Exhibit 10.3

Mechanical Technology, Incorporated
Amended and Restated 2012 Equity Incentive Plan
(Effective October 20, 2016)

 

Purpose

Mechanical Technology, Incorporated, a New York corporation (the “Company”),
wishes to recruit, reward, and retain employees, directors, and other service
providers, including consultants.  To further these objectives, the Company
hereby sets forth the Mechanical Technology, Incorporated 2012 Equity Incentive
Plan (the “Plan”), effective June 14, 2012, subject to approval by the Company’s
stockholders (the “Effective Date”).

Pursuant to the Plan, the Company may provide options (“Options”) to employees,
directors, and other service providers of the Company and its Eligible
Affiliates to purchase shares of the Company’s common stock (the “Common
Stock”).  The Company may also make direct grants or sales of Common Stock (with
any or no restrictions) (“Restricted Stock Grants”) to participants, and may
also grant stock appreciation rights (“SARs”), restricted stock units providing
for a future issuance of shares (“RSUs”), and other share-based awards (“Other
Share-Based Awards”).  Grants of the various equity-related instruments are
“Awards.”

Participants

All Employees of the Company and of any Eligible Affiliates are potentially
eligible for Awards under this Plan.  Eligible individuals become “optionees” or
“recipients” when the Administrator grants them, respectively, an Option or one
of the other Awards under this Plan.  The Administrator may also grant Awards to
directors, consultants, and certain other service providers of the Company or
any Eligible Affiliate.  (Optionees and recipients are referred to collectively
as “participants.”)  The term participant also includes, where appropriate, a
person authorized to exercise an Award or purchase or receive an Award in place
of the original recipient.

“Employee” means any person the Company or a Related Company employs as a common
law employee.  Other service providers must be natural persons to participate.

Administrator

The “Administrator” is the Compensation Committee (the “Compensation Committee”)
of the Board of Directors (the "Board"), unless the Board specifies a different
committee or acts under the Plan as though it were the Compensation Committee.

The Administrator is responsible for the general operation and administration of
the Plan and for carrying out the Plan’s provisions and has full discretion in
interpreting and administering the provisions of the Plan and reconciling any
inconsistencies with any Award Agreement.  Subject to the express provisions of
the Plan, the Administrator may exercise such powers and authority of the Board
as the Administrator may find necessary or appropriate to carry out its
functions.  The Administrator may act through meetings of a majority of its
members or by unanimous consent.  The Administrator may delegate its functions
to officers or other Employees of the Company or Eligible Affiliates.  The
Administrator’s powers will include, but not be limited to, the power to amend,
waive, or extend any provision or limitation of any Award.

The Administrator may provide that an Award is exercisable for shares while the
shares are subject to forfeiture under conditions the Administrator specifies.

Granting of Awards         

Subject to the terms of the Plan, the Administrator will, in its sole
discretion, determine

 * the persons who receive Awards,

 * the terms of such Awards (including amendment, release, or extension of any
   provision),

 * the schedule for exercisability or nonforfeitability (including any
   requirements that the participants or the Company satisfy performance
   criteria),

 * the time and conditions for expiration of the Awards, and

 * the form of payment due upon exercise or purchase (including any repricing or
   replacement of outstanding Awards).

     

 

 

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The Administrator may allow participants to exercise otherwise non-exercisable
portions of Awards, subject, in the Administrator’s sole discretion, to whatever
conditions it considers appropriate.

The Administrator’s determinations under the Plan need not be uniform and need
not consider whether possible recipients are similarly situated.

Options for Employees may be “incentive stock options” (“ISOs”) within the
meaning of Section 422 of the Internal Revenue Code of 1986 (the “Code”), or the
corresponding provision of any subsequently enacted tax statute, or nonqualified
stock options (“NQSOs”), and the Administrator will specify which form of option
it is granting.  (If the Administrator fails to specify the form of an option
grant to an Employee, it will be an ISO to the extent the tax laws permit.)  Any
options granted to outside directors or other persons who are not Employees must
be nonqualified stock options.  Neither the Company nor the Administrator will
be liable if any Option intended initially to be an ISO fails to so qualify or
is amended to be an NQSO.

The Administrator may set whatever conditions it considers appropriate for the
SARs or other Awards, subject to the terms of the Plan.

Nonexempt Employee

Any Option or SAR granted to an Employee who is a nonexempt Employee for
purposes of the Fair Labor Standards Act of 1938 (the “FLSA”) cannot by its
terms be exercisable by the Employee for a period of at least six months after
its Date of Grant, to the extent required under the FLSA for such Option or SAR
to be excluded from the Employee’s “regular rate” (as defined under the FLSA). 
The Administrator may impose such other conditions or limitations on Options or
SARs granted to nonexempt Employees as it may deem appropriate to qualify such
Options or SARs for exemption from such Employees’ regular rate under the FLSA. 
Nonexempt Employees will not be eligible for other types of Awards under the
Plan except to the extent that such Awards comply with the FLSA.

Substitutions

The Administrator may grant Awards in substitution for options or other equity
interests held by individuals who become Employees or other service providers of
the Company or of an Eligible Affiliate as a result of the Company’s or Eligible
Affiliate’s acquiring or merging with the individual’s employer or acquiring its
assets.  In addition, the Administrator may provide for the Plan’s assumption of
Awards granted outside the Plan to persons who would have been eligible under
the terms of the Plan to receive a grant (or who were eligible under the
acquired company’s plan), including (i) persons who provided services to any
acquired company or business, (ii) persons who provided services to the Company
or any Related Company, and (iii) persons who received Awards from the Company
before the Effective Date of the Plan.  If appropriate to conform the Awards to
the interests for which they are substitutes, the Administrator may grant
substitute Awards under terms and conditions (including, for exercisable Awards,
Exercise Price) that vary from those the Plan otherwise requires.

Date of Grant     

The Date of Grant will be the date as of which the Administrator grants an Award
to a person, as specified in the Administrator’s minutes or other written
evidence of action.

Exercise Price    

The Exercise Price is, for Options, the value of the consideration that a
participant must provide in exchange for one share of Common Stock and, for
SARs, the measurement price.  The Administrator will determine the Exercise
Price under each Award and may set the Exercise Price without regard to the
Exercise Price of any other Awards granted at the same or any other time.  The
Company may use the consideration it receives from the participant for general
corporate purposes.

