Document:

atlw_ex101.htm

EXHIBIT 10.1

 

Airborne Wireless Network

 

INDEMNIFICATION AGREEMENT

 

This Agreement is made as of [DATE], by and between Airborne Wireless Network, a Nevada corporation (the “Company”), and [NAME] (“Indemnitee”), a director and/or officer of the Company.

 

RECITALS

 

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, it is the express policy of the Company to indemnify its directors and officers so as to provide them with the maximum possible protection permitted by law; 

 

WHEREAS, Indemnitee does not regard the protection available under the Company’s Articles of Incorporation and Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve or remain as director and/or officer without adequate protection; and

 

WHEREAS, the Company desires Indemnitee to serve, or continue to serve, as a director and/or officer of the Company.

 

NOW, THEREFORE, in consideration of the foregoing and other valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Company and Indemnitee hereby agree as follows:

 

1. Indemnitee’s Agreement to Serve. Indemnitee agrees to serve and/or continue to serve as a director and/or officer of the Company in the same capacity or capacities in which Indemnitee is serving on the date hereof for at least 10 days from the date hereof; provided, however, that nothing contained in this Agreement is intended to or shall create any obligation of the Company to continue to retain Indemnitee as officer or the obligations of the shareholders to retain Indemnitee as a director during such period.

 

2. Definitions. As used in this Agreement:

 

(a) The term “Proceeding” shall include any threatened, pending or completed action, suit or proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, and any appeal therefrom.

 

(b) The term “Corporate Status” shall mean the status of a person who is or was a director and/or officer of the Company, or is or was serving, or has agreed to serve, at the request of the Company, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, limited liability company, trust or other enterprise.

 

	 
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(c) The term “Expenses” shall include, without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees of experts, reasonable travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and other disbursements or expenses of the types customarily incurred in connection with investigations, judicial or administrative proceedings or appeals, but shall not include the amount of judgments, fines or penalties against Indemnitee or amounts paid in settlement in connection with such matters.

 

(d) References to an “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner she reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

3. Indemnification in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee was or is a party to, or is threatened to be made a party to or otherwise involved in, any Proceeding (other than a Proceeding by or in the right of the Company to procure a judgment in its favor) by reason of Indemnitee’s Corporate Status or by reason of any action alleged to have been taken or omitted in connection therewith, against all Expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding, if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal Proceeding, had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

4. Indemnification in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee was or is a party to, or is threatened to be made a party to or otherwise involved in, any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status or by reason of any action alleged to have been taken or omitted in connection therewith, against all Expenses and, to the extent permitted by law, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding, if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests or the Company, except that no indemnification shall be made under this Section 4 in respect to any claim, issue or matter as to which Indemnitee shall have been adjudged by a court of competent jurisdiction, after the exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the Company, unless and only to the extent that the court before which the Proceeding was brought or other court of competent jurisdiction shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such Expenses and other amounts as such court shall deem proper.

 

	 
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5. Exceptions to Right of Indemnification. Notwithstanding anything to the contrary in this Agreement: (a) except as set forth in Section 10, the Company shall not indemnify Indemnitee in connection with a Proceeding (or part thereof) initiated by Indemnitee unless the initiation thereof was approved by the Board of Directors of the Company; (b) the Company shall not indemnify Indemnitee to the extent Indemnitee is reimbursed from the proceeds of insurance, and in the event the Company makes any indemnification payments to Indemnitee and Indemnitee is subsequently reimbursed from the proceeds of insurance, Indemnitee shall promptly refund such indemnification payments to the Company to the extent of such insurance reimbursement; and (c) unless otherwise ordered by a court of competent jurisdiction, the Company shall not indemnify Indemnitee if a court of competent jurisdiction in a final adjudication determines that Indemnitee’s acts or omissions involved intentional misconduct, fraud or a knowing violation of law which was material to the Proceeding.

