Document:

fision_ex102.htm

EXHIBIT 10.2
 
EMPLOYMENT, CONFIDENTIALITY
AND NON-SOLICITATION AGREEMENT
 
THIS EMPLOYMENT, CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT dated as of July 1, 2014 is by and between Fision Holdings, Inc., a Minnesota corporation (hereinafter "Company" or "FISION") and Garry N. Lowenthal ("Employee"), whose social security number is xxx-xx-xxxx.
 
WHEREAS, FISION desires to have the availability of Employee's expertise in general and financial management and business leadership as an Employee; and
 
WHEREAS, Employee desires to be employed by Employer to provide such services; and
 
WHEREAS, Employer and Employee have reached this Agreement in good faith and in arm's length negotiations, separate and apart from any other agreements.
 
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual covenants set forth below, the parties hereto agree as follows:
 
1. Duration of Employment. Effective July 1, 2014, Employee is hired (ratified) by FISION in the capacity of Executive Vice President and Chief Financial Officer and shall remain employed until terminated as provided herein. Employees first day of employment is August 1, 2010.
 
2. Duties of Employee. In accepting employment by FISION, Employee shall undertake and assume the responsibilities and duties as follows:
 
		a. 	Employee to perform in the function of EVP and CFO of FISION on a full-time basis;

			 
		b. 	EVP/CFO to report directly to the President & CEO of FISION;

			 
		c. 	EVP/CFO has the responsibility for all FISION accounting, controllership, treasury, information technology (internal for operations), legal, budgeting & forecasting, tax and audit functions, external reporting and all other functions, as directed by the President or Board of Directors;

			 
		d. 	EVP/CFO will oversee all financial operations including duties responsible for accounting operations, financial strategy, capital investments, fundraising activities, mergers & acquisitions, P&L and Balance Sheet responsibility, securities registrations and all other functions, as required by the President or Board of Directors;

			 
		e. 	EVP/CFO acts in the capacity of a Corporate Officer of FISION;

 
	 
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		f. 	Employee to perform all responsibilities and duties in a professional manner;

			 
		g. 	Employee to promptly comply with all policies, rules and regulations that may be issued from time to time by FISION; and

			 
		h. 	Employee agrees to devote his best efforts and all necessary time, energy and efforts to the position set forth above. FISION recognizes that Employee has now and may have future commitments to participate as a Board of Director and/or ad-hoc consultant for other companies and will allow Employee to do so during the term of Employee's employment with FISION including charitable and professional associations, as long as these activities do not conflict with Fision.

    
3. Compensation. Employee's compensation plan is set out in Addendum "A" attached hereto and by reference made a part hereof.
 
4. Additional Benefits. In addition to the compensation referred to in Section 3 above, Employee shall be entitled, during the term of this Agreement, to participate in the fringe benefits programs provided by Employer to its employees, including without limitation, participation in any medical, dental or other group health plans or accident benefits, disability benefits, life insurance benefits, pension or profit-sharing plans, as shall be instituted by Employer, in its sole discretion. Employee shall be entitled to and FISION agrees to grant Employee twenty (20) days of paid personal time off (PTO) per year vested in advance. Such PTO shall be used for vacation, sick leave and all other non-working absences while employed by FISION. If Employee decides to leave the Company, Employee shall be entitled to and FISION agrees to grant Employee two months of severance pay for every year of service (employment) to the Company, commencing August 1, 2010 (original day of employment), or twelve month's severance, whichever is greater. In the event of a change of control of the Company, the severance package to the Employee in the event of termination for any reason will be fifteen months.
 
Any of the additional benefits referenced in this Section 4 and provided by Employer to its Employees may not be terminated or amended by Employer. In the event that any benefit referenced above is terminated or amended on a company-wide basis, such termination or amendment shall in no way affect Employee's covenants, agreements and obligations pursuant to this Agreement.
 
In addition to the compensation and benefits set forth herein, FISION shall reimburse Employee for all reasonable and necessary business expenses incurred by Employee within the guidelines established, from time to time by the Officers of the Company. All approved business expenses and reimbursements will be paid to Employee after Employee submits a timely general expense report with supporting documents of actual expenses incurred.
 
5. Term and Termination of Employment. The employment of Employee is effective on the date set out in Paragraph 1 and shall remain in effect until terminated as set forth below. 
 
The term of the employment agreement shall be thirty-six months. Upon termination for any reason, Employee shall concurrently resign as an officer of the company. 
 
Upon termination for any reason, FISION would at its option also be able to repurchase any FISION stock owned by Employee, as accepted by Employee. At the time of termination, if there is a pending merger, sale, IPO or liquidation transaction, then Employee, at his option, may elect to have the fair market value be determined by the subsequent valuation at any time prior to the closing of such transaction. Furthermore, any accrued fees, salaries, accrued interest, expense reimbursements and outstanding loans made by Employee, including Security First International, Inc., to FISION shall be paid back in full to Employee and Security First International, Inc. within ten days of termination.
 
