Document:

VERTEX ENERGY, INC. 8-K

 

Exhibit 10.1

 

FORM OF INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this
“Agreement”) is made and entered into as of ____________  between VERTEX ENERGY, INC.,
a Nevada corporation (the “Company”), and ____________ (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, highly competent
persons have become more reluctant to serve corporations as directors, officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation;

 

WHEREAS, the Board
of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving
the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread
practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions
and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors,
officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise
itself. Chapter 78 of the Nevada Revised Statutes (the “NRS”) and the Articles of Incorporation of the
Company, as amended (the “Articles”) authorize indemnification of the directors, officers, employees, fiduciaries
and agents of the Company. The Amended and Restated Bylaws of the Company (the “Bylaws”) provide that the
Company will indemnify the directors and officers of the Company. The NRS expressly provides that the indemnification provisions set forth
therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and persons acting on behalf
of the Company with respect to indemnification;

 

WHEREAS, the uncertainties
relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board
has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that
they will not be so indemnified;

 

WHEREAS, this Agreement
is a supplement to and in furtherance of any indemnification provisions in the Articles and/or the Bylaws of the Company and any resolutions
adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
and

 

WHEREAS, Indemnitee
does not regard the protection available under the NRS, the Bylaws and insurance as adequate in the present circumstances, and may not
be willing to serve or continue to serve as an officer or director without adequate protection, and the Company desires Indemnitee to
serve or continue to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for
or on behalf of the Company on the condition that he or she be so indemnified. 

 

NOW, THEREFORE, in
consideration of Indemnitee’s agreement to serve as an officer and/or a director from and after the date of this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

    Indemnification Agreement
Page 1 of 14 

     

    

 

1. Indemnity of Indemnitee.
The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from
time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

 

(a) Proceedings Other
Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section
l(a) if, by reason of his or her Corporate Status (as hereinafter defined), Indemnitee was or is a party, or is threatened to
be made a party, to any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to
this Section 1(a), the Company shall indemnify Indemnitee against all Expenses (as hereinafter defined), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her, or on his or her behalf, in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee either (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

 

(b) Proceedings by
or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if,
by reason of his or her Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought
by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 1(b), the Company shall indemnify
Indemnitee against all Expenses and amounts paid in settlement actually and reasonably incurred by Indemnitee, or on Indemnitee’s
behalf, in connection with such Proceeding or any claim, issue or matters therein, if Indemnitee either (i) is not liable pursuant
to NRS 78.138 or (ii) acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses
or other amounts shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the
Company, unless and only to the extent that the court in which the Proceeding was brought or other court of competent jurisdiction shall
determine that in view of all the circumstances in the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses
as the court deems proper.

 

(c) Termination of
Proceeding. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, adversely affect the right of Indemnitee to indemnification or create an inference or presumption either
that Indemnitee is liable pursuant to NRS 78.138, that Indemnitee did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation, or, with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that the conduct was unlawful. The Company acknowledges that such a resolution, short of final
judgment, may be successful on the merits if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the
event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including,
without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that
Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence.

 

(d) Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding,
the Company shall indemnify Indemnitee to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses
actually and reasonably incurred by him or her on his or her behalf in connection with the defense of the Proceeding. If Indemnitee is
not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues
or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or
her, or on his or her behalf, in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such claim, issue or matter.

  

    Indemnification Agreement
Page 2 of 14 

     

    

 

2. Additional Indemnity.
In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement,
the Company shall and hereby does indemnify and hold harmless Indemnitee, to the fullest extent permitted by law, as may be amended from
time to time, against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her, or
on his or her behalf, if, by reason of his or her Corporate Status, he or she was or is a party, or is threatened to be made a party,
to any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out
of the simple or gross negligence, recklessness, or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon
the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee
that is finally determined (under the procedures, and subject to the presumptions, set forth in Section 6 and Section
7 hereof) to be unlawful.

 

3. Contribution.

 

(a) Whether or not the
indemnification provided in Section 1 and Section 2 hereof is available, in respect of any Proceeding
in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay the entire amount
of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives
and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding
in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides
for a full and final release of all claims asserted against Indemnitee.

 

(b) Without diminishing
or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with Indemnitee
(or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the
Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would
be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding
arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent
necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees
of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand,
and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts,
as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and
all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined
in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the
degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary
or secondary and the degree to which their conduct is active or passive.

 

(c) The Company hereby
agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors, or
employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(d) To the fullest extent
permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever,
the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines,
amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect
(i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).

