Document:

AMENDING
AGREEMENT

This
Amending Agreement (this “Agreement”) is dated effective as of the 25th day of January, 2016.

AMONG:

EPIC
STORES, LLC, having an address at 20805 North 19th Avenue, Phoenix, Arizona, USA 85027

(the
“Subsidiary”)

AND:

EPIC
STORE FUNDING CORP., having an address at 1250, 639 – 5th Avenue SW, Calgary, AB T2P 0M9

(the
“Investor”)

AND:

EPIC
STORES CORP., having an address at 20805 North 19th Avenue, Phoenix, Arizona, USA 85027

(the
“Parent”)

WHEREAS:

The
Subsidiary and the Investor are parties to a note purchase agreement dated April 16, 2015 (the “Purchase Agreement”),
pursuant to which the Subsidiary issued the Investor a convertible promissory note dated April 16, 2015 (the “Note”)
in the principal amount of $200,000, which was to be repaid by the Subsidiary to the Investor on or before June 30, 2015 (the
“Maturity Date”);

Under
the terms of the Purchase Agreement, the Subsidiary and the Investor agreed that they would use their commercially reasonable
efforts to agree upon the price and other terms of securities of the Subsidiary into which the Investor may, at its option, convert
the then outstanding principal and interest of the Note (the “Conversion Terms”) and, in the event that they
were unable to so agree on or prior to the Maturity Date, the Subsidiary would pay the Investor, in addition to any other amounts
due and owing under the Note, a break-up fee in an amount equal to $50,000 (the “Break-Up Fee”);

Effective
June 24, 2015, the Subsidiary was acquired by the Parent;

    	 	1	 

    	 	 	 

    

Notwithstanding
that the Subsidiary and the Investor were unable to agree on the Conversion Terms prior to the Maturity Date, to date, the Subsidiary
has not paid the Break-Up Fee, nor all of the interest or principal amount owing under the Note, to the Investor; and

The
Investor has agreed to extend the Maturity Date and the date for payment of the Break-Up Fee in consideration for the issuance
by the Parent to the Investor of warrants (each, a “Warrant”) to acquire shares of common stock in the capital
of the Parent, in accordance with the Section 3 of this Agreement, and the reimbursement of legal fees incurred by Investor;

THIS
AGREEMENT WITNESSES that, in consideration of the respective covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subsidiary, the Investor and the Parent
(each, a “Party” and, together, the “Parties”) agree as follows:

1.     
The Parties agree that:

(a)  
the definition of “Maturity Date” on page 1 of the Note is hereby amended from “June 30, 2015” to “December
31, 2015”, and any reference to “Maturity Date” or “June 30, 2015” in the Note is hereby replaced
with a reference to “December 31, 2015”. 

(b)  
Section 1.4.4 of the Purchase Agreement is hereby deleted and replaced in its entirety with the following: “On or prior
to January 20, 2016, the Company shall pay the Lender as a break-up fee an amount equal to $50,000 (the “Break-Up Fee”),
plus interest thereon in the amount of $6,500.46. In the event such amount is not paid on or prior to January 20, 2016,
then such amount shall accrue interest at a rate of 23% per annum, compounded monthly, on and after January 21, 2016, until the
date of payment of all such amounts in full.” 

(c)   
Each of (i) the Break-Up Fee plus an amount equal to $6,500.46 for all accrued but unpaid interest thereon through January 20,
2016, (ii) all accrued but unpaid principal of the Note equal to $200,000 plus all accrued but unpaid interest on the Note equal
to $10,434.10 through January 20, 2016, and (iii) the legal fees in the amount of $16,075 incurred by the Investor related to
the Note, the Purchase Agreement, and this Agreement, will each be paid to the Investor by the Parent or the Subsidiary on or
prior to January 20, 2016 (the “Payment Amounts”), and notwithstanding the foregoing, if the Payment Amounts
have not been received by the Investor on or prior to January 20, 2016, the Borrower will (iii) on January 21, 2016, wire to the
Investor $10,000 as partial payment first, of all accrued but unpaid interest on the Break-Up Fee, and second, in partial payment
of the unpaid amount of the Break-Up Fee, and (iv) as soon as possible after January 21, 2016, wire to the Investor the balance
of the Payment Amounts.

(d) 
If all of the Payment Amounts have not been received by the Investor on or prior to February 2, 2016, an additional payment of
$25,000 in immediately available funds (the “Additional Payment”) shall be due and payable on February 2, 2016,
by the Subsidiary to the Investor to an account designated by the Investor. If the Additional Payment is not so received by Investor
on or prior to February 2, 2016, interest on the Additional Amount at the rate of 23% per annum, compounded monthly, shall, beginning
on February 2, 2016, accrue and be payable by Subsidiary to Investor with respect to the Additional Payment until the date of
payment in full of the Additional Payment and any accrued but unpaid interest thereon.

    	 	2	 

    	 	 	 

    

2.     
Except as amended hereby, the terms of the Purchase Agreement and the Note continue in full force and effect. For greater certainty,
the Subsidiary and the Investor agree that all other rights and remedies of the Investor as provided for in the Purchase Agreement
and the Note are retained by the Investor. The amendment to the Note is a modification only and not a novation and all principal
and interest due and payable, as evidenced by the Note, shall continue to be due and payable until paid.

3.     
In consideration of the foregoing, the Parent agrees that, after receipt of a duly completed and executed questionnaire in the
form attached as Schedule “A” hereto (the “Questionnaire”) from the Investor and after receipt
by the Investor of the payment in full of all of the Payment Amounts and all accrued but unpaid interest thereon and all of the
Additional Payment and all accrued but unpaid interest thereon, the Parent will issue to the Investor, pursuant to the terms of
the Warrant Certificate, substantially in the form attached hereto as Schedule B:

(a)  
145,000 Warrants; and

(b)  
1,000 Warrants for each day commencing on and including January 9, 2016, until all of the Payment Amounts and all accrued but
unpaid interest thereon, and the Additional Payment and all accrued but unpaid interest thereon, have been received, in full,
by the Investor.

Each
Warrant issued pursuant to this Section 3 will be exercisable into one share of common stock of the Parent at a price of $1.02
per share until the date that is two years from the respective date of issuance.

4.     
The Investor acknowledges and agrees that:

(a)  
none of the Warrants, nor the shares of common stock of the Parent as may be issuable on exercise of the Warrants (together with
the Warrants, the “Securities”), have been or will be registered under the Securities Act or under any securities
or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the
United States or, directly or indirectly, to any U.S. Person (as defined in Section 6), except in accordance with the provisions
of Regulation S under the Securities Act (“Regulation S”), pursuant to an effective registration statement
under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements
of the Securities Act, and in each case only in accordance with any other applicable state, provincial and foreign securities
laws; 

    	 	3	 

    	 	 	 

    

(b)  
the Parent has not undertaken, and will have no obligation, to register any of the Securities under the Securities Act or any
other applicable securities laws;

(c)   
the Parent will refuse to register the transfer of any of the Securities into the United States, or to, or for the account or
benefit of, a U.S. Person not made pursuant to Regulation S, an effective registration statement under the Securities Act or pursuant
to an available exemption from the registration requirements of the Securities Act and in each case in accordance with applicable
state or local securities laws;

(d) 
the decision to execute this Agreement and to acquire the Securities has not been based upon any oral or written representation
as to fact or otherwise made by or on behalf of the Parent and such decision is based entirely upon a review of any public information
which has been filed by the Parent with the United States Securities and Exchange Commission (the “SEC”) (collectively,
the “Public Record”);

(e)  
the Parent and others will rely upon the truth and accuracy of the acknowledgements, representations, warranties, covenants and
agreements of the Investor contained in this Agreement and the Questionnaire, and agrees that if any of such acknowledgements,
representations and agreements are no longer accurate or have been breached, the Investor will promptly notify the Parent;

(f)    
there are risks associated with the acquisition of the Securities, as more fully described in the Parent’s periodic disclosure
forming part of the Public Record;

(g)  
the Investor and the Investor’s advisor(s) have had a reasonable opportunity to ask questions of, and receive answers from,
the Parent in connection with the distribution of the Securities hereunder, and to obtain additional information, to the extent
possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the
Parent;

(h)  
the books and records of the Parent were available upon reasonable notice for inspection, subject to certain confidentiality restrictions,
by the Investor during reasonable business hours at its principal place of business, and all documents, records and books in connection
with the distribution of the Securities hereunder have been made available for inspection by the Investor, its legal counsel and/or
its advisor(s);

(i)    
all of the information which the Investor has provided to the Parent is correct and complete and if there should be any change
in such information prior to the issuance of the Securities, the Investor will immediately notify the Parent, in writing, of the
details of any such change;

    	 	4	 

    	 	 	 

    

(j)    
the Investor has been advised to consult the Investor’s own legal, tax and other advisors with respect to the merits and
risks of the acquisition of the Warrants or an investment in the Securities and with respect to applicable resale restrictions,
and it is solely responsible (and the Parent is not in any way responsible) for compliance with:

(i)    
any applicable laws of the jurisdiction in which the Investor is resident in connection with the distribution of the Securities
hereunder, and

(ii) 
applicable resale restrictions; 

(k)  
there may be material tax consequences to the Investor of an acquisition or disposition of the Securities and the Parent gives
no opinion and makes no representation with respect to the tax consequences to the Investor under federal, state, provincial,
local or foreign tax laws with respect to the Investor’s acquisition or disposition of the Securities;

(l)    
no documents in connection with the issuance of the Securities have been reviewed by the SEC or any other securities regulators;

(m)
   neither the SEC nor any other securities commission or similar regulatory authority in any other jurisdiction has reviewed or
passed on the merits of any of the Securities;

(n)  
there is no government or other insurance covering any of the Securities; and

(o)  
the Securities are “restricted securities” as such term is defined under Rule 144 of the Securities Act and will be
subject to a hold period in relation to offers and sales of the Securities thereunder, which may be an indefinite period of time,
and it agrees that if it decides to offer, sell, pledge or otherwise transfer, directly or indirectly, any such securities absent
such registration, it will not offer, sell, pledge or otherwise transfer, directly or indirectly, any of such securities, except:

(i)    
to the Parent,

(ii)   
outside the United States in an “offshore transaction” in compliance with the requirements of Rule 904 of Regulation
S under the Securities Act, if available, and in compliance with applicable local laws and regulations; 

(iii)    in compliance with the exemption from registration under the Securities Act provided by Rule 144 thereunder, if available, and
in accordance with any applicable state securities laws, or

(iv)   in
a transaction that does not require registration under the Securities Act or any applicable state securities laws, and

    	 	5	 

    	 	 	 

    

(v)  
in the case of subparagraph (iii) or (iv), it has furnished to the Parent an opinion of counsel of recognized standing in form
and substance satisfactory to the Parent to such effect.

5.     
The Investor hereby represents and warrants to the Parent (which representations and warranties will survive the execution of
this Agreement) that:

(a)  
the Investor is not in the United States, is not a U.S. Person, is not acquiring the Warrants for the account or benefit of a
U.S. Person, did not receive the offer to acquire the Warrants while in the United States and it (or its authorized signatory)
was outside of the United States at the time its buy order was placed and this Agreement was executed;

(b)  
the Investor: (i) has adequate net worth and means of providing for its current financial needs and possible personal contingences,
(ii) has no need for liquidity in this investment, (iii) has such knowledge and experience in business matters as to be capable
of evaluating the merits and risks of its prospective investment in the Securities, and (iv) is able to bear the economic risks
of an investment in the Securities for an indefinite period of time;

(c)   
the Investor has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant
hereto, is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation, and all necessary approvals
by its directors, shareholders and others have been obtained to authorize execution and performance of this Agreement on behalf
of the Investor;

(d) 
the Investor is not an underwriter of, or dealer in, any of the Securities, nor is the Investor participating, pursuant to a contractual
agreement or otherwise, in the distribution of the Securities;

(e)  
the Investor is acquiring the Warrants for its own account for investment purposes only and not for the account of any other person
and not for distribution, assignment or resale to others, and no other person has a direct or indirect beneficial interest in
such Warrants, and the Investor has not subdivided its interest in any of the Warrants with any other person;

(f)    
the Investor is not aware of any advertisement of any of the Warrants and is not acquiring the Warrants as a result of any form
of general solicitation or general advertising, including advertisements, articles, notices or other communications published
in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising; 

(g)  
no person has made to the Investor any written or oral representations:

    	 	6	 

    	 	 	 

    

(i)    
that any person will resell or repurchase any of the Securities,

(ii) 
  that any person will refund the purchase price of any of the Securities, or

(iii)  as to the future price or value of any of the Securities;

(h)  
offers and sales of any of the Securities prior to the expiration of the period specified in Regulation S (such period hereinafter
referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor
provisions set forth in Regulation S, pursuant to the registration provisions of the Securities Act or an exemption therefrom,
and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration
provisions of the Securities Act or an exemption therefrom and in each case only in accordance with applicable state and provincial
securities laws; 

(i)    
it has not acquired the Securities as a result of, and will not itself engage in, any “directed selling efforts” (as
defined in Regulation S under the Securities Act) in the United States in respect of any of the Securities which would include
any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market
in the United States for the resale of any of the Securities; provided, however, that the Investor may sell or otherwise dispose
of any of the Warrants pursuant to registration of any of the Securities pursuant to the Securities Act and any applicable securities
laws or under an exemption from such registration requirements and as otherwise provided herein; 

(j)    
hedging transactions involving the Securities may not be conducted unless such transactions are in compliance with the provisions
of the Securities Act and in each case only in accordance with applicable securities laws;

(k)  
the Investor is knowledgeable of, or has been independently advised as to, the applicable laws of the securities regulators having
application in the jurisdiction in which the Investor is resident (the “International Jurisdiction”) which
would apply to the offer and sale of the Warrants;

(l)    
the Investor is acquiring the Warrants pursuant to exemptions from prospectus or equivalent requirements under applicable laws
or, if such is not applicable, the Investor is permitted to acquire the Warrants under the applicable laws of the securities regulators
in the International Jurisdiction without the need to rely on any exemptions;

(m)   the
applicable laws of the authorities in the International Jurisdiction do not require the Parent to make any filings or seek any
approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection
with the offer, issue, sale or resale of any of the Warrants;

(n)  
the acquisition of the Warrants by the Investor does not trigger:

    	 	7	 

    	 	 	 

    

(i)    
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such acquisition in the
International Jurisdiction, or

(ii) 
any continuous disclosure reporting obligation of the Parent in the International Jurisdiction, and

(iii)   the Investor will, if requested by the Parent, deliver to the Parent, at the cost of the Parent, a certificate or opinion of local
counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (l), (m) and (n) above
to the satisfaction of the Parent, acting reasonably.

