Document:

EX-4.6

 Exhibit 4.6 

FORM OF 
 HERCULES
TECHNOLOGY GROWTH CAPITAL, INC. 
 2004 EQUITY INCENTIVE PLAN 

 

	1.	PURPOSE. 

 (A) General Purpose. The Plan has been established to advance the
interests of the Company by providing for the grant of Awards to Participants. At all times during such periods as the Company qualifies or is intended to qualify as a “business development company” under the 1940 Act, the terms of the
Plan shall be construed so as to conform to the stock-based compensation requirements applicable to “business development companies” under the 1940 Act. An Award or related transaction will be deemed to be permitted under the 1940 Act if
permitted by any exemptive or “no-action” relief granted by the Commission or its staff. 
 (B) Available Awards. The
purpose of the Plan is to provide a means by which eligible recipients of Awards may be given an opportunity to benefit from increases in the value of the Company’s Stock through the granting of Restricted Stock, Incentive Stock Options,
Non-statutory Stock Options and Warrants. 
 (C) Eligible Participants. All key Employees and all Employee Directors are eligible to
be granted Awards by the Board under the Plan; provided that, no person shall be granted Awards of Restricted Stock unless such person is an Employee of the Company or an Employee of a wholly-owned consolidated subsidiary of the Company. 

 

	2.	DEFINITIONS. 

 (A) “1940 Act” means the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated thereunder. 
 (B) “Affiliate” means any corporation or other entity
that stands in a relationship to the Company that would result in the Company and such corporation or other entity being treated as one employer under Section 414(b) or Section 414(c) of the Code, except that in determining eligibility for
the grant of an Option by reason of service for an Affiliate, Sections 414(b) and 414(c) of the Code shall be applied by substituting “at least 50%” for “at least 80%” under Section 1563(a)(1), (2) and (3) of the
Code and Treas. Regs. § 1.414(c)-2; provided , that to the extent permitted under Section 409A, “at least 20%” shall be used in lieu of “at least 50%”; and further provided , that the lower ownership
threshold described in this definition (50% or 20% as the case may be) shall apply only if the same definition of affiliation is used consistently with respect to all compensatory stock options or stock awards (whether under the Plan or another
plan). The Company may at any time by amendment provide that different ownership thresholds (consistent with Section 409A) apply. Notwithstanding the foregoing provisions of this definition, except as otherwise determined by the Board, a
corporation or other entity shall be treated as an Affiliate only if its employees would be treated as employees of the Company for purposes of the rules promulgated under the Securities Act of 1933, as amended, with respect to the use of Form S-8.

 (C) “Award” means an award of Restricted Stock, Dividend Equivalent Rights, Options or Warrants granted pursuant to the
Plan. 
 (D) “Board” means the Board of Directors of the Company. 

(E) “Code” means the Internal Revenue Code of 1986, as amended and in effect, or any successor statute as from time to time
in effect. Any reference to a provision of the Code shall be deemed to include a reference to any applicable guidance (as determined by the Board) with respect to such provision. 

(F) “Commission” means the Securities and Exchange Commission. 

 (G) “Committee” means a committee of two or more members of the Board appointed
by the Board 
 (H) “Company” means Hercules Technology Growth Capital, Inc., a Maryland corporation. 

(I) “Continuous Service” means the Participant’s uninterrupted service with the Company or an Affiliate, whether as an
Employee or Employee Director. 
 (J) “Covered Transaction” means any of (i) a consolidation, merger, stock sale or
similar transaction or series of related transactions in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or
entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, (iii) a dissolution or liquidation of the Company or (iv) following such time as the
Company has a class of equity securities listed on a national securities exchange or quoted on an inter-dealer quotation system, a change in the membership of the Board for any reason such that the individuals who, as of the Effective Date,
constitute the Board of Directors of the Company (the “Continuing Directors”) cease for any reason to constitute at least a majority of the Board (a “Board Change”); provided, however, that any individual becoming a
director after the Effective Date whose election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the Continuing Directors will be considered as though such individual were a Continuing
Director, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended) or other actual or threatened solicitation of proxies or consents by or on behalf of any person or entity other than the Board. Where a Covered Transaction involves a tender offer that is reasonably
expected to be followed by a merger described in clause (i) (as determined by the Board), the Covered Transaction shall be deemed to have occurred upon consummation of the tender offer. 

(K) “Current Market Value” has the meaning set forth in Section 9. 

(L) “Dividend Equivalent Rights” has the meaning set forth in Section 11. 

(M) “Effective Date” has the meaning set forth in Section 14. 

(N) “Employee” means any person employed by the Company or an Affiliate. 

(O) “Employee Director” means a member of the Board of Directors of the Company that is also an Employee of the Company. 

(P) “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which
these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty
percent of the voting interests. 
 (Q) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
 (R) “Non-employee Director
Plan” means the 2006 Non-employee Director Plan, as from time to time amended and in effect. 
 (S) “Non-statutory Stock
Option” means an Option that is not an Incentive Stock Option. 
 (T) “Option” means an Incentive Stock Option or
a Non-statutory Stock Option granted pursuant to the Plan. 
 (U) “Participant” means a person to whom an Award is granted
pursuant to the Plan. 

 (V) “Permitted Transferee” means a Family Member of a Participant to whom an
Award has been transferred by gift. 
 (W) “Plan” means this 2004 Equity Incentive Plan, as from time to time amended and
in effect. 
 (X) “Restricted Stock” means an Award of Stock for so long as the Stock remains subject to restrictions
requiring that it be forfeited to the Company if specified conditions are not satisfied. 
 (Y) “Securities Act” means the
Securities Act of 1933, as amended. 
 (Z) “Stock” means the common stock of the Company, par value $.001 per share. 

(AA) “Warrant” means a warrant to purchase Stock of the Company granted pursuant to the Plan and having such terms and
conditions as the Board shall deem appropriate. 
  

	3.	ADMINISTRATION. 

 (A) Administration By Board. The Board shall administer the Plan
unless and until it delegates administration to a Committee, as provided in Section 3(c). 
 (B) Powers of Board. The Board
shall have the power, subject to the express provisions of the Plan and applicable law: 
 To determine from time to time
which of the persons eligible under the Plan shall be granted Awards; when and how each Award shall be granted and documented; what type or combination of types of Awards shall be granted; the provisions of each Award granted, including the time or
times when a person shall be permitted to exercise an Award; and the number of shares of Stock with respect to which an Award shall be granted to each such person. 

To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award documentation, in such manner and to such extent as it shall deem necessary or expedient to make the Plan
fully effective. 
 To amend the Plan or an Award as provided in Section 12. 

To terminate or suspend the Plan as provided in Section 13. 

Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company and that are not in conflict with the provisions of the Plan. 
 (C) Delegation to Committee. The Board may
delegate administration of the Plan to a Committee or Committees of two (2) or more members of the Board, and the term “Committee” shall apply to any persons to whom such authority has been delegated; provided that a
“required majority,” as defined in Section 57(o) of the 1940 Act, must approve each issuance of Awards and Dividend Equivalent Rights in accordance with Section 61(a)(3)(A)(iv) of the 1940 Act. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board, other than the Board reference at the end of this sentence and the Board references in the last sentence of this subsection (c), shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 

(D) Effect of Board’s Decision. Determinations, interpretations and constructions made by the Board in good faith shall not be
subject to review by any person and shall be final, binding and conclusive on all persons. 
  

	4.	SHARES SUBJECT TO THE PLAN; CERTAIN LIMITS.  

 (A) Share Reserve. The maximum
aggregate number of shares of Stock that may be issued under the Plan pursuant to grants of Restricted Stock or the exercise of Awards (and in the case of Warrants, exercise or exchange of Warrants) is 12 million (12,000,000) shares. 

