Document:

Exhibit 10.6.1

DILIGENT BOARD MEMBER SERVICES, INC.

2010 STOCK OPTION AND INCENTIVE PLAN

Adopted by the Board: April 22, 2010

 

Adopted by the Shareholders: June 8, 2010

 

ARTICLE I. PURPOSE.

 

1.1.           The purpose of the Plan is to provide a means by which selected Employees, Directors and Consultants of the Company, and its Affiliates, are incented to perform through the opportunity to benefit from increases in value of the Common Stock of the Company from grants of Options in the Company’s Common Stock.

 

1.2.           The Company, by means of the Plan, seeks to retain the services of persons who are now Employees, Directors, or Consultants to the Company or its Affiliates, to secure and retain the services of new Employees, Directors and Consultants, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

 

1.3.           All Options granted under the Plan shall be separately designated as Incentive Stock Options or Non-Qualified Stock Options at the time of grant, and in such form as issued pursuant to Article VI, and the number of shares of common stock will be listed in the name of the Employee, Director or Consultant in the Company’s stock records for shares purchased on exercise of each type of Option by said individual .

 

ARTICLE II. DEFINITIONS.

 

“Act” means the Securities Act of 1933, as amended.

 

“Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code.

 

“Award” means the grant of an Option.

 

“Board” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any Internal Revenue Code adopted in the future to replace the Internal Revenue Code of 1986.

 

“Committee” means the Remuneration and Nominations Committee or any other committee appointed by the Board in accordance with subsection C of Article III to administer the Plan. The Committee shall be composed of outside directions only.

  

  

 

“Common Stock” means shares of the Company’s common stock, par value $0.001 per share.

 

“Company” means Diligent Board Member Services, Inc., a Delaware corporation.

 

“Consultant” means any person, including an advisor, engaged by the Company or an Affiliate to render consulting or other personal services as an independent contractor and who is compensated for such services, provided that the term “Consultant” shall not include Directors.

 

“Continuous Status as an Employee, Director or Consultant” means that the provision of services to the Company or an Affiliate in the capacity of Employee, Director or Consultant, is not interrupted or terminated. Continuous Status as an Employee, Director or Consultant shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers between locations of the Company or among the Company, any Affiliate, or any successor, in any capacity as Employee, Director or Consultant, or (iii) any change in status as long as the person remains in the service of the Company, Affiliate or successor in any capacity as an Employee, Director, Consultant (except as otherwise provided in the Option Agreement). An approved leave of absence shall include sick leave, military leave, or any
other authorized personal leave approved by the Company; provided, however, that any such authorized leave of absence shall be treated as Continuous Status as an Employee, Director, or Consultant for the purposes of vesting only to the extent as may be provided in the Company’s leave policy. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. Notwithstanding anything to the contrary in this definitional paragraph, a Consultant’s status shall not be considered continuous unless the Consultant is and continues to be ready, willing and able to engage in substantial services to the Company. The Board, in its sole discretion, shall in all cases determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted or terminated.

 

“Covered Employee” means any person who, on the last day of the taxable year, is the chief executive officer (or is acting in such capacity) or is among the four most highly compensated officers (other than the chief executive officer) of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

 

“Director” means a member of the Board or of the board of directors of an Affiliate.

 

“Employee” means any person, including Officers and Executive Directors, employed by the Company or any Affiliate of the Company as determined under the rules contained in Code Section 3401. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient by itself to constitute “employment” by the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Executive Director” means an individual who is an officer of the Company and also serves as a member of the Board of Directors.

  

  

 

“Fair Market Value” means, as of any date, the value of the Common Stock of the Company determined as follows:

 

(a)           If the Common Stock is readily tradable on an established securities market, the fair market value of the Common Stock on the date of grant means the value determined based upon the last sale before or the first sale after the grant, the closing price on the trading day before or the trading day of the grant of the Award, or any other reasonable basis using actual transactions in the Common Stock as reported by such market and consistently applied.

 

(b)           If the Common Stock is not readily tradable on an established securities market, the fair market value of the Common Stock on the date of grant means the value determined by a valuation of the Common Stock determined by an independent appraisal that meets the requirements of Section 401(a)(28)(C) of the Code and the regulations thereunder as of a date that is no more than 12 months before the relevant Option grant date.

 

“Incentive Stock Option” means an Option intended to qualify as an incentive stock option (as set forth in the Option Agreement) and that qualifies as an Incentive Stock Option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

 

“Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option (as set forth in the Option Agreement) or that does not qualify as an Incentive Stock Option.

 

“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

“Option” means an option for the Company’s common stock granted pursuant to the Plan.

 

“Option Agreement” means a written agreement between the Company and a Recipient evidencing the terms and conditions of an individual Option grant. The Option Agreement shall be in the form approved by the Board from time to time. Each Option Agreement shall be subject to the terms and conditions of the Plan.

 

“Outside Director” means a Director who (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of Treasury regulations promulgated under Section 162(m) of the Code), (ii) is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan) during the taxable year, (iii) has not been an officer of the Company or an “affiliated corporation” at any time, (iv) is not currently receiving direct or indirect remuneration (including any payment in exchange for goods or services) from the Company or an “affiliated corporation” in any capacity other than as a Director, (v) is otherwise considered an “outside
director” for purposes of Section 162(m) of the Code, a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act.

  

  

 

“Plan” means this Diligent Board Member Services, Inc. 2010 Stock Option and Incentive Plan.

 

“Purchase Price” is defined in Subsection C of Article VI.

 

“Recipient” means an Employee, Director or Consultant, or their transferees, who holds an outstanding Option.

 

 “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

 

ARTICLE III. ADMINISTRATION.

 

1.4.        The Plan shall be administered by the Board unless and until the Board delegates administration to the Committee, as provided in subsection C of this Article III.

 

1.5.        The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(a)           To determine, in its sole discretion, from time to time which of the persons eligible under the Plan shall be granted an Award; when and how each Award shall be granted; whether an Option granted will be an Incentive Stock Option or a Non-Qualified Stock Option, or a combination of the foregoing; the provisions of each Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock pursuant to an Award; the number of shares with respect to which an Award shall be granted to each such person; and all other terms, conditions and restrictions applicable to each such Award or shares acquired upon exercise of an Option not
inconsistent with the terms of the Plan.