6.     
In this Agreement, the term “U.S. Person” has the meaning ascribed thereto in Regulation S, and for the
purpose of this Agreement includes, but is not limited to: (a) any person in the United States; (b) any natural person resident
in the United States; (c) any partnership or corporation organized or incorporated under the laws of the United States; (d) any
partnership or corporation organized outside the United States by a U.S. Person principally for the purpose of investing in securities
not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors who are not
natural persons, estates or trusts; or (e) any estate or trust of which any executor or administrator or trustee is a U.S. Person.

7.     
The Investor acknowledges and agrees that the representations and warranties contained in this Agreement are made by it with the
intention that such representations and warranties may be relied upon by the Parent and the Parent’s legal counsel in determining
the Investor’s eligibility to acquire the Warrants under applicable laws, or, if applicable, the eligibility of others on
whose behalf the Investor is contracting hereunder to acquire the Securities under applicable laws. The Investor further agrees
that, by accepting delivery of the certificates representing any of the Securities, it will be representing and warranting that
the representations and warranties contained herein are true and correct as at the date of such acceptance, with the same force
and effect as if they had been made by the Investor on the such date and that they will survive the acquisition by the Investor
of the Securities and will continue in full force and effect notwithstanding any subsequent disposition by the Investor of such
Securities. 

8.     
All dollar amounts in this Agreement are in lawful currency of the United States of America.

9.     
Each Party agrees that this Agreement cannot be revoked or amended without the prior written consent of each of the other Parties.

10. 
Each Party agrees that it shall, upon reasonable request of any other Party, undertake any and all such acts and execute such
additional documents, including any documents required to amend the Purchase Agreement or the Note, as may be necessary or appropriate
to give full force and effect to the provisions and intent of this Agreement. 

11. 
This Agreement is governed by the laws of the State of Nevada and the federal laws of the United States applicable therein, and
each Party agrees to the exclusive jurisdiction of the courts of the State of Nevada.

[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

    	 	8	 

    	 	 	 

    

12. 
This Agreement has been executed by the Parties effective as of the date first above written. This Agreement may be executed in
counterparts and delivered by email or other electronic transmission, and shall be deemed effective and original for all purposes.

IN
WITNESS WHEREOF, the Parties have executed this Amending Agreement as of the date first written above.

EPIC
STORES, LLC

By:
/s/ Brian Davidson

Print
Name: Brian Davidson

EPIC
STORES FUNDING CORP.

By:
/s/ Mark O’Donogue

Print
Name: Mark O’Donogue

EPIC
STORES CORP.

By:
/s/ Brian Davidson

Print
Name: Brian Davidson

    	 	9	 

    	 	 	 

    

SCHEDULE
“A”

CANADIAN
INVESTOR QUESTIONNAIRE

TO:EPIC
STORES CORP. (the “Issuer”)

RE:Acquisition
of warrants (the “Warrants”) of the Issuer

Capitalized
terms used in this Canadian Investor Questionnaire (this “Questionnaire”) and not specifically defined have
the meaning ascribed to them in the Amending Agreement among the Investor, Epic Stores, LLC and the Issuer to which this Schedule
“A” is attached.

In
connection with the acquisition by the Investor (being the undersigned, or if the undersigned is acquiring the Warrants as agent
on behalf of a disclosed beneficial Investor, such beneficial Investor, will be referred herein as the “Investor”)
of the Warrants, the Investor hereby represents, warrants and certifies to the Issuer that the Investor:

		(i)	is
                                         acquiring the Warrants as principal (or deemed principal under the terms of National
                                         Instrument 45-106 – Prospectus Exemptions adopted by the Canadian Securities
                                         Administrators (“NI 45-106”));

		(ii)	is
                                         resident in or is subject to the laws of one of the following (check one):

	☐
    Alberta	☐
    New Brunswick	☐
    Prince Edward Island
	☐
    British Columbia	☐
    Nova Scotia	☐
    Quebec
	☐
    Manitoba	☐
    Ontario	☐
    Saskatchewan
	☐
    Newfoundland and Labrador	☐
    Yukon
	
    ☐ Northwest Territories

		(iii)	and
                                         has not been provided with any offering memorandum in connection with the acquisition
                                         of the Warrants.

    	 	10	 

    	 	 	 

    

In
connection with the acquisition of the Warrants, the Investor hereby represents, warrants, covenants and certifies that the Investor
meets one or more of the following criteria:

	(a)    
     	the
    Investor is not a trust company or trust company registered under the laws of Prince Edward Island that is not registered
    or authorized under the Trust and Loan Companies Act (Canada) or under comparable legislation in another jurisdiction
    of Canada, and
	(b)    
     	the
    Investor is an “accredited investor” within the meaning of NI 45-106, by virtue of satisfying the indicated criterion
    below (YOU MUST INITIAL OR PLACE A CHECK-MARK ON THE APPROPRIATE LINE(S)) (see certain guidance with respect to
    accredited investors that starts on page 21 below)
	1.                  
     	☐	(i)     
     	except
    in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer,
	2.                  
     	☐	(ii)   
     	an
    individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred
    to in paragraph (ix),
	3.                  
     	☐	(iii) 
     	an
    individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly
    registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario)
    or the Securities Act (Newfoundland and Labrador),
	4.                  
     	☐	(iv)  
     	an
    individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that,
    before taxes but net of any related liabilities, exceeds $1,000,000,
	5.                  
     	☐	(v)    
     	an
    individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related
    liabilities, exceeds $5,000,000,
	6.                  
     	☐	(vi)  
     	an
    individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income
    before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either
    case, reasonably expects to exceed that net income level in the current calendar year,
	7.                  
     	☐	(vii)
     	an
    individual who, either alone or with a spouse, has net assets of at least $5,000,000,
	8.                  
     	☐	(viii)          
     	a
    person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently
    prepared financial statements and that has not been created or used solely to acquire or hold securities as an accredited
    investor as defined in this paragraph (viii),
	9.                  
     	☐	(ix)  
     	an
                                         investment fund that distributes or has distributed its securities only to

        (i)a
        person that is or was an accredited investor at the time of the distribution,

        (ii)a
        person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum amount investment]
        of NI 45-106, or 2.19 [Additional investment in investment funds] of NI 45-106, or

        (iii)a
        person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund
        reinvestment] of NI 45-106,

	10.               
     	☐	(x)    
     	an
    investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the
    regulator or, in Québec, the securities regulatory authority, has issued a receipt,
	11.               
     	☐	(xi)  
     	a
    trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act
    (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a
    fully managed account managed by the trust company or trust corporation, as the case may be,
	12.               
     	☐	(xii)
     	a
    person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry
    on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction,
	13.               
     	☐	(xiii)          
     	a
    registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility
    adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice
    on the securities being traded,
	14.               
     	☐	(xiv)          
     	an
    entity organized in a foreign jurisdiction that is analogous to the entity referred to in paragraph (i) in form and function,
    or
	15.               
     	☐	(xv)
     	a
    person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required
    by law to be owned by directors, are persons that are accredited investors,

    	 	11	 

    	 	 	 

    

For
the purposes of the Questionnaire:

(a)“control
person” means

		(i)	a
                                         person who holds a sufficient number of the voting rights attached to all outstanding
                                         voting securities of an issuer to affect materially the control of the issuer, or

		(ii)	each
                                         person in a combination of persons, acting in concert by virtue of an agreement, arrangement,
                                         commitment or understanding, which holds in total a sufficient number of the voting rights
                                         attached to all outstanding voting securities of an issuer to affect materially the control
                                         of the issuer,

and,
if a person or combination of persons holds more than 20% of the voting rights attached to all outstanding voting securities of
an issuer, the person or combination of persons is deemed, in the absence of evidence to the contrary, to hold a sufficient number
of the voting rights to affect materially the control of the issuer;

(b)“director”
means

		(i)	a
                                         member of the board of directors of a company or an individual who performs similar functions
                                         for a company, and

		(ii)	with
                                         respect to a person that is not a company, an individual who performs functions similar
                                         to those of a director of a company;

		(c)	“eligibility
                                         adviser” means a person that is registered as an investment dealer and authorized
                                         to give advice with respect to the type of security being distributed;

(d)“financial
assets” means

		(i)	cash,

		(ii)	securities,
                                         or

		(iii)	a
                                         contract of insurance, a deposit or an evidence of a deposit that is not a security for
                                         the purposes of securities legislation;

		(e)	“foreign
                                         jurisdiction” means a country other than Canada or a political subdivision
                                         of a country other than Canada;

		(f)	“fully
                                         managed account” means an account of a client for which a person makes the
                                         investment decisions if that person has full discretion to trade in securities for the
                                         account without requiring the client’s express consent to a transaction;

    	 	12	 

    	 	 	 

    
		(g)	“individual”
                                         means a natural person, but does not include

		(i)	a
                                         partnership, unincorporated association, unincorporated syndicate, unincorporated organization
                                         or trust, or

		(ii)	a
                                         natural person in the person's capacity as a trustee, executor, administrator or personal
                                         or other legal representative;

		(h)	“investment
                                         fund” means a mutual fund or a non-redeemable investment fund, and, for great
                                         certainty in British Columbia, includes an employee venture capital corporation and a
                                         venture capital corporation as such terms are defined in National Instrument 81-106 Investment
                                         Fund Continuous Disclosure;

		(i)	“jurisdiction”
                                         or “jurisdiction of Canada” means a province or territory of Canada except
                                         when used in the term foreign jurisdiction;

		(j)	“non-redeemable
                                         investment fund” means an issuer:

(i)whose
primary purpose is to invest money provided by its securityholders;

(ii)that
does not invest

		(A)	for
                                         the purpose of exercising or seeking to exercise control of an issuer, other than an
                                         issuer that is a mutual fund or a non-redeemable investment fund, or

		(B)	for
                                         the purpose of being actively involved in the management of any issuer in which it invests,
                                         other than an issuer that is a mutual fund or a non-redeemable investment fund, and

(iii)that
is not a mutual fund;

(k)“person”
includes

		(i)	an
                                         individual;

		(ii)	a
                                         corporation;

		(iii)	a
                                         partnership, trust, fund and an association, syndicate, organization or other organized
                                         group of persons, whether incorporated or not; and

		(iv)	an
                                         individual or other person in that person’s capacity as a trustee, executor, administrator
                                         or personal or other legal representative;

(l)“related
liabilities” means

		(i)	liabilities
                                         incurred or assumed for the purpose of financing the acquisition or ownership of financial
                                         assets, or

		(ii)	liabilities
                                         that are secured by financial assets; and

(mp)“spouse”
means, an individual who,

		(i)	is
                                         married to another individual and is not living separate and apart within the meaning
                                         of the Divorce Act (Canada), from the other individual,

		(ii)	is
                                         living with another individual in a marriage-like relationship, including a marriage-like
                                         relationship between individuals of the same gender, or

		(iii)	in
                                         Alberta, is an individual referred to in paragraph (i) or (ii), or is an adult interdependent
                                         partner within the meaning of the Adult Interdependent Relationships Act (Alberta).