 

    Indemnification Agreement
Page 3 of 14 

     

    

 

(e) The Company hereby
acknowledges that Indemnitee may have rights to indemnification for payment of the judgment or settlement amount provided by another entity
(“Other Indemnitor(s)”). The Company agrees with Indemnitee that the Company is the indemnitor of first resort
of Indemnitee with respect to matters for which indemnification is provided under this Agreement and that the Company will be obligated
to make all payments due to or for the benefit of Indemnitee under this agreement without regard to any rights that Indemnitee may have
against the Other Indemnitor(s). The Company hereby waives any equitable rights to contribution or indemnification from the Other Indemnitor
in respect of any amounts paid to Indemnitee hereunder until such time as the Indemnitee has been fully and finally indemnified. The Company
further agrees that no payment of Expenses or losses by the Other Indemnitor(s) to or for the benefit of Indemnitee shall affect
the obligations of the Company hereunder.

 

4. Indemnification
for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of his
or her Corporate Status, is a witness, or is made (or asked) to respond to discovery requests or otherwise asked to participate in
any Proceeding to which Indemnitee is not a party, the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or her, or on his or her behalf, in connection therewith.

 

5. Advancement of
Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with defending any Proceeding within thirty (30) days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and Indemnitee shall also submit
a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined by a court of
competent jurisdiction that Indemnitee is not entitled to be indemnified by the Company against such Expenses. Any advances and undertakings
to repay pursuant to this Section 5 shall be unsecured and interest free. In furtherance of the foregoing, Indemnitee
hereby undertakes to repay such amounts advanced if, and to the extent that, it shall ultimately be determined by a court of competent
jurisdiction that Indemnitee is not entitled to be indemnified by the Company pursuant to the terms of this Agreement.

 

6. Procedures and
Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights
of indemnity that are as favorable as may be permitted under the NRS and public policy of the State of Nevada. Accordingly, the parties
agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:

 

(a) To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the
Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such
a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may
have to Indemnitee unless, and to the extent that, the Company is actually and materially prejudiced as a result of such failure.

 

(b) Upon written request
by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect
to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three methods, which shall be at
the election of the Board (i) by a majority vote of a quorum consisting of Disinterested Directors (as defined below), (ii) if
a majority vote of a quorum consisting of Disinterested Directors so orders, or if a quorum of Disinterested Directors cannot be obtained,
by Independent Counsel (as defined below) in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or
(iii) by the stockholders of the Company.

 

    Indemnification Agreement
Page 4 of 14 

     

    

 

(c) Notwithstanding
anything to the contrary set forth in this Agreement, if a request for indemnification is made after a Change in Control, at the election
of Indemnitee made in writing to the Company, and if the Board by a majority vote of a quorum consisting of Disinterested Directors orders
the determination of Indemnitee’s entitlement to indemnification to be made by an Independent Counsel, or if a quorum of Disinterested
Directors cannot be obtained, any determination required to be made pursuant to Section 6(b) above as to whether Indemnitee
is entitled to indemnification shall be made by Independent Counsel selected as provided in this Section 6(c). The Independent
Counsel shall be selected by Indemnitee, unless Indemnitee shall request that such selection be made by the Board. The party making the
selection shall give written notice to the other party advising it of the identity of the Independent Counsel so selected. The party receiving
such notice may, within seven (7) days after such written notice of selection shall have been given, deliver to the other party a
written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 13 hereof, and the objection shall
set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act
as Independent Counsel. If a written objection is made, the Independent Counsel so selected may not serve as Independent Counsel unless
and until a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee
of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected
(or, if selected, such selection shall have been objected to) in accordance with this paragraph, then either the Company or Indemnitee
may petition the courts of the State of Nevada or other court of competent jurisdiction for resolution of any objection which shall have
been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom an
objection is favorably resolved or the person so appointed shall act as Independent Counsel under Section 6(c) hereof.
The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection
with acting pursuant to Section 6(b) hereof. The Company shall pay any and all reasonable and necessary fees and expenses
incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.

 

(d) If the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent
Counsel shall be selected as provided in this Section 6(d). If the Independent Counsel shall be selected by the Board, Indemnitee
may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection
to such selection; provided, however, that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of
this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection,
the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected
may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without
merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section
6(a) hereof, no Independent Counsel shall have been selected (or, if selected, such selection shall have been objected to) in
accordance with this paragraph, then either the Company or Indemnitee may petition the appropriate courts of the State of Nevada or other
court of competent jurisdiction for resolution of any objection which shall have been made by Indemnitee to the Company’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as
the court shall designate, and the person with respect to whom an objection is favorably resolved or the person so appointed shall act
as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent
Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay any and all reasonable fees
and expenses incident to the procedures of this Section 6(d), regardless of the manner in which such Independent Counsel was
selected or appointed.

 

    Indemnification Agreement
Page 5 of 14 

     

    

 

(e) In making a determination
with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof
and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(f) Indemnitee shall
be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter
defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of
their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise
by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition,
the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section
6(f) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing evidence. The Company will promptly advise Indemnitee in
writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason
or basis for which indemnification has been denied.

