Item 10.
Directors, Executive
Officers and Corporate Governance
Our executive officers and directors and their
respective ages and positions as of the date of this Form 10-K/A are:
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NAME (1) (2)
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AGE
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POSITION
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Executive Officers:
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Thomas Arnost
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68
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Executive Chairman of the Board
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Dean L. Julia
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47
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Co-Chief Executive Officer/Treasurer/Director/Co-Founder
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Michael D. Trepeta
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43
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Co-Chief Executive Officer/President/Director/ Co-Founder
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Paul Bauersfeld
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52
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Chief Technology Officer
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Sean J. McDonnell, CPA
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54
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Chief Financial Officer
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Sean Trepeta
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47
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President of Mobiquity Networks and director
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Directors are elected at the annual meeting
of stockholders and hold office until the following annual meeting. The terms of all officers expire at the annual meeting of directors
following the annual stockholders meeting. Officers serve at the pleasure of our board of directors and may be removed, either
with or without cause, by our board of directors, and a successor elected by a majority vote of our board of directors, at any
time. Nevertheless, the foregoing are subject to the employment contracts of our executive officers.
Executive Officers
Thomas Arnost
. Mr. Arnost has
been a director of our company since December 2011, he has served as Chairman of the Board since October 2013 and he has served
as Executive Chairman of the Board since October 2014. Mr. Arnost served as the Co-President of Univision Television Group, from
1997 to 2006, and prior to that as Executive Vice President of Univision Television Group from 1994 to 1996. Previously he served
as the Co-President of Univision Communications, Inc. Station Group, which he joined in 1994. In 2002, Mr. Arnost helped in the
successful launch of the Telefutura Station Group which has since significantly contributed to Univision's overall growth. During
his tenure with Univision, total station group revenue grew from under $120 million in 1993 to approximately $700 million in 2006.
Also during his tenure, Univision’s market value grew from roughly $500 million to over $14 billion. Mr. Arnost’s extensive
business, financial, management and leadership experience in the telecommunications industry particularly qualifies him for serving
on the company’s board as an independent director. Mr. Arnost graduated from the University of Arizona with a BS in Finance.
Dean L. Julia
.
Mr. Julia has
served as Chief Executive Officer of Mobiquity since December 2000 and as Co-CEO since March 2012. In 1998, Mr. Julia co-founded
Mobiquity and became an officer, director and principal stockholder of our company. Mr. Julia is responsible for establishing our
overall strategy and fostering key relationships with technology partners and developers. Mr. Julia has also served as COO of Mobiquity’s
wholly-owned subsidiary, Mobiquity Networks since its formation in January 2011, where he is responsible for the integration of
the sales and intellectual property departments of Mobiquity. From September 1996 through February 1998, Mr. Julia served as President
and Chief Executive Officer of DLJ Consulting, a financial intermediary consultant for public and private companies. Mr. Julia
is a founder of our company and has served on the board since its inception. He is expected to resign from the board on the listing
date of our common stock on the NYSE MKT. Mr. Julia received his Bachelor of Business Administration from Hofstra University in
1990.
Michael D. Trepeta
. Mr. Trepeta
is Co-CEO of Mobiquity since March 2012. In 1998, Mr. Trepeta co-founded Mobiquity and became President, director and principal
stockholder of our company. Mr. Trepeta is also Chief Executive Officer of our wholly-owned subsidiary, Mobiquity Networks since
its formation in 2011. Mr. Trepeta is responsible for the continued roll-out of Mobiquity's national proximity marketing network
by securing long term strategic partnerships with key property owners and management companies while simultaneously forming key
partnerships with out of home agencies who control the media assets within those properties. In 1998, Mr. Trepeta co-founded Mobiquity
as an officer, director and principal owner of the company. Mr. Trepeta is responsible for establishing the strategy for all integrated
marketing efforts at Mobiquity through the development of models and solutions that leverage the attributes of cutting edge marketing
technologies. From September 1996 through February 1998, he served as President of MDT Consulting Group, Inc., a corporation contracted
by various companies to serve as a financial intermediary to investment bankers and to assist in developing products, services,
and business strategies. Mr. Trepeta is a founder of the company and has demonstrated his management ability at senior levels
and he is expected to continue to serve on the board. Mr. Trepeta received a Bachelor of Science Degree in Applied Economics and
Business Management with a minor in Communications from Cornell University in 1993. Mr. Trepeta is the brother of Sean Trepeta.
Paul Bauersfeld
. Mr. Bauersfeld
has served as Chief Technology Officer of our company since June 2013. Mr. Bauersfeld is a technology executive and engineer with
over 20 years’ experience in software product development and entrepreneurial organizations. In 2003, Mr. Bauersfeld founded
Varsity Networks, a leading online media and services company dedicated to serving the local sports market through technology.
He served as CEO of Varsity Networks from its formation through 2013, where he was responsible for expanding the network to include
over 10,000 local sports communities with millions of monthly visitors. Prior to his positions at Varsity Network, he held positions
at a number of Fortune 100 and startup companies in the technology and media industries. Mr. Bauersfeld has also acted as an advisor
to a number of technology developmental corporations. His roles have included Co-founder and CEO of MessageOne from 2000 to 2001,
which enterprise was later acquired by Dell Computer Corp., VP of ecommerce at Ziff-Davis from 1999 to 2000, Technology Director
at Viacom’s Nickelodeon Online from 1997 to 1999, Founder of GiftOne in 1996, where he served in the position of President,
which entity was acquired by Skymall 1997, as well as engineering positions at Apple Computer from 1998 to 1993 and Xerox Corporation
from 1986 to 1988. He has a BS in Electrical Engineering from Rochester Institute of Technology, which degree he received in 1986.
