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  Exhibit 10.1

 

HOTAPP BLOCKCHAIN INC.

2018 EQUITY INCENTIVE PLAN

 

1. DEFINITIONS.

 

Unless
otherwise specified or unless the context otherwise requires, the
following terms, as used in this HotApp Blockchain Inc. 2018 Equity
Incentive Plan, have the following meanings:

 

Administrator means
the Board of Directors, unless it has delegated power to act on its
behalf to the Committee, in which case the Administrator means the
Committee.

 

Affiliate means a corporation which, for purposes of
Section 424 of the Code, is a parent or subsidiary of the
Company, direct or indirect.

 

Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.

 

Board of
Directors means the Board
of Directors of the Company.

 

Code means the United States Internal Revenue
Code of 1986, as amended.

 

Committee means the committee of the Board of
Directors to which the Board of Directors has delegated power to
act under or pursuant to the provisions of the
Plan.

 

Common
Stock means shares of the
Company’s common stock, $0.0001 par value per
share.

 

Company means HotApp Blockchain Inc. a Delaware
corporation.

 

Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.

 

Employee means any employee of the Company or of an
Affiliate (including, without limitation, an employee who is also
serving as an officer or director of the Company or of an
Affiliate), designated by the Administrator to be eligible to be
granted one or more Stock Rights under the
Plan.

 

Fair Market
Value of a Share of Common
Stock means:

 

(1)
If the Common Stock is listed on a national securities exchange or
traded in the over-the-counter market and sales prices are
regularly reported for the Common Stock, the average of the closing
or last price of the Common Stock on the composite tape or other
comparable reporting system for the five (5) trading days,
consisting of (i) the two (2) trading days immediately
following the applicable date, (ii) the trading day that is
the applicable date, and (iii) the two (2) trading days
immediately preceding the applicable date;

 

(2)
If the Common Stock is not traded on a national securities exchange
but is traded on the over-the-counter market, if sales prices are
not regularly reported for the Common Stock for the trading day
referred to in clause (1), and if bid and asked prices for the
Common Stock are regularly reported, the mean between the bid and
the asked price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock
was traded immediately preceding the applicable date;
and

 

(3)
If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as
the Administrator, in good faith, shall determine.

 

ISO means an option meant to qualify as an
incentive stock option under Section 422 of the
Code.

 

Non-Qualified
Option means an option
which is not intended to qualify as an ISO.

 

Option means an ISO or Non-Qualified Option granted
under the Plan.

 

 

1

 

 

Participant means an Employee, director or consultant of
the Company or an Affiliate to whom one or more Stock Rights are
granted under the Plan. As used herein, “Participant”
shall include “Participant’s Survivors” where the
context requires.

 

Plan means this HotApp Blockchain Inc. 2018
Equity Incentive Plan.

 

Shares means shares of the Common Stock as to which
Stock Rights have been or may be granted under the Plan or any
shares of capital stock into which the Shares are changed or for
which they are exchanged within the provisions of Paragraph 3 of
the Plan. The Shares issued under the Plan may be authorized and
unissued shares or shares held by the Company in its treasury, or
both.

 

Stock-Based
Award means a grant by the
Company under the Plan of an equity award or an equity based award
which is not an Option or a Stock Grant.

 

Stock Grant means a grant by the Company of Shares under
the Plan.

 

Stock Right means a right to Shares or the value of
Shares of the Company granted pursuant to the Plan—an ISO, a
Non-Qualified Option, a Stock Grant or a Stock-Based
Award.

 

Survivor means a deceased Participant’s legal
representatives and/or any person or persons who acquired the
Participant’s rights to a Stock Right by will or by the laws
of descent and distribution.

 

2. PURPOSES OF THE
PLAN.

 

The
Plan is intended to encourage ownership of Shares by Employees and
directors of and certain consultants to the Company in order to
attract and retain such people, to induce them to work for the
benefit of the Company or of an Affiliate and to provide additional
incentive for them to promote the success of the Company or of an
Affiliate. The Plan provides for the granting of ISOs,
Non-Qualified Options, Stock Grants and Stock-Based
Awards.

 

3. SHARES SUBJECT TO THE
PLAN.

 

(a)

The
number of Shares which may be issued from time to time pursuant to
this Plan shall be 50,000,000, or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has
interpreted the effect of any stock split, stock dividend,
combination, recapitalization or similar transaction in accordance
with Paragraph 24 of the Plan.

 

(b)

If an
Option ceases to be “outstanding,” in whole or in part
(other than by exercise), or if the Company shall reacquire (at not
more than its original issuance price) any Shares issued pursuant
to a Stock Grant or Stock-Based Award, or if any Stock Right
expires or is forfeited, cancelled, or otherwise terminated or
results in any Shares not being issued, the unissued Shares which
were subject to such Stock Right shall again be available for
issuance from time to time pursuant to this Plan. Notwithstanding
the foregoing, if a Stock Right is exercised in whole or in part,
by tender of Shares or if the Company’s tax withholding
obligation is satisfied by withholding Shares, the number of Shares
needed to have been issued under the Plan for purposes of the
limitation set forth in Paragraph 3(a) above shall be the number of
Shares that were subject to the Stock Right or portion thereof, and
not the net number of Shares actually issued.

 

4. ADMINISTRATION OF THE
PLAN.

 

The
Administrator of the Plan will be the Board of Directors, except to
the extent the Board of Directors delegates its authority to the
Committee, in which case the Committee shall be the Administrator.
Subject to the provisions of the Plan, the Administrator is
authorized to:

 

a.

Interpret
the provisions of the Plan and all Stock Rights and to make all
rules and determinations which it deems necessary or advisable for
the administration of the Plan;

 

b.

Determine
which Employees, directors and consultants shall be granted Stock
Rights;

 

c.

Determine
the number of Shares for which a Stock Right or Stock Rights shall
be granted, provided, however, that in no event shall Stock Rights
with respect to more than 1,000,000 Shares be granted to any
Participant in any fiscal year;

 

 

2

 

 

d.

Specify
the terms and conditions upon which a Stock Right or Stock Rights
may be granted;

 

e.

Make
changes to any outstanding Stock Right, including, without
limitation, to reduce or increase the exercise price or purchase
price, accelerate the vesting schedule or extend the expiration
date, provided that no such change shall impair the rights of a
Participant under any grant previously made without such
Participant’s consent;

 

f.

Buy out
for a payment in cash or Shares, a Stock Right previously granted
and/or cancel any such Stock Right and grant in substitution
therefor other Stock Rights, covering the same or a different
number of Shares and having an exercise price or purchase price per
share which may be lower or higher than the exercise price or
purchase price of the cancelled Stock Right, based on such terms
and conditions as the Administrator shall establish and the
Participant shall accept; and

 

g.

Adopt
any sub-plans applicable to residents of any specified jurisdiction
as it deems necessary or appropriate in order to comply with or
take advantage of any tax or other laws applicable to the Company
or to Plan Participants or to otherwise facilitate the
administration of the Plan, which sub-plans may include additional
restrictions or conditions applicable to Stock Rights or Shares
issuable pursuant to a Stock Right.

 

Provided,
however, that all such interpretations, rules, determinations,
terms and conditions shall be made and prescribed in the context of
preserving the tax status under Section 422 of the Code of
those Options which are designated as ISOs. Subject to the
foregoing, the interpretation and construction by the Administrator
of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of
Directors, if the Administrator is the Committee. In addition, if
the Administrator is the Committee, the Board of Directors may take
any action under the Plan that would otherwise be the
responsibility of the Committee.

 

To
the extent permitted under applicable law, the Board of Directors
or the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and
may delegate all or any portion of its responsibilities and powers
to any other person selected by it. The Board of Directors or the
Committee may revoke any such allocation or delegation at any
time.

 

 The
Committee and the Board, and each member thereof, shall be entitled
to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or Employee, the
Company’s independent auditors, Consultants or any other
agents assisting in the administration of the Plan. Members of the
Committee and the Board, and any officer or Employee acting at the
direction or on behalf of the Committee or the Board, shall not be
personally liable for any action or determination taken or made in
good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company
with respect to any such action or determination.

 

5. ELIGIBILITY FOR
PARTICIPATION.

 

The
Administrator will, in its sole discretion, name the Participants
in the Plan, provided, however, that each Participant must be an
Employee, director or consultant of the Company or of an Affiliate
at the time a Stock Right is granted. Notwithstanding the
foregoing, the Administrator may authorize the grant of a Stock
Right to a person not then an Employee, director or consultant of
the Company or of an Affiliate; provided, however, that the actual
grant of such Stock Right shall be conditioned upon such person
becoming eligible to become a Participant at or prior to the time
of the execution of the Agreement evidencing such Stock Right. ISOs
may be granted only to Employees. Non-Qualified Options, Stock
Grants and Stock-Based Awards may be granted to any Employee,
director or consultant of the Company or an Affiliate. The granting
of any Stock Right to any individual shall neither entitle that
individual to, nor disqualify him or her from, participation in any
other grant of Stock Rights.

 

6. TERMS AND CONDITIONS OF
OPTIONS.

 

Each
Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Administrator may
provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically
required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto.
The Option Agreements shall be subject to at least the following
terms and conditions:

 

 

3

 

 

A. Non-Qualified
Options: Each Option intended
to be a Non-Qualified Option shall be subject to the terms and
conditions which the Administrator determines to be appropriate and
in the best interest of the Company, subject to the following
minimum standards for any such Non-Qualified
Option:

 

a.

Option Price : Each Option Agreement shall state the option
price (per share) of the Shares covered by each Option, which
option price shall be determined by the Administrator but shall not
be less than the Fair Market Value per share of Common
Stock.

 

b.

Number of Shares : Each Option Agreement shall state the
number of Shares to which it pertains.

 

c.

Option Periods : Each Option Agreement shall state the date
or dates on which it first is exercisable and the date after which
it may no longer be exercised, and may provide that the Option
rights accrue or become exercisable in installments over a period
of months or years, or upon the occurrence of certain conditions or
the attainment of stated goals or events.

 

d.

Option Conditions : Exercise of any Option may be
conditioned upon the Participant’s execution of a Share
purchase agreement in form satisfactory to the Administrator
providing for certain protections for the Company and its other
shareholders, including requirements that:

 

i.

The
Participant’s or the Participant’s Survivors’
right to sell or transfer the Shares may be restricted;
and

 

ii.

The
Participant or the Participant’s Survivors may be required to
execute letters of investment intent and must also acknowledge that
the Shares will bear legends noting any applicable
restrictions.

 

B. ISOs: Each Option intended to be an ISO shall be
issued only to an Employee and be subject to the following terms
and conditions, with such additional restrictions or changes as the
Administrator determines are appropriate but not in conflict with
Section 422 of the Code and relevant regulations and rulings
of the Internal Revenue Service:

 

a.