 

(b)           To approve one or more forms of Option Agreement.

 

(c)           To construe and interpret, in its sole discretion, the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Option Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

 

(d)           To amend, modify or otherwise change in any manner the Plan or an Award as provided in Article XII and to suspend or terminate the Plan as provided in Article XIII.

 

(e)           Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company that are not in conflict with the provisions of the Plan.

 

All decisions, determinations and interpretations of the Board shall be final, binding and conclusive on any Recipient and any other person with an interest in the Plan or in an Award and on any Affiliate.

  

  

 

1.6.          The Board hereby delegates administration of the Plan to the Committee which will be composed of not fewer than two (2) of its members. Furthermore, notwithstanding anything in this Article III to the contrary, the Board hereby delegates to the Committee the exclusive right and authority to award Options to an eligible person who is a Covered Employee or who is expected to be a Covered Employee at the time of recognition of income resulting from such Award with respect to either of whom the Company wishes to avoid the application of Section 162(m) of the Code.

 

The Committee shall have, during such delegation and in connection with the administration of the Plan, the powers theretofore possessed by the Board (and references in this Plan to the Board shall thereafter be to the Committee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Administration of the Plan shall encompass, among other things, determining potential optionees, establishing the terms of each option, ensuring all proposed grants are consistent with the terms of the Plan, granting the options and ensuring the Corporate Secretary keeps accurate records of options granted and exercised.

 

The Board may withdraw administration of the Plan from the Committee at any time. The Board may abolish the Committee at any time and, upon abolition administration of the Plan shall revert automatically, without any further action on the Board's part, to the Board.

 

1.7.          Notwithstanding anything in this Article III to the contrary, at any time the Board may also delegate to any proper Officer the authority to grant Awards, without further approval of the Board, to eligible persons who (i) are not then subject to Section 16 of the Exchange Act and (ii) are either (A) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award, or (B) not persons with respect to whom the Company wishes to avoid the application of Section 162(m) of the Code; provided, however, that (i) the exercise price per share of each Option Award shall be equal to the Fair Market Value of such stock at the date
of grant, and (ii) each Option Award shall be subject to the terms and conditions of the standard form of Option Agreement approved by the Board and shall conform to the provisions of the Plan and such other guidelines as shall be established from time to time by the Board.

 

1.8.          No member of the Board or of any committee constituted under this Article III or any Officer acting pursuant to this Article shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or any Award.

 

ARTICLE IV. SHARES SUBJECT TO THE PLAN.

 

1.9.          Subject to the provisions of Article XI relating to adjustments upon changes in stock, the amount of stock that may be issued pursuant to Awards shall not exceed in the aggregate five million (5,000,000) shares of the Company’s Common Stock. If any Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares not acquired underlying such Award shall revert to and again become available for issuance under the Plan. 

  

  

 

1.10.        The Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

 

ARTICLE V. ELIGIBILITY.

 

1.11.        Incentive Stock Options may be granted to Employees. Non-Qualified Stock Options may be granted only to Employees, Directors or Consultants.

 

1.12.        No person shall be eligible for the grant of an Incentive Stock Option if, at the time of grant, such person owns (or is deemed to own pursuant to Section 424(d) of the Code) stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, or of any of its Affiliates (a “Ten Percent Stockholder”), unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of such stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

 

1.13.        To the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which Incentive Stock Options are exercisable for the first time by any Recipient during any calendar year under all plans of the Company and its Affiliates exceeds one hundred thousand dollars ($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.

 

1.14.        Subject to the provisions of Article XI relating to adjustments upon changes in stock, no person shall be eligible to be granted Awards covering more than five hundred thousand (500,000) shares of the Common Stock in any calendar year.

 

ARTICLE VI. TERMS OF OPTIONS.

 

Each Option shall be evidenced by an Option Agreement in such form and shall contain such terms and conditions as the Board shall deem appropriate. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Option Agreement or by communicating with the Company in such manner as the Company may authorize. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof or as specifically set forth in the Option Agreement or otherwise) the substance of each of the following provisions:

 

1.15.        Term. No Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it was granted. However, in the case of an Incentive Stock Option granted to a Recipient who, at the time the Option is granted, is a Ten Percent Stockholder (as described in subsection B of Article V), the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

 

1.16.        Price. The exercise price of each Option shall be not less than one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Non-Qualified Stock Option) may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

  

  

 

1.17.        Consideration. The purchase price of stock acquired pursuant to an Option (the “Purchase Price”) shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash or check at the time the Option is exercised, or (ii) as set forth in the Option Agreement (or in the case of a Non-Qualified Stock Option, as subsequently determined in the discretion of the Board or the Committee) (A) in shares of Common Stock duly endorsed over to the Company (which shares shall have been owned by the Option holder for at least six (6) months prior to such exercise and, for purposes of this paragraph, be valued at their
Fair Market Value as of the business day immediately preceding the date of such exercise), (B) by written direction to an authorized broker to sell the shares of Common Stock purchased pursuant to such exercise immediately for the account of the Option holder and pay an appropriate portion of the proceeds thereof to the Company, (C) according to a deferred payment or other arrangement (which may include, without limiting the generality of the foregoing, the use of other Common Stock of the Company) with the Recipient in any other form of legal consideration that may be acceptable to the Board, or (D) any combination of such methods of payment which together amount to the full exercise price of the shares purchased pursuant to the exercise of the Option. For purposes of this subsection C, the Purchase Price shall include the amount of the full exercise price of the shares of the Common Stock purchased pursuant to the exercise of the Option plus the minimum amount, if any, of any
applicable taxes which the Company is required to withhold.

 

In the case of any deferred payment arrangement approved by the Board, interest shall be payable at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. No deferred payment arrangement shall be permitted if the exercise of an Option for such a deferred payment would be a violation of any law or cause the Plan to be deemed a "nonqualified deferred compensation plan", as defined in Section 409A of the Code.

