DIRECTOR AGREEMENT
THIS
DIRECTOR AGREEMENT is made effective as of May 10, 2018 (the
“Agreement”),
Blockchain Industries, Inc., a Nevada corporation with its
principal place of business at 000 Xxxxxxx Xxx, Xxxxx 000, Xxxxx
Xxxxxx, XX 00000 (the “Company”), and
Xxx Xxxxxxx (“Director”).
WHEREAS, it is
essential to the Company to retain and attract as directors the
most capable persons available to serve on the board of directors
of the Company (the “Board”);
and
WHEREAS, the
Company believes that Director possesses the necessary
qualifications and abilities to serve as a director of the Company
and to perform the functions and meet the Company’s needs
related to its Board,
NOW,
THEREFORE, in consideration of the mutual promises contained
herein, the benefits to be derived by each party hereunder and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as
follows:
1. Term. The Director shall hold
office until such time that such Director’s successor is duly
elected and qualified, or until such Director’s death or
removal from office. The Director will be automatically removed
from the Board if such Director resigns his office by writing
delivered to the Board, becomes prohibited by law from acting as a
director or commits a material breach of this Agreement pursuant to
Section 7 below.
2. Compensation and
Expenses.
a. Stock Option. For the services
provided to the Company as a director, the Director shall receive a
non-qualified stock option (“Option”) to
purchase up to One Hundred Forty Four Thousand (144,000) shares of
the Company’s common stock (“Option
Shares”), pursuant and subject to the Company’s
Equity Incentive Plan, at the following exercise prices and vesting
schedule:
|
Exercise Price
|
Quantity Vested
|
Vesting Date
|
Expiration Date
|
|
$1.25
|
48,000
|
6/1/2018
|
12/31/2023
|
|
$1.25
|
48,000
|
6/1/2019
|
12/31/2023
|
|
$1.25
|
48,000
|
6/31/2020
|
12/31/2023
|
In the
event of the termination of the Director’s service
relationship (whether an as employee, director or consultant) with
the Company (“Termination of
Service”) at any time for any reason (including, but
not limited to, resignation, withdrawal, death, disability,
termination, with or without cause, or any other reason) before the
Director has exercised the Option in full, the Option shall
automatically expire, and cease to be exercisable immediately, with
respect to all of the Option Shares, whether vested or unvested. It
being understood and agreed that in no event will the Option become
exercisable for additional Options Shares upon a Termination of
Service for any reason and such outstanding and unexercised Option
shall immediately lapse and Director shall have no further rights
with respect to it.
b. Expenses. Upon submission of
appropriate receipts, invoices or vouchers as may be reasonably
required by the Company, the Company will reimburse Director for
all reasonable out-of-pocket travel expenses incurred in connection
with the performance of Director’s duties under this
Agreement.
c. Taxes. The Director
acknowledges that the exercise, transfer or other disposition of
the Option may give rise to significant U.S. income tax
consequences. Under Section 83 of the Internal Revenue Code and
Treas. Reg. section 1.83-7(b), upon the exercise of the Option, the
Director will recognize taxable ordinary income equal to the
difference between the fair market value of the common stock,
determined as of the exercise date, and the Option exercise price.
When the Director sells the common stock, the Director will
recognize taxable gain or loss (long-term if the Director held the
common stock for more than one year; otherwise, short-term) equal
to the difference between the amount the Director receives from the
sale and the tax basis of the common stock sold. If the Company, in
its discretion, determines that it is obligated to withhold any tax
in connection with the exercise of the Option, or in connection
with the transfer of any common stock acquired pursuant to the
Option, the Director hereby agrees that the Company may withhold
from the Director’s compensation or other remuneration the
appropriate amount of tax. At the discretion of the Company, the
amount required to be withheld may be withheld in cash from such
compensation or other remuneration or in kind from the common stock
otherwise deliverable to the Director on exercise of this option.
The Director further agrees that, if the Company does not withhold
an amount from the Director’s compensation or other
remuneration sufficient to satisfy the withholding obligation of
the Company, the Director will make reimbursement on demand, in
cash, for the amount underwithheld.