The Exercise Price per share for ISOs, NQSOs, and SARs may not be less than 100%
of the Fair Market Value of a share of Common Stock on the Date of Grant,
provided, however, that if the Administrator decides to grant an ISO to someone
described in Code Sections 422(b)(6) and 424(d) (as a
more-than-10%-stockholder), the Exercise Price must be at least 110% of the Fair
Market Value.

Limitation on Repricing   

Unless the Company’s stockholders approve the action: (1) the Administrator may
not amend an outstanding Option granted under the Plan to provide an Exercise
Price per share that is lower than the then-current Exercise Price of such
outstanding Option (other than as provided already under this Plan for
Adjustments upon Changes in Capital Stock) and (2) the Administrator may not
cancel any outstanding option (whether or not granted under the Plan) and grant
in substitution therefore new Awards under the Plan covering the same or a
different number of share of Common Stock and having an exercise price per share
lower than the then-current exercise price per share of the cancelled option,
except as provided under Substantial Corporate Change.

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Fair Market Value

“Fair Market Value” of a share of Common Stock for purposes of the Plan will be
determined as follows:

 * if the Common Stock trades on a national securities exchange or market, the
   closing sale price (for the primary trading session) on the Date of Grant;

 * if the Common Stock does not trade on any such exchange or market, the
   closing sale price as reported on the over-the-counter market at
   PinkSheets.com (the “OTC”) for the Date of Grant;

 * if no such closing sale price information is available, the average of bids
   and asked prices that OTC reports for the Date of Grant;

 * if the OTC does not report such bid and asked prices for the Date of Grant,
   the average of the bid and asked prices as reported by any other commercial
   service for the Date of Grant; or

 * if the Company ceases to have publicly-traded stock, the Administrator will
   determine the Fair Market Value for purposes of the Plan using any measure of
   value it determines to be appropriate (including, as it considers
   appropriate, relying on appraisals) in a manner consistent with the valuation
   principles under Code Section 409A, except as the Board or Committee may
   expressly determine otherwise.

For any date that is not a trading day, the Fair Market Value of a share of
Common Stock for such date will be determined by using the foregoing provisions,
as appropriate, for the immediately preceding trading day and with the timing in
the formulas above adjusted accordingly.  The Committee can substitute a
particular time of day or other measure of “closing sale price” or “bid and
asked prices” if appropriate because of exchange or market procedures or can, in
its sole discretion, use weighted averages either on a daily basis or such
longer period as complies with Code Section 409A.

The Administrator has sole discretion to determine the Fair Market Value for
purposes of this Plan, and all Awards are conditioned on the participants’
agreement that the Administrator’s determination is conclusive and binding even
though others might make a different determination.

Exercisability

The Administrator will determine the times and conditions for exercise or
retention of each Award.

Awards will become exercisable or nonforfeitable at such times and in such
manner as the Administrator determines and the Award Agreement indicates;
provided, however, that the Administrator may, on such terms and conditions as
it determines appropriate, accelerate the time at which the participant may
exercise any portion of an Option or at which restrictions on the Awards will
lapse.

If the Administrator does not specify otherwise, Awards will become exercisable
or non-forfeitable as to 25% per year on each anniversary of the Date of Grant,
so long as the participant remains employed or continues his relationship as an
individual service provider, and with respect to exercisable Awards, will expire
as of the tenth anniversary of the Date of Grant (unless they expire earlier
under the Plan or the Award Agreement).  The Administrator has the sole
discretion to determine that a change in service‑providing relationship
eliminates any further service credit on the exercise schedule.

No portion of an Award that is unexercisable or forfeitable at a participant’s
termination of service-providing relationship (for any reason) will thereafter
become exercisable or nonforfeitable (and the participant will immediately
forfeit any unexercisable or forfeitable portions at his termination of
service-providing relationship), unless the Award Agreement provides otherwise,
either initially or by amendment on or before such termination.

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Substantial Corporate Change

Upon a Substantial Corporate Change, the Plan and any unexercised or forfeitable
Awards will terminate (after the occurrence of one of the alternatives set forth
below under Termination Alternatives) unless either (i) an Award Agreement with
a participant provides otherwise or (ii) provision is made in writing in
connection with such transaction for

 * the assumption or continuation of outstanding Awards, or

 * the substitution for such Awards with awards covering the stock or securities
   of a successor employer entity, or a parent or subsidiary of such successor,

with appropriate adjustments as to the number and kind of shares of stock and
prices (and with fractional shares rounded down to the nearest whole share
unless the Administrator determines otherwise), in which event the Awards will
continue in the manner and under the terms so provided, with such increases in
exercisability or nonforfeitability, if any, as the Administrator determines
appropriate in its sole discretion.

Termination Alternatives  

If an Award would otherwise terminate under the preceding provisions, the
Administrator will either

 * provide that optionees or holders of SARs or other exercisable Awards will
   have the right, at such time before the completion of the transaction causing
   such termination as the Board or the Administrator reasonably designates, to
   exercise any unexercised portions of the Options or SARs or other exercisable
   Awards, including portions of such Awards not already exercisable, or

 *  for any Awards, cause the Company, or agree to allow the successor, to
   cancel each Award after payment to the participant of an amount, if any, in
   cash, cash equivalents, or successor equity interests substantially equal to
   the fair market value of the consideration (as valued by the Administrator)
   paid for the Company’s shares, under the transaction minus, for Options and
   SARs or other exercisable Awards, the Exercise Price for the shares covered
   by such Awards (and, for any Awards, where the Board or the Administrator
   determines it is appropriate, any required taxes, withholdings or other
   required deductions), and with such allocation among cash, cash equivalents,
   and/or successor equity interests as the Administrator determines or
   approves.