 

6. Indemnification of Expenses. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. Without limiting the foregoing, if any Proceeding or any claim, issue or matter therein is disposed of, on the merits or otherwise (including a disposition without prejudice), without (a) the disposition being adverse to Indemnitee, (b) an adjudication that Indemnitee was liable to the Company, (c) a plea of guilty or nolo contendere by Indemnitee, (d) an adjudication that Indemnitee did not act in good faith and in a manner she reasonably believed to be in or not opposed to the best interests of the Company, and (e) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe his or her conduct was unlawful, Indemnitee shall be considered for the purposes of this Agreement to have been wholly successful with respect thereto. In addition, notwithstanding any other provision contained in this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness to any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified and held harmless from all Expenses actually and reasonably incurred by Indemnitee in connection therewith.

 

	 
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7. Notification and Defense of Claims. As a condition precedent to Indemnitee’s right to be indemnified, Indemnitee agrees to notify the Company in writing as soon as reasonably practicable of any Proceeding for which indemnity will or could be sought by Indemnitee and provide the Company with a copy of any summons, citation, subpoena, complaint, indictment, information or other document relating to such Proceeding with which Indemnitee is served; provided, however, that the failure to give such notice shall not relieve the Company of its obligations to Indemnitee under this Agreement, except to the extent, if any, that the Company is actually and materially prejudiced by the failure to give such notice. With respect to any Proceeding of which the Company is so notified, the Company shall be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to Indemnitee. After notice from the Company to Indemnitee of its election so to assume such defense, the Company shall not be liable to Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with such Proceeding, other than as provided below in this Section 7. I ndemnitee shall have the right to employ Indemnitee’s own counsel in connection with such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Indemnitee unless (a) the employment of counsel by Indemnitee has been authorized by the Company, (b) counsel to Indemnitee shall have reasonably concluded and advised the Company in writing that there is a conflict of interest on any significant issue between the Company and Indemnitee in the conduct of the defense of such Proceeding, or (c) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel for Indemnitee shall be at the expense of the Company, except as otherwise expressly provided by this Agreement. The Company shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company or as to which counsel for Indemnitee shall have reasonably made the conclusion and given the notice provided for in clause (b) above. The Company shall not be required to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent. The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee will unreasonably withhold its consent to any proposed settlement.

 

8. Advancement of Expenses. Any Expenses incurred by Indemnitee in connection with any such Proceeding to which Indemnitee was or is a witness or a party or is threatened to be a party by reason of his or her Corporate Status or by reason of any action alleged to have been taken or omitted in connection therewith shall be paid by the Company in advance of the final disposition of such matter; provided, however, that the payment of such Expenses incurred by Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined by a court of competent jurisdiction that Indemnitee is not entitled to be indemnified by the Company as authorized in this Agreement; and further provided that no such advancement of Expenses shall be made if it is determined in accordance with the terms of this Agreement that (a) Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company, or (b) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment. If, pursuant to the terms of this Agreement, Indemnitee is not entitled to be indemnified with respect to such Proceeding, then such Expenses shall be repaid by Indemnitee within sixty days after the receipt by Indemnitee of the written request by the Company for Indemnitee to make payments to the Company.

 

	 
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9. Procedure for Indemnification. In order to obtain indemnification pursuant to Section 3, 4, 6 or 8, Indemnitee shall submit to the Company a written request, including in such request such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification or advancement of Expenses. Any such indemnification or advancement of Expenses shall be made promptly by the Company and in any event within 60 days after receipt by the Company of the written request of Indemnitee, unless with respect to requests under Section 3 or 4 the Company determines within such 60-day period that Indemnitee did not meet the applicable standard of conduct set forth in Section 3 or 4, as the case may be. Such determination, and any determination pursuant to Section 8 that advanced Expenses must be repaid to the Company, shall be made in each instance (a) by the Company’s Board of Directors by majority vote of a quorum consisting of directors who are not, and were not, parties to the Proceeding (“Disinterested Directors”), (b) if a majority vote of a quorum consisting of Disinterested Directors so orders, by independent legal counsel (selected by the Disinterested Directors) in a written opinion, (c) if a majority vote of a quorum of Disinterested Directors cannot be obtained, by independent legal counsel (selected by the Disinterested Directors) in a written opinion, or (d) by the stockholders of the Company, if that option is selected by the Disinterested Directors. To the extent permitted by applicable law, such counsel may be regular legal counsel to the Company. If there are no Disinterested Directors, independent legal counsel shall be selected by a majority vote of the directors then in office.

