Exhibit 10.1

 

FALCON MINERALS CORPORATION

 

 

 

2018 LONG-TERM INCENTIVE PLAN

 

 

 

Article I
PURPOSE

 

The purpose of this Falcon Minerals Corporation 2018 Long-Term Incentive Plan is
to enhance the profitability and value of the Company for the benefit of its
stockholders by enabling the Company to offer Participants cash and stock-based
incentives in order to attract, retain and reward such individuals and
strengthen the mutuality of interests between such individuals and the Company’s
stockholders. The Plan is effective as of the date set forth in Article XVI.

 

Article II
DEFINITIONS

 

For purposes of the Plan, the following terms shall have the following meanings:

 

2.1 “Affiliate” means each of the following: (a) any Subsidiary; (b) any Parent;
(c) any corporation, trade or business (including, without limitation, a
partnership or limited liability company) which is directly or indirectly
controlled 50% or more (whether by ownership of stock, assets or an equivalent
ownership interest or voting interest) by the Company or one of its Affiliates;
(d) any trade or business (including, without limitation, a partnership or
limited liability company) which directly or indirectly controls 50% or more
(whether by ownership of stock, assets or an equivalent ownership interest or
voting interest) of the Company; and (e) any other entity in which the Company
or any of its Affiliates has a material equity interest and which is designated
as an “Affiliate” by resolution of the Committee; provided that, unless
otherwise determined by the Committee, the Common Stock subject to any Award
constitutes “service recipient stock” for purposes of Section 409A of the Code
or otherwise does not subject the Award to Section 409A of the Code.

 

2.2 “Annual Incentive Award” means a conditional right granted to a Participant
under Section 11.5 hereof to receive a cash payment, Common Stock, or other
Award.

 

2.3 “Award” means any award under the Plan of any Stock Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Bonus Stock,
Dividend Equivalent, Performance Award, Other Stock-Based Award or Annual
Incentive Award. All Awards shall be granted by, confirmed by, and subject to
the terms of, a written agreement executed by the Company and the Participant.

 

2.4 “Award Agreement” means the written or electronic agreement setting forth
the terms and conditions of an Award.

 

2.5 “Board” means the Board of Directors of the Company.

 

 

 

 

2.6 “Bonus Stock” means Common Stock granted as a bonus pursuant to Section 11.4
hereof.

 

2.7 “Cause” means with respect to any Participant, in the absence of an
employment or other service agreement between a Participant and the Company or
its Affiliates (including Falcon Minerals Operating Partnership, LP) otherwise
defining Cause, (a) the continued failure to substantially perform such
Participant’s Duties, which continues beyond ten (10) days after a written
demand for substantial performance is delivered to such Participant by the
Company or its Affiliates; (b) any damage of a material nature to the business
or property of any member of the Company or its Affiliates caused by such
Participant’s willful or grossly negligent conduct; (c) deliberate misconduct
that is reasonably likely to be materially damaging to the Company or its
Affiliates; (d) the conviction of, or the plea of guilty or nolo contendere or
the equivalent in respect to, any felony or a misdemeanor involving an act of
dishonesty, moral turpitude, deceit or fraud by such Participant; or (e) a
material breach of any non-competition, non-solicitation, confidentiality,
non-disparagement or other restrictive covenant provisions relating to the
Company or its Affiliates by which such Participant may be bound, including,
without limitation, any such covenants contained in any Award Agreement, which
breach is not cured (if capable of cure) within ten (10) days following notice
of such breach provided by the Company to such Participant. In the event that
there is an employment or other service agreement between such Participant and
the Company or its Affiliates defining Cause, “Cause” shall have the meaning
provided in such agreement, and a Termination by the Company or its Affiliates
for Cause hereunder shall not be deemed to have occurred unless all applicable
notice and cure periods in such agreement are complied with. With respect to a
Participant’s Termination of Directorship, “cause” means an act or failure to
act that constitutes cause for removal of a director under applicable Delaware
law.

 

2.8 “Change in Control” has the meaning set forth in Section 12.2.

 

2.9 “Change in Control Price” has the meaning set forth in Section 12.1.

 

2.10 “Code” means the Internal Revenue Code of 1986, as amended. Any reference
to any section of the Code shall also be a reference to any successor provision
and any treasury regulation promulgated thereunder.

 

2.11 “Committee” means any committee of the Board duly authorized by the Board
to administer the Plan. If no committee is duly authorized by the Board to
administer the Plan, the term “Committee” shall be deemed to refer to the Board
for all purposes under the Plan.

 

2.12 “Common Stock” means the Class A common stock, $0.0001 par value per share,
of the Company.

 

2.13 “Company” means Falcon Minerals Corporation, a Delaware corporation, and
its successors by operation of law.

 

2.14 “Consultant” means any Person who is an advisor or consultant to the
Company or its Affiliates.

 

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2.15 “Disability” means, with respect to any Participant, in the absence of an
employment or other service agreement between a Participant and the Company or
its Affiliates (including Falcon Minerals Operating Partnership, LP) otherwise
defining Disability or terms of similar import such as “permanent disability,”
or as otherwise determined by the Committee in the applicable Award Agreement,
with respect to a Participant’s Termination, a permanent and total disability as
defined in Section 22(e)(3) of the Code. A Disability shall only be deemed to
occur at the time of the determination by the Committee of the Disability.
Notwithstanding the foregoing, for Awards that are subject to Section 409A of
the Code, Disability shall mean that a Participant is disabled under
Section 409A(a)(2)(C)(i) or (ii) of the Code. In the event that there is an
employment or other service agreement between such Participant and the Company
or its Affiliates defining Disability or terms of similar import such as
“permanent disability,” “Disability” shall have the meaning provided in such
agreement.

 

2.16 “Dividend Equivalent” means a right, granted to a Participant under
Section 11.4 hereof, to receive cash, Common Stock, other Awards or other
property equal in value to dividends paid with respect to a specified number of
shares of Common Stock, or other periodic payments.

 

2.17 “Duties” means the duties, responsibilities and obligations of a
Participant in connection with such Participant’s employment or service with the
Company or its Affiliates.

 

2.18 “Effective Date” means the effective date of the Plan as defined in
Article XVI.

 

2.19 “Eligible Employees” means each employee of the Company or an Affiliate.

 

2.20 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the Exchange Act or regulation thereunder
shall include such section or regulation, any valid regulation or interpretation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or
regulation.

 

2.21 “Fair Market Value” means, for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, as of any date and except as provided below, (a) the last sales
price reported for the Common Stock on the applicable date as reported on the
principal national securities exchange in the United States on which it is then
traded or (b) if the Common Stock is not traded, listed or otherwise reported or
quoted, the Committee shall determine in good faith the Fair Market Value in
whatever manner it considers appropriate taking into account the requirements of
Section 409A of the Code. For purposes of the grant of any Award, the applicable
date shall be the trading day immediately prior to the date on which the Award
is granted. For purposes of the exercise of any Award, the applicable date shall
be the date a notice of exercise is received by the Committee or, if not a day
on which the applicable market is open, the next day that it is open.

 

2.22 “Family Member” means “family member” as defined in Section A.1(a)(5) of
the general instructions of Form S-8.

 

2.23 “Incentive Stock Option” means any Stock Option awarded to an Eligible
Employee of the Company, its Subsidiaries and its Parents (if any) under the
Plan intended to be and designated as an “Incentive Stock Option” within the
meaning of Section 422 of the Code.

 

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2.24 “Initial Investors” means Blackstone Management Partners, L.L.C., a
Delaware limited liability company, and its Affiliates.

 

2.25 “Lock-Up Period” has the meaning set forth in Section 15.19.

 

2.26 “Non-Employee Director” means a director or a member of the Board of the
Company or any Affiliate who is not an active employee of the Company or any
Affiliate.

 

2.27 “Non-Qualified Stock Option” means any Stock Option awarded under the Plan
that is not an Incentive Stock Option.

 

2.28 “Other Stock-Based Award” means an Award under Article XI of the Plan that
is valued in whole or in part by reference to, or is payable in or otherwise
based on, Common Stock, including, without limitation, an Award valued by
reference to an Affiliate.

 

2.29 “Parent” means any parent corporation of the Company within the meaning of
Section 424(e) of the Code.

 

2.30 “Participant” means an Eligible Employee, Non-Employee Director or
Consultant to whom an Award has been granted pursuant to the Plan.

 

2.31 “Performance Award” means an Award granted to a Participant pursuant to
Article X hereof contingent upon achieving certain Performance Goals.

 

2.32 “Performance Goals” means goals established by the Committee as
contingencies for Awards to vest and/or become exercisable or distributable.

 

2.33 “Performance Period” means the designated period during which the
Performance Goals must be satisfied with respect to the Award to which the
Performance Goals relate.

  

2.34 “Person” means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a government or any branch,
department, agency, political subdivision or official thereof.

 

2.35 “Plan” means this Falcon Minerals Corporation 2018 Long-Term Incentive
Plan, as amended from time to time.

 

2.36 “Proceeding” has the meaning set forth in Section 15.8.

 

2.37 “Reorganization” has the meaning set forth in Section 4.2(b)(ii).

 

2.38 “Restricted Stock” means an Award of shares of Common Stock under the Plan
that is subject to restrictions under Article VIII.

 

2.39 “Restricted Stock Unit” means a right, granted to a Participant under
Article IX hereof, to receive Common Stock, cash or a combination thereof at the
end of a specified period (which may or may not be coterminous with the vesting
schedule of the Award).

