Document:

Exhibit 10.16

 

INCENTIVE STOCK OPTION AGREEMENT

 

 

THIS INCENTIVE STOCK
OPTION AGREEMENT (the “Agreement”) entered into as of March 11, 2019 (the “Grant Date”) between VerifyMe,
Inc., (the “Company”) and Margaret Gezerlis (the “Optionee”).

 

WHEREAS, by action
taken by the Board of Directors (the “Board”) it has adopted the 2017 Equity Incentive Plan (the “Plan”);

 

WHEREAS, the Board
intends to grant the Optionee Incentive Stock Options as defined by Section 422 of the Internal Revenue Code (the “Code”);
and

 

WHEREAS, pursuant to
the Plan, it has been determined that in order to enhance the ability of the Company to attract and retain qualified employees,
consultants, officers and directors, the Company may grant employees, consultants, officers and directors the right to purchase
the common stock of the Company (the “Common Stock”) pursuant to stock options.

 

NOW THEREFORE, in consideration
of the mutual covenants and promises hereafter set forth and for other good and valuable consideration, receipt of which is acknowledged,
the parties hereto agree as follows:

 

1.       Grant
of Incentive Options. The Company irrevocably granted to the Optionee, as a matter of separate agreement and not in lieu of
salary or other compensation for services, the right and option to purchase all or any part of 100,000 shares of Common Stock (the
“Options”) on the terms and conditions set forth herein and subject to the terms and conditions of the Plan. The Optionee
acknowledges receipt of a copy of the Plan. The Options are intended to be an Incentive Stock Option within the meaning of Section
422 of the Code, although the Company makes no representation or guarantee that the Option will qualify as an Incentive Stock Option.
To the extent that the aggregate Fair Market Value (determined on the Grant Date) of the shares of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of
the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order
in which they were granted) shall be treated as Non-Qualified Stock Options. Capitalized terms used but not defined herein will
have the meaning ascribed to them in the Plan.

 

2.       Price.
The exercise price of the Options is the closing price as of the Grant Date, or $0.321 per share.

 

3.       Vesting
- When Exercisable.

 

(a)       The
Options shall vest quarterly in equal increments over one year beginning as of November 15, 2018, subject to continued service
as an officer of the Company on each applicable vesting date and further subject to the Optionee executing this Agreement. In lieu
of fractional vesting, the shares shall be rounded up each time until fractional shares are eliminated.

 

    	 	1	 

     

    

 

(b)       Subject
to Sections 3(c) and 4 of this Agreement, vested Options may be exercised until 6:00 p.m. New York time for five years from the
Grant Date (the “Expiration Date”).

 

(c)       Notwithstanding
any other provision of this Agreement, in accordance with Section 24(a) of the Plan, at the discretion of the Board or the Compensation
Committee (as defined in the Plan), all Options, whether vested or unvested, will be subject to forfeiture.

 

(d)       No
disposition of the Common Stock shall be made within two years of the date of grant or within one year of the date of exercise.

 

4.       Termination
of Relationship.

 

(a)       Except
as provided in Section 4(b) or (c), if for any reason the Optionee ceases to perform services as an employee of the Company, all
rights granted hereunder shall terminate effective three months from that date.

 

(b)       If
the Optionee ceases to provide services for the Company as a result of her death, the Optionee’s estate or any Transferee,
as defined herein, shall have the right for 12 months form the date of death to exercise the Options subject to Section 3(c). For
the purpose of this Agreement, “Transferee” shall mean a person to whom such shares are transferred by will or by the
laws of descent and distribution.

 

(c)       If
the Optionee ceases to provide services as a result of becoming disabled within the meaning of Section 22(e)(3) of the Code, all
rights granted hereunder shall terminate effective one year from that date.

 

(d)       Notwithstanding
anything contained in this Section 4, the Options may not be exercised after the Expiration Date.

 

(e)       Any
of the Options that were not vested immediately prior to the Termination Date shall terminate at that time.

 

For purposes of this Section 4 “Company”
shall include subsidiaries and/or affiliates of the Company.

