Document:

Exhibit 10.14

AMENDED

VR HOLDINGS, INC.

STOCK PURCHASE WARRANT

Expiring August 30, 2017

 

 

	8,000,000 Shares	Chester, Maryland

 

 

THIS IS TO CERTIFY
that, for value received, NORMAN T. REYNOLDS (the “Holder”) is entitled at any time from the date hereof, but prior
to 5:00 p.m., Chester, Maryland time on August 30, 2017, subject to and upon the terms and conditions contained herein, to purchase
up to 8,000,000 fully paid and non-assessable shares of the common stock, par value $0.000001 per share (the “Common Stock”)
of VR HOLDINGS, INC., a Delaware corporation (the “Company”) at a purchase price of $0.10 per share (the “Exercise
Price”) of the Common Stock, after taking into account the restricted nature of the shares of the Common Stock as described
below (such number of the shares of the Common Stock and the purchase price being subject to adjustment as provided herein). This
Warrant shall be void and of no effect and all rights hereunder shall cease at 5:00 p.m., Chester, Maryland time on August 30,
2017, except to the extent theretofore exercised; provided that in the case of the earlier dissolution of the Company, this Warrant
shall become void on the date fixed for such dissolution. This Warrant amends that certain Stock Purchase Warrant dated August
8, 2012, issued by the Company in favor of the Holder. This amendment to the Warrant increases the right of the Holder to purchase
8,000,000 shares of the Common Stock from 7,000,000 shares of the Common Stock. The expiration date of August 30, 2017, of this
Warrant remains unchanged.

Covenants of
the Company. The Company covenants that, while this Warrant is exercisable (a) it will reserve from its authorized and unissued
shares of the Common Stock a sufficient number of shares of the Common Stock to provide for the delivery of the shares of the Common
Stock pursuant to the exercise of this Warrant, and (b) that all shares of the Common Stock which may be issued upon the exercise
of this Warrant will be fully paid and non-assessable.

1.                  
Protection Against Dilution, Etc. In any of the following events, occurring after the date of the issuance of this
Warrant, appropriate adjustment shall be made in the number of shares of the Common Stock to be deliverable upon the exercise of
this Warrant and the purchase price per share of the Common Stock to be paid, so as to maintain the proportionate interest of the
Holder as of the date hereof (a) recapitalization of the Company through a split-up or reverse split of the outstanding shares
of the Common Stock into a greater or lesser number, as the case may be, or (b) declaration of a dividend on the shares of the
Common Stock, payable in shares of the Common Stock or other securities of the Company convertible into shares of the Common Stock,
or (c) any of the events described in Paragraph 4 hereof.

2.                  
Merger, Etc. In case the Company, or any successor, shall be consolidated or merged with another company, or substantially
all of its assets shall be sold to another company in exchange for stock, cash or other property with the view to distributing
such stock, cash or other property to its stockholders, each of the shares of the Common Stock purchasable by this Warrant shall
be replaced for the purposes hereof by the securities of the Company or cash or property issuable or distributable in respect of
one share of the Common Stock of the Company, or its successors, upon such consolidation, merger, or sale, and adequate provision
to that effect shall be made at the time thereof. Provided, however, notwithstanding anything herein contained to the contrary,
in the event that the terms of any such consolidation, merger or sale call for the distribution of any cash or property to the
stockholders of the Company, no such cash or property shall be distributable to the Holder in connection with any unexercised portion
of this Warrant, unless the Holder shall have exercised this Warrant pursuant to the terms of Paragraph 6 hereof and all other
terms of this Warrant.

3.                  
Notice of Certain Events. Upon the happening of any event requiring an adjustment of the Warrant purchase price hereunder,
the Company shall forthwith give written notice thereof to the Holder stating the adjusted Warrant purchase price and the adjusted
number of shares of the Common Stock purchasable upon the exercise hereof resulting from such event and setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is based. The Board of Directors of the Company shall
determine the

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computation made hereunder. In the case
of (a) any consolidation, merger, or sale affecting the Company and calling for the payment of cash or the delivery of property
to stockholders of the Company, or (b) any voluntary or involuntary dissolution, liquidation, or winding up of the Company shall
at any time be proposed, the Company shall give at least 20 days’ prior written notice thereof to the Holder stating the
date on which such event is to take place and the date (which shall be at least 20 days after the giving of such notice) as of
which the holders of record of shares of the Common Stock shall be entitled to participate in any such event. If the Holder does
not elect to exercise any part of this Warrant as a result of any such notice, the Holder shall have no right with respect to any
portion of this Warrant which shall remain unexercised to participate in (x) any such cash or other property resulting from any
such consolidation, merger or sale, or (y) any voluntary or involuntary dissolution, liquidation, or winding up of the Company.

