable Law and as determined by the Board, by one or more of the following
methods of payment to the extent set forth in the Option Agreement:

 

(i) by cash or check, bank draft or money order payable to the Company;

 

(ii) pursuant to a “cashless exercise” program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of the
Common Stock subject to the Option, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the
exercise price to the Company from the sales proceeds;

 

(iii) by delivery to the Company (either by actual delivery or attestation) of
shares of Common Stock that are already owned by the Participant free and clear
of any liens, claims, encumbrances or security interests, with a Fair Market
Value on the date of exercise that does not exceed the exercise price, provided
that (A) at the time of exercise the Common Stock is publicly traded, (B) any
remaining balance of the exercise price not satisfied by such delivery is paid
by the Participant in cash or other permitted form of payment, (C) such delivery
would not violate any Applicable Law or agreement restricting the redemption of
the Common Stock, (D) any certificated shares are endorsed or accompanied by an
executed assignment separate from certificate, and (E) such shares have been
held by the Participant for any minimum period necessary to avoid adverse
accounting treatment as a result of such delivery;

 

(iv) if the Option is a Nonstatutory Stock Option, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of
Common Stock issuable upon exercise by the largest whole number of shares with a
Fair Market Value on the date of exercise that does not exceed the exercise
price, provided that (A) such shares used to pay the exercise price will not be
exercisable thereafter and (B) any remaining balance of the exercise price not
satisfied by such net exercise is paid by the Participant in cash or other
permitted form of payment; or

 

(v) in any other form of consideration that may be acceptable to the Board and
permissible under Applicable Law.

 

(d) Exercise Procedure and Payment of Appreciation Distribution for SARs. In
order to exercise any SAR, the Participant must provide notice of exercise to
the Plan Administrator in accordance with the SAR Agreement. The appreciation
distribution payable to a Participant upon the exercise of a SAR will not be
greater than an amount equal to the excess of (i) the aggregate Fair Market
Value on the date of exercise of a number of shares of Common Stock equal to the
number of Common Stock equivalents that are vested and being exercised under
such SAR, over (ii) the strike price of such SAR. Such appreciation distribution
may be paid to the Participant in the form of Common Stock or cash (or any
combination of Common Stock and cash) or in any other form of payment, as
determined by the Board and specified in the SAR Agreement.

 

(e) Transferability. Options and SARs may not be transferred to third party
financial institutions for value. The Board may impose such additional
limitations on the transferability of an Option or SAR as it determines. In the
absence of any such determination by the Board, the following restrictions on
the transferability of Options and SARs will apply, provided that except as
explicitly provided herein, neither an Option nor a SAR may be transferred for
consideration and provided, further, that if an Option is an Incentive Stock
Option, such Option may be deemed to be a Nonstatutory Stock Option as a result
of such transfer:

 

(i) Restrictions on Transfer. An Option or SAR will not be transferable, except
by will or by the laws of descent and distribution, and will be exercisable
during the lifetime of the Participant only by the Participant; provided,
however, that the Board may permit transfer of an Option or SAR in a manner that
is not prohibited by applicable tax and securities laws upon the Participant’s
request, including to a trust if the Participant is considered to be the sole
beneficial owner of such trust (as determined under Section 671 of the Code and
applicable state law) while such Option or SAR is held in such trust, provided
that the Participant and the trustee enter into a transfer and other agreements
required by the Company.

 

(ii) Domestic Relations Orders. Notwithstanding the foregoing, subject to the
execution of transfer documentation in a format acceptable to the Company and
subject to the approval of the Board or a duly authorized Officer, an Option or
SAR may be transferred pursuant to a domestic relations order.

 

 3

  

 

(f) Vesting. The Board may impose such restrictions on or conditions to the
vesting and/or exercisability of an Option or SAR as determined by the Board and
which may vary. Except as otherwise provided in the Award Agreement or other
written agreement between a Participant and the Company or an Affiliate, vesting
of Options and SARs will cease upon termination of the Participant’s Continuous
Service.

 

(g) Termination of Continuous Service for Cause. Except as explicitly otherwise
provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service is
terminated for Cause, the Participant’s Options and SARs will terminate and be
forfeited immediately upon such termination of Continuous Service, and the
Participant will be prohibited from exercising any portion (including any vested
portion) of such Awards on and after the date of such termination of Continuous
Service and the Participant will have no further right, title or interest in
such forfeited Award, the shares of Common Stock subject to the forfeited Award,
or any consideration in respect of the forfeited Award.

 

(h) Post-Termination Exercise Period Following Termination of Continuous Service
For Reasons Other than Cause. Subject to Section 4(i), if a Participant’s
Continuous Service terminates for any reason other than for Cause, the
Participant may exercise his or her Option or SAR to the extent vested, but only
within the following period of time or, if applicable, such other period of time
provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate; provided, however, that in no event may such
Award be exercised after the expiration of its maximum term (as set forth in
Section 4(a)):

 

(i) three months following the date of such termination if such termination is a
termination without Cause (other than any termination due to the Participant’s
Disability or death);

 

(ii) 12 months following the date of such termination if such termination is due
to the Participant’s Disability;

 

(iii) 18 months following the date of such termination if such termination is
due to the Participant’s death; or

 

(iv) 18 months following the date of the Participant’s death if such death
occurs following the date of such termination but during the period such Award
is otherwise exercisable (as provided in (i) or (ii) above).

 

Following the date of such termination, to the extent the Participant does not
exercise such Award within the applicable Post-Termination Exercise Period (or,
if earlier, prior to the expiration of the maximum term of such Award), such
unexercised portion of the Award will terminate, and the Participant will have
no further right, title or interest in terminated Award, the shares of Common
Stock subject to the terminated Award, or any consideration in respect of the
terminated Award.

 

(i) Restrictions on Exercise; Extension of Exercisability. A Participant may not
exercise an Option or SAR at any time that the issuance of shares of Common
Stock upon such exercise would violate Applicable Law. Except as otherwise
provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service
terminates for any reason other than for Cause and, at any time during the last
thirty days of the applicable Post-Termination Exercise Period: (i) the exercise
of the Participant’s Option or SAR would be prohibited solely because the
issuance of shares of Common Stock upon such exercise would violate Applicable
Law, or (ii) the immediate sale of any shares of Common Stock issued upon such
exercise would violate the Company’s Trading Policy, then the applicable
Post-Termination Exercise Period will be extended to the last day of the
calendar month that commences following the date the Award would otherwise
expire, with an additional extension of the exercise period to the last day of
the next calendar month to apply if any of the foregoing restrictions apply at
any time during such extended exercise period, generally without limitation as
to the maximum permitted number of extensions; provided, however, that in no
event may such Award be exercised after the expiration of its maximum term (as
set forth in Section 4(a)).

 

(j) Non-Exempt Employees. No Option or SAR, whether or not vested, granted to an
Employee who is a non-exempt employee for purposes of the Fair Labor Standards
Act of 1938, as amended, will be first exercisable for any shares of Common
Stock until at least six months following the date of grant of such Award.
Notwithstanding the foregoing, in accordance with the provisions of the Worker
Economic Opportunity Act, any vested portion of such Award may be exercised
earlier than six months following the date of grant of such Award in the event
of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in
which such Award is not assumed, continued or substituted, (iii) a Change in
Control, or (iv) such Participant’s retirement (as such term may be defined in
the Award Agreement or another applicable agreement or, in the absence of any
such definition, in accordance with the Company’s then current employment
policies and guidelines). This Section 4(j) is intended to operate so that any
income derived by a non-exempt employee in connection with the exercise or
vesting of an Option or SAR will be exempt from his or her regular rate of pay.

 

(k) Whole Shares. Options and SARs may be exercised only with respect to whole
shares of Common Stock or their equivalents.

 

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5. AWARDS OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS.

 

(a) Restricted Stock Awards and RSU Awards. Each Restricted Stock Award and RSU
Award will have such terms and conditions as determined by the Board which need
not be identical; provided, however, that each Restricted Stock Award Agreement
and RSU Award Agreement will conform (through incorporation of the provisions
hereof by reference in the Award Agreement or otherwise) to the substance of
each of the following provisions:

 

(i) Form of Award.

 

(1) RSAs: To the extent consistent with the Company’s Bylaws, at the Board’s
election, shares of Common Stock subject to a Restricted Stock Award may be (i)
held in book entry form subject to the Company’s instructions until such shares
become vested or any other restrictions lapse, or (ii) evidenced by a
certificate, which certificate will be held in such form and manner as
determined by the Board. Unless otherwise determined by the Board, a Participant
will have voting and other rights as a stockholder of the Company with respect
to any shares subject to a Restricted Stock Award.

