Document:

ex10-4.htm

Exhibit 10.4

 

 

RESTRICTED STOCK AWARD AGREEMENT, between Cable One, Inc. (the “Company”), a Delaware corporation, and [NAME]. 

 

This Restricted Stock Award Agreement (the “Award Agreement”) sets forth the terms and conditions of an award of [NUMBER] performance-based restricted shares (the “Award”) of the Company’s common stock, $0.01 par value per share “Share”), that are being granted to you under the Cable ONE, Inc. 2015 Omnibus Incentive Compensation Plan (the “Plan”) as of [DATE] (the “Grant Date”) and that are subject to certain restrictions on transfer and risks of forfeiture and other terms and conditions specified herein (such restricted Shares subject to this Award Agreement, the “Restricted Shares”). This Award provides you with the opportunity to earn, subject to the terms of this Award Agreement and the Plan, Shares, as set forth in Section 3 of this Award Agreement.

 

THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN AND THIS AWARD AGREEMENT, INCLUDING THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN SECTION 11 OF THIS AWARD AGREEMENT AND THE RESTRICTIVE COVENANT, CLAWBACK AND RECOUPMENT PROVISIONS SET FORTH IN SECTION 5 AND APPENDIX A OF THIS AWARD AGREEMENT. BY SIGNING YOUR NAME BELOW, YOU WILL HAVE CONFIRMED YOUR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AWARD AGREEMENT.

 

SECTION 1. The Plan. This Award is made pursuant to the Plan, all the terms of which are hereby incorporated in this Award Agreement, including but not limited to the provisions of Section 6(f) of the Plan. In the event of any conflict between the terms of the Plan, and the terms of this Award Agreement, the terms of this Award Agreement shall govern; provided that in the event of any conflict between the terms of Section 6(f) of the Plan, on the one hand, and this Award Agreement, on the other hand, the terms of Section 6(f) of the Plan shall govern except with respect to vesting of the Restricted Shares upon a Change of Control or upon termination of your employment, which shall be governed by the terms Section 3 of this Award Agreement.

 

SECTION 2. Definitions. Capitalized terms used in this Award Agreement that are not defined in this Award Agreement have the meanings as used or defined in the Plan. As used in this Award Agreement, the following terms have the meanings set forth below:

 

“Business Day” means a day that is not a Saturday, a Sunday or a day on which banking institutions are legally permitted to be closed in the City of New York.

  

 

 

 

 

“Cause” shall mean the occurrence of any of the following events: (a) your fraud, misappropriation, embezzlement or misuse of Company funds or property; (b) your failure to substantially perform your duties to the Company; (c) your conviction of, or entry of a plea of guilty or nolo contendre to, a felony or a crime involving moral turpitude; (d) any wilful act, or failure to act, by you in bad faith to the material detriment of the Company; (e) your material noncompliance with Company policies and guidelines; or (f) your material breach of any term of this Award Agreement or any agreement between you and the Company; provided that in cases where cure is possible, you shall first be provided a 15-day cure period. If, subsequent to your termination of employment with the Company or one of its Affiliates for any reason other than for Cause, the Company determines in good faith that your employment could have been terminated by the Company or applicable Affiliate for Cause, then, at the election of the Company, your employment will be deemed to have been terminated for Cause as of the date the events giving rise to Cause occurred.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Disability” means your absence from employment due to a physical or mental condition, illness or injury for a period of 180 consecutive Business Days.

 

“Determination Date” means the date as soon as reasonably practicable following the applicable Performance Period, but in no event later than March 15 of the year following the end of the applicable Performance Period, as determined by the Committee, on which the Committee determines whether the Performance Goal has been achieved. 

 

“Good Reason” means the occurrence, without your written consent, of any of the following events or circumstances: (a) a material reduction in your annual base salary or target bonus opportunity; (b) a material diminution in your title, duties or responsibilities; (c) a relocation of your principal work location by more than 50 miles; or (d) any material breach of this Award Agreement by the Company; provided that Good Reason shall not exist unless you give the Company notice specifically detailing the event you believe gives rise to Good Reason within 60 days of the date you have knowledge of such event. In cases where cure is possible, the Company shall be provided a 90-day cure period after such notice is given in accordance with Section 12 of this Award Agreement; if such circumstances are not cured by the expiration of such cure period, you may resign for Good Reason within three months following the end of the cure period, but if such circumstances are cured within the cure period or if you do not resign for Good Reason within three months following the end of the cure period, such circumstances will not be deemed to constitute Good Reason.

 

“Performance Goal” means the applicable goal set forth on Appendix B.

 

“Performance Period” means, as applicable, the period beginning on [DATE] and ending on [DATE] or the period beginning on [DATE] and ending on [DATE].

 

“Pro-Ration Fraction” means a fraction, (a) the numerator of which is the number of days elapsed from the Grant Date through the date of termination of employment and (b) the denominator of which is (i) in the case of a termination of employment described in 3(a)(ii), the number of days elapsed from the Grant Date through the later of the Service Completion Date and the Determination Date on which the Committee determines that the Performance Goal has been achieved, and (ii) in the case of a termination described in 3(a)(iii), the number of days elapsed from the Grant Date through the Service Completion Date.

  

 

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“Restrictive Covenants” means the restrictive covenants set forth in Appendix A, which are incorporated herein by reference.

 

“Service Completion Date” means [DATE].

 

“Vesting Date” means the later of the Service Completion Date and the Determination Date on which the Committee determines that the Performance Goal has been achieved.

 

SECTION 3. Vesting. (a) Performance-Based Vesting. (i) On each Determination Date, the Committee shall determine whether the Performance Goal has been achieved for the applicable Performance Period. Except as otherwise determined by the Committee in its sole discretion, which shall be subject to Section 6(f) of the Plan, or as otherwise provided in this Section 3, vesting of the Restricted Shares is contingent on the achievement of the Performance Goal within the applicable Performance Period and your continued employment with the Company or an Affiliate through the Service Completion Date. For the avoidance of doubt, if the Committee determines on the first Determination Date that the Performance Goal related thereto has not been satisfied, the Restricted Shares will remain unvested and outstanding and, provided that the Committee determines that the Performance Goal applicable to the second Performance Period has been achieved, such Restricted Shares will vest on the Vesting Date. In addition, except as otherwise provided in Section 3(a)(ii) – (iv), if your employment with the Company or an Affiliate terminates at any time before the Vesting Date, the Restricted Shares shall be immediately forfeited.

 

(ii) Termination Without Cause or for Good Reason. In the event that your employment is terminated by the Company without Cause or by you for Good Reason anytime on or after the first anniversary of the Grant Date, except as otherwise set forth in Section 3(a)(iv)(B), then a portion of your Restricted Shares determined by multiplying the Restricted Shares outstanding prior to such termination by the applicable Pro-Ration Fraction (such portion, the “Remaining Restricted Shares”) shall be treated as follows: (A) if such termination occurs before the Determination Date on which the Committee determines that the Performance Goal has been achieved, then the Remaining Restricted Shares shall no longer be subject to the service requirements, but shall remain outstanding and vest on the Determination Date on which the Committee determines the Performance Goal has been achieved, and (B) if such termination occurs on or after the Determination Date on which the Committee determines that the Performance Goal has been achieved, then such Remaining Restricted Shares shall immediately vest. All Restricted Shares other than the Remaining Restricted Shares shall be forfeited immediately upon such termination of employment. For the avoidance of doubt, if such termination of employment occurs before the first anniversary of the Grant Date, or if the Committee does not determine on either Determination Date that the applicable Performance Goal has been achieved, then all then outstanding Restricted Shares (including any Remaining Restricted Shares) shall be immediately forfeited as of the date of termination or the final Determination Date, as applicable. 

