Exhibit 10.90
As Amended as of April 25, 2011
MIMEDX GROUP, INC.
ASSUMED 2006 STOCK INCENTIVE PLAN
1. Definitions
In addition to other terms defined herein, 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 Corporation, and also
includes any other business entity which is controlled by, under common control
with or controls the Corporation; provided, however, that the term “Affiliate”
shall be construed in a manner in accordance with the registration provisions of
applicable federal securities laws and any requirements imposed under Code
Section 409A, related regulations or other guidance.
(c) Applicable Laws means any applicable laws, rules or regulations (or similar
guidance), including but not limited to the Securities Act, the Exchange Act and
the Code.
(d) Award means, individually or collectively, a grant under the Plan of an
Option (including an Incentive Option or Nonqualified Option); a Stock
Appreciation Right (including a Related SAR or a Freestanding SAR); a Restricted
Award (including a Restricted Stock Award or a Restricted Unit Award); a
Dividend Equivalent Award; or any other award granted under the Plan.
(e) Award Agreement means an agreement (which may be in written or electronic
form, in the Administrator’s discretion, and which includes any amendment or
supplement thereto) between the Corporation and a Participant specifying the
terms, conditions and restrictions of an Award granted to the Participant. An
Award Agreement may also state such other terms, conditions and restrictions,
including but not limited to terms, conditions and restrictions applicable to
shares or any other benefit underlying an Award, as may be established by the
Administrator.
(f) Board or Board of Directors means the Board of Directors of the Corporation.

 

 

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(g) Cause means, unless the Administrator determines otherwise, a Participant’s
termination of employment or service resulting from the Participant’s
(i) termination for “cause” as defined under the Participant’s employment,
consulting or other agreement with the Corporation or an Affiliate, if any, or
(ii) if the Participant has not entered into any such employment, consulting or
other agreement (or if any such agreement does not address the effect of a
“cause” termination), then the Participant’s termination shall be for “Cause” if
termination results due to the Participant’s (A) dishonesty; (B) refusal or
continued failure to perform his duties for the Corporation, as determined by
the Administrator or its designee; (C) engaging in fraudulent conduct; or
(D) engaging in any conduct that could be materially damaging to the Corporation
without a reasonable good faith belief that such conduct was in the best
interest of the Corporation. 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 the purposes of the Plan and
any Award, a Participant’s employment or service shall 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) Change in Control:
(i) General: Except as may be otherwise provided in an individual Award
Agreement or as may be otherwise required in order to comply with Code
Section 409A, a Change in Control shall be deemed to have occurred on the
earliest to occur of a change in the ownership of the Corporation, a change in
the effective control of the Corporation, a change in ownership of a substantial
portion of the Corporation’s assets and a disposition of a substantial portion
of the Corporation’s assets, all as defined below:
(a) A change in the ownership of the Corporation occurs on the date that any one
person, or more than one person acting as a group, acquires ownership of stock
of the Corporation which, together with stock held by such person or group,
represents more than fifty percent (50%) of the total fair market value or total
voting power of the stock of the Corporation. An increase in the percentage of
stock owned by any one person, or persons acting as a group, as a result of a
transaction in which the Corporation acquires its stock in exchange for property
will be treated as an acquisition of stock.
(b) A change in the effective control of the Corporation occurs on the date that
either: any one person, or more than one person acting as a group becomes the
beneficial owner of stock of the Corporation possessing more than fifty percent
(50%) of the total voting power of the stock of the Corporation; or a majority
of members of the Corporation’s board of directors is replaced during any
24-month period by directors whose appointment or election is not endorsed by at
least two-thirds (2/3) of the members of the Corporation’s board of directors
who were directors prior to the date of the appointment or election of the first
of such new directors.

 

 

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(c) A change in the ownership of a substantial portion of the Corporation’s
assets occurs on the date that any one person, or more than one person acting as
a group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Corporation that have a total fair market value equal to seventy-five percent
(75%) or more of the total fair market value of all of the assets of the
Corporation immediately prior to such acquisition or acquisitions. The transfer
of assets by the Corporation is not treated as a change in the ownership of such
assets if the assets are transferred to an entity more than fifty percent (50%)
of the total value or voting power of which is owned, directly or indirectly, by
the Corporation.
(d) A disposition of a substantial portion of the Corporation’s assets occurs on
the date that the Corporation transfers assets by sale, lease, exchange,
distribution to shareholders, assignment to creditors, foreclosure or otherwise,
in a transaction or transactions not in the ordinary course of the Corporation’s
business (or has made such transfers during the 12-month period ending on the
date of the most recent transfer of assets) that have a total fair market value
equal to seventy-five percent (75%) or more of the total fair market value of
all of the assets of the Corporation as of the date immediately prior to the
first such transfer or transfers. The transfer of assets by the Corporation is
not treated as a disposition of a substantial portion of the Corporation’s
assets if the assets are transferred to an entity, more than fifty percent (50%)
of the total value or voting power of which is owned, directly or indirectly, by
the Corporation.
(e) The Administrator shall have full and final authority, in its discretion, to
determine whether a Change in Control of the Corporation has occurred pursuant
to the above definition, the date of the occurrence of such Change in Control
and any incidental matters relating thereto.
For purposes of the above-definition of a “Change in Control,” the terms
“person,” “acting as a group” and “ownership” shall have the meanings prescribed
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended, and Rule 13d-3 promulgated thereunder; provided, however, that in any
merger, consolidation or share exchange in which less than fifty percent (50%)
of the outstanding voting securities of the Corporation or its successor
corporation are held by the former shareholders of the Corporation, the
shareholders of the other parties to the transaction shall be deemed to have
acted as a group that acquired ownership of more than fifty percent (50%) of the
outstanding voting securities of the Corporation, resulting in a change in
ownership under (a) above.
(ii) Definition Applicable to Awards subject to Code Section 409A:
Notwithstanding the preceding provisions of Section 1(h)(i), in the event that
any Awards granted under the Plan are deemed to be deferred compensation subject
to the provisions of Code Section 409A, then distributions related to such
Awards 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, related regulations or other guidance): (A) a change in
the ownership of the Corporation, (B) a change in effective control of the
Corporation, or (C) a change in the ownership of a substantial portion of the
assets of the Corporation.