 

1.18.        Transferability. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the Recipient only by such Recipient or by his attorney-in-fact or conservator, unless such exercise by the attorney-in-fact or the conservator of the Recipient would disqualify the Incentive Stock Option as such. Unless the Board otherwise specifies, a Non-Qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Recipient only by such person or by his attorney-in-fact or conservator. Notwithstanding the foregoing, the
Recipient may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Recipient, shall thereafter be entitled to exercise the Option.

  

  

 

1.19.        Vesting. The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal). The Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable (“vest”) with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was not fully exercised. The Option may be subject to such other terms and conditions on the time or times when it may
be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. Unless otherwise specified in an Option Agreement, the shares of stock underlying an Option grant shall vest in three equal amounts: the first installment will be first exercisable on the six (6)-month anniversary of the option grant date and each succeeding installment will be first exercisable one (1) year from the date that the immediately preceding installment became exercisable. Any vesting schedule can be accelerated in the discretion of the Board, unless otherwise specified in the Option Agreement.

 

1.20.        Termination of Employment or Relationship as a Director or Consultant. In the event a Recipient’s Continuous Status as an Employee, Director or Consultant terminates (other than upon the Recipient’s death or disability), the Recipient may exercise his or her Option (to the extent that the Recipient was entitled to exercise it at the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months after the termination of the Recipient’s Continuous Status as an Employee, Director or Consultant (or, such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, at the date of termination, the Recipient is not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Recipient does not exercise his or her Option within the time specified in the Option Agreement or in this Plan, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. The above terms shall apply only if the specific Option grant is silent on the above issues; however, a specific Option grant may provide for different terms in the event a Recipient’s Continuous Status as an Employee, Director or Consultant terminates (other than upon the Recipient’s death or disability).

 

1.21.        Disability of Recipient. In the event a Recipient’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Recipient’s disability, as defined in Section 22(e)(3) of the Code, the Recipient may exercise his or her Option (to the extent that the Recipient was entitled to exercise it at the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or, such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination of Continuous Status, the Recipient is not
entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Recipient does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. The above terms shall apply only if the specific Option grant is silent on the above issues; however, a specific Option grant may provide for different terms in the event a Recipient’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Recipient’s disability.

  

  

 

1.22.        Death of Recipient. In the event of the death of a Recipient during, or within a period specified in the Option after the termination of, the Recipient’s Continuous Status as an Employee, Director or Consultant, the Option may be exercised (to the extent the Recipient was entitled to exercise the Option at the date of death) by the Recipient’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Recipient’s death pursuant to subsection D of Article VI, but only within the period ending on the earlier of (i) the date twelve (12) months following the date of death (or, such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of death, the Recipient was not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. The above terms shall apply only if the specific Option grant is silent on the above issues; however, a specific Option grant may provide for different terms in the event a Recipient’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Recipient’s death.

 

1.23.        Responsibility for Option Exercise. A Recipient is responsible for taking any and all actions as may be required to exercise any Option in a timely manner, and for properly executing any documents as may be required for the exercise of an Option in accordance with such rules and procedures as may be established from time to time under the Plan. By signing or accepting an Option Agreement a Recipient (and any person to whom the Option under that Option Agreement is transferred) acknowledges that information regarding the procedures and requirements for the exercise of that Option is available upon such Recipient’s or person’s request to the Board. The Company shall have no duty or
obligation to notify any Recipient of the expiration of any Option.

 

ARTICLE VII. REPRICING, CANCELLATION AND RE-GRANT

OF OPTIONS.

 

The Board or the Committee shall not effect at any time directly or indirectly the repricing of any outstanding Options, including without limitation a repricing by the cancellation of any outstanding Options under the Plan and the grant in substitution therefor of new Options under the Plan covering the same or different amount of shares of stock. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Non-Qualified Stock Option) may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

 

ARTICLE VIII. COVENANTS OF THE COMPANY.

 

During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.

  

  

 

ARTICLE IX. USE OF PROCEEDS FROM EXERCISE OF OPTIONS.

 

Proceeds from the exercise of Options shall constitute general funds of the Company.

 

ARTICLE X. MISCELLANEOUS.

 

1.24.        Neither an Employee, Director or Consultant nor any person to whom an Option may be transferred shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Award unless and until such person has satisfied all requirements for exercise, which can include an early exercise of the Option pursuant to its terms and the Company has issued such shares.

 

1.25.        Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Employee, Director, Consultant or other holder of Awards or Common Stock issued upon exercise of Options any right to continue in the employ of the Company or any Affiliate (or to continue acting as a Director or Consultant) or shall affect the right of the Company or any Affiliate to terminate the employment of any Employee with or without cause, the right of the Company’s Board of Directors and/or the Company’s stockholders to remove any Director pursuant to the terms of the Company’s Articles of Incorporation and By-Laws and the provisions of Delaware Law, or the right to
terminate the relationship of any Consultant with the Company or its Affiliates.

 

1.26.        If the Company or its Affiliates is required to withhold any amounts by reason of federal, state or local tax laws, rules or regulations, in respect of the issuance of Awards or shares of stock pursuant to the Plan, the Company or such Affiliates shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Recipient. In any event, such person shall promptly make available to the Company or such Affiliate, when requested by the Company or such Affiliate, sufficient funds to meet the requirements of such withholding, and the Company or such Affiliate may take and authorize such steps as it may deem advisable in order to have such funds made available to the Company
or such Affiliate from any funds or property due or to become due to such person. The exercise will not be effective until the Company has received such funds to cover the withholding.

 

1.27.        To the extent provided by the terms of an Option Agreement, and to the extent the Company agrees, through a vote of its Board, regarding a non-cash payment, the person to whom an Option is granted may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under an Option by any of the following means or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares from the shares of the stock otherwise issuable to the Recipient as a result of the exercise or acquisition of stock underlying the Option; or (iii) delivering to the Company unencumbered shares of the Company’s stock owned by
the person acquiring the stock. The Fair Market Value of any shares of Common Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rules.

 

1.28.        The Company shall not be required to issue fractional shares pursuant to this Plan and, accordingly, a Recipient may be awarded or required to purchase only whole shares.

  

  

 

1.29.        The Plan and all determinations made and actions taken hereunder, to the extent not otherwise governed by the Code or laws of the United States, shall be governed by the laws of the State of Delaware and construed accordingly, without reference to the conflict of laws principles.