  

 

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(iii) Death or Disability. In the event your employment is terminated due to death or Disability on or after the first anniversary of the Grant Date, the service and performance requirements shall no longer apply and you or your estate or applicable beneficiary, as the case may be, shall immediately vest in a portion of your Restricted Shares determined by multiplying the Restricted Shares outstanding prior to such termination by the applicable Pro-Ration Fraction. Any Restricted Shares that do not vest pursuant to this Section 3(a)(iii) will be immediately forfeited.

 

(iv) Change of Control. (A) Except as otherwise provided in this Section 3(a)(iv)(A) or in Section 3(a)(iv)(B) below, following a Change of Control, the unvested Restricted Shares shall no longer be subject to the performance requirements but shall remain outstanding and subject to service requirements through the Service Completion Date; provided that in the event that your employment terminates on or after a Change of Control but before the Service Completion Date under any of the circumstances described in Section 3(a)(ii) above, (I) if such date of termination is also within 18 months following such Change of Control, your date of termination of employment shall be deemed to be the Service Completion Date, and all Restricted Shares then outstanding shall immediately vest and (II) if such date of termination is after the date that is 18 months following such Change of Control, then upon your date of termination, a portion of your then outstanding Restricted Shares shall immediately vest, determined in a manner consistent with the pro-ration provided in Section 3(a)(ii). Furthermore, in the event that your employment terminates under any of the circumstances described in Section 3(a)(ii) above before the Vesting Date and before a Change of Control, upon a Change of Control, the date of the Change of Control shall be deemed to be the Vesting Date for purposes of the Remaining Restricted Shares you then hold.

 

(B) Notwithstanding the foregoing, in the event of a Change of Control before the Vesting Date, unless (I) the unvested but outstanding Restricted Shares remain outstanding following such Change of Control in accordance with the Plan and (II) the material terms and conditions of such Restricted Shares as in effect immediately prior to the Change of Control are preserved following the Change of Control (including with respect to the vesting schedules), the date of the Change of Control shall be deemed to be the Vesting Date for purposes of such Restricted Shares (and any Remaining Restricted Shares), which will automatically vest and all forfeiture provisions related thereto will lapse as of such date.

 

SECTION 4. Delivery of Shares. On or following the date of this Award Agreement, the Restricted Shares shall be evidenced in such manner as the Company shall determine. Any certificate or book entry credit issued or entered in respect of such Restricted Shares shall be registered in your name and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to the Restricted Shares, substantially in the following form:

 

“The transferability of the shares of stock represented hereby is subject to the terms and conditions (including forfeiture) of the Cable ONE, Inc. 2015 Omnibus Incentive Compensation Plan and an Award Agreement, as well as the terms and conditions of applicable law. Copies of such Plan and Award Agreement are on file at the offices of Cable One, Inc.”

  

 

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In addition, the Company may affix to certificates for Shares issued pursuant to this Award Agreement any other legend that the Committee determines to be necessary or advisable (including to reflect any restrictions to which you may be subject under any applicable securities laws). The Company shall require that the certificates or book entry credits evidencing title of the Restricted Shares be held in custody by the Company or such other custodian as may be designated by the Committee or the Company, until such time, if any, as the Restricted Shares have vested, and the Company may require that, as a condition of your receiving the Restricted Shares, you shall have delivered to the Company or such other custodian as may be designated by the Committee or the Company, a stock power, endorsed in blank, relating to such Restricted Shares. If and when the Vesting Date occurs with respect to the Restricted Shares or the Restricted Shares otherwise become vested in accordance with Section 3, provided the Restricted Shares have not been forfeited pursuant to Section 3 or Section 5, the legend set forth above shall be removed from the certificates or book entry credits evidencing such Shares within 30 days following such date. Notwithstanding the foregoing, the Company shall be entitled to hold the Restricted Shares until it shall have received from you a duly executed Form W-8 or W-9, as applicable, and any other information or completed forms the Company may reasonably require.

 

SECTION 5. Forfeiture of Restricted Shares. (i) Unless the Committee determines otherwise, and except as otherwise provided in Section 3, if your employment terminates prior to the Vesting Date, your rights with respect to the Restricted Shares shall immediately terminate, and you will be entitled to no further payments or benefits with respect thereto. Furthermore, unless the Committee determines otherwise, and except as otherwise provided in Section 3, if the Committee determines on the final Determination Date that the Performance Goal has not been achieved, your rights with respect to the Restricted Shares shall immediately terminate, and you will be entitled to no further payments or benefits with respect thereto. 

  

 

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(ii) Notwithstanding anything to the contrary in this Award Agreement, in the event that you incur a termination of employment by the Company without Cause or due to Disability or by you for Good Reason, in order for the Restricted Shares that would be Remaining Restricted Shares to be treated as provided in Section 3(a)(ii) or (iii), you must sign a customary release of claims in favor of the Company and its Affiliates that is acceptable to the Company, and such release must become effective and irrevocable on or before the 65th day following your termination of employment. In the event you do not sign such release or revoke such release before it becomes effective, you will forfeit all rights to any unvested Restricted Shares or Remaining Restricted Shares, as applicable. In addition, in the event that you (A) violate the Restrictive Covenants, (B) engage in any conduct constituting Cause, (C) engage in fraud or wilful misconduct contributing to any financial restatements or irregularities or a material loss to the Company or its Affiliates or (D) otherwise violate any recoupment or clawback policy adopted by the Company, as may be amended from time to time, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law) (any of the events described in the foregoing clauses (A)-(D), a “Forfeiture Event”), all outstanding vested or unvested Restricted Shares and Remaining Restricted Shares, as applicable, shall be forfeited and canceled. In addition, in the event of a Forfeiture Event, the Board may require you to disgorge to the Company all net after-tax amounts that you have realized or received in respect of this Award, including on the sale or transfer of Shares in respect of Restricted Shares or Remaining Restricted Shares, as applicable (or, in the case of any transfer for less than the Fair Market Value of such Shares, you will disgorge to the Company an amount equal to the Fair Market Value of such Shares) and any dividend amounts paid pursuant to Section 6 or, following the Vesting Date, in respect of Shares related to this Award, in each case, to the extent realized or received in the 12 months before or the 12 months after such Forfeiture Event. Furthermore, in the event that your employment is terminated for Cause, you will forfeit all outstanding Remaining Restricted Shares. For the avoidance of doubt, to the extent permitted by applicable law, this Section 5(ii) will cease to be effective as a basis for forfeiture, clawback or recoupment of any portion of this Award from and after a Change of Control.

 

SECTION 6. Voting Rights; Dividends. If the Company declares and pays (or sets a record date with respect to) ordinary cash dividends on Shares on or after the Grant Date and prior to the Vesting Date, you shall not be entitled to receive such dividends at the time of payment. Instead, subject to Section 8 below, any such dividends as relate to the Restricted Shares shall be held by the Company or an escrow agent that is designated by the Company and shall vest and be paid (less any taxes required to be withheld) at the time the corresponding Restricted Shares vest (it being understood that the provisions of this sentence shall not apply to any extraordinary dividends or distributions). You shall have, with respect to the Restricted Shares, the same right to vote the Shares as a shareholder of Shares. 