4.                  
Stockholders’ Rights. Until the valid exercise of this Warrant, the Holder shall not be entitled to any rights
of a stockholder with respect to the shares of the Common Stock covered by this Warrant; but immediately upon the exercise of this
Warrant and upon payment as provided herein, the Holder shall be deemed a record holder of the shares of the Common Stock.

5.                  
Manner of Exercise. In order to exercise this Warrant, the Holder shall surrender this Warrant, duly endorsed or
assigned to the Company or, in blank, at the office of the Company, accompanied by (a) written Form of Election to Purchase attached
hereto (the “Exercise Notice”) that the Holder elects to exercise this Warrant or, if less than the entire amount thereof
is to be exercised, the portion thereof to be exercised, and (b) payment of the purchase price of the shares of the Common Stock
to be purchased on such exercise, in cash or by cashier’s or certified check.

This Warrant shall
be deemed to have been exercised immediately prior to the close of business on the day of surrender of this Warrant for exercise
in accordance with the foregoing provisions, and at such time the person or persons entitled to receive the shares of the Common
Stock issuable upon exercise shall be treated for all purposes as the record holder or holders of the shares of the Common Stock
at such time. As promptly as practicable on or after the exercise date, but in no event later than three business days, the Company
shall issue and shall deliver to the Holder a certificate or certificates for the number of full shares of the Common Stock issuable
upon exercise.

In case this Warrant
is exercised in part only, upon such exercise the Company shall execute and deliver to the Holder thereof, at the expense of the
Company, a new Warrant to purchase, in the aggregate, in the number of shares of the Common Stock covered by the unexercised portion
of this Warrant.

6.                  
Cashless Exercise. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Exercise Price, elect instead to receive upon such exercise the “Net Number” of
the shares of the Common Stock determined according to the following formula (a “Cashless Exercise”):

Net Number = (A x B)
- (A x C)

B

For purposes of
the foregoing formula:

A = The total number
of the shares of the Common Stock with respect to which this Warrant is then being exercised.

B = The average
of the closing sale price of the shares of the Common Stock (as reported by Bloomberg) on the five trading days immediately preceding
the date of the Exercise Notice.

C = The Exercise
Price then in effect for the applicable shares of the Common Stock at the time of such exercise.

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7.                  
Limitation on Exercise. The Holder (including any successor, transferee or assignee) shall not have the right to
convert any portion of this Warrant to the extent that after giving effect to such exercise, the Holder (together with the Holder’s
affiliates) would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the number of shares of the Common
Stock of the Company outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the
number of shares of the Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of
the Common Stock issuable upon conversion of this Warrant with respect to which the determination of such sentence is being made,
but shall exclude the number of shares of the Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised
portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise of the unexercised or non-converted
portion of any other securities of the Company (including, without limitation, any other notes or warrants) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph, in determining the number
of outstanding shares of the Common Stock, the Holder may rely on the number of outstanding shares of the Common Stock as reflected
in (x) the Company’s most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more recent public announcement
by the Company, or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of the Common Stock
outstanding. For any reason at any time, during regular business hours of the Company and upon the written request of the Holder,
the Company shall within two business days confirm in writing to the Holder the number of shares of the Common Stock then outstanding.
In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such
number of outstanding shares of the Common Stock was reported. By written notice to the Company, the Holder may increase or decrease
the Maximum Percentage to any other percentage specified in such notice; provided that (A) any such increase will not be effective
until the 61st day after such notice is delivered to the Company, (B) any such increase or decrease will apply only to the Holder
and not to any other holder of warrants, and (C) and in no case shall the Holder or its Affiliates acquire in excess of 9.999%
of the outstanding shares of the Common Stock or the voting power of the Company.

