Document:

Exhibit 10.1

 

		CHIEF OPERATING OFFICER
                           EMPLOYMENT AGREEMENT

 

This Chief Operating
Officer Employment Agreement (this “Agreement”) is entered into on September 12, 2019, to be effective as of September
23, 2019 (the “Effective Date”), by and among the Company, as defined herein, and Micah Simmons (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company
has determined that it is in its best interests and those of its shareholders to retain the Executive;

 

WHEREAS, the Company
desires to employ the Executive on the terms set forth below to provide services to the Company and its affiliated companies, and
the Executive is willing to accept such employment and provide such services on the terms set forth in this Agreement;

 

WHEREAS, the Company
and the Executive desire to enter into this Agreement, which has been drafted to comply with or be exempt from Section 409A
of the Internal Revenue Code of 1986, as amended; and

 

NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration, the parties hereto do hereby agree as follows:

 

1.       Certain
Definitions.

 

1.1       “Accrued
Obligation” means the sum of (x) the Executive’s Annual Base Salary through the Date of Termination for periods through
but not following his Separation From Service and (y) any accrued vacation pay earned by the Executive subject to any applicable
Company policies on carryover of accrued vacation pay, and in each case, to the extent not theretofore paid.

 

1.2       “Affiliate”
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

 

1.3       “Beneficial
Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

 

1.4       “Benefit
Obligation” shall mean all benefits to which the Executive (or his designated beneficiary or legal representative,
as applicable) is entitled or has become vested (or becomes entitled or vested as a result of termination) under the terms of
all employee benefit and compensation plans, agreements and arrangements (collectively, “Benefit Plans”)
in which the Executive is a participant as of the Date of Termination.

 

1.5       “Board”
shall mean the Board of Directors of the Company.

 

1.6       “Cause”
shall mean:

 

1.6.1       the
Executive seeking federal bankruptcy protection, and, in the view of the Board such action reflects negatively upon the reputation
and standing of the Company;

 

 

 

    
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1.6.2       the
Executive commits an action which may subject Company to legal liability, including but not limited to commission of acts which
violate: (a) the Americans with Disabilities Act of 1990, as amended; (b) Title VII of the Civil Rights Act of 1964, as amended
and including 42 U.S.C. Sec 2000(e) et seq.; (c) the Civil Rights Act of 1991; (d) The Civil Rights Acts of 1866, 1871 and 1964,
as amended; (e) 42 U.S.C. Sec 1981; (f) the Age Discrimination in Employment Act of 1967, as amended; (g) the Texas Commission
on Human Rights Act of 1983, as amended; or other law;

 

1.6.3       the
Executive develops a drug or alcohol problem which the Company deems to materially affect its reputation or which the Executive
fails or refuses to treat and end within a reasonable period of time upon request of the Board;

 

1.6.4       the
continued failure of the Executive to substantially perform the Executive’s duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness), which such failure continues or remains uncorrected for 30 days after
a written Notice of Termination; or

 

1.6.5       engaging
in conduct amounting to fraud, dishonesty, gross negligence, willful misconduct or conduct that is unprofessional, unethical, or
detrimental to the reputation, character and standing of Company;

 

1.6.6       failure
to abide by the terms of this Agreement or any policy, procedure or directive of Company as established and revised from time to
time;

 

1.6.7       a
judicial determination that Executive has engaged in illegal conduct or gross misconduct which is materially and demonstrably injurious
to the Company; or

 

1.6.8       any
act, or failure to act, based upon authority given pursuant to a lawful resolution duly adopted by the Board or upon the lawful
instructions of the Chief Executive Officer or of a more senior officer of the Company to Executive or based upon the advice of
counsel for the Company (which may be counsel employed by the Company or its subsidiaries).

 

1.7       “Change
of Control” shall be deemed to have occurred if any event set forth in any one of the following Sections shall have occurred:

 

1.7.1       any
Person is or becomes the Beneficial Owner, directly or indirectly, of 30% or more of either (a) the then outstanding shares
of common stock of the Company (the “Outstanding Company Common Shares”) or (b) the combined voting power
of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”), excluding any Person who becomes such a Beneficial Owner in connection with the issuance
of equity securities directly by Company to such Person in a Board approved equity financing or otherwise in connection with a
transaction that complies with clauses (a) and (b) of Section 1.7.3 below;

 

1.7.2       individuals,
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority
of the Incumbent Board (including in connection with an equity financing by the Company or in connection with preparing for a listing
of Company equity securities on a national stock exchange) shall be considered as though such individual was a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or removal of directors or any other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board;

 

 

 

    
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1.7.3       the
consummation of a reorganization, merger, amalgamation, consolidation, scheme of arrangement, exchange offer or similar transaction
of the Company or any of its subsidiaries or the sale, transfer or other disposition of all or substantially all of the Company’s
Assets (each, a “Business Combination”), unless, following such Business Transaction or series of related Business
Transactions, as the case may be, (a) individuals and entities (which, for purposes of this Agreement, shall include, without
limitation, any corporation, partnership, association, joint-stock company, limited liability company, trust, unincorporated organization
or other business entity) who were the beneficial owners, respectively, of more than 50% of, respectively, the Outstanding Company
Common Shares and Outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly
or indirectly, more than 50% of, respectively, the then outstanding common shares and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors (or other governing body), as the case may be, of the
entity resulting from such Business Transaction (including, without limitation, an entity which as a result of such transaction
owns the Company or all or substantially all of the Company's Assets either directly or through one or more subsidiaries or entities),
as the case may be, (b) no person (excluding any entity resulting from such Business Transaction or any employee benefit plan
(or related trust) of the Company or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly,
25% or more of, respectively, then the outstanding shares of common stock of the entity resulting from such Business Transaction
or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership
existed prior to the Business Transaction, and (c) at least a majority of the members of the board of directors (or other governing
body) of the entity resulting from such Business Transaction were members of the Incumbent Board at the time of the approval of
such Business Transaction; or

 

1.7.4       approval
or adoption by the Board of Directors or the shareholders of the Company of a plan or proposal which would result directly or indirectly
in the liquidation, transfer, sale or other disposal of all or substantially all of the Company’s Assets or the dissolution of
the Company.

 

1.8       “Company”
shall mean Deep Down, Inc., a Nevada corporation, or any successor thereto, including (but not limited to) any Entity into which
Deep Down, Inc. is merged, consolidated or amalgamated, or any Entity otherwise resulting from a Business Transaction.

 

1.9       “Company’s
Assets” shall mean the assets (of any kind) owned by the Company, including (but not limited to) the securities of the
Company’s Subsidiaries and any of the assets owned by the Company's Subsidiaries.

 

1.10     “Competition”
shall mean engaging in, or otherwise directly or indirectly acting as a consultant (other than an employee) or lender to, or being
a board member, principal, agent, stockholder, member, owner or partner of any other business or organization which competes, directly
or indirectly, with the business of the Company as the same shall be constituted at any time during the Term.

 

1.11     “Confidential
Information” shall mean Company’s or Company’s affiliate’s information which is used in the Company’s
business and is (a) proprietary to, about or created by the Company; (b) gives Company some competitive business advantage or the
opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interests of Company; (c) designated
as Confidential Information by Company, or from all the relevant circumstances should reasonably be assumed by the Executive to
be confidential and proprietary to Company; or (d) not generally known by persons or businesses outside of Company. Such Confidential
Information includes, but is not limited to, the following types of information and other information of a similar nature (whether
or not reduced to writing or designated as confidential):

 

1.11.1       Work
Product. Means product or information resulting from or related to work or projects performed or to be performed for Company;

 

 

 

    
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1.11.2       Other
Proprietary Information. Executive is aware of and acknowledges that Company has developed special competence and knowledge
in the subsea oilfield service industry and has accumulated information not generally known to others in the field which is of
unique value in the conduct and growth of Company’s business and which Company treats as proprietary. This information includes
data relating to Company’s proprietary rights prior to any public disclosure thereof, including but not limited to the nature
of the proprietary rights, production data, the status and details of research and development of products and services, and information
regarding acquiring, protecting, enforcing and licensing proprietary rights (including patents, copyrights and trade secrets);

 

1.11.3       Third-Party
Information. Confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain
the confidentiality of such information and to use it only for certain limited purposes;

 

1.11.4       Business
Operations. Internal personnel and financial information, vendor names and other vendor information (including vendor characteristics,
services and agreements), purchasing and internal cost information, internal services and operational manuals, and the manner and
methods of conducting Company’s business;

 

1.11.5       Marketing
and Development Operations. Marketing and development plans, price and cost data, price and fee amounts, pricing and billing
policies, quoting procedures, marketing techniques and methods of obtaining business, forecasts and forecast assumptions and volumes,
and future plans and potential strategies of Company which have been or are being discussed; and

 

1.11.6       Clients.
Names of Company clients and their representatives, contracts and their contents and parties, customer services, and data provided
by clients.

 

1.12    “Date
of Termination” shall mean the date of last employment for Executive as identified in the Notice of Termination which
shall be in compliance with the applicable provision of Section 4 setting the minimum required notice period for termination
of the Agreement by Executive or Company.

 

1.13     “Disability”
shall mean the absence of the Executive from performance of the Executive’s duties with the Company on a substantial basis for
120 consecutive or non-consecutive calendar days or more within any 12-month period as a result of incapacity due to mental
or physical illness.

 

1.14     “Employment
Period” shall mean the period commencing on the Effective Date and ending on September 23, 2022; provided, however,
that commencing on September 23, 2022, and on each annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date”), unless previously terminated, the Employment Period shall
be automatically extended for an additional annual period(s) (until the next annual anniversary of September 23 of the following
year), unless, at least 90 days prior to the applicable Renewal Date, the Company or Executive shall give notice to the other that
the Employment Period shall not be so extended.

 

1.15     “Entity”
shall mean any corporation, partnership, association, joint-stock company, limited-liability company, trust,
unincorporated organization or other business entity.

 

1.16     “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

 

 

    
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 1.17     “Good Reason” shall mean the occurrence of any of the following:

 

1.17.1       except as provided herein regarding a Change of Control, the assignment to the Executive of any position, authority, duties or
responsibilities that are not materially consistent with the Executive’s position (including status, offices and titles), authority,
duties or responsibilities as contemplated by Section 3.1 of this Agreement, or any other action by the Company which results
in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose any action not taken
in bad faith and which is remedied by the Company after receipt of notice thereof given by the Executive;

 

1.17.2       any material failure by the Company to comply with any of the material provisions of this Agreement (including, without limitation,
its obligations under Section 3.1) or any other agreements between the Executive and the Company, which is not cured
within 30 days of the Notice of Termination provided by Executive;

 

1.17.3       any
material reduction to Executive’s Annual Base Salary (as such term is defined in Section 3.2) or Executive’s bonus, retirement,
pension, savings, life insurance, medical, health and accident, or disability plans, which is not cured within 30 days of the Notice
of Termination provided by Executive, provided, however, that it shall not be Good Reason to terminate if the Company makes a similar
reduction with respect to other similarly situated employees; and

 

1.17.4       the Company requiring Executive to be based at a work location more than 50 miles from the primary work location applicable immediately
following the parties’ execution of this Agreement.