 

SECTION 7. Non-Transferability of Restricted Shares. Unless otherwise provided by the Committee in its discretion, Restricted Shares may not be sold, assigned, alienated, transferred, pledged, attached or otherwise encumbered except as provided in Section 9(a) of the Plan. Any purported sale, assignment, alienation, transfer, pledge, attachment or other encumbrance of a Restricted Share in violation of the provisions of this Section 7 and Section 9(a) of the Plan shall be void.

  

 

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SECTION 8. Withholding, Consents and Legends. (a) Withholding. The delivery of Shares pursuant to Section 4 of this Award Agreement is conditioned on satisfaction of any applicable withholding taxes in accordance with this Section 8(a) and Section 9(d) of the Plan. In the event that there is withholding tax liability in connection with the vesting of, or lapse of restrictions associated with, Restricted Shares and any accrued dividends related thereto, you may satisfy, in whole or in part, any withholding tax liability: (i) by cash payment of an amount equal to such withholding liability; (ii) by delivery of Shares owned by you (which are not subject to any pledge or other security interest) or by delivery of irrevocable instructions to a broker to sell Shares and promptly deliver to the Company the proceeds from the sale of Shares, in each case, with the amount realized equal to the amount required to cover such withholding liability; or (iii) by having the Company withhold from the number of Restricted Shares you would be entitled to receive a number of Shares having a fair value equal to such withholding tax liability.

 

(b) Consents. Your rights in respect of the Restricted Shares are conditioned on the receipt to the full satisfaction of the Committee of any required consents that the Committee may determine to be necessary or advisable (including your consenting to the Company’s supplying to any third-party recordkeeper of the Plan such personal information as the Committee deems advisable to administer the Plan).

 

SECTION 9. Successors and Assigns of the Company. The terms and conditions of this Award Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns.

 

SECTION 10. Committee Discretion. Subject to the terms of the Plan and this Award Agreement, the Committee shall have discretion with respect to any actions to be taken or determinations to be made in connection with this Award Agreement, and its determinations shall be final, binding and conclusive.

 

SECTION 11. Dispute Resolution. (a) Jurisdiction and Venue. (i) This Award Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws that could cause the application of the law of any jurisdiction other than the State of Delaware. 

 

(ii) Subject to the provisions of Section 11(a)(iii), any controversy or claim between you and the Company or its Affiliates arising out of or relating to or concerning the provisions of any Award Agreement or the Plan shall be finally settled by arbitration in Phoenix, Arizona, before, and in accordance with the rules then obtaining of the American Arbitration Association (the “AAA”) in accordance with the commercial arbitration rules of the AAA.

 

(iii) In addition to its right to submit any dispute or controversy to arbitration, the Company or one of its Affiliates may bring an action or special proceeding in a state or Federal court of competent jurisdiction sitting in Phoenix, Arizona, whether or not an arbitration proceeding has theretofore been or is ever initiated, for the purpose of temporarily, preliminarily or permanently enforcing the provisions of the Plan, the Restrictive Covenants, or to enforce an arbitration award, and, for the purposes of this Section 11(a)(iii), you (A) expressly consent to the application of Section 11(a)(iv) to any such action or proceeding, (B) agree that proof shall not be required that monetary damages for breach of the provisions of the Restrictive Covenants or this Award Agreement would be difficult to calculate and that remedies at law would be inadequate, and (C) irrevocably appoint the General Counsel of the Company as your agent for service of process in connection with any such action or proceeding, who shall promptly advise you of any such service of process by notifying you at the last address on file in the Company’s records.

 

 

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(iv) You and the Company hereby irrevocably submit to the exclusive jurisdiction of any state or Federal court located in Phoenix, Arizona, over any suit, action or proceeding arising out of, relating to or in connection with this Award Agreement or the Plan that is not otherwise required to be arbitrated or resolved in accordance with the provisions of Section 11(a)(ii). This includes any suit, action or proceeding to compel arbitration or to enforce an arbitration award. You and the Company acknowledge that the forum designated by this Section 11(a)(iv) has a reasonable relation to this Award Agreement, and to your relationship to the Company. Notwithstanding the foregoing, nothing herein shall preclude you or the Company from bringing any action or proceeding in any other court for the purpose of enforcing the provisions of Sections 11(a)(i), 11(a)(ii) or this Section 11(a)(iv). The agreement of you and the Company as to forum is independent of the law that may be applied in the action, and you and the Company agree to such forum even if the forum may under applicable law choose to apply nonforum law. You and the Company hereby waive, to the fullest extent permitted by applicable law, any objection which you or the Company now or hereafter may have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding in any court referred to in this Section 11(a)(iv). You and the Company undertake not to commence any action arising out of, or relating to or in connection with this Award Agreement in any forum other than a forum described in this Section 11(a)(iv), or, to the extent applicable, Section 11(a)(ii). You and the Company agree that, to the fullest extent permitted by applicable law, a final and nonappealable judgment in any such suit, action or proceeding in any such court shall be conclusive and binding upon you and the Company.

 

(b) Waiver of Jury Trial. You and the Company hereby waive, to the fullest extent permitted by applicable law, any right either of you may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under or in connection with this Award Agreement or the Plan. 

 

(c) Confidentiality. You hereby agree to keep confidential the existence of, and any information concerning, a dispute described in this Section 11, except that you may disclose information concerning such dispute to the court that is considering such dispute or to your legal counsel (provided that such counsel agrees not to disclose any such information other than as necessary to the prosecution or defense of the dispute).

  

 

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SECTION 12. Notice. All notices, requests, demands and other communications required or permitted to be given under the terms of this Award Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three Business Days after they have been mailed by U.S. registered mail, return receipt requested, postage prepaid, addressed to the other party as set forth below: 

 

	
If to the Company:
	
Cable One, Inc.

210 E. Earll Drive

Phoenix, AZ 85012

Attn: General Counsel

	 	 
	
If to you:
	
To your address as most recently supplied to the Company and set forth in the Company’s records

 

The parties may change the address to which notices under this Award Agreement shall be sent by providing written notice to the other in the manner specified above. 

 

SECTION 13. Headings and Construction. Headings are given to the Sections and subsections of this Award Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Award Agreement or any provision thereof. Whenever the words “include”, “includes” or “including” are used in this Award Agreement, they shall be deemed to be followed by the words “but not limited to”. 

 

SECTION 14. Amendment of this Award Agreement. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Award Agreement prospectively or retroactively; provided, however, that any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially and adversely impair your rights under this Award Agreement shall not to that extent be effective without your consent (it being understood, notwithstanding the foregoing proviso, that this Award Agreement and the Restricted Shares shall be subject to the provisions of Section 7(c) of the Plan). 

 

SECTION 15. Severability. If any provision of this Award Agreement is held by a court of competent jurisdiction to be illegal, void or unenforceable, such provision shall have no effect; however, the remaining provisions shall be enforced to the maximum extent possible. Further, if a court should determine that any portion of this Award Agreement is overbroad or unreasonable, such provision shall be given effect to the maximum extent possible by narrowing or enforcing in part that aspect of the provision found overbroad or unreasonable.