 

 

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(i) Code means the Internal Revenue Code of 1986, as amended.
(j) Committee means the Compensation Committee of the Board, which may be
appointed to administer the Plan.
(k) Common Stock means the common stock of MiMedx Group, Inc., $0.001 par value
per share.
(l) Corporation means MiMedx Group, Inc., a Florida corporation, together with
any successor thereto.
(m) Covered Employee shall have the meaning given the term in Section 162(m) of
the Code and related regulations.
(n) Director means a member of the Board or of the board of directors of an
Affiliate.
(o) Disability shall, except as may be otherwise determined by the Administrator
or required under Code Section 409A or related regulations or other guidance,
have the meaning given in any employment agreement, consulting agreement or
other similar agreement, if any, to which a Participant is a party, or, if there
is no such agreement (or if any such agreement does not address the effect of
termination due to disability), “Disability” shall mean the inability 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 discretion to determine if a termination
due to Disability has occurred.
(p) Displacement shall, as applied to any Participant, be as defined in any
employment 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
any such agreement does not address the effect of a termination due to
displacement), “Displacement” shall mean the termination of the Participant’s
employment or service due to the elimination of the Participant’s job or
position without fault on the part of the Participant (as determined by the
Administrator).
(q) Dividend Equivalent Award means a right granted to a Participant pursuant to
Section 10 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 4.
(s) Employee means any person who is an employee of the Corporation or any
Affiliate (including entities which become Affiliates after the Effective Date
of the Plan). For this purpose, an individual shall be considered to be an
Employee only if there exists between the individual and the Corporation or an
Affiliate the legal and bona fide relationship of employer and Employee;
provided, however, that, with respect to Incentive Options, “Employee” means any
person who is considered an employee of the Corporation or any Parent or
Subsidiary for purposes of Treas. Reg. Section 1.421-1(h) (or any successor
provision related thereto).

 

 

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(t) Exchange Act means the Securities Exchange Act of 1934, as amended.
(u) Fair Market Value per share of the Common Stock shall be established in good
faith by the Administrator and, unless otherwise determined by the
Administrator, the Fair Market Value shall be determined in accordance with the
following provisions: (A) if the shares of Common Stock are listed for trading
on the New York Stock Exchange or the American Stock Exchange, the Fair Market
Value shall be the closing sales price per share of the shares on the New York
Stock Exchange or the American Stock Exchange (as applicable) on the date
immediately preceding the date an Option 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 quoted on the Nasdaq
National Market or the Nasdaq SmallCap Market of the Nasdaq Stock Market but are
not listed for trading on the New York Stock Exchange or the American Stock
Exchange, the Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on such system on the
date immediately or nearest preceding the valuation date for which such
information is available, and, provided further, if the shares are not listed
for trading on the New York Stock Exchange or the American Stock Exchange or
quoted on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value shall be the average between the highest bid and lowest asked
prices for such stock on the date immediately or nearest preceding the valuation
date as reported on the Nasdaq OTC Bulletin Board Service or by the National
Quotation Bureau, Incorporated or a comparable service; or (B) 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 the Code Section 422 and accompanying regulations;
and (ii) Fair Market Value shall be determined in accordance with Section 409A,
related regulations or other guidance to the extent required by such provisions.
(v) Freestanding SAR means an SAR that is granted without relation to an Option,
as provided in Section 8.
(w) 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 and related regulations.
(x) Independent Contractor means an independent contractor, consultant or
advisor providing services to the Corporation or an Affiliate.

 

 

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(y) Nonqualified Option means an Option granted under Section 7 that is not
intended to qualify as an incentive stock option under Code Section 422 and
related regulations.
(z) Option means a stock option granted under Section 7 that entitles the holder
to purchase from the Corporation a stated number of shares of Common Stock at
the price set forth in an Award Agreement.
(aa) Option Period means the term of an Option, as provided in Section 7(d)(i).
(bb) Option Price means the price at which an Option may be exercised, as
provided in Section 7(b).
(cc) Parent means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(dd) Participant means an individual employed by, or providing services to, the
Corporation or an Affiliate who satisfies the requirements of Section 6 and is
selected by the Administrator to receive an Award under the Plan.
(ee) Performance Measures mean one or more performance factors which may be
established by the Administrator with respect to an Award. Performance factors
may be based on such corporate, business unit or division and/or individual
performance factors and criteria as the Administrator in its discretion may deem
appropriate; provided, however, that, if and to the extent that Section 162(m)
of the Code is applicable, then such performance factors shall be limited to one
or more of the following (as determined by the Administrator in its discretion):
(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) book value
per share; (x) return on investment; (xi) return on capital; (xii) improvements
in capital structure; (xiii) expense management; (xiv) profitability of an
identifiable business unit or product; (xv) maintenance or improvement of profit
margins; (xvi) stock price or total shareholder return; (xvii) market share;
(xviii) revenues or sales; (xix) costs; (xx) working capital; (xxi) economic
wealth created; (xxii) strategic business criteria; (xxiii) efficiency ratio(s);
(xxiv) achievement of division, group, function or corporate financial,
strategic or operational goals; and (xxv) comparisons with stock market indices
or performances of metrics of peer companies. If and to the extent that Section
162(m) of the Code is applicable, the Administrator shall, within the time and
in the manner prescribed by Section 162(m) of the Code and related regulations,
define in an objective fashion the manner of calculating the Performance
Measures it selects to use for Participants during any specific performance
period and determine whether such Performance Measures have been met. Such
performance factors may be adjusted or modified due to extraordinary items,
transactions, events or developments, or in recognition of, or in anticipation
of, any other unusual or nonrecurring events affecting the Corporation or the
financial statements of the Corporation, or in response to, or in anticipation
of, changes in Applicable Laws, accounting principles or business conditions, in
each case as determined by the Administrator.