A "for cause" termination by FISION shall be defined as (a) materially adverse and deliberate dishonesty, fraud, injury or attempted injury by Employee, in each case related to FISION or its business, (b) any criminal activity of a serious nature in which Employee is formally charged or convicted, (c) any materially adverse breach of this Agreement where Employee failed to perform the duties of its job assigned to it by the Board of Directors of FISION as specified with written notice to Employee and where Employee has not corrected such materially adverse deficiency in performing its duties for a period of thirty (30) days after such written notice.
    
	 
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If terminated "without cause," FISION agrees to pay Employee monthly severance compensation in the amount of twelve (12) months of base salary compensation at the highest level of monthly base salary compensation prior to termination (including any accruals), unless such termination occurs within one-year of a change in control of FISION in which case such severance payments shall be extended to fifteen (15) months. Any such payments shall be made in accordance with the payment process defined in Addendum A Section 1. BASE SALARY COMPENSATION.
 
If FISION or any such successor organization shall materially alter the job duties of Employee as EVP/CFO or has adversely changed the role, responsibilities and authority of Employee, then Employee shall consider such act as Constructive Termination without cause and FISION shall pay the severance compensation in the amount of fifteen (15) months of base salary compensation at the highest level of monthly base salary compensation prior to termination (including any accruals).
 
Those provisions of this Agreement which, by their terms, continue after termination of the engagement relationship (including, without limitation, paragraphs 6, 7, 8, 9 and 13) shall survive termination and remain in full force and effect. 
 
6. Confidential Information and Trade Secrets. Employee recognizes that Employee's position with FISION is one of trust and confidence. During the course of Employee's employment with FISION, Employee will become acquainted with confidential information relating to FISION's business including, without limitation, information relating to FISION's vendor relationships, to FISION's business allies, to FISION's customers, to FISION's strategic and marketing plans, to FISION's finances and pricing, to FISION's software applications, and to FISION's proprietary processes and methods of doing business. Employee understands and agrees that there is independent economic value in not having FISION's confidential and proprietary information known to others in the industry.
 
Therefore, by accepting employment with FISION, Employee agrees to respect all confidences and not to, directly or indirectly, use any of FISION's confidential or proprietary information for its own benefit or divulge any of FISION's confidential or proprietary information to any third party. Employee further agrees to cooperate in all efforts to see that the confidentiality of the information with which Employee deals, and to which Employee has access, will be maintained. 
 
7. Inventions and Intellectual Property. Employee agrees that all copyrightable materials, trademarks, inventions, discoveries, designs, product developments, computer software, and any other intellectual property which are, or have been developed or conceived by Employee, either solely or jointly with others (a) in the course of performance of its duties on behalf of FISION, or (b) utilizing the equipment, supplies, facility or information of FISION, or (c) relating to, or capable of being used or adopted for use in connection with the business of FISION, shall inure to, and be the property of FISION. Any such copyrightable material, trademark, invention, discovery, design, product development, computer software, or other similar property must be promptly disclosed to FISION.
 
Employee agrees to execute such documents and provide such assistance as FISION may reasonably request in order to enable it (a) to apply for a copyright, registered design, registered trademark, patent, or other protection for any copyrightable material, trademark, invention, discovery, design, product development, computer software, or other similar property described above, or (b) to be vested with exclusive title, free and clear of any liens or encumbrances, to any such copyrights, trademarks, trade names, inventions, discoveries, designs, product developments, patents, and any similar property. If any such request for assistance occurs after termination of Employee's employment with FISION, Employee shall be entitled to reimbursement of all reasonable expenses incurred by it as a consequence of that assistance, including reimbursement for the value of its time at a reasonable hourly rate.
     
	 
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NOTICE: This paragraph does not apply to a past or future invention for which (1) no equipment, supplies, facilities or trade secret information of FISION was used and (2) which was developed entirely on Employee's own time, and (3) which does not relate (i) directly to the business of FISION, or (ii) to FISION's actual or demonstratively anticipated research or development and (4) which does not result from any work performed by Employee for FISION.
 
8. Non-Solicitation. In view of the unique value to FISION of the services to be performed by Employee, the Confidential Information to be acquired, obtained by or disclosed to Employee, and as a material inducement to FISION to enter into this Agreement and to pay and provide to Employee the compensation and benefits referred to in this Agreement, Employee covenants and agrees that, during the term of Employee's employment with FISION, and for a period of one (1) year thereafter, Employee will not, on behalf of anyone other than FISION (including Employee);
 
(a) directly or indirectly solicit, contact, sell to, service, or assist in the solicitation, contact, sales or services to customers, prospective customers, vendors, referral sources, or strategic allies of FISION with whom Employee had any contact during Employee's engagement with FISION if that solicitation, contact, sales, or service, or assistance with solicitation, contract, or sales relates to a product or service which is offered by FISION, or 
 
(b) directly or indirectly, induce, encourage, solicit, or assist in the inducement, encouragement, or solicitation of Employees, vendors, customers, or business allies to terminate their relationships with FISION. 
 
