Exhibit 10.01
 
FREEDOM HOLDING CORP.
2019 EQUITY INCENTIVE PLAN
 
1.         Purpose; Eligibility.
 
1.1            General Purpose. The name of this plan is the Freedom Holding
Corp. 2019 Equity Incentive Plan (the “Plan”). The purposes of the Plan are to
(a) enable Freedom Holding Corp., a Nevada corporation (the “Company”), and any
Affiliate to attract and retain the types of Employees, Consultants and
Directors who will contribute to the Company’s long range success; (b) provide
incentives that align the interests of Employees, Consultants and Directors with
those of the shareholders of the Company; and (c) promote the success of the
Company’s business.
 
1.2            Eligible Award Recipients. The persons eligible to receive Awards
are the Employees, Consultants and Directors of the Company and its Affiliates
and such other individuals designated by the Committee who are reasonably
expected to become Employees, Consultants or Directors after the receipt of
Awards.
 
1.3            Available Awards. Awards that may be granted under the Plan
include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock
Appreciation Rights, (d) Restricted Awards and (e) Other Equity-Based Awards.
 
2.         Definitions.
 
“Affiliate” means a corporation or other entity that, directly or through one or
more intermediaries, controls, is controlled by or is under common control with,
the Company.
 
“Applicable Laws” means the requirements related to or implicated by the
administration of the Plan under applicable state corporate law, United States
federal and state securities laws, the Code, any stock exchange or quotation
system on which the shares of Common Stock are listed or quoted, state and
United States tax law, and the applicable laws of any foreign country or
jurisdiction where Awards are granted under the Plan.
 
“Award” means any right granted under the Plan, including an Incentive Stock
Option, a Non-qualified Stock Option, a Stock Appreciation Right, a Restricted
Award or an Other Equity-Based Award.
 
“Award Agreement” means a written agreement, contract, certificate or other
instrument or document evidencing the terms and conditions of an individual
Award granted under the Plan which may, in the discretion of the Company, be
transmitted electronically to any Participant. Each Award Agreement shall be
subject to the terms and conditions of the Plan.
 
 
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“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular Person, such Person shall be deemed to have
beneficial ownership of all securities that such Person has the right to acquire
by conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The terms
“Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
 
“Board” means the Board of Directors of the Company, as constituted at any time.
 
“Cash Award” means an Award denominated in cash that is granted under Section
7.3 of the Plan.
 
“Cause” means:
 
With respect to any Participant, unless the applicable Award Agreement states
otherwise:
(a) If the Participant is a party to an employment or service agreement with the
Company or its Affiliates and such agreement provides for a definition of Cause,
the definition contained therein; or
 
(b) If no such agreement exists, or if such agreement does not define Cause: (i)
the commission of, or plea of guilty or no contest to, a felony or a crime
involving moral turpitude or the commission of any other act involving willful
malfeasance or material fiduciary breach with respect to the Company or an
Affiliate; (ii) conduct that results in or is reasonably likely to result in
harm to the reputation or business of the Company or any of its Affiliates;
(iii) gross negligence or willful misconduct with respect to the Company or an
Affiliate; or (iv) material violation of state or federal securities laws.
 
The Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to whether a Participant has been discharged for
Cause.
 
“Change in Control”
 
(a) The direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Company and its subsidiaries, taken as a whole, to any Person that is not a
subsidiary of the Company;
 
(b) The date which is 10 business days prior to the consummation of a complete
liquidation or dissolution of the Company;
 
 
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(c) The acquisition, after the Effective Date of this Plan, by any Person of
Beneficial Ownership of 50% or more (on a fully diluted basis) of either (i) the
then outstanding shares of Common Stock of the Company, taking into account as
outstanding for this purpose such Common Stock issuable upon the exercise of
options or warrants, the conversion of convertible stock or debt, and the
exercise of any similar right to acquire such Common Stock (the “Outstanding
Company Common Stock”) or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this Plan, the following acquisitions shall not constitute a
Change in Control: (A) any acquisition by the Company or any Affiliate, (B) any
acquisition by any employee benefit plan sponsored or maintained by the Company
or any subsidiary, (C) any acquisition which complies with clauses, (i), (ii)
and (iii) of subsection (d) of this definition or (D) in respect of an Award
held by a particular Participant, any acquisition by the Participant or any
group of persons including the Participant (or any entity controlled by the
Participant or any group of persons including the Participant); or
 
(d) The consummation of a reorganization, merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company that
requires the approval of the Company’s shareholders, whether for such
transaction or the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business Combination: (i) more
than 50% of the total voting power of (A) the entity resulting from such
Business Combination (the “Surviving Company”), or (B) if applicable, the
ultimate parent entity that directly or indirectly has beneficial ownership of
sufficient voting securities eligible to elect a majority of the members of the
board of directors (or the analogous governing body) of the Surviving Company
(the “Parent Company”), is represented by the Outstanding Company Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the Outstanding Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of the Outstanding Company Voting Securities
among the holders thereof immediately prior to the Business Combination; (ii) no
Person (other than any employee benefit plan sponsored or maintained by the
Surviving Company or the Parent Company) is or becomes the Beneficial Owner,
directly or indirectly, of 50% or more of the total voting power of the
outstanding voting securities eligible to elect members of the board of
directors of the Parent Company (or the analogous governing body) (or, if there
is no Parent Company, the Surviving Company); and (iii) at least a majority of
the members of the board of directors (or the analogous governing body) of the
Parent Company (or, if there is no Parent Company, the Surviving Company)
following the consummation of the Business Combination were Board members at the
time of the Board’s approval of the execution of the initial agreement providing
for such Business Combination.
 
 
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“Code” means the Internal Revenue Code of 1986, as it may be amended from time
to time. Any reference to a section of the Code shall be deemed to include a
reference to any regulations promulgated thereunder.
 
“Committee” means a committee of one or more members of the Board appointed by
the Board to administer the Plan.
 
“Common Stock” means the common stock, $0.001 par value per share, of the
Company, or such other securities of the Company as may be designated by the
Committee from time to time in substitution thereof.
 
“Company” means Freedom Holding Corp., a Nevada corporation, and any successor
thereto.
 
“Consultant” means any individual or entity which performs bona fide services to
the Company or an Affiliate, other than as an Employee or Director, and who may
be offered securities registerable pursuant to a registration statement on Form
S-8 under the Securities Act.
 
“Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Consultant or Director, is not interrupted or
terminated. The Participant’s Continuous Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s Continuous Service; provided further that if any Award is subject
to Section 409A of the Code, this sentence shall only be given effect to the
extent consistent with Section 409A of the Code. For example, a change in status
from an Employee of the Company to a Director of an Affiliate will not
constitute an interruption of Continuous Service. The Committee or its delegate,
in its sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal or family
leave of absence. The Committee or its delegate, in its sole discretion, may
determine whether a Company transaction, such as a sale or spin-off of a
division or subsidiary that employs a Participant, shall be deemed to result in
a termination of Continuous Service for purposes of affected Awards, and such
decision shall be final, conclusive and binding.
 
