Document:

Exhibit 10.3

 

[Form of Notice of Performance Restricted Share Unit Award and

Restricted Share Unit Agreement under the Company’s Performance Incentive Plan]

 

THERAVANCE BIOPHARMA, INC. PERFORMANCE INCENTIVE PLAN

 

NOTICE OF PERFORMANCE RESTRICTED SHARE UNIT AWARD

 

You have been granted the number of restricted share units indicated below by Theravance Biopharma, Inc. (the “Company”) on the following terms:

 

	
Name:
    	
 
    
	
 
    	
 
    
	
Restricted   Share Unit Award Details:
    	
 
    
	
 
    	
 
    
	
Date   of Grant:
    	
 
    
	
Restricted   Share Units:
    	
 
    
	
Expiration   Date:
    	
 
    
	
Base   Value:
    	
$
    

 

Each restricted share unit (the “restricted share unit”) represents the right to receive one Ordinary Share of the Company subject to the terms and conditions contained in the Restricted Share Unit Agreement (the “Agreement”).

 

Vesting Schedule:

 

Vesting of the restricted share units is dependent upon achievement of both the performance-based conditions and service-based conditions set forth on Exhibit A, both of which must be satisfied in order for the restricted share units to vest.

 

A restricted share unit will be considered “vested” when both the performance-based conditions and the service-based conditions applicable to the restricted share unit have been satisfied or when the restricted share unit vests in accordance with the post-change in control vesting rules set forth in the section of Exhibit A entitled “Change in Control”.

 

You and the Company agree that these restricted share units are granted under and governed by the terms and conditions of the Theravance Biopharma, Inc. Performance Incentive Plan (the “Plan”) and of the Agreement that is attached to and made a part of this document.  Capitalized terms not defined herein have the meaning ascribed to such terms in Article II of the Plan.

 

You further agree that the Company may deliver by email all documents relating to the Plan or this award (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements).  You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company.  If the Company posts these documents on a web site, it will notify you by email.

 

You agree to cover the applicable withholding taxes as set forth more fully herein.

 

 

EXHIBIT A

 

Performance-Based Conditions [As applicable]

 

Upon achievement of       performance targets set forth below on or prior to the Expiration Date set forth in the Notice of Performance Restricted Share Award (the “Notice”), the performance-based conditions applicable to     % of the restricted share units (“Tranche   ”) will be achieved.  Upon achievement of           performance targets set forth below on or prior to the Expiration Date set forth in the Notice, the performance-based conditions applicable to the     % of the restricted share units (“Tranche   ”) will be achieved.  [As applicable]

 

Performance Targets:

 

[As applicable]

 

Notes:

 

A performance target will not be deemed achieved unless and until the Compensation Committee certifies in writing that the performance target has been achieved.  Minutes of a Compensation Committee meeting or an action by written consent with resolutions approving achievement constitute written certification.  This award is subject to Article 2.13(c) of the Plan.

 

Service-Based Conditions  [As applicable]

 

Subject to achievement of the performance-based conditions described above, the service-based conditions applicable to the restricted share units will be satisfied if you remain in continuous service as an Employee (“Service”) from the Date of Grant set forth in the Notice until the following date:

 

·                  Tranche    — The first Company Vesting Date (as defined below) on or after the         date the Compensation Committee certifies achievement of the performance-based conditions applicable to Tranche   .   Tranche    — The first Company Vesting Date on or after the        date the Compensation Committee certifies achievement of the performance-based conditions applicable to Tranche   .  [As applicable]

 

A “Company Vesting Date” means February 20, May 20, August 20 or November 20.

 

Change in Control

 

If the Company is subject to a Change in Control (as defined below) prior to the Expiration Date, the following rules will apply to restricted share units that are unvested as of the date of the Change in Control:

 

·                  If the performance-based conditions applicable to any unvested restricted share units have been satisfied and the restricted share units are unvested solely because the service-based vesting conditions have not yet been satisfied, all of those unvested restricted share units (the “Performance Units”) will remain eligible to vest based on the applicable service-based vesting conditions.