A “Substantial Corporate Change” means any of the following events after the
initial Effective Date of the Plan:

(i)      sale of all or substantially all of the assets of the Company to one or
more individuals, entities, or groups (other than an Excluded Owner) acting
together,

(ii)    complete or substantially complete dissolution or liquidation of the
Company,

(iii)   a person, entity, or group acting together (other than an Excluded
Owner) acquires or attains ownership of more than 50% of the undiluted total
voting power of the Company’s then-outstanding securities eligible to vote to
elect members of the Board (“Company Voting Securities”),

(iv)  completion of a merger, consolidation, or reorganization of the Company
with or into any other entity (other than an Excluded Owner) unless the holders
of the Company Voting Securities outstanding immediately before such completion,
together with any trustee or other fiduciary holding securities under a Company
benefit plan, hold securities that represent immediately after such merger or
consolidation at least 50% of the combined voting power of the then outstanding
voting securities of either the Company or the other surviving entity or its
ultimate parent;

(v)    the individuals who constitute the Board immediately before a proxy
contest cease to constitute at least a majority of the Board (excluding any
Board seat that is vacant or otherwise unoccupied) immediately following the
proxy contest; or

(vi)  during any one year period, the individuals who constitute the Board at
the beginning of the period (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board (excluding any Board seat that is
vacant or otherwise unoccupied), provided that any individuals that a majority
of Incumbent Directors approve for service on the Board are treated as Incumbent
Directors.

An “Excluded Owner” consists of the Company, any Related Company, any Company
benefit plan, any underwriter temporarily holding securities for an offering of
such securities, investors or directors designated by the Board, or any trusts
or other entities in which any of the foregoing entities, individuals or members
of their immediate family hold a majority of the ownership or beneficial
interests.

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Even if other tests are met, a Substantial Corporate Change has not occurred
under any circumstance in which the Company files for bankruptcy protection or
is reorganized following a bankruptcy filing.

The Administrator may determine that a particular participant’s Awards will not
become fully exercisable or nonforfeitable as a result of what the
Administrator, in its sole discretion, determines is the participant’s
insufficient cooperation with the Company with respect to a Substantial
Corporate Change.

The Administrator may allow conditional exercises before the completion of a
Substantial Corporate Change that are then rescinded if no Substantial Corporate
Change occurs.

If any portion of an Award becomes exercisable solely as a result of a
Substantial Corporate Change, the Administrator may provide that, upon exercise
of such Award, the participant will receive shares subject to a right of
repurchase by the Company or its successor at the Exercise Price; this
repurchase right (x) will lapse at the same rate as the Award would have become
exercisable under its terms without a Substantial Corporate Change and (y) will
not apply to any shares subject to the portion of the Award that was exercisable
under its terms without regard to the Substantial Corporate Change.

Any Award granted to a participant in replacement of other awards not under this
Plan will only become fully exercisable upon a Substantial Corporate Change if
(i) the plan under which the participant originally received the awards
specifically provided for such acceleration, (ii) the Administrator provided for
such acceleration in replacing the options, or (iii) the Administrator so
provides at another time.

If a Substantial Corporate Change other than a liquidation or dissolution of the
Company occurs, the Company’s repurchase and other rights under each outstanding
Restricted Stock Grant will inure to the benefit of the Company’s successor and
will apply to the cash, securities, or other property into which the Common
Stock was converted or exchanged pursuant to such Substantial Corporate Change
in the same manner and to the same extent as they applied to the Common Stock
subject to such Restricted Stock Grant.  If a Substantial Corporate Change
involving the liquidation or dissolution of the Company occurs, except to the
extent the instrument evidencing any Restricted Stock Grant or any other
agreement between a participant and the Company provides specifically to the
contrary, all restrictions and conditions on all Restricted Stock Grants then
outstanding will automatically be treated as terminated or satisfied.

The Board or other Administrator may take any actions described in the
Substantial Corporate Change section, without any requirement to seek
participant consent.

Limitation on ISOs           

An Option granted as an ISO will be an ISO only to the extent that the aggregate
Fair Market Value (determined at the Date of Grant) of the stock with respect to
which ISOs are exercisable for the first time by the optionee during any
calendar year (under the Plan and all other plans of the Company and its parent
or subsidiary corporations, within the meaning of Code Section 422(d)), does not
exceed $100,000.  This limitation applies to options in the order in which such
options were granted.  If, by design or operation, the Option exceeds this
limit, the excess will be treated as an NQSO.

Method of Exercise          

Unless the Award Agreement or a separate agreement entered into between the
Company and the optionee or recipient provides otherwise, either initially or by
amendment, to exercise any exercisable portion of an Award, the participant
must:

 * deliver notice of exercise to the Secretary of the Company (or to whomever
   the Administrator designates), in a form complying with any rules the
   Administrator may issue, signed or otherwise authenticated by the
   participant, and specifying the number of shares of Common Stock underlying
   the portion of the Award the participant is exercising;

 * for the shares of Common Stock with respect to which the participant is
   exercising the Award, pay the full Exercise Price by cash or a check or any
   other form of consideration permitted by the Administrator; and

 * deliver to the Administrator such representations and documents as the
   Administrator, in its sole discretion, may consider necessary or advisable.

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Payment in full of the Exercise Price need not accompany the written notice of
exercise if the exercise complies with a legally permissible cashless exercise
method involving sale to the market, including, for example, that the notice
directs that the stock certificates (or other indicia of ownership) for the
shares issued upon the exercise be delivered to a licensed broker acceptable to
the Company as the agent for the individual exercising the Award and at the time
the stock certificates (or other indicia) are delivered to the broker, the
broker will tender to the Company cash or cash equivalents acceptable to the
Company and equal to the Exercise Price and any required withholding taxes,
provided such method complies with the Sarbanes Oxley Act of 2002.

