Document:

Exhibit 10.2

 

THE SECURITY
REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

 

STOCK OPTION AGREEMENT

 

 

THIS
STOCK OPTION AGREEMENT ("Agreement") is made effective as of the date of grant set forth below ("Date of Grant")
by and between XINDA, INTERNATIONAL, INC., a Colorado corporation ("Company"), and the optionee named below ("Optionee")
as contemplated in the Company's 2020 Option Plan ("Plan"). Capitalized terms not defined herein shall have the meaning ascribed
to them in the Plan.

 

Optionee:                     Joseph Grimes

 

Social Security Number:                 xxx-xx-xxxx

 

Address:        28235 Shore, Mission
Viejo, CA 92692

 

Total
Option Shares:          100,000

 

Exercise Price Per Share:             Par Value $0.01

 

Date
of Grant:           June 20, 2020

 

First
Vesting Date:             December 20,2021

 

Expiration Date for Exercise of
Options:           June 20, 2025

 

Stock Option Number: TBD

 

Type of Stock Option:

(Check one)                   [ X] Incentive Stock
Option              [ ] Statutory Stock Option

 

 

 

 

    	 	1	 

     

    

 

1.              Conditional
Grant of Option. The Company hereby conditionally grants to Optionee an option (“Option”) to purchase the total number
of shares of Common Stock of the Company set forth above ("Shares") at the Exercise Price Per Share set forth above ("Exercise
Price"), subject to all of the terms and conditions of this Agreement and the Plan. If designated as an Incentive Stock Option above,
the Option is intended to qualify as an "incentive stock option" (“ISO”) within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (“Code”). Subject to the Plan, only Directors of the Company shall receive ISOs.
This Agreement shall be deemed a Stock Option Agreement as defined in the Plan. The terms and conditions of the Plan are incorporated
herein by this reference. All specific terms and references, including capitalized terms and references, which are undefined in this
Agreement, shall have the definition and meaning ascribed to them in the Plan, including, without limitation, the definition of the terms
Director and Consultant.

 

2.              Exercise
Price. The Exercise Price, is not less than the fair market value per share of Common Stock on the date of grant, as determined by
the Board; provided, however, in the event Optionee is a Director and owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of its Parent or Subsidiary corporations immediately before the Option
is granted, said exercise price is not less than one hundred ten percent (110%) of the fair market value per share of Common Stock on
the date of grant as determined by the Board.

 

3.              Exercise
of Option. Subject to the vesting schedule contained herein and the other conditions set forth in this Agreement, all or part of
the Option may be exercised prior to its expiration from the first vesting date set forth above ("First Vesting Date") up to
and including 5:00 p.m. Pacific Standard Time on the expiration date set forth above ("Expiration
Date") at the time or times set forth herein in accordance with the provisions of the Plan as follows:

 

		(i)	Vesting:

 

		(a)	The Option shall become exercisable in the amount of 33,334 shares upon the First
Vesting Date. Thereafter, unless all options have vested subject to other terms of this Agreement, the Option shall vest and become exercisable,
so long as Optionee continues to be retained by Company, at the rate of 33,333 Shares upon each anniversary of the First Vesting Date.

 

		(b)	In the event of a sale or merger of all or substantially all of the Company's assets
to an acquiring party following which the Company would not be a surviving operating entity, the Company will provide Optionee a fifteen
(15) day prior notice of such proposed event providing for immediate vesting of all remaining unvested Options under this Agreement.

 

		(c)	This Option may not be exercised for a fraction of a Share.

 

		(d)	In the event of Optionee's death, disability or other termination of employment,
the exercisability of the Option is governed by Sections 7, 8 and 9 below, subject to the limitations contained in subsection 3(i)(d)
below.
	 	 	 
		(e)	In no event may the Option be exercised after the date of expiration of the term of
the Option as set forth in Section 11 below.

 

 

 

 

 

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		(ii)	Method of Exercise. The Option shall be exercisable by written notice which
shall state the election to exercise the Option, the nwnber of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect to such shares of Common Stock as may be required by
the Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall be delivered in person or
by certified mail to the President, Secretary or Chief Financial Officer of the Company. The written notice shall be accompanied by payment
of the exercise price.
	 	 	 
	 	(ii)(ii)	Method of Exercise. The Option shall be
                                exercisable by written notice which shall state the election to exercise the Option, the number of Shares
                                in respect of which the Option is being exercised, and such other representations and agreements as to
                                the holder's investment intent with respect to such shares of Common Stock as may be required by the
                                Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall
                                be delivered in person or by certified mail to the President, Secretary or Chief Financial Officer of
                                the Company. The written notice shall be accompanied by payment of the exercise price.
	 	 	 
		(iii)	Compliance with Law. No Shares will be issued pursuant to the exercise of
an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange
or quotation medium upon which the Shares may then be listed or quoted. Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

 

		(iv)	Adjustments, Merger, etc. The number and class of the Shares and/or the exercise
price specified above are subject to appropriate adjustment in the event of changes in the capital stock of the Company by reason of stock
dividends, stock splits, combination or recombination of shares, reclassifications, mergers, consolidations, reorganizations or liquidations.
Subject to any required action of the stockholders of the Company, if the Company shall be the surviving corporation in any merger or
consolidation, the Option (to the extent that it is still outstanding) shall pertain to and apply to the securities to which a holder
of the same number of shares of Common Stock that are then subject to the Option would have been entitled. A dissolution or liquidation
of the Company, or a merger or consolidation in which the Company is not the surviving corporation, will cause the Option to terminate,
unless such dissolution or liquidation of the Company, or a merger or consolidation shall otherwise provide. Prior to the termination
of the Option the Company shall provide Optionee a notice of the intent to terminate the Option fifteen days prior to a dissolution or
liquidation of the Company, or a merger or consolidation in which the Company is not the surviving corporation, and Optionee shall have
the right under such notice to exercise this Option in whole or part (to the extent that the Option is still outstanding) during a ten-day
period ending on the fifth day prior to such dissolution
or liquidation of the Company, or a merger or consolidation. To the extent that the foregoing adjustments relate to stock or securities
of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.

 

 

 

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4.              Optionee's Representations. By receipt of the Option, by its execution, and by its exercise in whole or in part, Optionee
represents to the Company that Optionee understands that:

 

		(i)	Both the Option and any Shares purchased upon its exercise are securities, the issuance
by the Company of which requires compliance with federal and state securities laws;

 

		(ii)	These securities are made available to Optionee only on the condition that Optionee
makes the representations contained in this Section 4 to the Company;

 

		(iii)	Optionee has made a reasonable investigation of the affairs of the Company sufficient
to be well informed as to the rights and the value of these securities;

 

		(iv)	Optionee understands that the securities have not been registered under the Securities
Act of 1933, as amended (the 11Act") in reliance upon one or more specific exemptions contained in the Act, which may include reliance
on Rule 701 promulgated under the Act, if available, or which may depend upon: (a) Optionee's bona fide investment intention in acquiring
these securities; (b) Optionee's intention to hold these securities in compliance with federal and state securities laws; (c) Optionee
having no present intention of selling or transferring any part thereof (recognizing that the Option is not transferable) in violation
of applicable federal and state securities laws; and (d) there being certain restrictions on transfer of the Shares subject to the Option;

 

		(v)	Optionee understands that the Shares subject to the Option, in addition to other
restrictions on transfer, must be held indefinitely unless subsequently registered under the Act, or unless an exemption from registration
is available; that Rule 144, the usual exemption from registration, is only available after the satisfaction of certain holding periods
and in the presence of a public market for the Shares; that there is no certainty that a public market for the Shares will exist, and
that otherwise it will be necessary that the Shares be sold pursuant to another exemption from registration which may be difficult to
satisfy; and,

 

		(vi)	Optionee understands that the certificate representing the Shares will bear a legend
prohibiting their transfer in the absence of their registration or the opinion of counsel for the Company that registration is not required,
and a legend prohibiting their transfer in compliance with applicable state securities laws unless otherwise exempted.

