UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
x Preliminary
Information Statement
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
o Definitive
Information Statement
LIBERATOR, INC.
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
x No Fee required.
o Fee computed on
table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities
to which transaction applies:
(2) Aggregate number of securities
to which transaction applies:
(3) Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate
value of transaction:
(5) Total fee paid:
o Fee paid previously
with preliminary materials
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and
the date of its filing. |
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
LIBERATOR,
INC.
2745 Bankers Industrial Drive
Atlanta, Georgia 30360
Telephone: (770)
246-6400
INFORMATION STATEMENT PURSUANT TO SECTION
14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND REGULATION
14C THEREUNDER
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
NOTICE OF ACTIONS TAKEN BY WRITTEN CONSENT
OF MAJORITY SHAREHOLDER
IN LIEU OF A SPECIAL MEETING
To the shareholders of Liberator, Inc.:
This information statement
is furnished to holders of shares of common stock of Liberator, Inc., a Florida corporation, to inform you that, in lieu of a special
meeting of shareholders, on August 31, 2015 by written consent the holders of a majority of the combined voting power of our common
Stock and Series A Convertible Preferred Stock, voting as a single class, have (1) approved the name change of our company to “Luvu
Brands, Inc.” and (2) adopted and ratified our 2015 Equity Incentive Plan.
The accompanying information statement is being
furnished to our shareholders for informational purposes only pursuant to Section 14(c) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations prescribed thereunder. As described in this information statement, the foregoing corporate
action was approved by our board of directors by written consent on August 31, 2015. Thereafter, on August 31, 2015, members of
our board of directors and a principal shareholder who holds a majority of the combined voting power of our common
Stock and Series A Convertible Preferred Stock, adopted by written consent resolutions approving this action. The written consent
is the only shareholder approval required under Florida law for the purpose of approving the action. The Board is therefore not
soliciting your proxy or consent in connection with the matters discussed above. You are urged to read the information statement
carefully and in its entirety for a description of the action taken by the majority shareholder.
This action will not become effective before
the date which is 20 days after this information statement was first mailed to shareholders. This information statement is being
mailed on or about [ ], 2015 to shareholders of record on [ ], 2015.
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By order of the board of directors |
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/s/ Ronald P. Scott |
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[ ], 2015
Atlanta, Georgia |
Ronald P. Scott
Chief Financial Officer |
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INFORMATION STATEMENT
TABLE OF CONTENTS
|
Page No. |
Forward-looking statements |
i |
General information |
1 |
Principal shareholders |
1 |
Articles of Amendment to change our corporate name |
3 |
Adoption and Ratification of 2015 Equity Incentive Plan |
3 |
Dissenter’s rights |
4 |
Shareholders sharing the same last name and address |
4 |
Where you can find more information |
4 |
Exhibit A: Articles of Amendment to our Amended and Restated
Articles of Incorporation
Exhibit B: 2015 Equity Incentive Plan
FORWARD-LOOKING STATEMENTS
This information statement
contains “forward-looking statements.” These statements are based on our current expectations and involve risks and
uncertainties which may cause results to differ materially from those set forth in the statements. The forward-looking statements
may include statements regarding actions to be taken in the future. We undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or otherwise. Forward-looking statements should be evaluated
together with the many uncertainties that affect our business, particularly those set forth in the section on forward-looking
statements and in the risk factors in Item 1.A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 as filed
with the Securities and Exchange Commission (the “2014 10-K”) on September 29, 2014.
LIBERATOR,
INC.
2745 Bankers Industrial Drive
Atlanta, Georgia 30360
Telephone: (770)
246-6400
INFORMATION STATEMENT PURSUANT TO SECTION
14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
GENERAL INFORMATION
This information statement is being mailed on
or about [ ], 2015 to the holders of record at the close of business on [ ], 2015, which we refer to as the Record Date, of the
common stock of Liberator, Inc., a Florida corporation, in connection with actions taken by written consent of holders of a majority
of our common stock in lieu of a special meeting (1) approving the name change of our company to “Luvu Brands, Inc.”
and (2) adopted and ratified our 2015 Equity Incentive Plan.
Members of our board of directors and a principal
shareholder of our company who collectively own a majority of the combined voting power of our issued and outstanding common Stock
and Series A Convertible Preferred Stock, voting together as a single class, have executed a written consent on August 31, 2015
approving the actions. The majority shareholder held of record on the Record Date approximately 70% of the total combined voting
power of our issued and outstanding shares of common stock and Series A Convertible Preferred Stock, which was sufficient to approve
the action. The board of directors does not intend to solicit any proxies or consents from any other shareholders in connection
with these actions.
The elimination of the need for a meeting of
shareholders to approve the actions is made possible by Section 607.0704 of the Florida Business Corporation Act which provides
that any action to be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice,
and without a vote, if the action is taken by the holders of outstanding stock of each voting group entitled to vote thereon having
not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action
at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. In order to eliminate the costs
involved in holding a special meeting the majority shareholder executed the written consent.
This information statement is being distributed
pursuant to the requirements of Section 14(c) of the Securities Exchange Act of 1934, as amended to our shareholders of record
on the Record Date. The actions approved by the majority shareholder will be effective 20 days after the mailing of this information
statement. This information statement is being mailed on or about [ ], 2015 to shareholders of record on [ ], 2015. This information
statement also constitutes notice under Section 607.0704 of the Florida Business Corporations Act that the corporate action was
taken by written consent of the majority shareholder.
The entire cost of furnishing this information
statement will be borne by us. We will request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward
this information statement to the beneficial owners of our common stock held of record by them and will reimburse such persons
for their reasonable charges and expenses in connection therewith.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock by:
- all persons who are beneficial owners of five percent (5%) or more of any class of our voting securities;
- each of our directors;
- each of our Named Executive Officers; and
- all current directors and executive officers as a group.
