Washington, D.C. 20549
(Amendment No. 1)
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Richard A. Friedman, Esq.
This information statement has been
mailed on or about August __, 2016 to the shareholders of record on July 6, 2016 (the “
Record Date
”) of
SharkReach, Inc., a Nevada corporation (the “
Company
”), in connection with certain actions to be taken
by the written consent of the holders of a majority of the voting power of the outstanding common stock of the Company,
dated as of June 28, 2016. The actions to be taken pursuant to the written consent may be taken on or about August __, 2016,
twenty (20) days after the mailing of this information statement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information
regarding beneficial ownership of the Company’s common stock as of the Record Date by: (i) each person who is known
by us to beneficially own more than 5% of the Company’s common stock; (ii) each of the Company’s officers and directors;
and (iii) all of the Company’s officers and directors as a group.
Beneficial ownership has been determined in
accordance with the rules and regulations of the Securities and Exchange Commission (the “
Commission
”) and
includes voting or investment power with respect to the Company’s shares. Unless otherwise indicated, the persons named
in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned
by them. Common stock beneficially owned and percentage ownership is based on 55,300,000 shares outstanding on the Record Date,
and assumes the exercise of any options or warrants or conversion of any convertible securities held by such person, which are
presently exercisable or will become exercisable within 60 days of the Record Date, if any.
Name and address (1)
|
|
Shares of Common
Stock
|
|
|
Percent of Common
Stock
|
|
|
|
|
|
|
|
|
Steve Smith(2)
|
|
|
16,297,500
|
|
|
|
29.471
|
%
|
|
|
|
|
|
|
|
|
|
Steve Moriya
|
|
|
3,670,500
|
|
|
|
6.637
|
%
|
|
|
|
|
|
|
|
|
|
Jamie Allen
|
|
|
5,197,500
|
|
|
|
9.399
|
%
|
|
|
|
|
|
|
|
|
|
Crown Investment Holdings Inc.
|
|
|
3,984,000
|
|
|
|
7.204
|
%
|
|
|
|
|
|
|
|
|
|
SRI Seller Inc.
|
|
|
2,984,500
|
|
|
|
5.397
|
%
|
|
|
|
|
|
|
|
|
|
All officers and directors as a group
|
|
|
16,297,500
|
|
|
|
29.471
|
%
|
|
(1)
|
The address for the shareholders listed above is c/o the Company at 205 Pier Ave., Suite 101, Hermosa
Beach, California 90254.
|
|
(2)
|
Mr. Smith currently serves as the Company’s President, Chief Executive Officer and sole Director.
|
ACTION I
APPROVAL
OF an amendment to the Company’s Articles of Incorporation
to
increase the authorized common stock of the Company
Shareholders owning 50.3%
of the outstanding shares of the Company’s common stock as of June 28, 2016 have approved an amendment to the
Company’s Articles of Incorporation to increase the authorized common stock of the Company from 200,000,000 shares to
220,000,000 shares of common stock (the “Authorized Capital Increase”).
We intend to file a Certificate of Amendment
(“Amendment”) to our Articles of Incorporation with the Secretary of State for the State of Nevada effectuating the
above action. Pursuant to Rule 14c-2 under the Exchange Act, the Authorized Capital Increase will not be effective,
and the Amendment will not be filed, until twenty (20) days after the date this Information Statement is filed with the Securities
and Exchange Commission (the “Commission”) and a copy thereof is mailed to each of the Company’s shareholders. It
is presently contemplated that the mailing will be made on or about August __, 2016.
The Authorized Capital Increase
The purpose of the Authorized Capital Increase
is to increase the number of shares of the Company’s common stock available for issuance by the Company for general corporate
purposes, including acquisitions, equity financings and grants of stock and stock options, and other transactions under which the
Company’s Board of Directors may determine is in the best interest of the Company and its shareholders to issue shares of
common stock.
Except for shares contemplated to be issued
in connection with the acquisition described below, the Authorized Capital Increase will not have any immediate effect on the rights
of existing shareholders, but may have a dilutive effect on the Company’s existing shareholders if additional shares are
issued.
Contemplated Issuance of Common Stock
As disclosed in the Form 8-K filed by the
Company on July 20, 2016, the Company has entered into an Agreement and Plan of Merger (the “
Agreement
”), by
and among MIM Acquisition Corp., a wholly owned, newly formed subsidiary of the Company, Mastermind Involvement Marketing, LLC,
a Georgia limited liability company (“MIM”), Mastermind Marketing, Inc., a Georgia corporation (“MMI”)
and Villanta Corporation, a Georgia Corporation (“VIC” and together with MMI, the “MIM Owners”). Pursuant
to the Agreement, at closing, MIM shall be merged with and into MIM Acquisition Corp. under the terms set forth in the Agreement.
The closing of the transaction contemplated
in the Agreement is contingent on satisfaction or waiver of the closing conditions set therein. There can be no assurance that
the conditions to closing the transactions described in the Agreement can be satisfied.
Pursuant to the Agreement, at and following
closing, the shareholders of MIM will receive the following shares of the Company’s common stock and/or cash in exchange
for all of the issued and outstanding ownership interests of MIM:
|
(i)
|
An aggregate of
$3,000,000 worth of SharkReach common stock, as determined pursuant to the
terms of the Agreement.
|
|
(ii)
|
An additional $4,400,000 worth of the Company’s common stock, which shall be issued to MIM
Owners in increments, as set forth in the Agreement as, follows: (a) $1,500,000 worth shall be delivered six (6) months after closing;
(b) an additional $1,500,000 worth shall be delivered nine (9) months after closing, and, (c) the remaining $1,400,000 worth
shall be delivered twelve (12) months after closing.
|
|
(iii)
|
A cash payment of $3,000,000 payable by the Company to the MIM Owners at closing; and
|
|
(iv)
|
An additional, aggregate payment of $2,000,000, evidenced by a Note issued to the MIM Owners, which
shall be payable by the Company to the MIM Owners in installments commencing twelve (12) months after closing, due and payable
as follows: the first $1,000,000 due and payable 12 months after closing and the balance of $1,000,000 shall be due and payable
twenty-four (24) months after closing. The additional $2,000,000 payment shall be payable to the MIM Owners, in cash and/or the
Company’s Common Shares, at the Company’s option.
|
|
(v)
|
Following and during the initial two and one-half (2-½) years immediately following the
closing, an earn-out of an aggregate of $2,000,000 worth of the Company’s common stock will be issued to the MIM Owners.
In addition, commencing twelve months after closing, a second earn-out of an aggregate of $2,000,000 worth of the Company’s
common stock will be issued and delivered to the MIM Owners, which shares shall be issued as set forth in the Agreement.
|
Further, the Company’s current business
plan is to grow the Company through, among other things, the acquisition of other companies that the Board of Directors believes
would create value for the Company’s shareholders, as well as the hiring and/or retention of individuals who will provide
services that the Board of Directors believes are crucial for the Company’s continued growth. These transactions may require
the Company to issue shares of its common stock as part of the consideration thereto. As such, and while the Company does not currently
have any plans, proposals, understandings, agreements or commitments relating to the issuance of the shares to be authorized (other
than as discussed herein), the Board of Directors believes that increasing the Company’s authorized common stock would provide
it with the flexibility needed to accomplish any potential transaction that the Board of Directors may deem advisable in the future.
We are not increasing our authorized common
stock to construct or enable any anti-takeover defense or mechanism on behalf of the Company. While it is possible that management
could use the additional shares to resist or frustrate a third-party transaction providing an above-market premium that is favored
by a majority of the independent shareholders, the Company has no intent or plan to employ the additional unissued authorized shares
as an anti-takeover device.
Effects of the Authorized Capital Increase
General
Pursuant to the Authorized Capital Increase,
the Company’s authorized shares of common stock will be increased from 200,000,000 shares, par value $0.001 per share, to
220,000,000 shares, par value $0.001 per share.
Effect on Authorized and Outstanding Shares
As of the Record Date, the Company had 200,000,000
authorized shares of common stock, of which 55,300,000 were issued and outstanding.
The rights and preferences of the shares of
common stock prior and subsequent to the Authorized Capital Increase will remain the same. It is not anticipated that the Company’s
financial condition, the percentage ownership of management, the number of shareholders, or any aspect of the Company’s business
will materially change, as a result of the Authorized Capital Increase.
The Authorized Capital Increase will be
effected simultaneously for all of the Company’s common stock, will affect all of our holders of common stock uniformly,
and will not, in and of itself, affect any shareholder’s percentage ownership interests in the Company or proportionate
voting power.
The Company will continue to be
subject to the periodic reporting requirements of the Exchange Act. The Company’s common stock is currently registered
under Section 12(g) of the Exchange Act and as a result, the Company is subject to periodic reporting and other
requirements. The Authorized Capital Increase will not affect the registration of the Company’s common stock under the
Exchange Act.
Effectiveness of the Authorized Capital Increase
Pursuant to Rule 14c-2 under the
Exchange Act, the Authorized Capital Increase will not be effective, until at least twenty (20) days after the date on
which this Information Statement is filed with the Commission and a copy hereof has been mailed to the Company’s
shareholders as of the Record Date. The Company anticipates that this Information Statement will be mailed to our
shareholders as of the Record Date on or about August ___, 2016. Therefore, the Company anticipates that
the Authorized Capital Increase will be effective, and the Amendment to our Articles of Incorporation will be filed with
the Secretary of State for the State of Nevada, on or about August ___, 2016.
The Company has asked brokers and other custodians, nominees
and fiduciaries to forward this Information Statement to the beneficial owners of the Company’s common stock as of the
Record Date and will reimburse such persons for out-of-pocket expenses incurred in forwarding such material.
ACTION II
APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION
TO AUTHORIZE THE ISSUANCE OF UP TO 10,000,000 SHARES OF BLANK CHECK PREFERRED STOCK
The Majority Shareholders have adopted resolutions
approving an amendment to our Articles of Incorporation to authorize the issuance of up to 10,000,000 shares of blank check preferred
stock (the “Blank Check Preferred Amendment”).
The Blank Check Preferred Amendment, substantially
in the form of Appendix A hereto, will be filed with the Secretary of State for the State of Nevada.
Outstanding Shares and Purpose of the Proposal
As stated above,
our Articles of Incorporation currently authorizes us to issue a maximum of 200,000,000 shares of common stock, par value $0.001
per share.
Upon filing with the Secretary of State for
the State of Nevada, the Blank Check Preferred Amendment will also authorize the issuance of up to 10,000,000 shares of preferred
stock, $0.001 par value. The Board of Directors will be authorized to fix the designations, rights, preferences, powers and limitations
of each series of the preferred stock.
The term “blank check” preferred
stock refers to stock which gives the Board of Directors of a corporation the flexibility to create one or more series of preferred
stock, from time to time, and to determine the relative rights, preferences, powers and limitations of each series, including,
without limitation: (i) the number of shares in each series, (ii) whether a series will bear dividends and whether dividends will
be cumulative, (iii) the dividend rate and the dates of dividend payments, (iv) liquidation preferences and prices, (v) terms of
redemption, including timing, rates and prices, (vi) conversion rights, (vii) any sinking fund requirements, (viii) any restrictions
on the issuance of additional shares of any class or series, (ix) any voting rights and (x) any other relative, participating,
optional or other special rights, preferences, powers, qualifications, limitations or restrictions. Any issuances of preferred
stock by the Company will need to be approved the Board of Directors.
The Majority Shareholders believe that
the Blank Check Preferred Amendment is desirable because it will provide the Company with increased flexibility to meet
working capital and capital expenditure requirements through equity financings without the delay and expense ordinarily
attendant in obtaining further shareholder approvals. The Majority Shareholders believe that the Blank Check Preferred
Amendment will improve the Company’s ability to attract needed investment capital, as various series of the preferred
stock may be customized to meet the needs of any particular transaction or market conditions.
Effects of Blank Check Preferred Amendment
on Current Shareholders
The shares of preferred stock to be authorized
pursuant to the Blank Check Preferred Amendment could be issued, at the discretion of the Board of Directors, for any proper corporate
purpose, without further action by the shareholders other than as may be required by applicable law. Existing shareholders do not
have preemptive rights with respect to future issuance of preferred stock by the Company and their interest in the Company could
be diluted by such issuance with respect to any of the following: earnings per share, voting, liquidation rights and book and market
value.
The Board of Directors will have
the power to issue the shares of preferred stock in one or more classes or series, with such preferences and voting rights as
the Board of Directors may fix in the resolution providing for the issuance of such shares. The issuance of shares of
preferred stock could affect the relative rights of the Company’s shares of common stock. Depending upon the exact
terms, limitations and relative rights and preferences, if any, of the shares of preferred stock as determined by the Board
of Directors at the time of issuance, the holders of shares of preferred stock may be entitled to a higher dividend rate
than that paid on the common stock, a prior claim on funds available for the payment of dividends, a fixed preferential
payment in the event of liquidation and dissolution of the Company, redemption rights, rights to convert their shares of
preferred stock into shares of common stock, and voting rights which would tend to dilute the voting control of the Company
by the holders of shares of common stock. In addition, depending on the particular terms of any series of the preferred
stock, holders thereof may have significant voting rights and the right to representation on the Company’s Board of
Directors. Further, the approval of the holders of shares of preferred stock, voting as a class or as a series, may be
required for the taking of certain corporate actions, such as mergers.