 

 

 

 

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5.              Method
of Payment. Payment of the purchase price may be made subject to the terms of Section 14 herein, or by cash, check or, in the sole
discretion of the Board at the time of exercise, promissory notes or other Shares of Common Stock having a fair market value on the date
of surrender equal to the aggregate purchase price of the Shares being purchased.

 

6.              Restrictions
on Exercise. The Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration
for such Shares would constitute a violation of any applicable federal or state securities or other law or regulation. As a condition
to the exercise of the Option, the Company may require Optionee to make any representation and warranty to the Company as may be required
by any applicable law or regulation.

 

7.              Termination
of Status as a Director. In the event of termination of Optionee's continuous status as a Director, as such status may be determined
and construed by the Company in its sole discretion ("Continuous Status"), for any reason other than death or disability or
the completed term and performance under any consulting or employment agreement between the Optionee and the Company, Optionee may, but
only within sixty (60) days after the date of such termination (but in no event later than the date of expiration of the term of the
Option as set forth in Section 11 below), exercise the Option to the extent that Optionee was entitled to exercise it at the date of
such termination. To the extent that Optionee was not entitled to exercise the Option at the date of such termination, or if Optionee
does not exercise the Option within the time specified herein, the Option shall terminate.

 

8.             Disability
of Optionee. In the event of termination of Optionee's Continuous Status as an Director as a result of Optionee's disability, Optionee
may, but only within six (6) months from the date of termination of employment or consulting relationship (but in no event later than
the date of expiration of the term of the Option as set forth in Section 11 below), exercise the Option to the extent Optionee was entitled
to exercise it at the date of such termination; provided, however that if the disability is not total and permanent (as defined in Section
22(e)(3) of the Code) and the Optionee exercises the option within the period provided above but more than three months after the date
of termination, the Option shall automatically be deemed to be a Nonstatutory Stock Option and not an Incentive Stock Option; and provided,
further, that if the disability is total and permanent (as defined in Section 22(e)(3) of the Code), then the Optionee may, but only
within one (1) year from the date of termination of employment or consulting relationship (but in no event later than the date of expiration
of the term of the Option as set forth in Section 11 below), exercise the Option to the extent Optionee was entitled to exercise it at
the date of such termination. To the extent that Optionee was not entitled to exercise the Option at the date of termination, or if Optionee
does not exercise such Option (which Optionee was entitled to exercise) within the time periods specified herein, the Option shall terminate.

 

 9.             Death of Optionee. In the event of the death of Optionee:

 

		(i)	During the term of the Option while an Director of the
Company and having been in Continuous Status as an Director since the date of grant of the Option, the Option may be exercised, at any
time within one (1) year following the date of death (but, in the case of an Incentive Stock Option, in no event later than the date of
expiration of the term of the Option as set forth in Section 11 below), by Optionee's estate or by
a person who
acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that had accrued
at the time of death of the Optionee. To the extent that such Director was not entitled to exercise the Option at the date of death, or
if such Director, Consultant, estate or other person does not exercise such Option (which such Director, Consultant, estate or person
was entitled to exercise) within the one (1) year time period specified herein, the Option shall terminate; or,

 

 

 

 

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		(ii)	During the sixty (60) day period specified in Section 7 or the
one (1) year period specified in Section 8, after the termination of Optionee's Continuous Status as an Director, the Option may be exercised,
at any time within one (1) year following the date of death (but, in the case of an Incentive Stock Option, in no event later than the
date of expiration of the term of the Option as set forth in Section 11 below), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date
of termination. To the extent that such Director was not entitled to exercise the Option at the date of death, or if such Director, Consultant,
estate or other person does not exercise such Option (which such Director, Consultant, estate or person was entitled to exercise) within
the one (1) year time period specified herein, the Option shall terminate.

 

10.            Non-Transferability
of Option. The Option may not be transferred in any manner otherwise than by wil1 or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee, only by Optionee. The terms of the Option shall be binding upon the executors, administrators,
heirs, successors and assigns of Optionee.

 

11.            Term
of Option. The Option may not be exercised more than five (5) years from the date of grant of the Option, and may be exercised during
such term only in accordance with the Plan and terms of the Option; provided, however, that the term of this option, if it is a Nonstatutory
Stock Option, may be extended for the period set forth in Section 9(i) or Section 9(ii) in the circumstances set forth in such Sections.

 

12.           Early
Disposition of Stock; Taxation Upon Exercise of Option. If Optionee
is an Director and the Option qualifies as an ISO, Optionee understands that, if Optionee disposes of any Shares received under the Option
within two (2) years after the date of this Agreement or within one (1) year after such Shares were transferred to Optionee, Optionee
may be treated for federal income tax purposes as having received ordinary income at the time of such disposition in
any amount generally measured as the difference between the price paid for the Shares and the lower of the fair market value of
the Shares at the date of exercise or the fair market value of the Shares at the of disposition. Any gain recognized on such premature
sale of the Shares in excess of the amount treated as ordinary income
may be characterized as capital gain. Optionee hereby agrees to notify the Company in writing within thirty (30) days after the date
of any such disposition. Optionee understands that if Optionee disposes of such Shares at any time after the expiration of such two year
and one-year holding periods, any gain on such sale may be treated as long-term capital gain laws subject to meeting various qualifications.
If Optionee is a Consultant or this is a Nonstatutory Stock Option, Optionee
understands that, upon exercise of the Option, Optionee may recognize income for tax purposes in an amount equal to the excess of the
then fair market value of the Shares over the exercise price. Upon a resale of such shares by the Optionee, any difference between the
sale price and the fair market value of the Shares on the date of exercise of the Option may be treated as capital gain or loss. Optionee
understands that the Company may be required to withhold tax from Optionee's current compensation in some of the circumstances described
above (and Optionee hereby so authorizes the Company); to the extent that Optionee's current compensation is insufficient to satisfy
the withholding tax liability, the Company may require the Optionee to make a cash payment to cover such liability as a condition to
exercise of the Option.