 

10. Remedies. The right to indemnification and advancement of Expenses as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. Unless otherwise required by law, the burden of proving that indemnification is not appropriate shall be on the Company. Neither the failure of the Company to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company pursuant to Section 9 that Indemnitee has not met such applicable standard of conduct shall create a presumption that Indemnitee has not met the applicable standard of conduct. Indemnitee’s expenses, of the type described in the definition of “Expenses” in Section 2(c), actually and reasonably incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such Proceeding also shall be reimbursed by the Company.

 

11. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties or amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses, judgments, fines, penalties or amounts paid in settlement to which Indemnitee is entitled.

 

12. Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action reasonably necessary to secure such rights, including execution of such documents as are reasonably necessary to enable the Company to bring suit to enforce such rights.

 

	 
	
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13. Term of Agreement. This Agreement shall continue until and terminate upon the latest of (a) six years after the date that Indemnitee shall have ceased to serve as a director and/or officer of the Company or, at the request of the Company, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; (b) the expiration of all applicable statute of limitations periods for any claim which may be brought against Indemnitee in a Proceeding as a result of his or her Corporate Status; or (c) the final termination of all Proceedings pending on the date set forth in clauses (a) or (b) in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 relating thereto.

 

14. Indemnification Hereunder Not Exclusive. The indemnification and advancement of Expenses provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under the Company’s Articles of Incorporation or Bylaws, any agreement, any vote of stockholders or Disinterested Directors, the applicable law of the State of Nevada, and any other law (common or statutory) or otherwise, both as to action in Indemnitee’s official corporate capacity and as to action in another capacity while holding office for the Company. Nothing contained in this Agreement shall be deemed to prohibit the Company from purchasing and maintaining insurance, at its expense, to protect itself or Indemnitee against any expense, liability or loss incurred by it or Indemnitee in any such capacity, or arising out of Indemnitee’s status as such, whether or not Indemnitee would be indemnified against such expense, liability or loss under this Agreement; provided that the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise, including as provided in Section 5. 

 

15. No Special Rights. Nothing in this Agreement shall confer upon Indemnitee any right to continue to serve as a director or officer of the Company for any period of time or at any particular rate of compensation.

 

16. Savings Clause. If this Agreement or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect to any Proceeding to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the fullest extent permitted by applicable law.

 

17. Counterparts; Signatures. This Agreement may be executed in two counterparts, both of which together shall constitute the original instrument. This Agreement may be executed by facsimile signatures or by signatures e-mailed in PDF format.

 

18. Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the estate, heirs, executors, administrators and personal representatives of Indemnitee.

 

	 
	
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19. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. References to “Sections” refer to Sections of this Agreement unless otherwise stated. 

 

20. Amendment and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties to this Agreement. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision of this Agreement nor shall any such waiver constitute a continuing waiver.

 

21. Notices. All notices, requests, demands and other communications (collectively, “Notices”) given pursuant to this Agreement shall be in writing, and shall be delivered by personal service, courier, email transmission of a pdf format data file or by United States first class, registered or certified mail, postage prepaid, addressed: (a) if to the Company, at its corporate offices to the attention of the Chief Executive Officer and the Chief Financial Officer of the Company (or if such Notice is from the Chief Executive Officer or the Chief Financial Officer (and they are different persons), to the other officer and to the Board of Directors (and if sent by email, to the latest email address the sender has for the recipient or, if the recipient is an entity, for the officer(s) or other person designated to receive notices). Any Notice, other than a Notice sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section.

