Document:

Document

 

EXHIBIT 10.17
FRANKLIN RESOURCES, INC.
NOTICE OF RESTRICTED STOCK AWARD
Name:    Adam Spector (“Participant”)
Address:    Brandywine Global Investment Management, LLC
        1735 Market Street, Suite 1800
        Philadelphia, PA 19103
In accordance with the Franklin Resources, Inc. 2002 Universal Stock Incentive Plan (the “Plan”), Franklin Resources, Inc. (the “Company”) has awarded Participant the shares of common stock of the Company, subject to the terms and conditions of the accompanying Restricted Stock Award Agreement (including the Exhibits attached thereto) (the “Award Agreement”), this Notice of Restricted Stock Award (the “Notice of Award” and together with the Award Agreement, the “Award Documentation”) and the Plan, as follows.  Capitalized terms used but not defined in this Notice of Award shall have the meanings ascribed to such terms in the Plan.
						
	Date of Grant:	September 2, 2020
		
	Total Number of Restricted Shares (the “Shares”) Awarded:
	
263,578

The Shares shall vest in accordance with the Vesting Schedule (as defined in the Award Agreement), subject to the limitations set forth in the Award Documentation and the Plan.  Unless otherwise set forth in the Award Documentation and the Plan, (i) if Participant’s Continuous Status as an Employee terminates for any reason prior to the applicable vesting date of the Shares, the unvested Shares shall be forfeited and deemed reconveyed to the Company on the date of such termination, and the Company shall thereafter be the legal and beneficial owner of such reconveyed Shares, as applicable, and shall have all rights and interest in or related thereto without further action by Participant, and (ii) if any Shares do not vest as of the fourth (4th) anniversary of the Closing Date (as defined in Exhibit A to the Award Agreement), such unvested Shares shall be forfeited and deemed reconveyed to the Company on the fourth (4th) anniversary of the Closing Date, and the Company shall thereafter be the legal and beneficial owner of such reconveyed Shares, as applicable, and shall have all rights and interest in or related thereto without further action by Participant.
Nothing in the Award Documentation or in the Plan, which is incorporated herein by this reference, affects the Company’s, or a Subsidiary’s, right to terminate, or to change the terms of, Participant’s employment at any time.
From time to time, the Company may be in a “Blackout Period” and/or subject to applicable securities laws that could subject Participant to liability for engaging in any transaction involving the sale of the Shares.  Prior to the sale of any vested Shares, it is Participant’s responsibility to determine whether or not such sale of Shares will subject Participant to liability under insider trading rules or other applicable securities laws.
In receiving the Shares granted hereunder, Participant is hereby notified that the following constitute certain of the terms, conditions and obligations of receiving, holding and potentially vesting in, and settlement of the Shares granted hereunder:
(i)Participant may receive the Plan prospectus in connection with the Form S-8 registration statement for the Plan, any updates thereto, the Plan, the Award Agreement and this Notice of Award (collectively, the “Plan Documents”) in electronic form either through the Company’s intranet, the website of the third party stock administration provider used by the Company, or another form of electronic communication (e.g., e-mail), as determined by the Company;
(ii)Participant has access to the Company’s intranet and the internet;
(iii)Participant may be required to acknowledge receipt of electronic or paper copies of the Plan Documents and the Company’s most recent annual report to stockholders; and

Adam Spector 
Notice of Restricted Stock Award
Page 2

(iv)Participant has familiarized himself or herself with, and has accepted the Shares subject to, the terms and provisions of the Plan Documents.
Participant may receive, without charge, upon written or oral request, paper copies of any or all of the Plan Documents, documents incorporated by reference in the Form S-8 registration statement for the Plan, and the Company’s most recent annual report to stockholders by requesting them from Stock Administration at the Company, One Franklin Parkway, San Mateo, CA 94403-1906.  Telephone: (650) 312-2000.  Email: stockadmin@franklintempleton.com.  Participant may also withdraw Participant’s consent to receive any or all documents electronically by notifying Stock Administration at the above address in writing.
*    *    *
END OF NOTICE
 - 2 -

Adam Spector 
Restricted Stock Award Agreement
Page 1

FRANKLIN RESOURCES, INC.
RESTRICTED STOCK AWARD AGREEMENT
This Restricted Stock Award Agreement, together with any Exhibits or Appendix(es) attached hereto (hereinafter, collectively, this “Agreement”), is made as of the Date of Grant set forth in the Notice of Restricted Stock Award (the “Notice of Award” and together with this Agreement, the “Award Documentation”) between Franklin Resources, Inc. (the “Company”) and Adam Spector (“Participant”) to which this Agreement is attached.
WITNESSETH:
WHEREAS, the Company maintains the Franklin Resources, Inc. 2002 Universal Stock Incentive Plan (the “Plan”), authorizing the grant of common stock of the Company to eligible individuals as an incentive in connection with the performance of services for the Company and its Subsidiaries, as defined in the Plan, which is incorporated herein by this reference; and
WHEREAS, the Company has determined that it would be to the advantage and in the interest of the Company and its stockholders to award the Shares (as defined in the Notice of Award) to Participant, subject to certain restrictions, as an incentive for increased efforts and successful achievements.
NOW, THEREFORE, in consideration of the foregoing premises and of the mutual covenants herein contained, the parties hereto hereby agree as follows:
1.Defined Terms.  Capitalized terms used but not defined in this Agreement (including the Exhibits attached hereto) shall have the same meanings ascribed to such terms in the Notice of Award or the Plan, as applicable.
2.Restricted Shares.  The Company is issuing to Participant the Shares as set forth in the Notice of Award, subject to the rights of and limitations on Participant as owner thereof as set forth in this Agreement.  Such Shares are being issued in book entry form and maintained on the books of Merrill Lynch, the Company’s transfer agent, or any successor thereto.  All Shares issued hereunder shall be deemed issued to Participant as fully paid and non-assessable shares and, subject to the restrictions set forth in the Plan and this Agreement, Participant shall have all rights of a stockholder with respect thereto, including the right to vote, to receive dividends (including stock dividends), to participate in stock splits or other recapitalizations, and to exchange such Shares in a tender offer, merger, consolidation or other reorganization.  Any cash dividend payable with respect to the Shares then-outstanding (whether vested or unvested) will be paid as and when such cash dividend is paid to the Company’s stockholders.  Participant hereby acknowledges that Participant is acquiring the Shares issued hereunder for investment and not with a view to the distribution thereof, and that Participant does not intend to subdivide Participant’s interest in the Shares with any other person.
3.Transfer Restriction.  No portion of the Shares issued to Participant hereunder shall be sold, transferred by gift, pledged, hypothecated, or otherwise transferred or disposed of by Participant except by will or the laws of descent and distribution; provided that no such restrictions shall apply to the Shares after the date on which they become vested pursuant to Section 4.  This Section shall not preclude Participant from exchanging the Shares awarded hereunder pursuant to a cash or stock tender offer, merger, reorganization or consolidation.  Any securities (including stock dividends and stock splits) received with respect to any portion of the Shares which are not yet vested under Section 4 shall be subject to the provisions of this Agreement in the same manner and shall become fully vested at the same time as the portion of the Shares with respect to which such additional securities were issued.
4.Vesting.
(a)    Participant’s interest in the Shares shall become vested and non-forfeitable in accordance with the Vesting Schedule attached hereto as Exhibit A (the “Vesting Schedule”), subject to Section 12 below.  Upon vesting, the Company shall, within thirty (30) days of such vesting and provided the withholding requirements of Section 5 have been satisfied, deliver to Participant the certificate evidencing the non-forfeitable Share (free of restrictive legends on such stock certificate) or, the Committee may permit or require that such non-forfeitable Shares (free of the restrictive notations on Shares issued in book-entry form) be deposited directly with a brokerage firm or transfer agent determined acceptable to the Company for such purpose or to a designated agent of the Company, and the Committee may utilize electronic or automated methods of share transfer.

