Document:

ex4-1.htm

EXHIBIT 4.1

 

THE PULSE NETWORK, INC.

 

2013 STOCK OPTION PLAN

 

This 2013 Stock Option Plan (the “Plan”) provides for the grant of options to acquire shares of common stock, $0.001 par value (the “Common Stock”), of The Pulse Network, Inc., a Nevada corporation (the “Company”).  Stock options granted under this Plan that qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), are referred to in this Plan as “Incentive Stock Options.”  Incentive Stock Options and stock options that do not qualify under Section 422 of the Code (“Non-Qualified Stock Options”) granted under this Plan are referred to collectively as “Options.”

 

1. PURPOSES.

 

The purposes of this Plan are to retain the services of valued key employees and consultants of the Company and such other persons as the Plan Administrator shall select in accordance with Section 3 below, to encourage such persons to acquire a greater proprietary interest in the Company, thereby strengthening their incentive to achieve the objectives of the shareholders of the Company, and to serve as an aid and inducement in the hiring of new employees and to provide an equity incentive to consultants and other persons selected by the Plan Administrator.

 

2. ADMINISTRATION.

 

This Plan shall be administered initially by the Board of Directors of the Company (the “Board”), except that the Board may, in its discretion, establish a committee composed of two (2) or more members of the Board or two (2) or more other persons to administer the Plan, which committee (the “Committee”) may be an executive, compensation or other committee, including a separate committee especially created for this purpose.  The Committee shall have the powers and authority vested in the Board hereunder (including the power and authority to interpret any provision of the Plan or of any Option).  The members of any such Committee shall serve at the pleasure of the Board.  A majority of the members of the Committee shall constitute a quorum, and all actions of the Committee shall be taken by a majority of the members present.  Any action may be taken by a written instrument signed by all of the members of the Committee and any action so taken shall be fully effective as if it had been taken at a meeting.  The Board or, if applicable, the Committee is referred to herein as the “Plan Administrator.”

 

The Plan shall be administered by the Board or by the Committee which, for the purposes hereof, shall be composed of two (2) or more members of the Board who are “Non-Employee Directors” (as defined below), and, as applicable, outside directors.  The term “outside director” shall have the meaning assigned to it under Section 162(m) of the Code (as amended from time to time) and the regulations (or any successor regulations) promulgated thereunder (“Section 162(m) of the Code”).  The term “Non-Employee Director” shall have the meaning assigned to it under Rule 16b-3 (as amended from time to time) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any successor rule or regulatory requirement.

 

Subject to the provisions of this Plan, and with a view to effecting its purpose, the Plan Administrator shall have sole authority, in its absolute discretion, to (i) construe and interpret this Plan; (ii) define the terms used in the Plan; (iii) prescribe, amend and rescind the rules and regulations relating to this Plan; (iv) correct any defect, supply any omission or reconcile any inconsistency in this Plan; (v) grant Options under this Plan; (vi) determine the individuals to whom Options shall be granted under this Plan and whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option; (vii) determine the time or times at which Options shall be granted under this Plan; (viii) determine the number of shares of Common Stock subject to each Option, the exercise price of each Option, the duration of each Option and the times at which each Option shall become exercisable; (ix) determine all other terms and conditions of the Options; and (x) make all other determinations and interpretations necessary and advisable for the administration of the Plan.  All decisions, determinations and interpretations made by the Plan Administrator shall be binding and conclusive on all participants in the Plan and on their legal representatives, heirs and beneficiaries.

 

  

  

  

The Board or, if applicable, the Committee may delegate to one or more executive officers of the Company the authority to grant Options under this Plan to employees of the Company who, on the Date of Grant, are not subject to Section 16 of the Exchange Act with respect to the Common Stock (“Non-Insiders”), and are not “covered employees” as such term is defined for purposes of Section 162(m) of the Code (“Non-Covered Employees”), and in connection therewith the authority to determine: (i) the number of shares of Common Stock subject to such Options; (ii) the duration of the Option; (iii) the vesting schedule for determining the times at which such Option shall become exercisable; and (iv) all other terms and conditions of such Options.  The exercise price for any Option granted by action of an executive officer or officers pursuant to such delegation of authority shall not be less than the fair market value per share of the Common Stock on the Date of Grant.  Unless expressly approved in advance by the Board or the Committee, such delegation of authority shall not include the authority to accelerate vesting, extend the period for exercise or otherwise alter the terms of outstanding Options.  The term “Plan Administrator” when used in any provision of this Plan other than Sections 2, 5(f), 5(m), and 11 shall be deemed to refer to the Board or the Committee, as the case may be, and an executive officer who has been authorized to grant Options pursuant thereto, insofar as such provisions may be applied to persons that are Non-Insiders and Non-Covered Employees and Options granted to such persons.

 

3. ELIGIBILITY.

 

Incentive Stock Options may be granted to any individual who, at the time the Option is granted, is an employee of the Company or any Related Corporation (as defined below) (“Employees”).  Non-Qualified Stock Options may be granted to Employees and to such other persons other than directors who are not Employees as the Plan Administrator shall select.  Options may be granted in substitution for outstanding Options of another corporation in connection with the merger, consolidation, acquisition of property or stock or other reorganization between such other corporation and the Company or any subsidiary of the Company.  Options also may be granted in exchange for outstanding Options.  Any person to whom an Option is granted under this Plan is referred to as an “Optionee.” Any person who is the owner of an Option is referred to as a “Holder.”

 

As used in this Plan, the term “Related Corporation” shall mean any corporation (other than the Company) that is a “Parent Corporation” of the Company or “Subsidiary Corporation” of the Company, as those terms are defined in Sections 424(e) and 424(f), respectively, of the Code (or any successor provisions) and the regulations thereunder (as amended from time to time).

