Exhibit 10.1

STAFFING 360 SOLUTIONS, INC.
2020 OMNIBUS INCENTIVE PLAN

The Staffing 360 Solutions, Inc. 2020 Omnibus Incentive Plan (the “Plan”) was
adopted by the Board of Directors of Staffing 360 Solutions, Inc. a Delaware
corporation (the “Company”), effective as of June 30, 2020 (the “Effective
Date”), subject to approval by the Company’s stockholders.

Article 1.
PURPOSE

The purpose of the Plan is to attract and retain the services of key Employees,
key Contractors, and Outside Directors of the Company and its Subsidiaries and
to provide such persons with a proprietary interest in the Company through the
granting of Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Awards, Dividend Equivalent Rights, and Other Awards, whether granted singly, or
in combination, or in tandem, that will:

(a)increase the interest of such persons in the Company’s welfare;

(b)furnish an incentive to such persons to continue their services for the
Company or its Subsidiaries; and

(c)provide a means through which the Company may attract able persons as
Employees, Contractors, and Outside Directors.

With respect to Reporting Participants, the Plan and all transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act.  To the extent any provision of the Plan or
action by the Committee fails to so comply, such provision or action shall be
deemed null and void ab initio, to the extent permitted by law and deemed
advisable by the Committee.

Article 2.
DEFINITIONS

For the purpose of the Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:

2.1“Applicable Law” means all legal requirements relating to the administration
of equity incentive plans and the issuance and distribution of shares of Common
Stock, if any, under applicable corporate laws, applicable securities laws, the
rules of any exchange or inter-dealer quotation system upon which the Company’s
securities are listed or quoted, the rules of any foreign jurisdiction
applicable to Incentives granted to residents therein, and any other applicable
law, rule or restriction.

2.2“Authorized Officer” is defined in Section 3.2(b) hereof.

2.3“Award” means the grant of any Incentive Stock Option, Nonqualified Stock
Option, Restricted Stock, SAR, Restricted Stock Unit, Performance Award,
Dividend Equivalent Right or Other Award, whether granted singly or in
combination or in tandem (each individually referred to herein as an
“Incentive”).

 

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2.4“Award Agreement” means a written agreement between a Participant and the
Company which sets out the terms of the grant of an Award.

2.5“Award Period” means the period set forth in the Award Agreement during which
one or more Incentives granted under an Award may be exercised.

2.6“Board” means the board of directors of the Company.

2.7“Change in Control” means (a) an acquisition (whether directly from the
Company or otherwise) of any voting securities of the Company (the “Voting
Securities”) by any “Person” (as the term person is used for purposes of Section
13(d) or 14(d) of the Exchange Act, immediately after which such Person has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than fifty percent (50%) of the combined voting power of
the Company’s then outstanding Voting Securities; (b) the individuals who
constitute the members of the Board cease, by reason of a financing, merger,
combination, acquisition, takeover, or other non-ordinary course transaction
affecting the Company, to constitute at least fifty-one percent (51%) of the
members of the Board; or (c) approval by the Board and, if required,
stockholders of the Company of, or execution by the Company of any definitive
agreement with respect to, or the consummation of (it being understood that the
mere execution of a term sheet, memorandum of understanding, or other
non-binding document shall not constitute a Change of Control): (i) a merger,
consolidation or reorganization involving the Company, where either or both of
the events described in clauses (a) or (b) above would be the result, (ii) a
liquidation or dissolution of or appointment of a receiver, rehabilitator,
conservator or similar person for, or the filing by a third party of an
involuntary bankruptcy against, the Company; provided, however, that to the
extent necessary to comply with Section 409A of the Code, the occurrence of an
event described in this subsection (ii) shall not trigger the settlement or
payment of any Award granted under this Plan that constitutes non-exempt
“deferred compensation” for purposes of Section 409A of the Code, and (iii) an
agreement for the sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a subsidiary of
the Company).