(B) Reversion of Shares to the Share Reserve. If any Award shall for any reason expire or otherwise terminate, in whole or in part, the
shares of Stock not acquired under such Award shall revert to and again become available for issuance under the Plan. To the extent any Warrants are exchanged at any time for shares of Stock pursuant to the terms of the certificates governing such
Warrants, that number of shares equal to the difference between the number of shares for which such Warrants were exercisable immediately prior to such exchange and the number of shares of Stock for which such Warrants are, in fact, exchanged shall
revert to and again become available for issuance under the Plan. 
 (C) Type of Shares. The shares of Stock subject to the Plan may
be unissued shares or reacquired shares bought on the market or otherwise. No fractional shares of Stock will be delivered under the Plan. 

(D) Limits on Individual Grants. The maximum number of shares of Stock for which any Employee or Employee Director may be granted
Awards in any calendar year is one million (1,000,000) shares. 
 (E) Limits on Grants of Restricted Stock. The combined maximum
amount of Restricted Stock that may be issued under the Plan and the Non-employee Director Plan will be 10% of the outstanding shares of Stock on the effective date of the plans plus 10% of the number of shares of Stock issued or delivered by the
Company (other than pursuant to compensation plans) during the term of the plans. No one person shall be granted Awards of Restricted Stock relating to more than 25% of the shares available for issuance under this Plan. Shares granted pursuant to an
award of Restricted Stock that are used to settle tax withholding obligations pursuant to Section 9(E) shall be included as “Restricted Stock issued” for purposes of the calculations set forth in this Section 4(E). 

(F) No Grants in Contravention of 1940 Act. At all times during such periods as the Company qualifies or is intended to qualify as a
“business development company,” no Award may be granted under the Plan if the grant of such Award would cause the Company to violate Section 61(a)(3) of the 1940 Act, and, if otherwise approved for grant, shall be void and of no
effect. 
 (G) Limits on Number of Awards. The amount of voting securities that would result from the exercise of all of the
Company’s outstanding warrants, options, and rights, together with any Restricted Stock issued pursuant to this Plan, the Non-employee Director Plan and any other compensation plan of the Company, at the time of issuance shall not exceed 25% of
the outstanding voting securities of the Company, except that if the amount of voting securities that would result from the exercise of all of the Company’s outstanding warrants, options, and rights issued to the Company’s directors,
officers, and employees, together with any Restricted Stock pursuant to this Plan, the Non-employee Director Plan and any other compensation plan of the Company, would exceed 15% of the outstanding voting securities of the Company, then the total
amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights, together with any Restricted Stock issued pursuant to this Plan, the Non-employee Director Plan and any other compensation plan of the
Company, at the time of issuance shall not exceed 20% of the outstanding voting securities of the Company. Shares granted pursuant to an award of Restricted Stock that are used to settle tax withholding obligations pursuant to Section 9(E)
shall be included as “Restricted Stock issued” for purposes of the calculations set forth in this Section 4(G). 
 (H)
Date of Award’s Grant. The date on which the “required majority,” as defined in Section 57(o) of the 1940 Act, approves the issuance of an Award will be deemed the date on which such Award is granted. 

 

	5.	ELIGIBILITY. 

 Incentive Stock Options may be granted to Employees or Employee Directors
of the Company or a “parent” or “subsidiary” corporation of the Company as those terms are used in Section 424 of the Code. Awards other than Incentive Stock Options may be granted to both Employees and Employee Directors.
By accepting any 

 
Award granted hereunder, the Participant agrees to the terms of the Award and the Plan. Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are
converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Board. 

 

	6.	OPTION PROVISIONS. 

 Each Option shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Non-statutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of
Stock purchased on exercise of each type of Option. The provisions of separate Options need not be identical, but, to the extent relevant, each Option shall include (through incorporation by reference or otherwise) the substance of each of the
following provisions: 
 (A) Time and Manner of Exercise. Unless the Board expressly provides otherwise, an Option will not be deemed
to have been exercised until the Board receives a notice of exercise (in form acceptable to the Board) signed by the appropriate person and accompanied by any payment required under the Award. If the Option is exercised by any person other than the
Participant, the Board may require satisfactory evidence that the person exercising the Option has the right to do so. No Option shall be exercisable after the expiration of ten (10) years from the date on which it was granted. 

(B) Exercise Price of an Option. The exercise price of each Option shall be not less than the Current Market Value of, or if no such
market value exists, the current net asset value of, the stock subject to the Option as determined in good faith by the Board on the date the Option is granted. In the case of an Option granted to a 10% Holder and intended to qualify as an Incentive
Stock Option, the exercise price will not be less than 110% of the Current Market Value determined as of the date of grant. A “10% Holder” is an individual owning stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or its parent or subsidiary corporations. No such Stock Option, once granted, may be repriced other than in accordance with the 1940 Act and the applicable stockholder approval requirements of the Nasdaq National
Market. 
 (C) Consideration. The purchase price for Stock acquired pursuant to an Option shall be paid in full at the time of
exercise either (i) in cash, or, if so permitted by the Board and if permitted by the 1940 Act and otherwise legally permissible, (ii) through a broker-assisted exercise program acceptable to the Board, (iii) by such other means of
payment as may be acceptable to the Board, or (iv) in any combination of the foregoing permitted forms of payment. 
 (D)
Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the
Participant. 
 (E) Transferability of a Non-statutory Stock Option. A Non-statutory Stock Option shall be transferable by will or by
the laws of descent and distribution, or, to the extent provided by the Board, by gift to a Permitted Transferee, and a Non-statutory Stock Option that is nontransferable except at death shall be exercisable during the lifetime of the Participant
only by the Participant. 
 (F) Limitation on Repurchase Rights. If an Option gives the Company the right to repurchase shares of
Common Stock issued pursuant to the Plan upon termination of employment of such Participant, the terms of such repurchase right must comply with Section 260.140.41(k) of the California Code of Regulations and the 1940 Act. 

(G) Exercisability. The Board may determine the time or times at which an Option will vest or become exercisable and the terms on which
an Option requiring exercise will remain exercisable. Notwithstanding the foregoing, vesting shall take place at the rate of at least 20% per year over not more than five years from the date the award is granted, subject to reasonable
conditions such as continued employment; provided, however, that options may be subject to such reasonable forfeiture conditions as the Board may choose to impose and which are not inconsistent with Section 260.140.41 of the California Code of
Regulations. 

 (H) Termination of Continuous Service. Unless the Board expressly provides otherwise,
immediately upon the cessation of a Participant’s Continuous Service that portion, if any, of any Option held by the Participant or the Participant’s Permitted Transferee that is not then exercisable will terminate and the balance will
remain exercisable for the lesser of (i) a period of three months or (ii) the period ending on the latest date on which such Option could have been exercised without regard to this Section 6(h), and will thereupon terminate subject to
the following provisions (which shall apply unless the Board expressly provides otherwise): 
 if a Participant’s Continuous Service
ceases by reason of death, or if a Participant dies following the cessation of his or her Continuous Service but while any portion of any Option then held by the Participant or the Participant’s Permitted Transferee is still exercisable, the
then exercisable portion, if any, of all Options held by the Participant or the Participant’s Permitted Transferee immediately prior to the Participant’s death will remain exercisable for the lesser of (A) the one year period ending
with the first anniversary of the Participant’s death or (B) the period ending on the latest date on which such Option could have been exercised without regard to this Section 6(h)(i), and will thereupon terminate; and 

if the Board in its sole discretion determines that the cessation of a Participant’s Continuous Service resulted for reasons that cast
such discredit on the Participant as to justify immediate termination of his or her Options, all Options then held by the Participant or the Participant’s Permitted Transferee will immediately terminate. 