9. Breach of Covenants. The terms of paragraphs 6, 7 and 8 shall be enforceable in both law and equity, including by temporary restraining order or injunction, notwithstanding the existence of any claim or cause of action between the parties, whether predicated on this Agreement or otherwise. The parties agree that in the event of a breach by Employee of any of the terms of paragraphs 6, 7 and 8, FISION would suffer irreparable harm. In the event FISION brings any proceedings to enforce the provisions of paragraphs 6, 7 and 8 of this Agreement, the prevailing party shall be entitled to recover costs, including reasonable attorneys' fees.
 
10. Waiver. The waiver by FISION of due performance of, or compliance with any provisions of this Agreement shall not operate or be construed as a waiver of its right to demand due performance or compliance by Employee thereafter.
 
11. Severability. In the event that any term or portion of this Agreement is determined to be invalid or unenforceable, the parties intend and agree that the remaining terms shall continue to be valid and enforceable in all respects. Moreover, the parties intend and agree that the non-solicitation provisions of paragraph 8 of this Agreement may be judicially modified so as to make them enforceable should a court believe that they are overbroad in any respect.
 
12. Assignment and Modification. The rights and obligations of FISION under this Agreement shall inure to the benefit of, and be binding upon the successors and assigns of FISION. The rights and obligations of Employee under this Agreement, however, shall not be assigned to others.
 
	 
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13. Arbitration. This Agreement is deemed to have been made in the State of Minnesota and shall be interpreted pursuant to Minnesota law. The parties shall make good faith efforts to work through any disputes over the language or intent of this Agreement or over the performance of obligations hereunder. However, any unresolved disputes arising from, or relating to this Agreement or the relationship between the parties shall be resolved through binding arbitration conducted under the auspices of the American Arbitration Association at its Minneapolis, Minnesota office. The parties shall equally split the cost of any arbitration but the arbitrator is empowered to award to the prevailing party reimbursement of those costs. The existence of this arbitration clause shall not prevent FISION from initiating suit to seek injunctive relief in the manner contemplated in paragraph 9 above. However, any damage claim, including damage claims arising from the same alleged breach, which resulted in a suit for injunctive relief, shall be resolved through binding arbitration. Either party shall be entitled to docket an arbitration award in any court of competent jurisdiction.   

 
14. Governing Law. The parties agree that this Agreement has been executed in the State of Minnesota and shall be governed in all respects by the laws of said state.
 
15. Entire Agreement. This document contains the entire agreement of the parties relating to the subject matter hereof. No waiver, change or modification of any of the terms hereof shall be binding on either party unless executed in a writing signed by both parties.
 
16. Opportunity to Review. Employee acknowledges that Employee has had the opportunity to review this Agreement, and to have Employee's attorney, if Employee is represented by any such attorney, do the same, before executing the Agreement. The Agreement accurately recites the product of negotiations between the parties.
 
17. Good Faith. The parties hereto shall exercise good faith in the undertaking of all the duties, obligations, rights and responsibilities set forth herein.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, intending to be bound hereby.
    	 
	FISION: FISION Holdings, Inc.	 

	 	 	 	 
		By:	/s/ Michael P. Brown	 

	 
	 
	Michael P. Brown	 

	 
	Its:
	CEO
	 

	 
	 
		 

	 
	EMPLOYEE:  
	 

	 
	 
	 

	 
	By:
	/s/ Garry N. Lowenthal

	 
	 
	Garry N. Lowenthal

 
	 
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ADDENDUM A
 
THIS ADDENDUM, is effective July 1, 2014, by and between FISION Holdings, Inc., a Minnesota corporation (hereinafter "FISION" or "Company") and Garry N. Lowenthal (hereinafter "Employee").
 
WHEREAS, this Addendum is fully incorporated into the EMPLOYMENT, CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT effective July 1, 2014 ("Agreement") between FISION and Employee and specifically addresses Employee's compensation and benefits per Sections 3 and 4 of that Agreement.
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereby agree to as follows:
 
	1. 	BASE SALARY COMPENSATION- Effective January 1, 2013, and ratified on July 1, 2014, Employee shall be paid a base salary compensation of TEN THOUSAND DOLLARS AND 00/100 ($10,000.00) per month in accordance with the Company's payroll policy, if any.

 
	 
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	Employee will earn compensation of TEN THOUSAND DOLLARS AND 00/100 ($10,000.00) per month.

	 
	·
	Employee will be paid any unpaid monthly compensation/accruals, expense reimbursement, and accrued interest upon a successful closing of at least $1 million of an institutional round.

	 
	·
	Effective the earlier of: a) the closing of at least $1.5 million of an institutional round or b) January 1, 2015, Employee shall be paid a base salary compensation of twelve thousand five hundred dollars ($12,500) per month.

	 
	·
	Future increases in base salary compensation shall be reviewed at least annually for potential increase relative to company performance and compensation levels at comparative companies.