 

·                  If the performance-based conditions applicable to any remaining restricted share units have not been achieved as of the date of the Change in Control, then such restricted share units

 

2

 

(the “Remaining Units”) will be reduced (such reduced number of restricted share units, the “Retention Units”) and the balance of the Remaining Units will be forfeited as follows:

 

·                  If the Change in Control Value (as defined below) is less than or equal to the Base Value (as defined below), then the number of Retention Units will be 0 and 100% of the Remaining Units will be forfeited as of the date of the Change in Control;

 

·                  If the Change in Control Value is greater than the Base Value but less than two times the Base Value, then the number of Retention Units will be equal to 1% of the Remaining Units for each 1% (rounded down to the nearest whole percent) that the Change in Control Value is greater than the Base Value and the balance of the Remaining Units will be forfeited as of the date of the Change in Control; and

 

·                  If the Change in Control Value is equal to or greater than two times the Base Value, the number of Retention Units will be equal to the number of Remaining Units and none of the Remaining Units will be forfeited.

 

·                  In lieu of the performance-based conditions and service based conditions set forth above, the following vesting schedule will apply to the Retention Units after the Change in Control:  50% of the Retention Units will vest on the one-year anniversary of the Change in Control and the remaining 50% of the Retention Units will vest on the two-year anniversary of the Change in Control, subject to your continuous Service through the applicable vesting date.

 

·                  The restricted share units will be eligible for vesting acceleration under the Company’s Change in Control Severance Plan (the “Severance Plan”) to the extent you are eligible to participate in such plan.  However, notwithstanding the fact that the Severance Plan provides for vesting acceleration of all unvested restricted share units under certain circumstances, in the event of a Change in Control (as defined below), only the Performance Units and the Retention Units will be eligible for vesting acceleration under the Severance Plan.  For avoidance of doubt, in such event, if you are subject to an “involuntary termination” (as defined in the Severance Plan) within 3 months prior to a Change in Control, the number of Performance Units, Remaining Units and Retention Units will be determined based on the achievement of the applicable performance-based conditions as of the date of your involuntary termination.  In the event of a change in control described in Article 2.15(f)(iii) of the Plan, all of the unvested restricted share units are eligible for vesting acceleration on the terms and conditions set forth in the Severance Plan.

 

·                  In addition, after giving effect to any forfeiture of restricted share units described above, any remaining restricted share units will vest in full if the Company is subject to a “Change in Control” (as defined in the Plan) before your Service terminates and the restricted share units are not assumed or replaced with a new award as set forth in Article 2.10(a) of the Plan.

 

·                  “Base Value” means the Base Value specified in the Notice, which is equal to the closing price of the Company’s Ordinary Shares on the Date of Grant.  In the event of a share split or any other event described in Article 2.11(a) of the Plan, a corresponding adjustment will be made in the Base Value.

 

·                  “Change in Control” shall have the meaning set forth in Article 2.15(f) of the Plan, excluding Article 2.15(f)(iii).

 

3

 

·                  “Change in Control Value” means the total per share value to be received by a holder of the Company’s Ordinary Shares in a Change in Control, determined as of the closing date of the Change in Control.  Any non-cash transaction proceeds will be valued by the Compensation Committee in good faith using, if applicable, the same valuation methodology set forth in the definitive agreement evidencing the Change in Control.  To the extent not all of the transaction proceeds will be paid at closing (for example, because of an escrow or earn-out arrangement), the Compensation Committee will take into account reasonable discounts for the time value of money, the risk of forfeiture or non-achievement of future payment milestones and other contingencies in order to determine the Change in Control Value as of the closing date.  The Compensation Committee’s good faith determination of the Change in Control Value will be final and binding.

 

4

 

THERAVANCE BIOPHARMA, INC. PERFORMANCE INCENTIVE PLAN:
 RESTRICTED SHARE UNIT AGREEMENT

 

	
Grant   of Units
    	
 
    	
Subject to all of the   terms and conditions set forth in the Notice of Performance Restricted Share   Unit Award, including Exhibit A thereto, this Restricted Share Unit   Agreement (the “Agreement”)   and the Plan, the Company has granted to you the number of restricted share   units set forth in the Notice of Performance Restricted Share Unit Award.
    
