Exhibit 10.4

 

LIBERTY MEDIA CORPORATION

2017 OMNIBUS INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is entered into
effective as of December 15, 2019 by and between LIBERTY MEDIA CORPORATION, a
Delaware corporation (the “Company”), and Gregory B. Maffei (the “Grantee”).

 

The Grantee is employed as of the Grant Date as the President and Chief
Executive Officer of the Company pursuant to the terms of an employment
agreement between the Company and the Grantee dated effective as of December 13,
2019 (as amended and/or amended and restated from time to time, the “Employment
Agreement”). The Company has adopted the Liberty Media Corporation 2017 Omnibus
Incentive Plan (as may be amended prior to or after the Grant Date, the “Plan”),
a copy of which as in effect on the Grant Date is attached via a link at the end
of this online Agreement as Exhibit A and by this reference made a part hereof,
for the benefit of eligible employees and independent contractors of the Company
and its Subsidiaries. Capitalized terms used and not otherwise defined herein or
in the Employment Agreement will have the meaning given thereto in the Plan.

 

The Company and the Grantee therefore agree as follows:

 

1.            Definitions. All capitalized terms not defined in this Agreement
that are defined in the Employment Agreement will have the meanings ascribed to
them in the Employment Agreement. The following terms, when used in this
Agreement, have the following meanings:

 

“Base Price” means the BATRK Base Price, the FWONK Base Price and/or the LSXMK
Base Price, as the context requires.

 

“BATRK Base Price” means $29.10, the Fair Market Value of a share of BATRK
Common Stock on the Grant Date.

 

“BATRK Common Stock” means the Company’s Series C Liberty Braves Common Stock,
$0.01 par value.

 

“BATRK Options” has the meaning specified in Section 2 of this Agreement.

 

“Business Day” means any day other than Saturday, Sunday or a day on which
banking institutions in Denver, Colorado, are required or authorized to be
closed.

 

“Cause” has the meaning specified in the Employment Agreement.

 

“Change in Control” has the meaning specified in the Employment Agreement.

 

“Close of Business” means, on any day, 5:00 p.m., Denver, Colorado time.

 

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“Committee” means the Compensation Committee of the Board of Directors of the
Company.

 

“Common Stock” means BATRK Common Stock, FWONK Common Stock, and/or LSXMK Common
Stock as the context requires.

 

“Company” has the meaning specified in the preamble to this Agreement.

 

“Disability” has the meaning specified in the Employment Agreement.

 

“Employment Agreement” has the meaning specified in the recitals to this
Agreement.

 

“FWONK Base Price” means $43.85, the Fair Market Value of a share of FWONK
Common Stock on the Grant Date.

 

“FWONK Common Stock” means the Company’s Series C Liberty Formula One Common
Stock, $0.01 par value.

 

“FWONK Options” has the meaning specified in Section 2 of this Agreement.

 

“Good Reason” has the meaning specified in the Employment Agreement.

 

“Grant Date” means December 15, 2019.

 

“Grantee” has the meaning specified in the preamble to this Agreement.

 

“LSXMK Base Price” means $47.11, the Fair Market Value of a share of LSXMK
Common Stock on the Grant Date.

 

“LSXMK Common Stock” means the Company’s Series C Liberty SiriusXM Common Stock,
$0.01 par value.

 

“LSXMK Options” has the meaning specified in Section 2 of this Agreement.

 

“Options” means the BATRK Options, the FWONK Options and/or the LSXMK Options,
as the context requires.

 

“Option Shares” has the meaning specified in Section 4(a) of this Agreement.

 

“Plan” has the meaning specified in the recitals to this Agreement.

 

“Required Withholding Amount” has the meaning specified in Section 5 of this
Agreement.

 

“Separation” means the date as of which the Grantee is no longer employed by the
Company or any of its Subsidiaries.

 

“Subsidiary” has the meaning set forth in the Plan.

 

“Term” has the meaning specified in Section 2 of this Agreement.