Sean J. McDonnell, CPA
. Mr. McDonnell
has been our Chief Financial Officer since January 2005. Since January 1990, Mr. McDonnell has also owned and operated a private
accounting and tax practice handling many different types of business entities and associations. Mr. McDonnell has spent much of
his time helping his customers grow their companies and acquire financing for the purchase of buildings and equipment. Prior to
starting his own practice, he was employed from 1985 through 1990 as a senior staff member at the accounting firm of Breiner &
Bodian CPA's. After graduating from Dowling College in 1984 with a Bachelor in Business Administration, he was employed by Kenneth
Silver C.P.A. from 1984 to 1985. Mr. McDonnell has been a certified public accountant for almost 20 years.
Sean Trepeta
. Mr. Trepeta has
been a director of our company since December 2011. Mr. Trepeta is also serving as President of Mobiquity Networks, where he is
responsible for sales and marketing strategies. Mr. Trepeta continues to foster strategic relationships with agencies and national
brands. Prior to joining the Mobiquity Networks team in May 2011, Mr. Trepeta was President of Varsity Networks, a leading online
portal dedicated to serving the High School sports market, from 2007 to 2011. Prior to this, from 1998 to 2007, Mr. Trepeta was
the President and Co-Founder of OPEX Communications, Inc., a leading telecommunication service provider which was located in Chicago,
specializing in traditional long-distance, wireless, and dedicated services. Before OPEX, from 1996 to 1998, Mr. Trepeta was the
vice president of sales and marketing for the US Buying Group, Inc. (USBG) responsible for developing a small business-buying program,
which included value added services such as overnight shipping, office supplies, and computer software products, as well as a full
line of telecommunications services. Mr. Trepeta also developed and implemented the agent and carrier divisions of USBG. Prior
to joining USBG, he was with MCI Telecommunications and NYNEX in New York City. As Mr. Trepeta holds a Bachelor of Science degree
from the State University of New York at Cortland. Mr. Trepeta is expected to resign from the board on the listing date of our
common stock on the NYSE MKT. Mr. Trepeta is the brother of Michael Trepeta.
Corporate Governance
Our business, property
and affairs are managed by, or under the direction of, our Board, in accordance with the General Corporation Law of the State of
New York and our By-Laws. Members of the Board are kept informed of our business through discussions with the Chief Executive Officers
and other key members of management, by reviewing materials provided to them by management.
We continue to review our
corporate governance policies and practices by comparing our policies and practices with those suggested by various groups or authorities
active in evaluating or setting best practices for corporate governance of public companies. Based on this review, we have adopted,
and will continue to adopt, changes that the Board believes are the appropriate corporate governance policies and practices for
our Company. We have adopted changes and will continue to adopt changes, as appropriate, to comply with the Sarbanes-Oxley Act
of 2002 and subsequent rule changes made by the SEC and any applicable securities exchange.
Director
Qualifications
and
Diversity
The board seeks independent
directors who represent a diversity of backgrounds and experiences that will enhance the quality of the board’s deliberations
and decisions. Candidates shall have substantial experience with one or more publicly traded companies or shall have achieved a
high level of distinction in their chosen fields. The board is particularly interested in maintaining a mix that includes individuals
who are active or retired executive officers and senior executives, particularly those with experience in the finance and capital
market industries.
In evaluating nominations
to the Board of Directors, our Board also looks for certain personal attributes, such as integrity, ability and willingness to
apply sound and independent business judgment, comprehensive understanding of a director’s role in corporate governance,
availability for meetings and consultation on Company matters, and the willingness to assume and carry out fiduciary responsibilities.
Qualified candidates for membership on the Board will be considered without regard to race, color, religion, sex, ancestry, national
origin or disability.
Risk Oversight
Enterprise risks are identified
and prioritized by management and each prioritized risk is assigned to the full board for oversight. These risks include, without
limitation, the following:
Risks and exposures associated
with strategic, financial and execution risks and other current matters that may present material risk to our operations, plans,
prospects or reputation.
Risks and exposures associated
with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting,
financial policies, investment guidelines and credit and liquidity matters.
Risks and exposures relating
to corporate governance; and management and director succession planning.
Risks and exposures associated
with leadership assessment, and compensation programs and arrangements, including incentive plans.
Board Leadership Structure
In accordance with the
Company's By-Laws, the Chairman of the Board, Thomas Arnost, presides at all meetings of the Board. Currently, the offices of Chairman
of the Board and Chief Executive Officer are separated, although the Company has no fixed policy with respect to the separation
of these titles. The Chairman of the Board is a non-executive officer of the Company.
Indemnification
The New York Business Corporation
Law contains provisions permitting and, in some situations, requiring New York corporations to provide indemnification to their
officers and directors for losses and litigation expense incurred in connection with their service to the corporation. Our certificate
of incorporation and bylaws contain provisions requiring our indemnification of our directors and officers and other persons acting
in their corporate capacities.