 

4. STOCK.

 

The Plan Administrator is authorized to grant Options to acquire up to a total of fifteen million (15,000,000) shares of the Company’s authorized but unissued, or reacquired, Common Stock.  The number of shares with respect to which Options may be granted hereunder is subject to adjustment as set forth in Section 5(m) hereof.  In the event that any outstanding Option expires or is terminated for any reason, the shares of Common Stock allocable to the unexercised portion of such Option may again be subject to an Option granted to the same Optionee or to a different person eligible under Section 3 of this Plan; provided however, that any canceled Options will be counted against the maximum number of shares with respect to which Options may be granted to any particular person as set forth in Section 3 hereof.

 

5. TERMS AND CONDITIONS OF OPTIONS.

 

Each Option granted under this Plan shall be evidenced by a written agreement approved by the Plan Administrator (the “Agreement”).  Agreements may contain such provisions, not inconsistent with this Plan, as the Plan Administrator in its discretion may deem advisable.  All Options also shall comply with the following requirements:

 

	
  

	
(a) Number of Shares and Type of Option.

 

Each Agreement shall state the number of shares of Common Stock to which it pertains and whether the Option is intended to be an Incentive Stock Option or a Non-Qualified Stock Option.  In the absence of action to the contrary by the Plan Administrator in connection with the grant of an Option, all Options shall be Non-Qualified Stock Options.  The aggregate fair market value (determined at the Date of Grant, as defined below) of the stock with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (granted under this Plan and all other Incentive Stock Option plans of the Company, a Related Corporation or a predecessor corporation) shall not exceed $100,000, or such other limit as may be prescribed by the Code as it may be amended from time to time.  Any portion of an Option which exceeds the annual limit shall not be void but rather shall be a Non-Qualified Stock Option.

 

 

  

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(b) Date of Grant.

 

Each Agreement shall state the date the Plan Administrator has deemed to be the effective date of the Option for purposes of this Plan (the “Date of Grant”).

 

	
  

	
(c) Option Price.

 

Each Agreement shall state the price per share of Common Stock at which it is exercisable.  The exercise price shall be fixed by the Plan Administrator at whatever price the Plan Administrator may determine in the exercise of its sole discretion; provided that the per share exercise price for an Incentive Stock Option or any Option granted to a “covered employee” as such term is defined for purposes of Section 162(m) of the Code (“Covered Employee”) shall not be less than the fair market value per share of the Common Stock at the Date of Grant as determined by the Plan Administrator in good faith; provided further, that with respect to Incentive Stock Options granted to greater-than-ten percent (> 10%) shareholders of the Company (as determined with reference to Section 424(d) of the Code), the exercise price per share shall not be less than one hundred ten percent (110%) of the fair market value per share of the Common Stock at the Date of Grant as determined by the Plan Administrator in good faith; and, provided further, that Options granted in substitution for outstanding options of another corporation in connection with the merger, consolidation, acquisition of property or stock or other reorganization involving such other corporation and the Company or any subsidiary of the Company may be granted with an exercise price equal to the exercise price for the substituted option of the other corporation, subject to any adjustment consistent with the terms of the transaction pursuant to which the substitution is to occur.

 

	
  

	
(d) Duration of Options.

 

At the time of the grant of the Option, the Plan Administrator shall designate, subject to paragraph 5(g) below, the expiration date of the Option, which date shall not be later than ten (10) years from the Date of Grant in the case of Incentive Stock Options; provided, that the expiration date of any Incentive Stock Option granted to a greater-than-ten percent ( > 10%) shareholder of the Company (as determined with reference to Section 424(d) of the Code) shall not be later than five (5) years from the Date of Grant.  In the absence of action to the contrary by the Plan Administrator in connection with the grant of a particular Option, and except in the case of Incentive Stock Options as described above, all Options granted under this Section 5 shall expire ten (10) years from the Date of Grant.

 

	
  

	
(e) Vesting Schedule.

 

No Option shall be exercisable until it has vested.  The vesting schedule for each Option shall be specified by the Plan Administrator at the time of grant of the Option prior to the provision of services with respect to which such Option is granted; provided, that if no vesting schedule is specified at the time of grant, the Option shall vest according to the following schedule:

	
Number of Years

Following Date of Grant

	  	
Percentage of Total

Option Vested

	
One

	  	
25%

	
Two

	  	
25%

	
Three

	  	
25%

	
Four

	  	
25%

 

 

  

3

  

 

The Plan Administrator may specify a vesting schedule for all or any portion of an Option based on the achievement of performance objectives established in advance of the commencement by the Optionee of services related to the achievement of the performance objectives.  Performance objectives shall be expressed in terms of one or more of the following: return on equity, return on assets, share price, market share, sales, earnings per share, costs, net earnings, net worth, inventories, cash and cash equivalents, gross margin or the Company’s performance relative to its internal business plan.  Performance objectives may be in respect of the performance of the Company as a whole (whether on a consolidated or unconsolidated basis), a Related Corporation, or a subdivision, operating unit, product or product line of either of the foregoing.  Performance objectives may be absolute or relative and may be expressed in terms of a progression or a range.  An Option that is exercisable (in full or in part) upon the achievement of one or more performance objectives may be exercised only following written notice to the Optionee and the Company by the Plan Administrator that the performance objective has been achieved.

	
  

	
(f) Acceleration of Vesting.

 

The vesting of one or more outstanding Options may be accelerated by the Plan Administrator at such times and in such amounts as it shall determine in its sole discretion.

 

	
  

	
(g) Term of Option.