Notwithstanding the foregoing provisions of this Section 2.7, if an Award issued
under the Plan is subject to Section 409A of the Code, then an event shall not
constitute a Change in Control for purposes of such Award under the Plan unless
such event also constitutes a change in the Company’s ownership, its effective
control or the ownership of a substantial portion of its assets within the
meaning of Section 409A of the Code.

2.8“Claim” means any claim, liability or obligation of any nature, arising out
of or relating to this Plan or an alleged breach of this Plan or an Award
Agreement.

2.9“Code” means the United States Internal Revenue Code of 1986, as amended.

2.10“Committee” means the committee appointed or designated by the Board to
administer the Plan in accordance with Article 3 of this Plan.

2.11“Common Stock” means the common stock, par value $0.0001 per share, which
the Company is currently authorized to issue or may in the future be authorized
to issue, or any securities into which or for which the common stock of the
Company may be converted or exchanged, as the case may be, pursuant to the terms
of this Plan.

2.12“Company” means Staffing 360 Solutions, Inc., a Delaware corporation, and
any successor entity.

 

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2.13“Contractor” means any natural person, who is not an Employee, rendering
bona fide services to the Company or a Subsidiary, with compensation, pursuant
to a written independent contractor agreement between such person and the
Company or a Subsidiary, provided that such services are not rendered in
connection with the offer or sale of securities in a capital raising transaction
and do not directly or indirectly promote or maintain a market for the Company’s
securities.

2.14“Corporation” means any entity that (a) is defined as a corporation under
Section 7701 of the Code and (b) is the Company or is in an unbroken chain of
corporations (other than the Company) beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing a majority of the total combined voting power of all classes of stock
in one of the other corporations in the chain.  For purposes of clause (b)
hereof, an entity shall be treated as a “corporation” if it satisfies the
definition of a corporation under Section 7701 of the Code.

2.15“Date of Grant” means the effective date on which an Award is made to a
Participant as set forth in the applicable Award Agreement; provided, however,
that solely for purposes of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder, the Date of Grant of an Award shall be the
date of stockholder approval of the Plan if such date is later than the
effective date of such Award as set forth in the Award Agreement.

2.16“Dividend Equivalent Right” means the right of the holder thereof to receive
credits based on the cash dividends that would have been paid on the shares of
Common Stock specified in the Award if such shares were held by the Participant
to whom the Award is made.

2.17“Employee” means a common law employee (as defined in accordance with the
Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company or any Subsidiary of the Company; provided, however, in the
case of individuals whose employment status, by virtue of their employer or
residence, is not determined under Section 3401(c) of the Code, “Employee” shall
mean an individual treated as an employee for local payroll tax or employment
purposes by the applicable employer under Applicable Law for the relevant
period.

2.18“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

2.19“Executive Officer” means an officer of the Company or a Subsidiary subject
to Section 16 of the Exchange Act.

2.20“Exercise Date” is defined in Section 8.3(b) hereof.

2.21“Exercise Notice” is defined in Section 8.3(b) hereof.

2.22“Fair Market Value” means, as of a particular date, (a) if the shares of
Common Stock are listed on any established national securities exchange, the
closing sales price per share of Common Stock on the consolidated transaction
reporting system for the principal securities exchange for the Common Stock on
that date (as determined by the Committee, in its discretion), or, if there
shall have been no such sale so reported on that date, on the last preceding
date on which such a sale was so reported; (b) if the shares of Common Stock are
not so listed, but are quoted on an automated quotation system, the closing
sales price per share of Common Stock reported on the automated quotation system
on that date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported; (c) if
the Common Stock is not so listed or quoted, the mean between the closing bid
and asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be available, as
reported by the National Association of Securities Dealer, Inc.’s OTC Bulletin
Board or the Pink OTC Markets, Inc. (previously known as the National Quotation
Bureau, Inc.);

 

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or (d) if none of the above is applicable, such amount as may be determined by
the Board (acting on the advice of an Independent Third Party, should the Board
elect in its sole discretion to utilize an Independent Third Party for this
purpose), in good faith, to be the fair market value per share of Common
Stock.  The determination of Fair Market Value shall, where applicable, be in
compliance with Section 409A of the Code.