In addition, we may enter
into agreements with our directors providing contractually for indemnification consistent with the certificate of incorporation
and bylaws. Currently, we have no such agreements. The New York Business Corporation Law also authorizes us to purchase insurance
for our directors and officers insuring them against risks as to which we may be unable lawfully to indemnify them. We intend to
obtain limited insurance coverage for our officers and directors as well as insurance coverage to reimburse us for potential costs
of our corporate indemnification of officers and directors.
As far as exculpation or
indemnification for liabilities arising under the Securities Act of 1933 may be permitted for directors and officers and controlling
persons, we have been advised that in the opinion of the Securities and Exchange Commission such exculpation or indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable.
LACK OF COMMITTEES
Our Company has no audit,
compensation or nominating committees of our board of directors or committees performing similar functions. The audit committee
communications will go directly to the board members until such time as an audit committee is formed.
Under the National Association
of Securities Dealers Automated Quotations definition, an “independent director” means a person other than an officer
or employee of the Company or its subsidiaries or any other individuals having a relationship that, in the opinion of the Company’s
board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director.
The board’s discretion in determining director independence is not completely unfettered. Further, under the NASDAQ definition,
an independent director is a person who (1) is not currently (or whose immediate family members are not currently), and has not
been over the past three years (or whose immediate family members have not been over the past three years), employed by the company;
(2) has not (or whose immediate family members have not) been paid more than $120,000 during the current or past three fiscal years;
(3) has not (or whose immediately family has not) been a partner in or controlling shareholder or executive officer of an organization
which the company made, or from which the company received, payments in excess of the greater of $200,000 or 5% of that organizations
consolidated gross revenues, in any of the most recent three fiscal years; (4) has not (or whose immediate family members have
not), over the past three years been employed as an executive officer of a company in which an executive officer of Mobiquity has
served on that company’s compensation committee; or (5) is not currently (or whose immediate family members are not currently),
and has not been over the past three years (or whose immediate family members have not been over the past three years) a partner
of Mobiquity’s outside auditor.
The term “Financial
Expert” is defined under the Sarbanes-Oxley Act of 2002, as amended, as a person who has the following attributes: an understanding
of generally accepted accounting principles and financial statements; has the ability to assess the general application of such
principles in connection with the accounting for estimates, accruals and reserves; experience preparing, auditing, analyzing or
evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable
to the breadth and complexity of issues that can reasonably be expected to be raised by the company’s financial statements,
or experience actively supervising one or more persons engaged in such activities; an understanding of internal controls and procedures
for financial reporting; and an understanding of audit committee functions.
The Company may in the
future form an audit committee to consist of one or more independent directors. In the event an audit committee is established,
of which there can be no assurances given, its first responsibility would be to adopt a written charter. Such charter would be
expected to include, among other things:
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being directly responsible for the appointment, compensation and oversight of our independent auditor, which shall report directly to the audit committee, including resolution of disagreements between management and the auditors regarding financial reporting for the purpose of preparing or issuing an audit report or related work;
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·
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annually reviewing and reassessing the adequacy of the committee’s formal charter;
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·
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reviewing the annual audited financial statements with our management and the independent auditors and the adequacy of our internal accounting controls;
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·
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reviewing analyses prepared by our management and independent auditors concerning significant financial reporting issues and judgments made in connection with the preparation of our financial statements;
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·
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reviewing the independence of the independent auditors;
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·
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reviewing our auditing and accounting principles and practices with the independent auditors and reviewing major changes to our auditing and accounting principles and practices as suggested by the independent auditor or its management;
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reviewing all related party transactions on an ongoing basis for potential conflict of interest situations; and
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all responsibilities given to the audit committee by virtue of the Sarbanes-Oxley Act of 2002, which was signed into law by President George W. Bush on July 30, 2002.
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LACK OF INDEPENDENT DIRECTORS
Currently, the Company
has four directors, each of which are members of management. Accordingly, the Company has no independent directors at the current
time.
CODE OF ETHICS
The Company has a new code of ethics that applies
to the Company's directors and officers which has been designed to deter wrongdoing and to promote:
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Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
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·
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Full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company;
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·
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Compliance with applicable governmental law, rules and regulations;
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The prompt internal reporting of violations of the code of ethics to an appropriate pre-identified person; and
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Accountability for adherence to the code of ethics.
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A copy of the Code of Ethics was filed as Exhibit 14 to our Form
10-K for the fiscal year ended December 31, 2014.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act
of 1934, as amended, requires our officers and directors, and persons who own more than ten percent of a registered class of our
equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "Commission").
Officers, directors and greater than ten percent stockholders are required by the Commission's regulations to furnish us with copies
of all Section 16(a) forms they file. During fiscal 2014, to the best of the knowledge of the Company’s directors and officers,
no form 3’s or form 4’s or form 5’s were filed late with the Commission by officers or directors, except that
Tom Arnost made Form 4 late filings.
Item 11.
Executive
Compensation
.
The following table sets forth the overall
compensation earned over the fiscal years ended December 31, 2015 and 2014 by (1) each person who served as the principal
executive officer of the company during fiscal year 2015 and 2014; (2) the Company’s most highly compensated (up to a maximum
of two) executive officers as of December 31, 2015 and 2014 with compensation during fiscal years 2015 and 2014 of $100,000 or
more; and (3) those two individuals, if any, who would have otherwise been in included in section (2) above but for the fact that
they were not serving as an executive of the company as of December 31, 2014.