 

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2.            Grant of Options. Subject to the terms and conditions herein and
in the Plan, the Company hereby awards to the Grantee as of the Grant Date, the
following options, exercisable as set forth in Section 3 below and expiring at
the Close of Business on December 15, 2026 (such period, the “Term”), subject to
earlier termination as provided in Section 8 below: (a) options to purchase from
the Company at the BATRK Base Price 313,342 shares of BATRK Common Stock (the
“BATRK Options”), (b) options to purchase from the Company at the FWONK Base
Price 588,954 shares of FWONK Common Stock (the “FWONK Options”), and (c)
options to purchase from the Company at the LSXMK Base Price 927,334 shares of
LSXMK Common Stock (the “LSXMK Options”). Each option granted hereunder is a
“Nonqualified Stock Option.” The Base Price of each Option and the number of
Options granted hereunder are subject to adjustment pursuant to Section 12
below. No fractional shares of Common Stock will be issuable upon exercise of an
Option, and the Grantee will receive, in lieu of any fractional share of Common
Stock that the Grantee otherwise would receive upon such exercise, cash equal to
the fraction representing such fractional share multiplied by the Fair Market
Value of one share of the applicable class of Common Stock as of the date on
which such exercise is considered to occur pursuant to Section 4 below.

 

3.            Conditions of Exercise. Unless otherwise determined by the
Committee in its sole discretion (provided that such determination is not
adverse to the Grantee), the Options will be exercisable only in accordance with
the conditions stated in this Section 3.

 

(a)           The Options may be exercised only to the extent they have become
vested and exercisable in accordance with the provisions of this Section 3.
Except as otherwise provided in this Agreement or the Employment Agreement,
subject to the Grantee’s continued employment with the Company or any Subsidiary
on such date, all of the Options subject to this Agreement will become vested
and exercisable on December 31, 2023.

 

(b)           Notwithstanding the foregoing, (i) all Options will become vested
and exercisable on the date of the Grantee’s Separation if (A) the Grantee’s
Separation occurs on or after the Grant Date by reason of Disability or (B) the
Grantee dies while employed by the Company or a Subsidiary, and (ii) Options
that have not theretofore become vested and exercisable will become vested and
exercisable to the extent provided in Section 7 of this Agreement, on the date
of the Grantee’s Separation.

 

(c)           To the extent the Options become vested and exercisable, any or
all of such Options may be exercised (at any time or from time to time, except
as otherwise provided herein) until expiration of the Term or earlier
termination thereof as provided herein.

 

The Grantee acknowledges and agrees that the Committee, in its discretion and as
contemplated by the Plan, may adopt rules and regulations from time to time
after the date hereof with respect to the exercise of the Options and that the
exercise by the Grantee of Options will be subject to the further condition that
such exercise is made in accordance with all such rules and regulations as the
Committee may determine are applicable thereto.

 

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4.            Manner of Exercise. Options will be considered exercised (as to
the number and class of Options specified in the notice referred to in Section
4(a) below) on the latest of (i) the date of exercise designated in the written
notice referred to in Section 4(a) below, (ii) if the date so designated is not
a Business Day, the first Business Day following such date or (iii) the earliest
Business Day by which the Company has received all of the following:

 

(a)           Written notice, in such form as the Committee may require,
containing such representations and warranties as the Committee may reasonably
require and designating, among other things, the date of exercise and the number
and class of shares of Common Stock (“Option Shares”) to be purchased by
exercise of Options;

 

(b)           Payment of the Base Price for each Option Share to be purchased in
any (or a combination) of the following forms, as determined by the Grantee: (A)
cash, (B) check, (C) whole shares of any class or series of the Company’s common
stock, (D) the delivery, together with a properly executed exercise notice, of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the Base Price (and, if
applicable the Required Withholding Amount, as described in Section 5 below), or
(E) the delivery of irrevocable instructions via the Company’s online grant and
administration program for the Company to withhold the number of shares of the
applicable class of Common Stock (valued at the Fair Market Value of such Common
Stock on the date of exercise) required to pay the Base Price (and, if
applicable, the Required Withholding Amount, as described in Section 5 below)
that would otherwise be delivered by the Company to the Grantee upon exercise of
the Options (it being acknowledged that the method of exercise described in this
clause (E) applies to the Options granted pursuant to this Agreement and will
not apply to any options granted under the Plan to the Grantee after the Grant
Date unless otherwise provided in the applicable award agreement); and

 

(c)           Any other documentation that the Committee may reasonably require.

