Exhibit 10.40

 

AKOUSTIS TECHNOLOGIES, INC.

 

2018 STOCK INCENTIVE PLAN

 

1. Purpose

 

The purposes of the Plan are to encourage and enable selected Employees,
Directors and Consultants of the Company and its Affiliates to acquire or
increase their holdings of Common Stock and other equity-based interests in the
Company and/or to provide other incentive awards in order to promote a closer
identification of their interests with those of the Company and its
stockholders, and to provide flexibility to the Company in its ability to
motivate, attract and retain the services of Participants upon whose judgment,
interest and special effort the successful conduct of its operation largely
depends. These purposes may be carried out through the granting of Awards to
selected Participants.

 

2. Effective Date; Term

 

The Effective Date of the Plan shall be November 1, 2018, the date it was
approved by the Company’s stockholders (the “Effective Date”). Awards may be
granted on or after the Effective Date, but no Awards may be granted after
November 1, 2028. Awards that are outstanding at the end of the Plan term (or
such earlier termination date as may be established by the Board pursuant to
Section 16(a)) shall continue in accordance with their terms, unless otherwise
provided in the Plan or an Award Agreement. The Plan replaces the Prior Plans,
and no further grants will be made under the Prior Plans after the Effective
Date.

 

3. Definitions

 

In addition to other terms defined herein or in an Award Agreement, the
following terms shall have the meanings given below:

 

(a) Administrator means the Board and, upon its delegation of all or part of its
authority to administer the Plan to the Committee, the Committee.

 

(b) Affiliate means any Parent or Subsidiary of the Company, and also includes
any other business entity which controls, is controlled by or is under common
control with the Company; provided, however, that the term “Affiliate” shall be
construed in a manner in accordance with the registration provisions of
applicable federal securities laws if and to the extent required.

 

(c) Applicable Law means any applicable laws, rules or regulations (or similar
guidance), including but not limited to the Securities Act, the Exchange Act,
the Code and the listing or other rules of any applicable stock exchange.
References to any applicable laws, rules and regulations, including references
to any sections or other provisions of applicable laws, rules and regulations,
shall also refer to any successor provisions thereto unless the Administrator
determines otherwise.

 

(d) Award means a grant under the Plan of an Incentive Option; a Nonqualified
Option; a Stock Appreciation Right; a Restricted Stock Award; a Restricted Stock
Unit; a Deferred Stock Unit; a Performance Share; a Performance Unit; an Other
Stock-Based Award; a Dividend Equivalent Award; and/or any other award granted
under the Plan.

 

(e) Award Agreement means an award agreement or certificate (which may be in
written or electronic form, in the Administrator’s discretion, and which
includes any amendment or supplement thereto) between the Company and a
Participant, specifying such terms, conditions and restrictions as may be
established by the Administrator with regard to an Award and shares of Common
Stock or any other benefit related to an Award.

 

 

 

 

(f) Board or Board of Directors means the Board of Directors of the Company.

 

(g) Cause means, unless otherwise provided in an Award Agreement or determined
by the Administrator, a Participant’s termination of employment or service
resulting from the Participant’s (i) termination for “Cause” as defined under
the Participant’s employment agreement, change in control agreement, consulting
agreement or other similar agreement with the Company or an Affiliate, if any,
or (ii) if the Participant has not entered into any such agreement (or, if any
such agreement does not define “Cause”), then the Participant’s termination
shall be for “Cause” if termination results due to the Participant’s (A)
dishonesty; (B) refusal to perform his or her duties for the Company or an
Affiliate; or (C) engaging in fraudulent conduct or conduct that could be
materially damaging to the Company without a reasonable good faith belief that
such conduct was in the best interest of the Company. The determination of
“Cause” shall be made by the Administrator and its determination shall be final
and conclusive. Without in any way limiting the effect of the foregoing, for
purposes of the Plan and an Award, a Participant’s employment or service shall
also be deemed to have terminated for Cause if, after the Participant’s
employment or service has terminated, facts and circumstances are discovered
that would have justified, in the opinion of the Administrator, a termination
for Cause.

 

(h) A Change of Control shall (except as may be otherwise required, if at all,
under Code Section 409A) be deemed to have occurred on the earliest of the
following dates:

 

(i) The date any entity or person shall have become the beneficial owner of, or
shall have obtained voting control over, more than fifty percent (50%) of the
total voting power of the Company’s then outstanding voting stock;

 

(ii) The date of the consummation of (A) a merger, recapitalization,
consolidation or reorganization of the Company (or similar transaction involving
the Company), in which the holders of the Common Stock immediately prior to the
transaction have voting control over less than fifty-one percent (51%) of the
voting securities of the surviving corporation immediately after such
transaction, or (B) the sale or disposition of all or substantially all the
assets of the Company; or

 

(iii) The date there shall have been a change in a majority of the Board of
Directors of the Company within a 12-month period unless the nomination for
election by the Company’s stockholders or the appointment of each new Director
was approved by the vote of two-thirds of the members of the Board (or a
committee of the Board, if nominations are approved by a Board committee rather
than the Board) then still in office who were in office at the beginning of the
12-month period (excluding, for this purpose, any such person whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consent by or on behalf of a Person other
than the Board).

 

For the purposes herein, the term “person” shall mean any individual,
corporation, partnership, group, association or other person, as such term is
defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other than
the Company, a Subsidiary of the Company or any employee benefit plan(s)
sponsored or maintained by the Company or any Subsidiary thereof, and the term
“beneficial owner” shall have the meaning given the term in Rule 13d-3 under the
Exchange Act.

 

For the purposes of clarity, a transaction shall not constitute a Change of
Control if its principal purpose is to change the state of the Company’s
incorporation, create a holding company that would be owned in substantially the
same proportions by the persons who held the Company’s securities immediately
before such transaction or is another transaction of other similar effect.

 

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Notwithstanding the preceding provisions of this Section 3(i), in the event that
any Awards granted under the Plan are deemed to be deferred compensation subject
to (and not exempt from) the provisions of Code Section 409A, then distributions
related to such Awards to be made upon a Change of Control may be permitted, in
the Administrator's discretion, upon the occurrence of one or more of the
following events (as they are defined and interpreted under Code Section 409A):
(A) a change in the ownership of the Company; (B) a change in effective control
of the Company; or (C) a change in the ownership of a substantial portion of the
assets of the Company.

 

(i) Code means the Internal Revenue Code of 1986, as amended. Any reference
herein to a specific Code section shall be deemed to include all related
regulations or other guidance with respect to such Code section.

 

(j) Committee means the Compensation Committee of the Board (or a subcommittee
thereof), or such other committee of the Board which may be appointed to
administer the Plan in whole or in part.

 

(k) Common Stock means the common stock of Akoustis Technologies, Inc., $0.001
par value, or any successor securities thereto.

 

(l) Company means Akoustis Technologies, Inc., together with any successor
thereto. In the Administrator’s discretion, the term “Company” may also refer to
the Company and any or all of its Affiliates.

 

(m) Consultant means an independent contractor, consultant or advisor providing
services (other than capital raising services) to the Company or an Affiliate.

 

(n) Deferred Stock Unit means a Restricted Stock Unit, the terms of which may,
in the Administrator’s discretion, provide for delivery of shares of Common
Stock, cash or a combination thereof on a date or dates subsequent to the date
the Award is earned and vested, as provided in Section 9.

 

(o) Director means a member of the Board.

 

(p) Disability shall, unless otherwise provided in an Award Agreement or
determined by the Administrator (taking into account any Code Section 409A
considerations), as applied to any Participant, having the meaning given in any
employment agreement, change in control agreement, consulting agreement or other
similar agreement, if any, to which the Participant is a party, or, if there is
no such agreement (or if such agreement does not define “Disability”),
“Disability” shall mean the inability of the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death, or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
The Administrator shall have authority to determine if a Disability has
occurred.

 

(q) Dividend Equivalent Award means a right granted to a Participant pursuant to
Section 12 to receive the equivalent value (in cash or shares of Common Stock)
of dividends paid on Common Stock.

 

(r) Effective Date means the effective date of the Plan, as provided in Section
2.

 

(s) Employee means any person who is an employee of the Company or any Affiliate
(including entities which become Affiliates after the Effective Date). For this
purpose, an individual shall be considered to be an Employee only if there
exists between the individual and the Company or an Affiliate the legal and bona
fide relationship of employer and employee (taking into account Code Section
409A considerations if and to the extent applicable); provided, however, that
with respect to Incentive Options, “Employee” means any person who is considered
an employee of the Company or any Parent or Subsidiary for purposes of Treasury
Regulation Section 1.421-1(h).

 

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(t) Exchange Act means the Securities Exchange Act of 1934, as amended.

 

(u) Exercise Price means the price at which an Option or SAR may be exercised,
as provided in Section 7(b) and Section 8(a), respectively.