It should be noted that the option awards shown
below for Dean L. Julia and Michael D. Trepeta include options valued at $688,500 each. Included in this number was an exchange
of 1,500,000 options exercisable at $.01 per share in our subsidiary, Mobiquity Networks, which were exchanged for an identical
number of options in our Company at an exercise price of $.30 per share. This exchange was undertaken in January 2014 in order
to keep Mobiquity Networks as a wholly-owned subsidiary.
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Salary Compensation
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Name and Principal
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Salary
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Bonus
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Stock
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Option Awards
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Non-Equity Incentive Plan Compensation
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Nonqualified Deferred Compensation Earnings
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All Other Compensation
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Total
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Position
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Year
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($)
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($)
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Awards
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($)(1)
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($)
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($)
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($)(2)(3)
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($)
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Dean L. Julia
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2014
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$
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362,408
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$
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28,000
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–
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$
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846,150
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|
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–
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–
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$
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42,428
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$
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1,278,986
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Co-CEO of the company
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2015
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$
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360,914
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$
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–
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–
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$
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149,950
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|
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–
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–
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$
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57,866
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$
|
568,730
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Michael D. Trepeta
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2014
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$
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362,408
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$
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28,000
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–
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$
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846,150
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|
|
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–
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–
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$
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49,285
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$
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1,285,843
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Co-CEO of the company
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2015
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$
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360,592
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$
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–
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|
|
–
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|
$
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149,950
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|
|
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–
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|
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–
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$
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53,793
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$
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564,335
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Sean Trepeta
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2014
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$
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230,000
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$
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–
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–
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$
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584,900
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–
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$
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24,908
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$
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839,808
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President of Mobiquity Networks
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2015
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$
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240,000
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$
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–
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–
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|
|
$
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27,900
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|
|
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–
|
|
|
|
–
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|
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$
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24,804
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|
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$
|
292,704
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|
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|
|
|
|
|
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|
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Paul Bauersfeld
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2014
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$
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235,000
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|
|
$
|
–
|
|
|
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–
|
|
|
$
|
1,290,900
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|
|
|
–
|
|
|
|
–
|
|
|
$
|
24,903
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|
|
$
|
1,550,803
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|
|
|
|
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|
|
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|
|
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|
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Chief Technology Officer
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2015
|
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$
|
301,737
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$
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–
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–
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|
$
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–
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|
|
|
–
|
|
|
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–
|
|
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$
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27,028
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$
|
328,765
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_____________
(1)
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The options and restricted stock awards presented in this table for fiscal 2015 and 2014 reflect the full grant date fair value, as if the total dollar amount were earned in the year of grant. The stock awards are valued based on the fair market value of such Shares on the date of grant and are charged to compensation expense over the related vesting period. The options are valued at the date of grant based upon the Black-Scholes method of valuation, which is expensed over the service period over which the options become vested. As a general rule, for time-in-service-based options, the company will immediately expense any option or portion thereof which is vested upon grant, while expensing the balance on a pro rata basis over the remaining vesting term of the option.
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(2)
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Includes all other compensation not reported in the preceding columns, including (i) perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is less than $10,000; (ii) any “gross-ups” or other amounts reimbursed during the fiscal year for the payment of taxes; (iii) discounts from market price with respect to securities purchased from the company except to the extent available generally to all security holders or to all salaried employees; (iv) any amounts paid or accrued in connection with any termination (including without limitation through retirement, resignation, severance or constructive termination, including change of responsibilities) or change in control; (v) contributions to vested and unvested defined contribution plans; (vi) any insurance premiums paid by, or on behalf of, the company relating to life insurance for the benefit of the named executive officer; and (vii) any dividends or other earnings paid on stock or option awards that are not factored into the grant date fair value required to be reported in a preceding column.
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(3)
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Includes compensation for service as a director described under Director Compensation, below.
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For a description of the material terms of
each named executive officers’ employment agreement, including the terms of the terms of any common share purchase option
grants, see that section of this Form 10-K/
A
captioned “Employment Agreements.”
No outstanding common share purchase option
or other equity-based award granted to or held by any named executive officer in the past three years were re-priced or otherwise
materially modified, including extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination
of applicable performance criteria, or the change of the bases upon which returns are determined, nor was there any waiver or
modification of any specified performance target, goal or condition to payout, except as follows:
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·
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On March 1, 2013, we extended for an additional
five years options to purchase 50,000 shares of our common stock which were originally granted to each of Dean Julia and Michael
Trepeta in March 2008 and we lowered the exercise price from $.80 per share to $.35 per share; and
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·
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On December 19, 2014, we agreed to issue
to Dean Julia and Michael Trepeta effective January 3, 2015, options to purchase 250,000 shares of our common stock at an exercise
price of $.35 per share over a term of 10 years. These options were issued to replace a similar number of options exercisable at
$1.00 per share due to expire on January 3, 2015.
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|
·
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In December 2015, the Board replaced Dean
Julia’s and Michael Trepeta’s expiring options to purchase 200,000 shares at $1.20 per share with new six month options
on the same terms.
|
For a description of the material terms of
any contract, agreement, plan or other arrangement that provides for any payment to a named executive officer in connection with
his or her resignation, retirement or other termination, or a change in control of the company see “Employment Agreements”.