 

 

 

 

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13.            Tax
Consequences. The Optionee understands that any of the foregoing references to taxation are based on federal income tax laws and
regulations now in effect, and may not be applicable to the Optionee under certain circumstances. The Optionee may also have adverse
tax consequences under state or local law. The Optionee has reviewed with the Optionee's own tax advisors the federal, state, local and
foreign tax consequences of the transactions contemplated by this Agreement. The Optionee is relying solely on such advisors and not
on any statements or representations of the Company or any of its agents. The Optionee understands that the Optionee (and not the Company)
shall be responsible for the Optionee's own tax liability that may arise as a result of the transactions contemplated by this Agreement.

 

14.           
Net Issue Exercise. Notwithstanding any provisions herein to the contrary, if the fair market value of one share of the
Company's Common Stock is greater than the Per Share Exercise Price (at the date of calculation as set forth below), in lieu of exercising
the Option for cash, the Optionee may elect to receive shares equal to the value (as determined below) of the Option (or the portion
thereof being canceled) by surrender of the Option at the principal office of the Company together with the properly endorsed Notice
of Exercise and Subscription Form and notice of such election, in which event the Company will issue to the Optionee a number of shares
of Common Stock computed using the following formula:

 

 

X =Y (A-B)

A

 

Where X =
the number of shares of Common Stock to be issued to the Optionee

 

Y = the
number of shares of Common Stock purchasable under the Option or, if only a portion of the Option is being exercised, the portion of the
Option being canceled (at the date of such calculation)

 

A= the fair
market value of one share of the Company's Common Stock (at the date of such calculation)

 

B = Per Share Exercise Price (as adjusted to the date of
such calculation)

 

For purposes of the above
calculation, fair market value of one share of the Company's Stock will be the average of the closing prices of the Company's shares
of Common Stock as quoted on the OTC Bulletin Board (the ''OTCBB") (or on such other United States stock exchange or public
trading market or quotation medium on or by which the shares of the Company trade or are quoted if, at the time of the election,
they are not trading or being quoted on the OTCBB), for the five (5} consecutive trading days immediately preceding the date of the
date the completed, executed Notice of Exercise and Subscription Form is received.

 

 

 

 

 

 

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15.            Damages.
The parties agree that any violation of the Option (other than a default in the payment of money) cannot be compensated for by damages,
and any aggrieved party shall have the right, and is hereby granted the privilege, of obtaining specific performance of the Option in
any court of competent jurisdiction in the event of any breach hereunder.

 

16.            Delay.
No delay or failure on the part of the Company or the Optionee in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of
any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy.

 

17.            Restrictions.
Notwithstanding anything herein to the contrary, Optionee understands and agrees that Optionee shall not dispose of any of the Shares,
whether by sale, exchange, assignment, transfer, gift, devise, bequest, mortgage, pledge, encumbrance or otherwise, except in accordance
with the terms and conditions of this Agreement, and Optionee shall not take or omit any action which will impair the absolute and unrestricted
right, power, authority and capacity of Optionee to sell Shares in accordance with the terms and conditions hereof.

 

Any purported transfer
of Shares by Optionee that violates any provision of this Section 17 shall be wholly void and ineffectual and shall give to the Company
or its designee the right to purchase from Optionee all but not less than all of the Shares then owned by Optionee for a period of ninety
(90) days from the date the Company first learns of the purported transfer at the Agreement Price and on the Agreement Terms (as those
terms are defined in subsections (iv) and (v), respectively, of this Section 17).

 

The Company shall not cause or permit the transfer of
any Shares to be made on its books except in accordance with the terms hereof.

 

		(i)	Permitted Transfers.

 

		(a)	Optionee may sell, assign or transfer any Shares held by the Optionee but only by
complying with the provisions of this Section I 7.

 

		(b)	Upon the death of Optionee, Shares held by the Optionee may be transferred to the
personal representative of the Optionee's estate. Shares so transferred shall be subject to the provisions of the Option and this Agreement.

  

		(ii)	Stock Certificate Legend. Each stock certificate for Shares issued to the
Optionee shall have conspicuously written, printed, typed or stamped upon the face thereof, or upon the reverse thereof with a conspicuous
reference on the face thereof, one or both of the following legends:

 

 

 

 

 

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THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED
IN THE ABSENCE OF REGISTRATION THEREUNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT. SUCH SHARES MAY NOT
BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN ANY MANNER EXCEPT IN ACCORDANCE WITH AND SUBJECT TO THE TERMS OF THE STOCK
OPTION AGREEMENT, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. EVERY CREDITOR OF THE HOLDER HEREOF AND ANY PERSON
ACQUIRING OR PURPORTING TO ACQUIRE THIS CERTIFICATE OR THE SHARES HEREBY EVIDENCED OR ANY INTEREST THEREIN IS HEREBY NOTIFIED OF THE EXISTENCE
OF SUCH STOCK OPTION AGREEMENT, AND ANY ACQUISITION OR PURPORTED ACQUISITION OF THIS CERTIFICATE OR THE SHARES HEREBY EVIDENCED OR ANY
INTEREST THEREIN SHALL BE SUBJECT TO ALL RIGHTS AND OBLIGATIONS OF THE PARTIES TO SUCH STOCK OPTION AGREEMENT AS THEREIN SET FORTH.

 

IT IS UNLAWFUL
TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

 

		(iii)	Manner of Exercise. Any right to purchase hereunder shall be exercised by
giving written notice of election to the Optionee, the Optionee's personal representative or any other selling person, as the case may
be, prior to the expiration of such right to purchase.

 

		(iv)	Agreement Price. The "Agreement Price" shall be the higher of
(a) the fair market value of the Shares to be purchased determined in good faith by the Board of Directors of the Company and (b) the
original exercise price of the Shares to be purchased.

 

		(v)	Agreement Terms. "Agreement Terms" shall mean and include the following:

 

		(a)	Delivery of Shares and Closing Date. At the closing, the Optionee, the Optionee's
personal representative or such other selling person, as the case may be, shall deliver certificates representing the Shares, properly
endorsed for transfer, and with the necessary documentary and transfer tax stamps, if any, affixed, to the purchaser of such Shares. Payment
of the purchase price therefore
shall concurrently be made to the Optionee, the Optionee's personal representative or such other selling person, as provided in subsection
(b) of this subsection (v). Such delivery and payment shall be made at the principal office of the Company or at such other place as the
parties mutually agree.

 

 

 

 

 

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		(b)	Payment of Purchase Price. The Company shall pay the purchase price to the Optionee
at the closing.

 

		(vi)	Right to Purchase Upon Certain Events. The Company or its designee shall
have the right to purchase all, but not less than all, of the Shares held by the Optionee at the Agreement Price and on the Agreement
Terms for a period of ninety (90) days after any of the following events:

 

		(a)	An attempt by a creditor to levy upon or sell any of the Optionee's Shares;

 

		(b)	The filing of a petition by the Optionee under the U.S. Bankruptcy Code or any insolvency
laws;

 

		(c)	The filing of a petition against Optionee under any insolvency or bankruptcy laws
by any creditor of the Optionee if such petition is not dismissed within thirty (30) days of filing;

 

		(d)	The entry of a decree of divorce between the Optionee and the Optionee's spouse;
or,

 

		(e)	The termination of Optionee's services as an Director with the Company.

