Document:

ex10_4.htm

Exhibit 10.4

 

Lexmark International, Inc.

20XX-20XX Long-Term Incentive Plan

Award Agreement

This Long-Term Incentive Plan (the "LTIP") Award Agreement (“Agreement”) between Lexmark International, Inc., a Delaware corporation (the "Company"), and the person specified on the signature page (the "Participant") is entered into as of the date set forth on the signature page hereof.

This Agreement is only a summary of the principal terms governing the LTIP.  The LTIP is subject in all respects to the terms of the Lexmark International, Inc. 2013 Equity Compensation Plan (the “Plan”). In the event of any conflict or inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.  It is important that the Participant read and understand the Plan and not rely solely on the brief description that follows.  All capitalized terms used but not defined herein shall have the meaning set forth in the Plan.

Overview

The LTIP is designed to reward the achievement of a specific performance measure over a three-year period.  The Compensation and Pension Committee of the Board of Directors of the Company (the “Committee”) established the Performance Measure, as defined below, for the performance period beginning January 1, 20XX and ending December 31, 20XX (the “Performance Period”).

Depending upon the Company's attainment of the Performance Measure, the Participant may be eligible to receive a payment under the LTIP, as set forth below.

Performance Measure

The Committee has established the Company’s relative Total Shareholder Return (“TSR”) measured against the average TSR of the companies in the S&P MidCap Technology Index as the performance measure for the Performance Period (the “Performance Measure”).  The calculation of TSR for the Company and for the companies in the S&P MidCap Technology Index, will reflect the appreciation (depreciation) in the average closing stock prices of the Company and the companies in the S&P MidCap Technology Index for the 60-day period ending December 31, 20XX (the “Initial Price”) and the average closing stock prices for the 60-day period ending December 31, 20XX (the “Closing Price”), assuming that any dividends paid are reinvested on the date such amounts are paid to their respective shareholders.

Target Opportunity

The LTIP awards are denominated in cash, but in the Committee’s sole discretion may be paid in cash, the Company’s Class A Common Stock or a combination of cash and the Company’s Class A Common Stock. For the Performance Period, your target award is [INSERT TARGET] (“Target”).

The chart below illustrates how the LTIP awards will be calculated.

	
TSR Percentile Rank within the S&P Mid-Cap Technology Index:

	
Less than 25th

	
25th

	
40th

	
50th

	
60th

	
70th

	
80th

	
90th or greater

	
LTIP Payment as a % of Target:

	
0%

	
25%

	
50%

	
100%

	
125%

	
150%

	
175%

	
200%

To the extent the Company’s TSR during the Performance Period ranks in a percentile between the 25th and 90th percentile of the S&P MidCap Technology Index, then the LTIP payment shall be interpolated

  

  

  

between the corresponding LTIP payment amounts, set forth above.  For example, if the Company’s TSR percentile rank within the S&P MidCap Technology Index for the Performance Period is at the 45th percentile, the Participant shall be eligible to receive an LTIP payment equal to 75% of the Participant’s Target, subject to reduction in the Committee’s sole discretion.

Committee Discretion

The Committee may use its sole discretion in determining the amount of any payment, or no payment, to Participants under the LTIP and whether to reduce (but not increase) the amount of any payment based on any factors it deems appropriate.

Payout Timing

The Committee intends to review and approve the attainment of the Performance Measure following the end of the three-year Performance Period.  This review is expected to occur in a 20XX Committee meeting.  Payments will be made only after the Committee approval has occurred, and any such payments will be made no later than March 15, 20XX.

Separation from Service

Except in the event of the death, Disability or Retirement (as defined below) of the Participant during the Performance Period, the Participant must be employed at the end of the Performance Period (December 31, 20XX) to be eligible to receive a payout.  If the Participant should have a separation from service (as defined below) due to death, Disability or Retirement during the Performance Period, the payout, if any, is achieved based on the Company’s TSR percentile rank within the S&P MidCap Technology Index as of the end of the Performance Period, and will be prorated based on the number of complete months of service performed during the Performance Period prior to the separation from service due to death Disability or Retirement divided by 36, and will be made only after Committee approval has occurred after the end of Performance Period, and any such payments will be made no later than March 15, 20XX.  For purposes of the LTIP, “Retirement” means termination of employment on or after the date the Participant attains (i) age 65 or (i) age 55, provided the Participant has 15 years of continuous service with the Company and its Subsidiaries on such date. For purposes of the LTIP, “separation from service” shall mean a separation from service from the Company or its Subsidiaries for purposes of Code Section 409A, using the default provisions set forth in Section 1.409A-1(h) of the Treasury Regulations, or any successor regulation thereto.

Change in Control

In the event of a Change in Control during the Performance Period, the Participant shall be entitled to a payout, as soon as practicable after the Change in Control, equal to the greater of Target or the actual attainment of the Company’s TSR measured against the S&P MidCap Technology Index as of the date of the Change in Control, and will be prorated based on the number of complete months of service performed during the Performance Period prior to the Change in Control divided by 36.  If a Change in Control occurs after the Performance Period ends, but prior to the date of payment, the Participant’s payout, if any, shall be based on actual attainment of the Company’s TSR measured against the S&P MidCap Technology Index for the Performance Period.

Forfeiture of the Award

The Participant acknowledges that this opportunity for a long-term incentive award has been granted as an incentive to the Participant to remain employed by the Company or one of its Subsidiaries and to exert his or her best efforts to enhance the value of the Company and its Subsidiaries over the long-term. Accordingly, the Participant agrees that if he or she (a) within 12 months of a separation from service with the Company, or its Subsidiaries, accepts employment with a competitor of the Company or one of its Subsidiaries or otherwise engages in competition with the Company or one of its Subsidiaries, or (b) within 36 months of a separation from service with the Company, or its Subsidiaries, directly or indirectly,

  

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disrupts, damages, interferes or otherwise acts against the interests of the Company or one of its Subsidiaries, including, but not limited to, recruiting, soliciting or employing, or encouraging or assisting the Participant's new employer or any other person or entity to recruit, solicit or employ, any employee of the Company or one of its Subsidiaries without the Company's prior written consent, which may withheld in its sole discretion, or (c) within 36 months of a separation from service with the Company, or its Subsidiaries, disparages, criticizes, or otherwise makes any derogatory statements regarding the Company or its Subsidiaries or their directors, officers or employees, or (d) discloses or otherwise uses confidential information or material of the Company or one of its Subsidiaries, each of these constituting a harmful action, then the Participant shall immediately repay to the Company the full amount of the award received under the terms and conditions of the LTIP.  The Committee shall have the right not to enforce the provisions of this paragraph with respect to the Participant.