	
 
    	
 
    	
 
    
	
Payment for Units
    	
 
    	
No payment is required   for the restricted share units you are receiving.
    
	
 
    	
 
    	
 
    
	
Nature of Units
    	
 
    	
Your restricted share   units are bookkeeping entries. They represent only the Company’s unfunded and   unsecured promise to issue Ordinary Shares on a future date. As a holder of   restricted share units, you have no rights other than the rights of a general   creditor of the Company.
    
	
 
    	
 
    	
 
    
	
Settlement of Units
    	
 
    	
Each of your restricted   share units will be settled when it vests (unless you and the Company have   agreed to a later settlement date pursuant to procedures that the Company may   prescribe at its discretion).

 

At the time of   settlement, you will receive one Ordinary Share for each vested restricted   share unit.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
The restricted share   units that you are receiving will vest as shown in the Notice of Restricted   Share Unit Award, including Exhibit A thereto.

 

For purposes of this   Agreement, “Service” means your continuous   service as an Employee.

 

No additional   restricted share units vest after your Service has terminated for any reason,   except as set forth in the Company’s Change in Control Severance Plan   (subject to the limitations described in Exhibit A to the Notice of   Performance Restricted Share Unit Award) to the extent you are eligible for   benefits thereunder. It is intended that vesting in the restricted share   units is commensurate with a full-time work schedule. For possible   adjustments that may be made by the Company, see the Section below   entitled “Leaves of Absence and Part-Time Work.”
    
	
 
    	
 
    	
 
    
	
Forfeiture
    	
 
    	
If your Service   terminates for any reason, then your restricted share units that have not   vested before the termination date and do not vest as a result of the   termination pursuant to this Agreement or as set forth
    

 

5

 

	
 
    	
 
    	
on the Notice of   Performance Restricted Share Unit Award, including Exhibit A thereto,   will be forfeited. This means that the restricted share units will revert to   the Company. You receive no payment for restricted share units that are   forfeited. The Company determines when your Service terminates for all   purposes of your restricted share units.

 

Even if your Service   has not terminated, unless a “Change in Control” (as defined in   Exhibit A to the Notice of Performance Restricted Share Unit Award)   occurs prior to the Expiration Date, all restricted share units that are   unvested on the Expiration Date set forth in the Notice of Performance   Restricted Share Unit Award will be forfeited to the Company. Notwithstanding   the foregoing, to the extent the performance-based conditions applicable to   the restricted share units were achieved prior to the Expiration Date, then   those restricted share units will remain eligible to vest based on the   service-based conditions applicable to those restricted units.

 

In addition, a portion   of the restricted share units may be forfeited in connection with a Change in   Control, as described in the section of Exhibit A to the Notice of   Performance Restricted Share Unit Award entitled “Change in Control.”
    
	
 
    	
 
    	
 
    
	
Leaves of Absence and Part-Time   Work
    	
 
    	
For purposes of this   award, your Service does not terminate when you go on a military leave, a   sick leave or another bona fide   leave of absence, if the leave was approved by the Company (or the Parent,   Subsidiary or Affiliate employing you) in writing. If your leave of absence   (other than a military leave) lasts for more than 6 months, then vesting will   be suspended on the day that is 6 months and 1 day after the leave of absence   began. Vesting will resume effective as of the second vesting date after you   return from leave of absence provided you have worked at least one day during   that vesting period. In this regard, if the Compensation Committee certifies   achievement of performance-based conditions applicable to a restricted share   unit while vesting is suspended, then the performance-based conditions   applicable to the restricted share unit will be deemed achieved on the date   vesting resumes and the service-based conditions applicable to the restricted   share unit will be measured from such date.

 

In the case of all   leaves, your Service terminates when the approved leave ends, unless you   immediately return to active work.

 

If you and the Company   (or the Parent, Subsidiary or Affiliate employing you) agree to a reduction   in your scheduled work hours, then the Company reserves the right to modify   the rate at which the restricted share units vest, so that the rate of   vesting is commensurate with your reduced work schedule.
    

 

6

 

	
 
    	
 
    	
The Company shall not   be required to adjust any vesting schedule pursuant to this subsection.
    