 

The Optionee shall provide the
Company written notice of the occurrence of any such event within 30 days of such event.

 

		(vii)	Termination. The provisions of this Section 17 shall terminate and all rights
of each such party hereunder shall cease except for those which shall have theretofore accrued upon the occurrence of any of the following
events:

 

		(a)	Cessation of the Company's business;

 

		(b)	Bankruptcy, receivership or dissolution of the Company;

 

 

		(c)	Written consent or agreement of the shareholders of the Company holding Fifty Percent
(50%) of the then issued and outstanding shares of the Company (determined on a fully diluted basis);

 

		(d)	Consent or agreement of a majority of the members of the Board of Directors of the
Company; or,

 

 

 

 

 

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		(e)	Registration of any class of equity securities of the Company pursuant to Section 12
of the Securities Exchange Act of 1934, as amended.

 

		(viii)	Amendment. This Section 17 may be modified or amended in whole or in part
by a written instrument signed by shareholders of the Company holding 50% of the outstanding shares of Common Stock (determined on a fully
diluted basis) or a majority of the members of the Board of Directors of the Company.

  

18.          
Market Standoff. Unless the Board of Directors otherwise consents, Optionee agrees hereby not to sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period following the effective date of a registration statement of the
Company filed under the Act; provided, however, that such restriction shall apply only to the first two registration statements of the
Company to become effective under the Act which includes securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such 180-day period.

 

19.            
Rule 144. Optionee acknowledges and understands that the Shares may be subject to transfer and sale restrictions imposed
pursuant to SEC Rule 144 of the Rules promulgated under the Securities Act of 1933 ("Act") and the regulations promulgated
thereunder. Optionee shall comply with Rule 144 and with all policies and procedures established by the Company with regard to Rule 144
matters. Optionee acknowledged that the Company or its attorneys or transfer agent may require a restrictive legend on the certificate
or certificates representing the Shares pursuant to the restrictions on transfer of the Shares imposed by Rule 144.

 

20.            No
Distribution. Notwithstanding anything in this Agreement to the contrary, Optionee acknowledges that: (i) the Option, and the Shares
upon exercise, is and are being acquired in a private transaction which is not part of a distribution of the Option or Shares; (ii) the
Optionee intends to hold the Option and Shares for the account of the Optionee and does not intend to sell the Option or Shares as a
part of a distribution or otherwise; and (iii) neither the Optionee nor the Company is an underwriter with regard to the Option or the
Shares for purposes of Rule 144.

 

21.            Securities
Compliance. Optionee understands that the Option and the Shares may be offered and sold in reliance on one or more exemptions from
the registration requirements of federal and state securities laws, which exemptions may include, without limitation, Regulation D promulgated
under the Securities Act, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of Optionee set forth herein in order to determine the applicability of such exemptions and the suitability
of Optionee to acquire the Option and the Shares. The representations, warranties and agreements contained herein are true and correct
as of the date hereof and may be relied upon by the Company and Optionee will notify the Company immediately of any adverse change in
any such representations and warranties which may occur prior to the issuance of Shares. The representations, warranties and agreements
of Optionee contained herein shall survive the execution and delivery of this Agreement and the exercise of the Option and the issuance
of the Shares.

 

 

 

 

 

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22.          
Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to its subject matter,
and supersedes all other prior or contemporaneous agreements and understandings both oral or written; subject, however, that in the event
of any conflict between this Agreement and the Plan, the Plan shall govern. This Agreement may only be amended in a writing signed by
the Company and the Optionee.

 

23.            Privileges
of Stock Ownership. Optionee shall not have any of the rights of a shareholder with respect to any Shares until Optionee exercises
the Option and pays the Exercise Price, Shares are issued and delivered to Optionee, and Optionee is shown as a shareholder of record
on the books and records of the Company.

 

24.            Further
Acts. The parties hereto shall cooperate with each other and execute such additional documents or instruments and perform such further
acts as may be reasonably necessary to affect the purpose and intent of the Agreement.

 

25.            Effect
of Headings. The subject headings of the paragraphs and subparagraphs of this Agreement are included for purposes of convenience
only, and shall not affect the construction or interpretation of any of its provisions.

 

26.            Notices.
Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any notice required to be given or delivered to Optionee shall
be in writing and addressed to Optionee at the address indicated herein or to such other address as such party may designate in writing
from time to time to the Company. All notices shall be deemed to have been given or delivered upon actual personal delivery; three (3)
days after deposit in the United States mail by certified or registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after transmission by facsimile with a corresponding facsimile
transmission confirmation sheet.

 

27.            Counterparts.
This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The exhibits attached hereto and initialed by the parties are made a part
hereof and incorporated herein by this reference.

 

28.            Parties
in Interest. Nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason
of this Agreement on any persons other than the parties to it and their respective successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third party to this Agreement, nor shall any provision give any third
person any right of subrogation or action over against any party to this Agreement.

 

29.            Recovery
of Litigation Costs. If any legal action or any arbitration or other proceeding is brought for the enforcement of this Agreement,
or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the
successful or prevailing party or parties shall be entitled to recover as an element of their damages, reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other relief to which they may be entitled.

 

 

 

 

 

    	 	12	 

     

    

 

30.            Severability;
Construction. In the event that any provision in this Agreement shall be invalid or unenforceable, such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement.
This Agreement shall be construed as to its fair meaning and not for or against either party.

 

31.            Survival
of Representations and Obligations. All representations, warranties and agreements of the parties contained in this Agreement, or
in any instrument, certificate, opinion or other writing provided for in it, shall survive the exercise of the Option and the issuance
of the Shares.

 

32.            Specific
Performance. Each party's obligations under this Agreement are unique. If any party should default in its obligations under this
Agreement, the parties each acknowledge that it would be extremely impracticable to measure the resulting damages; accordingly, the nondefaulting
party, in addition to any other available rights or remedies, may sue in equity for specific performance without the necessity of posting
a bond or other security, and the parties each expressly waive the defense that a remedy in damages will be adequate.

 

33.            Gender;
Number. Whenever the context of this Agreement requires, the masculine gender includes the feminine or neuter gender, and the singular
number includes the plural.

 

34.            Governing
Law and Venue. This Agreement will be construed and enforced in accordance with, and the rights of the parties will be governed by,
the laws of the State of California without regard to conflict of laws principles. Venue in any action arising by reason of this Agreement
shall lie exclusively in Orange County, California.

 

35.           Employment
Agreement. This Option is issued pursuant to that certain Director's Agreement effective June 20,2020, and any amendments thereto,
between the Optionee and the Company. The terms of the Director's Agreement shall control over any conflicting terms in this Option.
Any breach under the Director's Agreement shall constitute a breach under this Option and allows the Company to terminate this Option
in whole or in part.

 

IN WITNESS WHEREOF, this Agreement is made effective on the date first
set forth above at Orange County, California.