8.                  
Representations and Covenants of the Holder. The Holder represents and covenants that this Warrant has not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities law. This Warrant
has been purchased for investment only and not with a view to distribution or resale, and may not be sold, pledged, hypothecated
or otherwise transferred unless this Warrant or the shares of the Common Stock represented hereby are registered under the Securities
Act, and any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration
is not required. A legend in substantially the following form will be placed on any certificates or other documents evidencing
the shares of the Common Stock to be issued upon any exercise of this Warrant:

THE SECURITIES REPRESENTED BY THIS
INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED
FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE, OR ANY
RULE OR REGULATION PROMULGATED THEREUNDER.

Further, stop transfer
instructions to the transfer agent of the shares of the Common Stock have been or will be placed with respect to the shares of
the Common Stock so as to restrict the resale, pledge, hypothecation or other transfer thereof, subject to the further items hereof,
including the provisions of the legend set forth in this paragraph.

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9.                  
Fractional Warrants. Upon the exercise of this Warrant, no fractions of shares of the Common Stock shall be issued;
but fractional Warrants shall be delivered, entitling the Holder, upon surrender with other fractional Warrants aggregating one
or more full shares of the Common Stock, to purchase such full shares of the Common Stock.

10.               
Registration Obligation. The Company has not agreed to file and the Company does not anticipate the filing of a registration
statement under the Securities Act to allow a public resale of this Warrant or the resale of any shares of the Common Stock issued
upon the exercise of this Warrant.

11.               
Loss, Theft, Destruction of Warrant. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory
to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company will make
and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor.

12.               
Arbitration. Any controversy or claim arising out of or relating to this Warrant, or the breach, termination, or
validity thereof, shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (“AAA Rules”) in effect as of the effective date of this Warrant. The American Arbitration
Association shall be responsible for (a) appointing a sole arbitrator, and (b) administering the case in accordance with the AAA
Rules. The situs of the arbitration shall be Houston, Texas. Upon the application of either party to this Warrant, and whether
or not an arbitration proceeding has yet been initiated, all courts having jurisdiction hereby are authorized to (x) issue and
enforce in any lawful manner, such temporary restraining orders, preliminary injunctions and other interim measures of relief as
may be necessary to prevent harm to a party’s interest or as otherwise may be appropriate pending the conclusion of arbitration
proceedings pursuant to this Warrant, and (y) enter and enforce in any lawful manner such judgments for permanent equitable relief
as may be necessary to prevent harm to a party’s interest or as otherwise may be appropriate following the issuance of arbitral
awards pursuant to this Warrant. Any order or judgment rendered by the arbitrator may be entered and enforced by any court having
competent jurisdiction.

13.               
Benefit. All the terms and provisions of this Warrant shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto, and their respective successors and permitted assigns.

14.               
Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given
(a) on the date they are delivered if delivered in person; (b) on the date initially received if delivered by facsimile transmission
or email followed by registered or certified mail confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and other fees
prepaid, if to the Company addressed to Mr. John E. Baker at 1615 Chester Road, Chester, Maryland 21619, telephone (443) 519-0129,
and email John.Baker@inwaretechnologies.com; and if to the Holder addressed to Norman T. Reynolds, Esq. at P.O. Box 131326, Houston,
Texas 77219, telecopy (713) 456-2509, and email nreynolds@ntrlawfirm.com. Any party hereto may change its address upon 10 days’
written notice to any other party hereto.

15.               
Construction. Words of any gender used in this Warrant shall be held and construed to include any other gender, and
words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. In addition,
the pronouns used in this Warrant shall be understood and construed to apply whether the party referred to is an individual, partnership,
joint venture, corporation or an individual or individuals doing business under a firm or trade name, and the masculine, feminine
and neuter pronouns shall each include the other and may be used interchangeably with the same meaning.

16.               
Headings. The headings used in this Warrant are for convenience and reference only and in no way define, limit, simplify
or describe the scope or intent of this Warrant, and in no way effect or constitute a part of this Warrant.

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17.               
Invalidity. In the event any one or more of the provisions contained in this Warrant shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the other
provisions of this Warrant.

18.               
Law Governing. This Warrant shall be construed and governed by the laws of the State of Delaware, and all obligations
hereunder shall be deemed performable in Harris County, Texas.