 

22. Applicable Law. This Agreement is governed by and is to be construed in accordance with the laws of the State of Nevada without giving effect to any provisions thereof relating to conflict of laws.

 

23. Enforcement. The Company expressly confirms and agrees that it has entered into this Agreement in order to induce Indemnitee to continue to serve as a director and/or officer of the Company and acknowledges that Indemnitee is relying upon this Agreement in continuing in such capacity.

 

[Remainder of page intentionally left blank]

 
	 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

	
 
	
AIRBORNE WIRELESS NETWORK 

		
	
 
	
By: ________________________________________ 

	
 
	
Print Name: __________________________________ 

	
 
	
Title: _______________________________________ 

		
		___________________________________________
		
Signature of Indemnitee

	
 
	
 

Print Name: __________________________________

 

Address: ____________________________________ 

		
		___________________________________________

 

 

	8atlw_ex102.htm

EXHIBIT 10.2

 

AIRBORNE WIRELESS NETWORK 

 

2017 STOCK OPTION PLAN 

 

1. PURPOSES OF THIS PLAN

 

The purposes of the 2017 Stock Option Plan (this “Plan”) of Airborne Wireless Network, a Nevada corporation (the “Company”), are to:

 

1.1 Encourage selected employees, directors, consultants and advisers to improve operations and increase profits of the Company;

 

1.2 Encourage selected employees, directors, consultants and advisers to accept or continue employment or association with the Company or its Affiliates (as defined below); and

 

1.3 Increase the interest of selected employees, directors, consultants and advisers in the Company’s welfare through participation in the growth in value of the Common Stock of the Company (the “Common Stock”).

 

2. TYPES OF AWARDS; ELIGIBLE PERSONS

 

2.1 Options granted under this Plan (“Options”) may be “incentive stock options” (“ISOs”) intended to satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”), or “non-qualified options” (“NQOs”). Every person who at the date of grant of an Option is an employee of the Company or of any Affiliate (as defined below) of the Company is eligible to receive NQOs or ISOs under this Plan. Every person who at the date of grant is a consultant or adviser to, or non-employee director of, the Company or any Affiliate (as defined below) of the Company is eligible to receive NQOs under this Plan. The term “Affiliate” as used in this Plan means a parent or subsidiary corporation as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term “employee” includes a director who is an employee of the Company. The term “consultant” includes persons employed by, or otherwise affiliated with, a consultant. The term “adviser” includes persons employed by, or otherwise affiliated with, an adviser.

 

2.2 The Administrator may approve the grant of Options under this Plan to persons who are expected to become employees, directors, consultants or advisers of the Company, but are not employees, directors, consultants or advisers at the date of approval.

 

2.3 Except as otherwise expressly set forth in this Plan, no right or benefit under this Plan or under any Option shall be subject in any manner to anticipation, alienation, hypothecation, or charge, and any such attempted action shall be void. No right or benefit under this Plan or under any Option shall in any manner be liable for or subject to debts, contracts, liabilities, or torts of any optionee or any other person except as otherwise may be expressly required by applicable law.

 

	 
	
	

 
	 

 

3. STOCK SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS

 

Subject to the provisions of Section 6.1.1 of this Plan, the total number of shares of Common Stock that may be issued pursuant to the exercise of Options shall not exceed 10,000,000 shares. The shares subject to an Option granted under this Plan that expires, terminates or is cancelled unexercised shall become available again for grants under this Plan. Where the exercise price of an Option is paid by means of the optionee’s surrender of previously owned shares of Common Stock or the Company’s withholding of shares otherwise issuable upon exercise of the Option as permitted herein, only the net number of shares issued and which remain outstanding in connection with such exercise shall be deemed “issued” and no longer available for issuance under this Plan. No Covered Employee (as defined in Section 162(m)(3) of the Code) or non-employee director shall be granted Options during any twelve-month period covering more than 5,000,000 shares.