	
 
    	
 
    	
 
    
	
Share Certificates
    	
 
    	
No Ordinary Shares   shall be issued to you prior to the date on which the restricted share units   vest. After any restricted share units vest pursuant to this Agreement, the   Company shall promptly cause to be issued in book-entry form, registered in   your name or in the name of your legal representatives, beneficiaries or   heirs, as the case may be, in the register of members of the Company, the   number of Ordinary Shares representing your vested restricted share units. No   fractional shares shall be issued.
    
	
 
    	
 
    	
 
    
	
Section 409A
    	
 
    	
Unless you and the   Company have agreed to a deferred settlement date (pursuant to procedures   that the Company may prescribe at its discretion), settlement of these   restricted share units is intended to be exempt from the application of Code Section 409A   pursuant to the “short-term deferral exemption” in Treasury Regulation   1.409A-1(b)(4) and shall be administrated and interpreted in a manner   that complies with such exemption.

 

Notwithstanding the   foregoing, to the extent it is determined that settlement of these restricted   share units is not exempt from Code Section 409A as a short-term   deferral or otherwise and the Company determines that you are a “specified   employee,” as defined in the regulations under Code Section 409A, at the   time of your “separation from service,” as defined in those regulations, then   any restricted share units that otherwise would have been settled during the   first six months following your separation from service will instead be   settled on the first business day following the earlier of the six-month   anniversary of your separation from service or your death, unless the event   triggering vesting is an event other than your separation from service.
    
	
 
    	
 
    	
 
    
	
No Shareholder Rights
    	
 
    	
The restricted share   units do not entitle you to any of the rights of a shareholder of Ordinary   Shares (except as set forth below under “Dividend Equivalent Rights”). Upon   settlement of the restricted share units into Ordinary Shares, you will   obtain full voting and other rights as a shareholder of the Company.
    
	
 
    	
 
    	
 
    
	
Dividend Equivalent Rights
    	
 
    	
In the event the   Company pays a cash dividend on its Ordinary Shares, in accordance with the   memorandum and articles of association of the Company and subject to   applicable law, prior to the vesting and settlement of these restricted share   units, the Company shall credit you with a dollar amount equal to   (i) the per share cash dividend paid by the Company on one Ordinary   Share multiplied by (ii) the total number of Ordinary Shares underlying   the unvested restricted share units that are outstanding on the record date   for that dividend (a “Dividend Equivalent Right”). Any Dividend Equivalent   Rights
    

 

7

 

	
Units Restricted
    	
 
    	
credited pursuant to   the preceding sentence shall be subject to the same terms and conditions,   including vesting, as the restricted share units to which they relate;   provided, however, that they will be paid in cash, subject to availability of   sufficient profits or share premium of the Company, upon vesting of the   underlying restricted share units. No crediting of Dividend Equivalent Rights   shall be made with respect to any restricted share units which, as of the   record date for that dividend, have either vested and settled or were forfeited   in accordance with this Agreement.

 

You may not sell,   transfer, pledge or otherwise dispose of any restricted share units or rights   under this Agreement other than by will or by the laws of descent and   distribution. Notwithstanding the foregoing, you may designate a beneficiary   or beneficiaries to receive any property distributable with respect to the   restricted share units upon your death. A beneficiary designation must be   filed with the Company on the proper form.
    
	
 
    	
 
    	
 
    
	
Withholding Taxes
    	
 
    	
No shares will be   distributed to you unless you have made arrangements acceptable to the   Company (and/or the Parent, Subsidiary or Affiliate employing you) to pay any   withholding taxes that may be due as a result of the vesting and/or   settlement of this award (“Tax Withholding   Obligations”). Prior to the relevant taxable event, you shall pay   or make adequate arrangements satisfactory to the Company (and/or the Parent,   Subsidiary or Affiliate employing you) to satisfy the Tax Withholding   Obligations.

 

At your discretion,   these arrangements may include (a) payment in cash, (b) payment   from the proceeds of the sale of shares through a Company-approved broker or   (c) withholding Ordinary Shares that otherwise would be issued to you   when the units are settled with a fair market value not in excess of the   amount necessary to satisfy the minimum withholding amount, provided that the   Company, acting through the Board of Directors or Compensation Committee, may   provide prospectively that it no longer authorizes (c) withholding of   shares.