 

(2) RSUs: A RSU Award represents a Participant’s right to be issued on a future
date the number of shares of Common Stock that is equal to the number of
restricted stock units subject to the RSU Award. As a holder of a RSU Award, a
Participant is an unsecured creditor of the Company with respect to the
Company’s unfunded obligation, if any, to issue shares of Common Stock in
settlement of such Award and nothing contained in the Plan or any RSU Agreement,
and no action taken pursuant to its provisions, will create or be construed to
create a trust of any kind or a fiduciary relationship between a Participant and
the Company or an Affiliate or any other person. A Participant will not have
voting or any other rights as a stockholder of the Company with respect to any
RSU Award (unless and until shares are actually issued in settlement of a vested
RSU Award).

 

(ii) Consideration.

 

(1) RSA: A Restricted Stock Award may be granted in consideration for (A) cash
or check, bank draft or money order payable to the Company, (B) past services to
the Company or an Affiliate, or (C) any other form of consideration (including
future services) as the Board may determine and permissible under Applicable
Law.

 

(2) RSU: Unless otherwise determined by the Board at the time of grant, a RSU
Award will be granted in consideration for the Participant’s services to the
Company or an Affiliate, such that the Participant will not be required to make
any payment to the Company (other than such services) with respect to the grant
or vesting of the RSU Award, or the issuance of any shares of Common Stock
pursuant to the RSU Award. If, at the time of grant, the Board determines that
any consideration must be paid by the Participant (in a form other than the
Participant’s services to the Company or an Affiliate) upon the issuance of any
shares of Common Stock in settlement of the RSU Award, such consideration may be
paid in any form of consideration as the Board may determine and permissible
under Applicable Law.

 

(iii) Vesting. The Board may impose such restrictions on or conditions to the
vesting of a Restricted Stock Award or RSU Award as determined by the Board and
which may vary. Except as otherwise provided in the Award Agreement or other
written agreement between a Participant and the Company or an Affiliate, vesting
of Restricted Stock Awards and RSU Awards will cease upon termination of the
Participant’s Continuous Service.

 

(iv) Termination of Continuous Service. Except as otherwise provided in the
Award Agreement or other written agreement between a Participant and the Company
or an Affiliate, if a Participant’s Continuous Service terminates for any
reason, (i) the Company may receive through a forfeiture condition or a
repurchase right any or all of the shares of Common Stock held by the
Participant under his or her Restricted Stock Award that have not vested as of
the date of such termination as set forth in the Restricted Stock Award
Agreement and (ii) any portion of his or her RSU Award that has not vested will
be forfeited upon such termination and the Participant will have no further
right, title or interest in the RSU Award, the shares of Common Stock issuable
pursuant to the RSU Award, or any consideration in respect of the RSU Award.

 

(v) Dividends and Dividend Equivalents. Dividends or dividend equivalents may be
paid or credited, as applicable, with respect to any shares of Common Stock
subject to a Restricted Stock Award or RSU Award, as determined by the Board and
specified in the Award Agreement).

 

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(vi) Settlement of RSU Awards. A RSU Award may be settled by the issuance of
shares of Common Stock or cash (or any combination thereof) or in any other form
of payment, as determined by the Board and specified in the RSU Award Agreement.
At the time of grant, the Board may determine to impose such restrictions or
conditions that delay such delivery to a date following the vesting of the RSU
Award.

 

(b) Performance Awards. With respect to any Performance Award, the length of any
Performance Period, the Performance Goals to be achieved during the Performance
Period, the other terms and conditions of such Award, and the measure of whether
and to what degree such Performance Goals have been attained will be determined
by the Board.

 

(c) Other Awards. Other forms of Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, including the appreciation in value
thereof (e.g., options or stock rights with an exercise price or strike price
less than 100% of the Fair Market Value at the time of grant) may be granted
either alone or in addition to Awards provided for under Section 4 and the
preceding provisions of this Section 5. Subject to the provisions of the Plan,
the Board will have sole and complete discretion to determine the persons to
whom and the time or times at which such Other Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Other Awards and all other terms and conditions of such Other
Awards.

 

6. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

 

(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the
Board shall appropriately and proportionately adjust: (i) the class(es) and
maximum number of shares of Common Stock subject to the Plan and the maximum
number of shares by which the Share Reserve may annually increase pursuant to
Section 2(a), (ii) the class(es) and maximum number of shares that may be issued
pursuant to the exercise of Incentive Stock Options pursuant to Section 2(a),
and (iii) the class(es) and number of securities and exercise price, strike
price or purchase price of Common Stock subject to outstanding Awards. The Board
shall make such adjustments, and its determination shall be final, binding and
conclusive. Notwithstanding the foregoing, no fractional shares or rights for
fractional shares of Common Stock shall be created in order to implement any
Capitalization Adjustment. The Board shall determine an equivalent benefit for
any fractional shares or fractional shares that might be created by the
adjustments referred to in the preceding provisions of this Section.

 

(b) Dissolution or Liquidation. Except as otherwise provided in the Award
Agreement, in the event of a dissolution or liquidation of the Company, all
outstanding Awards (other than Awards consisting of vested and outstanding
shares of Common Stock not subject to a forfeiture condition or the Company’s
right of repurchase) will terminate immediately prior to the completion of such
dissolution or liquidation, and the shares of Common Stock subject to the
Company’s repurchase rights or subject to a forfeiture condition may be
repurchased or reacquired by the Company notwithstanding the fact that the
holder of such Award is providing Continuous Service, provided, however, that
the Board may determine to cause some or all Awards to become fully vested,
exercisable and/or no longer subject to repurchase or forfeiture (to the extent
such Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.

 

(c) Corporate Transaction. The following provisions will apply to Awards in the
event of a Corporate Transaction unless otherwise provided in the instrument
evidencing the Award or any other written agreement between the Company or any
Affiliate and the Participant or unless otherwise expressly provided by the
Board at the time of grant of an Award.

 

(i) Awards May Be Assumed. In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company) may assume or continue any or all Awards
outstanding under the Plan or may substitute similar awards for Awards
outstanding under the Plan (including but not limited to, awards to acquire the
same consideration paid to the stockholders of the Company pursuant to the
Corporate Transaction), and any reacquisition or repurchase rights held by the
Company in respect of Common Stock issued pursuant to Awards may be assigned by
the Company to the successor of the Company (or the successor’s parent company,
if any), in connection with such Corporate Transaction. A surviving corporation
or acquiring corporation (or its parent) may choose to assume or continue only a
portion of an Award or substitute a similar award for only a portion of an
Award, or may choose to assume or continue the Awards held by some, but not all
Participants. The terms of any assumption, continuation or substitution will be
set by the Board.

 

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(ii) Awards Held by Current Participants. In the event of a Corporate
Transaction in which the surviving corporation or acquiring corporation (or its
parent company) does not assume or continue such outstanding Awards or
substitute similar awards for such outstanding Awards, then with respect to
Awards that have not been assumed, continued or substituted and that are held by
Participants whose Continuous Service has not terminated prior to the effective
time of the Corporate Transaction (referred to as the “Current Participants”),
the vesting of such Awards (and, with respect to Options and Stock Appreciation
Rights, the time when such Awards may be exercised) will be accelerated in full
to a date prior to the effective time of such Corporate Transaction (contingent
upon the effectiveness of the Corporate Transaction) as the Board determines
(or, if the Board does not determine such a date, to the date that is five (5)
days prior to the effective time of the Corporate Transaction), and such Awards
will terminate if not exercised (if applicable) at or prior to the effective
time of the Corporate Transaction, and any reacquisition or repurchase rights
held by the Company with respect to such Awards will lapse (contingent upon the
effectiveness of the Corporate Transaction). With respect to Performance Awards
which will accelerate vesting in connection with a Corporate Transaction
pursuant to this subsection (ii) and which Awards have multiple vesting levels
depending on the level of performance, unless otherwise provided in the Award
Agreement, such Performance Awards will accelerate vesting at 100% of the target
level. With respect to Awards which will accelerate vesting in connection with a
Corporate Transaction pursuant to this subsection (ii) and which Awards are
settled in the form of a cash payment, such cash payment will be made no later
than thirty (30) days following the effectiveness of the Corporate Transaction.

 

(iii) Awards Held by Persons other than Current Participants. In the event of a
Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding
Awards or substitute similar awards for such outstanding Awards, then with
respect to Awards that have not been assumed, continued or substituted and that
are held by persons other than Current Participants, such Awards will terminate
if not exercised (if applicable) prior to the effective time of the Corporate
Transaction; provided, however, that any reacquisition or repurchase rights held
by the Company with respect to such Awards will not terminate and may continue
to be exercised notwithstanding the Corporate Transaction.