Adam Spector 
Restricted Stock Award Agreement
Page 2

(b)    Except as set forth in the Vesting Schedule, if Participant’s Continuous Status as an Employee terminates for any reason, all Shares to the extent not yet vested in accordance with the Vesting Schedule on the date Participant’s Continuous Status as an Employee terminates shall be forfeited by Participant without payment of any consideration to Participant therefor.  Additionally, if any Shares do not vest on the fourth (4th) anniversary of the Closing Date, such unvested Shares shall be forfeited by Participant without payment of any consideration to Participant therefor.  Any Shares so forfeited shall be canceled and the Shares that are so forfeited shall be returned to the status of authorized but unissued Shares, to be held for future distributions under the Plan.
5.Withholding of Taxes.
(a)General.  Participant is ultimately liable and responsible for all taxes owed by Participant in connection with the Shares awarded, regardless of any action the Company or any of its Subsidiaries takes with respect to any tax withholding obligations that arise in connection with the Shares awarded.  Neither the Company nor any of its Subsidiaries makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant or vesting of the Shares awarded or the subsequent sale of any of the Shares.  The Company and its Subsidiaries do not commit and are under no obligation to structure the Shares to reduce or eliminate Participant’s tax liability.
(b)Payment of Withholding Taxes.  Prior to any event in connection with the Shares awarded that the Company determines may result in any tax withholding obligation, whether United States federal, state or local taxes or any applicable foreign taxes and including any employment tax obligation (the “Tax Withholding Obligation”), Participant must agree to the satisfaction of such Tax Withholding Obligation in a manner acceptable to the Company, including by one of the following methods:
(i)By Share Withholding.  Unless the Company permits Participant to satisfy the Tax Withholding Obligation by some other means in accordance with clause (iii) below, Participant authorizes the Company (in the exercise of its sole discretion) to withhold from those unrestricted Shares to be delivered to Participant upon vesting in accordance with the Vesting Schedule the whole number of Shares sufficient to satisfy the Tax Withholding Obligation.  Share withholding in accordance with the immediately preceding sentence will result in the delivery of a lower number of unrestricted Shares to Participant.  Share withholding will generally be used to satisfy the tax liability of individuals subject to the short-swing profit restrictions of Section 16(b) of the Exchange Act.
(ii)By Sale of Shares.  Unless the Company permits Participant to satisfy the Tax Withholding Obligation by some other means in accordance with clause (iii) below, and provided that the terms of this clause (ii) do not violate Section 13(k) of the Exchange Act, Participant’s acceptance of the Shares awarded constitutes Participant’s instruction and authorization to the Company and any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those unrestricted Shares to be delivered to Participant upon vesting in accordance with the Vesting Schedule as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the applicable Tax Withholding Obligation.  Such Shares will be sold on the day such Tax Withholding Obligation arises or as soon thereafter as administratively practicable.  Participant will be responsible for all brokers’ fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale.  To the extent the proceeds of such sale exceed the Tax Withholding Obligation, the Company agrees to pay such excess in cash to Participant.  Participant acknowledges that the Company is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the Tax Withholding Obligation.  Accordingly, Participant agrees to pay to the Company or any of its Subsidiaries as soon as practicable, including through additional payroll withholding, any amount of the Tax Withholding Obligation that is not satisfied by the sale of Shares described above.
(iii)By Check, Wire Transfer or Other Means.  At any time not less than five (5) business days (or such fewer number of days as determined by the Committee or its designee) before any Tax Withholding Obligation arises, Participant may request permission to satisfy the Tax Withholding Obligation by check, wire transfer or other means, by submitting such request, in writing, to the Company.  Alternatively, the Company may require that Participant satisfy any Tax Withholding Obligation in any such manner.  If the Company approves Participant’s request, or so requires, within five (5) business days of the applicable vesting date of the Shares (or such fewer number of days as determined by the Committee or its designee) Participant must deliver to the Company the amount that the Company determines is sufficient to satisfy the Tax Withholding Obligation by (x) wire transfer to such account as the Company may direct, (y) delivery of a certified check payable to the Company, or (z) such other means as specified from time to time by the Committee or its designee.

Adam Spector 
Restricted Stock Award Agreement
Page 3

6.Confidentiality and Intellectual Property.  As a condition of the grant of the Shares hereunder, Participant shall have executed and delivered to the Company the Franklin Templeton Confidentiality and Intellectual Property Agreement attached hereto as Exhibit B (the “Confidentiality Agreement”) simultaneously with the execution of this Agreement.  Participant acknowledges and agrees that the Award Documentation and the Confidentiality Agreement will be considered separate contracts, and the Confidentiality Agreement will survive the termination of the Award Documentation for any reason.
7.Successors.  This Agreement shall (a) inure to the benefit of, and be enforceable by, the Company’s successors and assigns, and (b) be binding on Participant’s executors, administrators, heirs and successors, in the event that Participant dies and Section 3 of this Agreement applies.  Nothing contained in the Plan, the Notice of Award or this Agreement shall be interpreted as imposing any liability on the Company or the Committee in favor of Participant or any purchaser or other transferee of Shares with respect to any loss, cost or expense which such Participant, purchaser or other transferee may incur in connection with, or arising out of any transaction involving, any Shares subject to the Plan, the Notice of Award or this Agreement.
8.Integration.  The terms of the Plan, the Notice of Award and this Agreement are intended by the Company and Participant to be the final expression of their agreement with respect to the Shares and may not be contradicted by evidence of any prior or contemporaneous agreement.  The Company and Participant further intend that the Plan, the Notice of Award and this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any arbitration, judicial, administrative or other legal proceeding involving the Plan, the Notice of Award or this Agreement.  Accordingly, the Plan, the Notice of Award and this Agreement contain the entire understanding between the parties and supersede all prior oral, written and implied agreements, understandings, commitments and practices among the parties (including the “Performance Stock Grant” provisions of that certain letter agreement by and among the Company, Participant and David Hoffman, dated February 17, 2020 (the “Affiliate Letter”)).  Participant understands and acknowledges that the Shares granted hereunder are made in full satisfaction to grant the Performance Stock Grant (as defined in the Affiliate Letter) to Participant under the Affiliate Letter, and the Company shall have no further obligation under the Affiliate Letter with respect to the Performance Stock Grant.
9.Waivers.  Any failure to enforce any terms or conditions of the Plan, the Notice of Award or this Agreement by the Company or by Participant shall not be deemed a waiver of that term or condition, nor shall any waiver or relinquishment of any right or power for all or any other times.
10.Severability of Provisions.  If any provision of the Plan, the Notice of Award or this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision thereof, and the Plan, the Notice of Award and this Agreement shall be construed and enforced as if none of them included such provision.
11.Committee Decisions Conclusive.  This Agreement and the Notice of Award are administered and interpreted by the Committee and the Committee has full and exclusive discretion to interpret and administer this Agreement and the Notice of Award.  All actions, interpretations and decisions of the Committee are conclusive and binding on all persons, and will be given the maximum possible deference allowed by law.
12.Forfeiture.
(a)Forfeiture Pursuant to Restatement of Financial Results.  Notwithstanding anything in the Award to the contrary, in the event that (i) the Company issues a restatement of financial results to correct a material error; (ii) the Committee determines, in good faith, that fraud or willful misconduct by Participant was a significant contributing factor to the need to issue such restatement; and (iii) some or all of the shares of Stock that were granted and/or other property earned prior to such restatement by Participant would not have been granted and/or earned, as applicable, based upon the restated financial results, Participant shall immediately return to the Company those shares of Stock, property received with respect to those shares of Stock, including any cash dividends paid with respect to those shares of Stock, any pre-tax income derived from ownership and any gross proceeds from disposition of such Stock and property, that would not have been granted and/or earned based upon the restated financial results (the “Repayment Obligation”), and all such shares of Stock (whether or not vested) shall immediately be forfeited.  The Company shall be able to enforce the Repayment Obligation by all legal means available, including, without limitation, by withholding such amount from other sums and property owed by the Company to Participant.
(b)Forfeiture Pursuant to Fraud or Breach of Securities Law.  Notwithstanding anything in the Award Documentation to the contrary, in the event that Participant:

