Exhibit 10.13

 

EVERI HOLDINGS INC.

STOCK OPTION AGREEMENT - 2012 PLAN

(For U.S. Participants)

Everi Holdings Inc. (the “Company”) has granted to the Participant named in the
Notice of Grant of Stock Option (the “Grant Notice”) to which this Stock Option
Agreement (the “Option Agreement”) is attached an option (the “Option”) to
purchase certain Shares upon the terms and conditions set forth in the Grant
Notice and this Option Agreement.  The Option has been granted pursuant to and
shall in all respects be subject to the terms and conditions of the Everi
Holdings  Inc. 2012 Equity Incentive Plan (the “Plan”), as amended to the Date
of Grant, the provisions of which are incorporated herein by reference.  By
signing the Grant Notice, the Participant: (a) acknowledges receipt of, and
represents that the Participant has read and is familiar with, the Grant Notice,
this Option Agreement, the Plan and a prospectus for the Plan prepared in
connection with the registration with the Securities and Exchange Commission of
Shares issuable pursuant to the Option (the “Plan Prospectus”), (b) accepts the
Option subject to all of the terms and conditions of the Grant Notice, this
Option Agreement and the Plan and (c) agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions
arising under the Grant Notice, this Option Agreement or the Plan.

1.DEFINITIONS AND CONSTRUCTION.

1.1        Definitions.  Unless otherwise defined herein, including in the
Glossary attached hereto, capitalized terms shall have the meanings assigned to
such terms in the Grant Notice or the Plan.

1.2        Construction.  Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement.  Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular.  Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.

2.TAX CONSEQUENCES.

This Option is intended to be a Nonstatutory Option and shall not be treated as
an Incentive Option within the meaning of Section 422(b) of the Code.

3.ADMINISTRATION.

All questions of interpretation concerning the Grant Notice, this Option
Agreement, the Plan or any other form of agreement or other document employed by
the Company in the administration of the Plan or the Option shall be determined
by the Committee.  All such determinations by the Committee shall be final,
binding and conclusive upon all persons having an interest in the Option, unless
fraudulent or made in bad faith.  Any and all actions, decisions and
determinations taken or made by the Committee in the exercise of its discretion
pursuant to the Plan or the Option or other agreement thereunder (other than
determining questions of interpretation pursuant to the preceding sentence)
shall be final, binding and conclusive upon all persons having an interest in
the Option.  Any officer shall have the authority to act on behalf of

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the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

4.EXERCISE OF THE OPTION.

4.1        Right to Exercise.  Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Vesting Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to exceed
the number of Vested Shares less the number of Shares previously acquired upon
exercise of the Option.  In no event shall the Option be exercisable for more
Shares than the Number of Option Shares, as adjusted pursuant to Section 9.

4.2        Method of Exercise.    Exercise of the Option shall be by means of
electronic or written notice (the “Exercise Notice”) in a form authorized by the
Company.  An electronic Exercise Notice must be digitally signed or
authenticated by the Participant in such manner as required by the notice and
transmitted to the Company or an authorized representative of the Company
(including a third-party administrator designated by the Company).  In the event
that the Participant is not authorized or is unable to provide an electronic
Exercise Notice, the Option shall be exercised by a written Exercise Notice
addressed to the Company, which shall be signed by the Participant and delivered
in person, by certified or registered mail, return receipt requested, by
confirmed facsimile transmission, or by such other means as the Company may
permit, to the Company, or an authorized representative of the Company
(including a third-party administrator designated by the Company).  Each
Exercise Notice, whether electronic or written, must state the Participant’s
election to exercise the Option, the number of whole Shares for which the Option
is being exercised and such other representations and agreements as to the
Participant’s investment intent with respect to such Shares as may be required
pursuant to the provisions of this Option Agreement.  Further, each Exercise
Notice must be received by the Company prior to the termination of the Option as
set forth in Section 6 and must be accompanied by full payment of the aggregate
Exercise Price for the number of Shares being purchased.  The Option shall be
deemed to be exercised upon receipt by the Company of such electronic or written
Exercise Notice and the aggregate Exercise Price.