 

Vested Options shall terminate, to the extent not previously exercised, upon the occurrence of the first of the following events: (i) the expiration of the Option, as designated by the Plan Administrator in accordance with Section 5(d) above; (ii) the date of an Optionee’s termination of employment or contractual relationship with the Company or any Related Corporation for cause (as determined in the sole discretion of the Plan Administrator); (iii) the expiration of three (3) months from the date of an Optionee’s termination of employment or contractual relationship with the Company or any Related Corporation for any reason whatsoever other than cause, death or Disability (as defined below) unless, in the case of a Non-Qualified Stock Option, the exercise period is extended by the Plan Administrator until a date not later than the expiration date of the Option; or (iv) the expiration of one year from termination of an Optionee’s employment or contractual relationship by reason of death or Disability (as defined below) unless, in the case of a Non-Qualified Stock Option, the exercise period is extended by the Plan Administrator until a date not later than the expiration date of the Option.  Upon the death of an Optionee, any vested Options held by the Optionee shall be exercisable only by the person or persons to whom such Optionee’s rights under such Option shall pass by the Optionee’s will or by the laws of descent and distribution of the state or county of the Optionee’s domicile at the time of death and only until such Options terminate as provided above.  For purposes of the Plan, unless otherwise defined in the Agreement, “Disability” shall mean medically determinable physical or mental impairment which has lasted or can be expected to last for a continuous period of not less than twelve (12) months or that can be expected to result in death (within the meaning of Section 22(e)(3) of the Code).  The Plan Administrator shall determine whether an Optionee has incurred a Disability on the basis of medical evidence acceptable to the Plan Administrator.  Upon making a determination of Disability, the Plan Administrator shall, for purposes of the Plan, determine the date of an Optionee’s termination of employment or contractual relationship.

 

Unless accelerated in accordance with Section 5(f) above, unvested Options shall terminate immediately upon termination of employment of the Optionee by the Company for any reason whatsoever, including death or Disability.  For purposes of this Plan, transfer of employment between or among the Company and/or any Related Corporation shall not be deemed to constitute a termination of employment with the Company or any Related Corporation.  For purposes of this subsection, employment shall be deemed to continue while the Optionee is on military leave, sick leave or other bona fide leave of absence (as determined by the Plan Administrator).  The foregoing notwithstanding, employment shall not be deemed to continue beyond the first ninety (90) days of such leave, unless the Optionee’s re-employment rights are guaranteed by statute or by contract.

 

	
  

	
(h) Exercise of Options.

 

Options shall be exercisable, in full or in part, at any time after vesting, until termination.  If less than all of the shares included in the vested portion of any Option are purchased, the remainder may be purchased at any subsequent time prior to the expiration of the Option term.  No portion of any Option for less than One Hundred (100) shares (as adjusted pursuant to Section 5(m) below) may be exercised; provided, that if the vested portion of any Option is less than One Hundred (100) shares, it may be exercised with respect to all shares for which it is vested.  Only whole shares may be issued pursuant to an Option, and to the extent that an Option covers less than one (1) share, it is unexercisable.

 

 

  

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Options or portions thereof may be exercised by giving written notice to the Company, which notice shall specify the number of shares to be purchased, and be accompanied by payment in the amount of the aggregate exercise price for the Common Stock so purchased, which payment shall be in the form specified in Section 5(i) below.  The Company shall not be obligated to issue, transfer or deliver a certificate of Common Stock to the Holder of any Option, until provision has been made by the Holder, to the satisfaction of the Company, for the payment of the aggregate exercise price for all shares for which the Option shall have been exercised and for satisfaction of any tax withholding obligations associated with such exercise.  During the lifetime of an Optionee, Options are exercisable only by the Optionee or in the case of a Non-Qualified Stock Option, transferee who takes title to such Option in the manner permitted by subsection 5(k) hereof.

 

	
  

	
(i) Payment upon Exercise of Option.

 

Upon the exercise of any Option, the aggregate exercise price shall be paid to the Company in cash or by certified or cashier’s check.  In addition, the Holder may pay for all or any portion of the aggregate exercise price by complying with one or more of the following alternatives:

 

(1) by delivering to the Company shares of Common Stock previously held by such Holder, or by the Company withholding shares of Common Stock otherwise deliverable pursuant to exercise of the Option, which shares of Common Stock received or withheld shall have a fair market value at the date of exercise (as determined by the Plan Administrator) equal to the aggregate exercise price to be paid by the Optionee upon such exercise;

 

(2) by delivering a properly executed exercise notice together with irrevocable instructions to a broker promptly to sell or margin a sufficient portion of the shares and deliver directly to the Company the amount of sale or margin loan proceeds to pay the exercise price; or

 

(3) by complying with any other payment mechanism approved by the Plan Administrator at the time of exercise.

 

Notwithstanding the foregoing, without the prior written consent of the Plan Administrator, a Holder shall not surrender, or attest to the ownership of, shares of Common Stock in payment of the exercise price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to any option for financial reporting purposes.

 

	
  

	
(j) Rights as a Shareholder.

 

A Holder shall have no rights as a shareholder with respect to any shares covered by an Option until such Holder becomes a record holder of such shares, irrespective of whether such Holder has given notice of exercise.  No rights shall accrue to a Holder and no adjustments shall be made on account of dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights declared on, or created in, the Common Stock for which the record date is prior to the date the Holder becomes a record holder of the shares of Common Stock covered by the Option, irrespective of whether such Holder has given notice of exercise.

 

	
  

	
(k) Transfer of Option.

 

Options granted under this Plan and the rights and privileges conferred by this Plan may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will, by applicable laws of descent and distribution or (except in the case of an Incentive Stock Option) pursuant to a qualified domestic relations order, and shall not be subject to execution, attachment or similar process; provided however, that any Agreement may provide or be amended to provide that a Non-Qualified Stock Option to which it relates is transferable without payment of consideration to immediate family members of the Optionee or to trusts or partnerships or limited liability companies established exclusively for the benefit of the Optionee and the Optionee’s immediate family members.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any Option or of any right or privilege conferred by this Plan contrary to the provisions hereof, or upon the sale, levy or any attachment or similar process upon the rights and privileges conferred by this Plan, such Option shall thereupon terminate and become null and void.

 

  

5

  

 

 

	
  

	
(l) Securities Regulation and Tax Withholding.

 

(1) Shares shall not be issued with respect to an Option unless the exercise of such Option and the issuance and delivery of such shares shall comply with all relevant provisions of law, including, without limitation, Section 162(m) of the Code, any applicable state securities laws, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations thereunder and the requirements of any stock exchange or automated inter-dealer quotation system of a registered national securities association upon which such shares may then be listed, and such issuance shall be further subject to the approval of counsel for the Company with respect to such compliance, including the availability of an exemption from registration for the issuance and sale of such shares.  The inability of the Company to obtain from any regulatory body the authority deemed by the Company to be necessary for the lawful issuance and sale of any shares under this Plan, or the unavailability of an exemption from registration for the issuance and sale of any shares under this Plan, shall relieve the Company of any liability with respect to the non-issuance or sale of such shares.