Minimum standards : The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A)
above, except clauses (a) thereunder.

 

b.

Option Price : Immediately before the ISO is granted, if the
Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:

 

i.

10%
or less of the total
combined voting power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered by each
ISO shall not be less than 100% of the Fair Market Value per share
of the Shares on the date of the grant of the Option;
or

 

ii.

More
than 10% of the total combined voting power of all classes of stock
of the Company or an Affiliate, the Option price per share of the
Shares covered by each ISO shall not be less than 110% of the Fair
Market Value on the date of grant.

 

c.

Term of Option : For Participants who own:

 

i.

10%
or less of the total
combined voting power of all classes of stock of the Company or an
Affiliate, each ISO shall terminate not more than ten years from
the date of the grant or at such earlier time as the Option
Agreement may provide; or

 

ii.

More
than 10% of the total combined voting power of all classes of stock
of the Company or an Affiliate, each ISO shall terminate not more
than five years from the date of the grant or at such earlier time
as the Option Agreement may provide.

 

d.

Limitation on Yearly Exercise : The Option Agreements shall
restrict the amount of ISOs which may become exercisable in any
calendar year (under this or any other ISO plan of the Company or
an Affiliate) so that the aggregate Fair Market Value (determined
at the time each ISO is granted) of the stock with respect to which
ISOs are exercisable for the first time by the Participant in any
calendar year does not exceed $100,000.

 

 

4

 

 

7. TERMS AND CONDITIONS OF
STOCK GRANTS.

 

Each
offer of a Stock Grant to a Participant shall state the date prior
to which the Stock Grant must be accepted by the Participant, and
the principal terms of each Stock Grant shall be set forth in an
Agreement, duly executed by the Company and, to the extent required
by law or requested by the Company, by the Participant. The
Agreement shall be in a form approved by the Administrator and
shall contain terms and conditions which the Administrator
determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards:

 

(a)
Each Agreement shall state the purchase price (per share), if any,
of the Shares covered by each Stock Grant, which purchase price
shall be determined by the Administrator but shall not be less than
the minimum consideration required by the Delaware General
Corporation Law on the date of the grant of the Stock
Grant;

 

(b)
Each Agreement shall state the number of Shares to which the Stock
Grant pertains; and

 

(c)
Each Agreement shall include the terms of any right of the Company
to restrict or reacquire the Shares subject to the Stock Grant,
including the time and events upon which such rights shall accrue
and the purchase price therefor, if any.

 

8. TERMS AND CONDITIONS OF
OTHER STOCK-BASED AWARDS.

 

The
Board shall have the right to grant other Stock-Based Awards based
upon the Common Stock having such terms and conditions as the Board
may determine, including, without limitation, the grant of Shares
based upon certain conditions, the grant of securities convertible
into Shares and the grant of stock appreciation rights, phantom
stock awards or stock units. The principal terms of each
Stock-Based Award shall be set forth in an Agreement, duly executed
by the Company and, to the extent required by law or requested by
the Company, by the Participant. The Agreement shall be in a form
approved by the Administrator and shall contain terms and
conditions which the Administrator determines to be appropriate and
in the best interest of the Company.

 

9. EXERCISE OF OPTIONS AND
ISSUE OF SHARES.

 

An
Option (or any part or installment thereof) shall be exercised by
giving written notice to the Company or its designee, together with
provision for payment of the full purchase price in accordance with
this Paragraph for the Shares as to which the Option is being
exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such notice shall be signed by the
person exercising the Option, shall state the number of Shares with
respect to which the Option is being exercised and shall contain
any representation required by the Plan or the Option Agreement.
Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States
dollars in cash or by check, or (b) at the discretion of the
Administrator, through delivery of shares of Common Stock having a
Fair Market Value equal as of the date of the exercise to the cash
exercise price of the Option and held for at least six months, or
(c) at the discretion of the Administrator, by having the
Company retain from the shares otherwise issuable upon exercise of
the Option, a number of shares having a Fair Market Value equal as
of the date of exercise to the exercise price of the Option, or
(d) at the discretion of the Administrator, in accordance with
a cashless exercise program established with a securities brokerage
firm, and approved by the Administrator, or (e) at the
discretion of the Administrator, by any combination of (a), (b),
(c) and (d) above or (f) at the discretion of the
Administrator, payment of such other lawful consideration as the
Administrator may determine. Notwithstanding the foregoing, the
Administrator shall accept only such payment on exercise of an ISO
as is permitted by Section 422 of the Code.

 

The
Company shall then reasonably promptly deliver the Shares as to
which such Option was exercised to the Participant (or to the
Participant’s Survivors, as the case may be). In determining
what constitutes “reasonably promptly,” it is expressly
understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or
regulation (including, without limitation, state securities or
”blue sky” laws) which requires the Company to take any
action with respect to the Shares prior to their issuance. The
Shares shall, upon delivery, be fully paid, non-assessable
Shares.

 

The
Administrator shall have the right to accelerate the date of
exercise of any installment of any Option; provided that the
Administrator shall not accelerate the exercise date of any
installment of any Option granted to an Employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to
Paragraph 27) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as
described in Paragraph 6.B.d.

 

 

5

 

 

The
Administrator may, in its discretion, amend any term or condition
of an outstanding Option provided (i) such term or condition
as amended is permitted by the Plan, (ii) any such amendment
shall be made only with the consent of the Participant to whom the
Option was granted, or in the event of the death of the
Participant, the Participant’s Survivors, if the amendment is
adverse to the Participant, and (iii) any such amendment of
any Option shall be made only after the Administrator determines
whether such amendment would constitute a
“modification” of any Option which is an ISO (as that
term is defined in Section 424(h) of the Code) or would cause
any adverse tax consequences for the holder of such Option
including, but not limited to, pursuant to Section 409A of the
Code.

 

10. ACCEPTANCE OF STOCK
GRANTS AND STOCK-BASED AWARDS AND ISSUE OF
SHARES.

 

A
Stock Grant or Stock-Based Award (or any part or installment
thereof) shall be accepted by executing the applicable Agreement
and delivering it to the Company or its designee, together with
provision for payment of the full purchase price, if any, in
accordance with this Paragraph for the Shares as to which such
Stock Grant or Stock-Based Award is being accepted, and upon
compliance with any other conditions set forth in the applicable
Agreement. Payment of the purchase price for the Shares as to which
such Stock Grant or Stock-Based Award is being accepted shall be
made (a) in United States dollars in cash or by check, or
(b) at the discretion of the Administrator, through delivery
of shares of Common Stock held for at least six months and having a
Fair Market Value equal as of the date of acceptance of the Stock
Grant or Stock Based-Award to the purchase price of the Stock Grant
or Stock-Based Award, or (c) at the discretion of the
Administrator, by delivery of the grantee’s personal recourse
note bearing interest payable not less than annually at no less
than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, or (d) at the discretion of
the Administrator, by any combination of (a), (b) and
(c) above; or (e) at the discretion of the Administrator,
payment of such other lawful consideration as the Administrator may
determine.

 

The
Company shall then, if required by the applicable Agreement,
reasonably promptly deliver the Shares as to which such Stock Grant
or Stock-Based Award was accepted to the Participant (or to the
Participant’s Survivors, as the case may be), subject to any
escrow provision set forth in the applicable Agreement. In
determining what constitutes “reasonably promptly,” it
is expressly understood that the issuance and delivery of the
Shares may be delayed by the Company in order to comply with any
law or regulation (including, without limitation, state securities
or “blue sky” laws) which requires the Company to take
any action with respect to the Shares prior to their
issuance.

 

The
Administrator may, in its discretion, amend any term or condition
of an outstanding Stock Grant, Stock-Based Award or applicable
Agreement provided (i) such term or condition as amended is
permitted by the Plan, and (ii) any such amendment shall be
made only with the consent of the Participant to whom the Stock
Grant or Stock-Based Award was made, if the amendment is adverse to
the Participant.

 

11. RIGHTS AS A
SHAREHOLDER.

 

No
Participant to whom a Stock Right has been granted shall have
rights as a shareholder with respect to any Shares covered by such
Stock Right, except after due exercise of the Option or acceptance
of the Stock Grant or as set forth in any Agreement, and tender of
the full purchase price, if any, for the Shares being purchased
pursuant to such exercise or acceptance and registration of the
Shares in the Company’s share register in the name of the
Participant.

 

12. ASSIGNABILITY AND
TRANSFERABILITY OF STOCK RIGHTS.

 

By
its terms, a Stock Right granted to a Participant shall not be
transferable by the Participant other than (i) by will or by
the laws of descent and distribution, or (ii) as approved by
the Administrator in its discretion and set forth in the applicable
Agreement. Notwithstanding the foregoing, an ISO transferred except
in compliance with clause (i) above shall no longer qualify as
an ISO. The designation of a beneficiary of a Stock Right by a
Participant, with the prior approval of the Administrator and in
such form as the Administrator shall prescribe, shall not be deemed
a transfer prohibited by this Paragraph. Except as provided above,
a Stock Right shall only be exercisable or may only be accepted,
during the Participant’s lifetime, by such Participant (or by
his or her legal representative) and shall not be assigned, pledged
or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of any Stock Right or of any
rights granted thereunder contrary to the provisions of this Plan,
or the levy of any attachment or similar process upon a Stock
Right, shall be null and void.

 

 

6

 

 

13. EFFECT ON OPTIONS OF
TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH
OR DISABILITY.

 

Except
as otherwise provided in a Participant’s Option Agreement, in
the event of a termination of service (whether as an employee,
director or consultant) with the Company or an Affiliate before the
Participant has exercised an Option, the following rules
apply:

 

a.

A
Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than
termination “for cause”, Disability, or death for which
events there are special rules in Paragraphs 14, 15, and 16,
respectively), may exercise any Option granted to him or her to the
extent that the Option is exercisable on the date of such
termination of service, but only within such term as the
Administrator has designated in a Participant’s Option
Agreement.

 

b.

Except
as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no
event may an Option intended to be an ISO, be exercised later than
three months after the Participant’s termination of
employment.

 

c.

The
provisions of this Paragraph, and not the provisions of Paragraph
15 or 16, shall apply to a Participant who subsequently becomes
Disabled or dies after the termination of employment, director
status or consultancy; provided, however, in the case of a
Participant’s Disability or death within three months after
the termination of employment, director status or consultancy, the
Participant or the Participant’s Survivors may exercise the
Option within one year after the date of the Participant’s
termination of service, but in no event after the date of
expiration of the term of the Option.

 

d.