 

 

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(ff) Plan means the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan, as it
may be hereafter amended and/or restated.
(gg) Related SAR means an SAR granted under Section 8 that is granted in
relation to a particular Option and that can be exercised only upon the
surrender to the Corporation, unexercised, of that portion of the Option to
which the SAR relates.
(hh) Restricted Award means a Restricted Stock Award and/or a Restricted Stock
Unit Award, as provided in Section 9.
(ii) Restricted Stock Award means shares of Common Stock awarded 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.
(jj) Restricted Stock Unit means a Restricted Award granted to a Participant
pursuant to Section 9 which is settled (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 Award represents the promise of
the Corporation to deliver shares, cash or a combination thereof, as applicable,
upon vesting of the Award and compliance with such other terms and conditions as
may be determined by the Administrator.
(kk) Retirement shall, as applied to any Participant, be as defined in any
employment 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
any such agreement does address the effect of termination due to retirement),
“Retirement” shall mean retirement in accordance with the retirement policies
and procedures established by the Corporation, as determined by the
Administrator.
(ll) SAR 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 of the Fair Market Value on the date of
exercise over the SAR base price, subject to the terms of the Plan 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.
(mm) Securities Act means the Securities Act of 1933, as amended.

 

 

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(nn) Shareholders’ Agreement means that certain Shareholders’ Agreement which
may be entered into between the Corporation and certain or all shareholders of
the Corporation, as it may be amended.
(oo) Subsidiary means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.
(pp) Termination Date means the date of termination of a Participant’s
employment or service with the Company as a non-employee Director or Independent
Contractor, for any reason, as determined by the Administrator in its
discretion.
2. Purpose
The purpose of the Plan is to encourage and enable selected Employees, Directors
and Independent Contractors of the Corporation and its Affiliates to acquire or
to increase their holdings of Common Stock of the Corporation and other
proprietary interests in the Corporation in order to promote a closer
identification of their interests with those of the Corporation and its
shareholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and shareholder value of the
Corporation. This purpose may be carried out through the grant of Awards to
selected Employees, Directors and Independent Contractors, which may include the
grant to selected Participants of Options in the form of Incentive Stock Options
and Nonqualified Options; SARs in the form of Related SARs and Freestanding
SARs; Restricted Awards in the form of Restricted Stock Awards and Restricted
Stock Units; and/or Dividend Equivalent Awards.
3. Administration of the Plan
(a) The Plan shall be administered by the Board of Directors of the Corporation,
or, upon its delegation, by the Committee. In the event that the Corporation
shall become subject to the reporting requirements of 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 under the Exchange Act, or as may otherwise
be permitted under Rule 16b-3, unless the Board determines otherwise. Further,
in the event that the provisions of Section 162(m) of the Code or related
regulations become applicable to the Corporation, the Plan shall be administered
by a committee comprised of two or more “outside directors” (as such term is
defined in Section 162(m) or related regulations) or as may otherwise be
permitted under Section 162(m) and related regulations. For the purposes of the
Plan, the term “Administrator” shall refer to the Board and, upon its delegation
to the Committee of all or part of its authority to administer the Plan, to the
Committee. Notwithstanding the foregoing, the Board shall have sole authority to
grant Awards to Directors who are not Employees of the Corporation or its
Affiliates.

 

 

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(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 (i) to determine all matters
relating to Awards, including selection of individuals to be granted Awards, the
types of Awards, the number of shares of the Common Stock, if any, subject to an
Award, and all terms, conditions, restrictions and limitations of an Award;
(ii) to prescribe the form or forms of Award Agreements evidencing any Awards
granted under the Plan; (iii) to establish, amend and rescind rules and
regulations for the administration of the Plan; and (iv) to construe and
interpret the Plan, Awards and Award Agreements made under the Plan, to
interpret rules and regulations for administering the Plan and to make all other
determinations deemed necessary or advisable for administering the Plan. Except
to the extent otherwise required or restricted under Code Section 409A or
related regulations or other guidance, (i) the Administrator shall have the
authority, in its sole discretion, 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 also may in its sole discretion modify or extend the terms and
conditions for exercise, vesting or earning of an Award. The Administrator may
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 otherwise applicable vesting or performance
conditions of an Award. Such events may include, but shall not be limited to,
termination of employment for cause, violation of policies of the Corporation or
an Affiliate, breach of non-solicitation, noncompetition, confidentiality,
proprietary rights and invention assignment agreements or other restrictive
covenants that may apply to the Participant, or other conduct by the Participant
that is determined by the Administrator to be detrimental to the business or
reputation of the Corporation or any Affiliate.

 

 

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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) 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 Laws, 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. No member of the Board or Committee,
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. The members of the Board or Committee, as applicable, shall be
entitled to indemnification and reimbursement in the manner provided in the
Corporation’s articles of incorporation and bylaws and/or under Applicable Laws.
(c) Notwithstanding the other provisions of Section 3, the Administrator may
delegate to one or more officers of the Corporation the authority to grant
Awards, and to make any or all of the determinations reserved for the
Administrator in the Plan and summarized in Section 3(b) with respect to such
Awards (subject to any restrictions imposed by Applicable Laws, 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 or Section
162(m) of the Code, the Participant, at the time of said grant or other
determination, (i) is not deemed to be an officer or director of the Corporation
within the meaning of Section 16 of the Exchange Act; and (ii) is not deemed to
be a Covered Employee as defined under Section 162(m) of the Code and related
regulations. To the extent that the Administrator has delegated authority to
grant Awards pursuant to this Section 3(c) to one or more officers of the
Corporation, references to the Administrator shall include references to such
officer or officers, subject, however, to the requirements of the Plan,
Rule 16b-3, Section 162(m) of the Code and other Applicable Laws.
4. Effective Date; Term
The Effective Date of the Plan shall be November 27, 2006. Awards may be granted
under the Plan on and after the Effective Date, but not after November 26, 2016.
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 12(a))
shall continue in accordance with their terms, unless otherwise provided in the
Plan or an Award Agreement.