The issuance of shares of preferred stock may
have the effect of discouraging or thwarting persons seeking to take control of the Company through a tender offer, proxy fight
or otherwise or seeking to bring about removal of incumbent management, or a corporate transaction such as a merger. For example,
the issuance of shares of preferred stock in a public or private sale, merger or in a similar transaction may, depending on the
terms of the series of preferred stock, dilute the interest of a party seeking to take over the Company. Further, the authorized
preferred stock could be used by the Board of Directors for adoption of a shareholder rights plan or “poison pill.”
Designation of Series A Preferred
Stock
As contemplated under the Agreement with
MIM and the MIM Owners, the Board of Directors has approved, subject to ratification by the Company’s shareholders, the issuance
of one thousand (1,000) shares of Series A Preferred Stock to the Company’s Chief Executive Officer. The issuance of the
Series A Preferred Stock to our Chief Executive Officer gives him voting power equal to 51% of the vote required to approve any
action which, pursuant to Nevada law, may or must be approved by vote or consent of the holders of a majority of the Company’s
common shares, or the holders of other securities, entitled to vote thereon. As such, if the issuance is ratified, and until such
time as the Series A Preferred Stock expires, the shareholders of the Company will not have the ability to control or direct, through
their individual votes, decisions relating to the Company’s business or any other matter brought to a vote of shareholders.
The Series A Preferred Stock will
have the following rights and preferences:
1.
Voting
.
The holders of the Series A Preferred Stock shall have the right to vote on any matter with holders of common stock voting together
as one (1) class. The record holder(s) of the Series A Preferred Stock shall have that number of votes (identical in every other
respect to the voting rights of the holders of common stock entitled to vote at any regular or special meeting of the shareholders)
equal to 51% of the vote required to approve any action, which Nevada law provides may or must be approved by vote or consent
of the holder of common shares or the holders of other securities entitled to vote, if any.
2.
Expiration
.
Upon the occurrence of the earlier of (i) the listing of the Company’s common stock on a national securities exchange; or
(ii) the completion of a financing resulting in aggregate proceeds (net of discounts and commissions) to the Company of not less
than Forty Million Dollars ($40,000,000), the Series A Preferred Stock shall automatically, without need for action by the Company’s
Board of Directors, be cancelled and returned to the available pool of blank check preferred stock available for issuance by the
Company’s Board of Directors.
In addition, except as may expressly be
provided in the Certificate of Designation, or as required by law, so long as any shares of Series A Preferred Stock remain outstanding,
the Company shall not, without the vote or written consent of the holders of at least a majority of the then outstanding shares
of the Series A Preferred Stock, take any action which would adversely and materially affect any of the preferences, limitations
or relative rights of the Series A Preferred Stock.
Other than as described above, the Board of
Directors does not currently anticipate fixing or designating any additional series of preferred stock.
ACTION III
APPROVAL OF THE
Equity
Incentive PlanS
The Majority Shareholders have adopted resolutions
approving the SharkReach, Inc. 2016 Executive Equity Incentive Plan (the “Executive Equity Incentive Plan”), the SharkReach,
Inc. 2016 Non- Executive Equity Incentive Plan (the “Non-Executive Equity Incentive Plan”) and the SharkReach, Inc.
2016 Equity Incentive Plan (the “Non-Employee Equity Plan” and collectively with the Executive Equity Plan and the
Non-Executive Equity Incentive Plan, the “Equity Incentive Plans”) in the form of Appendix B, Appendix C and Appendix
D hereto. The following is a description of the Equity Incentive Plans.
There are
15,000,000 shares reserved under the Executive Equity Incentive Plan, and 2,500,000 shares reserved under Non-Executive Equity
Incentive Plan.
There are also 2,500,000 shares reserved under the
Non-Employee Equity
Plan
for issuance to consultants, advisors and other third parties retained by the Company
.
The term of the Equity Incentive Plans is 10
years from August __, 2016. No grants have been made to date under the Equity Incentive Plans.
The purpose of the Equity Incentive Plans is
to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered
valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in the Company’s development
and financial success. The Equity Incentive Plans permit the grant of the following types of incentive awards:
|
.
|
Incentive Stock Options;
|
|
.
|
Non-qualified stock options;
|
The Equity Incentive Plans will be
administered by our Board of Directors or by a committee of the Board of Directors.
Subject to the terms of the Equity Incentive
Plans, the Board of Directors, or a committee thereof, as administrator has the sole discretion to select the directors, officers,
employees, consultants and advisors who will receive awards, determine the terms and conditions of the awards, and interpret the
provisions thereof and outstanding awards. Our Board of Directors (or a committee thereof) generally may amend or terminate the
Equity Incentive Plans at any time and for any reason, except that no amendment, suspension, or termination may impair the rights
of any participant without his or her consent, and except that approval of our shareholders is required for any amendment which:
|
.
|
materially increases the number of shares subject to the Equity Incentive Plans;
|
|
.
|
materially increases the benefits accruing to the participants;
|
|
.
|
materially modifies the requirements for eligibility for awards;
|
|
.
|
decreases the exercise price of options granted under the Equity Incentive Plans;
|
|
.
|
extends the term of any option beyond the limits currently provided under the Equity Incentive
Plans; or
|
|
.
|
reduces the exercise price of outstanding options or effects repricing through cancellations and
re-granting of new options.
|
Subject to the foregoing, the administrator
also has authority to amend outstanding awards prospectively or retrospectively, but no such amendment shall impair the rights
of any participant without such participant’s consent.
If any award under the Equity Incentive Plans
is cancelled prior to its exercise or vesting in full, or if the number of shares subject to an award is reduced for any reason,
the shares of our stock that are no longer subject to such award will be returned to the available pool of shares reserved for
issuance under the Equity Incentive Plans, except where such reissuance is inconsistent with the provisions of Section 162(m) of
the Internal Revenue Code (the “Code”).
Federal Income Tax Consequences
The following is a summary of the principal
U.S. federal income tax consequences generally applicable to awards under the Equity Incentive Plans. This summary does not purport
to consider all of the possible U.S. federal tax consequences of the awards and is not intended to reflect the particular tax position
of any award recipient. This summary is based upon the U.S. federal tax laws and regulations now in effect and as currently interpreted
and does not take into account possible changes in such tax laws or such interpretations, any of which may be applied retroactively.
Award recipients are strongly advised to consult their own tax advisors for additional information.
Grant of an Option.
The grant of an
option is not expected to result in any taxable income for the recipient as of the date of the grant, except that in the event
non-statutory options are granted with an exercise price lower than the then-current fair market value of the common stock, the
difference between the exercise price and the then-current fair market value may be treated as deferred compensation income recognized
as of the date the non-statutory options are granted.
Exercise of Incentive Stock Option.
The holder of an incentive stock option generally will have no taxable income upon exercising the option (except that a tax liability
may arise pursuant to the alternative minimum tax), and the Company will not be entitled to a tax deduction.
Exercise of Nonqualified Stock Option.
Generally, subject to Code Section 409A, upon exercising a nonqualified stock option, the award recipient must recognize ordinary
income equal to the excess of the fair market value of the shares of common stock acquired on the date of exercise over the exercise
price. The income will be treated as compensation income subject to payroll and withholding tax obligations. The Company would
be entitled to a compensation deduction in the amount of income recognized by the award recipient.
Disposition of Shares Acquired Through an
Option.
The tax consequence to a holder of an option upon a disposition of shares acquired through the exercise of an option
will depend on how long the shares have been held and upon whether such shares were acquired by exercising an incentive stock option
or by exercising a nonqualified stock option.
Generally, the disposition of shares which
were acquired by exercise of an incentive stock option will be taxable as long-term capital gain or loss if the award recipient
disposes of the shares more than two years after the option was granted and at least one year after exercising the option. If the
award recipient fails to satisfy the holding period requirements for treatment as an incentive stock option, a disposition will
result in any gain being treated as compensation income subject to ordinary tax rates. If the award recipient is still an employee
of the Company at the time of the disposition, the amount of gain treated as compensation will also be subject to payroll and withholding
taxes.
If an award recipient disposes of shares acquired
through the exercise of a nonqualified option, any gain or loss will be treated as a capital gain or loss. To the extent such shares
have been held for at least one year after exercise of the nonqualified option, the gain or loss will be treated as long-term capital
gain or loss.
Generally, there will be no tax consequence
to the Company in connection with the disposition of shares acquired under an option, except that the Company may be entitled to
a tax deduction in the case of the disposition of shares acquired under an incentive stock option before the applicable incentive
stock option holding periods set forth in the Code have been satisfied.
The grant by the Board of other stock-based
awards may have varying tax consequences to award recipients. Grants made pursuant to the Equity Incentive Plans may be subject
to Code Section 409A and plan administration may have to conform to Code Section 409A. Failure to comply with Code Section 409A,
if applicable, will result in acceleration of income and imposition of penalties and interest to award recipients.
Application of Section 16 of the Securities
Exchange Act of 1934.
Special rules may apply in the case of individuals subject to Section 16 of the Securities Exchange Act
of 1934, as amended. In particular, unless a special election is made pursuant to the Code, shares received pursuant to the exercise
of a stock option may be treated as restricted as to transferability and subject to a substantial risk of forfeiture for a period
of up to six months after the date of exercise. Accordingly, the amount of any ordinary income recognized, and the amount of the
Company’s tax deduction, are determined as of the end of such period.
New Plan Benefits
Future awards under the Equity Incentive Plans
are made at the discretion of the Board of Directors. At this time, therefore, the benefits that may be received by our executive
officers and other employees cannot be determined, and we have not included a table reflecting such benefits and awards.
Equity Compensation Plan Information
We had no equity compensation plans as of December
31, 2015.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This Information Statement includes forward-looking
statements. You can identify the Company’s forward-looking statements by the words “expects,” “projects,”
“believes,” “anticipates,” “intends,” “plans,” “predicts,” “estimates”
and similar expressions.
The forward-looking statements are based on
management’s current expectations, estimates and projections about us. The Company cautions you that these statements are
not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, the
Company has based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate.
Accordingly, actual outcomes and results may differ materially from what the Company has expressed or forecast in the forward-looking
statements.
You should rely only on the information the
Company has provided in this Information Statement. The Company has not authorized any person to provide information other than
that provided herein. The Company has not authorized anyone to provide you with different information. You should not assume that
the information in this Information Statement is accurate as of any date other than the date on the front of the document.
ADDITIONAL INFORMATION
The Company will provide upon request and without
charge to each shareholder receiving this Information Statement a copy of the Company’s Annual Report on Form 10-K filed on January
14, 2016, which includes audited financial statements for the years ended September 30, 2014 and September 30, 2015, including
the financial statements included therein, as filed with the Commission. Reports and other information filed by the Company can
be inspected and copied at the public reference facilities maintained at the Commission at 100 F Street, N.E., Washington, DC 20549.
Copies of such material can be obtained upon written request addressed to the Commission, Public Reference Section, 100 F Street,
N.E., Washington, D.C. 20549, at prescribed rates. The Commission maintains a web site on the Internet (http://www.sec.gov) that
contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission
through the Electronic Data Gathering, Analysis and Retrieval (EDGAR) System.
By order of the Board of Directors
August __, 2016
Steve Smith
Chief Executive Officer
APPENDIX
A
CERTIFICATE
OF AMENDMENT TO THE ARTICLES OF INCORPORATION
Pursuant
to NRS 78.385 and 78.390
1. The
name of the corporation is “SharkReach, Inc.”
2. The
following amendments to the Articles of Incorporation were approved by the directors and thereafter duly adopted by the shareholders
of the corporation on June 28, 2016.
3. Resolved,
that Article 3 of the Articles of Incorporation, be amended to read as follows:
“Authorized
Capital Stock.
The total number of shares of stock the Corporation is authorized to issue shall be two hundred and thirty
million (230,000,000) shares. This stock shall be divided into two classes to be designated as “Common Stock” and
“Preferred Stock”.
Common
Stock
. The total number of authorized shares of Common Stock shall be two hundred and twenty million (220,000,000) shares with
par value of $0.001 per share.
Preferred
Stock
. The total number of authorized shares of Preferred Stock shall be ten million (10,000,000) shares with par value of
$0.001 per share.
The board of directors of the Corporation is hereby expressly authorized
to provide, out of the unissued shares of Preferred Stock, for one or more series of preferred stock and, with respect to each
such series, to fix the number of shares constituting such series and the designation of such series, the voting powers, if any,
of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any
qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating,
optional and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof,
if any, may differ from those of any and all other series at any time outstanding.”
5. The
number of shares voting to approve this amendment to Article 3 is 27,852,500 or 50.04%,
6. This
Certificate of Amendment shall become effective on _________, 2016.
Dated
this __ day of August, 2016
By:
_________________________
Name:
Steve Smith
Title:
Chief Executive Officer
EXECUTIVE EQUITY INCENTIVE PLAN
1.
Purposes
of the Plan
. The purposes of this Executive Equity Incentive Plan (the “
Plan
”) are to attract and retain
the best available personnel for positions of substantial responsibility, to provide additional incentives to Employees, Directors
and Officers, and to promote the success of the Company and the Company’s Affiliates. Options granted under the Plan may be Incentive
Stock Options, Non-Qualified Stock Options and restricted common stock, as determined by the Administrator at the time of grant.
Our Board and holders of a majority of the Company’s outstanding common stock must authorize this Plan which will cover an
aggregate of 15,000,000 shares of common stock for executive employees.
The Company intends to grant Options to executive Employees
under the Plan.
2.
Definitions
.
As used herein, the following definitions shall apply:
“
Administrator
”
means the Board or a committee that has been delegated the responsibility of administering the Plan in accordance with Section 4
of the Plan.