 

(iv) Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in
the event an Award will terminate if not exercised prior to the effective time
of a Corporate Transaction, the Board may provide, in its sole discretion, that
the holder of such Award may not exercise such Award but will receive a payment,
in such form as may be determined by the Board, equal in value, at the effective
time, to the excess, if any, of (A) the value of the property the Participant
would have received upon the exercise of the Award (including, at the discretion
of the Board, any unvested portion of such Award), over (B) any exercise price
payable by such holder in connection with such exercise.

 

(d) Appointment of Stockholder Representative. As a condition to the receipt of
an Award under this Plan, a Participant will be deemed to have agreed that the
Award will be subject to the terms of any agreement governing a Corporate
Transaction involving the Company, including, without limitation, a provision
for the appointment of a stockholder representative that is authorized to act on
the Participant’s behalf with respect to any escrow, indemnities and any
contingent consideration.

 

(e) No Restriction on Right to Undertake Transactions. The grant of any Award
under the Plan and the issuance of shares pursuant to any Award does not affect
or restrict in any way the right or power of the Company or the stockholders of
the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its
business, any merger or consolidation of the Company, any issue of stock or of
options, rights or options to purchase stock or of bonds, debentures, preferred
or prior preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or exchangeable for
Common Stock, 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.

 

 7

  

 

7. ADMINISTRATION.

 

(a) Administration by Board. The Board will administer the Plan unless and until
the Board delegates administration of the Plan to a Committee or Committees, as
provided in subsection (c) below.

 

(b) Powers of Board. The Board will have the power, subject to, and within the
limitations of, the express provisions of the Plan:

 

(i) To determine from time to time (A) which of the persons eligible under the
Plan will be granted Awards; (B) when and how each Award will be granted; (C)
what type or combination of types of Award will be granted; (D) the provisions
of each Award granted (which need not be identical), including the time or times
when a person will be permitted to receive an issuance of Common Stock or other
payment pursuant to an Award; (E) the number of shares of Common Stock or cash
equivalent with respect to which an Award will be granted to each such person;
(F) the Fair Market Value applicable to an Award; and (G) the terms of any
Performance Award that is not valued in whole or in part by reference to, or
otherwise based on, the Common Stock, including the amount of cash payment or
other property that may be earned and the timing of payment.

 

(ii) To construe and interpret the Plan and Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Award Agreement, in a manner and to the
extent it deems necessary or expedient to make the Plan or Award fully
effective.

 

(iii) To settle all controversies regarding the Plan and Awards granted under
it.

 

(iv) To accelerate the time at which an Award may first be exercised or the time
during which an Award or any part thereof will vest, notwithstanding the
provisions in the Award Agreement stating the time at which it may first be
exercised or the time during which it will vest.

 

(v) To prohibit the exercise of any Option, SAR or other exercisable Award
during a period of up to thirty days prior to the consummation of any pending
stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares of
Common Stock or the share price of the Common Stock including any Corporate
Transaction, for reasons of administrative convenience.

 

(vi) To suspend or terminate the Plan at any time. Suspension or termination of
the Plan will not Materially Impair rights and obligations under any Award
granted while the Plan is in effect except with the written consent of the
affected Participant.

 

(vii) To amend the Plan in any respect the Board deems necessary or advisable;
provided, however, that stockholder approval will be required for any amendment
to the extent required by Applicable Law. Except as provided above, rights under
any Award granted before amendment of the Plan will not be Materially Impaired
by any amendment of the Plan unless (1) the Company requests the consent of the
affected Participant, and (2) such Participant consents in writing.

 

(viii) To submit any amendment to the Plan for stockholder approval.

 

(ix) To approve forms of Award Agreements for use under the Plan and to amend
the terms of any one or more Awards, including, but not limited to, amendments
to provide terms more favorable to the Participant than previously provided in
the Award Agreement, subject to any specified limits in the Plan that are not
subject to Board discretion; provided however, that, a Participant’s rights
under any Award will not be Materially Impaired by any such amendment unless (A)
the Company requests the consent of the affected Participant, and (B) such
Participant consents in writing.

 

(x) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company and
that are not in conflict with the provisions of the Plan or Awards.

 

(xi) To adopt such procedures and sub-plans as are necessary or appropriate to
permit and facilitate participation in the Plan by, or take advantage of
specific tax treatment for Awards granted to, Employees, Directors or
Consultants who are foreign nationals or employed outside the United States
(provided that Board approval will not be necessary for immaterial modifications
to the Plan or any Award Agreement to ensure or facilitate compliance with the
laws of the relevant foreign jurisdiction).

 

(xii) To effect, at any time and from time to time, subject to the consent of
any Participant whose Award is Materially Impaired by such action, (A) the
reduction of the exercise price (or strike price) of any outstanding Option or
SAR under the Plan; (B) the cancellation of any outstanding Option or SAR under
the Plan and the grant in substitution therefor of (1) a new Option or SAR under
the Plan or another equity plan of the Company covering the same or a different
number of shares of Common Stock, (2) a Restricted Stock Award, (3) a RSU Award,
(4) an Other Award, (5) cash and/or (6) other valuable consideration (as
determined by the Board); or (C) any other action that is treated as a repricing
under generally accepted accounting principles.

 

 8

  

 

(c) Delegation to Committee.

 

(i) General. The Board may delegate some or all of the administration of the
Plan to a Committee or Committees. If administration of the Plan is delegated to
a Committee, the Committee will have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board that have been delegated
to the Committee, including the power to delegate to a subcommittee of the
Committee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board will thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Committee may, at any time, abolish the subcommittee
and/or revest in the Committee any powers delegated to the subcommittee. The
Board may retain the authority to concurrently administer the Plan with the
Committee and may, at any time, revest in the Board some or all of the powers
previously delegated.

 

(ii) Rule 16b-3 Compliance. The Committee may consist solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3.In addition, the Board or
the Committee, in its sole discretion, may delegate to a Committee who need not
be Non-Employee Directors the authority to grant Awards to eligible persons who
are not then subject to Section 16 of the Exchange Act.

 

(d) Effect of Board’s Decision. All determinations, interpretations and
constructions made by the Board or any Committee in good faith will not be
subject to review by any person and will be final, binding and conclusive on all
persons.

 

(e) Delegation to an Officer. The Board or any Committee may delegate to one or
more Officers the authority to do one or both of the following (i) designate
Employees who are not Officers to be recipients of Options and SARs (and, to the
extent permitted by Applicable Law, other Awards) and, to the extent permitted
by Applicable Law, the terms thereof, and (ii) determine the number of shares of
Common Stock to be subject to such Awards granted to such Employees; provided,
however, that the resolutions evidencing such delegation will specify the total
number of shares of Common Stock that may be subject to the Awards granted by
such Officer and that such Officer may not grant an Award to himself or herself.
Any such Awards will be granted on the form of Award Agreement most recently
approved for use by the Board or the Committee, unless otherwise provided in the
resolutions approving the delegation authority. Notwithstanding anything to the
contrary herein, neither the Board nor any Committee may delegate to an Officer
who is acting solely in the capacity of an Officer (and not also as a Director)
the authority to determine the Fair Market Value.

 

8. TAX WITHHOLDING

 

(a) Withholding Authorization. As a condition to acceptance of any Award under
the Plan, a Participant authorizes withholding from payroll and any other
amounts payable to such Participant, and otherwise agree to make adequate
provision for (including), any sums required to satisfy any U.S. federal, state,
local and/or foreign tax or social insurance contribution withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with the exercise, vesting or settlement of such Award, as applicable.
Accordingly, a Participant may not be able to exercise an Award even though the
Award is vested, and the Company shall have no obligation to issue shares of
Common Stock subject to an Award, unless and until such obligations are
satisfied.

 

(b) Satisfaction of Withholding Obligation. To the extent permitted by the terms
of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S.
federal, state, local and/or foreign tax or social insurance withholding
obligation relating to an Award by any of the following means or by a
combination of such means: (i) causing the Participant to tender a cash payment;
(ii) withholding shares of Common Stock from the shares of Common Stock issued
or otherwise issuable to the Participant in connection with the Award; (iii)
withholding cash from an Award settled in cash; (iv) withholding payment from
any amounts otherwise payable to the Participant; (v) by allowing a Participant
to effectuate a “cashless exercise” pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board, or (vi) by such other
method as may be set forth in the Award Agreement.