Notwithstanding
anything herein to the contrary, if subsequent to a
Participant’s termination of employment, termination of
director status or termination of consultancy, but prior to the
exercise of an Option, the Board of Directors determines that,
either prior or subsequent to the Participant’s termination,
the Participant engaged in conduct which would constitute
“cause”, then such Participant shall forthwith cease to
have any right to exercise any Option.

 

e.

A
Participant to whom an Option has been granted under the Plan who
is absent from the Company or an Affiliate because of temporary
disability (any disability other than a Disability as defined in
Paragraph 1 hereof), or who is on leave of absence for any purpose,
shall not, during the period of any such absence, be deemed, by
virtue of such absence alone, to have terminated such
Participant’s employment, director status or consultancy with
the Company or with an Affiliate, except as the Administrator may
otherwise expressly provide.

 

f.

Except
as required by law or as set forth in a Participant’s Option
Agreement, Options granted under the Plan shall not be affected by
any change of a Participant’s status within or among the
Company and any Affiliates, so long as the Participant continues to
be an employee, director or consultant of the Company or any
Affiliate.

 

14. EFFECT ON OPTIONS OF
TERMINATION OF SERVICE “FOR CAUSE”.

 

Except
as otherwise provided in a Participant’s Option Agreement,
the following rules apply if the Participant’s service
(whether as an employee, director or consultant) with the Company
or an Affiliate is terminated “for cause” prior to the
time that all his or her outstanding Options have been
exercised:

 

a.

All
outstanding and unexercised Options as of the time the Participant
is notified his or her service is terminated “for
cause” will immediately be forfeited.

 

b.

For
purposes of this Plan, “cause” shall include (and is
not limited to) dishonesty with respect to the Company or any
Affiliate, insubordination, substantial malfeasance or non-feasance
of duty, unauthorized disclosure of confidential information,
breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or similar
agreement between the Participant and the Company, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the
existence of “cause” will be conclusive on the
Participant and the Company.

 

c.

“Cause”
is not limited to events which have occurred prior to a
Participant’s termination of service, nor is it necessary
that the Administrator’s finding of “cause” occur
prior to termination. If the Administrator determines, subsequent
to a Participant’s termination of service but prior to the
exercise of an Option, that either prior or subsequent to the
Participant’s termination the Participant engaged in onduct
which would constitute “cause”, then the right to
exercise any Option is forfeited.

 

 

7

 

 

d.

Any
provision in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of
“cause” for termination and which is in effect at the
time of such termination, shall supersede the definition in this
Plan with respect to that Participant.

 

15. EFFECT ON OPTIONS OF
TERMINATION OF SERVICE FOR DISABILITY.

 

Except
as otherwise provided in a Participant’s Option
Agreement:

 

a.

A
Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate by reason of Disability may exercise
any Option granted to such Participant:

 

(i)

To the
extent that the Option has become exercisable but has not been
exercised on the date of Disability; and

 

(ii)

In the
event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of Disability of any
additional vesting rights that would have accrued on the next
vesting date had the Participant not become Disabled. The proration
shall be based upon the number of days accrued in the current
vesting period prior to the date of Disability.

 

b.

A
Disabled Participant may exercise such rights only within the
period ending one year after the date of the Participant’s
termination of employment, directorship or consultancy, as the case
may be, notwithstanding that the Participant might have been able
to exercise the Option as to some or all of the Shares on a later
date if the Participant had not become Disabled and had continued
to be an employee, director or consultant or, if earlier, within
the originally prescribed term of the Option.

 

c.

The
Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a
procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such
procedure shall be used for such determination). If requested, the
Participant shall be examined by a physician selected or approved
by the Administrator, the cost of which examination shall be paid
for by the Company.

 

16. EFFECT ON OPTIONS OF
DEATH WHILE AN EMPLOYEE, DIRECTOR OR
CONSULTANT.

 

Except
as otherwise provided in a Participant’s Option
Agreement:

 

a.

In the
event of the death of a Participant while the Participant is an
employee, director or consultant of the Company or of an Affiliate,
such Option may be exercised by the Participant’s
Survivors:

 

(i)

To the
extent that the Option has become exercisable but has not been
exercised on the date of death; and

 

(ii)

In the
event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion through the date of death of any
additional vesting rights that would have accrued on the next
vesting date had the Participant not died. The proration shall be
based upon the number of days accrued in the current vesting period
prior to the Participant’s date of death.

 

b.

If the
Participant’s Survivors wish to exercise the Option, they
must take all necessary steps to exercise the Option within one
year after the date of death of such Participant, notwithstanding
that the decedent might have been able to exercise the Option as to
some or all of the Shares on a later date if he or she had not died
and had continued to be an employee, director or consultant or, if
earlier, within the originally prescribed term of the
Option.

 

17. EFFECT OF TERMINATION OF
SERVICE ON UNACCEPTED STOCK GRANTS.

 

In
the event of a termination of service (whether as an employee,
director or consultant) with the Company or an Affiliate for any
reason before the Participant has accepted a Stock Grant, such
offer shall terminate.

 

For
purposes of this Paragraph 17 and Paragraph 18 below, a Participant
to whom a Stock Grant has been offered and accepted under the Plan
who is absent from work with the Company or with an Affiliate
because of temporary disability (any disability other than a
Disability as defined in Paragraph 1 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant’s employment, director status or
consultancy with the Company or with an Affiliate, except as the
Administrator may otherwise expressly provide.

 

 

8

 

 

In
addition, for purposes of this Paragraph 17 and Paragraph 18 below,
any change of employment or other service within or among the
Company and any Affiliates shall not be treated as a termination of
employment, director status or consultancy so long as the
Participant continues to be an employee, director or consultant of
the Company or any Affiliate.

 

18. EFFECT ON STOCK GRANTS
OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR
DEATH OR DISABILITY.

 

Except
as otherwise provided in a Participant’s Stock Grant
Agreement, in the event of a termination of service (whether as an
employee, director or consultant), other than termination
“for cause,” Disability, or death for which events
there are special rules in Paragraphs 19, 20, and 21, respectively,
before all Company rights of repurchase shall have lapsed, then the
Company shall have the right to repurchase that number of Shares
subject to a Stock Grant as to which the Company’s repurchase
rights have not lapsed.

 

19. EFFECT ON STOCK GRANTS
OF TERMINATION OF SERVICE “FOR
CAUSE”.

 

Except
as otherwise provided in a Participant’s Stock Grant
Agreement, the following rules apply if the Participant’s
service (whether as an employee, director or consultant) with the
Company or an Affiliate is terminated “for
cause”:

 

a.

All
Shares subject to any Stock Grant shall be immediately subject to
repurchase by the Company at the purchase price, if any,
thereof.

 

b.

For
purposes of this Plan, “cause” shall include (and is
not limited to) dishonesty with respect to the employer,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, breach by the
Participant of any provision of any employment, consulting,
advisory, nondisclosure, non-competition or similar agreement
between the Participant and the Company, and conduct substantially
prejudicial to the business of the Company or any Affiliate. The
determination of the Administrator as to the existence of
“cause” will be conclusive on the Participant and the
Company.

 

c.

“Cause”
is not limited to events which have occurred prior to a
Participant’s termination of service, nor is it necessary
that the Administrator’s finding of “cause” occur
prior to termination. If the Administrator determines, subsequent
to a Participant’s termination of service, that either prior
or subsequent to the Participant’s termination the
Participant engaged in conduct which would constitute
“cause,” then the Company’s right to repurchase
all of such Participant’s Shares shall apply.

 

d.

Any
provision in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of
“cause” for termination and which is in effect at the
time of such termination, shall supersede the definition in this
Plan with respect to that Participant.

 

20. EFFECT ON STOCK GRANTS
OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except
as otherwise provided in a Participant’s Stock Grant
Agreement, the following rules apply if a Participant ceases to be
an employee, director or consultant of the Company or of an
Affiliate by reason of Disability: to the extent the
Company’s rights of repurchase have not lapsed on the date of
Disability, they shall be exercisable; provided, however, that in
the event such rights of repurchase lapse periodically, such rights
shall lapse to the extent of a pro rata portion of the Shares
subject to such Stock Grant through the date of Disability as would
have lapsed had the Participant not become Disabled. The proration
shall be based upon the number of days accrued prior to the date of
Disability.

 

The
Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a
procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such
procedure shall be used for such determination). If requested, the
Participant shall be examined by a physician selected or approved
by the Administrator, the cost of which examination shall be paid
for by the Company.

 

 

9

 

 

21. EFFECT ON STOCK GRANTS
OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
CONSULTANT.

 

Except
as otherwise provided in a Participant’s Stock Grant
Agreement, the following rules apply in the event of the death of a
Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate: to the extent the
Company’s rights of repurchase have not lapsed on the date of
death, they shall be exercisable; provided, however, that in the
event such rights of repurchase lapse periodically, such rights
shall lapse to the extent of a pro rata portion of the Shares
subject to such Stock Grant through the date of death as would have
lapsed had the Participant not died. The proration shall be based
upon the number of days accrued prior to the Participant’s
death.

 

22. PURCHASE FOR
INVESTMENT.

 

Unless
the offering and sale of the Shares to be issued upon the
particular exercise or acceptance of a Stock Right shall have been
effectively registered under the Securities Act of 1933, as now in
force or hereafter amended (the “1933 Act”), the
Company shall be under no obligation to issue the Shares covered by
such exercise unless and until the following conditions have been
fulfilled:

 

a.

The
person(s) who exercise(s) or accept(s) such Stock Right shall
warrant to the Company, prior to the receipt of such Shares, that
such person(s) are acquiring such Shares for their own respective
accounts, for investment, and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which
event the person(s) acquiring such Shares shall be bound by the
provisions of the following legend
which shall be endorsed upon the certificate(s) evidencing their
Shares issued pursuant to such exercise or such grant:

 

“The
shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or
(b) the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been
compliance with all applicable state securities
laws.”

 

b.

At the
discretion of the Administrator, the Company shall have received an
opinion of its counsel that the Shares may be issued upon such
particular exercise or acceptance in compliance with the 1933 Act
without registration thereunder.

 

23. DISSOLUTION OR
LIQUIDATION OF THE COMPANY.

 

Upon
the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised
and all Stock Grants and Stock-Based Awards which have not been
accepted will terminate and become null and void; provided,
however, that if the rights of a Participant or a
Participant’s Survivors have not otherwise terminated and
expired, the Participant or the Participant’s Survivors will
have the right immediately prior to such dissolution or liquidation
to exercise or accept any Stock Right to the extent that the Stock
Right is exercisable or subject to acceptance as of the date
immediately prior to such dissolution or liquidation. Upon the
dissolution or liquidation of the Company, any outstanding
Stock-Based Awards shall immediately terminate unless otherwise
determined by the Administrator or specifically provided in the
applicable Agreement.