 

(g) Notwithstanding
anything to the contrary set forth in this Agreement, if the person, persons or entity empowered or selected under Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have been appointed or shall not have made a determination within
sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, unless the Company establishes by written
opinion of Independent Counsel that (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary
to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition
of such indemnification under applicable law; provided, however, that such sixty (60) day period may
be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination
with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or
information relating thereto; and provided, further, that the foregoing provisions of this Section
6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section
6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination,
the Disinterested Directors resolve as required by Section 6(b)(iii) of this Agreement to submit such determination to
the stockholders for their consideration at an annual meeting thereof to be held within seventy five (75) days after such receipt
and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such
receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been
so called and such determination is made thereat.

 

(h) Indemnitee shall
cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.
Any Independent Counsel or member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination
regarding Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees
and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be
borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

    Indemnification Agreement
Page 6 of 14 

     

    

 

7. Remedies of Indemnitee.

 

(a) In the event that
(i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 6(b) or Section 6(c) of
this Agreement within sixty (60) days after receipt by the Company of the request for indemnification, or such longer period, not
to exceed an additional thirty (30) days, to which the period may be extended pursuant to Section 6(g), (iv) payment
of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request
therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee
is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement,
Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such indemnification or advancement of expenses either,
at Indemnitee’s sole option, in (1) an appropriate court of the State of Nevada, or any other court of competent jurisdiction
or (2) an arbitration to be conducted by a single arbitrator, selected by mutual agreement of the Company and Indemnitee, pursuant
to the rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to seek any such adjudication.

 

(b) In the event that
a determination shall have been made pursuant to Section 6(b) or Section 6(c) of this Agreement that
Indemnitee is not entitled to indemnification, (i) any judicial proceeding or arbitration commenced pursuant to this Section
7 shall be conducted in all respects de novo on the merits, and Indemnitee shall not be prejudiced by reason of any adverse determination
under Section 6(b) or Section 6(c); and (ii) in any such judicial proceeding or arbitration, the
Company shall have the burden of proving that Indemnitee is not entitled to indemnification under this Agreement.

 

(c) If a determination
shall have been made pursuant to Section 6(b) or Section 6(c), or shall have been deemed to have been made
pursuant to Section 6(g), of this Agreement that Indemnitee is entitled to indemnification, the Company shall be obligated
to pay the amounts constituting such indemnification within five (5) days after such determination has been made or has been deemed
to have been made and shall be conclusively bound by such determination in any judicial proceeding commenced pursuant to this Section
7, unless the Company establishes by written opinion of Independent Counsel that (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with
the request for indemnification exists, or (ii) a prohibition of such indemnification exists under applicable law.

 

(d) In the event that
Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of, or an award in arbitration to enforce, his or her
rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability
insurance policies maintained by the Company, the Company shall pay to him or her, or on his or her behalf, in advance, and shall indemnify
him or her against, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually
and reasonably incurred by him or her in such judicial adjudication or arbitration, regardless of whether Indemnitee ultimately is determined
to be entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e) The Company shall
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 7 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses
and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance,
to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought
by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

    Indemnification Agreement
Page 7 of 14 

     

    

 

	 	8. 	Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a) The rights of indemnification
and advancement of expenses as provided by this Agreement shall not be deemed exclusive of, and shall be in addition to, any other rights
to which Indemnitee may at any time be entitled under applicable law, the Articles or the Bylaws of the Company, any agreement, a vote
of stockholders, a resolution of directors of the Company, or otherwise, and nothing in this Agreement shall diminish or otherwise restrict
Indemnitee’s rights to indemnification or advancement of expenses under any of the foregoing. No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a
change in the NRS, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the
Articles, the Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change and Indemnitee shall be deemed to have such greater benefits hereunder. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
The Company shall not adopt any amendments to its Articles or Bylaws, the effect of which would be to deny, diminish or encumber Indemnitee’s
right to indemnification or advancement of expenses under this Agreement, any other agreement or otherwise, without the prior written
consent of the Indemnitee.

 

(b)            The
Company shall use commercially reasonable efforts to obtain and maintain in effect one or more policies of insurance with reputable insurance
companies to provide the officers/directors of the Company with coverage for losses from wrongful acts and omissions and to ensure the
Company’s performance of its indemnification obligations under this Agreement. The Indemnitee shall be covered by such policy or
policies in accordance with its or their terms to the maximum extent of the coverage available for any such director or officer under
such policy or policies. In all such insurance policies, the Indemnitee shall be named as an insured in such a manner as to provide the
Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and officers.

 

(c) In the event of
any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights (with all of Indemnitee’s reasonable expenses, including, without
limitation, attorneys’ fees and charges, related thereto to be reimbursed by or, at the option of Indemnitee, advanced by the Company).