 

(v) Fair Market Value per share of the Common Stock shall be established by the
Administrator and, unless otherwise determined by the Administrator, the Fair
Market Value shall be determined in accordance with the following provisions:
(i) if the shares of Common Stock are listed for trading on the New York Stock
Exchange, LLC (“NYSE”), the NASDAQ Stock Market LLC (“Nasdaq”) or another
national or regional stock exchange, the Fair Market Value shall be the closing
sales price per share of the shares on the principal stock exchange on which
such securities are listed on the date an Award is granted or other
determination is made (such date of determination being referred to herein as a
“valuation date”), or, if there is no transaction on such date, then on the
trading date nearest preceding the valuation date for which closing price
information is available, and, provided further, if the shares are not listed
for trading on the NYSE, Nasdaq or another stock exchange but are regularly
quoted on an automated quotation system (including the OTC Bulletin Board and
the quotations published by the OTC Markets Group) or by a recognized securities
dealer, the Fair Market Value shall be the closing sales price for such shares
as quoted on such system or by such securities dealer on the valuation date, but
if selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the valuation date (or, if no such prices were reported on that date,
on the last date such prices were reported), as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or (ii) if the
shares of Common Stock are not listed or reported in any of the foregoing, then
the Fair Market Value shall be determined by the Administrator based on such
valuation measures or other factors as it deems appropriate. Notwithstanding the
foregoing, (i) with respect to the grant of Incentive Options, the Fair Market
Value shall be determined by the Administrator in accordance with the applicable
provisions of Section 20.2031-2 of the Federal Estate Tax Regulations, or in any
other manner consistent with Code Section 422; and (ii) Fair Market Value shall
be determined in accordance with Code Section 409A if and to the extent
required.

 

(w) Full Value Award means an Award, other than in the form of an Option or SAR,
which is settled by the issuance of Common Stock.

 

(x) Good Reason means, unless otherwise provided in an Award Agreement or
determined by the Administrator, in the context of a Change of Control, a
Participant’s termination of employment or service resulting from the
Participant’s (i) termination for “Good Reason” as defined under the
Participant’s employment agreement, change of control agreement, consulting
agreement or other similar agreement with the Company or an Affiliate, if any,
or (ii) if the Participant has not entered into any agreement (or, if any such
agreement does not define “Good Reason”), then a Participant’s termination shall
be for “Good Reason” if termination results due to any of the following without
the Participant’s consent: (A) a material reduction in the Participant’s base
salary as in effect immediately prior to the date of the Change of Control, (B)
the assignment to the Participant of duties or responsibilities materially
inconsistent with, or a material diminution in, the Participant’s position,
authority, duties or responsibilities as in effect immediately prior to the
Change of Control, or (C) the relocation by the Company of the Participant’s
principal place of employment by more than 100 miles from the location at which
the Participant was stationed immediately prior to the Change of Control.
Notwithstanding the foregoing, with respect to Directors, unless the
Administrator determines otherwise, a Director’s termination from service on the
Board shall be for “Good Reason” if the Participant ceases to serve as a
Director, or, if the Company is not the surviving company in the Change of
Control event, a member of the board of directors of the surviving entity, in
either case, due to the Participant’s failure to be nominated to serve as a
director of such entity or the Participant’s failure to be elected to serve as a
director of such entity, but not due to the Participant’s decision not to
continue service on the Board of Directors of the Company or the board of
directors of the surviving entity, as the case may be. An event or condition
that would otherwise constitute “Good Reason” shall constitute Good Reason only
if the Company fails to rescind or cure such event or condition within 30 days
after receipt from the Participant of written notice of the event which
constitutes Good Reason, and Good Reason shall cease to exist for any event or
condition described herein on the 60th day following the later of the occurrence
or the Participant’s knowledge thereof, unless the Participant has given the
Company written notice thereof prior to such date. In the context other than a
Change of Control, “Good Reason” shall be as defined by the Administrator. The
determination of “Good Reason” shall be made by the Administrator and its
determination shall be final and conclusive.

 

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(y) Incentive Option means an Option that is designated by the Administrator as
an Incentive Option pursuant to Section 7 and intended to meet the requirements
of incentive stock options under Code Section 422.

 

(z) Nonqualified Option means an Option granted under Section 7 that is not
intended to qualify as an incentive stock option under Code Section 422.

 

(aa) Option means a stock option granted under Section 7 that entitles the
holder to purchase from the Company a stated number of shares of Common Stock at
the Exercise Price, and subject to such terms and conditions, as may be set
forth in the Plan or an Award Agreement or established by the Administrator.

 

(bb) Option Period means the term of an Option, as provided in Section 7(d).

 

(cc) Other Stock-Based Award means a right, granted to a Participant under
Section 11, that relates to or is valued by reference to shares of Common Stock
or other Awards relating to shares of Common Stock.

 

(dd) Parent means a “parent corporation,” whether now or hereafter existing, as
defined in Code Section 424(e).

 

(ee) Participant means an individual who is an Employee employed by, or a
Director or Consultant providing services to, the Company or an Affiliate who
satisfies the requirements of Section 6 and is selected by the Administrator to
receive an Award under the Plan.

 

(ff) Performance Award means a Performance Share Award and/or a Performance Unit
Award, as provided in Section 10.

 

(gg) Performance Measures mean one or more performance factors or criteria which
may be established by the Administrator with respect to an Award. Performance
Measures may be based on such performance factors or criteria as the
Administrator in its discretion may deem appropriate, which may include, without
limitation: (i) cash flow; (ii) return on equity; (iii) return on assets; (iv)
earnings per share; (v) operations expense efficiency milestones; (vi)
consolidated earnings before or after taxes (including earnings before interest,
taxes, depreciation and amortization); (vii) net income; (viii) operating
income; (ix) pre-tax income; (x) book value per share; (xi) return on
investment; (xii) return on capital; (xiii) improvements in capital structure;
(xiv) expense management; (xv) profitability including of an identifiable
business unit or service offering; (xvi) maintenance or improvement of profit
margins; (xvii) stock price or total shareholder return; (xviii) market share;
(xix) revenues or sales; (xx) costs; (xxi) working capital; (xxii) economic
wealth created; (xxiii) strategic business criteria; (xxiv) efficiency ratio(s);
(xxv) operating ratio(s); (xxvi) achievement of division, group, function or
corporate financial, strategic or operational goals; (xxvii) gross margins;
(xxviii) product productions or shipments; and (xxix) comparisons with stock
market indices or performance metrics of peer companies. The foregoing criteria
may relate to the Company, one or more of its Subsidiaries or other Affiliates
or one or more of its segments, operating units or groups, divisions,
departments, partnerships, joint ventures or minority investments, facilities,
product lines or products service offerings or any combination of the foregoing.
The targeted level or levels of performance with respect to such business
criteria also may be established at such levels and on such terms as the
Administrator may determine, in its discretion, including but not limited to on
an absolute basis, in relation to performance in a prior performance period,
relative to one or more peer group companies or indices, on a per share and/or
share per capita basis, on a pre-tax or after tax basis and/or any combination
thereof. For avoidance of doubt, the foregoing list of performance factors and
criteria are illustrative only, and the Administrator may select any other
objective or subjective performance criteria as it may determine.

 

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(hh) Performance Share means an Award granted under Section 10, in an amount
determined by the Administrator and specified in an Award Agreement, stated with
reference to a specified number of shares of Common Stock, that entitles the
holder to receive shares of Common Stock, a cash payment or a combination of
Common Stock and cash (as determined by the Administrator), subject to the terms
of the Plan and the terms and conditions established by the Administrator.

 

(ii) Performance Unit means an Award granted under Section 10, in an amount
determined by the Administrator and specified in an Award Agreement, that
entitles the holder to receive shares of Common Stock, a cash payment or a
combination of Common Stock and cash (as determined by the Administrator),
subject to the terms of the Plan and the terms and conditions established by the
Administrator.

 

(jj) Plan means the Akoustis Technologies, Inc. 2018 Stock Incentive Plan, as it
may be amended and/or restated.

 

(kk) Prior Plans means the Akoustis, Inc. 2014 Stock Plan, the Akoustis
Technologies, Inc. 2015 Equity Inventive Plan and the Akoustis Technologies,
Inc. 2016 Stock Inventive Plan, in each case as the same may be amended and/or
restated.

 

(ll) Restricted Award means a Restricted Stock Award, a Restricted Stock Unit
Award and/or a Deferred Stock Unit, as provided in Section.

 

(mm) Restricted Stock Award means an Award of shares of Common Stock granted to
a Participant under Section 9. Shares of Common Stock subject to a Restricted
Stock Award shall cease to be restricted when, in accordance with the terms of
the Plan and the terms and conditions established by the Administrator, the
shares vest and become transferable and free of substantial risks of forfeiture.

 

(nn) Restricted Stock Unit means an Award granted to a Participant pursuant to
Section 9 which is settled, if at all, (i) by the delivery of one share of
Common Stock for each Restricted Stock Unit, (ii) in cash in an amount equal to
the Fair Market Value of one share of Common Stock for each Restricted Stock
Unit or (iii) in a combination of cash and shares equal to the Fair Market Value
of one share of Common Stock for each Restricted Stock Unit, as determined by
the Administrator. A Restricted Stock Unit represents the unfunded promise of
the Company to deliver shares of Common Stock, cash or a combination thereof, as
applicable, at the end of the applicable restriction period if and only to the
extent the Award vests and ceases to be subject to forfeiture, subject to
compliance with the terms of the Plan and Award Agreement and any performance or
other terms and conditions established by the Administrator.