 

 

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5. Shares of Stock Subject to the Plan; Award Limitations
(a) Shares of Stock Subject to the Plan: Subject to adjustments as provided in
Section 5(d), the aggregate number of shares of Common Stock that may be issued
pursuant to Awards granted under the Plan shall not exceed 8,500,000 shares.
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 Corporation hereby reserves sufficient authorized shares of Common Stock to
meet the grant of Awards hereunder.
(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 number of shares of Common Stock that may be issued to any one
Participant under the Plan pursuant to the grant of Incentive Options shall not
exceed 8,500,000 shares;
(ii) If and to the extent Section 162(m) of the Code is applicable:
(A) In any calendar year, no Participant may be granted Options and SARs that
are not related to an Option for more than 1,000,000 shares of Common Stock;
(B) No Participant may be granted Awards in any calendar year for more than
1,000,000 shares of Common Stock; and
(C) No Participant may be paid more than $2,000,000 with respect to any
cash-settled award or awards which were granted during any single calendar year.
(For purposes of Section 5(b)(iii)(A) and (B), an Option and Related SAR shall
be treated as a single Award.)

 

 

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(c) Shares Not Subject to Limitations: The following will not be applied to the
share limitations of Section 5(a) above: (i) dividends, including dividends paid
in shares, or dividend equivalents paid in cash in connection with outstanding
Awards; (ii) Awards which by their terms are settled in cash rather than the
issuance of shares; (iii) any shares subject to an Award under the Plan which
Award is forfeited, cancelled, terminated, expires or lapses for any reason or
any shares subject to an Award which shares are repurchased or reacquired by the
Corporation; and (iv) any shares surrendered by a Participant or withheld by the
Corporation to pay the Option Price or purchase price for an Award or shares
used to satisfy any tax withholding requirement in connection with the exercise,
vesting or earning of an Award if, in accordance with the terms of the Plan, a
Participant pays such Option Price or purchase price or satisfies such tax
withholding by either tendering previously owned shares or having the
Corporation withhold shares.
(d) Adjustments: If there is any change in the outstanding shares of Common
Stock because of a merger, consolidation or reorganization involving the
Corporation or an Affiliate, or if the Board of Directors of the Corporation
declares a stock dividend, stock split distributable in shares of Common Stock,
reverse stock split, combination or reclassification of the Common Stock, or if
there is a similar change in the capital stock structure of the Corporation or
an Affiliate affecting the Common Stock, the number of shares of Common Stock
reserved for issuance under the Plan shall be correspondingly adjusted, and the
Administrator shall make such adjustments to Awards and to any provisions of
this Plan as the Administrator deems equitable to prevent dilution or
enlargement of Awards or as may be otherwise advisable.
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) an
Independent Contractor.
(b) With respect to the grant of Incentive Options, the individual is otherwise
eligible to participate under Section 6, is an Employee of the Corporation 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 Corporation or a Parent or
Subsidiary. Notwithstanding the foregoing, an Employee who owns more than 10% of
the total combined voting power of the Corporation or a Parent or Subsidiary may
be granted an Incentive Option if the Option 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 under Section 424(d) of the Code.

 

 

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(c) With respect to the grant of substitute awards or assumption of awards in
connection with a merger, consolidation, acquisition, reorganization or similar
business combination involving the Corporation 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 Laws (including, to the extent
necessary, the federal securities laws registration provisions and Section 409A
and Section 424(a) of the Code and related regulations or other guidance).
(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 limitations of the Plan, the Administrator
may in its sole and absolute discretion grant Options to such eligible
individuals 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 Corporation or a Parent or Subsidiary. To the extent that an
Option is designated as an Incentive Option but does not qualify as such under
Section 422 of the Code, the Option (or portion thereof) shall be treated as a
Nonqualified Option. An Option may be granted with or without a Related SAR.
(b) Option Price: The Option Price shall be established by the Administrator and
stated in the Award Agreement evidencing the grant of the Option; provided, that
(i) the Option 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
voting power of all classes of stock of the Corporation or a Parent or
Subsidiary, as provided in Section 6(b)); and (ii) in no event shall the Option
Price per share of any Option be less than the par value per share (if any) 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 Option Price not equal to at least 100% of the Fair Market Value
on the date of grant, if such options are assumed or substituted in accordance
with Reg. Section 1.424-1 (or any successor provision thereto) and if the option
price of any such assumed or substituted option was at least equal to 100% of
the fair market value of the underlying stock on the original date of grant, or
if the terms of such assumed or substituted option otherwise comply with Code
Section 409A, related regulations and other guidance. The preceding sentence
shall also apply to SARs that are assumed or substituted in a corporate
transaction, to the extent required under Code Section 409A, related regulations
or other guidance.
(c) Date of Grant: An Incentive Option shall be considered to be granted on the
date that the Administrator acts to grant the Option, or on any later date
specified by the Administrator as the effective date of the Option. A
Nonqualified Option shall be considered to be granted on the date the
Administrator acts to grant the Option or any other date specified by the
Administrator as the date of grant of the Option.
(d) Option Period and Limitations on the Right to Exercise Options:

 

 

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(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. With respect to
Incentive Options, 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 Corporation 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 conditions pursuant to which, an Option
may become exercisable shall be determined by the Administrator in its
discretion, subject to the terms of the Plan.
(ii) An Option may be exercised by giving written notice to the Corporation 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 therefore 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,
where permitted by the Administrator and Applicable Laws (and subject to such
terms and conditions as may be established by the Administrator), payment may
also be made:
(A) By delivery (by either actual delivery or attestation) of shares of Common
Stock owned by the Participant for a time period, if any, determined by the
Administrator and otherwise acceptable to the Administrator;
(B) With respect only to purchases upon exercise of an Option after a public
market for the Common Stock exists, by delivery of written notice of exercise to
the Corporation and delivery to a broker of written notice of exercise and
irrevocable instructions to promptly deliver to the Corporation the amount of
sale or loan proceeds to pay the Option Price;
(C) By cash bonuses, loans or such other payment methods as may be approved by
the Administrator (and subject to such terms as may be established by the
Administrator), and which methods are acceptable under Applicable Laws; or
(D) By any combination of the foregoing methods.
Shares tendered 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. For the purposes of the Plan, a “public market” for the Common
Stock shall be deemed to exist (i) upon consummation of a firm commitment
underwritten public offering of the Common Stock pursuant to an effective
registration statement under the Securities Act, or (ii) if the Administrator
otherwise determines that there is an established public market for the Common
Stock.