“Deferred Stock Units (DSUs)” has the meaning set forth in Section 7.2 hereof.
 
“Director” means a member of the Board.
 
 
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“Disability” means, unless the applicable Award Agreement says otherwise, that
the Participant is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment; provided,
however, for purposes of determining the term of an Incentive Stock Option
pursuant to Section 6.10 hereof, the term Disability shall have the meaning
ascribed to it under Section 22(e)(3) of the Code. The determination of whether
an individual has a Disability shall be determined under procedures established
by the Committee. Except in situations where the Committee is determining
Disability for purposes of the term of an Incentive Stock Option pursuant to
Section 6.10 hereof within the meaning of Section 22(e)(3) of the Code, the
Committee may rely on any determination that a Participant is disabled for
purposes of benefits under any long-term disability plan maintained by the
Company or any Affiliate in which a Participant participates.
 
“Disqualifying Disposition” has the meaning set forth in Section 14.12.
 
“Effective Date” shall mean September 20, 2018.
 
“Employee” means any person, including an Officer or Director, employed by the
Company or an Affiliate; provided, that, for purposes of determining eligibility
to receive Incentive Stock Options, an Employee shall mean an employee of the
Company or a parent or subsidiary corporation within the meaning of Section 424
of the Code. Mere service as a Director or payment of a director’s fee by the
Company or an Affiliate shall not be sufficient to constitute “employment” by
the Company or an Affiliate.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Fair Market Value” means, as of any date, the value of the Common Stock as
determined below. If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation, the New York
Stock Exchange or the NASDAQ Stock Market, the Fair Market Value shall be the
closing price of a share of Common Stock (or if no sales were reported the
closing price on the date immediately preceding such date) as quoted on such
exchange or system on the day of determination, as reported on Google Finance.
If the Common Stock is not then listed on any nationally recognized securities
exchange but is traded over the counter at the time determination of its Fair
Market Value is required to be made hereunder, its Fair Market Value shall be
deemed to be equal to the average between the reported high and low sales prices
of Common Stock on the most recent date on which Common Stock was publicly
traded, as reported by the OTC Markets Group. In the absence of an established
market for the Common Stock, the Fair Market Value shall be determined in good
faith by the Committee and such determination shall be conclusive and binding on
all persons.
 
“Fiscal Year” means the Company’s fiscal year.
 
“Free Standing Rights” has the meaning set forth in Section 7.1(a).
 
 
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“Good Reason” means, unless the applicable Award Agreement states otherwise:
 
(a) If an Employee or Consultant is a party to an employment or service
agreement with the Company or its Affiliates and such agreement provides for a
definition of Good Reason, the definition contained therein; or
 
(b) If no such agreement exists or if such agreement does not define Good
Reason, the occurrence of one or more of the following without the Participant’s
express written consent, which circumstances are not remedied by the Company
within thirty (30) days of its receipt of a written notice from the Participant
describing the applicable circumstances (which notice must be provided by the
Participant within ninety (90) days of the Participant’s knowledge of the
applicable circumstances): (i) any material, adverse change in the Participant’s
duties, responsibilities, authority, title, status or reporting structure; (ii)
a material reduction in the Participant’s base salary or bonus opportunity; or
(iii) a geographical relocation of the Participant’s principal office location
by more than fifty (50) miles.
 
“Grant Date” means the date on which the Committee adopts a resolution, or takes
other appropriate action, expressly granting an Award to a Participant that
specifies the key terms and conditions of the Award or, if a later date is set
forth in such resolution, then such date as is set forth in such resolution.
 
“Incentive Stock Option” means an Option that is designated by the Committee as
an incentive stock option within the meaning of Section 422 of the Code and that
meets the requirements set out in the Plan.
 
“Non-Employee Director” means a Director who is a “non-employee director” within
the meaning of Rule 16b-3.
 
“Non-qualified Stock Option” means an Option that by its terms does not qualify
or is not intended to qualify as an Incentive Stock Option.
 
“Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
 
“Option” means an Incentive Stock Option or a Non-qualified Stock Option granted
pursuant to the Plan.
 
“Optionholder” means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Option.
 
“Option Exercise Price” means the price at which a share of Common Stock may be
purchased upon the exercise of an Option.
 
“Other Equity-Based Award” means an Award that is not an Option, Stock
Appreciation Right, Restricted Stock or Restricted Stock Unit that is payable by
delivery of Common Stock and/or which is measured by reference to the value of
Common Stock.
 
 “Participant” means an eligible person to whom an Award is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Award.
 
 
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“Permitted Transferee” means: (a) a member of the Optionholder’s immediate
family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships), any person sharing the Optionholder’s household (other than a
tenant or employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or the Optionholder)
control the management of assets, and any other entity in which these persons
(or the Optionholder) own more than 50% of the voting interests; (b) third
parties designated by the Committee in connection with a program established and
approved by the Committee pursuant to which Participants may receive a cash
payment or other consideration in consideration for the transfer of a
Non-qualified Stock Option; and (c) such other transferees as may be permitted
by the Committee in its sole discretion.
 
“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.
 
“Plan” means this Freedom Holding Corp. 2019 Equity Incentive Plan, as amended
and/or amended and restated from time to time.
 
“Related Rights” has the meaning set forth in Section 7.1(a).
 
“Restricted Award” means any Award granted pursuant to Section 7.2(a).
 
“Restricted Period” has the meaning set forth in Section 7.2(a).
 
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Stock Appreciation Right” means the right pursuant to an Award granted under
Section 7.1 to receive, upon exercise, an amount payable in cash or shares equal
to the number of shares subject to the Stock Appreciation Right that is being
exercised multiplied by the excess of (a) the Fair Market Value of a share of
Common Stock on the date the Award is exercised, over (b) the exercise price
specified in the Stock Appreciation Right Award Agreement.
 
“Stock for Stock Exchange” has the meaning set forth in Section 6.4.
 
“Substitute Award” has the meaning set forth in Section 4.5.
 
“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of its
Affiliates.
 
“Total Share Reserve” has the meaning set forth in Section 4.1.
 
 
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3.         Administration.
 