 

5.            Mandatory Withholding for Taxes. The Grantee acknowledges and
agrees that the Company will deduct from the shares of Common Stock otherwise
payable or deliverable upon exercise of any Options that number of shares of the
applicable class of Common Stock having a Fair Market Value on the date of
exercise that is equal to the amount of all federal, state and local taxes
required to be withheld by the Company or any Subsidiary of the Company upon
such exercise, as determined by the Company (the “Required Withholding Amount”),
unless the Grantee remits the Required Withholding Amount to the Company or its
designee in cash in such form and by such time as the Company may require or
other provisions for withholding such amount satisfactory to the Company have
been made. If the Grantee elects to make payment of the Base Price by delivery
of irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the Base Price, such
instructions may also include instructions to deliver the Required Withholding
Amount to the Company. In such case, the Company will notify the broker promptly
of the Company's determination of the Required Withholding Amount.
Notwithstanding the foregoing or anything contained herein to the contrary, (i)
the Grantee may, in his sole discretion, direct the Company to deduct from the
shares of Common Stock otherwise payable or deliverable upon exercise of any
Options that number of shares of the class of Common Stock acquired upon
exercise of such Options having a Fair Market Value on the date of exercise that
is equal to the Required Withholding Amount and (ii) the Company will not
withhold any shares of Common Stock to pay the Required Withholding Amount if
the Grantee has remitted cash to the Company or a Subsidiary or designee thereof
in an amount equal to the Required Withholding Amount by such time as the
Company may require.

 

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6.            Payment or Delivery by the Company. As soon as practicable after
receipt of all items referred to in Section 4 above, and subject to the
withholding referred to in Section 5 above, the Company will (i) deliver or
cause to be delivered to the Grantee certificates issued in the Grantee’s name
for, or cause to be transferred to a brokerage account through Depository Trust
Company for the benefit of the Grantee, the number and class of shares of Common
Stock purchased by exercise of Options, and (ii) deliver any cash payment to
which the Grantee is entitled in lieu of a fractional share of Common Stock as
provided in Section 2 above. Any delivery of shares of Common Stock will be
deemed effected for all purposes when certificates representing such shares have
been delivered personally to the Grantee or, if delivery is by mail, when the
certificates have been received by the Grantee, or at the time the stock
transfer agent completes the transfer of shares to a brokerage account through
Depository Trust Company for the benefit of the Grantee, if applicable, and any
cash payment will be deemed effected when a check from the Company, payable to
the Grantee and in the amount equal to the amount of the cash owed, has been
delivered personally to the Grantee or, if delivery is by mail, upon receipt by
the Grantee.

 

7.            Effect of Termination of Employment by the Company Without Cause
or by the Grantee For or Without Good Reason on Exercisability of Options.

 

(a)           If the Grantee’s Separation occurs on or after January 1, 2020 on
account of a termination of the Grantee’s employment by the Company without
Cause or on account of a voluntary termination by the Grantee of his employment
for Good Reason, any Options that are outstanding and unvested at the time of
such termination will immediately become vested and exercisable in full.

 

(b)           In addition to the acceleration provided pursuant to Section 3(b)
on account of death or Disability, if the Grantee’s Separation occurs on or
after January 1, 2020 on account of a voluntary termination by the Grantee of
his employment without Good Reason, a pro rata portion of the Options that are
not vested on the date of such Separation will vest and become exercisable as of
the date of such Separation, such pro rata portion to be equal to the product of
the number of Option Shares represented by the Options that are not vested on
the date of such Separation, multiplied by a fraction, the numerator of which is
the number of calendar days that have elapsed from January 1, 2020 through the
date of Separation, and the denominator of which is 1,460 days.

 

8.            Termination of Options. The Options will terminate at the time
specified below:

 

(a)           If a Change in Control occurs after the Grant Date but prior to
the Grantee’s Separation, all Options will terminate at the expiration of the
Term.