 

In the event of a Change of Control or
other Business Transaction, following the Change of Control or the consummation of such other Business Transaction, “Good
Reason” shall be deemed to exist in the event Executive is assigned to any position, authority, duties or responsibilities
that are (a) not at or with the ultimate parent company of the successor to the Company or the Entity surviving or resulting from
such Business Transaction, or (b) materially inconsistent with the Executive's position (including status, offices, titles and
or reporting line), authority, duties or responsibilities as contemplated by Section 3.1 within six months of the Change
of Control.

 

1.18     “Intellectual
Property” shall mean all inventions, original works of authorship, developments, concepts, know-how, formulae, methods,
and trademarks of any kind whatsoever, individually or jointly created, conceived, developed or reduced to practice, which are
original creations or improvements upon existing inventions, works, or marks, regardless of whether patentable or registerable
under any law, that Executive creates, conceives, develops or reduces to practice after entering this Agreement (whether or not
created, conceived, developed, or reduced to practice during work hours) that: (a) are developed using equipment, supplies, facilities,
or trade secrets of the Company; (b) result at least in part from work performed by Executive for Company or know-how obtained
working for the Company; or (c) relate to the Company’s current or anticipated research and development. Intellectual Property
specifically does not include Prior Intellectual Property.

 

 1.19     “IRS” shall mean the Internal Revenue Service.

 

1.20    
“Notice of Termination” shall mean a written notice which: (a) indicates the specific termination provision in
this Agreement relied upon, (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the provision so indicated, (c) the Date of Termination, and
(d) whether the Company invokes Section 4.6 for all or a portion of the remainder of Executive’s employment in the
event of termination by Executive.

 

 

 

    
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1.21   
“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (a) the Company or any of its Subsidiaries, (b) a
trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (c) an
underwriter temporarily holding securities pursuant to an offering by the Company of such securities, or (d) a corporation
or other Entity owned, directly or indirectly, by the shareholders of the Company in the same proportions as their ownership of
Outstanding Company Common Shares.

 

1.22   
“Prior Intellectual Property” shall mean all inventions, original works of authorship and trademarks of any
kind whatsoever, which Executive created, owned or had any right to, or currently owns or has any right whatsoever to prior to
entering this Agreement.

 

1.23     “Restricted
Period” shall mean the period of Executive’s employment and a period of 24 months following the Date of Termination
of Executive’s employment with Company.

 

1.24     “Section 409A” means Section 409A of the Internal Revenue
Code of 1986, as amended.

 

1.25     “Section 409A Amounts” means those amounts that are deferred
compensation subject to Section 409A.

 

1.26     “Separation
From Service” shall have the meaning ascribed to such term in Section 409A.

 

1.27     “Specified
Executive” means a person who is a "specified employee” within the meaning of Section 409A.

 

1.28     “Subsidiary”
shall mean any majority-owned subsidiary of the Company or any majority-owned subsidiary thereof, or any other Entity in which
the Company owns, directly or indirectly, a majority of the economic interest therein.

 

1.29     “Waiting
Period” shall mean the six-month period commencing on the date after the Executive’s Separation From Service.

 

2.       Employment
Period. The Company and Executive hereby agree that unless this Agreement is earlier terminated as provided for herein,
the Company will continue to employ Executive throughout the Employment Period.

 

3.       Terms
of Employment.

 

 3.1       Position and Duties.

 

3.1.1         During the Employment Period, the Executive’s position (including status, offices, titles, authority, duties and responsibilities)
shall be Chief Operating Officer of the Company, reporting to the Company’s Chief Executive Officer. The Executive’s
services shall be performed at the location where the Company operates.

 

 

 

    
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3.1.2         During the Employment Period, and excluding any periods of Vacation (defined below) and PTO (defined below) to which the Executive
is entitled, the Executive agrees to devote Executive’s full attention and time during normal business hours for a similarly
situated executive to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned
to the Executive hereunder, to use the Executive's best efforts to perform faithfully and efficiently such responsibilities. During
the Employment Period it shall not be a violation of this Agreement for the Executive to (a) serve on corporate, civic or charitable
boards or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions and (c) manage
personal investments, so long as such activities in clause (a), (b), and (c) together do not significantly interfere with
the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement or otherwise
negatively impact the good will of the Company as viewed in the eyes of the Board. It is expressly understood and agreed that to
the extent that such activities have been conducted by the Executive prior to the date hereof, and are listed on Exhibit “A”,
the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the date
hereof shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

 

 3.2       Compensation.

 

3.2.1         Base Salary. During the Employment Period, the Executive shall receive an annualized base salary (the “Annual Base
Salary”) of $245,000.00 per annum, paid according to the Company’s standard payroll practices and subject to state and
federal withholding and any other deductions authorized by Executive.

 

3.2.2         Annual Bonus. The Executive shall be eligible to earn a cash bonus payment each fiscal year under this Agreement the (“Annual
Bonus Payment”). For the 2019 fiscal year, the Annual Bonus Payment, if any, shall be discretionary. Beginning in 2020 and
continuing each year of the Agreement thereafter, the Annual Bonus Payment shall be calculated based upon achievement of a target
financial objective set by the Board’s Compensation Committee within three months of the beginning of each fiscal year thereafter.
Such Annual Bonus Payment shall be based, at least in part, upon the target financial objective for the Company as compared to
EBITDA for the prior fiscal year.

 

3.2.2.1      If
the Board subsequently determines the financial statements of the Company must be materially restated for any fiscal year involved
in the determination of the Annual Bonus Payment, the Executive may be required to repay any portion of the Annual Bonus Payment
in excess of what Executive’s Annual Bonus Payment would be under the restated financial statements. Conversely, if Executive
would be entitled to a larger Annual Bonus Payment under the restated financial statements, the Company shall pay to Executive
the difference between what the Executive has previously been paid and what the Executive would have earned under the restated
financial statements.

 

3.2.2.2      For
purposes of the determination of the Annual Bonus Payment, EBITDA shall be defined as follows: The net income (loss) of the Company
plus interest expense-net, income taxes, depreciation and amortization (including amortization of purchased receivables). The determination
of EBITDA, for purposes of the Annual Bonus Payment, shall be made by the Board in accordance with generally accepted accounting
principles in effect in the United States, applied on a consistent basis (“GAAP”). EBITDA shall be adjusted for the
following purposes: (a) to exclude net gains and losses on the disposal of assets and other non-operating income or expense items;
(b) to exclude EBITDA generated from acquisitions of new businesses or companies during the year (an acquisition of a new office
would not be deemed to be a material acquisition); (c) to exclude capitalized costs that would otherwise be expenses of the period;
and (d) for other items in the discretion of the Board, provided, however that as to Executive Officers, the Board may not exercise
discretion to increase EBITDA for purposes of the Annual Bonus Payment.

 

 

 

    
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3.2.2.3      The
Annual Bonus Payment, if earned, will be paid in cash no later than 30 days after the completion of the annual audit of the Company’s
consolidated financial statements, unless the Executive shall elect to defer the receipt of such Annual Bonus Payment pursuant
to an arrangement which meets the requirements of Section 409A. In any event, for purposes of Section 409A, the Annual Bonus Payment
will not be considered earned by the Executive until the completion of the annual audit of the Company’s consolidated financial
statements.

 

3.2.3        
Stock Award. The Executive shall receive a restricted common stock award as provided in
the attached Restricted Stock Agreement (Exhibit “B”) upon the Effective Date of the Agreement. From Time to time Company
may provide Executive additional restricted stock offers in the same general form as that identified in the Restricted Stock Agreement.

 

3.2.4        
Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be eligible to participate in
all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of
the Company, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities
(measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, less favorable, in the whole, than the most favorable
of those provided by the Company for the Executive under such plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company, subject to the terms and conditions of the applicable
plans, practices, policies and programs.

 

3.2.5        
Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible to participate in all welfare benefit plans, practices, policies and programs provided by the Company; including, without
limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs (the “Plans”) from time to time to the extent applicable generally to, and no
less favorable than those provided to other peer executives at any time during the 120-day period immediately preceding the Effective
Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives
of the Company. The Company shall pay 100% of all premiums with respect to such Plans.

 

3.2.6        
Fringe Benefits. During the Employment Period, the Executive shall be entitled to such fringe benefits (including, without
limitation, payment of cellular telephone, vehicle allowance, payment of professional fees and taxes and related expenses, as appropriate)
in accordance with the plans, practices, programs and policies of the Company for other peer executives at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the Company. Notwithstanding the foregoing, any amounts payable under
Section 3.2 that are Section 409A Amounts shall be paid in a manner and at such times so as to be compliant with
or exempt from Section 409A.

 

3.2.7       
Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable
business expenses incurred by the Executive subject to the terms of the Company’s applicable expense reimbursement policies applicable
to other peer executives at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company. Notwithstanding
the foregoing, any amounts payable under Section 3.2 that are Section 409A Amounts shall be paid in a manner and
at such times so as to be compliant with or exempt from Section 409A.

 

 

 

    
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3.2.8        
Vacation and other Paid Time Off. During the Employment Period, the Executive shall be entitled to up to 15 days paid vacation
(“Vacation”) per calendar year or such greater amount of Vacation as may be applicable generally to other peer executives
at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer executives of the Company. To the extent not used in any fiscal year,
Executive may carry over up to three weeks of Vacation to a subsequent fiscal year. Executive may not take more than 10 consecutive
business days of Vacation in any 30 day period without consulting management. Additionally, Executive shall be entitled to five
days of general paid time off (“PTO”) which may be used for sick leave or other absences. To the extent not used in
any fiscal year, PTO may not be carried over to a subsequent fiscal year.

 

 3.3       Certain Additional Payments by the Company.

 

3.3.1        
Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment or distribution by the Company
or any of its affiliated companies to or for the benefit of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement, any other plan, agreement or contract or otherwise, but determined without regard to any
additional payments required under Section 3.3) (a “Payment”) would be subject to any additional tax
or excise tax imposed by sections 409A, 457A or 4999 of the Code (and any successor provisions or sections to sections 409A, 457A
and 4999) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to promptly receive from the Company an additional payment (a “Gross-Up Payment”)
in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments. Any Gross-Up Payment shall be made by the Company at least 10 days prior to the date that the Executive
is required to remit to the relevant taxing authority any federal, state and local taxes imposed upon the Executive, including
the amount of additional taxes imposed upon the Executive due to the Company’s payment of the initial taxes on such amounts.
Notwithstanding any provision of this Agreement to the contrary, any amounts to which the Executive would otherwise be entitled
under this Section 3.3.1 during the first six months following the date of the Executive’s Separation From Service
shall be accumulated and paid to the Executive on the date that is six months following the date of his Separation From Service.
All reimbursements by the Company under this Section 3.3.1 shall be paid no later than the earlier of (a) the time
periods described above and (b) the last day of the Executive’s taxable year next following the taxable year in which
the expense was incurred.