 

SECTION 16. Counterparts. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. You and the Company hereby acknowledge and agree that signatures delivered by facsimile or electronic means (including by “pdf”) shall be deemed effective for all purposes.

  

 

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IN WITNESS WHEREOF, the parties have duly executed this Award Agreement as of the date first written above.

 

	
CABLe ONE, INC.,

	 
	
by

	  	  
	  	
Name:

	  	
Title:

	 	 
	 	 
	[NAME]TEARLAB
CORPORATION

 

(formerly
OCCULOGIX, INC. and formerly VASCULAR SCIENCES CORPORATION)

 

2002
STOCK INCENTIVE PLAN

 

AS
AMENDED EFFECTIVE AS OF FEBRUARY 5, 2015

 

1. Establishment,
Purpose and Term of Plan.

 

1.1 Establishment.
The TearLab Corporation 2002 Stock Incentive Plan (the “Plan”) was originally established effective
as of the effective date of the Delaware reincorporation of OccuLogix Corporation (the predecessor corporation to the Company)
on June 5, 2002 (the “Original Effective Date”), and is hereby amended and restated effective as of
February 5, 2015 (the “Effective Date”).

 

1.2 Purpose.
The purpose of the Plan is to advance the interests of the Participating Company Group and its stockholders by providing an incentive
to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to
contribute to the growth and profitability of the Participating Company Group.

 

1.3 Term
of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the
shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of
the Plan and the agreements evidencing Awards granted under the Plan have lapsed. However, all Awards shall be granted, if at
all, within ten (10) years from February 5, 2015.

 

2. Definitions
and Construction.

 

2.1 Definitions.
Whenever used herein, the following terms shall have their respective meanings set forth below:

 

(a) “Award”
means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock or Restricted
Stock Units.

 

(b) “Award
Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award
granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

 

(c) “Board”
means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan,
“Board” also means such Committee(s).

 

(d) “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

 

(e) “Committee”
means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers
as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have
all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any
time, subject to the terms of the Plan and any applicable limitations imposed by law.

 

(f) “Company”
means TearLab Corporation, a Delaware corporation, or any successor corporation thereto.

 

    	 

    	 

    

 

(g) “Consultant”
means any natural person, including an advisor, engaged by the Company or a Parent Corporation or Subsidiary Corporation to render
bona fide services to such entity, provided the services (i) are not in connection with the offer or sale of securities in a capital-raising
transaction, and (ii) do not directly promote or maintain a market for the Company’s securities, in each case, within the
meaning of Form S-8 promulgated under the Securities Act, and provided, further, that a Consultant will include only those persons
to whom the issuance of shares of Stock may be registered under Form S-8 promulgated under the Securities Act.

 

(h) “Director”
means a member of the Board or of the board of directors of any other Participating Company.

 

(i) “Disability”
means the inability of the Participant, in the opinion of a qualified physician acceptable to the Company, to perform the major
duties of the Participant’s position with the Participating Company Group because of the sickness or injury of the Participant.

 

(j) “Employee”
means any person treated as an employee (including an Officer or a Director who is also treated as an employee) in the records
of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes
of Section 422 of the Code; provided, however, that neither service as a Director nor payment of a director’s fee shall
be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise
of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s
employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the Plan
as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination.

 

(k) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(l) “Fair
Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Board,
in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject
to the following:

 

(i) If,
on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share
of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if
the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other national or
regional securities exchange or market system constituting the primary market for the Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock
has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be
the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined
by the Board, in its discretion.

 

(ii) If,
on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of
a share of Stock shall be as determined by the Board in good faith without regard to any restriction other than a restriction
which, by its terms, will never lapse.

 

(m) “Incentive
Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an incentive
stock option within the meaning of Section 422(b) of the Code.

 

(n) “Insider”
means an Officer, a Director of the Company or other person whose transactions in Stock are subject to Section 16 of the Exchange
Act.

 

(o) “Involuntary
Termination” means the termination of the Service of any individual which occurs by reason of:

 

    	-2-

    	 

    

 

(i) Such
individual’s involuntary dismissal or discharge by the Company for reasons other than Misconduct, or

 

(ii) Such
individual’s voluntary resignation following (A) a change in his or her position with the Company which materially reduces
his or her duties and responsibilities or the level of management to which he or she reports, (B) a reduction in his or her level
of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive
programs) by more than fifteen percent (15%) or (C) a relocation of such individual’s place of employment by more than fifty
(50) miles, provided and only if such change, reduction or relocation is effected without the individual’s consent.

 

(p) “Misconduct”
means the commission of any act of fraud, embezzlement or dishonesty by the Participant, any unauthorized use or disclosure by
such person of confidential information or trade secrets of the Company (or any Participating Company), or any other intentional
misconduct by such person adversely affecting the business or affairs of the Company (or any Participating Company) in a material
manner. The foregoing definition shall not in any way preclude or restrict the right of the Company (or any Participating Company)
to discharge or dismiss any Participant or other person in the Service of the Company (or any Participating Company) for any other
acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination
for Misconduct.

 

(q) “Nonstatutory
Stock Option” means an Option not intended to be (as set forth in the Award Agreement) or which does not qualify
as an Incentive Stock Option.

 

(r) “Officer”
means any person designated by the Board as an officer of the Company.

 

(s) “Option”
means a right to purchase Stock pursuant to the terms and conditions of the Plan. An Option may be either an Incentive Stock Option
or a Nonstatutory Stock Option.

 

(t) “Parent
Corporation” means any present or future “parent corporation” of the Company, as defined in Section
424(e) of the Code.

 

(u) “Participant”
means the holder of an outstanding Award.

 

(v) “Participating
Company” means the Company or any Parent Corporation or Subsidiary Corporation.

 

(w) “Participating
Company Group” means, at any point in time, all corporations collectively which are then Participating Companies.

 

(x) “Performance
Goals” means the goal(s) determined by the Committee (in its discretion) to be applicable to a Participant with
respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level
or levels of achievement using one or more of the following measures: (i) revenue, (ii) gross margin, (iii) operating margin,
(iv) operating income, (v) pre-tax profit, (vi) pre-tax margin, (vii) earnings before interest, taxes, depreciation and amortization,
(viii) net income, (ix) cash flow, (x) operating expenses, (xi) the market price of Stock, (xii) earnings per share, (xiii) earnings
yield, (xiv) earnings yield spread, (xv) total stockholder return, (xvi) return on capital, (xvii) return on assets, (xviii) product
quality, (xix) economic value added, (xx) number of customers, (xxi) market share, (xxii) return on investments, (xxiii) profit
after taxes, (xxiv) customer satisfaction, (xxv) business divestitures and acquisitions, (xxvi) supplier awards from significant
customers, (xxvii) new product development, (xxviii) working capital, (xxix) time to market, (xxx) return on net assets, and (xxxi)
sales. The Performance Goals may differ from Participant to Participant and from Award to Award. Any criteria used may be measured,
as applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to, passage of time and/or against another
company or companies), (iii) on a per-share basis, (iv) against the performance of the Company as a whole or a segment of the
Company, and (v) on a pre-tax or after-tax basis.