Award Expiration

No one may exercise an Option or other exercisable Award more than ten years
after its Date of Grant (or five years for ISOs granted to 10% owners covered by
Code Sections 422(b)(6) and 424(d)).  A participant will immediately forfeit and
can never exercise or retain any portion of an Award that is unexercisable or
forfeitable at his termination of service-providing relationship (for any
reason), unless the Award Agreement or a separate agreement entered into between
the Company and the optionee or recipient provides otherwise, either initially
or by amendment.  In addition, unless the Award Agreement or a separate
agreement entered into between the Company and the optionee or recipient
provides otherwise, either initially or by amendment, no one may exercise
otherwise exercisable portions of an Award after the first to occur of:

Employment Termination

The 1st day after three (3) months after the date of termination of
service-providing relationship (other than for death or Disability), where
termination of service-providing relationship means the time when the
employer-employee or other individual service-providing relationship between the
individual and the Company (and all Related Companies) ends for any reason.  The
Administrator may provide that Awards terminate immediately upon termination of
service for “cause” under an Employee’s employment or consultant’s services
agreement or under another definition specified in the Award Agreement.  Unless
the Award Agreement or the Administrator provides otherwise, termination of
service-providing relationship does not include instances in which the Company
immediately rehires a common law employee as an independent contractor.  The
Administrator, in its sole discretion, will determine all questions of whether
particular terminations or leaves of absence are terminations of service and may
decide to suspend the exercise or forfeiture schedule during a leave rather than
to terminate the Award.  Unless the Award Agreement or the Administrator
provides otherwise, terminations of service include situations in which the
participant’s employer ceases to be related to the Company closely enough to be
a Related Company for new grants.  The Administrator may provide that Options
and SARs will begin their three (3) month expiration period when any securities
trading blackout applicable to the departing officer, employee, or director
expires.

Gross Misconduct              

For the Company’s termination of the participant’s service-providing
relationship as a result of the participant’s Gross Misconduct, the time of such
termination.  For purposes of this Plan, “Gross Misconduct” means the
participant has

 * committed fraud, misappropriation, embezzlement, or willful misconduct;

 * committed or been indicted for or convicted of, or pled guilty or no contest
   to, any misdemeanor (other than for minor infractions or traffic violations)
   involving fraud, breach of trust, misappropriation, or other similar activity
   or otherwise relating to the Company or any Related Company, or any felony;
   or

 * committed an act of gross negligence or otherwise acted with willful
   disregard for the Company’s or a Related Company’s best interests.

If the participant has an employment or other agreement in effect at the time of
his or her termination that specifies “cause” for termination, “Gross
Misconduct” for purposes of his or her termination will refer to “cause” under
the employment or other agreement, rather than to the foregoing definition.

Disability             

The first annual anniversary of the participant’s termination of service for
disability, where “disability” means the inability to engage in any substantial
gainful activity because of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 12 months, or, if the
Company then maintains long-term disability insurance, the date as of which the
individual is eligible for benefits under that insurance; or

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Death    

The first annual anniversary of the participant’s date of death.

If the Administrator permits exercise of an Award after termination of
service-providing relationship, the Award will nevertheless expire as of the
date that the former service provider violates any covenant not to compete or
other post-employment covenant in effect between the Company or a Related
Company and the former employee or other service provider.  In addition, an
optionee who exercises an ISO, if permitted, more than three (3) months after
termination of employment with the Company and/or Eligible Affiliates will only
receive ISO treatment to the extent the law permits, and becoming or remaining
an employee of another related company (that is not an Eligible Affiliate) or an
independent contractor will not prevent loss of ISO status because of the formal
termination of employment.

Nothing in this Plan extends the term of an Award beyond the tenth anniversary
of its Date of Grant, nor does anything in this Award Expiration section make an
Award exercisable or nonforfeitable that has not otherwise become exercisable or
nonforfeitable, unless the Administrator specifies otherwise.

Restricted Stock Awards

THE ADMINISTRATOR MAY GRANT AWARDS ENTITLING RECIPIENTS TO ACQUIRE RESTRICTED
STOCK, SUBJECT TO THE COMPANY’S RIGHT TO REPURCHASE ALL OR PART OF SUCH SHARES
AT THEIR ISSUE PRICE OR OTHER STATED OR FORMULA PRICE (OR TO REQUIRE FORFEITURE
OF SUCH SHARES IF ISSUED AT NO COST) FROM THE RECIPIENT IF CONDITIONS SPECIFIED
BY THE ADMINISTRATOR IN THE APPLICABLE AWARD ARE NOT SATISFIED BEFORE THE END OF
THE APPLICABLE RESTRICTION PERIOD OR PERIODS.  INSTEAD OF GRANTING AWARDS FOR
RESTRICTED STOCK, THE ADMINISTRATOR MAY GRANT RSUS ENTITLING THE RECIPIENT TO
RECEIVE SHARES OF COMMON STOCK TO BE DELIVERED AT THE TIME SUCH GRANTS VEST
(AND, TOGETHER WITH RESTRICTED STOCK, “RESTRICTED STOCK AWARDS”).

THE ADMINISTRATOR WILL DETERMINE THE TERMS AND CONDITIONS OF A RESTRICTED STOCK
AWARD, INCLUDING THE CONDITIONS FOR VESTING AND REPURCHASE (OR FORFEITURE) AND
THE ISSUE PRICE, IF ANY. 

RESTRICTED STOCK DIVIDENDS              

PARTICIPANTS HOLDING SHARES OF RESTRICTED STOCK WILL BE ENTITLED TO ALL ORDINARY
CASH DIVIDENDS PAID WITH RESPECT TO SUCH SHARES, UNLESS THE ADMINISTRATOR
PROVIDES OTHERWISE.  IF ANY SUCH DIVIDENDS OR DISTRIBUTIONS ARE PAID IN SHARES,
OR CONSIST OF A DIVIDEND OR DISTRIBUTION TO HOLDERS OF COMMON STOCK OTHER THAN
AN ORDINARY CASH DIVIDEND, THE SHARES, CASH, OR OTHER PROPERTY WILL BE SUBJECT
TO THE SAME RESTRICTIONS ON TRANSFERABILITY AND FORFEITABILITY AS THE SHARES OF
RESTRICTED STOCK WITH RESPECT TO WHICH THEY WERE PAID.   EACH DIVIDEND PAYMENT
WILL BE MADE NO LATER THAN THE END OF THE CALENDAR YEAR IN WHICH THE DIVIDENDS
ARE PAID TO SHAREHOLDERS OF THAT CLASS OF STOCK OR, IF LATER, THE 15TH DAY OF
THE THIRD MONTH FOLLOWING THE DATE THE DIVIDENDS ARE PAID TO SHAREHOLDERS OF
THAT CLASS OF STOCK.