1
Except as otherwise indicated, and subject to
applicable community property laws, the persons named in the table below have sole voting and investment power with respect to
all shares of common stock held by them.
Applicable percentage ownership in the following
table is based on [70,702,596] shares of common stock outstanding as of August 31, 2015. Beneficial ownership is determined in
accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership
of that person, shares of common stock subject to options held by that person that are currently exercisable or exercisable within
60 days of August 31, 2015, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing
the percentage ownership of any other person. Unless otherwise disclosed these persons’ address is c/o Liberator, Inc., 2745
Bankers Industrial Drive, Atlanta, GA 30360.
Title of
Class |
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Name and Address of Beneficial Owner |
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Amount and Nature of Beneficial Ownership |
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Percent
of Class |
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Executive Officers and Directors |
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Common |
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Louis S. Friedman |
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32,694,376 |
(1) |
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43.6 |
% |
Common |
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Ronald P. Scott |
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596,416 |
(2) |
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0.8 |
% |
Common |
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Leslie Vogelman |
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375,000 |
(3) |
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0.5 |
% |
Common |
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All directors and executive officers as a group (3 persons) |
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33,665,792 |
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44.4 |
% |
5% Shareholders |
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Common |
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Hope Capital, Inc. (4) |
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5,378,001 |
(5) |
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7.6 |
% |
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Executive Officers and Directors |
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Series A Convertible Preferred Stock |
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Louis S. Friedman |
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4,300,000 |
(6) |
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100.0 |
% |
Series A Convertible Preferred Stock |
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Ronald P. Scott |
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0 |
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0.0 |
% |
Series A Convertible Preferred Stock |
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Leslie Vogelman |
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0 |
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0.0 |
% |
Series A Convertible Preferred Stock |
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All directors and executive officers as a group (3 persons) |
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4,300,000 |
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100.0 |
% |
(1) |
Includes 4,300,000 shares of common stock issuable upon conversion of 4,300,000 shares of Series A Convertible Preferred stock at the discretion of the holder. Mr. Friedman owns 100% of the Series A Convertible Preferred Stock, each share of which has the number of votes equal to the result of: (i) the number of shares of Common Stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Convertible Preferred Stock issued and outstanding at the time of such vote. Accordingly, Mr. Friedman will own 70.2 % of the combined voting power of the Common Stock and Series A Convertible Preferred Stock, voting as a single class and will control the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Mr. Friedman may differ from the interests of the other shareholders. |
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(2) |
Includes options to purchase 500,000 shares of Common Stock. |
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(3) |
Includes options to purchase 375,000 shares of Common Stock. |
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(4) |
This person’s address is 111 Great Neck Road, Suite 216, Great Neck, NY 11021. Curt Kramer is the sole shareholder of Hope Capital, Inc. and the natural control person over these securities. |
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(5) |
Includes 5,378,001 shares of common stock. |
(6) |
Mr. Friedman owns 100% of the Series A Convertible Preferred Stock, each share of which has the number of votes equal to the result of: (i) the number of shares of Common Stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Convertible Preferred Stock issued and outstanding at the time of such vote. Accordingly, Mr. Friedman will own 70.2 % of the combined voting power of the Common Stock and Series A Convertible Preferred Stock, voting as a single class and will control the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Mr. Friedman may differ from the interests of the other shareholders. |
2
ARTICLES OF AMENDMENT TO CHANGE OUR CORPORATE
NAME
On August 31, 2015 our board of
directors approved a name change of our company to “Luvu Brands, Inc.” and recommended that our shareholders
approve this name change. By written consent, on August 31, 2015 the majority shareholder approved the name change. We
believe the corporate name to Luvu Brands will better reflect our broader offering of wellness and
lifestyle products designed for mass market channels. To effect the name change, we will file Articles of Amendment
to our Articles of Incorporation with the Secretary of State of Florida, a copy of which is
included as Exhibit A to this information statement. We expect that the effective date of these Articles of Amendment
will be on or about [ ], 2015 which is 20 days after this information statement is first mailed to our shareholders who did
not execute the written consent of the majority shareholder.
Because our common stock is
currently quoted on the OTC Markets, the name change will also require processing by the Financial Industry Regulatory Authority,
Inc. (“FINRA”), pursuant to Rule 10b-17 of the Securities Exchange Act of 1934, as amended, in order for this action
to be recognized in the market for trading purposes. We expect to receive FINRA’s clearance prior to the effective date.
Our common stock will be quoted on the OTC Bulletin Board under our new name immediately following the effective date. We will
file a Current Report on Form 8-K with the Securities and Exchange Commission disclosing the effective date of the name change,
as well as our new trading symbol and CUSIP number, prior to such effective date.
Following the name change,
the share certificates in bearing the current name and CUSIP number will continue to be valid. In the future, new share certificates
will be issued reflecting the new name and new CUSIP number in due course as old certificates are tendered for exchange or transfer,
but this in no way will effect the validity of your current share certificates. We request that shareholders do not send in any
of their stock certificates at this time.
ADOPTION AND RATIFICATION OF 2015 EQUITY
INCENTIVE PLAN
On August 31, 2015 our
board of directors approved our 2015 Equity Incentive Plan and recommended that our shareholders approve this plan. By written
consent, on August 31, 2015 the majority shareholder approved the plan. A copy of the plan is included as Exhibit B to
this information statement.
The purpose of the Plan
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 into our development and financial
success. Under the plan, we are authorized to issue incentive stock options intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended, and non-qualified stock options. We have reserved for issuance an aggregate of 5,000,000 shares
of common stock under the plan. The aggregate market value (determined as of the respective date of dates of grant of the common
stock for which one or more options granted to any employee under this plan may for the first time become exercisable as incentive
stock options under the Federal tax laws during any one calendar year shall not exceed the sum of One Hundred Thousand dollars
($100,000).