Executive Officer Outstanding Equity Awards
at Fiscal Year-End
The following table provides certain information
concerning any common share purchase options, stock awards or equity incentive plan awards held by each of our named executive
officers and Thomas Arnost that were outstanding as of December 31, 2015.
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Option Awards
|
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Stock Awards
|
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Name
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Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration Date
|
|
Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#)
|
|
Market
Value of
Shares
or
Units of
Stock That
Have
Not
Vested
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
|
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
|
|
Dean
|
|
250,000
|
|
–
|
|
–
|
|
$
|
.35
|
|
12/19/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
L.
|
|
200,000
|
|
–
|
|
–
|
|
$
|
1.20
|
|
06/28/16
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Julia
|
|
150,000
|
|
–
|
|
–
|
|
$
|
1.20
|
|
08/22/17
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(1)
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.38
|
|
03/01/18
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.65
|
|
03/02/19
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.54
|
|
03/25/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
200,000
|
|
–
|
|
–
|
|
$
|
.50
|
|
04/07/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.26
|
|
02/28/21
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.63
|
|
02/28/22
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.25
|
|
02/13/23
|
|
–
|
|
–
|
|
–
|
|
--
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.45
|
|
04/01/23
|
|
–
|
|
–
|
|
–
|
|
--
|
|
|
|
1,500,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
01/17/24
|
|
–
|
|
–
|
|
–
|
|
--
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/03/24
|
|
–
|
|
–
|
|
–
|
|
--
|
|
|
|
250,000
|
|
–
|
|
–
|
|
$
|
.50
|
|
07/16/24
|
|
–
|
|
–
|
|
–
|
|
--
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
04/22/25
|
|
–
|
|
–
|
|
–
|
|
--
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/03/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.32
|
|
03/01/25
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
|
|
250,000
|
|
–
|
|
–
|
|
$
|
.35
|
|
12/19/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
D.
|
|
200,000
|
|
–
|
|
–
|
|
$
|
1.20
|
|
06/28/16
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Trepeta
|
|
150,000
|
|
–
|
|
–
|
|
$
|
1.20
|
|
08/22/17
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.38
|
|
03/01/18
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.65
|
|
03/02/19
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.54
|
|
03/25/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
200,000
|
|
–
|
|
–
|
|
$
|
.50
|
|
04.07/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.26
|
|
02/28/21
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.63
|
|
02/28/22
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.25
|
|
02/13/23
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.45
|
|
04/01/23
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
1,500,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
01/17/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/03/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
250,000
|
|
–
|
|
–
|
|
$
|
.50
|
|
07/16/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
04/22/25
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/03/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.32
|
|
03/01/25
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration Date
|
|
Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#)
|
|
Market
Value of
Shares
or
Units of
Stock That
Have
Not
Vested
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
|
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
|
|
Sean
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.75
|
|
05/07/22
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Trepeta
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.25
|
|
02/13/23
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(1) (2)
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/03/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
125,000
|
|
1,375,000
|
|
--
|
|
$
|
.50
|
|
12/19/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
04/22/25
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
|
|
250,000
|
|
–
|
|
–
|
|
$
|
.50
|
|
07/16/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Arnost
|
|
125,000
|
|
–
|
|
–
|
|
$
|
.45
|
|
07/08/19
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(3)
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/01/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
250,000
|
|
–
|
|
–
|
|
$
|
.40
|
|
12/13/23
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.75
|
|
05/07/22
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.25
|
|
02/13/23
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
200,000
|
|
–
|
|
–
|
|
$
|
.60
|
|
12/20/16
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
125,000
|
|
–
|
|
–
|
|
$
|
.43
|
|
10/07/19
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
|
–
|
|
–
|
|
$
|
.35
|
|
01/07/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
125,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
04/06/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
125,000
|
|
–
|
|
–
|
|
$
|
.25
|
|
07/06/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
125,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
10/06/20
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.30
|
|
04/20/25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
|
|
500,000
|
|
–
|
|
–
|
|
$
|
.45
|
|
06/11/18
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Bauresfeld
|
|
100,000
|
|
–
|
|
–
|
|
$
|
.59
|
|
03/03/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(1)
|
|
1,000,000
|
|
1,000,000
|
|
–
|
|
$
|
.50
|
|
07/15/19
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
500,000
|
|
500,000
|
|
–
|
|
$
|
.50
|
|
12/19/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean
|
|
50,000
|
|
–
|
|
–
|
|
$
|
.35
|
|
12/19/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
McDonnell
|
|
250,000
|
|
–
|
|
–
|
|
|
.50
|
|
01/17/24
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________
(1)
|
All options contain cashless exercise provisions.
|
(2)
|
Sean Trepeta owns warrants to purchase 150,001 shares at $.50 per share which are not granted under a compensation plan, which warrants he purchased from the company as part of a private placement offering which was primarily sold to non-affiliated persons.
|
(3)
|
Thomas Arnost owns convertible notes,
warrants and letter of credit which are not reflected in the table.
|
(4)
|
Sean McDonnell owns warrants to purchase 83,334
shares at $.50 per share which are not granted under a compensation plan, which warrants he purchased from the company as part
of a private placement offering which was primarily sold to non-affiliated persons.
|
Employment Agreement of Executive Chairman
In December 2014, we entered into a three-year
employment agreement with Thomas Arnost serving as Executive Chairman of the board. Mr. Arnost receives a monthly salary of $10,000
plus an annual grant of options for serving on the board of directors. In the event of his termination, by Mr. Arnost or by the
company for cause, Mr. Arnost will receive his pay through the termination date. In the event that Mr. Arnost is terminated
without cause, he shall be entitled to receive his salary paid through the end of the term of his agreement. Mr. Arnost may terminate
the agreement at any time by giving three months prior written notice to our board of directors. Mr. Arnost will also be entitled
to indemnification against all claims, judgments, damages, liabilities, costs and expenses (including reasonably legal fees) arising
out of, based upon or related to his performance of services to us, to the maximum extent permitted by law.