4.3        Payment of Exercise Price.

(a)        Forms of Consideration Authorized.  Except as otherwise provided
below, payment of the aggregate Exercise Price for the number of Shares for
which the Option is being exercised shall be made (i) in cash, by check or in
cash equivalent; (ii) if permitted by the Company and subject to the limitations
contained in Section 4.3(b), by means of (1) a Cashless Exercise, (2) a
Net-Exercise, or (3) a Stock Tender Exercise; or (iii) by any combination of the
foregoing.

(b)        Limitations on Forms of Consideration.  The Company reserves, at any
and all times, the right, in the Company’s sole and absolute discretion, to
establish, decline to approve or terminate any program or procedure providing
for payment of the Exercise Price through any of the means described below,
including with respect to the Participant notwithstanding that such program or
procedures may be available to others.

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(i)        Cashless Exercise.  A “Cashless Exercise” means the delivery of a
properly executed Exercise Notice together with irrevocable instructions to a
broker in a form acceptable to the Company providing for the assignment to the
Company of the proceeds of a sale or loan with respect to Shares acquired upon
the exercise of the Option in an amount not less than the aggregate Exercise
Price for such Shares (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to time
by the Board of Governors of the Federal Reserve System).

(ii)        Net-Exercise.  A “Net-Exercise” means the delivery of a properly
executed Exercise Notice electing a procedure pursuant to which (1) the Company
will reduce the number of Shares otherwise issuable to the Participant upon the
exercise of the Option by the largest whole number of Shares having a Fair
Market Value that does not exceed the aggregate Exercise Price for the Shares
with respect to which the Option is exercised, and (2) the Participant shall pay
to the Company in cash the remaining balance of such aggregate Exercise Price
not satisfied by such reduction in the number of whole Shares to be
issued.  Following a Net-Exercise, the number of Shares remaining subject to the
Option, if any, shall be reduced by the sum of (1) the net number of Shares
issued to the Participant upon such exercise, and (2) the number of Shares
deducted by the Company for payment of the aggregate Exercise Price.

(iii)        Stock Tender Exercise.  A “Stock Tender Exercise” means the
delivery of a properly executed Exercise Notice accompanied by (1) the
Participant’s tender to the Company, or attestation to the ownership, in a form
acceptable to the Company of whole Shares having a Fair Market Value that does
not exceed the aggregate Exercise Price for the Shares with respect to which the
Option is exercised, and (2) the Participant’s payment to the Company in cash of
the remaining balance of such aggregate Exercise Price not satisfied by such
Shares’ Fair Market Value.  A Stock Tender Exercise shall not be permitted if it
would constitute a violation of the provisions of any law, regulation or
agreement restricting the redemption of the Company’s Shares.  If required by
the Company, the Option may not be exercised by tender to the Company, or
attestation to the ownership, of Shares unless such Shares either have been
owned by the Participant for a period of time required by the Company (and not
used for another option exercise by attestation during such period) or were not
acquired, directly or indirectly, from the Company.

4.4        Tax Withholding.

(a)        In General.  At the time the Option is exercised, in whole or in
part, or at any time thereafter as requested by the Company or an Affiliate, the
Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
(including any social insurance) withholding obligations of the Company or
Affiliate, if any, which arise in connection with the Option.  The Company shall
have no obligation to deliver Shares until the tax withholding obligations of
the Company or Affiliate have been satisfied by the Participant.

(b)        Withholding in Shares.  The Company shall have the right, but not the
obligation, to require the Participant to satisfy all or any portion of the
Company’s or Affiliate’s

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tax withholding obligations upon exercise of the Option by deducting from the
Shares otherwise issuable to the Participant upon such exercise a number of
whole Shares having a fair market value, as determined by the Company as of the
date of exercise, not in excess of the amount of such tax withholding
obligations determined by the applicable minimum statutory withholding rates.

4.5        Beneficial Ownership of Shares; Certificate Registration.  The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all Shares
acquired by the Participant pursuant to the exercise of the Option.  Except as
provided by the preceding sentence, a certificate for the Shares as to which the
Option is exercised shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.

4.6        Restrictions on Grant of the Option and Issuance of Shares.  The
grant of the Option and the issuance of Shares upon exercise of the Option shall
be subject to compliance with all applicable requirements of federal, state or
foreign law with respect to such securities.  The Option may not be exercised if
the issuance of Shares upon exercise would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Shares
may then be listed.  In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act of 1933, as amended (“Securities
Act”) shall at the time of exercise of the Option be in effect with respect to
the Shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the Shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  THE PARTICIPANT IS CAUTIONED
THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE
SATISFIED.  ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any Shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.  As a condition to the
exercise of the Option, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.