 

3.3.2       
Subject to the provisions of Section 3.3.3, all determinations required to be made under this Section 3.3,
including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized
in arriving at such determination shall be made by PricewaterhouseCoopers or, as provided below, such other certified public accounting
firm as may be designated by the Executive (the “Accounting Firm”) which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days after the receipt of notice from the Executive that there has been
a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting a Change of Control, the Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 3.3, shall be paid by the Company to the Executive within five days after the receipt of the
Accounting Firm’s determination. Any determination by the Accounting Firm, absent manifest error, shall be binding upon the
Company and the Executive, subject to the last sentence of Section 3.3.1, and in no event later than the payment deadline
specified in Section 3.3.1. As a result of the uncertainty in the application of section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to Section 3.3.3 and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive, subject to the last sentence
of Section 3.3.1, and in no event later than the payment deadline specified in Section 3.3.1.

 

 

 

    
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3.3.3        
The Executive shall notify the Company in writing of any claim by the IRS that, if successful, would require the payment by the
Company of the Gross-Up Payment (or an additional Gross-Up Payment in the event the IRS seeks higher payment). Such notification
shall be given as soon as practicable, but no later than 10 business days after the Executive is informed in writing of such claim,
and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following the date on which he gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

 

3.3.3.1     
give the Company any information reasonably requested by the Company relating to such claim,

 

3.3.3.2     
take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time,
including without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the
Company,

 

3.3.3.3     
cooperate with the Company in good faith in order to effectively contest such claim, and

 

3.3.3.4     
permit the Company to participate in any proceedings relating to such claims; provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred at any time during the
period that ends 10 years following the lifetime of the Executive in connection with such proceedings and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions
of Section 3.3.3, the Company shall control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority
in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. The Company shall not direct the Executive to pay such a claim and
sue for a refund if, due to the prohibitions of section 402 of the Sarbanes-Oxley Act of 2002, the Company may not advance to the
Executive the amount necessary to pay such claim. All such costs and expenses shall be made by the Company at least 10 days prior
to the date that the Executive is required to pay or incur such costs and expenses. The costs and expenses that are subject to
be paid by the Company pursuant to Section 3.3.3 shall not be limited as a result of when the costs or expenses are incurred.
The amounts of costs or expenses that are eligible for payment pursuant to this Section 3.3.3.4 during a given taxable year
of the Executive shall not affect the amount of costs or expenses eligible for payment in any other taxable year of the Executive.
The right to payment of costs and expenses pursuant to this Section 3.3.3.4 is not subject to liquidation or exchange for
another benefit. Notwithstanding any provision of this Agreement to the contrary, any amounts to which the Executive would otherwise
be entitled under this Section 3.3.3.4 during the first six months following the date of the Executive’s Separation
From Service shall be accumulated and paid to the Executive on the date that is six months following the date of his Separation
From Service. All reimbursements by the Company under this Section 3.3.3.4 shall be paid no later than the earlier of (a) the
time periods described above and (b) the last day of the Executive’s taxable year next following the taxable year in
which the expense was incurred.

 

 

 

    
	 	10	 

     

    

 

3.4      If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 3.3.3, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 3.3.3 promptly pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant
to Section 3.3.3 a determination is made that the Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall not be required to be repaid.

 

3.5      Any provision in this Agreement or any other plan or agreement to the contrary notwithstanding, if the Company is required to pay
a Gross-Up Payment pursuant to the provisions of this Agreement and pursuant to the provisions of another plan or agreement, then
the Company shall pay the total of the amounts determined pursuant to this Agreement and the provisions of such other plan or agreement.

 

4.       Termination
of Employment.

 

4.1       Death
or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period
without necessity of Notice of Termination. If the Company determines in good faith belief that the Executive has a Disability,
the Company may terminate the Agreement upon not less than 30 days written notice.

 

4.2.      By the
Company with Cause. Subject to the limitations of Section 1.6 regarding notice and cure, the Company may terminate the
Executive’s employment immediately during the Employment Period for Cause by providing a Notice of Termination.

 

4.3       By the Executive with Good Reason. Subject to the limitations of Section 1.17 regarding notice and cure, the Executive’s
employment may be terminated immediately by the Executive at any time during the Employment Period for Good Reason by providing
a Notice of Termination.

 

4.4       By the Company without Cause. The Executive’s employment may be terminated by the Company at any time during the Employment
Period without Cause at any time by providing a Notice of Termination and upon not less than 60 days written notice.

 

4.5       By the Executive without Good Reason. The Executive’s employment may be terminated by the Executive at any time during the
Employment Period without good Reason by providing a Notice of Termination and upon not less than 60 days written notice.

 

4.6       Garden Leave. In the event of termination by Executive with or without Good Reason, the Company may elect to relieve Executive
of any and all duties under this Agreement and deny Executive access to Company property so long as Company makes any and all payments
otherwise due under the Agreement during the Notice of Termination period. The Company may elect to place Executive on Garden Leave
at any time during the remainder of Executive’s employment identified in the Notice of Termination. Such leave shall not
prejudice either Company or Executive to any other rights or payments due under this Agreement.

 

 

 

    
	 	11	 

     

    

 

 5.      Obligations of the Company Upon Termination.

 

5.1       Death
or Disability. If, during the Employment Period, the Executive’s employment is terminated by reason of the Executive’s death
or Disability:

 

5.1.1         the
Company shall pay to the Executive (or Executive’s heirs, beneficiaries or representatives, as applicable) in a lump sum in cash,
within 30 days after the Date of Termination, the Accrued Obligation; and

 

5.1.2         the
Company shall pay or cause the Executive (or Executive’s heirs, beneficiaries or representative, as applicable) to be paid the
Benefit Obligation at the times specified in and in accordance with the terms of the applicable Benefit Plans.

 

5.2       Good
Reason or Other Than for Cause. If, during the Employment Period, the Agreement is terminated by the Executive for Good Reason
or by the Company for any reason other than for Cause, then:

 

5.2.1         The
Company shall pay to the Executive, at the times specified in Section 5.2.2 below, the following amounts:

 

5.2.1.1       the
Accrued Obligation,

 

5.2.1.2       the
Benefit Obligation,

 

5.2.1.3       a
sum equal to one time the Executive's Annual Base Salary (at the rate in effect as of the Date of Termination), and

 

5.2.1.4       a
sum equal to 1/12 one time the Executive’s average Annual Bonus Payment over the preceding two-year period, if any, for each
completed month of employment completed during the fiscal year in which Executive’s employment is terminated.

 

5.2.2         The
Company shall pay the Executive the Benefit Obligation at the times specified in and in accordance with the terms of the applicable
Benefit Plans. The Company shall pay the Executive the amounts described under Section 5.2.1.1 within 30 days after the
Date of Termination. The Company shall pay Executive the amount described under Section 5.2.1.3 over 12 months at regular payroll
intervals following the Date of Termination, provided, however, that the sum shall be paid over 24 months in the event of a termination
which involves the application of Section 5.2.4. The Company shall pay Executive the amount described under Section 5.2.1.4 no
later than such payment would have otherwise been due Executive if Executive completed full employment in the applicable fiscal
year.

 

5.2.3         Payments
to the Executive under this Section 5.2 (other than the Accrued Obligation and the Benefit Obligation) are contingent upon
the Executive’s execution (and non-revocation) of a release substantially in the form of Exhibit “C” hereto no later
than 60 days following Executive's Separation From Service.

 

5.2.4         The
payment due Executive under Section 5.2.1.3 shall be increased to two times the Executive’s Annual Base Salary (at the rate
in effect as of the Date of Termination) if Executive is terminated under Section 5.2 within 12 months of a Change of Control which
occurs more than 12 months following the Effective Date.

 

 

 

    
	 	12	 

     

    

 

5.3       Cause.
If the Executive’s employment is terminated by the Company for Cause during the Employment Period, this Agreement shall terminate
without further obligations to the Executive, other than the obligation to pay to the Executive (a) the Accrued Obligation
and (b) the Benefit Obligation in accordance with the terms of the applicable Benefit Plans. In such case, the Accrued Obligation
shall be paid to the Executive in a lump sum in cash within 30 days after the Date of Termination and the Benefit Obligation shall
be paid in accordance with the terms of the applicable Benefit Plans.

 

5.4       Termination
by Executive Other Than for Good Reason. If the Executive voluntarily terminates his employment during the Employment Period
for any reason other than for Good Reason, the Executive’s employment shall terminate without further obligations to the Executive,
other than for payment of the Accrued Obligation and the Benefit Obligation and the rights provided in Section 6. In such
case, the Accrued Obligation shall be paid to the Executive in a lump sum in cash within 30 days after the Date of Termination
and the Benefit Obligation shall be paid in accordance with the terms of the applicable Benefit Plans.

 

5.5       General.
Notwithstanding anything herein to the contrary, if the Executive is a Specified Executive on the date of his Separation From Service,
any payments or benefits hereunder that are deferred compensation subject to Section 409A, are payable upon his Separation From
Service, and are not otherwise exempt from Section 409A, shall not be paid during the Waiting Period, and on the first business
day following the expiration of the Waiting Period all payment and benefits that were payable during the Waiting Period will be
paid to the Executive in a cash lump sum payment, without interest, and thereafter payments and benefits will be paid as provided
herein.

 

6.      
Other Rights. Except as provided herein, nothing in this Agreement shall prevent or limit the Executive’s continuing
or future participation in any plan, program, policy or practice provided by the Company and for which the Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with
the Company. Except as otherwise provided herein, amounts which are vested benefits, which vest according to the terms of this
Agreement or which the Executive is otherwise entitled to receive under any of the Benefit Plans or any other plan, policy, practice
or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement.

 

 7.       Competition, Disclosure, Ownership, and Solicitation.

 

7.1       Non-Disclosure.
Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process,
communicate, use, disclose or divulge any Confidential Information of the Company or its affiliates at any time. Any termination
of the Executive’s employment or of this Agreement shall have no effect on the continuing operation of this Section 7.1.

 

7.2       Return
of Confidential Information. The Executive agrees to return all Confidential Information, including all photocopies, extracts
and summaries thereof, and any such information stored electronically on tapes, computer disks or in any other manner to the Company
at any time upon request by the Company and upon the termination of his employment hereunder for any reason without request of
the Company. In no event shall an asserted violation of the provision of this Section 7.2 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this Agreement.

 

7.3       Non-Competition.
In exchange for the provision of Confidential Information and training by the Company, the Executive shall not engage in Competition
during the Restricted Period, provided, that it shall not be a violation of this Section 7.3 for the Executive to become
the registered or beneficial owner of up to five percent of any class of the capital stock of a corporation registered under the
Securities Exchange Act of 1934, as amended, provided that the Executive does not actively participate in the business of such
corporation until such time as this covenant expires.