Notwithstanding anything in the foregoing to the contrary, in the case of a Participant residing in California, unless such Participant’s
employment is terminated for cause (as defined in any contract of employment between the Company and such Participant, or if none, in the instrument evidencing the grant of such Participant’s option), in the event of termination of employment
of such Participant, he or she shall have the right to exercise an option, to the extent that he or she was otherwise entitled to exercise such option on the date employment terminated, as follows: (i) at least six months from the date of
termination, if termination was caused by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code) and (ii) at least 30 days from the date of termination, if
termination was caused other than by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code). 
  

	7.	RESTRICTED STOCK PROVISIONS. 

 Each grant of Restricted Stock shall contain such terms
and conditions as the Board shall deem appropriate. The provisions of separate grants of Restricted Stock need not be identical, but, to the extent relevant, each grant shall include (through incorporation by reference or otherwise) the substance of
each of the following provisions: 
 (A) Consideration. To the extent permitted by the 1940 Act, Awards of Restricted Stock may be
made in exchange for past services or other lawful consideration. 
 (B) Transferability of Restricted Stock. Except as the Board
otherwise expressly provides, Restricted Stock shall not be transferable other than by will or by the laws of descent and distribution. 

(C) Vesting. The Board may determine the time or times at which shares of Restricted Stock will vest or become exercisable and the
terms on which shares of Restricted Stock will remain exercisable. The vesting schedule for Restricted Stock issued under the Plan will be determined at the time of the initial grant of Restricted Stock. 

(D) Termination of Continuous Service. Unless the Board expressly provides otherwise, immediately upon the cessation of a
Participant’s Continuous Service that portion, if any, of any Restricted Stock held by Participant or the Participant’s Permitted Transferee that is not then vested will thereupon terminate and the unvested shares will be returned to the
Company and will be available to be issued as Awards under this Plan. 
  

	8.	WARRANT PROVISIONS. 

 Warrants granted prior to January 1, 2006 shall be governed by the applicable
terms of the Plan as then in effect. 

	9.	MISCELLANEOUS. 

 (A) Acceleration. The Board shall have the power to accelerate
the time at which an Award or any portion thereof vests or may first be exercised, regardless of the tax or other consequences to the Participant or the Participant’s Permitted Transferee resulting from such acceleration. 

(B) Stockholder Rights. No Participant or other person shall be deemed to be the holder of, or to have any of the rights of a holder
with respect to, any shares of Stock subject to an Option or Warrant unless and until such Award has been delivered to the Participant or other person upon exercise of the Award (or, in the case of Warrants, upon exercise or exchange of the
Warrant). Holders of Restricted Stock shall have all the rights of a holder upon issuance of the Restricted Stock Award. 
 (C) No
Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue in the employment of, or to continue to serve as a director of, the
Company or an Affiliate or shall affect the right of the Company or an Affiliate to terminate (i) the employment of the Participant (if the Participant is an Employee) with or without notice and with or without cause or (ii) the service of
an Employee Director (if the Participant is an Employee Director) pursuant to the Bylaws of the Company or an Affiliate and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated. Nothing in
the Plan will be construed as giving any person any rights as a stockholder except as to shares of Stock actually issued under the Plan. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of
termination of service for any reason, even if the termination is in violation of an obligation of the Company or an Affiliate to the Participant. 

(D) Legal Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to
remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved;
(ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance;
and (iii) all conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act, the Company may require, as a condition to the grant or the exercise of the Award (or, in the case of
Warrants, as a condition to exercise or exchange of the Warrant), such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act. The Company may require that certificates evidencing
Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions. 

(E) Withholding Obligations. Each grant or exercise of an Award granted hereunder (or, in the case of Warrants, exercise or exchange of
a Warrant) shall be subject to the Participant’s having made arrangements satisfactory to the Board for the full and timely satisfaction of all federal, state, local and other tax withholding requirements applicable to such grant, exercise or
exchange. Without limiting the generality of the foregoing, the Participant may satisfy such withholding requirements by tendering a check (acceptable to the Board) for the full amount of such withholding. In the event the Company or an Affiliate
becomes liable for tax withholding with respect to an Option prior to the date of exercise (or, in the case of Warrants, exercise or exchange), the Company may require the Participant to remit the required tax withholding by separate check
acceptable to the Company or may make such other arrangements (including withholding from other payments to the Participant) for the satisfaction of such withholding as it determines. 

The Company or its designated third party administrator shall have the right to deduct applicable taxes from any Award payment and withhold,
at the time of delivery or vesting of cash or shares of Stock under this Plan, an appropriate amount of cash or number of shares of Stock or a combination thereof for payment of taxes or other amounts 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. A Participant may also satisfy tax withholding obligations by the transfer to the Company of shares of Stock theretofore owned by the holder of
the Award with respect to which withholding is required. Shares of Stock used to satisfy tax withholding obligations shall be valued based on the 

 
shares’ Current Market Value on the date of the transaction. Consistent with Section 409A of the Internal Revenue Code, the Company will use the closing sales price of its shares of
Common Stock on the NASDAQ Global Select Market (or any other such exchange on which its shares of Common Stock may be traded in the future) as “Current Market Value” for all purposes under the Plan. 

(F) Section 409A. Awards under the Plan are intended either to qualify for an exemption from Section 409A or to comply with
the requirements thereof, and shall be construed accordingly. 
  

	10.	ADJUSTMENTS UPON CHANGES IN STOCK. 

 (A) Capitalization Adjustments. In the event
of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure, the Board will make appropriate adjustments to the maximum number of shares
specified in Section 4(a) that may be delivered under the Plan, to the maximum per-participant share limit described in Section 4(d) and will also make appropriate adjustments to the number and kind of shares of stock or securities subject
to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change. To the extent consistent with qualification of Incentive Stock Options under Section 422 of
the Code and with the performance-based compensation rules of Section 162(m), where applicable, the Board may also make adjustments of the type described in the preceding sentence to take into account distributions to stockholders other than
those provided for in such sentence, or any other event, if the Board determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards granted hereunder; provided, however, that the
exercise price of Awards granted under the Plan will not be adjusted unless the Company receives an exemptive order from the Securities and Exchange Commission or written confirmation from the staff of the Securities and Exchange Commission that the
Company may do so. 
 (B) Covered Transaction. Except as otherwise provided in an Award, in the event of a Covered Transaction in
which there is an acquiring or surviving entity, the Board may provide for the assumption of some or all outstanding Awards, or for the grant of new awards in substitution therefor, by the acquiror or survivor or an affiliate of the acquiror or
survivor, in each case on such terms and subject to such conditions as the Board determines. In the absence of such an assumption or if there is no substitution, except as otherwise provided in the Award, each Award will become fully vested or
exercisable prior to the Covered Transaction on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Board, to participate as a stockholder in the Covered Transaction following vesting or exercise, and the Award
will terminate upon consummation of the Covered Transaction. 
  

	11.	DIVIDEND EQUIVALENT RIGHTS. 

 The Board may provide for the payment of amounts in lieu of
cash dividends or other cash distributions (“Dividend Equivalent Rights”) with respect to Stock subject to an Award; provided, however, that grants of Dividend Equivalent Rights must be approved by order of the Securities and
Exchange Commission. The Board may impose such terms, restrictions and conditions on Dividend Equivalent Rights, including the date such rights will terminate, as it deems appropriate, and may terminate, amend or suspend such Dividend Equivalent
Rights at any time without the consent of the Participant or Participants to whom such Dividend Equivalent Rights have been granted, if any. 
  