Our board of directors
or a compensation committee designated by our board of directors administers the plan. The material terms of each option granted
pursuant to the plan will contain the following terms:
Ÿ that
the purchase price of each share purchasable under an option shall be determined by the board of directors or a compensation committee
designated by our board of directors at the time of grant,
Ÿ the
term of each option shall be fixed by the board of directors or a compensation committee designated by our board of directors,
but no option shall be exercisable more than 10 years after the date such option is granted, and
Ÿ in
the absence of any option vesting periods designated by the board of directors or a compensation committee designated by our board
of directors at the time of grant, options shall vest and become exercisable in terms and conditions, consistent with the 2015
Plan, as may be determined by the board of directors or a compensation committee designated by our board of directors and specified
in the grant instrument.
As of the date of this
information statement, we have not made any grants under the plan. The plan has no effect on our current 2009 Stock Option Plan.
3
DISSENTER'S RIGHTS
Under Florida law there are no dissenter's rights
available to our shareholders in connection with the name change of our company or the adoption of the equity incentive plan.
SHAREHOLDERS SHARING THE SAME LAST NAME AND
ADDRESS
The SEC has adopted rules that permit companies
and intermediaries such as brokers to satisfy delivery requirements for proxy and information statements with respect to two or
more shareholders sharing the same address by delivering a single proxy or information statement addressed to those shareholders.
This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders
and cost savings for companies. We and some brokers household proxy materials, delivering a single proxy or information statement
to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once
you have received notice from your broker or us that they are or we will be householding materials to your address, householding
will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate
in householding and would prefer to receive a separate proxy or information statement, or if you currently receive multiple proxy
or information statements and would prefer to participate in householding, please notify your broker if your shares are held in
a brokerage account or us if you hold registered shares. You can notify us by sending a written request to Liberator, Inc., 2745
Bankers Industrial Drive, Atlanta, GA 30360 or by faxing a communication to (770) 246-6401.
WHERE YOU CAN FIND MORE INFORMATION
This information statement refers to certain
documents that are not presented herein or delivered herewith. Such documents are available to any person, including any beneficial
owner of our shares, to whom this information statement is delivered upon oral or written request, without charge. Requests for
such documents should be directed to Liberator, Inc., 2745 Bankers Industrial Drive, Atlanta, GA 30360 or by faxing a communication
to (770) 246-6401.
We file annual and special reports and other
information with the SEC. Certain of our SEC filings are available over the Internet at the SEC's web site at http://www.sec.gov.
You may also read and copy any document we file with the SEC at its public reference facilities:
Public Reference Room Office
100 F Street, N.E.
Room 1580
Washington, D.C. 20549
You may also obtain copies of the documents
at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
Callers in the United States can also call 1-202-551-8090 for further information on the operations of the public reference facilities.
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BY ORDER OF THE BOARD OF DIRECTORS |
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/s/ Ronald P. Scott |
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[ ], 2015 |
Ronald P. Scott
Chief Financial Officer |
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4
Exhibit A
FORM
ARTICLES OF AMENDMENT TO
AMENDED
AND RESTATED ARTICLES OF INCORPORATION OF
Liberator,
Inc.
Pursuant
to Section 607.1006 of the Florida Business Corporation Act of the State of Florida (the “FBCA”), the
undersigned Chief Financial Officer of Liberator, Inc. (the “Corporation”), a corporation organized and
existing under and by virtue of the laws of the State of Florida and bearing Document Number P99000018914,
does hereby certify:
FIRST: The Board
of Directors approved the following amendment to the Corporation’s Articles of Incorporation by a unanimous written consent
on August 31, 2015 pursuant to Section 607.0821 of the FBCA, and recommended that the Corporation’s shareholders approve
such amendment.
SECOND: The holders
of a majority of the Corporation’s issued and outstanding common stock and Series A Convertible Preferred Stock, representing
its sole class of voting securities, approved the following amendment to the Corporation’s Articles of Incorporation by written
consent on August 31, 2015 pursuant to Section 607.0704 of the FBCA. The number of votes cast by the majority shareholder was
sufficient for approval.
THIRD: Article
I of the Corporation's Articles of Incorporation is hereby deleted in its entirety and replaced with the following:
ARTICLE I
NAME
The name of the Corporation is Luvu Brands,
Inc.
FOURTH: The effective date of these
Articles of Amendment shall be [ ], 2015.
IN WITNESS WHEREOF,
the undersigned duly authorized officer has executed these Articles of Amendment as of [ ], 2015.
Liberator, Inc.
By: ___________________________
Ronald P. Scott, Chief Financial Officer
1
Exhibit B
LUVU BRANDS, INC.
2015 Equity Incentive Plan
1. Purpose.
1.1 Purpose. The purpose of this 2015 Equity Incentive
Plan is to enable the Company to offer to its employees, officers, directors and consultants whose past, present and/or potential
contributions to the Company and its Subsidiaries have been, are or will be, important to the success of the Company, an opportunity
to acquire a proprietary interest in the Company. The types of long-term incentive Awards that may be provided under the Plan will
enable the Company to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity
of its businesses.
2. Definitions.
2.1 Definitions. For purposes of the Plan, the following
terms shall be defined as set forth below:
(a) “Agreement” means the agreement
between the Company and the Holder setting forth the terms and conditions of an Award under the Plan. Agreements shall be in the
form(s) attached hereto.
(b) “Award” means Stock Options,
Restricted Stock and/or other Stock Based Awards awarded under the Plan.
(c) “Board” means the Board of
Directors of the Company.
(d) “Code” means the Internal Revenue
Code of 1986, as amended from time to time.
(e) “Committee” means the Compensation
Committee of the Board or any other committee of the Board that the Board may designate to administer the Plan or any portion thereof.
If no Committee is so designated, then all references in this Plan to “Committee” shall mean the Board.
(f) “Common Stock” means the common
stock of the Company, $0.01 par value per share.