 

 

 

    
	 	13	 

     

    

 

7.4       Non-Solicitation;
Non-Interference. During the Restricted Period, the Executive agrees that the Executive will not, directly or indirectly, for
his benefit or for the benefit of any other person, firm or Entity, do any of the following:

 

7.4.1         solicit
from any customer doing business with the Company or any of its Subsidiaries, as of the Date of Termination, business of the same
or of a similar nature to the business of the Company or any of its Subsidiaries with such customer;

 

7.4.2         solicit
from any potential customer (that is known to the Executive) of the Company or any of its Subsidiaries business of the same or
of a similar nature to that which has been the subject of a known written or oral bid, offer or proposal by the Company or any
of its Subsidiaries, or of substantial preparation with a view to making such a bid, proposal or offer, within six months prior
to such Date of Termination;

 

7.4.3         solicit
the employment or services of any person employed by or a consultant to the Company upon the Date of Termination, or within six
months prior thereto (provided, however, that the provisions hereof shall be deemed not to prohibit the Executive,
on the Executive’s behalf or on behalf of other persons, firms or Entities, from placing advertisements in newspapers or other
media of general circulation advertising employment opportunities and offering employment to individuals responding to those advertisements);
or

 

7.4.4         otherwise
knowingly interfere with the business or accounts of the Company or any of its Subsidiaries.

 

7.5       Reformation.
Should any provision within this Section 7 of this Agreement be determined too broad under any law or statute, the parties
expressly request the agreement be reformed to provide the maximum possible protection to Company.

 

7.6       Extension
Due to Breach. For any period of time during which Executive is in breach of the covenant not to compete set out in this Section
7, Executive agrees the non-competition and non-solicitation obligations shall be extended for an equal period.

 

7.7       Good
Will. The Executive and the Company agree and acknowledge that the Company has a substantial and legitimate interest in protecting
the Company’s and its Subsidiaries’ Confidential Information and goodwill. The Executive and the Company further agree and acknowledge
that the provisions of this Section 7 are necessary to protect the Company’s legitimate business interests and are designed
to protect the Company’s and its Subsidiaries’ Confidential Information and goodwill. The Executive agrees that the scope of the
restrictions as to time, geographic area, and scope of activity in this Section 7 are necessary for the protection of the
Company’s legitimate business interests and are not oppressive or injurious to the public interest. The Executive agrees that in
the event of a breach or threatened breach of any of the provisions of this Section 7 the Company shall be entitled to injunctive
relief against the Executive’s activities to the extent allowed by law, and the Executive waives any requirement for the posting
of any bond by the Company in connection with such action. The Executive further agrees that any breach or threatened breach of
any of the provisions of Section 7 would cause injury to the Company for which monetary damages alone would not be a sufficient
remedy. The Executive hereby agrees that the period during which the agreements and covenants of the Executive made in Section
7 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation
of any provision of Section 7.

 

7.8       Patents,
Copyrights and Trademarks. Executive agrees that all Intellectual Property shall become the sole property of Company as outlined
herein:

 

7.8.1         Disclosure
and Assignment. Executive hereby agrees to disclose and hold in trust for the sole benefit of Company any and all Intellectual
Property. Without any additional compensation, Executive hereby assigns to Company, or its designee, all Executive’s right,
title and interest throughout the world in and to any and all Intellectual Property, including without limitation all patent, trademark,
trade secret, copyright, and other proprietary rights therein. Executive further hereby waives and forever releases any moral rights
or rights of attribution with respect to any Intellectual Property.

 

 

 

    
	 	14	 

     

    

 

7.8.2         Records.
Executive agrees to keep and maintain adequate and current written records of all Intellectual Property, including, but not limited
to, notes, sketches, drawings, flow charts, electronic data or recordings, and laboratory notebooks at Company’s place of
business. Executive agrees that such records shall be the sole property of the Company and Executive agrees not to remove such
records from the Company's place of business except as expressly permitted by Company.

 

7.8.3         Assistance.
Executive agrees to assist Company, or its designee, at Company's expense, in every way to secure Company’s rights in the Intellectual
Property in any and all countries during Executive’s employment with Company at any time necessary thereafter. To the extent
Executive is unable or unwilling to provide such assistance, Executive hereby irrevocably designates and appoints Company and its
duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and in Executive’s behalf
and stead to execute and file any such applications or records and to do all other lawfully permitted acts to further Company’s
rights in the Intellectual Property. Executive hereby waives and irrevocably assigns to Company any and all claims, of any nature
whatsoever, which Executive now or hereafter has for past, present or future infringement of any and all proprietary rights assigned
to Company with respect to any Intellectual Property.

 

7.8.4         Prior
Intellectual Property. At the time of entering this Agreement, Executive shall provide Company with a signed and dated list
of all Prior Intellectual Property. If Executive fails to provide Company with such a list within 30 days of entering this Agreement,
Executive agrees that no such Prior Intellectual Property exist.

 

7.9       Non-Disparagement.
Except as noted in this Section, the parties each promise to refrain from making any disparaging remarks about the other
following the termination of the employment relationship between them. Company may, however, offer a faithful account of Executive’s
service to anyone seeking a recommendation or account for future employment of Executive. Similarly, Executive may make any appropriate
good faith charge to any governmental agency regarding the actions of Company, including but not limited to making a report to
the Securities and Exchange Commission regarding the actions of the Company.

 

7.10     Return
of Materials. Executive agrees that upon termination of this Agreement, Executive shall: (a) deliver to Company all Confidential
Information and all copies thereof, along with any and all other property belonging to Company or any Client or supplier of Company,
(b) return to Company all equipment or devices, if any, (c) deliver all passwords and log in information for social media profiles;
and (d) return to Company all sales material and all other documents, information or materials of whatever kind or nature and stored
on any type of media developed by or for Company and thereafter shall neither use such documents, information materials or any
similar materials, nor supply or make available such documents, information or materials to any third party.

 

7       Successors.
This Agreement, and any rights and obligations hereunder, is personal to the Executive and shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. 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.

 

 

 

    
	 	15	 

     

    

 

8       Miscellaneous.

 

8.1       Waivers and
Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may
be waived, only by a written instrument signed by the Executive and the Company or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege hereunder will operate as a waiver thereof,
nor will any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right,
power or privilege hereunder. Notwithstanding anything herein to the contrary, the Company may amend this Agreement in writing
in any manner so that payments or benefits hereunder comply with or continue to be exempt from Section 409A, including, but not
limited to, (a) adding a requirement that no payment or benefits due on account of the Executive's Separation From Service shall
be paid during the six-month period commencing on the Executive’s Date of Termination and (b) making payment of any amounts due
to the Executive hereunder such that any such payment is exempt from Section 409A (including making payment as soon as administratively
practicable, within the meaning of Section 409A, for such purpose).

 

8.2       Applicable
Law, Forum, and Venue. This Agreement shall be governed and construed exclusively in accordance with the laws of the State
of Texas without regard to the conflicts of laws or principles thereof. The parties agree that Texas shall be the forum for any
action or suit related to this Agreement, including, but not limited to, any claim affecting its validity, construction, effect,
performance or termination. The parties further agree that the venue for any such action or suit shall exclusively be the state
or federal courts sitting in Harris County, Texas.

 

8.3       Waiver of Trial
by Jury. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON ANY MATTER ARISING OUT OF, OR IN CONNECTION
WITH, OR RELATING TO THIS AGREEMENT.

 

8.4       Headings.
The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.

 

8.5       Notices.
All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

	If to the Executive:	
        Micah Simmons

        at the address set forth in his personnel
file 

at Deep Down, Inc.
	 
	 	 
	 	 
	 	 
	If to the Company:	
        Deep Down, Inc.

        18511 Beaumont Highway

        Houston, Texas 77049

        Attention: Chief Executive Officer
	 

 

or to such other address as either party
shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually
received by the addressee.

 

 

 

    
	 	16	 

     

    

 

8.6       Validity.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

 

8.7       Withholding.
The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

 

8.8       Entire Agreement.
This Agreement constitutes the entire agreement and understanding between the parties relating to the subject matter hereof and
supersedes all prior agreements between the parties relating to the subject matter hereof.

 

8.9       Deferred Compensation
and Specified Executive. The Executive acknowledges and understands that none of the Company, its Affiliates, nor any of their
officers, directors or employees are responsible or liable for and none of them guarantee the tax consequences of any payments
or benefits under this Agreement, including, but not limited to, any excise taxes or interest that may be incurred under Section
409A.

 

8.10     Assignment. This Agreement may be assigned by Company to any affiliated or related company at any time without notice.
This Agreement may not be assigned by Executive for any reason without express written consent of Company.

 

8.11     Reformation.
Should any provision within this Agreement be determined too broad under any law or statute, the parties expressly request the
Agreement be reformed to provide the maximum possible protection to Company.

 

8.12     No Construction
Against Drafter. Executive is encouraged to seek the advice of legal counsel in reviewing this Agreement and has had an opportunity
to review and consider the Agreement before entering it. Therefore, in any construction to be made of this Agreement, the Agreement
shall not be construed for or against either Party.

 

8.13     Defend
Trade Secrets Act Notice. An individual shall not be held criminally or civilly liable under any Federal or State trade secret
law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an
attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally
or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit
for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the
individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade
secret under seal; and does not disclose the trade secret, except pursuant to court order.

 

9     Indemnity.

 

9.1     Legal Fees. To the extent permitted by applicable law, and the By-Laws of the Company, the Company agrees to defend, indemnify
and hold harmless the Executive from any and all claims, demands or causes of action, including reasonable attorneys’ fees and
expenses, suffered or incurred by the Executive as a result of the assertion or filing of any claim, demand, litigation or other
proceedings based, in whole or in part, upon statements, acts or omissions made by or on behalf of the Executive pursuant to this
Agreement and/or in the course and scope of the Executive’s employment by the Company. Within 10 days after notice from the Executive
of the filing or assertion of any claim for which indemnification is provided (or sooner if action is required sooner in order
to properly defend the Executive), the Company shall designate competent, experienced counsel to represent the Executive, at the
Company’s expense, which counsel shall be subject to the Executive’s approval, which shall not be unreasonably withheld. Should
the Company fail to so designate or pay, or make arrangements for payment of, such counsel, then Executive shall have the right
to engage counsel of the Executive’s choosing, and the Company shall be obligated to pay or reimburse any and all fees and expenses
incurred by the Executive in defending himself in connection with any such claim.

 

 

 

    
	 	17	 

     

    

 

9.2     Insurance.
During the entire employment period, and for a period of not less than five years after termination of the Executive’s
employment, the Company shall maintain, and pay all applicable premiums for, directors’ and officers’ liability
insurance, of which the Executive shall be an insured, which shall provide full coverage for the defense and indemnification
of the Executive, to the fullest extent permitted by applicable law.

 

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

 

	COMPANY:	EXECUTIVE:
	 	 
	DEEP DOWN, INC.	MICAH SIMMONS
	 	 
	 	 
	BY: /s/ Charles K. Njuguna                                                                  	/s/ Micah Simmons                                                                     
	 	 Charles K. Njuguna, President/CEO	Individually

 

 

 

 

 

 

 

 

    
	 	18	 

     

    

 

EXHIBIT A

 

OUTSIDE ACTVITIES (SECTION 3.1.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    
	 	A-1	 

     

    

 

EXHIBIT B

 

RESTRICTED STOCK AGREEMENT

 

		RESTRICTED STOCK AGREEMENT

 

 

 

This Restricted Stock Agreement (“Agreement”)
is made and entered into on September 12, 2019, to be effective as of September 23, 2019 (“Date of Grant”), by and
between Deep Down, Inc., a Nevada corporation (the “Company”), and Micah Simmons (“Executive”). The
defined term “Employer” shall include, where applicable, the Company and affiliates and entities in which the Company
has an ownership interest, directly or indirectly.