“
Affiliate”
means any Parent and/or Subsidiary.
“
Applicable Laws
”
means the requirements relating to the administration of equity compensation plans under the applicable corporate and securities
laws of any of the states in the United States, U.S. federal securities laws, the Code, the rules and regulations of
any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan.
“
Award
”
means the grant of an Incentive Stock Options, Non-Qualified Stock Options and/or restricted common stock.
“
Awardee
”
means any executive employee granted an Incentive Stock Options, Non-Qualified Stock Options and/or restricted common stock.
“
Board
”
means the Board of Directors of the Company.
“
Cause
”
means, unless otherwise specifically provided in a Awardee’s Option Agreement, or Stock Award Agreement, a finding by the Administrator
that the Awardee’s employment with or service to the Company or any Affiliate was terminated due to one or more of the following:
(i) the Awardee’s use of alcohol or any unlawful controlled substance to an extent that it interferes with the performance
of the Awardee’s duties; (ii) the Awardee’s commission of any act of fraud, insubordination, misappropriation or personal
dishonesty relating to or involving the Company or any Affiliate in any material respect; (iii) the Awardee’s gross negligence;
(iv) the Awardee’s violation of any express direction of the Company or of any Affiliate or any material violation of any
rule, regulation, policy or plan established by the Company or any Affiliate from time to time regarding the conduct of its employees
or its business; (v) the Awardee’s disclosure or use of confidential information of the Company or any Affiliate, other than
as required in the performance of the Awardee’s duties; (vi) actions by the Awardee that are determined by the Administrator
to be clearly contrary to the best interests of the Company and/or its Affiliates as determined in good faith by the Administrator;
(vii) the Awardee’s conviction of a crime constituting a felony or any other crime involving moral turpitude; or (viii) any
other act or omission which, in the determination of the Administrator, is materially detrimental to the business of the Company
or of an Affiliate. Notwithstanding the foregoing, if a Awardee has entered into a written employment or consulting agreement with
the Company that specifies the conditions or circumstances under which the Awardee’s service may be terminated for cause, then
the terms of such agreement shall apply for purposes of determining whether “Cause” shall have occurred for purposes
of this Plan.
“
Change in Control
Event
” has the meaning set forth in Section 13(c).
“
Code
”
means the Internal Revenue Code of 1986, as amended.
“
Committee
”
means a committee of Directors appointed by the Board in accordance with
Section 4 of the Plan.
“
Common Stock
”
means the common stock, par value $0.001 per share, of the Company.
“
Company
”
means SharkReach, Inc., a Nevada corporation.
“
Director
”
means a member of the Board or of the board of directors of an Affiliate.
“
Disability
”
means total and permanent disability as defined in Section 22(e)(3) of the Code.
“
Employee
”
means any person, including officers and Directors, serving as an employee of the Company or an Affiliate. An individual shall
not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any Subsidiary or any successor. For purposes of an Option initially
granted as an Incentive Stock Option, if a leave of absence of more than three months precludes such Option from being treated
as an Incentive Stock Option under the Code, such Option thereafter shall be treated as a Non-qualified Stock Option for purposes
of this Plan. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment”
by the Company.
“
Fair Market
Value
” means, as of any date, the value of Common Stock determined as follows:
(i) if
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the NASDAQ
National Market or the NASDAQ Capital Market, the Fair Market Value of a Share shall be the closing sales price of a Share (or the
closing bid, if no such sales were reported) as quoted on such exchange or system for the last market trading day prior to the
day of determination, as reported in
The Wall Street Journal
or such other source as the Administrator deems reliable;
(ii) if
the Common Stock is regularly quoted by a recognized securities dealer but is not listed in the manner contemplated by clause (i)
above, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Common Stock on the
last market trading day prior to the day of determination, as reported in
The Wall Street Journal
or such other source as
the Administrator deems reliable; or
(iii) if
neither clause (i) above nor clause (ii) above applies, the Fair Market Value shall be determined in good faith by the
Administrator.
“
Incentive Stock
Option
” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
“
Non-qualified
Stock Option
” means an Option not intended to qualify as an Incentive Stock Option.
“
Notice of Grant
”
means a written or electronic notice evidencing certain terms and conditions of an Award.
“
Option
”
means a stock option granted pursuant to the Plan.
“
Option Agreement
”
means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan and the applicable Notice of Grant.
“
Optioned Stock
or Shares
” means the Common Stock subject to an Option Non-Qualified Stock Option or Stock Award.
“
Optionee
”
means the holder of an outstanding Option Non-Qualified Stock Option or Stock Award granted under the Plan.
“
Parent
”
means a “parent corporation” of the Company (or, in the context of Section 13(c) of the Plan, of a successor corporation),
whether now or hereafter existing, as defined in Section 424(e) of the Code.
“
Restricted Period
”
has the meaning set forth in Section 11(a).
“
Restricted Stock
”
means shares of Common Stock acquired pursuant to a grant of a Stock Award under Section 11 of the Plan.
“
Rule 16b-3
”
means Rule 16b-3 of the Exchange Act or any successor to such Rule 16b-3, as such rule is in effect when discretion is
being exercised with respect to the Plan.
“
Section 16(b)
”
means Section 16(b) of the Exchange Act.
“
Share
”
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.
“
Stock Award
”
means an Award of Shares pursuant to Section 11 of the Plan.
“
Stock Award
Agreement
” means an agreement, approved by the Administrator, providing the terms and conditions of a Stock Award. Each
Stock Award Agreement shall be subject to the terms and conditions of the Plan and the applicable Notice of Grant.
“
Stock Award
Shares
” means Shares subject to a Stock Award.
“
Stock Awardee
”
means the holder of an outstanding Stock Award granted under the Plan.
“
Subsidiary
”
means a “subsidiary corporation” of the Company (or, in the context of Section 13(c) of the Plan, of a successor
corporation), whether now or hereafter existing, as defined in Section 424(f) of the Code.
“
Substitute Options
”
has the meaning set forth in Section 14.
3.
Subject
to the Plan.
Subject to the provisions of Section 13 of the Plan, the initial maximum number of shares of Common
Stock that may be issued under the Plan shall be 15,000,000 shares of Common Stock. For purposes of the foregoing limitation, the
shares of Common Stock underlying any Awards that are forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Common Stock or otherwise terminated (other than by exercise) shall be added back to the number of shares of Common Stock available
for issuance under the Plan. Common Stock to be issued under the Plan may be either authorized and unissued shares or shares held
in treasury by the Company.
4.
Administration
of the Plan.
(a) Appointment
of Committee. The Plan shall be administered by the Board of Directors or a Committee to be appointed by the Board.
The Board shall have the power to add or remove members of the Committee, from time to time, and to fill vacancies thereon arising
by resignation, death, removal, or otherwise. Meetings shall be held at such times and places as shall be determined by the Committee.
A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before that meeting.
(b)
Powers
of the Administrator
. Subject to the provisions of the Plan, the Administrator shall have the authority, in its discretion:
(i) to
determine the Fair Market Value;
(ii) to
determine the number of shares of Common Stock to be covered by each Award granted hereunder;
(iii) to
approve forms of agreement for use under the Plan;
(iv) to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder and of any Option
Agreement and/or Stock Award Agreement. Such terms and conditions include, but are not limited to, the exercise price, the time
or times when Options or Stock Awards may be exercised (which may be based on performance criteria), any vesting, acceleration
or waiver of forfeiture provisions, and any restriction or limitation regarding any Option, Non-qualified Option or Restricted
Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;
(v) to
construe and interpret the terms of the Plan, Awards granted pursuant to the Plan and agreements entered into pursuant to the Plan;
(vi) to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under foreign tax laws;
(vii) to
modify or amend each Option or Stock Award (subject to Section 16(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than otherwise provided for in the Plan, provided, however,
any such extension shall be consistent with Code Section 422(a)(2) and other Applicable Laws;
(viii) to
allow Optionees to satisfy withholding tax obligations by having the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the amount required to be withheld, provided that withholding
is calculated at no less than the minimum statutory withholding level. The Fair Market Value of the Shares to be withheld shall
be determined as of the date that the income resulting from exercise of the Option is recognized by the Optionee. All determinations
to have Shares withheld for this purpose shall be made by the Administrator in its discretion;
(ix) to
authorize any person to execute on behalf of the Company any agreement entered into pursuant to the Plan and any instrument required
to effect the grant of an Award previously granted by the Administrator; and
(x) to
make all other determinations deemed necessary or advisable for purposes of administering the Plan.
(c)
Effect
of Administrator’s Decision
. The Administrator’s decisions, determinations and interpretations shall be final and
binding on all holders of Awards. Neither the Administrator, nor any member or delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection with the Plan, and each of the foregoing shall be
entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including
without limitation reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under
any directors’ and officers’ liability insurance coverage which may be in effect from time to time.
5.
Eligibility
. Incentive
Stock Options, Non-qualified Stock Options and Restricted Stock may be granted to all executive officers of the Company.
6.
Limitations.
(a) Each
Option shall be designated in the applicable Option Agreement as either an Incentive Stock Option or a Non-qualified Stock Option.
However, notwithstanding such designation, if an Employee first becomes eligible in any given year to exercise Incentive Stock
Options for Shares having a Fair Market Value in excess of $100,000, those Options representing the excess shall be treated as
Non-qualified Stock Options. In the previous sentence, “Incentive Stock Options” include Incentive Stock Options granted
under any plan of the Company or any Affiliate. For the purpose of deciding which Options apply to Shares that “exceed”
the $100,000 limit, Incentive Stock Options shall be taken into account in the same order as granted. The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such Shares is granted.
(b) Neither
the Plan nor any Award nor any agreement entered into pursuant to the Plan shall confer upon an awardee any right with respect
to continuing the grantee’s relationship as a Service Provider with the Company or any Affiliate, nor shall they interfere in any
way with the awardee’s right or the right of the Company or any Affiliate to terminate such relationship at any time, with
or without cause.
7.
Term
of the Plan
. The Plan shall become effective upon approval by the Company’s shareholders and shall continue in effect
for a term of ten (10) years unless terminated earlier under Section 13 of the Plan.
8.
Term
of Options
. The term of each Option shall be stated in the applicable Option Agreement or, if not so stated, ten
years from the date of grant. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns, directly or indirectly, stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company and any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the applicable Option Agreement.
9.
Option
Exercise Price; Exercisability
.
(a)
Exercise
Price
. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined
by the Administrator, subject to the following:
(i) In
the case of an Incentive Stock Option:
|
1)
|
granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company and any Affiliate, the per Share exercise
price shall be not less than 110% of the Fair Market Value per Share on the date of grant, or
|
|
2)
|
granted to any Employee other than an Employee described in paragraph (A) immediately above,
the per Share exercise price shall be not less than 100% of the Fair Market Value per Share on the date of grant.
|
(ii) In
the case of a Non-qualified Stock Option, the per Share exercise price shall be not less than 100% of the Fair Market Value per
Share on the date of grant.
(iii) Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than 100% (or 110%, if clause (i)(A) above
applies) of the Fair Market Value per Share on the date of grant pursuant to a merger or other comparable corporate transaction,
but in no event shall Options be granted at a per Share exercise price that would cause the Options to be deemed a deferral of
compensation under Code Section 409A.
(b)
Exercise
Period and Conditions
. At the time that an Option is granted, the Administrator shall fix the period within which
the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised.
10.
Exercise
of Options; Consideration.
(a)
Procedure
for Exercise; Rights as a Shareholder
. Any Option granted hereunder shall be exercisable according to the terms
of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement,
provided, however, that unless otherwise determined by the Administrator and provided for in the Option Agreement, each Option
shall vest and become exercisable as to one-sixth (1/6) of the Shares subject to the Option on the date that is six months after
the date of grant, and as to an additional one-sixth (1/6) of the Shares subject to the Option every six months thereafter until
fully vested and exercisable. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled
during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised
when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option
Agreement and Section 10(f) of the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee.
Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 13 of the Plan. Exercising an Option in any manner shall decrease
the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares
as to which the Option is exercised.
(b)
Termination
of Relationship as an Executive Employee
. If an Optionee ceases to be an executive employee, other than as a result
of the Optionee’s death, Disability or termination for Cause, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the Notice of Grant). In the absence of a specified
time in the Option Agreement and except as otherwise provided in Sections 10(c), 10(d) and 10(e) of this Plan, the Option
shall remain exercisable for three months following the Optionee’s termination (but in no event later than the expiration
of the term of such Option). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his
or her Option in full within the time specified by the Administrator, the unexercised portion of the Option shall terminate, and
the Shares covered by such unexercised portion of the Option shall revert to the Plan. Notwithstanding anything contained herein
to the contrary, an Optionee who changes his or her status from executive to non-executive shall not be deemed to have ceased being
an employee for purposes of this Section 10(b), nor shall a transfer of employment among the Company and any Affiliate be
considered a termination of employment.
(c)
Disability
of an Optionee
. If an Optionee ceases to be an executive employee as a result of the Optionee’s Disability, the
Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option
is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in
the Notice of Grant). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee’s termination (but in no event later than the expiration of the term of such Option).
If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion
of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option in full within
the time specified herein, the unexercised portion of the Option shall terminate, and the Shares covered by such unexercised portion
of the Option shall revert to the Plan.
(d)
Death
of an Optionee
. If an Optionee dies while an executive employee, the Option may be exercised within such period
of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s death (but in no
event later than the expiration of the term of such Option). If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If the Option is not so exercised
in full within the time specified herein, the unexercised portion of the Option shall terminate, and the Shares covered by the
unexercised portion of such Option shall revert to the Plan.
