NOTICE OF GRANT OF STOCK APPRECIATION RIGHTS AWARD

 

EMPOWERED PRODUCTS, INC.
2012 OMNIBUS INCENTIVE PLAN

 

FOR GOOD AND VALUABLE CONSIDERATION, Empowered Products, Inc. (the “Company”)
hereby grants, pursuant to the provisions of the Company’s 2012 Omnibus
Incentive Plan (the “Plan”), to the Participant designated in this Notice of
Grant of Stock Appreciation Rights Award (the “Notice”) the right to the
appreciation in value from the Date of Grant with respect to the aggregate
number of Shares of the Company’s Common Stock set forth in this Notice, subject
to certain restrictions as outlined below in this Notice and the additional
provisions set forth in the attached Terms and Conditions of Stock Appreciation
Rights Award (collectively, the “Agreement”). Also enclosed is a copy of the
information statement describing important provisions of the Plan.

 

Grantee: [__________] Date of Grant: ____________ Exercise Price per Share:
$____ Expiration Date: ____________ Total Number of Shares in respect of which
Stock Appreciations Rights Granted: _______ Total Exercise Price: $______
Vesting Schedule: __________________________________

Exercise After Termination of Employment:

 

Termination of Employment for any reason: any non-vested portion of the Award
expires immediately;

 

Termination of Employment due to death or Disability: vested portion of the
Award is exercisable by the Grantee (or, in the event of the Grantee’s death,
the Grantee’s legal personal representative) for for ______ [months/years] [MUST
BE AT LEAST 6 MONTHS] after the Grantee's Termination;

 

Termination of Employment for any reason other than death or Disability: vested
portion of the Award expires immediately.

 

Termination of Employment for any reason other than death or Disability (except
for termination for cause as defined by applicable law): vested portion of the
Award is exercisable for a period of _____ [days/months] [MUST BE AT LEAST 30
DAYS] following the Grantee’s Termination.

 

In no event may this Award be exercised after the Expiration Date as provided
above.

 

[Performance Conditions:] [insert as appropriate]

By signing below, the Grantee agrees that this Stock Appreciation Rights Award
is granted under and governed by the terms and conditions of the Company’s 2012
Omnibus Incentive Plan, this Notice and the attached Terms and Conditions.

 

Grantee    Empowered Products, Inc.         ________________________________  
By: ____________________________     Title:___________________________ 
 Date:____________________________   Date:___________________________       

  

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TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS AWARD

 

1. Grant of SAR. The Stock Appreciation Rights ("SAR") granted to the Grantee
and described in the Notice of Grant of Stock Appreciation Rights Award (the
"Notice") is subject to the provisions of the Plan, which is incorporated by
reference in its entirety into these Terms and Conditions of Stock Appreciation
Rights Award (these "Terms and Conditions").

 

The Board of Directors of the Company has authorized and approved the 2012
Omnibus Incentive Plan (the “Plan”), and the Plan has been approved by the
Company’s stockholders. The Committee has approved an award to the Grantee of a
SAR to acquire the value of the appreciation in the Company’s Common Stock
following the Date of Grant, conditional on the Grantee’s acceptance of the
provisions set forth in the Plan, the Notice and these Terms and Conditions
within 60 days after the Notice and these Terms and Conditions are presented to
the Grantee for review. For purposes of the Notice and these Terms and
Conditions, any reference to the Company shall include a reference to any
Affiliate.

 

The Company intends that this SAR not be considered to provide for the deferral
of compensation under Section 409A of the Code and that this Agreement shall be
so administered and construed. Further, the Company may modify the Plan and this
Award to the extent necessary to fulfill this intent.

 

2. Exercise of SAR.

 

(a) Right to Exercise. This SAR shall be exercisable, in whole or in part,
during its term in accordance with the vesting schedule set out in the Notice
and with the applicable provisions of the Plan and this Agreement. No Shares
shall be issued pursuant to the exercise of this SAR Award unless the issuance
and exercise comply with applicable laws. Assuming such compliance, for income
tax purposes the Shares shall be considered transferred to the Grantee on the
date on which the SAR is exercised with respect to such Shares. To the extent
permitted under Section 6.03 of the Plan, the Committee may, in its discretion,
(i) accelerate vesting of the SAR, or (ii) extend the applicable exercise
period.

 

(b) Method of Exercise. The Grantee may exercise the SAR by delivering an
exercise notice in a form approved by the Company (the “Exercise Notice”) which
shall state the election to exercise the SAR, the number of Shares with respect
to which the SAR is being exercised, and such other representations and
agreements as may be required by the Company. Subject to Section 7 of these
Terms and Conditions, this SAR Award shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice.

 

(c) Acceleration of Vesting on Change in Control. Unless otherwise specified in
the Notice of Grant, in the event of a Change in Control, no accelerated vesting
of any SAR Awards outstanding on the date of such Change in Control shall occur.

 

3. Method of Payment. Upon exercise of a SAR, in whole or in part, by delivery
of an Exercise Notice to the Company, the Grantee shall be entitled to receive a
number of Shares (the “Net SAR Shares”) equal to the quotient obtained by
dividing x by y, where:

 

x = the number of Shares being exercised multiplied by the excess, if any, of
(A) the Fair Market Value of a Share on the date of exercise over (B) the
Exercise Price, and

 

y = the Fair Market Value of a Share on the date of exercise.