(g) “Company” means Luvu Brands
Inc., a corporation organized under the laws of the State of Florida.
(h) “Disability” means physical
or mental impairment as determined under procedures established by the Committee for purposes of the Plan.
(i) “Effective Date” means the
date set forth in Section 11.1, below.
(j) “Fair Market Value”, unless
otherwise required by any applicable provision of the Code or any regulations issued thereunder, means, as of any given date: (i)
if the Common Stock is listed on a national securities exchange, the closing price of the Common Stock in the principal trading
market for the Common Stock on such date, as reported by the exchange (or on the last preceding trading date if such security was
not traded on such date); (ii) if the Common Stock is not listed on a national securities exchange, but is traded in the over-the-counter
market, the closing bid price for the Common Stock on such date, as reported by the OTC Bulletin Board or the OTC Markets Inc.
or similar publisher of such quotations; and (iii) if the fair market value of the Common Stock cannot be determined pursuant to
clause (i) or (ii) above, such price as the Committee shall determine, in good faith.
(k) “Holder” means a person who
has received an Award under the Plan.
(l) “Incentive Stock Option” means
any Stock Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of
the Code.
2
(m) “Nonqualified Stock Option”
means any Stock Option that is not an Incentive Stock Option.
(n) “Normal Retirement” means retirement
from active employment with the Company or any Subsidiary, other than for Cause or due to death or disability, of a Holder who;
(i) has reached the age of 65; (ii) has reached the age of 62 and has completed five years of service with the Company; or (iii)
has reached the age of 60 and has completed 10 years of service with the Company.
(o) “Other Stock-Based Award” means
an Award under Section 8, below, that is valued in whole or in part by reference to, or is otherwise based upon, Common Stock.
(p) “Parent” means any present
or future “parent corporation” of the Company, as such term is defined in Section 424(e) of the Code.
(q) “Plan” means the Luvu Brands,
Inc. 2015 Equity Incentive Plan, as hereinafter amended from time to time.
(r) “Repurchase Value” shall mean
the Fair Market Value in the event the Award to be repurchased under Section 9.2 is comprised of shares of Common Stock and the
difference between Fair Market Value and the Exercise Price (if lower than Fair Market Value) in the event the Award is a Stock
Option; in each case, multiplied by the number of shares subject to the Award.
(s) “Restricted Stock” means Common
Stock, received under an Award made pursuant to Section 7, below that is subject to restrictions under said Section 7.
(t) “Stock Option” or “Option”
means any option to purchase shares of Common Stock that is granted pursuant to the Plan.
(u) “Subsidiary” means any present
or future “subsidiary corporation” of the Company, as such term is defined in Section 424(f) of the Code.
3. Administration.
3.1 Committee Membership. The Plan shall be administered
by the Committee, the Board or a committee designated by the Board. Committee members shall serve for such term as the Board may
in each case determine, and shall be subject to removal at any time by the Board. The Committee members, to the extent deemed to
be appropriate by the Board, shall be “non-employee directors” as defined in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (“Exchange Act”), and “outside directors” within the meaning
of Section 162(m) of the Code. The Committee shall conduct itself in conformance with the provisions of the Compensation Committee
Charter.
3.2 Powers of Committee. The Committee shall have
the authority and responsibility to recommend to the Board for approval, Awards for Board members, executive officers, non-executive
employees and consultants of the Company, pursuant to the terms of the Plan: (i) Stock Options, (ii) Restricted Stock, and/or (iii)
Other Stock-Based Awards. For purposes of illustration and not of limitation, the Committee shall have the authority (subject to
the express provisions of this Plan):
(a) to select the officers, employees, directors and consultants
of the Company or any Subsidiary to whom Stock Options, Restricted Stock, and/or Other Stock-Based Awards may from time to time
be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan or requisite Board approval, of any Award granted hereunder including, but not limited to, number of
shares, share exercise price or types of consideration paid upon exercise of Stock Options and the purchase price of Common Stock
awarded under the Plan (including without limitation by a Holder’s conversion of deferred salary or other indebtedness of
the Company to the Holder), such as other securities of the Company or other property, any restrictions or limitations, and any
vesting, exchange, surrender, cancellation, acceleration, termination, exercise or forfeiture provisions, as the Committee shall
determine;
3
(c) to determine any specified performance goals or such
other factors or criteria which need to be attained for the vesting of an Award granted hereunder;
(d) to determine the terms and conditions under which Awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or apart from other equity awarded under this Plan
and cash Awards made by the Company or any Subsidiary outside of this Plan; and
(e) to determine the extent and circumstances under which
Common Stock and other amounts payable with respect to an Award hereunder shall be deferred that may be either automatic or at
the election of the Holder; and
3.3 Interpretation of Plan.
3.1 Committee Authority. Subject to Section 10, below,
the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award issued
under the Plan (and to determine the form and substance of all Agreements relating thereto), and to otherwise supervise the administration
of the Plan. Subject to Section 10, below, all decisions made by the Committee pursuant to the provisions of the Plan shall be
made in the Committee’s sole discretion, subject to Board authorization if indicated, and shall be final and binding upon
all persons, including the Company, its Subsidiaries and Holders.
3.2 Incentive Stock Options. Anything in the Plan
to the contrary notwithstanding, no term or provision of the Plan relating to Incentive Stock Options or any Agreement providing
for Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of the Holder(s) affected,
to disqualify any Incentive Stock Option under such Section 422.
4. Stock Subject to Plan.
4.1 Number of Shares. The total number of shares of
Common Stock reserved and available for issuance under the Plan shall be five million (5,000,000) shares. Shares of Common Stock
under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any share of Common Stock
that have been granted pursuant to a Stock Option ceases to be subject to a Stock Option, or if any shares of Common Stock that
are subject to any Restricted Stock, Deferred Stock Award, or Other Stock-Based Award granted hereunder are forfeited or any such
Award otherwise terminates without a payment being made to the Holder in the form of Common Stock, such shares shall again be available
for distribution in connection with future grants and Awards under the Plan.