 

As a condition to the exercise of an Option, the Plan Administrator may require the Holder to represent and warrant in writing at the time of such exercise that the shares are being purchased only for investment and without any then-present intention to sell or distribute such shares.  At the option of the Plan Administrator, a stop-transfer order against such shares may be placed on the stock books and records of the Company, and a legend indicating that the stock may not be pledged, sold or otherwise transferred unless an opinion of counsel is provided stating that such transfer is not in violation of any applicable law or regulation, may be stamped on the certificates representing such shares in order to assure an exemption from registration.  The Plan Administrator also may require such other documentation as may from time to time be necessary to comply with federal and state securities laws.

 

(2) The Holder shall pay to the Company by certified or cashier’s check, promptly upon exercise of an Option or, if later, the date that the amount of such obligations becomes determinable, all applicable federal, state, local and foreign withholding taxes that the Plan Administrator, in its discretion, determines to result upon exercise of an Option or from a transfer or other disposition of shares of Common Stock acquired upon exercise of an Option or otherwise related to an Option or shares of Common Stock acquired in connection with an Option.  Upon approval of the Plan Administrator, a Holder may satisfy such obligation by complying with one or more of the following alternatives selected by the Plan Administrator:

 

(A) by delivering to the Company shares of Common Stock previously held by such Holder or by the Company withholding shares of Common Stock otherwise deliverable pursuant to the exercise of the Option, which shares of Common Stock received or withheld shall have a fair market value at the date of exercise (as determined by the Plan Administrator) equal to any withholding tax obligations arising as a result of such exercise, transfer or other disposition;

 

(B) by executing appropriate loan documents approved by the Plan Administrator by which the Holder borrows funds from the Company to pay any withholding taxes due under this Paragraph 2, with such repayment terms as the Plan Administrator shall select; or

 

(C) by complying with any other payment mechanism approved by the Plan Administrator from time to time.

 

Notwithstanding the foregoing, without the prior written consent of the Plan Administrator, a Holder shall not surrender, or attest to the ownership of, shares of Common Stock in payment of the exercise price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to any option for financial reporting purposes.

 

(3) The issuance, transfer or delivery of certificates of Common Stock pursuant to the exercise of Options may be delayed, at the discretion of the Plan Administrator, until the Plan Administrator is satisfied that the applicable requirements of the federal and state securities laws and the withholding provisions of the Code have been met and that the Holder has paid or otherwise satisfied any withholding tax obligation as described in (2) above.

 

  

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(m) Stock Dividend or Reorganization.

 

(1) If (i) the Company shall at any time be involved in a transaction described in Section 424(a) of the Code (or any successor provision) or any “corporate transaction” described in the regulations thereunder; (ii) the Company shall declare a dividend payable in, or shall subdivide or combine, its Common Stock or (iii) any other event with substantially the same effect shall occur, the Plan Administrator shall, subject to applicable law, with respect to each outstanding Option, proportionately adjust the number of shares of Common Stock subject to such Option and/or the exercise price per share so as to preserve the rights of the Holder substantially proportionate to the rights of the Holder prior to such event, and to the extent that such action shall include an increase or decrease in the number of shares of Common Stock subject to outstanding Options, the number of shares available under Section 4 of this Plan shall automatically be increased or decreased, as the case may be, proportionately, without further action on the part of the Plan Administrator, the Company, the Company’s shareholders, or any Holder.

 

(2) In the event that the presently authorized capital stock of the Company is changed into the same number of shares with a different par value, or without par value, the stock resulting from any such change shall be deemed to be Common Stock within the meaning of the Plan, and each Option shall apply to the same number of shares of such new stock as it applied to old shares immediately prior to such change.

 

(3) If the Company shall at any time declare an extraordinary dividend with respect to the Common Stock, whether payable in cash or other property, the Plan Administrator may, subject to applicable law, in the exercise of its sole discretion and with respect to each outstanding Option, proportionately adjust the number of shares of Common Stock subject to such Option and/or adjust the exercise price per share so as to preserve the rights of the Holder substantially proportionate to the rights of the Holder prior to such event, and to the extent that such action shall include an increase or decrease in the number of shares of Common Stock subject to outstanding Options, the number of shares available under Section 4 of this Plan shall automatically be increased or decreased, as the case may be, proportionately, without further action on the part of the Plan Administrator, the Company, the Company’s shareholders, or any Holder.

 

(4) The foregoing adjustments in the shares subject to Options shall be made by the Plan Administrator, or by any successor administrator of this Plan, or by the applicable terms of any assumption or substitution document.

 

(5) The grant of an Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge, consolidate or dissolve, to liquidate or to sell or transfer all or any part of its business or assets.

 

6. EFFECTIVE DATE; TERM.

 

Incentive Stock Options may be granted by the Plan Administrator from time to time on or after the date on which this Plan is adopted (the “Effective Date”) through the day immediately preceding the tenth anniversary of the Effective Date.  Non-Qualified Stock Options may be granted by the Plan Administrator on or after the Effective Date and until this Plan is terminated by the Board in its sole discretion.  Termination of this Plan shall not terminate any Option granted prior to such termination.  Any Incentive Stock Options granted by the Plan Administrator prior to the approval of this Plan by the shareholders of the Company in accordance with Section 422 of the Code shall be granted subject to ratification of this Plan by the shareholders of the Company within twelve (12) months before or after the Effective Date.  Any Option granted by the Plan Administrator to any Covered Employee prior to the approval of this Plan by the shareholders of the Company in accordance with such Code provision shall be granted subject to ratification of this Plan by the shareholders of the Company within twelve (12) months before or after the Effective Date.  If such shareholder ratification is sought and not obtained, all Options granted prior thereto and thereafter shall be considered Non-Qualified Stock Options and any Options granted to Covered Employees will not be eligible for the exclusion set forth in Section 162(m) of the Code with respect to the deductibility by the Company of certain compensation.