3.1            Authority of Committee. The Plan shall be administered by the
Committee or, in the Board’s sole discretion, by the Board. Subject to the terms
of the Plan, the Committee’s charter and Applicable Laws, and in addition to
other express powers and authorization conferred by the Plan, the Committee
shall have the authority:
 
(a)           to construe and interpret the Plan and apply its provisions;
 
(b)           to promulgate, amend, and rescind rules and regulations relating
to the administration of the Plan;
 
(c)           to authorize any person to execute, on behalf of the Company, any
instrument required to carry out the purposes of the Plan;
 
(d)           to delegate its authority to one or more Officers of the Company
with respect to Awards that do not involve “insiders” within the meaning of
Section 16 of the Exchange Act;
 
(e)           to determine when Awards are to be granted under the Plan and the
applicable Grant Date;
 
(f)           from time to time to select, subject to the limitations set forth
in this Plan, those Participants to whom Awards shall be granted;
 
(g)           to determine the number of shares of Common Stock to be made
subject to each Award;
 
(h)           to determine whether each Option is to be an Incentive Stock
Option or a Non-qualified Stock Option;
 
(i)           to prescribe the terms and conditions of each Award, including,
without limitation, the exercise price and medium of payment and vesting
provisions, and to specify the provisions of the Award Agreement relating to
such grant;
 
(j)           to amend any outstanding Awards, including for the purpose of
modifying the time or manner of vesting, or the term of any outstanding Award;
provided, however, that if any such amendment impairs a Participant’s rights or
increases a Participant’s obligations under his or her Award or creates or
increases a Participant’s federal income tax liability with respect to an Award,
such amendment shall also be subject to the Participant’s consent;
 
(k)           to determine the duration and purpose of leaves of absences which
may be granted to a Participant without constituting termination of their
employment for purposes of the Plan, which periods shall be no shorter than the
periods generally applicable to Employees under the Company’s employment
policies;
 
 
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(l)           to make decisions with respect to outstanding Awards that may
become necessary upon a change in corporate control or an event that triggers
anti-dilution adjustments;
 
(m)           to interpret, administer, reconcile any inconsistency in, correct
any defect in and/or supply any omission in the Plan and any instrument or
agreement relating to, or Award granted under, the Plan; and
 
(n)           to exercise discretion to make any and all other determinations
which it determines to be necessary or advisable for the administration of the
Plan.
 
The Committee also may modify the purchase price or the exercise price of any
outstanding Award, provided that if the modification effects a repricing,
shareholder approval shall be required before the repricing is effective.
 
3.2            Committee Decisions Final. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final and binding on the Company
and the Participants, unless such decisions are determined by a court having
jurisdiction to be arbitrary and capricious.
 
3.3            Delegation. The Committee or, if no Committee has been appointed,
the Board may delegate administration of the Plan to a committee or committees
of one or more members of the Board, and the term “Committee” shall apply to any
person or persons to whom such authority has been delegated. The Committee shall
have the power to delegate to a subcommittee any of the administrative powers
the Committee is authorized to exercise (and references in this Plan to the
Board or the Committee shall thereafter be to the committee or subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan. The members of the Committee shall be appointed by and serve at the
pleasure of the Board. From time to time, the Board may increase or decrease the
size of the Committee, add additional members to, remove members (with or
without cause) from, appoint new members in substitution therefor, and fill
vacancies, however caused, in the Committee. The Committee shall act pursuant to
a vote of the majority of its members or, in the case of a Committee comprised
of only two members, the unanimous consent of its members, whether present or
not, or by the written consent of the majority of its members and minutes shall
be kept of all of its meetings and copies thereof shall be provided to the
Board. Subject to the limitations prescribed by the Plan and the Board, the
Committee may establish and follow such rules and regulations for the conduct of
its business as it may determine to be advisable.
 
 
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3.4            Committee Composition. Except as otherwise determined by the
Board, the Committee shall consist solely of two or more Non-Employee Directors.
The Board shall have discretion to determine whether or not it intends to comply
with the exemption requirements of Rule 16b-3. However, if the Board intends to
satisfy such exemption requirements, with respect to any insider subject to
Section 16 of the Exchange Act, the Committee shall be the full Board or a
compensation committee of the Board that at all times consists solely of two or
more Non-Employee Directors. Within the scope of such authority, the Board or
the Committee may delegate to a committee of one or more members of the Board
who are not Non-Employee Directors the authority to grant Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act. Nothing
herein shall create an inference that an Award is not validly granted under the
Plan in the event Awards are granted under the Plan by a compensation committee
of the Board that does not at all times consist solely of two or more
Non-Employee Directors.
 
3.5            Indemnification. In addition to such other rights of
indemnification as they may have as Directors or members of the Committee, and
to the extent allowed by Applicable Laws, the Committee shall be indemnified by
the Company against the reasonable expenses, including attorney’s fees, actually
incurred in connection with any action, suit or proceeding or in connection with
any appeal therein, to which the Committee may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted under the Plan, and against all amounts paid by the Committee in
settlement thereof (provided, however, that the settlement has been approved by
the Company, which approval shall not be unreasonably withheld) or paid by the
Committee in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee did not act in good faith and in a manner
which such person reasonably believed to be in the best interests of the
Company, or in the case of a criminal proceeding, had no reason to believe that
the conduct complained of was unlawful; provided, however, that within 60 days
after the institution of any such action, suit or proceeding, such Committee
shall, in writing, offer the Company the opportunity at its own expense to
handle and defend such action, suit or proceeding.
 
4.         Shares Subject to the Plan.
 
4.1            Subject to adjustment in accordance with Section 11, no more than
3,740,000 shares of Common Stock shall be available for the grant of Awards
under the Plan (the “Total Share Reserve”). Any shares of Common Stock granted
in connection with Options and Stock Appreciation Rights shall be counted
against this limit as one (1) share for every one (1) Option or Stock
Appreciation Right awarded. During the terms of the Awards, the Company shall
keep available at all times the number of shares of Common Stock required to
satisfy such Awards.
 
4.2            Shares of Common Stock available for distribution under the Plan
may consist, in whole or in part, of authorized and unissued shares, treasury
shares or shares reacquired by the Company in any manner.
 
 
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4.3            Subject to adjustment in accordance with Section 11, all of the
shares of Common Stock may be issued in the aggregate pursuant to the exercise
of Incentive Stock Options (the “ISO Limit”).
 
4.4            Any shares of Common Stock subject to an Award that expire or are
canceled, forfeited, or terminated without issuance of the full number of shares
of Common Stock to which the Award related will again be available for issuance
under the Plan. Notwithstanding anything to the contrary contained herein:
shares subject to an Award under the Plan shall not again be made available for
issuance or delivery under the Plan if such shares are (a) shares tendered in
payment of an Option, (b) shares delivered or withheld by the Company to satisfy
any tax withholding obligation, or (c) shares covered by a stock-settled Stock
Appreciation Right or other Awards that were not issued upon the settlement of
the Award.
 
4.5            Awards may, in the sole discretion of the Committee, be granted
under the Plan in assumption of, or in substitution for, outstanding awards
previously granted by an entity acquired by the Company or with which the
Company combines (“Substitute Awards”). Substitute Awards shall not be counted
against the Total Share Reserve; provided, that, Substitute Awards issued in
connection with the assumption of, or in substitution for, outstanding options
intended to qualify as Incentive Stock Options shall be counted against the ISO
limit. Subject to applicable stock exchange requirements, available shares under
a shareholder-approved plan of an entity directly or indirectly acquired by the
Company or with which the Company combines (as appropriately adjusted to reflect
such acquisition or transaction) may be used for Awards under the Plan and shall
not count toward the Total Share Limit.
 