 

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2.40 “Restriction Period” has the meaning set forth in Section 8.3(a) with
respect to Restricted Stock.

 

2.41 “Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act as
then in effect or any successor provision.

 

2.42 “Section 409A of the Code” means Section 409A of the Code and any
applicable treasury regulations and other official guidance thereunder.

 

2.43 “Securities Act” means the Securities Act of 1933, as amended and all rules
and regulations promulgated thereunder. Reference to a specific section of the
Securities Act or regulation thereunder shall include such section or
regulation, any valid regulation or interpretation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.

 

2.44 “Stock Appreciation Right” means the right pursuant to an Award granted
under Article VII to receive an amount in cash and/or stock equal to the
difference between (a) the Fair Market Value of a share of Common Stock on the
date such right is exercised, and (b) the per share exercise price of such
right.

 

2.45 “Stock Option” or “Option” means any option to purchase shares of Common
Stock granted to Participants granted pursuant to Article VI.

 

2.46 “Subsidiary” means any subsidiary corporation of the Company within the
meaning of Section 424(f) of the Code.

 

2.47 “Substitute Award” means an Award granted under the Plan in substitution
for awards held by individuals who become eligible to receive an Award under the
Plan as a result of a merger, consolidation, or acquisition of another entity
(or the assets of another entity) by the Company or its Affiliates.

 

2.48 “Ten Percent Stockholder” means a Person owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, its Subsidiaries or its Parent.

 

2.49 “Termination” means a Termination of Consultancy, Termination of
Directorship or Termination of Employment, as applicable.

 

2.50 “Termination of Consultancy” means: (a) that the Consultant is no longer
acting as a consultant to the Company or an Affiliate (including Falcon Minerals
Operating Partnership, LP); or (b) when an entity that is retaining a
Participant as a Consultant ceases to be an Affiliate, unless the Participant
otherwise is, or thereupon becomes, a Consultant to the Company or another
Affiliate at the time the entity ceases to be an Affiliate. In the event that a
Consultant becomes an Eligible Employee or a Non-Employee Director upon the
termination of such Consultant’s consultancy, unless otherwise determined by the
Committee, in its sole discretion, no Termination of Consultancy shall be deemed
to occur until such time as such Consultant is no longer a Consultant, an
Eligible Employee or a Non-Employee Director. Notwithstanding the foregoing, the
Committee may otherwise define Termination of Consultancy in the Award Agreement
or, if no rights of a Participant are reduced, may otherwise define Termination
of Consultancy thereafter; provided that any such change to the definition of
the term “Termination of Consultancy” does not subject the applicable Award to
Section 409A of the Code.

 

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2.51 “Termination of Directorship” means that the Non-Employee Director has
ceased to be a director of the Company or Falcon Minerals Operating Partnership,
LP, except that if a Non-Employee Director becomes an Eligible Employee or a
Consultant upon the termination of such Non-Employee Director’s directorship,
such Non-Employee Director’s ceasing to be a director of the Company shall not
be treated as a Termination of Directorship unless and until the Participant has
a Termination of Employment or Termination of Consultancy, as the case may be.

 

2.52 “Termination of Employment” means: (a) a termination of employment (for
reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Affiliates (including Falcon
Minerals Operating Partnership, LP); or (b) when an entity that is employing a
Participant ceases to be an Affiliate, unless the Participant otherwise is, or
thereupon becomes, employed by the Company or another Affiliate at the time the
entity ceases to be an Affiliate. In the event that an Eligible Employee becomes
a Consultant or a Non-Employee Director upon the termination of such Eligible
Employee’s employment, unless otherwise determined by the Committee, in its sole
discretion, no Termination of Employment shall be deemed to occur until such
time as such Eligible Employee is no longer an Eligible Employee, a Consultant
or a Non-Employee Director. Notwithstanding the foregoing, the Committee may
otherwise define Termination of Employment in the Award Agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Employment thereafter, provided that any such change to the definition of the
term “Termination of Employment” does not subject the applicable Award to
Section 409A of the Code.

 

2.53 “Transfer” means: (a) when used as a noun, any direct or indirect transfer,
sale, assignment, pledge, hypothecation, encumbrance or other disposition
(including the issuance of equity in any entity), whether for value or no value
and whether voluntary or involuntary (including by operation of law), and
(b) when used as a verb, to directly or indirectly transfer, sell, assign,
pledge, encumber, charge, hypothecate or otherwise dispose of (including the
issuance of equity in any entity) whether for value or for no value and whether
voluntarily or involuntarily (including by operation of law). “Transferred” and
“Transferable” shall have a correlative meaning.

 

Article III
ADMINISTRATION

 

3.1 The Committee. The Plan shall be administered and interpreted by the
Committee. To the extent required by applicable law, rule or regulation, it is
intended that each member of the Committee shall qualify as (a) a “non-employee
director” under Rule 16b-3 and (b) an “independent director” under the rules of
any national securities exchange or national securities association, as
applicable. If it is later determined that one or more members of the Committee
do not so qualify, actions taken by the Committee prior to such determination
shall be valid despite such failure to qualify.

 

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3.2 Grants of Awards. The Committee shall have full authority to grant, pursuant
to the terms of the Plan, to Participants: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Restricted Stock Units,
(v) Substitute Awards, (vi) Bonus Stock, (vii) Performance Awards, (viii) Other
Stock-Based Awards, (ix) Dividend Equivalents and (x) Annual Incentive Awards.
In particular, the Committee shall have the authority:

 

(a) to select the eligible individuals to whom Awards may from time to time be
granted hereunder;

 

(b) to determine whether and to what extent Awards, or any combination thereof,
are to be granted hereunder to one or more eligible individuals;

 

(c) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;

 

(d) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder (including, but not limited to, the
exercise or purchase price (if any), any restriction or limitation, any vesting
schedule or acceleration thereof or any forfeiture restrictions or waiver
thereof, regarding any Award and the shares of Common Stock relating thereto,
based on such factors, if any, as the Committee shall determine, in its sole
discretion);

 

(e) to determine the amount of cash to be covered by each Award granted
hereunder;

 

(f) to determine whether, to what extent and under what circumstances grants of
Awards under the Plan are to operate on a tandem basis and/or in conjunction
with or apart from other awards made by the Company outside of the Plan;

 

(g) to determine whether and under what circumstances a Stock Option may be
settled in cash, Common Stock and/or Restricted Stock;

 

(h) to determine whether a Stock Option is an Incentive Stock Option or
Non-Qualified Stock Option;

 

(i) to determine whether to require a Participant, as a condition of the
granting of any Award, to not sell or otherwise dispose of shares acquired
pursuant to the exercise of an Award for a period of time as determined by the
Committee, in its sole discretion, following the date of the acquisition of such
Award;

 

(j) to modify, extend or renew an Award, subject to Article XIII and
Section 6.4(l); provided, however, that such action does not subject the Award
to Section 409A of the Code without the consent of the Participant; and

 

(k) solely to the extent permitted by applicable law, to determine whether, to
what extent and under what circumstances to provide loans (which may be on a
recourse basis and shall bear interest at the rate the Committee shall provide)
to Participants in order to exercise Options under the Plan.

 

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3.3 Guidelines. Subject to Article XIII hereof, the Committee shall have the
authority to (a) adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan or the exercise of rights granted under the
Plan or an Award and (b) perform all acts, including the delegation of its
responsibilities (to the extent permitted by applicable law and applicable stock
exchange rules), as it shall, from time to time, deem advisable; to construe and
interpret the terms and provisions of the Plan and any Award issued under the
Plan (and any agreements relating thereto); and to otherwise supervise the
administration of the Plan. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any agreement relating
thereto in the manner and to the extent it shall deem necessary to effectuate
the purpose and intent of the Plan. The Committee may adopt special guidelines
and provisions for Persons who are residing in or employed in, or subject to,
the taxes of, any domestic or foreign jurisdictions to comply with applicable
tax and securities laws of such domestic or foreign jurisdictions. To the extent
applicable, the Plan is intended to comply with the applicable requirements of
Rule 16b-3 and the Plan shall be limited, construed and interpreted in a manner
so as to comply therewith.

 

3.4 Decisions Final. Any decision, interpretation or other action made or taken
in good faith by or at the direction of the Company, the Board or the Committee
(or any of its members) arising out of or in connection with the Plan shall be
within the absolute discretion of all and each of them, as the case may be, and
shall be final, binding and conclusive on the Company and all employees and
Participants and their respective heirs, executors, administrators, successors
and assigns.

 

3.5 Procedures. If the Committee is appointed, the Board shall designate one of
the members of the Committee as chairman and the Committee shall hold meetings,
subject to the By-Laws of the Company, at such times and places as it shall deem
advisable, including, without limitation, by telephone conference or by written
consent to the extent permitted by applicable law. A majority of the Committee
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by all of the Committee members in accordance with the
By-Laws of the Company, shall be fully effective as if it had been made by a
vote at a meeting duly called and held. The Committee shall keep minutes of its
meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.

 

3.6 Designation of Consultants/Liability.

 

(a) The Committee may designate employees of the Company and professional
advisors to assist the Committee in the administration of the Plan and (to the
extent permitted by applicable law and applicable exchange rules) may grant
authority to officers to grant Awards and/or execute agreements or other
documents on behalf of the Committee. In the event of any designation of
authority hereunder, subject to applicable law, applicable stock exchange rules
and any limitations imposed by the Committee in connection with such
designation, such designee or designees shall have the power and authority to
take such actions, exercise such powers and make such determinations that are
otherwise specifically designated to the Committee hereunder.