 

If the Company (or the   Parent, Subsidiary or Affiliate employing you) satisfies the Tax Withholding   Obligations by withholding a number of Ordinary Shares as described above,   you will be deemed to have been issued the full number of shares subject to   the award of restricted share units, including the number of shares withheld   to satisfy the Tax Withholding Obligations, and the fair market value of   these shares, determined as of the date when taxes otherwise would have been   withheld in cash, will be applied to the withholding taxes.

 

You acknowledge that   the proceeds of a sale pursuant to (b) above or withholding pursuant to   (c) above may not be sufficient to satisfy the Tax Withholding   Obligations. To the extent the proceeds from such sale are insufficient to   cover the Tax Withholding Obligations, the
    

 

8

 

	
 
    	
 
    	
Company (or the Parent,   Subsidiary or Affiliate employing you) may in its discretion withhold the   balance of the Tax Withholding Obligations from your wages or other cash   compensation paid to you by the Company (or the Parent, Subsidiary or   Affiliate employing you).
    
	
 
    	
 
    	
 
    
	
Restrictions on Issuance
    	
 
    	
The Company will not   issue shares to you if the issuance of shares at that time would violate any   law or regulation.
    
	
 
    	
 
    	
 
    
	
Restrictions on Resale
    	
 
    	
You agree not to sell   any Ordinary Shares you receive under this Agreement at a time when   applicable laws, regulations, Company trading policies (including the   Company’s Insider Trading Policy, a copy of which can be found on the   Company’s intranet) or an agreement between the Company and its underwriters   prohibit a sale. This restriction will apply as long as your Service   continues and for such period of time after the termination of your Service   as the Company may specify.
    
	
 
    	
 
    	
 
    
	
No Retention Rights
    	
 
    	
Your award or this   Agreement does not give you the right to be employed or retained by the   Company (or a Parent, Subsidiary or Affiliate) in any capacity. The Company   and its Parents, Subsidiaries and Affiliates reserve the right to terminate   your Service at any time, with or without cause.
    
	
 
    	
 
    	
 
    
	
Recoupment Policy
    	
 
    	
This award, and the   shares acquired upon settlement of this award, shall be subject to any   Company recoupment policy in effect from time to time.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of a share   split, a share dividend or a similar change in the Ordinary Shares, the   number of restricted share units may be adjusted pursuant to the Plan.
    
	
 
    	
 
    	
 
    
	
Effect of Significant Corporate   Transactions
    	
 
    	
If the Company is a   party to a merger, consolidation or certain change in control transactions,   then this award will be subject to the applicable provisions of   Article 2.11 of the Plan, provided that any action taken must either   (a) preserve the exemption of your restricted share units from   Section 409A of the Code or (b) comply with Section 409A of   the Code.
    
	
 
    	
 
    	
 
    
	
Applicable Law
    	
 
    	
This Agreement will be   interpreted and enforced with respect to issues of contract law under the   laws of the Cayman Islands (without regard to its choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The Plan and Other Agreements
    	
 
    	
The text of the Plan is   incorporated in this Agreement by reference. A copy of the Plan is available   on the Company’s intranet or by request to the Finance Department. Capitalized   terms not otherwise defined herein shall have the meanings ascribed to such   terms in Article II of the Plan.
    

 

9

 

	
 
    	
 
    	
This Agreement, the   Notice of Performance Restricted Share Unit Award, including Exhibit A   thereto, and the Plan constitute the entire understanding between you and the   Company regarding this award. Any prior agreements, commitments or   negotiations concerning this award are superseded. This Agreement may be   amended only by another written agreement between the parties.
    

 

BY ACCEPTING THIS RESTRICTED SHARE UNIT AWARD, YOU AGREE TO  ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

10Exhibit
10.1

 

Ecoark
Holdings, Inc.