 

(d) The Company shall
not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee
has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

(e) The Company’s
obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall
be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.

 

9. Exception to Right
of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make
any indemnity in connection with any claim made against Indemnitee:

 

(a) for which payment
has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any
excess beyond the amount paid under any insurance policy or other indemnity provision; or

 

    Indemnification Agreement
Page 8 of 14 

     

    

 

(b) for an accounting
of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section
16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or similar provisions
of state statutory law or common law; or

 

(c) for any reimbursement
of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee
from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise
from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation
of Section 306 of the Sarbanes-Oxley Act); or

 

(d) for any reimbursement
of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the
compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements
implementing Section 10D of the Exchange Act; or

 

(e) in connection with
any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company (other than to enforce Indemnitee’s rights under this Agreement) or its directors, officers,
employees or other indemnitees, unless (i) the Board of the Company authorized the Proceeding (or such part of the Proceeding) prior
to its initiation, or (ii) the Company indemnifies Indemnitee, in its sole discretion, independently of this Agreement pursuant to
the powers vested in the Company under applicable law.

 

10. Retroactive Effect;
Duration of Agreement; Successors and Binding Agreement. All agreements and obligations of the Company contained herein shall
be deemed to have become effective upon the date Indemnitee first had Corporate Status; shall continue during the period Indemnitee
has Corporate Status; and shall continue thereafter so long as Indemnitee may be subject to any Proceeding (or any action commenced
under Section 7 hereof) by reason of his or her Corporate Status, whether or not he or she is acting or serving
in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.
This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors
(including any direct or indirect successor by purchase, merger, consolidation, reorganization or otherwise to all or substantially all
of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. The Company shall
require any such successor to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory
to Indemnitee and his or her counsel, expressly to assume and agree to perform this Agreement in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place. Except as otherwise set forth in this Section
10, this Agreement shall not be assignable or delegable by the Company.

 

11. Security.
To the extent requested by Indemnitee and approved by the Board of the Company, the Company may at any time and from time to time provide
security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.

 

12. Enforcement.

 

(a) The Company expressly
confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee
to serve, or continue to serve, as an officer or a director of the Company, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving or continuing to serve as an officer or a director of the Company.

 

(b) This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the subject matter hereof.

 

    Indemnification Agreement
Page 9 of 14 

     

    

 

13. Definitions.
For purposes of this Agreement:

 

(a) “Change in Control”
means the occurrence of any one of the following events:

 

(i) any sale,
lease, exchange or other transfer (in one or a series of related transactions) of all or substantially all of the assets of the Company;

 

(ii) any “Person”
as such term is used in Section 13(d) and Section 14(d) of the Exchange Act becomes, directly or indirectly, the “beneficial
owner” as defined in Rule 13d-3 under the Exchange Act of securities of the Company that represent more than 50% of the
combined voting power of the Company’s then outstanding voting securities (the “Outstanding Company Voting Securities”); provided, however,
that for purposes of this Section 13(a)(ii), the following acquisitions shall not constitute a Change in Control: (I) any acquisition
directly from the Company, (II) any acquisition by the Company, (III) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any person or entity that directly or indirectly controls, is controlled by or is
under common control with the Company and/or to the extent provided by the Board, any person or entity in which the Company has a significant
interest, (IV) any acquisition by any corporation pursuant to a transaction that complies with Sections 13(a)(iv)(A) and 13(a)(iv)(B),
(V) any acquisition involving beneficial ownership of less than 50% of the then-outstanding shares of the Company’s common
stock, par value $0.001 per share (and any stock or other securities into which such ordinary shares may be converted or into which they
may be exchanged) (the “Outstanding Company Common Shares”) or the Outstanding Company Voting Securities
that is determined by the Board, based on review of public disclosure by the acquiring Person with respect to its passive investment intent,
not to have a purpose or effect of changing or influencing the control of the Company; provided, however,
that for purposes of this clause (V), any such acquisition in connection with (x) an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened solicitation of proxies or consents or (y) any “Business
Combination” (as defined below) shall be presumed to be for the purpose or with the effect of changing or influencing
the control of the Company;

 

(iii) during
any period of not more than two (2) consecutive years, individuals who constitute the Board as of the beginning of the period (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the beginning of such period, whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) will
be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or
threatened solicitation of proxies by or on behalf of any person other than the Board will be deemed to be an Incumbent Director;

 

(iv) consummation
of a merger, amalgamation or consolidation (a “Business Combination”) of the Company with any other corporation,
unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Shares and the Outstanding Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such
Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially
all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the Outstanding Company Common Shares and the Outstanding Company Voting Securities,
as the case may be, and (B) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent
governing body) of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the
initial agreement or of the action of the Board providing for such Business Combination; or

 

    Indemnification Agreement
Page 10 of 14 

     

    

 

(v)       the
stockholders of the Company approve a plan of complete liquidation of the Company.