 

24. ADJUSTMENTS.

 

Upon
the occurrence of any of the following events, a
Participant’s rights with respect to any Stock Right granted
to him or her hereunder shall be adjusted as hereinafter provided,
unless otherwise specifically provided in a Participant’s
Agreement:

 

A. Stock Dividends and Stock
Splits. If (i) the shares
of Common Stock shall be subdivided or combined into a greater or
smaller number of shares or if the Company shall issue any shares
of Common Stock as a stock dividend on its outstanding Common
Stock, or (ii) additional shares or new or different shares or
other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number
of shares of Common Stock deliverable upon the exercise of an
Option or acceptance of a Stock Grant shall be appropriately
increased or decreased proportionately, and appropriate adjustments
shall be made including, in the purchase price per share, to
reflect such events. The number of Shares subject to the limitation
in Paragraph 4(c) shall also be proportionately adjusted upon the
occurrence of such events.

 

 

10

 

 

B. Corporate
Transactions. If the Company is
to be consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company’s assets
other than a transaction to merely change the state of
incorporation (a “Corporate Transaction”), the
Administrator or the board of directors of any entity assuming the
obligations of the Company hereunder (the “Successor
Board”), shall, as to outstanding Options, either
(i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the Shares then
subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection
with the Corporate Transaction or securities of any successor or
acquiring entity; or (ii) upon written notice to the
Participants, provide that all Options must be exercised (either
(a) to the extent then exercisable or, (b) at the
discretion of the Administrator, all Options being made fully
exercisable for purposes of this Subparagraph), within a specified
number of days of the date of such notice, at the end of which
period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the
Fair Market Value of the Shares subject to such Options (either
(a) to the extent then exercisable or, (b) at the
discretion of the Administrator, all Options being made fully
exercisable for purposes of this Subparagraph) over the exercise
price thereof.

 

With
respect to outstanding Stock Grants, the Administrator or the
Successor Board, shall either (i) make appropriate provisions
for the continuation of such Stock Grants on the same terms and
conditions by substituting on an equitable basis for the Shares
then subject to such Stock Grants either the consideration payable
with respect to the outstanding Shares of Common Stock in
connection with the Corporate Transaction or securities of any
successor or acquiring entity; or (ii) terminate all Stock
Grants in exchange for a cash payment equal to the excess of the
Fair Market Value of the Shares subject to such Stock Grants over
the purchase price thereof, if any. In addition, in the event of a
Corporate Transaction, the Administrator may waive any or all
Company repurchase rights with respect to outstanding Stock
Grants.

 

C. Recapitalization or
Reorganization. In the event of
a recapitalization or reorganization of the Company other than a
Corporate Transaction pursuant to which securities of the Company
or of another corporation are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising
an Option or accepting a Stock Grant after the recapitalization or
reorganization shall be entitled to receive for the purchase price
paid upon such exercise or acceptance of the number of replacement
securities which would have been received if such Option had been
exercised or Stock Grant accepted prior to such recapitalization or
reorganization.

 

D. Adjustments to Stock-Based
Awards. Upon the happening of
any of the events described in Subparagraphs A, B or C above, any
outstanding Stock-Based Award shall be appropriately adjusted to
reflect the events described in such Subparagraphs. The
Administrator or the Successor Board shall determine the specific
adjustments to be made under this Paragraph 24, and subject to
Paragraph 4, its determination shall be
conclusive.

 

E. Modification of
ISOs. Notwithstanding the
foregoing, any adjustments made pursuant to Subparagraph A, B or C
above with respect to ISOs shall be made only after the
Administrator determines whether such adjustments would constitute
“modification” of such ISOs (as that term is defined in
Section 424(h) of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making
such adjustments, unless the holder of an ISO specifically requests
in writing that such adjustment be made and such writing indicates
that the holder has full knowledge of the consequences of such
“modification” on his or her income tax treatment with
respect to the ISO.

 

25. ISSUANCES OF
SECURITIES.

 

Except
as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of
shares subject to Stock Rights. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or
in property (including without limitation, securities) of the
Company prior to any issuance of Shares pursuant to a Stock
Right.

 

 

11

 

 

26. FRACTIONAL
SHARES.

 

No
fractional shares shall be issued under the Plan and the person
exercising a Stock Right shall receive from the Company cash in
lieu of such fractional shares equal to the Fair Market Value
thereof.

 

27. CONVERSION OF ISOs INTO
NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

 

The
Administrator, at the written request of any Participant, may in
its discretion take such actions as may be necessary to convert
such Participant’s ISOs (or any portions thereof) that have
not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs,
regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. At the time of such
conversion, the Administrator (with the consent of the Participant)
may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Administrator in its discretion may
determine, provided that such conditions shall not be inconsistent
with this Plan. Nothing in the Plan shall be deemed to give any
Participant the right to have such Participant’s ISOs
converted into Non-Qualified Options, and no such conversion shall
occur until and unless the Administrator takes appropriate action.
The Administrator, with the consent of the Participant, may also
terminate any portion of any ISO that has not been exercised at the
time of such conversion.

 

28. WITHHOLDING.

 

In
the event that any federal, state, or local income taxes,
employment taxes, Federal Insurance Contributions Act
(“F.I.C.A.”) withholdings or other amounts are required
by applicable law or governmental regulation to be withheld from
the Participant’s salary, wages or other remuneration in
connection with the exercise or acceptance of a Stock Right or in
connection with a Disqualifying Disposition (as defined in
Paragraph 29) or upon the lapsing of any right of repurchase, the
Company may withhold from the Participant’s compensation, if
any, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or
employed the Participant, the statutory minimum amount of such
withholdings unless a different withholding arrangement, including
the use of shares of the Company’s Common Stock or a
promissory note, is authorized by the Administrator (and permitted
by law). For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in
the manner provided in Paragraph 1 above, as of the most recent
practicable date prior to the date of exercise. If the fair market
value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be required to advance
the difference in cash to the Company or the Affiliate employer.
The Administrator in its discretion may condition the exercise of
an Option for less than the then Fair Market Value on the
Participant’s payment of such additional
withholding.

 

29. NOTICE TO COMPANY OF
DISQUALIFYING DISPOSITION.

 

Each
Employee who receives an ISO must agree to notify the Company in
writing immediately after the Employee makes a Disqualifying
Disposition of any shares acquired pursuant to the exercise of an
ISO. A Disqualifying Disposition is defined in Section 424(c)
of the Code and includes any disposition (including any sale or
gift) of such shares before the later of (a) two years after
the date the Employee was granted the ISO, or (b) one year
after the date the Employee acquired Shares by exercising the ISO,
except as otherwise provided in Section 424(c) of the Code. If
the Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition
can occur thereafter.

 

30. TERMINATION OF THE
PLAN.

 

The
Plan will terminate on 10 years after adoption, the date which is
ten years from the earlier of the date of its adoption by the Board
of Directors and the date of its approval by the shareholders of
the Company. The Plan may be terminated at an earlier date by vote
of the shareholders or the Board of Directors of the Company;
provided, however, that any such earlier termination shall not
affect any Agreements executed prior to the effective date of such
termination.

 

 

12

 

 

31. AMENDMENT OF THE PLAN
AND AGREEMENTS.

 

The
Plan may be amended by the shareholders of the Company. The Plan
may also be amended by the Administrator, including, without
limitation, to the extent necessary to qualify any or all
outstanding Stock Rights granted under the Plan or Stock Rights to
be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the
Code, and to the extent necessary to qualify the shares issuable
upon exercise or acceptance of any outstanding Stock Rights
granted, or Stock Rights to be granted, under the Plan for listing
on any national securities exchange or quotation in any national
automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is
of a scope that requires shareholder approval shall be subject to
obtaining such shareholder approval. Any modification or amendment
of the Plan shall not, without the consent of a Participant,
adversely affect his or her rights under a Stock Right previously
granted to him or her. With the consent of the Participant
affected, the Administrator may amend outstanding Agreements in a
manner which may be adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator,
outstanding Agreements may be amended by the Administrator in a
manner which is not adverse to the Participant.

 

32. EMPLOYMENT OR OTHER
RELATIONSHIP.

 

Nothing
in this Plan or any Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment,
consultancy or director status of a Participant, nor to prevent a
Participant from terminating his or her own employment, consultancy
or director status or to give any Participant a right to be
retained in employment or other service by the Company or any
Affiliate for any period of time.

 

33. GOVERNING
LAW.

 

This
Plan shall be construed and enforced in accordance with the law of
the State of Delaware.

 

 

 

13Exhibit 10.1

 

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), made in New York, New York as of August 1, 2018 (the “Effective Date”), between SIGA Technologies, Inc., a Delaware corporation (the “Company”), and Robin E. Abrams (“Executive”).

 

WHEREAS, the Company and the Executive are parties to that certain Employment Agreement made as of April 12, 2016, as amended and restated by that certain Amended and Restated Employment Agreement dated August 1, 2016 (the “First Amended and Restated Employment Agreement”) pursuant to which Executive is employed as the General Counsel and Chief Administrative Officer of the Company on the terms and conditions set forth in the First Amended and Restated Employment Agreement; and

 

WHEREAS, Executive and SIGA seek to allow Executive to continue the role of Executive Vice President and General Counsel of vTv Therapeutics, Inc. (vTv) while Executive also continues to serve as General Counsel and Chief Administrative Officer of SIGA and pursuant hereto amend and restate the First Amended and Restated Employment Agreement in its entirety;

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and agreements hereinafter set forth, the Company and Executive agree as follows:

 

1.         Term.  Unless earlier terminated in accordance with Section 4 hereof, the term of Executive’s employment under this Agreement shall be the two-year period commencing on the Effective Date and ending on the second anniversary of the Effective Date (the “Term” and each such year, a “Term Year”).  In addition, unless either party hereto provides notice of its desire not to renew this Agreement thirty (30) days prior to the expiration of the Term, this Agreement shall automatically renew for additional one (1) year periods commencing upon the expiration of the initial Term (or any such subsequent Term), with each such additional year thereafter being made part of the Term and each such additional year, thereafter a Term Year, provided, however, that this Agreement shall not automatically renew upon the expiration of any subsequent Term that ends following the third (3rd) anniversary of the occurrence of a Change of Control (as defined below).

 

2.         Employment.

 

(a)        Employment by the Company.  Executive agrees to be employed by the Company during the Term upon the terms and subject to the conditions set forth in this Agreement, unless and until Executive’s job responsibilities at vTv change materially, in which case Executive and SIGA agree to revisit these terms and revise accordingly.  Executive shall serve as the General Counsel and Chief Administrative Officer of the Company and shall report to the Board of Directors of the Company (the “Board”) and Chief Executive Officer of the Company.