	12.	AMENDMENT OF THE PLAN AND AWARDS. 

 The Board may at any time or times amend the Plan or
any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Board may not, without
the Participant’s consent, alter the terms of an Award so as to affect substantially and adversely the Participant’s rights under the Award, unless the Board expressly reserved the right to do so at the time of the grant of the Award. Any
amendments to the Plan shall be conditioned upon stockholder approval only to the extent, if any, such approval is required by law (including the Code and applicable stock exchange requirements), as determined by the Board. 

	13.	TERMINATION OR SUSPENSION OF THE PLAN. 

 (A) Plan Term. The Board may suspend or
terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is initially adopted by the Board or approved by the stockholders of the Company, whichever
is earlier. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 
 (B) No Impairment of
Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Awards granted while the Plan is in effect except with the written consent of the Participant. 

 

	14.	EFFECTIVE DATE OF PLAN. 

 The Plan shall become effective upon approval by the
stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board; provided, however, that the Plan shall not be effective with respect to an Award of Restricted Stock or
the grant of Dividend Equivalent Rights unless the Company has received an order of the Commission that permits such Award or grant (the “Effective Date”). 
  

	15.	1940 ACT. 

 No provision of this Plan shall contravene any portion of the 1940 Act, and
in the event of any conflict between the provisions of the Plan or any Award and the 1940 Act, the applicable Section of the 1940 Act shall control and all Awards under the Plan shall be so modified. All Participants holding such modified Awards
shall be notified of the change to their Awards and such change shall be binding on such Participants. 
  

	16.	INFORMATION RIGHTS OF PARTICIPANTS. 

 The Company shall provide to each Participant who
acquires Stock pursuant to the Plan, not less frequently than annually, copies of annual financial statements (which need not be audited). The Company shall not be required to provide such statements to key employees whose duties in connection with
the Company assure their access to equivalent information. 
  

	17.	SEVERABILITY. 

 If any provision of this Plan or any Award is or becomes or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction or as to any Participant or Award, or would disqualify this Plan or any Award under any applicable law, such provision shall be construed or deemed amended to conform to the applicable laws,
or if it cannot be construed or deemed amended without, in the determination of the Board, materially altering the intent of this Plan or the Award, such provision shall be stricken as to such jurisdiction, Participant or Award and the remainder of
this Plan and any such Award shall remain in full force and effect. 
  

	18.	OTHER COMPENSATION ARRANGEMENTS. 

 The existence of the Plan or the grant of any Award
will not in any way affect the Company’s right to award a person bonuses or other compensation in addition to Awards under the Plan. 
  

	19.	WAIVER OF JURY TRIAL. 

 By accepting an Award under the Plan, each Participant waives any
right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered
in connection therewith, and agrees that any such action, proceedings or counterclaim shall be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney
of 

 
the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. 

 

	20.	LIMITATION ON LIABILITY. 

 Notwithstanding anything to the contrary in the Plan, neither
the Company nor the Board, nor any person acting on behalf of the Company or the Board, shall be liable to any Participant or to the estate or beneficiary of any Participant by reason of any acceleration of income, or any additional tax, asserted by
reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code; provided, that nothing in this Section 20 shall limit the ability of the Board or the Company
to provide by express agreement with a Participant for a gross-up payment or other payment in connection with any such tax or additional tax. 
 Approved
July 7, 2015ex10-1.htm

Exhibit 10.1

FORM OF BOARD OF DIRECTORS APPOINTMENT AGREEMENT

THIS BOARD OF DIRECTORS APPOINTMENT AGREEMENT (the “Agreement”) is dated as of the 27th day of August, 2015.

BETWEEN

Alan Murphy (the "Director")

AND

STW Resources Holding Corp., a Nevada corporation having a business office at 3424 South CR 1192, Midland, Texas 79706 (the "Company").

WHEREAS, The Company desires to retain the services of Director on the Company’s Board of Directors to provide primarily general advice on current standard practices and trends in Director’s area of expertise and from time-to-time in a consulting capacity with respect to certain activities or specific projects as described in this Agreement, and Director is willing so to act.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained the parties hereto agree as follows:

1.           INTERPRETATION

1.1           Where used herein the following terms shall have the meanings set out below:

 

	
  

	
(a)

	
"Directory Board" means the group of individuals appointed by the Company to act as Directors to the Board;

	
  

	
(b)

	
"Directory Services" means the Directory and consulting services to be provided by the Director to the Company as set out herein;

	
  

	
(c)

	
"Board" means the board of directors of the Company;

	
  

	
(d)

	
"Business Material" means any financial, market and technical information, methods and plans, trade secrets, know-how, technical expertise and other information relating to the Company's business and operations;

	
  

	
(e)

	
"Term" has the meaning given to it in subsection 2.1.

1.2           Governing Law.  This Agreement shall be governed by and be construed in accordance with the laws of Texas applicable therein.

1.3           Severability.  If any one or more of the provisions contained in this Agreement should be determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

2.           TERM

2.1           Term.

(a)             This Agreement shall continue for a period of one (1) year from the Effective Date and shall continue thereafter for as long as Director is re-elected as a Director of the Company at the Company’s Annual Meeting of the Shareholders.

 (b)            Notwithstanding the foregoing and provided that Director has neither voluntarily resigned nor been terminated for "cause" as defined in Section 5 of this Agreement, Company agrees to use its best efforts to reelect Director to the Board for a period of two (2) years at the 2016 Annual Meeting of the Shareholders.

  

-1-

  

 

3.           DIRECTORY SERVICES

3.1           Directory Services.  The Company hereby appoints and retains the Director, on a non-exclusive basis, during the Term to serve as a member of the Directory Board and provide the Directory Services as requested by the Company from time to time, and the Director hereby accepts such appointment to the Directory Board and agrees to provide diligently the Directory Services.  The Director shall perform such duties and responsibilities as are normally related to such position in accordance with Company's bylaws and applicable law, and Director hereby agrees to use his best efforts to provide the Services. Director shall not allow any other person or entity to perform any of the Services for or instead of Director. Director shall comply with the statutes, rules, regulations and orders of any governmental or quasi-governmental authority, which are applicable to the performance of the Directory Services, and Company's rules, regulations, and practices as they may from time-to-time be adopted or modified In providing the Directory Services, the Director will conform to and abide by the following:

	
  

	
(a)

	
Duties and Expectations of a Director of STW Resources Holding Corp., attached as Exhibit “A” to this Agreement, and as amended from time to time.; and

	
  

	
(b)

	
Statement of Roles and Responsibilities of the Board of Directors of STW Resources Holding Corp., attached as Exhibit “B” to this Agreement, and as amended from time to time.

3.2           Time Commitment.  Director agrees to attend quarterly meetings of the Company’s Directory Board and spend one day per quarter in person at the Company’s headquarters or such other place that the Company may reasonably request acting as a consultant on such matters as the Company may reasonably request.  Including the foregoing time commitments, the

Director will devote up to eight (8) days in total annually to providing the Directory Services and the consulting services to the Company pursuant to this Agreement.

3.3           Board and Director to Act Independently.  The Board and the Director shall diligently and responsibly receive all advice from other directors, officers of the company, Advisory Board Members, and consultants, and the Board and the Director will use independent judgment before acting upon such advice.

3.4           Remuneration.  In consideration of the provision of the Directory Services, the Company shall compensate the Director as follows:

 

	
  

	
(a)

	
Issuance of 33,334 shares of the Company’s common stock upon the execution of this Agreement.