 

    	-3-

    	 

    

 

(y) “Period
of Restriction” means the period during which the transfer of shares of Restricted Stock are subject to restrictions
and therefore, the shares of Stock are subject to a substantial risk of forfeiture. Such restrictions may be based on Performance
Goals, the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by
the Board.

 

(z) “Restricted
Stock” means shares of Stock issued pursuant to a Restricted Stock Award under Section 8 of the Plan.

 

(aa) “Restricted
Stock Unit” means a bookkeeping entry representing the right to receive one share of Stock under Section 9 of the
Plan. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

 

(bb) “Rule
16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.

 

(cc) “Securities
Act” means the Securities Act of 1933, as amended.

 

(dd) “Service”
means a Participant’s employment or service with the Participating Company Group, whether in the capacity of an Employee,
a Director or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because of a change in
the capacity in which the Participant renders Service to the Participating Company Group or a change in the Participating Company
for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s
Service. Furthermore, a Participant’s Service with the Participating Company Group shall not be deemed to have terminated
if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company; provided,
however, that (i) if any such leave exceeds three (3) months, then three (3) months following the first (1st) day of such leave
the Participant’s Service shall be deemed to have terminated unless the Participant’s right to return to Service with
the Participating Company Group is guaranteed by statute or contract and (ii) for purposes of Incentive Stock Options, if reemployment
upon expiration of a leave of absence approved by the Company is not guaranteed by statute or contract and exceeds three (3) months,
then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease
to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option. Notwithstanding
the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service
for purposes of determining vesting under the Participant’s Award Agreement. The Participant’s Service shall be deemed
to have terminated either upon an actual termination of Service or upon the corporation for which the Participant performs Service
ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s
Service has terminated and the effective date of such termination.

 

(ee) “Stock”
means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2.

 

(ff) “Stock
Appreciation Right” means a right to surrender to the Company all or a portion of an Option in exchange for an amount
equal to the excess, if any, of: (i) the Fair Market Value as of the date such Option or portion thereof is surrendered of the
Stock issuable on exercise of such Option or portion thereof over (ii) the exercise price of such Option or portion thereof relating
to such stock.

 

(gg) “Subsidiary
Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section
424(f) of the Code.

 

(hh) “Ten
Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning
of Section 422(b)(6) of the Code.

 

    	-4-

    	 

    

 

2.2 Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
Where a Stock Appreciation Right has been granted in conjunction with an Option, the term “Option” shall include the
related Stock Appreciation Right where the context permits.

 

3. Administration.

 

3.1 Administration
by the Board. The Plan shall be administered by the Board. All questions of interpretation of the Plan or of any Award shall
be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan
or such Award.

 

3.2 Authority
of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has
apparent authority with respect to such matter, right, obligation, determination or election.

 

3.3 Powers
of the Board. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Board shall
have the full and final power and authority, in its discretion:

 

(a) to
determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock to be
subject to each Award;

 

(b) to
designate Options as Incentive Stock Options or Nonstatutory Stock Options;

 

(c) to
determine the Fair Market Value of shares of Stock or other property;

 

(d) to
determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired
upon the exercise thereof, including, without limitation, (i) the exercise price of the Award, (ii) the method of payment for
shares purchased upon the exercise of the Award, (iii) the method for satisfaction of any tax withholding obligation arising in
connection with the Award, including by the withholding or delivery of shares of stock, (iv) the timing, terms and conditions
of the exercisability of the Award or the vesting of any shares acquired upon the exercise thereof, (v) the time of the expiration
of the Award, (vi) the effect of the Participant’s termination of Service with the Participating Company Group on any of
the foregoing, and (vii) all other terms, conditions and restrictions applicable to the Award or such shares not inconsistent
with the terms of the Plan;

 

(e) to
approve one or more forms of Award Agreement;

 

(f) to
amend, modify, extend, cancel, or renew any outstanding Award or to waive any restrictions or conditions applicable to any outstanding
Award or any shares acquired upon the exercise thereof;

 

(g) to
accelerate, continue, extend or defer the exercisability of any Award or the vesting of any shares acquired upon the exercise
thereof, including with respect to the period following a Participant’s termination of Service with the Participating Company
Group;

 

(h) to
prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions
of, the Plan, including, without limitation, as the Board deems necessary or desirable to comply with the laws of, or to accommodate
the tax policy or custom of, foreign jurisdictions whose citizens may be granted Awards; and

 

(i) to
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other
determinations and take such other actions with respect to the Plan or any Award as the Board may deem advisable to the extent
not inconsistent with the provisions of the Plan or applicable law.

 

    	-5-

    	 

    

 

3.4 Administration
with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that any class of equity security
of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the
requirements, if any, of Rule 16b-3.

 

3.5 Indemnification.
In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the Participating
Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act
for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’
fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with
any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection
with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60)
days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.

 

4. Shares
Subject to Plan.

 

4.1 Maximum
Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock
that may be issued under the Plan shall be seven million two hundred thousand (7,200,000). This share reserve shall consist of
authorized but unissued or reacquired shares of Stock or any combination thereof. If an outstanding Award for any reason expires,
is forfeited, or is terminated or canceled or if shares of Stock are acquired upon the exercise of an Award subject to a Company
repurchase option and are repurchased by the Company at the Participant’s exercise price, the shares of Stock allocable
to the unexercised portion of such Award or repurchased, forfeited or cancelled shares of Stock shall again be available for issuance
under the Plan. However, except as adjusted pursuant to Section 4.2, in no event shall more than seven million two hundred thousand
(7,200,000) shares of Stock be available for issuance pursuant to the exercise of Incentive Stock Options (the “ISO
Share Issuance Limit”).

 

4.2 Adjustments
for Changes in Capital Structure. In the event of any dividend or other distribution (whether in the form of cash, shares
of Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares of Stock or other securities of the Company, or other change
in the corporate structure of the Company affecting the shares of Stock, appropriate adjustments shall be made in the number and
class of shares subject to the Plan and to any outstanding Awards, in the ISO Share Issuance Limit set forth in Section 4.1, and
in the exercise price per share of any outstanding Awards. If a majority of the shares which are of the same class as the shares
that are subject to outstanding Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership
Change Event, as defined in Section 11.1) shares of another corporation (the “New Shares”), the Board
may unilaterally amend the outstanding Awards to provide that such Awards are exercisable for New Shares. In the event of any
such amendment, the number of shares subject to, and the exercise price per share of, the outstanding Awards shall be adjusted
in a fair and equitable manner as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share
resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may
the exercise price of any Award be decreased to an amount less than the par value, if any, of the stock subject to the Award.
The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive.

 

5. Eligibility
and Award Limitations.

 

5.1
Persons Eligible for Awards. Awards may be granted only to Employees, Consultants, and Directors. Eligible persons may
be granted more than one (1) Award. However, eligibility in accordance with this Section shall not entitle any person to be granted
an Award, or, having been granted an Award, to be granted an additional Award.

 

    	-6-

    	 

    

 

5.2 Option
Grant Restrictions. Any person who is not an Employee on the effective date of the grant of an Option to such person may be
granted only a Nonstatutory Stock Option.

 

5.3 Fair
Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock option
plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during any
calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portions of such
options which exceed such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section 5.3, options designated
as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock
shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different
limitation from that set forth in this Section 5.3, such different limitation shall be deemed incorporated herein effective as
of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as
an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section
5.3, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation,
the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.