 

(c) No Obligation to Notify or Minimize Taxes; No Liability to Claims. Except as
required by Applicable Law the Company has no duty or obligation to any
Participant to advise such holder as to the time or manner of exercising such
Award. Furthermore, the Company has no duty or obligation to warn or otherwise
advise such holder of a pending termination or expiration of an Award or a
possible period in which the Award may not be exercised. The Company has no duty
or obligation to minimize the tax consequences of an Award to the holder of such
Award and will not be liable to any holder of an Award for any adverse tax
consequences to such holder in connection with an Award. As a condition to
accepting an Award under the Plan, each Participant (i) agrees to not make any
claim against the Company, or any of its Officers, Directors, Employees or
Affiliates related to tax liabilities arising from such Award or other Company
compensation and (ii) acknowledges that such Participant was advised to consult
with his or her own personal tax, financial and other legal advisors regarding
the tax consequences of the Award and has either done so or knowingly and
voluntarily declined to do so. Additionally, each Participant acknowledges any
Option or SAR granted under the Plan is exempt from Section 409A only if the
exercise or strike price is at least equal to the “fair market value” of the
Common Stock on the date of grant as determined by the Internal Revenue Service
and there is no other impermissible deferral of compensation associated with the
Award. Additionally, as a condition to accepting an Option or SAR granted under
the Plan, each Participant agrees not make any claim against the Company, or any
of its Officers, Directors, Employees or Affiliates in the event that the
Internal Revenue Service asserts that such exercise price or strike price is
less than the “fair market value” of the Common Stock on the date of grant as
subsequently determined by the Internal Revenue Service.

 

 9

  

 

(d) Withholding Indemnification. As a condition to accepting an Award under the
Plan, in the event that the amount of the Company’s and/or its Affiliate’s
withholding obligation in connection with such Award was greater than the amount
actually withheld by the Company and/or its Affiliates, each Participant agrees
to indemnify and hold the Company and/or its Affiliates harmless from any
failure by the Company and/or its Affiliates to withhold the proper amount.

 

9. MISCELLANEOUS.

 

(a) Source of Shares. The stock issuable under the Plan will be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the open market or otherwise.

 

(b) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares
of Common Stock pursuant to Awards will constitute general funds of the Company.

 

(c) Corporate Action Constituting Grant of Awards. Corporate action constituting
a grant by the Company of an Award to any Participant will be deemed completed
as of the date of such corporate action, unless otherwise determined by the
Board, regardless of when the instrument, certificate, or letter evidencing the
Award is communicated to, or actually received or accepted by, the Participant.
In the event that the corporate records (e.g., Board consents, resolutions or
minutes) documenting the corporate action approving the grant contain terms
(e.g., exercise price, vesting schedule or number of shares) that are
inconsistent with those in the Award Agreement or related grant documents as a
result of a clerical error in the Award Agreement or related grant documents,
the corporate records will control and the Participant will have no legally
binding right to the incorrect term in the Award Agreement or related grant
documents.

 

(d) Stockholder Rights. No Participant will be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares of Common Stock
subject to such Award unless and until (i) such Participant has satisfied all
requirements for exercise of the Award pursuant to its terms, if applicable, and
(ii) the issuance of the Common Stock subject to such Award is reflected in the
records of the Company.

 

(e) No Employment or Other Service Rights. Nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any
Award granted pursuant thereto will confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the
time the Award was granted or affect the right of the Company or an Affiliate to
terminate at will and without regard to any future vesting opportunity that a
Participant may have with respect to any Award (i) the employment of an Employee
with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of
the Company or an Affiliate, and any applicable provisions of the corporate law
of the state or foreign jurisdiction in which the Company or the Affiliate is
incorporated, as the case may be. Further, nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any
Award will constitute any promise or commitment by the Company or an Affiliate
regarding the fact or nature of future positions, future work assignments,
future compensation or any other term or condition of employment or service or
confer any right or benefit under the Award or the Plan unless such right or
benefit has specifically accrued under the terms of the Award Agreement and/or
Plan.

 

(f) Change in Time Commitment. In the event a Participant’s regular level of
time commitment in the performance of his or her services for the Company and
any Affiliates is reduced (for example, and without limitation, if the
Participant is an Employee of the Company and the Employee has a change in
status from a full-time Employee to a part-time Employee or takes an extended
leave of absence) after the date of grant of any Award to the Participant, the
Board may determine, to the extent permitted by Applicable Law, to (i) make a
corresponding reduction in the number of shares or cash amount subject to any
portion of such Award that is scheduled to vest or become payable after the date
of such change in time commitment, and (ii) in lieu of or in combination with
such a reduction, extend the vesting or payment schedule applicable to such
Award. In the event of any such reduction, the Participant will have no right
with respect to any portion of the Award that is so reduced or extended.

 

 10

  

 

(g) Execution of Additional Documents. As a condition to accepting an Award
under the Plan, the Participant agrees to execute any additional documents or
instruments necessary or desirable, as determined in the Plan Administrator’s
sole discretion, to carry out the purposes or intent of the Award, or facilitate
compliance with securities and/or other regulatory requirements, in each case at
the Plan Administrator’s request.

 

(h) Electronic Delivery and Participation. Any reference herein or in an Award
Agreement to a “written” agreement or document will include any agreement or
document delivered electronically, filed publicly at www.sec.gov (or any
successor website thereto) or posted on the Company’s intranet (or other shared
electronic medium controlled by the Company to which the Participant has
access). By accepting any Award the Participant consents to receive documents by
electronic delivery and to participate in the Plan through any on-line
electronic system established and maintained by the Plan Administrator or
another third party selected by the Plan Administrator. The form of delivery of
any Common Stock (e.g., a stock certificate or electronic entry evidencing such
shares) shall be determined by the Company.

 

(i) Clawback/Recovery. All Awards granted under the Plan will be subject to
recoupment in accordance with any clawback policy that the Company is required
to adopt pursuant to the listing standards of any national securities exchange
or association on which the Company’s securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or
other Applicable Law and any clawback policy that the Company otherwise adopts,
to the extent applicable and permissible under Applicable Law. In addition, the
Board may impose such other clawback, recovery or recoupment provisions in an
Award Agreement as the Board determines necessary or appropriate, including but
not limited to a reacquisition right in respect of previously acquired shares of
Common Stock or other cash or property upon the occurrence of Cause. No recovery
of compensation under such a clawback policy will be an event giving rise to a
Participant’s right to voluntary terminate employment upon a “resignation for
good reason,” or for a “constructive termination” or any similar term under any
plan of or agreement with the Company.

 

(j) Securities Law Compliance. A Participant will not be issued any shares in
respect of an Award unless either (i) the shares are registered under the
Securities Act; or (ii) the Company has determined that such issuance would be
exempt from the registration requirements of the Securities Act. Each Award also
must comply with other Applicable Law governing the Award, and a Participant
will not receive such shares if the Company determines that such receipt would
not be in material compliance with Applicable Law.

 

(k) Transfer or Assignment of Awards; Issued Shares. Except as expressly
provided in the Plan or the form of Award Agreement, Awards granted under the
Plan may not be transferred or assigned by the Participant. After the vested
shares subject to an Award have been issued, or in the case of Restricted Stock
and similar awards, after the issued shares have vested, the holder of such
shares is free to assign, hypothecate, donate, encumber or otherwise dispose of
any interest in such shares provided that any such actions are in compliance
with the provisions herein, the terms of the Trading Policy and Applicable Law.

 

(l) Effect on Other Employee Benefit Plans. The value of any Award granted under
the Plan, as determined upon grant, vesting or settlement, shall not be included
as compensation, earnings, salaries, or other similar terms used when
calculating any Participant’s benefits under any employee benefit plan sponsored
by the Company or any Affiliate, except as such plan otherwise expressly
provides. The Company expressly reserves its rights to amend, modify, or
terminate any of the Company’s or any Affiliate’s employee benefit plans.

 

(m) Deferrals. To the extent permitted by Applicable Law, the Board, in its sole
discretion, may determine that the delivery of Common Stock or the payment of
cash, upon the exercise, vesting or settlement of all or a portion of any Award
may be deferred and may also establish programs and procedures for deferral
elections to be made by Participants. Deferrals will be made in accordance with
the requirements of Section 409A.

 

(n) Section 409A. Unless otherwise expressly provided for in an Award Agreement,
the Plan and Award Agreements will be interpreted to the greatest extent
possible in a manner that makes the Plan and the Awards granted hereunder exempt
from Section 409A, and, to the extent not so exempt, in compliance with the
requirements of Section 409A. If the Board determines that any Award granted
hereunder is not exempt from and is therefore subject to Section 409A, the Award
Agreement evidencing such Award will incorporate the terms and conditions
necessary to avoid the consequences specified in Section 409A(a)(1) of the Code,
and to the extent an Award Agreement is silent on terms necessary for
compliance, such terms are hereby incorporated by reference into the Award
Agreement. Notwithstanding anything to the contrary in this Plan (and unless the
Award Agreement specifically provides otherwise), if the shares of Common Stock
are publicly traded, and if a Participant holding an Award that constitutes
“deferred compensation” under Section 409A is a “specified employee” for
purposes of Section 409A, no distribution or payment of any amount that is due
because of a “separation from service” (as defined in Section 409A without
regard to alternative definitions thereunder) will be issued or paid before the
date that is six months and one day following the date of such Participant’s
“separation from service” or, if earlier, the date of the Participant’s death,
unless such distribution or payment can be made in a manner that complies with
Section 409A, and any amounts so deferred will be paid in a lump sum on the day
after such six month period elapses, with the balance paid thereafter on the
original schedule.