3. Market Stand-Off Agreement. In
the event of a public or private offering of the Company’s
securities and upon request of the Company, the underwriters or
placement agents placing the offering of the Company’s
securities, the Director agrees not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise
dispose of any of the Option Shares other than those included in
the registration, without the prior written consent of the Company
or such underwriters, as the case may be, for such period of time
from the effective date of such registration as may be requested by
the Company or such placement agent or underwriter.
4. Confidential Information. The
Director recognizes and acknowledges that the Director will have
access to Confidential Information (as defined below) relating to
the business or interests of the Company or of persons with whom
the Company may have business relationships. The Director agrees
that both during and after his time as a director of the Company,
the Director will not use for the Director’s own, or for
another’s benefit, or disclose or permit the disclosure of
any confidential information relating to the Company, including
without limitation any information about the deliberations of the
Board. The term “Confidential
Information” means any non-public information that
relates to the actual or anticipated business and/or products,
research or development of the Company, its affiliates or
subsidiaries, or to the Company’s, its affiliates’ or
subsidiaries’ technical data, trade secrets, or know-how,
including, but not limited to, research, product plans, or other
information regarding the Company’s, its affiliates’ or
subsidiaries’ products or services and markets therefor,
customer lists and customers, prospective customers, software,
developments, inventions, processes, methodologies, algorithms,
know-how, procedures, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing,
finances, business plans, vendor relationships, passwords,
encryption coding, search technology, analytics, transaction data,
ledgers, and other business information disclosed by the Company,
its affiliates or subsidiaries, either directly or indirectly, in
writing, orally or by drawings or inspection of premises, parts,
equipment, programs, formulas, ledgers or other property of
Company, its affiliates or subsidiaries. The Director also agrees
during his appointment that he will not, other than for the benefit
of the Company and in connection with his service as a director,
make any notes, memoranda, electronic records, tape records, films,
photographs, plans, drawings or any form of record relating to any
matter within the scope of the business or concerning the dealings
or affairs of the Company and will return any such items at any
time at the request of the Board. The Director confirms that he has
notified the Board in writing of all other directorships,
appointments and interests, including any directorship, appointment
or interest in a company, business or undertaking which competes or
is likely to compete with the Company or which could otherwise
potentially give rise to a conflict with his duties with the
Company.
5. Duties, Time and Commitment.
The Director shall use reasonable best efforts to attend all
convened meetings of the Board. During the continuance of the
Director’s appointment, the Director will be expected to: (i)
faithfully, efficiently, competently and diligently perform his
duties and exercise such powers as are appropriate to his role as a
director; (ii) in so far as reasonably possible, attend all
meetings of the Board and of any committees of the Board of which
he is a member; (iii) comply with all reasonable requests,
instructions and regulations made or given by the Board (or by any
duly authorized committee thereof) and give to the Board such
explanations, information and assistance the Board may reasonably
require; (iv) act in the best interests of the Company; and (v) use
commercially reasonable efforts to promote and extend the interests
and reputation of the Company, including assisting the Board in
relation to public and corporate affairs and bringing to bear for
the benefit of the Board the Director’s particular knowledge
and experience.
6. Business Opportunities & Conflicts
Disclosure. The Company acknowledges and agrees that the
Director should be permitted to engage in, acquire or invest in the
same or similar activities or lines of business involving the
provision of services or products with respect to digital assets,
cryptocurrency, alternative distribution ledgers and/or blockchain
technologies (each, a “Business
Opportunity”), provided that the Director fully
complies with and adheres to the following advance notice,
standards of conduct and Disqualified Business Opportunity (as
hereinafter defined) restrictions:
a. Business Opportunity Notice.