 

(b) “Corporate Status” means the fact that a person is or was a director, officer, employee, agent or fiduciary
of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise.

 

(c) “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

 

(d) “Enterprise”
shall mean the Company, and any other corporation, constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger to which the Company (or any of its wholly-owned subsidiaries) is a party, partnership, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a
director, officer, trustee, partner, manager, managing member, employee, agent or fiduciary.

 

(e) “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts and other professionals,
witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, ERISA
excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred or actually incurred in connection
with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in
a Proceeding, or responding to, or objecting to, a request to provide discovery in a Proceeding. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any Proceeding, including, without limitation, the premium, security for, and other
costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Should any payments by the Company to or for
the account of Indemnitee under this Agreement be determined to be subject to any federal, state or local income or excise tax, Expenses
shall also include such amounts as are necessary to place Indemnitee in the same after-tax position (after giving effect to all applicable
taxes) Indemnitee would have been in had no such tax been determined to apply to those payments. The parties agree that for the purposes
of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses
included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable in the good faith judgment of
such counsel shall be presumed conclusively to be reasonable. Expenses, however, shall not include amounts paid in settlement by Indemnitee
or the amount of judgments or fines against Indemnitee.

  

(f) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five (5) years has been, retained to represent (i) the Company or Indemnitee in any matter material to either
such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action
to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel
referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.

 

    Indemnification Agreement
Page 11 of 14 

     

    

 

(g) “Proceeding”
includes any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether
brought by or in the right of the Company or otherwise and whether civil, criminal, administrative, legislative or investigative (formal
or informal); in each case whether or not Indemnitee’s Corporate Status existed at the time any liability or expense is incurred
for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding
one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his or her rights under this Agreement.

 

14. Severability.
The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest
extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed
modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

15. Modification
and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

16. Notice by Indemnitee.
Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement
of Expenses covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have
to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

 

17. Notices.
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given
(a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

 

	 	(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto.

 

	 	(b) To the Company at:

 

Vertex Energy, Inc.

1331 Gemini Street

Suite 250

Houston, Texas 77058

Attention: Chief Financial Officer

Email: chrisc@vertexenergy.com

 

or to such other address
as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

18. Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or
any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

19. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

    Indemnification Agreement
Page 12 of 14 

     

    

 

20. Successors and
Assigns. The terms of this Agreement shall be binding upon the Company and its successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company) and
shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors, administrators and other
legal representatives.

 

21. Governing Law
and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada, without regard to its conflict of laws rules. The Company and Indemnitee
hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement
(other than an arbitration pursuant to Section 7 hereof) shall be brought only in the appropriate court of the State
of Texas (the “Texas Court”), and not in any other state or federal court in the United States of America or
any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Texas Court for purposes of such action
or proceeding, (iii) waive any objection to the laying of venue of any such action or proceeding in the Texas Court, and (iv) waive,
and agree not to plead or to make, any claim that any such action or proceeding brought in the Texas Court has been brought in an improper
or inconvenient forum.

 

[Remainder of page intentionally left blank]

 

    Indemnification Agreement
Page 13 of 14 

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on and as of the day and year first above written.

  

	 	COMPANY
	 	 
	 	VERTEX ENERGY, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	INDEMNITEE

	 	 
	 	Name:	 
	 	Address:	 

 

[Signature Page to Indemnification Agreement]

 

    Indemnification Agreement
Page 14 of 14AXIM BIOTECHNOLOGIES, INC

Ex. 4.1

AXIM BIOTECHNOLOGIES, INC. 2015 STOCK INCENTIVE PLAN

 

Adopted May 20, 2015

 

THIS AXIM BIOTECHNOLOGIES, INC. 2015 STOCK INCENTIVE PLAN (the “Plan”) is designed to retain directors, executives and selected employees and consultants and reward them for making contributions to the success of the Company. These objectives are accomplished by making long-term incentive awards under the Plan thereby providing Participants with a proprietary interest in the growth and performance of the Company. 

 

1. Definitions

 

(a) “Board” – The Board of Directors of the Company. 