 

5.       Method
of Exercise. The Options shall be exercisable by a written notice which shall:

 

(a)        state
the election to exercise the Options, the number of shares to be exercised, the person in whose name the stock certificate or certificates
for such shares of Common Stock is to be registered, address and social security number of such person (or if more than one, the
names, addresses and social security numbers of such persons);

 

(b)        if
applicable, contain such representations and agreements as to the holder’s investment intent with respect to such shares
of Common Stock as set forth in Section 10 herein;

 

    	 	2	 

     

    

 

(c)        be
signed by the person or persons entitled to exercise the Options and, if the Options are being exercised by any person or persons
other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons
to exercise the Options;

 

(d)        be
accompanied by full payment of the exercise price by tender to the Company of an amount equal to the exercise price multiplied
by the number of underlying shares being purchased (the “Purchase Price”), (i) either in cash, by wire transfer, or
by certified check or bank cashier’s check, payable to the order of the Company; (ii) if there is no effective form S-8 covering
the resale of the Common Stock, through a cashless exercise of the Options in accordance with Section 6(f) below; or (iii) by a
combination of any of the foregoing methods; and

 

(e)       be
accompanied by payment of any amount that the Company, in its sole discretion, deems necessary to comply with any federal, state
or local withholding requirements for income and employment tax purposes. If the Optionee fails to make such payment in a timely
manner, the Company may: (i) decline to permit exercise of the Options or (ii) withhold and set-off against compensation and any
other amounts payable to the Optionee the amount of such required payment. Such withholding may be in the shares underlying the
Options at the sole discretion of the Company.

 

(f)       If
the Fair Market Value (as defined below) of one share of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising the Options for cash, the Optionee may elect to pay the exercise price using a cashless
exercise. If a cashless exercise is elected, the Company shall issue to the Optionee the number of shares of Common Stock computed
using the following formula:

 

X = Y (A-B)

               A

 

Where:

 

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

 

		Y     =	the portion of the Option (in number of shares of Common Stock) being exercised by Optionee (at the date of such calculation);

 

		A     =	the Fair Market Value (as defined below); and

 

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

  

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For purposes of this
Agreement, Fair Market Value shall mean:

  

“Fair Market
Value” shall mean: (i) if the principal trading market for such securities is a national securities exchange, the OTCQB
or other market operated by the OTC Markets (or a similar system then in use), the average of the closing prices on the principal
market for the last five trading days immediately prior to such exercise date; or (ii) if (i) is not applicable, the average of
the high bid and low asked prices so reported for the trading day immediately prior to such Exercise Date.  Notwithstanding
the foregoing, if there is no last reported sales price or bid and ask prices, as the case may be, for the day in question, then
Fair Market Value shall be determined as of the latest day prior to such day for which such last reported sales price or bid and
asked prices, as the case may be, are available, unless such securities have not been traded on an exchange or in the over-the-counter
market for 30 or more days immediately prior to the day in question, in which case the Fair Market Value shall be determined in
good faith by, and reflected in a formal resolution of the board of directors of the Company. 

 

The Optionee acknowledges
that due to the short-swing profit potential, she shall not engage in a cashless exercise unless such exercise has been pre-approved
by the Board of Directors or Compensation Committee.

 

The certificate or
certificates for shares of Common Stock as to which the Options shall be exercised shall be registered in the name of the person
or persons exercising the Options.

 

6.       Sale
of Shares Acquired Upon Exercise of Options. If the Optionee is an officer (as defined by Section 16(b) of the Securities Exchange
Act of 1934 (“Section 16(b)”)) or a director of the Company, any shares of Common Stock acquired pursuant to the Options
cannot be sold by the Optionee until at least six months elapse from the Grant Date except in case of death or disability or if
the grant was exempt from the short-swing profit provisions of Section 16(b). Further the cashless exercise provision Section
5 may only be elected if the approval required by Rule 16b-3 has been obtained or the exercise is exempted by Rule 16b-6 under
the Securities Exchange Act of 1934.

 

7.       Anti-Dilution
Provisions. The Options shall have the anti-dilution rights set forth in the Plan.

 

8.       Necessity
to Become Holder of Record. The Optionee shall not have any rights as a shareholder with respect to any of the shares underlying
the Options until the Optionee shall have become the holder of record of such shares. No cash dividends or cash distributions,
ordinary or extraordinary, shall be provided to the Optionee if the record date is prior to the date on which the Optionee became
the holder of record thereof.