 

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Notwithstanding the foregoing, the Committee may in its discretion pay the value
of the Net SAR Shares (i) all in cash, (ii) all in Shares or (iii) in any
combination of cash or Shares (including payment in cash of any fractional Net
SAR Share).

 

4. Restrictions on Exercise. This SAR may not be exercised if the issuance of
the Shares upon exercise or the method of payment of consideration for those
shares would constitute a violation of any applicable law or regulation.

 

5. Non-Transferability of SAR. This SAR may not be transferred in any manner
(other than on death to the legal personal representatives of the Grantee) and
may be exercised during the lifetime of the Grantee only by the Grantee. The
terms of the Plan and this Agreement shall be binding upon the legal personal
representatives of the Grantee.

 

6. Term of SAR. This SAR may be exercised only within the term set out in the
Notice, and may be exercised during such term only in accordance with the Plan
and the terms of this Agreement.

 

7. Withholding.

 

(a) The Committee shall determine the amount of any withholding or other tax
(together "Tax") required by law to be withheld or paid by the Company with
respect to any income recognized by the Grantee with respect to the SAR Award.

 

(b) The Grantee shall be required to meet any applicable tax withholding
obligation in accordance with the provisions of Section 11.05 of the Plan.

 

(c) Subject to any rules prescribed by the Committee, the Grantee agrees that
the Company may withhold or collect any Tax payable in respect of the SAR or
Shares acquired pursuant to the SAR (i) by withholding from this Award at the
appropriate time that number of whole Shares whose Fair Market Value is equal to
the amount of any Tax required to be withheld with respect to such Award, (ii)
by requesting direct and immediate payment to the Company in cash of the amount
of any Tax required to be withheld with respect to such Award or (iii) by
deduction of such Tax from any salary, fees or any other payment payable to the
Grantee by the Company at any time on or after the date the Tax charge arises.

 

8. Defined Terms. Capitalized terms used but not defined in the Notice and these
Terms and Conditions shall have the meanings set forth in the Plan, unless such
term is defined in any Employment Agreement between the Grantee and the Company
or an Affiliate. Any terms used in the Notice and these Terms and Conditions,
but defined in the Grantee’s Employment Agreement are incorporated herein by
reference and shall be effective for purposes of the Notice and these Terms and
Conditions without regard to the continued effectiveness of the Employment
Agreement

 

9. Grantee Representations. The Grantee hereby represents to the Company that
the Grantee has read and fully understands the provisions of the Notice, these
Terms and Conditions and the Plan and the Grantee’s decision to participate in
the Plan is completely voluntary. Further, the Grantee acknowledges that the
Grantee is relying solely on his or her own advisors with respect to the tax
consequences of this SAR Award.

 

10. Regulatory Limitations on Exercises. Notwithstanding the other provisions of
this Agreement, no exercise of the SAR or issuance of Shares pursuant to this
Agreement shall be effective if (i) the shares reserved under the Plan are not
subject to an effective registration statement at the time of such exercise or
issuance, or otherwise eligible for an exemption from registration, or (ii) the
Company determines in good faith that such exercise or issuance would violate
any Company policy or applicable securities or other law or regulation.

 

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11. Miscellaneous.

 

(a) Notices. All notices, requests, deliveries, payments, demands and other
communications which are required or permitted to be given under these Terms and
Conditions shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth herein, or to such other address as either shall have specified by notice
in writing to the other. Notice shall be deemed duly given hereunder when
delivered or mailed as provided herein.

 

(b) Waiver. The waiver by any party hereto of a breach of any provision of the
Notice or these Terms and Conditions shall not operate or be construed as a
waiver of any other or subsequent breach.

 

(c) Entire Agreement. These Terms and Conditions, the Notice and the Plan
constitute the entire agreement between the parties with respect to the subject
matter hereof.

 

(d) Binding Effect; Successors. These Terms and Conditions shall inure to the
benefit of and be binding upon the parties hereto and to the extent not
prohibited herein, their legal personal representatives. Nothing in these Terms
and Conditions, express or implied, is intended to confer on any person other
than the parties hereto and as provided above, their legal personal
representatives any rights, remedies, obligations or liabilities.

 

(e) Governing Law. The Notice and these Terms and Conditions shall be governed
by and construed in accordance with the laws of the State of Nevada.

 

(f) Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of these Terms and
Conditions.

 

(g) Conflicts; Amendment. The provisions of the Plan are incorporated in these
Terms and Conditions in their entirety. In the event of any conflict between the
provisions of these Terms and Conditions and the provisions of the Notice or the
Plan, the provisions of the Notice or the Plan, as the case may be, shall
control. The Agreement may be amended at any time by written agreement of the
parties hereto.

 

(h) No Right to Continued Employment. Nothing in the Notice or these Terms and
Conditions shall confer upon the Grantee any right to continue in the employ or
service of the Company or affect the right of the Company to terminate the
Grantee’s employment or service at any time.

 

(i) Further Assurances. The Grantee agrees, upon demand of the Company or the
Committee, to do all acts and execute, deliver and perform all additional
documents, instruments and agreements which may be reasonably required by the
Company or the Committee, as the case may be, to implement the provisions and
purposes of the Notice and these Terms and Conditions and the Plan.

 

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