Frankly
Inc.


Strategic
Transaction Retention Plan


 


	Purpose	The
    purposes of the Frankly Inc. (the “Company”) Strategic Transaction Retention Plan (the “Plan”)
    are to induce selected key contributors to remain employed with the Company, or an acquirer of the Company in a Strategic
    Transaction (as defined herein), and to remain actively engaged in the Company’s business, and to enhance the Company’s
    value by providing participants incentive benefits to help assure the success of a Strategic Transaction concerning the Company.
	 	 
	Retention
    Bonus	The
    undersigned participant (“Participant”) will be eligible to receive an award in the amount of fifty-four percent
    (54%) of your current base salary (the “Retention Bonus”) in the event that you remain employed by the Company
    subsidiary with whom you are currently employed through February 15, 2018. The Retention Bonus amount will be increased by
    nineteen percent (19%) of your base salary in the event that the Company enters a definitive binding agreement for a “Strategic
    Transaction” by February 15, 2018 and such transaction closes by February 15, 2018. The Retention Bonus amount will
    be further increased by an additional twenty seven percent (27%) of your base salary in the event that the Company achieves
    internal performance goals in the following areas for the last four months of 2017, subject to final approval by the Board
    of Directors of the Company:   Performance Goal Criteria Target Weighting Revenue As measured against budget and/or stated
    Board objectives. 30% EBITDA As measured against budget and/or stated Board objectives. 30% New Client Acquisition Winning
    new large clients with significant revenue potential (i.e., Fox, CBS, Univision) 30% Client Retention As determined by the
    retention of Frankly’s current clients and recurring revenue 10%



 





	Performance Goal	 	Criteria	 	Target

 Weighting
	Revenue	 	As measured against budget and/or stated Board objectives.	 	30%
	EBITDA	 	As measured against budget and/or stated Board objectives.	 	30%
	New Client Acquisition	 	Winning new large clients with significant revenue potential (i.e., Fox, CBS, Univision)	 	30%
	Client Retention	 	As determined by the retention of Frankly’s current clients and recurring revenue	 	10%







 


	Strategic
    Transaction	As
    used herein, Strategic Transaction means: (a) a third-party equity investment in Company in which the Company receives at
    least US$5 million, (b) the merger with or acquisition by a third-party of equity interests of the Company representing 50%
    or more of the equity value of the Company (measured as of immediately prior to the closing of such transaction), or (c) The
    acquisition by a third-party of all or substantially all of the Company’s assets. Transactions falling under sections
    (b) or (c) above are also referred to herein as a “Change of Control.”



 



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	 	Notwithstanding the foregoing, a Change of Control hereunder shall not be deemed to occur unless such transaction also qualifies as an event under Treasury Regulation Section 1.409A-3(i)(5)(v) (change in the ownership of a corporation) or Treasury Regulation Section 1.409A-3(i)(5)(vii) (change in the ownership of a substantial portion of a corporation’s assets).
	 	 
	Retention Bonus – Form and Timing of Payments	The Retention Bonus will be payable in a combination of cash and/or Company RSUs to be determined by Company in its sole discretion, with a target payout consisting of: zero-quarters (0/4) in cash and four-quarters (4/4) in Restricted Stock Units in Company (“RSUs”). The full amount of the cash component of the Retention Bonus will be paid on February 15, 2018, provided you have not terminated your employment with Company by that date. All of the RSUs component of the Retention Bonus will vest, on February 15, 2018. In the event of a Change of Control, the Company, in its discretion, may accelerate the vesting and/or payout date for all or a portion of your Retention Bonus. Note: The allocation targets identified above for the cash/RSUs composition of your Retention Bonus are not guaranteed, and the Company in its discretion will determine the final allocation on or before the payout date based on circumstances at that time. To the extent that your Retention Bonus includes RSUs, in the computation of your Retention Bonus, each such RSU will be valued at CAD$2.52. Notwithstanding anything to the contrary herein, no portion of the Retention Bonus will vest or be payable if, prior to February 15, 2018, you terminate your employment with the Company subsidiary that employs you, or such entity terminates your employment for “Cause,” as defined in the Frankly Inc. Amended and Restated Equity Incentive Plan.
	 	 
	Withholding Taxes	All cash payments under the Plan will be reduced as necessary to pay withholding and payroll taxes and other deductions required by law. Participants are solely responsible for payment of all applicable income and other applicable taxes due in connection with the receipt and/or vesting of RSUs.
	 	 