4.7        Fractional Shares.  The Company shall not be required to issue
fractional Shares upon the exercise of the Option.

5.NONTRANSFERABILITY OF THE OPTION.

During the lifetime of the Participant, the Option shall be exercisable only by
the Participant or the Participant’s guardian or legal representative.  The
Option shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution.  Following the death of the
Participant,

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the Option, to the extent provided in Section 7, may be exercised by the
Participant’s legal representative or by any person empowered to do so under the
deceased Participant’s will or under the then applicable laws of descent and
distribution.

6.TERMINATION OF THE OPTION.

The Option shall terminate and may no longer be exercised after the first to
occur of (a) the close of business on the Option Expiration Date, (b) the close
of business on the last date for exercising the Option following termination of
the Participant’s Service as described in Section 7, or (c) a Change in Control
to the extent provided in Section 8.

7.EFFECT OF TERMINATION OF SERVICE.

7.1        Option Exercisability.    The Option shall terminate immediately upon
the Participant’s termination of Service to the extent that it is then unvested
and shall be exercisable after the Participant’s termination of Service to the
extent it is then vested only during the applicable time period as determined
below and thereafter shall terminate.

(a)        Retirement.  If the Participant’s Service terminates other than for
Cause after the Participant has both (i) attained age fifty (50) and (ii)
completed ten (10) year of continuous Service (such combination of age and
continuous Service, “Retirement Eligibility”), the Option, to the extent
unexercised and exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time prior to the Option
Expiration Date.

(b)        Disability.  If the Participant’s Service terminates because of the
Disability of the Participant, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the Participant’s guardian
or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Participant’s Service terminated, but in any
event no later than the Option Expiration Date.  Notwithstanding the foregoing,
if the Participant’s Service terminates because of the Disability of the
Participant after the Participant achieves Retirement Eligibility, the Option,
to the extent unexercised and exercisable for Vested Shares on the date on which
the Participant’s Service terminated, may be exercised by the Participant (or
the Participant’s guardian or legal representative) at any time prior to the
Option Expiration Date.

(c)        Death.    If the Participant’s Service terminates because of the
death of the Participant, the Option, to the extent unexercised and exercisable
for Vested Shares on the date on which the Participant’s Service terminated, may
be exercised by the Participant’s legal representative or other person who
acquired the right to exercise the Option by reason of the Participant’s death
at any time prior to the expiration of twelve (12) months after the date on
which the Participant’s Service terminated, but in any event no later than the
Option Expiration Date.  Notwithstanding the foregoing, (i) if the Participant
dies during the three-month period provided by Section 7.1(e) or during the
twelve-month period provided by Section 7.1(b), the Option, to the extent
unexercised and exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant’s legal
representative or other person who acquired the right to exercise the Option by
reason of the Participant’s death at any time prior to the

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expiration of twelve (12) months after the date of the Participant’s death, but
in any event no later than the Option Expiration Date; or (ii) if the
Participant’s Service terminates because of the death of the Participant after
the Participant achieves Retirement Eligibility, the Option, to the extent
unexercised and exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant’s legal
representative or other person who acquired the right to exercise the Option by
reason of the Participant’s death at any time prior to the Option Expiration
Date.

(d)        Termination for Cause.  Notwithstanding any other provision of this
Option Agreement to the contrary, if the Participant’s Service is terminated for
Cause or if, following the Participant’s termination of Service and during any
period in which the Option otherwise would remain exercisable, the Participant
engages in any act that would constitute Cause, the Option shall terminate in
its entirety and cease to be exercisable immediately upon such termination of
Service or act.

(e)        Other Termination of Service.    If the Participant’s Service
terminates for any reason, except Disability, death or Cause or after achieving
Retirement Eligibility, the Option, to the extent unexercised and exercisable
for Vested Shares by the Participant on the date on which the Participant’s
Service terminated, may be exercised by the Participant at any time prior to the
expiration of three (3) months after the date on which the Participant’s Service
terminated, but in any event no later than the Option Expiration Date.