    	 	13	 

    	 	 	 

    

Guidance
On Accredited Investor Exemptions for Individuals

An
individual accredited investor is an individual:

		(a)	who,
                                         either alone or with a spouse, beneficially owns financial assets (please see the guidance
                                         below regarding what financial assets are) having an aggregate realizable value that.
                                         before taxes but net of any related liabilities (please see the guidance below regarding
                                         what related liabilities are), exceeds $1,000,000;

		(b)	whose
                                         net income before taxes exceeded $200,000 in each of the 2 most recent calendar years
                                         or whose net income before taxes combined with that of a spouse exceeded $300,000 in
                                         each of the 2 most recent calendar years and who, in either case, reasonably expects
                                         to exceed that net income level in the current calendar year;

		(c)	who,
                                         either alone or with a spouse, has net assets (please see the guidance below regarding
                                         calculating net assets) of at least $5,000,000; and

		(d)	who
                                         beneficially owns financial assets (please see the guidance below regarding what financial
                                         assets are) having an aggregate realizable value that, before taxes but net of any related
                                         liabilities (please see the guidance below regarding what related liabilities are), exceeds
                                         $5,000,000.

The
monetary thresholds above are intended to create bright-line standards. Investors who do not satisfy these monetary thresholds
do not qualify as accredited investors.

Spouses

Sections
(a), (b) and (c) above are designed to treat spouses as a single investing unit, so that either spouse qualifies as an accredited
investor if the combined financial assets of both spouses exceed $1,000,000, the combined net income of both spouses exceeds $300,000,
or the combined net assets of both spouses exceed $5,000,000. Section (d) above does not treat spouses as a single investing unit.

If
the combined net income of both spouses does not exceed $300,000, but the net income of one of the spouses exceeds $200,000, only
the spouse whose net income exceeds $200,000 qualifies as an accredited investor.

Financial
Assets and Related Liabilities

For
the purposes of Sections (a) and (d) above, “financial assets” means: (1) cash, (2) securities, or (3) a contract
of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation. These financial
assets are generally liquid or relatively easy to liquidate. The value of a Investor’s personal residence is not included
in a calculation of financial assets.

The
calculation of financial assets must exclude “related liabilities”, meaning: (1) liabilities incurred or assumed
for the purpose of financing the acquisition or ownership of financial assets, or (2) liabilities that are secured by financial
assets.

As
a general matter, it should not be difficult to determine whether financial assets are beneficially owned by an individual, an
individual’s spouse, or both, in any particular instance. However, in the case where financial assets are held in a trust
or in another type of investment vehicle for the benefit of an individual, there may be questions as to whether the individual
beneficially owns the financial assets. The following factors are indicative of beneficial ownership of financial assets:

    	 	14	 

    	 	 	 

    

·        
physical or constructive possession of evidence of ownership of the financial asset; 

·        
entitlement to receipt of any income generated by the financial asset; 

·        
risk of loss of the value of the financial asset; and 

·        
the ability to dispose of the financial asset or otherwise deal with it as the individual sees fit.

For
example, securities held in a self-directed RRSP for the sole benefit of an individual are beneficially owned by that individual.

In
general, financial assets in a spousal RRSP can be included for the purposes of the $1,000,000 financial asset test in Section
(a) above because Section (a) takes into account financial assets owned beneficially by a spouse. However, financial assets in
a spousal RRSP cannot be included for purposes of the $5,000,000 financial asset test in Section (d) above.

Financial
assets held in a group RRSP under which the individual does not have the ability to acquire the financial assets and deal with
them directly do not meet the beneficial ownership requirements in either Sections (a) or (d) above.

Net
Assets 

For
the purposes of Section (c) above, “net assets” means all of an Investor’s total assets minus all of
the Investor’s total liabilities. Accordingly, for the purposes of the net asset test, the calculation of total assets includes
the value of an Investor’s personal residence, and the calculation of total liabilities includes the amount of any liability
(such as a mortgage) in respect of the Investor’s personal residence.

To
calculate an Investor’s net assets under the net asset test, subtract the Investor’s total liabilities from the Investor’s
total assets. The value attributed to assets should reasonably reflect their estimated fair value. Income tax is considered a
liability if the obligation to pay it is outstanding at the time of the distribution of the security to the Investor by the Company.

Guidance
On Accredited Investor Exemptions for Corporations, Trusts and Other Entities

Accredited
investors that are corporations, trusts or other entities include:

		(a)	a
                                         corporation, trust or other entity, other than an investment fund, that has net assets
                                         (please see the guidance below regarding calculating net assets) of at least $5,000,000
                                         as shown on its most recently prepared financial statements in accordance with applicable
                                         generally accepted accounting principles and that has not been created or used solely
                                         to purchase or hold securities as an accredited investor;

		(b)	a
                                         corporation, trust or other entity in respect of which all of the owners of interests,
                                         direct, indirect or beneficial, except the voting securities required by law to be owned
                                         by directors, are persons that are accredited investors; and

		(c)	a
                                         trust established by an accredited investor for the benefit of the accredited investor’s
                                         family members of which a majority of the trustees are accredited investors and all of
                                         the beneficiaries are the accredited investor’s spouse, a former spouse of the
                                         accredited investor or a parent, grandparent, brother, sister, child or grandchild of
                                         that accredited investor, of that accredited investor’s spouse or of that accredited
                                         investor’s former spouse.

    	 	15	 

    	 	 	 

    

Net
Assets 

For
the purposes of Section (a) above, “net assets” means all of the Investor’s total assets minus all of
the Investor’s total liabilities. The minimum net asset threshold of $5,000,000 specified in Section (a) above must be shown
on the entity’s most recently prepared financial statements. The financial statements must be prepared in accordance with
applicable generally accepted accounting principles.

The
Investor agrees that the above representations and warranties will be true and correct both as of the execution of this Questionnaire
and as of the date of issuance of the Warrants and acknowledges that they will survive the completion of the issue of the Warrants.

The
Investor acknowledges that the foregoing representations and warranties are made by the Investor with the intent that they be
relied upon in determining the suitability of the Investor to acquire the Warrants and that this Questionnaire is incorporated
into and forms part of the Agreement and the undersigned undertakes to immediately notify the Issuer of any change in any statement
or other information relating to the Investor set forth herein which takes place prior to the date of issuance of the Warrants.

The
Investor undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Investor
set forth in the Agreement or in this Questionnaire which takes place prior to the issuance of the Warrants.

By
completing this Questionnaire, the Investor authorizes the indirect collection of this information by each applicable regulatory
authority or regulator and acknowledges that such information will be made available to the public under applicable laws. 

DATED
as of _______ day of __________________, 2015.

EPIC
STORE FUNDING CORP.

Print Name of Investor (or person signing as agent of
the Investor)

By:____________________

Signature

_______________________

Print Name and Title of Authorized

Signatory (if Investor is not an individual)

 

 

    	 	16	 

    	 	 	 

    

SCHEDULE
“B”

THE
SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT IN THE UNITED STATES OR U.S.
PERSONS (AS DEFINED HEREIN) AND ARE NOT PURCHASING FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS PURSUANT TO REGULATION S UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). 

NONE
OF THE SECURITIES REPRESENTED HEREBY, AND NONE OF THE SECURITIES INTO WHICH SUCH SECURITIES ARE CONVERTIBLE, HAVE BEEN REGISTERED
UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED HEREIN)
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE U.S. STATE AND FOREIGN SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES AND THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT.

WARRANT
CERTIFICATE

EPIC
STORES CORP.

THESE
WARRANTS WILL EXPIRE AND BECOME NULL AND VOID AT THE TIME OF EXPIRY (AS DEFINED HEREIN).

	Warrant
    Certificate No.:  	Number
    of Warrants:  

This
is to certify that, for value received, EPIC STORES FUNDING CORP., of 20805 North 19th Avenue, #2, Phoenix, AZ 85027
(the “Holder”), is the registered holder of [NUMBER] ()
share purchase warrants (each, a “Warrant”) of EPIC STORES CORP. (the “Issuer”).
Each Warrant will entitle the Holder, upon and subject to the terms and conditions attached to this certificate or any replacement
certificate (in either case the “Warrant Certificate”) as Appendix “A” (the “Terms
and Conditions”), to acquire from the Issuer one fully paid and non-assessable share of common stock in the capital
of the Issuer (each, a “Warrant Share”) at a price of $1.02 per Share at any time prior to 5:00 p.m. (Pacific
time) on , 2018 (the “Time of Expiry”).

The
Warrants are issued subject to the Terms and Conditions, and the Holder may exercise the right to purchase Warrant Shares only
in accordance with the Terms and Conditions.

Nothing
contained herein or in the Terms and Conditions will confer any right upon the Holder or any other Person (as defined in the Terms
and Conditions) to subscribe for or purchase any Warrant Shares at any time subsequent to the Time of Expiry, and from and after
the Time of Expiry the Warrants and all rights under this Warrant Certificate will be void and of no value.

IN
WITNESS WHEREOF the Issuer has caused this Warrant Certificate to be executed this ________ day of __________________, 2016.

EPIC
STORES CORP.

Per: __________________

Authorized Signatory

    	 	17	 

    	 	 	 

    

APPENDIX
“A”

TERMS
AND CONDITIONS

1.Interpretation

1.1Definitions

In
these Terms and Conditions, unless there is something in the subject matter or context inconsistent therewith:

		(a)	“Aggregate
                                         Exercise Price" means an amount equal to the product of (a) the number
                                         of Warrant Shares in respect of which Warrants are then being exercised pursuant to Section
                                         4 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date
                                         in accordance with the terms hereof;

		(b)	“Business
                                         Day” means any day except Saturday, Sunday and any day which is a federal legal
                                         holiday in the United States or a day on which banking institutions in the State of Nevada
                                         are authorized or required by law or other government action to close;

		(c)	“Exercise
                                         Price” means $1.02 per Warrant Share, subject to adjustment as provided in
                                         Section 4.6;

		(d)	“Exercise
                                         Date” has the meaning given to such term in Section 4.2(a);

		(e)	“Fair
                                         Market Value” means, as of any particular date: (i) the volume weighted
                                         average of the closing sales prices of the Warrant Shares for such day on all domestic
                                         securities exchanges on which the Warrant Shares may at the time be listed; (ii) if there
                                         have been no sales of the Warrant Shares on any such exchange on any such day, the average
                                         of the highest bid and lowest asked prices for the Warrant Shares on all such exchanges
                                         at the end of such day; (iii) if on any such day the Warrant Shares is not listed on
                                         a domestic securities exchange, the closing sales price of the Warrant Shares as quoted
                                         on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association
                                         for such day; or (iv) if there have been no sales of the Warrant Shares on the OTC Bulletin
                                         Board, the Pink OTC Markets or similar quotation system or association on such day, the
                                         average of the highest bid and lowest asked prices for the Warrant Shares quoted on the
                                         OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at
                                         the end of such day; in each case, averaged over twenty (20) consecutive Business Days
                                         ending on the Business Day immediately prior to the day as of which "Fair Market
                                         Value" is being determined; provided, that if the Warrant Shares is listed
                                         on any domestic securities exchange, the term "Business Day" as used in this
                                         sentence means Business Days on which such exchange is open for trading. If at any time
                                         the Warrant Shares is not listed on any domestic securities exchange or quoted on the
                                         OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association,
                                         the "Fair Market Value" of the Warrant Shares shall be the fair market value
                                         per share as determined jointly by the Issuer’s Board of Directors and the Holder;

		(f)	“Holder”
                                         means the holder of the Warrants;

		(g)	“Issue
                                         Date” means __________, 2016;

    	 	18	 

    	 	 	 

    
		(h)	“Issuer”
                                         means Epic Stores Corp., until a successor corporation will have become such as a result
                                         of a Reorganization, and, thereafter, “Issuer” will mean such successor corporation;

		(i)	“Person”
                                         means any individual, sole proprietorship, limited or unlimited liability corporation,
                                         partnership, unincorporated association, unincorporated syndicate, unincorporated organization,
                                         body corporate, joint venture, trust, pension fund, union, governmental authority, and
                                         a natural person including in such person’s capacity as trustee, heir, beneficiary,
                                         executor, administrator or other legal representative;

		(j)	“Reorganization”
                                         has the meaning given to such term in Section 4.6(a)(ii);

		(k)	“Shares”
                                         means the shares of common stock in the capital of the Issuer as constituted at the date
                                         hereof and any Shares resulting from any subdivision or consolidation of the Shares;

		(l)	“Subscription
                                         Form” has the meaning given to such term in Section 4.1(a);

		(m)	“Time
                                         of Expiry” means 5:00 p.m. (Pacific Time) on , 2018;

		(n)	“Warrant
                                         Certificate” means the Warrant Certificate attached to these Terms and Conditions;

		(o)	“Warrants”
                                         means the share purchase warrants of the Issuer represented by the Warrant Certificate;
                                         and

		(p)	“Warrant
                                         Shares” means the Shares issuable upon exercise of the Warrants.