 

(b) “Change in Control ” – Means, and shall be deemed to have occurred upon the occurrence of, any one of the following events: 

 

i. The acquisition in one transaction by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “ Person ”) of beneficial ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as defined in Section 3(a)(10) of the Exchange Act) representing 51% or more of outstanding Stock of the Company; provided, however, that a Change in Control as defined in this clause (1) shall not be deemed to occur in connection with any acquisition by the Company, an employee benefit plan of the Company or any Person who immediately prior to the effective date of this Plan is a holder of Stock (a “Current Stockholder ”) so long as such acquisition does not result in any Person other than the Company, such employee benefit plan or such Current Stockholder beneficially owning shares or securities representing 51% or more of the outstanding; or 

 

ii. Any election has occurred of persons as directors of the Company that causes two-thirds or more of the Board to consist of persons other than (i) persons who were members of the Board on the effective date of this Plan and (ii) persons who were nominated by the Board for election as members of the Board at a time when at least two-thirds of the Board consisted of persons who were members of the Board on the effective date of this Plan; provided, however, that any person nominated for election by the Board when at least two-thirds of the members of the Board are persons described in sub clause (i) or (ii) and persons who were themselves previously nominated in accordance with this clause (2) shall, for this purpose, be deemed to have been nominated by a Board composed of persons described in sub clause (ii); or 

 

iii. Approval by the stockholders of the Company of a reorganization, merger, consolidation or similar transaction (a “Reorganization Transaction ”), in each case, unless, immediately following such Reorganization Transaction, more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of the corporation or other entity resulting from or surviving such Reorganization Transaction and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock immediately prior to such Reorganization Transaction in substantially the same proportions as their ownership of the outstanding Stock immediately prior to such Reorganization Transaction; or 

 

iv. Approval by the stockholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company to a corporation or other entity, unless, with respect to such corporation or other entity,  

Ex. 4.1

immediately following such sale or other disposition, more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of such corporation or other entity and the combined voting power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock immediately prior to such sale or disposition in substantially the same proportions as their ownership of the outstanding Stock immediately prior to such sale or disposition.

 

(c) “Code” – The Internal Revenue Code of 1986, as amended from time to time. 

 

(d) “Committee” – The Compensation Committee of the Company's Board, or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board who are disinterested persons, as contemplated by Rule 16b-3 (“ Rule 16b-3 ”) promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”). 

 

(e) “Company” – AXIM Biotechnologies, Inc. and its subsidiaries, including subsidiaries of subsidiaries. 

 

(f) “Exchange Act” – The Securities Exchange Act of 1934, as amended from time to time. 

 

(g)  “Fair Market Value” – The fair market value of the Company's issued and outstanding Stock as determined in good faith by the Board or the Committee. 

 

(h) “Grant ” – The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination, or in tandem, to a Participant pursuant to such terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan. 

 

(i) “Grant Agreement” – An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant. 

 

(j) “Option” – Either an Incentive Stock Option, in accordance with Section 422 of Code, or a Nonstatutory Option, to purchase the Company's Stock that may be awarded to a Participant under the Plan. A Participant who receives an award of an Option shall be referred to as an “Optionee”. 

 

(k) “Participant” – A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan. 

 

(l) Restricted Stock Purchase Offer” – A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan. 

 

(m) “Securities Act” – The Securities Act of 1933, as amended from time to time. 

 

(n) “Stock” – Authorized and issued or unissued shares of common stock of the Company. 

 

(o) “Stock Award” – A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated to pay additional consideration. 

Ex. 4.1

2. Administration. The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the Fair Market Value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan's administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder.

 

3. Eligibility.

 

(a) General: The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements of Rule 16b-3. 

 

(b) Incentive Stock Options: Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director's fee shall not be sufficient to constitute employment by the Company. 

 

(c) The Company shall not grant an Incentive Stock Option under the Plan to any employee if such Grant would result in such employee holding the right to exercise for the first time in any one calendar year, under all Incentive Stock Options granted under the Plan or any other plan maintained by the Company, with respect to shares of Stock having an aggregate fair market value, determined as of the date the Option is granted, in excess of $100,000. Should it be determined that an Incentive Stock Option granted under the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee holds two (2) or more such Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding such maximum, such Option shall be considered a Nonstatutory Option. 

 

(d) Nonstatutory Option: The provisions of the foregoing Section 3(b) shall not apply to any Option designated as a “Nonstatutory Option ” or which sets forth the intention of the parties that the Option be a Nonstatutory Option. 

 

(e) Stock Awards and Restricted Stock Purchase Offers: The provisions of this Section 3 shall not apply to any Stock Award or Restricted Stock Purchase Offer under the Plan. 

Ex. 4.1

4.  Stock

 

(a) Authorized Stock: Stock subject to Grants may be either unissued or reacquired Stock 

 

(b) Number of Shares: Subject to adjustment as provided in Section 5(i) of the Plan, the total number of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the Plan shall not exceed ten million (10,000,000). If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant. 

 

(c) Reservation of Shares: The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained. 

 

(d) Application of Funds : The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights will be used for general corporate purposes. 

 

(e) No Obligation to Exercise : The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant. 

 

5. Terms and Conditions of Options. Options granted hereunder shall be evidenced by agreements between the Company and the  respective Optionees, in such form and substance as the Board or Committee shall from time to  time approve. Option agreements need not be identical, and in each case may include such provisions as the Board or Committee may determine, but all such agreements shall be subject to and limited by the following terms and conditions:

 

(a) Number of Shares: Each Option shall state the number of shares to which it pertains. 

