Document:

Exhibit
10.10

 

Immuron
Limited

ACN
063 114 045

 

Executive
Share Option Plan

 

Middletons
Lawyers

 

	Melbourne
        office

        Ref:AXG

         

    	 		

     

    

 

Table
of Contents

 

	1.	The
    plan	1
	 	 	 
	2.	Eligibility	1
	 	 	 
	3.	Participation	1
	3.1	Invitation to participate	1
	3.2	Application form	1
	3.3	Participant bound
    by application form, rules and constitution	2
	 	 	 
	4.	Grant
    of options	2
	4.1	Grant of options	2
	4.2	No payment for
    options	2
	4.3	Options non-transferable	2
	4.4	Option certificate	2
	4.5	Limit on issues
    of new shares	2
	 	 	 
	5.	Exercise
    of options	3
	5.1	Manner of exercise
    of options	3
	5.2	Exercise conditions	3
	5.3	Control event	3
	5.4	Issue or transfer
    of shares on exercise	3
	5.5	Shares rank equally	3
	5.6	Quotation on ASX	3
	5.7	Financial assistance	4
	 	 	 
	6.	Cessation
    of employment and lapsing of options	4
	6.1	Resignation, retirement,
    redundancy and Permanent Disability	4
	6.2	Death	4
	6.3	Cessation for any
    other reason	4
	6.4	Liquidation	5
	6.5	Fraud	5
	6.6	Forfeiture conditions	5
	6.7	Lost Options	5
	6.8	End of exercise
    period	5
	 	 	 
	7.	Changes
    in circumstances	5
	7.1	Reconstruction	5
	7.2	Participation in
    new issues	6
	7.3	Adjustment to number
    of underlying securities - bonus issues	6
	 	 	 
	8.	Amendment	6
	 	 	 
	9.	Powers
    of the Board	6
	9.1	Powers of the Board	6
	9.2	Indemnification	6
	9.3	Commencement of
    Plan	7
	9.4	Termination or
    suspension of Plan	7
	9.5	Resolution to terminate,
    suspend, supplement or amend	7
	 	 	 
	10.	Powers
    of the administrator	7
	10.1	Appointment of
    administrator	7

 

    	 		

     

    

 

Table
of Contents (ctd)

 

	10.2	Role
    of administrator	7
	 	 	 
	11.	Contracts of
    employment and other employment rights	7
	11.1	Discretion of board	7
	11.2	No right to grant
    of options	7
	11.3	Calculation of employee
    benefits	7
	11.4	No right to future
    employment etc.	7
	11.5	Acknowledgment by
    Participant	8
	 	 	 
	12.	Connection with
    other plans	8
	 	 	 
	13.	Notices	8
	 	 	 
	14.	General	8
	 	 	 
	15.	Plan costs	8
	15.1	Plan Costs	8
	15.2	Reimbursement	8
	 	 	 
	16.	Overseas Eligible
    Persons	8
	 	 	 
	17.	Governing law	9
	 	 	 
	18.	Definitions and
    interpretation	9
	18.1	Definitions	9
	18.2	Interpretation	11

 

    	 	2	

     

    

 

Immuron
Limited Executive Share Option Plan

 

		1.	The
                                         plan

 

The
purpose of the Plan is to provide Eligible Persons with an incentive to remain with or continue the provision of services to,
the Group and to improve the longer-term performance of the Company and its return to shareholders. It is intended that the Plan
will enable the Group to retain and attract skilled and experienced employees, consultants and advisers by providing them with
additional motivation to make the Group more successful.

 

The
Plan shall only apply to Options to acquire Shares in the Company

 

		2.	Eligibility

 

The
Board may determine at any time that any Eligible Person is not entitled to participate in the Plan if the Eligible Person’s
participation would be unlawful.

 

		3.	Participation

 

		3.1	Invitation
                                         to participate

 

Subject
to these rules, the Board may invite any Eligible Person selected by it to complete an Application Form relating to a specified
number of Options allocated to that Eligible Person by the Board. The Eligible Person may by notice in writing to the Board accept
a lesser number of Options specified in the offer and may nominate a Permitted Nominee to accept the whole or lesser number of
Options offered. The Board must approve in writing any Options being granted to a Permitted Nominee.

 

		3.2	Application
                                         form

 

The
Board must give to each Eligible Person invited to complete an Application Form, an Application Form together with the following
information relating to the Options allocated to the Eligible Person:

 

		(a)	the
                                         date of grant or intended date of grant;

 

		(b)	the
                                         total number of Options to be granted;

 

		(c)	the
                                         Exercise Period;

 

		(d)	the
                                         Exercise Price or the method of determining the Exercise Price;

 

		(e)	the
                                         Exercise Conditions attaching to the Options (if any);

 

		(f)	the
                                         Disposal Restrictions attaching to any Shares issued on exercise (if any);

 

		(g)	the
                                         Forfeiture Conditions attaching to the Options (if any);

 

		(h)	any
                                         other terms and conditions relating to the grant which, in the opinion of the Board,
                                         are fair and reasonable but not inconsistent with these rules;

 

		(i)	in
                                         respect of the initial grant made to an Eligible Person, a summary, or a copy of these
                                         rules; and

 

    	 		

     

    

 

		(j)	any
                                         other information or documents required to be notified by the Corporations Act or the
                                         Listing Rules.

 

		3.3	Participant
                                         bound by application form, rules and constitution

 

By
completing and returning the Application Form, a Participant agrees to be bound by the terms of the Application Form, these rules
and the Constitution.

 

		4.	Grant
                                         of options

 

		4.1	Grant
                                         of options

 

The
Board may grant Options to a Participant on acceptance of a duly signed and completed Application Form.