 

Notice
of Non-Qualified Stock Option Grant 

 

You
(the “Optionee”) have been granted the following option (the “Option”) to purchase Common
Stock of Ecoark Holdings, Inc. (the “Company”), par value $0.001 per share (“Share”):

 

	Name of Optionee:	Peter Mehring
	 	 
	Total Number of Shares	 
	Subject to Option:	2,017,500
	 	 
	Type of Option:	Non-Qualified Stock Options (NQSOs)
	 	 
	Exercise Price Per Share:	$2.60
	 	 
	Effective Date of Grant:	October 13, 2017
	 	 
	Vesting Schedule:	The Options shall become vested and nonforfeitable if the Grantee shall have remained in the continuous employ of the Company through the vesting dates set forth below with respect to the percentage of Options set forth next to such date:

 

	 		 	 	Percentage of	 
	 	 	 	 	NQSOs Vesting on	 
	 	Vesting Date	 	 	Such Vesting Date	 
	 	 	 	 	 	 
	 	10/13/2018	 	 	25%	
	 	10/13/2019	 	 	25%	
	 	10/13/2020	 	 	25%	
	 	10/13/2021	 	 	25%	

 

	Expiration Date:	If the Optionee’s employment or service as a Director or Consultant, as the case may be, is terminated, the Option shall expire on the earliest of the following occasions: (i) three months following the termination of the Optionee’s employment or service for any reason other than Cause, death, or Disability; (ii) one year following the termination of the Optionee’s employment or service due to death or Disability; or (iii) the date of termination of the Optionee’s employment or service for Cause.  The foregoing notwithstanding, however, no Option shall be exercisable later than the tenth (10th) anniversary date of its grant.

 

    

     

    

 

This
grant is subject to all of the terms and conditions set forth in the Non-Qualified Stock Option Agreement (the “Agreement”).
This grant is made and granted as a stand-alone award and is not granted under or pursuant to the Company’s 2017 Omnibus
Incentive Plan (the “Plan”). However, unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Agreement.

 

By
your signature and the signature of the Company’s representative below, you and the Company agree and acknowledge that this
Option is governed by the terms and conditions of the attached Non-Qualified Stock Option Agreement, which are incorporated herein
by reference, and that you have been provided with a copy of the Plan and Non-Qualified Stock Option Agreement.

 

	Grantee:	 	Ecoark
                                         Holdings, Inc.

 

	By:		 	By:	
	Name:	Peter
    Mehring	 	Name:	Randy
    May
	 	 	 	Title:	Chief
    Executive Officer

 

    -2-

     

    

 

Ecoark
Holdings, Inc.

 

Non-Qualified
Stock Option Agreement

 

Section
1. Grant of Option.

 

(a)
Option. On the terms and conditions set forth in the Notice of Non-Qualified Stock Option Grant (the “Grant Notice”)
and this Non-Qualified Stock Option Agreement (the “Agreement”), the Company grants to the Optionee on the
Effective Date of Grant the option (the “Option”) to purchase at the Exercise Price the number of Shares set
forth in the Grant Notice.

 

(b)
Plan and Defined Terms. The Option granted by this Agreement is granted as a stand-alone grant, separate and apart from, and
outside of, the Plan, and shall not constitute an award granted under or pursuant to the Plan. Notwithstanding the foregoing,
the terms, conditions, and definitions set forth in the Plan shall apply to the Option as though the Option had been granted under
the Plan, and the Option shall be subject to such terms, conditions, and definitions, which are hereby incorporated into this
Agreement by reference; provided that, for the avoidance of doubt, the Option granted by this Agreement shall not reduce and shall
have no impact on the number of shares available for grant under the Plan. To the extent any provision hereof is inconsistent
with a provision of the Plan, the provisions of this Agreement will govern. All capitalized terms that are used in the Grant Notice
or this Agreement and not otherwise defined therein or herein shall have the meanings ascribed to them in the Plan.

 

Section
2. Right to Exercise.

 

The
Option hereby granted shall be exercised by written notice to the Committee, specifying the number of Shares the Optionee desires
to purchase together with provision for payment of the Exercise Price. Subject to such limitations as the Committee may impose
(including prohibition of one more of the following payment methods), payment of the Exercise Price may be made by (a) check
payable to the order of the Company, for an amount in United States dollars equal to the aggregate Exercise Price of such Shares,
(b) by tendering to the Company Shares having an aggregate Fair Market Value equal to such Exercise Price, (c) by broker-assisted
exercise, or (d) by a combination of such methods. The Company may require the Optionee to furnish or execute such other
documents as the Company shall reasonably deem necessary (i) to evidence such exercise and (ii) to comply with or satisfy
the requirements of the Securities Act of 1933, as amended, the Exchange Act, applicable state or non-U.S. securities laws or
any other law.