 

9.        Reservation
of Right to Terminate Relationship. Nothing contained in this Agreement shall restrict the right of the Company to terminate
the relationship of the Optionee at any time, with or without cause. The termination of the relationship of the Optionee by the
Company, regardless of the reason therefor, shall have the results provided for in this Agreement.

 

10.        Conditions
to Exercise of Options. If a Registration Statement on Form S-8 (or any other successor form) is not effective as to the shares
of Common Stock issuable upon exercise of the Options, the remainder of this Section 10 is applicable as to federal law. In order
to enable the Company to comply with the Securities Act of 1933 (the “Securities Act”) and relevant state law, the
Company may require the Optionee, as a condition of the exercising of the Options granted hereunder, to give written assurance
satisfactory to the Company that the shares underlying the Options are being acquired for such person’s own account, for
investment only, with no view to the distribution of same, and that any subsequent resale of any such shares either shall be made
pursuant to a registration statement under the Securities Act and applicable state law which has become effective and is current
with regard to the shares being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable
state law.

 

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The Options are subject
to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification
of the shares of Common Stock underlying the Options upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issue or purchase of
the shares underlying the Options, the Options may not be exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected.

 

11.        Transfer.
The transferability of the Options are set forth in the Plan under Section 12, subject to any limitation set forth in the Code.

 

12.       Parties
Bound by Plan. The Plan and each determination, interpretation or other action made or taken pursuant to the provisions of
the Plan shall be final and shall be binding and conclusive for all purposes on the Company and the Optionee and the Optionee’s
respective successors in interest.

 

13.       Severability.
In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.

 

14.       Benefit.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors
and assigns.

 

 

 

15.        Notices
and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted delivery, or email (followed
by receipted delivery) as follows:

  

	
        To the Company:

         

        VerifyMe, Inc.

        75 S. Clinton Ave

        Suite 510

        Rochester, NY 14604

        Attention: Patrick White

        patrick@verifyme.com

	
         

        With a copy to:

         

        Nason, Yeager, Gerson, Harris & Fumero, P.A.

        3001 PGA Boulevard, Suite 305

        Palm Beach Gardens, Florida 33410

        Attention: Michael D. Harris, Esq.

        mharris@nasonyeager.com

	
         

        To the Optionee:

         

        As provided on the signature page hereto

 

or to such other address as either of them,
by notice to the other may designate from time to time.

 

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16.       Attorney’s
Fees. In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing
party shall be entitled to a reasonable attorney’s fee, costs and expenses.

 

17.       Governing
Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating
to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the
laws of the State of Nevada without regard to choice of law considerations.

 

18.       Oral
Evidence. This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements
between the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against whom enforcement
or the change, waiver discharge or termination is sought.

 

19.       Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. The execution of this Agreement may be by actual, PDF, electronic or facsimile signature.

 

20.       Section
or Paragraph Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

 

21.       Stop-Transfer
Orders.

 

(a)       The
Optionee agrees that, in order to ensure compliance with the restrictions set forth in the Plan and this Agreement, the Company
may issue appropriate “stop transfer” instructions to its duly authorized transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

(b)       The
Company shall not be required (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred
in violation of any of the provisions of the Plan or the Agreement or (ii) to treat the owner of such shares of Common Stock or
to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares of Common Stock shall have
been so transferred.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF
the parties hereto have set their hand and seals the day and year first above written.

 

	 	VERIFYME, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Patrick White	 
	 	 	Patrick White	 
	 	 	Chief Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	OPTIONEE	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Margaret Gezerlis	 
	 		Name: Margaret Gezerlis	 
	 	 	 	 
	 	Address of the Optionee:	 
	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	Email:	 	 

 

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NOTICE OF EXERCISE

 

To:          __________________________

__________________________

__________________________

Attention _________,
_______________

Facsimile: (____) _____-______

 

Please be advised that
___________________ hereby elect to exercise its option to purchase shares of ___________, pursuant to the Stock Option Agreement
dated __________________.

 

Number of Shares to Be Purchased:_______________

 

Multiplied by: Purchase Price Per Share$______________

 

Total Purchase Price$_______________

 

Please check the payment method below:

 

____Enclosed is a check for the total
purchase price above.

 

____Wire transfer sent on _____________,
20__.

 

Please contact us as soon as possible to
discuss the possible payment of withholding taxes and any other documents we may require.