 

		4.2	No
                                         payment for options

 

Unless
otherwise determined by the Board, no payment is required for the grant of Options under the Plan.

 

		4.3	Options
                                         non-transferable

 

An
Option granted under the Plan is not capable of being transferred or encumbered by a Participant or a Permitted Nominee, unless
the Board determines otherwise. The Company has no obligation to apply for quotation of the Options on the ASX.

 

		4.4	Option
                                         certificate

 

The
Company must issue a Certificate to a Participant in respect of the Options granted to that Participant. The Company must comply
with the provisions of the Constitution, the Listing Rules and the Corporations Act relating to the issue of the Certificate.

 

		4.5	Limit
                                         on issues of new shares

 

The
Company shall not offer or issue Options to any Eligible Person in accordance with the Plan if the total number of Shares the
subject of Options when aggregated with:

 

		a)	the
                                         number of options to be granted;

 

		b)	the
                                         number of Shares which would be issued if all current Options granted under any Group
                                         company employee incentive scheme (including the Plan) were exercised;

 

		c)	the
                                         number of Shares which would have issued as a result of the exercise of Options granted
                                         under any Group company employee incentive scheme (including the Plan) of the Company
                                         where Options were granted during the preceding five years; and

 

		d)	all
                                         other Shares issued pursuant to any Group company employee incentive scheme (including
                                         the Plan) of the Company during the preceding five years,

 

would
exceed 5% of the total number of issued shares as at the time of the proposed offer.

 

    	 	2	

     

    

 

		5.	Exercise
                                         of options

 

		5.1	Manner
                                         of exercise of options

 

The
exercise of any Option granted under the Plan may only be affected in such form and manner as the Board may prescribe.

 

		5.2	Exercise
                                         conditions

 

Subject
to rules 5.3 and 6, an Option granted under the Plan may only be exercised:

 

		(a)	if
                                         all the Exercise Conditions have been met;

 

		(b)	if
                                         the Exercise Price has been paid to the Company or as the Company may direct; and

 

		(c)	within
                                         the Exercise Period relating to the Option.

 

An
Option granted under the Plan may not be exercised once it has lapsed.

 

		5.3	Control
                                         event

 

Notwithstanding
rule 5.2, the Board may determine that an Option may be exercised, whether or not any or all applicable Exercise Conditions have
been met, on the occurrence of a Control Event.

 

		5.4	Issue
                                         or transfer of shares on exercise

 

Following
exercise of an Option by a Participant, the Company must, within such time as the Board determines, allot and issue or procure
the transfer to the Participant of the number of Shares in respect of which the Option has been exercised, credited as fully paid.

 

		5.5	Shares
                                         rank equally

 

Subject
to the satisfaction of any applicable Disposal Restrictions, Shares allotted and issued under the Plan will rank equally in all
respects with all other Shares from the date of allotment and issue, including:

 

		(a)	voting
                                         rights; and

 

		(b)	entitlements
                                         to participate in:

 

		(i)	distributions
                                         and dividends; and

 

		(ii)	future
                                         rights issues and bonus issues,

 

where
the record date for determining entitlements falls on or after the date of allotment and issue.

 

		5.6	Quotation
                                         on ASX

 

The
Company must apply for quotation on the official list of the ASX of Shares allotted and issued on the exercise of Options as soon
as practicable after the allotment and issue of those Shares, so long as Shares are quoted on the official list of ASX at that
time.

 

    	 	3	

     

    

 

		5.7	Financial
                                         assistance

 

The
Company may financially assist a person through the provision of loan funds on a fully recourse basis to pay for the grant of
an Option, to pay any Exercise Price for an Option or to acquire Shares under the Plan, subject to compliance with the provisions
of the Corporations Act and the Listing Rules relating to financial assistance. Shares issued through the exercise of Options
and paid for with loan funds provided by the Company will be placed in escrow and will have Disposal Restrictions placed on those
Shares.

 

		6.	Cessation
                                         of appointment/employment and lapsing of options

 

		6.1	Resignation,
                                         retirement, redundancy and Permanent Disability

 

If
a Participant ceases to be appointed as director or employed by or, in the case of a consultant, contracted by any member of the
Group due to his or her resignation, retirement, retrenchment by reason of redundancy or Permanent Disability:

 

		(a)	all
                                         Options granted to that Participant as at the date of cessation which are Vested Options
                                         may be exercised by that Participant in the 6 month period following the date of
                                         cessation of appointment or employment (and the Exercise Period is amended accordingly),
                                         after which those Vested Options will lapse; and

 

		(b)	all
                                         other Options granted (but not vested) to that Participant will lapse, unless the
                                         Board determines otherwise, in which event the Board will determine the period within
                                         which those other Options may be exercised following the date of cessation of appointment
                                         or employment (and the Exercise Period is amended accordingly), after which those other
                                         Options will lapse.

 

		6.2	Death

 

If
a Participant ceases to be appointed or employed by or contract to any member of the Group due to his or her death:

 

		(a)	all
                                         Options granted to that Participant as at the date of cessation which are Vested Options
                                         may be exercised in the 12 month period following the date of cessation of appointment
                                         or employment (and the Exercise Period is amended accordingly), after which those Vested
                                         Options will lapse; and

 

		(b)	all
                                         other Options granted (but not vested) to that Participant will lapse, unless the Board
                                         determines otherwise, in which event the Board will determine the period within which
                                         those other Options may be exercised following the date of cessation of appointment or
                                         employment (and the Exercise Period is amended accordingly), after which those other
                                         Options will lapse.