2.23“Immediate Family Members” is defined in Section 15.8 hereof.

2.24“Incentive” is defined in Section 2.3 hereof.

2.25“Incentive Stock Option” means an incentive stock option within the meaning
of Section 422 of the Code, granted pursuant to this Plan.

2.26“Independent Third Party” means an individual or entity independent of the
Company having experience in providing investment banking or similar appraisal
or valuation services and with expertise generally in the valuation of
securities or other property for purposes of this Plan.  The Board may utilize
one or more Independent Third Parties.

2.27“Nonqualified Stock Option” means a nonqualified stock option, granted
pursuant to this Plan, which is not an Incentive Stock Option.

2.28“Option Price” means the price which must be paid by a Participant upon
exercise of a Stock Option to purchase a share of Common Stock.

2.29“Other Award” means an Award issued pursuant to Section 6.9 hereof.

2.30“Outside Director” means a director of the Company who is not an Employee or
a Contractor.

2.31“Participant” means an Employee, Contractor or an Outside Director to whom
an Award is granted under this Plan.

2.32“Performance Award” means an Award hereunder of cash, shares of Common
Stock, units or rights based upon, payable in, or otherwise related to, Common
Stock pursuant to Section 6.7 hereof.

2.33“Performance Goal” means any of the Performance Criteria set forth in
Section 6.10 hereof.

2.34“Plan” means this Staffing 360 Solutions, Inc. 2020 Omnibus Incentive Plan,
as amended from time to time.

2.35“Prior Plan Awards” means (a) any awards under the Prior Plans that are
outstanding on the Effective Date, and that on or after the Effective Date, are
forfeited, expire or are canceled; and (b) any shares subject to awards relating
to Common Stock under the Prior Plans that, on or after the Effective Date are
settled in cash.

2.36“Prior Plans” means the Staffing 360 Solutions, Inc. 2016 Omnibus Incentive
Plan.

2.37“Reporting Participant” means a Participant who is subject to the reporting
requirements of Section 16 of the Exchange Act.

 

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2.38“Restricted Stock” means shares of Common Stock issued or transferred to a
Participant pursuant to Section 6.4 of this Plan which are subject to
restrictions or limitations set forth in this Plan and in the related Award
Agreement.

2.39“Restricted Stock Units” means units awarded to Participants pursuant to
Section 6.6 hereof, which are convertible into Common Stock at such time as such
units are no longer subject to restrictions as established by the Committee.

2.40“Restriction Period” is defined in Section 6.4(b)(i) hereof.

2.41“Retirement” shall have the meaning set forth in the Participant’s Award
Agreement.

2.42“SAR” or “Stock Appreciation Right” means the right to receive an amount, in
cash and/or Common Stock, equal to the excess of the Fair Market Value of a
specified number of shares of Common Stock as of the date the SAR is exercised
(or, as provided in the Award Agreement, converted) over the SAR Price for such
shares.

2.43“SAR Price” means the exercise price or conversion price of each share of
Common Stock covered by a SAR, determined on the Date of Grant of the SAR.

2.44“Spread” is defined in Section 12.4(b) hereof.

2.45“Stock Option” means a Nonqualified Stock Option or an Incentive Stock
Option.

2.46“Subsidiary” means (a) any corporation in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing a majority of the total
combined voting power of all classes of stock in one of the other corporations
in the chain, (b) any limited partnership, if the Company or any corporation
described in item (a) above owns a majority of the general partnership interest
and a majority of the limited partnership interests entitled to vote on the
removal and replacement of the general partner, and (c) any partnership or
limited liability company, if the partners or members thereof are composed only
of the Company, any corporation listed in item (a) above or any limited
partnership listed in item (b) above.  “Subsidiaries” means more than one of any
such corporations, limited partnerships, partnerships or limited liability
companies.