 

 

 

	 	Company: XINDA, INTERNATIONAL, INC, a Nevada Corporation
	 	 
	 	By: /s/ Joseph Grimes                      
	 	Name: Joseph Grimes
	 	Title: CEO

 

 

 

 

 

 

 

 

 

    	 	13	 

     

    

 

OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN DIRECTOR AT THE WILL OF THE
COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES
AND AGREES THAT THIS OPTION, THE COMPANY’S PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, THE TRANSACTIONS CONTEMPLATED HEREUNDER
AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN DIRECTOR FOR
THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee acknowledges receipt of a copy of the Plan, represents
that Optionee is familiar with the terms and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions
thereof. Optionee has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Agreement and fully understands all provisions of the Plan and this Agreement. Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board or of the Committee upon any questions arising wider the
Plan.

 

IN WITNESS WHEREOF, this
Agreement is made effective on the date first set forth above at Orange County, California.

 

 

 

 

 

	 	OPTIONEE
	 	 
	 	/s/ Joseph Grimes                     
	 	Name: Joseph Grimes
	 	 

 

 

 

 

 

 

    	 	14	 

     

    

 

CONSENT OF SPOUSE

 

 

The undersigned spouse
of the Optionee to the foregoing Stock Option Agreement acknowledges on his or her own behalf that: I
have read the foregoing Stock Option Agreement and I know its
contents. I hereby consent to and approve of the provisions of the Stock Option Agreement, and agree that the Shares issued upon exercise
of the Option covered thereby and my interest in them shall be subject to the provisions of the Stock Option Agreement and that I will
take no action at any time to hinder operation of the Stock Option Agreement as to the Shares or my interest in the Shares.

 

IN WITNESS
WHEREOF, this Agreement is made effective on the date first set forth above at Orange County, California.

 

 

 

 

 

 

 

 

	 	__________________________________
	 	Name:
	 	 
	 	 
	 	 

 

 

 

 

 

 

 

 

 

 

 

    	 	15	 

     

    

 

EXHIBIT TO OPTION

SUBSCRIPTION
FORM AND NOTICE OF EXERCISE

 

XINDA, INTERNATIONAL, Inc.                                                                            Date:

Attn:
President

65 Enterprise

Aliso Viejo, CA
92656

 

Ladies and Gentlemen:

 

The
undersigned, the holder of the enclosed Option, hereby irrevocably elects to exercise the purchase rights represented by the Option
and to purchase there under ________________ shares of Common Stock of XINDA, INTERNATIONAL, INC. (the "Company"), and
herewith encloses payment of $_________and/or ___________shares of the
Company's common stock, (the "Purchase Price") in full payment of the Purchase Price of such shares being
purchased.

 

Exercise
of the Option shall not be deemed effective unless and until good and immediately available funds in the full amount of the Purchase
Price have been confirmed in the account of the Company. The original Option shall be presented with this Subscription Form and Notice
of Exercise.

 

The
Company may, in its discretion, withhold a portion of some or all of the exercised shares or other amounts for the payment of taxes or
other items. Holder represents that Holder is not subject to any backup withholding requirements. Holder acknowledges that the shares
of stock of the Company issued upon exercise will not be entitled to any dividend declared upon such stock prior to the effective date
of exercise of the Option.

 

Holder hereby constitutes this Subscription Form and Notice of Exercise as an assignment, deposit tender, and
transfer in blank of the Option as set forth therein. Holder hereby irrevocably constitutes and appoints the secretary of the Company
as Holder's attorney in fact to issue shares upon the exercise of the Option and reflect the same on the books and records of the Company,
cancel the Option, issue a new Option, if applicable, and perform any necessary act on behalf of Holder, with full power substitution.

 

 

	 	Very truly yours,
	 	 
	 	________________________________
	 	 
	 	By: _____________________________
	 	 
	 	Title: ___________________________

 

 

 

 

 

 

 

    	 	16tvty-ex101_7.htm

Exhibit 10.1

 

 

 

 

 

 

 

 

 

SUMMARY PLAN
DESCRIPTION

for the

Separation Benefits Program*

for

Section 16 Officers

 

Effective as of September 22, 2021

 

 

 

 

	
	 

	
* This program is a part of the Tivity Health, Inc. Health and Welfare Benefit Plan.
	

 

Exhibit 10.1

 

 

 

Table of Contents

 

 

 

 

i

 

 

Introduction

Tivity Health, Inc. (the “Company”) maintains the Separation Benefits Program for Section 16 Officers2 (“Separation Benefits Program”), a part of the Tivity Health, Inc. Health and Welfare Benefit Plan (the “Plan”), for the benefit of eligible colleagues of the Company and any other Employer the Company allows to participate in (and that effectively adopts) this Separation Benefits Program and the Plan (each, an “Employer”). 

The Plan is an employee welfare benefit plan that provides various welfare benefits, including certain separation (or severance) benefits for eligible colleagues of the Employers who terminate employment under certain circumstances subject to the provisions of the Separation Benefits Program (“participants”), as described in this Summary Plan Description (“SPD”). The Eligibility and Participation in the Plan section below outlines the eligiblity requirements for the benefits described in this SPD.

This SPD serves as the summary plan description for this Separation Benefits Program portion of the Plan, as required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and summarizes the major features of the Separation Benefits Program available to participants on and after September 22, 2021. 

This SPD describes the separation benefits available to Section 16 Officers class of participants (the separation benefits available to other participant classes are described in a separate summary plan description prepared for those participant classes).

Important Information about the Plan

Plan Name

The name of the Plan of which this Separation Benefits Program is a part is the Tivity Health, Inc. Health and Welfare Benefit Plan.

Plan Year

The Plan’s records are kept on a calendar year (January 1 through December 31) basis.

Plan Number

The ERISA plan number assigned by the Company to the Plan is 507.

Plan Sponsor

The name and address of the sponsor of the Plan are:

Tivity Health, Inc.  
701 Cool Springs Blvd.
Franklin, TN  37067

	
	 

	
1
	
 References to Section 16 Officers are employees meeting the definition within the meaning of Securities Exchange Act of 1934, as amended (the “Exchange Act”). 

1

 

 

Plan Sponsor’s Employer Identification Number (EIN)

The employer identification number assigned by the Internal Revenue Service to the Plan Sponsor is 62-1117144.

Plan Administrator

The name, business address, and business telephone number of the Plan Administrator are:

Tivity Health, Inc. 
701 Cool Springs Blvd.
Franklin, TN  37067

Telephone: 800.869.5311

If you have any questions about this Separation Benefits Program, you may contact the Company at the following:

Tivity Health, Inc. 
Attention: Bonnie Schirato
1445 S. Spectrum Blvd, Suite 100

Chandler, AZ  85286

 

Telephone: On file  

Funding Medium and Type of Plan Administration

All benefits and the expenses of administering the Separation Benefits Program are paid for by the Employer out of its general assets. Participants do not contribute to the cost of coverage under the Separation Benefits Program.

The Separation Benefits Program is administered by the Company, as Plan Administrator. Refer to the How the Plan is Administered section below for more information.