Adam Spector 
Restricted Stock Award Agreement
Page 4

(i)is convicted by any court for fraud;
(ii)is finally adjudicated by any court or is otherwise finally determined by a Regulatory Agency to be in violation of any Securities Law where the violation related to a period of time during which Participant was an employee; or
(iii)enters into a settlement agreement with a Regulatory Agency, with or without admission of any liability, in relation to or in connection with an allegation concerning a violation of any Securities Law by Participant where the violation or alleged violation related to a period of time during which Participant was an employee, and the terms of the settlement agreement result in (x) Participant making, or being required to make, payment of any penalty or a payment in lieu of any penalty or redress in respect of such violation, or alleged violation; (y) the publication of any statement of reprimand or censure; or (z) Participant suffering any other penalty including (without limitation) suspension or termination of Participant’s status for the purposes of any Securities Law, all of Participant’s Shares granted pursuant to this Agreement that have not vested shall immediately be forfeited without any payment to Participant therefor and Participant will immediately cease to have any further rights over or interest in such Shares.  Notwithstanding the foregoing, the Committee may determine, in its sole discretion, that only a portion of Participant’s Shares specified by the Committee (or no such Shares) shall be forfeited.
(iv)For the purposes of this Section 12(b), the following words shall have the following meanings: 
(A)“Regulatory Agency” shall mean in any jurisdiction any department of government, independent agency, authority appointed by statute or by government in connection with the supervision and/or enforcement of any Securities Law including, but not limited to, the U.S. Securities and Exchange Commission;
(B)“Securities Law” shall mean any enactment, law, statute, rule, requirement or regulation in any jurisdiction relating to Securities that is or was applicable to the Company or that is or was applicable to Participant; and
(C)“Securities” shall mean any shares, bonds, derivatives or other financial instruments or financial assets or any interest therein.
(c)Other Repayment/Forfeiture.  Any benefits Participant may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (ii) similar laws, and implementing rules and regulations, of the European Union (as implemented by its member states and by the European Securities and Markets Authority) and of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to Participant.
13.Governing Law; Forum; WAIVER OF JURY TRIAL.  Except where otherwise preempted by federal law, the validity, interpretation, construction, and performance of this Agreement and the Notice of Award are governed by and are to be construed under the laws of the state of Delaware applicable to agreements made and to be performed in that state, without regard to conflict of laws rules.  Any dispute or claim arising out of or relating to this Agreement, the Notice of Award or claim of breach thereof shall be brought exclusively in the Court of Chancery of the State of Delaware or, if such court lacks jurisdiction, the United States District Court for the District of Delaware, to the extent federal jurisdiction exists, and in any court sitting in Dover, Delaware, and any applicable appellate courts.  By execution of this Agreement, the Company, Participant and their respective affiliates, consent to the exclusive jurisdiction of such courts, and waive any right to challenge jurisdiction or venue in such court with regard to any suit, action, or proceeding under or in connection with this Agreement and the Notice of Award.  EACH PARTY TO THIS AGREEMENT ALSO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
*    *    *
END OF AGREEMENT

IN WITNESS WHEREOF, the undersigned Participant acknowledges receipt of this Agreement, the Plan, and, as an express condition to the Shares, agrees to be bound by the terms of both the Award Documentation and the Plan.
FRANKLIN RESOURCES, INC.
By:    /s/ Jennifer M. Johnson
Name: Jennifer M. Johnson
Title:   President and CEO, Franklin Resources, Inc.

Date: September 2, 2020

PARTICIPANT
By:    ____________________________________    
Adam Spector
      ____________________________________
      Printed Name
Date: _____________
						
	SPOUSAL CONSENT

To the extent that Participant’s spouse and Participant are domiciled in Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, or are otherwise entitled to the benefits of the statutes of such states, Participant’s spouse indicates by the execution of this Agreement his or her consent to be bound by the terms herein as to his or her interests, whether as community property or otherwise, if any, in the Shares.

	    
Name
	    
Signature            Date

[Signature Page to Restricted Stock Award Agreement]