 

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(b)           If, in the absence of a Change in Control after the Grant Date,
the Grantee’s Separation occurs prior to the Close of Business on December 31,
2023 on account of a termination of the Grantee’s employment for Cause, all
Options that are not vested and exercisable as of the Close of Business on the
date of Separation will terminate at that time and all Options that are vested
and exercisable as of the Close of Business on the date of Separation will
terminate at the Close of Business on the first Business Day following the
expiration of the 90-day period that began on the date of the Grantee's
Separation.

 

(c)           If (i) the Grantee’s Separation occurs after the Close of Business
on December 31, 2023, or (ii) in the absence of a Change in Control after the
Grant Date, the Grantee’s Separation occurs (A) on account of a termination of
the Grantee’s employment without Cause, (B) on account of a termination of the
Grantee’s employment by the Grantee with or without Good Reason, or (C) by
reason of the death or Disability of the Grantee, then, in each case, all
Options that are not vested and exercisable as of the Close of Business on the
date of Separation after giving effect to the provisions of Sections 3 and 7
above will terminate at that time, and all Options that are vested and
exercisable as of the Close of Business on the date of Separation after giving
effect to the provisions of Sections 3 and 7 above will terminate at the
expiration of the Term.

 

In any event in which Options remain exercisable for a period of time following
the date of the Grantee’s Separation as provided above, the Options may be
exercised during such period of time only to the extent the same were vested and
exercisable as provided in Section 3 above on such date of Separation (after
giving effect to the application of Section 7 above). Notwithstanding any period
of time referenced in this Section 8 or any other provision of this Agreement or
any other agreement that may be construed to the contrary, the Options will in
any event terminate not later than upon the expiration of the Term.

 

9.            Nontransferability. Options are not transferable (either
voluntarily or involuntarily), before or after Grantee’s death, except as
follows: (a) during Grantee’s lifetime, pursuant to a Domestic Relations Order,
issued by a court of competent jurisdiction, that is not contrary to the terms
and conditions of the Plan or this Agreement, and in a form acceptable to the
Committee; or (b) after Grantee’s death, by will or pursuant to the applicable
laws of descent and distribution, as may be the case. Any person to whom Options
are transferred in accordance with the provisions of the preceding sentence
shall take such Options subject to all of the terms and conditions of the Plan
and this Agreement, including that the vesting and termination provisions of
this Agreement will continue to be applied with respect to the Grantee. Options
are exercisable only by the Grantee (or, during the Grantee’s lifetime, by the
Grantee’s court appointed legal representative) or a person to whom the Options
have been transferred in accordance with this Section.

 

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10.          Forfeiture for Misconduct and Repayment of Certain Amounts. If (i)
a material restatement of any financial statement of the Company (including any
consolidated financial statement of the Company and its consolidated
subsidiaries) is required and (ii) in the reasonable judgment of the Committee,
(A) such restatement is due to material noncompliance with any financial
reporting requirement under applicable securities laws and (B) such
noncompliance is a result of misconduct on the part of the Grantee, the Grantee
will repay to the Company Forfeitable Benefits received by the Grantee during
the Misstatement Period in such amount as the Committee may reasonably
determine, taking into account, in addition to any other factors deemed relevant
by the Committee, the extent to which the market value of Common Stock during
the Misstatement Period was affected by the error(s) giving rise to the need for
such restatement. “Forfeitable Benefits” means (i) any and all cash and/or
shares of Common Stock received by the Grantee (A) upon the exercise during the
Misstatement Period of any SARs held by the Grantee or (B) upon the payment
during the Misstatement Period of any Cash Award or Performance Award held by
the Grantee, the value of which is determined in whole or in part with reference
to the value of Common Stock, and (ii) any proceeds received by the Grantee from
the sale, exchange, transfer or other disposition during the Misstatement Period
of any shares of Common Stock received by the Grantee upon the exercise, vesting
or payment during the Misstatement Period of any Award held by the Grantee. By
way of clarification, “Forfeitable Benefits” will not include any shares of
Common Stock received upon exercise of any Options during the Misstatement
Period that are not sold, exchanged, transferred or otherwise disposed of during
the Misstatement Period. “Misstatement Period” means the 12-month period
beginning on the date of the first public issuance or the filing with the
Securities and Exchange Commission, whichever occurs earlier, of the financial
statement requiring restatement.