Employment Agreements of Co-Chief Executive Officers
Each of the following executive officers
is a party to an employment agreement with the company.
Name
|
|
Position
|
|
Monthly Salary (1)
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
Dean L. Julia
|
|
Co-Chief Executive Officer
|
|
$ 30,000
|
|
(2)
|
|
Michael Trepeta
|
|
Co-Chief Executive Officer
|
|
$ 30,000
|
|
(2)
|
|
________________
(1)
|
Compensation of each executive officer named in the table above has his monthly base salary increased by $2,000 each subsequent March 1st during the term of the agreement and any extensions thereof. Each officer has deferred their March 1, 2015 and 2016 salary increase of $2,000 per month, which deferral can change on demand of the respective executive.
|
(2)
|
Annual bonuses are paid by us by the last business day of March for the preceding calendar (fiscal) year, except in the event of termination prior to the end of any fiscal year (other than termination for cause), a pro rata portion of the annual bonus shall be paid within 30 days of termination. In 2013, we approved amending the employment agreements of Messrs. Julia and Trepeta to provide that each officer may choose an annual bonus equal to 5% of pre-tax earnings for the most recently completed year before deduction of annual bonuses paid to officers or, in the event majority control of the company is acquired by a person or a group of persons during the prior fiscal year, the officer may choose to receive the aforementioned bonus or 1% of the control consideration paid by acquirer(s) to acquire majority control of the company.
|
A summary of each Executive’s employment
agreement, as amended, is as follows:
Each executive’s employment agreement
has a term of five years and automatically renews for a period of one year thereafter effective on March 1
st
of each
new calendar year unless the employment agreement is terminated in accordance with its terms on or prior to December 30
th
of the prior calendar year. As of January 1, 2016, each executive’s employment agreement currently expires on February 28,
2021. Each executive may terminate his employment agreement upon written three-month notice. In such event, we shall
be relieved of all of our obligations under the agreement, except for payment of the executive’s base salary and annual bonus
earned and unpaid through the effective date of termination, those obligations with respect to indemnification and director and
officer insurance and severance pay as described below.
We may terminate the Executive’s employment
for cause as defined in each agreement. In the event the employment agreement is terminated for cause, the executive’s base
salary and any unearned annual bonus, severance pay and all benefits shall terminate immediately upon such discharge, and we shall
have no further obligations to the executive except for payment and reimbursement for any monies due which right to payment or
reimbursement accrued prior to such termination.
We may terminate the employment agreement
upon the disability as defined in the agreement or death of the executive by giving written notice to the executive. In the case
of disability, such termination will become effective immediately upon the giving of such notice unless otherwise specified by
us. Upon any such termination, we shall be relieved of all our obligations under the executive’s employment, except for
payment of the executive’s base salary and annual bonus earned and unpaid through the effective date of termination and
severance pay.
In the event of termination by us of executive’s
employment agreement without cause, then the executive shall be entitled to receive on the termination date termination pay of
one-year base salary based upon the scheduled annual salary of each executive officer for the next contract year, plus the amount
of bonuses paid or entitled to be paid to the executive for the current fiscal year or the preceding fiscal year, whichever is
higher. In the event of termination, the executives will continue to receive all salary and benefits included in the employment
agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date
thereof.
We have agreed to defend and indemnify each
Executive in his capacity as an officer against all claims, judgments, damages, liabilities, costs and expenses (including reasonable
attorney’s fees) arising out of, based upon, or related to his performance of services to us, to the maximum extent permitted
under law. We will also use our reasonable best efforts to include each Executive as an insured under all applicable directors’
and officers’ liability insurance policies maintained by us.
Each Executive is currently entitled to the following additional
benefits:
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·
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$2,000 per month pay raise on each March 1 during the term of the Agreement and any extension thereof;
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·
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As an executive officer, the annual grant on March 1 of each year of ten-year stock options to purchase 100,000 shares at an exercise price equal to the then fair market value of our common stock as determined by our board of directors. As a director of the company, each Executive also receives as a board member the number of options granted annually to each other board member;
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·
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Election to our board of directors and during the term of employment, the board’s nomination for re-election to the board;
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·
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Paid disability insurance and term life insurance for the benefit of each Executive’s family in an amount fixed by our board of directors at a cost not to exceed $10,000 per annum;
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Use of company automobile with all related costs paid for by us;
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·
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Right to participate in any pensions of our company.