Agent for Service of Legal Process

The name and address of the Plan’s agent for service of legal process are:

Tivity Health, Inc.
Attention:  Chief Legal Officer
701 Cool Springs Blvd.
Franklin, TN  37067

Conflicting Provisions

If the terms of this SPD conflict with the terms of the official plan documents of the Plan, the terms of the official plan documents, rather than this SPD, will control.

Except as otherwise specifically provided in the plan documents for the Plan, any statement or representation, whether oral, written, electronic, or otherwise, made by the Plan Administrator, a service provider, or any other individual or entity that alters, modifies, amends, or is inconsistent with the written terms of the official plan documents of the Plan shall be invalid and unenforceable and may not be relied upon by any colleague, participant, beneficiary, service provider, or other individual or entity.

2

 

Amendment and Termination

The Plan, including this Separation Benefits Program, may be amended or terminated at any time, in the sole and unlimited discretion of the Company as sponsor of the Plan; provided, however, that with respect to any amendment or termination that materially impacts the benefits and other rights of any participant hereunder, such amendment or termination shall only be made with twelve (12) months of advance written notice to the impacted participant(s). No participant or beneficiary shall have a right to continuing benefits except to the extent required by law.

No Contract of Employment

The Plan, including this Separation Benefits Program, is not intended to be, and may not be construed as constituting, a contract or other arrangement for employment between you and the Employer.

Non-Assignability of Benefits and Other Rights and Obligations

Except as expressly provided in the Plan or in this SPD, the benefits under this Separation Benefits Program:

	
 
	
•
	
Are not in any way subject to your debts or other obligations;

	
 
	
•
	
May not be voluntarily or involuntarily sold, transferred, alienated, assigned or encumbered by you; and

	
 
	
•
	
Shall not be subject to being taken by your creditors. 

Any attempt to cause the benefits under this Plan to be so subjected will not be recognized, except to the extent required by law (e.g., as required by the tax withholding provisions of applicable law).

Similarly, except as expressly provided in the Plan or in this SPD, any other rights and/or obligations under the Plan to or with respect to may not be voluntarily or involuntarily sold, transferred, alienated, assigned, or encumbered, and any attempt to cause such right or obligation to be so subjected will not be recognized except to the extent required by law (e.g., by the designation of any authorized representative pursuant to the Plan’s claims procedures).

Eligibility and Participation in the Separation Benefits Program

Who Is Eligible to Participate

You will automatically become a participant in this Separation Benefits Program if you meet all of the following eligibility requirements of the Plan:

	
 
	
•
	
You are classified in the Employer’s payroll system as an active colleague in a full-time position (defined as a position that regularly requires the colleague to spend 30 or more hours per week working) and you have been designated by the Company’s Board of Directors as a Section 16 Officer with respect to the Company;

	
 
	
•
	
Your employment is involuntarily terminated by the Employer for any reason other than “Cause” which is defined as:

	
 
	
-
	
Your continued failure to substantially perform your duties after written notice and failure to cure within sixty (60) days; 

	
 
	
-
	
Conviction of a felony or engaging in misconduct which is materially injurious to the Employer, monetarily or to its reputation or otherwise, or which would damage your ability to effectively perform his/her duties; 

3

 

	
 
	
-
	
Theft or dishonesty; 

	
 
	
-
	
Intoxication while on duty; or 

	
 
	
-
	
Willful violation of Employer policies or procedures after written notice and failure to cure within thirty (30) days; if the violation is incapable of cure, termination may occur immediately upon written notice;

	
 
	
•
	
You terminate your employment for “Good Reason” which will exist if, without your express written consent, the Company

-   Materially reduces your base salary*; or 

-   Requires you to move more than 50 miles from your home address as of the effective date of this Plan

	

	
* If all Section 16 officers are required to take a salary reduction that is equal to or less than 25% of their base salary, then you will not have “Good Reason” to terminate your employment and collect severance benefits under this Plan.  

	

	
You must provide written notice of the event constituting “Good Reason” within 30 days of first learning of the event. The Company will have a 30-day cure period after receiving written notice from you of the “Good Reason” event. If the Company does not cure the event constituting “Good Reason” within the cure period, then you must terminate your employment within 30 days following the expiration of the cure period for it to constitute “Good Reason.”

	
 
	
•
	
You work through the date designated by the Employer for you to complete any outstanding work and/or transition any remaining duties, if applicable;

	
 
	
•
	
You are not employed or engaged, directly or indirectly, in any capacity, by the Employer or any of its related companies, or any of its successors; and

	
 
	
•
	
You timely sign (and do not revoke) the Employer’s separation agreement and general release of liability (“Separation Agreement”). 

If you are hired by the Employer or any related or successor employer, in any capacity, while receiving separation benefits, you are not eligible to participate (or to continue participating) in this Separation Benefits Program.

Your valid execution of the Separation Agreement is required for participation in,
and access to any benefits provided under, this Separation Benefits Program.

Who Is Not Eligible to Participate

You are not eligible to participate in this Separation Benefits Program if any of the following apply:

	
 
	
•
	
You do not meet one or more of the eligibility requirements above;

	
 
	
•
	
You are classified in the records of the Employer as an independent contractor, regardless of whether you’re later determined by the Internal Revenue Service or a federal or state court to be a common law employee;

	
 
	
•
	
You are entitled to any severance payments or benefits from another Employer-sponsored program or any other program or agreement (for example, an employment agreement or severance agreement) that provides greater severance payments or more favorable terms than those described in this Plan;

	
 
	
•
	
You do not timely sign, or you revoke, the Separation Agreement;

4

 

	
 
		

	
 
	
•
	
You are employed or engaged, directly or indirectly, in any capacity, by an Employer or any of its related companies, or any of its successors;

	
 
	
•
	
Your employment is terminated by the Employer for Cause; or

	
 
	
•
	
You voluntarily resign or otherwise end your employment with the Employer, other than for Good Reason, including if you end employment prior to the date designated by the Employer for you to complete any outstanding work and/or transition any remaining duties, if applicable.

Termination following a Change of Control

In the event of a Change of Control, as defined below, you will be eligible to participate in the Separation Benefits Program and you will be eligible to receive the greater of 26 weeks of severance benefits or the severance benefits described herein based on years of service, provided you meet all of the eligibility requirements described in this SPD, if your employment is involuntarily terminated without Cause or you terminate your employment for Good Reason within twelve (12) months of the Change of Control. A “Change of Control” shall mean any of the following events:

	
 
	
•
	
Any person or entity, including a “group” as defined in Section 13(d)(3) of the Exchange Act, other than the Company or a wholly-owned subsidiary thereof or any employee benefit plan of the Company or any of its subsidiaries, becomes the beneficial owner of the Company’s securities having 35% or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of directors of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business); or 

	
 
	
•
	
As the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sales of assets or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then outstanding securities of the Company or any successor corporation or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction.

When Coverage under this Separation Benefits Program Ends

Your coverage under this Separation Benefits Program (and all benefits under this program) will end on the earliest of the following, subject to the terms of the Separation Agreement that you signed:

	
 
	
•
	
After you become a participant, the date on which you become employed (or reemployed) or engaged, directly or indirectly, in any capacity, during the severance period (described under Separation Benefits under this Program below), by an Employer or any of its related companies, or any of its successors; provided, however, that, in this event, you will receive a minimum of two weeks of the benefits provided for under this program;

	
 
	
•
	
The date this Separation Benefits Program or the Plan is terminated.