1.2Gender

Words
importing the singular number include the plural and vice versa, and words importing the masculine gender include the feminine
and neuter genders.

1.3Interpretation
not affected by Headings

The
division of these Terms and Conditions into sections and the insertion of headings are for convenience of reference only and will
not affect the construction or interpretation thereof.

1.4Applicable
Law

The
Warrant Certificate and these Terms and Conditions will be exclusively construed in accordance with the laws of the State of Nevada.
The Warrant Certificate and these Terms and Conditions are governed by the laws of the State of Nevada and the federal laws of
the United States applicable therein.

1.5Currency

Unless
otherwise provided, all dollar amounts referred to in the Warrant Certificate and these Terms and Conditions are in lawful money
of the United States of America.

    	 	19	 

    	 	 	 

    

2.Issue
of Warrants

2.1Additional
Warrants

The
Issuer may at any time and from time to time issue additional warrants or grant options or similar rights to purchase Shares.

2.2Warrants
to Rank Pari Passu

All
Warrants and additional warrants, options or similar rights to purchase Shares from time to time issued or granted by the Issuer
will rank pari passu, whatever may be the actual dates of issue or grant thereof, or of the dates of the certificates by
which they are evidenced.

2.3Replacement
of Lost or Damaged Warrant Certificate

		(a)	If
                                         the Warrant Certificate becomes mutilated, lost, destroyed or stolen, the Issuer, at
                                         its discretion, may issue and deliver a new Warrant Certificate of like date and tenor
                                         as the one mutilated, lost, destroyed or stolen, in exchange for, in place of, and upon
                                         cancellation of, such mutilated Warrant Certificate, or in lieu of, and in substitution
                                         for, such lost, destroyed or stolen Warrant Certificate.

		(b)	The
                                         applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost
                                         of such issue and, in case of loss, destruction or theft, will furnish to the Issuer
                                         such evidence of ownership and of loss, destruction or theft of the Warrant Certificate
                                         so lost, destroyed or stolen as will be satisfactory to the Issuer in its discretion.
                                         Such applicant may also be required to furnish indemnity in amount and form satisfactory
                                         to the Issuer in its discretion, and will pay the reasonable charges of the Issuer in
                                         connection therewith.

2.4Holder
Not a Shareholder

The
holding of the Warrant Certificate will not constitute the Holder a shareholder of the Issuer, nor entitle it to any right or
interest in respect thereof except as expressly provided in the Warrant Certificate.

3.Notice

3.1Notice
to Holder

Any
notice required or permitted to be given to the Holder will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of the Holder
appearing on the Warrant Certificate or to such other address as the Holder may specify by notice in writing to the Issuer to
the address set forth in Section 3.2, and any such notice will be deemed to have been given and received by the Holder: (a) if
mailed, on the third Business Day following the mailing thereof; (b) if by facsimile or other electronic communication, on successful
transmission; or (c) if delivered, on delivery, but if at the time of mailing, or between the time of mailing and the third Business
Day thereafter, there is a strike, lockout or other labour disturbance affecting postal service, then the notice will not be effectively
given until actually delivered.

    	 	20	 

    	 	 	 

    

3.2Notice
to the Issuer

Any
notice required or permitted to be given to the Issuer will be in writing and may be given by personal delivery, overnight courier,
prepaid registered post, email or other means of electronic communication capable of producing a printed copy to the address of
the Issuer set forth below or such other address as the Issuer may specify by notice in writing to the Holder to the address of
the Holder appearing on the Warrant Certificate, and any such notice will be deemed to have been given and received by the Issuer:
(a) if mailed, on the third Business Day following the mailing thereof; (b) if by email or other electronic communication, on
successful transmission; or (c) if delivered, on delivery, but if at the time of mailing, or between the time of mailing and the
third Business Day thereafter, there is a strike, lockout or other labour disturbance affecting postal service, then the notice
will not be effectively given until actually delivered.

Notices
to the Issuer will be delivered to:

Epic
Stores Corp.

20805 North 19th Avenue

Phoenix, Arizona, USA 85027

Attn:President

Email:brian@riggscompanies.com

4.Exercise
of Warrants

4.1Method
of Exercise of Warrants

The
Holder may exercise its right to purchase all or any part of the Warrant Shares at the Exercise Price at any time and from time
to time until the Time of Expiry by:

		(a)	delivering
                                         the Issuer at the address set forth in Section 3.2 the Warrant Certificate and a completed
                                         and executed subscription form, in the form attached as Appendix “B” hereto
                                         (the “Subscription Form”), for the number of Warrant Shares which
                                         the Holder wishes to purchase; and

		(b)	paying
                                         the appropriate Exercise Price for the number of Warrant Shares subscribed for, either
                                         by

		(i)	bank
                                         draft, certified cheque or money order, payable to the Issuer, and delivering such payment
                                         to the Issuer at the address set forth in Section 3.2, or by wire transfer to such account
                                         as may be provided by the Issuer to the Holder upon request;

		(ii)	by
                                         instructing the Issuer to withhold a number of Warrant Shares then issuable upon exercise
                                         of this Warrant with an aggregate Fair Market Value as of the Exercise Date equal to
                                         such Aggregate Exercise Price;

		(iii)	by
                                         surrendering to the Issuer (x) Warrant Shares previously acquired by the Holder with
                                         an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise
                                         Price and/or (y) other securities of the Issuer having a value as of the Exercise Date
                                         equal to the Aggregate Exercise Price, which value in the case of debt securities shall
                                         be the principal amount thereof plus accrued and unpaid interest; or

    	 	21	 

    	 	 	 

    
		(iv)	any
                                         combination of the foregoing.

In
the event of any withholding of Warrant Shares or surrender of other equity securities pursuant to clause (ii), (iii) or (iv)
above where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares
withheld by or surrendered to the Issuer shall be rounded up to the nearest whole share and the Issuer shall make a cash payment
to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on
the incremental fraction of a share being so withheld by or surrendered to the Issuer in an amount equal to the product of (x)
such incremental fraction of a share being so withheld or surrendered multiplied by (y) in the case of Warrant Shares, the Fair
Market Value per Warrant Share as of the Exercise Date, and, in all other cases, the value thereof as of the Exercise Date determined
in accordance with clause (iii)(y) above.

4.2Effect
of Exercise of Warrants

		(a)	On
                                         the third Business Day following the date the Issuer receives a duly executed Subscription
                                         Form and the Exercise Price for the number of Warrant Shares specified in the Subscription
                                         Form (the “Exercise Date”), the Warrant Shares so subscribed for will
                                         be deemed to have been issued and the Person(s) to whom such Warrant Shares have been
                                         deemed to be issued will be deemed to have become the holder (or holders) of record of
                                         such Warrant Shares on such date.

		(b)	As
                                         promptly as practicable after the Exercise Date and, in any event, within five (5) Business
                                         Days of the Exercise Date, the Issuer will cause to be delivered to the Person in whose
                                         name the Warrant Shares so subscribed for are to be registered as specified in the Subscription
                                         Form, and courier to such Person at its respective address specified in the Subscription
                                         Form, a certificate for the appropriate number of fully paid and non-assessable Warrant
                                         Shares, which will not exceed that number which the Holder is entitled to purchase pursuant
                                         to the Warrant Certificate surrendered.

4.3Subscription
for Less than Entitlement

The
Holder may subscribe for and purchase a number of Warrant Shares less than the number which the Holder is entitled to purchase
pursuant to the surrendered Warrant Certificate. In the event of any purchase of a number of Warrant Shares less than the number
which can be purchased pursuant to the Warrant Certificate, the Holder, upon exercise thereof, will be entitled to receive a new
Warrant Certificate in respect of the balance of the Warrant Shares which the Holder was entitled to purchase pursuant to the
surrendered Warrant Certificate and which were not then purchased.

4.4Warrants
for Fractions of Warrant Shares

If,
on exercise or partial exercise of any Warrant, the Holder is entitled to receive a fraction of a Warrant Share, such Warrant
may be exercised in respect of such fraction only in combination with another Warrant or Warrants which, in the aggregate, entitle
the Holder to receive a whole Warrant Share. As to any fraction of a Warrant Share that the Holder would otherwise be entitled
to purchase upon such exercise, the Issuer shall pay to such Holder an amount in cash (by delivery of a certified or official
bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the
Fair Market Value of one Warrant Share on the Exercise Date.

    	 	22	 

    	 	 	 

    

4.5Expiration
of Warrants

The
Holder agrees that, after the Time of Expiry, unless a Subscription Form has been delivered to the Issuer, all rights under the
Warrant Certificate and these Terms and Conditions will wholly cease and terminate and the Warrants will be void and of no further
force and effect.

4.6Adjustment
of Exercise Price

		(a)	The
                                         Exercise Price and the number of Warrant Shares deliverable upon the exercise of the
                                         Warrants will be subject to adjustment in the event of and in the manner following:

		(i)	if
                                         and whenever the Shares at any time outstanding are subdivided into a greater, or consolidated
                                         into a lesser, number of Shares, the Exercise Price will be decreased or increased proportionately
                                         as the case may be. Upon any such subdivision or consolidation, the number of Warrant
                                         Shares deliverable upon the exercise of the Warrants will be increased or decreased proportionately
                                         as the case may be; and

		(ii)	in
                                         the case of any capital reorganization or of any reclassification of the capital of the
                                         Issuer, or in the case of the consolidation, merger or amalgamation, or similar transaction
                                         of the Issuer with or into any other company (in any case, a “Reorganization”),
                                         each Warrant will, after such Reorganization, be deemed to confer the right to purchase
                                         the number of Warrant Shares or other securities of the Issuer (or of the company resulting
                                         from such Reorganization) which the Holder would have been entitled to upon the Reorganization
                                         if the Holder had been a shareholder of the Issuer at the time of such Reorganization.

		(b)	In
                                         the case of any Reorganization, appropriate adjustments will be made in the application
                                         of the provisions of this Section 4.6 relating to the rights and interest thereafter
                                         of the Holder so that the provisions of this Section 4.6 will be made applicable as nearly
                                         as reasonably possible to any Warrant Shares or other securities deliverable after the
                                         Reorganization on the exercise of the Warrants.

		(c)	The
                                         subdivision or consolidation of Shares at any time outstanding into a greater or lesser
                                         number of Shares (whether with or without par value) will not be deemed to be a Reorganization
                                         for the purposes of this Section 4.6.

		(d)	The
                                         adjustments provided for in this Section 4.6 are cumulative and will become effective
                                         immediately after the applicable record date or, if no record date is fixed, the effective
                                         date of the event which results in such adjustments.

4.7Determination
of Adjustments

If
any questions will at any time arise with respect to the Exercise Price or any adjustment provided for in Section 4.6, such
questions will be conclusively determined by the independent firm of accountants duly appointed as auditors of the Issuer, or,
if they decline to so act, by any other firm of certified public accountants registered with the Public Company Accounting Oversight
Board that the Issuer and Holder may agree upon and who will have access to all appropriate records, and such determination will
be binding upon the Issuer and the Holder.

    	 	23	 

    	 	 	 

    

5.Modification
of Terms and Conditions for Certain Purposes

From
time to time, the Issuer may, subject to the provisions herein and subject to the prior written consent of the Holder, modify
the Terms and Conditions for the purpose of correction or rectification of any ambiguities, defective provisions, errors or omissions.

6.Time
of Essence

Time
will be of the essence hereof.

7.Successors

This
Warrant Certificate will inure to the benefit of, and will be binding upon, the Issuer and its successors.

8.WARRANT
TRANSFER

Subject
to the transfer conditions referred to in the legend endorsed hereon, this Warrant Certificate, the Warrants represented hereby
and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of
this Warrant Certificate to the Issuer at its then principal executive officers. Upon such compliance and surrender the Issuer
shall execute and deliver a new Warrant Certificate or Warrant Certificates in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant Certificate evidencing
the number of Warrants, if any, not so assigned and this Warrant Certificate shall promptly be cancelled.

9.Valid
issuance of warrant and warrant shares; payment of taxes

With
respect to the exercise of any Warrants pursuant to this Warrant Certificate, the Issuer hereby represents, covenants and agrees:

		(a)	Each
                                         Warrant is, and any Warrant issued in substitution for or replacement of any Warrant
                                         represented hereby, shall be, upon issuance, duly authorized and validly issued.