EXHIBIT A
VESTING SCHEDULE
1.Vesting Schedule.  The Shares shall be subject to the vesting conditions as set forth below.
(a)General.  The Shares will vest as follows, in each case, subject to Participant’s Continuous Status as an Employee through the applicable vesting date (except as set forth below):
(i)Twenty-five percent (25%) of the Shares will be vested as of the Date of Grant if and only if the Performance Criteria (as defined below) is satisfied as of such date;
(ii)An additional twenty-five percent (25%) of the Shares plus any portion of the Shares eligible to vest on a prior vesting date that did not vest as a result of the failure to satisfy the Performance Criteria as of such prior vesting date will vest on each of the first three (3) anniversaries of the Closing Date if and only if the Performance Criteria is satisfied as of such anniversary; and
(iii)In the event that the Performance Criteria was not satisfied as of the third (3rd) anniversary of the Closing Date, any unvested portion of the Shares will vest on the fourth (4th) anniversary of the Closing Date if and only if the Performance Criteria is satisfied as of such date. 
(iv)Any portion of the Shares that has not vested as of the fourth (4th) anniversary of the Closing Date shall automatically be forfeited for no consideration.
The “Performance Criteria” will, as of any applicable date of determination, be satisfied if, as of such date of determination, (x) the annualized investment return of Affiliate’s Global Opportunistic Fixed Income composite (determined gross of any fees and in a manner consistent with past practices) over the trailing five (5)-year period ending on the last day of the calendar quarter immediately prior to the calendar quarter in which such date of determination occurs is greater than (y) the annualized investment return of the FTSE World Government Bonus Index (unhedged) (or its successor index) for the same trailing five (5)-year period.
(b)Good Leaver Termination.  Notwithstanding the foregoing, if Participant’s Continuous Status as an Employee terminates as a result of a Good Leaver Termination, the Shares shall, subject to Participant’s satisfaction of the Release Requirement, continue to be eligible to vest as if employment had continued through each applicable vesting date and subject to satisfaction of the Performance Criteria on such vesting dates.  For the avoidance of doubt, any unvested portion of the Shares shall be immediately forfeited to the Company for no consideration if Participant’s Continuous Status as an Employee terminates for any reason other than a Good Leaver Termination.
2.Defined Terms.
(a)“Affiliate” means Brandywine Global Investment Management, LLC.
(b)“Cause” means the occurrence or existence of any of the following with respect to Participant: (i) Participant’s willful refusal to perform reasonable duties or reasonable obligations owed to Affiliate or any of its affiliates, other than as a result of physical or mental illness (after giving effect to a ten (10) business day cure period, to the extent such failure or refusal is susceptible of cure); (ii) the conviction of, or plea of guilty or nolo contendere by, Participant in respect of any felony or any crime involving theft, fraud or material personal dishonesty; (iii) intentional misconduct or gross negligence by Participant in connection with Participant’s duties to Affiliate or any of its affiliates; (iv) Participant’s willful and material violation of the written policies of Affiliate or any of its affiliates (after giving effect to a ten (10) business day cure period, to the extent such failure or refusal is susceptible of cure); (v) Participant’s material breach of any agreement in effect between Participant and Affiliate or any of its affiliates, including, but not limited to, this Agreement; (vi) embezzlement or fraud committed (or attempted) by Participant or at Participant’s direction; (vii) misappropriation of any material assets or business opportunities of Affiliate or any of its affiliates by Participant or at Participant’s direction; or (viii) any material violation by Participant of any material domestic or foreign securities laws, rules or regulations including, but not limited to, those of any self-regulatory organization or authority.
(c)“Closing Date” means July 31, 2020.
A - 1

(d)“Disability” means that Participant is unable, by reason of bona fide physical or mental injury, illness or other similar cause, to perform his primary duties for a period of ninety (90) consecutive days or any one hundred and eighty days (180) days during any twelve (12) month period, and where such injury, illness or other similar cause would reasonably be expected to prevent Participant from operating or functioning in a similar capacity in the future.  The foregoing determination shall be made by a licensed independent physician reasonably selected by the Company with the consent of Participant (or his authorized representative) (such consent not to unreasonably withheld, delayed or conditioned).
(e)“Good Leaver Termination” means Participant’s Continuous Status as an Employee is terminated (i) by Affiliate without Cause, (ii) by Participant for Good Reason, or (iii) as a result of Participant’s death or Disability, in each case, prior to the fourth (4th) anniversary of the Closing Date.
(f)“Good Reason” means, without Participant’s consent, (i) a material reduction to Participant’s duties, authority or responsibilities; (ii) a reduction in Participant’s base salary or Affiliate’s breach of the bonus allocation and determination provisions set forth in Section 1(d) of the RSA at the direction of either the Company or the Board of Directors of Affiliate; (iii) the material breach by the Company of the Affiliate Letter or a breach by Affiliate at the direction of the Company of any other agreement to which Participant is a party; or (iv) any requirement by the Company that Participant be based at any office or location that is not within thirty (30) miles of Participant’s current work location (excluding customary business travel).  Notwithstanding the foregoing, for a termination of Participant’s employment to be treated as a termination with Good Reason (I) Participant must give the Company notice of the event or action claimed to be Good Reason within ten (10) days after Participant first has actual knowledge of such event or action, (II) Participant must give the Company at least ten (10) days to cure such event or action, and (III) failing a cure, Participant must terminate his employment within thirty (30) days after the expiration of such ten (10) day period.
(g)“Release Requirement” means Participant’s execution of a general release of claims in favor of the Company and its direct and indirect Subsidiaries promptly following Participant’s Good Leaver Termination that becomes effective within sixty (60) days following Participant’s Good Leaver Termination; provided, that such release of claims is consistent in all material respects with the language attached as Schedule I to this Exhibit A and with such other terms as may be mutually agreed by the Company and Participant.
(h)“RSA” means that certain Revenue Sharing Agreement by and among Legg Mason, Inc., Affiliate and certain Principal Officers named therein, dated as of December 5, 1997, as amended and modified on November 8, 2000 and August 9, 2004.
*    *    *
A - 2

SCHEDULE I TO EXHIBIT A
RELEASE PROVISION
Release and Waiver of Claims.  You hereby waive and release and forever discharge the Company and its respective parent entities, subsidiaries (including Affiliate), divisions, limited partnerships, affiliated corporations, successors and assigns and their respective past and present directors, managers, officers, stockholders, partners, agents, employees, insurers, attorneys, and servants each in his, her or its capacity as such, and each of them, separately and collectively (collectively, “Releasees”), from any and all existing claims, charges, complaints, liens, demands, causes of action, obligations, damages and liabilities, known or unknown, suspected or unsuspected, whether or not mature or ripe, that you ever had and now have against any Releasee, including, without limitation, any claims, charges, complaints, liens, demands, causes of action, obligations, damages and liabilities arising out of or in any way related to your employment with or separation from Affiliate, to any services performed for Affiliate, to any status, term or condition in such employment, or to any physical or mental harm or distress from such employment or non-employment or claim to any hire, rehire or future employment of any kind by Affiliate, all to the extent allowed by applicable law.  This release of claims includes, but is not limited to, claims based on express or implied contract, compensation plans, covenants of good faith and fair dealing, wrongful discharge, claims for discrimination, harassment and retaliation, violation of public policy, tort or common law, whistleblower or retaliation claims; and claims for additional compensation or damages or attorneys’ fees or claims under federal, state, and local laws, regulations and ordinances, including but not limited to Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Worker Adjustment and Retraining Notification Act, or equivalent state WARN act, the Employee Retirement Income Security Act, and the Sarbanes-Oxley Act of 2002.  You understand that this release of claims includes a release of all known and unknown claims through the date on which this release of claims becomes irrevocable (the “Effective Date”).
Limitation of Release: Notwithstanding the foregoing, this release of claims will not prohibit you from filing a charge of discrimination with the National Labor Relations Board, the Equal Employment Opportunity Commission or an equivalent state civil rights agency, but you agree and understand that you are waiving your right to monetary compensation thereby if any such agency elects to pursue a claim on your behalf.  Further, nothing in this release of claims shall be construed to waive any right that is not subject to waiver by private agreement under federal, state or local employment or other laws, such as claims for workers’ compensation or unemployment benefits or any claims that may arise after the Effective Date. In addition, nothing in this release of claims will be construed to affect any of the following claims, all rights in respect of which are reserved:
(a)Rights in respect of the Shares;
(b)Reimbursement of unreimbursed business expenses properly incurred prior to the termination date in accordance with Affiliate policy;
(c)Vested benefits to which you are entitled as a former employee under Affiliate’s employee benefit plans, incentive plans, revenue sharing arrangements and/or any other compensatory agreement to which you are a party;
(d)Any claim for unemployment compensation or workers’ compensation administered by a state government to which you are presently or may become entitled; 
(e)Any claim that Affiliate has breached this release of claims; and
(f)Indemnification as a current or former director or officer of Affiliate or any of its affiliates (including as a fiduciary of any employee benefit plan), or inclusion as a beneficiary of any insurance policy related to your service in such capacity.Exhibit 10.1

 

EXECUTION VERSION

 

22nd CENTURY GROUP, INC.