 
	2. 	PAID-TIME-OFF and OTHER BENEFITS- FISION agrees to grant Employee twenty (20) days of paid personal time off (PTO) per year, vested in advance with accruals for unused PTO, from the original start date of August 1, 2010. Such PTO shall be used for vacation, sick leave and all other non-working absences from FISION. Employee will be eligible to participate in all other company benefits available to any other FISION employee or consultant.

		
	3. 	FISION BONUS, STOCK AWARDS AND STOCK OPTIONS- The Compensation Committee and/or the Board of Directors will determine, on a periodic basis, at least annually, any cash bonus, stock awards and stock options to be awarded to Employee. All FISION awards/grants of common stock, warrants or options will be based on par value.

		
	4. 	TERMINATION OF ADDENDUM – This Addendum shall terminate upon execution of a new Addendum A or by termination of the Agreement and any extensions.

 
IN WITNESS WHEREOF, the parties have made and entered into this Addendum effective as of the date first written above.
  
	EMPLOYEE:  
	 
	FISION HOLDINGS, INC.  
	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Garry N. Lowenthal
	 
	By:
	/s/ Michael P. Brown
	 

	 
	Garry N. Lowenthal 
	 
	 
	Michael P. Brown
	 

	 
	 
	 
	Title:
	CEO
	 

	 
	 
	 
	 
	 
	 

	Date:
	7/1/2014
	 
	Date:
	7/1/2014
	 

 
 
6fision_ex103.htm

EXHIBIT 10.3
 
Fision Holdings, Inc.
 
STOCK OPTION AND COMPENSATION PLAN
 
Amended July 18, 2013
Second Amendment December 30, 2014
 
1. Purpose. The purpose of this 2011 Stock Option and Compensation Plan (the "Plan") ofFision Holdings, Inc. (the "Company") is to increase stockholder value and to advance the interests of the Company by furnishing a variety of economic incentives ("Incentives") designed to attract, retain and motivate employees and certain key consultants. Incentives may consist of opportunities to purchase or receive shares of Common Stock, $.0001 par value, of the Company ("Common Stock"), monetary payments, or both on terms determined under this Plan.
 
2. Administration. The Plan shall be administered by the Stock Option Committee (the "Committee") of the Board of Directors of the Company, or the entire Board of Directors, until such time as a stock option committee is formed. The Committee shall consist of not less than two directors of the Company to be appointed from time to time by the Board of Directors of the Company. Each member of the Committee shall be a "disinterested person" within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, and the regulations promulgated thereunder (the "1934 Act"). The Board of Directors of the Company may from time to time appoint members of the Committee in substitution for, or in addition to, members previously appointed, and may fill vacancies, however caused, in the Committee. The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it shall deem advisable. A majority of the Committee's members shall constitute a quorum. All action of the Committee shall be taken by the majority of its members. Any action may be taken by a written instrument signed by majority of the members and any action so taken shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary, shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable. The Committee shall have complete authority to award Incentives under the Plan, to interpret the Plan, and to make any other determination which it believes necessary and advisable for the proper administration of the Plan. The Committee's decisions and matters relating to the Plan shall be final and conclusive on the Company and its participants.
 
3. Eligible Participants. Employees of or consultants to the Company or its subsidiaries or affiliates (including officers and directors, but excluding directors who are not also employees of or consultants to the Company or its subsidiaries or affiliates) shall become eligible to receive Incentives under the Plan when designated by the Committee. Participants may be designated individually or by groups or categories (for example, by pay grade) as the Committee deems appropriate. Participation of officers of the Company or its subsidiaries or affiliates and any performance objectives relating to such officers' participation must be approved by the Committee. Participation by others and any performance objectives relating to others may be approved by groups or categories (for example, by pay grade) and authority to designate participants who are not officers and to set or modify such targets may be delegated.
 
4. Types of Incentives/Awards. Incentives under the Plan may be granted in anyone or a combination of the following forms: (a) incentive stock options and non-statutory stock options (section 6); (b) stock appreciation rights ("SARs") (section 7); (c) stock awards (section 8); (d) restricted stock (section 8); (e) performance shares (section 9); and (f) cash awards (section 10).

 
	 
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5. Shares Subject to the Plan.
 
5.1. Number of Shares. Subject to adjustment as provided in Section 11.6, the number of shares of Common Stock which may be issued under the Plan shall not exceed 3,100,000 shares of $.0001 par value Common Stock.
 
5.2. Cancellation. To the extent that cash in lieu of shares of Common Stock is delivered upon the exercise of a SAR pursuant to Section 7.4, the Company shall be deemed, for purposes of applying the limitation on the number of shares, to have issued the greater of the number of shares of Common Stock which it was entitled to issue upon such exercise or on the exercise of any related option. In the event that a stock option or SAR granted hereunder expires or is terminated or canceled unexercised as to any shares of Common Stock, such shares may again be issued under the Plan either pursuant to stock options, SARs or otherwise. In the event that shares of Common Stock are issued as restricted stock or pursuant to a stock award and thereafter are forfeited or reacquired by the Company pursuant to rights reserved upon issuance thereof, such forfeited and reacquired shares may again be issued under the Plan, either as restricted stock, pursuant to stock awards or otherwise. The Committee may also determine to cancel, and agree to the cancellation of, stock options in order to make a participant eligible for the grant of a stock option at a lower price than the option to be canceled.
 