		(b)	All
                                         Warrant Shares issuable upon the exercise of the Warrants pursuant to the terms hereof
                                         shall be, upon issuance, and the Issuer shall take all such actions as may be necessary
                                         or appropriate in order that such Warrant Shares are, validly issued, fully paid and
                                         non-assessable, issued without violation of any preemptive or similar rights of any stockholder
                                         of the Issuer and free and clear of all taxes, liens and charges. During the Exercise
                                         Period, the Issuer shall at all times reserve and keep available out of its authorized
                                         but unissued Shares or other securities constituting Warrant Shares, solely for the purpose
                                         of issuance upon the exercise of the Warrants, the maximum number of Warrant Shares issuable
                                         upon the exercise of the Warrants, and the par value per Warrant Share shall at all times
                                         be less than or equal to the applicable Exercise Price. The Issuer shall not increase
                                         the par value of any Warrant Shares receivable upon the exercise of this Warrant above
                                         the Exercise Price then in effect, and shall take all such actions as may be necessary
                                         or appropriate in order that the Issuer may validly and legally issue fully paid and
                                         nonassessable shares of stock upon the exercise of any Warrants hereunder.

		(c)	The
                                         Issuer shall take all such actions as may be necessary to ensure that all such Warrant
                                         Shares are issued without violation by the Issuer of any applicable law or governmental
                                         regulation or any requirements of any domestic securities exchange upon which Shares
                                         or other securities constituting Warrant Shares may be listed at the time of such exercise
                                         (except for official notice of issuance which shall be immediately delivered by the Issuer
                                         upon each such issuance).

		(d)	The
                                         Issuer shall pay all expenses in connection with, and all taxes and other governmental
                                         charges that may be imposed with respect to, the issuance or delivery of Warrant Shares
                                         upon exercise of any Warrants hereunder; provided, that the Issuer shall not be
                                         required to pay any tax or governmental charge that may be imposed with respect to any
                                         applicable withholding or the issuance or delivery of the Warrant Shares to any Person
                                         other than the Holder, and no such issuance or delivery shall be made unless and until
                                         the Person requesting such issuance has paid to the Issuer the amount of any such tax,
                                         or has established to the satisfaction of the Issuer that such tax has been paid.

    	 	24	 

    	 	 	 

    

APPENDIX
B

SUBSCRIPTION
FORM

TO:Epic
Stores Corp. (the “Issuer”)

20805 North 19th Avenue

Phoenix, Arizona, USA 85027

Attn:President

Email:brian@riggscompanies.com

The
undersigned holder of the within Warrant Certificate (the “Holder”) hereby subscribes for _________ shares
of common stock (each, a “Share”) in the capital of the Issuer at an exercise price of $1.02 per Share (or
such other dollar amount as is applicable pursuant to any adjustment contemplated by Section 4.6 of the within Warrant Certificate),
in which case this Subscription Form is accompanied by a certified cheque or bank draft payable to the Issuer, or the Holder has
arranged for a wire transfer to such account as has been directed by the Issuer, for the whole amount of the purchase price of
the Shares in accordance with the Terms and Conditions to which this Appendix B is attached. The Holder represents that, at the
time of exercise of the Warrants, all of the representations and warranties contained in the Amending Agreement between the Issuer,
the Holder and Epic Stores, LLC pursuant to which these Warrants were issued are true and accurate.

The
Holder hereby directs that the Shares hereby subscribed for be registered and delivered as follows:

	NAME(S)
    IN FULL	 	ADDRESS(ES)	 	NUMBER
    OF SHARES
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	TOTAL:		

DATED
this _____ day of ______________________, 20___.

In
the presence of:

_________________

Signature of Holder

_________________

Name of Holder (please print)

_________________

Address of Holder

    	 	25	 

    	 	 	 

    

LEGENDS

The
certificates representing the Shares acquired on the exercise of the Warrants will bear the following legends, if and as applicable,
and all such other legends as may be required at the time of exercise under applicable securities laws:

THE
SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT IN THE UNITED STATES OR U.S.
PERSONS (AS DEFINED HEREIN) AND ARE NOT PURCHASING FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS PURSUANT TO REGULATION S UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). 

NONE
OF THE SECURITIES REPRESENTED HEREBY, AND NONE OF THE SECURITIES INTO WHICH SUCH SECURITIES ARE CONVERTIBLE, HAVE BEEN REGISTERED
UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED HEREIN)
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE U.S. STATE AND FOREIGN SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES AND THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT.

INSTRUCTIONS
FOR SUBSCRIPTION FORM

The
signature to the Subscription Form must correspond in every particular with the name written upon the face of the Warrant Certificate
without alteration or enlargement or any change whatever. If there is more than one subscriber, all must sign.

In
the case of Person(s) signing by agent or attorney or by personal representative(s), the authority of such agent, attorney or
representative(s) to sign must be proven to the satisfaction of the Issuer.

If
the Warrant Certificate and the Subscription Form are being sent by mail, they must be sent by registered mail.

    	 	26ex10-1.htm

 

Exhibit 10.1

 

 

Trimble Navigation Limited

935 Stewart Drive

Post Office Box 3642

Sunnyvale, CA 94085-3913

408 481 8000

 

 

January 29, 2016

 

Robert Painter

2260 Story Hill Road

Boulder, CO 80305

 

 

Dear Robert:

 

On behalf of Trimble Navigation Ltd. (“Trimble” or “Company”), I am pleased to confirm your promotion to the position of Chief Financial Officer (CFO) and Executive Committee Member, reporting to Steve Berglund, Chief Executive Officer of Trimble Navigation Limited. This offer is contingent upon the successful completion of a background check. The effective date of your promotion will be February 1, 2016 and the work location of this position will be the Trimble office located in Westminster, CO. A summary of the changes to your current compensation package is outlined below and will be effective February 1, 2016:

 

Annual Base Salary - Your new salary will be paid on a bi-weekly basis aggregating to the equivalent of $375,000 annually.

 

Management Incentive Plan — You will continue be eligible to participate in Trimble’s Management Incentive Plan with an annual target bonus of 80% of base salary, payout depending on company performance plus any individual assigned personal performance objectives as outlined in the Management Incentive Plan adopted by the Board of Directors.

 

Promotional Equity Grant— Since you will be a key member of the Trimble management team and executive committee, it will be recommended to the Board of Directors that you be granted 30,000 Restricted Stock Units (“Promotional RSUs”) as of your effective date as Trimble CFO. Promotional RSUs will vest over a three-year period with 33% of the RSUs vesting on the first anniversary of the grant date, 33% of the RSUs vesting on the second anniversary of the grant date, and 34% of the RSUs vesting on the third anniversary of the grant date. In addition, it will also be recommended that you be granted Options (“Promotional Options”) to purchase 45,000 shares of Trimble Common Stock. The stock will vest over a 4 year period with 50% vesting after the first two years and 1/48th will vest each month thereafter.

 

Long Term Incentive Equity Program — You will continue be eligible to participate in the executive long term incentive program commensurate with your new position and such annual grants will be subject to CEO and Board approval.

 

Paid Vacation — Unlimited at the discretion of the executive.

 

Other Benefits — You will retain your eligibility for benefits, as defined by Company policy and governing plan documents, including medical, dental, vision, life insurance, short and long-term disability insurance, tuition reimbursement, 401(K) Retirement Savings Plan, and all Company-paid holidays.

 

There will be no other changes to any other current terms and conditions of your employment with Trimble, as outlined in your original offer letter or any subsequent employment letters. Your signed

 

  

  

  

 

Financial Misconduct Reporting, Proprietary Information and Invention Agreement, Insider Trading, Corporate Disclosure and Business Ethics and Conduct documents remain enforceable.

 

The Company will, in connection with your employment, withhold from any compensation and benefits payable to you all federal, state, city and other taxes as requested by you or that the Company is required to withhold pursuant to any law or government regulation or ruling.

 

In the event of a change of control of the company, you will be provided the coverage as specified in the change in control agreement attached hereto as Exhibit A (the “CIC Agreement”). The agreement, under specific conditions, will allow for the payment of one year’s base salary and target bonus upon termination of employment in connection with a change in control. The agreement also accelerates the vesting of stock option awards, RSUs and PRSUs upon a termination of employment in connection with a change in control.

 

Trimble is an “at-will” employer, meaning that the employer or employee can terminate the employment relationship at any time, with or without prior notice. This “at-will” status of employment can be changed only in an express written contract between an employee and Trimble Navigation Limited. If, during your first year of employment as CFO, you are terminated by Trimble for any reason other than cause, Trimble will provide one year’s base, target bonus and annual Cobra cost upon termination of employment as well as acceleration of 50% of the Promotional RSUs and Options. These severance benefits will be memorialized in a separate written severance agreement attached hereto as Exhibit B.

 

This CFO appointment is subject to Board approval. The compensation package listed above is subject to Compensation Committee and Board approval also.

 

Robert, Trimble’s success is derived from the people who work here as you know. Your acceptance of this promotion will be enthusiastically received, and we feel confident that you will continue to make significant contributions to our continued success as you assume the responsibilities of this very important role in Trimble.

 

Please call me if you have any questions or if I can be of additional assistance. I can be reached at 408.481.7200.

 

Sincerely,

 

 

 

Steven W. Berglund

President and Chief Executive Officer

 

I accept this promotion and agree to the terms stated in this letter. I acknowledge and agree that the terms set forth in this letter supersede any prior agreement on the same terms. I further understand and agree that the terms set forth in this letter can only be changed by a written agreement signed by an authorized agent of the Company. I understand and agree that I am employed at will and that my employment can be terminated at any time, with or without cause, and with or without notice, at the option of either the Company or me.

 

Please sign and return the original of this letter. You should retain one copy of this letter for your files.

 

 

 

 

	  	  	  	  
	
Robert Painter

	  	
Date Accepted

	  

 

  

  

  

 

EXHIBIT A

 

TRIMBLE NAVIGATION LIMITED

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT, effective on the date of last signature (this “Agreement”), is entered into by and between Trimble Navigation Limited (the “Company”) and Robert Painter (the “Executive”).

 

W I T N E S S E T H

 

WHEREAS, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders;

 

WHEREAS, the Company recognizes that, as is the case with many publicly held corporations, the possibility of a change in control may arise and that such possibility may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders;

 

WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to secure the Executive’s continued services and to ensure the Executive’s continued and undivided dedication to his duties in the event of any threat or occurrence of a change in control of the Company; and

 

WHEREAS, the Board of Directors of the Company has authorized the Company to enter into this Agreement.

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive hereby agree as follows:

 

1.         Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

 

(a)        “Board” means the Board of Directors of the Company.

 

(b)        “Bonus” means the annual or quarterly bonuses payable pursuant to the Company’s Management Incentive Plan or such other plan that provides for the payment of incentive bonuses as may be, from time to time, authorized by the Board.

 

(c)        “Cause” means (i) the Executive’s engagement in acts of embezzlement, dishonesty or moral turpitude; (ii) the conviction of the Executive for having committed a felony; (iii) a breach by the Executive of the Executive’s fiduciary duties and responsibilities to the Company having the potential to result in a material adverse effect on the Company’s business, operations, prospects or reputation; or (iv) the repeated failure of the Executive to perform duties and responsibilities as an employee of the Company to the reasonable satisfaction of the Board (except in the case of death or

 

  

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disability) that has not been cured within thirty (30) days after a written demand for substantial performance has been delivered to the Executive by the Board. The determination of Cause shall be made by the Board.

 

(d)        “Change in Control” means the occurrence of any of the following events:

 

(i)         any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities;

 

(ii)        the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;

 

(iii)        the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least sixty percent (60%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or

 

(iv)       a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii) or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

 

Notwithstanding anything in this Agreement to the contrary, if the Executive’s employment is terminated within the nine months prior to a Change in Control, and the Executive reasonably demonstrates that such termination was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control (such a termination of employment, an “Anticipatory Termination”), then for all purposes of this Agreement, the date immediately prior to the date of such termination of employment shall be deemed to be the date of a Change in Control.

 

(e)        “Company” means Trimble Navigation Limited, a California corporation.

 

(f)         “Date of Termination” means the date on which the Executive’s employment by the Company terminates.