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”)
is dated as of November 15, 2021, between 22nd CENTURY GROUP, INC., a Nevada corporation (“Company”) and Richard
Fitzgerald (“Employee”).

 

WHEREAS, the Company desires to engage the Employee
as a full-time executive employee to provide services to the Company pursuant to the terms of this Agreement, and the Employee desires
to accept such employment.

 

NOW, THEREFORE, in consideration of the covenants
and agreements hereinafter set forth, the parties agree as follows:

 

1.       EFFECTIVE
DATE

 

The Employee’s employment with the Company
shall commence on November 15, 2021 (the “Effective Date”).

 

2.       EMPLOYMENT
DUTIES AND TERM

 

2.1       General.
As of the Effective Date, the Company employs the Employee as, and the Employee agrees to serve as, Chief Financial Officer of the Company
upon the terms and conditions specified in this Agreement. The Employee shall perform such duties and services for the Company as may
be determined from time to time by the Company’s Board of Directors (the “Board”) and the Chief Executive
Officer (“CEO”) provided that such duties and services shall be consistent in all material respects with the
Employee’s position Chief Financial Officer of the Company. Unless otherwise determined by the Board, the Employee will be a direct
report to the CEO. The Employee agrees to serve the Company faithfully and to the best of his ability under the direction of the Board.

 

2.2       Exclusive
Services. The Employee shall devote his full working time throughout the Employment Term (as defined in Section 2.3) to the performance
of services for the Company. During the Employment Term, the Employee will not be employed by any other person or entity, or be self-employed,
without the prior approval of the Board. The Employee shall use his best efforts, judgment and energy to improve and advance the business
and interests of the Company in a manner consistent with the duties of his position. Upon the Employee’s execution of this Agreement
and during the Employment Term, the Employee will disclose to the Company any existing or proposed participation or membership in trade
or professional associations, and any existing or proposed appointments as a member of the board of directors (or similar governing body)
of any for-profit or not-for-profit entity; all such participations, memberships and appointments shall be subject to approval by the
CEO.

 

    	 	

     

    

 

2.3       Employment
Term. The Employee’s employment under this Agreement shall commence as of the Effective Date and shall continue until the earlier
of (1) the 3-year anniversary of the Effective Date or (2) termination pursuant to Section 5 of this Agreement. For the purposes
of this Agreement, “Employment Term” means the period beginning on the Effective Date and ending on the date
that Employee’s employment with the Company terminates for any reason.

 

3.       COMPENSATION

 

3.1       Base
Salary. During the Employment Term, the Employee shall be paid an annual base salary (“Base Salary”) in
the amount of $325,000.00, payable in accordance with the Company’s payroll practices. Base Salary is subject to increase or decrease,
from time to time, in the sole and absolute discretion of the Board.

 

3.2       Signing
Bonus. Within fifteen (15) days of the execution of this Agreement, Company shall pay to Employee a one-time cash payment of $75,000.00
(“Signing Bonus”). The Signing Bonus shall be subject to full repayment by Employee for a period of sixty (60)
days from November 15, 2021 (“Clawback Period”), should Employee (i) resign from his employment with the Company
during the Clawback Period or (ii) be terminated for Cause, as defined in Section 5.4 herein during the Clawback Period. For the avoidance
of doubt, the Employee shall not be subject to any repayment obligations for the Signing Bonus after the expiration of the Clawback Period.

 

3.3       Cash
Bonus Opportunity. During the Employment Term, the Employee will be eligible to earn an annual cash bonus targeted at 75% of Base
Salary. The amount of cash bonus awarded to the Employee in any year will be determined by the Board, in consultation with the CEO, based
on annual performance metrics and strategic goals for the Company and annual individual objectives for the Employee. Payment of a cash
bonus in respect of a Company fiscal year will be made not later than 120 days following the end of the applicable Company fiscal year,
provided that, if the Employment Term ends prior to payment, the Employee shall not be entitled to such cash award.

 

3.4       Performance
Unit Awards. During the Employment Term, the Employee will be eligible to receive an annual award of Performance Units (as defined
in the 2021 Plan). The target annual Performance Unit award to the Employee will be 100% of Base Salary, and each such award shall be
subject to performance,vesting and other requirements specified by, or determined in accordance with, the 2021 Plan.

 

3.5       Reimbursement
of Expenses. The Company shall reimburse the Employee for reasonable travel and other business expenses incurred by him in the fulfillment
of his duties hereunder upon presentation by the Employee of an itemized account of such expenditures, in accordance with Company practices
and policies.

 

    	 	2	 

     

    

 

4.       EMPLOYEE
BENEFITS

 

The Employee shall, during the Employment Term, be
included to the extent eligible thereunder in all employee benefit plans, programs or arrangements (including plans, programs or arrangements
providing for retirement benefits, disability benefits, health and life insurance, or vacation and paid holidays) which shall from time
to time be established by the Company for, or made available to, its management employees generally.

 

5.       TERMINATION
OF EMPLOYMENT

 

5.1       Termination
Events.

 

5.1.1. By
the Company. The Company may terminate the Employee’s employment at any time for Cause (as hereinafter defined), without Cause,
or upon the Employee’s Disability (as hereinafter defined).

 

5.2       Termination
Without Cause.

 

5.2.1 Severance Benefits.
If the Employee’s employment is terminated by the Company without Cause:

 

(i) The Company shall continue to pay
the Employee the Base Salary (at the rate in effect immediately prior to such termination) for a period of 12 months following the
effective date of termination (such period being referred to hereinafter as the “Severance Period”). The payments
shall occur in installments in the same amount in effect immediately prior to such termination and at the same regular payment intervals
as the Employee’s Base Salary was being paid on the Effective Date and such installments shall be deemed a series of separate payments
within the meaning of Treas. Reg. §1.409A-2(b)(2)(iii).

 

(ii) If the Employee timely elects
continue health insurance coverage under  the Company’s applicable group health insurance plan pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then the Company shall directly pay, or reimburse Employee
for, the COBRA premium for the Employee and Employee’s covered dependents under such plan during the  Severance Period, provided
that (a) the Employee will be responsible for paying the same portion of the premium that the Company requires to be paid by its
management employees under the applicable plan,  and (b) the Company’s obligation to pay or reimburse the Employee for
such premiums will terminate on the date Employee becomes eligible to receive reasonably  comparable health insurance coverage from
a subsequent employer (and Employee agrees to promptly notify the Company of such eligibility).  If the Company determines that it
cannot provide the benefit required by this Section 5.2.1(ii) without potentially breaching the Company’s applicable group health
insurance contract,  violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring
an excise tax, the Company shall in lieu thereof during the Severance Period pay to the Employee a taxable monthly payment in an amount
equal to the portion of the COBRA premium otherwise payable or reimbursable by the Company under this Section 5.2.1(ii).