(e)
Termination
for Cause.
Unless otherwise provided in an Option Agreement, if an executive employee relationship with the Company
is terminated for Cause, then such employee shall have no right to exercise any of such employee’s Options at any time on
or after the effective date of such termination. All Shares covered by such Options and not acquired by exercise prior to the date
of such termination shall revert to the Plan.
(f)
Form
of Consideration
. The Administrator shall determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form
of consideration at the time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) other
Shares of the Company’s capital stock which (A) have been owned by the Optionee for more than six months on the date of surrender,
and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;
(iv) consideration
received by the Company under a cashless exercise (net issue) program permitted by the Administrator, including a cashless exercise
program utilizing the services of a single broker acceptable to the Administrator or without (see (v) below;
(v)
Net Issue Exercise.
In lieu of exercising this Option, the Optionee may elect to receive Option Shares equal to the value
of this Option (or the portion thereof being canceled) by surrender of this Option at the principal office of the Company together
with notice of such election, in which event the Company shall issue to the Optionee a number of Option Shares computed using the
following formula:
Y (A-B)
X = ———————
A
|
Where:
|
X = the number of the Option Shares to be issued to the
Optionee.
|
Y = the number of option
shares purchasable under the option grant.
A = the fair market value
of one Share on the date of determination.
B= the per share Exercise
Price.
(vi) a
reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any
combination of the foregoing methods of payment; or
(viii) such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.
11.
Stock
Awards
. The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase
price as it determines) Shares to any an executive employee, as defined herein, subject to such terms and conditions, including
vesting and/or performance conditions, as the Administrator sets forth in a Stock Award Agreement evidencing such grant. Stock
Awards may be granted or sold in respect of past services or other valid consideration or in lieu of any cash compensation otherwise
payable to such individual. The grant of Stock Awards shall be subject to the following provisions:
(a) At
the time a Stock Award is made, the Administrator shall establish a vesting period (the “Restricted Period”) applicable
to the Stock Award Shares subject to such Stock Award or shall determine that such Stock Award is not subject to any vesting requirements.
Subject to the right of the Administrator to establish a Restricted Period that extends vesting dates to later or earlier dates
than the dates provided in this sentence, the Restricted Period of a Stock Award, if any, shall lapse as to one-sixth (
1
/6)
of the Shares subject to the Stock Award on the date that is six months after the date of grant, and as to an additional one-sixth
(
1
/6) of the Shares subject to the Stock Award every six months thereafter until unrestricted. The Administrator may,
in its sole discretion, at the time a grant is made, prescribe restrictions in addition to or in lieu of the expiration of the
Restricted Period, including the satisfaction of corporate or individual performance objectives. The Administrator may provide
that all restrictions on Stock Award Shares shall lapse if certain performance criteria are met and that, if such criteria are
not met, that such restrictions shall lapse if certain vesting conditions are satisfied. None of the Stock Award Shares may be
sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period applicable to such Stock
Award Shares or prior to the satisfaction of any other restrictions prescribed by the Administrator with respect to such Stock
Award Shares.
(b) The
Company shall issue, in the name of each Service Provider to whom Stock Award Shares have been granted, stock certificates representing
the total number of Stock Award Shares granted to such person, as soon as reasonably practicable after the grant. The Company,
at the direction of the Administrator, shall hold such certificates, properly endorsed for transfer, for the Stock Awardee’s benefit
until such time as the Stock Award Shares are forfeited to the Company, or the restrictions lapse.
(c) Unless
otherwise provided by the Administrator, holders of Stock Award Shares shall have the right to vote such Shares and have the right
to receive any cash dividends with respect to such Shares. All distributions, if any, received by a Stock Awardee with respect
to Stock Award Shares as a result of any stock split, stock distribution, combination of shares, or other similar transaction shall
be subject to the restrictions of this Section 11.
(d) Subject
to the terms of the applicable Stock Award Agreement, any Stock Award Shares granted to a Service Provider pursuant to the Plan
shall be forfeited if, prior to the date on which all restrictions applicable to such Stock Award shall have lapsed, the Stock
Awardee voluntarily terminates employment with the Company or its Affiliates or resigns or voluntarily terminates his consultancy
arrangement with the Company or its Affiliates or if the Stock Awardee’s employment or consultancy arrangement is terminated for
Cause. If the Stock Awardee’s employment or consultancy arrangement terminates for any other reason, the Stock Award Shares held
by such person shall be forfeited, unless the Administrator, in its sole discretion, shall determine otherwise. Upon such forfeiture,
the Stock Award Shares that are forfeited shall be retained in the treasury of the Company and be available for subsequent awards
under the Plan.
(e) Upon
the satisfaction of the conditions prescribed by the Administrator with respect to a particular Stock Award, the restrictions applicable
to the related Stock Award Shares shall lapse and, at the Stock Awardee’s request, a stock certificate for the number of Stock
Award Shares with respect to which the restrictions have lapsed shall be delivered, free of all such restrictions under the Plan,
to the Stock Awardee or his beneficiary or estate, as the case may be.
12.
Non-Transferability
. Unless
determined otherwise by the Administrator, an Option, and Stock Award (until such time as all restrictions lapse) may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution
and, in the case of an Option, may be exercised, during the lifetime of an Awardee, only by the Awardee. If the Administrator makes
an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate. Notwithstanding
the foregoing, the Administrator, in its sole discretion, may provide in the Option Agreement regarding a given Option that the
Optionee may transfer, without consideration for the transfer, his or her Non-qualified Stock Options to members of his or her
immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this
Plan and the applicable Option. During the period when Shares subject to Stock Award are restricted (by virtue of vesting
schedules or otherwise), such Shares may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution.
13.
Adjustments
Upon Changes in Capitalization; Dissolution; Change in Control and Other Events.
(a)
Changes
in Capitalization
. Subject to any required action by the shareholders of the Company, the number of Shares of Common
Stock covered by each outstanding Option, and the number of Shares of Common Stock that have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation or expiration
of an Option, Non-qualified Stock Option or Stock Award, as well as the price per share of Common Stock covered by each such outstanding
Option, Option, Non-qualified Stock Option or Stock Award, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination
in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares of Common Stock subject to an Award hereunder.
(b)
Dissolution
or Liquidation
. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall
notify each holder of an Award as soon as practicable prior to the effective date of such proposed dissolution or liquidation.
The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option, Non-Qualified
Stock Option or Stock Award until ten (10) days prior to such transaction as to all of the Shares covered thereby. In addition,
the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of a Stock Award
or any restrictions as to any Stock Award shall lapse as to all such Shares covered thereby, provided the proposed dissolution
or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option,
Non-Qualified Stock Option or Stock Award will terminate immediately prior to the consummation of such proposed action.
(c)
Merger
or Asset Sale
. In the event of a merger or consolidation of the Company with or into another corporation or any
other entity or the exchange of substantially all of the outstanding stock of the Company for shares of another entity or other
property in which, after any such transaction the prior shareholders of the Company own less than fifty percent (50%) of the voting
shares of the continuing or surviving entity, or in the event of the sale of all or substantially all of the assets of the Company,
(any such event, a “Change of Control Event”), then, absent a provision to the contrary in any particular Option
Agreement or Stock Award (in which case the terms of such shall supersede each of the provisions of this Section 13(c)
that are inconsistent with such Agreement or Award), each outstanding Option, Non-Qualified Stock Option or Stock Award shall be
assumed or an equivalent option, right, share or award substituted by the successor corporation or a parent or subsidiary of the
successor corporation. In the event that the Administrator determines that the successor corporation or a parent or a subsidiary
of the successor corporation has refused to assume or substitute an equivalent option, right, agreement or award for each outstanding
Option, Non-Qualified Stock Option or Stock Award, the awardee shall fully vest in and have the right to exercise each outstanding
Option, Non-Qualified Stock Option or Stock Award as to all of the stock covered thereby, including Shares that would not otherwise
be vested or exercisable, and all vesting periods under Restricted Stock Awards shall be deemed to have been satisfied. If an Option,
Non-Qualified Stock Option or Stock Award becomes fully vested and exercisable in lieu of assumption or substitution in the event
of a Change of Control, the Administrator shall notify all awardees that all outstanding Options Non-Qualified Stock Option or
Stock Award shall be fully exercisable for a period of twenty (20) days from the date of such notice and that any Options,
Non-Qualified Stock Option or Stock Award that are not exercised within such period shall terminate upon the expiration of such
period. For the purposes of this paragraph, all outstanding Options Non-Qualified Stock Option or Stock Award shall be considered
assumed if, following the consummation of the Change of Control, the Option, Non-Qualified Stock Option or Stock Award confers
the right to purchase or receive, for each Share subject to the Option, Non-Qualified Stock Option or Stock Award immediately prior
to the consummation of the Change of Control, the consideration (whether stock, cash, or other property) received in the Change
of Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type chosen by the holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the Change of Control is not solely common stock of the successor corporation or its parent, the
Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise
of the Option, Non-Qualified Stock Option or Stock Award, for each Share subject to the Option, Non-Qualified Stock Option or Stock
Award, to be solely common stock of the successor corporation or its parent or subsidiary equal in fair market value to the per
share consideration received by holders of Common Stock in the Change of Control.
14.
Substitute
Options
. In the event that the Company, directly or indirectly, acquires another entity, the Board may authorize
the issuance of stock options (“Substitute Options”) to the individuals performing services for the acquired entity in
substitution of stock options previously granted to those individuals in connection with their performance of services for such
entity upon such terms and conditions as the Board shall determine, taking into account the conditions of Code Section 424(a),
as from time to time amended or superseded, in the case of a Substitute Option that is intended to be an Incentive Stock Option.
Shares of capital stock underlying Substitute Stock Options shall not constitute Shares issued pursuant to this Plan for any purpose.
15.
Date
of Grant
. The date of grant of an Option, Non-Qualified Stock Option or Stock Award shall be, for all purposes,
the date on which the Administrator makes the determination granting such Option, Non-Qualified Stock Option or Stock Award, or
such other later date as is determined by the Administrator. Notice of the determination shall be provided to each grantee within
a reasonable time after the date of such grant.
16.
Amendment
and Termination of the Plan.
(a)
Amendment
and Termination
. The Board may at any time amend, alter, suspend or terminate the Plan.
(b)
Shareholder
Approval
. The Company shall obtain shareholder approval of any Plan amendment to the extent necessary to comply
with Applicable Laws.
(c)
Effect
of Amendment or Termination
. No amendment, alteration, suspension or termination of the Plan shall adversely affect
the rights of any Awardee with respect to an outstanding Award, unless mutually agreed otherwise between the Awardee and the Administrator,
which agreement shall be in writing and signed by the Awardee and the Company. Termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination.
17.
Conditions
Upon Issuance of Shares.
(a)
Legal
Compliance
. Shares shall not be issued in connection with the grant of any Stock Award or Unrestricted Share or
the exercise of any Option, Non-Qualified Stock Option or Stock Award unless such grant or the exercise of such Non-Qualified Stock
Option or Stock Award and the issuance and delivery of such Shares shall comply with Applicable Laws.
(b)
Investment
Representations
. As a condition to the grant of any Award or the exercise of any Option, Non-Qualified Stock Option
or Stock Award, the Company may require the person receiving such Award or exercising such Option, Non-Qualified Stock Option or
Stock Award to represent and warrant at the time of any such exercise or grant that the applicable Shares are being acquired only
for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
(c)
Additional
Conditions
. The Administrator shall have the authority to condition the grant of any Award or rights in such other
manner that the Administrator determines to be appropriate, provided that such condition is not inconsistent with the terms of
the Plan. Such conditions may include, among other things, obligations of recipients to execute lock-up agreements and shareholder
agreements in the future. The Administrator may implement such measures as the Administrator deems appropriate to determine whether
Shares acquired as a result of the exercise of an Incentive Stock Option have been the subject of a “disqualifying disposition”
for federal income tax purposes, including requiring the Optionee to hold such Shares in his or her own name and requiring that
the Optionee notify the Administrator of any such “disqualifying disposition.”
(d)
Trading
Policy Restrictions
. Option, Non-Qualified Stock Option or Stock Award exercises and other Awards under the Plan
shall be subject to the terms and conditions of any insider trading policy established by the Company or the Administrator.
18.
Inability
to Obtain Authority
. The inability of the Company to obtain authority from any regulatory body having jurisdiction
over the Company, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, 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.
19.
Reservation
of Shares
. The Company, during the term of this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
20.
Shareholder
Approval
. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months
after the date the Plan is adopted, or earlier as required by the rules of the stock exchange governing trading of the Company’s
stock. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws.
21.
Withholding;
Notice of Sale
. The Company shall be entitled to withhold from any amounts payable to an Employee any amounts, which
the Company determines, in its discretion, are required to be withheld under any Applicable Law as a result of any action taken
by a holder of an Award.
22.
Governing
Law
. This Plan shall be governed by the laws of the state of Nevada, without regard to conflict of law principles.
NON-EXECUTIVE EQUITY INCENTIVE PLAN
1.
Purposes
of the Plan
. The purposes of this Non- Executive Equity Incentive Plan (the “
Plan
”) are to attract
and retain the best available personnel for positions of substantial responsibility, to provide additional incentives to Employees,
Directors and Officers, and to promote the success of the Company and the Company’s Affiliates. Options granted under the
Plan may be Incentive Stock Options, Non-Qualified Stock Options and restricted common stock, as determined by the Administrator
at the time of grant. Our Board and holders of a majority of the Company’s outstanding common stock must authorize this Plan
which will cover an aggregate of 2,500,000 for non-executive employees.