 

 

Name of Option Holder (Please Print): ________________________________

 

Address of Option Holder

 

________________________________________________________________

 

 

Telephone Number of Option Holder: ________________________________

 

Social Security Number or Employer Identification Number: ________________________

 

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If the certificate is to be issued to person
other than the Option Holder, please provide the following for such person:

 

 

________________________________

(Name)

 

________________________________

(Address)

 

________________________________

 

________________________________

 

 

________________________________

(Telephone Number)

 

________________________________

(Social
Security Number)

 

 

In connection with the issuance of the
Common Stock, if the Common Stock may not be immediately publicly sold, the Holder hereby represents to the Company that
it is acquiring the Common Stock for its own account for investment and not with a view to, or for resale in connection with, a
distribution of the shares within the meaning of the Securities Act of 1933 (the “Securities Act”).

 

Holder is ______ is not ______ [please
initial one] an accredited investor for at least one of the reasons on the attached Exhibit A. If the SEC has amended the
rule defining the definition of accredited investor, the Holder acknowledges that as a condition to exercise the Options, the Company
may request updated information regarding the Holder’s status as an accredited investor. The Holder’s exercise of the
Options shall be in compliance with the applicable exemptions under the Securities Act and applicable state law.

 

 

 

		 	Dated: 	
	Signature of Option Holder	 	 

 

    	 	9	 

     

    

 

Exhibit A 

To Notice of Exercise of Stock
Option Agreement

 

For Individual Investors Only:

 

1.       A
person who has an individual net worth, or a person who with his or her spouse has a combined net worth, in excess of $1,000,000.
For purposes of calculating net worth under this paragraph (1), (i) the primary residence shall not be included as an asset, (ii)
to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary
residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured
by the primary residence exceeds the amount outstanding 60 days prior to exercising the stock options, other than as a result of
the acquisition of the primary residence, the amount of such excess shall be included as a liability.

 

2a.       A
person who had individual income (exclusive of any income attributable to the person’s spouse) of more than who has $200,000
in each of the two most recently completed years and who reasonably expects to have an individual income in excess of $200,000
this year.

 

2b.       Alternatively,
a person, who with his or her spouse, has joint income in excess of $300,000 in each applicable year.

 

3.       A
director or executive officer of the Company.

 

Other Investors:

 

4.       Any
bank as defined in Section 3(a)(2) of the Securities Act of 1933 (“Securities Act”) whether acting in its individual
or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance
company as defined in Section 2(13) of the Securities Act; investment company registered under the Investment Company Act of 1940
or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established
and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined
in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, with investment
decisions made solely by persons that are accredited investors.

 

5.       A
private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

 

6.       An
organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust
or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

 

7.       A
trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act.

 

8.       An
entity in which all of the equity owners are accredited investors. 

 

 

10Exhibit 10.17

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS NON-QUALIFIED
STOCK OPTION AGREEMENT (the “Agreement”) entered into as of January ___, 2018 between VerifyMe, Inc. (the “Company”)
and Norman Gardner (the “Optionee”).

 

WHEREAS, the Board
of Directors (the “Board”) of the Company has adopted the 2013 Omnibus Equity Compensation Plan (the “Plan”);

 

WHEREAS, by action
taken by the Executive Committee of the Board (the “Committee”), it has amended the Plan in order to permit transferability
of Options, as defined;

 

WHEREAS, pursuant to
the Plan, the Company has granted the Optionee the right to purchase Common Stock of the Company pursuant to stock options; and

 

WHEREAS, the Optionee
has transferred 500,000 Options to Larry Schafran.

 

NOW THEREFORE, in consideration
of the mutual covenants and promises hereafter set forth and for other good and valuable consideration, receipt of which is acknowledged,
the parties hereto agree as follows:

 

1.       Grant
of Non-Qualified Stock Options. The Company irrevocably granted to the Optionee, as a matter of separate agreement and not
in lieu of salary or other compensation for services, the right and option to purchase all or any part of 10,000,000 shares of
authorized but unissued or treasury Common Stock of the Company (the “Options”) on the terms and conditions herein
set forth. The Optionee acknowledges receipt of a copy of the Plan, as amended. The Optionee presently holds 4,500,000 Options
from the grant of the 10,000,000 Options.