 

(oo) Retirement shall, unless otherwise provided in an Award Agreement or
determined by the Administrator (taking into account any Code Section 409A
considerations), as applied to any Participant, have the meaning given in any
employment agreement, change in control agreement, consulting agreement or other
similar agreement, if any, to which the Participant is a party, or, if there is
no such agreement (or if such agreement does not define “Retirement”), then
“Retirement” shall, unless the Administrator determines otherwise, mean
retirement in accordance with the retirement policies and procedures established
by the Company. The Administrator shall have authority to determine if a
Retirement has occurred.

 

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(pp) SAR or Stock Appreciation Right means a stock appreciation right granted
under Section 8 entitling the Participant to receive, with respect to each share
of Common Stock encompassed by the exercise of such SAR, the excess, if any, of
the Fair Market Value on the date of exercise over the Exercise Price, subject
to the terms of the Plan and Award Agreement and any other terms and conditions
established by the Administrator. References to “SARs” include both Related SARs
and Freestanding SARs, unless the context requires otherwise.

 

(qq) Securities Act means the Securities Act of 1933, as amended.

 

(rr) Subsidiary means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Code Section 424(f).

 

(ss) Termination Date means the date of termination of a Participant’s
employment or service for any reason, as determined by the Administrator (taking
into account any Code Section 409A considerations).

 

4. Administration of the Plan

 

(a) The Plan shall be administered by the Board or, upon its delegation, by the
Committee (or a subcommittee thereof). To the extent required under Rule 16b-3
adopted under the Exchange Act, the Committee shall be comprised solely of two
or more “non-employee directors,” as such term is defined in Rule 16b-3, or as
may otherwise be permitted under Rule 16b-3. In addition, Committee members
shall qualify as “independent directors” under applicable stock exchange rules
if and to the extent required.

 

(b) Subject to the provisions of the Plan, the Administrator shall have full and
final authority in its discretion to take any action with respect to the Plan
including, without limitation, the authority to (i) determine all matters
relating to Awards, including selection of individuals to be granted Awards, the
types of Awards, the number of shares of Common Stock, if any, subject to an
Award, and all terms, conditions, restrictions and limitations of an Award; (ii)
prescribe the form or forms of Award Agreements evidencing any Awards granted
under the Plan; (iii) establish, amend and rescind rules and regulations for the
administration of the Plan; (iv) correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any Award or Award Agreement; and
(v) construe and interpret the Plan, Awards and Award Agreements, interpret
rules and regulations for administering the Plan and make all other
determinations deemed necessary or advisable for administering the Plan. In
addition, (i) the Administrator shall have the authority, subject to the
restrictions contained in Section 4(c) herein, to accelerate the date that any
Award which was not otherwise exercisable, vested or earned shall become
exercisable, vested or earned in whole or in part without any obligation to
accelerate such date with respect to any other Award granted to any recipient;
and (ii) the Administrator may in its sole discretion modify or extend the terms
and conditions for exercise, vesting or earning of an Award (in each case,
taking into account any Code Section 409A considerations). The Administrator’s
authority to grant Awards and authorize payments under the Plan shall not in any
way restrict the authority of the Company to grant compensation to Employees,
Directors or Consultants under any other compensation plan, program or
arrangement of the Company or an Affiliate. In addition, the Administrator shall
have the authority and discretion to establish terms and conditions of Awards
(including but not limited to the establishment of subplans) or other
arrangements as the Administrator determines to be necessary or appropriate to
conform to the applicable requirements or practices of jurisdictions outside of
the United States. In addition to action by meeting in accordance with
Applicable Law, any action of the Administrator with respect to the Plan may be
taken by a written instrument signed by all of the members of the Board or
Committee, as appropriate, and any such action so taken by written consent shall
be as fully effective as if it had been taken by a majority of the members at a
meeting duly held and called. All determinations of the Administrator with
respect to the Plan and any Award or Award Agreement will be final and binding
on the Company and all persons having or claiming an interest in any Award
granted under the Plan.

 

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(c) Notwithstanding the provisions of Section 4(b), Awards granted to a
Participant under the Plan shall be subject to a minimum vesting period of one
year; provided, however, that (i) the Administrator may provide for acceleration
of vesting of all or a portion of an Award in the event of a Participant's
death, Disability or Retirement, or (to the extent provided pursuant to Section
13 herein) upon the occurrence of a Change of Control of the Company; (ii) the
Administrator may provide for the grant of an Award to any Participant without a
minimum vesting period or may accelerate the vesting of all or a portion of an
Award for any reason, but only with respect to Awards for no more than an
aggregate of five percent (5%) of the total number of shares of Common Stock
authorized for issuance under the Plan pursuant to Section 5(a) herein, upon
such terms and conditions as the Administrator shall determine; and (iii) the
Administrator also may provide for the grant of Awards to Participants that have
different vesting terms in the case of Awards that are substituted for other
equity awards in connection with mergers, consolidations or other similar
transactions, Awards that are granted as an inducement to be employed by the
Company or an Affiliate or to replace forfeited awards from a former employer,
or Awards that are granted in exchange for foregone cash compensation.

 

(d) The Administrator may adjust or modify Performance Measures or other
performance factors or terms or conditions of Awards due to transactions, events
or developments, or in recognition of any other unusual or infrequent events
affecting the Company or the financial statements of the Company, or in response
to changes in Applicable Law, accounting principles or business conditions, in
each case as determined by the Administrator. By way of example but not
limitation, the Administrator may provide with respect to any Award that any
evaluation of performance shall exclude or otherwise adjust for any specified
circumstance or event that occurs during a performance period, including but not
limited to circumstances or events such as the following: currency fluctuations;
discontinued operations; non-cash items, such as amortization, depreciation or
reserves; asset impairment; significant litigation or claim judgments or
settlements; changes in accounting standards; any recapitalization,
restructuring, reorganization, merger, acquisition, divestiture, consolidation,
spin-off, split-up, combination, liquidation, dissolution, sale of assets or
other similar corporate transaction or event and/or any other specific unusual
or infrequent events or objectively determinable category thereof.

 

(e) Notwithstanding the other provisions of Section 4, the Board may delegate to
one or more officers of the Company or a special committee consisting of one or
more directors who are also officers of the Company the authority, within
specified parameters, to grant Awards to eligible Participants, and to make any
or all of the determinations reserved for the Administrator in the Plan and
summarized in Section 4(b) with respect to such Awards (subject to any
restrictions imposed by Applicable Law and such terms and conditions as may be
established by the Administrator); provided, however, that, if and to the extent
required by Section 16 of the Exchange Act, the Participant, at the time of said
grant or other determination, is not deemed to be an officer or director of the
Company within the meaning of Section 16 of the Exchange Act. To the extent that
the Administrator has delegated authority to grant Awards pursuant to this
Section 4(e) to an officer(s) and/or a special committee, references to the
“Administrator” shall include references to such officer(s) and/or special
committee, subject, however, to the requirements of the Plan, Rule 16b-3, and
other Applicable Law.

  

5. Shares of Stock Subject to the Plan; Award Limitations

 

(a) Shares of Stock Subject to the Plan: Subject to adjustments as provided in
this Section 5, the maximum aggregate number of shares of Common Stock that may
be issued pursuant to Awards granted under the Plan shall not exceed 3,000,000
shares, plus any shares subject to an award granted under any of the Prior
Plans, which Prior Plan award is at any time forfeited, cancelled, terminated,
expires or lapses for any reason without the issuance of shares or pursuant to
which such shares are forfeited or reacquired by the Company. Shares delivered
under the Plan shall be authorized but unissued shares, treasury shares or
shares purchased on the open market or by private purchase. The Company hereby
reserves sufficient authorized shares of Common Stock to meet the grant of
Awards hereunder.

 

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(b) Award Limitations: Notwithstanding any provision in the Plan to the
contrary, the following limitations shall apply to Awards granted under the
Plan, in each case subject to adjustments pursuant to Section 5(d):

 

(i) The maximum aggregate number of shares of Common Stock that may be issued
under the Plan pursuant to the grant of Incentive Options shall not exceed
3,000,000 shares of Common Stock.

 

(ii) With respect to non-employee Directors, in any 12-month period, no such
non-employee Director may be granted Awards for more than 200,000 shares of
Common Stock (or the equivalent value thereof based on the Fair Market Value per
share of Common Stock on the date of grant of such an Award), provided, however,
that any Director cash retainer fees or other fees that are settled in shares of
Common Stock shall not be subject to this limitation. For this purpose an Option
and Related SAR shall be treated as a single award.

 

(c) Additional Share Counting Provisions. The following provisions shall apply
with respect to the share limitations of Section 5(a):

 

(i) For purposes of determining the number of shares of Common Stock to be
counted against the maximum share limit set forth in Section 5(a), each share of
Common Stock subject to an Award shall be counted against the limit as one
share.