STOCK CERTIFICATES               

THE ADMINISTRATOR MAY REQUIRE THE PARTICIPANT TO DEPOSIT IN ESCROW ANY STOCK
CERTIFICATES THE COMPANY ISSUES IN RESPECT OF SHARES OF RESTRICTED STOCK,
TOGETHER WITH A STOCK POWER ENDORSED IN BLANK, WITH THE COMPANY (OR ITS
DESIGNEE). AT THE EXPIRATION OF THE APPLICABLE RESTRICTION PERIODS, THE COMPANY
(OR SUCH DESIGNEE) WILL DELIVER THE CERTIFICATES NO LONGER SUBJECT TO SUCH
RESTRICTIONS TO THE PARTICIPANT OR IF THE PARTICIPANT HAS DIED, TO THE
BENEFICIARY THE PARTICIPANT HAS DESIGNATED IN A MANNER ACCEPTABLE TO THE COMPANY
TO RECEIVE AMOUNTS DUE OR EXERCISE RIGHTS OF THE PARTICIPANT IF THE PARTICIPANT
DIES BEFORE RECEIPT OR EXERCISE (THE “DESIGNATED BENEFICIARY”).  IN THE ABSENCE
OF AN EFFECTIVE DESIGNATION BY A PARTICIPANT, “DESIGNATED BENEFICIARY” WILL MEAN
THE PERSON OR PERSONS ENTITLED TO SUCH CERTIFICATES OR AMOUNTS PURSUANT TO THE
PARTICIPANT’S WILL OR, AS APPLICABLE, AS DETERMINED PURSUANT TO THE LAWS OF
DESCENT AND DISTRIBUTION.

RSU SETTLEMENT   

UPON THE VESTING OF AND/OR LAPSING OF ANY OTHER RESTRICTIONS (I.E., SETTLEMENT)
WITH RESPECT TO EACH RSU, THE COMPANY WILL PAY THE PARTICIPANT ONE SHARE OF
COMMON STOCK OR AN AMOUNT OF CASH EQUAL TO THE FAIR MARKET VALUE OF ONE SHARE OF
COMMON STOCK, AS PROVIDED IN THE APPLICABLE AWARD AGREEMENT.  THE ADMINISTRATOR
MAY, IN ITS DISCRETION, PROVIDE THAT SETTLEMENT OF RSUS WILL BE DEFERRED, ON A
MANDATORY BASIS OR AT THE ELECTION OF THE PARTICIPANT, AND TO THE EXTENT
APPLICABLE, IN A MANNER CONSISTENT THE CODE SECTION 409A.

 

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RSU VOTING RIGHTS             

A PARTICIPANT WILL HAVE NO VOTING RIGHTS WITH RESPECT TO ANY RSUS.

RSU Dividend Equivalents               

To the extent the Administrator provides, in its sole discretion, a grant of
RSUs may provide participants with the right to receive an amount equal to any
dividends or other distributions declared and paid on an equal number of
outstanding shares of Common Stock (“Dividend Equivalents”).  The Company may
pay the Dividend Equivalents currently or may credit them to an account for the
participants, may settle them in cash and/or shares of Common Stock, and may
subject them to the same restrictions on transfer and forfeitability as the RSUs
with respect to which the DERs are paid, as determined by the Administrator in
its sole discretion, subject in each case to such terms and conditions as the
Administrator may establish, in each case to be set forth in the applicable
Award agreement.

Stock Appreciation Rights

A SAR represents the right to receive a payment in Common Stock, equal to the
excess, if any, of the Fair Market Value on the date the SAR is exercised over
the SAR’s Exercise Price.  The Administrator will establish in its sole
discretion all applicable terms and conditions, and describe such determination
in the applicable Award Agreement, provided that the SAR will expire no more
than 10 years after its Date of Grant.

Other Share-Based Awards            

The Administrator may grant Other Share-Based Awards that are denominated in,
valued in whole or in part by reference to, or otherwise based on or related to
the Common Stock.  The Administrator, in its sole discretion, will determine
purchase, exercise, exchange, or conversion of the Other Share-Based Awards and
all other terms and conditions applicable to the Awards.

Award Agreement             

Award Agreements (which could be certificates) will describe the terms of each
Award and will include such terms and conditions, consistent with the Plan, as
the Administrator may determine are necessary or advisable.  To the extent an
Award Agreement contains any provision that contradicts any provision of this
Plan, the terms of the provision of this Plan supersede the contradictory
provision of the Award Agreement, except as the Award Agreement otherwise
expressly provides.  The Award Agreements may contain special rules.

Other Restrictions             

Without any requirements to seek a participant’s consent, the Company may
require the participant to use one or more specified brokerage firms to exercise
Awards and to hold shares received from or under Awards until the later of one
year after exercise or lapse of all forfeiture restrictions or two years after
the Date of Grant.

Acceleration

The Administrator may at any time provide that any Award will become immediately
exercisable or vested in whole or in part, free of some or all restrictions or
conditions, or otherwise realizable in full or in part, as the case may be.

Stock Subject To Plan

Except as adjusted below under Adjustments upon Changes in Capital Stock,

 * the aggregate number of shares of Common Stock the Company may issue under
   Awards may not exceed 600,000 shares of Common Stock, of which a maximum of
   600,000 shares can be used for Awards other than Options and SARs,

 * the Company can issue under ISOs from the preceding total an aggregate of
   600,000 shares of Common Stock, and

 * the maximum number of shares that may be granted or covered under Awards for
   a single individual in a calendar year (including for purposes of Appendix I)
   may not exceed 300,000.  (The individual maximum applies only to Awards first
   made under this Plan and not to Awards made in substitution of a prior
   employer’s options or other incentives, except as Code Section 162(m)
   otherwise requires.)

The Common Stock will come from either authorized but unissued shares or from
previously issued shares that the Company reacquires, including shares it
purchases on the open market or holds as treasury shares.  If any Award expires,
is canceled, surrendered, or forfeited, or terminates for any other reason
without having been fully exercised, or is settled in cash, or otherwise results
in Common Stock not being issued (any shares which are retained by the Company
to satisfy the Exercise Price or any withholding taxes due with respect to an
Award shall be treated as not issued and should continue to be available under
the Plan), the shares of Common Stock available under that Award will again be
available for the granting of new Awards.  SARs shall be counted in full against
the number of shares available for issuance under the Plan, regardless of the
number of shares issued upon settlement of the SARs.  Shares restored to the
Plan will only count for purposes of the ISO authorized number if the Code so
permits.