Participant agrees to be fully liable for any remedies available at law or in equity, including, but not limited to, injunctive relief, for any breach of this above described covenant, promise and agreement.  Participant agrees to reimburse the Company for all costs and expenses, including attorneys’ fees, incurred by the Company in enforcing the obligations of Participant.  This entire provision shall survive the termination of the Agreement and, in no manner, shall the remedies described herein be considered as the Company’s exclusive or entire remedy for Participant’s breach, non-compliance or violation of this Agreement or any other agreement that Participant may have entered into with the Company.

Tax Withholding

In the event that the payout of the award is made in Class A Common Stock of the Company, delivery of such stock shall not be made unless and until the Participant, or, if applicable, the Participant’s beneficiary or estate, has made appropriate arrangements for the payment to the Company of an amount sufficient to satisfy any applicable U.S. federal, state and local and non-U.S. tax withholding or other tax requirements, as determined by the Company.  To satisfy the Participant’s applicable withholding and other tax requirements, the Company may, in its sole discretion, withhold a number of shares of Class A Common Stock having an aggregate Fair Market Value on the payout date equal to the applicable amount of such withholding and other tax requirements, subject to any rules adopted by the Committee or required to ensure compliance with applicable law, including, but not limited to, Section 16 of the Securities Exchange Act of 1934, as amended.  Any cash payment made under this Agreement shall be made net of any amounts required to be withheld or paid with respect thereto (and with respect to any shares of Class A Common Stock delivered therewith) under any applicable U.S. federal, state and local and non-U.S. tax withholding and other tax requirements.

Transferability

Unless otherwise provided in accordance with the provisions of the Plan, the award granted pursuant to this Agreement may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the Participant, other than by will or the laws of descent and distribution.  The term “Participant” as used in this Agreement shall include any permitted transferee.

Interpretation; Construction

All powers and authority conferred upon the Committee pursuant to any term of the Plan or this Agreement shall be exercised by the Committee, in its sole discretion.  All determinations, interpretations or other actions made or taken by the Committee pursuant to the provisions of the Plan or this Agreement shall be final, binding and conclusive for all purposes and upon all persons and, in the event of any judicial review thereof, shall be overturned only if arbitrary and capricious.  The Committee may consult with legal counsel, who may be counsel to the Company or any of its Subsidiaries, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

  

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Amendment

The Committee shall have the right to alter or amend the LTIP and this Agreement in its sole discretion, from time to time, as provided in the Plan in any manner for the purpose of promoting the objectives of the Plan, provided that no such amendment shall materially impair the Participant's rights under the LTIP without the Participant's consent; provided, however, the Participant’s consent shall not be required for any amendment that impairs the Participant’s rights if the amendment is required by law. Subject to the preceding sentence, any alteration or amendment to the LTIP by the Committee shall, upon adoption by the Committee, become and be binding and conclusive. The Company shall give written notice to the Participant of any such alteration or amendment of the LTIP as promptly as practical after the adoption.  This Agreement may also be amended in writing signed by both an authorized representative of the Company and the Participant.

No Guarantee of Employment or Future Incentive Awards

Nothing in the Plan or the LTIP shall be deemed to:

	
(a)  

	
interfere with or limit in any way the right of the Company or any Subsidiary to terminate the Participant's employment at any time for any reason, with or without cause;

	
(b)  

	
confer upon the Participant any right to continue in the employ of the Company or any Subsidiary; or

	
(c)  

	
provide Participant the right to receive any Incentive Awards under the Plan in the future or any other benefits the Company may provide to some or all of its employees.

Internal Revenue Code Section 162(m)

The award opportunities set forth in this Agreement are intended to constitute “qualified performance-based compensation” within the meaning of Section 1.162-27(e) of the Treasury regulations.  The Committee will certify the achievement of the performance measures described above.

Internal Revenue Code Section 409A

The parties intend for the awards under this Agreement to comply with the requirements of Code Section 409A and the Treasury regulations or other guidance issued thereunder.  Notwithstanding any provision of the Agreement to the contrary, the Agreement shall be interpreted and construed consistent with this intent, provided that the Company shall not be required to assume any increased economic burden.

Assignability

Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Participant without the prior consent of the other party.

Applicable Law

The LTIP and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the law that might be applied under principles of conflict of laws and excluding any conflict or choice of law rule or principle that may otherwise refer construction or interpretation of the LTIP or this Agreement to the substantive law of another jurisdiction.

Jurisdiction

The Participant hereby irrevocably and unconditionally submits to the jurisdiction and venue of the state courts of the Commonwealth of Kentucky and of the United States District Court of the Eastern District of Kentucky located in Fayette County, Kentucky, and any appellate court from any thereof, in any action or

  

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proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereby irrevocably agree that all claims in respect of any such action or proceeding may be heard and determined in such Kentucky state or United States federal courts located in such jurisdiction.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  Participant further agrees that any action related to, or arising out of, this Agreement shall only be brought by Participant exclusively in the federal and state courts located in Fayette County, Kentucky.  Nothing in this Agreement shall affect any right that the Company may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.

Section and Other Headings, Etc.

The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.  In this Agreement all references to “dollars” or “$” are to United States dollars.

Severability

If any provision of this Agreement, the LTIP or the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions of this Agreement, the LTIP or the Plan, and the Agreement, the LTIP and the Plan shall be construed and enforced as if such provision had not been included.

Survival

Any provision of this Agreement which contemplates performance or observance subsequent to any termination or expiration of this Agreement shall survive any termination or expiration of this Agreement and continue in full force and effect.

Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

*           *           *           *           *

  

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Please sign and date this Agreement to acknowledge that you have read the terms of this Agreement and understand that this LTIP award is subject to the provisions of the Plan and that you agree to the terms and conditions contained herein and therein.