IN WITNESS WHEREOF,
this Warrant has been issued on August 13, 2013.

VR HOLDINGS, INC.

ByJohn E. Baker

John E. Baker, Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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FORM OF ELECTION TO PURCHASE

(To be executed by the Holder
to exercise the right to purchase shares of the Common Stock under the foregoing Warrant)

To: VR HOLDINGS, INC.

In accordance
with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase ______________
shares of the Common Stock (the “Common Stock”), $0.000001 par value, of VR Holdings, Inc. and encloses one Warrant
and $0.10 for each share of the Common Stock being purchased or an aggregate of $________________ as a credit on amounts owed by
the Company to the undersigned, or in cash or certified or official bank check or checks, which sum represents the aggregate exercise
price together with any applicable taxes payable by the undersigned pursuant to the Warrant. Provided, however, in lieu of making
the cash payment otherwise contemplated in payment of the Exercise Price, the undersigned hereby elects to receive upon such exercise
the “Net Number” of the shares of the Common Stock pursuant to the Cashless Exercise provisions of the Warrant.

The undersigned requests
that certificates for the shares of the Common Stock issuable upon this exercise be issued in the name of:

 

 

 

 

 

 

 

 

 

(Please print name and address)

 

 

(Please insert Social Security or Tax
Identification Number)

If the number of shares
of the Common Stock issuable upon this exercise shall not be all of the shares of the Common Stock which the undersigned is entitled
to purchase in accordance with the enclosed Warrant, the undersigned requests that a new Warrant evidencing the right to purchase
the shares of the Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:

 

 

 

 

 

 

 

 

 

 

 

 

(Please print name and address)

 

 

 

 

	Dated	 	 	Name of Holder:	 
	 	 	 	 	
	 	 	 	(Print)	 
	 	 	 	 	 
	 	 	 	(By)	 
	 	 	 	 	 
	 	 	 	(Name)	 
	 	 	 	 	 
	 	 	 	(Title)	 

 

Signature must conform in all respects
to name of the Holder as specified on the face of the Warrant.EX 10.2-FY14Q1-EmpStockOptAgmt

EXHIBIT 10.2

DLH HOLDINGS CORP.
EMPLOYEE STOCK OPTION CERTIFICATE
AND AGREEMENT

	
							
	Date of Grant:
	 
	November 8, 2013
	 
	 
	Option No.:
	2013-

	 
	 
	 
	 
	 
	 

	Name of Optionee:
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	Number of Shares:
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	Exercise Price Per Share:
	 
	$1.395
	 
	 
	 

	 
	 
	 
	 
	 
	 

	Expiration Date:
	 
	November 8, 2023
	 
	 
	 

	 
	 
	 
	 
	 
	 

Effective on the date of grant specified above, DLH HOLDINGS CORP. (the “Company”) has granted to the above-named Optionee under the Company’s 2006 Long Term Incentive Plan, as amended (the “Plan”), an option to purchase from the Company the number of shares of Common Stock of the Company set forth above. This option is subject to all the terms and conditions of the Plan which is incorporated in this option as though set forth in full.

The terms and conditions of this option are as follows:

1.    Number and Price of Options. The number and price of the shares subject to this option shall be the number and price set forth above, subject to any adjustments which may be made under Section 11 below. 

2.    Vesting and Exercisability.  This option may not be exercised until it is vested. Subject to the terms and conditions set forth in this Option, this option may be exercised to purchase the shares of Common Stock covered by this Option in accordance with the provisions of this paragraph. 

(a)     With respect to the shares covered by this Option, and provided Optionee is an employee of the Company on each vesting date, and unless otherwise provided by this Option Agreement, this Option, may be exercised to purchase the Shares as follows: 

(i)     Options to purchase [50% of the ]Shares shall vest on the date the Management Resources and Compensation Committee of the Board of Directors of the Company (the “Committee”) determines that the Company has achieved the Company’s [adjusted EBITDA]/ [new business bookings] target for the fiscal year ending September 30, 2014 (the “Performance Target”), as established by the Committee and communicated to the Optionee (the Options described in this Section 2(a)(i) may be referred to herein as the “Performance Options”); and

(ii)     Options to purchase [50% of the ] Shares shall vest if the closing price of the Company’s Common Stock equals or exceeds $3.00 per share (as shall be adjusted to give effect to any stock splits, reverse stock splits, stock dividends, recapitalizations and other similar 

1

transactions after the Date of Grant) for ten consecutive trading days prior to 5:00 p.m., New York time on the Expiration Date.