 

(ii) To the extent that an Award is canceled, terminates, expires, is forfeited
or lapses for any reason, any such unissued or forfeited shares subject to the
Award will again be available for issuance pursuant to Awards granted under the
Plan.

 

(iii) Awards settled in cash shall not be counted against the share limitations
stated in Section 5(a) herein.

 

(iv) Dividends, including dividends paid in shares, or dividend equivalents paid
in cash in connection with outstanding Awards, will not be counted towards the
share limitations in Section 5(a).

 

(v) To the extent that the full number of shares subject to an Award other than
an Option or SAR is not issued for any reason, including by reason of failure to
achieve performance factors or criteria, only the number of shares issued and
delivered shall be considered for purposes of determining the number of shares
remaining available for issuance pursuant to Awards granted under the Plan.

 

(vi) The following shares of Common Stock may not again be made available for
issuance as Awards under the Plan: (A) shares withheld from an Award or
delivered by a Participant to satisfy tax withholding requirements for Awards;
(B) shares not issued or delivered as a result of the net settlement of an
outstanding Award; (C) shares withheld or delivered to pay the Exercise Price
related to an outstanding Award; and (D) shares repurchased on the open market
with the proceeds of the Exercise Price.

 

9

 

 

(vii) Further, (A) shares issued under the Plan through the settlement,
assumption or substitution of outstanding awards granted by another entity or
obligations to grant future awards as a condition of or in connection with a
merger, acquisition or similar transaction involving the Company acquiring
another entity shall not reduce the maximum number of shares available for
delivery under the Plan, and (B) available shares under a stockholder approved
plan of an acquired company (as appropriately adjusted to reflect the
transaction) may be used for Awards under the Plan and will not reduce the
maximum number of shares available under the Plan, subject, in the case of both
(A) and (B) herein, to applicable stock exchange listing requirements.

 

(d) Adjustments; Right to Issue Additional Securities: If there is any change in
the outstanding shares of Common Stock because of a merger, change in control,
consolidation, recapitalization or reorganization involving the Company, or if
the Board declares a stock dividend, stock split distributable in shares of
Common Stock or reverse stock split, other distribution (other than ordinary or
regular cash dividends) or combination or reclassification of the Common Stock,
or if there is a similar change in the capital stock structure of the Company
affecting the Common Stock (excluding conversion of convertible securities by
the Company and/or the exercise of warrants by their holders), then the number
and type of shares of Common Stock reserved for issuance under the Plan shall be
correspondingly adjusted, and the Administrator shall make such adjustments to
Awards (such as the number and type of shares subject to an Award, the Exercise
Price of an Award and any performance goals) or to any provisions of this Plan
as the Administrator deems equitable to prevent dilution or enlargement of
Awards or as may otherwise be advisable. Nothing in the Plan, an Award or an
Award Agreement shall limit the ability of the Company to issue additional
securities of any type or class.

 

6. Eligibility

 

An Award may be granted only to an individual who satisfies all of the following
eligibility requirements on the date the Award is granted:

 

(a) The individual is either (i) an Employee, (ii) a Director or (iii) a
Consultant.

 

(b) With respect to the grant of Incentive Options, the individual is otherwise
eligible to participate under this Section 6, is an Employee of the Company or a
Parent or Subsidiary and does not own, immediately before the time that the
Incentive Option is granted, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or a Parent or
Subsidiary. Notwithstanding the foregoing, an Employee who owns more than 10% of
the total combined voting power of all classes of stock of the Company or a
Parent or Subsidiary may be granted an Incentive Option if the Exercise Price is
at least 110% of the Fair Market Value of the Common Stock, and the Option
Period does not exceed five years. For this purpose, an individual will be
deemed to own stock which is attributable to him or her under Code Section
424(d).

 

(c) With respect to the grant of substitute awards or assumption of awards in
connection with a merger, consolidation, acquisition, reorganization or similar
transaction involving the Company or an Affiliate, the recipient is otherwise
eligible to receive the Award and the terms of the award are consistent with the
Plan and Applicable Law.

 

(d) The individual, being otherwise eligible under this Section 6, is selected
by the Administrator as an individual to whom an Award shall be granted (as
defined above, a “Participant”).

 

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7. Options

 

(a) Grant of Options: Subject to the terms of the Plan, the Administrator may in
its discretion grant Options to such eligible Participants in such numbers,
subject to such terms and conditions, and at such times as the Administrator
shall determine. Both Incentive Options and Nonqualified Options may be granted
under the Plan, as determined by the Administrator; provided, however, that
Incentive Options may only be granted to Employees of the Company or a Parent or
Subsidiary. To the extent that an Option is designated as an Incentive Option
but does not qualify as such under Code Section 422, the Option (or portion
thereof) shall be treated as a Nonqualified Option. An Option may be granted
with or without a Related SAR.

  

(b) Exercise Price: The Exercise Price per share at which an Option may be
exercised shall be established by the Administrator and stated in the Award
Agreement evidencing the grant of the Option; provided, that (i) the Exercise
Price of an Option shall be no less than 100% of the Fair Market Value per share
of the Common Stock as determined on the date the Option is granted (or 110% of
the Fair Market Value with respect to Incentive Options granted to an Employee
who owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or a Parent or Subsidiary, as provided in
Section 6(b)); and (ii) in no event shall the Exercise Price per share of any
Option be less than the par value per share of the Common Stock. Notwithstanding
the foregoing, the Administrator may in its discretion authorize the grant of
substitute or assumed options of an acquired entity with an Exercise Price not
equal to 100% of the Fair Market Value of the stock on the date of grant, if the
terms of such substitution or assumption otherwise comply, to the extent deemed
applicable, with Code Section 409A and/or Code Section 424(a).

 

(c) Date of Grant: An Option shall be considered to be granted on the date that
the Administrator acts to grant the Option, or on such later date as may be
established by the Administrator in accordance with Applicable Law.

 

(d) Option Period and Limitations on the Right to Exercise Options:

 

(i) The Option Period shall be determined by the Administrator at the time the
Option is granted and shall be stated in the Award Agreement. The Option Period
shall not extend more than 10 years from the date on which the Option is granted
(or five years with respect to Incentive Options granted to an Employee who owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or a Parent or Subsidiary, as provided in Section 6(b)).
Any Option or portion thereof not exercised before expiration of the Option
Period shall terminate. The period or periods during which, and the terms and
conditions pursuant to which, an Option may vest and become exercisable shall be
determined by the Administrator in its discretion, subject to the terms of the
Plan (including but not limited to the provisions of Section 4(c) herein).

 

(ii) An Option may be exercised by giving written notice to the Company in form
acceptable to the Administrator at such place and subject to such conditions as
may be established by the Administrator or its designee. Such notice shall
specify the number of shares to be purchased pursuant to an Option and the
aggregate purchase price to be paid therefor and shall be accompanied by payment
of such purchase price. Unless an Award Agreement provides otherwise, such
payment shall be in the form of cash or cash equivalent; provided that, except
where prohibited by the Administrator or Applicable Law (and subject to such
terms and conditions as may be established by the Administrator), payment may
also be made:

 

11

 

 

(A) By delivery (by either actual delivery or attestation) of shares of Common
Stock owned by the Participant for such time period, if any, as may be
determined by the Administrator;

 

(B) By shares of Common Stock withheld upon exercise;

 

(C) So long as a Public Market exists at the time of exercise of the Option, by
delivery of written notice of exercise to the Company and delivery to a broker
of written notice of exercise and irrevocable instructions to promptly deliver
to the Company the amount of sale or loan proceeds to pay the Exercise Price;

 

(D) By such other payment methods as may be approved by the Administrator and
which are acceptable under Applicable Law; and/or

 

(E) By any combination of the foregoing methods.

 

Shares delivered or withheld in payment on the exercise of an Option shall be
valued at their Fair Market Value on the date of exercise, as determined by the
Administrator or its designee. For the purposes of the Plan, a “Public Market”
for the Common Stock shall be deemed to exist (A) upon consummation of a firm
commitment underwritten public offering of the Common Stock (or successor
securities thereto) pursuant to an effective registration statement under the
Securities Act or (B) if the Administrator otherwise determines that there is an
established public market for the Common Stock.

  

(iii) The Administrator shall determine the extent, if any, to which a
Participant may have the right to exercise an Option following termination of
the Participant’s employment or service with the Company. Such rights, if any,
shall be subject to the sole discretion of the Administrator, shall be stated in
the individual Award Agreement, need not be uniform among all Options issued
pursuant to this Section 7, and may reflect distinctions based on the reasons
for termination of employment or service.

 

(e) Notice of Disposition: If shares of Common Stock acquired upon exercise of
an Incentive Option are disposed of within two years following the date of grant
or one year following the transfer of such shares to a Participant upon
exercise, the Participant shall, promptly following such disposition, notify the
Company in writing of the date and terms of such disposition and provide such
other information regarding the disposition as the Administrator may reasonably
require.