 

 

 

    	 	4	

     

    

 

		6.3	Cessation
                                         for any other reason

 

If
a Participant ceases to be appointed, employed or in the case of a consultant engaged by any member of the Group for any reason
other than those contemplated by rules 6.1 and 6.2:

 

		(a)	all
                                         Options granted to that Participant as at the date of cessation which are Vested Options
                                         and which have been vested for a period of six months prior to the date of cessation
                                         may be exercised in the 3 month period following the date of cessation of appointment
                                         or employment (and the Exercise Period is amended accordingly), after which those Vested
                                         Options will lapse; and

 

		(b)	all
                                         other Options granted (but not vested) to that Participant will lapse, unless the Board
                                         determines otherwise, in which event the Board will determine the period within which
                                         the Options may be exercised following the date of cessation of appointment or employment
                                         (and the Exercise Period is amended accordingly), after which the Options will lapse.

 

		6.4	Liquidation

 

On
Liquidation, all Options which are not Vested Options will lapse.

 

		6.5	Fraud

 

If,
in the opinion of the Board, a Participant (or, where a Participant is a person nominated by an Eligible Person, the employee
or director who nominated the Participant) has acted fraudulently or dishonestly, the Board may determine that any Option granted
to that Participant should lapse, and the Option will lapse accordingly.

 

		6.6	Forfeiture
                                         conditions

 

An
Option will lapse on the occurrence of a Forfeiture Condition relating to that Option, unless the Board determines otherwise.

 

		6.7	Lost
                                         Options

 

A
Participant may submit a request to the Board that an Option granted to that Participant should lapse. On receipt of that request,
the Board may determine that the Option should lapse, in which case the option will lapse accordingly.

 

		6.8	End
                                         of exercise period

 

If
an Option has not lapsed earlier in accordance with this rule 6, it will lapse at the end of the Exercise Period.

 

		6.9	Financial
                                         assistance on cessation of appointment/employment

 

Where
the expiry dates of vested options are varied due to the circumstances set out in 6.1(a), 6.1(b), 6.2(a) and 6.2(b) above the
Board may at its discretion provide financial assistance in accordance with clause 5.7 to the Eligible Person or the Eligible
Person’s representative.

 

		7.	Changes
                                         in circumstances

 

		7.1	Reconstruction

 

In
the event of any reconstruction (including consolidation, subdivision, reduction, capital return, buy back or cancellation) of
the share capital of the Company, the number of Options to which each Participant is entitled and/or the Exercise Price of those
Options must be reconstructed in accordance with the Listing Rules. Options must be reconstructed in a manner which will not result
in any additional benefits being conferred on Participants which are not conferred on other shareholders of the Company.

 

    	 	5	

     

    

 

		7.2	Participation
                                         in new issues

 

Subject
to the Listing Rules, a Participant is only entitled to participate (in respect of Options granted under the Plan) in a new issue
of Shares to existing shareholders generally if the Participant has validly exercised his or her Options within the relevant Exercise
Period and become a Shareholder prior to the relevant record date, and is then only entitled to participate in relation to Shares
of which the Participant is the registered holder.

 

		7.3	Adjustment
                                         to number of underlying securities - bonus issues

 

If
there is a Bonus Issue or any other pro rata issue to the holders of Shares, the terms for all existing Options on issue will
be amended in the manner provided by the Listing Rules (including without limitation under Chapter 6 of the Listing Rules).

 

		8.	Amendment

 

Subject
to the Listing Rules, these rules may be amended or supplemented by resolution of the Board. Unless the resolution of the Board
expressly states otherwise, any amendment or supplement to these rules will not apply to any Options granted under these rules
which have not yet been exercised.

 

		9.	Powers
                                         of the Board

 

		9.1	Powers
                                         of the Board

 

The
Plan will be managed by the Board, which will have power to:

 

		(a)	determine
                                         appropriate procedures for the administration of the Plan consistent with these rules;

 

		(b)	resolve
                                         conclusively all questions of fact or interpretation arising in connection with the Plan;

 

		(c)	determine
                                         matters falling for determination under these rules in its discretion having regard to
                                         the interests of and for the benefit of the Company;

 

		(d)	exercise
                                         the discretions conferred on it by these rules or which may otherwise be required in
                                         relation to the Plan; and

 

		(e)	delegate
                                         to any one or more persons (for such period and on such conditions as it may determine)
                                         the exercise of any of its powers or discretions arising under the Plan.

 

		9.2	Indemnification

 

The
Company must indemnify, and keep indemnified, to the full extent permitted by law, each person who is or has been a director or
alternate director and an officer of the Company against all proceedings, actions, claims, demands, losses, liabilities, damages,
costs and expenses which may be made, brought against, suffered or incurred by the person arising directly or indirectly out of
or in connection with the administration of the Plan.

 

    	 	6	

     

    

 

		9.3	Commencement
                                         of Plan

 

The
Plan will take effect on and from such date as the Board may resolve.

 

		9.4	Termination
                                         or suspension of Plan

 

The
Board may terminate or suspend the operation of the Plan at any time.

 

		9.5	Resolution
                                         to terminate, suspend, supplement or amend

 

In
passing a resolution to terminate or suspend the operation of the Plan or to supplement or amend these rules, the Board must consider
and endeavour to ensure that there is fair and equitable treatment of all Participants.

 

		10.	Powers
                                         of the administrator

 

		10.1	Appointment
                                         of administrator

 

The
Board may appoint an Administrator and may determine the terms and conditions of the Administrator’s appointment. The Board
may remove the Administrator.

 

		10.2	Role
                                         of administrator

 

The
Administrator must administer the Plan in accordance with these rules and any procedures determined by the Board and agreed to
as between the Board and the Administrator.

 

		11.	Contracts
                                         of employment and other employment rights

 

		11.1	Discretion
                                         of board

 

It
is a condition of these rules that the Plan may be terminated at any time at the discretion of the Board and that no compensation
under any employment contract will arise as a result.