 

1        Award.
The Company hereby makes a grant of restricted stock subject to the terms and conditions contained herein. The shares granted to
Executive pursuant to this Agreement are an aggregate of 200,000 shares (the “Restricted Shares”) of common stock of
the Company, $0.001 par value per share, which in turn are a portion of the overall common stock of the Company (the “Stock”).

 

2        Restricted
Shares. Executive hereby accepts the grant of Restricted Shares when issued and agrees to the limitations below:

 

2.1       Transfer
Restriction. The Restricted Shares granted hereunder may not be sold, assigned, transferred, exchanged, pledged, hypothecated
or encumbered by Executive, and no such sale, assignment, transfer, exchange, pledge, hypothecation or encumbrance, whether made
or created by voluntary act of Executive or any agent of Executive or by operation of law, shall be recognized by, or be binding
upon, or shall in any manner affect the rights of, the Company or any agent or any custodian holding certificates for the Restricted
Shares until the Forfeiture Restriction (defined below) lapses.

 

2.2       Forfeiture
Restriction. The Restricted Shares shall be forfeited and revert to the Company upon the termination of Executive’s employment
with the Company for any reason (the “Forfeiture Restriction”) effective upon the last date Executive performs work
for the Company, unless the Forfeiture Restriction lapses before such date as described below.

 

2.3       Lapse
of Forfeiture Restriction. The Forfeiture Restriction with respect to each tranche of Restricted Shares (as described below)
shall lapse upon the first to occur of any of the following events: (1) the Executive’s interest in the Restricted Shares
vests as herein stated; (2) Executive’s death; (3) Executive’s employment with the Company terminates due to disability
as limited below; or (4) in the event of a Change of Control as herein defined.

 

2.3.1         Vesting.
Upon vesting, the Forfeiture Restriction shall lapse. Unless vesting occurs sooner pursuant to the terms of an Employment Agreement,
Executive’s interest in the Restricted Shares shall vest as follows:

 

	

Vesting Date
	 	Restricted Shares 

Released from 

Forfeiture Restriction	 
	September 23, 2019	 	 	50,000	 
	September 23, 2020	 	 	50,000	 
	September 23, 2021	 	 	50,000	 
	September 23, 2022	 	 	50,000	 

 

 

 

    
	 	B-1	 

     

    

 

2.3.2         Change
in Control. Upon the occurrence of a “Change in Control” as defined below, the Forfeiture Restriction on the Restricted
Shares shall be removed provided the Executive remains employed by the Company immediately prior to the Change in Control.

 

For purposes
of this Agreement, “Change in Control” shall mean the occurrence of any of the following events:

 

2.3.2.1      Any
Person (meaning individual, trust or entity of any form) is or becomes the Beneficial Owner (meaning a Person who, directly or
indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power and\or investment
power over more than thirty percent (30%) or more of either (A) the then outstanding shares of common stock of the Company
(the “Outstanding Company Common Shares”) or (B) the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”)),
excluding any Person who becomes such a Beneficial Owner in connection with the issuance of equity securities directly by the Company
to such Person in a Board (meaning the Company’s Board of Directors) approved equity financing;

 

2.3.2.2      Individuals,
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent
Board (including in connection with an equity financing by the Company or in connection with preparing for a listing of Company
equity securities on a national stock exchange) shall be considered as though such individual was a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or any other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

 

2.3.2.3      The
consummation of a reorganization, merger, amalgamation, consolidation, scheme of arrangement, exchange offer or similar transaction
of the Company or any of its subsidiaries or the sale, transfer or other disposition of all or substantially all of the Company’s
assets (each, a “Business Transaction”), unless, following such Business Transaction or series of related Business
Transactions, as the case may be, (A) individuals and entities (which, for purposes of this Agreement, shall include, without
limitation, any corporation, partnership, association, joint-stock company, limited liability company, trust, unincorporated organization
or other business entity) who were the beneficial owners, respectively, of more than fifty percent (50%) of, respectively, the
Outstanding Company Common Shares and Outstanding Company Voting Securities immediately prior to such Business Transaction beneficially
own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding common shares and the combined
voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or other governing
body), as the case may be, of the entity resulting from such Business Transaction (including, without limitation, an entity which
as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through
one (1) or more subsidiaries or entities), as the case may be, (B) no person (excluding any entity resulting from such
Business Transaction or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business
Transaction) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding
shares of common stock of the entity resulting from such Business Transaction or the combined voting power of the then outstanding
voting securities of such entity except to the extent that such ownership existed prior to the Business Transaction, and (C) at
least a majority of the members of the board of directors (or other governing body) of the entity resulting from such Business
Transaction were members of the Incumbent Board at the time of the approval of such Business Transaction; or

 

2.3.2.4      Approval
or adoption by the Board of Directors or the shareholders of the Company of a plan or proposal which would result directly or indirectly
in the liquidation, transfer, sale or other disposal of all or substantially all of the Company’s assets or the dissolution
of the Company.

 

 

 

    
	 	B-2	 

     

    

 

2.3.3         Disability.
A disability shall occur if the Employer reasonably determines Executive cannot perform the essential functions of Executive’s
job duties due to a physical or mental impairment with or without reasonable accommodation and terminates Executive’s employment.
Under such circumstance, Forfeiture Restriction shall lapse with respect to the Restricted Shares in which Executive was entitled
to vest during the year in which the disability arose and termination occurred, but the Forfeiture Restriction concerning any additional
Restricted Shares shall remain in place.

 

2.3.4         Removal
of Forfeiture Restriction. Restricted Shares with respect to which the Forfeiture Restriction have lapsed shall cease to be
subject to any Forfeiture Restriction, and the Company, pending payment of corresponding taxes by Executive, shall provide the
Executive a certificate representing the Restricted Shares as to which the Forfeiture Restriction has lapsed.

 

3       Dispute
Regarding Forfeiture Restriction. If the employment of Executive with the Employer terminates prior to the lapse of the
Forfeiture Restriction, and there exists a dispute between Executive and the Employer or the Company as to the satisfaction of
the conditions to the lapse of the Forfeiture Restriction or the terms and conditions of the grant, the Restricted Shares shall
remain subject to the Forfeiture Restriction until the resolution of such dispute, except that any distributions that may be payable
to the holders of record of Stock as of a date during the period from termination of Executive’s employment to the resolution
of such dispute shall:

 

3.1       to
the extent to which such distributions would have been payable to Executive on the Restricted Shares under the terms hereof, be
held by the Company as part of its general funds, and shall be paid to or for the account of Executive only upon, and in the event
of, a resolution of such dispute in a manner favorable to Executive, and then only with respect to such of the Restricted Shares
as to which such resolution shall be so favorable, and

 

3.2       be
retained by the Company in the event of a resolution of such dispute in a manner unfavorable to Executive only with respect to
such of the Restricted Shares as to which such resolution shall be so unfavorable.

 

4       Certificates.
Notwithstanding anything herein to the contrary, the Company may, in its discretion, reflect ownership of the Shares through the
issuance of stock certificates, or in book-entry form, without stock certificates, on its books and records.  If the
Company elects to issue certificates, one or more certificates evidencing the Restricted Shares shall be issued by the Company
in Executive’s name, or at the Company’s option, in the name of the Company’s nominee, pursuant to which Executive
shall have voting rights.

 

The Company may cause
the certificate or certificates to, upon issuance, be delivered to the Secretary of the Company or to such other depository as
may be designated by the Company for safekeeping until the forfeiture thereof occurs or the Forfeiture Restriction applicable thereto
lapse pursuant to the terms of this Agreement.  Upon request of the Company or its designee, Executive shall deliver
to the Company a stock power, endorsed in blank, relating to the Restricted Shares then subject to the Forfeiture Restriction.  Subject
to the Company’s rights under this Section 4 and the other provisions of this Agreement, upon the lapse of the Forfeiture
Restriction without forfeiture, the Company shall deliver to Executive a certificate evidencing the vested Restricted Shares with
respect to which Forfeiture Restriction have lapsed, and shall retain a certificate representing unvested Restricted Shares still
subject to Forfeiture Restriction. Notwithstanding any other provisions of this Agreement, the issuance or delivery of any Stock
(whether subject to Forfeiture Restriction or unrestricted) may be postponed for such period as may be required to comply with
applicable requirements of any national securities exchange or any requirements of any law or regulation applicable to the issuance
or delivery of such Stock.  The Company shall not be obligated to issue or deliver any Stock if the issuance or delivery
thereof shall constitute a violation of any provision of any law or of any regulation of any governmental authority or any national
securities exchange.

 

 

 

    
	 	B-3	 

     

    

 

5       Withholding
of Tax. To the extent that the receipt of the Restricted Shares or the lapse of any Forfeiture Restriction result in income
to Executive for federal, state, provincial or local income tax purposes, Executive shall pay to the Employer or make arrangements
satisfactory to the Company regarding payment of any federal, state, provincial or local taxes of any kind required by law to be
withheld with respect to such income. The Company will permit payment of such taxes to be made through the tender of cash or shares
of Stock, the withholding of shares of Stock out of Stock otherwise distributable or any other arrangement satisfactory to the
Company.  The Company shall, to the extent permitted by law, have the right to withhold delivery of a Stock certificate
under Section 4 above or to deduct any such taxes from any payment of any kind otherwise due to the Executive. If Executive
does not pay the entire amount of such taxes to the Employer within 30 days after the date on which the income subject to such
taxes is recognized, the Company shall withhold from the Shares to which Executive is entitled a number of shares of Stock having
an aggregate fair market value equal to the amount of such taxes remaining to be paid by Executive and shall deliver a certificate
for the remaining Shares to the Executive in accordance with Section 4. If Executive makes the election authorized by Section
83(b) of the Internal Revenue Code, Executive shall submit to the Company a copy of the statement filed by Executive to make such
election.

 

6       Status
of Shares. Executive agrees that, notwithstanding anything to the contrary herein, the Shares may not be sold or
otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities
laws.  Executive also agrees (i) that certificates shall bear the legend or legends as the Company deems
appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the
transfer of the Shares on its transfer records if such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to
its transfer agent, if any, to stop registration of the transfer of the Shares. Executive acknowledges that the issuance of
the Restricted Shares was not registered pursuant to a registration statement under the Securities Act of 1933 (the
“Securities Act”) or applicable state securities laws and therefor are deemed to be “restricted
securities” as contemplated by Rule 144 under the Securities Act. Executive is aware of the restriction on re-sale
applicable to restricted securities under such laws, and agrees not to dispose of such Shares in any manner that would
constitute a violation of such laws.

 

7       Changes
in Capital Structure. In the event that the outstanding shares of Stock or other securities of the Company shall be changed
in number or class by reason of split-ups, spin-offs, combinations, mergers, consolidations or recapitalizations, or by reason
of Stock dividends, reverse stock splits or other event (“Liquidation Event”), the number or class of securities comprising
the Restricted Shares shall be appropriately and equitably adjusted.