5.3. Type of Common Stock. Common Stock issued under the Plan in connection with stock options, SARS, performance shares, restricted stock or stock awards may be in the form of authorized and unissued shares.
 
6. Stock Options. A stock option is a right to purchase shares of Common Stock from the Company. Each stock option granted by the Committee under this Plan shall be subject to the following terms and conditions:
 
6.1. Price. The option price per share shall be determined by the Committee subject to adjustment under Section 11.6.
 
6.2. Number. The number of shares of Common Stock subject to the option shall be determined by the Committee, subject to adjustment as provided in Section 11.6. The number of shares of Common Stock subject to a stock option shall be reduced in the same proportion that the holder thereof exercises a SAR if any SAR is granted in conjunction with or related to the stock option.
 
6.3. Duration and Time for Exercise. Subject to earlier termination as provided in Section 11.4, the term of each stock option shall be determined by the Committee but shall not exceed ten years and one day from the date of grant. Each stock option shall become exercisable at such time or times during its term as shall be determined by the Committee at the time of grant. The Committee may accelerate the exercisability of any stock option. Subject to the foregoing and with the approval of the Committee, all or any part of the shares of Common Stock with respect to which the right to purchase has accrued may be purchased by the Company at the time of such accrual or at any time or times thereafter during the term of the option.
 
6.4. Manner of Exercise. A stock option may be exercised, in whole or in part, by giving written notice to the Company, specifying the number of shares of Common Stock to be purchased and accompanied by the full purchase price for such shares. The option price shall be payable in United States dollars upon exercise of the option and may be paid by cash; uncertified or certified check; bank draft; by delivery of shares of Common Stock in payment of all or any part of the option price (cashless exercise) which shares shall be valued for this purpose at the Fair Market Value on the date such option is exercised; by instructing the Company to withhold from the shares of Common Stock issuable upon exercise of the stock option shares of Common Stock in payment of all or any part of the option price, which shares shall be valued for this purpose at the Fair Market Value or in such other manner as may be authorized from time to time by the Committee. Prior to the issuance of shares of Common Stock upon the exercise of a stock option, a participant shall have no rights as a stockholder.

 
	 
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6.5. Incentive Stock Options. Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant of stock options which are intended to qualify as Incentive Stock Options (as such term is defined in Section 422A of the Internal Revenue Code of 1986, as amended):
 
(a) The aggregate Fair Market Value (determined as of the time the option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any participant during any calendar year (under all of the Company's plans) shall not exceed $100,000;
 
(b) Any Incentive Stock Option certificate authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain all provisions required in order to qualify the options as Incentive Stock Options;
 
(c) All Incentive Stock Options must be granted within ten years from the earlier of the date on which this Plan was adopted by the Board of Directors or the date this Plan was approved by the stockholders;
 
(d) Unless sooner exercised, all Incentive Stock Options shall expire no later than 10 years after the date of grant; and
 
(e) The option price for Incentive Stock Options shall be not less than the Fair Market Value of the Common Stock subject to the option on the date of grant; and
 
7. Stock Appreciation Rights. A SAR is a right to receive, without payment to the Company, a number of shares of Common Stock, cash or any combination thereof, the amount of which is determined pursuant to the formula set forth in Section 7.4. A SAR may be granted (a) with respect to any stock option granted under this Plan, either concurrently with the grant of such stock option or at such later time as determined by the Committee (as to all or any portion of the shares of Common Stock subject to the stock option), or (b) alone, without reference to any related stock option. Each SAR granted by the Committee under this Plan shall be subject to the following terms and conditions:
 
7.1. Number. Each SAR granted to any participant shall relate to such number of shares of Common Stock as shall be determined by the Committee, subject to adjustment as provided in Section 11.6. In the case of a SAR granted with respect to a stock option, the number of shares of Common Stock to which the SAR pertains shall be reduced in the same proportion that the holder of the option exercises the related stock option.
 
7.2. Duration. Subject to earlier termination as provided in Section 11.4, the term of each SAR shall be determined by the Committee but shall not exceed ten years and one day from the date of grant. Unless otherwise provided by the Committee, each SAR shall become exercisable at such time or times, to such extent and upon such conditions as the stock option, if any, to which it relates, is exercisable. The Committee may in its discretion accelerate the exercisability of any SAR.

 
	 
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7.3. Exercise. A SAR may be exercised, in whole or in part, by giving written notice to the Company, specifying the number of SARs which the holder wishes to exercise. Upon receipt of such written notice, the Company shall, within 90 days thereafter, deliver to the exercising holder certificates for the shares of Common Stock or cash or both, as determined by the Committee, to which the holder is entitled pursuant to Section 7.4.
 