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In the past, we agreed to compensate Dean Julia
and Michael Trepeta with options to purchase Mobiquity Network Inc.’s common stock in the event such entity raised financing
as a stand-alone enterprise for its operations. In order to terminate this arrangement, in January 2014, our board of directors
approved an exchange of Mobiquity Network options previously issued Messrs. Julia and Trepeta for options to purchase 1,500,000
shares of our common stock at the then fair market value of our common stock, under our 2009 Stock Option Plan as described below.
Employment Agreement
– Paul Bauersfeld
In December 2014, we entered into an employment
agreement with Paul Bauersfeld, our Chief Technology Officer, who is an employee at will. Mr. Bauersfeld, as a full-time employee,
is to be paid a salary at the rate of $25,000 per month. Upon the execution of the agreement, he received 10-year options to purchase
1,000,000 shares of our common stock vesting quarterly over a period of three years. For calendar 2015, he was entitled to a bonus
of $125,000 upon revenues of Mobiquity Networks achieving a minimum of $6 million in revenues and a further bonus of $125,000 for
a total of $250,000 at such time as Mobiquity Network’s revenues achieve a minimum of $12 million, it being understood that
any revenues which do not have a 30% margin shall not count toward these totals. In fiscal 2015, Mr. Bauersfeld did not earn a
bonus. The foregoing compensatory arrangements with Mr. Bauersfeld is in addition to the non-statutory stock options to purchase
2,600,000 shares of our common stock previously granted to Mr. Bauersfeld. All options granted to Mr. Bauersfeld will become immediately
vested in the event of a change of control of our company or sale of substantially all of our assets. In the event we terminate
Mr. Bauersfeld without cause. Mr. Bauersfeld is entitled to receive six months’ severance pay.
Employment Agreement – Sean Trepeta
In December 2014, Mobiquity Networks entered
into an employment agreement with Sean Trepeta, to serve as President of Mobiquity Networks as an employee at will. Mr. Trepeta,
as a full-time employee, is to be paid a salary at the rate of $20,000 per month. Upon the execution of the agreement, he received
10-year options to purchase 1,500,000 shares of our common stock vesting quarterly over a period of three years. For calendar 2015,
he was entitled to a bonus of $125,000 upon revenues of Mobiquity Networks achieving a minimum of $6 million in revenues and a
further bonus of $125,000 for a total of $250,000 at such time as Mobiquity Network’s revenues achieve a minimum of $12 million,
it being understood that any revenues which do not have a 30% margin shall not count toward these totals. For fiscal 2015, Mr.
Trepeta did not earn any bonus. All options granted to Mr. Trepeta will become immediately vested in the event of a change in control
of our Company or sale of substantially all of our assets. In the event we terminate Mr. Trepeta without cause, after six months
of continued employment under the employment agreement, Mr. Trepeta is entitled to receive three months’ severance pay.
Employment Arrangements
Sean McDonnell, our Chief Financial Officer,
is an employee at will and is currently receiving a salary of $132,000 per annum.
DIRECTOR COMPENSATION
Currently, all four directors of the Company
are executive officers of the Company. Their compensation is described herein. In the event that the Company obtains non-executive/independent
directors, it is anticipated that their compensation will include cash fees to attend board meetings and/or committee meetings
and stock options in consideration of their services as a director.
Employee Benefit and Consulting Services
Compensation Plans
On January 3, 2005, our company established
an Employee Benefit and Consulting Services Compensation Plan (the “2005 Plan”) covering 2,000,000 shares, which 2005
Plan was ratified by our stockholders in February 2005. On August 12, 2005, the company’s stockholders approved a 2,000,000
share increase in the 2005 Plan to 4,000,000 shares. On August 28, 2009, the Board adopted the “2009 Plan” identical
to the 2005 Plan with 4,000,000 shares under the 2009 Plan. In September 2013, the Company’s stockholders ratified a board
amendment to increase the number of shares covered by the 2009 Plan to 10,000,000 shares. All references to “the Plans”
include the 2005 Plan and 2009 Plan. As the 2005 and 2009 Plans are identical other than the number of shares covered by each Plan,
it is the Company’s intention to first utilized the number of shares issuable (available) under the 2005 Plan prior to issuing
shares under the 2009 Plan. In February 2015, the Board approved an increase in the number of shares covered by the 2009 Plan from
10,000,000 shares to 20,000,000 shares, subject to stockholder approval within one year. However, since approval was not obtained
within the requisite time period, the Board established a 2016 Plan covering 10,000,000 shares which is otherwise identical to
the 2005 and 2009 Plans. All options granted under the 2009 Plan, which exceed the Plan limits, have been moved to the 2016 Plan.
The 2005, 2009 and 2016 Plans are collectively herein referred to as the “Plan.”
Administration
Our board of directors administers the Plans,
has the authority to determine and designate officers, employees, directors and consultants to whom awards shall be made and the
terms, conditions and restrictions applicable to each award (including, but not limited to, the option price, any restriction or
limitation, any vesting schedule or acceleration thereof, and any forfeiture restrictions). The board may, in its sole discretion,
accelerate the vesting of awards.
Types of Awards
The Plans are designed to enable us to offer
certain officers, employees, directors and consultants of us and our subsidiaries equity interests in us and other incentive awards
in order to attract, retain and reward such individuals and to strengthen the mutuality of interests between such individuals and
our stockholders. In furtherance of this purpose, the Plans contain provisions for granting non-statutory stock options
and incentive stock options and common stock awards.
Stock Options
. A “stock option”
is a contractual right to purchase a number of shares of common stock at a price determined on the date the option is granted.