 

  

7

  

 

7. NO OBLIGATIONS TO EXERCISE OPTION.

 

The grant of an Option shall impose no obligation upon the Optionee to exercise such Option.

 

8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT.

 

Whether or not any Options are to be granted under this Plan shall be exclusively within the discretion of the Plan Administrator, and nothing contained in this Plan shall be construed as giving any person any right to participate under this Plan.  The grant of an Option shall in no way constitute any form of agreement or understanding binding on the Company or any Related Company, express or implied, that the Company or any Related Company will employ or contract with an Optionee for any length of time, nor shall it interfere in any way with the Company’s or, where applicable, a Related Company’s right to terminate Optionee’s employment at any time, which right is hereby reserved.

 

9. APPLICATION OF FUNDS.

 

The proceeds received by the Company from the sale of Common Stock issued upon the exercise of Options shall be used for general corporate purposes, unless otherwise directed by the Board.

 

10. INDEMNIFICATION OF PLAN ADMINISTRATOR.

 

In addition to all other rights of indemnification they may have as members of the Board, members of the Plan Administrator shall be indemnified by the Company for all reasonable expenses and liabilities of any type or nature, including attorneys’ fees, incurred in connection with any action, suit or proceeding to which they or any of them are a party by reason of, or in connection with, this Plan or any Option granted under this Plan, and against all amounts paid by them in settlement thereof (provided that such settlement is approved by independent legal counsel selected by the Company), except to the extent that such expenses relate to matters for which it is adjudged that such Plan Administrator member is liable for willful misconduct; provided, that within fifteen (15) days after the institution of any such action, suit or proceeding, the Plan Administrator member involved therein shall, in writing, notify the Company of such action, suit or proceeding, so that the Company may have the opportunity to make appropriate arrangements to prosecute or defend the same.

 

11. AMENDMENT OF PLAN.

 

The Plan Administrator may, at any time, modify, amend or terminate this Plan or modify or amend Options granted under this Plan, including, without limitation, such modifications or amendments as are necessary to maintain compliance with applicable statutes, rules or regulations; provided however, no amendment with respect to an outstanding Option which has the effect of reducing the benefits afforded to the Holder thereof shall be made over the objection of such Holder; further provided, that the events triggering acceleration of vesting of outstanding Options may be modified, expanded or eliminated without the consent of Holders.  The Plan Administrator may condition the effectiveness of any such amendment on the receipt of shareholder approval at such time and in such manner as the Plan Administrator may consider necessary for the Company to comply with or to avail the Company and/or the Optionees of the benefits of any securities, tax, market listing or other administrative or regulatory requirement.  Without limiting the generality of the foregoing, the Plan Administrator may modify grants to persons who are eligible to receive Options under this Plan who are foreign nationals or employed outside the United States to recognize differences in local law, tax policy or custom.

 

  

8

  

 

Effective Date: March 29, 2013.

 

THE PULSE NETWORK, INC.

 

 

/s/ Mohamed Ayad               

Name: Mohamed Ayad

Title: Secretary

 

 

 

 

  

9ex10-4.htm

EXHIBIT 10.4

 

EMPLOYMENT AGREEMENT

 

This is an Employment Agreement entered into between The Pulse Network, Inc., a Nevada corporation (“Employer”), and The Pulse Network, Inc., a Massachusetts corporation, and wholly owned subsidiary of Employer (“Subsidiary”) and Stephen Saber (“Executive”), the terms and conditions of which are as follows:

 

1. Term of Employment; Cancellation.

 

(a) Subject to the terms and conditions set forth in this Employment Agreement, Employer agrees to employ Executive and Executive agrees to be employed by Employer (for all purposes of compensation, benefits and/or employee rights, Subsidiary may perform the obligations of Employer under this agreement, with Executive’s consent) for an initial term of five years, starting on April 1, 2013 and ending on the fifth anniversary of such date; provided, however, that (i) this initial five-year term automatically shall extend for one additional year on such second anniversary date and on each subsequent anniversary of such date unless Employer or Executive notifies the other pursuant to Section 6(a) that no such extension will be effected at least two months before such anniversary date and (ii) this Employment Agreement is subject to earlier termination as provided herein.  The date described in this Section 1 on which Executive starts his employment with Employer shall be referred to in this Employment Agreement as the “Starting Date”.  The employment term described in this Section 1 shall be referred to in this Employment Agreement as the “Term”.  If either party provides proper notice that this Employment Agreement will not be renewed, then it shall expire at the end of the Term.

 

(b) Executive acknowledges that Employer and Subsidiary are entering into this Employment Agreement in connection with Employer’ acquisition (the “Acquisition”) of all of the issued and outstanding shares of common stock of Subsidiary (the “Acquired Assets”).  Employer’s and Subsidiary’s agreement under this Employment Agreement is conditioned upon the closing of the Acquisition, and neither Employer nor Subsidiary will have any liability to Executive under this Employment Agreement if the Acquisition does not close.  This Employment Agreement may be terminated by Employer without prior notice and with no obligation of Employer or Subsidiary under Section 4 to pay contractual severance benefits to Executive, if at any time the transfer of assets to Employer pursuant to the Acquisition is enjoined or rescinded or Employer’ ability to enjoy possession and use of such assets is enjoined or limited through any cause of action arising from earlier ownership of such assets or its assignment of such assets to Employer as described above.

 

2. Position, and Duties and Responsibilities.

 

(a) Position.  Executive shall be Chief Executive Officer of Employer.

 

(b) Duties and Responsibilities.  Executive’s duties and responsibilities shall be those normally associated with Executive’s position as chief executive officer of Subsidiary, plus any additional duties and responsibilities that Employer’s Board of Directors, from time to time may assign orally or in writing to Executive.  Executive shall undertake to perform all his duties and responsibilities hereunder in good faith and on a full-time basis and shall at all times act in the course of Executive’s employment under this Employment Agreement in the best interest of Employer and Subsidiary.