 

8       Employment
Relationship. For purposes of this Agreement, Executive shall be considered to be in the employment of the Employer as
long as Executive remains an employee of the Employer, or any successor, whether a corporation or other legal entity.  Any
question as to whether and when there has been a termination of such employment, and the nature or cause of such termination, shall
be determined by the Company in good faith. Nothing contained herein shall be construed as conferring upon Executive the right
to continue in the employ of the Employer, nor shall anything contained herein be construed or interpreted to limit the “employment
at will” relationship between Executive and the Employer.

 

9       Company’s
Powers. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted
as terminating, modifying or altering, any of the powers, rights or authority vested in the Company.

 

10     Binding
Effect.  The terms and conditions of this Agreement shall, in accordance with their terms, be binding upon, and
inure to the benefit of, all successors of Executive, including, without limitation, Executive’s estate and the executors,
administrators, or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy, or representative of creditors
of Executive.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company.

 

 

 

    
	 	B-4	 

     

    

 

11     Notices.
Every notice hereunder shall be in writing and shall be given by registered or certified mail or by any other method accepted by
the Company or the Company’s designee. All notices to the Company shall be directed to Deep Down, Inc., 18511 Beaumont Highway,
Houston, Texas 77049 Attention: Secretary. Any notice given by the Company to Executive directed to Executive
at the address on file with the Company shall be effective to bind Executive and any other person who shall acquire rights hereunder.  The
Company shall be under no obligation whatsoever to advise Executive of the existence, maturity or termination of any of Executive’s
rights hereunder and Executive shall be deemed to have familiarized himself or herself with all matters contained herein that may
affect any of Executive’s rights or privileges hereunder.

 

12     Modification
and Severability. If a court of competent jurisdiction declares that any provision of this Agreement is illegal, invalid
or unenforceable, then such provision shall be modified automatically to the extent necessary to make such provision fully enforceable.
If such court does not modify any such provision as contemplated herein, but instead declares it to be wholly illegal, invalid
or unenforceable, then such provision shall be severed from this Agreement, as applicable, and such declaration shall in no way
affect the legality, validity and enforceability of the other provisions of this Agreement to which such declaration does not relate.
In this event, this Agreement shall be construed as if it did not contain the particular provision held to be illegal, invalid
or unenforceable, the rights and obligations of the parties hereto shall be construed and enforced accordingly, and this Agreement
otherwise shall remain in full force and effect.  If any provision of this Agreement is capable of two constructions,
one of which would render the provision void and the other would render the provision valid, then the provision shall have the
construction which renders it valid

 

13     Applicable
Law, Forum, and Venue. This Agreement shall be governed and construed exclusively in accordance with the laws of the State
of Texas without regard to the conflicts of laws or principles thereof. The parties agree that Texas shall be the forum for any
action or suit related to this Agreement, including, but not limited to, any claim affecting its validity, construction, effect,
performance or termination. The parties further agree that the venue for any such action or suit shall exclusively be the state
or federal courts sitting in Harris County, Texas.

 

14.     Waiver
of Trial by Jury. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON ANY MATTER ARISING OUT OF, OR IN
CONNECTION WITH, OR RELATING TO THIS AGREEMENT.

 

IN WITNESS WHEREOF, the Company
has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Executive has executed this Agreement,
all effective as of the date of first above written.

 

	COMPANY:	EXECUTIVE:
	 	 
	DEEP DOWN, INC.	MICAH SIMMONS
	 	 
	 	 
	BY: /s/ Charles K. Njuguna                                                                  	/s/ Micah Simmons                                                                     
	 	 Charles K. Njuguna, President/CEO	Individually

 

 

 

    
	 	B-5	 

     

    

 

EXHIBIT C

 

SEPARATION AND RELEASE AGREEMENT

 

This Separation and
Release Agreement (the “Release Agreement”) is entered between Executive and the Company.
All defined terms hereunder shall have the same meaning ascribed to them under that certain Chief Operating Officer Employment
Agreement (defined therein as the “Agreement”) entered between Executive and Company.

 

1.       Executive
acknowledges and represents Executive was employed by the Company under the Agreement, which provides Executive certain benefits
upon termination of the Agreement, but which benefits are contingent upon Executive releasing the Company from all liabilities.

 

2.       In
exchange for the benefits ascribed to Executive under the Agreement, the receipt of which Executive hereby acknowledges, Executive
releases the Company as provided herein. Executive represents that Company has remitted to Executive any and all sums due to Executive
arising from Executive’s employment with Company and that Executive is not due or entitled to any additional sums from Company
save possibly under a retirement benefit program or insurance program.

 

3.       Executive
hereby releases the Company and its principals, owners, directors, officers, parent companies, subsidiaries, affiliates, employees,
agents and other persons acting on behalf of the Company (collectively referred to as “the Released Parties”) from
all claims of whatsoever nature that Executive may have against the Released Parties arising from or in any way related to Executive’s
employment with the Company. Executive also releases the Released Parties from all claims of whatsoever nature that Executive may
have against the Released Parties arising from or in any way related to the termination of Executive’s employment with the
Company, and from any and all claims that Executive may have against any of the Released Parties arising from any act occurring
prior to the execution of this Release Agreement, including, without limitation, any claim, demand, action, cause of action or
right, including claims for attorney's fees, based on but not limited to: (a) the Americans with Disabilities Act of 1990, as amended;
(b) Tex. Hum. Res. Code § 121.001, et seq.; (c) Title VII of the Civil Rights Act of 1964, as amended and including
42 U.S.C. Sec 2000(e) et seq.; (d) the Civil Rights Act of 1991; (e) The Civil Rights Acts of 1866, 1871 and 1964, as amended;
(f) 42 U.S.C. Sec 1981; (g) the Equal Pay Act of 1963; (h) the Fair Labor Standards Act, as amended; (i) the Rehabilitation Act
of 1973, as amended; (j) the Age Discrimination in Employment Act of 1967, as amended; (k) the Older Workers Benefit Protection
Act of 1990; (l) Chapter 21 of the Texas Labor Code (also known as the Texas Commission on Human Rights Act of 1983), as amended
(including, but not limited to, Tex. Lab. Code §§21.051 – 21.055 and 21.401 – 21.405); (m) the Family Medical
Leave Act of 1993, codified as 29 U.S.C. §§ 2601, et seq., as amended; (n) the Texas Workers’ Compensation
Act, as amended, including, but not limited to, Texas Labor Code §§ 451.001, et seq.; (o) the National Labor Relations
Act; (p) the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended; (q) the Executive Retirement Income
Security Act, as amended; (r) the Internal Revenue Code of 1986, as amended, including but not limited to, any claim for taxes,
interest, or penalties under IRC 409A; (s) the Sarbanes Oxley Act of 2002, including 15 U.S.C. §
1514A; (t) Immigration Reform and Control Act, as amended; (u) the Occupational Safety and Health Act, as amended; (v) Genetic
Nondiscrimination Act of 2008, as amended; (w) any existing employment agreement or potential entitlement under any Company
program or plan; (x) Tex. Health & Safety Code §81.101, et seq. (the Texas communicable disease law); and (y) any
other statute or law, including all suits in tort or contract, including wrongful termination and claims for reimbursement, bonus,
incentives, commissions, compensation and benefits, defamation, damage to business reputation, impairment of economic opportunity,
and any other claims for compensatory, statutory, or punitive damages. Executive expressly acknowledges and agrees that the sum
referred to in Paragraph 2 above is reasonable consideration for granting this release.

 

 

 

    
	 	C-1	 

     

    

 

Executive understands
this release is not intended to interfere with Executive’s right to file a charge with, or provide information regarding
the activities of Company to, the Securities and Exchange Commission, Equal Employment Opportunity Commission, National Labor Relations
Board, Department of Labor, Texas Commission on Human Rights or any other governmental agency (collectively “Governmental
Agency”) in connection with any claim Executive believes Executive may have against the Released Parties. However, by executing
this Release Agreement, Executive hereby waives the right to recover in any proceeding Executive may bring before any Governmental
Agency, in any proceeding brought by any Governmental Agency on Executive’s behalf.

 

4.       Executive
understands that nothing in this Release Agreement is intended to waive claims: (a) that arise under any state’s workers’
compensation or unemployment laws; (b) for reimbursement of business expenses incurred on behalf of the Company under the Company’s
expense reimbursement policies; (c) for vested rights Executive may have under any ERISA-covered employee benefit plans as of the
date Executive signs this Release Agreement, including, but not limited to COBRA benefits; (d) that may arise after Executive signs
this Release Agreement; (e) to enforce or challenge the validity of this Release Agreement; or (f) which cannot be released.

 

5.       In
accordance with the Older Worker’s Benefit Protection Act of 1990, Executive is aware of and acknowledges the following:
(a) Executive is waiving all rights and claims that Executive has or may have under the federal Age Discrimination in Employment
Act, as well as any rights or claims that Executive has under other federal, state, or local laws with regard to age and other
employment discrimination; (b) Executive has been advised by the Company to consult with an attorney prior to executing this Release
Agreement; (c) Executive has a period of 21 days in which to consider this Release Agreement before signing it; (d) for a period
of 7 days following the signing of this Release Agreement, Executive may revoke this Release Agreement (solely as to any claims
under the federal Age Discrimination in Employment Act) and this Release Agreement shall not become effective and enforceable as
to any claims under the federal Age Discrimination in Employment Act until that 7-day revocation period has expired; (e) Executive
has carefully read and fully understands all of the provisions of this Release Agreement; (f) Executive knowingly and voluntarily
agrees to all the terms set forth in this Release Agreement; and (g) Executive knowingly and voluntarily intends to be legally
bound by this Release Agreement. Executive further agrees that, in the event Executive decides to revoke this Release Agreement
as provided for by this section, Executive will deliver written notice to the Company’s Chief Executive Officer by mail (postmarked
no later than the 7th day), facsimile, or email.

 

EXECUTIVE ACKNOWLEDGES
THAT THE SEVEN DAY RIGHT TO RESCIND THIS AGREEMENT, AS NOTED IN THIS PARAGRAPH, SHALL EXTEND ONLY TO EXECUTIVE’S POTENTIAL
AGE DISCRIMINATION CLAIMS. EXECUTIVE ACKNOWLEDGES AND AGREES THAT THE REMAINDER OF THE RELEASES ENUMERATED IN PARAGRAPH 3 OF THIS
AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT EVEN IF EXECUTIVE RESCINDS THE AGREEMENT AS PROVIDED BY THIS SECTION.

 

6.       Executive
hereby relinquishes any right to re-employment with Company after Executive executes this Release Agreement. Executive agrees that
Executive no longer desires employment with Company, and that Executive shall not seek, apply for, accept or otherwise pursue employment
with Company. Executive acknowledges that if Executive re-applies for or seeks employment with Company, Company’s refusal
to hire Executive based on this provision will provide a complete defense to any claims arising from any attempt by Executive to
apply for employment.

 

7.       Executive
agrees this release does not invalidate or otherwise interfere with any obligation created under the Agreement which survives the
termination of the Agreement, specifically including, but not limited to, Section 8 of the Agreement.