LEXMARK INTERNATIONAL, INC.

By:   _______________________________

Jeri L. Isbell

Vice President of Human Resources

EXECUTIVE:

By:  ________________________________

                   [NAME]

Date:  ________________________________

 

 

Designation of Beneficiary

In the event of my death, I hereby designate the following person, as my beneficiary, to receive any award that becomes payable upon my death pursuant to this Agreement.  I acknowledge that if I fail to designate a beneficiary, below, that any award that becomes payable upon my death shall be paid to my estate.

 

 

                                                      ________________________________

(Beneficiary Name)

 

 

6Exhibit 10.4

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

BETWEEN

 

NXT-ID, INC.

 

And

 

Gino
Pereira

(Executive)

 

THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), originally dated as of October 1, 2012 (the “Effective
Date”) and amended as of March 11, 2013 is entered into by and between Nxt-ID, Inc., a Delaware corporation (the “Company”),
and Gino Pereira, an individual with a physical address at 51 Tram Drive, Oxford, CT 06478, (the “Executive”) (collectively,
the “Parties,” individually, a “Party”).

 

W I T N E S S E T H:

 

WHEREAS, Employee has substantial
experience in the Corporation’s business and is currently the Corporation’s President and Chief Executive Officer;
and

 

WHEREAS, the Board has determined
that it is in the best interest of the Company, its affiliates, and its stockholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change in Control (as defined in Article
Seven herein); and

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements set forth herein, the Parties, intending to be legally bound,
hereby agree as follows:

 

Article
OnE

 

DefINItions

 

1.          Definitions.
As used in this Agreement:

 

1.1          The term “Accrued Obligations,” when used in the case of the Executive’s death or disability shall mean
the sum of (1) the that portion Executive’s Base Salary that was not previously paid to the Executive from the
last payment date through the Date of Termination, and (2) an amount equal 24 months salary at the level of the Executive’s
Base Salary then in effect,

 

1.2          The term “Automatic Extension” shall have the meaning set forth in Section 2.2 herein.

 

1.3          The term “Base Salary”, shall have the meaning set forth in Section 3.1 herein.

 

1.4          The term “Board” shall have the meaning set forth in the recitals.

 

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1.5          The term “Cause” shall have the meaning set forth in Section 4.3 herein.

 

1.6          The term “Common Stock” shall mean the Common Stock, par value $0.001, of the Company.

 

1.7          The term “Compensation Committee” shall mean the Compensation Committee of the Company.

 

1.8          The term “Corporate Documents” shall mean the Company’s Certificate of Incorporation, as amended and/or
its Bylaws, as amended.

 

1.9          The term “Effective Date” shall have the meaning set forth in the preamble.

 

1.10         The term “Good Reason” shall have the meaning set forth in Section 4.4 herein.

 

1.11         The term “Initial Term” shall have the meaning set forth in Section 2.2 herein.

 

1.12         The term “Severance
Benefit” shall have the meaning set forth in Section 4.7(a)(i) herein.

 

1.13         The term “Without Cause” shall have the meaning set forth in Section 4.3 herein.

 

1.14         The term “Without Good Reason” shall have the meaning set forth in Section 4.5 herein.

 

Article
Two

 

POSITION & DUTIES

 

2.          Employment.

 

2.1          Title.
The Executive shall serve as the President and Chief Executive Officer of the Company and agrees to perform services for the Company
and such other affiliates of the Company, as described in Section 3 herein.

 

2.2          Term. The Executive’s employment shall be for an initial term of three (3) years (“Initial Term”),
commencing on the Effective Date. The Executive’s employment shall be automatically extended on the day after the second
year anniversary of the Effective Date (“Automatic Extension”), and on each anniversary date thereof, for additional
two (2) year periods.

 

2.3          Duties and Responsibilities. The Executive shall report to the Board and in his capacity as an officer of the Company
shall perform such duties and services as may be appropriate and as are assigned to him by the Board. During the term of this Agreement
Executive shall, subject to the direction of the Board of the Company, oversee and direct the operations of the Company, and shall
perform such duties as are customarily performed by the President and Chief Executive Officer of a company such as the Company
or as are otherwise delegated to him from time to time by the Board.

 

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2.4          Performance of Duties. During the term of the Agreement, except as otherwise approved by the Board or as provided
below, the Executive agrees to devote his full business time, effort, skill and attention to the affairs of the Company and its
subsidiaries, will use his best efforts to promote the interests of the Company, and will discharge his responsibilities in a diligent
and faithful manner, consistent with sound business practices. The foregoing shall not, however, preclude Executive from devoting
reasonable time, attention and energy in connection with the following activities, provided that such activities do not materially
interfere with the performance of his duties and services hereunder:

 

(a)          serving as a director, consultant, or a member of a committee of any company or organization,
if serving in such capacity does not involve any conflict with the business of the Company or any subsidiary and such other company
or organization is not in competition, in any manner whatsoever, with the business of the Company or any of its subsidiaries; 

 

(b)          fulfilling speaking engagements; 

 

(c)          engaging in charitable and community activities;

 

(d)          managing his personal business and investments; and

 

(e)          any other activity approved of by the Board. For purposes of this Agreement, any activity
specifically listed on Schedule A shall be considered as having been approved by the Board.

 

2.5          Representations
and Warranties of the Executive with Respect to Conflicts, Past Employers and Corporate Opportunities. The Executive represents
and warrants that:

 

(a)          his
employment by the Company will not conflict with any obligations which he has to any other person, firm or entity; 

 

(b)          he has not brought to the Company (during the period before the signing of this Agreement)
and he will not bring to the Company any materials or documents of a former or present employer, or any confidential information
or property of any other person, firm or entity; and 

 

(c)          he will not, without disclosure to and approval of the Board, directly or indirectly, assist
or have an active interest in (whether as a principal, stockholder, lender, employee, officer, director, partner, venturer, consultant
or otherwise) in any person, firm, partnership, association, corporation or business organization, entity or enterprise that competes
with or is engaged in a business which is substantially similar to the business of the Company; provided, however, that
ownership of not more than two percent (2%) of the outstanding securities of any class of any publicly held corporation shall not
be deemed a violation of this Section 2.5; provided, further, that any investment specifically listed on Schedule A shall not be
deemed a violation of this Section 2.5.