 

(f) Limitation on Incentive Options: In no event shall there first become
exercisable by an Employee in any one calendar year Incentive Options granted by
the Company or any Parent or Subsidiary with respect to shares having an
aggregate Fair Market Value (determined at the time an Incentive Option is
granted) greater than $100,000; provided that, if such limit is exceeded, then
the first $100,000 of shares to become exercisable in such calendar year will be
Incentive Options and the Options (or portion thereof) for shares with a value
in excess of $100,000 that first became exercisable in that calendar year will
be Nonqualified Options.

 

8. Stock Appreciation Rights

 

(a) Grant of SARs: Subject to the terms of the Plan, the Administrator may in
its discretion grant SARs to such eligible Participants, in such numbers, upon
such terms and at such times as the Administrator shall determine. SARs may be
granted to the holder of an Option (a “Related Option”) with respect to all or a
portion of the shares of Common Stock subject to the Related Option (a “Related
SAR”) or may be granted separately to an eligible individual (a “Freestanding
SAR”). The Exercise Price per share of a SAR shall be no less than 100% of the
Fair Market Value per share of the Common Stock on the date the SAR is granted.
Notwithstanding the foregoing, the Administrator may in its discretion authorize
the grant of substitute or assumed SARs of an acquired entity with an Exercise
Price per share not equal to at least 100% of the Fair Market Value of the stock
on the date of grant, if the terms of such substitution or assumption otherwise
comply, to the extent deemed applicable, with Code Section 409A and/or Code
Section 424(a). A SAR shall be considered to be granted on the date that the
Administrator acts to grant the SAR, or on such other date as may be established
by the Administrator in accordance with Applicable Law.

 

12

 

 

(b) Related SARs: A Related SAR may be granted either concurrently with the
grant of the Related Option or (if the Related Option is a Nonqualified Option)
at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such Related Option. The Exercise Price of a Related SAR
shall be equal to the Exercise Price of the Related Option. Related SARs shall
be exercisable only at the time and to the extent that the Related Option is
exercisable (and may be subject to such additional limitations on exercisability
as the Administrator may provide in an Award Agreement), and in no event after
the complete termination or full exercise of the Related Option. Notwithstanding
the foregoing, a Related SAR that is related to an Incentive Option may be
exercised only to the extent that the Related Option is exercisable and only
when the Fair Market Value exceeds the Exercise Price of the Related Option.
Upon the exercise of a Related SAR granted in connection with a Related Option,
the Option shall be canceled to the extent of the number of shares as to which
the SAR is exercised, and upon the exercise of a Related Option, the Related SAR
shall be canceled to the extent of the number of shares as to which the Related
Option is exercised or surrendered.

 

(c) Freestanding SARs: A SAR may be granted without relationship to an Option
(as defined above, a “Freestanding SAR”) and, in such case, will be exercisable
upon such terms and subject to such conditions as may be determined by the
Administrator, subject to the terms of the Plan.

 

(d) Exercise of SARs:

 

(i) Subject to the terms of the Plan (including but not limited to Section 4(c)
herein), SARs shall be vested and exercisable in whole or in part upon such
terms and conditions as may be established by the Administrator. The period
during which a SAR may be exercisable shall not exceed 10 years from the date of
grant or, in the case of Related SARs, such shorter Option Period as may apply
to the Related Option. Any SAR or portion thereof not exercised before
expiration of the period established by the Administrator shall terminate.

  

(ii) SARs may be exercised by giving written notice to the Company in form
acceptable to the Administrator at such place and subject to such terms and
conditions as may be established by the Administrator or its designee. Unless
the Administrator determines otherwise, the date of exercise of a SAR shall mean
the date on which the Company shall have received proper notice from the
Participant of the exercise of such SAR.

 

(iii) The Administrator shall determine the extent, if any, to which a
Participant may have the right to exercise a SAR following termination of the
Participant’s employment or service with the Company. Such rights, if any, shall
be determined in the sole discretion of the Administrator, shall be stated in
the individual Award Agreement, need not be uniform among all SARs issued
pursuant to this Section 8 and may reflect distinctions based on the reasons for
termination of employment or service.

 

(e) Payment Upon Exercise: Subject to the terms of the Plan, upon the exercise
of a SAR, a Participant shall be entitled to receive payment from the Company in
an amount determined by multiplying (i) the excess, if any, of the Fair Market
Value of a share of Common Stock on the date of exercise of the SAR over the
Exercise Price of the SAR, by (ii) the number of shares of Common Stock with
respect to which the SAR is being exercised. The consideration payable upon
exercise of a SAR shall be paid in cash, shares of Common Stock (valued at Fair
Market Value on the date of exercise of the SAR) or a combination of cash and
shares of Common Stock, as determined by the Administrator.

 

13

 

 

9. Restricted Awards

 

(a) Grant of Restricted Awards: Subject to the terms of the Plan, the
Administrator may in its discretion grant Restricted Awards to such
Participants, for such numbers of shares of Common Stock, upon such terms and at
such times as the Administrator shall determine. Such Restricted Awards may be
in the form of Restricted Stock Awards, Restricted Stock Units and/or Deferred
Stock Units that are subject to certain conditions, which conditions must be met
in order for the Restricted Award to vest and be earned (in whole or in part)
and no longer subject to forfeiture. Restricted Stock Awards shall be payable in
shares of Common Stock. Restricted Stock Units and Deferred Stock Units shall be
payable in cash or shares of Common Stock, or partly in cash and partly in
shares of Common Stock, in accordance with the terms of the Plan and the
discretion of the Administrator. Subject to the provisions of Section 4(c)
herein, the Administrator shall determine the nature, length and starting date
of the period, if any, during which a Restricted Award may vest and be earned
(the “Restriction Period”), and shall determine the conditions which must be met
in order for a Restricted Award to be granted, vested, earned and/or
distributable (in whole or in part), which conditions may include, but are not
limited to, payment of a stipulated purchase price, attainment of performance
objectives, continued service or employment for a certain period of time, a
combination of attainment of performance objectives and continued service,
Retirement, Disability, death or other termination of employment or service or a
combination of such or other conditions. In the case of Restricted Awards based
in whole or in part upon performance factors or criteria, the Administrator
shall determine the Performance Measures applicable to such Restricted Awards
(subject to Section 3(ii)).

 

(b) Vesting of Restricted Awards: Subject to the terms of the Plan (and taking
into account any Code Section 409A considerations), the Administrator shall have
sole authority to determine whether and to what degree Restricted Awards have
vested and been earned and are payable and to establish and interpret the terms
and conditions of Restricted Awards.

 

(c) Termination of Employment or Service; Forfeiture: Unless the Administrator
determines otherwise, if the employment or service of a Participant shall be
terminated for any reason (whether by the Company or the Participant and whether
voluntary or involuntary) and all or any part of a Restricted Award has not
vested or been earned pursuant to the terms of the Plan and related Award
Agreement, such Award, to the extent not then vested or earned, shall be
forfeited immediately upon such termination and the Participant shall have no
further rights with respect thereto.

 

(d) Share Certificates; Escrow: Unless the Administrator determines otherwise, a
certificate or certificates representing the shares of Common Stock subject to a
Restricted Stock Award shall be issued in the name of the Participant (or, in
the case of uncertificated shares, other written evidence of ownership in
accordance with Applicable Law shall be provided) after the Award has been
granted. Notwithstanding the foregoing, the Administrator may require that (i) a
Participant deliver the certificate(s) (or other instruments) for such shares to
the Administrator or its designee to be held in escrow until the Restricted
Stock Award vests and is no longer subject to a substantial risk of forfeiture
(in which case the shares will be promptly released to the Participant) or is
forfeited (in which case the shares shall be returned to the Company); and/or
(ii) a Participant deliver to the Company a stock power, endorsed in blank (or
similar instrument), relating to the shares subject to the Restricted Stock
Award which are subject to forfeiture. Unless the Administrator determines
otherwise, a certificate or certificate representing shares of Common Stock
issuable pursuant to a Restricted Stock Unit or a Deferred Stock Unit shall be
issued in the name of the Participant (or, in the case of uncertificated shares,
other written evidence of ownership in accordance with Applicable Law shall be
provided) promptly after the Award (or portion thereof) has vested and been
earned and is distributable.

 

14

 

 

(e) Deferred Stock Units: A Deferred Stock Unit represents the unfunded promise
of the Company to deliver shares of Common Stock, cash or a combination thereof,
as applicable, if and to the extent that the Award has vested and is eligible
for distribution (including, by way of example only, distribution upon
termination of employment or service or upon a specified date or dates, and
taking into account any Code Section 409A considerations), subject to compliance
with the terms of the Plan and Award Agreement and any other terms and
conditions established by the Administrator. A Deferred Stock Unit shall be
settled, if at all, (i) by the delivery of one share of Common Stock for each
Deferred Stock Unit, (ii) in cash in an amount equal to the Fair Market Value of
one share of Common Stock for each Deferred Stock Unit or (iii) in a combination
of cash and shares equal to the Fair Market Value of one share of Common Stock
for each Deferred Stock Unit, as determined by the Administrator.