5.         Eligibility.
 
5.1            Eligibility for Specific Awards. Incentive Stock Options may be
granted only to Employees. Awards other than Incentive Stock Options may be
granted to Employees, Consultants and Directors and those individuals whom the
Committee determines are reasonably expected to become Employees, Consultants or
Directors following the Grant Date.
 
5.2            Ten Percent Shareholders. A Ten Percent Shareholder shall not be
granted an Incentive Stock Option unless the Option Exercise Price is at least
110% of the Fair Market Value of the Common Stock at the Grant Date and the
Option is not exercisable after the expiration of five years from the Grant
Date.
 
 
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6.         Option Provisions. Each Option granted under the Plan shall be
evidenced by an Award Agreement. Each Option so granted shall be subject to the
conditions set forth in this Section 6, and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award
Agreement. All Options shall be separately designated Incentive Stock Options or
Non-qualified Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option. Notwithstanding the
foregoing, the Company shall have no liability to any Participant or any other
person if an Option designated as an Incentive Stock Option fails to qualify as
such at any time or if an Option is determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code and the
terms of such Option do not satisfy the requirements of Section 409A of the
Code. The provisions of separate Options need not be identical, but each Option
shall include (through incorporation of provisions hereof by reference in the
Option or otherwise) the substance of each of the following provisions:
 
6.1            Term. Subject to the provisions of Section 5.2 regarding Ten
Percent Shareholders, no Incentive Stock Option shall be exercisable after the
expiration of 10 years from the Grant Date. The term of a Non-qualified Stock
Option granted under the Plan shall be determined by the Committee; provided,
however, no Non-qualified Stock Option shall be exercisable after the expiration
of 10 years from the Grant Date.
 
6.2            Exercise Price of an Incentive Stock Option. Subject to the
provisions of Section 5.2 regarding Ten Percent Shareholders, the Option
Exercise Price of each Incentive Stock Option shall be not less than 100% of the
Fair Market Value of the Common Stock subject to the Option on the Grant Date.
Notwithstanding the foregoing, an Incentive Stock Option may be granted with an
Option Exercise Price lower than that set forth in the preceding sentence if
such Option is granted pursuant to an assumption or substitution for another
option in a manner satisfying the provisions of Section 424(a) of the Code.
 
6.3            Exercise Price of a Non-qualified Stock Option. The Option
Exercise Price of each Non-qualified Stock Option shall be not less than 100% of
the Fair Market Value of the Common Stock subject to the Option on the Grant
Date. Notwithstanding the foregoing, a Non-qualified Stock Option may be granted
with an Option Exercise Price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 409A of the
Code.
 
 
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6.4            Consideration. The Option Exercise Price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (a) in cash or by certified or bank check at
the time the Option is exercised or (b) in the discretion of the Committee, upon
such terms as the Committee shall approve, the Option Exercise Price may be
paid: (i) by delivery to the Company of other Common Stock, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of delivery equal
to the Option Exercise Price (or portion thereof) due for the number of shares
being acquired, or by means of attestation whereby the Participant identifies
for delivery specific shares of Common Stock that have an aggregate Fair Market
Value on the date of attestation equal to the Option Exercise Price (or portion
thereof) and receives a number of shares of Common Stock equal to the difference
between the number of shares thereby purchased and the number of identified
attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a
“cashless” exercise program established with a broker; (iii) by reduction in the
number of shares of Common Stock otherwise deliverable upon exercise of such
Option with a Fair Market Value equal to the aggregate Option Exercise Price at
the time of exercise; (iv) by any combination of the foregoing methods; or (v)
in any other form of legal consideration that may be acceptable to the
Committee. Unless otherwise specifically provided in the Option, the exercise
price of Common Stock acquired pursuant to an Option that is paid by delivery
(or attestation) to the Company of other Common Stock acquired, directly or
indirectly from the Company, shall be paid only by shares of the Common Stock of
the Company that have been held for more than six months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes). Notwithstanding the foregoing, during any period for which
the Common Stock is publicly traded (i.e., the Common Stock is listed on any
established stock exchange or a national market system) an exercise by an
Officer that involves or may involve a direct or indirect extension of credit or
arrangement of an extension of credit by the Company, directly or indirectly, in
violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be
prohibited with respect to any Award under this Plan.
 
6.5            Transferability of an Incentive Stock Option. An Incentive Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.
 
6.6            Transferability of a Non-qualified Stock Option. A Non-qualified
Stock Option may, in the sole discretion of the Committee, be transferable to a
Permitted Transferee, upon written approval by the Committee to the extent
provided in the Award Agreement. If the Non-qualified Stock Option does not
provide for transferability, then the Non-qualified Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.
 
 
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6.7            Vesting of Options. Each Option may, but need not, vest and
therefore become exercisable in periodic installments that may, but need not, be
equal. The Option may be subject to such other terms and conditions on the time
or times when it may be exercised (which may be based on performance or other
criteria) as the Committee may deem appropriate. The vesting provisions of
individual Options may vary. No Option may be exercised for a fraction of a
share of Common Stock. The Committee may, but shall not be required to, provide
for an acceleration of vesting and exercisability in the terms of any Award
Agreement upon the occurrence of a specified event.
 
6.8            Termination of Continuous Service. Unless otherwise provided in
an Award Agreement or in an employment agreement the terms of which have been
approved by the Committee, in the event an Optionholder’s Continuous Service
terminates (other than upon the Optionholder’s death or Disability), the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination) but only
within such period of time ending on the earlier of (a) the date three months
following the termination of the Optionholder’s Continuous Service or (b) the
expiration of the term of the Option as set forth in the Award Agreement;
provided that, if the termination of Continuous Service is by the Company for
Cause, all outstanding Options (whether or not vested) shall immediately
terminate and cease to be exercisable. If, after termination, the Optionholder
does not exercise his or her Option within the time specified in the Award
Agreement, the Option shall terminate.
 
6.9            Extension of Termination Date. An Optionholder’s Award Agreement
may also provide that if the exercise of the Option following the termination of
the Optionholder’s Continuous Service for any reason would be prohibited at any
time because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act or any other state or federal
securities law or the rules of any securities exchange or interdealer quotation
system, then the Option shall terminate on the earlier of (a) the expiration of
the term of the Option in accordance with Section 6.1 or (b) the expiration of a
period after termination of the Participant’s Continuous Service that is three
months after the end of the period during which the exercise of the Option would
be in violation of such registration or other securities law requirements.
 
6.10            Disability of Optionholder. Unless otherwise provided in an
Award Agreement, in the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination), but only within such period
of time ending on the earlier of (a) the date 12 months following such
termination or (b) the expiration of the term of the Option as set forth in the
Award Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified herein or in the Award Agreement, the
Option shall terminate.
 