 

Section
3. Term and Expiration.

 

(a)
Basic Term. Subject to earlier termination pursuant to the terms here, the Option shall expire on the expiration date set
forth in the Grant Notice.

 

(b)
Termination of Employment or Service. If the Optionee’s employment or service as a Director or Consultant, as the case
may be, is terminated, the Option shall expire on the earliest of the following occasions:

 

(i)
The expiration date set forth in the Grant Notice;

 

    -3-

     

    

 

(ii)
Three months following the termination of the Optionee’s employment or service for any reason other than Cause, death, or
Disability;

 

(iii)
One year following the termination of the Optionee’s employment or service due to death or Disability; or

 

(iv)
The date of termination of the Optionee’s employment or service for Cause.

 

The
Optionee may exercise all or part of this Option at any time before its expiration under the preceding sentence, but, subject
to the following sentence, only to the extent that the Option had become vested before the Optionee’s employment or service
terminated. When the Optionee’s employment or service terminates, this Option shall expire immediately with respect to the
number of Shares for which the Option is not yet vested. If the Optionee dies after termination of employment or service, but
before the expiration of the Option, all or part of this Option may be exercised (prior to expiration) by the personal representative
of the Optionee or by any person who has acquired this Option directly from the Optionee by will, bequest or inheritance, but
only to the extent that the Option was vested and exercisable upon termination of the Optionee’s employment or service.

 

(c)
Definition of “Cause.” The term “Cause” shall have the meaning ascribed to such term in the
Optionee’s employment agreement with the Company or any Subsidiary. If the Optionee’s employment agreement does not
define the term “Cause,” or if the Optionee has not entered into an employment agreement with the Company or
any Subsidiary, the term “Cause” shall mean (i) the willful engaging by the Optionee in misconduct that
is demonstrably injurious to the Company or any Parent or Subsidiary (monetarily or otherwise), (ii) the Optionee’s
conviction of, or pleading guilty or nolo contendere to, a felony involving moral turpitude, or (iii) the Optionee’s
violation of any confidentiality, non-solicitation, or non-competition covenant to which the Optionee is subject.

 

(d)
Definition of “Disability.” The term “Disability” shall have the meaning ascribed to such term
in the Optionee’s employment agreement with the Company or any Subsidiary. If the Optionee’s employment agreement
does not define the term “Disability,” or if the Optionee has not entered into an employment agreement with
the Company or any Subsidiary, the term “Disability” shall mean the Optionee’s entitlement to long-term
disability benefits pursuant to the long-term disability plan maintained by the Company or in which the Company’s employees
participate.

 

Section
4. Transferability of Option.

 

The
Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution, and the Option shall
be exercisable during the Optionee’s lifetime only by the Optionee or on his or her behalf by the Optionee’s guardian
or legal representative.

 

Section
5. Investment Intent; Restrictions on Transfer.

 

Optionee
represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares
upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof;
and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form
and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise
of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and
shall not be required to furnish the Company with the foregoing written statement.

 

    -4-

     

    

 

Optionee
further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information
reasonably necessary to verify the accuracy of such information.

 

Unless
and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

 

and/or
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.

 

Section
5. Miscellaneous Provisions.

 

(a)
Acknowledgements.

 

(i)
The Optionee hereby acknowledges that he or she has read and understands the terms of the Plan and this Agreement, and agrees
to be bound by their respective terms and conditions. The Optionee acknowledges that there may be tax consequences upon the exercise
or transfer of the Option and that the Optionee should consult an independent tax advisor prior to any exercise of the Option.