 

10. Performance Awards

 

(a) Grant of Performance Awards: Subject to the terms of the Plan, the
Administrator may in its discretion grant Performance Awards to such eligible
Participants upon such terms and conditions and at such times as the
Administrator shall determine. Performance Awards may be in the form of
Performance Shares and/or Performance Units. Subject to Section 5(b), the
Administrator shall have discretion to determine the number of Performance Units
and/or Performance Shares granted to any Participant. Subject to the provisions
of Section 4(c) herein, the Administrator shall determine the nature, length and
starting date of the period during which a Performance Award may be earned (the
“Performance Period”), and shall determine the conditions which must be met in
order for a Performance Award to be granted or to vest or be earned (in whole or
in part), which conditions may include but are not limited to payment of a
stipulated purchase price, attainment of performance objectives, continued
service or employment for a certain period of time, a combination of such
conditions or other conditions. Subject to Section 3(ii), the Administrator
shall determine the Performance Measures applicable to such Performance Awards.

 

(b) Earning of Performance Awards: Subject to the terms of the Plan (and taking
into account any Code Section 409A considerations), the Administrator shall have
sole authority to determine whether and to what degree Performance Awards have
been earned and are payable and to interpret the terms and conditions of
Performance Awards.

 

(c) Form of Payment: Payment of the amount to which a Participant shall be
entitled upon earning a Performance Award shall be made in cash, shares of
Common Stock or a combination of cash and shares of Common Stock, as determined
by the Administrator in its sole discretion. Payment may be made in a lump sum
or upon such terms as may be established by the Administrator (taking into
account any Code Section 409A considerations).

 

(d) Termination of Employment or Service; Forfeiture: Unless the Administrator
determines otherwise (taking into account any Code Section 409A considerations),
if the employment or service of a Participant shall terminate for any reason
(whether by the Company or the Participant and whether voluntary or involuntary)
and the Participant has not earned all or part of a Performance Award pursuant
to the terms of the Plan and related Award Agreement, such Award, to the extent
not then earned, shall be forfeited immediately upon such termination and the
Participant shall have no further rights with respect thereto.

 

15

 

 

11. Other Stock-Based Awards

 

The Administrator shall have the authority to grant Other Stock-Based Awards to
eligible Participants. Such Other Stock-Based Awards may be valued in whole or
in part by reference to, or otherwise based on or related to, shares of Common
Stock or Awards for shares of Common Stock, including but not limited to Other
Stock-Based Awards granted in lieu of bonus, salary or other compensation, Other
Stock-Based Awards granted with vesting or performance conditions and/or Other
Stock-Based Awards granted without being subject to vesting or performance
conditions (subject to the terms of Section 4(c) herein). Subject to the
provisions of the Plan, the Administrator shall determine the number of shares
of Common Stock to be awarded to a Participant under (or otherwise related to)
such Other Stock-Based Awards; whether such Other Stock-Based Awards shall be
settled in cash, shares of Common Stock, other securities or any other form of
property as the Administrator may determine, or a combination of such forms of
consideration; and the other terms and conditions of such Awards.

 

12. Dividends and Dividend Equivalent Rights

 

The Administrator may, in its sole discretion, provide that Awards other than
Options and SARs may earn dividends or dividend equivalent rights (or “dividend
equivalents”); provided, however, that dividends and dividend equivalents, if
any, on unearned or unvested Awards (time-vesting or performance-vesting) shall
not be paid (even if accrued) unless and until the underlying Award (or portion
thereof) has vested and/or been earned. Any crediting of dividends or dividend
equivalents may be subject to such additional restrictions and conditions as the
Administrator may establish, including reinvestment in additional shares of
Common Stock or share equivalents. Notwithstanding the other provisions herein,
any dividends or dividend equivalents related to an Award shall be structured in
a manner so as to avoid causing the Award and related dividends or dividend
equivalents to be subject to Code Section 409A or shall otherwise be structured
so that the Award and dividends or dividend equivalents are in compliance with
Code Section 409A.

 

13. Change of Control

 

Notwithstanding any other provision in the Plan to the contrary, the following
provisions shall apply in the event of a Change of Control (except to the
extent, if any, otherwise required under Code Section 409A):

 

(a) To the extent that the successor or surviving company in the Change of
Control event does not assume or substitute for an Award (or in which the
Company is the ultimate parent corporation and does not continue the Award) on
substantially similar terms or with substantially equivalent economic benefits
(as determined by the Administrator prior to the Change of Control) as Awards
outstanding under the Plan immediately prior to the Change of Control event, (i)
all outstanding Options and SARs shall become fully vested and exercisable,
whether or not then otherwise vested and exercisable; and (ii) any restrictions,
including but not limited to the Restriction Period, Performance Period and/or
performance factors or criteria applicable to any outstanding Awards other than
Options or SARs shall be deemed to have been met, and such Awards shall become
fully vested, earned and payable to the fullest extent of the original grant of
the applicable Award (or, in the case of performance-based Awards the earning of
which is based on attaining a target level of performance, such Awards shall be
deemed earned at the greater of actual performance or target performance).

 

(b) Further, in the event that an Award is substituted, assumed or continued as
provided in Section 13(a) herein, the Award will nonetheless become vested (and,
in the case of Options and SARs, exercisable) in full and any restrictions,
including but not limited to the Restriction Period, Performance Period and/or
performance factors or criteria applicable to any outstanding Award shall be
deemed to have been met, and such Awards shall become fully vested, earned and
payable to the fullest extent of the original award (or, in the case of
performance-based Awards the earning of which is based on attaining a target
level of performance, such Awards shall be deemed earned at the greater of
actual performance or target performance), if the employment or service of the
Participant is terminated within two years after the effective date of a Change
of Control if such termination of employment or service (i) is by the Company
not for Cause or (ii) is by the Participant for Good Reason. For clarification,
for the purposes of this Section 13, the “Company” shall include any successor
to the Company.

 

16

 

 

(c) Notwithstanding any other provision of the Plan to the contrary, in the
event that a Participant has entered into an employment agreement, consulting
agreement or other similar agreement, plan or policy as of the Effective Date of
the Plan, the Participant shall be entitled to the greater of the benefits
provided upon a change of control of the Company under the Plan or the
respective employment agreement or other arrangement as in effect on the Plan
Effective Date, and such agreement or arrangement shall not be construed to
reduce in any way the benefits otherwise provided to a Participant upon a Change
of Control as defined in the Plan.

 

14. Nontransferability of Awards

 

Incentive Options shall not be transferable (including by sale, assignment,
pledge or hypothecation) other than transfers by will or the laws of intestate
succession or, in the Administrator’s discretion, such transfers as may
otherwise be permitted in accordance with Treasury Regulation Section
1.421-1(b)(2) or Treasury Regulation Section 1.421-2(c). Awards other than
Incentive Options shall not be transferable (including by sale, assignment,
pledge or hypothecation) other than by will or the laws of intestate succession,
except for transfers if and to the extent permitted by the Administrator in a
manner consistent with the registration provisions of the Securities Act. Except
as may be permitted by the preceding, an Option or SAR shall be exercisable
during the Participant’s lifetime only by him or her or by his or her guardian
or legal representative. The designation of a beneficiary in accordance with the
Plan does not constitute a transfer.

 

15. Withholding

 

The Company shall withhold all required local, state, federal, foreign and other
taxes and any other amount required to be withheld by any governmental authority
or law from any amount payable in cash with respect to an Award. Prior to the
delivery or transfer of any certificate for shares or any other benefit
conferred under the Plan, the Company shall require any Participant or other
person to pay to the Company in cash the amount of any tax or other amount
required by any governmental authority to be withheld and paid over by the
Company to such authority for the account of such recipient. Notwithstanding the
foregoing, the Administrator may in its discretion establish procedures to
require or permit a recipient to satisfy such obligations in whole or in part,
and any local, state, federal, foreign or other income tax obligations relating
to such an Award, by delivery to the Company of shares of Common Stock held by
the Participant (which are fully vested and not subject to any pledge or other
security interest) and/or by the Company withholding shares of Common Stock from
the shares to which the recipient is otherwise entitled. The number of shares to
be withheld or delivered shall have a Fair Market Value as of the date that the
amount of tax to be withheld is determined as nearly equal as possible to, but
not exceeding (unless otherwise permitted by the Administrator in a manner in
accordance with Applicable Law and applicable accounting principles), the amount
of such obligations being satisfied. Such withholding obligations shall be
subject to such terms and procedures as may be established by the Administrator.
The Participant shall remain responsible at all times for paying any federal,
state, foreign and/or local income or employment tax due with respect to any
Award, and the Company shall not be liable for any interest or penalty that a
Participant incurs by failing to make timely payments of tax or otherwise.

 

17

 

 

16. Amendment and Termination of the Plan and Awards

 

(a) Amendment and Termination of Plan; Prohibition on Repricing: The Plan may be
amended, altered, suspended and/or terminated at any time by the Board;
provided, that (i) approval of an amendment to the Plan by the stockholders of
the Company shall be required to the extent, if any, that stockholder approval
of such amendment is required by Applicable Law; and (ii) except for adjustments
made pursuant to Section 5(d), the Company may not, without obtaining
stockholder approval, (A) amend the terms of outstanding Options or SARs to
reduce the Exercise Price of such outstanding Options or SARs; (B) exchange
outstanding Options or SARs for cash, for Options or SARs with an Exercise Price
that is less than the Exercise Price of the original Option or SAR, or for other
equity awards at a time when the original Option or SAR has an Exercise Price
above the Fair Market Value of the Common Stock; or (C) take other action with
respect to Options or SARs that would be treated as a repricing under the rules
of the principal stock exchange on which shares of the Common Stock are listed.