 

4. ADMINISTRATION

 

4.1 This Plan shall be administered by the Board of Directors of the Company (the “Board”) or by a committee (the “Committee”) to which administration of this Plan, or of part of this Plan, is delegated by the Board (in either case, the “Administrator”). The Board shall appoint and remove members of the Committee in its discretion in accordance with applicable laws. If necessary in order to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or Section 162(m) of the Code, or any successor statute or regulation, the Committee shall, in the Board’s discretion, be comprised solely of “non-employee directors” within the meaning of Rule 16b-3 or “outside directors” within the meaning of Section 162(m) of the Code. The foregoing notwithstanding, the Administrator may delegate non-discretionary administrative duties to such employees of the Company as it deems proper and the Board, in its absolute discretion, may at any time and from time to time exercise any and all rights and duties of the Administrator under this Plan.

 

4.2 Subject to the other provisions of this Plan, the Administrator shall have the authority, in its discretion: (a) to grant Options; (b) to determine the fair market value of the Common Stock subject to Options; (c) to determine the exercise price of Options granted, but which shall be no less than the fair market value at the date of grant; (d) to determine the persons to whom, and the time or times at which, Options shall be granted, and the number of shares subject to each Option; (e) to construe and interpret the terms and provisions of this Plan and of any option agreement and all Options granted under this Plan; (f) to prescribe, amend, and rescind rules and regulations relating to this Plan; (g) to determine the terms and provisions of each Option granted (which need not be identical), including but not limited to, the time or times at which Options shall be exercisable; (h) with the consent of the optionee, to modify or amend any Option; (i) to reduce the exercise price of any Option to not less than the fair market value as of the date of reduction; (j) to accelerate or defer (with the consent of the optionee) the exercise date of any Option; (k) to authorize any person to execute on behalf of the Company any instrument evidencing the grant of an Option; (l) to determine the duration and purposes of leaves of absence which may be granted to participants without constituting a termination of their employment for the purposes of this Plan; and (m) to make all other determinations deemed necessary or advisable for the administration of this Plan or any option agreement or Option.

 

4.3 All questions of interpretation, implementation and application of this Plan or any option agreement or Option shall be determined by the Administrator, which determination shall be final and binding on all persons.

 

	 
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5. OPTION AGREEMENTS

 

5.1 Each Option shall be evidenced by a written stock option agreement, in form satisfactory to the Administrator, executed by the Company and the person to whom such Option is granted. In the event of a conflict between the terms or conditions of an option agreement and the terms and conditions of this Plan, the terms and conditions of this Plan shall govern.

 

5.2 Each stock option agreement shall specify whether the Option it evidences is an NQO or an ISO, provided, however, all Options granted under this Plan to non-employee directors, consultants and advisers of the Company are intended to be NQOs.

 

6. TERMS AND CONDITIONS OF OPTIONS

 

Each Option granted under this Plan shall be subject to the terms and conditions set forth in Section 6.1. NQOs shall also be subject to the terms and conditions set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2.

 

6.1 Terms and Conditions to Which All Options Are Subject. All Options granted under this Plan shall be subject to the following terms and conditions:

 

6.1.1 Changes in Capital Structure. Unless otherwise provided in the stock option agreement evidencing the Option, subject to Section 6.1.3, if the stock of the Company is changed by reason of a stock split, reverse stock split, stock dividend, recapitalization, reclassification or other distribution of the Company’s securities without consideration, or if the Company effects a spin-off of the Company’s subsidiary, appropriate adjustments shall be made by the Administrator, in its sole discretion, in (a) the number and class of shares of stock subject to this Plan and each Option outstanding under this Plan, and (b) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustments.

 

6.1.2 Mergers, etc. In the event of any capital reorganization, any reclassification of the Common Stock of the Company (other than recapitalization described in Section 6.1.1 of this Plan), or the consolidation or merger of the Company, upon exercise of any Option following such capital reorganization, reclassification, consolidation or merger, the optionee shall receive the securities, cash or other property that the optionee would have received had the optionee exercised the Option immediately prior to such capital reorganization, reclassification, consolidation or merger. 