 

		11.2	No
                                         right to grant of options

 

Participation
in the Plan does not confer on any Eligible Person any right to a grant of Options.

 

		11.3	Calculation
                                         of employee benefits

 

The
value of the Options do not increase a Participant’s income for the purpose of calculating any employee benefits (for example
in calculating holiday pay, salary entitlements on termination).

 

		11.4	No
                                         right to future employment etc.

 

Participation
in the Plan does not confer on any Participant any right to future employment or engagement as a consultant and does not affect
any rights which the Company may have to terminate the employment of any Participant.

 

    	 	7	

     

    

 

		11.5	Acknowledgment
                                         by Participant

 

It
is acknowledged and accepted by each Participant that the terms of the Plan do not form part of the terms and conditions of the
Participant’s employment contract, nor do the terms of the Plan constitute a contract or arrangement (including any related
condition or collateral arrangement) in relation to the Participant’s employment contract.

 

		12.	Connection
                                         with other plans

 

Unless
the Board otherwise determines, participation in the Plan does not affect, and is not affected by, participation in any other
incentive or other plan operated by the Company unless the terms of that other plan provide otherwise.

 

		13.	Notices

 

Any
notice or direction given under these rules is validly given if it is handed to the person concerned or sent by ordinary prepaid
post to the person’s last known address or given in any reasonable manner which the Board from time to time determines.

 

		14.	General

 

Notwithstanding
any rule, Shares may not be allotted and issued, acquired, transferred or otherwise dealt with under the Plan if to do so would
contravene the Corporations Act, the Listing Rules, or any other applicable laws.

 

		15.	Plan
                                         costs

 

		15.1	Plan
                                         Costs

 

Unless
otherwise determined by the Board, the Company must pay all costs, charges and expenses relating to the establishment and operation
of the Plan, including all costs incurred in or associated with an allotment, issue or acquisition of Shares for the purposes
of enabling Participants to exercise Options granted to them under the Plan.

 

		15.2	Reimbursement

 

The
Company and any Associated Body Corporate of the Company may provide money to the trustee of any trust or any other person to
enable them to acquire Shares to be held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes,
to the extent permitted by the Corporations Act. In addition, the Company may require any Associated Body Corporate to enter into
any other agreement or arrangement as it considers necessary to oblige that Associated Body Corporate to reimburse the Company
for any amounts paid by the Company in connection with this Plan, directly or indirectly, in relation to any employee or director
of that Associated Body Corporate.

 

		16.	Overseas
                                         Eligible Persons

 

The
Company at the Board’s discretion may:

 

		(a)	grant
                                         options to Eligible Persons and Participants who are resident outside of Australia; and

 

    	 	8	

     

    

 

		(b)	make
                                         regulations for the operation of the Plan which are not inconsistent with these rules
                                         to apply to Eligible Persons and Participants who are resident outside of Australia.

 

		17.	Governing
                                         law

 

The
laws of Victoria, Australia, govern these rules.

 

		18.	Definitions
                                         and interpretation

 

		18.1	Definitions

 

In
this document, unless the context requires otherwise:

 

Accounting
Standards means the Australian Accounting Standards from time to time and if and to the extent that any matter is not covered
by Australian Accounting Standards means generally accepted accounting principles applied from time to time in Australia for a
business similar to the Business.

 

Administrator
means the person (if any) selected by the Board to carry out the day to day administration of the Plan as contemplated by
rule 10.1.

 

Application
Form means the form that the Board determines is to be used by an Eligible Person to apply for Options under the Plan.

 

Associated
Body Corporate of the Company means each:

 

		(a)	related
                                         body corporate of the Company, within the meaning of section 50 of the Corporations Act;

 

		(b)	body
                                         corporate that has voting power in the Company of not less than 20%; or

 

		(c)	body
                                         corporate in which the Company has voting power of not less than 20%,

 

where
“voting power” has the meaning in section 610 of the Corporations Act.

 

ASX
means ASX Limited ACN 008 624 691.

 

Board
means the board of directors of the Company or a committee appointed by the board of directors of the Company.

 

Bonus
Issue means a Pro Rata Issue of Shares to holders of Shares for which no consideration is payable by them.

 

Certificate
means, in relation to a Participant, the certificate or statement (in a form approved by the Board) issued to the Participant
which discloses the number of Options entered in the register of Option holders in the name of the Participant.

 

Company
means Immuron Limited ACN 063 114 045.

 

Constitution
means the constitution of the Company.

 

Control
of an entity means having the right:

 

    	 	9	

     

    

 

		(a)	to
                                         vote 50% (or more) of the votes that can be cast on the election or removal of the entity’s
                                         directors;

 

		(b)	to
                                         appoint or remove directors who possess 50% (or more) of the votes exercisable by all
                                         directors of the entity; or

 

		(c)	to
                                         50% (or more) of the profits or distributions of the entity or of its net liquidation
                                         proceeds.

 

For
this definition, if the entity does not have a board of directors, ‘director’ means a member of the entity’s
governing body with a role similar to a board of directors.

 

Control
Event means any of the following:

 

		(a)	an
                                         offer is made by a person for the whole of the issued ordinary share capital of the Company
                                         (or any part as is not at the time owned by the offeror or any person acting in concert
                                         with the offeror) and after announcement of the offer the offeror (being a person who
                                         did not Control the Company prior to the offer) acquires Control of the Company;

 

		(b)	any
                                         other event occurs which causes a change in Control of the Company; or

 

		(c)	any
                                         other event which the Board reasonably considers should be regarded as a Control Event.

 

Corporations
Act means Corporations Act 2001 (Cth).

 

Disposal
Restrictions means, in relation to an Option, the restrictions (if any) determined by the Board that are required to be satisfied
before a Share acquired as a result of the exercise of the Option by the Participant can be sold, transferred or otherwise dealt
with by a Participant.