 

(b) Exercise Price: Each Incentive Stock Option shall state the exercise price, which shall be determined as follows: 

 

(i) Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock of the Company (“ Ten Percent Holder ”) shall have an exercise price of no less than 110% of the Fair Market Value of the Stock as of the date of grant; and 

 

(ii) Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant. 

Ex. 4.1

For the purposes of this Section 5(b), the Fair Market Value shall be as determined by the Board in good faith, which determination shall be conclusive and binding; provided however, that if there is an active public market for such Stock, the Fair Market Value per share shall be the average of the  bid and asked prices (or the closing price if such stock is listed on the NASDAQ Global Market or NASDAQ Capital Market) on the date of grant of the Option, or if listed on a stock exchange, the closing price on such exchange on such date of grant.  

 

The exercise price of each Nonstatutory Stock Option shall be determined at the discretion of the Board of Directors of the Corporation.  

 

(c) Medium and Time of Payment: The exercise price shall become immediately due upon exercise of the Option and shall be paid in cash or check made payable to the Company. Should the Company's outstanding Stock be registered under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows: 

 

(i) in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at Fair Market Value on the exercise date, or 

 

(ii) through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction. 

 

(iii)  At the discretion of the Board, exercisable either at the time of Option grant or of Option exercise, the exercise price may also be paid (i) by Optionee's delivery of a promissory note in form and substance satisfactory to the Company and permissible under applicable securities rules and bearing interest at a rate determined by the Board in its sole discretion, but in no event less than the minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal tax laws, or (ii) in such other form of consideration permitted by the Nevada Revised Statutes as may be acceptable to the Board. 

 

(d) Term and Exercise of Options: Any Option granted to an employee of the Company shall become exercisable over a period of no longer than ten (10) years. In no event shall any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be exercisable after the expiration of ten (10) years from the date of the Option. Unless otherwise specified by the Board or the Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be the date upon which the Board or the Committee authorizes the granting of such Option.   

 

Each Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective Option agreements may provide. During the lifetime of an Optionee, the Option shall be exercisable only by the Optionee and shall not be assignable or transferable by the Optionee, and  no other person shall acquire any rights therein. To the extent not exercised, installments (if more than one) shall accumulate, but shall be exercisable, in whole or in part, only during the period for exercise as stated in the Option agreement, whether or not other installments are then exercisable.  

Ex. 4.1

(e) Termination of Status as Employee, Consultant or Director: If Optionee's status as an employee shall terminate for any reason other than Optionee's disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right to exercise the portions of any of Optionee's Incentive Stock Options which were exercisable as of the date of such termination, in whole or in part, within 90 days after such termination (or, in the event of “ termination for good cause ” as that term is defined in Nevada case law related thereto, or by the terms of the Plan or the Option Agreement or an employment agreement, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option). 

 

With respect to Nonstatutory Options granted to employees, directors or consultants, the Board may specify such period for exercise, not less than 90 days (except that in the case of “ termination for cause ” or removal of a director), the Option shall automatically terminate as of the termination of employment or services as to shares covered by the Option, following termination of employment or services as the Board deems reasonable and appropriate. The Option may be exercised only with respect to installments that the Optionee could have exercised at the date of termination of employment or services. Nothing contained herein or in any Option granted pursuant hereto shall be construed to affect or restrict in any way the right of the Company to terminate the employment or services of an Optionee with or without cause. 

 

(f) Disability of Optionee: If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the ninety (90) day period set forth in Section 5(e) shall be a period, as determined by the Board and set forth in the Option, of not less than six months nor more than one year after such termination. 

 

(g) Death of Optionee: If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the portion of such Optionee's Option which was exercisable at the date of death may be exercised, in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee's death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect to installments exercisable at the time of Optionee's death and not previously exercised by the Optionee. 

 

(h) Nontransferability of Option: No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution. 

 

(i) Recapitalization: Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been “ effected without receipt of consideration ” by the Company. 

  

In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization ”), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be  

Ex. 4.1

no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Paragraph 6(d) of the Plan; provided, that any such right granted shall be granted to all Optionees not receiving an offer to receive substitute options on a consistent basis, and provided further, that any such exercise shall be subject to the consummation of such Reorganization. 

 

Subject to any required action of shareholders, if the Company shall be the surviving entity in any merger or consolidation, each outstanding Option thereafter shall pertain to and apply to the securities to which a holder of shares of Stock equal to the shares subject to the Option would have been entitled by reason of such merger or consolidation.  

 

In the event of a change in the Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares without par value into the same number of shares with a par value, the shares resulting from any such change shall be deemed to be the Stock within the meaning of the Plan.  

 

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. Except as expressly provided in this Section 5(i), the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number or price of shares of Stock subject to any Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.  

 

The Grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make any adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part of its business or assets. 