 

1.30.        The receipt, transfer and exercise of any Award is subject to taxation under Section 83 of the Code.

 

ARTICLE XI. ADJUSTMENTS UPON CHANGES IN STOCK.

 

If any change is made in the stock subject to the Plan, or subject to any Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan, and the outstanding Awards will be appropriately adjusted in the class(es) and number of shares and price per share of stock subject to such outstanding Awards. Such adjustments shall be made by the Board or the Committee, the determination of which shall be
final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction not involving the receipt of consideration by the Company.)

 

ARTICLE XII. AMENDMENT OF THE PLAN AND AWARDS.

 

1.31.       The Board at any time, and from time to time, may amend the Plan. However, except as provided in Article XI relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will:

 

(a)           Increase the number of shares reserved for Awards under the Plan;

 

(b)           Modify the requirements as to eligibility for participation in the Plan (to the extent such modification requires stockholder approval in order for the Plan to satisfy the requirements of Section 422 of the Code); or

 

(c)           Modify the Plan in any other way if such modification requires stockholder approval in order for the Plan to satisfy the requirements of Section 422 of the Code.

 

1.32.       The Board may in its sole discretion submit any other amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations promulgated thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

  

  

 

1.33.        It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Directors or Consultants with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.

 

1.34.        Rights and obligations of the Recipient under any Award granted before amendment of the Plan shall not be materially impaired by any amendment of the Plan except with the written consent of the Recipient, unless such amendment is necessary to comply with any applicable law, regulation or rule as determined in the sole discretion of the Board.

 

1.35.        The Board at any time, and from time to time, may amend, modify, extend, cancel or renew any Award or waive any restrictions or conditions applicable to any Award or any shares acquired upon the exercise thereof and accelerate, continue, extend or defer the exercise time for any Award or the vesting of any shares acquired upon the exercise thereof, including with respect to the period following a Recipient’s termination of Continuous Status as an Employee, Director or Consultant; provided, however, that the rights and obligations under any Award shall not be materially impaired by any such amendment except with the written consent of the Recipient, unless such amendment is necessary to
comply with any applicable law, regulation or rule as determined in the sole discretion of the Board.

 

The Board may accelerate the time at which an Option may first be exercised or the time during which an Option or any part thereof will vest notwithstanding the provisions in the Option Agreement stating the time at which it may first be exercised or the time during which it will vest.

 

1.36.        The Board may amend the Plan to take into account changes in law and tax and accounting rules, as well as other developments, and to grant Awards that qualify for beneficial treatment under such rules without stockholder approval.

 

ARTICLE XIII. TERMINATION OR SUSPENSION OF THE PLAN.

 

1.37.        The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on June 7, 2020, which shall be within ten (10) years from the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is later. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

1.38.        Rights and obligations under any Award granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except with the written consent of the Recipient, unless such impairment is necessary to qualify the Award as an Incentive Stock Option or to comply with any applicable law, regulation or rule all as determined in the sole discretion of the Board.

 

ARTICLE XIV. EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective as determined by the Board, but no Awards granted under the Plan shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be obtained within twelve (12) months before or after the date when the Plan is adopted by the Board.

  

  

 

ARTICLE XV. COMPLIANCE WITH SECURITIES LAWS.

 

The grant of Awards and the issuance of shares of Common Stock upon the exercise of Options shall be subject to compliance with all applicable requirements of federal and state law with respect to such securities. Options may not be exercised if the issuance of shares of Common Stock upon exercise would constitute a violation of any applicable federal or state securities laws or other laws or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed. In addition, no Option may be exercised unless (A) a registration statement under the Act shall at the time of exercise of the Option be in effect with respect to the Common Stock shares to be issued upon the exercise of that Option or (B) in the opinion of counsel to the Company, the Common Stock shares
issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Common Stock shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition of the exercise of any Option, the Company may require the Recipient to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. The Company may, upon the advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel
deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

 

ARTICLE XVI. COMPLIANCE WITH SECTION 409A.

 

To the extent that the Board determines that any Award granted under the Plan is subject to Section 409A of the Code, the Option Agreement or other agreement evidencing the Award will incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and Award agreements will be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Plan's effective date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Plan's effective date the Board determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance
(including such Department of Treasury guidance as may be issued after the Plan's effective date), the Board may adopt such amendment to the Plan and applicable Award agreements or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.Exhibit 10.13

 

AGREEMENT

 

This agreement (“Agreement”) is made as of the 1st day of January, 2011 by and between Diligent APAC Board Services Pte. Ltd., a Singapore corporation, 5 Shenton Way, #16-00 UIC Building, Singapore 068808 (the “Company”), and Eslinda Hamzah, an individual residing at 101-C Siglap Road, Singapore 455898 (“Executive”).

 

	
1.

	
Employment. Company hereby employs Executive and Executive hereby accepts employment upon the terms and conditions hereinafter set forth.

 

	
2.

	
Term. Unless earlier terminated pursuant to Article 6 below, this Agreement shall commence on January 1, 2011, or such other date as the parties may agree (the “Effective Date”) and shall continue in effect for two years (through December 31, 2012) (the “Initial Term”). This Agreement shall continue in effect thereafter for one year periods until either party provides the other One Hundred Twenty (120) days prior written notice of termination. The Initial Term and the subsequent annual periods that this Agreement remains in effect shall be hereinafter referred to as the “Term”.

 

	
3.

	
Duties and Obligations of Executive. Executive is being hired as the Managing Director of the Company to manage and run the Company and to head the Company’s effort to sell the Diligent Boardbooks® product in the Asia Pacific Region. During the Term, in addition to the other obligations set forth herein, Executive shall hold the title and perform the duties and fulfill the obligations set forth on Schedule A.

 

	
4.

	
Collateral Agreement. Contemporaneous with the execution of this Agreement, the Company has entered into an Agreement (the “Collateral Agreement”) with Diligent Board Member Services, Inc. (“Parent”) pursuant to which Parent has granted to Company the right to sell Diligent Boardbooks in the Asia Pacific Region.

 

	
5.