 

    	 	3	 

     

    

 

(iii) The Employee shall have no further
right to receive any other compensation or benefits after such termination of employment except as specifically determined in accordance
with the terms of the employee benefit plans or programs of the Company. In the event of the Employee’s death during the Severance
Period, Base Salary continuation payments under this Section 5.2.1 shall continue to be made during the remainder of the Severance Period
to the beneficiary designated in writing for this purpose by the Employee or, if no such beneficiary is specifically designated, to the
Employee’s estate.

 

5.2.2 Termination of Severance Benefit.
If, during the Severance Period, the Employee breaches any of his obligations under this Agreement (including, without limitation, the
Employee’s obligations under Section 6), the Company may, in addition to all other rights and remedies upon written notice
to the Employee, terminate the Severance Period and cease to make any further payments or provide any benefits described in Section 5.2.1.

 

5.2.3 Release. The Company’s obligation
to make the Base Salary and provide health insurance benefits described in Section 5.2.1 shall be subject to the following conditions:
(i) within 21 days after the effective date of termination or resignation, the Employee shall have executed and delivered to the Company
a Termination Agreement and Release (“Release”) in the form of Exhibit A attached hereto, and (ii)
the Release shall not have been revoked by the Employee during the revocation period specified therein. If the Employee fails to deliver
a fully executed Release to the Company before expiration of such 21 day period, or such release is revoked as permitted therein, then
the Company will have no obligation to make any of the payments or provide any of the benefits specified in Section 5.2.1.

 

5.3       Termination
for Cause; Resignation. If the Employee’s employment is terminated by the Company for Cause, or the Employee resigns from his
employment hereunder for any reason, the Employee shall be entitled only to payment of his Base Salary as then in effect through and including
the date of termination or resignation. The Employee shall have no further right to receive any other compensation or benefits after such
termination or resignation of employment, except as determined in accordance with the terms of the employee benefit plans or programs
of the Company.

 

5.4       Cause.
Termination for “Cause” shall mean termination of the Employee’s employment by the Company because of:

 

(i)       any
act or omission that constitutes a breach by the Employee of any of his obligations under this Agreement or any written Company policy
or procedure and failure to cure such breach after notice of, and a reasonable opportunity to cure, such breach;

 

    	 	4	 

     

    

 

(ii)       the
continued willful failure or refusal of the Employee to substantially perform the duties reasonably required of him as an employee of
the Company;

 

(iii)       an
act of moral turpitude, dishonesty or fraud by, or criminal conviction (excluding non-felony convictions relating solely to vehicle and
traffic offenses) of, the Employee which in the sole determination of the Board would render his continued employment by the Company damaging
or detrimental to the Company;

 

(iv)       any
material misappropriation of Company property by the Employee; or

 

(v)       any
other willful misconduct by the Employee which is materially injurious to the financial condition or business reputation of, or is otherwise
materially injurious to, the Company.

 

5.5        Termination
by the Employee For Good Reason.

 

(i)        This
Agreement may be terminated by the Employee upon notice to the Company of any event constituting “Good Reason” as defined
herein.

 

(ii)        As
used herein, the term “Good Reason” means: the failure of the Company to pay Employee’s compensation in
accordance with this Agreement without the prior written consent of the Employee; a material reduction in the Employee’s Base Salary;
a material reduction in the Employee’s bonus opportunity; any material breach by the Company of any material provision of this Agreement
or any material provision of any other agreement between the Employee and the Company; or a material, adverse change in the Employee’s
title, authority, duties, or responsibilities (other than temporarily while the Employee is physically or mentally incapacitated or as
required by applicable law). Provided, however, that the Employee shall not be deemed to have Good Reason pursuant to this provision unless
the Employee gives the Company written notice that the specified conduct or event has occurred and making specific reference to this Section
5.5 and the Company fails to cure such conduct or event within thirty (30) days of receipt of such notice.

 

(iii)       In the event the Employee terminates this
Agreement under this Section 5.5, Employee shall be entitled to the severance benefits described under Section 5.2, pertaining to Severance
Benefits, provided that the Employee elects to comply with the Restrictive Covenants set forth in Section 6. If Employee disavows the
Restrictive Covenants and chooses to compete with the Company in violation of the covenants set forth in Section 6, then Employee forfeits
all Severance Benefits provided in Section 5.2.

 

5.6       Death or Disability.
In the event of termination of employment by reason of death or Disability, the Employee (or his estate, as applicable) shall be entitled
to Base Salary and benefits through the date of termination. Other benefits shall be determined in accordance with the benefit plans maintained
by the Company, and the Company shall have no further obligation hereunder. For purposes of this Agreement, “Disability”
means a physical or mental disability or infirmity of the Employee that, in the sole opinion of the Board, prevents (with or without reasonable
accommodation) the normal performance of substantially all his material duties as an employee of the Company, which disability or infirmity
shall exist for any continuous period of 90 days.

 

    	 	5	 

     

    

 

5.7       Resignation
of Positions. Upon termination of Employee’s employment with the Company for any reason, the Employee agrees to immediately
resign from all positions and offices in which he is then serving the Company and its subsidiaries.

 

6.       CONFIDENTIALITY;
NONSOLICITATION AND NONCOMPETITION

 

6.1       Confidentiality.
The Employee covenants and agrees with the Company that he will not any time during the Employment Term and thereafter, except in performance
of his obligations to the Company hereunder or with the prior written consent of the Company, directly or indirectly, disclose any secret
or Confidential Information that he may learn or has learned by reason of his association with the Company. The term “Confidential
Information” includes information not previously made generally available to the public by the Company, with respect to
the Company’s products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, product price lists, customer lists, technical information, financial information (including the revenues,
costs or profits associated with any of the Company’s products), business and strategic plans, prospects or opportunities, but shall
exclude any information which the Company intentionally makes generally available to the public other than as a result of disclosure by
the Employee in violation of this Section 6.1. The Employee will be released of his obligations under this Section 6.1 to the extent the
Employee is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority
having jurisdiction in the matter or under subpoena or other process of law provided that the Employee provides the Company with prompt
written notice of such requirement. In addition, the Employee will not be in breach of any obligations under Section 6.1, and will not
be  criminally or civilly liable under any Federal or state trade secret law, for the disclosure of Confidential Information that
is made in confidence to a Federal, state or local government official, either directly or indirectly, or to an attorney, solely for the
purpose of reporting or investigating a suspected violation of law involving the Company or is made in a complaint or other document filed
in a lawsuit or other proceeding, if such filing is made under seal.  If the Employee  files a lawsuit for retaliation by the
Company  for reporting a suspected violation of law involving the Company, the Employee may disclose Confidential Information, including
trade secrets, to his attorney and use such Confidential Information in the court proceeding if such Confidential Information is filed
under seal.

