Document ID: 11332

Text:
5.6 Equity. The Executive will be entitled to participate in any equity incentive plan that may be adopted by Reeds at levels commensurate with his position as COO. Reeds will amend its existing equity incentive plan or adopt a new equity incentive plan as soon as practicable following the Effective Date and in any event during 2017 (2017 Plan). Once the plan is adopted and as soon as practicable following the Effective Date, the Executive shall receive initial equity grants at levels commensurate with his position as COO of Reeds (the Initial Equity Award). It is anticipated that the Initial Equity Award will consist of restricted stock (the Restricted Stock) and/ or stock options (the Options and together with the Restricted Stock and any additional equity or other equity based awards to the Executive, the Incentive Equity). Reeds and the Executive will consult in good faith on the structure and terms of the Incentive Equity. The Initial Equity Award, whether in the form of Restricted Stock and/ or Options (or in any other form) shall vest in two equal installments on each of the first two anniversaries of the Effective Date and to the extent awarded as Options will be granted with an exercise price equal to the fair market value of the shares subject to the Options as of the date of grant and become exercisable in two equal installments on the first two anniversaries of the Effective Date. The Executive will make an election under Section 83(b) of the Code with respect to any Restricted Stock. Vesting of all Incentive Equity (and related payment rights) shall accelerate upon any Change in Control. Change in Control for this purpose means any (i) any individual, entity or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1933 ) (a Person) acquires beneficial ownership, directly or indirectly (within the meaning of Rule 13d-3 promulgated under the Exchange Act ) ( a Beneficial Owner), of more than fifty percent of the combined voting power of the then issued and outstanding shares of the voting common stock of the Company (the Voting Stock), (ii) the occurrence of a merger, consolidation, reorganization, share exchange or similar corporate transaction, whether or not the Company is the surviving corporation, other than a transaction which would result in the Voting Stock outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent of the voting stock of the Company or such surviving entity immediately after such transaction, or (iii) the sale, transfer or disposition of all or substantially all of the business and assets of the Company to any Person. The Executive may also make equity investments in Reeds on terms that may be agreed upon by the Executive and Reeds.

Named Entities:
30
30
Role
95
95
Role
337
341
Act
359
360
Regulation
376
377
Percentage

Tokenized Text:
5
.
6
Equity
.
The
Executive
will
be
entitled
to
participate
in
any
equity
incentive
plan
that
may
be
adopted
by
Reeds
at
levels
commensurate
with
his
position
as
COO
.
Reeds
will
amend
its
existing
equity
incentive
plan
or
adopt
a
new
equity
incentive
plan
as
soon
as
practicable
following
the
Effective
Date
and
in
any
event
during
2017
(
2017
Plan
)
.
Once
the
plan
is
adopted
and
as
soon
as
practicable
following
the
Effective
Date
,
the
Executive
shall
receive
initial
equity
grants
at
levels
commensurate
with
his
position
as
COO
of
Reeds
(
the
Initial
Equity
Award
)
.
It
is
anticipated
that
the
Initial
Equity
Award
will
consist
of
restricted
stock
(
the
Restricted
Stock
)
and
/
or
stock
options
(
the
Options
and
together
with
the
Restricted
Stock
and
any
additional
equity
or
other
equity
based
awards
to
the
Executive
,
the
Incentive
Equity
)
.
Reeds
and
the
Executive
will
consult
in
good
faith
on
the
structure
and
terms
of
the
Incentive
Equity
.
The
Initial
Equity
Award
,
whether
in
the
form
of
Restricted
Stock
and
/
or
Options
(
or
in
any
other
form
)
shall
vest
in
two
equal
installments
on
each
of
the
first
two
anniversaries
of
the
Effective
Date
and
to
the
extent
awarded
as
Options
will
be
granted
with
an
exercise
price
equal
to
the
fair
market
value
of
the
shares
subject
to
the
Options
as
of
the
date
of
grant
and
become
exercisable
in
two
equal
installments
on
the
first
two
anniversaries
of
the
Effective
Date
.
The
Executive
will
make
an
election
under
Section
83
(
b
)
of
the
Code
with
respect
to
any
Restricted
Stock
.
Vesting
of
all
Incentive
Equity
(
and
related
payment
rights
)
shall
accelerate
upon
any
Change
in
Control
.
Change
in
Control
for
this
purpose
means
any
(
i
)
any
individual
,
entity
or
group
(
within
the
meaning
of
Section
13
(
d
)
(
3
)
of
the
Securities
Exchange
Act
of
1933
)
(
a
Person
)
acquires
beneficial
ownership
,
directly
or
indirectly
(
within
the
meaning
of
Rule
13d-3
promulgated
under
the
Exchange
Act
)
(
a
Beneficial
Owner
)
,
of
more
than
fifty
percent
of
the
combined
voting
power
of
the
then
issued
and
outstanding
shares
of
the
voting
common
stock
of
the
Company
(
the
Voting
Stock
)
,
(
ii
)
the
occurrence
of
a
merger
,
consolidation
,
reorganization
,
share
exchange
or
similar
corporate
transaction
,
whether
or
not
the
Company
is
the
surviving
corporation
,
other
than
a
transaction
which
would
result
in
the
Voting
Stock
outstanding
immediately
prior
thereto
continuing
to
represent
(
either
by
remaining
outstanding
or
by
being
converted
into
voting
securities
of
the
surviving
entity
)
at
least
fifty
percent
of
the
voting
stock
of
the
Company
or
such
surviving
entity
immediately
after
such
transaction
,
or
(
iii
)
the
sale
,
transfer
or
disposition
of
all
or
substantially
all
of
the
business
and
assets
of
the
Company
to
any
Person
.
The
Executive
may
also
make
equity
investments
in
Reeds
on
terms
that
may
be
agreed
upon
by
the
Executive
and
Reeds
.