Within ten (10) business days of the Director’s appointment
to the Board, the Director shall inform the Board of any held
(direct or indirect) personal interests which may conflict with the
Company and its businesses. In the event that the Director becomes
aware of a Business Opportunity, the Director shall notify the
Company in writing of such opportunity (a “Disclosed Business
Opportunity”) and deliver to the Company, or provide
the Company access to, all information prepared by or on behalf of,
or material information submitted or delivered to, the Director
related to such potential transaction (the “Business Opportunity
Notice”). Following the expiration of the thirty-
(30-)-day period (“Business Opportunity Notice
Period”) after receipt of such Business Opportunity
Notice, the Company shall be deemed to have renounced any interest
or expectancy in the Disclosed Business Opportunity and the
Director may pursue the Disclosed Business Opportunity, provided
that the Disclosed Business Opportunity is conducted by the
Director in accordance with the standard set forth in Section 6.c.
below and that the Disclosed Business Opportunity is not a
Disqualified Business Opportunity. The Company shall not be
prohibited from pursuing any Business Opportunity with respect to
which it is deemed to have renounced any interest or expectancy as
a result of this Section 6.
b. Disqualified Business
Opportunity. During the term of this Agreement and for a
period of twelve (12) months after the Director ceases to be a
Director of the Company, the Director shall not shall not, directly
or indirectly, pursue, become engaged in or have any ownership
interest or become associated with in any Person (as hereinafter
defined) which directly or indirectly pursues or becomes engaged in
any Business Opportunity that (i) is first presented to the
Director solely in his capacity as a director or officer of the
Company or its affiliates or (ii) is identified by the Director
solely through the disclosure of information by or on behalf of the
Company or its affiliates (each such Business Opportunity referred
to in clauses (i) and (ii), a “Disqualified Business
Opportunity”). The Director acknowledges that the
foregoing restrictions and time limitations with respect to a
Business Opportunity and Disqualified Business Opportunity are
reasonable and properly required for the adequate protection of the
business interests of the Company.
c. Standards for Separate Conduct of
Disclosed Business Opportunity. The Director may pursue a
Disclosed Business Opportunity following the expiration Business
Opportunity Notice Period if such Disclosed Business Opportunity is
developed and pursued solely through the use of personnel and
assets of the Director or jointly with the personnel and assets of
any other “Person(s)” (as
hereinafter defined), provided that such Person(s) does not owe any
fiduciary or other duty to the Company. “Person” means
an individual, corporation, partnership, limited liability company,
trust, joint venture, unincorporated organization or other legal or
business entity.
7. Termination for Material
Breach. The Director’s service on the Board may be
terminated by the Company pursuant to the provision of written
notice to the Director under Section 17 below in the event of a
material breach by the Director of any of the provisions of this
Agreement, including but not limited to Section 6 above;
provided however, that the Director shall have
been given reasonable notice and an opportunity to promptly cure
any such event of a material breach (unless the event cannot be
cured).
8. Insurance. The Company agrees
to use commercially reasonable efforts to procure and maintain an
insurance policy or policies providing directors’ and
officers’ liability insurance. Director shall be covered by
such policy or policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any of the
Company’s directors or officers. The Director acknowledges
that as of the date of this Agreement, the Company has not yet
obtained directors’ and officers’ liability insurance
coverage.
9. Limitation of Liability; Right to
Indemnification. The Company shall indemnify the Director in
his capacity as director of the Company to the fullest extent
permitted by applicable law against all debts, judgments, costs,
charges or expenses incurred or sustained by the Director in
connection with any action, suit or proceeding to which the
Director may be made a party by reason of his being or having been
a director of the Company. The Company shall have the right to
assume, with legal counsel of its choice, the defense of Director
in any such action, suit or proceeding for which the Company is
providing indemnification to Director. Should Director determine to
employ separate legal counsel in any such action, suit or
proceeding, any costs and expenses of such separate legal counsel
shall be the sole responsibility of Director. If the Company does
not assume the defense of any such action, suit or other
proceeding, the Company shall, upon request of the Director,
promptly advance or pay any amount for costs or expenses
(including, without limitation, the reasonable legal fees and
expenses of counsel retained by Director) incurred by Director in
connection with any such action, suit or proceeding. The Company
shall not be obligated to indemnify Director against any actions
that constitute, in the reasonable discretion of the Board of
Directors, an act of gross negligence or willful misconduct or
contrary to the general indemnification provisions of the Nevada
Revised Statutes or the Company’s certificate of
incorporation or bylaws.