 

6.2       Acknowledgment
of Company Assets. The Employee acknowledges that the Company, at the Company’s expense, has acquired, created and maintains,
and will continue to acquire, create and maintain, significant goodwill with its current and prospective customers, strategic partners,
vendors and employees and significant Confidential Information, and that such goodwill and Confidential Information is valuable property
of the Company. The Employee further acknowledges that to the extent such goodwill and Confidential Information will be generated through
the Employee’s efforts, such efforts will be funded by the Company and the Employee will be fairly compensated for such efforts.
The Employee acknowledges that all goodwill developed by the Employee relative to the Company’s customers, strategic partners, vendors
and employees, and all Confidential Information developed by the Employee, shall be the sole and exclusive property of the Company and
shall not be personal to the Employee. Accordingly, in order to afford the Company reasonable protection of such goodwill and of the Company’s
Confidential Information, the Employee agrees as follows:

 

    	 	6	 

     

    

 

6.2.1.       No
solicitation; Non-Interference. During the Employment Term and for a period of two years after termination of employment for any reason
(such two-year period, the “Post-Termination Restrictive Covenant Period”), the Employee shall not, directly
or indirectly, as an investor, lender, officer, director, manager, or as an employee, associate, consultant or agent of any individual
or entity, or in any other capacity: (i) solicit or endeavor to entice away from the Company any individual who is employed by the
Company; (ii) solicit or endeavor to entice away from the Company any entity who is, or was within the then most recent 12-month
period, a customer (or reasonably anticipated to become a customer) of the Company; (iii) interfere with the business relationship
between the Company and any customer, strategic partner, supplier or vendor of the Company or attempt to persuade or encourage any
customer, strategic partner, supplier or vendor of the Company to cease doing business with the Company or to engage in any activity competitive
with the Company; or (iv) make or publish any disparaging remarks about the Company, its products, prospects or management.

 

6.2.2       Change
of Control Activity. The Employee agrees that during the Post-Termination Restrictive Covenant Period, the Employee shall not, directly
or indirectly, or in any individual or representative capacity, engage or otherwise participate in any Change of Control Activity with
respect to the Company. “Change of Control Activity” means (a) effect, seek, offer or propose (whether publicly
or otherwise) to effect, or cause or participate in, or in any way assist any other individual or entity to effect, seek, offer or propose
(whether publicly or otherwise) to effect or participate in: (i) any acquisition of any securities (or beneficial ownership thereof) or
all or substantially all of the assets of the Company, (ii) any tender or exchange offer, merger or other business combination involving
the Company, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the
Company, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities
and Exchange Commission) or consents to vote any voting securities of the Company; (b) form, join or in any way participate in a “group”
(as defined under the Securities Exchange Act of 1934, as amended) with respect to the securities of the Company; (c) make any public
announcement with respect to, or submit an unsolicited proposal for or offer of (with or without condition), any extraordinary transaction
involving the Company or its securities or assets; or (d) enter into any discussions or arrangements with any third party with respect
to any of the foregoing.

 

6.2.3.       Non-Competition.
During the Employment Term and during the Post-Termination Restrictive Covenant Period, the Employee shall not, directly or indirectly,
as an investor, lender, officer, director, manager, or as an employee, associate, consultant or agent of any individual or entity, or
in any other capacity, (other than as an investor owning not more than a 1% interest in a publicly-traded entity), engage in the Restricted
Business (as hereinafter defined) anywhere in the world other than on behalf of the Company. The Employee acknowledges and agrees that
the Company conducts business throughout the world, that the Company’s legitimate and protectable business interests are throughout
the world, and therefore this Section 6.2.3 is intended to prohibit competitive activities by the Employee throughout the world.
 “Restricted Business” means research and product development with respect to, the manufacture, distribution,
marketing or sale of, or the licensing of intellectual property related to, tobacco products, hemp products, cannabis products, cannabinoids
or other products made from or related to the tobacco plant or the cannabis plant, including but not limited to hemp, hemp/cannabis, industrial
hemp, marijuana, marijuana/cannabis, Cannabis sativa, Cannabis indica, and Cannabis ruderalis.

 

    	 	7	 

     

    

 

6.3       Exclusive
Property. The Employee confirms that all Confidential Information is and shall remain the exclusive property of the Company. All business
records, and documents (whether in paper or electronic media) kept or made by Employee relating to the business of the Company shall be
and remain the property of the Company. Upon termination of the Employee’s employment with the Company for any reason, the Employee
promptly deliver to the Company all of the following that are in the Employee’s possession or under his control: (i) all computers,
telecommunication devices and other tangible property of the Company and its affiliates, and (ii) all documents and other materials, in
whatever form, which include Confidential Information or which otherwise relate in whole or in part to the present or prospective business
of the Company, including but not limited to, drawings, graphs, charts, specifications, notes, reports, memoranda, and computer disks
and tapes, and all copies thereof.

 

6.4       Injunctive
Relief; Tolling. Without intending to limit the remedies available to the Company, the Employee acknowledges that a breach of any
of the covenants contained in this Section 6 may result in material and irreparable injury to the Company or its affiliates or subsidiaries
for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in
the event of such a breach or threat thereof, the Company shall be entitled to seek a temporary restraining order and/or a preliminary
or permanent injunction restraining the Employee from engaging in activities prohibited by this Section 6 or such other relief as may
be required specifically to enforce any of the covenants in this Section 6. If for any reason, it is held that the restrictions under
this Section 6 are not reasonable or that consideration therefore is inadequate, such restrictions shall be interpreted or modified
to include as much of the duration and scope identified in this Section 6 as will render such restrictions valid and enforceable
including, if applicable, modifications to the geographic scope of Section 6.2.3. The Post-Termination Restrictive Covenant Period
will not include any period during which the Employee is in violation of Sections 6.1, 6.2.1, 6.2.2 or 6.2.3.

 

6.5       Communication
to Third Parties. The Employee agrees that the Company shall have the right to communicate the terms of this Section 6 to any third
parties, including but not limited to, any prospective employer of the Employee. The Employee waives any right to assert any claim for
damages against Company or any officer, employee or agent of Company arising from such disclosure of the terms of this Section 6.

 

6.6       Independent
Obligations. The provisions of this Section 6 shall be independent of any other provision of this Agreement. The existence of any
claim or cause of action by the Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense of the enforcement of this Section 6 by the Company.

 

    	 	8	 

     

    

 

6.7       Non-Exclusivity.
The Company’s rights and the Employee’s obligations set forth in this Section 6 and in Section 7 are in addition to, and not
in lieu of, all rights and obligations provided by applicable statutory or common law.

 

7.       INVENTIONS

 

The term “Invention” means any discovery,
concept or idea, whether or not patentable or copyrightable, including but not limited to processes, methods, formulae and techniques,
as well as improvements thereof or know- how related thereto.  The Employee will promptly and fully inform the Company in writing
of any Invention which is conceived, made, or reduced to practice by the Employee, either solely or jointly with another or others, during
the Employment Term or within 12 months after termination of the Employee’s employment for any reason, setting forth in detail
the procedures employed and the results achieved.  The Company and/or its nominee or assign will be the sole owner, without payment
of royalty or any other compensation to the Employee, of any such Invention which (i) is conceived, made or reduced to practice with
the use of Confidential Information or the Company’s equipment, facilities, materials, personnel or other resources, or (ii) at
the time it is conceived, made or reduced to practice relates to the Company’s present or prospective business or actual or demonstrably
anticipated research or development, or (iii) is the result of any work performed by the Employee for the Company.  With respect
to each such Invention of which the Company is the owner, the Employee will execute and deliver promptly to the Company (without charge
to the Company but at its expense) such written instruments and do such other acts as may be necessary in the opinion of the Company to
obtain and maintain United States and/or foreign letters patent or United States and/or foreign copyright registrations and to vest the
entire right and title thereto in the Company.