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No adjustment will be made for a dividend or other right (except a stock
dividend) for which the record date precedes the date of exercise.  Any dividend
equivalents distributed under the Plan shall be applied against the number of
shares available for Awards under the Plan.

The participant will have no rights of a stockholder with respect to the shares
of stock subject to an Award except to the extent that the Company has issued
certificates for, or otherwise confirmed ownership of, such shares upon the
exercise or the granting of an Award, or the Administrator otherwise specifies.

The Company will not issue fractional shares pursuant to the exercise of an
Award, unless the Administrator determines otherwise, but the Administrator may,
in its discretion, direct the Company to make a cash payment in lieu of
fractional shares.

Person Who May Exercise

During the participant’s lifetime, only the participant or his duly appointed
guardian or personal representative may exercise or hold an Award (other than
nonforfeitable Common Stock).  After his death, a Designated Beneficiary or, if
there is no Designated Beneficiary, a participant’s personal representative or
any other person authorized under a will or under the laws of descent and
distribution may exercise any then exercisable portion of an Award or hold any
then nonforfeitable portion of any Award.  If someone other than the original
recipient seeks to exercise or hold any portion of an Award, the Administrator
may request such proof as it may consider necessary or appropriate of the
person’s right to exercise or hold the Award.

Performance Rules           

Subject to the terms of the Plan, the Administrator will have the authority to
establish and administer performance objectives with respect to such Awards as
it considers appropriate, which performance objectives must be satisfied, as the
Administrator specifies, before the participant receives or retains an Award or
before the Award becomes nonforfeitable or exercisable.

The Administrator will determine whether such performance objectives are
attained, and such determination will be final and conclusive.

The Administrator may express each performance objective in absolute and/or
relative terms, and may use comparisons with current internal targets, the past
performance of the Company (including the performance of one or more Related
Companies) and/or the past or current performance of other companies.  In the
case of earnings-based measures, performance objectives may use comparisons
relating to capital (including, but not limited to, the cost of capital),
shareholders’ equity and/or shares outstanding, or to assets or net assets.

The Administrator also retains the discretion to specify that it can adjust a
performance objective award payout downwards under such factors as it considers
appropriate.

Adjustments Upon Changes In Capital Stock             

Subject to any required action by the Company (which it agrees to promptly take)
or its stockholders, and subject to the provisions of applicable corporate law,
if, after the Date of Grant of an Award,

(i)   the outstanding shares of Common Stock increase or decrease or change into
or are exchanged for a different number or kind of security because of any
recapitalization, reclassification, stock split, or reverse stock split, the
Administrator must make a proportionate and appropriate adjustment in the number
of shares of Common Stock underlying each Award, so that the proportionate
interest of the participant immediately following such event in the fully
diluted equity of the Company will, to the extent practicable, be the same as
immediately before such event or

(ii) the outstanding shares of Common Stock increase or decrease or change into
or are exchanged for a different number or kind of security because of any
combination of shares, exchange of shares, stock dividend, or other distribution
payable in capital stock or some other increase or decrease in such Common Stock
occurs without the Company’s receiving consideration (excluding, unless the
Administrator determines otherwise, stock repurchases), the Administrator may
make what it determines to be an equitable adjustment in the number of shares of
Common Stock underlying each Award.

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Neither adjustment applies to Common Stock that the participant has already
purchased which is subject to the adjustments applicable to Common Stock. 
Unless the Administrator determines another method would be appropriate, any
such adjustment to an exercisable Award will not change the total price with
respect to shares of Common Stock underlying the unexercised portion of such
Award but will include a corresponding proportionate adjustment in the Award’s
Exercise Price and in any applicable repurchase obligations or rights.  The
Board or other Administrator may take any actions described in this section
without any requirement to seek participant consent.

The Administrator will make a commensurate change to the maximum number and kind
of shares provided in each portion of the Stock Subject to Plan section.

Any issue by the Company of any class of preferred stock, or securities
convertible into shares of common or preferred stock of any class, will not
affect, and no adjustment by reason thereof will be made with respect to, the
number of shares of Common Stock subject to any Award or the Exercise Price
except as this Adjustments section specifically provides.  The grant of an Award
under the Plan will not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, or to merge or to consolidate, or to dissolve, liquidate,
sell, or transfer all or any part of its business or assets.

Related Company Employees

Employees of Eligible Affiliates will be potentially entitled to participate in
the Plan, except as the Administrator otherwise designates.

“Eligible Affiliate” means MTI MicroFuel Cells Inc., MTI Instruments, Inc., and
any other Related Companies, except as the Administrator otherwise specifies. 
For ISO grants, “Related Company” means any corporation in an unbroken chain of
corporations including the Company if, at the time a participant receives an ISO
under the Plan, each corporation (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in another corporation in such chain.  “Related
Company” also includes a single-member limited liability company included within
the chain described in the preceding sentence.  The Administrator may use a
different definition of Related Company for NQSOs and other Awards and may
include other forms of entity at the same level of equity relationship (or such
other level as the Board or the Administrator specifies).

Legal Compliance

The Company will not issue any shares of Common Stock under an Award until all
applicable requirements imposed by Federal and state securities and other laws,
rules, and regulations, and by any applicable regulatory agencies or stock
exchanges or markets, have been fully met.  To that end, the Company may require
the participant to take any reasonable action to comply with such requirements
before issuing such shares, including compliance with any Company black-out
periods or trading restrictions.  No provision in the Plan or action taken under
it authorizes any action that Federal or state laws or any other laws, rules or
regulations otherwise prohibit.

The Plan is intended to conform to the extent necessary with all provisions of
the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of
1934 and all regulations and rules the Securities and Exchange Commission issues
under those laws.  Notwithstanding anything in the Plan to the contrary, the
Administrator must administer the Plan, and Awards may be granted and exercised,
only in a way that conforms to such laws, rules, and regulations and any other
laws, rules and regulations.  To the extent permitted by applicable law, the
Plan and any Awards will be treated as amended to the extent necessary to comply
with such laws, rules, and regulations, and the Administrator may make any
further amendments to Awards that are necessary for such compliance.