 
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6.11            Death of Optionholder. Unless otherwise provided in an Award
Agreement, in the event an Optionholder’s Continuous Service terminates as a
result of the Optionholder’s death, then the Option may be exercised (to the
extent the Optionholder was entitled to exercise such Option as of the date of
death) by the Optionholder’s estate, by a person who acquired the right to
exercise the Option by bequest or inheritance or by a person designated to
exercise the Option upon the Optionholder’s death, but only within the period
ending on the earlier of (a) the date 12 months following the date of death or
(b) the expiration of the term of such Option as set forth in the Award
Agreement. If, after the Optionholder’s death, the Option is not exercised
within the time specified herein or in the Award Agreement, the Option shall
terminate.
 
6.12            Incentive Stock Option $100,000 Limitation. To the extent that
the aggregate Fair Market Value (determined at the time of grant) of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionholder during any calendar year (under all plans of the
Company and its Affiliates) exceeds $100,000, the Options or portions thereof
which exceed such limit (according to the order in which they were granted)
shall be treated as Non-qualified Stock Options.
 
7.         Provisions of Awards Other Than Options.
 
7.1            Stock Appreciation Rights.  
 
(a)           General
 
Each Stock Appreciation Right granted under the Plan shall be evidenced by an
Award Agreement. Each Stock Appreciation Right so granted shall be subject to
the conditions set forth in this Section 7.1, and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award
Agreement. Stock Appreciation Rights may be granted alone (“Free Standing
Rights”) or in tandem with an Option granted under the Plan (“Related Rights”).
 
(b)           Grant Requirements
 
Any Related Right that relates to a Non-qualified Stock Option may be granted at
the same time the Option is granted or at any time thereafter but before the
exercise or expiration of the Option. Any Related Right that relates to an
Incentive Stock Option must be granted at the same time the Incentive Stock
Option is granted.
 
(c)           Term of Stock Appreciation Rights
 
The term of a Stock Appreciation Right granted under the Plan shall be
determined by the Committee; provided, however, no Stock Appreciation Right
shall be exercisable later than the tenth anniversary of the Grant Date.
 
 
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(d)           Vesting of Stock Appreciation Rights
 
Each Stock Appreciation Right may, but need not, vest and therefore become
exercisable in periodic installments that may, but need not, be equal. The Stock
Appreciation Right may be subject to such other terms and conditions on the time
or times when it may be exercised as the Committee may deem appropriate. The
vesting provisions of individual Stock Appreciation Rights may vary. No Stock
Appreciation Right may be exercised for a fraction of a share of Common Stock.
The Committee may, but shall not be required to, provide for an acceleration of
vesting and exercisability in the terms of any Stock Appreciation Right upon the
occurrence of a specified event.
 
(e)           Exercise and Payment
 
Upon exercise of a Stock Appreciation Right, the holder shall be entitled to
receive from the Company an amount equal to the number of shares of Common Stock
subject to the Stock Appreciation Right that is being exercised multiplied by
the excess of (i) the Fair Market Value of a share of Common Stock on the date
the Award is exercised, over (ii) the exercise price specified in the Stock
Appreciation Right or related Option. Payment with respect to the exercise of a
Stock Appreciation Right shall be made on the date of exercise. Payment shall be
made in the form of shares of Common Stock (with or without restrictions as to
substantial risk of forfeiture and transferability, as determined by the
Committee in its sole discretion), cash or a combination thereof, as determined
by the Committee.
 
(f)           Exercise Price
 
The exercise price of a Free Standing Right shall be determined by the
Committee, but shall not be less than 100% of the Fair Market Value of one share
of Common Stock on the Grant Date of such Stock Appreciation Right. A Related
Right granted simultaneously with or subsequent to the grant of an Option and in
conjunction therewith or in the alternative thereto shall have the same exercise
price as the related Option, shall be transferable only upon the same terms and
conditions as the related Option, and shall be exercisable only to the same
extent as the related Option; provided, however, that a Stock Appreciation
Right, by its terms, shall be exercisable only when the Fair Market Value per
share of Common Stock subject to the Stock Appreciation Right and related Option
exceeds the exercise price per share thereof and no Stock Appreciation Rights
may be granted in tandem with an Option unless the Committee determines that the
requirements of Section 7.1(b) are satisfied.
 
(g)           Reduction in the Underlying Option Shares
 
Upon any exercise of a Related Right, the number of shares of Common Stock for
which any related Option shall be exercisable shall be reduced by the number of
shares for which the Stock Appreciation Right has been exercised. The number of
shares of Common Stock for which a Related Right shall be exercisable shall be
reduced upon any exercise of any related Option by the number of shares of
Common Stock for which such Option has been exercised.
 
 
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7.2            Restricted Awards.  
 
(a)           General
 
A Restricted Award is an Award of actual shares of Common Stock (“Restricted
Stock”) or hypothetical Common Stock units (“Restricted Stock Units”) having a
value equal to the Fair Market Value of an identical number of shares of Common
Stock, which may, but need not, provide that such Restricted Award may not be
sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation or
for any other purpose for such period (the “Restricted Period”) as the Committee
shall determine. Each Restricted Award granted under the Plan shall be evidenced
by an Award Agreement. Each Restricted Award so granted shall be subject to the
conditions set forth in this Section 7.2, and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award
Agreement.
 
(b)           Restricted Stock and Restricted Stock Units
 
(i)           Each Participant granted Restricted Stock shall execute and
deliver to the Company an Award Agreement with respect to the Restricted Stock
setting forth the restrictions and other terms and conditions applicable to such
Restricted Stock. Restricted Stock shall be held by the Company rather than
delivered to the Participant pending the release of the applicable restrictions.
As the Committee deems appropriate, it may require the Participant to
additionally execute and deliver to the Company an appropriate blank stock power
with respect to the Restricted Stock covered by such agreement. If a Participant
fails to execute an agreement evidencing an Award of Restricted Stock and, if
applicable, a stock power, the Award shall be null and void. Subject to the
restrictions set forth in the Award, the Participant generally shall have the
rights and privileges of a shareholder as to such Restricted Stock, including
the right to vote such Restricted Stock and the right to receive dividends;
provided that, any cash dividends and stock dividends with respect to the
Restricted Stock shall be withheld by the Company for the Participant’s account,
and interest may be credited on the amount of the cash dividends withheld at a
rate and subject to such terms as determined by the Committee. The cash
dividends or stock dividends so withheld by the Committee and attributable to
any particular share of Restricted Stock (and earnings thereon, if applicable)
shall be distributed to the Participant in cash or, at the discretion of the
Committee, in shares of Common Stock having a Fair Market Value equal to the
amount of such dividends, if applicable, upon the release of restrictions on
such share and, if such share is forfeited, the Participant shall have no right
to such dividends.
 