An incentive stock option is an option granted under the Internal Revenue Code of 1986 to our employees with certain tax advantages
to the grantee over non-statutory stock options. The option price per share of common stock purchasable upon exercise of a stock
option and the time or times at which such options shall be exercisable shall be determined by the Board at the time of grant.
Such option price in the case of incentive stock options shall not be less than 100% of the fair market value of the common stock
on the date of grant and may be granted below fair market value in the case of non-statutory stock options. Incentive stock options
granted to owners of 10% or more of our common stock must be granted at an exercise price of at least 110% of the fair market value
of our common stock and may not have a term greater than five years. Also, the value of incentive options vesting to any employee
cannot exceed $100,000 in any calendar year. The option price of our options must be paid in cash, money order, check or common
stock of the company. The non-statutory stock options may also contain at the time of grant, at the discretion of the
board, certain other cashless exercise provisions. These cashless exercise provisions are included in the currently outstanding
non-statutory stock options granted by the board.
Options shall be exercisable at the times and
subject to the conditions determined by the Board at the date of grant, but no option may be exercisable more than ten years after
the date it is granted. If the optionee ceases to be an employee of our company for any reason other than death, any incentive
stock option exercisable on the date of the termination of employment may be exercised for a period of thirty days or until the
expiration of the stated term of the option, whichever period is shorter. In the event of the optionee’s death, any incentive
stock option exercisable at the date of death may be exercised by the legal heirs of the optionee from the date of death until
the expiration of the stated term of the option or six months from the date of death, whichever event first occurs. In
the event of disability of the optionee, any incentive stock options shall expire on the stated date that the Option would otherwise
have expired or 12 months from the date of disability, whichever event first occurs. The termination and other provisions
of a non-statutory stock option shall be fixed by the board of directors at the date of grant of each respective option.
Common Stock Award
. Common stock awards
are shares of common stock that will be issued to a recipient at the end of a restriction period, if any, specified by the board
if he or she continues to be an employee, director or consultant of us. If the recipient remains an employee, director or consultant
at the end of the restriction period, the applicable restrictions will lapse and we will issue a stock certificate representing
such shares of common stock to the participant. If the recipient ceases to be an employee, director or consultant of us for any
reason (including death, disability or retirement) before the end of the restriction period unless otherwise determined by the
board, the restricted stock award will be terminated.
Awards
As of December 31, 2015, the Company has granted
under the Plans a total of 15,425,000 options and outside the Plans a total of 3,915,000 options or a total of options to purchase
19,340,000 shares of the Company’s Common Stock with a weighted average exercise price of $.39 per share. The board has granted
options with varying terms
.
It is not possible to predict the individuals
who will receive future awards under the Plans or outside the Plans or the number of shares of Common Stock covered by any future
award because such awards are wholly within the discretion of the Board. The table below contains information as of December 31,
2015 on the known benefits provided to certain persons and group of persons who own options under or outside the Plans.
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Number of Shares
Subject to Options
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Range of Exercise Price ($) per Share
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Value of
Unexercised Options at
Dec. 31, 2015 (1)
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Dean L. Julia, Co-CEO
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3,450,000
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.25 – 1.20
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$
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–
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Michael D. Trepeta, Co-CEO
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3,450,000
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.25 – 1.20
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$
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–
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Sean McDonnell, Chief Financial Officer
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300,000
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.35 - .50
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$
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–
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Sean Trepeta, President, Mobiquity Networks
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1,800,000
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.25 - .75
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$
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–
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Thomas Arnost, Executive Chairman
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1,750,000
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.25 - .75
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$
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–
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Paul Bauersfeld
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3,600,000
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.45 -.59
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$
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–
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Six Executive Officers as a group
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14,350,000
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.25 – 1.20
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$
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–
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Non-Executive Officer, Employees and Consultants
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4,990,000
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.10 – 1.20
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________________
(1)
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Value is normally calculated by multiplying (a) the difference between the market value per share at period end (i.e. $.15 based upon a last sale on (or the last trade date before) December 31, 2015) and the option exercise price by (b) the number of shares of Common Stock underlying the option.
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In the past, the Company has granted certain
employees and consultants, stock awards for services for the prior year with vesting to occur after the passage of an additional
12 months. These awards totaled 45,000 Shares for 2008, subject to continued services with the Company through December 31, 2009.
These awards totaled 51,000 Shares for 2009 subject to continued services with the Company through December 31, 2010. These awards
totaled 105,000 Shares for 2010 subject to continued services with the Company through December 31, 2011. These awards totaled
45,000 shares for 2011, subject to continued services with the Company through December 31, 2012. A total of 203,500 shares were
issued under the 2005 Plan pursuant to the stock award program described above (net of cancellations). No stock awards were granted
in fiscal 2012, fiscal 2013, 2014 and 2015.
Eligibility
Our officers, employees, directors and consultants
of Mobiquity and our subsidiaries are eligible to be granted stock options, and common stock awards.
Termination or Amendment of the Plans
The board may at any time amend, discontinue,
or terminate all or any part of the Plans, provided, however, that unless otherwise required by law, the rights of a participant
may not be impaired without his or her consent, and provided that we will seek the approval of our stockholders for any amendment
if such approval is necessary to comply with any applicable federal or state securities laws or rules or regulations.