 

(b)        Performance of Duties.  Throughout Executive’s employment with the Company, Executive shall faithfully and diligently perform Executive’s duties in conformity with the lawful directions of the Company and serve the Company to the best of Executive’s ability.  Executive shall devote an allocated portion equivalent to approximately seventy percent of Executive’s business time and best efforts to the business and affairs of the Company.  In Executive’s capacity as the General Counsel and Chief Administrative Officer of the Company, Executive shall have such duties and responsibilities as Executive may be assigned by the Board of Directors or Chief Executive Officer not inconsistent with Executive’s position as General Counsel and Chief Administrative Officer of the Company.  Executive will perform Executive’s duties primarily from the Company’s offices in New York City, New York, subject to reasonable travel requirements.

 

3.         Compensation and Benefits.

 

(a)        Base Salary.  The Company agrees to pay to Executive a base salary with respect to the 2018 calendar year at the annual rate of $520,000 or such greater amount as determined by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) from time to time (“Base Salary”).  Effective as of January 1st of each subsequent calendar year, beginning with January 1, 2019 and ending on the third (3rd) anniversary of the occurrence of a Change of Control (as defined below), the Base Salary shall be automatically increased by three percent (3%) each calendar year, provided that the Compensation Committee may increase Executive’s Salary by additional discretionary amounts but any such additional discretionary amounts shall be disregarded when calculating the amount of any automatic increase in Executive’s Base Salary.  Payments of the Base Salary shall be payable in equal installments in accordance with the Company’s standard payroll practices.

 

(b)        Annual Bonus.  The Company shall pay to Executive an annual cash bonus as set forth below (the “Annual Bonus”):

 

(i)         With respect to Executive’s Annual Bonus for the 2018 calendar year and each subsequent calendar year during the Term, the Company shall pay Executive an Annual Bonus, subject to the discretion of the Compensation Committee, based upon a target bonus opportunity of 100% of Executive’s then current Base Salary, based upon the Executive’s achievement of performance criteria and goals approved by the Compensation Committee.  Each such Annual Bonus shall be paid as soon as practicable but no later than March 15th of the year following the year to which the Annual Bonus relates.

 

(ii)        Notwithstanding anything herein to the contrary, in the event of a Change of Control of the Company, Executive shall receive an Annual Bonus for the year in which the Change of Control occurs equal to the greater of (i) the target Annual Bonus for such year or (ii) the Annual Bonus determined based upon the applicable performance criteria and goals for such year, provided that Executive remains employed on the last day of such calendar year, payable at the times set forth above.

 

(c)        Benefits and Perquisites.  Executive shall be entitled to participate in, to the extent Executive is otherwise eligible under the terms thereof, the benefit plans and programs, and receive the benefits and perquisites, generally provided by the Company from time to time to senior executives of the Company, including without limitation family medical insurance (subject to applicable employee contributions).  Executive shall be entitled to receive four weeks of vacation, in accordance with Company policy.

 

2

(d)        Business Expenses.  The Company agrees to reimburse Executive for all reasonable and necessary travel, business entertainment and other business expenses incurred by Executive in connection with the performance of Executive’s duties under this Agreement.  Such reimbursements shall be made by the Company on a timely basis upon submission by Executive of vouchers in accordance with the Company’s standard procedures.

 

(e)        Indemnification.  The Company shall indemnify Executive, to the fullest extent permitted by its certificate of incorporation or by-laws, for any and all liabilities to which Executive may be subject as a result of, in connection with or arising out of Executive’s employment by the Company hereunder, as well as the costs and expenses (including reasonable attorneys’ fees) of any legal action brought or threatened to be brought against Executive or the Company as a result of, in connection with or arising out of such employment or board service (such costs and expenses being advanced by the Company in accordance with the procedures set forth in the Company’s by-laws).  Executive shall be entitled to the full protection of any insurance policies which the Company may elect to maintain generally for the benefit of its officers.

 

(f)         No Other Compensation or Benefits; Payment.  The compensation and benefits specified in this Section 3 and in Section 5 of this Agreement shall be in lieu of any and all other compensation and benefits, except compensation that Executive will receive in connection with her role as Executive Vice President, General Counsel and Chief Compliance Officer of vTv.  Payment of all compensation and benefits to Executive specified in this Section 3 and in Section 5 of this Agreement (i) shall be made in accordance with the relevant Company policies in effect from time to time to the extent the same are consistently applied, including normal payroll practices, and (ii) shall be subject to all legally required and customary withholdings.

 

(g)        Cessation of Employment.  In the event Executive shall cease to be employed by the Company for any reason, Executive’s compensation and benefits shall cease on the date of such event, except as otherwise specifically provided herein or in any applicable employee benefit plan or program or as required by law.

 

4.         Termination of Employment.  Executive’s employment hereunder may be terminated prior to the end of the Term under the following circumstances.

 

(a)        Death.  Executive’s employment hereunder shall terminate upon Executive’s death.

 

(b)        Executive Becoming Totally Disabled.  The Company may terminate Executive’s employment hereunder at any time after Executive becomes “Totally Disabled.”  For purposes of this Agreement, Executive shall be “Totally Disabled” in the event Executive is unable to perform the duties and responsibilities contemplated under this Agreement for a period of either (A) 120 consecutive days or (B) 6 months in any 12-month period due to physical or mental incapacity or impairment.  During any period that Executive fails to perform Executive’s duties hereunder as a result of incapacity due to physical or mental illness (the “Disability Period”), Executive shall continue to receive the compensation and benefits provided by Section 3 of this Agreement until Executive’s employment hereunder is terminated; provided, however, that the amount of base compensation and benefits received by Executive during the Disability Period shall be reduced by the aggregate amounts, if any, payable to Executive under any disability benefit plan or program provided to Executive by the Company.

 

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(c)        Termination by the Company for Cause.  The Company may terminate Executive’s employment hereunder for Cause at any time after providing written notice to Executive.  For purposes of this Agreement, the term “Cause” shall mean any of the following:  (i) Executive’s failure or refusal to perform Executive’s duties under this Agreement (other than as a result of total or partial incapacity due to physical or mental illness); (ii) any act by or omission of Executive constituting gross negligence or willful misconduct in connection with the performance of Executive’s duties that could reasonably be expected to materially injure the reputation, business or business relationships of the Company or any of its affiliates; (iii) perpetration of an intentional and knowing fraud against or affecting the Company or any of its affiliates or any customer, client, agent, or employee thereof; (iv) the commission by or indictment of Executive for (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud (“indictment,” for these purposes, meaning a United States-based indictment, probable cause hearing or any other procedure pursuant to which an initial determination of probable or reasonable cause with respect to such offense is made); or (v) the breach of a covenant set forth in Section 6.

 

(d)        Termination by the Company Without Cause.  The Company may terminate Executive’s employment hereunder at any time for any reason or no reason by giving Executive sixty (60) days prior written notice of the termination.  Following any such notice, the Company may reduce or remove any and all of Executive’s duties, positions and titles with the Company.

 

(e)        Termination by Executive for Good Reason.  Executive may terminate Executive’s employment hereunder for Good Reason at any time after providing written notice to the Company.  For purposes of this Agreement, the term “Good Reason” shall mean any of the following:  (i) the Company fails to pay the compensation described in Section 3 of this Agreement (in accordance with, and subject to, such provisions); (ii) Executive no longer holds the office of General Counsel and Chief Administrative Officer or offices of equivalent stature, or Executive’s functions, responsibilities and/or duties as General Counsel and Chief Administrative Officer are materially diminished or (iii) Executive’s job site is relocated to a location which is more than fifty (50) miles from New York City, unless the parties mutually agree to such relocation.  In order to terminate Executive’s employment for Good Reason, Executive shall provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within ninety (90) days after the first occurrence of such circumstances, and the Company shall have thirty (30) days following receipt of such notice to cure such circumstances in all material respects.

 

(f)         Termination Upon a Change of Control.  If (x) the Company terminates Executive’s employment hereunder without Cause, (y) Executive terminates Executive’s employment for Good Reason or (z) the Company delivers a notice of nonrenewal pursuant to Section 1, in each case during the period that begins ninety (90) days prior to the occurrence of a Change of Control and that ends on the second (2nd) anniversary of the occurrence of a Change of Control (the “Change of Control Period”), Executive shall be entitled to the payments provided for by Section 5(d).  For purposes of this Agreement, a “Change of Control” shall be conclusively deemed to have occurred if any of the following shall have taken place:

 

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(i)         the consummation of a transaction or a series of related transactions pursuant to which any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (“Exchange Act”), other than Executive, Executive’s designee(s) or “affiliate(s)” (as defined in Rule 12b-2 under the Exchange Act), or a Permitted Holder, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities; or

 

(ii)        stockholders of the Company approve a merger or consolidation of the Company with any other entity other than a Permitted Holder, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or

 

(iii)       the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of, or the Company sells or disposes of, all or substantially all of the Company’s assets other than to a Permitted Holder.

 

For purposes of this Section 4(f), a “Permitted Holder” shall mean MacAndrews & Forbes Holdings Inc. and its subsidiaries or affiliates.

 

(g)        Termination by Executive Without Good Reason.  Executive may terminate Executive’s employment hereunder at any time for any reason or no reason by giving the Company thirty (30) days prior written notice of the termination.  Following any such notice, the Company may reduce or remove any and all of Executive’s duties, positions and titles with the Company, and any such reduction or removal shall not constitute Good Reason.

 

5.         Compensation Following Termination.  In the event that Executive’s employment hereunder is terminated, Executive shall be entitled only to the following compensation and benefits upon such termination:

 

(a)        General.  On any termination of Executive’s employment, Executive shall be entitled to the following (collectively, the “Standard Termination Payments”):

 

(i)         any accrued but unpaid Base Salary for services rendered through the date of termination; provided, however, that in the event Executive’s employment is terminated pursuant to Section 4(b), the amount of Base Salary received by Executive during the Disability Period shall be reduced by the aggregate amounts, if any, payable to Executive under any disability benefit plan or program provided to Executive by the Company;

 

(ii)        any vacation accrued to the date of termination, in accordance with Company policy;

 

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(iii)       any accrued but unpaid expenses through the date of termination required to be reimbursed in accordance with Section 3(d) of this Agreement; and

 

(iv)      any benefits to which Executive may be entitled upon termination pursuant to the plans, programs and grants referred to in Section 3(c) hereof in accordance with the terms of such plans, programs and grants.