 

 

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(iii) Unless the Administrator determines otherwise, no Option granted to a
Participant who was an Employee at the time of grant shall be exercised unless
the Participant is, at the time of exercise, an Employee, and has been an
Employee continuously since the date the Option was granted, subject to the
following:
(A) The employment relationship of a Participant shall be treated as continuing
intact for any period that the Participant is on military or sick leave or other
bona fide leave of absence, provided that the period of such leave does not
exceed three months, or, if longer, as long as the Participant’s right to
reemployment is guaranteed either by statute or by contract. The employment
relationship of a Participant shall also be treated as continuing intact while
the Participant is not in active service because of Disability. The
Administrator shall have sole authority to determine whether a Participant is
disabled and, if applicable, the Participant’s Termination Date.
(B) Unless the Administrator determines otherwise, if the employment of a
Participant is terminated because of Disability or death, the Option may be
exercised only to the extent exercisable on the Participant’s Termination Date,
except that the Administrator may in its sole discretion accelerate the date for
exercising all or any part of the Option which was not otherwise exercisable on
the Termination Date. The Option must be exercised, if at all, prior to the
first to occur of the following, whichever shall be applicable: (X) the close of
the one-year period following the Termination Date (or such other period stated
in the Award Agreement); or (Y) the close of the Option Period. In the event of
the Participant’s death, such Option shall be exercisable by such person or
persons as shall have acquired the right to exercise the Option by will or by
the laws of intestate succession.
(C) Unless the Administrator determines otherwise, if the employment of the
Participant is terminated for any reason other than Disability, death or for
“Cause,” his Option may be exercised to the extent exercisable on his
Termination Date, except that the Administrator may in its sole discretion
accelerate the date for exercising all or any part of the Option which was not
otherwise exercisable on the Termination Date. The Option must be exercised, if
at all, prior to the first to occur of the following, whichever shall be
applicable: (X) the close of the period of three months next succeeding the
Termination Date (or such other period stated in the Award Agreement); or
(Y) the close of the Option Period. If the Participant dies following such
termination of employment and prior to the earlier of the dates specified in
(X) or (Y) of this subparagraph (C), the Participant shall be treated as having
died while employed under subparagraph (B) (treating for this purpose the
Participant’s date of termination of employment as the Termination Date). In the
event of the Participant’s death, such Option shall be exercisable by such
person or persons as shall have acquired the right to exercise the Option by
will or by the laws of intestate succession.

 

 

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(D) Unless the Administrator determines otherwise, if the employment of the
Participant is terminated for “Cause,” his Option shall lapse and no longer be
exercisable as of his Termination Date, as determined by the Administrator.
(E) Notwithstanding the foregoing, the Administrator may, in its sole discretion
(subject to any requirements imposed under Code Section 409A, related
regulations or other guidance), accelerate the date for exercising all or any
part of an Option which was not otherwise exercisable on the Termination Date,
extend the period during which an Option may be exercised, modify the terms and
conditions to exercise, or any combination of the foregoing.
(iv) Unless the Administrator determines otherwise, an Option granted to a
Participant who was a Director but who was not an Employee at the time of grant
may be exercised only to the extent exercisable on the Participant’s Termination
Date (unless the termination was for Cause), and must be exercised, if at all,
prior to the first to occur of the following, as applicable: (X) the close of
the period of three months next succeeding the Termination Date (or such other
period stated in the Award Agreement); or (Y) the close of the Option Period. If
the services of a Participant are terminated for Cause, his Option shall lapse
and no longer be exercisable as of his Termination Date, as determined by the
Administrator. Notwithstanding the foregoing, the Administrator may in its sole
discretion (subject to any requirements imposed under Code Section 409A, related
regulations or other guidance) accelerate the date for exercising all or any
part of an Option which was not otherwise exercisable on the Termination Date,
extend the period during which an Option may be exercised, modify the other
terms and conditions to exercise, or any combination of the foregoing.
(v) Unless the Administrator determines otherwise, an Option granted to a
Participant who was an Independent Contractor at the time of grant (and who does
not thereafter become an Employee, in which case he shall be subject to the
provisions of Section 7(d)(iii)) may be exercised only to the extent exercisable
on the Participant’s Termination Date (unless the termination was for Cause),
and must be exercised, if at all, prior to the first to occur of the following,
as applicable: (X) the close of the period of three months next succeeding the
Termination Date (or such other period stated in the Award Agreement); or (Y)
the close of the Option Period. If the services of a Participant are terminated
for Cause, his Option shall lapse and no longer be exercisable as of his
Termination Date, as determined by the Administrator. Notwithstanding the
foregoing, the Administrator may in its sole discretion (subject to any
requirements imposed under Code Section 409A, related regulations or other
guidance) accelerate the date for exercising all or any part of an Option which
was not otherwise exercisable on the Termination Date, extend the period during
which an Option may be exercised, modify the other terms and conditions to
exercise, or any combination of the foregoing.

 

 

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(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
Corporation 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 Corporation 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. To the extent that any Incentive Options are
first exercisable by a Participant in excess of such limitation, the excess
shall be considered a Nonqualified Option.