The Company intends to grant Options to non-executive
Employees under the Plan.
2.
Definitions
.
As used herein, the following definitions shall apply:
“
Administrator
”
means the Board or a committee that has been delegated the responsibility of administering the Plan in accordance with Section 4
of the Plan.
“
Affiliate”
means any Parent and/or Subsidiary.
“
Applicable
Laws
” means the requirements relating to the administration of equity compensation plans under the applicable corporate
and securities laws of any of the states in the United States, U.S. federal securities laws, the Code, the rules and
regulations of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
“
Award
”
means the grant of an Incentive Stock Options, Non-Qualified Stock Options and/or restricted common stock.
“
Awardee
”
means any non-executive employee granted an Incentive Stock Options, Non-Qualified Stock Options and/or restricted common stock.
“
Board
”
means the Board of Directors of the Company.
“
Cause
”
means, unless otherwise specifically provided in a Awardee’s Option Agreement, or Stock Award Agreement, a finding by the
Administrator that the Awardee’s employment with or service to the Company or any Affiliate was terminated due to one or
more of the following: (i) the Awardee’s use of alcohol or any unlawful controlled substance to an extent that it interferes
with the performance of the Awardee’s duties; (ii) the Awardee’s commission of any act of fraud, insubordination,
misappropriation or personal dishonesty relating to or involving the Company or any Affiliate in any material respect; (iii) the
Awardee’s gross negligence; (iv) the Awardee’s violation of any express direction of the Company or of any Affiliate
or any material violation of any rule, regulation, policy or plan established by the Company or any Affiliate from time to time
regarding the conduct of its employees or its business; (v) the Awardee’s disclosure or use of confidential information
of the Company or any Affiliate, other than as required in the performance of the Awardee’s duties; (vi) actions by
the Awardee that are determined by the Administrator to be clearly contrary to the best interests of the Company and/or its Affiliates
as determined in good faith by the Administrator; (vii) the Awardee’s conviction of a crime constituting a felony or
any other crime involving moral turpitude; or (viii) any other act or omission which, in the determination of the Administrator,
is materially detrimental to the business of the Company or of an Affiliate. Notwithstanding the foregoing, if a Awardee has entered
into a written employment or consulting agreement with the Company that specifies the conditions or circumstances under which the
Awardee’s service may be terminated for cause, then the terms of such agreement shall apply for purposes of determining whether
“Cause” shall have occurred for purposes of this Plan.
“
Change in Control
Event
” has the meaning set forth in Section 13(c).
“
Code
”
means the Internal Revenue Code of 1986, as amended.
“
Committee
”
means a committee of Directors appointed by the Board in accordance with
Section 4 of the Plan.
“
Common Stock
”
means the common stock, par value $0.001 per share, of the Company.
“
Company
”
means SharkReach, Inc., a Nevada corporation.
“
Director
”
means a member of the Board or of the board of directors of an Affiliate.
“
Disability
”
means total and permanent disability as defined in Section 22(e)(3) of the Code.
“
Employee
”
means any person, including officers and Directors, serving as an employee of the Company or an Affiliate. An individual shall
not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any Subsidiary or any successor. For purposes of an Option initially
granted as an Incentive Stock Option, if a leave of absence of more than three months precludes such Option from being treated
as an Incentive Stock Option under the Code, such Option thereafter shall be treated as a Non-qualified Stock Option for purposes
of this Plan. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.
“
Fair Market
Value
” means, as of any date, the value of Common Stock determined as follows:
(i) if
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the NASDAQ
National Market or the NASDAQ Capital Market, the Fair Market Value of a Share shall be the closing sales price of a Share (or the
closing bid, if no such sales were reported) as quoted on such exchange or system for the last market trading day prior to the
day of determination, as reported in
The Wall Street Journal
or such other source as the Administrator deems reliable;
(ii) if
the Common Stock is regularly quoted by a recognized securities dealer but is not listed in the manner contemplated by clause (i)
above, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Common Stock on the
last market trading day prior to the day of determination, as reported in
The Wall Street Journal
or such other source as
the Administrator deems reliable; or
(iii) if
neither clause (i) above nor clause (ii) above applies, the Fair Market Value shall be determined in good faith by the
Administrator.
“
Incentive Stock
Option
” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
“
Non-qualified
Stock Option
” means an Option not intended to qualify as an Incentive Stock Option.
“
Notice of Grant
”
means a written or electronic notice evidencing certain terms and conditions of an Award.
“
Option
”
means a stock option granted pursuant to the Plan.
“
Option Agreement
”
means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan and the applicable Notice of Grant.
“
Optioned Stock
or Shares
” means the Common Stock subject to an Option Non-Qualified Stock Option or Stock Award.
“
Optionee
”
means the holder of an outstanding Option Non-Qualified Stock Option or Stock Award granted under the Plan.
“
Parent
”
means a “parent corporation” of the Company (or, in the context of Section 13(c) of the Plan, of a successor corporation),
whether now or hereafter existing, as defined in Section 424(e) of the Code.
“
Restricted
Period
” has the meaning set forth in Section 11(a).
“
Restricted
Stock
” means shares of Common Stock acquired pursuant to a grant of a Stock Award under Section 11 of the Plan.
“
Rule 16b-3
”
means Rule 16b-3 of the Exchange Act or any successor to such Rule 16b-3, as such rule is in effect when discretion is
being exercised with respect to the Plan.
“
Section 16(b)
”
means Section 16(b) of the Exchange Act.
“
Share
”
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.
“
Stock Award
”
means an Award of Shares pursuant to Section 11 of the Plan.
“
Stock Award
Agreement
” means an agreement, approved by the Administrator, providing the terms and conditions of a Stock Award. Each
Stock Award Agreement shall be subject to the terms and conditions of the Plan and the applicable Notice of Grant.
“
Stock Award
Shares
” means Shares subject to a Stock Award.
“
Stock Awardee
”
means the holder of an outstanding Stock Award granted under the Plan.
“
Subsidiary
”
means a “subsidiary corporation” of the Company (or, in the context of Section 13(c) of the Plan, of a successor
corporation), whether now or hereafter existing, as defined in Section 424(f) of the Code.
“
Substitute
Options
” has the meaning set forth in Section 14.
3.
Subject
to the Plan.
Subject to the provisions of Section 13 of the Plan, the initial maximum number of shares of Common
Stock that may be issued under the Plan shall be 2,500,000 shares of Common Stock. For purposes of the foregoing limitation, the
shares of Common Stock underlying any Awards that are forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Common Stock or otherwise terminated (other than by exercise) shall be added back to the number of shares of Common Stock available
for issuance under the Plan. Common Stock to be issued under the Plan may be either authorized and unissued shares or shares held
in treasury by the Company.
4.
Administration
of the Plan.
(a) Appointment
of Committee. The Plan shall be administered by the Board of Directors or a Committee to be appointed by the Board.
The Board shall have the power to add or remove members of the Committee, from time to time, and to fill vacancies thereon arising
by resignation, death, removal, or otherwise. Meetings shall be held at such times and places as shall be determined by the Committee.
A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before that meeting.
(b)
Powers
of the Administrator
. Subject to the provisions of the Plan, the Administrator shall have the authority, in its discretion:
(i) to
determine the Fair Market Value;
(ii) to
determine the number of shares of Common Stock to be covered by each Award granted hereunder;
(iii) to
approve forms of agreement for use under the Plan;
(iv) to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder and of any Option
Agreement and/or Stock Award Agreement. Such terms and conditions include, but are not limited to, the exercise price, the time
or times when Options or Stock Awards may be exercised (which may be based on performance criteria), any vesting, acceleration
or waiver of forfeiture provisions, and any restriction or limitation regarding any Option, Non-qualified Option or Restricted
Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;
(v) to
construe and interpret the terms of the Plan, Awards granted pursuant to the Plan and agreements entered into pursuant to the Plan;
(vi) to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under foreign tax laws;
(vii) to
modify or amend each Option or Stock Award (subject to Section 16(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than otherwise provided for in the Plan, provided, however,
any such extension shall be consistent with Code Section 422(a)(2) and other Applicable Laws;
(viii) to
allow Optionees to satisfy withholding tax obligations by having the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the amount required to be withheld, provided that withholding
is calculated at no less than the minimum statutory withholding level. The Fair Market Value of the Shares to be withheld shall
be determined as of the date that the income resulting from exercise of the Option is recognized by the Optionee. All determinations
to have Shares withheld for this purpose shall be made by the Administrator in its discretion;
(ix) to
authorize any person to execute on behalf of the Company any agreement entered into pursuant to the Plan and any instrument required
to effect the grant of an Award previously granted by the Administrator; and
(x) to
make all other determinations deemed necessary or advisable for purposes of administering the Plan.
(c)
Effect
of Administrator’s Decision
. The Administrator’s decisions, determinations and interpretations shall
be final and binding on all holders of Awards. Neither the Administrator, nor any member or delegate thereof, shall be liable for
any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and each of the
foregoing shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage
or expense (including without limitation reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under any directors’ and officers’ liability insurance coverage which may be in effect from
time to time.
5.
Eligibility
. Incentive
Stock Options, Non-qualified Stock Options and Restricted Stock may be granted to all non-executive officers of the Company.
6.
Limitations.
(a) Each
Option shall be designated in the applicable Option Agreement as either an Incentive Stock Option or a Non-qualified Stock Option.
However, notwithstanding such designation, if an Employee first becomes eligible in any given year to exercise Incentive Stock
Options for Shares having a Fair Market Value in excess of $100,000, those Options representing the excess shall be treated as
Non-qualified Stock Options. In the previous sentence, “Incentive Stock Options” include Incentive Stock Options granted
under any plan of the Company or any Affiliate. For the purpose of deciding which Options apply to Shares that “exceed”
the $100,000 limit, Incentive Stock Options shall be taken into account in the same order as granted. The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such Shares is granted.
(b) Neither
the Plan nor any Award nor any agreement entered into pursuant to the Plan shall confer upon an awardee any right with respect
to continuing the grantee’s relationship as a Service Provider with the Company or any Affiliate, nor shall they interfere
in any way with the awardee’s right or the right of the Company or any Affiliate to terminate such relationship at any time,
with or without cause.
7.
Term
of the Plan
. The Plan shall become effective upon approval by the Company’s shareholders and shall continue
in effect for a term of ten (10) years unless terminated earlier under Section 13 of the Plan.
8.
Term
of Options
. The term of each Option shall be stated in the applicable Option Agreement or, if not so stated, ten
years from the date of grant. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns, directly or indirectly, stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company and any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the applicable Option Agreement.
9.
Option
Exercise Price; Exercisability
.
(a)
Exercise
Price
. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined
by the Administrator, subject to the following:
(i) In
the case of an Incentive Stock Option:
|
1)
|
granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company and any Affiliate, the per Share exercise
price shall be not less than 110% of the Fair Market Value per Share on the date of grant, or
|
|
2)
|
granted to any Employee other than an Employee described in paragraph (A) immediately above,
the per Share exercise price shall be not less than 100% of the Fair Market Value per Share on the date of grant.
|
(ii) In
the case of a Non-qualified Stock Option, the per Share exercise price shall be not less than 100% of the Fair Market Value per
Share on the date of grant.
(iii) Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than 100% (or 110%, if clause (i)(A) above
applies) of the Fair Market Value per Share on the date of grant pursuant to a merger or other comparable corporate transaction,
but in no event shall Options be granted at a per Share exercise price that would cause the Options to be deemed a deferral of
compensation under Code Section 409A.
(b)
Exercise
Period and Conditions
. At the time that an Option is granted, the Administrator shall fix the period within which
the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised.
10.
Exercise
of Options; Consideration.
(a)
Procedure
for Exercise; Rights as a Shareholder
. Any Option granted hereunder shall be exercisable according to the terms
of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement,
provided, however, that unless otherwise determined by the Administrator and provided for in the Option Agreement, each Option
shall vest and become exercisable as to one-sixth (1/6) of the Shares subject to the Option on the date that is six months after
the date of grant, and as to an additional one-sixth (1/6) of the Shares subject to the Option every six months thereafter until
fully vested and exercisable. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled
during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised
when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option
Agreement and Section 10(f) of the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee.
Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 13 of the Plan. Exercising an Option in any manner shall decrease
the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares
as to which the Option is exercised.
(b)
Termination
of Relationship as an Non-executive Employee
. If an Optionee ceases to be an non-executive employee, other than
as a result of the Optionee’s death, Disability or termination for Cause, the Optionee may exercise his or her Option within
such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). In the absence
of a specified time in the Option Agreement and except as otherwise provided in Sections 10(c), 10(d) and 10(e) of this
Plan, the Option shall remain exercisable for three months following the Optionee’s termination (but in no event later
than the expiration of the term of such Option). If, on the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee
does not exercise his or her Option in full within the time specified by the Administrator, the unexercised portion of the Option
shall terminate, and the Shares covered by such unexercised portion of the Option shall revert to the Plan. Notwithstanding anything
contained herein to the contrary, an Optionee who changes his or her status from non-executive to executive shall not be deemed
to have ceased being an employee for purposes of this Section 10(b), nor shall a transfer of employment among the Company
and any Affiliate be considered a termination of employment.