 

  

2

  

 

(g)        “Good Reason” means, without the Executive’s express written consent, the occurrence of any of the following events after a Change in Control:

 

(i)         the assignment to the Executive of any duties (including a diminution of duties) inconsistent in any adverse respect with the Executive’s position(s), duties, responsibilities or status with the Company immediately prior to such Change in Control;

 

(ii)        an adverse change in the Executive’s reporting responsibilities, titles or offices with the Company as in effect immediately prior to such Change in Control;

 

(iii)       any removal or involuntary termination of the Executive from the Company otherwise than as expressly permitted by this Agreement or any failure to re-elect the Executive to any position with the Company held by the Executive immediately prior to such Change in Control;

 

(iv)       a reduction by the Company in the Executive’s rate of annual base salary as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter;

 

(v)        any requirement of the Company that the Executive (A) be based anywhere more than twenty-five (25) miles from the facility where the Executive is located at the time of the Change in Control or (B) travel on Company business to an extent substantially more burdensome than the travel obligations of the Executive immediately prior to such Change in Control;

 

(vi)       the failure of the Company to (A) continue in effect any compensation plan in which the Executive is participating immediately prior to such Change in Control, or the taking of any action by the Company which would adversely affect the Executive’s participation in or reduce the Executive’s benefits under any such plan (including the failure to provide the Executive with a level of discretionary incentive award grants consistent with the past practice of the Company in granting such awards to the Executive during the three-Year period immediately preceding the Change in Control), (B) provide the Executive and the Executive’s dependents with welfare benefits (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive immediately prior to such Change in Control, (C) provide fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive immediately prior to such Change in Control, or (D) provide the Executive with paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive immediately prior to such Change in Control, unless in the case of any violation of (A), (B), (C) or (D)

 

  

3

  

 

above, the Executive is permitted to participate in other plans, programs or arrangements which provide the Executive (and, if applicable, the Executive’s dependents) with no less favorable benefits at no greater cost to the Executive;

 

(vii)       the Executive no longer being the Chief Financial Officer of the Company or its successor; or

 

(viii)      the failure of the Company to obtain the assumption agreement from any successor as contemplated in Section 11(b) hereof.

 

Any event or condition described in Sections 1(g)(i) through (vii) which occurs prior to a Change in Control, but was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, shall constitute Good Reason following a Change in Control for purposes of this Agreement (as if a Change in Control had occurred immediately prior to the occurrence of such event or condition) notwithstanding that it occurred prior to the Change in Control.

 

For purposes of this Agreement, any good faith determination of Good Reason made by the Executive shall be conclusive; provided, however, that an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company promptly after receipt of notice thereof given by an Executive shall not constitute Good Reason. The Executive’s continued employment shall not constitute consent to or a waiver of rights with respect to any event or condition constituting Good Reason. The Executive must provide notice of termination within ninety (90) days of his knowledge of an event or condition constituting Good Reason hereunder or such event shall not constitute Good Reason hereunder. A transaction which results in the Company no longer being a publicly traded entity shall not in and of itself be treated as Good Reason unless and until one of the events or conditions set forth in Sections 1(g)(i) through (vii) occurs.

 

(h)        “Nonqualifying Termination” means a termination of the Executive’s employment (i) by the Company for Cause, (ii) by the Executive for any reason other than Good Reason, (iii) as a result of the Executive’s death or (iv) by the Company due to the Executive’s absence from his duties with the Company on a full-time basis for at least one hundred eighty (180) consecutive days as a result of the Executive’s incapacity due to physical or mental illness.

 

(i)         “Projected Bonus Amount” means, with respect to any Year, the greater of (i) the Executive’s Target Bonus Amount for such Year; or (ii) to the extent calculable after at least one calendar quarter of the Year, the Bonus the Executive would have earned in the Year in which the Executive’s Date of Termination occurs had the Company’s financial performance through the end of the fiscal quarter immediately preceding the Date of Termination continued throughout said Year (the “Earned Bonus Amount”).

 

(j)         “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity.

 

  

4

  

 

(k)        “Target Bonus Amount” means, with respect to any Year, the Participant’s target Bonus for such Year based upon the Company’s forecasted operational plan.

 

(1)        “Termination Period” means the period of time beginning with a Change in Control and ending one (1) year following such Change in Control.

 

(m)       “Year” means the fiscal year of the Company.

 

2.         Acceleration of Options, Restricted Stock Units and Performance Restricted Stock Units Upon Termination of Employment. Upon a termination of employment of the Executive during the Termination Period, other than by reason of a Nonqualifying Termination, each of the Executive’s outstanding unvested stock options, restricted stock units and performance restricted stock units granted under any of the Company’s stock option or incentive plans shall accelerate and become vested and, if applicable, exercisable with respect to the total number of shares covered by all such outstanding unvested stock options, restricted stock units and performance restricted stock units.

 

3.         Termination of Employment.

 

(a)        If during the Termination Period the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, then the Company shall pay to the Executive, within five (5) business days following the Date of Termination, as compensation for services rendered to the Company:

 

(i)         a lump-sum cash amount equal to the sum of (A) the Executive’s base salary from the Company and its Subsidiaries through the Date of Termination and any outstanding Bonus for which payment is due and owing at such time and (B) to the extent not provided under the Company’s Bonus plans, a pro-rata portion of the Executive’s Projected Bonus Amount for the Year in which the Executive’s Date of Termination occurs, in each case to the extent not theretofore paid; plus

 

(ii)        a lump-sum cash amount equal to the sum of (A) twelve (12) months of base salary calculated using the Executive’s highest monthly rate of base salary during the 12-month period immediately preceding the Date of Termination, or if greater, immediately preceding the Change in Control and (B) the highest of (1) the Executive’s average Bonus (annualized for any partial Years of employment) earned during the 3-Year period immediately preceding the Year in which the Date of Termination occurs (or shorter annualized period if the Executive had not been employed for the full three-Year period), (2) the Executive’s Target Bonus Amount for the Year in which the Change in Control occurs and (3) the Executive’s Target Bonus Amount for the Year in which the Date of Termination occurs; provided, that any amount paid pursuant to this Section 3(a)(ii) shall offset an equal amount of any severance relating to salary or bonus continuation to be received by the Executive upon termination of

 

  

5

  

 

employment of the Executive under any severance plan, policy, agreement or arrangement of the Company.

 

(b)        If during the Termination Period, the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, for a period of one (1) year commencing on the Date of Termination, the Company shall continue to keep in full force and effect (or otherwise provide) all policies of medical, dental, accident, disability and life insurance with respect to the Executive and his dependents with the same level of coverage, upon the same terms and otherwise to the same extent (and on the same after-tax basis), as such policies shall have been in effect immediately prior to the Date of Termination (or, if more favorable to the Executive, immediately prior to the Change in Control), and the Company and the Executive shall share the costs of the continuation of such insurance coverage in the same proportion as such costs were shared immediately prior to the Date of Termination.

 

(c)        If during the Termination Period, the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, each of the Executive’s outstanding stock options granted under any of the Company’s stock option or incentive plans shall be exercisable by the Executive until the earlier of (i) the expiration of the term of the option or (ii) one (1) year following the Date of Termination.

 

(d)        If during the Termination Period the employment of the Executive shall terminate by reason of a Nonqualifying Termination, then the Company shall pay to the Executive (or the Executive’s beneficiary or estate) such payments and provide to the Executive such benefits, if any, as the Company customarily pays or provides to executives of the Company upon termination of employment and in any event in compliance with the requirements of Section 409A.

 

(e)        Anything in this Agreement to the contrary notwithstanding, no amount payable under Section 3(a)(ii) hereof that is non-qualified deferred compensation subject to Section 409A, as determined in the sole discretion of the Company, shall be paid unless the Executive experiences a “separation from service” within the meaning of Section 409A of the Code (a “Separation from Service”), and except as otherwise provided below with respect to an Anticipatory Termination, shall instead be paid, with interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code (“Interest”), to the Executive on the first business day that is after the earlier of (i) the date that is six months following the date of the Executive’s Separation from Service,” or (ii) the date of the Executive’s death (the “Delayed Payment Date”), if the Executive is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination (a “Specified Employee”)), and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Section 409A(a)(2) of the Code, or any successor provision thereto).

 

(f)         Anything in the foregoing to the contrary notwithstanding, any amount payable under Section 3(a)(ii) hereof in connection with an Anticipatory Termination that

 

  

6

  

 

is non-qualified deferred compensation subject to Section 409A of the Code shall be paid as follows: (i) if the Change in Control is a “change in control event” within the meaning of Section 409A of the Code, (A) except as provided in clause (i)(B), on the date of such Change in Control, or (B) if the Executive is a Specified Employee and the Delayed Payment Date is later than the date of the Change in Control, on the Delayed Payment Date, and (ii) if such Change in Control is not a “change in control event” within the meaning of Section 409A of the Code, on the first business day following the date that is nine months following the date of the Anticipatory Termination to the extent payment at such time is not a violation of Section 409A of the Code. In the event of an Anticipatory Termination, any payment or benefit that is not non-qualified deferred compensation within the meaning of Section 409A of the Code that is payable under this Agreement shall be paid or shall commence being provided on the date of the Change in Control. Interest with respect to the period, if any, from the date of the Change in Control through the actual date of payment shall be paid on any delayed cash amounts.

 

4.         Golden Parachute. In the event that the benefits provided for in this Agreement (together with any other benefits or amounts) otherwise constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this Section 4 be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive’s benefits under this Agreement shall be either: (i) delivered in full, or (ii) delivered as to such lesser extent as would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company and the Executive otherwise agree in writing, all determinations required to be made under this Section 4, including the manner and amount of any reduction in the Executive’s benefits under this Agreement, and the assumptions to be utilized in arriving at such determinations, shall be made in writing in good faith by Ernst & Young LLP (the “Consulting Firm”). In the event that the Consulting Firm (or any affiliate thereof) is unable or unwilling to act, the Executive may appoint a nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Consulting Firm hereunder). All fees and expenses of the Consulting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Consulting Firm in connection with the performance of the services hereunder. For purposes of making the calculations required by this Section 4, the Consulting Firm may make reasonable assumptions and approximations concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive shall furnish to the Consulting Firm such information and documents as the Consulting Firm may reasonably request to make a determination under this Section 4.

 

5.         Withholding Taxes. The Company may withhold from all payments due to the Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

 

6.         Reimbursement of Expenses. If any contest or dispute shall arise under this Agreement involving termination of the Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the

 

  

7

  

Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in connection with such contest or dispute (regardless of the result thereof), together with interest in an amount equal to the prime rate of Bank of America from time to time in effect, but in no event higher than the maximum legal rate permissible under applicable law, such interest to accrue from the date the Company receives the Executive’s statement for such fees and expenses through the date of payment thereof.; provided, however, that all such reimbursements must be made no later than the last day of the third calendar year that begins after the Date of Termination.

 

7.       Termination of Agreement. This Agreement shall be effective on the date hereof and shall continue until the first to occur of (a) the termination of the Executive’s employment with the Company prior to a Change in Control (except as otherwise provided hereunder), (b) a Nonqualifying Termination, or (c) the termination of the Executive’s employment following the Termination Period.

 

8.       Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company or its Subsidiaries, and if the Executive’s employment with the Company shall terminate prior to a Change in Control, the Executive shall have no further rights under this Agreement (except as otherwise provided hereunder); provided, however, that notwithstanding anything herein to the contrary, any termination of the Executive’s employment following a Change in Control shall be subject to all of the benefit and payment provisions of this Agreement.

 

9.       Compensation Recoupment. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), the benefits provided for in this Agreement shall not be deemed fully earned or vested, even if paid or distributed to Executive, if the amount payable under Section 3(a)(ii) or any portion thereof is deemed incentive compensation and subject to recovery, or “clawback” by the Company pursuant to the provisions of the Act and any rules or regulations promulgated thereunder or by any stock exchange on which the Company’s securities are listed (the “Rules”). In addition, Executive hereby acknowledges that this Agreement may be amended as necessary and/or shall be subject to any recoupment policies adopted by the Company to comply with the requirements and/or limitations under the Act and the Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) the Company to revoke, recover and/or clawback the benefits provided herein.

 

10.     Obligations of the Executive. The Executive agrees that if a Change in Control shall occur, the Executive shall not voluntarily leave the employ of the Company without Good Reason during the 90-day period immediately following a Change in Control.

 

11.     Successors’ Binding Obligation.

 

(a)       This Agreement shall not be terminated by any merger, consolidation or corporate reorganization of the Company (a “Company Change”) or transfer of assets. In the event of any Company Change or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or any person or entity to which the assets of the Company are transferred.

 

  

8

  

 

(b)       The Company agrees that concurrently with any Company Change or transfer of assets, it will cause any successor or transferee unconditionally to assume by written instrument delivered to the Executive (or his beneficiary or estate) all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such Company Change or transfer of assets that results in a Change in Control shall constitute Good Reason hereunder and shall entitle the Executive to compensation and other benefits from the Company in the same amount and on the same terms as the Executive would be entitled hereunder if the Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing, the date on which any such Company Change or transfer of assets becomes effective shall be deemed the date Good Reason occurs, and the Executive may terminate employment for Good Reason on or following such date.

 

(c)       This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

 

12.       Notice.

 

(a)        For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:

 

Robert Painter

2260 Story Hill Road

Boulder, CO 80305

 

If to the Company:

 

Trimble Navigation Limited

935 Stewart Drive

Sunnyvale, California 94085

Attention: General Counsel

 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. Alternatively, notice may be deemed to have been delivered when sent by facsimile to a location provided by the other party hereto.

 

  

9

  

 

(b)       A written notice of the Executive’s Date of Termination by the Company or the Executive, as the case may be, to the other, shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specify the Date of Termination date (which date shall not be less than fifteen (15) nor more than sixty (60) days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

13.     Full Settlement; No Mitigation. The Company’s obligation to make any payments provided for by this Agreement to the Executive and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment.