 

	 
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6.1.3 Corporate Transactions. 

 

(a) Unless otherwise provided in the stock option agreement evidencing the Option, in the event of a Corporate Transaction, the Administrator, in its sole discretion, and prior to consummation of the Corporate Transaction, may (i) terminate any outstanding Options effective immediately prior to the consummation of such Corporate Transaction, (ii) permit exercise of any Options prior to their termination, even if such Options would not otherwise have been exercisable, and/or (iii) provide that all or certain of the outstanding Options shall be assumed or an equivalent option substituted by an applicable successor corporation or entity or any Affiliate of the successor corporation or entity. In addition, in the event the Corporate Transaction involves a merger or consolidation in which the holders of Common Stock receive cash for their shares, the Administrator may provide that the Options may be exercised contingent upon the closing of such merger or consolidation and that, with respect to Options which have an exercise price less than the per share cash merger consideration the optionee would receive upon the closing or such merger or consolidation, the optionees shall not be required to deliver the exercise price but the exercise price shall be offset against the merger consideration. 

 

(b) For purposes of this Plan, a “Corporate Transaction” means (i) a liquidation or dissolution of the Company; (ii) a merger or consolidation of the Company with or into another entity; or (iii) a sale of all or substantially all of the assets of the Company in a single transaction or a series of related transactions.

 

6.1.4 Vesting; Time of Option Exercise. The Administrator may establish a vesting schedule in connection with any option based on time and/or performance criteria. In any case, no Option shall be exercisable until a written stock option agreement in form satisfactory to the Company is executed by the Company and the optionee.

 

6.1.5 Option Grant Date. The date of grant of an Option shall be the date specified by the Administrator in its approval of the Option or, if no such date is specified, the date of such approval. 

 

6.1.6 Non-Transferability of Option Rights. Except with the express written approval of the Administrator, which approval the Administrator is authorized to give only with respect to NQOs, no Option granted under this Plan shall be assignable or otherwise transferable by the optionee except by will or by the laws of descent and distribution. During the life of the optionee, an Option shall be exercisable only by the optionee. 

 

6.1.7 Payment. Except as provided below, payment in full, in cash, shall be made for all stock purchased at the time written notice of exercise of an Option is given to the Company. Subject to the terms of the stock option agreement granting the Option, the Administrator, in the exercise of its absolute discretion after considering any tax, accounting and financial consequences, may authorize any one or more of the following additional methods of payment:

 

(a) Acceptance of the optionee’s full recourse promissory note for all or part of the Option price, payable on such terms and bearing such interest rate as determined by the Administrator (but in no event less than the minimum interest rate specified under the Code at which no additional interest or original issue discount would be imputed), which promissory note may be either secured or unsecured in such manner as the Administrator shall approve (including, without limitation, by a security interest in the shares of the Company);

 

	 
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(b) Delivery by the optionee of shares of capital stock already owned by the optionee for all or part of the Option price, provided the fair market value (determined as set forth in Section 6.1.10) of such shares of capital stock is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by delivery of such stock;

 

(c) Through the surrender of shares of Common Stock then issuable upon exercise of the Option, provided the fair market value (determined as set forth in Section 6.1.10) of such shares of Common Stock is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by surrender of such stock; and

 

(d) Subject to compliance with any applicable laws or regulations, by means of so-called “cashless exercises.”

 

6.1.8 Withholding and Employment Taxes. At the time of exercise and as a condition thereto, or at such other time as the amount of such obligation becomes determinable, the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes. Such obligation to remit may be satisfied, if authorized by the Administrator in its sole discretion, after considering any tax, accounting and financial consequences, by the optionee’s (a) delivery of a promissory note in the required amount on such terms as the Administrator deems appropriate, (b) tendering to the Company previously owned shares of Common Stock or other securities of the Company with a fair market value equal to the required amount, or (c) agreeing to have shares of Common Stock (with a fair market value equal to the required amount), which are acquired upon exercise of the Option, withheld by the Company.