 

(j) Rights as a Shareholder: An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 5(i) hereof. 

 

(k) Modification, Acceleration, Extension, and Renewal of Options: Subject to the terms and conditions and within the limitations of the Plan, the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under Section 422 of the Code and applicable state securities laws. Notwithstanding the provisions of this Section 5(k), however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights or obligations under any Option theretofore granted under the Plan 

Ex. 4.1

(l) Exercise Before Exercise Date: At the discretion of the Board, the Option may, but need not, include a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee's employment as contemplated by Section 5(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable. 

 

(m) Other Provisions: The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, applicable state securities laws, the corporate law of the state of Nevada, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company. 

 

(n) Repurchase Agreement: The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion (“ Repurchase Agreement ”), (i) restricting the Optionee's right to transfer shares purchased under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein; and (ii) providing that upon termination of Optionee's employment with the Company, for any reason, the Company (or another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment at a price equal to: (A) the fair value of such shares as of such date of termination; or (B) if such repurchase right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under the applicable state securities laws; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as determined by the Board or Committee. 

 

6. Stock Awards and Restricted Stock Purchase Offers.

 

(a) Types of Grants. 

 

(i) Stock Award. All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation. 

Ex. 4.1

(ii) Restricted Stock Purchase Offer. A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant's continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. 

 

(b) Conditions and Restrictions. Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as “Restricted Stock .” Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish. 

 

(c) Cancellation and Rescission of Grants. Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the following conditions: 

 

(i) A Participant shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Board or Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. For Participants whose employment has terminated, the judgment of the chief executive officer shall be based on the Participant's position and responsibilities while employed by the Company, the Participant's post-employment responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Company and the other organization or business, the effect on the Company's customers, suppliers and competitors and such other considerations as are deemed relevant given the applicable facts and circumstances. A Participant who has retired shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Participant or a greater than ten percent (10%) equity interest in the organization or business. 

 

(ii) A Participant shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company's business, any confidential information or material, as defined in the Company's Proprietary Information and Invention Agreement or similar agreement regarding confidential information and intellectual property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company. 

Ex. 4.1

(iii) A Participant shall disclose promptly and assign to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in foreign countries. 

 

(iv) Upon exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Committee that he or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 6(c) prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that the Participant received in connection with the rescinded exercise, payment or delivery. 

 

(d) Nonassignability. 

 

(i) Except pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant or any other benefit under the Plan shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted. 

 

(ii) Where a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a “blind” trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards. 

 

(e) Termination of Employment. If the employment or service to the Company of a Participant terminates, other than pursuant to any of the following provisions under this Section 6(e), all unexercised, deferred and unpaid Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise: 

 

(i) Retirement Under a Company Retirement Plan. When a Participant's employment terminates as a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and vesting of any such Grants may be accelerated. 

 

(ii) Rights in the Best Interests of the Company. When a Participant resigns from the Company and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant's Grants are not in the Company's best interest. 

 

(iii) Death or Disability of a Participant. 

Ex. 4.1

1. In the event of a Participant's death, the Participant's estate or beneficiaries shall have a period up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living. 

 

2. In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability. 

 

3. After the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant's estate, beneficiaries or representative; notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant might ultimately have become payable to other beneficiaries. 

 

4. In the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board or Committee, as applicable, shall be binding and conclusive. 

 

7. Change in Control . Unless otherwise provided in the applicable Grant Agreement, in the event of a Change in Control, 50% of the vesting restrictions applicable to each Participant’s Grant(s) shall terminate fully and the Participant shall immediately have the right to the delivery of share certificates or exercise of Options, i.e. to the extent that a Participant’s Option(s) are unvested, 50% of such unvested portion shall vest.

 

8. Investment Intent. All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Rule 701 thereunder. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (A) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (B) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights.

Ex. 4.1

9. Amendment, Modification, Suspension or Discontinuance of the Plan. The Board may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan.

 

In the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options and Nonstatutory Options and (iii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determinations for such Grants. In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption of previously issued Grants. 

 

10. Tax Withholding. The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.

 

11. Availability of Information. During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company and applicable law to be furnished in an annual report to the shareholders of the Company.

 

12. Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief personnel officer or to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief personnel officer or the chief executive officer.

 

13. Indemnification of Board. In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, 

Ex. 4.1

suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same.

 

14. Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of New York and construed accordingly.

  

15. Termination Dates. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 9.

 

The foregoing 2015 Stock Incentive Plan was duly adopted and approved by the Board of Directors as of May 20, 2015.  

 

 

	 

	AXIM BIOTECHNOLOGIES, INC. 

	 

	 

	 

	 

	By: 

	/s/ Dr. George E Anastassov

	 

	 

	Name: Dr. George E. Anastassov 

	 

	 

	Title: Chief Executive Officer

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