 

6. Terms
and Conditions of Options.

 

Options
shall be evidenced by Option Agreements specifying the number of shares of Stock covered thereby, in such form as the Board shall
from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced
by a fully executed Option Agreement. Option Agreements may incorporate all or any of the terms of the Plan by reference and shall
comply with and be subject to the following terms and conditions:

 

6.1 Exercise
Price. The exercise price for each Option shall be established in the discretion of the Board; provided, however, that (a)
the exercise price per share for an Incentive Stock Option shall be not less than the Fair Market Value of a share of Stock on
the effective date of grant of the Option, (b) the exercise price per share for a Nonstatutory Stock Option shall be not less
than one hundred percent (100%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option, and
(c) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten
percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the
foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price
lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 424(a) of the Code.

 

6.2 Exercisability
and Term of Options. Options shall be exercisable at such time or times, or upon such event or events, and subject to such
terms, conditions, performance criteria and restrictions as shall be determined by the Board and set forth in the Option Agreement
evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10) years after
the effective date of grant of such Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable
after the expiration of five (5) years after the effective date of grant of such Option. Subject to the foregoing, unless otherwise
specified by the Board in the grant of an Option, any Option granted hereunder shall terminate ten (10) years after the effective
date of grant of the Option, unless earlier terminated in accordance with its provisions.

 

6.3 Payment
of Exercise Price.

 

(a) Forms
of Consideration Authorized. Except as otherwise provided below, payment of the exercise price for the number of shares
of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the
Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not less than
the exercise price, (iii) by delivery of a properly executed notice together with irrevocable instructions to a broker providing
for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon
the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve System) (a “Cashless Exercise”),
(iv) by such other consideration as may be approved by the Board from time to time to the extent permitted by applicable law,
or (v) by any combination thereof. The Board may at any time or from time to time, by approval of or by amendment to the standard
forms of Option Agreement described in Section 10, or by other means, grant Options which do not permit all of the foregoing forms
of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration.

 

    	-7-

    	 

    

 

(b) Limitations
on Forms of Consideration.

 

(i) Tender
of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to the ownership,
of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation
or agreement restricting the redemption of the Company’s stock. Unless otherwise provided by the Board, an Option may not
be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been
owned by the Participant for more than six (6) months (and not used for another Option exercise by attestation during such period)
or were not acquired, directly or indirectly, from the Company.

 

(ii) Cashless
Exercise. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish,
decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise.

 

(iii) Payment
by Promissory Note. No promissory note shall be permitted if the exercise of an Option using a promissory note would be a
violation of any law. Any permitted promissory note shall be on such terms as the Board shall determine. The Board shall have
the authority to permit or require the Participant to secure any promissory note used to exercise an Option with the shares of
Stock acquired upon the exercise of the Option or with other collateral acceptable to the Company. Unless otherwise provided by
the Board, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal Reserve
System or any other governmental entity affecting the extension of credit in connection with the Company’s securities, any
promissory note shall comply with such applicable regulations, and the Participant shall pay the unpaid principal and accrued
interest, if any, to the extent necessary to comply with such applicable regulations.

 

6.4 Repurchase
Rights. Shares issued under the Plan may be subject to a right of first refusal, one or more repurchase options, or other
conditions and restrictions as determined by the Board in its discretion at the time the Option is granted. The Company shall
have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or
more persons as may be selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and
all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends
evidencing any such transfer restrictions.

 

6.5 Effect
of Termination of Service.

 

(a) Option
Exercisability. Subject to earlier termination of the Option as otherwise provided herein and unless otherwise provided
by the Board in the grant of an Option and set forth in the Option Agreement, an Option shall be exercisable after a Participant’s
termination of Service only during the applicable time period determined in accordance with this Section 6.6 and thereafter shall
terminate:

 

(i) Disability.
If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised
and exercisable on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s
guardian or legal representative) at any time prior to the expiration of twelve (12) months (or such longer period of time as
determined by the Board, in its discretion) after the date on which the Participant’s Service terminated, but in any event
no later than the date of expiration of the Option’s term as set forth in the Option Agreement evidencing such Option (the
“Option Expiration Date”).

 

    	-8-

    	 

    

 

(ii) Death.
If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and
exercisable on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal
representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any
time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion)
after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.
The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3)
months (or such longer period of time as determined by the Board, in its discretion) after the Participant’s termination
of Service.

 

(iii) Other
Termination of Service. If the Participant’s Service terminates for any reason, except Disability or death, the Option,
to the extent unexercised and exercisable by the Participant on the date on which the Participant’s Service terminated,
may be exercised by the Participant at any time prior to the expiration of three (3) months (or such longer period of time as
determined by the Board, in its discretion) after the date on which the Participant’s Service terminated, but in any event
no later than the Option Expiration Date.

 

(b) Extension
if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of an Option within the applicable time periods
set forth in Section 6.6(a) is prevented by the provisions of Section 11 below, the Option shall remain exercisable until three
(3) months (or such longer period of time as determined by the Board, in its discretion) after the date the Participant is notified
by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.

 

(c) Extension
if Participant Subject to Section 16(b). Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 6.6(a) of shares acquired upon the exercise of the Option would subject the Participant to suit under Section
16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Participant would no longer be subject to such suit, (ii) the one hundred and ninetieth
(190th) day after the Participant’s termination of Service, or (iii) the Option Expiration Date.

 

(d) Extension
during Blackout Period. Notwithstanding the foregoing, if there is in effect during the applicable time periods set forth
in Section 6.6(a) a Company-imposed trading blackout to which the Participant is subject (including a Participant that is an Insider)
and provided that neither Section 6.6(b) nor Section 6.6(c) is applicable to the circumstances at hand, the Option shall remain
exercisable until the earlier of (i) the end of the tenth business day following the end of the trading blackout or (ii) the Option
Expiration Date.

 

6.6 Transferability
of Options. During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s
guardian or legal representative. No Option shall be assignable or transferable by the Participant, except by will or by the laws
of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Board, in its discretion, and set forth
in the Option Agreement evidencing such Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities
Act.

 

7. Terms
and Conditions of Stock Appreciation Rights.

 

7.1 Grant
of Stock Appreciation Rights. The Committee may, from time to time, grant Stock Appreciation Rights to any Participant in
connection with the grant of any Option. Any such grant of Stock Appreciation Rights shall be included in the Option Agreement.

 

7.2 Specific
Terms of Stock Appreciation Rights. Stock Appreciation Rights shall be exercisable only at the same time, by the same person
and to the same extent, that the Option related thereto is exercisable. Upon exercise of any Stock Appreciation Right, the corresponding
portion of the related Option shall be surrendered to the Company.

 

7.3 Exercise
of Stock Appreciation Rights. The Company has the absolute right, at any time and from time to time, to require a Participant
to exercise an Option in lieu of the related Stock Appreciation Right.

 

    	-9-

    	 

    

 

8. Terms
and Conditions of Restricted Stock.

 

8.1 Grant
of Restricted Stock. Subject to the terms and provisions of the Plan, the Board, at any time and from time to time, may grant
Shares of Restricted Stock to Employees, Consultants or Directors in such amounts as the Board, in its sole discretion, will determine.