 

6.1.9 Other Provisions. Each Option granted under this Plan may contain such other terms, provisions and conditions not inconsistent with this Plan as may be determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the Option as an “incentive stock option” within the meaning of Section 422 of the Code.

 

6.1.10 Determination of Fair Market Value. For purposes of this Plan, “Fair Market Value” means, as of any date, the value of the Common Stock as determined below. I f the Common Stock is listed on any established stock exchange or a national market system, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal or other publicly available source. In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator Committee and such determination shall be conclusive and binding on all persons

 

	 
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6.1.11 Option Term. No Option shall be exercisable more than ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreement (the end of the maximum exercise period stated in the stock option agreement is referred to in this Plan as the “Expiration Date”).

 

6.1.12 Termination of Employment.

 

(a) Except as otherwise provided in the stock option agreement if for any reason an optionee ceases to be employed by the Company or any of its Affiliates (and for such purposes “employment” shall be deemed to include service as an employee, director, consultant or adviser ) (such event being called a “Termination”), the Option shall terminate and expire upon the earliest to occur of: (i) the Termination Date; (b) the Expiration Date; and (c) if applicable, immediately prior to a Corporate Transaction as contemplated by Section 6.1.3. 

 

(b) For purposes of this Plan, the “Termination Date” shall be 90 days of the date of such Termination, except: (a) the date of Termination if Termination is by the Company “For Cause”; or (b) one year following the date of Termination if Termination is as a result of the death or disability of the optionee. An optionee’s employment shall not be deemed to terminate by reason of a transfer to or from the Company or an Affiliate or among such entities, or sick leave, military leave or other leave of absence approved by the Administrator, if the period of any such leave does not exceed 90 days or, if longer, if such optionee’s right to reemployment by the Company or any Affiliate is guaranteed either contractually or by statute.

 

(c) For purposes of this Plan, “For Cause” shall mean, in the context of an optionee’s loss of employment with the Company or any of its Affiliates, that the Company or such Affiliate terminated optionee’s employment: (a) “for cause” applicable law or any employment policy or practice used by the Company in determining whether to terminate an employee’s employment for cause; (b) due to such optionee’s willful breach or habitual neglect or continued incapacity to perform such optionee’s required duties or follow the Company’s policies; (c) due to optionee’s commission of an act or acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude in connection with optionee’s services to the Company or its Affiliates or which in the determination of the Administrator would prevent the effective performance of such optionee’s duties or (d) “for cause” under any employment or consulting agreement between the Company and such optionee (as “for cause” is defined therein).

 

6.2 Terms and Conditions to Which Only NQOs Are Subject. Options granted under this Plan which are designated as NQOs shall be subject to the following terms and conditions:

 

6.2.1 Exercise Price. The exercise price of an NQO shall be the amount determined by the Administrator as specified in the option agreement but shall not be less than the fair market value of the stock subject to the Option on the Option grant date.

 

6.3 Terms and Conditions to Which Only ISOs Are Subject. Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions:

 

6.3.1 Exercise Price. The exercise price of an ISO shall not be less than the fair market value of the stock subject to the Option on the Option grant date. The exercise price of an ISO granted to any 10% Stockholder shall in no event be less than 110% of the fair market value of the stock covered by the Option at the time the Option is granted. A “10% Stockholder” is a person who owns, directly or by attribution under the Code (currently Section 424(d) of the Code), stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any Affiliate. 

 

	 
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6.3.2 Disqualifying Dispositions. If stock acquired by exercise of an ISO granted pursuant to this Plan is disposed of in a “disqualifying disposition” within the meaning of Section 422 of the Code (a disposition within two years from the date of grant of the Option or within one year after the exercise of the Option), the holder of the stock immediately before the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the Option as the Company may reasonably require.

 

6.3.3 Grant Date. If an ISO is granted in anticipation of employment as provided in Section 2.2, the Option shall be deemed granted, without further approval, on the date the grantee assumes the employment relationship forming the basis for such grant, and, in addition, satisfies all requirements of this Plan for Options granted on that date.