 
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(ii)           The terms and conditions of a grant of Restricted Stock Units
shall be reflected in an Award Agreement. No shares of Common Stock shall be
issued at the time a Restricted Stock Unit is granted, and the Company will not
be required to set aside funds for the payment of any such Award. A Participant
shall have no voting rights with respect to any Restricted Stock Units granted
hereunder. The Committee may also grant Restricted Stock Units with a deferral
feature, whereby settlement is deferred beyond the vesting date until the
occurrence of a future payment date or event set forth in an Award Agreement
(“Deferred Stock Units”). At the discretion of the Committee, each Restricted
Stock Unit or Deferred Stock Unit (representing one share of Common Stock) may
be credited with cash and stock dividends paid by the Company in respect of one
share of Common Stock (“Dividend Equivalents”). Dividend Equivalents shall be
paid currently (and in no case later than the end of the calendar year in which
the dividend is paid to the holders of the Common Stock or, if later, the 15th
day of the third month following the date the dividend is paid to holders of the
Common Stock). Dividend Equivalents shall be withheld by the Company and
credited to the Participant’s account, and interest may be credited on the
amount of cash Dividend Equivalents credited to the Participant’s account at a
rate and subject to such terms as determined by the Committee. Dividend
Equivalents credited to a Participant’s account and attributable to any
particular Restricted Stock Unit or Deferred Stock Unit (and earnings thereon,
if applicable) shall be distributed in cash or, at the discretion of the
Committee, in shares of Common Stock having a Fair Market Value equal to the
amount of such Dividend Equivalents and earnings, if applicable, to the
Participant upon settlement of such Restricted Stock Unit or Deferred Stock Unit
and, if such Restricted Stock Unit or Deferred Stock Unit is forfeited, the
Participant shall have no right to such Dividend Equivalents. Dividend
Equivalents will be deemed re-invested in additional Restricted Stock Units or
Deferred Stock Units based on the Fair Market Value of a share of Common Stock
on the applicable dividend payment date and rounded down to the nearest whole
share.
 
(c)           Restrictions
 
(i)           Restricted Stock awarded to a Participant shall be subject to the
following restrictions until the expiration of the Restricted Period, and to
such other terms and conditions as may be set forth in the applicable Award
Agreement: (A) the Participant shall not be entitled to delivery of the stock
certificate; (B) the shares shall be subject to the restrictions on
transferability set forth in the Award Agreement; (C) the shares shall be
subject to forfeiture to the extent provided in the applicable Award Agreement;
and (D) to the extent such shares are forfeited, the stock certificates shall be
returned to the Company, and all rights of the Participant to such shares and as
a shareholder with respect to such shares shall terminate without further
obligation on the part of the Company.
 
 
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(ii)           Restricted Stock Units and Deferred Stock Units awarded to any
Participant shall be subject to (A) forfeiture until the expiration of the
Restricted Period, and satisfaction of any applicable performance goals during
such period, to the extent provided in the applicable Award Agreement, and to
the extent such Restricted Stock Units or Deferred Stock Units are forfeited,
all rights of the Participant to such Restricted Stock Units or Deferred Stock
Units shall terminate without further obligation on the part of the Company and
(B) such other terms and conditions as may be set forth in the applicable Award
Agreement.
 
(iii)           The Committee shall have the authority to remove any or all of
the restrictions on the Restricted Stock, Restricted Stock Units and Deferred
Stock Units whenever it may determine that, by reason of changes in Applicable
Laws or other changes in circumstances arising after the date the Restricted
Stock or Restricted Stock Units or Deferred Stock Units are granted, such action
is appropriate.
 
(d)           Restricted Period
 
With respect to Restricted Awards, the Restricted Period shall commence on the
Grant Date and end at the time or times set forth on a schedule established by
the Committee in the applicable Award Agreement.
 
No Restricted Award may be granted or settled for a fraction of a share of
Common Stock. The Committee may, but shall not be required to, provide for an
acceleration of vesting in the terms of any Award Agreement upon the occurrence
of a specified event.
 
(e)           Delivery of Restricted Stock and Settlement of Restricted Stock
Units
 
Upon the expiration of the Restricted Period with respect to any shares of
Restricted Stock, the restrictions set forth in Section 7.2(c) and the
applicable Award Agreement shall be of no further force or effect with respect
to such shares, except as set forth in the applicable Award Agreement. Upon such
expiration, the Company shall deliver to the Participant, or his or her
beneficiary, without charge, the stock certificate evidencing the shares of
Restricted Stock which have not then been forfeited and with respect to which
the Restricted Period has expired (to the nearest full share) and any cash
dividends or stock dividends credited to the Participant’s account with respect
to such Restricted Stock and the interest thereon, if any. Upon the expiration
of the Restricted Period with respect to any outstanding Restricted Stock Units,
or at the expiration of the deferral period with respect to any outstanding
Deferred Stock Units, the Company shall deliver to the Participant, or his or
her beneficiary, without charge, one share of Common Stock for each such
outstanding vested Restricted Stock Unit or Deferred Stock Unit (“Vested Unit”)
and cash equal to any Dividend Equivalents credited with respect to each such
Vested Unit in accordance with Section 7.2(b)(ii) hereof and the interest
thereon or, at the discretion of the Committee, in shares of Common Stock having
a Fair Market Value equal to such Dividend Equivalents and the interest thereon,
if any; provided, however, that, if explicitly provided in the applicable Award
Agreement, the Committee may, in its sole discretion, elect to pay cash or part
cash and part Common Stock in lieu of delivering only shares of Common Stock for
Vested Units. If a cash payment is made in lieu of delivering shares of Common
Stock, the amount of such payment shall be equal to the Fair Market Value of the
Common Stock as of the date on which the Restricted Period lapsed in the case of
Restricted Stock Units, or the delivery date in the case of Deferred Stock
Units, with respect to each Vested Unit.
 
 
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(f)           Stock Restrictions
 
Each certificate representing Restricted Stock awarded under the Plan shall bear
a legend in such form as the Company deems appropriate.
 
7.3         Other Equity-Based and Cash Awards. The Committee may grant Other
Equity-Based Awards, either alone or in tandem with other Awards, in such
amounts and subject to such conditions as the Committee shall determine in its
sole discretion. Each Equity-Based Award shall be evidenced by an Award
Agreement and shall be subject to such conditions, not inconsistent with the
Plan, as may be reflected in the applicable Award Agreement. The Committee may
also grant Cash Awards. Cash Awards shall be evidenced in such form as the
Committee may determine.
 
8.         Securities Law Compliance. Each Award Agreement shall provide that no
shares of Common Stock shall be purchased or sold thereunder unless and until
(a) any then applicable requirements of state or federal laws and regulatory
agencies have been fully complied with to the satisfaction of the Company and
its counsel and (b) if required to do so by the Company, the Participant has
executed and delivered to the Company a letter of investment intent in such form
and containing such provisions as the Committee may require. The Company shall
use reasonable efforts to seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
grant Awards and to issue and sell shares of Common Stock upon exercise of the
Awards; provided, however, that this undertaking shall not require the Company
to register under the Securities Act the Plan, any Award or any Common Stock
issued or issuable pursuant to any such Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such
Awards unless and until such authority is obtained.
 