	
  

	
(b)

	
In consideration of the services to be rendered under this Agreement, Company shall pay Director a fee at the rate of Seventy-Five Thousand Dollars ($75,000) per year ($27,329 for the partial year 2015), which shall be paid solely at the Company’s discretion in cash or in shares of the Company’s stock, in accordance with Company's regularly established practices regarding the payment of Directors' fees, but in no event later than 12 months after the Effective Date of this Agreement and each of its subsequent anniversaries, if any.

	
  

	
(c)

	
Payment of $1,000.00, in cash, for each day of attendance at Directory Board meetings or any other meeting called by the Company and attended by Director.

	
  

	
(d)

	
All reasonable costs of travel, lodging, and entertainment reasonably necessary for Director to carry out his duties shall be paid or reimbursed by the Company, so long as any such expense in excess of $100.00 is approved, in advance, by the Company.

3.5           Disclosure of Director.  During the Term, the Director shall:

 

	
  

	
(a)

	
disclose to the Company all of his interests in any transaction or agreement contemplated by the Company or any matter which may taint the Director's objectivity when performing his role as an Director hereunder;

	
  

	
(b)

	
inform the Company of any business opportunities made available to the Director as a result of the Director's involvement with the Company or otherwise through the performance of the Directory Services; and

	
  

	
(c)

	
not serve as an Director, or consent to an appointment as a member of the board of directors, of a company which competes, directly or indirectly, with the Company.

	
  

	
(d)

	
Conform to and abide by the STW Resources Holding Corp. Board of Directors Conflict of Interest Policy, attached as Exhibit “C” to this Agreement, and as amended from time to time.

 

  

-2-

  

 

4.           CONFIDENTIAL INFORMATION

4.1           Confidentiality Obligation.  The Director recognizes and agrees that any Business Material furnished or to be furnished to him by the Company is to be used only for the purpose of providing the Directory Services hereunder and that such Business Material will be kept confidential by the Director provided, however, that any such Business Material may be disclosed:

 

	
  

	
(a)

	
if specifically consented to in writing by the Company; or

	
  

	
(b)

	
if required by applicable law or by an order of a court of competent jurisdiction.

4.2           Exceptions.  The provisions of Section 4.1 shall not apply to:

 

	
  

	
(a)

	
information which becomes generally available to the public other than as a result of a disclosure by the Director;

	
  

	
(b)

	
information which is generally known to knowledgeable business people involved in the business conducted by the Company other than as a result of a disclosure by the Director in violation of this part;

	
  

	
(c)

	
information that was available to the Director on a non-confidential basis prior to its disclosure to the Director by the Company; or

	
  

	
(d)

	
information that becomes available to the Director on a non-confidential basis from a person or entity other than the Company, unless such disclosure by that person is itself in breach of a confidentiality commitment made directly or indirectly to the Company;

 

and provided that nothing in this Agreement shall prevent the Director from using his expertise and knowledge in the conduct of other business for its own account or as a consultant to others.

4.3           License and Assignment of Rights. Director acknowledges that all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets which are made by Director (solely or jointly with others) within the scope of and as part of Director’s consultancy with the Company (collectively referred to herein as “Inventions”) are “works made for hire” (to the greatest extent permitted by applicable law) and are compensated by such amounts paid to Director under this Agreement, unless regulated otherwise by the mandatory law of the state of Texas. To the extent that Director owns or controls intellectual property rights of any kind in any pre-existing works which are subsequently incorporated by Director in any Inventions without the express written permission of the Company, Director hereby grants the Company a royalty-free, irrevocable, world-wide, perpetual, non-exclusive license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell, license, disclose, publish, or otherwise disseminate or transfer such subject matter. Director also agrees and warrants that Director will not use or incorporate third party proprietary materials into Inventions or disclose third party proprietary information to Company.

4.4           Non-Compete; Nonsolicitation. During the term of Director’s consultancy and for one (1) year thereafter, Director will not, without the Company’s prior written consent,

	
  

	
(a)

	
directly work on any products or services, or indirectly work on any commercial products or services, that are competitive with products or services

	
  

	
(i)

	
being commercially developed or exploited by the Company during Director’s consultancy and

	
  

	
(ii)

	
on which Director worked or about which Director learned Proprietary Information during Director’s consultancy with the Company; or

	
  

	
(b)

	
solicit the employment of any employee of the Company with whom Director has had contact in connection with the relationship arising under this Agreement.

4.3           Insider Trading.  Director acknowledges that he has read the Company’s Insider Trading Policy, a copy of which is attached as Exhibit D, and that he understands his obligations under, and the restrictions imposed upon him by, such Policy.

  

-3-

  

 

5.           EXTENSION AND TERMINATION

5.1           Extension of Term by Company.  The Company, by the sole discretion of the Board, may extend the term of this Agreement with the Director for one-year periods beyond the expiration of the initial term of this Agreement.

 

5.2           Termination by the Company or Director.  The Company or the Director may terminate this Agreement without cause at any time by giving 30 days written notice of termination of this Agreement to the other party.  Any termination of this Agreement, either pursuant to this Section or otherwise, will not affect the obligations under Section 4, which will survive such termination.  In the event that this Agreement is terminated by the Company without cause, the Company shall pay the Director the annual amount of compensation accrued as of the date of termination and  any expenses incurred by the Director up to the effective date of the termination to the extent such expenses have not previously been reimbursed. Upon payment of such amounts, the Director shall have no claim against the Company for damages or otherwise by reason of such termination.  In the event of termination of this Agreement, the Director shall, prior to the effective date of the termination, deliver to the Company all books, records, or other information in his possession pertaining to the Company's business.

6.           INDEMNITY AND LIMITATION OF LIABILITY

6.1           Indemnification by the Company. The Company shall indemnify and hold harmless the Director against any and all losses, damages, suits, judgments, costs and expenses arising under any such third party claim or action provided however, that the Director provides the Company with:

	
  

	
(a)

	
written notice of such claim or action within 14 days of acquiring knowledge of the event;

	
  

	
(b)

	
sole control and authority of the defense or settlement of such claim or action (provided that the Company shall not enter into any settlement which materially affects the Director's rights without the Director's prior written consent); and

	
  

	
(c)

	
proper and full information and reasonable assistance to defend and/or settle any such claim or action.

6.2           No Liability for Acts of the Company.  The Director shall not be liable for any act of the Company or any of its directors, officers or employees.

6.3           Limitation of Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY OR PUNITIVE DAMAGES (EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM ANY PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOSS OF BUSINESS.

7.           GENERAL PROVISIONS

7.1           No Partnership or Agency.  The relationship between the Company and the Director is that of independent contractor and nothing herein contained shall be interpreted so as to create a partnership or agency relationship between the parties.

7.2           Assignment.  Neither party may assign any rights or delegate any obligations hereunder without the prior written consent of the other party.

7.3           Mediation and Arbitration.  Any dispute arising under this Agreement shall be resolved through a mediation - arbitration approach. The parties agree to select a mutually agreeable, neutral third party to help them mediate any dispute that arises under the terms of this Agreement.  Costs and fees associated with the mediation shall be shared equally by the parties.  If the mediation is unsuccessful, the parties agree that the dispute shall be decided by a single arbitrator by binding arbitration under the rules of the American Arbitration Association in Midland, Texas.  The decision of the arbitrator shall be final and binding on the parties and may be entered and enforced in any court of competent jurisdiction by either party.  The arbitrator is not authorized to award punitive damages to either party.  The prevailing party in the arbitration proceedings shall be awarded reasonable attorney fees, expert witness costs and expenses, and all other costs and expenses incurred directly or indirectly in connection with the proceedings, unless the arbitrator shall for good cause determine otherwise.