 

2.6          Activities
and Interests with Companies Doing Business with the Company. In addition to those activities and interests of Executive disclosed
on Schedule A attached hereto, Executive shall promptly disclose to the Board, in accordance with the Company’s policies,
full information concerning any interests, direct or indirect, he holds (whether as a principal, stockholder, lender, executive,
director, officer, partner, venturer, consultant or otherwise) in any business which, as reasonably known to Executive, purchases
or provides services or products to, the Company or any of its subsidiaries, provided that the Executive need not disclose any
such interest resulting from ownership of not more than two (2%) of the outstanding securities of any class of any publicly held
corporation.

 

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2.7          Other Business Opportunities. Nothing in this Agreement shall be deemed to preclude the Executive from participating
in other business opportunities if and to the extent that: (a) such business opportunities are not directly competitive with, similar
to the business of the Company, or would otherwise be deemed to constitute an opportunity appropriate for the Company; (b) the
Executive’s activities with respect to such opportunities do not have a material adverse effect on the performance of the
Executive’s duties hereunder, and (c) the Executive’s activities with respect to such opportunity have been fully disclosed
in writing to the Board.

 

2.8          Reporting Location. For purposes of this Agreement, the Executive’s reporting location shall be Shelton, Connecticut,
which shall include the area within a 40 mile radius from the Company’s current office.

 

Article
Three

 

compensation

 

3.          Compensation.

 

3.1          Base Salary.
Executive shall receive an initial annual base salary of One Hundred and Fifty Thousand Dollars ($150,000), until such time as
the Company has developed a working prototype of the “WocketTM”.
Upon the achievement of this milestone, the base annual salary shall increase to Three Hundred Thousand Dollars ($300,000), payable
according to the Company’s normal payroll policies and procedures (the “Base Salary”) and subject to all federal,
state, and municipal withholding requirements. The Base Salary shall be reviewed by the Board annually for adequacy.

 

3.2          Cash Bonus. The Executive shall be eligible for a cash bonus equal to an amount as determined by the Compensation
Committee of the Board or by the independent directors (as that term is defined by the stock exchange or market on which the Company’s
shares may be the traded).

 

3.3          Equity-Based Compensation. The Executive shall be entitled to participate in all equity-based compensation plans
offered by the Company and as determined by the Board of Directors.

 

(a)          Upon
a Change of Control, all equity-based compensation will be deemed to have vested as of the Change of Control Effective Date (as
defined by Article 7 herein)..

 

3.4          Participation
In Benefit Plans.

 

(a)          Retirement
Plans. Executive shall be entitled to participate, without any waiting or eligibility periods, in all qualified retirement
plans provided to other executive officers and other key employees.

 

(b)          Taxes. The Company shall pay, on a grossed-up basis for federal, state, and local income
taxes, the amount of any excise tax payable by Executive as a result of any payments triggered by this Agreement, or other compensation
agreements between Executive and the Company, or any of its subsidiaries and any income tax payable by Executive as a result of
any payments in Common Stock triggered by this Agreement or other compensation agreements between Executive and the Company, or
any of its subsidiaries, except as might otherwise be provided such benefit plan.

 

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(c)          Life Insurance. The Company will purchase life insurance on the life of Executive in
an amount not less than $3,000,000, the benefits of which will be payable one-half to the Executive’s beneficiary and one-half
to the Company. The Executive’s “beneficiary” is the person or persons (who may be designated concurrently, successively
or contingently) designated by the Executive in his last effective writing filed with the Company prior to his death, or if the
Executive shall have failed to make an effective designation, the Executive’s beneficiary is his spouse, if the Executive
is married and his spouse is living at the time of each payment, and otherwise his surviving children. The Executive shall assist
the Company in procuring such insurance by submitting to such examinations and by signing such applications and other instruments
as may be reasonable and as may be required by the insurance carriers to which application is made for any such insurance. The
Executive represents that, to the best of his knowledge, he is currently insurable at standard premium rates for life insurance
policies.

 

(d)           Employee Benefit Plans and Insurance. The Executive shall have the right to participate
in employee benefit plans and insurance programs of the Company that the Company may sponsor from time to time and to receive customary
Company benefits, if those benefits are so offered. Nothing herein shall obligate Executive to accept such benefits if and when
they are offered.

 

(e)          Vacation.

 

(i)          The
Executive shall be entitled to take such vacations, with pay, as are customary among other chief executive officers of organizations
of similar size and nature, which vacation level shall be reviewed by the Compensation Committee from time to time. No more than
1.5 times (1.5x) Executive’s authorized annual vacation allocation may be accrued, at any given time. In the event that
Executive has reached his maximum authorized vacation allocation, accrual will not re-commence until Executive uses some of his
paid vacation credit and thereby brings the balance below his maximum. Accrued paid vacation credit forfeited because of an excess
balance can not be retroactively reapplied.

 

(ii)         Pay will only be provided for any unused, accrued paid vacation credit at the time of Executive’s
separation from the business by the Company due to a reduction in force, by Executive upon retirement, or upon the death of an
employee, provided that Executive has been a regular full-time employee for three calendar months prior to such event. Termination
of employment for Cause by the Company, or Executive’s resignation, will result in the forfeiture of any unused paid vacation
credit.

 

(f)          Paid
Holidays. The Executive shall be entitled to such paid holidays as are generally available to all employees. As of the date
of this Agreement, the Company’s employees are permitted to observe ten (10) paid holidays.

 

3.5          Relocation
and Business-related Expenses. In the event that Executive is required to move from his primary residence and consents to
such move, then Executive shall be provided with relocation assistance as provided below:

 

(a)          Housing
and Temporary Lodging. The Company will pay the costs, for the Executive and his family, of house-hunting trips and the cost
of transporting the Executive, his spouse, furniture, household effects, and vehicles, to the area in which the Company will be
headquartered. In addition, the Company will pay the cost of the Executive’s travel, temporary living expenses, including
housing, whether hotel or apartment, and meals, during the period prior to the Executive’s move to the city in which the
Company will be headquartered.