9.         Use of Proceeds from Stock. Proceeds from the sale of Common Stock
pursuant to Awards, or upon exercise thereof, shall constitute general funds of
the Company.
 
10.         Miscellaneous.
 
10.1            Acceleration of Exercisability and Vesting. The Committee shall
have the power to accelerate the time at which an Award may first be exercised
or the time during which an Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Award stating the time at
which it may first be exercised or the time during which it will vest.
 
10.2            Shareholder Rights. Except as provided in the Plan or an Award
Agreement, no Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to
such Award unless and until such Participant has satisfied all requirements for
exercise of the Award pursuant to its terms and no adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions of other rights for which the record date is prior to
the date such Common Stock certificate is issued, except as provided in Section
11 hereof.
 
 
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10.3            No Employment or Other Service Rights. Nothing in the Plan or
any instrument executed or Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right
of the Company or an Affiliate to terminate the employment of an Employee with
or without notice and with or without Cause.
 
10.4            Transfer; Approved Leave of Absence. For purposes of the Plan,
no termination of employment by an Employee shall be deemed to result from
either (a) a transfer of employment to the Company from an Affiliate or from the
Company to an Affiliate, or from one Affiliate to another, or (b) an approved
leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the Employee’s right to reemployment is guaranteed
either by a statute or by contract or under the policy pursuant to which the
leave of absence was granted or if the Committee otherwise so provides in
writing, in either case, except to the extent inconsistent with Section 409A of
the Code if the applicable Award is subject thereto.
 
10.5            Withholding Obligations. To the extent provided by the terms of
an Award Agreement and subject to the discretion of the Committee, the
Participant may satisfy any federal, state or local tax withholding obligation
relating to the exercise or acquisition of Common Stock under an Award by any of
the following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such
means: (a) tendering a cash payment; (b) authorizing the Company to withhold
shares of Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under the
Award, provided, however, that no shares of Common Stock are withheld with a
value exceeding the maximum amount of tax required to be withheld by law; or (c)
delivering to the Company previously owned and unencumbered shares of Common
Stock of the Company.
 
11.         Adjustments Upon Changes in Stock. In the event of changes in the
outstanding Common Stock or in the capital structure of the Company by reason of
any stock or extraordinary cash dividend, stock split, reverse stock split, an
extraordinary corporate transaction such as any recapitalization,
reorganization, merger, consolidation, combination, exchange, or other relevant
change in capitalization occurring after the Grant Date of any Award, Awards
granted under the Plan and any Award Agreements, the exercise price of Options
and Stock Appreciation Rights, the maximum number of shares of Common Stock
subject to all Awards stated in Section 4 and the maximum number of shares of
Common Stock with respect to which any one person may be granted Awards during
any period stated in Section 4 and Section 7.5(d)(vi) will be equitably adjusted
or substituted, as to the number, price or kind of a share of Common Stock or
other consideration subject to such Awards to the extent necessary to preserve
the economic intent of such Award. In the case of adjustments made pursuant to
this Section 11, unless the Committee specifically determines that such
adjustment is in the best interests of the Company or its Affiliates, the
Committee shall, in the case of Incentive Stock Options, ensure that any
adjustments under this Section 11 will not constitute a modification, extension
or renewal of the Incentive Stock Options within the meaning of Section
424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure
that any adjustments under this Section 11 will not constitute a modification of
such Non-qualified Stock Options within the meaning of Section 409A of the Code.
Any adjustments made under this Section 11 shall be made in a manner which does
not adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
 
 
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12.         Effect of Change in Control.
 
12.1            Unless otherwise provided in an Award Agreement, notwithstanding
any provision of the Plan to the contrary, in the event of a Change in Control,
all outstanding Options and Stock Appreciation Rights shall become immediately
exercisable with respect to 100% of the shares subject to such Options or Stock
Appreciation Rights, and/or the Restricted Period shall expire immediately with
respect to 100% of the outstanding shares of Restricted Stock or Restricted
Stock Units.
 
To the extent practicable, any actions taken by the Committee under the
immediately preceding clause shall occur in a manner and at a time which allows
affected Participants the ability to participate in the Change in Control with
respect to the shares of Common Stock subject to their Awards.
 
12.2            In addition, in the event of a Change in Control, the Committee
may in its discretion and upon at least 10 days’ advance notice to the affected
persons, cancel any outstanding Awards and pay to the holders thereof, in cash
or stock, or any combination thereof, the value of such Awards based upon the
price per share of Common Stock received or to be received by other shareholders
of the Company in the event. In the case of any Option or Stock Appreciation
Right with an exercise price (or SAR Exercise Price in the case of a Stock
Appreciation Right) that equals or exceeds the price paid for a share of Common
Stock in connection with the Change in Control, the Committee may cancel the
Option or Stock Appreciation Right without the payment of consideration
therefor.
 
12.3            The obligations of the Company under the Plan shall be binding
upon any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to all or substantially all of the assets
and business of the Company and its Affiliates, taken as a whole.
 
13.         Amendment of the Plan and Awards.
 
13.1            Amendment of Plan. The Board at any time, and from time to time,
may amend or terminate the Plan. However, except as provided in Section 11
relating to adjustments upon changes in Common Stock and Section 13.3, no
amendment shall be effective unless approved by the shareholders of the Company
to the extent shareholder approval is necessary to satisfy any Applicable Laws.
At the time of such amendment, the Board shall determine, upon advice from
counsel, whether such amendment will be contingent on shareholder approval.
 
13.2            Shareholder Approval. The Board may, in its sole discretion,
submit any other amendment to the Plan for shareholder approval.
 
 
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13.3            Contemplated Amendments. It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees, Consultants and Directors with the maximum
benefits provided or to be provided under the provisions of the Code and the
regulations promulgated thereunder relating to Incentive Stock Options or to the
nonqualified deferred compensation provisions of Section 409A of the Code and/or
to bring the Plan and/or Awards granted under it into compliance therewith.
 
13.4            No Impairment of Rights. Rights under any Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(a) the Company requests the consent of the Participant and (b) the Participant
consents in writing.
 
13.5            Amendment of Awards. The Committee at any time, and from time to
time, may amend the terms of any one or more Awards; provided, however, that the
Committee may not affect any amendment which would otherwise constitute an
impairment of the rights under any Award unless (a) the Company requests the
consent of the Participant and (b) the Participant consents in writing.
 
14.         General Provisions.
 
14.1            Forfeiture Events. The Committee may specify in an Award
Agreement that the Participant’s rights, payments and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture or recoupment
upon the occurrence of certain events, in addition to applicable vesting
conditions of an Award. Such events may include, without limitation, breach of
non-competition, non-solicitation, confidentiality, or other restrictive
covenants that are contained in the Award Agreement or otherwise applicable to
the Participant, a termination of the Participant’s Continuous Service for
Cause, or other conduct by the Participant that is detrimental to the business
or reputation of the Company and/or its Affiliates.
 