 

Eligible
Person means an employee, a director of or in the case of a consultant any person engaged to provide services to any member
of the Group who is determined by the Board to be an Eligible Person for the purposes of the Plan, or any other person who is
determined by the Board to be an Eligible Person for the purposes of the Plan.

 

Exercise
Conditions means, in relation to an Option, the period of time, performance hurdles and other conditions (if any) determined
by the Board that are required to be satisfied before the Option can be exercised.

 

Exercise
Period means, in relation to an Option, the period in which the Option may be exercised specified by the Board under rule
3.2, subject to any variation under rules 5.3 and 6.

 

Exercise
Price means the Market Price of a Share determined on the date a participant was invited to complete an Application Form relating
to the Option under rule 3.1 or any other amount that is specified by the Board under rule 3.2, subject to any adjustment under
rule 7.

 

Forfeiture
Conditions means, in relation to an Option, the conditions (if any) determined by the Board that will result in the Option
lapsing if satisfied.

 

Group
means the Company and each Associated Body Corporate of the Company.

 

    	 	10	

     

    

 

Liquidation
means the passing of a resolution for voluntary winding up, or the making of an order for the compulsory winding up of the
Company.

 

Listing
Rules means the listing rules (as defined in the Corporations Act) made or adopted by the ASX.

 

Market
Price means, in relation to an Option, the volume weighted average market price of Shares sold on the ASX on the 5 trading
days immediately before the date of determination.

 

Option
means a right to subscribe for or acquire a Share, subject to any adjustment under rule 7.31 and 7.3.

 

Participant
means an Eligible Person who has been invited to participate in the Plan and any other person who is nominated by that Eligible
Person (following receipt of an invitation by the Board under rule 3.1) and who is determined by the Board to be a Permitted Nominee
for the purposes of the Plan.

 

Permitted
Nominee means if Options are issued to a Permitted Nominee of a Participant, the Participant must, without limiting any provisions
of these rules, ensure that the Permitted Nominee complies with these rules.

 

Permanent
Disability means, in relation to a Participant, the inability, by reason of physical condition, mental illness or accident,
of the Participant to perform substantially all of the duties of the position in which the Participant has been employed or appointed
or engaged (in the case of a consultant) – in any case as determined by the Board.

 

Plan
means the Immuron Executive Share Option Plan established and operated in accordance with these rules.

 

Pro
Rata Issue means an issue which has been offered to all holders of Shares on a pro rata basis.

 

Share
means a fully paid ordinary share in the capital of the Company.

 

Vested
Option means an Option in respect of which all Exercise Conditions have been met or which are otherwise exercisable (including
as contemplated by rules 5.32 and 6).

 

		18.2	Interpretation

 

In
these rules, unless the context otherwise requires:

 

		(a)	a
                                         reference to any thing (including an amount or a provision of this document) is a reference
                                         to the whole and each part of it;

 

		(b)	the
                                         singular includes the plural, and vice versa;

 

		(c)	the
                                         word ‘person’ includes an individual, a body corporate, a firm, an unincorporated
                                         body, a society, an association and an authority;

 

		(d)	a
                                         reference to a particular person includes their legal personal representatives, administrators,
                                         successors, substitutes and permitted assigns;

 

		(e)	a
                                         reference to ‘costs’ includes charges, expenses and legal costs;

 

    	 	11	

     

    

 

		(f)	a
                                         reference to a “rule” or “these rules” is to the rule or these
                                         rules (as the case may be) as amended or replaced;

 

		(g)	a
                                         reference to the Constitution includes a reference to any provision having substantially
                                         the same effect which is substituted for or replaces the Constitution;

 

		(h)	where
                                         a Participant is a director of any member of the Group, but is not also an employee of
                                         any member of the Group, a reference to the employment with any member of the Group of
                                         that Participant is a reference to that Participant holding office as a director of any
                                         member of the Group;

 

		(i)	where
                                         a Participant is a person nominated by an Eligible Person, a reference to the employment
                                         with any member of the Group of that Participant is a reference to the employment with
                                         any member of the Group of that Eligible Person;

 

		(j)	a
                                         Participant does not cease to be employed by any member of the Group where the Participant
                                         ceases to be employed by one member of the Group but commences employment with another
                                         member of the Group provided that the new employment commences within 60 days from the
                                         date of termination or such other period as the Board may determine by notice in writing;

 

		(k)	a
                                         reference to ‘law’ means statute law, common law and equitable principles;

 

		(l)	a
                                         reference to a particular law includes that law and any subordinate legislation (such
                                         as regulations) under it, in each case as amended, replaced, re-enacted or consolidated;

 

		(m)	a
                                         reference to an accounting term is to that term as it is used in the Accounting Standards;

 

		(n)	a
                                         reference to ‘dollars’, ‘$‘or ‘A$’ is to the lawful
                                         currency of Australia;

 

		(o)	a
                                         time means that time in Melbourne, Australia;

 

		(p)	a
                                         reference to a day or a month means a calendar day or calendar month;

 

		(q)	if
                                         a period of time starts from a given day (or event), it is to be calculated exclusive
                                         of that day (or the day the event occurs);

 

		(r)	the
                                         masculine includes the feminine, and vice versa;

 

		(s)	the
                                         meaning of any general language is not restricted by any accompanying example and the
                                         words ‘includes’, ‘including’ ‘such as’ or ‘for
                                         example’ (or similar phrases) are not words of limitation; and

 

		(t)	headings
                                         in this document are for convenience only and do not affect its meaning.

 

If
(but for this rule) a provision of this document would be illegal, void or unenforceable or contravene the law, this document
is to be interpreted as if the provision was omitted.