 

(b) The Committee may employ such legal counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
or the Board in the engagement of any such counsel, consultant or agent shall be
paid by the Company. The Committee, its members and any Person designated
pursuant to Section 3.6(a) shall not be liable for any action or determination
made in good faith with respect to the Plan. To the maximum extent permitted by
applicable law, no officer of the Company or member or former member of the
Committee or of the Board shall be liable for any action or determination made
in good faith with respect to the Plan or any Award granted under it.

 

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3.7 Indemnification. To the maximum extent permitted by applicable law and the
Certificate of Incorporation and By-Laws of the Company and to the extent not
covered by insurance directly insuring such Person, each officer or employee of
the Company or any Affiliate and member or former member of the Committee or the
Board shall be indemnified and held harmless by the Company against any cost or
expense (including reasonable fees of counsel reasonably acceptable to the
Committee) or liability (including any sum paid in settlement of a claim with
the approval of the Committee), and advanced amounts necessary to pay the
foregoing at the earliest time and to the fullest extent permitted, arising out
of any act or omission to act in connection with the administration of the Plan,
except to the extent arising out of such officer’s, employee’s, member’s or
former member’s own fraud or bad faith. Such indemnification shall be in
addition to any right of indemnification the employees, officers, directors or
members or former officers, directors or members may have under applicable law
or under the Certificate of Incorporation or By-Laws of the Company or any
Affiliate. Notwithstanding anything else herein, this indemnification will not
apply to the actions or determinations made by an individual with regard to
Awards granted to such individual under the Plan.

 

Article IV
SHARE LIMITATION

 

4.1 Shares. (a) The aggregate number of shares of Common Stock that may be
issued or used for reference purposes or with respect to which Awards may be
granted under the Plan shall not exceed 8,600,000 shares (subject to any
increase or decrease pursuant to Section 4.2), which may be either authorized
and unissued Common Stock or Common Stock held in or acquired for the treasury
of the Company or both (the “Share Reserve”). The maximum number of shares of
Common Stock with respect to which Incentive Stock Options may be granted under
the Plan shall be equal to the Share Reserve. With respect to Stock Appreciation
Rights and Options settled in Common Stock, upon settlement, only the number of
shares of Common Stock delivered to a Participant shall count against the Share
Reserve. If any Award granted under the Plan expires, is forfeited, terminates
or is canceled for any reason without having been exercised or settled in full,
the number of shares of Common Stock underlying the applicable portion of the
Award shall again be available for the purpose of Awards under the Plan. If any
shares of Common Stock are withheld to satisfy tax withholding obligations on an
Award issued under the Plan, the number of shares of Common Stock withheld shall
again be available for purposes of Awards under the Plan. Shares used to settle
a Substitute Award shall not reduce the number of shares of Common Stock
available in the Share Reserve.

 

(b) Annual Non-Employee Director Award Limitation. The aggregate grant date fair
value (computed as of the date of grant in accordance with applicable financial
accounting rules) of all Awards granted under the Plan to any individual
Non-Employee Director in any fiscal year of the Company (excluding Awards made
pursuant to deferred compensation arrangements in lieu of all or a portion of
cash retainers and any stock dividends payable in respect of outstanding Awards)
shall not exceed $300,000.

 

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4.2 Changes.

 

(a) The existence of the Plan and the Awards granted hereunder shall not affect
in any way the right or power of the Board, the Committee or the stockholders of
the Company to make or authorize (i) any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its
business, (ii) any merger or consolidation of the Company or any Affiliate,
(iii) any issuance of bonds, debentures, preferred or prior preference stock
ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of
the Company or any Affiliate, (v) any sale or transfer of all or part of the
assets or business of the Company or any Affiliate or (vi) any other corporate
act or proceeding.

 

(b) Subject to the provisions of Section 12.1:

 

(i) If the Company at any time subdivides (by any split, recapitalization or
otherwise) the outstanding Common Stock into a greater number of shares of
Common Stock, or combines (by reverse split, combination or otherwise) its
outstanding Common Stock into a lesser number of shares of Common Stock, then
the respective exercise prices for outstanding Awards that provide for a
Participant elected exercise, the number of shares of Common Stock covered by
outstanding Awards and the aggregate number or kind of securities that
thereafter may be issued under the Plan shall be appropriately adjusted by the
Committee to prevent dilution or enlargement of the rights granted to, or
available for, Participants under the Plan.

 

(ii) Excepting transactions covered by Section 4.2(b)(i), if the Company effects
any merger, consolidation, statutory exchange, spin-off, reorganization, sale or
transfer of all or substantially all the Company’s assets or business, or other
corporate transaction or event in such a manner that the Company’s outstanding
shares of Common Stock are converted into the right to receive (or the holders
of Common Stock are entitled to receive in exchange therefor), either
immediately or upon liquidation of the Company, securities or other property of
the Company or other entity (each, a “Reorganization”), then, subject to the
provisions of Section 12.1, (A) the aggregate number or kind of securities that
thereafter may be issued under the Plan, (B) the number or kind of securities or
other property (including cash) to be issued pursuant to Awards granted under
the Plan (including as a result of the assumption of the Plan and the
obligations hereunder by a successor entity, as applicable), and (C) the
purchase price thereof, shall be appropriately adjusted by the Committee to
prevent dilution or enlargement of the rights granted to, or available for,
Participants under the Plan.

 

(iii) If there shall occur any change in the capital structure of the Company
other than those covered by Section 4.2(b)(i) or 4.2(b)(ii), including by reason
of any extraordinary dividend (whether cash or equity), any conversion, any
adjustment, any issuance of any class of securities convertible or exercisable
into, or exercisable for, any class of equity securities of the Company, then
the Committee shall adjust any Award and make such other adjustments to the Plan
to prevent dilution or enlargement of the rights granted to, or available for,
Participants under the Plan.

 

(iv) Any such adjustment determined by the Committee pursuant to this
Section 4.2(b) shall be final, binding and conclusive on the Company and all
Participants and their respective heirs, executors, administrators, successors
and permitted assigns. Any adjustment to, or assumption or substitution of, an
Award under this Section 4.2(b) shall be intended to comply with the
requirements of Section 409A of the Code and Treasury Regulation § 1.424-1 (and
any amendments thereto), to the extent applicable. Except as expressly provided
in this Section 4.2 or in the applicable Award Agreement, a Participant shall
have no additional rights under the Plan by reason of any transaction or event
described in this Section 4.2.

 

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(v) Fractional shares of Common Stock resulting from any adjustment in Awards
pursuant to Section 4.2(a) or this Section 4.2(b) shall be aggregated until, and
eliminated at, the time of exercise or payment by rounding-down for fractions
less than one-half and rounding-up for fractions equal to or greater than
one-half. No cash settlements shall be required with respect to fractional
shares eliminated by rounding. Notice of any adjustment shall be given by the
Committee to each Participant whose Award has been adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of the Plan.

 

4.3 Minimum Purchase Price. Notwithstanding any provision of the Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under the Plan, such shares shall not be issued for a consideration that
is less than as permitted under applicable law.

 

Article V
ELIGIBILITY

 

5.1 General Eligibility. All current and prospective Participants are eligible
to be granted Awards. Eligibility for the grant of Awards and actual
participation in the Plan shall be determined by the Committee in its sole
discretion.

 

5.2 Incentive Stock Options. Notwithstanding the foregoing, only Eligible
Employees of the Company, its Subsidiaries and its Parent (if any) are eligible
to be granted Incentive Stock Options under the Plan. Eligibility for the grant
of an Incentive Stock Option and actual participation in the Plan shall be
determined by the Committee in its sole discretion.

 

5.3 General Requirement. The vesting and exercise of Awards granted to a
prospective Participant are conditioned upon such individual actually becoming
an Eligible Employee, Consultant or Non-Employee Director, respectively.

 

Article VI
STOCK OPTIONS

 

6.1 Options. Stock Options may be granted alone or in addition to other Awards
granted under the Plan. Each Stock Option granted under the Plan shall be of one
of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option.

 

6.2 Grants. The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options. The Committee shall have the authority to grant any
Consultant or Non-Employee Director one or more Non-Qualified Stock Options. To
the extent that any Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Stock Option or the portion thereof which does not so qualify
shall constitute a separate Non-Qualified Stock Option.

 

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6.3 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, no term of the Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code.

 

6.4 Terms of Options. Options granted under the Plan shall be subject to the
following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:

 

(a) Exercise Price. The exercise price per share of Common Stock subject to a
Stock Option shall be determined by the Committee at the time of grant; provided
that the per share exercise price of a Stock Option shall not be less than 100%
(or, in the case of an Incentive Stock Option granted to a Ten Percent
Stockholder, 110%) of the Fair Market Value of the Common Stock at the date of
grant.

 

(b) Stock Option Term. The term of each Stock Option shall be fixed by the
Committee; provided that no Stock Option shall be exercisable more than 10 years
after the date the Option is granted; and provided, further, that the term of an
Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed
five years.

 

(c) Exercisability. Unless otherwise provided by the Committee in accordance
with the provisions of this Section 6.4, Stock Options granted under the Plan
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at the time of grant. If the
Committee provides, in its discretion, that any Stock Option is exercisable
subject to certain limitations (including, without limitation, that such Stock
Option is exercisable only in installments or within certain time periods), the
Committee may waive such limitations on the exercisability at any time at or
after the time of grant in whole or in part (including, without limitation,
waiver of the installment exercise provisions or acceleration of the time at
which such Stock Option may be exercised), based on such factors, if any, as the
Committee shall determine, in its sole discretion.