 

2.       Price.
The exercise price of the Options is $0.07 per share.

 

3.       Vesting
- When Exercisable.

 

(a)       The
Options shall be fully vested upon execution of this Agreement and shall be exercisable until 6:00 pm New York time on June 28,
2022 (the “Expiration Date”) , provided that in no event shall any Option be exercisable beyond its term. In the event
of a Change of Control, as defined under clause (2), the Options shall be assumed or substituted by the successor corporation or
a parent or subsidiary of the successor corporation.  If the successor corporation refuses to assume or substitute for the
Options, all Options immediately prior to the closing of the Change of Control event will automatically be exercised by a net exercise
of the Options, under which the Company will not require a payment of the exercise price of the Options in cash but will reduce
the number of shares of stock issued upon exercise by a whole number of shares based upon the price paid per share by the successor
corporation. For example, if the successor corporation pays $0.28 per share and your exercise price is $0.07, if you hold 100,000
options, the Company will issue you 75,000 shares immediately prior to the Change of Control event. If the successor corporation
pays a price per share which is below the exercise price under Section 2, then the Options will terminate immediately upon the
Change of Control event if they are not assumed.

 

    	 		 

    	 

    

 

Change of Control means and includes each
of the following:

 

(1) A sale, transfer,
or other disposition by the Company through a single transaction or a series of transactions of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding securities to any Person who is not an Affiliate
and a replacement of the majority of the members of the Board under Section 3(a)(4) below. For purposes of this definition, the
term “Person” shall mean and include any individual, partnership, joint venture, association, trust, corporation, or
other entity (including a “group” as referred to in Section 13(d)(3) of the Securities Exchange Act of 1934).
For purposes of this definition, the term “Affiliate” shall mean any Person who is an executive officer, director or
more than 10% shareholder of the Company or who, directly or indirectly, individually or through any person or entity, has the
power to control the Company;

 

(2) A sale, transfer,
or other disposition through a single transaction or a series of related transactions of all or substantially all of the assets
of the Company;

 

(3) Any consolidation
or merger of the Company, unless immediately after the consolidation or merger the holders of the Common Stock of the Company immediately
prior to the consolidation or merger are the beneficial owners of securities of the surviving corporation representing at least
50% of the combined voting power of the surviving corporation’s then outstanding securities; or

 

(4) Within a 12 month
period, individuals who, as of the beginning of such period, constitute the Board (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 a majority 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) shall 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 shall be deemed to be an Incumbent Director.

 

(b)       None
of the Options may be exercised prior to vesting.

 

(c)       Notwithstanding
any other provision of this Agreement, upon resolution of the Board or the Committee (as defined in the Plan), the Options, whether
vested or unvested, shall be immediately forfeited if any of the events below occur:

 

 

(1)       Where
applicable, termination as an employee or consultant of the Company for cause or fraud, theft, dishonesty or violation of a material
Company policy.

 

    	 		 

    	 

    

 

(2)       Purchasing
or selling securities of the Company without written authorization in accordance with the Company's inside information guidelines
then in effect;

 

(3)       Breaching
any duty of confidentiality including that required by the Company's inside information guidelines then in effect;

 

(4)       Competing
with the Company;

 

(5)       Where
applicable, being unavailable for consultation after termination of his relationship with the Company’s employ if such availability
is a condition of any agreement between the Company and the Optionee;

 

(6)       Recruitment
of Company personnel after termination of, whether such termination is voluntary or for cause;

 

(7)       Failure
to assign any invention or technology to the Company if such assignment is a condition of any agreements between the Company and
the Optionee; and

 

(8)       A
finding by the Company’s Board that the Optionee has acted against the interests of the Company.

 

 

4.       Termination
of Relationship.

 

(a)       If
for any reason the Optionee ceases performing services in the capacity for which the Options were granted, the Optionee may exercise
the Options until the earlier of (i) one year following ceasing to perform services or (ii) the Expiration Date.

 

(b)       Any
of the Options that were not vested immediately prior to ceasing to perform services in the capacity for which the Options were
granted shall terminate at that time.