(iii)     For the purpose of determining the closing price of the Company’s Common Stock, the closing price of a share of Common Stock shall mean (A) if the Common Stock is traded on a national securities exchange, including on the Nasdaq Stock Market (“Nasdaq”), the per share closing price of the Common Stock shall be the reported closing price the principal securities exchange on which they are listed on the date of determination (or if there is no closing price for such date of determination, then the last preceding business day on which there was a closing price); or (B) if the Common Stock is traded in the over-the-counter market but bid quotations are not published on Nasdaq,  the per share closing price of the Common Stock shall be the closing bid price per share for the Common Stock as furnished by a broker-dealer which regularly furnishes price quotations for the Common Stock on the date of determination (or if there is no closing price for such date of determination, then the last preceding business day on which there was a closing price).

(b)    Subject to the other terms and conditions of this Option, the Performance Options described in Section 2(a)(i) hereof shall only vest if the Committee determines, based on the audited financial statements of the Company for the fiscal year ending September 30, 2014, that the Performance Target has been achieved, which determination shall be made prior to the time that the Company files its Annual Report on Form 10-K for the fiscal year ending September 30, 2014 with the Securities and Exchange Commission. All determinations by the Committee shall be final and binding. Notwithstanding any other provision of the Employment Agreement (as defined below), with respect to the Performance Options, the specific amount of Performance Options that vests shall be determined by the Committee based on the Company’s performance towards achieving the Performance Target, as follows:

	
				
	 
	•
	 
	If the Company meets or exceeds the Performance Target, one hundred percent (100%) of the Performance Options shall vest.

 
	
				
	 
	•
	 
	If the Company’s achievement is ninety percent (90%) of the Performance Target (the “Threshold Level”) or greater, but less than the Performance Target, a pro rata portion (based on linear interpolation) of the Performance Options shall vest, and the number of Performance Options vesting shall be determined based on the amount by which the Company’s performance exceeded the Threshold Level, up to achievement of the Performance Target, with the number of Performance Options that may vest being reduced by 2% for every 1% of variance below the Performance Target (but above the Threshold Level). 

 
	
				
	 
	•
	 
	If the degree of variance below the Performance Target is not a whole number, then for the purpose of determining whether the Threshold Level is achieved, or the degree of variance below the Performance Target, the Committee shall round the resulting number down to the nearest whole number.

	
				
	 
	•
	 
	If the Company does not achieve the Threshold Level of performance, no portion of the Performance Options shall vest and the Performance Options shall be immediately void.

            

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	•
	 
	In no event shall any Performance Options vest as to more than one hundred percent (100%) of the shares subject to the Performance Target.

     (c)     This Option expires at 5:00 p.m. (New York time) on the Expiration Date (the “Expiration Time”) as stated above whether or not it has been duly exercised, unless sooner terminated as provided below. Subject to the terms and conditions set forth in the Optionee’s employment agreement with the Company, dated ______________ (the “Employment Agreement”), this Option may also terminate sooner as provided below if your employment is terminated for any reason. This Option shall terminate and no Shares may be purchased after the Expiration Time.  

3.    Acceptance of Option Agreement.  Your acceptance of this stock option agreement will indicate your acceptance of and your agreement to be bound by its terms and the terms of the Plan.  It imposes no obligation upon you to purchase any of the shares subject to the option.  Your obligation to purchase shares can arise only upon your exercise of the option in the manner set forth herein. This stock option agreement shall be subject in all respects to the terms and conditions of the Plan and in the event of any question or controversy relating to the terms of the Plan, the decision of the Board of Directors shall be final.

4.    Condition of Employment. Except as provided in Section 9, this option may not be exercised unless the Optionee is employed by the Company or one of its parent or subsidiary corporations on the date of such exercise and shall have been an employee continuously since the date of grant.
    