2.47“Termination of Service” occurs when a Participant who is (a) an Employee of
the Company or any Subsidiary ceases to serve as an Employee of the Company and
its Subsidiaries, for any reason; (b) an Outside Director of the Company or a
Subsidiary ceases to serve as a director of the Company and its Subsidiaries for
any reason; or (c) a Contractor of the Company or a Subsidiary ceases to serve
as a Contractor of the Company and its Subsidiaries for any reason.  Except as
may be necessary or desirable to comply with applicable federal or state law, a
“Termination of Service” shall not be deemed to have occurred when a Participant
who is an Employee becomes an Outside Director or Contractor or vice versa.  If,
however, a Participant who is an Employee and who has an Incentive Stock Option
ceases to be an Employee but does not suffer a Termination of Service, and if
that Participant does not exercise the Incentive Stock Option within the time
required under Section 422 of the Code upon ceasing to be an Employee, the
Incentive Stock Option shall thereafter become a Nonqualified Stock
Option.  Notwithstanding the foregoing provisions of this Section 2.47, in the
event an Award issued under the Plan is subject to Section 409A of the Code,
then, in lieu of the foregoing definition and to the extent necessary to comply
with the requirements of Section 409A of the Code, the definition of
“Termination of Service” for purposes of such Award shall be the definition of
“separation from service” provided for under Section 409A of the Code and the
regulations or other guidance issued thereunder.

 

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2.48“Total and Permanent Disability” means a Participant is qualified for
long-term disability benefits under the Company’s or Subsidiary’s disability
plan or insurance policy; or, if no such plan or policy is then in existence or
if the Participant is not eligible to participate in such plan or policy, that
the Participant, because of a physical or mental condition resulting from bodily
injury, disease, or mental disorder, is unable to perform his or her duties of
employment for a period of six (6) continuous months, as determined in good
faith by the Committee, based upon medical reports or other evidence
satisfactory to the Committee; provided that, with respect to any Incentive
Stock Option, Total and Permanent Disability shall have the meaning given it
under the rules governing Incentive Stock Options under the
Code.  Notwithstanding the foregoing provisions of this Section 2.48, in the
event an Award issued under the Plan is subject to Section 409A of the Code,
then, in lieu of the foregoing definition and to the extent necessary to comply
with the requirements of Section 409A of the Code, the definition of “Total and
Permanent Disability” for purposes of such Award shall be the definition of
“disability” provided for under Section 409A of the Code and the regulations or
other guidance issued thereunder.

Article 3.
ADMINISTRATION

General Administration; Establishment of Committee.  Subject to the terms of
this Article 3, the Plan shall be administered by the Board or such committee of
the Board as is designated by the Board to administer the Plan (the
“Committee”).  The Committee shall consist of not fewer than two persons.  Any
member of the Committee may be removed at any time, with or without cause, by
resolution of the Board. Any vacancy occurring in the membership of the
Committee may be filled by appointment by the Board.  At any time there is no
Committee to administer the Plan, any references in this Plan to the Committee
shall be deemed to refer to the Board.

Membership on the Committee shall be limited to those members of the Board who
are “non-employee directors” as defined in Rule 16b-3 promulgated under the
Exchange Act.  The Committee shall select one of its members to act as its
Chairman.  A majority of the Committee shall constitute a quorum, and the act of
a majority of the members of the Committee present at a meeting at which a
quorum is present shall be the act of the Committee.

3.1Designation of Participants and Awards.

(a)The Committee or the Board shall determine and designate from time to time
the eligible persons to whom Awards will be granted and shall set forth in each
related Award Agreement, where applicable, the Award Period, the Date of Grant,
and such other terms, provisions, limitations, and performance requirements, as
are approved by the Committee, but not inconsistent with the Plan.  The
Committee shall determine whether an Award shall include one type of Incentive
or two or more Incentives granted in combination or two or more Incentives
granted in tandem (that is, a joint grant where exercise of one Incentive
results in cancellation of all or a portion of the other Incentive).  Although
the members of the Committee shall be eligible to receive Awards, all decisions
with respect to any Award, and the terms and conditions thereof, to be granted
under the Plan to any member of the Committee shall be made solely and
exclusively by the other members of the Committee, or if such member is the only
member of the Committee, by the Board.