7.2        Extension if Exercise Prevented by Law.  Notwithstanding the
foregoing, other than termination of the Participant’s Service for Cause, if the
exercise of the Option within the applicable time periods set forth in
Section 7.1 is prevented by the provisions of Section 4.6, the Option shall
remain exercisable until the later of (a) thirty (30) days after the date such
exercise first would no longer be prevented by such provisions, or (b) the end
of the applicable time period under Section 7.1, but in any event no later than
the Option Expiration Date.

8.EFFECT OF CHANGE IN CONTROL.

In the event of a Change in Control, except to the extent that the Committee
determines to cash out the Option as described below, the surviving, continuing,
successor, or purchasing entity or parent thereof, as the case may be (the
“Acquiror”), may, without the consent of the Participant, assume or continue in
full force and effect the Company’s rights and obligations under all or any
portion of the Option or substitute for all or any portion of the Option a
substantially equivalent option for the Acquiror’s stock.  For purposes of this
Section, the Option or any portion thereof shall be deemed assumed if, following
the Change in Control, the Option confers the right to receive, subject to the
terms and conditions of the Plan and this Option Agreement, for each Share
subject to such portion of the Option immediately prior to the Change in
Control, the consideration (whether stock, cash, other securities or property or
a combination thereof) to which a holder of a Share on the effective date of the
Change in Control was entitled (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration is not
solely common stock of the Acquiror, the Committee may, with the consent of the
Acquiror, provide for the consideration to be received upon the exercise of the
Option, for each Share subject to the Option, to consist solely of common stock
of the Acquiror equal in Fair Market Value to the

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per share consideration received by holders of Shares pursuant to the Change in
Control.  The Option shall terminate and cease to be outstanding effective as of
the time of consummation of the Change in Control to the extent that the Option
is neither assumed or continued by the Acquiror in connection with the Change in
Control nor exercised as of the time of the Change in Control.

Notwithstanding any contrary provision in the Plan, the Committee may, in its
discretion and without the consent of any Participant, determine that, upon the
occurrence of a Change in Control, each Option or portion thereof outstanding
immediately prior to the Change in Control and not previously exercised shall be
canceled in exchange for a payment with respect to each vested Share (and each
unvested Share, if so determined by the Committee) subject to such canceled
Option in (i) cash, (ii) stock of the Company or of a corporation or other
business entity a party to the Change in Control, or (iii) other property which,
in any such case, shall be in an amount having a Fair Market Value equal to the
Fair Market Value of the consideration to be paid per Share in the Change in
Control, reduced (but not below zero) by the exercise or purchase price per
share, if any, under the Option.  In the event such determination is made by the
Committee, an Option having an exercise or purchase price per share equal to or
greater than the Fair Market Value of the consideration to be paid per Share in
the Change in Control may be canceled without payment of consideration to the
holder thereof.

9.ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

Subject to any required action by the stockholders of the Company and the
requirements of Sections 409A and 424 of the Code to the extent applicable, in
the event of any change in the Shares effected without receipt of consideration
by the Company, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares, or similar change in the capital structure of the
Company, or in the event of payment of a dividend or distribution to the
stockholders of the Company in a form other than Shares (excepting normal cash
dividends) that has a material effect on the Fair Market Value of Shares,
appropriate and proportionate adjustments shall be made in the number, Exercise
Price and kind of Shares subject to the Option, in order to prevent dilution or
enlargement of the Participant’s rights under the Option.  For purposes of the
foregoing, conversion of any convertible securities of the Company shall not be
treated as “effected without receipt of consideration by the Company.”  Any
fractional Share resulting from an adjustment pursuant to this Section shall be
rounded down to the nearest whole number and the Exercise Price shall be rounded
up to the nearest whole cent.  In no event may the Exercise Price be decreased
to an amount less than the par value, if any, of the stock subject to the
Option. The Committee in its sole discretion, may also make such adjustments in
the terms of the Option to reflect, or related to, such changes in the capital
structure of the Company or distributions as it deems appropriate.  All
adjustments pursuant to this Section shall be determined by the Committee, and
its determination shall be final, binding and conclusive.

10.RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.