 

(b)        Termination by Reason of Death or Executive Becoming Totally Disabled; Termination by the Company for Cause; Termination by Executive Without Good Reason.  In the event that Executive’s employment is terminated prior to the expiration of the Term (i) by reason of Executive’s death pursuant to Section 4(a) or Executive becoming Totally Disabled pursuant to Section 4(b), (ii) by the Company for Cause pursuant to Section 4(c), or (iii) by Executive without Good Reason pursuant to Section 4(f), Executive (or Executive’s estate, as the case may be) shall be entitled to the Standard Termination Payments and the payment of any accrued but unpaid Annual Bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash at the time described in Section 3(b).

 

(c)        Termination by the Company Without Cause; Termination by Executive for Good Reason.  In the event that Executive’s employment is terminated (x) prior to the expiration of the Term by the Company without Cause pursuant to Section 4(d) or by Executive for Good Reason pursuant to Section 4(e), or (y) at the expiration of the Term following the Company delivering a notice of nonrenewal of this Agreement pursuant to Section 1, Executive shall be entitled only to the following:

 

(i)         the Standard Termination Payments;

 

(ii)        the continued payment of the Base Salary (as determined pursuant to Section 3(a)) for one (1) year (such sums to be paid at the times and in the amounts such Base Salary would have been paid had Executive’s employment not terminated);

 

(iii)       the payment of any accrued but unpaid Annual Bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash at the time described in Section 3(b); and

 

(iv)       to have the Company take all such action as is necessary such that all outstanding equity grants to Executive, including any stock options and restricted stock grants, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award.

 

(d)       Termination during the Change of Control Period.    In the event that Executive’s employment is terminated (x) prior to the expiration of the Term by the Company without Cause pursuant to Section 4(d) or by Executive for Good Reason pursuant to Section 4(e) or (y) at the expiration of the Term following the Company delivering a notice of nonrenewal of this Agreement pursuant to Section 1, in each case during the Change in Control Period, in lieu of the benefits provided under Section 5(c) above, Executive shall be entitled only to the following:

 

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(i)         the Standard Termination Payments;

 

(ii)        the continued payment of the Base Salary (as determined pursuant to Section 3(a)) for one (1) year (such sums to be paid at the times and in the amounts such Base Salary would have been paid had Executive’s employment not terminated;

 

(iii)       the payment of any accrued but unpaid Annual Bonuses with respect to the prior full calendar year as determined by the Compensation Committee in good faith and payable in cash at the time described in Section 3(b);

 

(iv)       a pro rata portion of any Annual Bonus under Section 3(b) for the year of termination based on the number of days employed during such year, calculated based upon attainment of the full target level of achievement set forth in Section 3(b), and payable in cash in accordance with Section 5(f); and

 

(v)        to have the Company take all such action as is necessary such that all outstanding equity grants, including any stock options and restricted stock grants, to Executive shall, immediately and irrevocably vest and, to the extent applicable, become exercisable as of the date of termination and shall remain exercisable for a period of not less than one (1) year from the date of termination, or, if earlier, the expiration of the term of such equity award.

 

(e)        Effect of Material Breach of Section 6 on Compensation and Benefits Following Termination of Employment.  If, at the time of termination of Executive’s employment for any reason prior to the expiration of the Term or any time thereafter, Executive is in material breach of any covenant contained in Section 6 hereof, then, notwithstanding anything in this Section 5 to the contrary, Executive (or Executive’s estate, as applicable) shall not be entitled to any payment (or if payments have commenced, any continued payment) other than the Standard Termination Payments.

 

(f)         No Further Liability; Release.  Payment made and performance by the Company in accordance with this Section 5 shall operate to fully discharge and release the Company and its directors, officers, employees, affiliates, stockholders, successors, assigns, agents and representatives from any further obligation or liability with respect to Executive’s employment and termination of employment.  Other than providing the compensation and benefits provided for in accordance with this Section 5, the Company and its directors, officers, employees, affiliates, stockholders, successors, assigns, agents and representatives shall have no further obligation or liability to Executive or any other person under this Agreement or with respect to Executive’s employment or the termination thereof, with the exception of indemnification obligations under Section 3(e) hereof.  The payment of any amounts pursuant to this Section 5 (other than payments required by law and the Standard Termination Payments) is expressly conditioned upon the timely delivery (and non-revocation) by Executive to the Company of a release, substantially in the form attached hereto as Exhibit A, of any and all claims Executive may have against the Company and its directors, officers, employees, affiliates, stockholders, successors, assigns, agents and representatives arising out of or related to Executive’s employment by the Company and the termination of such employment and Executive’s non-revocation of such release.  Such release must be returned to the Company in accordance with the term set forth in such release agreement but no later than forty-five (45) days after Executive’s termination of employment and must become irrevocable at the expiration of any applicable revocation period.  The payment of any amounts pursuant to this Section 5 (other than payments required by law and the Standard Termination Payments) will commence within thirty (30) days following the expiration of any applicable revocation period with respect to such release that has been timely executed by Executive and returned to the Company.  However, if, pursuant to this Section 5(f), a payment may be made in one of two tax years, such payment will be made in the latter tax year.

 

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6.         Exclusive Employment; Non-competition; Non-solicitation; Nondisclosure of Proprietary Information; Surrender of Records; Inventions and Patents; Code of Ethics.

 

(a)        No Conflict; No Other Employment.  During the period of Executive’s employment with the Company, Executive shall not:  (i) engage in any activity which conflicts or interferes with or derogates from the performance of Executive’s duties hereunder nor shall Executive engage in any other business activity, whether or not such business activity is pursued for gain or profit and including service as a director of any other company, except as approved in advance in writing by the Company; provided, however, that (i) Executive may undertake and fulfill all necessary and appropriate responsibilities to serve as Executive Vice President, General Counsel and Chief Compliance Officer of vTv; (ii) Executive shall be entitled to manage Executive’s personal investments and otherwise attend to personal affairs, including charitable, social and political activities, in a manner that does not unreasonably interfere with Executive’s responsibilities hereunder, and (iii) other than as set forth above, Executive may not accept or engage in any other employment, whether as an employee or consultant or in any other capacity, and whether or not compensated therefor, except as approved in advance in writing by the Company and such approval will not be unreasonably withheld.

 

(b)        Non-competition; Non-solicitation.

 

(i)         Executive acknowledges and recognizes the highly competitive nature of the Company’s business and that access to the Company’s confidential records and proprietary information renders Executive special and unique within the Company’s industry.  In consideration of the payment by the Company to Executive of amounts that may hereafter be paid to Executive pursuant to this Agreement (including, without limitation, pursuant to Sections 3 and 5 hereof) and other obligations undertaken by the Company hereunder, Executive agrees that during (i) Executive’s employment with the Company and (ii) six (6) months thereafter (the “Covered Time”), if Company terminates for cause or Executive terminates employment with the Company, Executive shall not, directly or indirectly, engage (as owner, investor, partner, stockholder, employer, employee, consultant, advisor, director or otherwise) in any Competing Business, provided that the provisions of this Section 6(b) will not be deemed breached merely because Executive owns less than 1% of the outstanding common stock of a publicly-traded company, and nothing in this Agreement is intended to, or shall be interpreted in any way that, conflicts with any ethical obligation that Executive may have as an attorney admitted to the bar of any court or under the New York Rules of Professional Conduct, including but not limited to Rules 1.6(a), 1.9(c) and 5.b(a), or expand the confidentiality duty of such provisions.  For purposes of this Agreement, “Competing Business” shall mean (i) any business in which the Company is currently engaged, or, to the extent that Executive is materially involved in such business, the business in which the Company’s affiliates are then engaged anywhere in the world.  For purposes of this Agreement, as of the date of this Agreement, the Company is actively engaged in the biodefense sector that is focused on smallpox therapeutics.

 

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(ii)        In further consideration of the payment by the Company to Executive of amounts that may hereafter be paid to Executive pursuant to this Agreement (including, without limitation, pursuant to Sections 3 and 5 hereof) and other obligations undertaken by the Company hereunder, Executive agrees that during Executive’s employment and the Covered Time, Executive shall not, directly or indirectly, (i) solicit, encourage or attempt to solicit or encourage any of the employees, agents, consultants or representatives of the Company or, to the extent that she has had material contact with such employees, agents, consultants or representatives, any of its affiliates to terminate his, her, or its relationship with the Company or such affiliate; (ii) solicit, encourage or attempt to solicit or encourage any of the employees, agents, consultants or representatives of the Company or, to the extent that she has had material contact with such employees, agents, consultants or representatives, any of its affiliates to become employees, agents, representatives or consultants of any other person or entity; (iii) solicit or attempt to solicit any customer, vendor or distributor of the Company or, to the extent that she has had material contact with such customer, vendor or distributor, any of its affiliates with respect to any product or service being furnished, made, sold or leased by the Company or such affiliate; or (iv) persuade or seek to persuade any customer of the Company or, to the extent that she has had material contact with such customer, any affiliate to cease to do business or to reduce the amount of business which any customer has customarily done or contemplates doing with the Company or such affiliate, whether or not the relationship between the Company or its affiliate and such customer was originally established in whole or in part through Executive’s efforts.  For purposes of this Section 6(b) only, the terms “customer,” “vendor” and “distributor” shall mean a customer, vendor or distributor who has done business with the Company or any of its affiliates within twelve months preceding the termination of Executive’s employment.

 

(iii)       During Executive’s employment with the Company and during the Covered Time, Executive agrees that upon the earlier of Executive’s (i) negotiating with any Competitor (as defined below) concerning the possible employment of Executive by the Competitor, (ii) receiving a written offer of employment from a Competitor, or (iii) becoming employed by a Competitor, Executive will (A) immediately provide notice to the Company of such circumstances and (B) provide copies of Section 6 of this Agreement to the Competitor.  Executive further agrees that the Company may provide notice to a Competitor of Executive’s obligations under this Agreement, including without limitation Executive’s obligations pursuant to Section 6 hereof.  For purposes of this Agreement, “Competitor” shall mean any entity (other than the Company or any of its affiliates) that engages, directly or indirectly, in any Competing Business.

 

(iv)       Executive understands that the provisions of this Section 6(b) may limit Executive’s ability to earn a livelihood in a Competing Business but nevertheless agrees and hereby acknowledges that the consideration provided under this Agreement, including any amounts or benefits provided under Sections 3 and 5 hereof and other obligations undertaken by the Company hereunder, is sufficient to justify the restrictions contained in such provisions.  In consideration thereof and in light of Executive’s education, skills and abilities, Executive agrees that Executive will not assert in any forum that such provisions prevent Executive from earning a living or otherwise are void or unenforceable or should be held void or unenforceable.