5.    Exercise Procedure.    This option is exercisable by a written notice signed by you and delivered to the Company at its executive offices, signifying your election to exercise the option.  A form of the notice is attached to this option certificate. The notice must state the number of shares of Common Stock for which your option is being exercised and must be accompanied by the full purchase price of the shares being purchased. Payment shall be either (i) in cash, or by certified or bank cashier's check payable to the order of the Company, free from all collection charges; (ii)  by delivery of shares of Common Stock of the Company already owned by the  Optionee for at least six months prior to the date of exercise, which Common Stock shall be valued at Fair Market Value on the date of exercise; or (iii) by a combination of the methods of payment specified in (i) and (ii) above.

For these purposes, the market value per share of Common Stock shall be: (i) if the Common Stock is traded on a national securities exchange or on the NASDAQ Stock Market System (“Nasdaq”), the per share closing price of the Common Stock on the principal securities exchange on which they are listed or on Nasdaq, as the case may be, on the date of exercise (or if there is no closing price for such date of exercise, then the last preceding business day on which there was a closing price); or (ii) if the Common Stock is traded in the over-the-counter market and quotations are published on an inter-dealer quotation system (but not on Nasdaq), the closing bid price of the Common Stock on the date of exercise as reported by thereon (or if there are no closing bid prices for such date of exercise, then the last preceding business day on which there was a closing bid price); or (iii) if the Common Stock is traded in the over-the-counter market but bid quotations are not published on an inter-dealer quotation system, the closing bid price per share for the Common Stock as furnished by a broker-dealer which regularly furnishes price quotations for the Common Stock.  If notice of the exercise of this option is given by the person or persons other than you, the Company may require, as a condition to the exercise of this option, the submission to the Company of appropriate proof of the right of such person or person to exercise this option.
    

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6.    Issuance of Shares. Certificate for the shares purchased will be issued as soon as practicable.  The Company, however, shall not be required to issue or deliver a certificate for any shares until it has complied with all requirements of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, any stock exchange on which the Company’s Common Stock may then be listed and all applicable state laws in connection with the issuance or sale of such shares or the listing of such shares.  

7.    No Rights Until Exercise. Until the issuance of the certificate for the shares, you or such other person as may be entitled to exercise this option, shall have none of the rights of a stockholder with respect to shares issuable upon exercise of this option.

8.    Transferability.  This option is personal to the Optionee and during the Optionee's lifetime may be exercised only by the Optionee. This option shall not be transferable other than by will or the laws of descent and distribution, and as may be permitted under the Internal Revenue Code, the federal securities laws and the rules and regulations promulgated thereunder.  If notice of the exercise of this option is given by the person or persons other than you, the Company may require, as a condition to the exercise of this option, the submission to the Company of appropriate proof of the right of such person or person to exercise this option.
    
9.    Termination of Employment.  Unless otherwise provided in the Employment Agreement (or a superseding employment agreement entered into between the Company and Optionee) and as set forth below, in the event that the Optionee ceases to be an employee of the Company or of any subsidiary, this Option shall terminate in accordance with the terms of the Plan.  

     (a)      Notwithstanding the foregoing, however, unless otherwise provided in an employment agreement between the Company and the Optionee or elsewhere in this Option Agreement, upon termination of employment by the Optionee other than for “good reason” (as defined in the Employment Agreement), the Optionee shall continue to have the right to exercise any unexercised portion of this option, solely to the extent vested as of the date of termination of employment of Optionee, for such period of time as is provided for in the Plan, but in no event after the Expiration Time. Unless otherwise provided in an employment agreement between the Company and the Optionee, in the event of the death of Optionee during the foregoing period of time, this Option shall be exercisable by his or her personal representatives, heirs or legatees to the same extent that the Optionee could have exercised this option if he or she had not died, for twelve months from the date of death, but in no event after the Expiration Time. In the event the employment of the Optionee was terminated for “cause” (as defined in the Employment Agreement), this Option will terminate on the date of that the Optionee ceases to be an employee of the Company or a subsidiary.

     (b)    In the event Optionee’s employment with the Company or any subsidiary is terminated by the Company without “cause” (as defined in the Employment Agreement) or by Optionee for “good reason” (as such term is defined in the Employment Agreement), this Option shall remain exercisable, solely to the extent it was vested as of the date of termination of employment of Optionee, for such period of time as is provided for in the Plan, but in no event after the Expiration Time.