 

 

 

    
	 	C-2	 

     

    

 

8.       Executive
agrees, upon the request of any of the Released Parties, to cooperate fully, execute any required documents, and participate
as required (including as a witness), in any legal proceedings in which the Company or any of the Released Parties is, or may
become, involved. These legal proceedings include, but are not limited to grievance proceedings, audits, investigations,
arbitration hearings, and lawsuits (“Proceeding”). Executive agrees to devote as much time as is reasonably
necessary to prepare for any Proceeding and to work with Company to provide any information or assistance the Company finds
reasonably necessary to protect Company’s interest in any Proceeding. Executive will be reimbursed to the extent
permitted by any applicable law for any out-of-pocket expenses including but not limited to travel expenses in connection
with any Proceeding in which Executive participates in pursuant to this Section.  Executive will not receive
compensation in addition to that which is provided by this Release Agreement for fulfilling Executive’s obligations
under this Section.  Nothing contained in this Section or this Release Agreement is intended to or shall be construed to
in any way prohibit or impede Executive from providing truthful testimony or statements in any Proceeding or before any
Governmental Agency.

 

9.       Executive
represents and warrants that Executive has no knowledge that the Company or any of the Released Parties has committed or is suspected
of committing any act which is or may be in violation of any federal or state law or regulation or has acted in a manner which
requires corrective action of any kind.

 

IF THIS AGREEMENT
IS NOT RECEIVED BY THE COMPANY ON OR BEFORE THE 25TH DAY AFTER DELIVERY, THIS OFFER IS WITHDRAWN WITHOUT FURTHER NOTICE.

 

SIGNED this ____ day of __________, 20___.

 

	 	Executive:
	 	 
	 	 
	 	                                                                                              
	 	Micah Simmons

 

 

 

 

 

 

    
	 	C-3WELLS FARGO & COMPANY 8-K

 

Exhibit 4.1

 

[Face
of Note]

 

Unless
this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede
& Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

	CUSIP
NO. 95001HAP6	FACE AMOUNT: $__________
	REGISTERED NO. ___	 

 

WELLS
FARGO FINANCE LLC

 

MEDIUM-TERM
NOTE, SERIES A

Fully
and Unconditionally Guaranteed by Wells Fargo & Company

 

Principal
at Risk Securities Linked to the S&P 500® Index

due March 17, 2022

 

WELLS
FARGO FINANCE LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (hereinafter
called the “Company,” which term includes any successor corporation under and as defined in the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the
Maturity Payment Amount (as defined below), in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, on the Stated Maturity Date. The “Initial Stated Maturity Date”
shall be March 17, 2022. If the Calculation Day (as defined below) is not postponed, the Initial Stated Maturity Date will be
the “Stated Maturity Date.” If the Calculation Day is postponed, the “Stated Maturity Date”
shall be the later of (i) the Initial Stated Maturity Date and (ii) three Business Days (as defined below) after the
Calculation Day as postponed. This Security shall not bear any interest.

Any
payments on this Security at Maturity will be made against presentation of this Security at the office or agency of the Company
maintained for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company
for such purpose.

“Face
Amount” shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its
“Face Amount.”

    	 	 	 

    	 

    

Determination
of Maturity Payment Amount

The
“Maturity Payment Amount” of this Security will equal:

 

		●	if
                                         the Ending Level is greater than the Starting Level: the Face Amount plus the
                                         lesser of:
	 	 	 
	 	(i)	 
	 	 	 
	 	(ii)	the
Maximum Return;
	 	 	 
		●	if
                                         the Ending Level is less than or equal to the Starting Level, but greater than or equal
                                         to the Threshold Level: the Face Amount; or

 

		●	if
                                         the Ending Level is less than the Threshold Level: the Face Amount minus:
	 	 	 
	 	 	 

 

All
calculations with respect to the Maturity Payment Amount will be rounded to the nearest one hundred-thousandth, with five one-millionths
rounded upward (e.g., 0.000005 would be rounded to 0.00001); and the Maturity Payment Amount will be rounded to the nearest cent,
with one-half cent rounded upward.

 

“Index”
shall mean the S&P 500® Index.

 

The
“Pricing Date” shall mean September 13, 2019.

 

The
“Starting Level” is 3009.57, the Closing Level of the Index on September 12, 2019.

 

The
“Closing Level” of the Index on any Trading Day means the official closing level of the Index reported by the
Index Sponsor on such Trading Day, as obtained by the Calculation Agent on such Trading Day from the licensed third-party market
data vendor contracted by the Calculation Agent at such time; in particular, taking into account the decimal precision and/or
rounding convention employed by such licensed third-party market data vendor on such date, subject to the provisions set forth
below under “Adjustments to the Index,” “Discontinuance of the Index” and “Market Disruption Events.”

 

The
“Ending Level” will be the Closing Level of the Index on the Calculation Day.

 

The
“Threshold Level” is 2558.1345, which is equal to 85% of the Starting Level.

 

The
“Participation Rate” is 150%.

 

The
“Maximum Return” is 23% of the Face Amount of this Security.

 

    	 	2	 

    	 

    

 

“Index
Sponsor” shall mean S&P Dow Jones Indices LLC.

 

“Business
Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

 

A
“Trading Day” means a day, as determined by the Calculation Agent, on which (i) the Relevant Stock Exchanges
with respect to each security underlying the Index are scheduled to be open for trading for their respective regular trading sessions
and (ii) each Related Futures or Options Exchange is scheduled to be open for trading for its regular trading session.

 

The
“Related Futures or Options Exchange” for the Index means an exchange or quotation system where trading has
a material effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to
the Index.

 

The
“Relevant Stock Exchange” for any security underlying the Index means the primary exchange or quotation system
on which such security is traded, as determined by the Calculation Agent.

 

The
“Calculation Day” shall be March 14, 2022. If such day is not a Trading Day, the Calculation Day will be postponed
to the next succeeding Trading Day. The Calculation Day is also subject to postponement due to the occurrence of a Market Disruption
Event (as defined below). If a Market Disruption Event occurs or is continuing with respect to the Index on the Calculation Day,
such Calculation Day will be postponed to the first succeeding Trading Day on which a Market Disruption Event has not occurred
and is not continuing; however, if such first succeeding Trading Day has not occurred as of the eighth Trading Day after the originally
scheduled Calculation Day, that eighth Trading Day shall be deemed to be the Calculation Day. If the Calculation Day has been
postponed eight Trading Days after the originally scheduled Calculation Day and a Market Disruption Event occurs or is continuing
on such eighth Trading Day, the Calculation Agent will determine the Closing Level of the Index on such eighth Trading Day in
accordance with the formula for and method of calculating the Closing Level of the Index last in effect prior to commencement
of the Market Disruption Event, using the closing price (or, with respect to any relevant security, if a Market Disruption Event
has occurred with respect to such security, its good faith estimate of the value of such security at the Scheduled Closing Time
of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular trading session of such
Relevant Stock Exchange) on such date of each security included in the Index. As used herein, “closing price”
means, with respect to any security on any date, the Relevant Stock Exchange traded or quoted price of such security as of the
Scheduled Closing Time of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular
trading session of such Relevant Stock Exchange.

 

“Calculation
Agent Agreement” shall mean the Calculation Agent Agreement dated as of May 18, 2018 between the Company and the
Calculation Agent, as amended from time to time.

 

“Calculation
Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among
other things, the determination of the

 

    	 	3	 

    	 

    

 

Ending
Level and the Maturity Payment Amount, which term shall, unless the context otherwise requires, include its successors under such
Calculation Agent Agreement. The initial Calculation Agent shall be Wells Fargo Securities, LLC. Pursuant to the Calculation Agent
Agreement, the Company may appoint a different Calculation Agent from time to time after the initial issuance of this Security
without the consent of the Holder of this Security and without notifying the Holder of this Security.

 

Adjustments
to the Index

 

If
at any time the method of calculating the Index or a Successor Equity Index, or the closing level thereof, is changed in a material
respect, or if the Index or a Successor Equity Index is in any other way modified so that such index does not, in the opinion
of the Calculation Agent, fairly represent the level of such index had those changes or modifications not been made, then the
Calculation Agent will, at the close of business in New York, New York, on each date that the closing level of such index is to
be calculated, make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary
in order to arrive at a level of an index comparable to the Index or Successor Equity Index as if those changes or modifications
had not been made, and the Calculation Agent will calculate the closing level of the Index or Successor Equity Index with reference
to such index, as so adjusted. Accordingly, if the method of calculating the Index or Successor Equity Index is modified so that
the level of such index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to
a split or reverse split in such equity index), then the Calculation Agent will adjust the Index or Successor Equity Index in
order to arrive at a level of such index as if it had not been modified (e.g., as if the split or reverse split had not
occurred).

 

Discontinuance
of the Index

If
the Index Sponsor discontinues publication of the Index, and the Index Sponsor or another entity publishes a successor or substitute
equity index that the Calculation Agent determines, in its sole discretion, to be comparable to the Index (a “Successor
Equity Index”), then, upon the Calculation Agent’s notification of that determination to the Trustee and the Company,
the Calculation Agent will substitute the Successor Equity Index as calculated by the Index Sponsor or any other entity and calculate
the Ending Level as described above. Upon any selection by the Calculation Agent of a Successor Equity Index, the Company will
cause notice to be given to the Holder of this Security.

In
the event that the Index Sponsor discontinues publication of the Index prior to, and the discontinuance is continuing on, the
Calculation Day and the Calculation Agent determines that no Successor Equity Index is available at such time, the Calculation
Agent will calculate a substitute Closing Level for the Index in accordance with the formula for and method of calculating the
Index last in effect prior to the discontinuance, but using only those securities that comprised the Index immediately prior to
that discontinuance. If a Successor Equity Index is selected or the Calculation Agent calculates a level as a substitute for the
Index, the Successor Equity Index or level will be used as a substitute for the Index for all purposes, including the purpose
of determining whether a Market Disruption Event exists.

    	 	4	 

    	 

    

If
on the Calculation Day the Index Sponsor fails to calculate and announce the level of the Index, the Calculation Agent will calculate
a substitute Closing Level of the Index in accordance with the formula for and method of calculating the Index last in effect
prior to the failure, but using only those securities that comprised the Index immediately prior to that failure; provided
that, if a Market Disruption Event occurs or is continuing on such day, then the provisions set forth above under the definition
of “Calculation Day” shall apply in lieu of the foregoing.

Market
Disruption Events 

A
“Market Disruption Event” means any of the following events as determined by the Calculation Agent in its sole
discretion:

 

		(A)	The
                                         occurrence or existence of a material suspension of or limitation imposed on trading
                                         by the Relevant Stock Exchanges or otherwise relating to securities which then comprise
                                         20% or more of the level of the Index or any Successor Equity Index at any time during
                                         the one-hour period that ends at the Close of Trading on that day, whether by reason
                                         of movements in price exceeding limits permitted by those Relevant Stock Exchanges or
                                         otherwise.