 

14.     Employment with Subsidiaries. Employment with the Company for purposes of this Agreement shall include employment with any Subsidiary.

 

15.     Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

 

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

 

17.     Miscellaneous. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company may have hereunder, including without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. Except as otherwise specifically provided herein, the rights of, and benefits payable to, the Executive, his estate or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits

 

  

10

  

payable to, the Executive, his estate or his beneficiaries under any other employee benefit plan or compensation program of the Company.

 

 

  

11

  

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the day and year set forth below.

	
Trimble Navigation Limited

	  
	  	  	  
	
By:

	  	  
	
Name:

	  	  
	
Title:

	  	  
	  	  	  
	
Date:

	  	  
	  	  	  
	  	  	  
	  	  	  
	
Executive

	  
	  	  	  
	  	  
	
Name:

	
Robert Painter

	  
	
Title:

	  	  
	  	  	  
	
Date:

	  	  

 

 

SIGNATURE PAGE TO

CHANGE IN CONTROL SEVERANCE AGREEMENT

  

  

  

 

EXHIBIT B

 

TRIMBLE NAVIGATION LIMITED

 

EXECUTIVE SEVERANCE AGREEMENT

 

THIS EXECUTIVE SEVERANCE AGREEMENT (this “Agreement”), effective on the date of last signature, is entered into by and between Trimble Navigation Limited (the “Company”) and Robert Painter (the “Executive”).

 

W I T N E S S E T H

 

WHEREAS, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders; and

 

WHEREAS, the Company desires to attract and retain certain key employee personnel and, accordingly, the Board of Directors of the Company has approved the Company entering into a severance agreement with Executive in order to encourage his continued service to the Company;

 

WHEREAS, Executive is prepared to commit such services in return for specific arrangements with respect to severance compensation and other benefits;

 

WHEREAS, Executive will serve and/or has served as an executive, management personnel, or officer of the Company;

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements contained herein, this Agreement sets forth benefits which the Company will pay to Executive in the event of termination of Executive’s employment under the circumstances described herein:

 

1.         Term. This Agreement shall have a term of one year commencing on February 1, 2016 (the “Effective Date”) and ending on the first anniversary of such date, unless the Executive’s employment with the Company is terminated under circumstances that do not give rise to any payments or benefits under Section 3(a) hereof (the “Term”).

 

2.         Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

 

(a)        “Board” means the Board of Directors of the Company.

 

(b)        “Bonus” means the annual or quarterly bonuses payable pursuant to the Company’s Management Incentive Plan or such other plan that provides for the payment of incentive bonuses as may be, from time to time, authorized by the Board.

 

  

1

  

 

(c)        “Cause” means (i) the Executive’s engagement in acts of embezzlement, dishonesty or moral turpitude; (ii) the conviction of the Executive for having committed a felony; (iii) a breach by the Executive of the Executive’s fiduciary duties and responsibilities to the Company having the potential result in a material adverse effect on the Company’s business, operations, prospects or reputation; or (iv) the repeated willful failure of the Executive to perform duties and responsibilities as an employee of the Company to the reasonable satisfaction of the Board (except in the case of death or disability) that has not been cured within thirty (30) days after a written demand for substantial performance has been delivered to the Executive by the Board. The determination of Cause shall be made by the sole determination of the Board.

 

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

 

(e)        “Company” means Trimble Navigation Limited, a California corporation.

 

(f)         “Date of Termination” means the date on which the Executive’s employment by the Company terminates and such termination constitutes a “separation of service” as defined and applied in Section 409A of the Code.

 

(g)        “Good Reason” means either (i) a material diminution in your title, position, or responsibilities, or your removal from such position and responsibilities, (ii) not being the CFO of the Company or its successor; (iii) a material reduction by the Company in your compensation as in effect immediately prior to such reduction; or (iv) the relocation of you to a facility or a location more than twenty-five (25) miles from your prior primary work location provided in each case, that you have (A) provided written notice of the circumstances establishing Good Reason within sixty (60) days of the initial existence of such conditions, (B) given the Company at least thirty (30) days to cure and (C) if the Company fails to cure, you terminate employment within ninety (90) days following the expiration of the cure period.

 

(h)        “Promotional RSUs and Stock Options” means the award of restricted stock units and stock options granted to the Executive upon your promotion as described in your promotional offer letter.

 

(i)         “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% of more of the total combined voting power of the then outstanding securities of such corporation or other entity.

 

(j)         “Severance Compensation” means a lump sum cash amount equal to the sum of (i) the Executive’s annual base salary from the Company and its Subsidiaries in effect immediately prior to the Date of Termination, plus (ii) the Target Bonus Amount plus (iii) an amount equal to the monthly COBRA premium for Executive and his eligible dependents multiplied by twelve (12).

 

(k)        “Target Bonus Amount” means, with respect to any year, the Executive’s target Bonus for such Year, which is based upon a percentage of Executive’s annual base salary.

 

  

2

  

(1)        “Year” means the fiscal year of the Company.

 

3.         Rights of Executive upon Termination Without Cause or for Good Reason.

 

(a)        Provided the Executive has executed and delivered the release described in Section 5 below and such release has become effective and irrevocable, if the Company terminates the Executive’s employment during the Term other than for Cause or the Executive terminates his employment during the term for Good Reason then (i) the Company shall, no later than 65 days following the Date of Termination, pay the Executive a lump sum cash payment equal to the Severance Compensation and (ii) the Company shall provide accelerated vesting for 50% of the total shares subject to Executive’s Promotional RSUs and Stock Options (provided, that all other outstanding equity or equity based awards held by the Executive shall continue to be governed by their terms).

 

(b)        In the event the Executive’s termination of employment gives rise to payments and benefits under that certain Change in Control Severance Agreement, by and between the Company and the Executive dated as of the date hereof as amended from time to time, Executive shall not be eligible to receive any payments or benefits under this Agreement.

 

(c)        In the event that the benefits provided for in this Agreement (together with any other benefits or amounts) otherwise constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this Section 3(c) be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive’s benefits under this Agreement shall be either (i) delivered in full, or (ii) delivered as to such lesser extent as would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, result in the receipt by the Executive on an after-tax basis, of the greater amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 499 of the Code. Unless the Company and the Executive otherwise agree in writing, all determinations required to be made under this Section 3(c), including the manner and amount of any reduction in the Executive’s benefits under this Agreement, and the assumptions to be utilized in arriving at such determinations, shall be made in writing in good faith by Ernst & Young LLP (the “Consulting Firm”). In the event that the Consulting Firm (or any affiliate thereof) is unable or unwilling to act, the Executive may appoint a nationally recognized public accounting firm to make the determinations required hereunder (which account firm shall then be referred to as the Consulting Firm hereunder). All fees and expenses of the Consulting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Consulting Firm in connection with the performance of services hereunder. For the purposes of making the calculations required under this Section 3(c), the Consulting Firm may make reasonable assumptions and approximations concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive shall furnish to the Consulting Firm such information and documents as the Consulting Firm may reasonably request to make a determination under this Section 3(c).

 

  

3

  

 

4.         Notice.

 

(a)        For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five (5) days after deposit in the United States Mail, certified and return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:

Robert Painter

2260 Story Hill Road

Boulder, CO 80305

 

If to the Company:

 

Trimble Navigation Limited

935 Stewart Drive

Sunnyvale, California 94085

Attention: General Counsel

 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. Alternatively, notice may be deemed to have been delivered when sent by facsimile or email to a location provided by the other party hereto.

 

(b)        A written notice of the Executive’s Date of Termination by the Company to the Executive shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specify the Date of Termination (which, except in the case of termination for Cause, shall not be less than fifteen (15) nor more than sixty (60) days after the giving of such notice). The failure by the Company to set forth in such notice any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Executive or Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

5.         Release. In consideration for the benefits and payments provided for under Section 3(a) of this Agreement, unless such requirement is waived by the Board in its sole discretion, the Executive agrees to execute and not revoke within the time provided for by the Company a release acceptable to the Company (substantially in the form attached hereto as Exhibit A) releasing the Company, its Subsidiaries, stockholders, partners, officers, directors, employees and agents from any and all claims and from any and all causes of action of any kind, including but not limited to all claims or causes of action arising out of the Executive’s employment with the Company or the termination of such employment (the “Release”). The Executive shall execute such Release within the time period provided for by the Company. If the

 

  

4

  

 

Release has not become effective and irrevocable prior to the 65th day following the Date of Termination (or such earlier date specified in the Release), Executive shall not be entitled to any benefits and payments pursuant to Section 3(a) of this Agreement.

 

6.         Withholding Taxes. The Company may withhold from all payments due to the Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

 

7.         Scope of Agreement. Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company. Notwithstanding any other provision hereof to the contrary, the Executive may, at any time during his employment with the Company upon the giving of 30 days prior written notice, terminate his employment. If this Agreement or the employment of the Executive is terminated under circumstances in which the Executive is not entitled to any Severance Compensation, neither the Executive nor the Company shall have any further obligation or liability hereunder.

 

8.         Section 409A. Notwithstanding anything to the contrary in this Agreement, if the Executive is a “specified employee” (as defined and applied in Section 409A of the Code) as of the Date of Termination, to the extent any payment under this Agreement constitutes deferred compensation (after taking into account any applicable exemptions under Section 409A of the Code) and to the extent required by Section 409A of the Code, the Executive shall not be entitled to any payments under this Agreement until the earlier of (a) the first day following the six-month anniversary of the Date of Termination, or (b) the Executive’s date of death. For purposes of Section 409A of the Code, each “payment” (as defined by Section 409A of the Code) made under this Agreement shall be considered a “separate payment.” In addition, for purposes of Section 409A of the Code, payments shall be deemed exempt from Section 409A of the Code to the full extent possible under the “short-term deferral” exemption of Treasury Regulation § 1.409A-1(b)(4) and (with respect to amounts paid no later than the second calendar year following the calendar year containing the Date of Termination) the “two-years/two-times” separation pay exemption of Treasury Regulation § 1.409A-1(b)(9)(iii), which are hereby incorporated by reference.

 

9.         Compensation Recoupment. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), the Severance Compensation shall not be deemed fully earned or vested, even if paid or distributed to Executive, if the Severance Compensation or any portion thereof is deemed incentive compensation and subject to recovery, or “clawback” by the Company pursuant to the provisions of the Act and any rules or regulations promulgated thereunder or by any stock exchange on which the Company’s securities are listed (the “Rules”). In addition, Executive hereby acknowledges that this Agreement may be amended as necessary and/or shall be subject to any recoupment policies adopted by the Company to comply with the requirements and/or limitations under the Act or the Rules, or any other federal or stock exchange requirements, including by expressly permitting (or, if applicable, requiring) the Company to revoke, recover and/or clawback the Severance Compensation.

 

  

5

  

 

10.       Successors’ Binding Obligation.

 

(a)        This Agreement shall not be terminated by any merger, consolidation or corporate reorganization of the Company (a “Company Change”) or transfer of assets. In the event of any Company change or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or any person or entity to which the assets of the Company are transferred.

 

(b)        This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

 

11.       Employment with Subsidiaries. Employment with the Company for purposes of this Agreement shall include employment with any Subsidiary.

 

12.       Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

 

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

 

14.       Miscellaneous. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company may have hereunder, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. Except as otherwise specifically provided herein, the rights of, and benefits payable to, the Executive, his estate or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, the Executive, his estate or his beneficiaries under any other employee benefit plan or compensation program of the Company.

 

  

6

  

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the day and year set forth below.

 

	
Trimble Navigation Limited

	  
	  	  	  
	  	  	  
	
By:

	  	  
	  	  	  
	
Name:

	  	  
	  	  	  
	
Title:

	  	  
	  	  	  
	
Date:

	  	  
	  	  	  
	  	  	  
	  	  	  
	
Executive

	  
	  	  	  
	  	  
	
Name:

	  	  
	
Title:

	  	  
	  	  	  
	 	 	 
	
Date:

	  	  

 

 

SIGNATURE PAGE TO

EXECUTIVE SEVERANCE AGREEMENT

  

  

  

EXHIBIT A

 

SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS

 

 

This Settlement Agreement and Release of All Claims (hereinafter “Agreement”) is entered into by and between [name] (hereinafter “Employee”) and Trimble Navigation Limited (hereinafter the “Company”). In consideration of the covenants set forth below and other good and valuable consideration, receipt of which is hereby acknowledged, and to avoid unnecessary litigation, the parties agree to settle the disputes between them as follows:

 

	
1.

	
The parties stipulate that:

 

	
  

	
a.

	
Employee was employed by the Company through [Date].

 

	
  

	
b.

	
Employee’s employment with the Company is being terminated [by the Company without Cause] [by the Employee with Good Reason] (as defined in that certain Executive Severance Agreement (the “Severance Agreement”) by and between Employee and the Company).