  

(b) Amendment and Termination of Awards: The Administrator may (subject to
Section 16(a)(ii) herein) amend, alter, suspend and/or terminate any Award
granted under the Plan, prospectively or retroactively, but (except as otherwise
provided in Section 16(c)) such amendment, alteration, suspension or termination
of an Award shall not, without the written consent of a Participant with respect
to an outstanding Award, materially adversely affect the rights of the
Participant with respect to the Award.

 

(c) Amendments to Comply with Applicable Law: Notwithstanding Section 16(a) and
Section 16(b) herein, the following provisions shall apply:

 

(i) The Administrator shall have unilateral authority to amend the Plan and any
Award (without Participant consent) to the extent necessary to comply with
Applicable Law or changes to Applicable Law (including but in no way limited to
Code Section 409A, Code Section 422 and federal securities laws).

 

(ii) The Administrator shall have unilateral authority to make adjustments to
the terms and conditions of Awards in recognition of unusual or nonrecurring
events affecting the Company or any Affiliate, or the financial statements of
the Company or any Affiliate, or of changes in Applicable Law, or accounting
principles, if the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or necessary or
appropriate to comply with applicable accounting principles or Applicable Law.

 

17. Restrictions on Awards and Shares; Compliance with Applicable Law

 

(a) General. As a condition to the issuance and delivery of Common Stock
hereunder, or the grant of any benefit pursuant to the Plan, the Company may
require a Participant or other person at any time and from time to time to
become a party to an Award Agreement, other agreement(s) restricting the
transfer, purchase, repurchase and/or voting of shares of Common Stock of the
Company, and any employment, consulting, non-competition, confidentiality,
non-solicitation, non-disparagement or other agreements or provisions imposing
such restrictions as may be required by the Company. In addition, without in any
way limiting the effect of the foregoing, each Participant or other holder of
shares issued under the Plan shall be permitted to transfer such shares only if
such transfer is in accordance with the Plan, the Award Agreement, any other
applicable agreements and Applicable Law. The acquisition of shares of Common
Stock under the Plan by a Participant or any other holder of shares shall be
subject to, and conditioned upon, the agreement of the Participant or other
holder of such shares to the restrictions described in the Plan, the applicable
Award Agreement, any other applicable agreements and Applicable Law.

 

(b) Compliance with Applicable Laws, Rules and Regulations. The Company may
impose such restrictions on Awards, shares of Common Stock and any other
benefits underlying Awards hereunder as it may deem advisable, including without
limitation restrictions under the federal securities laws, the requirements of
any stock exchange or similar organization and any blue sky, state or foreign
securities or other laws applicable to such securities. Notwithstanding any
other Plan provision to the contrary, the Company shall not be obligated to
issue, deliver or transfer shares of Common Stock under the Plan, make any other
distribution of benefits under the Plan, or take any other action, unless such
delivery, distribution or action is in compliance with Applicable Law (including
but not limited to the requirements of the Securities Act). The Company will be
under no obligation to register shares of Common Stock or other securities with
the Securities and Exchange Commission or to effect compliance with the
exemption, registration, qualification or listing requirements of any state
securities laws, stock exchange or similar organization, and the Company will
have no liability for any inability or failure to do so. The Company may cause a
restrictive legend or legends to be placed on any certificate issued pursuant to
an Award hereunder in such form as may be prescribed from time to time by
Applicable Law or as may be advised by legal counsel.

 

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18. No Right or Obligation of Continued Employment or Service or to Awards;
Compliance with the Plan

 

Neither the Plan, an Award, an Award Agreement nor any other action related to
the Plan shall confer upon a Participant any right to continue in the employ or
service of the Company or an Affiliate as an Employee, Director or Consultant,
or interfere in any way with the right of the Company or an Affiliate to
terminate the Participant’s employment or service at any time. Except as
otherwise provided in the Plan, an Award Agreement or as may be determined by
the Administrator, all rights of a Participant with respect to an Award shall
terminate upon the termination of the Participant’s employment or service. In
addition, no person shall have any right to be granted an Award, and the Company
shall have no obligation to treat Participants or Awards uniformly. By
participating in the Plan, each Participant shall be deemed to have accepted all
of the conditions of the Plan and the terms and conditions of any rules and
regulations adopted by the Administrator and shall be fully bound thereby. Any
Award granted hereunder is not intended to be compensation of a continuing or
recurring nature, or part of a Participant’s normal or expected compensation,
and in no way represents any portion of a Participant’s salary, compensation or
other remuneration for purposes of pension benefits, severance, redundancy,
resignation or any other purpose.

 

19. General Provisions

 

(a) Stockholder Rights: Except as otherwise determined by the Administrator or
provided in the Plan, a Participant and his or her legal representative,
legatees or distributees shall not be deemed to be the holder of any shares of
Common Stock subject to an Award and shall not have any rights of a stockholder
unless and until certificates for such shares have been issued and delivered to
him or her or them under the Plan. A certificate or certificates for shares of
Common Stock acquired upon exercise of an Option or SAR shall be issued in the
name of the Participant or his or her beneficiary and distributed to the
Participant or his or her beneficiary (or, in the case of uncertificated shares,
other written notice of ownership in accordance with Applicable Law shall be
provided) as soon as practicable following receipt of notice of exercise and,
with respect to Options, payment of the Exercise Price (except as may otherwise
be determined by the Company in the event of payment of the Exercise Price
pursuant to Section 7(d)(ii)(C)). Except as otherwise provided in Section 9(d)
regarding Restricted Stock Awards or otherwise determined by the Administrator,
a certificate for any shares of Common Stock issuable pursuant to a Restricted
Award, Performance Award, or Other Stock-Based Award shall be issued in the name
of the Participant or his or her beneficiary and distributed to the Participant
or his or her beneficiary (or, in the case of uncertificated shares, other
written notice of ownership in accordance with Applicable Law shall be provided)
after the Award (or portion thereof) has vested and been earned and is
distributable.

 

(b) Section 16(b) Compliance: To the extent that any Participants in the Plan
are subject to Section 16(b) of the Exchange Act, it is the general intention of
the Company that transactions under the Plan shall comply with Rule 16b-3 under
the Exchange Act and that the Plan shall be construed in favor of such Plan
transactions meeting the requirements of Rule 16b-3. Notwithstanding anything in
the Plan to the contrary, the Administrator, in its sole and absolute
discretion, may bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to Participants who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other Participants.

 

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(c) Unfunded Plan; No Effect on Other Plans:

 

(i) The Plan shall be unfunded, and the Company shall not be required to create
a trust or segregate any assets that may at any time be represented by Awards
under the Plan. The Plan shall not establish any fiduciary relationship between
the Company and any Participant or other person. Neither a Participant nor any
other person shall, by reason of the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Affiliate, including, without
limitation, any specific funds, assets or other property which the Company or
any Affiliate, in their discretion, may set aside in anticipation of a liability
under the Plan. A Participant shall have only a contractual right to shares of
Common Stock or other amounts, if any, payable under the Plan, unsecured by any
assets of the Company or any Affiliate. Nothing contained in the Plan shall
constitute a guarantee that the assets of such entities shall be sufficient to
pay any benefits to any person.

 

(ii) The amount of any compensation deemed to be received by a Participant
pursuant to an Award shall not constitute compensation with respect to which any
other employee benefits of such Participant are determined, including, without
limitation, benefits under any bonus, pension, profit sharing, life insurance or
salary continuation plan, except as otherwise specifically provided by the terms
of such plan or as may be determined by the Administrator.

  

(iii) Except as otherwise provided in the Plan, the adoption of the Plan shall
not affect any other stock incentive or other compensation plans in effect for
the Company or any Affiliate, nor shall the Plan preclude the Company from
establishing any other forms of stock incentive or other compensation for
employees or service providers of the Company or any Affiliate.

 

(d) Governing Law: The Plan and Awards shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws provisions of any state, and in accordance with applicable
federal laws of the United States.

 

(e) Beneficiary Designation: The Administrator may, in its discretion, permit a
Participant to designate in writing a person or persons as beneficiary, which
beneficiary shall be entitled to receive settlement of Awards (if any) to which
the Participant is otherwise entitled in the event of death. In the absence of
such designation by a Participant, and in the event of the Participant’s death,
the estate of the Participant shall be treated as beneficiary for purposes of
the Plan, unless the Administrator determines otherwise. The Administrator shall
have discretion to approve and interpret the form or forms of such beneficiary
designation. A beneficiary, legal guardian, legal representative or other person
claiming any rights pursuant to the Plan is subject to all terms and conditions
of the Plan and any Award Agreement applicable to the Participant, except to the
extent that the Plan and/or Award Agreement provide otherwise, and to any
additional restrictions deemed necessary or appropriate by the Administrator.