  

-4-

  

 

7.4          Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

7.5           Binding on Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Company’s successors, transferees, and assigns.

7.6           Amendments.   Any amendment to this Agreement must be in writing signed by Director and the Company. The Company and Director acknowledge that any amendment of this Agreement (including, without limitation, any extension of this Agreement or any change from the terms of Sections 3.3, 5.1, and 5.2 in the consideration to be provided to Director and the term of the Agreement with respect to services to be provided hereunder) or any departure from the terms or conditions hereof with respect to Director’s consulting services for the Company is subject to the Company’s and Director’s prior written approval.

7.7.           Entire Agreement.  This Agreement supersedes any prior consulting or other similar agreements between Director and the Company with respect to the subject matter hereof. There is no other agreement governing or affecting the subject matter hereof.

7.8           Notices.  All notices hereunder shall be deemed to have been given, if made in writing, when mailed, postage prepaid, to the parties at the addresses set forth above, or to such other

addresses as a party shall specify to the other.

 

7.9           Multiple Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.  Facsimile transmitted signatures shall be considered the same as original signatures.

AS EVIDENCE OF THEIR AGREEMENT this Agreement has been executed by the parties hereto as of the date first above written.

DIRECTOR

/s/ Alan Murphy

Alan Murphy

STW RESOURCES HOLDING CORP.

/s/ Stanley T. Weiner

By: Stanley T. Weiner

Its CEO

  

-5-

  

Exhibit A

Duties and Expectations of a Director of STW Resources Holding Corp.

Purpose

STW Resources Holding Corp. (“STW”) is committed to ensuring that it achieves standards of excellence in the quality of its governance and has adopted this policy describing the duties and expectations of its Directors.

Application

This policy applies to all elected and ex-officio Directors and is provided to Directors before they are recruited for appointment to the Board. A Director who wishes to serve on the Board must confirm in writing that he or she will abide by this policy.

Position Description

As a member of the Board, and in contributing to the collective achievement of the role of the Board, the individual Director is responsible for the following:

Fiduciary Duties

Each Director is responsible to act honestly, in good faith and in the best interests of STW and in so doing, to support STW in fulfilling its mission and discharging its accountabilities.  A Director shall apply the level of skill and judgment that may reasonably be expected of a person with his or her knowledge and experience. Directors with special skill and knowledge are expected to apply that skill and knowledge to matters that come before the Board.

Accountability

A Director’s fiduciary duties are owed to the corporation. A Director is not solely accountable to any special group or interest and shall act and make decisions that are in the best interest of STW, as a whole. A Director shall be knowledgeable of the stakeholders to whom STW is accountable and shall appropriately take into account the interests of such stakeholders when making decisions as a Director, but shall not prefer the interests of any one group if to do so would not be in the best interests of STW.

Education

A Director shall be knowledgeable about:

	
–

	
The operations of STW;

	
–

	
The duties and expectations of a Director;

	
–

	
The Board’s governance role, governance structure and processes;

	
–

	
The Board’ adopted governance policies; and

	
–

	
STW’s By-Laws

A Director will participate in a Board orientation session, orientation to committees, Board retreats, and may apply for Board educational opportunities.

Board Policies and STW Policies

A Director shall be knowledgeable of and comply with the Board and STW policies that are applicable to the Board including:

	
–

	
The Board’s Conflict of Interest Policy; and

	
–

	
The Board’s Confidentiality Policy

  

A-1

  

 

Teamwork

A Director shall develop and maintain sound relations and work co-operatively and respectfully with the Board Chair, members of the Board and senior management.

Community Representation and Support

A Director shall represent the Board and STW in the community when asked to do so by the Board Chair.

Time and Commitment

A Director is expected to commit the time required to perform Board and committee

duties.  The Board formally meets approximately four times a year, and a Director is expected to

adhere to the Board’s attendance policy.

Contribution to Governance

Directors are expected to make a contribution to the governance role of the Board through:

	
–

	
Reading materials in advance of meetings and coming prepared to contribute to discussions;

	
–

	
Offering constructive contributions to Board and committee discussions;

	
–

	
Contributing his or her special expertise and skill;

	
–

	
Respecting the views of other members of the Board;

	
–

	
Voicing conflicting opinions during Board and committee meetings but respecting the decision of the majority even when a Director does not agree with it;

	
–

	
Respecting the role of the Chair;

	
–

	
Respecting the role and Terms of Reference of Board committees; and

	
–

	
Participating in Board evaluations and annual performance reviews.

Continuous Improvement

A Director shall commit to be responsible for continuous self-improvement. A Director shall receive and act upon the results of Board evaluations in a positive and constructive manner.

Term and Renewal

Terms and renewals will be applied as outlined in the STW By-Laws and/or the Director’s Appointment Agreement.

Amendment

This policy may be amended by the Board at any time for any purpose.

 

Approval Date: April 09, 2010

Last Review Date: August 25, 2015

 

  

A-2

  

Exhibit B

Statement of the Roles and Responsibilities of the Board of Directors

of STW Resources Holding Corp.

Purpose

To ensure that the Board has a shared understanding of its governance role, the Board has adopted this statement of the Roles and Responsibilities of the Board.

Responsibilities of the Board

	
–

	
The Board is responsible for the overall governance of the affairs of STW.

	
–

	
The Board is responsible for ensuring it operates in accordance with its By-laws.

	
–

	
Each Director is responsible to act honestly, in good faith and in the best interest of STW and in so doing, to support the organization in fulfilling its mission and discharging its accountabilities.

Strategic Planning, Mission, Vision and Values

	
–

	
The Board participates in the formulation and adoption of STW’s mission, vision and values.

	
–

	
The Board ensures that STW develops and adopts a strategic plan that is consistent with its mission, vision and values, which will enable the organization to realize its vision.

	
–

	
The Board participates in the development of and ultimately approves the strategic plan.

	
–

	
The Board oversees STW operations for consistency with the strategic plan and strategic directions.

	
–

	
The Board receives regular briefings or progress reports on implementation of the strategic directions and imperatives.

	
–

	
The Board ensures that its decisions are consistent with the strategic plan and STW’s vision, mission and values.

	
–

	
The Board annually conducts a review of the strategic plan as part of a regular annual planning cycle.

Quality and Performance Measurement and Monitoring

	
–

	
The Board is responsible for establishing a process and a schedule for monitoring and assessing performance in areas of Board responsibility including:

 

	
  

	
–

	
Fulfillment of the strategic directions in a manner consistent with the mission, vision and values;

	
  

	
–

	
Oversight of management performance;

	
  

	
–

	
Quality of the delivery of STW services;

	
  

	
–

	
Financial conditions; and

	
  

	
–

	
Board’s own effectiveness

	
–

	
The Board ensures that management has identified appropriate measures of performance.

	
–

	
The Board monitors STW performance against Board approved performance goals and objectives.

	
–

	
The Board ensures that management has plans in place to address variances from performance standards, and the Board oversees implementation of remediation plans.

Financial Oversight

	
–

	
The Board is responsible for stewardship of financial resources including ensuring availability of, and overseeing allocation of, financial resources.

	
–

	
The Board approves policies for financial planning and approves the annual operating, capital and project budgets.

	
–

	
The Board monitors financial performance against budgets.

	
–

	
The Board approves investment policies and monitors compliance.

	
–

	
The Board ensures the accuracy of financial information through oversight of management.

	
–

	
The Board ensures management has put measures in place to ensure the integrity of internal controls.