 

  

  

  

 

3. Compensation and Benefits.

 

(a) Base Salary.  Executive’s initial base salary shall be calculated at the rate of $350,000.00 per year.  The base salary shall be payable in accordance with Employer’s standard payroll practices and policies for employees and shall be subject to such withholdings as required by law or as otherwise permissible under such practices or policies.  Executive’s base salary shall increase by 7% on April 1 of each year, based on the salary due to Executive in the year prior to each such increase.

 

(b) Bonus and Other Incentive Compensation.  Employer shall pay Executive bonus of cash compensation equal to 1.5% of all monthly net revenues of Employer and Subsidiary, payable not later than 15 days after the end of each month.  Executive during the Term shall be eligible (but not guaranteed) to receive another or other bonuses pursuant to such unique or general plans or programs as Employer shall make available to Executive.  Executive shall also be eligible (but not guaranteed) to receive other benefits, including stock options, that Employer may from time to time determine to offer to its executive officers.  Employer and Executive may agree upon goals and objectives to be required for Executive to meet to be eligible for payment of a bonus.  Bonuses are not payable for any time period during which an event, occurrence or breach of this Employment Agreement takes place that, with any required notice, lapse of time or compliance with procedures under Section 4, constitutes Cause for termination under Section 4.  Executive shall not be entitled to any bonus payable following the expiration of this Employment Agreement or the termination thereof in accordance with Section 4.

 

(c) Employee Benefit Plans.  Executive shall be eligible to participate in the employee benefit plans, programs and policies maintained by or for Employer or Subsidiary for similarly situated employees in accordance with the terms and conditions to participate in such plans, programs and policies as in effect from time to time.  The introduction and administration of benefit plans, programs and policies are within Employer’s sole discretion and the introduction, deletion or amendment of any benefit plan, program or policy will not constitute a breach of this Employment Agreement.

 

(d) Vacation.  Executive shall be eligible for vacation as provided to similarly situated employees under policies set forth in Employer’s or Subsidiary’s Employee Handbook, if there is one, or other policies in place, which vacation time shall be taken at such time or times in each year so as not to materially and adversely interfere with the business of Employer or Subsidiary.  Unused vacation may not be carried over from any one-year period to any other period except as may be required by law. In any case, Executive shall be eligible for a minimum of four weeks of vacation.

 

(e) Other Benefits.  Employer shall pay for costs related to Executive’s reasonable monthly cell phone and other mobile Internet costs, home office Internet costs, car and commuting costs and club membership costs, payable not later than 10 days after the end of each month.  Employer shall not be liable to pay more than $1,100 per month for car and commuting costs. Employer shall pay for Long Term Disability Insurance and Life Insurance for Executive as determined by the board.

 

  

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4. Termination of Employment.

 

(a) Termination By Employer Other Than For Cause Or Disability Or By Executive For Good Reason.

 

(1) Employer shall have the right to terminate Executive’s employment under this Agreement at any time, and Executive shall have the right to resign at any time.  However, a notice under Section 1 that no extension of Executive’s Term will be effected shall not constitute at the time of such notice a termination of Executive’s employment by Employer or a resignation by Executive.  If either Employer or Executive elects to give such notice, Employer’s only obligation to Executive under this Employment Agreement after the expiration of the Term shall be to pay Executive’s earned but unpaid salary then in effect under Section 3(a), if any, until the date the Term expired.

 

(2) If Employer terminates Executive’s employment other than for Cause or Disability or Executive resigns for Good Reason, Employer shall (in lieu of notice of termination and in lieu of any other severance benefits under any of Employer’s employee benefit plans, programs or policies) pay Executive an amount equal to Executive’s annual base salary as in effect under Section 3(a) either immediately before Executive’s termination of employment or on the first day of the Term, whichever is greater.  Employer may, at its sole discretion, elect to pay Executive the amount owing under this Section 4(a)(2) in a lump sum or by way of salary continuation.  Executive waives his rights, if any, to have such payment(s) taken into account in computing any other benefits payable to, or on behalf of, Executive by Employer.

 

(b) Termination By Employer For Cause or By Executive Other Than For Good Reason.

 

(1) Employer shall have the right to terminate Executive’s employment at any time for Cause, and Executive shall have the right to resign at any time other than for Good Reason.

 

(2) If Employer terminates Executive’s employment for Cause or Executive resigns other than for Good Reason, Employer’s only obligation to Executive under this Employment Agreement shall be to pay Executive’s earned but unpaid base salary then in effect under Section 3(a), if any, up to the date Executive’s employment terminates, and Executive’s right to exercise any outstanding stock options shall terminate thirty days after the day this Employment Agreement terminates under this Section 4.

 

(c) Cause.  The term “Cause” as used in this Employment Agreement includes but is not limited to the following:

 

(1) Executive has engaged in conduct which constitutes gross negligence, gross misconduct or gross neglect in the performance of Executive’s duties and responsibilities under this Employment Agreement, including conduct resulting or intending to result directly or indirectly in gain or personal enrichment for Executive (“Cause” as defined here may be determined by the Shareholder in its reasonable judgment);

 

  

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(2) Executive has been convicted of a felony for fraud, embezzlement or theft; or

 

(3) Executive has engaged in a breach of any provision of this Employment Agreement, which Executive has failed to cure within thirty days after Executive has been provided notice of such breach.

 

(d) Good Reason.  The term “Good Reason” means

 

(1) Any material reduction in Executive’s base salary;

 

(2) A relocation of Executive’s primary work site more than fifty miles from 437 Turnpike Street, Canton, Massachusetts, absent Executive’s consent; or

 

(3) Any material breach of any of the terms of this Employment Agreement by Employer; provided, however,

 

(4) No Good Reason shall exist unless (i) Executive gives Employer a detailed, written statement of the basis for Executive’s belief that Good Reason exists and gives Employer a fifteen day period after the delivery of such statement to cure the basis for such belief and (ii) Executive actually submits Executive’s resignation to Employer’s President or the Shareholder during the sixty day period which begins immediately after the end of such fifteen day period if Executive reasonably and in good faith determines that Good Reason continues to exist after the end of such fifteen day period.