 

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(b)          Reimbursement. Executive shall be entitled to reimbursement within a reasonable time
for all properly documented and approved expenses for travel. The Company shall reimburse business expenses of Executive directly
related to Company business, including, but not limited to, airfare, lodging, meals, travel expenses, medical expenses while traveling
not covered by insurance, business entertainment, expenses associated with entertaining business persons, local expenses to governments
or governmental officials, tariffs, applicable taxes outside of the United States, special expenses associated with travel to certain
countries, supplemental life insurance or supplemental insurance of any kind or special insurance rates or charges for travel outside
the United States (unless such insurance is being provided by the Company), rental cars and insurance for rental cars, and any
other expenses of travel that are reasonable in nature or that have been otherwise pre-approved. Executive shall be governed by
the travel and entertainment policy in effect at the Company.

 

3.6          Severance Benefit.
In the event that Executive’s employment is terminated, other than for Cause, Executive shall receive compensation pursuant
to Section 4.7 herein.

 

3.7          Payroll Procedures and Policies. All payments required to be made by the Company to the Executive pursuant to this
Article Three shall be paid on a regular basis in accordance with the Company’s normal payroll procedures and policies.

 

Article
Four

 

Termination OF EMPLOYMENT

 

4.1          Death.
The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Term.

 

4.2          Disability.
If the Company determines in good faith that the Disability (as defined below) of the Executive has occurred during the Employment
Term, the Company may give the Executive notice of its intention to terminate the Executive’s employment. In such event,
the Executive’s employment hereunder shall terminate effective on the 30th day after receipt of such notice by
the Executive (the “Disability Effective Date”); provided, that, within the 30-day period after such
receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this
Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties hereunder on a full-time
basis for an aggregate of 180 days within any given period of 270 consecutive days (in addition to any statutorily required
leave of absence and any leave of absence approved by the Company) as a result of incapacity of the Executive, despite any reasonable
accommodation required by law, due to bodily injury or disease or any other mental or physical illness, which will, in the opinion
of a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative,
be permanent and continuous during the remainder of the Executive’s life.

 

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4.3          Termination
by Company.

 

(a)          Termination
for Cause.

 

The Company
may terminate the Executive’s employment hereunder for Cause (as defined below). For purposes of this Agreement, “Cause”
shall mean:

 

(i)          the
willful and continued failure of the Executive to perform substantially the Executive’s duties hereunder (other than any
such failure resulting from bodily injury or disease or any other incapacity due to mental or physical illness) after a written
demand for substantial performance is delivered to the Executive by the Board or the Chairman of the Company, which specifically
identifies the manner in which the Board or the Chairman of the Company believes the Executive has not substantially performed
the Executive’s duties; or 

 

(ii)         the
willful engaging by the Executive in illegal conduct or gross misconduct that is materially and demonstrably detrimental to the
Company and/or its affiliated companies, monetarily or otherwise.

 

For purposes
of this provision, no act, or failure to act, on the part of the Executive shall be considered “willful” unless done,
or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission
was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board, upon the instructions of the Chairman or another Board Member of Company, or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company and its affiliated companies. The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than two-thirds of the entire membership of the Board then in office at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

 

(iii)        the
Executive’s conviction of, or plea of nolo contendere to, any felony of theft, fraud, embezzlement or violent crime.

 

(b)          Termination
without Cause.

 

All terminations
by the Company that are not for Cause, shall be considered Without Cause.

 

4.4          Termination
by Executive. The Executive may terminate the Executive’s employment hereunder at any time during the Employment Term
for Good Reason (as defined below) For purposes of this Agreement, “Good Reason” shall mean any of the following (without
the Executive’s express written consent): 

 

(a)          The
assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices,
titles and reporting requirements), duties, functions, responsibilities or authority as contemplated by Section 2.3 of this Agreement,
or any other action by the Company that results in a diminution in such position, duties, functions, responsibilities or authority,
excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

 

    	7

    	 

    

 

(b)          Any
failure by the Company to comply with any of the provisions of Section 2.3 of this Agreement, other than an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given
by the Executive; 

 

(c)          The Company’s
requiring the Executive to be based at any office or location other than as provided in Section 2.8 of this Agreement or the Company’s
requiring the Executive to travel on the Company’s or its affiliated companies’ business to a substantially greater
extent than during the three-year period immediately preceding the Effective Date;

 

(d)          Any
failure by the Company to comply with and satisfy Section 8.1 of this Agreement; or 

 

(e)          Any
purported termination by the Company of the Executive’s employment hereunder otherwise than as expressly permitted by this
Agreement, and for purposes of this Agreement, no such purported termination shall be effective. 

 

For purposes of this Section 4.4, any
good faith determination of “Good Reason” made by the Executive shall be conclusive.

 

4.5          Notice of Termination.
Any termination of the Executive’s employment hereunder by the Company or by the Executive (other than a termination pursuant
to Section 4.1) shall be communicated by a Notice of Termination (as defined below) to the other party hereto. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which (a) indicates the specific termination provision
in this Agreement relied upon, (b) in the case of a termination for Disability, Cause or Good Reason, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision
so indicated, and (c) specifies the Date of Termination (as defined in Section 4.7 below); provided, however, that notwithstanding
any provision in this Agreement to the contrary, a Notice of Termination given in connection with a termination for Good Reason
shall be given by the Executive within a reasonable period of time, not to exceed 120 days, following the occurrence of the
event giving rise to such right of termination. The failure by the Company or the Executive to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Disability, Cause or Good Reason shall not waive any right of the Company
or the Executive hereunder or preclude the Company or the Executive from asserting such fact or circumstance in enforcing the Company’s
or the Executive’s rights hereunder.

 

4.6          Date
of Termination. For purposes of this Agreement, the “Date of Termination” shall mean the effective date of termination
of the Executive’s employment hereunder, which date shall be (a) if the Executive’s employment is terminated
by the Executive’s death, the date of the Executive’s death, (b) if the Executive’s employment is terminated
because of the Executive’s Disability, the Disability Effective Date, (c) if the Executive’s employment is terminated
by the Company (or applicable affiliated company) for Cause or by the Executive for Good Reason, the date on which the Notice
of Termination is given, (d) if the Executive’s employment is terminated pursuant to Section 2.2, the date on which
the Employment Term ends pursuant to Section 2.2 due to a party’s delivery of a Notice of Termination thereunder, and (e) if
the Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination, which date
shall in no event be earlier than the date such notice is given; provided, however, that if within 30 days after any Notice
of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written
agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected).