 

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(c)        Proprietary Information.  Executive acknowledges that, during the course of Executive’s employment with the Company, Executive will necessarily have access to and make use of proprietary information and confidential records of the Company and its affiliates.  Executive covenants that Executive shall not during the Term or at any time thereafter, directly or indirectly, use for Executive’s own purpose or for the benefit of any person or entity other than the Company, nor otherwise disclose, any proprietary information to any individual or entity, unless such disclosure has been authorized in writing by the Company or is otherwise required by law.  Executive acknowledges and understands that the term “proprietary information” includes, but is not limited to:  (a) inventions, trade secrets, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, research, discoveries, developments, designs, and techniques regarding any of the foregoing utilized by the Company or any of its affiliates; (b) the name and/or address of any customer or vendor of the Company or any of its affiliates or any information concerning the transactions or relations of any customer or vendor of the Company or any of its affiliates with the Company or such affiliate or any of its or their partners, principals, directors, officers or agents; (c) any information concerning any product, technology, or procedure employed by the Company or any of its affiliates but not generally known to its or their customers, vendors or competitors, or under development by or being tested by the Company or any of its affiliates but not at the time offered generally to customers or vendors; (d) any information relating to the pricing or marketing methods, sales margins, cost of goods, cost of material, capital structure, operating results, borrowing arrangements or business plans of the Company or any of its affiliates; (e) any information which is generally regarded as confidential or proprietary in any line of business engaged in by the Company or any of its affiliates; (f) any business plans, budgets, advertising or marketing plans; (g) any information contained in any of the written or oral policies and procedures or manuals of the Company or any of its affiliates; (h) any information belonging to customers or vendors of the Company or any of its affiliates or any other person or entity which the Company or any of its affiliates has agreed to hold in confidence; (i) any inventions, innovations or improvements covered by this Agreement; and (j) all written, graphic and other material relating to any of the foregoing.  Executive acknowledges and understands that information that is not novel or copyrighted or patented may nonetheless be proprietary information.  The term “proprietary information” shall not include information generally available to and known by the industry, was known by Executive prior to the commencement of her employment (or anticipated employment) with the Company, or information that is or becomes available to Executive on a non-confidential basis from a source other than the Company, any of its affiliates, or the directors, officers, employees, partners, principals or agents of the Company or any of its affiliates (other than as a result of a breach of any obligation of confidentiality).

 

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(d)        Confidentiality and Surrender of Records.  Executive shall not during the Term or at any time thereafter (irrespective of the circumstances under which Executive’s employment by the Company terminates), except as required by law, directly or indirectly publish, make known or in any fashion disclose any confidential records to, or permit any inspection or copying of confidential records by, any individual or entity other than in the course of such individual’s or entity’s employment or retention by the Company.  Upon termination of employment for any reason or upon request by the Company, Executive shall deliver promptly to the Company all property and records of the Company or any of its affiliates, including, without limitation, all confidential records.  For purposes hereof, “confidential records” means all correspondence, reports, memoranda, files, manuals, books, lists, financial, operating or marketing records, magnetic tape, or electronic or other media or equipment of any kind which may be in Executive’s possession or under Executive’s control or accessible to Executive which contain any proprietary information.  All property and records of the Company and any of its affiliates (including, without limitation, all confidential records) shall be and remain the sole property of the Company or such affiliate during the Term and thereafter.

 

(e)        Inventions and Patents.

 

(i)         Executive agrees that all processes, technologies and inventions, including new contributions, improvements, ideas and discoveries, whether patentable or not, conceived, developed, invented or made by Executive during the Term shall belong to the Company, provided that such inventions grew out of Executive’s work with the Company or any of its subsidiaries or affiliates, are related in any manner to the business (commercial or experimental) of the Company or any of its subsidiaries or affiliates or are conceived or made on the Company’s time or with the use of the Company’s facilities or materials (collectively, “Inventions”).  Executive shall further: (a) promptly disclose such Inventions to the Company; (b) assign to the Company, without additional compensation, all patent and other rights to such Inventions for the United States and foreign countries; (c) sign all papers necessary to carry out the foregoing; and (d) give testimony in support of Executive’s inventorship.

 

(ii)        Executive agrees that Executive will not assert any rights to any Invention as having been made or acquired by Executive prior to the date of this Agreement, except for Inventions, if any, disclosed to the Company in writing prior to the date hereof.

 

(iii)       The Company shall be the sole owner of all the products and proceeds of Executive’s services hereunder, including, but not limited to, all materials, ideas, concepts, formats, suggestions, developments, arrangements, packages, programs and other intellectual properties that Executive may acquire, obtain, develop or create in connection with and during the Term, free and clear of any claims by Executive (or anyone claiming under Executive) of any kind or character whatsoever (other than Executive’s right to receive payments hereunder).  Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend its right, title or interest in or to any such properties.

 

(f)         Enforcement.  Executive acknowledges and agrees that, by virtue of Executive’s position, Executive’s services and access to and use of confidential records and proprietary information, any violation by Executive of any of the undertakings contained in this Section 6 would cause the Company and/or its affiliates immediate, substantial and irreparable injury for which it or they have no adequate remedy at law.  Accordingly, Executive agrees and consents to the entry of an injunction or other equitable relief by a court of competent jurisdiction restraining any violation or threatened violation of any undertaking contained in this Section 6.  Executive waives posting by the Company or its affiliates of any bond otherwise necessary to secure such injunction or other equitable relief.  Rights and remedies provided for in this Section 6 are cumulative and shall be in addition to rights and remedies otherwise available to the parties hereunder or under any other agreement or applicable law.

 

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(g)        Code of Ethics.  Nothing in this Section 6 is intended to limit, modify or reduce Executive’s obligations under the Company’s Code of Ethics.  Executive’s obligations under this Section 6 are in addition to, and not in lieu of, Executive’s obligations under the Code of Ethics.  To the extent there is any inconsistency between this Section 6 and the Code of Ethics which would permit Executive to take any action or engage in any activity pursuant to this Section 6 which Executive would be barred from taking or engaging in under the Code of Ethics, the Code of Ethics shall control.

 

7.         Assignment and Transfer.

 

(a)        Company.  This Agreement shall inure to the benefit of and be enforceable by and binding upon, and may be assigned by the Company without Executive’s consent to, any purchaser of all or substantially all of the Company’s business or assets, or to any successor to the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise).

 

(b)        Executive.  The parties hereto agree that Executive is obligated under this Agreement to render personal services during Executive’s employment of a special, unique, unusual, extraordinary and intellectual character, thereby giving this Agreement special value.  Executive’s rights and obligations under this Agreement shall not be transferable by Executive by assignment or otherwise, and any purported assignment, transfer or delegation thereof shall be void; provided, however, that if Executive shall die, all amounts then payable to Executive hereunder shall be paid in accordance with the terms of this Agreement to Executive’s estate.

 

8.         Miscellaneous.

 

(a)        Cooperation.  Following termination of employment by the Company for cause or by the Executive, Executive shall cooperate with the Company, as requested by the Company upon reasonable notice and with due regard to Executive’s obligations to a future employer, (i) to effect a transition of Executive’s responsibilities and to ensure that the Company is aware of all matters being handled by Executive, provided that Executive shall only be obligated to provide such assistance for a period of six (6) months following the date of Executive’s termination of employment, (ii) to provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any action or proceeding (or any appeal from any action or proceeding) related to a matter to which Executive has information or  knowledge that may be made against the Company or its affiliates, and (iii) to provide reasonable assistance to the Company and its affiliates in the prosecution of any action or proceeding (or any appeal from any action or proceeding) related to a matter to which Executive has information or knowledge, to the extent that such claims may relate to the period of Executive’s employment with the Company.  Upon presentation of appropriate documentation, the Company shall pay or reimburse Executive a reasonable hourly rate and for all reasonable out-of-pocket travel or travel-related expenses incurred in the course of complying with this Section 8(a).

 

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(b)        Mitigation; Offset.  Executive shall not be required to mitigate damages or the amount of any payment provided to Executive under Section 5 of this Agreement by seeking other employment or otherwise, nor shall the amount of any payments provided to Executive under Section 5 be reduced by any compensation earned by Executive as the result of employment by another employer after the termination of Executive’s employment or otherwise.

 

(c)        Protection of Reputation.  During the Term and thereafter, Executive and the Company agree that neither will take any action which is intended, or would reasonably be expected, to harm the Executive or the Company or any of its affiliates or its or their reputation or which would reasonably be expected to lead to unwanted or unfavorable publicity to the Executive, the Company or its affiliates.  Nothing herein shall prevent Executive from making any truthful statement in connection with any legal proceeding or investigation by the Company or any governmental authority.

 

(d)        Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by and construed (both as to validity and performance) and enforced in accordance with the internal laws of the State of New York applicable to agreements made and to be performed wholly within such jurisdiction, without regard to the principles of conflicts of law or where the parties are located at the time a dispute arises.  In the event of any controversy or claim arising out of or relating to this Agreement or the breach or alleged breach hereof, each of the parties hereto irrevocably (a) consents to the jurisdiction of any state court sitting in the County of New York, State of New York, or federal court sitting in the County of New York, State of New York. (b) waives any objection which it may have at any time to the laying of venue of any action or proceeding brought in any such court and (c) waives any claim that such action or proceeding has been brought in an inconvenient forum.

 

(e)        Injunctive Relief.  Notwithstanding anything to the contrary contained herein, the Company and any affiliate of the Company (if applicable) shall have the right to seek injunctive or other equitable relief from a court of competent jurisdiction to enforce Section 6 of this Agreement without any obligation to post a bond.

 

(f)         Entire Agreement.  This Agreement (including the plans referenced in Section 3(c) of this Agreement) contains the entire agreement and understanding between the parties hereto in respect of Executive’s employment from and after the date hereof and supersedes, cancels and annuls any prior or contemporaneous written or oral agreements, understandings, commitments and practices between them respecting Executive’s employment from and after the date hereof.

 

(g)        Amendment.  This Agreement may be amended only by a writing which makes express reference to this Agreement as the subject of such amendment and which is signed by Executive and, on behalf of the Company, by its duly authorized officer.

 

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(h)        Severability.  If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction or arbitration panel to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law.  If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the parties hereto agree that the court or arbitration panel making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced.  The parties hereto recognize that if, in any judicial or arbitral proceeding, a court or arbitration panel shall refuse to enforce any of the separate covenants contained in this Agreement, then that invalid or unenforceable covenant contained in this Agreement shall be deemed eliminated from these provisions to the extent necessary to permit the remaining separate covenants to be enforced.  In the event that any court or arbitration panel determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties hereto agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable.

 

(i)         Construction.  The headings and captions of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement.  The language in all parts of this Agreement shall be in all cases construed according to its fair meaning and not strictly for or against the Company or Executive.  As used herein, the words “day” or “days” shall mean a calendar day or days.