	
Compensation. For all services rendered by Executive and for all covenants undertaken by Executive pursuant to this Agreement, Company shall pay to Executive the monetary compensation and Executive shall receive stock awards with respect to the Parent’s stock as provided in Schedule B. The payment of compensation to Executive shall be subject to such statutory deductions (including, without limitation, employee payment obligations to the Central Provident Fund) as may be required in accordance with applicable law.

 

	
5.1

	
Fringe Benefits. During the Term, Company shall extend to Executive other fringe benefits as per Schedule C. Company makes no provision for disability, retirement or death in service benefits to the Executive.

 

  

  

 

	
6.

	
Termination.

 

	
6.1

	
Termination of Executive for Cause. Company may terminate this Agreement for “cause” by written notice to Executive upon the occurrence of one or more of the following:

 

	
  

	
(a)

	
Executive commits a material act of dishonesty, deceit, or breach of fiduciary duty in the performance of Executive’s duties as an employee of Company;

 

	
  

	
(b)

	
Executive neglects or fails, in a material respect, to perform or observe Executive’s job responsibilities and/or obligations as set forth in Schedule A and such neglect or failure is not cured within thirty days of receipt of notice from Company of such neglect or failure ;

 

	
  

	
(c)

	
Executive substantially violates any written policy regarding employee behavior or conduct that has been provided to Executive by Company and Executive does not cure such breach within thirty (30) days after written notice from Company of such violation;

 

	
  

	
(d)

	
Executive is convicted of, or pleads nolo contendre to, (i) any felony, or any misdemeanor involving moral turpitude or (ii) any crime or offense involving dishonesty with respect to Company; or

 

	
  

	
(e)

	
Executive materially breaches any other provision of this Agreement and does not cure such breach within thirty days after written notice from Company, except that such cure period shall not apply to any breach by Executive of the restrictive covenants in Article 9 of this Agreement.

 

In the event Company opts to terminate this Agreement for cause, Company shall provide written notice of such termination which shall also specify the reason for such termination.

 

In the event this Agreement is terminated by either party for any reason other than for cause against Company, all obligations of Company under this Agreement shall terminate except for those set forth in Article 10 and those obligations accrued prior to the termination date.

 

	
6.2

	
Termination by Executive. Executive shall have the right to terminate this Agreement forthwith if Company breaches or fails to perform any of its obligations hereunder and such breach or failure is not cured within thirty days after notice by Executive of such breach or failure to perform. In the event Executive opts to terminate this Agreement pursuant to this Article 6.2, Executive shall provide written notice of such termination which shall also specify the reason for such termination. In the event this Agreement is terminated by either party for other than cause against Executive, then all obligations of Executive shall terminate except for those set forth in Articles 9 and 10 and those obligations accrued prior to the termination date.

 

  

  

 

	
6.3

	
Illness or Disability of Executive. If Executive is unable for health reasons to perform services for Company for a continuous period of more than 90 days, Executive shall be deemed to be permanently and totally disabled and Company may terminate this Agreement forthwith, and both Company and Executive or his estate, trustee or personal representative (as the case may be) shall not be entitled to claim any compensation for any and all loss or damage as a result of such early termination and shall have no claim whatsoever for any part of any future compensation that would have been paid to Executive for the remainder of Term from the date of termination. Executive shall be paid all compensation due under this Agreement until it is terminated in writing.

 

	
6.4

	
Death of Executive. This Agreement will terminate immediately upon the death of Executive, and in such case, the surviving named beneficiary or Executive’s estate shall receive any compensation earned and unpaid as of the date of Executive’s death. Both Company and Executive or his estate, trustee or personal representative (as the case may be) shall not be entitled to claim any compensation for any and all loss or damage as a result of such early termination and shall have no claim whatsoever for any part of any future compensation that would have been paid to Executive for the remainder of Term from the date of termination.

 

	
6.5

	
Resignation by Executive. In the event that Executive voluntarily resigns after the Initial Term as an employee of Company by giving the 120 days notice referred to in Article 2, all obligations of Company under this Agreement shall terminate on the effective date of such resignation other than Company’s obligations under Article 10 and those obligations accrued prior to the termination date.

 

	
7.

	
Expenses. The T&E expenses of Executive incurred in connection with the conduct of Company’s business shall be paid as provided in Schedule B.

 

	
8.

	
Devotion to business. Throughout Executive’s employment pursuant to this Agreement, Executive will devote 100% of Executive’s professional and business hours and Executive’s undivided attention to the business and affairs of Company and its divisions and affiliates, except as otherwise set forth in this Agreement. Nothing in this Agreement will preclude Executive from devoting reasonable periods as may be required for outside activities and engagements that will not interfere with Executive’s performance of her duties hereunder and will not reflect adversely on Company, and that are not inconsistent with the mission or purposes of Company, including, but not limited to, such activities as the following: (a) service as a director, trustee, or member of a committee of any organization involving no
conflict of interest with the interests of Company; (b) fulfilling speaking engagements, teaching at continuing education seminars, or fulfilling other professional or business educational opportunities; and/or (c) engaging in charitable and community activities that are not inconsistent with the mission and purposes of Company.

 

  

  

 

	
9.

	
Restrictive Covenants.

 

	
9.1

	
Competition. Executive agrees that while this Agreement is in effect, and for a period of one year after its termination, Executive will not, without the written consent of Company, engage in, directly or indirectly, either as principal, agent, proprietor, director, officer, employee or consultant, or participate in the ownership, management, operation or control of any business, offering a board portal product in those countries in the Asia Pacific Region where a client of Company is using the Diligent Boardbooks Product during the Term or at the date of termination of this Agreement. A business competitive with the business of Company shall include a business that manufactures, provides or markets software for digital board books, regardless of how delivered. Nothing in this section shall prevent Executive from purchasing
securities of any business whose securities are regularly traded on any national securities exchange, or in the over-the-counter market; provided that such purchases shall not result in Executive owning, directly or indirectly, at any time, one percent (1%) or more of the voting securities of any entity engaged in any business competitive to that carried on by Company at the termination of this Agreement.