(c)
Disability
of an Optionee
. If an Optionee ceases to be a non-executive employee as a result of the Optionee’s Disability,
the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the
Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth
in the Notice of Grant). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee’s termination (but in no event later than the expiration of the term of such
Option). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option in full
within the time specified herein, the unexercised portion of the Option shall terminate, and the Shares covered by such unexercised
portion of the Option shall revert to the Plan.
(d)
Death
of an Optionee
. If an Optionee dies while a non-executive employee, the Option may be exercised within such period
of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s death (but in
no event later than the expiration of the term of such Option). If, at the time of death, the Optionee is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If the Option is not so
exercised in full within the time specified herein, the unexercised portion of the Option shall terminate, and the Shares covered
by the unexercised portion of such Option shall revert to the Plan.
(e)
Termination
for Cause.
Unless otherwise provided in an Option Agreement, if a non-executive employee relationship with the Company
is terminated for Cause, then such employee shall have no right to exercise any of such employee’s Options at any time on
or after the effective date of such termination. All Shares covered by such Options and not acquired by exercise prior to the date
of such termination shall revert to the Plan.
(f)
Form
of Consideration
. The Administrator shall determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form
of consideration at the time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) other
Shares of the Company’s capital stock which (A) have been owned by the Optionee for more than six months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares
as to which said Option shall be exercised;
(iv) consideration
received by the Company under a cashless exercise (net issue) program permitted by the Administrator, including a cashless exercise
program utilizing the services of a single broker acceptable to the Administrator or without (see (v) below;
(v)
Net Issue Exercise.
In lieu of exercising this Option, the Optionee may elect to receive Option Shares equal to the value
of this Option (or the portion thereof being canceled) by surrender of this Option at the principal office of the Company together
with notice of such election, in which event the Company shall issue to the Optionee a number of Option Shares computed using the
following formula:
Y (A-B)
X = ———————
A
|
Where:
|
X = the number of the Option Shares to be issued to the
Optionee.
|
Y = the number of option
shares purchasable under the option grant.
A = the fair market value
of one Share on the date of determination.
B= the per share Exercise
Price.
(vi) a
reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s
participation in any Company-sponsored deferred compensation program or arrangement;
(vii) any
combination of the foregoing methods of payment; or
(viii) such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.
11.
Stock
Awards
. The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase
price as it determines) Shares to any non-executive employee, as defined herein, subject to such terms and conditions, including
vesting and/or performance conditions, as the Administrator sets forth in a Stock Award Agreement evidencing such grant. Stock
Awards may be granted or sold in respect of past services or other valid consideration or in lieu of any cash compensation otherwise
payable to such individual. The grant of Stock Awards shall be subject to the following provisions:
(a) At
the time a Stock Award is made, the Administrator shall establish a vesting period (the “Restricted Period”) applicable
to the Stock Award Shares subject to such Stock Award or shall determine that such Stock Award is not subject to any vesting requirements.
Subject to the right of the Administrator to establish a Restricted Period that extends vesting dates to later or earlier dates
than the dates provided in this sentence, the Restricted Period of a Stock Award, if any, shall lapse as to one-sixth (
1
/6)
of the Shares subject to the Stock Award on the date that is six months after the date of grant, and as to an additional one-sixth
(
1
/6) of the Shares subject to the Stock Award every six months thereafter until unrestricted. The Administrator may,
in its sole discretion, at the time a grant is made, prescribe restrictions in addition to or in lieu of the expiration of the
Restricted Period, including the satisfaction of corporate or individual performance objectives. The Administrator may provide
that all restrictions on Stock Award Shares shall lapse if certain performance criteria are met and that, if such criteria are
not met, that such restrictions shall lapse if certain vesting conditions are satisfied. None of the Stock Award Shares may be
sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period applicable to such Stock
Award Shares or prior to the satisfaction of any other restrictions prescribed by the Administrator with respect to such Stock
Award Shares.
(b) The
Company shall issue, in the name of each Service Provider to whom Stock Award Shares have been granted, stock certificates representing
the total number of Stock Award Shares granted to such person, as soon as reasonably practicable after the grant. The Company,
at the direction of the Administrator, shall hold such certificates, properly endorsed for transfer, for the Stock Awardee’s
benefit until such time as the Stock Award Shares are forfeited to the Company, or the restrictions lapse.
(c) Unless
otherwise provided by the Administrator, holders of Stock Award Shares shall have the right to vote such Shares and have the right
to receive any cash dividends with respect to such Shares. All distributions, if any, received by a Stock Awardee with respect
to Stock Award Shares as a result of any stock split, stock distribution, combination of shares, or other similar transaction shall
be subject to the restrictions of this Section 11.
(d) Subject
to the terms of the applicable Stock Award Agreement, any Stock Award Shares granted to a Service Provider pursuant to the Plan
shall be forfeited if, prior to the date on which all restrictions applicable to such Stock Award shall have lapsed, the Stock
Awardee voluntarily terminates employment with the Company or its Affiliates or resigns or voluntarily terminates his consultancy
arrangement with the Company or its Affiliates or if the Stock Awardee’s employment or consultancy arrangement is terminated
for Cause. If the Stock Awardee’s employment or consultancy arrangement terminates for any other reason, the Stock Award
Shares held by such person shall be forfeited, unless the Administrator, in its sole discretion, shall determine otherwise. Upon
such forfeiture, the Stock Award Shares that are forfeited shall be retained in the treasury of the Company and be available for
subsequent awards under the Plan.
(e) Upon
the satisfaction of the conditions prescribed by the Administrator with respect to a particular Stock Award, the restrictions applicable
to the related Stock Award Shares shall lapse and, at the Stock Awardee’s request, a stock certificate for the number of
Stock Award Shares with respect to which the restrictions have lapsed shall be delivered, free of all such restrictions under the
Plan, to the Stock Awardee or his beneficiary or estate, as the case may be.
12.
Non-Transferability
. Unless
determined otherwise by the Administrator, an Option, and Stock Award (until such time as all restrictions lapse) may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution
and, in the case of an Option, may be exercised, during the lifetime of an Awardee, only by the Awardee. If the Administrator makes
an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate. Notwithstanding
the foregoing, the Administrator, in its sole discretion, may provide in the Option Agreement regarding a given Option that the
Optionee may transfer, without consideration for the transfer, his or her Non-qualified Stock Options to members of his or her
immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this
Plan and the applicable Option. During the period when Shares subject to Stock Award are restricted (by virtue of vesting
schedules or otherwise), such Shares may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution.
13.
Adjustments
Upon Changes in Capitalization; Dissolution; Change in Control and Other Events.
(a)
Changes
in Capitalization
. Subject to any required action by the shareholders of the Company, the number of Shares of Common
Stock covered by each outstanding Option, and the number of Shares of Common Stock that have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation or expiration
of an Option, Non-qualified Stock Option or Stock Award, as well as the price per share of Common Stock covered by each such outstanding
Option, Option, Non-qualified Stock Option or Stock Award, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an Award hereunder.
(b)
Dissolution
or Liquidation
. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall
notify each holder of an Award as soon as practicable prior to the effective date of such proposed dissolution or liquidation.
The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option, Non-Qualified
Stock Option or Stock Award until ten (10) days prior to such transaction as to all of the Shares covered thereby. In addition,
the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of a Stock Award
or any restrictions as to any Stock Award shall lapse as to all such Shares covered thereby, provided the proposed dissolution
or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option,
Non-Qualified Stock Option or Stock Award will terminate immediately prior to the consummation of such proposed action.
(c)
Merger
or Asset Sale
. In the event of a merger or consolidation of the Company with or into another corporation or any
other entity or the exchange of substantially all of the outstanding stock of the Company for shares of another entity or other
property in which, after any such transaction the prior shareholders of the Company own less than fifty percent (50%) of the voting
shares of the continuing or surviving entity, or in the event of the sale of all or substantially all of the assets of the Company,
(any such event, a “Change of Control Event”), then, absent a provision to the contrary in any particular Option
Agreement or Stock Award (in which case the terms of such shall supersede each of the provisions of this Section 13(c)
that are inconsistent with such Agreement or Award), each outstanding Option, Non-Qualified Stock Option or Stock Award shall be
assumed or an equivalent option, right, share or award substituted by the successor corporation or a parent or subsidiary of the
successor corporation. In the event that the Administrator determines that the successor corporation or a parent or a subsidiary
of the successor corporation has refused to assume or substitute an equivalent option, right, agreement or award for each outstanding
Option, Non-Qualified Stock Option or Stock Award, the awardee shall fully vest in and have the right to exercise each outstanding
Option, Non-Qualified Stock Option or Stock Award as to all of the stock covered thereby, including Shares that would not otherwise
be vested or exercisable, and all vesting periods under Restricted Stock Awards shall be deemed to have been satisfied. If an Option,
Non-Qualified Stock Option or Stock Award becomes fully vested and exercisable in lieu of assumption or substitution in the event
of a Change of Control, the Administrator shall notify all awardees that all outstanding Options Non-Qualified Stock Option or
Stock Award shall be fully exercisable for a period of twenty (20) days from the date of such notice and that any Options,
Non-Qualified Stock Option or Stock Award that are not exercised within such period shall terminate upon the expiration of such
period. For the purposes of this paragraph, all outstanding Options Non-Qualified Stock Option or Stock Award shall be considered
assumed if, following the consummation of the Change of Control, the Option, Non-Qualified Stock Option or Stock Award confers
the right to purchase or receive, for each Share subject to the Option, Non-Qualified Stock Option or Stock Award immediately prior
to the consummation of the Change of Control, the consideration (whether stock, cash, or other property) received in the Change
of Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type chosen by the holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the Change of Control is not solely common stock of the successor corporation or its parent, the
Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise
of the Option, Non-Qualified Stock Option or Stock Award, for each Share subject to the Option, Non-Qualified Stock Option or Stock
Award, to be solely common stock of the successor corporation or its parent or subsidiary equal in fair market value to the per
share consideration received by holders of Common Stock in the Change of Control.
14.
Substitute
Options
. In the event that the Company, directly or indirectly, acquires another entity, the Board may authorize
the issuance of stock options (“Substitute Options”) to the individuals performing services for the acquired entity
in substitution of stock options previously granted to those individuals in connection with their performance of services for such
entity upon such terms and conditions as the Board shall determine, taking into account the conditions of Code Section 424(a),
as from time to time amended or superseded, in the case of a Substitute Option that is intended to be an Incentive Stock Option.
Shares of capital stock underlying Substitute Stock Options shall not constitute Shares issued pursuant to this Plan for any purpose.
15.
Date
of Grant
. The date of grant of an Option, Non-Qualified Stock Option or Stock Award shall be, for all purposes,
the date on which the Administrator makes the determination granting such Option, Non-Qualified Stock Option or Stock Award, or
such other later date as is determined by the Administrator. Notice of the determination shall be provided to each grantee within
a reasonable time after the date of such grant.
16.
Amendment
and Termination of the Plan.
(a)
Amendment
and Termination
. The Board may at any time amend, alter, suspend or terminate the Plan.
(b)
Shareholder
Approval
. The Company shall obtain shareholder approval of any Plan amendment to the extent necessary to comply
with Applicable Laws.
(c)
Effect
of Amendment or Termination
. No amendment, alteration, suspension or termination of the Plan shall adversely affect
the rights of any Awardee with respect to an outstanding Award, unless mutually agreed otherwise between the Awardee and the Administrator,
which agreement shall be in writing and signed by the Awardee and the Company. Termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination.
17.
Conditions
Upon Issuance of Shares.
(a)
Legal
Compliance
. Shares shall not be issued in connection with the grant of any Stock Award or Unrestricted Share or
the exercise of any Option, Non-Qualified Stock Option or Stock Award unless such grant or the exercise of such Non-Qualified Stock
Option or Stock Award and the issuance and delivery of such Shares shall comply with Applicable Laws.
(b)
Investment
Representations
. As a condition to the grant of any Award or the exercise of any Option, Non-Qualified Stock Option
or Stock Award, the Company may require the person receiving such Award or exercising such Option, Non-Qualified Stock Option or
Stock Award to represent and warrant at the time of any such exercise or grant that the applicable Shares are being acquired only
for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
(c)
Additional
Conditions
. The Administrator shall have the authority to condition the grant of any Award or rights in such other
manner that the Administrator determines to be appropriate, provided that such condition is not inconsistent with the terms of
the Plan. Such conditions may include, among other things, obligations of recipients to execute lock-up agreements and shareholder
agreements in the future. The Administrator may implement such measures as the Administrator deems appropriate to determine whether
Shares acquired as a result of the exercise of an Incentive Stock Option have been the subject of a “disqualifying disposition”
for federal income tax purposes, including requiring the Optionee to hold such Shares in his or her own name and requiring that
the Optionee notify the Administrator of any such “disqualifying disposition.”
(d)
Trading
Policy Restrictions
. Option, Non-Qualified Stock Option or Stock Award exercises and other Awards under the Plan
shall be subject to the terms and conditions of any insider trading policy established by the Company or the Administrator.
18.
Inability
to Obtain Authority
. The inability of the Company to obtain authority from any regulatory body having jurisdiction
over the Company, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, 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.
19.
Reservation
of Shares
. The Company, during the term of this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
20.
Shareholder
Approval
. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months
after the date the Plan is adopted, or earlier as required by the rules of the stock exchange governing trading of the Company’s
stock. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws.
21.
Withholding;
Notice of Sale
. The Company shall be entitled to withhold from any amounts payable to an Employee any amounts, which
the Company determines, in its discretion, are required to be withheld under any Applicable Law as a result of any action taken
by a holder of an Award.