 

    	 	12ex10-1.htm

Exhibit 10.1

 

	

 

 

February 8, 2017

 

Mr. Jeffrey Jacobowitz

Managing Member

Simcoe Capital Management, LLC

509 Madison Avenue, Suite 2200

New York, NY 10022

 

Dear Jeff:

 

On behalf of Exar Corporation (“Exar”), I am very pleased that you have been invited to join the Board of Directors of Exar (the “Board”). Subject to your execution and delivery of this letter agreement, the Board confirmed your appointment at its upcoming regular meeting on February 7, 2017, upon which your term as Director will officially commence.

 

This letter agreement sets forth the basic terms and conditions that will apply to your service as a Director of Exar:

 

	
A.
	
Board of Directors Compensation Policy; Indemnification and Insurance

 

	 	
1.
	
As a member of the Board, you will receive an annual cash retainer fee for your service on the Board. We refer you to Exar’s definitive proxy statement for 2016 for a complete description of the current cash compensation policy for non-employee directors. You may find a copy of our proxy statement on our website at ir.exar.com or on the SEC website at www.sec.gov. The Board and the Compensation Committee reviews Exar’s cash compensation program for non-employee directors from time to time; and as a result, your annual retainer fee is subject to change consistent with other non-employee directors upon recommendation of the Compensation Committee and approval by the Board. 

 

	 	
2.
	
Subject to approval by the Board or the Compensation Committee, effective on the first trading day of the month following your appointment to the Board (the “Effective Date”), you will receive an option to purchase 40,000 shares of Exar’s Common Stock. This initial option will have an exercise price equal to the closing price of Exar’s Common Stock on the Effective Date and will vest in four equal annual installments over the four-year period following the Effective Date. In addition, subject to approval by the Board of the Compensation Committee, effective on the Effective Date, you will receive 28,000 restricted stock units, which will vest in four annual installments commencing in 2018 of 7,000 units each on, with respect to each year, the earlier to occur of the anniversary of the Effective Date or the annual meeting of stockholders that occurs in such year. The vesting of these awards will be subject to your continued service on the Board and will vest in full upon a change of control of Exar or certain other corporate transactions that result in termination of your service on the Board. 

 

 

	

 

 

 

 

 

Page 2

Jeff Jacobowitz

February 8, 2017

 

 

	 	
3.
	
You will be covered by a Director Indemnification Agreement in the form included with this letter. Please sign both copies of the agreement and return them to my attention in the envelope provided.

 

	 	
4.
	
You will also be covered under Exar’s general D&O Liability Insurance policy. A copy of the general terms and limits of such policy will be part of the Board orientation materials you will receive separately.

 

	 	
5.
	
Exar will also reimburse you for documented reasonable expenses for travel and professional education incurred in connection with your duties as a director.

 

	
B.
	
Election at 2017 Annual Meeting

 

	 	
1.
	
Subject to your and your firm’s compliance with the terms of this letter agreement, the Board will nominate you for election to the Board and recommend a vote in favor of your election by the stockholders at the 2017 Annual Stockholders Meeting (the “2017 Meeting”). Upon election or re-election, as applicable, the term of each Director is to serve until the next annual meeting of stockholders held in the following year. 

 

	 	
2.
	
Upon becoming a Director of Exar, and at all times while serving as a Director of Exar, you covenant and agree: (i) to comply with all reasonably customary policies, procedures, processes, codes, rules, standards and guidelines generally applicable to members of the Board, including, without limitation, Exar’s Code of Conduct, Insider Trading Policy (the “Trading Policy”) and corporate governance guidelines; and (ii) to keep confidential and not disclose, publicly or to any Person, discussions and matters considered in meetings of the Board and its committees or confidential information otherwise received as a Director, unless and until publicly disclosed by Exar. 

 

	 	
3.
	
Corporate Governance Guidelines. Under Exar’s Corporate Governance Guidelines, any director that is elected with less than a majority of the votes cast in an uncontested election shall immediately tender his or her resignation to the Board for its consideration. If this occurs, the Board will evaluate whether the Board should accept the resignation based on a review of whether the individual continues to satisfy the Board’s membership criteria in light of such circumstances and may accept or reject such resignation as it shall deem appropriate and in the best interests of Exar and its stockholders. In addition, pursuant to Exar’s Corporate Governance Guidelines, you are required to promptly notify the Chairman of the Corporate Governance and Nominating Committee, with a copy to the Secretary of Exar, when your employment changes. Any director who retires, is terminated from or otherwise changes his or her present employment, or who materially changes his or her position, should offer to resign from the Board. If this occurs, the Board will evaluate whether the Board should accept the resignation based on a review of whether the individual continues to satisfy the Board’s membership criteria in light of such circumstances and may accept or reject such resignation as it shall deem appropriate and in the best interests of Exar and its stockholders. In addition, the Board has adopted a retirement policy for its Directors, pursuant to which a Director shall submit his or her resignation for the Board’s consideration upon reaching the age of 75 years old. The Board will evaluate whether the Board should accept the resignation based on a review of whether the individual continues to satisfy the Board's membership criteria in light of such circumstances and may accept or reject such resignation as it shall deem appropriate and in the best interests of Exar and its stockholders. Without limiting the generality of your covenants in paragraph B.2 above, you agree to comply with the provisions of this paragraph B.3. 

 

 

	

 

 

 

 

 

Page 3

Jeff Jacobowitz

February 8, 2017

 

 

	
D.
	
Board and Committee Meeting Schedule

 

The Board and each of its Committees hold a regular meeting once per quarter at Exar’s headquarters facilities. Special meetings are held in between the regular meetings whenever a specific item for Board or Committee review or approval is warranted. A schedule of regular Board and Committee meetings for the remainder of this calendar year is enclosed. 