(b)Notwithstanding Section 3.1(a), to the extent permitted by Applicable Law,
the Board may, in its discretion and by a resolution adopted by the Board,
authorize one or more officers of the Company (an “Authorized Officer”) to (i)
designate one or more Employees as eligible persons to whom Awards will be
granted under the Plan, and (ii) determine the number of

 

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shares of Common Stock that will be subject to such Nonqualified Stock Options,
Incentive Stock Options or SARs; provided, however, that the resolution of the
Board granting such authority shall (x) specify the total number of shares of
Common Stock that may be made subject to the Nonqualified Stock Options,
Incentive Stock Options or SARs, (y) set forth the price or prices (or a formula
by which such price or prices may be determined) to be paid for the purchase of
the Common Stock subject to such Nonqualified Stock Options, Incentive Stock
Options or SARs, and (z) not authorize an officer to designate himself as a
recipient of any Award.

3.2Authority of the Committee.  The Committee, in its discretion, shall (a)
interpret the Plan and Award Agreements, (b) prescribe, amend, and rescind any
rules and regulations and sub-plans (including sub-plans for Awards made to
Participants who are not resident in the United States), as necessary or
appropriate for the administration of the Plan, (c) establish performance goals
for an Award and certify the extent of their achievement, and (d) make such
other determinations or certifications and take such other action as it deems
necessary or advisable in the administration of the Plan.  Any interpretation,
determination, or other action made or taken by the Committee shall be final,
binding, and conclusive on all interested parties.  The Committee’s discretion
set forth herein shall not be limited by any provision of the Plan, including
any provision which by its terms is applicable notwithstanding any other
provision of the Plan to the contrary.

The Committee may delegate to officers of the Company, pursuant to a written
delegation, the authority to perform specified functions under the Plan.  Any
actions taken by any officers of the Company pursuant to such written delegation
of authority shall be deemed to have been taken by the Committee.

With respect to restrictions in the Plan that are based on the requirements of
Rule 16b‑3 promulgated under the Exchange Act, Section 422 of the Code, the
rules of any exchange or inter-dealer quotation system upon which the Company’s
securities are listed or quoted, or any other Applicable Law, to the extent that
any such restrictions are no longer required by Applicable Law, the Committee
shall have the sole discretion and authority to grant Awards that are not
subject to such mandated restrictions and/or to waive any such mandated
restrictions with respect to outstanding Awards.

Article 4.
ELIGIBILITY

Any Employee (including an Employee who is also a director or an officer),
Contractor or Outside Director of the Company whose judgment, initiative, and
efforts contributed or may be expected to contribute to the successful
performance of the Company is eligible to participate in the Plan; provided that
only Employees of a Corporation shall be eligible to receive Incentive Stock
Options.  The Committee, upon its own action, may grant, but shall not be
required to grant, an Award to any Employee, Contractor or Outside
Director.  Awards may be granted by the Committee at any time and from time to
time to new Participants, or to then Participants, or to a greater or lesser
number of Participants, and may include or exclude previous Participants, as the
Committee shall determine.  Except as required by this Plan, Awards need not
contain similar provisions.  The Committee’s determinations under the Plan
(including without limitation determinations of which Employees, Contractors or
Outside Directors, if any, are to receive Awards, the form, amount and timing of
such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
Participants who receive, or are eligible to receive, Awards under the Plan.