 

8.2 Restricted
Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of
Restriction, the number of shares of Restricted Stock granted, and such other terms and conditions as the Board, in its sole
discretion, will determine. Unless the Board determines otherwise, the Company as escrow agent will hold shares of Restricted
Stock until the restrictions on such shares of Restricted Stock have lapsed.

 

8.3 Transferability.
Except as provided in this Section 8 or the Award Agreement, shares of Restricted Stock may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

 

8.4 Other
Restrictions. The Board, in its sole discretion, may impose such other restrictions on shares of Restricted Stock as it may
deem advisable or appropriate.

 

8.5 Removal
of Restrictions. Except as otherwise provided in this Section 8, shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction
or at such other time as the Board may determine. The Board, in its discretion, may accelerate the time at which any restrictions
will lapse or be removed.

 

8.6 Voting
Rights. During the Period of Restriction, Participants holding shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those shares of Restricted Stock, unless the Board determines otherwise.

 

8.7 Dividends
and Other Distributions. During the Period of Restriction, Participants holding shares of Restricted Stock will be entitled
to receive all dividends and other distributions paid with respect to such shares of Restricted Stock, unless the Board provides
otherwise. If any such dividends or distributions are paid in shares of Stock, the shares of Stock will be subject to the same
restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid.

 

8.8 Return
of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions
have not lapsed will revert to the Company and again will become available for grant under the Plan.

 

9. Terms
and Conditions of Restricted Stock Units.

 

9.1 Grant.
Restricted Stock Units may be granted at any time and from time to time as determined by the Board. After the Board determines
that it will grant Restricted Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions,
and restrictions related to the grant, including the number of Restricted Stock Units.

 

9.2 Vesting
Criteria and Other Terms. The Board will set vesting criteria in its discretion, which, depending on the extent to which the
criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Board may
set vesting criteria based upon the achievement of Performance Goals, Company-wide, business unit, or individual goals (including,
but not limited to, continued employment), or any other basis determined by the Board in its discretion.

 

9.3 Earning
Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout
as determined by the Board. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Board, in
its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

 

    	-10-

    	 

    

 

9.4 Form
and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined
by the Board and set forth in the Award Agreement. The Board, in its sole discretion, may only settle earned Restricted Stock
Units in cash, shares of Stock, or a combination of both.

 

9.5 Cancellation.
On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

 

10. Standard
Forms of Award Agreement.

 

10.1 Award
Agreement. Unless otherwise provided by the Board at the time the Award is granted, an Award shall comply with and be subject
to the terms and conditions set forth in the form of Award Agreement approved by the Board concurrently with its adoption of the
Plan and as amended from time to time.

 

10.2 Authority
to Vary Terms. The Board shall have the authority from time to time to vary the terms of any standard form of Award Agreement
described in this Section 10 either in connection with the grant or amendment of an individual Award or in connection with the
authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended
standard form or forms of Award Agreement are not inconsistent with the terms of the Plan.

 

11. Change
in Control.

 

11.1 Definitions.

 

(a) An
“Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect
to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders
of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.

 

(b) A
“Change in Control” shall mean an Ownership Change Event or a series of related Ownership Change Events
(collectively, a “Transaction”) wherein the stockholders of the Company immediately before the Transaction
do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s
voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the
total combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in
Section 11.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the “Transferee”),
as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an
interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business
entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company
or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.

 

11.2 Effect
of Change in Control on Awards. In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation
or other business entity or parent thereof, as the case may be (the “Acquiring Corporation”), may, without
the consent of the Participant, either assume the Company’s rights and obligations under outstanding Awards or substitute
for outstanding Awards substantially equivalent awards for the Acquiring Corporation’s stock. In the event that the Acquiring
Corporation does not assume or substitute for the outstanding Awards, the Participant will fully vest in and have the right to
exercise all of his or her outstanding Awards, including shares of Stock as to which such Awards would not otherwise be vested
or exercisable. Any Awards which are neither assumed or substituted for by the Acquiring Corporation in connection with the Change
in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the
date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Award prior to the Change in
Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject
to all applicable provisions of the Award Agreement evidencing such Award except as otherwise provided in such Award Agreement.
Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Awards immediately
prior to an Ownership Change Event described in Section 11.1(a)(i) constituting a Change in Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power
of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the
meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the outstanding Awards
shall not terminate unless the Board otherwise provides in its discretion. Additionally, and notwithstanding anything in this
Section 11.2 to the contrary, if a Participant’s Service is terminated by reason of an Involuntary Termination within eighteen
(18) months following the effective date of a Change in Control in which the Acquiring Corporation assumes or substitutes for
outstanding Awards, the shares of Stock subject to such Participant’s outstanding Awards will automatically accelerate and
vest in full as of the Participant’s termination of Service, including shares of Stock as to which such Awards would not
otherwise be vested or exercisable. Any Award so accelerated shall remain exercisable until the Award’s expiration or, if
earlier, the termination of the Award, as provided in the Participant’s Award Agreement.

 

    	-11-

    	 

    

 

12. Tax
Withholding.

 

The
Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable pursuant to an Award, or to
accept from the Participant the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the
Company, equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the
Participating Company Group with respect to such Award or the shares acquired pursuant thereto. Alternatively or in addition,
in its discretion, the Company shall have the right to require the Participant, through payroll withholding, cash payment or otherwise,
including by means of a Cashless Exercise (as applicable), to make adequate provision for any such tax withholding obligations
of the Participating Company Group arising in connection with the Award or the shares acquired pursuant thereto. The Fair Market
Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount
determined by the applicable minimum statutory withholding rates. The Company shall have no obligation to deliver shares of Stock
or to release shares of Stock from an escrow established pursuant to the Award Agreement until the Participating Company Group’s
tax withholding obligations have been satisfied by the Participant.

 

13. Compliance
With Code Section 409A.

 

Awards
will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements
of Code Section 409A, except as otherwise determined in the sole discretion of the Board. The Plan and each Award Agreement under
the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted in accordance with such
intent, except as otherwise determined in the sole discretion of the Board. To the extent that an Award or payment, or the settlement
or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will
meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional
tax or interest applicable under Code Section 409A.

 

14. No
Effect on Employment or Service.

 

Neither
the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s Service with
the Participating Company Group, nor will they interfere in any way with the Participant’s right or the right of any Participating
Company to terminate such Service at any time, with or without cause, to the extent permitted by applicable law.

 

15. Compliance
with Securities Law.

 

The
grant of Awards and the issuance of shares of Stock upon exercise of Awards shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities. Awards may not be exercised if the issuance of
shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition,
no Award may be exercised unless (a) a registration statement under the Securities Act shall at the time of exercise of the Award
be in effect with respect to the shares issuable upon exercise of the Award or (b) in the opinion of legal counsel to the Company,
the shares issuable upon exercise of the Award may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares
hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of any Award, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation
and to make any representation or warranty with respect thereto as may be requested by the Company.