 

    	8

    	 

    

 

4.7          Obligations
of the Company upon Termination.

 

(a)          Good
Reason or Change of Control; Other Than for Cause. If, during the Employment Term, the Company (or applicable affiliated company)
shall terminate the Executive’s employment hereunder other than for Cause or the Executive shall terminate the Executive’s
employment either for Good Reason: 

 

(i)          the
Company shall pay to the Executive in a lump sum (A) the sum of (1) Executive’s Base Salary, if any, which has
been earned but not paid through the Termination Date, (2) the product of (x) the Annual Bonus and (y) a fraction, the numerator
of which is the number of days in the current fiscal year through the Termination Date and the denominator of which is 365, and
(3) any accrued vacation or other pay pursuant to the Corporation’s vacation policy, to the extent not previously paid;
and (B) an amount equal to the sum of (1) an amount equal to 36 months of Executive’s Base Salary and (2) the
Annual Bonus multiplied by a factor of 3;

 

(ii)         all stock options,
stock appreciation rights, and restricted stock shall immediately vest;

 

(iii)        all stock options and
stock appreciation rights shall be payable in Common Stock;

 

(iv)        all performance share shall
immediately vest and

 

(v)         the Company shall pay, on
a grossed-up basis (as determined in the same manner as under Section 3.4(b) herein the amount of any excise and income taxes payable
by Executive as a result of any payments in Common Stock triggered by this Agreement, or other agreements between Executive and
the Company, or any of its subsidiaries.

 

to the
extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy, practice or arrangement
or contract or agreement of the Company and its affiliated companies (such other amounts and benefits hereinafter referred to
as the “Other Benefits”).

 

(b)          Death.
If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Term, this Agreement
shall terminate without further compensation obligations to the Executive’s legal representatives under this Agreement,
other than for (i) payment of Accrued Obligations (which shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 90 days of the Date of Termination) and the timely payment or settlement of any
other amount pursuant the Other Benefits and (ii) treatment of all other compensation under existing plans as provided by
the terms and rules of those plans.

 

    	9

    	 

    

 

(c)          Disability.
If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Term, this
Agreement shall terminate without further compensation obligations to the Executive, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive in a lump sum in cash within 90 days of the Date of Termination) and the
timely payment or settlement of any other amount pursuant to the Other Benefits and (ii) treatment of all other compensation
under existing plans as provided by the terms and rules of those plans.

 

(d)          Cause;
Other than for Good Reason. If the Executive’s employment is terminated for Cause during the Employment Term, this Agreement
shall terminate without further compensation obligations to the Executive other than the obligation to pay to the Executive Base
Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive and any accrued
vacation or other pay pursuant to the Corporation’s vacation policy, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates the Executive’s employment during the Employment Term, excluding a termination either for
Good Reason or (ii) a Change of Control, this Agreement shall terminate without further compensation obligations to the Executive,
other than for that portion of Executive’s Base Salary that was not previously paid to the Executive from the last payment
date through the effective date of the Executive’s voluntary termination, any accrued vacation or other pay pursuant to
the Corporation’s vacation policy and the timely payment or provision of the Other Benefits, as provided in any applicable
plan, and the Executive shall have no further obligations nor liability to the Company. In such case, any amounts owed to the
Executive shall be paid to the Executive in a lump sum in cash within 90 days of the Date of Termination subject to applicable
laws and regulations.

 

4.8          Continuation
of Payments During Disputes. The Parties agree that in the case of:

 

(a)          termination
which the Company contends is for Cause, but Executive claims is not for Cause; or

 

(b)          termination by Executive under Section 4.4 herein,

 

the Company shall continue
to pay all compensation due to Executive hereunder until the resolution of such dispute, but the Company shall be entitled to repayment
of all sums so paid, if it ultimately shall be determined by a court of competent jurisdiction, in a final non-appealable decision,
that the termination was for Cause or such termination by Executive was not authorized under Section 4.4 herein, and all sums so
repaid shall bear interest at the prime rate as published in The Wall Street Journal on the date on which such court makes
such determination. Any such reimbursement of payments by Executive shall not include any legal fees or other loss, costs, or expenses
incurred by the Company, notwithstanding any provision of the Indemnification Agreement, which is attached as Exhibit A
and is considered a part of this Agreement.

 

    	10

    	 

    

 

Article
Five

 

indemnification

 

5.          Indemnification.
The Executive shall be indemnified and held harmless pursuant to the terms and conditions set forth in the Indemnification Agreement
substantially in the form attached as Exhibit A hereto.

 

Article
Six

 

confidentiality

 

6.          Confidentially; Non-Competition; and Non-Solicitation. 

 

6.1          Confidentiality.
In consideration of employment by the Company and Executive’s receipt of the salary and other benefits associated with Executive’s
employment, and in acknowledgment that (a) the Company is engaged in the oil and gas business, (b) maintains secret and confidential
information, (c) during the course of Executive’s employment by the Company such secret or confidential information may
become known to Executive, and (d) full protection of the Company’s business makes it essential that no employee appropriate
for his or her own use, or disclose such secret or confidential information, Executive agrees that during the time of Executive’s
employment and for a period of two (2) years following the termination of Executive’s employment with the Company,
Executive agrees to hold in strict confidence and shall not, directly or indirectly, disclose or reveal to any person, or use
for his own personal benefit or for the benefit of anyone else, any trade secrets, confidential dealings, or other confidential
or proprietary information of any kind, nature, or description (whether or not acquired, learned, obtained, or developed by Executive
alone or in conjunction with others) belonging to or concerning the Company or any of its subsidiaries, except (i) with the prior
written consent of the Company duly authorized by its Board, (ii) in the course of the proper performance of Executive’s
duties hereunder, (iii) for information (x) that becomes generally available to the public other than as a result of unauthorized
disclosure by Executive or his affiliates or (y) that becomes available to Executive on a nonconfidential basis from a source
other than the Company or its subsidiaries who is not bound by a duty of confidentiality, or other contractual, legal, or fiduciary
obligation, to the Company, or (iv) as required by applicable law or legal process.