 

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Article 5.
SHARES SUBJECT TO PLAN

5.1Number Available for Awards.  Subject to adjustment as provided in Articles
11 and 12 and any increase by any Prior Plan Awards eligible for reuse pursuant
to Section 5.2, the maximum number of shares of Common Stock that may be
delivered pursuant to Awards granted under the Plan is ________________
(_______) shares, of which one hundred percent (100%) may be delivered pursuant
to Incentive Stock Options.  Shares to be issued may be made available from
authorized but unissued Common Stock, Common Stock held by the Company in its
treasury, or Common Stock purchased by the Company on the open market or
otherwise.  During the term of this Plan, the Company will at all times reserve
and keep available the number of shares of Common Stock that shall be sufficient
to satisfy the requirements of this Plan.

5.2Reuse of Shares.  To the extent that any Award under this Plan or any Prior
Plan Award shall be forfeited, shall expire or be canceled, in whole or in part,
then the number of shares of Common Stock covered by the Award or Prior Plan
Award so forfeited, expired or canceled may again be awarded pursuant to the
provisions of this Plan.  Awards that may be satisfied either by the issuance of
shares of Common Stock or by cash or other consideration shall be counted
against the maximum number of shares of Common Stock that may be issued under
this Plan only during the period that the Award is outstanding or to the extent
the Award is ultimately satisfied by the issuance of shares of Common
Stock.  Shares of Common Stock otherwise deliverable pursuant to an Award that
are withheld upon exercise or vesting of an Award for purposes of paying the
exercise price or tax withholdings shall be treated as delivered to the
Participant and shall be counted against the maximum number of shares of Common
Stock that may be issued under this Plan.  Awards will not reduce the number of
shares of Common Stock that may be issued pursuant to this Plan if the
settlement of the Award will not require the issuance of shares of Common Stock,
as, for example, a SAR that can be satisfied only by the payment of
cash.  Notwithstanding any provisions of the Plan to the contrary, only shares
forfeited back to the Company, shares canceled on account of termination,
expiration or lapse of an Award, shall again be available for grant of Incentive
Stock Options under the Plan, but shall not increase the maximum number of
shares described in Section 5.1 above as the maximum number of shares of Common
Stock that may be delivered pursuant to Incentive Stock Options.

Article 6.
GRANT OF AWARDS

6.1In General.

(a)The grant of an Award shall be authorized by the Committee and shall be
evidenced by an Award Agreement setting forth the Incentive or Incentives being
granted, the total number of shares of Common Stock subject to the Incentive(s),
the Option Price (if applicable), the Award Period, the Date of Grant, and such
other terms, provisions, limitations, and performance objectives, as are
approved by the Committee, but (i) not inconsistent with the Plan, and (ii) to
the extent an Award issued under the Plan is subject to Section 409A of the
Code, in compliance with the applicable requirements of Section 409A of the Code
and the regulations or other guidance issued thereunder.  The Company shall
execute an Award Agreement with a Participant after the Committee approves the
issuance of an Award.  Any Award granted pursuant to this Plan must be granted
within ten (10) years of the date of adoption of this Plan by the Board. The
Plan shall be submitted to the Company’s stockholders for approval; however, the
Committee may grant Awards under the Plan prior to the time of stockholder
approval.  Any such Award granted prior to such stockholder approval shall be
made subject to such stockholder approval.  The grant of an Award

 

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to a Participant shall not be deemed either to entitle the Participant to, or to
disqualify the Participant from, receipt of any other Award under the Plan.

(b)If the Committee establishes a purchase price for an Award, the Participant
must accept such Award within a period of thirty (30) days (or such shorter
period as the Committee may specify) after the Date of Grant by executing the
applicable Award Agreement and paying such purchase price.

(c)Any Award under this Plan that is settled in whole or in part in cash on a
deferred basis may provide for interest equivalents to be credited with respect
to such cash payment. Interest equivalents may be compounded and shall be paid
upon such terms and conditions as may be specified by the grant.