 

 

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(g) Nontransferability: Incentive Options shall not be transferable (including
by sale, assignment, pledge or hypothecation) other than by will or the laws of
intestate succession or, in the Administrator’s discretion, as may otherwise be
permitted in accordance with Treas. Reg. Section 1.421-1(b)(2) or any successor
provision thereto. Nonqualified Options shall not be transferable (including by
sale, assignment, pledge or hypothecation) other than by will or the laws of
intestate succession, except for such transfers to immediate family members or
related entities as may be permitted by the Administrator in a manner consistent
with the registration provisions of the Securities Act. Except as may be
permitted by the preceding sentence, an Option shall be exercisable during the
Participant’s lifetime only by him or by his guardian or legal representative.
The designation of a beneficiary in accordance with the Plan does not constitute
a transfer.
8. Stock Appreciation Rights
(a) Grant of SARs: Subject to the limitations of the Plan, the Administrator may
in its sole and absolute discretion grant SARs to such eligible individuals, 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 base price per share of an SAR shall be
no less than 100% the Fair Market Value per share of the Common Stock on the
date the SAR is granted (except as may be otherwise permitted in the case of
substituted or assumed SARs in accordance with Section 7(b)).
(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; provided, however, that Related SARs
must be granted in accordance with Code Section 409A, related regulations and
other guidance. The base price of a Related SAR shall be equal to the Option
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 the 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 Option 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 Related 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: An 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.

 

 

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(d) Exercise of SARs:
(i) Subject to the terms of the Plan, SARs shall be exercisable in whole or in
part upon such terms and conditions as may be established by the Administrator
and stated in the applicable Award Agreement. The period during which an 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 Corporation 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 an SAR shall
mean the date on which the Corporation shall have received proper notice from
the Participant of the exercise of such SAR.
(iii) Each Participant’s Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise an SAR following termination of the
Participant’s employment or service with the Corporation. Such provisions shall
be determined in the sole discretion of the Administrator, 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. Notwithstanding
the foregoing, unless the Administrator determines otherwise, no SAR may be
exercised unless the Participant is, at the time of exercise, an eligible
Participant, as described in Section 6, and has been a Participant continuously
since the date the SAR was granted, subject to the provisions of
Sections 7(d)(iii), (iv) and (v).
(e) Payment Upon Exercise: Subject to the limitations of the Plan, upon the
exercise of an SAR, a Participant shall be entitled to receive payment from the
Corporation in an amount determined by multiplying (i) the difference between
the Fair Market Value of a share of Common Stock on the date of exercise of the
SAR over the base price of the SAR by (ii) the number of shares of Common Stock
with respect to which the SAR is being exercised. Notwithstanding the foregoing,
the Administrator in its discretion may limit in any manner the amount payable
with respect to an SAR. The consideration payable upon exercise of an 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.
(f) Nontransferability: Unless the Administrator determines otherwise, (i) SARs
shall not be transferable (including by sale, assignment, pledge or
hypothecation) other than by will or the laws of intestate succession, and
(ii) SARs may be exercised during the Participant’s lifetime only by him or by
his guardian or legal representative. The designation of a beneficiary in
accordance with the Plan does not constitute a transfer.

 

 

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9. Restricted Awards
(a) Grant of Restricted Awards: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant Restricted Awards to
such individuals in such numbers, upon such terms and at such times as the
Administrator shall determine. Such Restricted Awards may be in the form of
Restricted Stock Awards and/or Restricted 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 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. The Administrator
shall determine the nature, length and starting date of the period, if any,
during which a Restricted Award may be earned (the “Restriction Period”), and
shall determine the conditions which must be met in order for a Restricted 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 (or a combination of attainment of performance objectives
and continued service), Retirement, Displacement, Disability, death or any
combination of such conditions. In the case of Restricted Awards based upon
performance criteria, or a combination of performance criteria and continued
service, the Administrator shall determine the Performance Measures applicable
to such Restricted Awards (subject to Section 1(ee)).
(b) Vesting of Restricted Awards: Subject to the terms of the Plan and Code
Section 409A, related regulations or other guidance, 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. The Administrator may (subject to any
restrictions imposed under Code Section 409A, related regulations or other
guidance) accelerate the date that any Restricted Award granted to a Participant
shall be deemed to be vested or earned in whole or in part, without any
obligation to accelerate such date with respect to other Restricted Awards
granted to any Participant.
(c) Forfeiture of Restricted Awards: Unless the Administrator determines
otherwise, if the employment or service of a Participant shall be terminated for
any reason and all or any part of a Restricted Award has not vested or been
earned pursuant to the terms of the Plan and the individual Award, 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
to the Award or any shares of Common Stock, cash or other benefits related to
the Award.
(d) Shareholder Rights; Share Certificates: The Administrator shall have sole
discretion to determine whether a Participant shall have dividend rights, voting
rights or other rights as a shareholder with respect to shares subject to a
Restricted Stock Award which has not yet vested or been earned. If the
Administrator so determines, a certificate or certificates for whole shares of
Common Stock subject to a Restricted Stock Award may be issued in the name of
the Participant as soon as practicable after the Award has been granted;
provided, however, that, notwithstanding the foregoing, the Administrator or its
designee shall have the right to retain custody of certificates evidencing the
shares subject to a Restricted Stock Award and to require the Participant to
deliver to the Corporation a stock power, endorsed in blank, with respect to
such Award, until such time as the Restricted Stock Award vests (or is
forfeited) and is no longer subject to a substantial risk of forfeiture.