4.2 Adjustment Upon Changes in Capitalization, Etc.
In the event of any dividend (other than a cash dividend) payable on shares of Common Stock, stock split, reverse stock split,
combination or exchange of shares, or other similar event (not addressed in Section 4.3, below) occurring after the grant of an
Award, which results in a change in the shares of Common Stock of the Company as a whole, (i) the number of shares issuable in
connection with any such Award and the purchase price thereof, if any, shall be proportionately adjusted to reflect the occurrence
of any such event and (ii) the Committee shall determine whether such change requires an adjustment in the aggregate number of
shares reserved for issuance under the Plan or to retain the number of shares reserved and available under the Plan in their sole
discretion. Any adjustment required by this Section 4.2 shall be made by the Committee, in good faith, subject to Board authorization
if indicated, whose determination will be final, binding and conclusive.
4
4.3 Certain Mergers and Similar Transactions. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in the shareholders of the Company or their relative
stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption
will be binding on all Awardees, (c) a merger in which the Company is the surviving corporation but after which the shareholders
of the Company immediately prior to such merger (other than any shareholder that merges, or which owns or controls another corporation
that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (d) the sale of
substantially all of the assets of the Company, or (e) the acquisition, sale, or transfer of more than 50% of the outstanding shares
of the Company by tender offer or similar transaction, any or all outstanding Awards may be assumed, converted or replaced by the
successor corporation (if any), which assumption, conversion or replacement will be binding on all Awardees. In the alternative,
the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Awardees as was provided
to shareholders (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Holder, substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Holder. In the event such successor corporation (if any) refuses or otherwise declines to
assume or substitute Awards, as provided above, (i) the vesting of any or all Awards granted pursuant to this Plan will accelerate
immediately prior to the effective date of a transaction described in this Section 4.3 and (ii) any or all Options granted pursuant
to this Plan will become exercisable in full prior to the consummation of such event at such time and on such conditions as the
Committee determines. If such Options are not exercised prior to the consummation of the corporate transaction, they shall terminate
at such time as determined by the Committee. Subject to any greater rights granted to Awardees under the foregoing provisions of
this Section 4.3, in the event of the occurrence of any transaction described in this Section 4.3, any outstanding Awards will
be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.
5. Eligibility.
Awards may be made or granted to employees,
officers, directors and consultants who are deemed to have rendered or to be able to render significant services to the Company
or its Subsidiaries and who are deemed to have contributed or to have the potential to contribute to the success of the Company.
No Incentive Stock Option shall be granted to any person who is not an employee of the Company or a Subsidiary at the time of grant.
Notwithstanding anything to the contrary contained in the Plan, Awards covered or to be covered under a registration statement
on Form S-8 which may be filed with the United States Securities and Exchange Commission may be made under the Plan only if (a)
they are made to natural persons, (b) who provide bona fide services to the Company or its Subsidiaries, and (c) the services are
not in connection with the offer and sale of securities in a capital raising transaction, and do not directly or indirectly promote
or maintain a market for the Company’s securities.
6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under
the Plan may be of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any Stock Option granted under the
Plan shall contain such terms, not inconsistent with this Plan, or with respect to Incentive Stock Options, not inconsistent with
the Plan and the Code, as the Committee may from time to time approve. The Committee shall have the authority to grant Incentive
Stock Options or Non-qualified Stock Options, or both types of Stock Options, which may be granted alone or in addition to other
Awards granted under the Plan. To the extent that any Stock Option intended to qualify as an Incentive Stock Option does not so
qualify, it shall constitute a separate Nonqualified Stock Option.
6.2 Terms and Conditions. Stock Options granted under
the Plan shall be subject to the following terms and conditions:
(a) Option Term. The term of each Stock Option shall
be fixed by the Committee; provided, however, that an Incentive Stock Option may be granted only within the ten-year period commencing
from the Effective Date and may only be exercised within ten years of the date of grant (or five years in the case of an Incentive
Stock Option granted to an optionee who, at the time of grant, owns Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (“10% Shareholder”).
(b) Exercise Price. The exercise price per share of
Common Stock purchasable under a Stock Option shall be determined by the Committee at the time of grant and may not be less than
100% of the Fair Market Value on the day of grant; provided, however, that the exercise price of an Incentive Stock Option granted
to a 10% Shareholder shall not be less than 110% of the Fair Market Value on the date of grant.
5
(c) Exercisability. Stock Options shall be exercisable
at such time or times and subject to such terms and conditions as shall be determined by the Committee and as set forth in Section
9, below. If the Committee provides, in its discretion, that any Stock Option is exercisable only in installments, i.e., that it
vests over time, the Committee may waive such installment exercise provisions at any time at or after the time of grant in whole
or in part, based upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case; Stock Options may be exercised in whole or in part
at any time during the term of the Option, by giving written notice of exercise to the Company specifying the number of shares
of Common Stock to be purchased. Such notice shall be accompanied by payment in full of the purchase price, which shall be in cash
or, if provided in the Agreement, either in shares of Common Stock (including Restricted Stock and other contingent Awards under
this Plan) or partly in cash and partly in such Common Stock, or such other means which the Committee determines are consistent
with the Plan’s purpose and applicable law. Cash payments shall be made by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; provided, however, that the Company shall not be required to deliver certificates
for shares of Common Stock with respect to which an Option is exercised until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof. Payments in the form of Common Stock shall be valued at the Fair Market
Value on the date prior to the date of exercise. Such payments shall be made by delivery of stock certificates in negotiable form
that are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances. A Holder shall have
none of the rights of a shareholder with respect to the shares subject to the Option until such shares shall be transferred to
the Holder upon the exercise of the Option.