 

    	-12-

    	 

    

 

16. Termination
or Amendment of Plan.

 

Without
the approval of the Company’s stockholders, the Board may terminate or amend the Plan at any time. However, subject to changes
in applicable law, regulations or rules that would permit otherwise, without the approval of the Company’s stockholders,
there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by
operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options,
(c) no extension of the term of an Award granted to an Insider, other than as provided for in Section 6.6(d), (d) no reduction
in the exercise price of an Award granted to an Insider, other than in connection with adjustments for changes in the Company’s
capital structure as permitted pursuant to Section 4.2 and (e) no other amendment of the Plan that would require approval of the
Company’s stockholders under any applicable law, regulation or rule. No termination or amendment of the Plan shall adversely
affect any then outstanding Award unless expressly agreed to by the affected Participant or required by applicable law, legislation
or rule. In any event, no termination or amendment of the Plan may adversely affect any then outstanding Award without the consent
of the Participant, unless such termination or amendment is required to enable an Award designated as an Incentive Stock Option
to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule.

 

17. Stockholder
Approval.

 

The
Plan or any increase in the maximum aggregate number of shares of Stock issuable thereunder as provided in Section 4.1 (the “Authorized
Shares”) shall be approved by the stockholders of the Company within twelve (12) months of the date of adoption
thereof by the Board. Awards granted prior to stockholder approval of the Plan or in excess of the Authorized Shares previously
approved by the stockholders shall become exercisable no earlier than the date of stockholder approval of the Plan or such increase
in the Authorized Shares, as the case may be.

 

    	-13-

    	 

    

 

PLAN
HISTORY

 

	June
    2002	 	Board
    of Directors of OccuLogix Corporation, a Florida corporation (“OccuLogix”) adopts Plan, with an initial reserve
    of Two Million Six Hundred Seventy-Eight Thousand Nine Hundred and Ninety-Seven (2,678,997) shares. This share reserve includes
    the number of shares of stock underlying outstanding options and the number of shares available for grant as options under
    the OccuLogix Corporation 1997 Stock Option Plan. However, this share reserve, at any time, shall be reduced by the number
    of shares subject to Prior Plan Options.
	 	 	 
	June
    2002	 	Stockholders
    of OccuLogix approve Plan, with an initial reserve of Two Million Six Hundred Seventy-Eight Thousand Nine Hundred and Ninety-Seven
    (2,678,997) shares. This share reserve includes the number of shares of stock underlying outstanding options and the number
    of shares available for grant as options under the OccuLogix Corporation 1997 Stock Option Plan. However, this share reserve,
    at any time, shall be reduced by the number of shares subject to Prior Plan Options.
	 	 	 
	June
    2002	 	Effective
    date of Delaware reincorporation of OccuLogix.
	 	 	 
	December
    2004	 	Board
    of Directors of OccuLogix, Inc. amends Plan to increase the share reserve to 4,456,000.
	 	 	 
	April
    2007	 	Board
    of Directors of OccuLogix, Inc. resolves to submit to the stockholders of OccuLogix, Inc., for their authorization at the
    2007 Annual Meeting, a proposal to increase the share reserve under the Plan by 2,000,000, from 4,456,000 to 6,456,000.
	 	 	 
	June
    2007	 	Stockholders
    of OccuLogix, Inc. approve the proposal to increase the share reserve under the Plan by 2,000,000, from 4,456,000 to 6,456,000.
	 	 	 
	May
    2008	 	Board
    of Directors of OccuLogix, Inc. resolves to submit to the stockholders of OccuLogix, Inc., for their authorization at the
    2008 Annual and Special Meeting, a proposal to increase the share reserve under the Plan by 53,544,000, from 6,456,000 to
    60,000,000.
	 	 	 
	September
    2008	 	Stockholders
    of OccuLogix, Inc. approve the proposal to increase the share reserve under the Plan by 53,544,000, from 6,456,000 to 60,000,000.
	 	 	 
	October
    2008	 	OccuLogix,
    Inc. effects a 1:25 reverse stock split, as a result of which every 25 issued and outstanding shares of common stock were
    combined into one share (and any fractional share was converted into a whole share) and the share reserve under the Plan was
    decreased to 2,400,000.
	 	 	 
	December
    2009	 	Board
    of Directors of OccuLogix, Inc. resolves to submit to the stockholders of OccuLogix, Inc., for their authorization at the
    2010 Annual Meeting, a proposal to increase the share reserve under the Plan by 800,000, from 2,400,000 to 3,200,000.
	 	 	 
	May
    2010	 	Board
    of Directors of OccuLogix, Inc. approves the amendment of the Plan to provide for full vesting acceleration of all outstanding
    stock options in the event of a change in control in which the acquiring corporation does not assume or substitute for outstanding
    stock options under the Plan; and (ii) full vesting acceleration of all outstanding stock options held by an optionee in the
    event the optionee’s service with OccuLogix (or its successor) is involuntarily terminated within 18 months following
    a change in control in which the acquiring corporation assumes or substitutes for outstanding stock options under the Plan.
	 	 	 
	June
    2010	 	Stockholders
    of TearLab Corporation (formerly OccuLogix, Inc.) approve the proposal to increase the share reserve under the Plan by 800,000,
    from 2,400,000 to 3,200,000.

 

    	 

    	 

    

 

	April
    2012	 	Board
    of Directors of TearLab Corporation approve the amendment of the Plan to provide for (i) an increase in the share reserve
    under the Plan by 1,000,000 from 3,200,000 to 4,200,000 and (ii) ability to grant Restricted Stock and Restricted Stock Units.
	 	 	 
	June
    2012	 	Stockholders
    of TearLab Corporation approve the amendment of the Plan to provide for (i) an increase in the share reserve under the Plan
    by 1,000,000 from 3,200,000 to 4,200,000 and (ii) ability to grant Restricted Stock and Restricted Stock Units.
	 	 	 
	March
    2013	 	Board
    of Directors of TearLab Corporation approve the amendment of the Plan to provide for an increase in the share reserve under
    the Plan by 1,000,000 from 4,200,000 to 5,200,000.
	 	 	 
	June
    2013	 	Stockholders
    of TearLab Corporation approve the amendment of the Plan to provide for an increase in the share reserve under the Plan by
    1,000,000 from 4,200,000 to 5,200,000.
	 	 	 
	February
    2014	 	Board
    of Directors of TearLab Corporation approve the amendment of the Plan to provide for an increase in the share reserve under
    the Plan by 1,000,000 from 5,200,000 to 6,200,000, to remove prospective service providers from the list of individuals eligible
    to participate in the Plan, to remove the limits on the number of awards that may be granted to an employee in a fiscal year,
    and to make certain other amendments to update the Plan.
	 	 	 
	June
    2014	 	Stockholders
    of TearLab Corporation approve the amendment of the Plan to provide for an increase in the share reserve under the Plan by
    1,000,000 from 5,200,000 to 6,200,000, to remove prospective service providers from the list of individuals eligible to participate
    in the Plan, to remove the limits on the number of awards that may be granted to an employee in a fiscal year, and to make
    certain other amendments to update the Plan.
	 	 	 
	February
    2015	 	Board
    of Directors of TearLab Corporation approve the amendment of the Plan to provide for an increase in the share reserve under
    the Plan by 1,000,000 from 6,200,000 to 7,200,000 and to eliminate the ability of the Board to re-price options without stockholder
    approval.
	 	 	 
	June
    2015	 	Stockholders
    of TearLab Corporation approve the amendment of the Plan to provide for an increase in the share reserve under the Plan by
    1,000,000 from 6,200,000 to 7,200,000 and to eliminate the ability of the Board to re-price options without stockholder approval.

 

    	-2-

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