7.4. Payment. Subject to the right of the Committee to deliver cash in lieu of shares of Common Stock (which, as it pertains to officers and directors of the Company, shall comply with all requirements of the 1934 Act), the number of shares of Common Stock which shall be issuable upon the exercise of a SAR shall be determined by dividing the number of shares of Common Stock as to which the SAR is exercised multiplied by the amount of the appreciation in such shares (for this purpose, the "appreciation" shall be the amount by which the Fair Market Value of the shares of Common Stock subject to the SAR on the exercise date exceeds (1) in the case of a SAR related to a stock option, the purchase price of the shares of Common Stock under the stock option or (2) in the case of a SAR granted alone, without reference to a related stock option, an amount which shall be determined by the Committee at the time of grant, subject to adjustment under Section 11.6 by the Fair Market Value of a share of Common Stock on the exercise date.
 
In lieu of issuing shares of Common Stock upon the exercise of a SAR, the Committee may elect to pay the holder of the SAR cash equal to the Fair Market Value on the exercise date of any or all of the shares which would otherwise be issuable. No fractional shares of Common Stock shall be issued upon the exercise of a SAR; instead, the holder of the SAR shall be entitled to receive a cash adjustment equal to the same fraction of the Fair Market Value of a share of Common Stock on the exercise date or to purchase the portion necessary to make a whole share at its Fair Market Value on the date of exercise.
 
8. Stock Awards and Restricted Stock. A stock award consists of the transfer by the Company to a participant of shares of Common Stock, without other payment therefore, as additional compensation for services to the Company. A share of restricted stock consists of shares of Common Stock which are sold or transferred by the Company to a participant at a price determined by the Committee (which price shall be at least equal to the minimum price required by applicable law for the issuance of a share of Common Stock) and subject to restrictions on their sale or other transfer by the participant. The transfer of Common Stock pursuant to stock awards and the transfer and sale of restricted stock shall be subject to the following terms and conditions:
 
8.1. Number of Shares. The number of shares to be transferred or sold by the Company to a participant pursuant to a stock award or as restricted stock shall be determined by the Committee.
 
8.2. Sale Price. The Committee shall determine the price, if any, at which shares of restricted stock shall be sold to a participant, which may vary from time to time and among participants and which may be below the Fair Market Value of such shares of Common Stock at the date of sale.
 
8.3. Restrictions. All shares of restricted stock transferred or sold hereunder shall be subject to such restrictions as the Committee may determine, including, without limitation any or all of the following:
 
(a) a prohibition against the sale, transfer, pledge or other encumbrance of the shares of restricted stock, such prohibition to lapse at such time or times as the Committee shall determine (whether in annual or more frequent installments, at the time of the death, disability or retirement of the holder of such shares, or otherwise);
 
(b) a requirement that the holder of shares of restricted stock forfeit, or (in the case of shares sold to a participant) resell back to the Company at his or her cost, all or a part of such shares in the event of termination of his or her employment or consulting engagement during any period in which such shares are subject to restrictions; and
 
(c) such other conditions or restrictions as the Committee may deem advisable.
 
8.4. Escrow. In order to enforce the restrictions imposed by the Committee pursuant to Section 8.3, the participant receiving restricted stock shall enter into an agreement with the Company setting forth the conditions of the grant. Shares of restricted stock shall be registered in the name of the participant and deposited, together with a stock power endorsed in blank, with the Company. Each such certificate shall bear a legend in substantially the following form:
 
"The transferability of this certificate and the shares of Common Stock represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the Stock Option and Compensation Plan of Fision Holdings, Inc. (the "Company"), and an agreement entered into between the registered owner and the Company. A copy of the Plan and the agreement is on file in the office of the secretary of the Company."
 
8.5. End of Restrictions. Subject to Section 11.5, at the end of any time period during which the shares of restricted stock are subject to forfeiture and restrictions on transfer, such shares will be delivered free of all restrictions to the participant or to the participant's legal representative, beneficiary or heir.
 
8.6. Stockholder. Subject to the terms and conditions of the Plan, each participant receiving restricted stock shall have all the rights of a stockholder with respect to shares of stock during any period in which such shares are subject to forfeiture and restrictions on transfer, including without limitation, the right to vote such shares. Dividends paid in cash or property other than Common Stock with respect to shares of restricted stock shall be paid to the participant currently.
 
9. Performance Shares. A performance share consists of an award which shall be paid in shares of Common Stock, as described below. The grant of performance share shall be subject to such terms and conditions as the Committee deems appropriate, including the following:
 
9.1. Performance Objectives. Each performance share will be subject to performance objectives for the Company or one of its operating units to be achieved by the end of a specified period. The number of performance shares granted shall be determined by the Committee and may be subject to such terms and conditions as the Committee shall determine. If the performance objectives are achieved, each participant will be paid in shares of Common Stock or cash. If such objectives are not met, each grant of performance shares may provide for lesser payments in accordance with formulae established in the award.