     (c)     Unless otherwise provided in an employment agreement between the Company and the Optionee, in the event the Optionee’s employment is terminated due to his death or permanent disability, this Option shall remain exercisable solely to the extent vested as of the date of the termination of his employment, for such period of time as provided for in the Plan, but in no event after the Expiration Time. In the event of the death of the Optionee during the one year period after the date of permanent 

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disability of the Optionee, that portion of the Option which was exercisable shall be exercisable by his or her personal representatives, heir or legatees at any time prior to the expiration of one year from the date of the death of Optionee, but in no event after the Expiration Time. 

10.    Not an Employment Agreement. This option does not confer on the Optionee any right to continue in the employ of the Company or interfere in any way with the right of the Company to determine the terms of the Optionee’s employment.

11.     Corporate Transactions and Change in Control. Subject to the terms and conditions which may be provided in the Employment Agreement (or a superseding employment agreement entered into between the Company and Optionee), in the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, rights offering, or any other change in the corporate structure or stock of the Company, the Board shall make such adjustments, if any, as it deems appropriate in the number and kind of shares covered by this Option, or in the option price, or both. Notwithstanding the foregoing, however, in the event of a Change of Control, as defined in the Employment Agreement, Options which are vested as of the effective date of the termination of Employee’s employment (pursuant to the Employment Agreement) shall remain exercisable in accordance with the Plan, but in no event after the Expiration Time. Notwithstanding any provision to the contrary, the Committee or the Board may cancel, amend, alter or supplement any term or provision of this option to avoid the penalty provisions of Section 4999 of the Code, subject to the terms of an employment agreement between the Company and the Optionee.

12.    Capital Adjustments.   The existence of the Option shall not affect in any way the right or power of Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in Company’s capital structure or its business, or any merger or consolidation of Company or any issue of bonds, debentures, preferred stock having a preference to or affecting Company’s common stock or of any rights thereof, or the issuance of any securities convertible into any such common stock or of any rights, options, or warrants to purchase any common stock, or the dissolution or liquidation of Company, any sale or transfer of all or any part of its assets or business, or any other act or proceeding of Company, whether of a similar character or otherwise. The securities with respect to which the Option is granted are shares of common stock of the Company as presently constituted, but if and whenever, prior to the delivery by Company of all the shares with respect to which the Option is granted, the Company shall effect a subdivision or consolidation of shares of its common stock or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of such common stock outstanding, the number of shares subject to the Option and the applicable Exercise Price shall be adjusted as provided for in the Plan.  

13.    Securities Law Compliance. This option shall be subject to the requirement that if at any time the Board shall determine that the registration, listing or qualification of the shares covered hereby upon any securities exchange or under any federal or state law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the granting of this option or the purchase of the shares, this option may not be exercised unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board. The Board may require that the person exercising this option shall make such representations and agreements and furnish such information as it deems appropriate to assure compliance with the foregoing or any other applicable legal requirements.

14.    Tax Matters. To the maximum extent permissible under the Code, this Option is intended to qualify for “incentive stock option” treatment under the provisions of Section 422 of the 

5

Code.  It is understood and acknowledged by Optionee, however, that all of the options represented by this Option Certificate may not qualify as Incentive Stock Options.  You are therefore urged to consult with your individual tax advisor prior to exercising this Option since the exercise of this Option may result in adverse tax consequences including the payment of additional federal and/or state income taxes.

15    Withholding Tax. The Company shall have the power and the right to deduct or withhold, or require a Optionee to remit to the Company as a condition precedent for the fulfillment of any option exercise, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this option. Whenever Shares are to be issued or cash paid to an Optionee upon exercise of an option, the Company shall have the right to require the Optionee to remit to the Company, as a condition of exercise of the option, an amount sufficient to satisfy federal, state and local withholding tax requirements at the time of exercise.  However, notwithstanding the foregoing, to the extent that a Optionee is an insider (as determined by the Board of Directors), satisfaction of withholding requirements by having the Company withhold Shares may only be made to the extent that such withholding of Shares (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act.