 

(ii)
Optionee and the Company acknowledge and agree that (A) Optionee and Company entered into that certain Restricted Stock Award
Agreement dated March 21, 2017, as amended (the “Restricted Stock Award”); (B) Optionee and the Company entered
into that certain Restricted Stock Unit Grant Agreement dated June 28, 2017 (the “RSU Award”); (C) in addition
to this Agreement, Optionee and Company have agreed to the terms of an Incentive Stock Option Award Agreement, a Nonstatutory
Option Award Agreement, and a Stock Option Grant Agreement, each of which are dated October 13, 2017 (collectively, with this
Agreement, the “Option Agreements”); and (D) by his signature on the Option Agreements, Optionee agrees
to forfeit the Restricted Stock Award and the RSU Award, and agrees that the Option Agreements are a fair and equitable substitute
for the Restricted Stock Award, the RSU Award, and for all services that Optionee has provided to the Company as of the date of
the Option Agreements.

 

    -5-

     

    

 

(b)
Tax Withholding. Pursuant to Article 20 of the Plan, the Company shall have the power and the right to deduct or withhold,
or require the Optionee to remit to the Company, an amount sufficient to satisfy any federal, state and local taxes (including
the Optionee’s FICA obligations) required by law to be withheld with respect to this Option. The Committee may condition
the delivery of Shares upon the Optionee’s satisfaction of such withholding obligations. The Optionee may elect to satisfy
all or part of such withholding requirement by tendering previously-owned Shares or by having the Company withhold Shares having
a Fair Market Value equal to the minimum statutory withholding (based on minimum statutory withholding rates for federal, state
and local tax purposes, as applicable, including payroll taxes) that could be imposed on the transaction, and, to the extent the
Committee so permits, amounts in excess of the minimum statutory withholding to the extent it would not result in additional accounting
expense. Such election shall be irrevocable, made in writing, signed by the Optionee, and shall be subject to any restrictions
or limitations that the Committee, in its sole discretion, deems appropriate.

 

(c)
Notice Concerning Disqualifying Dispositions. If the Option is an Incentive Stock Option, the Optionee shall notify the Committee
of any disposition of Shares issued pursuant to the exercise of the Option if the disposition constitutes a “disqualifying
disposition” within the meaning of Sections 421 and 422 of the Code (or any successor provision of the Code then in
effect relating to disqualifying dispositions). Such notice shall be provided by the Optionee to the Committee in writing within
10 days of any such disqualifying disposition.

 

(d)
Rights as a Stockholder. Neither the Optionee nor the Optionee’s transferee or representative shall have any rights
as a stockholder with respect to any Shares subject to this Option until the Option has been exercised and Share certificates
have been issued to the Optionee, transferee or representative, as the case may be.

 

(e)
Ratification of Actions. By accepting this Agreement, the Optionee and each person claiming under or through the Optionee
shall be conclusively deemed to have indicated the Optionee’s acceptance and ratification of, and consent to, any action
taken under this Agreement and Grant Notice by the Company, the Board, or the Committee.

 

(f)
Notice. Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal
delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid.
Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most
recently provided in writing to the Company.

 

(g)
Choice of Law. This Agreement and the Grant Notice shall be governed by, and construed in accordance with, the laws of the
State of Nevada, without regard to any conflicts of law or choice of law rule or principle that might otherwise cause this Agreement
or the Grant Notice to be governed by or construed in accordance with the substantive law of another jurisdiction.

 

    -6-

     

    

 

(h)
Arbitration. Any dispute or claim arising out of or relating to this Agreement or the Grant Notice shall be settled by binding
arbitration before a single arbitrator in Nevada and in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator shall decide any issues submitted in accordance with the provisions and commercial purposes of this
Agreement and the Grant Notice, provided that all substantive questions of law shall be determined in accordance with the state
and Federal laws applicable in the state in which the Company is incorporated, without regard to internal principles relating
to conflict of laws.

 

(i)
Modification or Amendment. This Agreement may only be modified or amended by written agreement executed by the parties hereto;
provided, however, that the adjustments permitted pursuant to Article 4.3 of the Plan may be made without such written agreement.

 

(j)
Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced
as if such illegal or invalid provision had not been included.

 

(k)
References to Plan. All references to the Plan shall be deemed references to the Plan as may be amended from time to time.

 

(l)
Section 409A Compliance. To the extent applicable, it is intended that this Agreement comply with the requirements of
Code Section 409A and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service and the Agreement and the Grant Notice shall be interpreted accordingly.

 

 

-7-

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