14.2            Clawback. Notwithstanding any other provisions in this Plan, the
Company may cancel any Award, require reimbursement of any Award by a
Participant, and effect any other right of recoupment of equity or other
compensation provided under the Plan in accordance with any Company policies
that may be adopted and/or modified from time to time (“Clawback Policy”). In
addition, a Participant may be required to repay to the Company previously paid
compensation, whether provided pursuant to the Plan or an Award Agreement, in
accordance with the Clawback Policy. By accepting an Award, the Participant is
agreeing to be bound by the Clawback Policy, as in effect or as may be adopted
and/or modified from time to time by the Company in its discretion (including,
without limitation, to comply with applicable law or stock exchange listing
requirements).
 
14.3            Other Compensation Arrangements. Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.
 
 
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14.4            Sub-plans. The Committee may from time to time establish
sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or
other laws of various jurisdictions in which the Company intends to grant
Awards. Any sub-plans shall contain such limitations and other terms and
conditions as the Committee determines are necessary or desirable. All sub-plans
shall be deemed a part of the Plan, but each sub-plan shall apply only to the
Participants in the jurisdiction for which the sub-plan was designed.
 
14.5            Deferral of Awards. The Committee may establish one or more
programs under the Plan to permit selected Participants the opportunity to elect
to defer receipt of consideration upon exercise of an Award, satisfaction of
performance criteria, or other event that absent the election would entitle the
Participant to payment or receipt of shares of Common Stock or other
consideration under an Award. The Committee may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, shares or other
consideration so deferred, and such other terms, conditions, rules and
procedures that the Committee deems advisable for the administration of any such
deferral program.
 
14.6            Unfunded Plan. The Plan shall be unfunded. None of the Company,
the Board or the Committee shall be required to establish any special or
separate fund or to segregate any assets to assure the performance of its
obligations under the Plan.
 
14.7            Recapitalizations. Each Award Agreement shall contain provisions
required to reflect the provisions of Section 11.
 
14.8            Delivery. Upon exercise of a right granted under this Plan, the
Company shall issue Common Stock or pay any amounts due within a reasonable
period of time thereafter. Subject to any statutory or regulatory obligations
the Company may otherwise have, for purposes of this Plan, 30 days shall be
considered a reasonable period of time.
 
14.9            No Fractional Shares. No fractional shares of Common Stock shall
be issued or delivered pursuant to the Plan. The Committee shall determine
whether cash, additional Awards or other securities or property shall be issued
or paid in lieu of fractional shares of Common Stock or whether any fractional
shares should be rounded, forfeited or otherwise eliminated.
 
14.10          Other Provisions. The Award Agreements authorized under the Plan
may contain such other provisions not inconsistent with this Plan, including,
without limitation, restrictions upon the exercise of the Awards, as the
Committee may deem advisable.
 
14.11          Section 409A. The Plan is intended to comply with Section 409A of
the Code to the extent subject thereto, and, accordingly, to the maximum extent
permitted, the Plan shall be interpreted and administered to be in compliance
therewith. Any payments described in the Plan that are due within the
“short-term deferral period” as defined in Section 409A of the Code shall not be
treated as deferred compensation unless Applicable Laws require otherwise.
Notwithstanding anything to the contrary in the Plan, to the extent required to
avoid accelerated taxation and tax penalties under Section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to the Plan during the six (6) month period immediately
following the Participant’s termination of Continuous Service shall instead be
paid on the first payroll date after the six-month anniversary of the
Participant’s separation from service (or the Participant’s death, if earlier).
Notwithstanding the foregoing, neither the Company nor the Committee shall have
any obligation to take any action to prevent the assessment of any excise tax or
penalty on any Participant under Section 409A of the Code and neither the
Company nor the Committee will have any liability to any Participant for such
tax or penalty.
 
 
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14.12          Disqualifying Dispositions. Any Participant who shall make a
“disposition” (as defined in Section 424 of the Code) of all or any portion of
shares of Common Stock acquired upon exercise of an Incentive Stock Option
within two years from the Grant Date of such Incentive Stock Option or within
one year after the issuance of the shares of Common Stock acquired upon exercise
of such Incentive Stock Option (a “Disqualifying Disposition”) shall be required
to immediately advise the Company in writing as to the occurrence of the sale
and the price realized upon the sale of such shares of Common Stock.
 
14.13          Section 16. It is the intent of the Company that the Plan
satisfy, and be interpreted in a manner that satisfies, the applicable
requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act
so that Participants will be entitled to the benefit of Rule 16b-3, or any other
rule promulgated under Section 16 of the Exchange Act, and will not be subject
to short-swing liability under Section 16 of the Exchange Act. Accordingly, if
the operation of any provision of the Plan would conflict with the intent
expressed in this Section 14.13, such provision to the extent possible shall be
interpreted and/or deemed amended so as to avoid such conflict.
 
14.14          Beneficiary Designation. Each Participant under the Plan may from
time to time name any beneficiary or beneficiaries by whom any right under the
Plan is to be exercised in case of such Participant’s death. Each designation
will revoke all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Committee and shall be effective only when filed by
the Participant in writing with the Company during the Participant’s lifetime.
 
14.15          Expenses. The costs of administering the Plan shall be paid by
the Company.
 
14.16          Severability. If any of the provisions of the Plan or any Award
Agreement is held to be invalid, illegal or unenforceable, whether in whole or
in part, such provision shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability and the remaining
provisions shall not be affected thereby.
 
14.17          Plan Headings. The headings in the Plan are for purposes of
convenience only and are not intended to define or limit the construction of the
provisions hereof.
 
14.18          Non-Uniform Treatment. The Committee’s determinations under the
Plan need not be uniform and may be made by it selectively among persons who are
eligible to receive, or actually receive, Awards. Without limiting the
generality of the foregoing, the Committee shall be entitled to make non-uniform
and selective determinations, amendments and adjustments, and to enter into
non-uniform and selective Award Agreements.
 
15.         Effective Date of Plan. The Plan shall become effective as of the
Effective Date.
 
16.         Termination or Suspension of the Plan. The Plan shall terminate
automatically on the tenth anniversary of the Effective Date. No Award shall be
granted pursuant to the Plan after such date, but Awards theretofore granted may
extend beyond that date. The Board may suspend or terminate the Plan at any
earlier date pursuant to Section 13.1 hereof. No Awards may be granted under the
Plan while the Plan is suspended or after it is terminated.
 
 
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17.         Choice of Law. The law of the State of Nevada shall govern all
questions concerning the construction, validity and interpretation of this Plan,
without regard to such state’s conflict of law rules.
 
 As adopted by the Board of Directors of Freedom Holding Corp. on July 25, 2018.
 
 As approved by the shareholders of Freedom Holding Corp. on September 20, 2018.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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