10. Remedies. The Director agrees
that any breach of the terms of Section 3 and Section 6 of this
Agreement would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law;
the Director therefore also agrees that in the event of said breach
or any threat of breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such breach
and/or threatened breach and/or continued breach by the Director
and/or any and all entities acting for and/or with the Director,
without having to prove damages or paying a bond, in addition to
any other remedies to which the Company may be entitled at law or
in equity. The terms of this paragraph shall not prevent the
Company from pursuing any other available remedies for any breach
or threatened breach hereof, including, but not limited to, the
recovery of damages from the Director. The Director acknowledges
that the Company would not have entered into this Agreement had the
Director not agreed to the provisions of this Section
8.
11. Amendments and Waiver. No
supplement, modification or amendment of this Agreement will be
binding unless executed in writing by both parties. No waiver of
any provision of this Agreement on a particular occasion will be
deemed or will constitute a waiver of that provision on a
subsequent occasion or a waiver of any other provision of this
Agreement.
12. Binding Effect. This Agreement
will be binding upon and inure to the benefit of and be enforceable
by the parties and their respective successors and
assigns.
13. Severability. The provisions of
this Agreement are severable, and any provision of this Agreement
that is held by a court of competent jurisdiction to be invalid,
void, or otherwise unenforceable in any respect will not affect the
validity or enforceability of any other provision of this
Agreement.
14. Arbitration. Any disputes
arising from this Agreement not resolved by the parties in a good
faith, timely manner shall be arbitrated within Los Angeles County,
California under the rules and procedures of the American
Arbitration Association. Attorney fees and costs are to be awarded
to the prevailing party.
15. Governing Law. This Agreement
will be governed by and construed and enforced in accordance with
the laws of the State of Nevada applicable to contracts made and to
be performed in that state without giving effect to the principles
of conflicts of laws.
16. Entire Agreement. This
Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof, superseding all
negotiations, prior discussions and prior agreements and
understanding relating to such subject matter.
17. Notices. Every notice relating
to this Agreement shall be in writing and shall be given by
personal delivery or by registered or certified mail, postage
prepaid, return receipt requested; to:
If to
the Company, to:
00
Xxxxx Xxxxxxxx
Xxxxx
000
Xxx
Xxxx, XX 00000
Attention:
President
If to
the Director, to the address for notice on the signature page to
this Agreement or, if no such address is provided, to the last
address of the Director provided by the Director to the
Company.
Either
of the parties may change their address for purposes of notice
hereunder by giving notice in writing to such other party pursuant
to this Section 16.
18. Miscellaneous. This Agreement
may be executed by the Company and Director in any number of
counterparts, each of which shall be deemed an original instrument,
but all of which together shall constitute but one and the same
instrument. Any party may execute this Agreement by facsimile
signature and the other party will be entitled to rely on such
facsimile signature as evidence that this Agreement has been duly
executed by such party.
19. Definitions. As used in this
Agreement, the following definitions shall apply:
a. The
“Board” shall
have the meaning set forth in the preamble.
b. “Business
Opportunity” shall have the meaning set forth in
Section 6.
c. “Business Opportunity
Notice” shall have the meaning set forth in Section
6.
d. “Business Opportunity
Notice Period” shall
have the meaning set forth in Section 6.
e. “Company”
shall have the meaning set forth in the preamble.
f. “Confidential
Information” shall have the meaning set forth in
Section 4.
g. “Dollars” and
the sign “$” mean
the lawful money of the United States of America.
h. “Director”
shall have the meaning set forth in the preamble.
i. “Disqualified Business
Opportunity” shall have the meaning set forth in
Section 6.
j. “Option”
shall have the meaning set forth in Section 2.
k. “Option
Shares” shall have the meaning set forth in Section
2.
l. “Termination of
Service” shall have the meaning set forth in Section
2.
m. “Person(s)”
shall have the meaning set forth in Section 6.
2460623v.7
The
Parties have executed this Agreement as of the date first written
above.
DIRECTOR
By:
By:
Name: Xxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxxx
Title:
CEO
Address for Notice:
0000
Xxxx Xxxxxxxx Xx.
Xxxxx,
XX 00000
XXX
2460623v.7