 

11.          No Stockholder Rights. Prior to the exercise of Options in
accordance with the terms and conditions set forth in this Agreement, the
Grantee will not be deemed for any purpose to be, or to have any of the rights
of, a stockholder of the Company with respect to any shares of Common Stock
underlying the Options, as applicable, nor will the existence of this Agreement
affect in any way the right or power of the Company or any stockholder of the
Company to accomplish any corporate act, including, without limitation, any
reclassification, reorganization or other change of or to its capital or
business structure, merger, consolidation, liquidation, or sale or other
disposition of all or any part of its business or assets.

 

12.          Adjustments. If the outstanding shares of any class of Common Stock
are subdivided into a greater number of shares (by stock dividend, stock split,
reclassification or otherwise) or are combined into a smaller number of shares
(by reverse stock split, reclassification or otherwise), or if the Committee
determines that any stock dividend, extraordinary cash dividend,
reclassification, recapitalization, reorganization, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase any
shares of Common Stock or other similar corporate event (including mergers or
consolidations) affects shares of any class of Common Stock such that an
adjustment is required to preserve the benefits or potential benefits intended
to be made available under this Agreement, then the applicable class of Options
will be subject to adjustment (including, without limitation, as to the number
of Options and the Base Price per share of such Options) in such manner as the
Committee, in its sole discretion, deems equitable and appropriate in connection
with the occurrence of any of the events described in this Section 12 following
the Grant Date.

 

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13.          Restrictions Imposed by Law. Without limiting the generality of
Section 10.8 of the Plan, the Grantee will not exercise the Options, and the
Company will not be obligated to make any cash payment or issue or cause to be
issued any shares of Common Stock if counsel to the Company determines that such
exercise, payment or issuance would violate any applicable law or any rule or
regulation of any governmental authority or any rule or regulation of, or
agreement of the Company with, any securities exchange or association upon which
shares of such Common Stock are listed or quoted. The Company will in no event
be obligated to take any affirmative action in order to cause the exercise of
the Options or the resulting payment of cash or issuance of shares of Common
Stock to comply with any such law, rule, regulation or agreement.

 

14.          Notice. Unless the Company notifies the Grantee in writing of a
different procedure or address, any notice or other communication to the Company
with respect to this Agreement will be in writing and will be delivered
personally or sent by United States first class mail, postage prepaid and
addressed as follows:

 

Liberty Media Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Attn: Chief Legal Officer

 

Unless the Company elects to notify the Grantee electronically pursuant to the
online grant and administration program or via email, any notice or other
communication to the Grantee with respect to this Agreement will be in writing
and will be delivered personally, or will be sent by United States first class
mail, postage prepaid, to the Grantee's address as listed in the records of the
Company on the date of this Agreement, unless the Company has received written
notification from the Grantee of a change of address.

 

15.          Amendment. Notwithstanding any other provision hereof, this
Agreement may be amended from time to time as approved by the Committee as
contemplated in the Plan. Without limiting the generality of the foregoing,
without the consent of the Grantee,

 

(a)           this Agreement may be amended from time to time as approved by the
Committee (i) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or (ii) to add to the covenants and agreements of the Company for the benefit of
the Grantee or surrender any right or power reserved to or conferred upon the
Company in this Agreement, subject to any required approval of the Company’s
stockholders and, provided, in each case, that such changes or corrections will
not adversely affect the rights of the Grantee with respect to the Award
evidenced hereby, or (iii) to make such other changes as the Company, upon
advice of counsel, determines are necessary because of the adoption or
promulgation of, or change in or of the interpretation of, any law or
governmental rule or regulation, including any applicable federal or state
securities laws; and

 

(b)           subject to any required action by the Board or the stockholders of
the Company, the Options granted under this Agreement may be canceled by the
Company and a new Award made in substitution therefor, provided, that the Award
so substituted will satisfy all of the requirements of the Plan as of the date
such new Award is made and no such action will adversely affect any Options.