 

(d) Method of Exercise. Subject to whatever installment exercise and waiting
period provisions apply under Section 6.4(c), to the extent vested, Stock
Options may be exercised in whole or in part at any time during the Option term,
by giving written notice of exercise to the Company specifying the number of
shares of Common Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price as follows: (i) in cash or by check, bank
draft or money order payable to the order of the Company; (ii) solely to the
extent permitted by applicable law, if the Common Stock is traded on a national
securities exchange, and the Committee authorizes, through a procedure whereby
the Participant delivers irrevocable instructions to a broker reasonably
acceptable to the Committee to deliver promptly to the Company an amount equal
to the purchase price; (iii) having the Company withhold shares of Common Stock
issuable upon exercise of the Stock Option, or by payment in full or in part in
the form of Common Stock owned by the Participant, based on the Fair Market
Value of the Common Stock on the payment date as determined by the Committee; or
(iv) on such other terms and conditions as may be acceptable to the Committee.
No shares of Common Stock shall be issued until payment therefor has been made
or provided for in accordance with this Section 6.4(d).

 

 12 

 

 

(e) Non-Transferability of Options. No Stock Option shall be Transferable by the
Participant other than by will or by the laws of descent and distribution, and
all Stock Options shall be exercisable, during the Participant’s lifetime, only
by the Participant. Notwithstanding the foregoing, the Committee may determine,
in its sole discretion, at the time of grant or thereafter that a Non-Qualified
Stock Option that is otherwise not Transferable pursuant to this Section is
Transferable to a Family Member in whole or in part and in such circumstances,
and under such conditions, as specified by the Committee; provided that, the
transferor remains liable for all obligations under the Plan related to such
Transferred Stock Options and any Award Agreement in respect of such Transferred
Stock Options; and provided, further, that the transferor retains rights of
notice with respect to such Transferred Stock Option, as applicable. A
Non-Qualified Stock Option that is Transferred to a Family Member pursuant to
the preceding sentence (i) may not be subsequently Transferred other than by
will or by the laws of descent and distribution and (ii) remains subject to the
terms of the Plan and the applicable Award Agreement. Any shares of Common Stock
acquired upon the exercise of a Non-Qualified Stock Option by a permissible
transferee of a Non-Qualified Stock Option or a permissible transferee pursuant
to a Transfer after the exercise of the Non-Qualified Stock Option shall be
subject to the terms of the Plan and the applicable Award Agreement.

 

(f) Termination by Death or Disability. Unless otherwise determined by the
Committee at the time of grant, or if no rights of the Participant are reduced,
thereafter, if a Participant’s Termination is by reason of death or Disability,
all Stock Options that are held by such Participant that are vested and
exercisable at the time of the Participant’s Termination may be exercised by the
Participant (or in the case of the Participant’s death, by the legal
representative of the Participant’s estate) at any time within a period of one
(1) year from the date of such Termination, but in no event beyond the
expiration of the stated term of such Stock Options; provided, however, that, in
the event of a Participant’s Termination by reason of Disability, if the
Participant dies within such exercise period, all unexercised Stock Options held
by such Participant shall thereafter be exercisable, to the extent to which they
were exercisable at the time of death, for a period of one (1) year from the
date of such death, but in no event beyond the expiration of the stated term of
such Stock Options.

 

(g) Involuntary Termination Without Cause. Unless otherwise determined by the
Committee at the time of grant, or if no rights of the Participant are reduced,
thereafter, if a Participant’s Termination is by involuntary termination by the
Company without Cause, all Stock Options that are held by such Participant that
are vested and exercisable at the time of the Participant’s Termination may be
exercised by the Participant at any time within a period of ninety (90) days
from the date of such Termination, but in no event beyond the expiration of the
stated term of such Stock Options.

 

(h) Voluntary Resignation. Unless otherwise determined by the Committee at the
time of grant, or if no rights of the Participant are reduced, thereafter, if a
Participant’s Termination is voluntary (other than a voluntary termination
described in Section 6.4(i)(y) hereof), all Stock Options that are held by such
Participant that are vested and exercisable at the time of the Participant’s
Termination may be exercised by the Participant at any time within a period of
ninety (90) days from the date of such Termination, but in no event beyond the
expiration of the stated term of such Stock Options.

 

 13 

 

 

(i) Termination for Cause. Unless otherwise determined by the Committee at the
time of grant, or if no rights of the Participant are reduced, thereafter, if a
Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as
provided in Section 6.4(h)) after the occurrence of an event that would be
grounds for a Termination for Cause, all Stock Options, whether vested or not
vested, that are held by such Participant shall thereupon terminate and expire
as of the date of such Termination.

 

(j) Unvested Stock Options. Unless otherwise determined by the Committee at the
time of grant, or if no rights of the Participant are reduced, thereafter, Stock
Options that are not vested as of the date of a Participant’s Termination for
any reason shall terminate and expire as of the date of such Termination.

 

(k) Incentive Stock Option Limitations. To the extent that the aggregate Fair
Market Value (determined as of the time of grant) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an Eligible Employee during any calendar year under the Plan and/or any other
stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000,
such Options shall be treated as Non-Qualified Stock Options. In addition, if an
Eligible Employee does not remain employed by the Company, any Subsidiary or any
Parent at all times from the time an Incentive Stock Option is granted until
three months prior to the date of exercise thereof (or such other period as
required by applicable law), such Stock Option shall be treated as a
Non-Qualified Stock Option. Should any provision of the Plan not be necessary in
order for the Stock Options to qualify as Incentive Stock Options, or should any
additional provisions be required, the Committee may amend the Plan accordingly,
without the necessity of obtaining the approval of the stockholders of the
Company.

 

(l) Form, Modification, Extension and Renewal of Stock Options. Subject to the
terms and conditions and within the limitations of the Plan, Stock Options shall
be evidenced by such form of agreement or grant as is approved by the Committee,
and the Committee may (i) modify, extend or renew outstanding Stock Options
granted under the Plan; provided that the rights of a Participant are not
reduced without such Participant’s consent; and provided, further, that such
action does not subject the Stock Options to Section 409A of the Code without
the consent of the Participant; and (ii) accept the surrender of outstanding
Stock Options (to the extent not theretofore exercised) and authorize the
granting of new Stock Options in substitution therefor (to the extent not
theretofore exercised). Notwithstanding the foregoing, an outstanding Option may
not be modified to reduce the exercise price thereof nor may a new Option at a
lower price be substituted for a surrendered Option (other than adjustments or
substitutions in accordance with Section 4.2), unless such action is approved by
the stockholders of the Company.

 

(m) Deferred Delivery of Common Stock. The Committee may in its discretion
permit Participants to defer delivery of Common Stock acquired pursuant to a
Participant’s exercise of an Option in accordance with the terms and conditions
established by the Committee in the applicable Award Agreement, which shall be
intended to comply with the requirements of Section 409A of the Code.

 

 14 

 

 

(n) Early Exercise. The Committee may provide that a Stock Option include a
provision whereby the Participant may elect at any time before the Participant’s
Termination to exercise the Stock Option as to any part or all of the shares of
Common Stock subject to the Stock Option prior to the full vesting of the Stock
Option and such shares shall be subject to the provisions of Article VIII and be
treated as Restricted Stock. Unvested shares of Common Stock so purchased may be
subject to a repurchase option in favor of the Company or to any other
restriction the Committee determines to be appropriate.

 

(o) Other Terms and Conditions. The Committee may include a provision in an
Award Agreement providing for the automatic exercise of a Non-Qualified Stock
Option on a cashless basis on the last day of the term of such Option if the
Participant has failed to exercise the Non-Qualified Stock Option as of such
date, with respect to which the Fair Market Value of the shares of Common Stock
underlying the Non-Qualified Stock Option exceeds the exercise price of such
Non-Qualified Stock Option on the date of expiration of such Option, subject to
Section 15.4. Stock Options may contain such other provisions, which shall not
be inconsistent with any of the terms of the Plan, as the Committee shall deem
appropriate.

 

Article VII
STOCK APPRECIATION RIGHTS

 

7.1 Stock Appreciation Rights. Stock Appreciation Rights may be granted alone or
in addition to other Awards granted under the Plan.

 

7.2 Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights
granted hereunder shall be subject to such terms and conditions, not
inconsistent with the provisions of the Plan, as shall be determined from time
to time by the Committee, and the following:

 

(a) Exercise Price. The exercise price per share of Common Stock subject to a
Stock Appreciation Right shall be determined by the Committee at the time of
grant; provided that the per share exercise price of a Stock Appreciation Right
shall not be less than 100% of the Fair Market Value of the Common Stock at the
time of grant.

 

(b) Term. The term of each Stock Appreciation Right shall be fixed by the
Committee, but shall not be greater than 10 years after the date the right is
granted.

 

(c) Exercisability. Unless otherwise provided by the Committee in accordance
with the provisions of this Section 7.2, Stock Appreciation Rights granted under
the Plan shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee at the time of grant. If
the Committee provides, in its discretion, that any such right is exercisable
subject to certain limitations (including, without limitation, that it is
exercisable only in installments or within certain time periods), the Committee
may waive such limitations on the exercisability at any time at or after grant
in whole or in part (including, without limitation, waiver of the installment
exercise provisions or acceleration of the time at which such right may be
exercised), based on such factors, if any, as the Committee shall determine, in
its sole discretion.