 

 11

  

 

(o) CHOICE OF LAW. This Plan and any controversy arising out of or relating to
this Plan shall be governed by, and construed in accordance with, the internal
laws of the State of California, without regard to conflict of law principles
that would result in any application of any law other than the law of the State
of California.

 

10. COVENANTS OF THE COMPANY.

 

(a) Compliance with Law. The Company will seek to obtain from each regulatory
commission or agency, as may be deemed to be necessary, having jurisdiction over
the Plan such authority as may be required to grant Awards and to issue and sell
shares of Common Stock upon exercise or vesting of the Awards; provided,
however, that this undertaking will not require the Company to register under
the Securities Act the Plan, any Award or any Common Stock issued or issuable
pursuant to any such Award. If, after reasonable efforts and at a reasonable
cost, the Company is unable to obtain from any such regulatory commission or
agency the authority that counsel for the Company deems necessary or advisable
for the lawful issuance and sale of Common Stock under the Plan, the Company
will be relieved from any liability for failure to issue and sell Common Stock
upon exercise or vesting of such Awards unless and until such authority is
obtained. A Participant is not eligible for the grant of an Award or the
subsequent issuance of Common Stock pursuant to the Award if such grant or
issuance would be in violation of any Applicable Law.

 

11. ADDITIONAL RULES FOR AWARDS SUBJECT TO SECTION 409A.

 

(a) Application. Unless the provisions of this Section of the Plan are expressly
superseded by the provisions in the form of Award Agreement, the provisions of
this Section shall apply and shall supersede anything to the contrary set forth
in the Award Agreement for a Non-Exempt Award.

 

(b) Non-Exempt Awards Subject to Non-Exempt Severance Arrangements. To the
extent a Non-Exempt Award is subject to Section 409A due to application of a
Non-Exempt Severance Arrangement, the following provisions of this subsection
(b) apply.

 

(i) If the Non-Exempt Award vests in the ordinary course during the
Participant’s Continuous Service in accordance with the vesting schedule set
forth in the Award Agreement, and does not accelerate vesting under the terms of
a Non-Exempt Severance Arrangement, in no event will the shares be issued in
respect of such Non-Exempt Award any later than the later of: (i) December 31st
of the calendar year that includes the applicable vesting date, or (ii) the 60th
day that follows the applicable vesting date.

 

(ii) If vesting of the Non-Exempt Award accelerates under the terms of a
Non-Exempt Severance Arrangement in connection with the Participant’s Separation
from Service, and such vesting acceleration provisions were in effect as of the
date of grant of the Non-Exempt Award and, therefore, are part of the terms of
such Non-Exempt Award as of the date of grant, then the shares will be earlier
issued in settlement of such Non-Exempt Award upon the Participant’s Separation
from Service in accordance with the terms of the Non-Exempt Severance
Arrangement, but in no event later than the 60th day that follows the date of
the Participant’s Separation from Service. However, if at the time the shares
would otherwise be issued the Participant is subject to the distribution
limitations contained in Section 409A applicable to “specified employees,” as
defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued
before the date that is six months following the date of such Participant’s
Separation from Service, or, if earlier, the date of the Participant’s death
that occurs within such six month period.

 

(iii) If vesting of a Non-Exempt Award accelerates under the terms of a
Non-Exempt Severance Arrangement in connection with a Participant’s Separation
from Service, and such vesting acceleration provisions were not in effect as of
the date of grant of the Non-Exempt Award and, therefore, are not a part of the
terms of such Non-Exempt Award on the date of grant, then such acceleration of
vesting of the Non-Exempt Award shall not accelerate the issuance date of the
shares, but the shares shall instead be issued on the same schedule as set forth
in the Grant Notice as if they had vested in the ordinary course during the
Participant’s Continuous Service, notwithstanding the vesting acceleration of
the Non-Exempt Award. Such issuance schedule is intended to satisfy the
requirements of payment on a specified date or pursuant to a fixed schedule, as
provided under Treasury Regulations Section 1.409A-3(a)(4).

 

 12

  

 

(c) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Employees
and Consultants. The provisions of this subsection (c) shall apply and shall
supersede anything to the contrary set forth in the Plan with respect to the
permitted treatment of any Non-Exempt Award in connection with a Corporate
Transaction if the Participant was either an Employee or Consultant upon the
applicable date of grant of the Non-ExemptAward.

 

(i) Vested Non-Exempt Awards. The following provisions shall apply to any Vested
Non-Exempt Award in connection with a Corporate Transaction:

 

(1) If the Corporate Transaction is also a Section 409A Change in Control then
the Acquiring Entity may not assume, continue or substitute the Vested
Non-Exempt Award. Upon the Section 409A Change of Control the settlement of the
Vested Non-Exempt Award will automatically be accelerated and the shares will be
immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the
Company may instead provide that the Participant will receive a cash settlement
equal to the Fair Market Value of the shares that would otherwise be issued to
the Participant upon the Section 409A Change of Control.

 

(2) If the Corporate Transaction is not also a Section 409A Change of Control,
then the Acquiring Entity must either assume, continue or substitute each Vested
Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt
Award shall be issued to the Participant by the Acquiring Entity on the same
schedule that the shares would have been issued to the Participant if the
Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in
lieu of an issuance of shares, the Acquiring Entity may instead substitute a
cash payment on each applicable issuance date, equal to the Fair Market Value of
the shares that would otherwise be issued to the Participant on such issuance
dates, with the determination of the Fair Market Value of the shares made on the
date of the Corporate Transaction.

 

(ii) Unvested Non-Exempt Awards. The following provisions shall apply to any
Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to
subsection (e) of this Section.

 

(1) In the event of a Corporate Transaction, the Acquiring Entity shall assume,
continue or substitute any Unvested Non-ExemptAward. Unless otherwise determined
by the Board, any Unvested Non-Exempt Award will remain subject to the same
vesting and forfeiture restrictions that were applicable to the Award prior to
the Corporate Transaction. The shares to be issued in respect of any Unvested
Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on
the same schedule that the shares would have been issued to the Participant if
the Corporate Transaction had not occurred. In the Acquiring Entity’s
discretion, in lieu of an issuance of shares, the Acquiring Entity may instead
substitute a cash payment on each applicable issuance date, equal to the Fair
Market Value of the shares that would otherwise be issued to the Participant on
such issuance dates, with the determination of Fair Market Value of the shares
made on the date of the Corporate Transaction.

 

(2) If the Acquiring Entity will not assume, substitute or continue any Unvested
Non-Exempt Award in connection with a Corporate Transaction, then such Award
shall automatically terminate and be forfeited upon the Corporate Transaction
with no consideration payable to any Participant in respect of such forfeited
Unvested Non-Exempt Award. Notwithstanding the foregoing, to the extent
permitted and in compliance with the requirements of Section 409A, the Board may
in its discretion determine to elect to accelerate the vesting and settlement of
the Unvested Non-ExemptAward upon the Corporate Transaction, or instead
substitute a cash payment equal to the Fair Market Value of such shares that
would otherwise be issued to the Participant, as further provided in subsection
(e)(ii) below. In the absence of such discretionary election by the Board, any
Unvested Non-Exempt Award shall be forfeited without payment of any
consideration to the affected Participants if the Acquiring Entity will not
assume, substitute or continue the Unvested Non-Exempt Awards in connection with
the Corporate Transaction.

 

(3) The foregoing treatment shall apply with respect to all Unvested Non-Exempt
Awards upon any Corporate Transaction, and regardless of whether or not such
Corporate Transaction is also a Section 409A Change of Control.

 

(d) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Non-Employee
Directors. The following provisions of this subsection (d) shall apply and shall
supersede anything to the contrary that may be set forth in the Plan with
respect to the permitted treatment of a Non-Exempt Director Award in connection
with a Corporate Transaction.

 

 13

  

 

(i) If the Corporate Transaction is also a Section 409A Change of Control then
the Acquiring Entity may not assume, continue or substitute the Non-Exempt
Director Award. Upon the Section 409A Change of Control the vesting and
settlement of any Non-Exempt Director Award will automatically be accelerated
and the shares will be immediately issued to the Participant in respect of the
Non-Exempt Director Award. Alternatively, the Company may provide that the
Participant will instead receive a cash settlement equal to the Fair Market
Value of the shares that would otherwise be issued to the Participant upon the
Section 409A Change of Control pursuant to the preceding provision.