 

6.2          Non-Competition. During Executive’s employment with the Company and for so long as Executive receives any Severance
Benefit or is receiving any Severance Amount provided under this agreement in respect of the termination of his employment, Executive
shall not be engaged as an officer or executive of, or in any way be associated in a management or ownership capacity with any
corporation, company, partnership or other enterprise or venture which conducts a business which is in direct competition with
the business of the Company; provided, however, that Executive may own not more than two percent (2%) of the outstanding
securities, or equivalent equity interests, of any class of any corporation, company, partnership, or either enterprise that is
in direct competition with the business of the Company, which securities are listed on a national securities exchange or traded
in the over-the-counter market. For purposes of this Agreement, a lump sum payment equivalent made to Executive shall be judged
in relation to his most recent annual base salary to determine whether Executive is continuing to receive a Severance Benefit or
Severance Amount and shall be measured from the date such payment is received. It is expressly agreed that the remedy at law for
breach of this covenant is inadequate and that injunctive relief shall be available to prevent the breach thereof.

 

6.3          Non-Solicitation. Executive also agrees that he will not, directly or indirectly, during the term of his employment
or within one (1) year after termination of his employment for any reason, in any manner, encourage, persuade, or induce any other
employee of the Company to terminate his employment, or any person or entity engaged by the Company to represent it to terminate
that relationship without the express written approval of the Company. It is expressly agreed that the remedy at law for breach
of this covenant is inadequate and that injunctive relief shall be available to prevent the breach thereof.

 

    	11

    	 

    

 

Article
Seven

 

Change of Control

 

7.          Certain
Definitions.

 

7.1          Change
of Control Effective Date. The “Change of Control Effective Date” shall mean the first date during the Change of
Control Period (as defined in Section 7.2) on which a Change of Control occurs. Notwithstanding anything in this Agreement to the
contrary, if a Change of Control occurs and if the Executive’s employment with the Company (or applicable affiliated company)
is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect
a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes
of this Agreement the “Change of Control Effective Date” shall mean the date immediately prior to the date of such
termination of employment. 

 

7.2          Change
of Control Period. The “Change of Control Period” shall mean the period commencing on the date of this Agreement
and ending on the third anniversary of such date; provided, however, that commencing on
the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof
herein referred to as the “Renewal Date”), the Change of Control Period shall be automatically extended so as to terminate
three years after such Renewal Date. 

 

7.3          Change
of Control. For purposes of this Agreement, a “Change of Control” shall mean: 

 

(a)          the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either (A) the
then outstanding Common Shares the Company (the “Outstanding Shares”) or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Voting Securities”); provided, however, that for purposes of this Subsection 7.3(a) the following acquisitions shall
not constitute a Change of Control: (w) Company-sponsored recapitalization that is approved by the Incumbent Board, as defined
below; (x) a capital raise initiated by the Company where the Incumbent Board remains for at least at least 548 days after
the closing date of the raise, or (y) an acquisition of another company or asset(s) initiated by the Company and where the Company’s
shareholders immediately after the transaction own at least 51% of the shares of the combined concern; or 

 

(b)          individuals
who, as of the date of this Agreement, constitute the Company’s Board (the “Incumbent Board”) cease for any reason
to constitute a majority of such Board of Directors; provided, however , that any individual becoming a director of the Company
shareholders subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders was approved
by a vote of a majority of the directors of the Company then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Company Board; or 

 

    	12

    	 

    

 

(c)          consummation
of a reorganization, merger, amalgamation or consolidation of the Company, with or without approval by the shareholders of the
Company, in each case, unless, following such reorganization, merger, amalgamation or consolidation, (i) more than 50% of,
respectively, the then outstanding shares of common stock (or equivalent security) of the company resulting from such reorganization,
merger, amalgamation or consolidation and the combined voting power of the then outstanding voting securities of such company
entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Shares and Outstanding Voting
Securities immediately prior to such reorganization, merger, amalgamation or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger, amalgamation or consolidation, of the Outstanding Shares
and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding a parent of the Company that may come into
being after the date of this Agreement through any transaction deliberately undertaken by the Company after an affirmative vote
of its Incumbent Directors and the Company shareholders), any employee benefit plan (or related trust) of the Company or such
company resulting from such reorganization, merger, amalgamation or consolidation, and any Person beneficially owning, immediately
prior to such reorganization, merger, amalgamation or consolidation, directly or indirectly, 15% or more of the Outstanding Shares
or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 15% or more of, respectively,
the then outstanding shares of common stock (or equivalent security) of the company resulting from such reorganization, merger,
amalgamation or consolidation or the combined voting power of the then outstanding voting securities of such company entitled
to vote generally in the election of directors, and (ii) a majority of the members of the board of directors of the company
resulting from such reorganization, merger, amalgamation or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization, merger, amalgamation or consolidation; or

 

(d)          consummation
of a sale or other disposition of all or substantially all the assets of the Company, with or without approval by the shareholders
of the Company, other than to a corporation, with respect to which following such sale or other disposition, (i) more than
50% of, respectively, the then outstanding shares of common stock (or equivalent security) of such corporation and the combined
voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Shares and Outstanding Voting Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding
Shares and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit
plan (or related trust) of the Company or such corporation, and any Person beneficially owning, immediately prior to such sale
or other disposition, directly or indirectly, 15% or more of the Outstanding Shares or Outstanding Voting Securities, as the case
may be) beneficially owns, directly or indirectly, 15% or more of, respectively, the then outstanding shares of common stock (or
equivalent security) of such corporation or the combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors, and (C) a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Incumbent
Board providing for such sale or other disposition of assets of the Company; or

 

(e)          approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 

    	13

    	 

    

 

Article
Eight

 

miscellaneous

 

8.          Miscellaneous.

 

8.1          Benefit.
This Agreement shall inure to the benefit of and be binding upon each of the Parties, and their respective successors. This Agreement
shall not be assignable by any Party without the prior written consent of the other Party. The Company shall require any successor,
whether direct or indirect, to all or substantially all the business and/or assets of the Company to expressly assume and agree
to perform, by instrument in a form reasonably satisfactory to Executive, this Agreement and any other agreements between Executive
and the Company or any of its subsidiaries, in the same manner and to the same extent as the Company.