 

(d) Method of Exercise. Subject to whatever installment exercise and waiting
period provisions apply under Section 7.2(c), Stock Appreciation Rights may be
exercised in whole or in part at any time in accordance with the applicable
Award Agreement, by giving written notice of exercise to the Company specifying
the number of Stock Appreciation Rights to be exercised.

 

 15 

 

 

(e) Payment. Upon the exercise of a Stock Appreciation Right, a Participant
shall be entitled to receive, for each right exercised, up to, but no more than,
an amount in cash and/or Common Stock (as chosen by the Committee in its sole
discretion) equal in value to the excess of the Fair Market Value of one share
of Common Stock on the date that the right is exercised over the Fair Market
Value of one share of Common Stock on the date that the right was awarded to the
Participant.

 

(f) Termination. Unless otherwise determined by the Committee at grant or, if no
rights of the Participant are reduced, thereafter, subject to the provisions of
the applicable Award Agreement and the Plan, upon a Participant’s Termination
for any reason, Stock Appreciation Rights will remain exercisable following a
Participant’s Termination on the same basis as Stock Options would be
exercisable following a Participant’s Termination in accordance with the
provisions of Sections 6.4(f) through 6.4(j).

 

(g) Non-Transferability. No Stock Appreciation Rights shall be Transferable by
the Participant other than by will or by the laws of descent and distribution,
and all such rights shall be exercisable, during the Participant’s lifetime,
only by the Participant.

 

7.3 Other Terms and Conditions. The Committee may include a provision in an
Award Agreement providing for the automatic exercise of a Stock Appreciation
Right on a cashless basis on the last day of the term of such Stock Appreciation
Right if the Participant has failed to exercise the Stock Appreciation Right as
of such date, with respect to which the Fair Market Value of the shares of
Common Stock underlying the Stock Appreciation Right exceeds the exercise price
of such Stock Appreciation Right on the date of expiration of such Stock
Appreciation Right, subject to Section 15.4. Stock Appreciation Rights may
contain such other provisions, which shall not be inconsistent with any of the
terms of the Plan, as the Committee shall deem appropriate.

 

Article VIII
RESTRICTED STOCK

 

8.1 Awards of Restricted Stock. Shares of Restricted Stock may be issued either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the Participants, to whom, and the time or times at which, grants of
Restricted Stock shall be made, the number of shares to be awarded, the price
(if any) to be paid by the Participant (subject to Section 8.2), the time or
times within which such Awards may be subject to forfeiture, the vesting
schedule and rights to acceleration thereof, and all other terms and conditions
of the Awards. The Committee may condition the grant or vesting of Restricted
Stock upon the attainment of specified performance targets (including the
Performance Goals) or such other factor as the Committee may determine in its
sole discretion.

 

 16 

 

 

8.2 Awards and Certificates. Participants selected to receive Restricted Stock
shall not have any right with respect to such Award, unless and until such
Participant has delivered a fully executed copy of the agreement evidencing the
Award to the Company, to the extent required by the Committee, and has otherwise
complied with the applicable terms and conditions of such Award. Further, such
Award shall be subject to the following conditions:

 

(a) Purchase Price. The purchase price of Restricted Stock shall be fixed by the
Committee. Subject to Section 4.3, the purchase price for shares of Restricted
Stock may be zero to the extent permitted by applicable law, and, to the extent
not so permitted, such purchase price may not be less than par value.

 

(b) Acceptance. Awards of Restricted Stock must be accepted within a period of
60 days (or such shorter period as the Committee may specify at grant) after the
grant date, by executing a Restricted Stock Award Agreement and by paying
whatever price (if any) the Committee has designated thereunder.

 

(c) Legend. Each Participant receiving Restricted Stock shall be issued a stock
certificate in respect of such shares of Restricted Stock, unless the Committee
elects to use another system, such as book entries by the transfer agent, as
evidencing ownership of shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant, and shall, in addition to such
legends required by applicable securities laws, bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

 

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the Falcon Minerals
Corporation (the “Company”) 2018 Long-Term Incentive Plan (the “Plan”) and an
Agreement entered into between the registered owner and the Company dated [___].
Copies of such Plan and Agreement are on file at the principal office of the
Company.”

 

(d) Custody. If stock certificates are issued in respect of shares of Restricted
Stock, the Committee may require that any stock certificates evidencing such
shares be held in custody by the Company until the restrictions thereon shall
have lapsed, and that, as a condition of any grant of Restricted Stock, the
Participant shall have delivered a duly signed stock power or other instruments
of assignment (including a power of attorney), each endorsed in blank with a
guarantee of signature if deemed necessary or appropriate by the Company, which
would permit transfer to the Company of all or a portion of the shares subject
to the Restricted Stock Award in the event that such Award is forfeited in whole
or part.

 

8.3 Restrictions and Conditions. The shares of Restricted Stock awarded pursuant
to the Plan shall be subject to the following restrictions and conditions:

 

(a) Restriction Period. (i) The Participant shall not be permitted to Transfer
shares of Restricted Stock awarded under the Plan during the period or periods
set by the Committee (the “Restriction Period”) commencing on the date of such
Award, as set forth in the Restricted Stock Award Agreement and such agreement
shall set forth a vesting schedule and any event that would accelerate vesting
of the shares of Restricted Stock. Within these limits, based on service,
attainment of Performance Goals pursuant to Section 8.3(a)(ii) and/or such other
factors or criteria as the Committee may determine in its sole discretion, the
Committee may condition the grant or provide for the lapse of such restrictions
in installments in whole or in part, or may accelerate the vesting of all or any
part of any Restricted Stock Award and/or waive the deferral limitations for all
or any part of any Restricted Stock Award.

 

 17 

 

 

(ii) If the grant of shares of Restricted Stock or the lapse of restrictions is
based on the attainment of Performance Goals, the Committee shall establish the
objective Performance Goals and the applicable vesting percentage of the
Restricted Stock applicable to each Participant or class of Participants in
writing prior to the beginning of the applicable fiscal year or at such later
date as otherwise determined by the Committee and while the outcome of the
Performance Goals are substantially uncertain. Such Performance Goals may
incorporate provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances.

 

(b) Rights as a Stockholder. Except as provided in Section 8.3(a) and this
Section 8.3(b) or as otherwise determined by the Committee in an Award
Agreement, the Participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a holder of shares of Common Stock of the Company,
including, without limitation, the right to receive dividends, the right to vote
such shares and, subject to and conditioned upon the full vesting of shares of
Restricted Stock, the right to tender such shares. The Committee may, in its
sole discretion, determine at the time of grant that the payment of dividends
shall be deferred until, and conditioned upon, the expiration of the applicable
Restriction Period.

 

(c) Termination. Unless otherwise determined by the Committee at grant or, if no
rights of the Participant are reduced, thereafter, subject to the applicable
provisions of the Award Agreement and the Plan, upon a Participant’s Termination
for any reason during the relevant Restriction Period, all Restricted Stock
still subject to restriction will be forfeited in accordance with the terms and
conditions established by the Committee at grant or thereafter.

 

(d) Lapse of Restrictions. If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock, the certificates for such shares shall
be delivered to the Participant. All legends shall be removed from said
certificates at the time of delivery to the Participant, except as otherwise
required by applicable law or other limitations imposed by the Committee.

 

Article IX
RESTRICTED STOCK UNITS

 

9.1 Restricted Stock Units. The Committee is authorized to grant Restricted
Stock Units to Participants, subject to the following terms and conditions:

 

(a) Award and Restrictions. Restricted Stock Units shall be subject to such
restrictions (which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including, without limitation, based on
achievement of one or more Performance Goals and/or future service
requirements), separately or in combination, in installments or otherwise, as
the Committee may determine.

 

 18 

 

 

(b) Dividend Equivalents. Unless otherwise determined by the Committee at date
of grant, Dividend Equivalents on the specified number of shares of Common Stock
covered by an Award of Restricted Stock Units shall be either (i) paid with
respect to such Restricted Stock Units on the dividend payment date in cash or
in shares of unrestricted Stock having a Fair Market Value equal to the amount
of such dividends, or (ii) deferred with respect to such Restricted Stock Units
and the amount or value thereof automatically deemed reinvested in additional
Restricted Stock Units.

 

(c) Settlement. Settlement of vested Restricted Stock Units shall occur upon
expiration of the deferral period specified for such Restricted Stock Units by
the Committee (or, if permitted by the Committee, as elected by the
Participant). Settlement of Restricted Stock Units shall be made by delivery of
(i) a number of shares of Common Stock equal to the number of Restricted Stock
Units for which settlement is due, (ii) cash in an amount equal to the Fair
Market Value of the specified number of shares of Common Stock covered by such
Restricted Stock Units, or (iii) a combination thereof, as determined by the
Committee at the date of grant or thereafter.

 

Article X
PERFORMANCE AWARDS

 

10.1 Performance Awards. The Committee may grant a Performance Award to a
Participant payable upon the attainment of specific Performance Goals. If the
Performance Award is payable in shares of Common Stock, such shares shall be
transferable to the Participant upon attainment of the relevant Performance Goal
in accordance with Article VIII. If the Performance Award is payable in cash, it
will be paid upon the attainment of the relevant Performance Goals in cash or,
to the extent provided in an Award Agreement, in shares of Common Stock or
Restricted Stock (based on the then current Fair Market Value of such shares).
Each Performance Award shall be evidenced by an Award Agreement in such form
that is not inconsistent with the Plan and that the Committee may from time to
time approve.