 

 

5.       Profits
on the Sale of Certain Shares; Redemption. If any of the events specified in Section 3(c) of this Agreement occur within one
year from the last date of employment with, or performance of services for, the Company (the “Termination Date”) (or
such longer period required by any written employment agreement), all profits earned from the Optionee’s sale of the Company's
securities, including the sale of shares of Common Stock underlying Options, during the two-year period commencing one year prior
to the Termination Date shall be forfeited and forthwith paid by the Optionee to the Company. Further, in such event, the Company
may at its option redeem shares of Common Stock acquired upon exercise of Options. The Company's rights under this Section 5 do
not lapse one year from the Termination Date but are a contract right subject to any appropriate statutory limitation period.

 

    	 		 

    	 

    

 

6.       Method
of Exercise. The Options shall be exercisable by a written notice which shall:

 

(a)        state
the election to exercise the Options, the number of shares to be exercised, the person in whose name the stock certificate or certificates
for such shares of Common Stock is to be registered, address and social security number of such person (or if more than one, the
names, addresses and social security numbers of such persons);

 

(b)        contain
such representations and agreements as to the holder’s investment intent with respect to such shares of Common Stock as set
forth in Section 11 hereof;

 

(c)        be
signed by the person or persons entitled to exercise the Options and, if the Options are being exercised by any person or persons
other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons
to exercise the Options;

 

(d)        be
accompanied by full payment of the exercise price by tender to the Company of an amount equal to the Exercise Price multiplied
by the number of underlying shares being purchased (the “Purchase Price”), (i) by wire transfer or by certified check
or bank cashier’s check, payable to the order of the Company; (ii) through a cashless exercise by surrendering such number
of shares of Common Stock received upon exercise of the Options in accordance with Section 6(e) below; or (iii) by a combination
of any of the foregoing methods.

 

(e)        If the
Fair Market Value (as defined below) of one share of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising the Options for cash, the Optionee may elect to pay the Exercise Price using a cashless
exercise. If a cashless exercise is elected, the Company shall issue to the Optionee the number of shares of common stock computed
using the following formula:

 

X = Y (A-B)

               A

 

Where:

 

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

 

		Y     =	the portion of the Option (in number of shares of common stock) being exercised by Optionee (at the date of such calculation);

 

		A     =	the Fair Market Value (as defined below); and

 

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

 

For purposes of this
Agreement, Fair Market Value shall mean:

 

    	 		 

    	 

    

 

“Fair Market
Value” shall mean: (i) if the principal trading market for such securities is a national securities exchange, the OTCQB
or other market operated by the OTC Markets (or a similar system then in use), the average of the closing prices on the principal
market the last five trading days immediately prior to such Exercise Date (as defined in Section 6(g) below); or (ii) if (i) is
not applicable, the average of the high bid and low asked prices so reported for the trading day immediately prior to such Exercise
Date.  Notwithstanding the foregoing, if there is no last reported sales price or bid and ask prices, as the case may be,
for the day in question, then Fair Market Value shall be determined as of the latest day prior to such day for which such last
reported sales price or bid and asked prices, as the case may be, are available, unless such securities have not been traded on
an exchange or in the over-the-counter market for 30 or more days immediately prior to the day in question, in which case the Fair
Market Value shall be determined in good faith by, and reflected in a formal resolution of the board of directors of the Company. 

 

(f)       be
accompanied by payment of any amount that the Company, in its sole discretion, deems necessary to comply with any federal, state
or local withholding requirements for income and employment tax purposes. If the Optionee fails to make such payment in a timely
manner, the Company may: (i) decline to permit exercise of the Options or (ii) withhold and set-off against compensation and any
other amounts payable to the Optionee the amount of such required payment. Such withholding may be in the shares underlying the
Options at the sole discretion of the Company.

 

(g)       Upon
receipt of the Purchase Price in Section 6(d) together with written notice, the Company will deliver to the Optionee, as promptly
as possible, a certificate or certificates representing the shares of Common Stock so purchased, registered in the name of the
Optionee or its transferee (as permitted under Section 12 below). With respect to any exercise of the Options, the Optionee will
for all purposes be deemed to have become the holder of record of the number of shares of Common Stock purchased hereunder on the
date a properly executed notice and payment of the Purchase Price is received by the Company (the “Exercise Date”),
irrespective of the date of delivery of the certificate evidencing such shares, except that, if the date of such receipt is a date
on which the stock transfer books of the Company are closed, such person will be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer books are open.