 

6.3.4 Term. Notwithstanding Section 6.1.11, no ISO granted to any to 10% Stockholder shall be exercisable more than five years after the date of grant.

 

7. MANNER OF EXERCISE

 

7.1 An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the officer of the Company designated by the Administrator, accompanied by payment of the exercise price and withholding taxes as provided in Sections 6.1.7 and 6.1.8. The date the Company receives written notice of an exercise hereunder accompanied by payment of the exercise price will be considered as the date such Option was exercised.

 

7.2 Promptly after receipt of written notice of exercise of an Option and the payments called for by Section 7.1, the Company shall, without stock issue or transfer taxes to the optionee or other person entitled to exercise the Option, deliver to the optionee or such other person a certificate or certificates for the requisite number of shares of Common Stock. An optionee or permitted transferee of the Option shall not have any privileges as a stockholder with respect to any shares of stock covered by the Option until the date of issuance (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent) of such shares.

 

8. EMPLOYMENT OR CONSULTING RELATIONSHIP

 

Nothing in this Plan or any Option granted hereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate any optionee’s employment, consulting or advising, at any time, nor confer upon any optionee any right to continue in the employ of, or consult or advise with, the Company or any of its Affiliates.

 

	 
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9. CONDITIONS UPON ISSUANCE OF SHARES

 

The Company shall have no obligation to issue shares of Common Stock upon exercise of an Option unless such issuance has been registered under the Securities Act and qualified or registered under applicable state securities laws, or such issuance is exempt from registration or qualification under the Securities Act and applicable state securities laws. The Company shall have no obligation to register or qualify the issuance of the shares under the Securities Act or applicable state securities laws. 

 

10. NON-EXCLUSIVITY OF THIS PLAN

 

The adoption of this Plan shall not be construed as creating any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options other than under this Plan.

 

11. MARKET STAND-OFF

 

Each optionee, if so requested by the Company in connection with any registration of an offering of any securities of the Company under the Securities Act, shall not sell or otherwise transfer any shares of Common Stock acquired upon exercise of Options during the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act after the date of adoption of this Plan that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restriction until the end of such 180-day period.

 

12. AMENDMENTS TO PLAN

 

The Board may at any time amend, alter, suspend or discontinue this Plan. Without the consent of an optionee, no amendment, alteration, suspension or discontinuance may adversely affect such optionee’s outstanding Option(s) except to conform this Plan and ISOs granted under this Plan to the requirements of federal or other tax laws relating to incentive stock options. No amendment, alteration, suspension or discontinuance shall require stockholder approval unless stockholder approval is required to preserve incentive stock option treatment for federal income tax purposes or under applicable law; provided that the Administrator may in its discretion seek stockholder approval of any amendment, alteration, suspension or discontinuance. 

 

13. INTERPRETATION

 

The following rules shall apply to the interpretation of this Plan: 

 

13.1 the singular includes the plural and the plural includes the singular;

 

13.2 any pronoun shall include the corresponding masculine, feminine and neuter forms; 

 

13.3 “or” is not exclusive and “include” and “including” are not limiting; and

 

13.4 a reference a Section is to the Section of this Plan unless otherwise expressly provided. 

 

	 
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14. FFECTIVE DATE OF PLAN; TERMINATION

 

14.1 Effective Date. This Plan shall become effective upon adoption by the Board; provided, however, that no Option shall be exercisable unless and until written consent of the stockholders of the Company, or approval of stockholders of the Company voting at a validly called stockholders’ meeting, is obtained within 12 months after adoption by the Board. If any Options are so granted and stockholder approval shall not have been obtained within 12 months of the date of adoption of this Plan by the Board, such Options shall terminate retroactively as of the date they were granted. 

 

14.2 Termination. This Plan shall terminate on December 31, 2026. Termination of this Plan shall not affect any outstanding Options and such outstanding Options shall continue to be subject to the terms of this Plan.

 

 

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