 

10.2 Terms and Conditions. Performance Awards awarded pursuant to this Article X
shall be subject to the following terms and conditions:

 

(a) Earning of Performance Award. At the expiration of the applicable
Performance Period, the Committee shall determine the extent to which the
Performance Goals are achieved and the percentage of each Performance Award that
has been earned.

 

(b) Non-Transferability. Subject to the applicable provisions of the Award
Agreement and the Plan, Performance Awards may not be Transferred during the
Performance Period.

 

(c) Dividends. Unless otherwise determined by the Committee at the time of
grant, amounts equal to dividends declared during the Performance Period with
respect to the number of shares of Common Stock covered by a Performance Award
will not be paid to the Participant.

 

(d) Payment. Following the Committee’s determination in accordance with
Section 10.2(a), the Company shall settle Performance Awards, in such form
(including, without limitation, in shares of Common Stock or in cash) as
determined by the Committee, in an amount equal to such Participant’s earned
Performance Awards.

 

 19 

 

 

(e) Termination. Subject to the applicable provisions of the Award Agreement and
the Plan, upon a Participant’s Termination for any reason during the Performance
Period for a given Performance Award, the Performance Award in question will
vest or be forfeited in accordance with the terms and conditions established by
the Committee at grant.

 

(f) Accelerated Vesting. Based on service, performance and/or such other factors
or criteria, if any, as the Committee may determine, the Committee may, at or
after grant, accelerate the vesting of all or any part of any Performance Award.

 

Article XI
OTHER AWARDS

 

11.1 Other Stock-Based Awards. The Committee is authorized to grant to
Participants Other Stock-Based Awards that are payable in, valued in whole or in
part by reference to, or otherwise based on or related to shares of Common
Stock, including, but not limited to, shares of Common Stock awarded purely as a
bonus and not subject to restrictions or conditions, shares of Common Stock in
payment of the amounts due under an incentive or performance plan sponsored or
maintained by the Company or an Affiliate, stock equivalent units and Awards
valued by reference to book value of shares of Common Stock. Other Stock-Based
Awards may be granted either alone or in addition to or in tandem with other
Awards granted under the Plan.

 

11.2 Subject to the provisions of the Plan, the Committee shall have authority
to determine the Participants, to whom, and the time or times at which, such
Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such Awards and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified Performance Period. The Committee may condition the
grant or vesting of Other Stock-Based Awards upon the attainment of specified
Performance Goals as the Committee may determine, in its sole discretion. Such
Performance Goals may incorporate provisions for disregarding (or adjusting for)
changes in accounting methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar type events or
circumstances.

 

11.3 Terms and Conditions. Other Stock-Based Awards made pursuant to this
Article XI shall be subject to the following terms and conditions:

 

(a) Non-Transferability. Subject to the applicable provisions of the Award
Agreement and the Plan, shares of Common Stock subject to Awards made under this
Article XI may not be Transferred prior to the date on which the shares are
issued, or, if later, the date on which any applicable restriction, performance
or deferral period lapses.

 

(b) Dividends. Unless otherwise determined by the Committee at the time of
Award, subject to the provisions of the Award Agreement and the Plan, the
recipient of an Award under this Article XI shall not be entitled to receive,
currently or on a deferred basis, dividends or dividend equivalents in respect
of the number of shares of Common Stock covered by the Award.

 

(c) Vesting. Any Award under this Article XI and any Common Stock covered by any
such Award shall vest or be forfeited to the extent so provided in the Award
Agreement, as determined by the Committee, in its sole discretion.

 

 20 

 

 

(d) Price. Common Stock issued on a bonus basis under this Article XI may be
issued for no cash consideration. Common Stock purchased pursuant to a purchase
right awarded under this Article XI shall be priced, as determined by the
Committee in its sole discretion.

 

11.4 Bonus Stock. The Committee is authorized to grant Common Stock as a bonus,
or to grant Common Stock or other Awards in lieu of obligations to pay cash or
deliver other property under the Plan or under other plans or compensatory
arrangements; provided that, in the case of Participants subject to Section 16
of the Exchange Act, the amount of such grants remains within the discretion of
the Committee to the extent necessary to ensure that acquisitions of Common
Stock or other Awards are exempt from liability under Section 16(b) of the
Exchange Act. Common Stock or Awards granted hereunder shall be subject to such
other terms as shall be determined by the Committee.

 

11.5 Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Common
Stock, other Awards, or other property equal in value to dividends paid with
respect to a specified number of shares of Common Stock or other periodic
payments. Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award other than an Award of Restricted Stock). The
Committee may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Common
Stock, Awards or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Committee may specify.

 

11.6 Annual Incentive Awards. The Committee is authorized to grant Annual
Incentive Awards under the Plan.

 

(a) Potential Annual Incentive Awards. The Committee shall determine the
Participants who will potentially receive Annual Incentive Awards, and the
amounts potentially payable thereunder, for that fiscal year, either out of an
Annual Incentive Award pool established by such date under Section 11.5(b)
hereof or as individual Annual Incentive Awards. The amount potentially payable,
with respect to Annual Incentive Awards, shall be based upon the achievement of
a performance goal or goals based on one or more of the business criteria set
forth in Article X hereof in the given performance year, as specified by the
Committee, in accordance with Section 11.5(b) hereof.

 

(b) Annual Incentive Award Pool. The Committee may establish an Annual Incentive
Award pool, which shall be an unfunded pool, for purposes of measuring
performance of the Company in connection with Annual Incentive Awards. The
amount of such Annual Incentive Award pool shall be based upon the achievement
of a Performance Goal or Performance Goals during the given performance period,
as specified by the Committee in accordance with Article X hereof. The Committee
may specify the amount of the Annual Incentive Award pool as a percentage of any
of such business criteria, a percentage thereof in excess of a threshold amount
or as another amount which need not bear a strictly mathematical relationship to
such business criteria.

 

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(c) Payout of Annual Incentive Awards. After the end of each applicable
performance period, the Committee shall determine the amount, if any, of (i) the
Annual Incentive Award pool, and the maximum amount of the potential Annual
Incentive Award payable to each Participant in the Annual Incentive Award pool,
or (ii) the amount of the Annual Incentive Award payable to each Participant. To
the extent provided in an Award Agreement, the Committee may, in its discretion,
determine that the amount payable to any Participant as a final Annual Incentive
Award shall be reduced from the amount of his or her potential Annual Incentive
Award, including a determination to make no final Award whatsoever. The
Committee shall specify the circumstances in which an Annual Incentive Award
shall be paid or forfeited in the event of termination of employment by the
Participant prior to the end of the applicable year or settlement of such Annual
Incentive Award.

 

11.7 Substitute Awards; No Re-Pricing. Awards may be granted under the Plan in
substitution for similar awards held by individuals who become Participants as a
result of a merger, consolidation or acquisition of another entity or the assets
of another entity by or with the Company or an Affiliate of the Company. Such
Substitute Awards referred to in the immediately preceding sentence that are
Options or Stock Appreciation Rights may have an exercise price that is less
than the Fair Market Value of a share of Stock on the date of the substitution.
Except as provided in this Section 11.6 or in Article XII, the terms of
outstanding Awards may not be amended to reduce the exercise price or grant
price of outstanding Options or Stock Appreciation Rights or to cancel
outstanding Options and Stock Appreciation Rights in exchange for cash, other
Awards or Options or Stock Appreciation Rights with an exercise price or grant
price that is less than the exercise price or grant price of the original
Options or Stock Appreciation Rights without the approval of the stockholders of
the Company.

 

Article XII
CHANGE IN CONTROL PROVISIONS

 

12.1 Benefits. In the event of a Change in Control of the Company (as defined
below), and except as otherwise provided by the Committee in an Award Agreement,
a Participant’s unvested Award shall not vest automatically and a Participant’s
Award shall be treated in accordance with one or more of the following methods
as determined by the Committee:

 

(a) Awards, whether or not then vested, shall be continued, assumed, or have new
rights substituted therefor, as determined by the Committee in a manner
consistent with the requirements of Section 409A of the Code, and restrictions
to which shares of Restricted Stock or any other Award granted prior to the
Change in Control are subject shall not lapse upon a Change in Control and the
Restricted Stock or other Award shall, where appropriate in the sole discretion
of the Committee, receive the same distribution as other Common Stock on such
terms as determined by the Committee; provided that the Committee may decide to
award additional Restricted Stock or other Awards in lieu of any cash
distribution. Notwithstanding anything to the contrary herein, for purposes of
Incentive Stock Options, any assumed or substituted Stock Option shall comply
with the requirements of Treasury Regulation § 1.424-1.

 

(b) The Committee, in its sole discretion, may provide for the purchase of any
Awards by the Company or an Affiliate for an amount of cash equal to the excess
(if any) of the Change in Control Price (as defined below) of the shares of
Common Stock covered by such Awards, over the aggregate exercise price of such
Awards. For purposes hereof, “Change in Control Price” shall mean the highest
price per share of Common Stock paid in any transaction related to a Change in
Control of the Company.