The Participant shall have no rights as a stockholder with respect to any Shares
covered by the Option until the date of the issuance of the Shares for which the
Option has been exercised (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company).  No
adjustment shall be made for dividends,

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distributions or other rights for which the record date is prior to the date the
Shares are issued, except as provided in Section 9.  If the Participant is an
employee, the Participant understands and acknowledges that, except as otherwise
provided in a separate, written employment agreement between the Company or an
Affiliate and the Participant, the Participant’s employment is “at will” and is
for no specified term.  Nothing in this Option Agreement shall confer upon the
Participant any right to continue in the Service of the Company or an Affiliate
or interfere in any way with any right of the Company or any Affiliate to
terminate the Participant’s Service as a director, an employee or consultant, as
the case may be, at any time.

11.LEGENDS.

The Company may at any time place legends referencing any applicable federal,
state or foreign securities law restrictions on all certificates representing
Shares subject to the provisions of this Option Agreement.  The Participant
shall, at the request of the Company, promptly present to the Company any and
all certificates representing Shares acquired pursuant to the Option in the
possession of the Participant in order to carry out the provisions of this
Section.

12.MISCELLANEOUS PROVISIONS.

12.1        Termination or Amendment.  The Committee may terminate or amend the
Plan or the Option at any time; provided, however, that except as provided in
Section 8 in connection with a Change in Control, no such termination or
amendment may have a materially adverse effect on the Option or any unexercised
portion hereof without the consent of the Participant unless such termination or
amendment is necessary to comply with any applicable law or government
regulation.  No amendment or addition to this Option Agreement shall be
effective unless in writing.

12.2        Further Instruments.  The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Option Agreement.

12.3        Binding Effect.  This Option Agreement shall inure to the benefit of
the successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.

12.4        Delivery of Documents and Notices.  Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by the Company or any Affiliate,
or upon deposit in the U.S. Post Office or foreign postal service, by registered
or certified mail, or with a nationally recognized overnight courier service,
with postage and fees prepaid, addressed to the other party at the address of
such party set forth in the Grant Notice or at such other address as such party
may designate in writing from time to time to the other party.

(a)        Description of Electronic Delivery.  The Plan documents, which may
include but do not necessarily include: the Plan, the Grant Notice, this Option
Agreement, the

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Plan Prospectus, and any reports of the Company provided generally to the
Company’s stockholders, may be delivered to the Participant electronically.  In
addition, if permitted by the Company, the Participant may deliver
electronically the Grant Notice and Exercise Notice called for by Section 4.2 to
the Company or to such third party involved in administering the Plan as the
Company may designate from time to time.  Such means of electronic delivery may
include but do not necessarily include the delivery of a link to a Company
intranet or the Internet site of a third party involved in administering the
Plan, the delivery of the document via e-mail or such other means of electronic
delivery specified by the Company.

(b)        Consent to Electronic Delivery.  The Participant acknowledges that
the Participant has read Section 12.4(a) of this Option Agreement and consents
to the electronic delivery of the Plan documents and, if permitted by the
Company, the delivery of the Grant Notice and Exercise Notice, as described in
Section 12.4(a).  The Participant acknowledges that he or she may receive from
the Company a paper copy of any documents delivered electronically at no cost to
the Participant by contacting the Company by telephone or in writing.  The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the attempted electronic delivery of such
documents fails.  Similarly, the Participant understands that the Participant
must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such
documents fails.  The Participant may revoke his or her consent to the
electronic delivery of documents described in Section 12.4(a) or may change the
electronic mail address to which such documents are to be delivered (if the
Participant has provided an electronic mail address) at any time by notifying
the Company of such revoked consent or revised e-mail address by telephone,
postal service or electronic mail.  Finally, the Participant understands that he
or she is not required to consent to electronic delivery of documents described
in Section 12.4(a).

12.5        Integrated Agreement.  The Grant Notice, this Option Agreement and
the Plan, together with the Superseding Agreement, if any, shall constitute the
entire understanding and agreement of the Participant and the Company or any
Affiliate with respect to the subject matter contained herein and supersede any
prior agreements, understandings, restrictions, representations, or warranties
among the Participant and the Company or any Affiliate with respect to such
subject matter.  To the extent contemplated herein, the provisions of the Grant
Notice, the Option Agreement and the Plan shall survive any exercise of the
Option and shall remain in full force and effect.