 

 

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(e) Nontransferability: Unless the Administrator determines otherwise,
Restricted Awards that have not vested shall not be transferable (including by
sale, assignment, pledge or hypothecation) other than by will or the laws of
intestate succession, and the recipient of a Restricted Award shall not sell,
transfer, assign, pledge or otherwise encumber shares subject to the Award until
the Restriction Period has expired and until all conditions to vesting have been
met. The designation of a beneficiary in accordance with the Plan does not
constitute a transfer.
10. Dividends and Dividend Equivalents
Awards granted under the Plan shall, to the extent vested, earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a Participant’s account. Any crediting of
dividends or dividend equivalents may be subject to such 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 equivalent rights related to
an Award shall be structured in a manner so as to avoid causing the Award 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,
related regulations or other guidance.
11. No Right or Obligation of Continued Employment or Service
Neither the Plan, the grant of an Award nor any other action related to the Plan
shall confer upon the Participant any right to continue in the service of the
Corporation or an Affiliate as an Employee, Director or Independent Contractor
or to interfere in any way with the right of the Corporation 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.
12. Amendment and Termination of the Plan
(a) Amendment and Termination: The Plan may be amended, altered and/or
terminated at any time by the Administrator; provided, however, that approval of
an amendment to the Plan by the shareholders of the Corporation shall be
required to the extent, if any, that shareholder approval of such amendment is
required by Applicable Laws. Any Award may be amended, altered and/or terminated
at any time by the Administrator; provided, however, that any such amendment,
alteration or termination of an Award shall not, without the consent of the
recipient of an outstanding Award, materially adversely affect the rights of the
recipient with respect to the Award.

 

 

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(b) Unilateral Authority of Administrator to Modify Plan and Awards:
Notwithstanding Section 12(a) herein, the following provisions shall apply:
(i) The Administrator shall have unilateral authority to amend the Plan and any
Award (without Participant consent and without shareholder approval, unless such
shareholder approval is required by Applicable Laws) to the extent necessary to
comply with Applicable Laws or changes to Applicable Laws (including but not
limited to Code Section 409A and Code Section 422, related regulations or other
guidance 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 Corporation or any Affiliate, or the financial statements
of the Corporation or any Affiliate, or of changes in 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.
(c) Cash Settlement: Notwithstanding any provision of the Plan, an Award or an
Award Agreement to the contrary, the Administrator shall have discretion
(subject to (i) any requirements imposed under Code Section 409A, related
regulations or other guidance and (ii) consideration of such accounting
principles as the Administrator deems relevant) to cause any Award (or portion
thereof) granted under the Plan to be canceled in consideration of an
alternative award or cash payment of an equivalent cash value, as determined by
the Administrator in its sole discretion, made to the holder of such canceled
Award.
13. Restrictions on Awards and Shares
(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 Corporation
shall require a Participant or other person to become a party to an Award
Agreement, the Shareholders Agreement, other agreement(s) restricting the
transfer, purchase or repurchase of shares of Common Stock of the Corporation,
voting agreement or such other agreements and any other employment agreements,
consulting agreements, non-competition agreements, confidentiality agreements,
non-solicitation agreements or other similar agreements imposing such
restrictions as may be required by the Corporation. 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 terms of Section 13 herein, the Award
Agreement, the Shareholders Agreement and any other applicable agreements. 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 this Section 13, the Award Agreement, the Shareholders Agreement and any
other applicable agreements.

 

 

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(b) Compliance with Applicable Laws: The Corporation may impose such
restrictions on Awards, shares 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 laws
applicable to such securities. Notwithstanding any other Plan provision to the
contrary, the Corporation 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 Laws (including but not limited to the
requirements of the Securities Act). The Corporation may cause a restrictive
legend 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 Laws or as may be
advised by legal counsel.
14. Change in Control
In the event of a Change in Control, all Awards shall vest and become
immediately exercisable in full.
15. Compliance with Code Section 409A
(a) General: Notwithstanding any other provision in the Plan or an Award to the
contrary, if and to the extent that Section 409A of the Code is deemed to apply
to the Plan or any Award granted under the Plan, it is the general intention of
the Corporation that the Plan and all such Awards shall comply with Code
Section 409A, related regulations or other guidance, and the Plan and any such
Award 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 Code
Section 409A, related regulations or other guidance. Without in any way limiting
the effect of the foregoing, in the event that Code Section 409A, related
regulations or other guidance require that any special terms, provisions or
conditions be included in the Plan or any Award, then such terms, provisions and
conditions shall, to the extent practicable, be deemed to be made a part of the
Plan or Award, as applicable. Further, in the event that the Plan or any Award
shall be deemed not to comply with Code Section 409A or any related regulations
or other guidance, then neither the Corporation, 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.
(b) Special Code Section 409A Provisions for Nonqualified Options:
Notwithstanding the other provisions of the Plan, unless otherwise permitted
under Code Section 409A, related regulations or other guidance, (i) the Option
Price for a Nonqualified Option may never be less than the Fair Market Value of
the Common Stock on the date of grant of the Option and the number of shares
subject to the Option shall be fixed on the original grant date; (ii) the
transfer or exercise of the Option shall be subject to taxation under Code
Section 83 and related regulations; and (iii) the Nonqualified Option may not
include any feature for the deferral of compensation other than the deferral of
recognition of income until the later of exercise or disposition of the Option
or the time the shares acquired pursuant to the exercise of the Option first
became substantially vested.

 

 

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(c) Special Code Section 409A Provisions for SARs: Notwithstanding the other
provisions the Plan, unless otherwise permitted under Code Section 409A, related
regulations or other guidance, (i) compensation payable under an SAR cannot be
greater than the difference between the Fair Market Value of the Common Stock on
the SAR grant date and the Fair Market Value of the Common Stock on the SAR
exercise date; (ii) the SAR base price may never be less than the Fair Market
Value of the Common Stock on the date the SAR is granted; and (iii) the SAR may
not include any feature for the deferral of compensation other than the deferral
of recognition of income until the exercise of the SAR.
(d) Short-Term Deferrals: Except to the extent otherwise required or permitted
under Code Section 409A, related regulations or other guidance, distributions
pursuant to Restricted Stock Units or any Awards granted under the Plan that are
subject to Code Section 409A must be made no later than the later of (A) the
15th day of the third month following the Participant’s first taxable year in
which the amount is no longer subject to a substantial risk of forfeiture; or
(B) the 15th day of the third month following the end of the Corporation’s first
taxable year in which the amount is no longer subject to a substantial risk of
forfeiture. Notwithstanding the foregoing, if and to the extent that the
distribution of shares of Common Stock or any other benefit payable pursuant to
an Award is deemed to involve the deferral of compensation that is not otherwise
exempt from Code Section 409A, then (i) the distribution of such shares or
benefit shall occur no later than the end of the calendar year in which the
Award vests; and (ii) if the Participant is or may be a “specified employee” (as
defined in Code Section 409A, related regulations or other guidance), a
distribution due to separation from service may not be made before the date that
is six months after the date of separation from service (or, if earlier, the
date of death of the Participant), except as may be otherwise permitted pursuant
to Code Section 409A, related regulations or other guidance.