		(B)	The
                                         occurrence or existence of a material suspension of or limitation imposed on trading
                                         by any Related Futures or Options Exchange or otherwise in futures or options contracts
                                         relating to the Index or any Successor Equity Index on any Related Futures or Options
                                         Exchange at any time during the one-hour period that ends at the Close of Trading on
                                         that day, whether by reason of movements in price exceeding limits permitted by the Related
                                         Futures or Options Exchange or otherwise.

		(C)	The
                                         occurrence or existence of any event, other than an early closure, that materially disrupts
                                         or impairs the ability of market participants in general to effect transactions in, or
                                         obtain market values for, securities that then comprise 20% or more of the level of the
                                         Index or any Successor Equity Index on their Relevant Stock Exchanges at any time during
                                         the one-hour period that ends at the Close of Trading on that day.

		(D)	The
                                         occurrence or existence of any event, other than an early closure, that materially disrupts
                                         or impairs the ability of market participants in general to effect transactions in, or
                                         obtain market values for, futures or options contracts relating to the Index or any Successor
                                         Equity Index on any Related Futures or Options Exchange at any time during the one-hour
                                         period that ends at the Close of Trading on that day.

		(E)	The
                                         closure on any Exchange Business Day of the Relevant Stock Exchanges on which securities
                                         that then comprise 20% or more of the level of the Index or any Successor Equity Index
                                         are traded or any Related Futures or Options Exchange prior to its Scheduled Closing
                                         Time unless the earlier closing time is announced by the Relevant Stock Exchange or Related
                                         Futures or Options Exchange, as

    	 	5	 

    	 

    

applicable,
at least one hour prior to the earlier of (1) the actual closing time for the regular trading session on such Relevant Stock
Exchange or Related Futures or Options Exchange, as applicable, and (2) the submission deadline for orders to be entered
into the Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, system for execution at such actual closing
time on that day.

		(F)	The
                                         Relevant Stock Exchange for any security underlying the Index or Successor Equity Index
                                         or any Related Futures or Options Exchange fails to open for trading during its regular
                                         trading session.

For
purposes of determining whether a Market Disruption Event has occurred:

		(1)	the
                                         relevant percentage contribution of a security to the level of the Index or any Successor
                                         Equity Index will be based on a comparison of (x) the portion of the level of such
                                         Index attributable to that security and (y) the overall level of the Index or Successor
                                         Equity Index, in each case immediately before the occurrence of the Market Disruption
                                         Event;

		(2)	the
                                         “Close of Trading” on any Trading Day for the Index or any Successor
                                         Equity Index means the Scheduled Closing Time of the Relevant Stock Exchanges with respect
                                         to the securities underlying the Index or Successor Equity Index on such Trading Day;
                                         provided that, if the actual closing time of the regular trading session of any
                                         such Relevant Stock Exchange is earlier than its Scheduled Closing Time on such Trading
                                         Day, then (x) for purposes of clauses (A) and (C) of the definition of “Market
                                         Disruption Event” above, with respect to any security underlying the Index or Successor
                                         Equity Index for which such Relevant Stock Exchange is its Relevant Stock Exchange, the
                                         “Close of Trading” means such actual closing time and (y) for purposes of
                                         clauses (B) and (D) of the definition of “Market Disruption Event” above,
                                         with respect to any futures or options contract relating to the Index or Successor Equity
                                         Index, the “close of trading” means the latest actual closing time of the
                                         regular trading session of any of the Relevant Stock Exchanges, but in no event later
                                         than the Scheduled Closing Time of the Relevant Stock Exchanges;

		(3)	the
                                         “Scheduled Closing Time” of any Relevant Stock Exchange or Related
                                         Futures or Options Exchange on any Trading Day for the Index or any Successor Equity
                                         Index means the scheduled weekday closing time of such Relevant Stock Exchange or Related
                                         Futures or Options Exchange on such Trading Day, without regard to after hours or any
                                         other trading outside the regular trading session hours; and

		(4)	an
                                         “Exchange Business Day” means any Trading Day for the Index or any
                                         Successor Equity Index on which each Relevant Stock Exchange for the securities underlying
                                         the Index or any Successor Equity Index and each Related Futures or Options Exchange
                                         are open for trading during their respective regular

    	 	6	 

    	 

    

trading
sessions, notwithstanding any such Relevant Stock Exchange or Related Futures or Options Exchange closing prior to its Scheduled
Closing Time.

Calculation
Agent

The
Calculation Agent will determine the Maturity Payment Amount and the Ending Level. In addition, the Calculation Agent will (i)
determine if adjustments are required to the Closing Level of the Index under the circumstances described in this Security, (ii)
if publication of the Index is discontinued, select a Successor Equity Index or, if no Successor Equity Index is available, determine
the Closing Level of the Index under the circumstances described in this Security, and (iii) determine whether a Market Disruption
Event or non-Trading Day has occurred.

The
Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall
be a broker-dealer, bank or other financial institution) with respect to this Security.

All
determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

Tax
Considerations

The
Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed
to have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States
federal income tax purposes to characterize and treat this Security as a prepaid derivative contract that is an “open transaction.”

Redemption
and Repayment

This
Security is not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior to March
17, 2022. This Security is not entitled to any sinking fund.

Acceleration

If
an Event of Default, as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment
Amount (calculated as set forth in the next sentence) of this Security may be declared due and payable in the manner and with
the effect provided in the Indenture. The amount payable to the Holder hereof upon any acceleration
permitted under the Indenture will be equal to the Maturity Payment Amount hereof calculated as provided herein as though the
date of acceleration was the Calculation Day. 

__________________

Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

    	 	7	 

    	 

    

 

Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature
or its duly authorized agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

[The
remainder of this page has been left intentionally blank]

 

 

    	 	8	 

    	 

    

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

DATED: 

 

	
 

	
WELLS FARGO FINANCE LLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	
 

	
Its:
	  

 

	
 

	
Attest:

	
 

	
 

	
 

	
 

	
 

	
 

	
Its: 
	 

 

TRUSTEE’S CERTIFICATE OF 

AUTHENTICATION 

This is one of the Securities of the 

series designated therein described 

in the within-mentioned Indenture.

 

	
CITIBANK, N.A.,

	
 

	
 

	
as Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Signature

	
 

	
 

	
 

	
 

	
 

	
OR

	
 

	
 

	
 

	
 

	
WELLS FARGO BANK, N.A.,

	
 

	
 

	
as Authenticating Agent for the Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Signature

	
 

 

 

 

    	 	9	 

    	 

    

[Reverse
of Note]

 

 

WELLS
FARGO FINANCE LLC

 

MEDIUM-TERM
NOTE, SERIES A

Fully
and Unconditionally Guaranteed by Wells Fargo & Company

 

Principal
at Risk Securities Linked to the S&P 500® Index

due March 17, 2022

 

This
Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued
and to be issued in one or more series under an indenture dated as of April 25, 2018, as amended or supplemented from time
to time (herein called the “Indenture”), among the Company, as issuer, Wells Fargo & Company, as guarantor
(the “Guarantor”) and Citibank, N.A., as trustee (herein called the “Trustee,” which term
includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor,
the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series A, of the Company.
The amount payable on the Securities of this series may be determined by reference to the performance of one or more equity-,
commodity- or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical measures of economic
or financial performance, or a basket comprised of two or more of the foregoing, or any other market measure or may bear interest
at a fixed rate or a floating rate. The Securities of this series may mature at different times, be redeemable at different times
or not at all, be repayable at the option of the Holder at different times or not at all and be denominated in different currencies.

The
Securities are issuable only in registered form without coupons and will be either (a) book-entry securities represented
by one or more Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities
issued to and registered in the names of, the beneficial owners or their nominees.

The
Company agrees, to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of
interest against a Holder of this Security.

Guarantee

The
Securities of this series are fully and unconditionally guaranteed by the Guarantor as and to the extent set forth in the Indenture.

Modification
and Waivers 

The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture
at any time by the

    	 	10	 

    	 

    

 

Company,
the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders
of a majority in principal amount of the Securities of all series at the time Outstanding affected by certain provisions of the
Indenture, acting together as a class, on behalf of the Holders of all Securities of such series, to waive compliance by the Company
or the Guarantor with those provisions of the Indenture. Certain past defaults under the Indenture and their consequences may
be waived under the Indenture by the Holders of a majority in principal amount of the Securities of each series at the time Outstanding,
on behalf of the Holders of all Securities of such series. Solely for the purpose of determining
whether any consent, waiver, notice or other action or Act to be taken or given by the Holders of Securities pursuant to the Indenture
has been given or taken by the Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount
of this Security will be deemed to be equal to the amount set forth on the face hereof as the “Face Amount” hereof.
Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company or the Guarantor with certain conditions set forth therein, shall not apply to this Security. The remaining
provisions of Section 401 of the Indenture shall apply to this Security.

Authorized
Denominations

This
Security is issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which
is an integral multiple of $1,000.

Registration
of Transfer

Upon
due presentment for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis,
Minnesota, a new Security or Securities of this series, with the same terms as this Security, in authorized denominations for
an equal aggregate Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject
to the limitations provided therein and to the limitations described below, without charge except for any tax or other governmental
charge imposed in connection therewith.

This
Security is exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days
after the Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines
that this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z)
an Event of Default with respect

    	 	11	 

    	 

    

 

to
the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant to the preceding sentence,
it shall be exchangeable for definitive Securities in registered form, having the same date of issuance, Stated Maturity Date
and other terms and of authorized denominations aggregating a like amount.

This
Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary
or a nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior
to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the
Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall
be affected by notice to the contrary.

Obligation
of the Company Absolute

No
reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Maturity Payment Amount at the times, place and rate, and in the coin
or currency, herein prescribed, except as otherwise provided in this Security.

No
Personal Recourse

No
recourse shall be had for the payment of the Maturity Payment Amount, or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or any successor corporation or of the Guarantor or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

Defined
Terms

All
terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless
otherwise defined in this Security.

Governing
Law

This
Security shall be governed by and construed in accordance with the law of the State of New York, without regard to principles
of conflicts of laws.

    	 	12	 

    	 

    

 

ABBREVIATIONS 

 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
TEN COM

	
--

	
as tenants in common

	
 

	
 

	
 

	
 

	
 

	
TEN ENT

	
--

	
as tenants by the entireties

	
 

	
 

	
 

	
 

	
 

	
JT TEN

	
--

	
as joint tenants with right

of survivorship and not

as tenants in common

	
 

 

	
UNIF GIFT MIN ACT

	
--

	
 

	
Custodian

	
 

	
 

	
 

	
(Cust)

	
 

	
(Minor)

 

	
Under Uniform Gifts to Minors Act

	
 

	
 

	
 

	
(State)

	
 

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

 

	
Please Insert Social Security or

	
 

	
Other Identifying Number of Assignee

	
 

	
 

	
 

	
 

	
 

 

	
 

	
 

 

	
 

 

 (Please print or type name and address including postal zip code of Assignee)

 

 

    	 	13	 

    	 

    

 

the
within Security of WELLS FARGO FINANCE LLC and does hereby irrevocably constitute and appoint __________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution in the premises.

 

	Dated:		 	 
	 	 
	 	 
	 	 
	 	 

 

 

 

NOTICE:
The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.

 

 

 

    	 	14

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