(e) Transferability. Except as may be set forth in
the Agreement, no Stock Option shall be transferable by the Holder other than by will or by the laws of descent and distribution,
and all Stock Options shall be exercisable, during the Holder’s lifetime, only by the Holder (or, to the extent of legal
incapacity or incompetency, the Holder’s guardian or legal representative).
(f) Termination by Reason of Death. If a Holder’s
employment by the Company or a Subsidiary terminates by reason of death, any Stock Option held by such Holder, unless otherwise
determined by the Committee at the time of grant and set forth in the Agreement, shall thereupon automatically terminate, except
that the portion of such Stock Option that has vested on the date of death may thereafter be exercised by the legal representative
of the estate or by the legatee of the Holder under the will of the Holder, for a period of one year (or such other greater or
lesser period as the Committee may specify at grant) from the date of such death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.
(g) Termination by Reason of Disability. If a Holder’s
employment by the Company or any Subsidiary terminates by reason of Disability, any Stock Option held by such Holder, unless otherwise
determined by the Committee at the time of grant and set forth in the Agreement, shall there upon automatically terminate, except
that the portion of such Stock Option that has vested on the date of termination may thereafter be exercised by the Holder for
a period of one year (or such other greater or lesser period as the Committee may specify at the time of grant) from the date of
such termination of employment or until the expiration of the stated term of such Stock Option, whichever period is the shorter.
(h) Other Termination. Subject to the provisions of
Section 12, below, and unless otherwise determined by the Committee at the time of grant and set forth in the Agreement, if a Holder
is an employee of the Company or a Subsidiary at the time of grant and if such Holder’s employment by the Company or any
Subsidiary terminates for any reason other than death or Disability, the Stock Option shall thereupon automatically terminate,
except that if the Holder’s employment is terminated by the Company or a Subsidiary without cause or due to Normal Retirement,
then the portion of such Stock Option that has vested on the date of termination of employment may be exercised for the lesser
of three months after termination of employment or the balance of such Stock Option’s term.
(i) Additional Incentive Stock Option Limitation.
In the case of an Incentive Stock Option, the aggregate Fair Market Value (on the date of grant of the Option) with respect to
which Incentive Stock Options become exercisable for the first time by a Holder during any calendar year (under all such plans
of the Company and its Parent and Subsidiary) shall not exceed $100,000.
(j) Buyout and Settlement Provisions. The Committee
may at any time, subject to Board authorization, if indicated, offer to repurchase a Stock Option previously granted, based upon
such terms and conditions as the Committee shall establish and communicate to the Holder at the time that such offer is made.
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7. Restricted Stock.
7.1 Grant. Shares of Restricted Stock may be awarded
either alone or in addition to other Awards granted under the Plan. The Committee, subject to Board authorization, if indicated,
shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be awarded, the number
of shares to be awarded, the price (if any) to be paid by the Holder, the time or times within which such Awards may be subject
to forfeiture (“Restriction Period”), the vesting schedule and rights to acceleration thereof, and all
other terms and conditions of the Awards.
7.2 Terms and Conditions. Each Restricted Stock Award
shall be subject to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will
be represented by a stock certificate or certificates registered in the name of the Holder to whom such Restricted Stock shall
have been awarded. During the Restriction Period, certificates representing the Restricted Stock and any securities constituting
Retained Distributions (as defined below) shall bear a legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms and conditions provided
in the Plan and the Agreement. Such certificates shall be deposited by the Holder with the Company, together with stock powers
or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of
the Restricted Stock and any securities constituting Retained Distributions that shall be forfeited or that shall not become vested
in accordance with the Plan and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute
issued and outstanding shares of Common Stock for all corporate purposes. The Holder will have the right to vote such Restricted
Stock, to receive and retain all regular cash dividends and other cash equivalent distributions as the Board may in its sole discretion
designate, pay or distribute on such Restricted Stock and to exercise all other rights, powers and privileges of a holder of Common
Stock with respect to such Restricted Stock, with the exceptions that (i) the Holder will not be entitled to delivery of the stock
certificate or certificates representing such Restricted Stock until the Restriction Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled; (ii) the Company will retain custody of the stock certificate
or certificates representing the Restricted Stock during the Restriction Period; (iii) other than regular cash dividends and other
cash equivalent distributions as the Board may in its sole discretion designate, pay or distribute, the Company will retain custody
of all distributions (“Retained Distributions”) made or declared with respect to the Restricted Stock
(and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted
Stock) until such time, if ever, as the Restricted Stock with respect to which such Retained Distributions shall have been made,
paid or declared shall have become vested and with respect to which the Restriction Period shall have expired; (iv) a breach of
any of the restrictions, terms or conditions contained in this Plan or the Agreement or otherwise established by the Committee
with respect to any Restricted Stock or Retained Distributions will cause a forfeiture of such Restricted Stock and any Retained
Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each Award of Restricted Stock and the satisfaction of any other applicable restrictions, terms
and conditions (i) all or part of such Restricted Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 9, below, and (ii) any Retained Distributions with respect to such Restricted Stock shall become vested to the extent
that the Restricted Stock related thereto shall have become vested, subject to Section 9, below. Any such Restricted Stock and
Retained Distributions that do not vest shall be forfeited to the Company and the Holder shall not thereafter have any rights with
respect to such Restricted Stock and Retained Distributions that shall have been so forfeited.
8. Other Stock-Based Awards.
Other Stock-Based Awards may be awarded, subject
to limitations under applicable law, that are denominated or payable in, valued in whole or in part by reference to, or otherwise
based on, or related to, shares of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including,
without limitation, purchase rights, shares of Common Stock awarded which are not subject to any restrictions or conditions, or
other rights convertible into shares of Common Stock and Awards valued by reference to the value of securities of or the performance
of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone or in addition to or in tandem with any other Awards
under this Plan or any other plan of the Company. Each other Stock-Based Award shall be subject to such terms and conditions as
may be determined by the Committee.