 

 

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16. General Provisions
(a) Shareholder Rights: Except as otherwise determined by the Administrator (and
subject to the provisions of Section 9(d) regarding Restricted Stock Awards), a
Participant and his legal representative, legatees or distributes shall not be
deemed to be the holder of any shares subject to an Award and shall not have any
rights of a shareholder unless and until certificates for such shares have been
issued and delivered to him or them under the Plan. A certificate or
certificates for shares of Common Stock acquired upon exercise of an Option or
SAR shall be promptly issued in the name of the Participant (or his beneficiary)
and distributed to the Participant (or his beneficiary) as soon as practicable
following receipt of notice of exercise and, with respect to Options, payment of
the Option Price (except as may otherwise be determined by the Corporation in
the event of payment of the Option Price pursuant to Section 7(d)(ii)(C)).
Except as otherwise provided in Section 9(d) regarding Restricted Stock Awards,
a certificate for any shares of Common Stock issuable pursuant to a Restricted
Award shall be promptly issued in the name of the Participant (or his
beneficiary) and distributed to the Participant (or his beneficiary) after the
Award (or portion thereof) has vested or been earned and any other conditions to
distribution have been met.
(b) Withholding: The Corporation 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 Corporation shall require any
recipient of an Award to pay to the Corporation in cash the amount of any tax or
other amount required by any governmental authority to be withheld and paid over
by the Corporation to such authority for the account of such recipient.
Notwithstanding the foregoing, the Administrator may establish procedures to
permit a recipient to satisfy such obligation in whole or in part, and any
local, state, federal, foreign or other income tax obligations relating to such
an Award, by electing (the “election”) to have the Corporation withhold shares
of Common Stock from the shares to which the recipient is entitled. The number
of shares to be withheld 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) the amount of such obligations being satisfied. Each election
must be made in writing to the Administrator in accordance with election
procedures established by the Administrator.
(c) Section 16(b) Compliance: If and 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 Corporation that transactions under the Plan by such persons
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 or any successor rules thereto. 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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(d) Code Section 162(m) Performance-Based Compensation. If and to the extent to
which Section 162(m) of the Code is applicable, the Corporation intends that
compensation paid under the Plan to Covered Employees will, to the extent
practicable, constitute “qualified performance-based compensation” within the
meaning of Section 162(m) and related regulations, unless otherwise determined
by the Administrator. Accordingly, Awards granted to Covered Employees which are
intended to qualify for the performance-based exception under Code Section
162(m) and related regulations shall be deemed to include any such additional
terms, conditions, limitations and provisions as are necessary to comply with
the performance-based compensation exemption of Section 162(m), unless the
Administrator, in its discretion, determines otherwise.
(e) Unfunded Plan; No Effect on Other Plans:
(i) The Plan shall be unfunded, and the Corporation 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 Corporation 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 Corporation or any
Affiliate, including, without limitation, any specific funds, assets or other
property which the Corporation 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 the Common Stock or other amounts, if any, payable
under the Plan, unsecured by any assets of the Corporation 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) The adoption of the Plan shall not affect any other stock incentive or
other compensation plans in effect for the Corporation or any Affiliate, nor
shall the Plan preclude the Corporation from establishing any other forms of
stock incentive or other compensation for employees or service providers of the
Corporation or any Affiliate.
(f) Applicable Laws: The Plan shall be governed by and construed in accordance
with the laws of the State of Florida, without regard to the conflict of laws
provisions of any state, and in accordance with applicable federal laws of the
United States.

 

 

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(g) 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 sole 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.
(h) 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.
(i) Severability: If any provision of the Plan shall be held illegal or invalid
for any reason, such illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
(j) Rules of Construction: Headings are given to the sections of this Plan
solely as a convenience to facilitate reference. The reference to any statute,
regulation or other provision of law shall be construed to refer to any
amendment to or successor of such provision of law.
(k) Successors and Assigns: The Plan shall be binding upon the Corporation, its
successors and assigns, and Participants, their executors, administrators and
permitted transferees and beneficiaries.
(l) Right of Offset: Notwithstanding any other provision of the Plan or an Award
Agreement, the Corporation may 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 Corporation that is or
becomes due and payable.
(m) Effect of Changes in Status: An Award shall not be affected by any change in
the terms, conditions or status of the Participant’s employment or service,
provided that the Participant continues to be an employee of, or in service to,
the Corporation or an Affiliate.
(n) Shareholder Approval: The Plan is subject to approval by the shareholders of
the Corporation, which approval must occur, if at all, within 12 months of the
Effective Date of the Plan. Awards granted prior to such shareholder approval
shall be conditioned upon and shall be effective only upon approval of the Plan
by such shareholders on or before such date.
(o) Fractional Shares: Except as otherwise provided by an Award Agreement or 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.

 

 

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IN WITNESS WHEREOF, this MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan,
is, by the authority of the Board of Directors of the Corporation, executed in
behalf of the Corporation, effective as of the 25th day of April 2011.

            MIMEDX GROUP, INC.
      By:   /s/ Parker H. Petit        Name:   Parker H. “Pete” Petit       
Title:   Chairman   

ATTEST:
/s/ Roberta McCaw                                                       
Secretary
[Corporate Seal]