 

7.       Sale
of Shares Acquired Upon Exercise of Options; Delivery of Shares.

 

(a)       If
the Optionee is an officer (as defined by Section 16(b) of the Securities Exchange Act of 1934 (“Section 16(b)”)) or
a director of the Company, any shares of the Company’s Common Stock acquired pursuant to the Options cannot be sold by the
Optionee until at least six months elapse from the Grant Date except in case of death or disability or if the grant was exempt
from the short-swing profit provisions of Section 16(b).

Further the cashless exercise provision may only be elected if the approval required by Rule 16b-3 has been obtained or the exercise
is exempted by Rule 16b-6 under the Securities Exchange Act of 1934.

 

    	 		 

    	 

    

 

(b)       The
Executive Committee of the Board of Directors (the “Board”) may approve permitting the Optionee to used shares of Common
Stock to pay federal, state and local taxes and the exercise price in accordance with the exemption under Rule 16b-3 under the
Securities Exchange Act of 1934. Any references to the Board includes any Committee authorized to act under the Plan.

 

8.       Adjustments.
Upon the occurrence of any of the following events, the Optionee’s rights with respect to the Options shall be adjusted as
hereinafter provided unless otherwise specifically provided in a written agreement between the Optionee and the Company relating
to the Options:

 

(a)       If
the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue
any shares of its Common Stock as a stock dividend on its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of Options shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be
made in the exercise price per share to reflect such subdivision, combination or stock dividend.

 

(b)       If
the Company is to be consolidated with or acquired by another entity, the board of directors of any entity assuming the obligations
of the Company hereunder (the “Successor Board”) shall either (i) make appropriate provision for the continuation of
the Options by substituting on an equitable basis for the shares underlying the Options the consideration payable with respect
to the outstanding shares of Common Stock in connection with the acquisition or consolidation; or (ii) terminate all the Options
in exchange for a cash payment equal to the excess of the fair market value of the shares subject to the Options over the exercise
price thereof.

 

(c)       In the event of a recapitalization
or a reorganization of the Company (other than a transaction described in Section 8(b) above) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding shares of Common Stock, the Optionee upon exercising
the Options shall be entitled to receive for the purchase price paid upon such exercise, the securities the Optionee would have
received if the Optionee had exercised the Options prior to such recapitalization or reorganization. Except as expressly provided
herein, no issuance by the Company of shares of Common Stock of any class or securities convertible or exercisable into shares
of Common Stock of any class shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to the Options. No adjustments shall be made for dividends or other distributions paid in cash or in property
other than securities)With respect to shares issued in accordance with this Section 8, no fractional shares shall be issued
and the Optionee shall receive from the Company cash in lieu of such fractional shares.

 

    	 		 

    	 

    

 

(f)       The
Board or the Successor Board shall determine the specific adjustments to be made under this Section 8, and its determination shall
be conclusive. If the Optionee receives securities or cash in connection with a corporate transaction described in Section 8(a),
(b) or (c) above as a result of holding the Options, such securities or cash shall be subject to all of the conditions and restrictions
applicable to the Options with respect to which such securities or cash were issued, unless otherwise determined by the Board or
the Successor Board.

 

9.        Necessity
to Become Holder of Record. Neither the Optionee, the Optionee’s estate, nor any Transferee shall have any rights as
a shareholder with respect to any shares underlying the Options until such person shall have become the holder of record of such
shares. No dividends or cash distributions, ordinary or extraordinary, shall be provided to the holder if the record date is prior
to the date on which such person became the holder of record thereof.

 

10.        Reservation of Right to
Terminate Relationship. Nothing contained in this Agreement shall restrict the right of the Company to terminate the relationship
of the Optionee at any time, with or without cause. The termination of the relationship of the Optionee by the Company, regardless
of the reason therefor, shall have the results provided for in Sections 3 and 4 of this Agreement.