7
9. Accelerated Vesting and Exercisability.
9.1 Non-Approved Transactions. If any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as referred
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined
voting power of the Company’s then outstanding securities in one or more transactions, and the Board does not authorize or
otherwise approve such acquisition, then the vesting periods of any and all Stock Options and other Awards granted and outstanding
under the Plan shall be accelerated and all such Stock Options and Awards will immediately and entirely vest, and the respective
holders thereof will have the immediate right to purchase and/or receive any and all Common Stock subject to such Stock Options
and Awards on the terms set forth in this Plan and the respective agreements respecting such Stock Options and Awards.
9.2 Approved Transactions. The Committee may, subject
to Board authorization, if indicated, in the event of an acquisition of substantially all of the Company’s assets or at least
50% of the combined voting power of the Company’s then outstanding securities in one or more transactions (including by way
of merger or reorganization) which has been approved by the Company’s Board of Directors, (i) accelerate the vesting of any
and all Stock Options and other Awards granted and outstanding under the Plan, and (ii) require a Holder of any Award granted under
this Plan to relinquish such Award to the Company upon the tender by the Company to Holder of cash in an amount equal to the Repurchase
Value of such Award.
10. Amendment and Termination.
The Board may at any time, and from time to
time, amend alter, suspend or discontinue any of the provisions of the Plan, but no amendment, alteration, suspension or discontinuance
shall be made that would impair the rights of a Holder under any Agreement theretofore entered into hereunder, without the Holder’s
consent.
11. Term of Plan.
11.1 Effective Date. The Plan shall become effective
at such time as the Plan is approved and adopted by the Company’s Board of Directors (the “Effective Date”),
subject to the following provisions:
(a) to the extent that the Plan authorizes the Award of Incentive
Stock Options, shareholder approval for the Plan shall be obtained within 12 months of the Effective Date; and
(b) the failure to obtain shareholder for the Plan as contemplated
by subparagraph (a) of this Section 11 shall not invalidate the Plan; provided, however, that (i) in the absence of such shareholder
approval, Incentive Stock Options may not be awarded under the Plan and (ii) any Incentive Stock Options theretofore awarded under
the Plan shall be converted into Non-Qualified Options upon terms and conditions determined by the Committee to reflect, as nearly
as is reasonably practicable in its sole determination, the terms and conditions of the Incentive Stock Options being so converted.
1.2 Termination Date. Unless otherwise terminated
by the Board, this Plan shall continue to remain effective until the earlier of ten (10) years from the Effective Date or such
time as no further Awards may be granted and all Awards granted under the Plan are no longer outstanding. Notwithstanding the foregoing,
grants of Incentive Stock Options may be made only during the ten-year period following the Effective Date.
12. General Provisions.
12.1 Written Agreements. Each Award granted under
the Plan shall be confirmed by, and shall be subject to the terms, of the Agreement executed by the Company and the Holder. The
Committee may terminate any Award made under the Plan if the Agreement relating thereto is not executed and returned to the Company
within 10 days after the Agreement has been delivered to the Holder for his or her execution.
8
12.2 Unfunded Status of Plan. The Plan is intended
to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made
to a Holder by the Company, nothing contained herein shall give any such Holder any rights that are greater than those of a general
creditor of the Company.
12.3 Employees.
(a) Engaging in Competition with the Company; Disclosure
of Confidential Information. If a Holder’s employment with the Company or a Subsidiary is terminated for any reason whatsoever,
and within three months after the date thereof such Holder either (i) accepts employment with any competitor of, or otherwise engages
in competition with, the Company or (ii) discloses to anyone outside the Company or uses any confidential information or material
of the Company in violation of the Company’s policies or any agreement between the Holder and the Company, the Committee,
in its sole discretion, may require such Holder to return to the Company the economic value of any Award that was realized or obtained
by such Holder at any time during the period beginning on that date that is six months prior to the date such Holder’s employment
with the Company is terminated.
(b) Termination for Cause. The Committee may, if a
Holder’s employment with the Company or a Subsidiary is terminated for cause, annul any Award granted under this Plan to
such employee and, in such event, the Committee, in its sole discretion, may require such Holder to return to the Company the economic
value of any Award that was realized or obtained by such Holder at any time during the period beginning on that date that is six
months prior to the date such Holder’s employment with the Company is terminated.
(c) No Right of Employment. Nothing contained in the
Plan or in any Award hereunder shall be deemed to confer upon any Holder who is an employee of the Company or any Subsidiary any
right to continued employment with the Company or any Subsidiary, nor shall it interfere in any way with the right of the Company
or any Subsidiary to terminate the employment of any Holder who is an employee at any time.
12.4. Investment Representations; Company Policy.
The Committee may require each person acquiring shares of Common Stock pursuant to a Stock Option or other Award under the Plan
to represent to and agree with the Company in writing that the Holder is acquiring the shares for investment without a view to
distribution thereof. Each person acquiring shares of Common Stock pursuant to a Stock Option or other Award under the Plan shall
be required to abide by all policies of the Company in effect at the time of such acquisition and thereafter with respect to the
ownership and trading of the Company’s securities.
12.5 Additional Incentive Arrangements. Nothing contained
in the Plan shall prevent the Board from adopting such other or additional incentive arrangements as it may deem desirable, including,
but not limited to, the granting of Stock Options and the Awarding of Common Stock and cash otherwise than under the Plan; and
such arrangements may be either generally applicable or applicable only in specific cases.
12.6 Withholding Taxes. Not later than the date as
of which an amount must first be included in the gross income of the Holder for Federal income tax purposes with respect to any
option or other Award under the Plan, the Holder shall pay to the Company, or make arrangements satisfactory to the Committee regarding
the payment of, any Federal, state and local taxes of any kind required by law to be withheld or paid with respect to such amount.