22.
Governing
Law
. This Plan shall be governed by the laws of the state of Nevada, without regard to conflict of law principles.
SHARKREACH 2016
EQUITY INCENTIVE PLAN
1.
Purposes
of the Plan
. The purposes of this Equity Incentive Plan (the “
Plan
”) are to attract and retain the
best available consultants, advisors and other third parties and, to provide additional incentives to such persons to promote
the success of the Company and the Company’s Affiliates. Options granted under the Plan may be Non-Qualified Stock
Options and restricted common stock, as determined by the Administrator at the time of grant. Our Board and holders of a
majority of the Company’s outstanding common stock must authorize this Plan which will cover an aggregate of 2,500,000
shares of common stock.
The Company intends to grant Non-qualified Stock Options and restricted common stock to
consultants, advisors and other third parties that the Company deems instrumental in obtaining prospective customers, or who
have followers, a client base or a fan base (“Influencers”), under the Plan.
2.
Definitions
.
As used herein, the following definitions shall apply:
“
Administrator
”
means the Board or a committee that has been delegated the responsibility of administering the Plan in accordance with Section 4
of the Plan.
“
Affiliate”
means any Parent and/or Subsidiary.
“
Applicable Laws
”
means the requirements relating to the administration of equity compensation plans under the applicable corporate and securities
laws of any of the states in the United States, U.S. federal securities laws, the Code, the rules and regulations of
any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan.
“
Award
”
means the grant of a Non-Qualified Stock Options and/or restricted common stock to Influencers.
“
Awardee
”
means any consultants, advisors and other third parties that the Company deems influential to prospective customers, or who have
followers, a client base or a fan base, who are granted a Non-Qualified Stock Options and/or restricted common stock under this
Plan.
“
Board
”
means the Board of Directors of the Company.
“
Cause
”
means, unless otherwise specifically provided in a Awardee’s Option Agreement, or Stock Award Agreement, a finding by the
Administrator that the Awardee’s employment with or service to the Company or any Affiliate was terminated due to one or
more of the following: (i) the Awardee’s use of alcohol or any unlawful controlled substance to an extent that it interferes
with the performance of the Awardee’s duties; (ii) the Awardee’s commission of any act of fraud, insubordination,
misappropriation or personal dishonesty relating to or involving the Company or any Affiliate in any material respect; (iii) the
Awardee’s gross negligence; (iv) the Awardee’s violation of any express direction of the Company or of any Affiliate
or any material violation of any rule, regulation, policy or plan established by the Company or any Affiliate from time to time
regarding the conduct of its employees or its business; (v) the Awardee’s disclosure or use of confidential information
of the Company or any Affiliate, other than as required in the performance of the Awardee’s duties; (vi) actions by
the Awardee that are determined by the Administrator to be clearly contrary to the best interests of the Company and/or its Affiliates
as determined in good faith by the Administrator; (vii) the Awardee’s conviction of a crime constituting a felony or
any other crime involving moral turpitude; or (viii) any other act or omission which, in the determination of the Administrator,
is materially detrimental to the business of the Company or of an Affiliate. Notwithstanding the foregoing, if a Awardee has entered
into a written employment or consulting agreement with the Company that specifies the conditions or circumstances under which the
Awardee’s service may be terminated for cause, then the terms of such agreement shall apply for purposes of determining whether
“Cause” shall have occurred for purposes of this Plan.
“
Change in Control
Event
” has the meaning set forth in Section 13(c).
“
Code
”
means the Internal Revenue Code of 1986, as amended.
“
Committee
”
means a committee of Directors appointed by the Board in accordance with
Section 4 of the Plan.
“
Common Stock
”
means the common stock, par value $0.00001 per share, of the Company.
“
Company
”
means SharkReach, Inc., a Nevada corporation.
“
Director
”
means a member of the Board or of the board of directors of an Affiliate.
“
Disability
”
means total and permanent disability as defined in Section 22(e)(3) of the Code.
“
Fair Market Value
”
means, as of any date, the value of Common Stock determined as follows:
(i) if the
Common Stock is listed on any established stock exchange or a national market system, including without limitation the NASDAQ National
Market or the NASDAQ Capital Market, the Fair Market Value of a Share shall be the closing sales price of a Share (or the
closing bid, if no such sales were reported) as quoted on such exchange or system for the last market trading day prior to the
day of determination, as reported in
The Wall Street Journal
or such other source as the Administrator deems reliable;
(ii) if the
Common Stock is regularly quoted by a recognized securities dealer but is not listed in the manner contemplated by clause (i)
above, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Common Stock on the
last market trading day prior to the day of determination, as reported in
The Wall Street Journal
or such other source as
the Administrator deems reliable; or
(iii) if neither
clause (i) above nor clause (ii) above applies, the Fair Market Value shall be determined in good faith by the Administrator.
“
Incentive Stock
Option
” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
“
Non-qualified Stock
Option
” means an Option not intended to qualify as an Incentive Stock Option.
“
Notice of Grant
”
means a written or electronic notice evidencing certain terms and conditions of an Award.
“
Option
”
means a Non-Qualified Stock Option granted pursuant to the Plan.
“
Option Agreement
”
means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan and the applicable Notice of Grant.
“
Optioned Stock
or Shares
” means the Common Stock subject to a Non-Qualified Stock Option or Stock Award.
“
Optionee
”
means the holder of an outstanding Option Non-Qualified Stock Option or Stock Award granted under the Plan.
“
Parent
”
means a “parent corporation” of the Company (or, in the context of Section 13(c) of the Plan, of a successor corporation),
whether now or hereafter existing, as defined in Section 424(e) of the Code.
“
Restricted Period
”
has the meaning set forth in Section 11(a).
“
Restricted Stock
”
means shares of Common Stock acquired pursuant to a grant of a Stock Award under Section 11 of the Plan.
“
Rule 16b-3
”
means Rule 16b-3 of the Exchange Act or any successor to such Rule 16b-3, as such rule is in effect when discretion is
being exercised with respect to the Plan.
“
Section 16(b)
”
means Section 16(b) of the Exchange Act.
“
Share
”
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.
“
Stock Award
”
means an Award of Shares pursuant to Section 11 of the Plan.
“
Stock Award Agreement
”
means an agreement, approved by the Administrator, providing the terms and conditions of a Stock Award. Each Stock Award Agreement
shall be subject to the terms and conditions of the Plan and the applicable Notice of Grant.
“
Stock Award Shares
”
means Shares subject to a Stock Award.
“
Stock Awardee
”
means the holder of an outstanding Stock Award granted under the Plan.
“
Subsidiary
”
means a “subsidiary corporation” of the Company (or, in the context of Section 13(c) of the Plan, of a successor
corporation), whether now or hereafter existing, as defined in Section 424(f) of the Code.
“
Substitute Options
”
has the meaning set forth in Section 14.
3.
Subject
to the Plan.
Subject to the provisions of Section 13 of the Plan, the initial maximum number of shares of Common
Stock that may be issued under the Plan shall be 2,500,000 shares. For purposes of the foregoing limitation, the shares of Common
Stock underlying any Awards that are forfeited, canceled, reacquired by the Company, satisfied without the issuance of Common Stock
or otherwise terminated (other than by exercise) shall be added back to the number of shares of Common Stock available for issuance
under the Plan. Common Stock to be issued under the Plan may be either authorized and unissued shares or shares held in treasury
by the Company.
4.
Administration
of the Plan.
(a) Appointment of Committee. The
Plan shall be administered by the Board of Directors or a Committee to be appointed by the Board. The Board shall have the power
to add or remove members of the Committee, from time to time, and to fill vacancies thereon arising by resignation, death, removal,
or otherwise. Meetings shall be held at such times and places as shall be determined by the Committee. A majority of the members
of the Committee shall constitute a quorum for the transaction of business, and the vote of a majority of those members present
at any meeting shall decide any question brought before that meeting.
(b)
Powers of the Administrator
. Subject
to the provisions of the Plan, the Administrator shall have the authority, in its discretion:
(i) to determine Awardees
under this Plan
(ii) to determine the
Fair Market Value;
(iii) to determine the
number of shares of Common Stock to be covered by each Award granted hereunder;
(iv) to approve forms
of agreement for use under the Plan;
(v) to determine the
terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder and of any Option Agreement and/or
Stock Award Agreement. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options
or Stock Awards may be exercised (which may be based on performance criteria), any vesting, acceleration or waiver of forfeiture
provisions, and any restriction or limitation regarding any Option, Non-qualified Option or Restricted Stock, based in each case
on such factors as the Administrator, in its sole discretion, shall determine;
(vi) to construe and
interpret the terms of the Plan, Awards granted pursuant to the Plan and agreements entered into pursuant to the Plan;
(vii) to prescribe,
amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established
for the purpose of qualifying for preferred tax treatment under foreign tax laws;
(viii) to modify or
amend each Option or Stock Award (subject to Section 16(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than otherwise provided for in the Plan, provided, however, any such
extension shall be consistent with Code Section 422(a)(2) and other Applicable Laws;
(ix) to allow Optionees
to satisfy withholding tax obligations by having the Company withhold from the Shares to be issued upon exercise of an Option that
number of Shares having a Fair Market Value equal to the amount required to be withheld, provided that withholding is calculated
at no less than the minimum statutory withholding level. The Fair Market Value of the Shares to be withheld shall be determined
as of the date that the income resulting from exercise of the Option is recognized by the Optionee. All determinations to have
Shares withheld for this purpose shall be made by the Administrator in its discretion;
(x) to authorize any
person to execute on behalf of the Company any agreement entered into pursuant to the Plan and any instrument required to effect
the grant of an Award previously granted by the Administrator; and
(xi) to make all other
determinations deemed necessary or advisable for purposes of administering the Plan.
(c)
Effect of Administrator’s
Decision
. The Administrator’s decisions, determinations and interpretations shall be final and binding on
all holders of Awards. Neither the Administrator, nor any member or delegate thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan, and each of the foregoing shall be entitled in all
cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including without limitation
reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors’
and officers’ liability insurance coverage which may be in effect from time to time.
5.
Eligibility
.
Non-qualified Stock Options and Restricted Stock may be granted to all executive and non-executive officers of the Company.
6.
Limitations.
(a) Each Option shall
be designated in the applicable Option Agreement as a Non-qualified Stock Option.
(b) Neither the Plan nor
any Award nor any agreement entered into pursuant to the Plan shall confer upon an awardee any right with respect to continuing
the grantee’s relationship as a Service Provider with the Company or any Affiliate, nor shall they interfere in any way with
the awardee’s right or the right of the Company or any Affiliate to terminate such relationship at any time, with or without cause.
7.
Term
of the Plan
. The Plan shall become effective upon approval by the Company’s shareholders and shall continue
in effect for a term of ten (10) years unless terminated earlier under Section 13 of the Plan.
8.
Term
of Options
. The term of each Option shall be stated in the applicable Option Agreement or, if not so stated, ten
years from the date of grant. However, in the case of an Non-Qualified Stock Option granted to an Optionee who, at the time the
Non-Qualified Stock Option is granted, owns, directly or indirectly, stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company and any Parent or Subsidiary, the term of the Non-Qualified Stock
Option shall be five (5) years from the date of grant or such shorter term as may be provided in the applicable Option Agreement.
9.
Option
Exercise Price; Exercisability
.
(a)
Exercise Price
. The
per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator,
subject to the following:
(i) In the case of a
Non-qualified Stock Option, the per Share exercise price shall be not less than 100% of the Fair Market Value per Share on the
date of grant.
(ii) Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than 100% (or 110%, if clause (i)(A) above
applies) of the Fair Market Value per Share on the date of grant pursuant to a merger or other comparable corporate transaction,
but in no event shall Options be granted at a per Share exercise price that would cause the Options to be deemed a deferral of
compensation under Code Section 409A.
(b)
Exercise Period
and Conditions
. At the time that an Option is granted, the Administrator shall fix the period within which the Option
may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised.
10.
Exercise
of Options; Consideration.
(a)
Procedure for Exercise;
Rights as a Shareholder
. Any Option granted hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement, provided, however,
that unless otherwise determined by the Administrator and provided for in the Option Agreement, each Option shall vest and become
exercisable as to one-sixth (1/6) of the Shares subject to the Option on the date that is six months after the date of grant, and
as to an additional one-sixth (1/6) of the Shares subject to the Option every six months thereafter until fully vested and exercisable.
Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option,
and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration
and method of payment authorized by the Administrator and permitted by the Option Agreement and Section 10(f) of the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the Optionee. Until the Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise
of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan. Exercising an Option in any manner shall decrease the number of Shares thereafter available, both
for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(b)
Termination of
Relationship
. If an Optionee ceases to be eligible under this Plan, other than as a result of the Optionee’s
death, Disability or termination for Cause, the Optionee may exercise his or her Option within such period of time as is specified
in the Option Agreement to the extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In the absence of a specified time in the Option Agreement
and except as otherwise provided in Sections 10(c), 10(d) and 10(e) of this Plan, the Option shall remain exercisable
for three months following the Optionee’s termination (but in no event later than the expiration of the term of such
Option). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option in full
within the time specified by the Administrator, the unexercised portion of the Option shall terminate, and the Shares covered by
such unexercised portion of the Option shall revert to the Plan.
(c)
Disability of an
Optionee
. If an Optionee ceases to be eligible under this Planas a result of the Optionee’s Disability, the
Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option
is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in
the Notice of Grant). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee’s termination (but in no event later than the expiration of the term of such
Option). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option in full
within the time specified herein, the unexercised portion of the Option shall terminate, and the Shares covered by such unexercised
portion of the Option shall revert to the Plan.