 

  

B-1

  

 

Oversight of Management Including Selection, Supervision and Succession Planning for

the Chief Executive Officer of the Company (CEO)

	
–

	
The Board recruits and supervises the CEO by:

	
  

	
–

	
Developing and approving the CEO’s job description;

	
  

	
–

	
Undertaking a CEO recruitment process and selection of the CEO, as required;

	
  

	
–

	
Reviewing and approving the CEO’s annual performance goals; and

	
  

	
–

	
Reviewing CEO performance and determining CEO compensation

Risk Identification and Oversight

 

	
–

	
The Board is responsible to be knowledgeable about risks inherent to the organization and ensure that appropriate risk analysis is performed as part of Board decision-making.

	
–

	
The Board ensures that appropriate programs and processes are in place to protect against risk.

	
–

	
The Board is responsible for identifying unusual risks to the organization for ensuring that there are plans in place to prevent and manage such risks.

Shareholder Communication and Accountability

	
–

	
The Board identities STW Shareholders and understands Shareholder accountability.

	
–

	
The Board ensures the organization appropriately communicates with Shareholders in a manner consistent with accountability to Shareholders.

	
–

	
The Board contributes to the maintenance of strong Shareholder relationships.

	
–

	
The Board performs advocacy on behalf of the organization with Shareholders where required in support of the mission, vision and values and strategic directions of STW.

Governance

	
–

	
The Board is responsible for the quality of its own governance.

	
–

	
The Board establishes governance structures to facilitate the performance of the Board’s role and enhance individual director performance.

	
–

	
The Board is responsible for the recruitment of a skilled, experienced and qualified Board.

	
–

	
The Board ensures ongoing Board training and education.

	
–

	
The Board periodically assesses and reviews its governance through periodically evaluating Board structures including Board recruitment processes and Board composition and size, number of committees and their Terms of Reference, processes for appointment of committee chairs, processes for appointment of Board officers and other governance processes and structures.

Legal Compliance

	
–

	
The Board ensures that appropriate processes are in place to ensure compliance with the laws and regulations of the state of incorporation, states of operation, and the federal laws and regulations of the United States.

Amendment

	
–

	
This statement may be amended by the Board at any time.

Approval Date: April 09, 2010

Last Review Date: 08/25/2015

 

  

B-2

  

Exhibit C

STW Resources Holding Corp. Board of Directors Conflict of Interest Policy

Statement of Conflict of Interest Policy:

No member of the STW Board of Directors or committees shall derive any personal profit or gain, directly or indirectly, by reason of his or her participation with STW.  Each individual shall

disclose to STW any personal interest which s/he may have in any matter pending with STW and shall refrain from participation in all decisions on such matter.

Any member of the STW Board or committees who is also a member of a Board, staff or committee of, or has a personal interest in, any organization that might provide or be the recipient of services and/or sales to or from STW shall identify his or her affiliation with such organization; further, in connection with any actions specifically directed to that organization, the member shall not participate in any decisions respecting that organization.

Directors on the STW Board will avoid conflict of interest transactions and refrain from activity which could compromise the independence of the STW organization.  A transaction in which a Director of the corporation has a conflict of interest may be approved if the material facts of the transaction and the Director’s interest were disclosed or known to the Board of Directors or a committee of the Board and the Board or committee of the Board authorized, approved or ratified the transaction. A conflict of interest transaction is authorized, approved or ratified, if it receives the affirmative vote of a majority of the Directors on the Board or on the committee, who have no direct or indirect interest in the transaction.

The By-Laws or a resolution of the Board may impose additional requirements on conflict of interest.

Amendment:

This policy may be amended by the Board.

Approval Date: April 09, 2010

Last Review: August 25, 2015

  

C-1

  

Exhibit D

STW RESOURCES HOLDING CORP.

2015 INSIDER TRADING POLICY

I. INTRODUCTION

“Insider trading” refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include “tipping” such information, securities trading by the person “tipped,” and securities trading by those who misappropriate such information.

The scope of insider trading violations can be wide reaching. The Securities and Exchange Commission (the “SEC”) has brought insider trading cases against corporate officers, directors, and employees who traded the corporation’s securities after learning of significant, confidential corporate developments; friends, business associates, family members, and other “tippees” of such officers, directors, and employees who traded the securities after receiving such information; employees of law, banking, brokerage, and printing firms who were given such information in order to provide services to the corporation whose securities they traded; government employees who learned of such information because of their employment by the government; and other persons who misappropriated, and took advantage of, confidential information from their employers.

Consequently, an “insider” can include officers, directors, major stockholders and employees of an entity whose securities are publicly traded. In general, an insider must not trade for personal gain in the securities of that entity if that person possesses material, nonpublic information about the entity. In addition, an insider who is aware of material, nonpublic information must not disclose such information to family, friends, business or social acquaintances, employees or independent contractors of the entity (unless such employees or independent contractors have a position within the entity giving them a clear right and need to know), and other third parties. An insider is responsible for assuring that his or her family members comply with insider trading laws. An insider may make trades in the market or discuss material information only after the material information has been made public.

II. PENALTIES; SANCTIONS

General. Violation of the prohibition on insider trading can result in a prison sentence and civil and criminal fines for the individuals who commit the violation, and civil and criminal fines for the entities that commit the violation.

STW RESOURCES HOLDING CORP. (the “Company”) can be subject to a civil monetary penalty even if the directors, officers or employees who committed the violation concealed their activities from the Company.

Criminal Penalties. The maximum prison sentence for an insider trading violation is now 20 years. The maximum criminal fine for individuals is now $5,000,000, and the maximum fine for non-natural persons (such as an entity whose securities are publicly traded) is now $25,000,000.

Civil Sanctions. Persons who violate insider trading laws may become subject to an injunction and may be forced to disgorge any profits gained or losses avoided. The civil penalty for a violator may be an amount up to three times the profit gained or loss avoided as a result of the insider trading violation.

 

The Company (as well as other natural or non-natural persons who are deemed to be controlling persons of the violator) faces a civil penalty not to exceed the greater of $1,000,000 or three times the profit gained or loss avoided as a result of the violation if the Company knew or recklessly disregarded the fact that the controlled person was likely to engage in the acts constituting the insider trading violation and failed to take appropriate steps to prevent the acts before they occurred.

In addition, persons who traded contemporaneously with, and on the other side of, the insider trading violator may sue the violator and the controlling persons of the violator to recover the profit gained or loss avoided by the violator.

Bounties. The SEC is offering bounties to persons who provide information leading to the imposition of the civil penalty.

  

D-1

  

III. POLICY STATEMENT

Illegal insider trading is against the policy of the Company. Such trading can cause significant harm to the reputation for integrity and ethical conduct of the Company. Individuals who fail to comply with the requirements of this Insider Trading Policy are subject to disciplinary action, at the sole discretion of the Company, including dismissal for cause.

IV. WHAT IS MATERIAL, NONPUBLIC INFORMATION?

Nonpublic, or inside, information about the Company that is not known to the investing public may include, among other things, strategic plans; significant capital investment plans; negotiations concerning acquisitions or dispositions; major new contracts (or the loss of a major contract); other favorable or unfavorable business or financial developments, projections or prospects; a change in control or a significant change in management; impending securities splits, securities dividends or changes in dividends to be paid; a call of securities for redemption; and, most frequently, financial results.

All information about the Company is considered nonpublic information until it is disseminated in a manner calculated to reach the securities marketplace through recognized channels of distribution and public investors have had a reasonable period of time to react to the information. Generally, information which has not been available to the investing public for at least two (2) full business days is considered to be nonpublic. Recognized channels of distribution include annual reports, prospectuses, press releases, marketing materials, and publication of information in prominent financial publications, such as The Wall Street Journal.