 

	
E.
	
Director Independence and Board Committees 

 

	 	
1.
	
You hereby represent and confirm that you are an “independent director” as such term is defined in Section 303A.02 of the New York Stock Exchange Listed Company Manual (the “NYSE Regulations”), and in particular that you do not meet any of the factors that would otherwise prevent you from being an “independent director” set forth in Section 303A.02(b) of the NYSE Regulations. In addition, you hereby represent and confirm that you meet the standard of independence as set forth in Rule 10A-3(b)(1)(ii) of the Exchange Act.

 

	 	
2.
	
To the extent permitted by law and the NYSE Regulations, you will be eligible and will be considered for Committee membership on the Board to the same extent as other independent members of the Board. 

 

	
F.
	
Additional Covenants and Agreements

 

	 	
1.
	
Except as otherwise requested by the Board, you and your firm shall cause all Voting Securities beneficially owned, directly or indirectly, by you and any other members of the Investor Group (as defined below), or over which any of them exercise control or direction, to be present for quorum purposes and to be voted, at the 2017 Meeting, or any adjournments or postponements thereof, (i) in favor of each Director nominated and recommended by the Board for election at such meeting, (ii) against any stockholder nominations for Director which are not approved and recommended by the Board, (iii) in favor of Exar’s proposal for the ratification of the re-appointment of its current independent registered public accounting firm, (iv) in favor of Exar’s “say-on-pay” proposal, and (v) in favor of an increase to Exar’s current equity incentive plan share reserve that is approved by the Exar Board.

 

	 	
2.
	
The Investor and each of the Affiliates of the Investor agrees that, during the Nomination Period (as defined below), irrespective of any resignation by you from the Board prior to such date, no member of the Investor Group shall, unless specifically requested or authorized in writing by a resolution of a majority of the Directors of Exar (not including you), directly or indirectly, in any manner, alone or in concert with others: 

 

 

	

 

 

 

 

 

Page 4

Jeff Jacobowitz

February 8, 2017

 

 

	 	
(a)
	
except as already in effect as of the date hereof and previously disclosed in the Schedule 13D/A most recently filed with the SEC by the Investor and its Affiliates) with respect to Exar, form, join, encourage, influence, advise or in any way participate in any partnership, limited partnership, syndicate or other group, including, without limitation, any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities or otherwise in any manner agree, attempt, seek or propose to deposit any Voting Securities into any voting trust or subject any Voting Securities to any voting or similar arrangement, other than solely with other members of the Investor Group with respect to the Voting Securities now or hereafter owned by them;

 

	 	
(b)
	
make, or in any way encourage or participate in any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC but without regard to the exclusion set forth in Rule 14a−1(l)(2)(iv) under the Exchange Act) or consents to vote, or seek to advise, encourage or influence any Person with respect to the voting of, any Voting Securities; or (B) otherwise communicate with Exar’s stockholders or others pursuant to Rule 14a −1(l)(2)(iv) under the Exchange Act or otherwise regarding the Board, Exar, or the management, policies, strategies, affairs or business of Exar;

 

	 	
(c)
	
initiate, propose or otherwise “solicit” (as such terms are used in the proxy rules of the SEC) stockholders of Exar for the approval of any stockholder proposal or cause or encourage any Person to initiate any such stockholder proposal; (B) participate in, or take any action pursuant to, any “stockholder access” proposal that may be adopted by the SEC, whether in accordance with proposed Rule 14a−11 under the Exchange Act or otherwise; (C) seek to call, or request the call of, or call a special meeting of the stockholders of Exar; or (D) make a request for a list of Exar’s stockholders or other Exar records;

 

	 	
(d)
	
support or participate in any “withhold the vote” or similar campaign with respect to Exar or the Board, or seek election or appointment to, or representation on, or nominate or propose the nomination of any candidate to the Board, including any nomination of any candidate to stand for election to the Board at the 2017 Meeting, other than you or other Directors nominated by the Board; or seek the removal of any member of the Board;

 

	 	
(e)
	
otherwise take, or make any public disclosure, announcement or statement (including, without limitation, the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) (A) with respect to any intention, plan or arrangement to take (or in support of any intention, plan or arrangement of a third party to take), any action that is inconsistent with, any provision of this Agreement, or (B) that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, Exar, any of its Directors or officers or any individual who has served as a Director or officer of Exar;

 

	 	
(f)
	
enter into any affirmative discussions or communications, or enter into any arrangement, understanding or agreements (whether written or oral) with, or encourage, advise, assist, finance or facilitate, any Person in connection with any of the foregoing, or make any investment in or enter into any arrangement with any other Person that engages, or offers or proposes to engage, in any of the foregoing; or 

 

 

	

 

 

 

 

 

Page 5

Jeff Jacobowitz

February 8, 2017

 

 

	 	
(g)
	
otherwise take, or solicit, cause or encourage others to take, any action that would not be permitted by any of the foregoing.

 

	 	
3.
	
The Investor and each of the Affiliates of the Investor agrees that, for the period commencing on the date of your initial appointment to the Exar Board and ending three (3) years from the date of such appointment, no member of the Investor Group shall purchase or cause to be purchased or otherwise acquire or agree to acquire beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act) of any Common Stock or other securities issued by Exar (or any rights, options or other securities convertible into or exercisable or exchangeable for such securities any obligations measured by the price or value of any securities of Exar or any of its affiliates, including any swaps or other derivative arrangements whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), if in any such case, immediately after the taking of such action, the Investor Group would, in the aggregate, collectively beneficially own, or have an economic interest in, more than 10% of the then outstanding shares of Common Stock of Exar. For the avoidance of doubt, any securities, including any options and restricted stock units, whether vested or unvested or exercised or unexercised, awarded to you in connection with your service as a Director of Exar will be included in the securities holdings beneficially owned by the Investor Group.