 

(ii) If the Corporate Transaction is not also a Section 409A Change of Control,
then the Acquiring Entity must either assume, continue or substitute the
Non-Exempt Director Award. Unless otherwise determined by the Board, the
Non-Exempt Director Award will remain subject to the same vesting and forfeiture
restrictions that were applicable to the Award prior to the Corporate
Transaction. The shares to be issued in respect of the Non-Exempt Director Award
shall be issued to the Participant by the Acquiring Entity on the same schedule
that the shares would have been issued to the Participant if the Corporate
Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of
an issuance of shares, the Acquiring Entity may instead substitute a cash
payment on each applicable issuance date, equal to the Fair Market Value of the
shares that would otherwise be issued to the Participant on such issuance dates,
with the determination of Fair Market Value made on the date of the Corporate
Transaction.

 

(e) If the RSU Award is a Non-Exempt Award, then the provisions in this Section
11(e) shall apply and supersede anything to the contrary that may be set forth
in the Plan or the Award Agreement with respect to the permitted treatment of
such Non-Exempt Award:

 

(i) Any exercise by the Board of discretion to accelerate the vesting of a
Non-Exempt Award shall not result in any acceleration of the scheduled issuance
dates for the shares in respect of the Non-Exempt Award unless earlier issuance
of the shares upon the applicable vesting dates would be in compliance with the
requirements of Section 409A.

 

(ii) The Company explicitly reserves the right to earlier settle any Non-Exempt
Award to the extent permitted and in compliance with the requirements of Section
409A, including pursuant to any of the exemptions available in Treasury
Regulations Section 1.409A-3(j)(4)(ix).

 

(iii) To the extent the terms of any Non-Exempt Award provide that it will be
settled upon a Change in Control or Corporate Transaction, to the extent it is
required for compliance with the requirements of Section 409A, the Change in
Control or Corporate Transaction event triggering settlement must also
constitute a Section 409A Change of Control. To the extent the terms of a
Non-Exempt Award provides that it will be settled upon a termination of
employment or termination of Continuous Service, to the extent it is required
for compliance with the requirements of Section 409A, the termination event
triggering settlement must also constitute a Separation From Service. However,
if at the time the shares would otherwise be issued to a Participant in
connection with a “separation from service” such Participant is subject to the
distribution limitations contained in Section 409A applicable to “specified
employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares
shall not be issued before the date that is six months following the date of the
Participant’s Separation From Service, or, if earlier, the date of the
Participant’s death that occurs within such six month period.

 

(iv) The provisions in this subsection (e) for delivery of the shares in respect
of the settlement of a RSU Award that is a Non-Exempt Award are intended to
comply with the requirements of Section 409A so that the delivery of the shares
to the Participant in respect of such Non-Exempt Award will not trigger the
additional tax imposed under Section 409A, and any ambiguities herein will be so
interpreted.

 

12. SEVERABILITY.

 

If all or any part of the Plan or any Award Agreement is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of the Plan or such Award Agreement
not declared to be unlawful or invalid. Any Section of the Plan or any Award
Agreement (or part of such a Section) so declared to be unlawful or invalid
shall, if possible, be construed in a manner which will give effect to the terms
of such Section or part of a Section to the fullest extent possible while
remaining lawful and valid.

 

 14

  

 

13. TERMINATION OF THE PLAN.

 

The Board may suspend or terminate the Plan at any time.

 

No Incentive Stock Options may be granted after the tenth anniversary of the
earlier of: (i) the Adoption Date, or (ii) the date the Plan is approved by the
Company’s stockholders.

 

No Awards may be granted under the Plan while the Plan is suspended or after it
is terminated.

 

14. DEFINITIONS.

 

As used in the Plan, the following definitions apply to the capitalized terms
indicated below:

 

(a) ”Acquiring Entity” means the surviving or acquiring corporation (or its
parent company) in connection with a Corporate Transaction.

 

(b) ”Adoption Date” means the date the Plan is first approved by the Board or
Compensation Committee.

 

(c) ”Affiliate” means, at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined in Rule 405 promulgated
under the Securities Act. The Board may determine the time or times at which
“parent” or “subsidiary” status is determined within the foregoing definition.

 

(d) ”Applicable Law” means shall mean any applicable securities, federal, state,
foreign, material local or municipal or other law, statute, constitution,
principle of common law, resolution, ordinance, code, edict, decree, rule,
listing rule, regulation, judicial decision, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Body (or under the authority of the
NASDAQ Stock Market or the Financial Industry Regulatory Authority).

 

(e) ”Award” means any right to receive Common Stock, cash or other property
granted under the Plan (including an Incentive Stock Option, a Nonstatutory
Stock Option, a Restricted Stock Award, a RSU Award, a SAR, a Performance Award
or any Other Award).

 

(f) ”Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of an Award. The Award Agreement
generally consists of the Grant Notice and the agreement containing the written
summary of the general terms and conditions applicable to the Award and which is
provided to a Participant along with the Grant Notice.

 

(g) ”Board” means the Board of Directors of the Company (or its designee). Any
decision or determination made by the Board shall be a decision or determination
that is made in the sole discretion of the Board (or its designee), and such
decision or determination shall be final and binding on all Participants.

 

(h) ”Capitalization Adjustment” means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or
subject to any Award after the Effective Date without the receipt of
consideration by the Company through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, large nonrecurring cash dividend, stock split, reverse stock split,
liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or any similar equity restructuring transaction, as that
term is used in Statement of Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (or any successor thereto). Notwithstanding the
foregoing, the conversion of any convertible securities of the Company will not
be treated as a Capitalization Adjustment.

 

(i) ”Capital Stock” means each and every class of common stock of the Company,
regardless of the number of votes per share.

 

(j) ”Cause” has the meaning ascribed to such term in any written agreement
between the Participant and the Company defining such term and, in the absence
of such agreement, such term means, with respect to a Participant, the
occurrence of any of the following actions or events by such Participant: (i)
attempted commission of, or participation in, a fraud or act of dishonesty
against the Company and/or its Affiliates; (ii) material violation of any
contract or agreement between the Participant and the Company and/or its
Affiliates or of any statutory duty owed to the Company and/or its Affiliates or
such Participant’s material failure to comply with the Company’s and/or its
Affiliates’s written policies or rules; (iii) unauthorized use or disclosure of
the Company’s and/or its Affiliates’s confidential information or trade secrets;
(iv) conviction of, or plea of “guilty” or “no contest” to a felony; (v) willful
and continuing failure to perform assigned duties after receiving written
notification from the Company and/or its Affiliates of the failure; (vi) gross
negligence or gross misconduct; or (vii) failure to cooperate in good faith with
a governmental or internal investigation of the Company and/or its Affiliates or
its directors, officers or employees, if the Company requests cooperation. The
determination that a termination of the Participant’s Continuous Service is
either for Cause or without Cause will be made by the Board with respect to
Participants who are executive officers of the Company and by the Company’s
Chief Executive Officer with respect to Participants who are not executive
officers of the Company. Any determination by the Company that the Continuous
Service of a Participant was terminated with or without Cause for the purposes
of outstanding Awards held by such Participant will have no effect upon any
determination of the rights or obligations of the Company or such Participant
for any other purpose.

 

 15

  

 

(k) ”Change in Control” or “Change of Control” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events; provided, however, to the extent necessary to avoid adverse
personal income tax consequences to the Participant in connection with an Award,
also constitutes a Section 409A Change of Control:

 

(i) any Exchange Act Person becomes the Owner, directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company’s then outstanding securities other than by virtue of a
merger, consolidation or similar transaction. Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur (A) on account of the acquisition
of securities of the Company directly from the Company, (B) on account of the
acquisition of securities of the Company by an investor, any affiliate thereof
or any other Exchange Act Person that acquires the Company’s securities in a
transaction or series of related transactions the primary purpose of which is to
obtain financing for the Company through the issuance of equity securities, or
(C) solely because the level of Ownership held by any Exchange Act Person (the
“Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;

 

(ii) there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately after the
consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than 50%
of the combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than 50% of the combined
outstanding voting power of the parent of the surviving Entity in such merger,
consolidation or similar transaction, in each case in substantially the same
proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such transaction;

 

(iii) the stockholders of the Company approve or the Board approves a plan of
complete dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur, except for a liquidation into
a parent corporation;

 

(iv) there is consummated a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an Entity, more than 50% of the combined voting power of the voting
securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of
the Company immediately prior to such sale, lease, license or other disposition;
or

 

(v) individuals who, on the date the Plan is adopted by the Board, are members
of the Board (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the members of the Board; provided, however, that if the
appointment or election (or nomination for election) of any new Board member was
approved or recommended by a majority vote of the members of the Incumbent Board
then still in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.