6.2Option Price.  The Option Price for any share of Common Stock which may be
purchased under a Nonqualified Stock Option for any share of Common Stock must
be equal to or greater than the Fair Market Value of the share on the Date of
Grant.  The Option Price for any share of Common Stock which may be purchased
under an Incentive Stock Option must be at least equal to the Fair Market Value
of the share on the Date of Grant; if an Incentive Stock Option is granted to an
Employee who owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than  ten percent (10%) of the combined voting
power of all classes of stock of the Company (or any parent or Subsidiary), the
Option Price shall be at least one hundred ten percent (110%) of the Fair Market
Value of the Common Stock on the Date of Grant.  No dividends or Dividend
Equivalent Rights may be paid or granted with respect to any Stock Option
granted hereunder.

6.3Maximum ISO Grants.  The Committee may not grant Incentive Stock Options
under the Plan to any Employee which would permit the aggregate Fair Market
Value (determined on the Date of Grant) of the Common Stock with respect to
which Incentive Stock Options (under this and any other plan of the Company and
its Subsidiaries) are exercisable for the first time by such Employee during any
calendar year to exceed $100,000.  To the extent any Stock Option granted under
this Plan which is designated as an Incentive Stock Option exceeds this limit or
otherwise fails to qualify as an Incentive Stock Option, such Stock Option (or
any such portion thereof) shall be a Nonqualified Stock Option.  In such case,
the Committee shall designate which stock will be treated as Incentive Stock
Option stock by causing the issuance of a separate stock certificate and
identifying such stock as Incentive Stock Option stock on the Company’s stock
transfer records.

6.4Restricted Stock.  If Restricted Stock is granted to or received by a
Participant under an Award (including a Stock Option), the Committee shall set
forth in the related Award Agreement: (a) the number of shares of Common Stock
awarded, (b) the price, if any, to be paid by the Participant for such
Restricted Stock and the method of payment of the price, (c) the time or times
within which such Award may be subject to forfeiture, (d) specified Performance
Goals of the Company, a Subsidiary, any division thereof or any group of
Employees of the Company, or other criteria, which the Committee determines must
be met in order to remove any restrictions (including vesting) on such Award,
and (e) all other terms, limitations, restrictions, and conditions of the
Restricted Stock, which shall be consistent with this Plan, to the extent
applicable and, to the extent Restricted Stock granted under the Plan is subject
to Section 409A of the Code, in compliance with the applicable requirements of
Section 409A of the Code and the regulations or other guidance issued
thereunder.  The provisions of Restricted Stock need not be the same with
respect to each Participant.

(a)Legend on Shares.  The Company shall electronically register the Restricted
Stock awarded to a Participant in the name of such Participant, which shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock,

 

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substantially as provided in Section 15.10 of the Plan.  No stock certificate or
certificates shall be issued with respect to such shares of Common Stock,
unless, following the expiration of the Restriction Period (as defined in
Section 6.4(b)(i)) without forfeiture in respect of such shares of Common Stock,
the Participant requests delivery of the certificate or certificates by
submitting a written request to the Committee (or such party designated by the
Company) requesting delivery of the certificates.  The Company shall deliver the
certificates requested by the Participant to the Participant as soon as
administratively practicable following the Company’s receipt of such request.

(b)Restrictions and Conditions.  Shares of Restricted Stock shall be subject to
the following restrictions and conditions:

(i)Subject to the other provisions of this Plan and the terms of the particular
Award Agreements, during such period as may be determined by the Committee
commencing on the Date of Grant or the date of exercise of an Award (the
“Restriction Period”), the Participant shall not be permitted to sell, transfer,
pledge or assign shares of Restricted Stock. Except for these limitations, the
Committee may in its sole discretion, remove any or all of the restrictions on
such Restricted Stock whenever it may determine that, by reason of changes in
Applicable Laws or other changes in circumstances arising after the date of the
Award, such action is appropriate.