If permitted by the Committee, tax withholding or payment obligations may be settled with Common Stock, including Common Stock
that is part of the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be
conditioned upon such payment or arrangements and the Company or the Holder’s employer (if not the Company) shall, to the
extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Holder from
the Company or any Subsidiary.
12.7 Governing Law. The Plan and all Awards made and
actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Florida.
12.8 Other Benefit Plans. Any Award granted under
the Plan shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company or any Subsidiary
and shall not affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount
of benefits is related to the level of compensation (unless required by specific reference in any such other plan to Awards under
this Plan).
9
12.9 Non-Transferability. Except as otherwise expressly
provided in the Plan or the Agreement, no right or benefit under the Plan may be alienated, sold, assigned, hypothecated, pledged,
exchanged, transferred, encumbered or charged, and any attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void.
12.10 Applicable Laws. The obligations of the Company
with respect to all Stock Options and Awards under the Plan shall be subject to (i) all applicable laws, rules and regulations
and such approvals by any governmental agencies as may be required, including, without limitation, the Securities Act of 1933,
as amended (the “Securities Act”), and (ii) the rules and regulations of any securities exchange on which
the Common Stock may be listed or quoted.
12.11 Conflicts. If any of the terms or provisions
of the Plan or an Agreement conflict with the requirements of Section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with such requirements. Additionally, if this Plan or any Agreement does not contain
any provision required to be included herein under Section 422 of the Code, such provision shall be deemed to be incorporated herein
and therein with the same force and effect as if such provision had been set out at length herein and therein. If any of the terms
or provisions of any Agreement conflict with any terms or provisions of the Plan, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of the Plan. Additionally, if any Agreement does not contain any
provision required to be included therein under the Plan, such provision shall be deemed to be incorporated therein with the same
force and effect as if such provision had been set out at length therein.
12.12 Non-Registered Stock. The shares of Common Stock
to be distributed under this Plan have not been, as of the Effective Date, registered under the Securities Act or any applicable
state or foreign securities laws and the Company has no obligation to any Holder to register the Common Stock or to assist the
Holder in obtaining an exemption from the various registration requirements, or to list the Common Stock on a national securities
exchange or any other trading or quotation system.
10
Plan Amendments
Date Approved by Board |
Date Approved by Shareholders, if necessary |
Sections Amended |
Description of Amendment(s) |
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FORM OF OPTION AWARD AGREEMENT
LUVU BRANDS, INC.
2745 Bankers Industrial Drive
Atlanta, Georgia 30360
[DATE]
_________________
_________________
_________________
Re: Stock Option
Dear __________:
We are pleased to advise you that, on [_______],
the Board of Directors of Luvu Brands, Inc., a Florida corporation (the “Company”) authorized the Award
to you of an option to purchase [_______] shares of our common stock, par value $0.01 per share (the “Option”),
upon the following terms and conditions:
1. The Option is granted in accordance with and subject to the
terms and conditions of the Company’s 2015 Equity Incentive Plan (the “Plan”).
2. The Option is [an incentive] [non-qualified] stock option.
3. The Option is exercisable commencing on [__________] and
terminating at 5:00 pm New York time on [__________].
4. The price at which the Option may be exercised is $[_____]
per share.
5. The Option is non-transferable and may be exercised, in whole
or in part, during the exercise period, only by you, except that upon your death, the Option may be exercised strictly in accordance
with the terms and conditions of the Plan.
6. The exercise price and number of shares issuable upon exercise
of the Option (the “Option Shares”) are subject to adjustment in accordance with the Plan in the event
of stock splits, dividends, reorganizations and similar corporate events.
7. If, neither the Option nor the Option Shares have been registered
under the Securities Act of 1933, as amended (the “Act”), and the Option Shares may not be sold, assigned,
pledged, transferred or otherwise disposed of absent registration under the Act or the availability of an applicable exemption
from registration. All certificates evidencing the Option Shares will contain a legend describing this restriction on resale of
the Option Shares. There is [currently no public market for the Company’s securities and there is] no assurance that there
will be a public market into which you may sell the Option Shares or that you will be able to sell your Option Shares at a profit
or at all.
8. In order to exercise the Option, you must provide us with
written notice that you are exercising all or a portion of your Option. The written notice must specify the number of Option Shares
that you are exercising your Option for, and must be accompanied by the exercise price described in paragraph 4, above. Your Option
Shares will be issued to you within approximately one week following our receipt of your exercise notice and cleared funds evidencing
the exercise price.
9. No rights or privileges of a shareholder of the Company are
conferred by reason of the grant of the Option to you. You will have no rights of a shareholder until you have delivered your exercise
notice to us and we have received the exercise price of the Option in cleared funds.
You understand that the Plan contains important
information about your Option and your rights with respect to the Option. The Plan includes terms relating to your right to exercise
the Option; important restrictions on your ability to transfer the Option or Option Shares; provisions relating to adjustments
in the number of Option Shares and the exercise price; and early termination of the Option following the occurrence of certain
events; including the termination of your relationship with us. By signing below, you acknowledge your receipt of a copy of the
Plan. By acceptance of your Option, you agree to abide by the terms and conditions of the Plan.
10. Our business is subject to many risks and uncertainties.
We may never operate profitably. The exercise of your Option is a speculative investment and there is no assurance that you will
realize a profit on the sale of Option Shares received upon exercise of your Option.
11. The Option will become effective upon your acknowledgment
of the terms and conditions of this Agreement and your delivery to us of a signed counterpart of this Agreement.
12. This Agreement and Plan contain all of the terms and conditions
of your Option and supersedes all prior agreements or understandings relating to your Option. This Agreement shall be governed
by the laws of the State of Florida without regard to the conflicts of law provisions thereof.
13. This Agreement may not be amended orally.
Very truly yours,
__________________________
Name:
Its:
AGREED TO AND ACCEPTED THIS
_____ DAY OF ________ 20__
________________________________
(Signature)
_________________________________
(Print Name)
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