 

(f) Gender and Number: Except where otherwise indicated by the context, words in
any gender shall include any other gender, words in the singular shall include
the plural and words in the plural shall include the singular.

 

(g) Severability: If any provision of the Plan or an Award Agreement shall be
held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan or the Award Agreement (which shall be
construed or deemed amended to conform to Applicable Law), and the Plan or Award
Agreement shall be construed and enforced as if the illegal or invalid provision
had not been included.

 

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(h) Rules of Construction: Headings are given to the sections of the Plan solely
as a convenience to facilitate reference. The reference to any statute,
regulation or other provision of law shall (unless the Administrator determines
otherwise) be construed to refer to any amendment to or successor of such
provision of law.

 

(i) Successors and Assigns: The Plan shall be binding upon the Company, its
successors and assigns, and Participants, their executors, administrators and
permitted transferees and beneficiaries.

 

(j) Award Agreement: The grant of any Award under the Plan shall be evidenced by
an Award Agreement between the Company and the Participant. Such Award Agreement
may state terms, conditions and restrictions applicable to the Award and may
state such other terms, conditions and restrictions, including but not limited
to terms, conditions and restrictions applicable to shares of Common Stock or
other benefits subject to an Award, as may be established by the Administrator.

 

(k) Right of Offset: Notwithstanding any other provision of the Plan or an Award
Agreement, the Company may at any time (subject to any Code Section 409A
considerations) reduce the amount of any payment or benefit otherwise payable to
or on behalf of a Participant by the amount of any obligation of the Participant
to or on behalf of the Company or an Affiliate that is or becomes due and
payable.

 

(l) Uncertificated Shares: Notwithstanding anything in the Plan to the contrary,
to the extent the Plan provides for the issuance of stock certificates to
reflect the issuance of shares of Common Stock, the issuance may, in the
Company’s discretion, be effected on a non-certificated basis, to the extent not
prohibited by the Company’s certificate of incorporation or bylaws or by
Applicable Law.

 

(m) Income and Other Taxes: Participants are solely responsible and liable for
the satisfaction of all taxes and penalties that may arise in connection with
Awards (including but not limited to any taxes arising under Code Section 409A),
and the Company shall not have any obligation to indemnify or otherwise hold any
Participant harmless from any or all of such taxes. The Company shall have no
responsibility to take or refrain from taking any actions in order to achieve a
certain tax result for a Participant or any other person.

  

(n) Effect of Certain Changes in Status: Notwithstanding the other terms of the
Plan or an Award Agreement, the Administrator has sole discretion to determine
(taking into account any Code Section 409A considerations), at the time of grant
of an Award or at any time thereafter, the effect, if any, on Awards (including
but not limited to modifying the vesting, exercisability and/or earning of
Awards) granted to a Participant if the Participant’s status as an Employee,
Director or Consultant changes, including but not limited to a change from
full-time to part-time, or vice versa, or if other similar changes in the nature
or scope of the Participant’s employment or service occur.

 

(o) Stockholder Approval: The Plan is subject to approval by the stockholders of
the Company, which approval must occur, if at all, within 12 months of the
Effective Date. Awards granted prior to such stockholder approval shall be
conditioned upon and shall be effective only upon approval of the Plan by such
stockholders on or before such date.

 

(p) Deferrals: Subject to the provisions of this Section 19(p) and Section 20,
the Administrator may permit or require a Participant to defer such
Participant’s receipt of the payment of cash or the delivery of shares of Common
Stock that would otherwise be payable with respect to an Award. Any such
deferral shall be subject to such terms and conditions as may be established by
the Administrator and to any applicable Code Section 409A requirements.

 

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(q) Fractional Shares: Except as otherwise provided in an Award Agreement or
determined by the Administrator, (i) the total number of shares issuable
pursuant to the exercise, vesting or earning of an Award shall be rounded down
to the nearest whole share, and (ii) no fractional shares shall be issued. The
Administrator may, in its discretion, determine that a fractional share shall be
settled in cash.

 

(r) Compliance with Recoupment, Ownership and Other Policies or Agreements:
Notwithstanding anything in the Plan or an Award Agreement to the contrary, the
Administrator may, at any time (during or following termination of employment or
service for any reason), determine that a Participant’s rights, payments and/or
benefits with respect to an Award (including but not limited to any shares
issued or issuable and/or cash paid or payable with respect to an Award) shall
be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any other conditions
applicable to an Award. Such events may include, but shall not be limited to,
termination of employment for Cause, violation of policies of the Company or an
Affiliate, breach of non-solicitation, non-competition, confidentiality,
non-disparagement or other covenants, other conduct by the Participant that is
determined by the Administrator to be detrimental to the business or reputation
of the Company or any Affiliate, and/or other circumstances where such
reduction, cancellation, forfeiture or recoupment is required by Applicable Law.
In addition, without limiting the effect of the foregoing, as a condition to the
grant of an Award or receipt or retention of shares of Common Stock, cash or any
other benefit under the Plan, (i) the Administrator may, at any time, require
that a Participant comply with any compensation recovery (or “clawback”), stock
ownership, stock retention or other policies or guidelines adopted by the
Company or an Affiliate, each as in effect from time to time and to the extent
applicable to the Participant, and (ii) each Participant shall be subject to
such compensation recovery, recoupment, forfeiture or other similar provisions
as may apply under Applicable Law.

 

(s) Attestation: Wherever in the Plan or any Award Agreement a Participant is
permitted to pay the Exercise Price of an Award or taxes relating to the
exercise, vesting or earning of an Award by delivering shares of Common Stock,
the Participant may, unless the Administrator determines otherwise and subject
to procedures satisfactory to the Administrator, satisfy such delivery
requirement by presenting proof of beneficial ownership of such shares, in which
case the Company shall treat the Award as exercised, vested or earned without
further payment and/or shall withhold such number of shares from the shares
acquired by the exercise, vesting or earning of the Award, as appropriate.

 

(t) Plan Controls: Unless the Administrator determines otherwise, (i) in the
event of a conflict between any term or provision contained in the Plan and an
express term contained in any Award Agreement, the applicable terms and
provisions of the Plan will govern and prevail, and (ii) the terms of an Award
Agreement shall not be deemed to be in conflict or inconsistent with the Plan
merely because they impose greater or additional restrictions, obligations or
duties, or if the Award Agreement provides that such Award Agreement terms apply
notwithstanding the provisions to the contrary in the Plan.

 

(u) Indemnification: No member of the Board or Committee or its or their
designees or agents, as applicable, shall be liable while acting as
Administrator for any action or determination made in good faith with respect to
the Plan, an Award or an Award Agreement. Members of the Board and the Committee
and officers and employees of the Company or an Affiliate to whom authority to
act for the Board or the Committee is delegated shall be entitled to such
indemnification and other rights as may be provided under the Company’s
certificate of incorporation, bylaws and/or other instrument and/or pursuant to
Applicable Law.

 

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20. Compliance with Code Section 409A

 

Notwithstanding any other provision in the Plan or an Award Agreement to the
contrary, if and to the extent that Code Section 409A is deemed to apply to the
Plan or any Award, it is the general intention of the Company that the Plan and
all such Awards shall, to the extent practicable, comply with, or be exempt
from, Code Section 409A, and the Plan and any such Award Agreement shall, to the
extent practicable, be construed in accordance therewith. Deferrals of shares or
any other benefit issuable pursuant to an Award otherwise exempt from Code
Section 409A in a manner that would cause Code Section 409A to apply shall not
be permitted unless such deferrals are in compliance with, or exempt from, Code
Section 409A. In the event that the Company (or a successor thereto) has any
stock which is publicly traded on an established securities market or otherwise,
distributions that are subject to Code Section 409A to any Participant who is a
“specified employee” (as defined under Code Section 409A) upon a “separation
from service” (as defined in Code Section 409A) may only be made following the
expiration of the six-month period after the date of separation from service
(with such distributions to be made during the seventh month following
separation from service), or, if earlier than the end of the six-month period,
the date of death of the specified employee, or as otherwise permitted under
Code Section 409A. For purposes of Code Section 409A, each installment payment
provided under the Plan or an Award Agreement shall be treated as a separate
payment. Without in any way limiting the effect of any of the foregoing, (i) in
the event that Code Section 409A requires that any special terms, provisions or
conditions be included in the Plan or any Award Agreement, then such terms,
provisions and conditions shall, to the extent practicable, be deemed to be made
a part of the Plan or Award Agreement, as applicable, and (ii) terms used in the
Plan or an Award Agreement shall be construed in accordance with Code Section
409A if and to the extent required. Further, in the event that the Plan or any
Award shall be deemed not to comply with Code Section 409A, then neither the
Company, the Administrator nor its or their designees or agents shall be liable
to any Participant or other person for actions, decisions or determinations made
in good faith.

 

ADOPTED BY THE BOARD OF DIRECTORS ON AUGUST 24, 2018

 

ADOPTED BY THE STOCKHOLDERS OF THE COMPANY ON NOVEMBER 1, 2018

 

 

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