 

	
  

	
c.

	
Employee has not filed, and has not assisted any third party in filing, any action (including but not limited to civil and administrative claims and actions) against the Company, or any of its past or present officers, directors, employees, shareholders, agents, predecessors, successors, representatives, suppliers, or affiliated companies (hereinafter referred to collectively as “the Releasees”).

 

	
  

	
d.

	
Employee represents and agrees that Employee has been paid all compensation earned and due to Employee as of Employee’s last day of work including, but not limited to, all accrued but unused vacation/PTO.

 

	
  

	
e.

	
Employee and the Company each desire to compromise, settle, discharge and release in full any and all rights, claims and actions whatsoever that Employee has or may have against the Releasees arising out of Employee’s employment by the Company and/or the termination of Employee’s employment, through action of law, statute, or contract, up to and including the date of this Agreement.

 

	
2.

	
Upon Employee’s execution of this Agreement, Employee shall deliver an original signed copy of the Agreement to the Company, along with any and all property owned by the Company that is within Employee’s possession, including, but not limited to, computers, technical resources, programs, computer files and paperwork. Employee also agrees that Employee will provide any and all lists of passwords and access information to the Company, including copies, and that he or she will retain none of the same.

 

	
3.

	
a.         No later than 65 days following the Date of Termination (as defined in the Severance Agreement), provided that Employee has completed the actions required in Paragraph 2, but not before the expiration of Employee’s seven-day revocation period, the Company promises to pay the consideration, less deductions required by law, and cause the accelerated vesting contemplated under Section 3 of the Severance Agreement.

 

	
  

	
b.

	
The consideration provided in this Paragraph 3 to Employee is given in accordance with the following understanding and agreement of the parties:

 

  

A-1

  

 

	
  

	
(i)

	
The parties agree that the consideration paid to Employee and accelerated vesting of 50% of Employee’s Promotional RSUs and Stock Options under this Paragraph 3 shall constitute full and complete settlement of all claims of whatever kind that have been or could be made by Employee against any of the Releasees, without regard to whether such claims are based on an alleged breach of an obligation or duty arising from contract, tort, or statute.

 

	
  

	
(ii)

	
Employee acknowledges and agrees that the Releasees have made no representations to Employee regarding the tax consequences of any consideration received by Employee pursuant to this Agreement. Employee agrees to pay federal and state taxes, if any, that are required by law to be paid by Employee with respect to this settlement. Employee further agrees to indemnify, defend and hold the Releasees harmless from any claims, demands, judgments or recoveries by any governmental entity against the Releasees for any amounts claimed due on account of this Agreement based on or because of actions or omissions by Employee or pursuant to claims made under any federal or state tax laws based on or because of actions or omissions by Employee, and any costs, expenses or damages sustained by the Releasees by reason of any such claims, including any amounts paid by the Releasees as taxes, attorneys’ fees, deficiencies, levies, assessments, fines, penalties, interest or otherwise.

 

	
  

	
(iii)

	
Employee agrees that the consideration delivered under this Paragraph 3 shall constitute the entire amount of consideration provided to Employee under this Agreement and that Employee will not seek any further compensation for any other claimed damage, cost or attorneys’ fees in connection with the matters encompassed by this Agreement. This consideration paid by the Company is solely consideration for this Agreement to which Employee is not otherwise entitled.

 

	
4.

	
In consideration for the Company’s promise to deliver the consideration described above, Employee agrees to and hereby does irrevocably waive and release the Releasees from any and all claims, charges, demands, obligations, damages, liabilities or causes of action of any kind whatsoever (hereinafter “claims”), whether known or unknown, suspected or unsuspected, that Employee has or may have against them by reason of any act, omission, transaction or event occurring up to and including the date of this Agreement, including, without limitation, any act, omission, transaction or event related to or arising out of Employee’s employment with the Company or termination of that employment, without regard to whether such claims are based on alleged breach of an obligation or duty arising in contract or tort, any alleged unlawful act (under the California Labor Code, the California Business & Professions Code, the California Constitution, local ordinances, or other state or federal statutes), or any other claim regardless of the forum in which it might be brought. It is expressly understood and agreed by Employee that this waiver and release includes, but is not limited to, any and all rights or claims that arise under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Worker Adjustment and Retraining Act, or any state or local laws including but not limited to the California Fair Employment and Housing Act and the California Family Rights Act; as well as any and all claims arising under the Employee Retirement Income Security Act of 1974, up to the effective date of this Agreement but not thereafter. Nothing in this Agreement shall be construed to prohibit Employee from filing a charge or complaint, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding by the Equal Employment Opportunity Commission.

 

  

A-2

  

	
5.

	
Employee understands and agrees that Employee’s release of claims described in this Agreement includes (but is not limited to) a waiver of Employee’s rights and claims arising under the Age Discrimination in Employment Act of 1967 (ADEA). Employee understands and agrees that Employee has the right not to execute this Agreement without first having considered it for a full twenty-one (21) days from receipt of the Agreement. Employee agrees that Employee may sign this Agreement without waiting the full twenty-one (21) days and that, if Employee has done so, Employee’s decision to do so has been knowing and voluntary, and not induced through fraud, misrepresentation, a threat to withdraw or alter the offer prior to the expiration of the twenty-one (21) day period, or the provision of different terms to employees who sign any release prior to the expiration of the twenty-one (21) day period. Employee did not execute this Agreement without first being advised in writing to consult an attorney of Employee’s choice. Employee further understands and agrees that Employee:

 

	
  

	
a.

	
Has had the full aforementioned twenty-one (21) day period within which to consider this Agreement before executing it and, if Employee has waived the full period, the waiver has been knowing and voluntary as described above;

 

	
  

	
b.

	
Has carefully read and fully understands all of the provisions of this Agreement;

 

	
  

	
c.

	
Has at all times during the course of negotiation and execution of this Agreement been advised by an attorney or has had adequate opportunity to consult counsel of Employee’s choice concerning the terms of this Agreement. Employee was advised and is hereby advised in writing to consult with counsel of Employee’s choice prior to entering into this Agreement;

 

	
  

	
d.

	
Is, through this Agreement, releasing the Releasees from any and all claims that Employee has or may have against them;

 

	
  

	
e.

	
Knowingly and voluntarily agrees to all of the terms set forth in this Agreement;

 

	
  

	
f.

	
Knowingly and voluntarily intends to be legally bound by the same;

 

	
  

	
g.

	
Has had a full seven (7) days following the execution of this Agreement to revoke this Agreement and has been and is hereby advised in writing that this Agreement shall not become effective or enforceable until the revocation period has expired; and

 

	
  

	
h.

	
Understands that rights or claims under the Age Discrimination in Employment Act of 1967 that may arise after the date this Agreement is executed are not waived.

 

	
6.

	
This Agreement is a full and final compromise and settlement and a general release by Employee that includes all unknown and unanticipated damages or injuries, to property or person, by reason of any act, omission, transaction or event occurring up to and including the date of this Agreement, including, without limitation, any act, omission, transaction or event related to or arising out of Employee’s employment with the Company or termination of that employment. Employee waives all rights or benefits that Employee may now or in the future have under the terms of Section 1542 of the California Civil Code, which Employee has had an opportunity to review with counsel of Employee’s choice and which reads as follows:

 

A general release does not extend to claims which the creditor does not

know or suspect to exist in his or her favor at the time of executing the

 

  

A-3

  

 

release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

This waiver is not a mere recital, but is a known waiver of rights and benefits. This is a bargained-for provision of this Agreement and is further consideration for the covenants and conditions contained herein.

 

	
7.

	
Employee agrees to keep the terms and the amount of this Agreement completely confidential and agrees that Employee will not hereafter disclose any information concerning this Agreement to anyone, including, but not limited to, any past, present or prospective clients, employees, shareholders, agents, suppliers or competitors of the Company. The only exceptions to the foregoing sentence shall be disclosure to Employee’s legal and tax advisers as is necessary or disclosure as may be specifically required by federal, state or local administrative or judicial proceedings or to implement this Agreement. Under no circumstances, except as permitted herein, is Employee to mention the amount of any consideration provided pursuant to this Agreement. Employee further agrees to condition any disclosure concerning the terms or amount of this Agreement that is permitted hereunder upon an agreement by the recipient not to disclose the terms of this Agreement to anyone and to respond to inquiries regarding the parties’ dispute in the same way that Employee and the Company must respond hereunder, except for disclosures required by federal, state or local law or regulation. If Employee or the Company receives any inquiry about the controversy between them, each agrees to state only that (1) Employee is no longer employed with the Company, and (2) the matter is confidential and cannot be discussed, or words to virtually the identical effect.

 

	
8.

	
Employee acknowledges and agrees that in the course of Employee’s employment with the Company, Employee has had access to and/or made use of certain confidential information relating to the business activities of the Company. Such confidential information includes, but is not limited to, the Company’s practices and processes in managing its human resources such as recruiting, retention, compensation and training; the Company’s business strategies including marketing and distribution; financial results; pricing data; key persons to contact with regard to customer accounts and customer needs; market surveys and research data; and contractual agreements between the Company and customers, distributors and other persons or entities, compilations of information and records that are owned by the Company and are regularly used in the operation of the Company’s business and other information that is kept confidential by the Company.

 

	
  

	
a.

	
Employee agrees that Employee will continue to abide by any written agreements concerning the use and protection of confidential and proprietary information, which are incorporated herein by reference, and that this Agreement does not extinguish any such written agreements. Employee agrees that Employee will not disclose any such confidential information, directly or indirectly, or use any of it in any way whatsoever.

 

	
  

	
b.

	
Employee further represents and agrees that all files, computer programs, records, documents, lists, specifications, and similar items relating to the business activities of the Company, including any and all copies, whether prepared by Employee or otherwise coming into Employee’s possession, custody or control, are property of the Company and have been or will be returned immediately by Employee to the Company and that Employee will not remove from the premises of the Company any such property or information.

 

	
9.

	
Employee expressly agrees that Employee will bring no new or further proceedings against the Company before any court or administrative tribunal or any other forum whatsoever by reason of any

  

A-4

  

claim, liability or cause of action, whether known or unknown, suspected or unsuspected, arising out of Employee’s employment or termination of that employment, or any other act, omission or transaction by the Company, occurring up to and including the effective date of this Agreement.

 

	
10.

	
This Agreement and compliance with this Agreement shall not constitute or be construed as an admission by the Company or the Releasees of any wrongdoing or liability of any kind, or an admission of any violation of the rights of Employee, or any person, or violation of any order, law, statute, duty or contract whatsoever, or that Employee was or is entitled to any amounts or relief demanded by him.

 

	
11.

	
Each party shall bear its own costs and attorney’s fees associated with the process leading to this Agreement.

 

	
12.

	
Should any part of this Agreement be declared or determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining parts shall not be affected thereby, and said illegal, invalid or unenforceable part shall be deemed not to be a part of this Agreement.

 

	
13.

	
Each party acknowledges that it has had an adequate opportunity to review the terms of this Agreement with counsel. The parties agree that this Agreement shall be interpreted in accordance with the law of the State of California, excluding its choice of law rules. The parties further agree that this Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against either party.

 

	
14.

	
Employee agrees that in executing this Agreement Employee does not rely and has not relied on any representation or statement made other than those specifically set forth in this written Agreement. The parties agree that this Agreement constitutes the entire agreement between Employee and the Company and (except as provided in Paragraph 8.a) supersedes any and all prior agreements or understandings, written or oral, between them and that any other agreement between the parties shall be, and hereby is, deemed terminated.

 

	
15.

	
This Agreement shall be binding upon the parties hereto and, as applicable, upon their heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of said parties and each of them and to their heirs, administrators, representatives, executors, successors, and assigns. Employee expressly warrants that Employee has not transferred to any person or entity any rights, causes of action, or claims released by this Agreement.

 

	
16.

	
This Agreement is offered by the Company on [Date] and shall remain available, unless otherwise rejected by the Employee or revoked by the Company, until no later than 5:00 p.m. Pacific Time (2:00 p.m. Eastern Time) on [Date], which is not less than twenty-one (21) days following the date this Agreement is offered. Employee may accept the offer only by returning an executed copy of this Agreement to the Company and by completing the other conditions specified in Paragraph 2 above. If the Agreement is not accepted by Employee before the date and time specified, the offer shall be deemed rejected and shall be revoked by the Company.

 

	
17.

	
The parties, having read all of the foregoing, having been advised by or having had adequate opportunity to consult with counsel, and having understood and agreed to the terms and conditions of this Settlement Agreement and Release of All Claims, do hereby voluntarily execute said Agreement by affixing their signatures hereto.

 

  

A-5

  

Dated: _______________

_____________________________________

Robert Painter

Dated: _______________

For Trimble Navigation Limited

_____________________________________

By:

Its:

 

 

A-6

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