Nonpublic information is material if it might reasonably be expected to affect the market value of the securities and/or influence investor decisions to buy, sell or hold securities. If a person feels the information is material, it probably is. Moreover, it should be remembered that plaintiffs who challenge and judges who rule on particular transactions have the benefit of hindsight.

If a person is in doubt as to whether information is public or material, that person should wait until the information becomes public, or should refer questions to Grant Seabolt, who has been designated to act as the Compliance Officer (herein so called).

 V. HANDLING OF INFORMATION

The Company’s records must always be treated as confidential. Items such as interim and annual financial statements, managed assets information and similar information are proprietary (that is, information pertaining to and used exclusively by the Company), and proprietary information must not be disclosed or used for any purpose other than for Company business. All Company policies and procedures designed to preserve and protect confidential information must be strictly followed at all times.

No director, advisory board member, officer or employee of the Company shall at any time make any recommendation or express any opinion as to trading in the Company’s securities.

Information learned about other entities in a special relationship with the Company, such as acquisition negotiations, is confidential and must not be given to outside persons without proper authorization.

All confidential information in the possession of a director, officer or employee is to be returned to the Company at the termination his or her relationship with the Company.

  

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VI. TRADING IN THE COMPANY AND OTHER SECURITIES

General Rule. Directors, advisory board members, officers and employees of the Company shall not effect any transaction in the Company’s securities if they possess material, nonpublic information about the Company. This restriction generally does not apply to the exercise of stock options under the Company’s stock option or deferred compensation plans, but would apply to the sale of any shares acquired under such plans. The provisions set forth in this Paragraph VI and all other provisions of this Insider Trading Policy shall equally apply to the directors, officers and employees of any subsidiary of the Company, except as noted in the “Trading Window Periods” paragraph below.

Pre-Clearance by Compliance Officer. Every director, officer or employee of the Company shall advise the Compliance Officer before he or she effects any transaction in the Company’s securities. This shall be done by submitting a completed Trading Approval Form, attached as Exhibit A, to the Compliance Officer. The Compliance Officer shall advise such director, officer or employee whether the proposed transaction is permissible under this Insider Trading Policy by making the appropriate indication and countersigning the Trading Approval Form.

Trading Window Periods. Investment by the Company’s directors, officers or employees in Company securities is encouraged, so long as such persons do not purchase or sell such securities in violation of this Insider Trading Policy. In furtherance of the goals underlying the Company’s Insider Trading Policy, the Company’s directors, officers (those required to make filings under Section 16 of the Securities Exchange Act of 1934) and all employees at the Vice President level and above, as well as all employees in the accounting group are prohibited from buying or selling Company securities at all times, except during the period extending from the third (3rd) through the thirteenth (13th) business day following the release of the Company’s earnings for the immediately preceding fiscal period to the public (the “Trading Window Period”). The prohibition on trading in Company securities by such persons at all times other than the Trading Window Period is designed to prevent any inadvertent trading by such persons in the Company’s securities during times when there may be material financial information about the Company that has not been publicly disclosed. The grant or exercise of stock options to purchase the Company’s stock is permitted outside Trading Window Periods (although any sale of such stock outside Trading Window Periods is prohibited unless such sale is made pursuant to an approved Rule 10b5-1 Trading Plan, as discussed below).

Black-out Communications. In addition to the foregoing restrictions, the Company reserves the right to issue “black-out notices” to specified persons when material, nonpublic information exists. Any person who receives such a notice shall treat the notice as confidential and shall not disclose its existence to anyone else.

Trading in Securities of Other Entities. In addition, no director, officer or employee of the Company shall effect any transaction in the securities of another entity, the value of which is likely to be affected by actions of the Company that have not yet been publicly disclosed. Please note that this provision is in addition to the restrictions on trading in securities of other entities set forth any Code of Ethics of the Company.

Applicability to Family Members. The foregoing restrictions on trading are also applicable to family members’ accounts, accounts subject to the control of personnel subject to this Insider Trading Policy or any family member, and accounts in which personnel subject to this Insider Trading Policy or any family member has any beneficial interest, except that the restrictions on trading do not apply to accounts where investment decisions are made by an independent investment manager in a fully discretionary account. Personnel subject to this Insider Trading Policy are responsible for assuring that their family members comply with the foregoing restrictions on trading. For purposes of this Policy, “Family Members” include one’s spouse and all members of the family who reside in one’s home.

Rule 10b5-1 Trading. Notwithstanding the restrictions stated in this Paragraph VI, such restrictions shall not apply to purchases or sales of securities of the Company made by the persons covered hereby who have entered into a written trading plan that complies with Rule 10b5-1 of the Exchange Act and has been approved by the Compliance Officer.

  

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VII. INVESTIGATIONS; SUPERVISION

If any person subject to this Insider Trading Policy has reason to believe that material, nonpublic information of the Company has been disclosed to an outside party without authorization, that person should report this to the Compliance Officer immediately.

If any person subject to this Insider Trading Policy has reason to believe that an insider of the Company or someone outside of the Company has acted, or intends to act, on inside information, that person should report this to the Compliance Officer immediately.

If it is determined that an individual maliciously and knowingly reports false information to the Company with intent to do harm to another person or the Company, appropriate disciplinary action will be taken according to the severity of the charges, up to and including dismissal. All such disciplinary action will be taken at the sole discretion of the Company.

VIII. LIABILITY OF THE COMPANY

The adoption, maintenance and enforcement of this Insider Trading Policy is not intended to result in the imposition of liability upon the Company for any insider trading violations where such liability would not exist in the absence of this Insider Trading Policy.

Questions. All questions regarding this Insider Trading Policy should be directed to Grant Seabolt, who has been designated to act as the Compliance Officer.

This Policy pertains to the 2015 calendar year and supersedes any previous policy of the Company concerning insider trading.

 

__________________________________________________________________

 

CONFIRMATION OF RECEIPT, READING, AND AGREEMENT WITH

THE COMPANY’S INSIDER TRADING POLICY

I HEREBY ACKNOWLEDGE THAT I HAVE RECEIVED, HAVE READ AND UNDERSTAND THE FOREGOING POLICIES OF THE COMPANY.

	
Date: August 27, 2015

	
Signature:

 

/s/ Alan Murphy

Print Name: Alan Murphy

	
  

	
 

  

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EXHIBIT A

Submitted Pursuant to:

STW RESOURCES HOLDING CORP. INSIDER TRADING POLICY

PRE-CLEARANCE TRADING APPROVAL FORM

I, ____________________________ (name), seek pre-clearance to engage in the transaction described below:

Acquisition or Disposition (circle one)

Name: _____________________________________

 

Account Number: ____________________________

Date of Request: _____________________________

Amount or # of Shares: _______________________

Broker: ____________________________________

 

 

I hereby certify that, to the best of my knowledge, the transaction described herein is not prohibited by the Insider Trading Policy.

 

	
Signature: ______________________

	
Print Name: _______________________

Approved or Disapproved (circle one)

Date of Approval: ______________

 

	
Signature: ____________________

	
Print Name: _______________________

Compliance Officer Approval:

	
Signature: ____________________

	
Print Name: _______________________

If approval is granted, you are authorized to proceed with this transaction for immediate execution, but only within the current Trading Window Period for all directors, advisory board members, officers (those required to make filings under Section 16 of the Securities Exchange Act of 1934), employees that are Vice President or above, accounting personnel and independent contractors in possession of material non-public information.

 

A-1

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