Purchase For Investment And Other Restrictions    

Unless a registration statement under the Securities Act covers the shares of
Common Stock a participant receives under an Award, the Administrator may
require, at the time of grant and/or exercise, that the participant agree in
writing to acquire such shares for investment and not for public resale or
distribution, unless and until the shares subject to the Award are registered
under the Securities Act.  Unless the shares are registered under the Securities
Act, the participant must acknowledge:

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 * that the shares received under the Award are not so registered, and

 * that the participant may not sell or otherwise transfer the shares unless
   
   * such sale or transfer complies with all applicable laws, rules, and
     regulations, including all applicable Federal and state securities laws,
     rules, and regulations, and either
   
   * the shares have been registered under the Securities Act in connection with
     the sale or transfer thereof, or
   
   * counsel satisfactory to the Company has issued an opinion satisfactory to
     the Company that the sale or other transfer of such shares is exempt from
     registration under the Securities Act.

Additionally, the Common Stock, when issued under an Award, will be subject to
any other transfer restrictions, rights of first refusal, rights of repurchase
or of forfeiture, and voting agreements set forth in or incorporated by
reference into other applicable documents, including the Award Agreements, or
the Company’s articles or certificate of incorporation, by-laws, or generally
applicable stockholders’ agreements.

The Administrator may, in its sole discretion, take whatever additional actions
it considers appropriate to comply with such restrictions and applicable laws,
including placing legends on certificates and issuing stop transfer orders to
transfer agents and registrars.

Taxes, Withholding and Other Required Deductions              

The participant must satisfy all applicable federal, state, and local or other
tax, withholding, and other obligations and required deductions before the
Company will deliver stock certificates or otherwise recognize ownership of
Common Stock under an Award.  The Company may decide to satisfy such obligations
through additional withholding on salary or wages.  If the Company elects not to
or cannot withhold from other compensation, the participant must pay the Company
the full amount, if any, required to satisfy such amounts, or,  if and to the
extent permitted, have a broker tender to the Company cash equal to the
withholding obligations.  Payment of these obligations is due before the Company
will issue any shares on exercise or release from forfeiture of an Award or, if
the Company so requires, at the same time as is payment of the exercise price
unless the Company determines otherwise.   If provided for in an ISO or other
Award or approved by the Administrator in its sole discretion (other than with
respect to ISOs), a participant may satisfy such obligations in whole or in part
by delivery of shares of Common Stock, including shares retained from the Award
creating the obligation, valued at their Fair Market Value; provided, however,
except as the Administrator otherwise provides, the total amount where stock is
being used to satisfy such obligations cannot exceed the Company’s minimum
statutory withholding obligations (based on minimum statutory withholding rates,
including payroll taxes, that are applicable to such supplemental taxable
income).  Shares surrendered to satisfy any obligation pursuant to this section
cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other
similar requirements.

Transfers, Assignments, And Pledges

Except as otherwise permitted by the Administrator, an Award may not be
assigned, pledged, or otherwise transferred in any way, whether by operation of
law or otherwise or through any legal or equitable proceedings (including
bankruptcy), by the participant to any person, except by will or by operation of
applicable laws of descent and distribution.

Amendment or Termination of Plan and Options

The Board may amend, suspend, or terminate the Plan at any time, without the
consent of the participants or their beneficiaries; provided, however, that such
actions are consistent with this section.  Except as required by law or by the
Substantial Corporate Change or Adjustment Upon Changes in Capital Stock
sections or permitted under the Method of Exercise section, the Administrator
may not, without the participant’s or Designated Beneficiary’s consent, modify
the terms and conditions of an Award so as to materially adversely affect the
participant.  No amendment, suspension, or termination of the Plan will, without
the participant’s or Designated Beneficiary’s consent, terminate or materially
adversely affect any right or obligations under any outstanding Awards, except
as provided in the Substantial Corporate Change or the Adjustments Upon Changes
in Capital Stock sections.

The following actions will require prior applicable stockholder approval:

(i)       any amendment to an Award intended to comply with Section 162(m),
which amendment provides that the Award will become exercisable, realizable or
vested, as applicable to such Award; and

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(ii)     any amendment requiring stockholder approval under applicable law or
the rules of any exchange upon which the Company’s shares are traded. 

In addition, if at any time the approval of the Company’s stockholders is
required as to any other modification or amendment under Section 422 of the Code
or any successor provision with respect to ISOs, the Board may not effect such
modification or amendment without such approval.  The Administrator may not make
any Award that is conditioned upon stockholder approval of any amendment to the
Plan.

Privileges of Stock Ownership

No participant and no Designated Beneficiary or other person claiming under or
through such participant will have any right, title, or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Award except as to such shares of Common Stock, if any, already issued to such
participant.

Effect on Other Plans

Whether receiving or exercising an Award causes the participant to accrue or
receive additional benefits under any pension or other plan is governed solely
by the terms of such other plan.

Limitations on Liability

Notwithstanding any other provisions of the Plan, no individual acting as a
director, officer, other employee, or agent of the Company will be liable to any
participant, former participant, spouse, Designated Beneficiary, or any other
person for any claim, loss, liability, or expense incurred in connection with
the Plan, nor will such individual be personally liable because of any contract
or other instrument he executes in such other capacity.  The Company will
indemnify and hold harmless each director, officer, other employee, or agent of
the Company to whom any duty or power relating to the administration or
interpretation of the Plan has been or will be delegated, against any cost or
expense (including attorneys’ fees) or liability (including any sum paid in
settlement of a claim with the Board’s approval) arising out of any act or
omission to act concerning this Plan unless arising out of such person’s own
fraud or bad faith.

No Employment Contract

Nothing contained in this Plan constitutes an employment contract between the
Company and the participants.  The Plan does not give any participant any right
to be retained in the Company’s employ, nor does it enlarge or diminish the
Company’s right to end the participant’s employment or other relationship with
the Company.

Applicable Law

The laws of the State of New York (other than its choice of law provisions)
govern this Plan and its interpretation.

Duration of the Plan

The Administrator may not grant Awards under the Plan after the tenth
anniversary of the Effective Date.  The Plan will then terminate but will
continue to govern unexercised and unexpired Awards.