 

	
9.2

	
Recruitment of Clients. Executive agrees that she will not, while this Agreement is in effect and for a period of one year thereafter, directly or indirectly, individually or in concert with other persons, aid or endeavor to solicit or induce customers/clients of Company (with whom Executive or a Sales Assistant had contact while at Company) to obtain from another person or entity products or services competitive with the products or services then sold or provided by Company.

 

	
9.3

	
Confidential Information. Executive agrees that she will not, while this Agreement is in effect or at any time thereafter, use or disclose to any unauthorized person any trade secrets or other confidential information of Company, any of its clients or its affiliates. Executive acknowledges and agrees that trade secrets and other confidential information, whether created by Executive in connection with her employment or by others, constitute Company’s sole and exclusive property. For purposes of this section, the term “confidential information” includes, without limitation, all documents, materials and other information, whether in oral, written or electronic form, that have been or will be furnished by or on behalf of Company or a client to Executive (or that have been or will be created for, or submitted
to, Company while Executive is employed by Company), and includes, without limitation, all client data stored on its Boardbooks site, all notes, analyses, compilations, materials, manuscripts, books, pamphlets, tapes, CDs, products, product information, mailing lists, customer/client information and customer/client lists, business plans, business methods, web site designs, technology information, software, source code, pricing information, and any studies or other documents or materials prepared by the Executive which contain or reflect all or any portion of the originally disclosed materials. Notwithstanding the foregoing, Confidential Information does not include information that: (i) was or becomes generally available to the public other than as a result of a disclosure by Executive or Executive’s agents; or (ii) becomes available to Executive on a non confidential basis from an independent source without breach of any confidentiality obligations. or (iii) which Executive is
required to disclose under applicable laws or regulations or in connection with judicial or administrative proceedings, provided that to the extent possible Executive shall notify Company if compelled to disclose confidential information, prior to its disclosure, so as to permit Company an opportunity to seek a protective order or other appropriate relief it deems prudent. Executive will return all documents and other tangible evidence related to Company’s trade secrets and any confidential information on termination of this Agreement with or without cause. No breach or alleged breach of this Agreement by Company shall alter the obligations of Executive set forth in this Article. When Company is used in this Article 9.3, it shall also include Parent.

 

  

  

 

	
9.4

	
Right to Injunctive Relief and Other Remedies. Executive agrees that the restrictions contained in Article 9 are necessary for the protection of Company and its Parent and any breach thereof may cause Company or Parent irreparable harm for which there may not be adequate remedy at law. Executive consents in the event of such breach to the issuance of injunctive or other equitable relief in favor of Company restraining the breach of the Article 9 covenants by any court having jurisdiction. Executive agrees that the rights of Company to obtain an injunction shall not be considered a waiver of Company’s rights to assert any other remedy it may have at law or in equity.

 

	
9.5

	
Survival of Provisions. The provisions of this Article 9 shall survive termination of this Agreement.

 

	
10.

	
Non-Disparagement. During the term of this Agreement and thereafter, Executive shall not, directly or indirectly, disparage or make negative, derogatory or defamatory statements about Company or Parent, their business activities, their clients, or any of their directors, officers, employees, affiliates, agents, or representatives or any of them, to any person or business entity. Neither Parent, Company nor their directors, officers, employees, affiliates, agents and representatives shall, directly or indirectly, disparage or make negative, derogatory or defamatory statements about Executive. Except pursuant to a subpoena validly issued or enforced by a court, arbitrator, agency, or other governmental body of competent jurisdiction, or in response to a valid investigative demand by a governmental body, neither Executive nor
Company nor Parent (including any of their directors, officers, employees, affiliates, agents and representatives) will testify, consult, cooperate or otherwise communicate with any other person concerning any legal proceeding, judicial or administrative, against or adverse to Executive, Parent or Company. Executive, Parent and Company shall give prompt notice (i.e., no later than five (5) business days following receipt) to the other of any such subpoena or investigative demand before taking any action in response thereto.

 

The provisions of this Article 10 shall survive termination of this Agreement.

 

	
11.

	
Intellectual Property Rights. Executive agrees that all copyright and all other intellectual, moral, and proprietary rights (collectively, the “Intellectual Property Rights”) conceived of or developed by Executive during the Term of Executive’s employment with Company, whether alone or jointly with others and whether during working hours or otherwise, which relate to the business or interests of Company shall be Company’s exclusive property. Executive shall (i) promptly disclose in writing to Company each Intellectual Property Right related to the business or interests of Company that is conceived or developed by Executive during the term of Executive’s employment with Company, (ii) assign all rights to such Intellectual Property Rights to
Company and (iii) assist Company, at Company’s expense, in every way to obtain and/or protect any patents, trademarks or copyrights on such Intellectual Property Rights.

 

  

  

 

	
12.

	
Miscellaneous.

 

	
12.1

	
Severability. If any provision of this Agreement shall be adjudicated to be invalid, it shall not affect the remaining provisions of this Agreement. In addition, if any provision of this Agreement shall be adjudicated to be invalid as it relates to the restrictive covenants in Article 9, such provision shall be modified to provide for the maximum restriction on Executive that is lawful as, for example, by decreasing the geographical area or duration of any such restriction.

 

	
12.2

	
Further assurances. Each of Company and Executive agrees, at the expense of Company, to do such acts and execute such documents as are reasonably necessary to implement fully her or its respective covenants under this Agreement.

 

	
12.3

	
Succession. This Agreement shall extend to and be binding upon Executive and her heirs, administrators and executors and upon Company and its successors and assigns.

 

	
12.4

	
Entire agreement; waiver. This Agreement contains the entire and only agreement between Company and Executive with respect to the subject matter hereof. This Agreement supersedes all prior representations, agreements and understandings, whether oral or written, upon the subject matter hereof. All waivers and modifications of this Agreement shall be in writing and signed by the party against whom enforcement of such waiver or modification is sought. No waiver or failure or delay by either party to enforce a right set forth in this Agreement shall operate as a waiver of any term or condition of this Agreement as applied to the same or similar circumstances occurring thereafter.

 

	
12.5

	
Governing Law and Jurisdiction. This Agreement shall be construed and interpreted in accordance with the laws of Singapore and is subject to the non-eclusive jurisdiction of the Singapore courts.

