X0306 4 2018-08-02 0001136174 CATASYS, INC. CATS 0001730468 Sherman Michael Edward 11601 WILSHIRE BLVD SUITE 1100 LOS ANGELES CA 90025 1 Stock Option to purchase Common Stock 7.50 2018-08-02 4 A 0 37794 A 2028-08-02 Common Stock 39794 39794 D These securities were granted to Mr. Sherman for his services as a member of the Company's Board of Directors and Chairman of the Nominations and Governance Committee. These options have a three-year vesting period out of which 11,662 shares vested on August 2, 2018, the grant date, and 26,132 shares shall vest at the end of each calendar quarter for the 2018 and 2019 calendar years beginning January 1, 2018, such that all shares shall vest on December 31, 2019. Quarterly vesting of the option will be subject to Mr. Sherman attending board meetings, unless such absence is excused by the Chairman of the board. All unvested options will immediately vest in the event of termination without cause. /s/ Michael Sherman 2018-08-03