	
 
	
•
	
The date your coverage is terminated because of your false representation or fraud (described under Termination of Coverage for False Representations or Fraud below).

	
 
	
•
	
The date as of which all of the Separation Benefits Program benefits (described under Benefits below) have been provided to you; or, for outplacement services, the deadline by which you must receive the Plan’s outplacement services (refer to Outplacement Services below), if earlier.

5

 

Separation Benefits under this Program

This section summarizes the benefits available to participants under this Separation Benefits Program. Any benefits payable to a participant under this Separation Benefits Program will not be counted as compensation for purposes of determining benefits under any other benefit plan or policy of the Company, except to the extent expressly provided therein.

Severance Payment—Salary Continuation

As a Separation Benefits Program participant, you are entitled to severance payment(s) in the form of salary continuation paid in accordance with the Employer’s regular payroll procedures for the duration of the applicable severance period. Your severance payment(s) are determined based on your regular base pay, and not including bonuses, commissions, or any other forms of compensation.

The applicable “severance period” is determined in accordance with the following schedule, based on the number of your years of service with the Employer: 

Severance Period Schedule:

		
	
Years of Service
	
Severance Period
(expressed in weeks)

	
Under (<) 1
	
12

	
1 - < 3
	
26

	
3+ 
	
52 (maximum)

These severance payments will be subject to withholding as required by the Internal Revenue Code (“Code”) and other applicable law and are subject to any additional terms described in your Separation Agreement.

Timing and Other Limitations on Payment—Section 409A of the Code

The severance benefits provided under this Separation Benefits Program are intended to fall outside the scope of Section 409A of the Code, which governs nonqualified deferred compensation arrangements.  Each payment of severance pay benefits is treated as a separate payment for purposes of Section 409A of the Code and any payments are intended to satisfy, to the greatest extent possible, the exemptions from the application of Section 409A, including those provided under 26 C.F.R. §§ 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two (2) year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).

 

Notwithstanding anything to the contrary herein, if (i) on the date of your “separation from service” (as such term is defined under 26 C.F.R. § 1.409A-1(h)), you are deemed to be a “specified employee” (as such term is defined under 26 C.F.R. § 1.409A-1(i)(1)), as determined in accordance with the Company’s “specified employee” determination procedures, and (ii) any payments to be provided to you pursuant to this Separation Benefits Program which constitute “deferred compensation” for purposes of Section 409A of the Code are or may become subject to the additional tax under Section 409A(a)(1)(B) or any other taxes or penalties imposed under Section 409A if provided at the time otherwise required under this Separation Benefits Program, then such payments shall be delayed until the date that is six (6) months after the date of your “separation from service” (as such term is defined under 26 C.F.R. § 1.409A-1(h)) or, if sooner, the date of your death.  Any payments delayed pursuant to this section shall be made in a lump sum on the first day of the seventh month following your “separation from service” (as such term is defined under 26 C.F.R. § 1.409A-1(h)) or, if sooner, the date of your death.

 

6

 

 

Outplacement Services

As a Plan participant, you are entitled to a period of at least three (3) months (as described in your Separation Agreement) of outplacement services from the Plan’s designated outplacement services provider. You must activate these outplacement services within sixty (60) calendar days of the effective date of your termination of employment with the Employer.

You will be provided with information about these services and the designated outplacement services provider in your separation packet. A program participant may also request details from the designated outplacement services provider once services become available, as described in the preceding paragraph.

Subsidized Continuation Coverage

If you timely elect COBRA continuation coverage for any of the group health plan (medical, dental, and/or vision) coverages in which you were enrolled on your last day of employment with the Employer, in accordance with the COBRA election notice and form you receive after your termination, the cost of your COBRA continuation coverage will be subsidized such that your portion of the monthly COBRA premium during the severance period will approximate the regular colleague contribution for the coverage(s) you elect. This continuation coverage subsidy will be included in your gross income, if required by applicable law.

The availability of this subsidized coverage is subject to all terms and conditions of the applicable group health plan benefit program(s) under the Plan, including, but not limited to (i) your timely election of COBRA and timely payment of your share of the COBRA premiums during the severance period, and (ii) your continuing eligibility for such continuation coverage for the duration of the severance period (for example, if you first become enrolled in other employer group health plan coverage or Medicare after you elect COBRA under the Plan, your eligibility for COBRA continuation coverage under the Plan will end). 

Refer to the separate Summary Plan Description for the Tivity Health, Inc. Health and Welfare Benefit Plan and the COBRA election notice you receive from the COBRA administrator for details about COBRA continuation coverage under the Plan.

Exclusions—What’s Not Covered under the Separation Benefits Program

In addition to all exclusions and limitations described elsewhere in this SPD and in the Plan, the following are not covered under this Plan:

	
 
	
•
	
No benefits other than those as specifically described above in this Separation Benefits under this Program section are covered under the Separation Benefits Program.

	
 
	
•
	
Outplacement services received in excess of the maximum benefit or activated after the deadline described under Outplacement Services above are not covered under the Separation Benefits Program.

How the Plan is Administered

The Plan Administrator (named in the Important Information about the Plan section above) is the named fiduciary within the meaning of ERISA and has the sole and unlimited discretionary authority to administer and control the Plan in accordance with its terms, to interpret the Plan, and to determine eligibility for participation and for benefits under the terms of the Plan.

The principal duty of the Plan Administrator is to see that the Plan is carried out in accordance with its terms and for the exclusive benefit of participants and beneficiaries. The administrative duties of 

7

 

the Plan Administrator include, but are not limited to, interpreting the Plan, prescribing applicable procedures, determining eligibility for and the amount of benefits, and authorizing benefit payments and gathering information necessary for administering the Plan. The Plan Administrator may delegate any of these administrative duties among one or more persons or entities (any reference in this SPD to the “Plan Administrator” therefore shall mean the Plan Administrator or its delegate).

The Plan Administrator reviews claims and appeals under the Separation Benefits Program (described in the Benefit Claim Determinations and Review Procedures under the Separation Benefits Program section below). As such, the Plan Administrator is the named fiduciary responsible for serving as the final review committee and, in its sole discretion, has the authority to interpret Plan provisions as well as facts and other information related to claims and appeals.

Any determination by the Plan Administrator is final and conclusive, unless arbitrary or capricious. As a condition of coverage under the Plan, you agree that whenever the Plan Administrator makes a reasonable determination in the administration of the Plan, such determination shall be final and conclusive.

Circumstances That May Affect Benefits

Plan Participation and Benefits Subject to Terms of Separation Agreement

Your participation in, and the availability of benefits under, this Separation Benefits Program are subject to the terms of the Separation Agreement you signed.

Termination of Coverage for False Representations or Fraud

If you make a false representation to, or commit any fraud under or with respect to, the Plan (including this Separation Benefits Program), the Plan Administrator has the right to permanently terminate your coverage. The Plan Administrator may also seek reimbursement for all benefits or expenses paid by the Plan as a result of the false representations or fraud, and may pursue legal action against you.