 

	
12.6

	
Notices. Any notice or other communication required or permitted to be made or given to either party pursuant to this Agreement shall be sufficiently made or given on the date of mailing if the notice or communication is in writing and is delivered by hand or sent to the recipient by nationally recognized courier or certified mail, return receipt requested, addressed to the intended recipient at his or its address set forth in the preamble to this Agreement or to such other address as the recipient shall have designated by written notice given to the party providing notice.

 

	
12.7

	
Legal Fees. Executive, and her heirs, shall be entitled to reasonable attorney’s fees incurred in the fully successful defense or enforcement of any of their rights hereunder.

 

	
12.8

	
Article Headings. The article headings in this Agreement are for convenience of reference only and shall not be considered a part of, or modify, explain, enlarge, restrict or in any way affect, the construction or interpretation of any provisions of this Agreement.

 

	
12.9

	
Counterparts. This Agreement may be executed in counterparts. Facsimile and electronic signatures shall be treated as originals for all purposes of this Agreement.

  

  

 

	
12.10

	
Condition precedent. This Agreement is subject, as a condition precedent, to approval by the Company’s Board of Directors. This Agreement shall be submitted to the Board at a meeting to be held on September 22, 2010.

 

WITNESS the signatures of the parties hereto as of the date first written above.

 

	  	
Diligent APAC Board Services Pte. Ltd.

	  	Executive:
	  	  	  	ESLINDA HAMZAH
	  	  	  	  	  
	
By: 

	
/s/ Alessandro Sodi

	  	
By: 

	
/s/ Eslinda Hamzah

	 	 	 	 	 
	  	
  Alessandro Sodi

	  	  	
  Eslinda Hamzah

	  	
  Director

	  	  	  

  

  

 

SCHEDULE A

 

ACCOUNTABILITIES

 

	
Job Title:

	
Managing Director

	
Function:

	
Executive shall be responsible for managing the Company and directing Company’s sales efforts in the Asia Pacific Region through sales calls on prospective clients by the Sales Personnel and the management of the sales staff while working with the regional account managers.

	
Reports to:

	
Board of Company and President/CEO of Parent.

Accountabilities:

	
  

	
§

	
Executive is principally responsible for securing sales by the Company of the Parent’s Boardbook product either directly, or indirectly, through the Sales Assistants in the Asia Pacific Region.

	
  

	
§

	
Executive will manage all of the affairs of the Company, including without limitation, managing the Company’s employees and the sales efforts of the Company.

	
  

	
§

	
Executive will closely supervise the efforts of the Sales Assistants and will coordinate with the account managers. Executive will report to the President and CEO of the Parent (“President”) any issues arising in connection with such employees.

	
  

	
§

	
Prior to the Effective Date of this Agreement, Executive and the President shall agree on the objectives for the Company for the Initial Term. Thereafter, prior to the commencement of each calendar year, Executive and President shall establish the Asia Pacific Region objectives for the ensuing calendar year, including without limitation, the number of new service agreements and the license fees to be received for such new agreements.

	
  

	
§

	
Executive will create business strategies for effectively selling the Diligent Boardbooks product in the Asia Pacific Region and secure the approval of the President of such business strategies prior to their implementation.

	
  

	
§

	
Executive will confer with the President on the number of Sales Assistants, account managers and administrative assistants to be employed by the Company. The President must approve the number of staff as well as those individuals proposed to be hired by Executive.

	
  

	
§

	
Executive will submit to the President on a monthly basis by the 10th of each month a report of the activities and results for the Asia Pacific Region for the immediately prior month. The report will contain the details specified from time to time by the President.

 

  

  

 

	
  

	
§

	
At the request of the President and/or Chairman of Parent’s Board, Executive shall participate in any Board meeting of the Parent for which such request has been made. Executive may be required to make presentations to the Parent’s Board regarding the Company from time to time.

	
  

	
§

	
Executive will work with the Chief Financial Officer in connection with the preparation of the Company’s budget and the compilation of the Company’s financial statements and reports. Executive shall submit such information as reasonably requested by the Chief Financial Officer in connection with such budget, financial statements and reports.

	
  

	
§

	
Executive shall use the marketing materials prepared by Parent to promote the Diligent Boardbooks product in the Asia Pacific Region. Executive may propose additional marketing materials which will be subject to the approval of the President.

	
  

	
§

	
In connection with signing any newclients, Executive will use the Service Agreement as agreed with the General Counsel of Parent in negotiating the business relationship with a potential client. Executive will not agree to any substantial changes in such Service Agreement with a potential client without the approval of the President and/or General Counsel of Parent, as appropriate.

	
  

	
§

	
Executive has been provided with a pricing calculator which will establish the minimum configuration pricing for any proposed client. Executive shall not agree to a reduction of more than ten (10%) percent of the minimum configuration price without the approval of the President.

	
  

	
§

	
Executive shall, at all times during the term of this Agreement, conduct herself in a business-like, professional manner and in such a manner so as not to create negative publicity or damage to the business reputation of the Company.

	
  

	
§

	
Executive shall at all times comply with Company’s policies including, without limitation, the Code of Conduct, the Fraud Policy and the Privacy Policy.

  

  

 

SCHEDULE B

 

PAYMENTS BY PARENT, REVENUE SPLIT, EXPENSES AND COMPENSATION

 

1. COLLATERAL AGREEMENT

As stated in Article 4, the Company and Parent have entered into the Collateral Agreement in which Parent grants to Company the right to sell Diligent Boardbooks® in the Asia Pacific Region. The Company shall earn revenues (“Company Revenues”) from Subscription Fees pursuant to Service Agreements on Qualifying Sales (as defined in Paragraph 6 below) of Diligent Boardbooks. The Company will set aside the amounts of the Company’s Revenues specified below (“Designated Company Revenues”) which amounts shall be used solely to pay the amounts due under Paragraphs 2 and 3 below:

	
  

	
(A)

	
Fifty (50%) percent of the Company Revenues attributable to the first year’s annual Subscription Fees received in the first year of a Service Agreement with a new client.

	
  

	
(B)

	
Thirty-five (35%) percent of the Company Revenues attributable to the annual Subscription Fees received in the second year of a Service Agreement with a client.