 

Notwithstanding the foregoing or any other provision of this Plan, (A) the term
Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company, and (B) the definition of Change in Control (or any analogous term) in
an individual written agreement between the Company or any Affiliate and the
Participant shall supersede the foregoing definition with respect to Awards
subject to such agreement; provided, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written
agreement, the foregoing definition shall apply.

 

 16

  

 

(l) ”Code” means the Internal Revenue Code of 1986, as amended, including any
applicable regulations and guidance thereunder.

 

(m) ”Committee” means the Compensation Committee and any other committee of
Directors to whom authority has been delegated by the Board or Compensation
Committee in accordance with the Plan.

 

(n) ”Common Stock” means the Class A common stock of the Company.

 

(o) ”Company” means TransBiotec, Inc., a Delaware corporation.

 

(p) ”Compensation Committee” means the Compensation Committee of the Board.

 

(q) ”Consultant” means any person, including an advisor, who is (i) engaged by
the Company or an Affiliate to render consulting or advisory services and is
compensated for such services, or (ii) serving as a member of the board of
directors of an Affiliate and is compensated for such services. However, service
solely as a Director, or payment of a fee for such service, will not cause a
Director to be considered a “Consultant” for purposes of the Plan.
Notwithstanding the foregoing, a person is treated as a Consultant under this
Plan only if a Form S-8 Registration Statement under the Securities Act is
available to register either the offer or the sale of the Company’s securities
to such person.

 

(r) ”Continuous Service” means that the Participant’s service with the Company
or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Director or
Consultant or a change in the Entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, will not terminate a
Participant’s Continuous Service; provided, however, that if the Entity for
which a Participant is rendering services ceases to qualify as an Affiliate, as
determined by the Board, such Participant’s Continuous Service will be
considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. For example, a change in status from an Employee of the Company to a
Consultant of an Affiliate or to a Director will not constitute an interruption
of Continuous Service. To the extent permitted by law, the Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service will be considered interrupted in the case of (i) any
leave of absence approved by the Board or chief executive officer, including
sick leave, military leave or any other personal leave, or (ii) transfers
between the Company, an Affiliate, or their successors. Notwithstanding the
foregoing, a leave of absence will be treated as Continuous Service for purposes
of vesting in an Award only to such extent as may be provided in the Company’s
leave of absence policy, in the written terms of any leave of absence agreement
or policy applicable to the Participant, or as otherwise required by law. In
addition, to the extent required for exemption from or compliance with Section
409A, the determination of whether there has been a termination of Continuous
Service will be made, and such term will be construed, in a manner that is
consistent with the definition of “separation from service” as defined under
Treasury Regulation Section 1.409A-1(h) (without regard to any alternative
definition thereunder).

 

(s) ”Corporate Transaction” means the consummation, in a single transaction or
in a series of related transactions, of any one or more of the following events:

 

(i) a sale or other disposition of all or substantially all, as determined by
the Board, of the consolidated assets of the Company and its Subsidiaries;

 

(ii) a sale or other disposition of at least 50% of the outstanding securities
of the Company;

 

(iii) a merger, consolidation or similar transaction following which the Company
is not the surviving corporation; or

 

(iv) a merger, consolidation or similar transaction following which the Company
is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.

 

(t) ”Director” means a member of the Board.

 

(u) ”determine” or “determined” means as determined by the Board or the
Committee (or its designee) in its sole discretion.

 

(v) ”Disability” means, with respect to a Participant, such Participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months, as provided in Section 22(e)(3) of the Code, and will
be determined by the Board on the basis of such medical evidence as the Board
deems warranted under the circumstances.

 

 17

  

 

(w) ”Effective Date” means the date that this Plan is approved by the Company’s
stockholders.

 

(x) ”Employee” means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services,
will not cause a Director to be considered an “Employee” for purposes of the
Plan.

 

(y) ”Employer” means the Company or the Affiliate of the Company that employs
the Participant.

 

(z) ”Entity” means a corporation, partnership, limited liability company or
other entity.

 

(aa) ”Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

(bb) ”Exchange Act Person” means any natural person, Entity or “group” (within
the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” will not include (i) the Company or any Subsidiary of the
Company, (ii) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to a registered public
offering of such securities, (iv) an Entity Owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
Ownership of stock of the Company; or (v) any natural person, Entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of
the Effective Date, is the Owner, directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities.

 

(cc) ”Fair Market Value” means, as of any date, unless otherwise determined by
the Board, the value of the Common Stock (as determined on a per share or
aggregate basis, as applicable) determined as follows:

 

(i) If the Common Stock is listed on any established stock exchange or traded on
any established market, the Fair Market Value will be the closing sales price
for such stock as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in the Common Stock) on the date of
determination, as reported in a source the Board deems reliable.

 

(ii) If there is no closing sales price for the Common Stock on the date of
determination, then the Fair Market Value will be the closing selling price on
the last preceding date for which such quotation exists.

 

(iii) In the absence of such markets for the Common Stock, or if otherwise
determined by the Board, the Fair Market Value will be determined by the Board
in good faith and in a manner that complies with Sections 409A and 422 of the
Code.

 

(dd) ”Governmental Body” means any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; (c)
governmental or regulatory body, or quasi-governmental body of any nature
(including any governmental division, department, administrative agency or
bureau, commission, authority, instrumentality, official, ministry, fund,
foundation, center, organization, unit, body or Entity and any court or other
tribunal, and for the avoidance of doubt, any Tax authority) or other body
exercising similar powers or authority; or (d) self-regulatory organization
(including the NASDAQ Stock Market and the Financial Industry Regulatory
Authority).

 

(ee) ”Grant Notice” means the notice provided to a Participant that he or she
has been granted an Award under the Plan and which includes the name of the
Participant, the type of Award, the date of grant of the Award, number of shares
of Common Stock subject to the Award or potential cash payment right, (if any),
the vesting schedule for the Award (if any) and other key terms applicable to
the Award.

 

(ff) ”Incentive Stock Option” means an option granted pursuant to Section 4 of
the Plan that is intended to be, and qualifies as, an “incentive stock option”
within the meaning of Section 422 of the Code.

 

(gg) ”IPO Date” means the date of the underwriting agreement between the Company
and the underwriter(s) managing the initial public offering of the Common Stock,
pursuant to which the Common Stock is priced for the initial public offering.

 

(hh) ”Materially Impair” means any amendment to the terms of the Award that
materially adversely affects the Participant’s rights under the Award. A
Participant’s rights under an Award will not be deemed to have been Materially
Impaired by any such amendment if the Board, in its sole discretion, determines
that the amendment, taken as a whole, does not materially impair the
Participant’s rights. For example, the following types of amendments to the
terms of an Award do not Materially Impair the Participant’s rights under the
Award: (i) imposition of reasonable restrictions on the minimum number of shares
subject to an Option that may be exercised, (ii) to maintain the qualified
status of the Award as an Incentive Stock Option under Section 422 of the Code;
(iii) to change the terms of an Incentive Stock Option in a manner that
disqualifies, impairs or otherwise affects the qualified status of the Award as
an Incentive Stock Option under Section 422 of the Code; (iv) to clarify the
manner of exemption from, or to bring the Award into compliance with or qualify
it for an exemption from, Section 409A; or (v) to comply with other Applicable
Laws.

 

 18

  

 

(ii) ”Non-Employee Director” means a Director who either (i) is not a current
employee or officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
”non-employee director” for purposes of Rule 16b-3.

 

(jj) ”Non-Exempt Award” means any Award that is subject to, and not exempt from,
Section 409A, including as the result of (i) a deferral of the issuance of the
shares subject to the Award which is elected by the Participant or imposed by
the Company, (ii) the terms of any Non-Exempt Severance Agreement.

 

(kk) ”Non-Exempt Director Award” means a Non-Exempt Award granted to a
Participant who was a Director but not an Employee on the applicable grant date.

 

(ll) ”Non-Exempt Severance Arrangement” means a severance arrangement or other
agreement between the Participant and the Company that provides for acceleration
of vesting of an Award and issuance of the shares in respect of such Award upon
the Participant’s termination of employment or separation from service (as such
term is defined in Section 409A(a)(2)(A)(i) of the Code (and without regard to
any alternative definition thereunder) (“Separation from Service”)) and such
severance benefit does not satisfy the requirements for an exemption from
application of Section 409A provided under Treasury Regulations Section
1.409A-1(b)(4), 1.409A-1(b)(9) or otherwise.

 

(mm) ”Nonstatutory Stock Option” means any option granted pursuant to Section 4
of the Plan that does not qualify as an Incentive Stock Option.

 

(nn) ”Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act.