 
	 
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9.2. Not Stockholder. The grant of performance shares to a participant shall not create any rights in such participant as-a stockholder of the Company until the payment of shares of Common Stock with respect to an award.
 
9.3. No Adjustments. No adjustment shall be made in performance shares granted on account of cash dividends which may be paid or other rights which may be issued to the holders of Common Stock prior to the end of any period for which performance objectives were established.
 
9.4. Expiration of Performance Share. If any participant's employment or consulting engagement with the Company is terminated for any reason other than normal retirement, death or disability prior to the achievement of the participant's stated performance objectives, all the participant's rights on the performance shares shall expire and terminate unless otherwise determined by the Committee. In the event of termination by reason of death, disability, or normal retirement, the Committee, in its own discretion, may determine what portions, if any, of the performance shares should be' paid to the participant.
 
10. Cash Awards. A cash award consists of a monetary payment made by the Company to a participant as additional compensation for his or her services to the Company. Payment of a cash award will normally depend on achievement of performance objectives by the Company or by individuals. The amount of any monetary payment constituting a cash award shall be determined by the Committee in its sole discretion. Cash awards may be subject to other terms and conditions, which may vary from time to time and among participants, as the Committee deems appropriate.
 
11. General.
 
11.1. Effective Date. The Plan will become effective upon its approval by the shareholders with a majority of the outstanding shares of Common Stock of the Company, pursuant to shareholder action on December 30, 2010, in accordance with state law. Unless approved within one year after the date of the Plan's adoption by the Committee, or by the Company's Board of Directors, the Plan shall not be effective for any purpose.
 
11.2. Duration. The Plan shall remain in effect until all Incentives granted under the Plan have either been satisfied by the issuance of shares of Common Stock or the payment of cash or been terminated under the terms of the Plan and all restrictions imposed on shares of Common Stock in connection with their issuance under the Plan have lapsed. No Incentives may be granted under the Plan after the tenth anniversary of the date the Plan is approved by the stockholders of the Company.
 
11.3. Non-transferability of Incentives. No stock option, SAR, restricted stock or performance award may be transferred, pledged or assigned by the holder thereof except, in the event of the holder's death, by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as amended, per Title I of the Employee Retirement Income Security Act, or the rules thereunder, and the Company shall not be required to recognize any attempted assignment of such rights by any participant. During a participant's lifetime, an Incentive may be exercised only by him or her or by his or her guardian or legal representative.
 
11.4. Effect of Termination or Death. In the event that a participant ceases to be an employee of or consultant to the Company for any reason, including death, any Incentives may be exercised or shall expire at such times as may be determined by the Committee.

 
	 
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11.5. Additional Condition. Notwithstanding anything in this Plan to the contrary:
 
(a) the Company may, if it shall determine it necessary or desirable for any reason, at the time of award of any Incentive or the issuance of any shares of Common Stock pursuant to any Incentive, require the recipient of the Incentive, as a condition to the receipt thereof or to the receipt of shares of Common Stock issued pursuant thereto, to deliver to the Company a written representation of present intention to acquire the Incentive or the shares of Common Stock issued pursuant thereto for his or her own account for investment and not for distribution; and (b) if at any time the Company further determines, in its sole discretion, that the listing, registration or qualification (or any updating of any such document) of any Incentive or the shares of Common Stock issuable pursuant thereto is necessary on any securities exchange or under any federal or state securities or blue sky law, or that the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with the award of any Incentive, the issuance of shares of Common Stock pursuant thereto, or the removal of any restrictions imposed on such shares, such Incentive shall not be awarded or such shares of Common Stock shall not be issued or such restrictions shall not be removed, as the case may be, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company.
 
11.6. Adjustment. In the event of any merger, consolidation or reorganization of the Company with any other corporation or corporations, there shall be substituted for each of the shares of Common Stock then subject to the Plan, including shares subject to restrictions, options, or achievement of performance share objectives, the number and kind of shares of stock or other securities to which the holders of the shares of Common Stock will be entitled pursuant to the transaction. In the event of any recapitalization, stock dividend, stock split, combination of shares or other change in the Common Stock, the number of shares of Common Stock then subject to the Plan, including shares subject to restrictions, options or achievements of performance shares, shall be adjusted in proportion to the change in outstanding shares of Common Stock. In the event of any such adjustments, the purchase price of any option, the performance objectives of any Incentive, and the shares of Common Stock issuable pursuant to any Incentive shall be adjusted as and to the extent appropriate, in the discretion of the Committee, to provide participants with the same relative rights before and after such adjustment.
 
11.7. Incentive Plans and Agreements. Except in the case of stock awards or cash awards, the terms of each Incentive shall be stated in a plan or agreement approved by the Committee. The Committee may also determine to enter into agreements with holders of options to reclassify or convert certain outstanding options, within the terms of the Plan, as Incentive Stock Options, or as non-statutory stock options and in order to eliminate SARs with respect to all or part of such options and any other previously issued options.
 