16.    Notices.   All notices hereunder to the Company shall be delivered or mailed to the following address:
        
DLH HOLDINGS CORP.
1776 Peachtree Street, N.W.
Atlanta, GA  30309
Attention:  Chief Financial Officer

Such address for the service of notices may be changed at any time provided notice of such change is furnished in advance to the Optionee.

17.     Governing Law. This Agreement is granted and delivered in the State of New Jersey and is intended to be construed and enforced under the laws thereof. The Holder submits to the exclusive jurisdiction and venue of the federal or state courts of New Jersey, to resolve any and all issues that may arise out of or relate to this Option Agreement.

18.  Certain Definitions.  Capitalized terms used herein, to the extent not defined in this Stock Option Agreement shall have the meanings ascribed to such term in the Plan.

Signature page follows.

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19.  General Provisions.  This Option constitutes the entire agreement of the parties and supersede all prior undertakings and agreements with respect to the subject matter hereof. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. No fractional shares of Common Stock shall be issued or delivered pursuant to this Option. The Company shall determine whether cash or other property shall be issued or paid in lieu of fractional shares of Common Stock or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

DLH HOLDINGS CORP.

By:__________________________________
Name:  
Title:   
                            

ATTEST:

Corporate Secretary

By:__________________________________
Name:  
Title:   

7

ACKNOWLEDGMENT 
 
The Optionee acknowledges receipt of a copy of the Company’s 2006 Long-Term Incentive Plan, as amended, (the “Plan”), and represents that he or she has read and is familiar with the terms and provisions thereof and hereby accepts this Option subject to all of the terms and provisions of the Option Agreement and the Plan. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or the Committee upon any questions arising under the Plan. 
 
	
			
	 
	 
	 

	Date:                    
	 
	 

	 
	 
	Signature of Optionee

	 
	 
	 

	 
	 
	Name of Optionee

	 
	 
	 

	 
	 
	Address

	 
	 
	 

	 
	 
	City, State, Zip Code

OPTION EXERCISE FORM 

TO:    DLH HOLDINGS CORP.
1776 Peachtree Street, N.W.
Atlanta, GA 30309 
Attn: Chief Financial Officer

Ladies/Gentlemen:

I irrevocably elect to exercise my right to purchase _________ shares of Common Stock covered by this Option Agreement and make full payment of the Exercise Price of such shares as follows (PLEASE CHOOSE FORM OF PAYMENT).
    
o       Cash Purchase. I hereby elect to pay the exercise price in cash, and enclose a CERTIFIED CHECK (or has wired payment) in the amount of $____________. 

o    Cashless Exercise.  I have enclosed _________ shares of Common Stock of DLH Holdings Corp. in accordance with the Option Agreement. I represent that I have owned the shares being delivered  for at least six months prior to the date of exercise.

o        Combination of Cash and Cashless. I elect to pay the exercise price in cash and stock, and encloses a CERTIFIED CHECK (or has wired payment) in the amount of $____________ and have enclosed _________ shares of Common Stock of DLH Holdings Corp. in accordance with the Option Agreement.  I represent that I have owned the shares being delivered for at least six months prior to the date of exercise.
    
I understand and agree that DLH Holdings Corp. shall have the power and the right to deduct or withhold, or require me to remit to it, as a condition precedent for the fulfillment of any option exercise, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this option.  Further, I acknowledge that DLH Holdings Corp. shall have the right to require me to remit 

8

to DLH Holdings Corp., as a condition of exercise of the option, an amount sufficient to satisfy federal, state and local withholding tax requirements at the time of exercise.  However, notwithstanding the foregoing, to the extent that a Optionee is an insider (as determined by the Board of Directors), satisfaction of withholding requirements by having DLH Holdings Corp. withhold Shares may only be made to the extent that such withholding of Shares (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act.

Further, I agree to promptly notify DLH Holdings Corp. of the sale of any of the shares I received upon exercise of this option during the one year period commencing on the date I  receive the certificate for the shares.

Kindly deliver to me a certificate representing the shares as follows: 

INSTRUCTIONS FOR DELIVERY

Name:  ____________________________________________________________
              (please typewrite or print in block letters) 

Address:     _________________________________
_________________________________
_________________________________
        
Dated: _________________________  
 

Signature ________________________________

{N0039384  }    {N0039384  }
1

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