 

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16.          Grantee Employment. Nothing contained in this Agreement, and no
action of the Company or the Committee with respect hereto, will confer or be
construed to confer on the Grantee any right to continue in the employ of the
Company or interfere in any way with the right of the Company to terminate the
Grantee’s employment at any time, with or without Cause, subject to the
provisions of the Employment Agreement.

 

17.          Nonalienation of Benefits. Except as provided in Section 9 of this
Agreement, (i) no right or benefit under this Agreement will be subject to
anticipation, alienation, sale, assignment, hypothecation, pledge, exchange,
transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, hypothecate, pledge, exchange, transfer, encumber or charge the same
will be void, and (ii) no right or benefit hereunder will in any manner be
liable for or subject to the debts, contracts, liabilities or torts of the
Grantee or other person entitled to such benefits.

 

18.          Governing Law. This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of Colorado. Any dispute with
respect to the enforcement or interpretation of this Agreement shall be subject
to the arbitration provisions set forth in Section 9.12 of the Employment
Agreement, whether or not the “Employment Period” under such agreement has
ended.

 

19.          Construction. References in this Agreement to “this Agreement” and
the words “herein,” “hereof,” “hereunder” and similar terms include all Exhibits
and Schedules appended hereto, including the Plan. The word “include” and all
variations thereof are used in an illustrative sense and not in a limiting
sense. All decisions of the Committee upon questions regarding this Agreement or
the Plan will be conclusive. Unless otherwise expressly stated herein, in the
event of any inconsistency between the terms of the Plan and this Agreement, the
terms of the Plan will control. The headings of the sections of this Agreement
have been included for convenience of reference only, are not to be considered a
part hereof and will in no way modify or restrict any of the terms or provisions
hereof.

 

20.          Rules by Committee. The rights of the Grantee and the obligations
of the Company hereunder will be subject to such reasonable rules and
regulations as the Committee may adopt from time to time.

 

21.          Entire Agreement. This Agreement, together with the applicable
provisions of the Employment Agreement, is in satisfaction of and in lieu of all
prior discussions and agreements, oral or written, between the Company and the
Grantee regarding the Award. The Grantee and the Company hereby declare and
represent that no promise or agreement not expressed herein or in the Employment
Agreement has been made regarding the Award and that this Agreement, together
with the Employment Agreement, contains the entire agreement between the parties
hereto with respect to the Award and replaces and makes null and void any prior
agreements between the Grantee and the Company regarding the Award. Subject to
the restrictions set forth in Sections 9 and 17 of this Agreement, this
Agreement will be binding upon and inure to the benefit of the parties and their
respective heirs, successors and assigns.

 

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22.          Grantee Acceptance. The Grantee will signify acceptance of the
terms and conditions of this Agreement by acknowledging the acceptance of this
Agreement via the procedures described in the online grant and administration
program utilized by the Company or by such other method as may be agreed by the
Grantee and the Company.

 

23.         Code Section 409A Compliance. To the extent that the provisions of
Section 409A of the Code or any U.S. Department of the Treasury regulations
promulgated thereunder are applicable to any Option, the parties intend that
this Agreement will meet the requirements of such Code section and regulations
and that the provisions hereof will be interpreted in a manner that is
consistent with such intent. The Grantee will cooperate with the Company in
taking such actions as the Company may reasonably request to assure that this
Agreement will meet the requirements of Section 409A of the Code and any U.S.
Department of the Treasury regulations promulgated thereunder and to limit the
amount of any additional payments required by Section 9.7 of the Employment
Agreement to be made to the Grantee. The Company represents and warrants that
the Option satisfies all requirements under Section 409A of the Code and any
U.S. Department of the Treasury regulations promulgated thereunder such that the
Option is exempt from Section 409A of the Code, including, without limitation,
that the Common Stock underlying each Option is “service recipient stock” and
with respect to an “eligible issuer of service recipient stock” (each as defined
in Section 409A) and the Base Price is not less than the Fair Market Value of
one share of the applicable class of Common Stock on the Grant Date.

 

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