 

(e) Termination for Disability or Death.

 

(1) Employer shall have the right to terminate Executive’s employment on or after the date Executive has a Disability, and Executive’s employment shall terminate at Executive’s death.

 

(2) If Executive’s employment terminates under this Section 4(e), Employer’s only obligation under this Employment Agreement shall be to pay Executive or, if Executive dies, Executive’s estate any earned but unpaid base salary then in effect under Section 3(a) through the date Executive’s employment terminates.

 

The term “Disability” as used in this Employment Agreement means the suffering by Executive for at least a 180 consecutive day period of a physical or mental condition resulting from bodily injury, disease, or mental disorder which renders Executive incapable of continuing even with reasonable accommodation to perform the essential functions of Executive’s job.  Employer or the Shareholder shall determine whether Executive has a Disability.  If Executive disputes such determination, the issue shall be submitted to a panel consisting of three physicians who specialize in the physical or mental condition from which Executive is believed to suffer, one appointed and paid by Employer, one appointed and paid by Executive and the third appointed by these two physicians and paid one-half by Employer and one-half by Executive.  The determination as to whether Executive has a Disability shall be made by such panel and shall be binding on Employer and on Executive.  Executive acknowledges that, given the nature of Employer’s and Employer’ business and the critical importance of his position to the operations of Employer and Subsidiary, it would constitute an unreasonable accommodation on the part of Employer to operate without the services of Executive for in excess of 180 consecutive days.  Furthermore, Executive acknowledges that it would be impractical for Employer to hire a replacement for Executive, unless the replacement is hired on a permanent basis.

 

  

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(f) Benefits at Termination of Employment.  Executive shall not be entitled, by reason of his employment with Employer or by reason of any termination of such employment, however arising, to any remuneration, compensation or benefits other than those expressly provided for in this Section 4.  However, any termination of Executive arising out of Executive’s death, or Disability does not affect Executive’s right to collect disability or life insurance benefits that Executive may remain entitled to receive at that time in accordance with the terms of the applicable benefit plan, program or policy.

 

5. Covenants by Executive.

 

(a) Employer and Subsidiary Property.

 

(1) Executive upon the termination of Executive’s employment for any reason or, if earlier, upon Employer’s or Employer’ request shall promptly return all “Property” which had been entrusted or made available to Executive by Employer or Subsidiary.

 

(2) The term “Property” means all records, files, memoranda, reports, price lists, customer lists, drawings, plans, sketches, keys, codes, computer hardware and software and other property of any kind or description prepared, used or possessed by Executive during Executive’s employment by Employer (and any duplicates of any such property) together with any and all information, ideas, concepts, discoveries, and inventions and the like conceived, made, developed or acquired at any time by Executive individually or, with others during Executive’s employment which relate to Employer’s or Employer’ business, products or services.

 

(b) Trade Secrets.

 

(1) Executive agrees that Executive will hold in a fiduciary capacity for the benefit of Employer and Subsidiary, as their respective interests may appear, and will not directly or indirectly use or disclose, any “Trade Secret” that Executive may have acquired during the term of Executive’s employment by Employer for so long as such information remains a Trade Secret.

 

(2) The term “Trade Secret” means information, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers that (a) derives economic value, actual or potential, from not being generally known to, and not being generally readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (b) is the subject of reasonable efforts by Employer or Subsidiary, as the case may be, to maintain its secrecy.

 

  

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(3) This Section 5(b) and Section 5(c) are intended to provide rights to Employer and Subsidiary that are in addition to, not in lieu of, those rights Employer and Subsidiary have under the common law or applicable statutes for the protection of trade secrets.

 

(c) Confidential Information.

 

(1) Executive while employed under this Employment Agreement and thereafter during the “Restricted Period” shall hold in a fiduciary capacity for the benefit of Employer and Subsidiary, and shall not directly or indirectly use or disclose, any “Confidential Information” that Executive may have acquired (whether or not developed or compiled by Executive and whether or not Executive is authorized to have access to such information) during the term of, and in the course of, or as a result of Executive’s employment by Employer.

 

(2) The term “Confidential Information” means any secret, confidential or proprietary information of Employer or Subsidiary relating to its respective businesses, including, without limitation, trade secrets, customer lists, details of client or consultant contracts, current and anticipated customer requirements, pricing policies, price lists, market studies, business plans, operational methods, marketing plans or strategies, product development techniques or flaws, computer software programs (including object code and source code), data and documentation data, base technologies, systems, structures and architectures, inventions and ideas, past, current and planned research and development, compilations, devices, methods, techniques, processes, financial information and data, business acquisition plans and new personnel acquisition plans (not otherwise included in the definition of a Trade Secret under this Employment Agreement) that has not become generally available to the public by the act of one who has the right to disclose such information without violating any right of Employer or Subsidiary.  Confidential Information may include as well, but it is not limited to, future business plans, licensing strategies, advertising campaigns, information regarding customers, employees and independent contractors and the terms and conditions of this Employment Agreement.

 

(d) Restricted Period.  The term “Restricted Period” as used in the Employment Agreement shall mean the period that starts on the date of this Employment Agreement and extends until the later of one year from the date of this Employment Agreement and one year after Executive’s employment with Employer terminates without regard to whether such termination comes before, at or after the end of the Term.

 

(e) Nonsolicitation of Customers or Employees.

 

(1) Executive (i) while employed under this Employment Agreement shall not, on Executive’s own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise (other than Employer or Subsidiary), solicit Competing Business of customers of Employer or of Subsidiary and (ii) during the Restricted Period shall not, on Executive’s own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, solicit Competing Business of customers of Employer or of Subsidiary with whom Executive within the twenty-four month period immediately preceding the beginning of the Restricted Period had or made contact in the course of Executive’s employment by Employer.