12.6        Recoupment.  Notwithstanding anything to the contrary in this Option
Agreement, the Option (including any income, capital gains, proceeds realized or
other economic benefit actually or constructively received by the Participant
upon the receipt, vesting or exercise of the Option, and the Participant’s sale
or other disposition of the Stock acquired through exercise of the Option) shall
be subject to recovery under any clawback, recovery or recoupment policy which
the Company may adopt from time to time and any policy which the Company may be
required to adopt under Section 954 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act or other applicable law, the rules and regulations of
the U.S. Securities and Exchange Commission, or the requirements of any national
securities exchange on which the Company’s Stock may be listed.  By accepting
the Option, the Participant expressly acknowledges and agrees that the Option is
subject to the terms of the foregoing policies, whether retroactively or
prospectively adopted, and agrees to cooperate fully with the Committee to
facilitate the

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recovery of the Option, any shares of Stock acquired through the exercise of the
Option or proceeds realized from the Participant’s sale or other disposition of
the Stock acquired through exercise of the Option that the Committee determines
in its sole discretion is required or entitled to be recovered pursuant to the
terms of such policies.

12.7        Applicable Law.  This Option Agreement shall be governed by the laws
of the State of Nevada as such laws are applied to agreements between Nevada
residents entered into and to be performed entirely within the State of Nevada.

12.8        Counterparts.  The Grant Notice may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

 

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GLOSSARY

 

The following capitalized terms have the meanings below for purposes of this
Option Agreement and Grant Notice:

 

“Cause” means, unless such term or an equivalent term is otherwise defined in
another written agreement between a Participant and the Company or an Affiliate
applicable to this Option, any of the following: (i) the Participant’s theft,
dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or
falsification of any Company or Affiliate documents or records; (ii) the
Participant’s material failure to abide by the Company’s or any Affiliate’s code
of conduct or other policies (including, without limitation, policies relating
to confidentiality and reasonable workplace conduct); (iii) the Participant’s
unauthorized use, misappropriation, destruction or diversion of any tangible or
intangible asset or corporate opportunity of the Company or any Affiliate
(including, without limitation, the Participant’s improper use or disclosure of
the Company or any Affiliate’s confidential or proprietary information);
(iv) any intentional act by the Participant which has a material detrimental
effect on the Company or any Affiliate’s reputation or business; (v) the
Participant’s repeated failure to perform any reasonable assigned duties after
written notice from the Company or any Affiliate of, and a reasonable
opportunity to cure, such failure; (vi) any material breach by the Participant
of any employment, service, non-disclosure, non-competition, non-solicitation or
other similar agreement between the Participant and the Company or any
Affiliate, which breach is not cured pursuant to the terms of such agreement; or
(vii) the Participant’s conviction (including any plea of guilty or nolo
contendere) of any criminal act involving fraud, dishonesty, misappropriation or
moral turpitude, or which impairs the Participant’s ability to perform his or
her duties with the Company or any Affiliate.

“Change in Control” has the same meaning as in the Company’s 2014 Equity
Incentive Plan, as may be amended from time to time.

“Service” means a Participant’s employment or service with the Company or any
Affiliate, whether as an employee, a director or a consultant.  Unless otherwise
provided by the Committee, a Participant’s Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant
renders Service or a change in the Company or Affiliate for which the
Participant renders Service, provided that there is no interruption or
termination of the Participant’s Service.  Furthermore, a Participant’s Service
shall not be deemed to have been interrupted or terminated if the Participant
takes any military leave, sick leave, or other bona fide leave of absence
approved by the Company.  However, unless otherwise provided by the Committee,
if any such leave taken by a Participant exceeds ninety (90) days, then on the
ninety-first (91st) day following the commencement of such leave the
Participant’s Service shall be deemed to have terminated, unless the
Participant’s right to return to Service is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated by the
Company or required by law, an unpaid leave of absence shall not be treated as
Service for purposes of determining vesting under the Participant’s Option
Agreement.  A Participant’s Service shall be deemed to have terminated either
upon an actual termination of Service or upon the business entity for which the
Participant performs Service ceasing to be an Affiliate.  Subject to the
foregoing, the Company, in its discretion, shall determine whether the
Participant’s Service has terminated and the effective date of and reason for
such termination.

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