 

8.       CERTAIN
PAYMENTS

 

Notwithstanding anything in this Agreement to the
contrary, if any amounts due to the Employee under this Agreement and any other plan or program of the Company constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)),
then the aggregate of the amounts constituting the parachute payment shall be reduced to an amount that will equal three times his “base
amount” (as defined in Section 280G(b)(3) of the Code) less $1.00. The determination to be made with respect to this Section 8 shall
be made by an accounting firm jointly selected by the Company and the Employee and paid by the Company, and which may be the Company’s
independent auditors.

 

    	 	9	 

     

    

 

9.       MISCELLANEOUS.

 

9.1       Notices.
All notices or communications hereunder shall be in writing, addressed as follows:

 

To the Company,

 

22nd Century Group, Inc.

500 Seneca Street, Suite 507

Buffalo, New York 14204

Attention: General Counsel

 

To the Employee, at such address maintained in the
Company’s records as the Employee’s primary residential address.

 

All such notices shall be conclusively deemed to be received and shall
be effective, (i) if sent by hand delivery, upon receipt, (ii) if sent by nationally recognized overnight carrier, upon receipt;
or (iii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.

 

9.2       Severability.
Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

9.3       Assignment.
Neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Employee.

 

9.4       Entire
Agreement. This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements
or understandings between the Company and the Employee relating to the subject matter hereof. This Agreement may be amended at any time
by mutual written agreement of the parties hereto.

 

9.5       Withholding.
The payment of any amount pursuant to this Agreement shall be subject to applicable withholding and payroll taxes, and such other deductions
as may be required under the applicable law or Company’s employee benefits plans, if any.

 

9.6       Governing
Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable
to contracts executed in and to be performed entirely within that state. The Company and the Employee agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Employee’s
employment with the Company will be brought only to the exclusive jurisdiction of the courts of the State of New York or the federal courts
located in the State of New York, in each case located in Buffalo, New York, and each of the Company and the Employee hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought
in an inconvenient forum.  Further, the Company and the Employee agree  that, after a legal dispute is before a court as specified
in this Section 9.6, and during the pendency of such dispute before such court, all actions, suits, or proceedings with respect to such
dispute or any other dispute, including without limitation, any counterclaim, cross-claim or interpleader, will be subject to the exclusive
jurisdiction of such court.

 

    	 	10	 

     

    

 

9.7       Costs
of Enforcement.  In the event of a dispute or action to enforce the terms of this Employment Agreement, the prevailing party
shall be entitled to its costs and expenses incurred in connection therewith, including all attorneys' fees.

 

9.8       Legal
Advice.  The Employee hereby represents and warrants to the Company that he has had the opportunity to seek independent legal
advice prior to the execution and delivery of this Agreement and that he has availed himself of that opportunity prior to signing this
Agreement and that he is signing this Agreement voluntarily without any undue pressure. Employee represents that he: (i) is familiar with
the covenants set forth in Section 6 and (ii) is fully aware of his obligations hereunder, including, without limitation, the reasonableness
of the length of time, scope and geographic coverage of such covenants.

 

9.9       Absence
of Conflicting Obligations. The Employee represents and warrants that his execution, and delivery of this Agreement, and his performance
of services for the Company as contemplated by this Agreement, do not conflict with or breach any contractual, fiduciary or other legal
obligation owed by the Employee to any other individual or entity.

 

9.10       Counterparts. 
This Employment Agreement may be executed in multiple counterparts (including by means of electronic signatures, or facsimile or PDF signature
pages), any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute
one and the same instrument.

 

[Signature page follows]

 

    	 	11	 

     

    

 

IN WITNESS WHEREOF, the Company has caused this Agreement
to be duly executed and the Employee has hereunto set his hand, as of the day and year first above written.

 

22nd CENTURY GROUP, INC.

 

 

By: /s/ James A. Mish

Name: James A. Mish

Title: Chief Executive Officer

 

/s/ Richard Fitzgerald

Richard Fitzgerald

 

    	 	12	 

     

    

 

EXHIBIT A

 

22nd CENTURY GROUP, INC.

TERMINATION AGREEMENT AND RELEASE

 

In consideration of the payments and benefits to
be provided to me by 22nd Century Group, Inc. (the “Company”) pursuant to Section 5.2.1 of the Employment Agreement
between the Company and me dated November 15, 2021 (the “Employment Agreement”), I agree as follows:

 

1.                 
Termination. My employment with the Company is terminated effective ____________ and I will not thereafter apply for employment
with the Company.

 

2.                 
Release. On behalf of myself and my heirs, successors, executors, administrators, trustees, legal representatives, agents
and assigns, I fully and forever release and discharge the Company, its subsidiaries, divisions and affiliates and its and all of their
predecessors, successors, assigns, directors and officers (collectively “Released Parties”) from any and all
claims, demands, suits, causes of action, obligations, promises, damages, fees, covenants, agreements, attorneys’ fees, debts, contracts
and torts of every kind whatsoever, known or unknown, at law or in equity, foreseen or unforeseen, which against the Released Parties
I ever had, now have or which I may have for, upon or by reason of any matter, cause or thing whatsoever relating to or arising from my
employment with the Company or the termination thereof, specifically including, but not limited to, all claims under the following: the
Civil Rights Acts of 1866, 1871, 1964 and 1991; the Age Discrimination in Employment Act of 1967; the Older Workers’ Benefit Protection
Act of 1990; the Americans with Disabilities Act; the Equal Pay Act; the Employee Retirement Income Security Act; the Worker Adjustment
Retraining Notification Act; the Family and Medical Leave Act; the National Labor Relations Act; the Occupational Safety and Health Act;
the New York State Human Rights Law; the New York City Human Rights Law; the New York State Labor Law; §§ 120 and 241 of the
New York State Workers’ Compensation Law; any contract of employment, express or implied; and any and all other federal, state or
local laws, rules or regulations.

 

I hereby waive the right to receive any personal
relief (i.e. monetary or equitable relief) as a result of any lawsuit or other proceeding brought by the EEOC or any other governmental
agency, based on or related to any of the matters from which I have released the Released Parties. I also will take all actions necessary,
if any, now or in the future, to make this Release effective.

 

The foregoing release shall not operate to release
the Company from its obligations to make payments and provide benefits as provided under Section 5.2.1 of the Employment Agreement.

 

In connection with the foregoing release (i) I
acknowledge that the payments and benefits under Section 5.2.1 of the Employment Agreement are good and sufficient consideration to which
I would not otherwise be entitled but for my execution and delivery to the Company of this instrument, (ii) I acknowledge that I have
been advised by the Company to consult with an attorney before signing this instrument, (iii) the Company has allowed me at least twenty-one
(21) days from the date I first receive this instrument to consider it before being required to sign it and return it to the Company,
and (iv) I may revoke this instrument, in its entirety, within seven (7) days after signing it by delivering written notice of such revocation
to the Company on or before 5:00 p.m. on the seventh day of such revocation period.

 

IN WITNESS WHEREOF, the undersigned has executed
this instrument as of the ____ day of ___________.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00337-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00337-of-00352.parquet"}]]