 

(j)         Non-waiver.  Neither any course of dealing nor any failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or of the same right, power or privilege in any other instance.  All waivers by either party hereto must be contained in a written instrument signed by the party to be charged and, in the case of the Company, by its duly authorized officer.

 

(k)        Notices.  Any notice required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered or if sent by registered or certified mail, postage prepaid, with return receipt requested, addressed:

 

(i)         in the case of the Company, to:

 

SIGA Technologies, Inc.

35 East 62nd Street

New York, NY 10065

Attention:  Chief Executive Officer

 

(ii)        in the case of Executive, to Executive’s last known address as reflected in the Company’s records, or to such other address as Executive shall designate by written notice to the Company.

 

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Any notice given hereunder shall be deemed to have been given at the time of receipt thereof by the person to whom such notice is given if personally delivered or at the time of mailing if sent by registered or certified mail.

 

(l)         Assistance in Proceedings, Etc.  Executive shall, without additional compensation, during and after the Term, upon reasonable notice and with due regard to Executive’s obligations to a future employer, furnish such information and reasonable assistance to the Company as may reasonably be required by the Company in connection with any legal or quasi-legal proceeding, including any external or internal investigation, involving the Company or any of its affiliates.  The Company shall reimburse (or advance) compensation at a reasonable hourly rate and Executive’s expenses in connection with such assistance (including, without limitation, reasonable legal fees).

 

(m)       Survival.  Cessation or termination of Executive’s employment with the Company shall not result in termination of this Agreement.  The respective obligations of Executive and the Company as provided in Sections 3(e), 5, 6, 7 and 8 of this Agreement shall survive cessation or termination of Executive’s employment hereunder.

 

(n)        Section 409A of the Code.

 

(i)         The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively “Section 409A of the Code”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.

 

(ii)        A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits subject to Section 409A of the Code upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If  Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered non-qualified deferred compensation under Section 409A of the Code payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (A) the day following the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date of Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 8(n) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(iii)       (A) All expenses or other reimbursements provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (B) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year and (C) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.

 

15

(iv)      For purposes of Section 409A of the Code, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

 

(v)        Notwithstanding the foregoing, the Company makes no representations regarding the tax implications of the compensation and benefits to be paid to Executive under this Agreement, including, without limitation, under Section 409A of the Code.  The parties agree that in the event a qualified tax advisor to the Company or to Executive (neither party being required to retain such advisor) reasonably advises that the terms hereof would result in Executive being subject to tax under Section 409A of the Code, Executive and the Company shall negotiate in good faith to amend this Agreement to the extent necessary to prevent the assessment of any such tax.

 

[SIGNATURE PAGE TO FOLLOW]

 

16

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

 

	 	
SIGA TECHNOLOGIES, INC.

	 	 
	 	
By:

	/s/ Phillip L. Gomez, III
	 	 	
Name: Phillip L. Gomez, III

	 	 	
Title: Chief Executive Officer

	 	 	 
	 	 	/s/ Robin E. Abrams
	 	 	
Robin E. Abrams

 

[Signature Page to Abrams Second Amended and Restated Employment Agreement]

 

Exhibit A

 

Form of Release

 

GENERAL RELEASE OF CLAIMS

 

A general release is required as a condition for receiving the severance payments and benefits described in Section 5(f) of the Employment Agreement, dated as of _______, by and between you and SIGA Technologies, Inc., a Delaware corporation (the “Company”) (the “Employment Agreement”).

 

	(1)	
General.  By executing this General Release (“General Release”), you have advised us that you waive any and all claims against the Company, and its subsidiaries and affiliated or related entities, TriNet HR Corporation, and any and all of their respective predecessors, successors, assigns and employee benefit plans, and in such capacities their respective past, present or future officers, directors, shareholders, employees, trustees, fiduciaries, administrators, agents or representatives (collectively, the “Released Party” or “Released Parties”) and by execution of this General Release you irrevocably and unconditionally release and forever discharge any such claims except as provided in Paragraph 3(d) below.

 

	(2)	
Acknowledgment.  You hereby agree and acknowledge that the severance pay and benefits under Section [_] of the Employment Agreement exceed any payment, benefit or other thing of value to which you might otherwise be entitled under any policy, plan or procedure of the Company or its affiliates or pursuant to any prior agreement or contract with the Company or its affiliates.

 

	(3)	
Release.

 

(a) You hereby release, acquit and forever discharge the Released Parties, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities, and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way related to agreements, events, acts, omissions, or conduct at any time prior to and including the date you sign this Agreement. This General Release includes, but is not limited to: (i) claims and demands arising out of or in any way connected with your employment with the Company, or the termination of that employment; (ii) claims or demands related to your compensation or benefits with the Company, including but not limited to, wages, salary, bonuses, commissions, vacation pay, fringe benefits, expense reimbursements, incentive pay, severance pay, or any other form of compensation; (iii) claims pursuant to any federal, state, local or foreign law, statute, regulation, ordinance or common law or any other cause of action including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees or other claim arising under the federal Civil Rights Act of 1964, as amended; the federal Americans with Disabilities Act of 1990, as amended; the federal Age Discrimination in Employment Act of 1967, as amended (the “ADEA”); the federal Family Medical Leave Act, as amended; the federal Worker Adjustment and Retraining Notification Act, as amended; the Employee Retirement Income Security Act of 1974, as amended; (iv) all tort claims, including without limitation, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (v) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing, including claims arising out of an Employment Agreement, sales commission plan or incentive compensation plan applicable to your employment with the Company.  To the extent permitted by law, you also promise never directly or indirectly to bring or participate in an action against any Released Party.

 

(b) Excluded from this Agreement are any claims which by law cannot be waived in a private agreement between an employer and employee. Moreover, this General Release does not prohibit you from filing a charge with the Equal Employment Opportunity Commission (the “EEOC”) or equivalent state agency in your state or participating in an EEOC or state agency investigation. You do agree to waive your right to monetary or other recovery should any claim be pursued with the EEOC, state agency, or any other federal, state or local administrative agency your behalf arising out of or related to your employment with and/or separation from the Company.

 

(c) You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the ADEA, as amended. You also acknowledge that the consideration given for the waiver and release herein is in addition to anything of value to which you were already entitled. You further acknowledge that you have been advised by this writing, as required by the ADEA, that: (i) your waiver and release do not apply to any rights or claims that may arise after the execution date of this Agreement; (ii) you have been advised hereby that you have the right to consult with an attorney prior to executing this Agreement; (iii) you have up to [twenty-one (21)]/[fortyfive (45)] days from the date of this Agreement to execute this Agreement (although you may choose to voluntarily execute this Agreement earlier); (iv) you have seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; and (v) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth day after this Agreement is executed by you, provided that the Company has also executed this Agreement by that date (“Effective Date”); and (iv) this Agreement does not affect your ability to test the knowing and voluntary nature of this Agreement.

 

(d) Excepted from this General Release are: (i) retirement benefits accrued and vested prior to the effective date of your employment termination, (ii) all accrued and unpaid welfare benefit claims incurred prior to termination of your participation in such plans, (iii) the benefits specifically provided in Section 5.2 of the Employment Agreement, (iv) treatment of your equity awards as provided in the applicable equity plan and award agreements, (v) any right to indemnification under applicable corporate law, the Employment Agreement, the by-laws or certificate of incorporation of the Company or any Affiliate, or any agreement between you and the Company or any Affiliate and (vi) any rights as an insured under any director’s and officer’s liability insurance policy.

 

	(4)	
Releasors.  This General Release is being made by you for yourself and on behalf of your heirs, executors, administrators, dependents, trustees, legal representatives and assigns.

 

	(5)	
Restrictive Covenants.  You hereby agree that you are still subject to the obligations under Section 6 and Section 8(a) of the Employment Agreement which shall survive your termination of employment with the Company.

 

	(6)	
Enforceability.  Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release.

 

	(7)	
Consideration Period.  The ability to receive compensation and benefits under the terms of the Employment Agreement, as applicable, will remain open until [Date consistent with Section 3(c)]].  We also want to advise you of your right to consult with legal counsel prior to executing a copy of this General Release.

 

	(8)	
Severability.  If any provision of this General Release is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect the remaining provisions.  On the contrary, such remaining provisions shall be fully severable, and this General Release shall be construed and enforced as if such invalid provisions never had been inserted in the General Release.

 

	(9)	
Entire Agreement.  This General Release sets forth the entire understanding of the parties and supersedes any and all prior agreements, oral or written, relating to the subject matters contained herein and is legally binding and enforceable.  This General Release may not be modified except by a written document, signed by you and by a duly authorized corporate officer of the Company.

 

	(10)	
Governing Law; Consent to Jurisdiction.  This General Release shall be governed by and construed (both as to validity and performance) and enforced in accordance with the internal laws of the State of New York applicable to agreements made and to be performed wholly within such jurisdiction, without regard to the principles of conflicts of law or where the parties are located at the time a dispute arises.  In the event of any controversy or claim arising out of or relating to this General Release or the breach or alleged breach hereof, each of the parties hereto irrevocably (a) consents to the jurisdiction of any state court sitting in the County of New York, State of New York, or federal court sitting in the County of New York, State of New York. (b) waives any objection which it may have at any time to the laying of venue of any action or proceeding brought in any such court and (c) waives any claim that such action or proceeding has been brought in an inconvenient forum.

 

FINALLY, THIS IS TO EXPRESSLY ACKNOWLEDGE:

 

	·	
You have been provided a period of at least [twenty-one (21) days/forty-five (45) days] within which to consider the terms of this General Release;

 

	·	
You have been advised by the Company to consult with an attorney of your choosing in connection with this General Release;

 

	·	
You fully understand the significance of all of the terms and conditions of this General Release, and are signing this General Release voluntarily and of your own free will and without reservation or duress and assent to all the terms and conditions contained herein;

 

	·	
No promises or representations, written or oral, have been made to you by any person to induce you to sign this General Release other than the promise of payment set forth in Section 5.2 of the Employment Agreement.

 

I HEREBY STATE THAT I HAVE CAREFULLY READ THIS GENERAL RELEASE AND THAT I AM SIGNING THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY WITH THE FULL INTENT OF RELEASING THE RELEASEES FROM ANY AND ALL CLAIMS, EXCEPT AS SET FORTH HEREIN.  FURTHER, IF SIGNED PRIOR TO THE COMPLETION OF THE FORTY-FIVE (45) OR TWENTY-ONE (21) DAY REVIEW PERIOD, THIS IS TO ACKNOWLEDGE THAT I KNOWINGLY AND VOLUNTARILY SIGNED THIS GENERAL RELEASE ON AN EARLIER  DATE.

 

Please sign this copy of your General Release and return it to [________________].

 

	
Date

	 	
Name:

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