 

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(c) The Committee may, in its sole discretion, terminate all outstanding and
unexercised Stock Options, Stock Appreciation Rights or any Other Stock-Based
Award that provides for a Participant elected exercise, effective as of the date
of the Change in Control, by delivering notice of termination to each
Participant at least twenty (20) days prior to the date of consummation of the
Change in Control, in which case during the period from the date on which such
notice of termination is delivered to the consummation of the Change in Control,
each such Participant shall have the right to exercise in full all of such
Participant’s Awards that are then outstanding (without regard to any
limitations on exercisability otherwise contained in the Award Agreements), but
any such exercise shall be contingent on the occurrence of the Change in
Control; provided that, if the Change in Control does not take place within a
specified period after giving such notice for any reason whatsoever, the notice
and exercise pursuant thereto shall be null and void.

 

(d) Notwithstanding any other provision herein to the contrary, the Committee
may, in its sole discretion, provide for accelerated vesting or lapse of
restrictions, of an Award at any time.

 

12.2 Change in Control. Unless otherwise determined by the Committee in the
applicable Award Agreement or other written agreement with a Participant
approved by the Committee, a “Change in Control” shall mean the first (and only
the first) to occur of the following:

 

(a) the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of direct or indirect
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 50% of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that the following acquisitions (collectively, the “Excluded
Acquisitions”) shall not constitute a Change in Control (it being understood
that shares acquired in an Excluded Acquisition may nevertheless be considered
in determining whether any subsequent acquisition by such individual, entity or
group (other than an Excluded Acquisition) constitutes a Change in Control):
(i) any acquisition by the Company or any of its Subsidiaries; (ii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries; (iii) any acquisition by
an underwriter temporarily holding Company securities pursuant to an offering of
such securities; or (iv) any acquisition in connection with a Business
Combination (as hereinafter defined) which, pursuant to subparagraph (c) below,
does not constitute a Change in Control;

 

(b) individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of an individual, entity or group other than
the Board;

 

 23 

 

 

(c) consummation of a reorganization, merger, consolidation or other business
combination (any of the foregoing, a “Business Combination”) of the Company or
any direct or indirect Subsidiary of the Company with any entity, in any case
unless:

 

(i) the Outstanding Company Voting Securities outstanding immediately prior to
such Business Combination, immediately following such Business Combination,
continue to represent (either by remaining outstanding or being converted into
voting securities of the resulting or surviving entity or any ultimate parent
thereof) two-thirds or more of the outstanding common stock and of the then
outstanding voting securities entitled to vote generally in the election of
directors of the Company (or its successor) or any ultimate parent thereof;

 

(ii) after such Business Combination, no Person has direct or indirect
beneficial ownership of more than 50% of either (A) the then outstanding shares
of common stock of the ultimate parent company of the company surviving such
Business Combination or (B) the combined voting power of the then outstanding
voting securities of the ultimate parent company of the company surviving such
Business Combination; and

 

(iii) at least a majority of the members of the board of directors of the
Company (or its successor) or any ultimate parent thereof in such Business
Combination consists of individuals (“Continuing Directors”) who were members of
the Incumbent Board immediately prior to consummation of such Business
Combination (excluding from Continuing Directors for this purpose, however, any
individual whose election or appointment to the Board was at the request,
directly or indirectly, of the entity which entered into the definitive
agreement with the Company or any subsidiary of the Company providing for such
Business Combination);

 

(d) consummation of a sale or other disposition of all or substantially all of
the assets of the Company, other than to a corporation with respect to which,
following such sale or other disposition, at least two-thirds of, respectively,
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Voting Securities; or

 

(e) shareholder approval of a complete liquidation or dissolution of the
Company.

 

The term “the sale or disposition by the Company of all or substantially all of
the assets of the Company” shall mean a sale or other disposition transaction or
series of related transactions involving assets of the Company or of any direct
or indirect subsidiary of the Company (including the stock of any direct or
indirect subsidiary of the Company) in which the value of the assets or stock
being sold or otherwise disposed of (as measured by the purchase price being
paid therefore or by such other method as the Board determines is appropriate in
a case where there is no readily ascertainable purchase price) constitutes more
than two-thirds of the fair market value of the Company (as hereinafter
defined). The “fair market value of the Company” shall be the aggregate market
value of the then Outstanding Company Voting Securities (on a fully diluted
basis) plus the aggregate market value of the Company’s other outstanding equity
securities. The aggregate market value of the shares of Outstanding Company
Voting Securities shall be determined by multiplying the number of shares of
Outstanding Company Voting Securities (on a fully diluted basis) outstanding on
the date of the execution and delivery of a definitive agreement with respect to
the transaction or series of related transactions (the “Transaction Date”) by
the average closing price of the shares of Outstanding Company Voting Securities
for the ten trading days immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of the Company shall be
determined in a manner similar to that prescribed in the immediately preceding
sentence for determining the aggregate market value of the shares of Outstanding
Company Voting Securities or by such other method as the Board shall determine
is appropriate.

 

 24 

 

 

Notwithstanding the foregoing, with respect to any Award that is characterized
as “nonqualified deferred compensation” within the meaning of Section 409A of
the Code, an event shall not be considered to be a Change in Control under the
Plan for purposes of payment of such Award unless such event is also a “change
in ownership,” a “change in effective control” or a “change in the ownership of
a substantial portion of the assets” of the Company within the meaning of
Section 409A of the Code.

 

Article XIII
TERMINATION OR AMENDMENT OF PLAN

 

Notwithstanding any other provision of the Plan, the Board may at any time, and
from time to time, amend, in whole or in part, any or all of the provisions of
the Plan (including any amendment deemed necessary to ensure that the Company
may comply with any regulatory requirement referred to in Article XV or
Section 409A of the Code), or suspend or terminate it entirely, retroactively or
otherwise; provided, however, that, unless otherwise required by law or
specifically provided herein, the rights of a Participant with respect to Awards
granted prior to such amendment, suspension or termination, may not be impaired
without the consent of such Participant; and provided, further, that without the
approval of the holders of the Company’s Common Stock entitled to vote in
accordance with applicable law, no amendment may be made that would (a) increase
the aggregate number of shares of Common Stock that may be issued under the Plan
(except by operation of Section 4.2); (b) change the classification of
individuals eligible to receive Awards under the Plan; (c) decrease the minimum
option price of any Stock Option or Stock Appreciation Right; (d) extend the
maximum option period under Section 6.4; (e) award any Stock Option or Stock
Appreciation Right in replacement of a canceled Stock Option or Stock
Appreciation Right with a higher exercise price than the replacement award; or
(f) require stockholder approval in order for the Plan to continue to comply
with the applicable provisions of Section 422 of the Code to the extent
applicable to Incentive Stock Options. In no event may the Plan be amended
without the approval of the stockholders of the Company in accordance with the
applicable laws of the State of Delaware to increase the aggregate number of
shares of Common Stock that may be issued under the Plan, decrease the minimum
exercise price of any Award, or to make any other amendment that would require
stockholder approval under Financial Industry Regulatory Authority (FINRA) rules
and regulations or the rules of any exchange or system on which the Company’s
securities are listed or traded at the request of the Company. Notwithstanding
anything herein to the contrary, the Board may amend the Plan or any Award
Agreement at any time without a Participant’s consent to comply with applicable
law including Section 409A of the Code. The Committee may amend the terms of any
Award theretofore granted, prospectively or retroactively, but, subject to
Article IV or as otherwise specifically provided herein, no such amendment or
other action by the Committee shall impair the rights of any holder without the
holder’s consent.

 

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Article XIV
UNFUNDED STATUS OF PLAN

 

The Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payment as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any right that is
greater than those of a general unsecured creditor of the Company.

 

Article XV
GENERAL PROVISIONS

 

15.1 Legend. The Committee may require each Person receiving shares of Common
Stock pursuant to a Stock Option or other Award under the Plan to represent to
and agree with the Company in writing that the Participant is acquiring the
shares without a view to distribution thereof. In addition to any legend
required by the Plan, the certificates for such shares may include any legend
that the Committee deems appropriate to reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under the Plan shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities exchange system upon whose
system the Common Stock is then quoted, any applicable federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

 

15.2 Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required, and such arrangements may be either
generally applicable or applicable only in specific cases.

 

15.3 No Right to Employment/Directorship/Consultancy. Neither the Plan nor the
grant of any Option or other Award hereunder shall give any Participant or other
employee, Consultant or Non-Employee Director any right with respect to
continuance of employment, consultancy or directorship by the Company or any
Affiliate, nor shall there be a limitation in any way on the right of the
Company or any Affiliate by which an employee is employed or a Consultant or
Non-Employee Director is retained to terminate such employment, consultancy or
directorship at any time.

 

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15.4 Withholding of Taxes. The Company, or an Affiliate, as applicable, shall
have the right to deduct from any payment to be made pursuant to the Plan, or to
otherwise require, prior to the issuance or delivery of shares of Common Stock
or the payment of any cash hereunder, payment by the Participant of, any
federal, state or local taxes required by law to be withheld. Upon the vesting
of Restricted Stock (or other Award that is taxable upon vesting), or upon
making an election under Section 83(b) of the Code, a Participant shall pay all
required withholding to the Company. Any minimum statutorily required
withholding obligation with regard to any Participant may be satisfied, subject
to the consent of the Committee, by reducing the number of shares of Common
Stock otherwise deliverable or by delivering shares of Common Stock already
owned. Furthermore, at the discretion of the Committee, any additional tax
obligations of a Participant with respect to an Award may be satisfied by
further reducing the number of shares of Common Stock, otherwise deliverable
with respect to such Award, to the extent that such reductions do not result in
any adverse accounting implications to the Company, as determined by the
Committee. Any fraction of a share of Common Stock required to satisfy any such
tax obligations shall be disregarded and the amount due shall be paid instead in
cash by the Participant.