	Section 409A	
        It is intended that awards under the Plan satisfy,
        to the greatest extent possible, the exemption from the application of Section 409A of the Code (and any state law of similar effect)
        provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”). To the extent not so exempt,
        it is intended that awards under the Plan comply with Treasury Regulation Section 1.409A-3(i)(5)(iv)(A) (applicable to “transaction-based
        compensation”), which may entail a six-month deferral on payment for “specified employees” if the acquirer is
        a public entity and the payment results from a separation of service following the change of control.

         

        Notwithstanding the foregoing, in no event
        will Company or any successor be responsible for or have any obligation to reimburse a Participant for any taxes that may be imposed
        on a Participant under Section 409A of the Code or similar taxes imposed by state law.








 



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	Source
    of Payments	Company
    will make all cash payments under the Plan from its general assets. Company’s obligations under the Plan are unfunded
    and unsecured, and Participants have no rights other than those of general creditors.
	 	 
	No
    Assignment of Bonuses	Retention
                                         Bonuses under the Plan are not assignable or transferable by Participants before they
                                         are paid. Retention Bonuses will be paid only to the Participants who are entitled to
                                         receive them under the Plan.

         

        Moreover,
        this Plan will be paid in lieu of any potential annual discretionary bonuses for services rendered in 2017, and will not
        be additive to any other potential discretionary bonuses Participants may have been eligible in their employment contracts.

	 	 
	Employment
    at Will	Unless
    otherwise specified in a written employment agreement between a Participant and Company (or any subsidiary or successor),
    employment with the Company (or any subsidiary or successor) is for no specific period of time. Participation in the Plan
    does not confer any right to continued employment with the Company (or any subsidiary or successor). 
	 	 
	Administration	The
    Plan will be interpreted and administered by the Company. The determinations of the Company with regard to the Plan will be
    final and binding on all Participants.
	 	 
	Amendment	Prior
    to the closing of a Strategic Transaction, the Plan may be amended in Company’s discretion, including any amendments
    deemed advisable in order to avoid adverse tax consequences for one or more Participants imposed by Section 409A(a)(1) of
    the Code (or similar taxes imposed by state law).
	 	 
	Notices	Any
    notice or document required to be given under the Plan shall be considered to be given if actually delivered or mailed by
    certified mail, postage prepaid, if to Company, to 27-01 Queens Plaza North, Suite 502, Long Island City, NY 11101, Attention:
    Chief Executive Officer or, if to a Participant, at the last address of such Participant filed with Company.
	 	 
	Governing
    Law	ANY
    ACTION RELATING TO THIS PLAN SHALL BE GOVERNED BY THE APPLICABLE FEDERAL LAW AND THE LAWS OF THE STATE OF NEW YORK, WITHOUT
    GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
	 	 
	Severability	If
    any provision of this Plan is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to
    any individual Participant, or would disqualify this Plan under any law deemed applicable by the Company, such provision shall
    be construed or deemed amended to conform to applicable law, or if it cannot be construed or deemed amended without, in the
    sole determination of the Company, materially altering the intent of this Plan, such provision shall be stricken as to such
    jurisdiction or Participant and the remainder of this Plan shall remain in full force and effect.
	 	 




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	Prerequisite
    for Payment	The
    Bonus will not be paid to a Participant unless the Participant executes a general release of all claims (in a form prescribed
    by Company) he or she may have against the Company or persons affiliated with the Company. The release must be effective and
    irrevocable as of February 15, 2018 or such other date prescribed by Company (the “Release Deadline”).
    If a Participant has not executed a release by the Release Deadline or revokes his or her release, the Participant will not
    be entitled to any benefits under the Plan. To the extent applicable, the effectiveness of the Plan will be subject to any
    required shareholder, exchange or other regulatory approval.
	 	 
	Confidentiality	Participant
                                         agrees to keep the contents and terms of this Plan confidential. Any unapproved sharing
                                         of the contents and terms of the Plan with other parties may result in the revocation
                                         of Participant’s award hereunder at Company’s sole discretion. 



 


Dated
as of November 3, 2017


 


Accepted
and Agreed:


 


Participant


 


	/s/
    Lou Schwartz	 
	Lou
    Schwartz	 


 




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