 

11.        Conditions
to Exercise of Options. If a Registration Statement on Form S-8 (or any successor Form) is not effective as to the shares of
Common Stock issuable upon exercise of the Options, the remainder of this Section 11 is applicable as to federal law. In order
to enable the Company to comply with the Securities Act of 1933 (the “Securities Act”) and relevant state law, the
Company may require the Optionee, the Optionee’s estate, or any Transferee as a condition of the exercising of the Options
granted hereunder, to give written assurance satisfactory to the Company that the shares subject to the Options are being acquired
for such person’s own account, for investment only, with no view to the distribution of same, and that any subsequent resale
of any such shares either shall be made pursuant to a registration statement under the Securities Act and applicable state law
which has become effective and is current with regard to the shares being sold, or shall be pursuant to an exemption from registration
under the Securities Act and applicable state law.

 

The Options are subject
to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification
of the shares of Common Stock underlying the Options upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issue or purchase of
shares underlying the Options, the Options may not be exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected.

 

12.        Transfer.
No transfer of the Options by the Optionee by will or by the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a copy of the letters testamentary or such other evidence
as the Board may deem necessary to establish the authority of the estate and the acceptance by the Transferee or Transferees of
the terms and conditions of the Options.

 

    	 		 

    	 

    

 

13.        Duties
of the Company. The Company will at all times during the term of the Options:

 

(a)        Reserve
and keep available for issue such number of shares of its authorized and unissued Common Stock as will be sufficient to satisfy
the requirements of this Agreement;

 

(b)        Pay
all original issue taxes with respect to the issue of shares pursuant hereto and all other fees and expenses necessarily incurred
by the Company in connection therewith; and

 

(c)        Use
its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable
thereto.

 

14.       Parties
Bound by Plan. The Plan and each determination, interpretation or other action made or taken pursuant to the provisions of
the Plan shall be final and shall be binding and conclusive for all purposes on the Company and the Optionee and the Optionee’s
respective successors in interest.

 

15.       Severability.
In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.

 

16.       Benefit.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors
and assigns.

 

17.       Notices
and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by email or FedEx or similar receipted delivery, as follows:

 

	The Optionee:	To the Optionee at the address on the signature page of this Agreement
	 	 
	The Company:	
        VerifyMe, Inc.

         

        

Attention: Patrick White

Email: patrick@verifyme.com

	 	 
	
        with a copy to:

         
	
        Michael D. Harris, Esq.

        Nason, Yeager, Gerson, White & Lioce,
        P.A.

        3001 PGA Boulevard, Suite 305

        Palm Beach Gardens, Florida 33410

        Email: mharris@nasonyeager.com

 

or to such other address as either of them,
by notice to the other may designate from time to time.

 

18.       Attorneys’
Fees. In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing
party shall be entitled to reasonable attorneys’ fees, costs and expenses.

 

    	 		 

    	 

    

 

19.       Governing
Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating
to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the
laws of the State of Nevada without regard to choice of law considerations.

 

20.       Oral
Evidence. This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements
between the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement
or the change, waiver discharge or termination is sought.

 

21.       Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.

 

22.       Section
or Paragraph Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

 

23.       Stop-Transfer
Orders.

 

(a)       The
Optionee agrees that, in order to ensure compliance with the restrictions set forth in the Plan, the Company may issue appropriate
“stop transfer” instructions to its duly authorized transfer agent, if any, and that, if the Company transfers its
own securities, it may make appropriate notations to the same effect in its own records.

 

(b)       The
Company shall not be required (i) to transfer on its books any shares of the Company’s Common Stock that have been sold or
otherwise transferred in violation of any of the provisions of the Plan or (ii) to treat the owner of such shares of Common Stock
or to accord the right to vote or pay dividends to any purchaser or other Transferee to whom such shares of Common Stock shall
have been so transferred.

 

 

 

[Signature Page To Follow]

 

    	 		 

    	 

    

 

IN WITNESS WHEREOF
the parties hereto have set their hand and seals the day and year first above written.

 

 

	 	VERIFYME, INC. 	 
	 	 	 
	 	 	 
	 	 	 
	 	By: 	/s/ Patrick White	 
	 	        Patrick White	 
	 	        Chief Executive Officer	 
	 	 	 
	 	 	 
	 	 	 
	 	OPTIONEE:	 
	 	 	 
	 	 	 
	 	         /s/ Norman Gardner	 
	 	Norman Gardner	 
	 	 	 
	 	Address of the Optionee: 	 
	 	 	 
	 	 	 
	 	837 Lindy Lane	 
	 	Bala Cynwyd, PA 19004

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