 

15.5 No Assignment of Benefits. No Award or other benefit payable under the Plan
shall, except as otherwise specifically provided by law or permitted by the
Committee, be Transferable in any manner, and any attempt to Transfer any such
benefit shall be void, and any such benefit shall not in any manner be liable
for or subject to the debts, contracts, liabilities, engagements or torts of any
Person who shall be entitled to such benefit, nor shall it be subject to
attachment or legal process for or against such Person.

 

15.6 Listing and Other Conditions.

 

(a) Unless otherwise determined by the Committee, as long as the Common Stock is
listed on a national securities exchange or system sponsored by a national
securities association, the issuance of shares of Common Stock pursuant to an
Award shall be conditioned upon such shares being listed on such exchange or
system. The Company shall have no obligation to issue such shares unless and
until such shares are so listed, and the right to exercise any Option or other
Award with respect to such shares shall be suspended until such listing has been
effected.

 

(b) If at any time counsel to the Company shall be of the opinion that any sale
or delivery of shares of Common Stock pursuant to an Option or other Award is or
may in the circumstances be unlawful under the statutes, rules or regulations of
any applicable jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act or otherwise, with
respect to shares of Common Stock or Awards, and the right to exercise any
Option or other Award shall be suspended until, in the opinion of said counsel,
such sale or delivery shall be lawful or will not result in the imposition of
excise taxes on the Company.

 

(c) Upon termination of any period of suspension under this Section 15.6, any
Award affected by such suspension that shall not then have expired or terminated
shall be reinstated as to all shares available before such suspension and as to
shares which would otherwise have become available during the period of such
suspension, but no such suspension shall extend the term of any Award.

 

15.7 Governing Law. The Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Delaware
(regardless of the law that might otherwise govern under applicable Delaware
principles of conflict of laws).

 

 27 

 

 

15.8 Jurisdiction; Waiver of Jury Trial. Any suit, action or proceeding with
respect to the Plan or any Award Agreement, or any judgment entered by any court
of competent jurisdiction in respect of any thereof, shall be resolved only in
the courts of the State of Delaware or the United States District Court for the
District of Delaware and the appellate courts having jurisdiction of appeals in
such courts. In that context, and without limiting the generality of the
foregoing, the Company and each Participant shall irrevocably and
unconditionally (a) submit in any proceeding relating to the Plan or any Award
Agreement, or for the recognition and enforcement of any judgment in respect
thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the
State of Delaware, the court of the United States of America for the District of
Delaware, and appellate courts having jurisdiction of appeals from any of the
foregoing, and agree that all claims in respect of any such Proceeding shall be
heard and determined in such Delaware State court or, to the extent permitted by
law, in such federal court, (b) consent that any such Proceeding may and shall
be brought in such courts and waives any objection that the Company and each
Participant may now or thereafter have to the venue or jurisdiction of any such
Proceeding in any such court or that such Proceeding was brought in an
inconvenient court and agree not to plead or claim the same, (c) waive all right
to trial by jury in any Proceeding (whether based on contract, tort or
otherwise) arising out of or relating to the Plan or any Award Agreement,
(d) agree that service of process in any such Proceeding may be effected by
mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party, in the
case, of a Participant, at the Participant’s address shown in the books and
records of the Company or, in the case of the Company, at the Company’s
principal offices, attention General Counsel, and (e) agree that nothing in the
Plan shall affect the right to effect service of process in any other manner
permitted by the laws of the State of Delaware.

 

15.9 Construction. Wherever any words are used in the Plan in the masculine
gender they shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever words are used
herein in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.

 

15.10 Other Benefits. No Award granted or paid out under the Plan shall be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or its Affiliates nor affect any benefit under any other benefit
plan now or subsequently in effect under which the availability or amount of
benefits is related to the level of compensation.

 

15.11 Costs. The Company shall bear all expenses associated with administering
the Plan, including expenses of issuing Common Stock pursuant to Awards
hereunder.

 

15.12 No Right to Same Benefits. The provisions of Awards need not be the same
with respect to each Participant, and such Awards to individual Participants
need not be the same in subsequent years.

 

15.13 Death; Disability. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant’s death or Disability and to supply it with a copy of the will (in
the case of the Participant’s death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of the Plan.

 

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15.14 Section 16(b) of the Exchange Act. All elections and transactions under
the Plan by Persons subject to Section 16 of the Exchange Act involving shares
of Common Stock are intended to comply with any applicable exemptive condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
the Plan and the transaction of business thereunder.

 

15.15 Section 409A of the Code. The Plan is intended to be exempt from, or
comply with, the applicable requirements of Section 409A of the Code and shall
be limited, construed and interpreted in accordance with such intent. To the
extent that any Award is subject to Section 409A of the Code, it shall be paid
in a manner that will comply with Section 409A of the Code, including proposed,
temporary or final regulations or any other guidance issued by the Secretary of
the Treasury and the Internal Revenue Service with respect thereto.
Notwithstanding anything herein to the contrary, any provision in the Plan that
is inconsistent with Section 409A of the Code shall be deemed to be amended to
comply with Section 409A of the Code and to the extent such provision cannot be
amended to comply therewith, such provision shall be null and void. The Company
shall have no liability to a Participant, or any other party, if an Award that
is intended to be exempt from, or compliant with, Section 409A of the Code is
not so exempt or compliant or for any action taken by the Committee or the
Company and, in the event that any amount or benefit under the Plan becomes
subject to penalties under Section 409A of the Code, responsibility for payment
of such penalties shall rest solely with the affected Participants and not with
the Company. Notwithstanding any contrary provision in the Plan or Award
Agreement, any payment(s) of “nonqualified deferred compensation” (within the
meaning of Section 409A of the Code) that are otherwise required to be made
under the Plan to a “specified employee” (as defined under Section 409A of the
Code) as a result of such employee’s separation from service (other than a
payment that is not subject to Section 409A of the Code) shall be delayed for
the first six (6) months following such separation from service (or, if earlier,
the date of death of the specified employee) and shall instead be paid (in a
manner set forth in the Award Agreement) upon expiration of such delay period.

 

15.16 Successor and Assigns. The Plan shall be binding on all successors and
permitted assigns of a Participant, including, without limitation, the estate of
such Participant and the executor, administrator or trustee of such estate.

 

15.17 Severability of Provisions. If any provision of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and the Plan shall be construed and enforced as if
such provisions had not been included.

 

15.18 Payments to Minors, Etc. Any benefit payable to or for the benefit of a
minor, an incompetent Person or other Person incapable of receipt thereof shall
be deemed paid when paid to such Person’s guardian or to the party providing or
reasonably appearing to provide for the care of such Person, and such payment
shall fully discharge the Committee, the Board, the Company, its Affiliates and
their employees, agents and representatives with respect thereto.

 

 29 

 

 

15.19 Lock-Up Agreement. As a condition to the grant of an Award, if requested
by the Company, a Participant shall irrevocably agree not to sell, contract to
sell, grant any option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge or otherwise transfer or dispose of, any interest
in any Common Stock or any securities convertible into, derivative of, or
exchangeable or exercisable for, or any other rights to purchase or acquire
Common Stock (except Common Stock included in a public offering or acquired on
the public market after such offering) during such period of time that the the
Company shall specify (the “Lock-Up Period”); provided, however, that such
Lock-Up Period shall not exceed or be greater than any Lock-Up Period imposed
upon on Falcon Minerals Operating Partnership, LP, any Initial Investor or any
Affiliate of The Blackstone Group L.P. that holds Common Stock, with respect to
such Common Stock or pursuant to any related arrangement. The Participant shall
further agree to sign such documents as may be requested by the Company to
effect the foregoing and agree that the Company may impose stop-transfer
instructions with respect to Common Stock acquired pursuant to an Award until
the end of such Lock-Up Period. Notwithstanding Section 15.4, during any Lock-Up
Period with respect to a Participant, such Participant may elect to satisfy any
tax withholding obligations that arise by requiring the Company to reduce the
number of shares of Common Stock otherwise deliverable.

 

15.20 Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan, and
shall not be employed in the construction of the Plan.

 

15.21 Company Recoupment of Awards. A Participant’s rights with respect to any
Award hereunder shall in all events be subject to (a) any right that the Company
may have under any Company recoupment policy or other agreement or arrangement
with a Participant, or (b) any right or obligation that the Company may have
regarding the clawback of “incentive-based compensation” under Section 10D of
the Exchange Act and any applicable rules and regulations promulgated thereunder
from time to time by the U.S. Securities and Exchange Commission.

 

Article XVI
EFFECTIVE DATE OF PLAN

 

The Plan shall become effective on August 23, 2018, which is the date of its
adoption by the Board, subject to the approval of the Plan by the stockholders
of the Company in accordance with the requirements of the laws of the State of
Delaware.

 

Article XVII
TERM OF PLAN

 

No Award shall be granted pursuant to the Plan on or after the tenth anniversary
of the earlier of the date that the Plan is adopted or the date of stockholder
approval, but Awards granted prior to such tenth anniversary may extend beyond
that date.

 

Article XVIII
NAME OF PLAN

 

The Plan shall be known as the “Falcon Minerals Corporation 2018 Long-Term
Incentive Plan.”

 

 

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