 

  

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(2) Executive (i) while employed under this Employment Agreement shall not, either directly or indirectly, call on, solicit or attempt to induce any other officer, employee or independent contractor of Employer or Subsidiary to terminate his or her employment with Employer or Subsidiary and shall not assist any other person or entity in such a solicitation (regardless of whether any such officer, employee or independent contractor would commit a breach of contract by terminated his or her employment), and (ii) during the Restricted Period, shall not, either directly or indirectly, call on, solicit or attempt to induce any other officer, employee or independent contractor of Employer or of Subsidiary with whom Executive had contact, knowledge of, or association in the course of Executive’s employment with Employer as the case may be, during the twelve month period immediately preceding the beginning of the Restricted Period, to terminate his or her employment with Employer or Subsidiary and shall not assist any other person or entity in such a solicitation (regardless of whether any such officer, employee or independent contractor would commit a breach of contract by terminating his or her employment).

 

(3) The term “Competing Business” as used in this Employment Agreement means the creation or development, marketing, selling, licensing or servicing of any product or service in a way which competes with Employer or Subsidiary.

 

(f) Noncompetition Obligation.  Executive while employed under this Employment Agreement and thereafter during the Restricted Period shall not conduct or participate in Competing Business or organize or form any other business that will conduct Competing Business and shall not engage in the management of, or provide consulting concerning the management of, Competing Business on behalf of any business other than Employer or Subsidiary.

 

(g) Reasonable and Continuing Obligations.  Executive agrees that Executive’s obligations under this Section 5 are obligations that will continue beyond the date Executive’s employment terminates and that such obligations are reasonable and necessary to protect Employer’s and Employer’ legitimate business interests.  Employer and Subsidiary in addition shall have the right to take such other action as each deems necessary or appropriate to compel compliance with the provisions of this Section 5.

 

(h) Remedy for Breach.  Executive agrees that the remedies at law of Employer or Subsidiary for any actual or threatened breach by Executive of the covenants in this Section 5 would be inadequate and that Employer and Subsidiary shall be entitled to specific performance of the covenants in this Section 5, including entry of an ex parte, temporary restraining order in state or federal court, preliminary and permanent injunctive relief against activities in violation of this Section 5, or both, or other appropriate judicial remedy, writ or order, in addition to any damages and legal expenses which Employer or Subsidiary may be

 

  

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legally entitled to recover.  Executive acknowledges and agrees that the covenants in this Section 5 shall be construed as agreements independent of any other provision of this or any other agreement between Employer or Subsidiary and Executive, and that the existence of any claim or cause of action by Executive against Employer or Subsidiary, whether predicated upon this Employment Agreement or any other agreement, shall not constitute a defense to the enforcement by Employer or Subsidiary of such covenants.

 

(i) Survival. Executive’s obligations under this Section 5 shall survive the expiration or termination of this Employment Agreement, regardless of the grounds for any such termination.

 

6. Miscellaneous.

 

(a) Notices.  Notices and all other communications shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, or by e-mail with proof of receipt.  Notices to Employer and Subsidiary shall be sent to The Pulse Network, Inc., 437 Turnpike Street, Canton, Massachusetts 02021, Attention:  Corporate Secretary.  Notices and communications to Executive shall be sent to the address Executive most recently provided to Employer for this purpose.  Proof of actual receipt of notice shall evidence proper notice regardless of means of delivery.  The Pulse Network, Inc., and any of its subsidiaries, shall have the right to act as agent for Employer for the giving of any notice required or permitted under this Employment Agreement.

 

(b) No Waiver.  Except for the notice described in Section 6(a), no failure by either Employer, Employer or Executive at any time to give notice of any breach by the other of, or to require compliance with, any condition or provision of this Employment Agreement shall be deemed a waiver of any provisions or conditions of this Employment Agreement.

 

(c) Governing Law.  This Employment Agreement shall be governed by the laws of the Massachusetts, without reference to the choice of law principles thereof.

 

(d) Assignment.  This Employment Agreement shall be binding upon and inure to the benefit of Employer and Subsidiary and any successor to all or substantially all of the business or assets of Employer or Subsidiary and any permitted assigns.  Employer may assign its interests in this Employment Agreement to a successor to its business or to Employer or any subsidiary or affiliate of or successor to Employer, and no such assignment shall be treated as a termination of Executive’s employment under this Employment Agreement.  Executive’s rights and obligations under this Employment Agreement are personal and shall not be assigned or transferred.

 

(e) Other Agreements.  This Employment Agreement replaces and merges any and all previous agreements and understandings regarding all the terms and conditions of Executive’s employment relationship with Employer, and this Employment Agreement constitutes the entire agreement between Employer and Executive with respect to such terms and conditions.  This Employment Agreement constitutes the entire agreement between Employer and Executive with respect to the subject matter covered hereby.

 

  

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(f) Amendment.  No amendment to this Employment Agreement shall be effective unless it is in writing and signed by Employer and/or Employer, as their respective interests are thereby affected, and by Executive.

 

(g) Invalidity.  If any part of this Employment Agreement is held by a court of competent jurisdiction to be invalid or otherwise unenforceable, the remaining part shall be unaffected and shall continue in full force and effect, and the invalid or otherwise unenforceable part shall be deemed not to be part of this Employment Agreement.

 

IN WITNESS WHEREOF, Employer, Employer and Executive have executed this Employment Agreement in multiple originals to be effective on the first date of the Term.

 

	
Employer:

	  
	  	  
	
THE PULSE NETWORK, INC.,

	  
	
a Nevada corporation

	  
	  	  
	  	  
	
By: /s/ Mohamed Ayad

	
Date:  March 29, 2013

	
Name: Mohamed Ayad

	  
	
Title: President

	  
	  	  
	
Subsidiary:

	  
	  	  
	
THE PULSE NETWORK, INC.,

	  
	
a Massachusetts corporation

	  
	  	  
	  	  
	
By: /s/ Nicholas Saber

	
Date: March 29, 2013

	
Name: Nicholas Saber

	  
	
Title: President

	  
	  	  
	
EXECUTIVE

	  
	  	  
	  	  
	
/s/ Stephen Saber

	
Date: March 29, 2013

	
Stephen Saber

	  

  

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