 

(oo) ”Option” means an Incentive Stock Option or a Nonstatutory Stock Option to
purchase shares of Common Stock granted pursuant to the Plan.

 

(pp) ”Option Agreement” means a written agreement between the Company and the
Optionholder evidencing the terms and conditions of the Option grant. The Option
Agreement includes the Grant Notice for the Option and the agreement containing
the written summary of the general terms and conditions applicable to the Option
and which is provided to a Participant along with the Grant Notice. Each Option
Agreement will be subject to the terms and conditions of the Plan.

 

(qq) ”Optionholder” means a person to whom an Option is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Option.

 

(rr) ”Other Award” means an award based in whole or in part by reference to the
Common Stock which is granted pursuant to the terms and conditions of Section
5(c).

 

(ss) ”Other Award Agreement” means a written agreement between the Company and a
holder of an Other Award evidencing the terms and conditions of an Other Award
grant. Each Other Award Agreement will be subject to the terms and conditions of
the Plan.

 

(tt) ”Own,” ”Owned,” ”Owner,” ”Ownership” means that a person or Entity will be
deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

 

(uu) ”Participant” means an Employee, Director or Consultant to whom an Award is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Award.

 

 19

  

 

(vv) ”Performance Award” means an Award that may vest or may be exercised or a
cash award that may vest or become earned and paid contingent upon the
attainment during a Performance Period of certain Performance Goals and which is
granted under the terms and conditions of Section 5(b) pursuant to such terms as
are approved by the Board. In addition, to the extent permitted by Applicable
Law and set forth in the applicable Award Agreement, the Board may determine
that cash or other property may be used in payment of Performance Awards.
Performance Awards that are settled in cash or other property are not required
to be valued in whole or in part by reference to, or otherwise based on, the
Common Stock.

 

(ww) ”Performance Criteria” means the one or more criteria that the Board will
select for purposes of establishing the Performance Goals for a Performance
Period. The Performance Criteria that will be used to establish such Performance
Goals may be based on any measure of performance selected by the Board.

 

(xx) ”Performance Goals” means, for a Performance Period, the one or more goals
established by the Board for the Performance Period based upon the Performance
Criteria. Performance Goals may be based on a Company-wide basis, with respect
to one or more business units, divisions, Affiliates, or business segments, and
in either absolute terms or relative to the performance of one or more
comparable companies or the performance of one or more relevant indices. Unless
specified otherwise by the Board (i) in the Award Agreement at the time the
Award is granted or (ii) in such other document setting forth the Performance
Goals at the time the Performance Goals are established, the Board will
appropriately make adjustments in the method of calculating the attainment of
Performance Goals for a Performance Period as follows: (1) to exclude
restructuring and/or other nonrecurring charges; (2) to exclude exchange rate
effects; (3) to exclude the effects of changes to generally accepted accounting
principles; (4) to exclude the effects of any statutory adjustments to corporate
tax rates; (5) to exclude the effects of items that are “unusual” in nature or
occur “infrequently” as determined under generally accepted accounting
principles; (6) to exclude the dilutive effects of acquisitions or joint
ventures; (7) to assume that any business divested by the Company achieved
performance objectives at targeted levels during the balance of a Performance
Period following such divestiture; (8) to exclude the effect of any change in
the outstanding shares of common stock of the Company by reason of any stock
dividend or split, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar
corporate change, or any distributions to common stockholders other than regular
cash dividends; (9) to exclude the effects of stock based compensation and the
award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred
in connection with potential acquisitions or divestitures that are required to
expensed under generally accepted accounting principles; and (11) to exclude the
goodwill and intangible asset impairment charges that are required to be
recorded under generally accepted accounting principles. In addition, the Board
retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals and to define the manner of
calculating the Performance Criteria it selects to use for such Performance
Period. Partial achievement of the specified criteria may result in the payment
or vesting corresponding to the degree of achievement as specified in the Award
Agreement or the written terms of a Performance Cash Award.

 

(yy) ”Performance Period” means the period of time selected by the Board over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to vesting or exercise of an Award.
Performance Periods may be of varying and overlapping duration, at the sole
discretion of the Board.

 

(zz) ”Plan” means this TransBiotec, Inc. 2019 Equity Incentive Plan, as amended
from time to time.

 

(aaa) ”Plan Administrator” means the person, persons, and/or third-party
administrator designated by the Company to administer the day to day operations
of the Plan and the Company’s other equity incentive programs.

 

(bbb) ”Post-Termination Exercise Period” means the period following termination
of a Participant’s Continuous Service within which an Option or SAR is
exercisable, as specified in Section 4(h).

 

(ccc) Not Used in this Agreement

 

(ddd) Not Used in this Agreement

 

(eee) ”Prospectus” means the document containing the Plan information specified
in Section 10(a) of the Securities Act.

 

(fff) ”Restricted Stock Award” or “RSA” means an Award of shares of Common Stock
which is granted pursuant to the terms and conditions of Section 5(a).

 

(ggg) ”Restricted Stock Award Agreement” means a written agreement between the
Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of a Restricted Stock Award grant. The Restricted Stock Award
Agreement includes the Grant Notice for the Restricted Stock Award and the
agreement containing the written summary of the general terms and conditions
applicable to the Restricted Stock Award and which is provided to a Participant
along with the Grant Notice. Each Restricted Stock Award Agreement will be
subject to the terms and conditions of the Plan.

 

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(hhh) ”Returning Shares” means shares subject to outstanding stock awards
granted that following the Effective Date: (A) are not issued because such stock
award or any portion thereof expires or otherwise terminates without all of the
shares covered by such stock award having been issued; (B) are not issued
because such stock award or any portion thereof is settled in cash; (C) are
forfeited back to or repurchased by the Company because of the failure to meet a
contingency or condition required for the vesting of such shares; (D) are
withheld or reacquired to satisfy the exercise, strike or purchase price; or (E)
are withheld or reacquired to satisfy a tax withholding obligation. Returning
Shares of Class B common stock that become available for grant under this Plan
shall convert on a one-for-one basis into shares of Common Stock.

 

(iii) ”RSU Award” or “RSU” means an Award of restricted stock units representing
the right to receive an issuance of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 5(a).

 

(jjj) ”RSU Award Agreement” means a written agreement between the Company and a
holder of a RSU Award evidencing the terms and conditions of a RSU Award grant.
The RSU Award Agreement includes the Grant Notice for the RSU Award and the
agreement containing the written summary of the general terms and conditions
applicable to the RSU Award and which is provided to a Participant along with
the Grant Notice. Each RSU Award Agreement will be subject to the terms and
conditions of the Plan.

 

(kkk) ”Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

 

(lll) ”Rule 405” means Rule 405 promulgated under the Securities Act.

 

(mmm) ”Section 409A” means Section 409A of the Code and the regulations and
other guidance thereunder.

 

(nnn) ”Section 409A Change of Control” means a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and
Treasury Regulations Section 1.409A-3(i)(5)(without regard to any alternative
definition thereunder).

 

(ooo) ”Securities Act” means the Securities Act of 1933, as amended.

 

(ppp) ”Share Reserve” means the number of shares available for issuance under
the Plan as set forth in Section 2(a).

 

(qqq) ”Stock Appreciation Right” or “SAR” means a right to receive the
appreciation on Common Stock that is granted pursuant to the terms and
conditions of Section 4.

 

(rrr) ”SAR Agreement” means a written agreement between the Company and a holder
of a SAR evidencing the terms and conditions of a SAR grant. The SAR Agreement
includes the Grant Notice for the SAR and the agreement containing the written
summary of the general terms and conditions applicable to the SAR and which is
provided to a Participant along with the Grant Notice. Each SAR Agreement will
be subject to the terms and conditions of the Plan.

 

(sss) ”Subsidiary” means, with respect to the Company, (i) any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or classes of
such corporation will have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, Owned by the
Company, and (ii) any partnership, limited liability company or other entity in
which the Company has a direct or indirect interest (whether in the form of
voting or participation in profits or capital contribution) of more than 50%.

 

(ttt) ”Ten Percent Stockholder” means a person who Owns (or is deemed to Own
pursuant to Section 424(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any
Affiliate.

 

(uuu) ”Trading Policy” means the Company’s policy permitting certain individuals
to sell Company shares only during certain “window” periods and/or otherwise
restricts the ability of certain individuals to transfer or encumber Company
shares, as in effect from time to time.

 

(vvv) ”Unvested Non-Exempt Award” means the portion of any Non-Exempt Award that
had not vested in accordance with its terms upon or prior to the date of any
Corporate Transaction.

 

(www) ”Vested Non-Exempt Award” means the portion of any Non-Exempt Award that
had vested in accordance with its terms upon or prior to the date of a Corporate
Transaction.

 

 

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