 

8.2          Governing Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of New
York without resort to any principle of conflict of laws that would require application of the laws of any other jurisdiction;
provided, however, that Delaware law shall govern with respect to the Executive’s rights under a Change of Control
under Article Seven herein.

 

8.3          Counterparts. This Agreement may be executed in counterparts and via facsimile, each of which shall be deemed to
constitute an original, but all of which together shall constitute one and the same Agreement. Each such counterpart shall become
effective when one counterpart has been signed by each Party thereto.

 

8.4          Headings. The headings of the various articles and sections of this Agreement are for convenience of reference only
and shall not be deemed a part of this Agreement or considered in construing the provisions thereof.

 

8.5          Severability. Any term or provision of this Agreement that shall be prohibited or declared invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or declaration, without
invalidating the remaining terms and provisions hereof or affecting the validity or enforceability of such provision in any other
jurisdiction, and if any term or provision of this Agreement is held by any court of competent jurisdiction to be void, voidable,
invalid or unenforceable in any given circumstance or situation, then all other terms and provisions hereof, being severable, shall
remain in full force and effect in such circumstance or situation, and such term or provision shall remain valid and in effect
in any other circumstances or situation.

 

8.6          Construction. Use of the masculine pronoun herein shall be deemed to refer to the feminine and neuter genders and
the use of singular references shall be deemed to include the plural and vice versa, as appropriate. No inference in favor of or
against any Party shall be drawn from the fact that such Party or such Party’s counsel has drafted any portion of this Agreement.

 

    	14

    	 

    

 

8.7          Equitable Remedies. The Parties hereto agree that, in the event of a breach of this Agreement by either Party, the
other Party, if not then in breach of this Agreement, may be without an adequate remedy at law owing to the unique nature of the
contemplated relationship. In recognition thereof, in addition to (and not in lieu of) any remedies at law that may be available
to the non-breaching Party, the non-breaching Party shall be entitled to obtain equitable relief, including the remedies of specific
performance and injunction, in the event of a breach of this Agreement, by the Party in breach, and no attempt on the part of the
non-breaching Party to obtain such equitable relief shall be deemed to constitute an election of remedies by the non-breaching
Party that would preclude the non-breaching Party from obtaining any remedies at law to which it would otherwise be entitled.

 

8.8          Attorney’s Fees. If any Party hereto shall bring an action at law or in equity to enforce its rights under
this Agreement, the prevailing Party in such action shall be entitled to recover from the Party against whom enforcement is sought
its costs and expenses incurred in connection with such action (including fees, disbursements and expenses of attorneys and costs
of investigation). [In the event that Executive institutes any legal action to enforce Executive’s legal rights hereunder,
or to recover damages for breach of this Agreement, Executive, if Executive prevails in whole or in part, shall be entitled to
recover from the Company reasonable attorneys’ fees and disbursements incurred by Executive with respect to the claims or
matters on which Executive has prevailed.]

 

8.9          No Waiver. No failure, delay or omission of or by any Party in exercising any right, power or remedy upon any breach
or default of any other Party, or otherwise, shall impair any such rights, powers or remedies of the Party not in breach or default,
nor shall it be construed to be a waiver of any such right, power or remedy, or an acquiescence in any similar breach or default;
nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any provisions of this
Agreement must be in writing and be executed by the Parties and shall be effective only to the extent specifically set forth in
such writing.

 

8.10         Remedies Cumulative. All remedies provided in this Agreement, by law or otherwise, shall be cumulative and not alternative.

 

8.11         Amendment.
This Agreement may be amended only by a writing signed by all of the Parties hereto.

 

8.12         Entire Contract. This Agreement and the documents and instruments referred to herein constitute the entire contract
between the parties to this Agreement and supersede all other understandings, written or oral, with respect to the subject matter
of this Agreement.

 

8.13         Survival. This Agreement shall constitute a binding obligation of the Company and any successor thereto. Notwithstanding
any other provision in this Agreement, the obligations under Articles 5 and 6 shall survive termination of this Agreement.

 

8.14         Savings Clause. Notwithstanding any other provision of this Agreement, if the indemnification provisions in Exhibit
A hereto or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company
shall nevertheless indemnify Executive as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect
to any Proceeding to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated
and to the fullest extent permitted by applicable law.

 

    	15

    	 

    

 

8.15         Modifications
and Waivers. Notwithstanding any other provision of this Agreement, the indemnification provisions in Exhibit A hereto
and the Change of Control provisions Article Seven herein, may be amended from time to time to reflect changes in Delaware law
or for other reasons.

 

8.16         Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed
to have been given (i) when delivered by hand or (ii) if mailed by certified or registered mail with postage prepaid, on the third
day after the date on which it is so mailed:

 

(a)          if
to Executive:

 

Gino Pereira

51 Tram Drive

Oxford CT 06478 

 

(b)          if
to the Company:

 

Nxt-ID, Inc.,

4 Research Drive

Suite 402

Shelton, CT 06484

 

Attn: Chairman, Compensation Committee

 

or to such other address
as may have been furnished to Executive by the Company or to the Company by Executive, as the case may be.

 

8.17         No Limitation.
Notwithstanding any other provision of this Agreement, for avoidance of doubt, the parties confirm that the foregoing does not
apply to or limit Executive’s rights under Delaware law or the Company’s Corporate Documents.

 

    	16

    	 

    

 

IN WITNESS WHEREOF,
the parties have set their hands and seals hereunto on the date first above written.

 

	NXT-ID, INC.	EXECUTIVE
	
        

         

        By: /s/ David R. Gust                      

        Name: David R. Gust

        Title: Independent Director
	By:

                                                                    Name:
	
        

        

        

         Gino Pereira

	 
	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	17

    	 

    

 

Schedule A

 

Outside Activities

Gino Pereira

 

	
        Company or

        Project Name
	Nature of Business	Date Hired or Commenced Involvement	Position	Compensation	Annual Time Commitment,
(time away from office)
	N/A	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

 

 

 

 

 

 

 

Dated: August , 2012

 

Initials: Executive: _____        Company: ______

 

 

 

 

 

 

 

 

 

 

 

    	18

    	 

    

 

Exhibit A

 

Indemnification Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	19

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