11.8. Withholding.
 
(a) The Company shall have the right to withhold from any payments made under the Plan or to collect as a condition of payment, any taxes required by law to be withheld. At any time when a participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with a distribution of Common Stock or upon exercise of an option or SAR, the participant may satisfy this obligation in whole or in part by electing (the "Election") to have the Company withhold from the distribution shares of Common Stock having a value up to the amount required to be withheld. The value of the shares to be withheld shall be based on the Fair Market Value of the Common Stock on the date that the amount of tax to be withheld shall be determined ("Tax Date").

 
	 
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(b) Each Election must be made prior to the Tax Date. The Committee may disapprove of any Election, may suspend or terminate the right to make Elections, or may provide with respect to any Incentive that the right to make Elections shall not apply to such Incentive. An Election is irrevocable.
 
(c) If a participant is an officer or director of the Company within the meaning of Section 16 of the 1934 Act, then an Election must comply with all of the requirements of the 1934 Act.
 
11.9. No Continued Employment, Engagement or Right to Corporate Assets. No participant under the Plan shall have any right, because of his or her participation, to continue in the employ of, or to continue his or her consulting engagement for, the Company for any period of time or any right to continue his or her present or any other rate of compensation. Nothing contained in the Plan shall be construed as giving an employee, a consultant, such persons' beneficiaries or any other person any equity or interests of any kind in the assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between the Company and any such person.
 
11.10. Deferral Permitted. Payment of cash or distribution of any shares of Common Stock to which a participant is entitled under any Incentive shall be made as provided in the Incentive. Payment may be deferred at the option of the participant if provided in the Incentive.
 
11.11. Amendment of the Plan. The Committee or the Board of Directors may amend or discontinue the Plan at any time. However, no such amendment or discontinuance shall, subject to adjustment under Section 11.6: (a) change or impair, without the consent of the recipient, an Incentive previously granted; (b) materially increase the maximum number of shares of Common Stock which may be issued to all participants under the Plan; (c) materially increase the benefits which may be granted under the Plan; (d) materially modify the requirements as to eligibility for participation in the Plan; or (e) materially increase the benefits accruing to participants under the Plan.
 
11.12. Immediate Acceleration of Incentives. Notwithstanding any provision in this Plan or in any Incentive to the contrary: (1) the restrictions on all shares of restricted stock shall lapse immediately; (2) all outstanding options and SARs will become exercisable immediately; and (3) all performance shares shall be deemed to be met and payment made immediately, if subsequent to the date that the Plan is approved by the Committee, or the Board of Directors of the Company, any of the following events occur, unless otherwise determined by the Board of Directors and a majority of the Continuing Directors (as defined below):
 
(1) any person or group of persons becomes the beneficial owner of 40% or more of any equity security of the Company entitled to vote for the election of directors;
 
(2) a majority of the members of the Board of Directors of the Company is replaced within the period of less than 24 months by directors not nominated and approved by the then existing Board of Directors; or

 
	 
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(3) the stockholders of the Company approve an agreement to merge or consolidate with or into another corporation or an agreement to sell or otherwise dispose of all or substantially all of the Company's assets (including a plan of liquidation ).
 
For purposes of this Section 11.12, beneficial ownership by a person or group of persons shall be determined in accordance with Regulation 13D (or any similar successor regulation) promulgated by the Securities and Exchange Commission pursuant to the 1934 Act. Beneficial ownership of more than 30% of an equity security may be established by any reasonable method, but shall be presumed conclusively as to any person who files a Schedule 13D report with the Securities and Exchange Commission reporting such ownership. If the restrictions and forfeitability periods are eliminated by reason of the provision in (1) above, the limitations of this Plan shall not become applicable again should the person cease to own 30% or more of any equity security of the Company.
 
For purposes of this Section 11.12, "Continuing Directors" are directors: (a) who were in office prior to the time that any of the provisions in (1), (2) or (3) above occurred or any person who has publicly announced an intention to acquire 30% or more of any equity security of the Company; (b) directors in office for a period of more than two years; and (c) directors nominated and approved by the existing Continuing Directors.
 
11.13. Definition of Fair Market Value. Whenever "Fair Market Value" of Common Stock shall be determined for purposes of this Plan, it shall be determined by reference to the last sale price of a share of Common Stock on the principal United States Securities Exchange registered under the 1934 Act on which the Common Stock is listed (the "Exchange"), or, on the National Association of Securities Dealers, Inc. Automatic Quotation System (including the National Market system) ("NASDAQ") on the applicable date; however, if the Company's Common Stock has not yet been listed on any Exchange, the Board of Directors may determine any reasonable alternate methodology to determine "Fair Market Value." If the Exchange or NASDAQ is closed for trading on such date, or if the Common Stock does not trade on such date, then the last sale price used shall be the one on the date the Common Stock last traded on the Exchange or NASDAQ.
 
 
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