Right of Recovery

If it is determined that benefits paid under the Plan are in excess of benefits that should have been paid, or if the Plan makes any payments in error, the Plan Administrator has the full right to recover those payments from the person to whom the benefits were paid.

No Guarantee of Tax Consequences

The Employer makes no commitment or guarantee that any amounts paid to you or for your benefit under the Plan (including this Separation Benefits Program) will be excludable from your gross income for federal, state, and/or local income tax purposes, or that any other tax treatment will apply or be available to you.

You are responsible for determining whether each payment or benefit under the Plan is excludable from your gross income for federal, state, and/or local income tax purposes, and to notify the Plan Administrator if you have any reason to believe that such payment is not so excludable.

8

 

Statement of ERISA Rights

This Statement of ERISA rights is required by federal law and regulation. 

As a participant in the Plan (including this Separation Benefits Program), you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:

Receive Information about Your Plan and Benefits

Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan including, insurance contracts and, if applicable, a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and copies of the latest annual report (Form 5500 Series), if applicable, and updated SPD. The Plan Administrator may make a reasonable charge for the copies.

Receive a summary of the Plan’s annual financial report, if applicable. If applicable, the Plan Administrator is required by law to furnish each person under the Plan with a copy of this summary financial report.

Prudent Actions by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the people responsible for the operation of the Plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including the Employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.

Enforce Your Rights

If your claim for a welfare benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the Plan (if applicable) and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you’re discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you’re successful the court may order the person you’ve sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds that your claim is frivolous.

Assistance with Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the 

9

 

Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

Benefit Claim Determinations and Review Procedures 
under the Separation Benefits Program

If you believe you are entitled to benefits under the Separation Benefits Program and such benefits have not been offered to you, or you received lesser or different benefits than those to which you believe you are entitled under the Separation Benefits Program, you may file a claim for Separation Benefits Program benefits.

This section describes how to file a claim for Separation Benefits Program benefits and how claim and review (appeal) determinations are processed under the Separation Benefits Program, as required by ERISA. 

You must timely follow and exhaust the Plan’s reasonable claims procedures (described in this section) before you can file a lawsuit in state or federal court to obtain Separation Benefits Program benefits. Any such action must be brought, if at all, within 12 months following exhaustion of these claims procedures.

If you fail to timely follow the Separation Benefits Program’s claims procedures, you forfeit your right to review of your claim under these procedures or in a court of law.

How to File a Claim for Benefits

You (or your authorized representative) must file a claim for benefits within 90 days of the earlier of (i) the effective date of your termination of employment with the Employer or (ii) the date as of which you are claiming entitlement to benefits under the Separation Benefits Program. Claims submitted after this deadline will not be considered under the Separation Benefits Program (unless the claimant is unable to meet this deadline for reasons beyond the claimant’s control, in which case the claim must be submitted within 90 days of the date the circumstances causing the delay of the claim are removed, but in no event later than one year from the earlier of (i) or (ii) above).

Your claim must be in writing and should include at least the following:

	
 
	
•
	
Your name and contact information;

	
 
	
•
	
Reference to the “Separation Benefits Program”; and

	
 
	
•
	
Descriptions of the benefit(s) you seek under the Separation Benefits Program and why you believe you are entitled to such benefits.

Your claim must be submitted to the Plan Administrator at the following:

Tivity Health, Inc.
Attention:  Chief People and Culture Officer
1445 S. Spectrum Blvd, Suite 100

Chandler, AZ  85286

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Claim Review Process

When you timely file a claim for benefits, the Plan Administrator reviews your claim and makes a decision either to approve or deny the claim, in whole or in part. If your claim is approved, benefits will be paid (or provided) to you (or on your behalf). If your claim is denied, you will be notified in writing within a reasonable period of time, but not later than 90 days after receipt of your claim. If special circumstances require an extension of time for processing your claim, you will receive a written notice before the end of the initial 90-day period, and this extension will not exceed an additional 90 days. The notice will explain why an extension of time is necessary and when the Plan Administrator expects to render a decision.

If Your Claim for Benefits Is Denied

If your claim is denied, in whole or in part, you will receive a written notice of the adverse benefit determination from the Plan Administrator. This denial notice will include:

	
 
	
•
	
The specific reason(s) for the adverse determination;

	
 
	
•
	
References to specific Separation Benefits Program and/or other Plan provisions on which the determination is based;

	
 
	
•
	
A description of any additional material or information necessary for you to perfect your claim and an explanation of why the material or information is necessary; and

	
 
	
•
	
An explanation of the steps you must take if you disagree with the determination and wish to have the determination reviewed, and a statement of your right to bring suit under Section 502(a) of ERISA following an adverse determination after you have exhausted all levels of appeal required by the Separation Benefits Program.

How to Request Review of an Adverse Benefit Determination

If you do not agree with the adverse determination, you (or your authorized representative) may request that the determination be reviewed in accordance with the procedures described here, as required by ERISA.

You must file your written request for review of any claim for benefits with the Plan Administrator at:

Tivity Health, Inc.
Attention:  Chief People and Culture Officer
1445 S. Spectrum Blvd, Suite 100

Chandler, AZ  85286

within 60 days after you receive the written notification of the Plan Administrator’s adverse benefit determination. Your request for review must be in writing and must include the following:

	
 
	
•
	
A description of your claim sufficient to identify the claim;

	
 
	
•
	
A summary of all the reasons why you believe the benefits should be paid, including any documents, records or other information relating to or that support your claim; and

	
 
	
•
	
Any issues or comments that you think are pertinent to your claim.

During the time limit for requesting an appeal, upon request and free of charge, you will be given reasonable access to, and copies of, documents, records and other information (other than legally privileged documents) the Plan Administrator determines are relevant to your claim for benefits.

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Your claim for benefits will be reviewed fairly and fully, and a decision will be made on your claim within a reasonable period of time but not later than 60 days after the Plan Administrator receives your review request. If necessary, this period may be extended for an additional 60 days. In this case, you will be notified in writing prior to the extension of the reasons why the extension is needed and the date by which you may expect a decision, and a decision shall be made as soon as possible, but no later than 120 days after receipt of the request for review.

Notice of Decision on Appeal

If the Plan Administrator determines that your explanation and additional information support your claim, the Plan Administrator will process your claim.

If the original adverse benefit determination is upheld in whole or in part, you will receive a written notice stating:

	
 
	
•
	
The specific reason(s) for the adverse determination;

	
 
	
•
	
References to specific Separation Benefits Program and/or other Plan provisions on which the benefit determination is based;

	
 
	
•
	
A statement that you will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information (other than legally privileged documents) relevant to your claim for benefits; and

	
 
	
•
	
A statement describing your right to bring an action under Section 502(a) of ERISA following this final adverse benefit determination.

Any determination by the Plan Administrator in connection with the Plan is final and conclusive and binding on all persons, and shall be given deference in the event the determination is subject to judicial review and shall be overturned by a court of law only if it is arbitrary and capricious.

 

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