Authorization of Sub-Plans

The Board may from time to time establish one or more sub-plans under the Plan
for purposes of satisfying any applicable laws, rules or regulations of various
jurisdictions.  The Board will establish such sub-plans by adopting supplements
to this Plan containing (i) such limitations on the Administrator’s discretion
under the Plan as the Board considers necessary or desirable, or (ii) such
additional terms and conditions not otherwise inconsistent with the Plan as the
Board considers necessary or desirable.  All supplements the Board adopts will
be treated as part of the Plan, but each supplement will apply only to
participants within the affected jurisdiction and the Company will not be
required to provide copies of any supplement to participants in any jurisdiction
that is not the subject of such supplement.

Compliance with Code Section 409A

No Award may provide for deferral of compensation that does not comply with
Section 409A of the Code, unless the Administrator, at the time of grant or by
later amendment, specifically provides that the Award is not intended to comply
with Section 409A of the Code, provided that nothing in this Plan or otherwise
constitutes a guaranty to the participants that any Awards will comply with
Section 409A.

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Approval of the Plan        

The Plan was approved by the Company’s Board of Directors on April 14, 2012,
subject to approval by the Company’s stockholders.  The Plan was amended and
restated by the Company's Board of Directors on October 20, 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX I

Performance Grants under Code Section 162(m)

Special Performance Goals

The Administrator may choose to designate that either the granting or vesting of
Awards (other than Options and SARs) for Performance Periods are based on
“Special Performance Goals,” using exclusively one or more of the following
measures, as long as Special Performance Goals are substantially uncertain to be
attained when established:

 * earnings per share (on a fully diluted or other basis),

 * stock price targets or stock price maintenance,

 * pretax or after tax net income,

 * operating income,

 * gross revenue,

 * gross margin,

 * operating profit before or after discontinued operations and/or taxes

 * earnings before or after discontinued operations, interest, taxes,
   depreciation, and/or amortization,

 * earnings growth,

 * cash flow or cash position,

 * sales or sales growth or market share,

 * return on sales, assets, equity, or investment,

 * improvement of financial ratings,

 * achievement of balance sheet or income statement objectives,

 * total shareholder return,

 * entering into OEM contracts for military, industrial and consumer, or

 * achievement of specified technical improvements in products or products under
   development.

 

The Administrator may express each Special Performance Goal in absolute and/or
relative terms, and may use comparisons with current internal targets, the
Company’s past performance (including the performance of one or more Related
Companies) and/or the past or current performance of other companies.   The
Administrator may set Special Performance Goals that vary by Participant or by
Award, that may be particular to a Participant or the department, branch, line
of business, subsidiary or other unit in which the Participant works, and that
may cover such Performance Period as the Administrator may specify. 

The Administrator will determine the measures for setting Special Performance
Goals for any given Performance Period in accordance with generally accepted
accounting principles (“GAAP”), where applicable, and in a manner consistent
with the methods used in the Company’s audited financial statements.  Absent
specific contrary determination by the Administrator during the Applicable
Period, the Special Performance Goals will not take into account
(i) extraordinary items as determined by the Company’s independent public
accountants in accordance with GAAP, (ii) changes in accounting, (iii) gains or
losses on the dispositions of discontinued operations, (iv) the writedown of any
asset, and (v) charges for restructuring and rationalization programs.

Performance Period

A “Performance Period” is a period for which the Administrator sets Special
Performance Goals and during which the Administrator measures performance to
determine whether a Participant is entitled to payment or vesting of an Award
under the Plan.  A Performance Period may coincide with one or more complete or
partial fiscal years of the Company.

 

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Applicable Period

The “Applicable Period” with respect to any Performance Period means a period
beginning on or before the first day of the Performance Period and ending no
later than the earlier of (i) the 90th day of the Performance Period or (ii) the
date on which 25% of the Performance Period has been completed.

Administrator

The Administrator for purposes of granting Awards that use Special Performance
Goals must be a committee consisting of two or more directors, each of whom
qualifies as an “outside director” within the meaning of Section 162(m), and
those outside directors will have exclusive authority under this Plan to make
Awards and establish and determine satisfaction of Special Performance Goals
under this Appendix.  Assuming the minimum number of outside directors can still
act, the Administrator may satisfy this requirement through (i) providing that
persons who are not “outside directors” cannot vote on an issue, (ii) allowing
those persons to abstain from voting, or (iii) creating a subcommittee of
qualifying outside directors to take action with respect to this Plan.

Payment of Awards

Subject to the limitations set forth in this Appendix, Awards determined under
the Plan for a Performance Period will be paid or vested as soon as practicable
following the end of the Performance Period to which the Awards apply.  The
Administrator may not waive the achievement of the applicable Special
Performance Goals except in the case of the death or disability of the
Participant.

Certification

No Award will be paid or vested, as applicable, unless and until the
Administrator, based on the Company’s audited financial results for such
Performance Period (as prepared and reviewed by the Company’s independent public
accountants), has certified in the manner prescribed under applicable
regulations the extent to which the Performance Goals for the Performance Period
have been satisfied and the Administrator has made its decisions regarding the
extent of any Negative Discretion Adjustment of Awards.

Negative Discretion

The Administrator’s powers include the power to make “Negative Discretion
Adjustments,” which are adjustments that eliminate or reduce (but do not
increase) an Award otherwise payable to a Participant for a Performance Period. 
No Negative Discretion Adjustment may cause an Award to fail to qualify as
“performance based compensation” under Section 162(m).

Duration of Appendix I

Appendix I will remain effective for the duration of the Plan, unless the Board
terminates it earlier, provided, however, that the continued effectiveness of
Appendix I will be subject to the approval of the Company’s shareholders at such
times and in such manner as Section 162(m) may require.

Disclosure and Approval of Appendix I    

Appendix I must be submitted to Company shareholders for their approval as part
of the Plan.  The specific terms of the Plan, including the class of employees
eligible to be Participants, the measures used for Special Performance Goals,
and the terms of payment of Awards, must be disclosed to the shareholders to the
extent Section 162(m) requires.

Purpose of Appendix I

This Appendix is intended to conform with all provisions of Code Section 162(m)
and Treas. Reg. Section 1.162-27 to the extent necessary to allow the Company a
Federal income tax deduction for Awards as “qualified performance based
compensation,” provided that the Administrator retains the discretion whether to
make Awards that do not so qualify, and that the Administrator may also grant
Awards that satisfy Code Section 162(m) without the application of this
Appendix.

 

 

 

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