(d)
Death of an Optionee
. In
the event of death of the Optionee , the Option may be exercised within such period of time as is specified in the Option Agreement
(but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee’s
estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the
Option is vested on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee’s death (but in no event later than the expiration of the term of
such Option). If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If the Option is not so exercised in full within the time specified herein, the
unexercised portion of the Option shall terminate, and the Shares covered by the unexercised portion of such Option shall revert
to the Plan.
(e)
Termination for
Cause.
Unless otherwise provided in an Option Agreement, if an Optionee’s relationship with the Company is
terminated for Cause, then such Optionee shall have no right to exercise his/her Options at any time on or after the effective
date of such termination. All Shares covered by such Options and not acquired by exercise prior to the date of such termination
shall revert to the Plan.
(f)
Form of Consideration
. The
Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) other Shares of
the Company’s capital stock which (A) have been owned by the Optionee for more than six months on the date of surrender,
and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;
(iv) consideration received
by the Company under a cashless exercise (net issue) program permitted by the Administrator, including a cashless exercise program
utilizing the services of a single broker acceptable to the Administrator or without (see (v) below;
(v)
Net
Issue Exercise.
In lieu of exercising this Option, the Optionee may elect to receive Option Shares equal to the value of this
Option (or the portion thereof being canceled) by surrender of this Option at the principal office of the Company together with
notice of such election, in which event the Company shall issue to the Optionee a number of Option Shares computed using the following
formula:
Y (A-B)
X = ———————
A
Where:
|
|
X = the number of the Option Shares to be issued to the Optionee.
|
|
|
Y = the number of option shares purchasable under the option grant.
|
|
|
A = the fair market value of one Share on the date of determination.
|
|
|
B= the per share Exercise Price.
|
(vi) a reduction in
the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination
of the foregoing methods of payment; or
(viii) such other consideration
and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.
11.
Stock
Awards
. The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase
price as it determines) Shares, as defined herein, subject to such terms and conditions, including vesting and/or performance conditions,
as the Administrator sets forth in a Stock Award Agreement evidencing such grant. Stock Awards may be granted or sold in respect
of past services or other valid consideration or in lieu of any cash compensation otherwise payable to such individual. The grant
of Stock Awards shall be subject to the following provisions:
(a) At the time a Stock
Award is made, the Administrator shall establish a vesting period (the “Restricted Period”) applicable to the
Stock Award Shares subject to such Stock Award or shall determine that such Stock Award is not subject to any vesting requirements.
Subject to the right of the Administrator to establish a Restricted Period that extends vesting dates to later or earlier dates
than the dates provided in this sentence, the Restricted Period of a Stock Award, if any, shall lapse as to one-sixth (
1
/6)
of the Shares subject to the Stock Award on the date that is six months after the date of grant, and as to an additional one-sixth
(
1
/6) of the Shares subject to the Stock Award every six months thereafter until unrestricted. The Administrator may,
in its sole discretion, at the time a grant is made, prescribe restrictions in addition to or in lieu of the expiration of the
Restricted Period, including the satisfaction of corporate or individual performance objectives. The Administrator may provide
that all restrictions on Stock Award Shares shall lapse if certain performance criteria are met and that, if such criteria are
not met, that such restrictions shall lapse if certain vesting conditions are satisfied. None of the Stock Award Shares may be
sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period applicable to such Stock
Award Shares or prior to the satisfaction of any other restrictions prescribed by the Administrator with respect to such Stock
Award Shares.
(b) The Company shall
issue, in the name of each Service Provider to whom Stock Award Shares have been granted, stock certificates representing the total
number of Stock Award Shares granted to such person, as soon as reasonably practicable after the grant. The Company, at the direction
of the Administrator, shall hold such certificates, properly endorsed for transfer, for the Stock Awardee’s benefit until
such time as the Stock Award Shares are forfeited to the Company, or the restrictions lapse.
(c) Unless otherwise provided
by the Administrator, holders of Stock Award Shares shall have the right to vote such Shares and have the right to receive any
cash dividends with respect to such Shares. All distributions, if any, received by a Stock Awardee with respect to Stock Award
Shares as a result of any stock split, stock distribution, combination of shares, or other similar transaction shall be subject
to the restrictions of this Section 11.
(d) Subject to the terms
of the applicable Stock Award Agreement, any Stock Award Shares granted to a Service Provider pursuant to the Plan shall be forfeited
if, prior to the date on which all restrictions applicable to such Stock Award shall have lapsed, the Stock Awardee voluntarily
terminates employment with the Company or its Affiliates or resigns or voluntarily terminates his consultancy arrangement with
the Company or its Affiliates or if the Stock Awardee’s employment or consultancy arrangement is terminated for Cause. If
the Stock Awardee’s employment or consultancy arrangement terminates for any other reason, the Stock Award Shares held by
such person shall be forfeited, unless the Administrator, in its sole discretion, shall determine otherwise. Upon such forfeiture,
the Stock Award Shares that are forfeited shall be retained in the treasury of the Company and be available for subsequent awards
under the Plan.
(e) Upon the satisfaction
of the conditions prescribed by the Administrator with respect to a particular Stock Award, the restrictions applicable to the
related Stock Award Shares shall lapse and, at the Stock Awardee’s request, a stock certificate for the number of Stock Award
Shares with respect to which the restrictions have lapsed shall be delivered, free of all such restrictions under the Plan, to
the Stock Awardee or his beneficiary or estate, as the case may be.
12.
Non-Transferability
. Unless
determined otherwise by the Administrator, an Option, and Stock Award (until such time as all restrictions lapse) may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution
and, in the case of an Option, may be exercised, during the lifetime of an Awardee, only by the Awardee. If the Administrator makes
an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate. Notwithstanding
the foregoing, the Administrator, in its sole discretion, may provide in the Option Agreement regarding a given Option that the
Optionee may transfer, without consideration for the transfer, his or her Non-qualified Stock Options to members of his or her
immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this
Plan and the applicable Option. During the period when Shares subject to Stock Award are restricted (by virtue of vesting
schedules or otherwise), such Shares may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution.
13.
Adjustments
Upon Changes in Capitalization; Dissolution; Change in Control and Other Events.
(a)
Changes in Capitalization
. Subject
to any required action by the shareholders of the Company, the number of Shares of Common Stock covered by each outstanding Option,
and the number of Shares of Common Stock that have been authorized for issuance under the Plan but as to which no Awards have yet
been granted or that have been returned to the Plan upon cancellation or expiration of an Option, Non-qualified Stock Option or
Stock Award, as well as the price per share of Common Stock covered by each such outstanding Option, Option, Non-qualified Stock
Option or Stock Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares of Common Stock subject to an Award hereunder.
(b)
Dissolution or
Liquidation
. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify
each holder of an Award as soon as practicable prior to the effective date of such proposed dissolution or liquidation. The Administrator
in its discretion may provide for an Optionee to have the right to exercise his or her Option, Non-Qualified Stock Option or Stock
Award until ten (10) days prior to such transaction as to all of the Shares covered thereby. In addition, the Administrator
may provide that any Company repurchase option applicable to any Shares purchased upon exercise of a Stock Award or any restrictions
as to any Stock Award shall lapse as to all such Shares covered thereby, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option, Non-Qualified
Stock Option or Stock Award will terminate immediately prior to the consummation of such proposed action.
(c)
Merger or Asset
Sale
. In the event of a merger or consolidation of the Company with or into another corporation or any other entity
or the exchange of substantially all of the outstanding stock of the Company for shares of another entity or other property in
which, after any such transaction the prior shareholders of the Company own less than fifty percent (50%) of the voting shares
of the continuing or surviving entity, or in the event of the sale of all or substantially all of the assets of the Company, (any such
event, a “Change of Control Event”), then, absent a provision to the contrary in any particular Option Agreement or
Stock Award (in which case the terms of such shall supersede each of the provisions of this Section 13(c) that are inconsistent
with such Agreement or Award), each outstanding Option, Non-Qualified Stock Option or Stock Award shall be assumed or an equivalent
option, right, share or award substituted by the successor corporation or a parent or subsidiary of the successor corporation.
In the event that the Administrator determines that the successor corporation or a parent or a subsidiary of the successor corporation
has refused to assume or substitute an equivalent option, right, agreement or award for each outstanding Option, Non-Qualified
Stock Option or Stock Award, the awardee shall fully vest in and have the right to exercise each outstanding Option, Non-Qualified
Stock Option or Stock Award as to all of the stock covered thereby, including Shares that would not otherwise be vested or exercisable,
and all vesting periods under Restricted Stock Awards shall be deemed to have been satisfied. If an Option, Non-Qualified Stock
Option or Stock Award becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change of Control,
the Administrator shall notify all awardees that all outstanding Options Non-Qualified Stock Option or Stock Award shall be fully
exercisable for a period of twenty (20) days from the date of such notice and that any Options, Non-Qualified Stock Option
or Stock Award that are not exercised within such period shall terminate upon the expiration of such period. For the purposes of
this paragraph, all outstanding Options Non-Qualified Stock Option or Stock Award shall be considered assumed if, following the
consummation of the Change of Control, the Option, Non-Qualified Stock Option or Stock Award confers the right to purchase or receive,
for each Share subject to the Option, Non-Qualified Stock Option or Stock Award immediately prior to the consummation of the Change
of Control, the consideration (whether stock, cash, or other property) received in the Change of Control by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type
chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change
of Control is not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the exercise of the Option, Non-Qualified Stock Option
or Stock Award, for each Share subject to the Option, Non-Qualified Stock Option or Stock Award, to be solely common stock of the
successor corporation or its parent or subsidiary equal in fair market value to the per share consideration received by holders
of Common Stock in the Change of Control.
14.
Substitute
Options
. In the event that the Company, directly or indirectly, acquires another entity, the Board may authorize
the issuance of stock options (“Substitute Options”) to the individuals performing services for the acquired entity
in substitution of stock options previously granted to those individuals in connection with their performance of services for such
entity upon such terms and conditions as the Board shall determine, taking into account the conditions of Code Section 424(a),
as from time to time amended or superseded, in the case of a Substitute Option that is intended to be an Non-Qualified Stock Option.
Shares of capital stock underlying Substitute Stock Options shall not constitute Shares issued pursuant to this Plan for any purpose.
15.
Date
of Grant
. The date of grant of an Option, Non-Qualified Stock Option or Stock Award shall be, for all purposes,
the date on which the Administrator makes the determination granting such Option, Non-Qualified Stock Option or Stock Award, or
such other later date as is determined by the Administrator. Notice of the determination shall be provided to each grantee within
a reasonable time after the date of such grant.
16.
Amendment
and Termination of the Plan.
(a)
Amendment and Termination
. The
Board may at any time amend, alter, suspend or terminate the Plan.
(b)
Shareholder Approval
. The
Company shall obtain shareholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.
(c)
Effect of Amendment
or Termination
. No amendment, alteration, suspension or termination of the Plan shall adversely affect the rights
of any Awardee with respect to an outstanding Award, unless mutually agreed otherwise between the Awardee and the Administrator,
which agreement shall be in writing and signed by the Awardee and the Company. Termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination.
17.
Conditions
Upon Issuance of Shares.
(a)
Legal Compliance
. Shares
shall not be issued in connection with the grant of any Stock Award or Unrestricted Share or the exercise of any Option, Non-Qualified
Stock Option or Stock Award unless such grant or the exercise of such Non-Qualified Stock Option or Stock Award and the issuance
and delivery of such Shares shall comply with Applicable Laws.
(b)
Investment Representations
. As
a condition to the grant of any Award or the exercise of any Option, Non-Qualified Stock Option or Stock Award, the Company may
require the person receiving such Award or exercising such Option, Non-Qualified Stock Option or Stock Award to represent and warrant
at the time of any such exercise or grant that the applicable Shares are being acquired only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
(c)
Additional Conditions
. The
Administrator shall have the authority to condition the grant of any Award or rights in such other manner that the Administrator
determines to be appropriate, provided that such condition is not inconsistent with the terms of the Plan. Such conditions may
include, among other things, obligations of recipients to execute lock-up agreements and shareholder agreements in the future.
The Administrator may implement such measures as the Administrator deems appropriate to determine whether Shares acquired as a
result of the exercise of an Non-Qualified Stock Option have been the subject of a “disqualifying disposition” for
federal income tax purposes, including requiring the Optionee to hold such Shares in his or her own name and requiring that the
Optionee notify the Administrator of any such “disqualifying disposition.”
(d)
Trading Policy
Restrictions
. Option, Non-Qualified Stock Option or Stock Award exercises and other Awards under the Plan shall
be subject to the terms and conditions of any insider trading policy established by the Company or the Administrator.
18.
Inability
to Obtain Authority
. The inability of the Company to obtain authority from any regulatory body having jurisdiction
over the Company, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, 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.
19.
Reservation
of Shares
. The Company, during the term of this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
20.
Shareholder
Approval
. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months
after the date the Plan is adopted, or earlier as required by the rules of the stock exchange governing trading of the Company’s
stock. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws.
21.
Withholding;
Notice of Sale
. The Company shall be entitled to withhold from any amounts payable to an Optionee any amounts, which
the Company determines, in its discretion, are required to be withheld under any Applicable Law as a result of any action taken
by a holder of an Award.
22.
Governing
Law
. This Plan shall be governed by the laws of the state of Nevada, without regard to conflict of law principles.