 

	 	
4.
	
If at any time while you serve as a Director of Exar (i) you breach any of your obligations under Paragraph B.2 or B.3 above or (ii) any member of the Investor Group fails to comply with any of the terms of Section F of this letter agreement, then, after a period of ten business days to cure any such failure or breach after written notice from Exar, upon the written request of the Board, you agree to resign from the Board immediately, and you will deliver your written resignation to the Board forthwith. Notwithstanding anything to the contrary in this letter agreement, if at any time the Board changes its nomination of you or its recommendation in favor of your election at the 2017 Meeting, the obligations of you and your firm under Paragraph F.1., F.2 and F.3 of this letter agreement will terminate immediately, other than your confidentiality and nondisclosure obligations, which shall survive the termination of this letter agreement and the cessation of your services as a Director.

 

	 	
5.
	
Nothing in this Section F shall limit any actions that may be taken by you acting solely as a Director of Exar consistent with your fiduciary duties as a Director to Exar’s stockholders.

 

	 	
6.
	
You and your firm acknowledge and agree that you have received a copy of the Trading Policy and will be required to comply with the terms of such policy, which will among other things restrict you from disclosing confidential information regarding Exar to the Investor Group or its Affiliates.

 

 

	

  

 

 

 

 

 Page 6

Jeff Jacobowitz

February 8, 2017

 

 

	
G.
	
Miscellaneous

 

	 	
1.
	
The following terms, as used in this letter agreement, have the following meanings:

 

	 	
(a)
	
the terms “Affiliate” and “Associate” have the respective meanings given to such terms in Rule 12b-2 promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall include Persons who become Affiliates or Associates of any Person subsequent to the date of this Agreement;

 

	 	
(b)
	
the terms “beneficial owner” and “beneficially own” have the respective meanings given to such terms in Rule 13d-3 promulgated by the SEC under the Exchange Act;

 

	 	
(c)
	
the terms “Investor” and “your firm” mean Simcoe Capital Management, LLC, a Delaware limited liability company, and the term “Investor Group” means collectively you, the Investor and each of the Affiliates and Associates of the Investor; 

 

	 	
(d)
	
the term “Nomination Period” means the period from the date of this letter agreement until the earlier of: (i) the date on which the Nominating and Corporate Governance Committee notifies you in accordance with this Section G.1(d) that it has resolved not to nominate you for election to the Board at an annual meeting of stockholders to be held in 2018 or thereafter; (ii) if the Nominating and Corporate Governance Committee notifies you in accordance with this Section G.1(d) that it has agreed to nominate you for election to the Board at an annual meeting of stockholders to be held in 2018 or thereafter and within 5 days thereafter you notify Exar that you do not wish to stand for election at such annual meeting and, if you are then serving on the Board, you resign from the Board, the date you provide such notice and, if you are then serving on the Board, resign from the Board, and (iii) the date of the annual meeting of stockholders to be held in 2022. At least 15 days prior to the first date upon which a notice to the Secretary of the Company would be considered timely under the bylaws of the Company for any nomination of persons for election to the Board or proposal of business at any such annual meeting of stockholders to be held in any year after 2017 during the Nomination Period, the Nominating and Corporate Governance Committee will notify you whether it has resolved to recommend you for re-election to the Board at such annual meeting of stockholders. If you resign from the Board after the 2017 Meeting and prior to receiving the notice from the Nominating and Corporate Governance Committee contemplated by this Section G.1(d), the Nomination Period will terminate 10 days prior to the first date upon which a notice to the Secretary of the Company would be considered timely under the bylaws of the Company for any nomination of persons for election to the Board or proposal of business at the next annual meeting of stockholders to be held in 2018 or thereafter following the effective date of your resignation from the Board. 

 

	 	
(e)
	
the terms “Person” or “Persons” mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature; and

 

 

	

  

 

 

 

 

Page 7

Jeff Jacobowitz

February 8, 2017

 

 

	 	
(f)
	
the term “Voting Securities” means Common Stock and any other securities of Exar entitled to vote in the election of Exar Directors, or securities convertible into, or exercisable or exchangeable for Common Stock or such other securities. 

 

	 	
2.
	
This letter agreement shall be governed and construed in accordance with the laws of the State of Delaware, without regard to the conflict of law principles thereof. The parties and their respective Affiliates and Associates irrevocably and unconditionally consent and submit to the jurisdiction of the Court of Chancery of the State of Delaware for purposes of any action, suit or proceeding arising out of or relating to this letter agreement. 

 

	 	
3.
	
This letter agreement shall be binding upon and inure to the benefit of and be enforceable by the parties and their respective successors. No party to this Agreement may assign its rights or delegate its obligations under this letter agreement.

 

	 	
4.
	
This letter agreement constitutes the entire agreement of all the parties and supersedes any and all prior and contemporaneous agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof. Subject to applicable law, this letter agreement may only be amended pursuant to a written agreement executed by all the parties, and no waiver of compliance with any provision or condition hereof and no consent provided for herein shall be effective unless evidenced by a written instrument executed by the party against whom such waiver or consent is to be effective. 

 

	 	
5.
	
The parties agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with the terms hereof and that the parties are entitled to an injunction or specific performance of the terms hereof in addition to any other remedies at law or in equity.

 

Please sign this letter to indicate your acceptance of the proposed terms of your appointment and return it to my attention. In the event you have any questions, please do not hesitate to contact me.

 

Jeff, as Exar’s Chairman of the Board, I look forward to working with you. 

 

Sincerely yours,

 

 

 

Gary Meyers

Chairman of the Board

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