	
  

	
(C)

	
Twenty (20%) percent of the Company Revenues attributable to the annual Subscription Fees received in the third year of a Service Agreement with a client.

	
  

	
(D)

	
Ten (10%) percent of the Company Revenues attributable to the annual Subscription Fees received in the fourth year and thereafter of a Service Agreement with a client.

 “Subscription Fees” are the annual amount paid by clients pursuant to a Service Agreement for Diligent Boardbooks products which does not include installation fees.

“Service Agreement” means the agreement for Diligent Boardbooks to be entered into between Company and its clients and shall be in the form as agreed with the General Counsel of Parent.

The foregoing notwithstanding, the above percentages representing Designated Company Revenues shall be reduced by the amount, if any, paid to the Singapore Exchange for sales of Diligent Boardbooks in Singapore.

2. SALES ASSISTANTS AND SALES AND MARKETING EXPENSES

The Company may employ assistants for Managing Director who shall make sales of Diligent Boardbooks and who will assist the Managing Director in connection with the Managing Director’s sales (“Sales Assistants”). These Sales Assistants shall be paid the compensation provided in paragraph 4 below. The Company shall also reimburse expenses for travel and entertainment incurred by Managing Director and Sales Assistants and advertising and marketing expenses in the Region (these salary, commissions, travel and entertainment and marketing and advertising expenses are referred to herein as “Sales and Marketing Expenses”).

Company shall apply the Designated Company Revenues received during the Term first to pay all Sales and Marketing Expenses incurred from time to time.

  

  

 

3. COMPENSATION TO EXECUTIVE

Upon payment by Company of all Sales and Marketing Expenses, the remaining amount of the Designated Company Revenues shall be paid to Executive as compensation for Executive’s services as Managing Director of the Company. For the first two years of this Agreement, Company shall pay the amount of any shortfall in Designated Company Revenues to ensure that Managing Director is paid $250,000 in each such year. After the Initial Term, Executive’s sole source of compensation shall be the excess amount of Designated Company Revenues over Sales and Marketing Expenses incurred by the Company during the Term. The Company, at its sole discretion, may, without having any obligation to do so, pay bonuses to Executive. If compensation to the Executive is subject to withholding or other taxes in any jurisdiction, the
payments to Executive shall be reduced by the amounts required to be withheld by the appropriate taxing authority.

4. SALES ASSISTANTS SALARY AND COMMISSION

In addition to Sales Assistants annual salary as established by Company, each Sales Assistant will earn a commission equal to fifty (50%) percent of the Designated Company Revenues attributable to a sale of the Diligent Boardbooks product in the first year of a Service Agreement which was negotiated and closed by the Sales Assistant with a new client. Sales Assistants shall receive fifty (50%) percent of the Designated Company Revenues attributable to the second and third years of a Service Agreement which was negotiated and closed by the Sales Assistant.

5. TRAVEL AND ENTERTAINMENT EXPENSES

Company will reimburse Executive for the expenses incurred by her in the conduct of the Company’s business upon submission of receipts evidencing such expenses.

6. QUALIFYING SALES

Company shall earn Company Revenues for each sale of the Diligent Boardbooks product in the Asia Pacific Region which was closed by the Executive and/or a Sales Assistant, irrespective of where the lead for such transaction arose (referred to herein as a “Qualifying Sale”). By way of example and not limitation, if a U.S. client requests the Diligent Boardbooks product for its Asia Pacific office, and the Executive or a Sales Assistant closes this transaction, then this will be a Qualifying Sale for purposes of Company Revenues for the transaction. If, however, a lead for a possible sale of the Diligent Boardbooks product in Asia comes to an employee of Parent and the transaction is closed by an employee of Parent who is not the Executive or a Sales Assistant, then this transaction shall not be a
Qualifying Sale for revenue purposes to the Company. If a lead originates outside of Asia Pacific and a sale is accomplished through the joint efforts of an employee of Parent outside of Asia Pacific and the Executive or a Sales Assistant, then the Company and appropriate region shall agree in advance on the split of the revenues received for attribution to the specific Region and the Company.

  

  

 

7. ACCOUNT MANAGERS

Account Managers are responsible for coordination with accounts once they have been signed and account managers do not sign new accounts, and, hence, they are not Sales Assistants.

8. STOCK COMPENSATION

Pursuant to the Collateral Agreement, Parent shall grant Executive options for 750,000 shares of the Parent’s common stock at the Remuneration and Nominations Committee meeting in January 2011, to be effective after Executive’s commencement of employment. The stock options will vest over three years for exercise purposes at 250,000 shares per year on the later of the anniversary date of Executive’s employment and the anniversary date of the grant. The exercise price will be established as the closing market price on the day prior to the date of the grant. The terms governing the stock options are set forth in the Stock Option Agreement which each employee who is granted stock options must sign.

  

  

 

SCHEDULE C

 

The following are the benefits to be provided to Executive in connection with her employment:

 

Insurance Benefits:

Health Insurance: Full family health insurance coverage will be provided to the Executive on a contributory health insurance basis. Executive and Company shall agree on a medical plan available to Executive and other Company employees in Asia and Company shall pay ninety (90%) percent of the premiums for medical coverage allocable to Executive, only, on a monthly basis up to US$600.00 per month. Executive shall be responsible for any amounts attributable to adding a spouse or other dependents to the insurance. Executive shall be responsible for all premium amounts above Company’s payment.

 

Sick Leave:

Executive shall be entitled to three working days sick leave per year.

 

Maternity and Childcare Leave:

The provisions of the Singapore Employment Act (Cap. 91) and the Children Development Co-Savings Act (Cap. 38A) apply.

 

Vacation:

The Executive will be entitled to a minimum of four (4) weeks paid vacation per year - plus public holidays and personal days - as per Company policy.

 

Tools:

Desktop and laptop computers and business cards will be provided by Company as required.

 

Central Provident Fund:

Company shall make any employer contributions required to be made by it to the Central Provident Fund in connection with Executive’s employment.

 

Reservation of Rights:

Nothing in this Schedule C shall be deemed to limit the ability of Company to adopt, amend, revoke or replace any fringe benefit plans or Company policies or from taking any action in connection therewith that is applied uniformly to all executive employees of Company.

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