(ii)Except as provided in sub-paragraph (a) above or in the applicable Award
Agreement, the Participant shall have, with respect to his or her Restricted
Stock, all of the rights of a stockholder of the Company, including the right to
vote the shares, and the right to receive any dividends thereon.  Certificates
for shares of Common Stock free of restriction under this Plan shall be
delivered to the Participant promptly after, and only after, the Restriction
Period shall expire without forfeiture in respect of such shares of Common Stock
or after any other restrictions imposed on such shares of Common Stock by the
applicable Award Agreement or other agreement have expired.  Certificates for
the shares of Common Stock forfeited under the provisions of the Plan and the
applicable Award Agreement shall be promptly returned to the Company by the
forfeiting Participant.  Each Award Agreement shall require that each
Participant, in connection with the issuance of a certificate for Restricted
Stock, shall endorse such certificate in blank or execute a stock power in form
satisfactory to the Company in blank and deliver such certificate and executed
stock power to the Company.

(iii)The Restriction Period of Restricted Stock shall commence on the Date of
Grant or the date of exercise of an Award, as specified in the Award Agreement,
and, subject to Article 12 of the Plan, unless otherwise established by the
Committee in the Award Agreement setting forth the terms of the Restricted
Stock, shall expire upon satisfaction of the conditions set forth in the Award
Agreement; such conditions may provide for vesting based on length of continuous
service or such Performance Goals, as may be determined by the Committee in its
sole discretion.

(iv)Except as otherwise provided in the particular Award Agreement, upon
Termination of Service for any reason during the Restriction Period, the
nonvested shares of Restricted Stock shall be forfeited by the Participant.  In
the event a Participant has paid any consideration to the Company for such
forfeited Restricted Stock, the Committee shall specify in the Award Agreement
that either (1) the Company shall be obligated to, or (2) the Company may, in
its sole discretion, elect to, pay to the Participant, as soon as practicable
after the event causing forfeiture, in cash, an amount equal to the lesser of
the total consideration paid by the Participant for such forfeited shares or the
Fair Market Value

 

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of such forfeited shares as of the date of Termination of Service, as the
Committee, in its sole discretion shall select. Upon any forfeiture, all rights
of a Participant with respect to the forfeited shares of the Restricted Stock
shall cease and terminate, without any further obligation on the part of the
Company.

6.5SARs.  The Committee may grant SARs to any Participant, either as a separate
Award or in connection with a Stock Option.  SARs shall be subject to such terms
and conditions as the Committee shall impose, provided that such terms and
conditions are (a) not inconsistent with the Plan, and (b) to the extent a SAR
issued under the Plan is subject to Section 409A of the Code, in compliance with
the applicable requirements of Section 409A of the Code and the regulations or
other guidance issued thereunder.  The grant of the SAR may provide that the
holder may be paid for the value of the SAR either in cash or in shares of
Common Stock, or a combination thereof.  In the event of the exercise of a SAR
payable in shares of Common Stock, the holder of the SAR shall receive that
number of whole shares of Common Stock having an aggregate Fair Market Value on
the date of exercise equal to the value obtained by multiplying (x) the
difference between the Fair Market Value of a share of Common Stock on the date
of exercise over the SAR Price as set forth in such SAR (or other value
specified in the agreement granting the SAR), by (y) the number of shares of
Common Stock as to which the SAR is exercised, with a cash settlement to be made
for any fractional shares of Common Stock.  The SAR Price for any share of
Common Stock subject to a SAR may be equal to or greater than the Fair Market
Value of the share on the Date of Grant.  The Committee, in its sole discretion,
may place a ceiling on the amount payable upon exercise of a SAR, but any such
limitation shall be specified at the time that the SAR is granted.  No dividends
or Dividend Equivalent Rights may be paid or granted with respect to any SAR
granted hereunder.

6.6Restricted Stock Units.  Restricted Stock Units may be awarded or sold to any
Participant under such terms and conditions as shall be established by the
Committee, provided, however, that such terms and conditions are (a) not
inconsistent with the Plan, and (b) to the extent a Restricted Stock Unit issued
under the Plan is subject to Section 409A of the Code, in compliance with the
applicable requirements of Section 409A of the Code and the regulations or other
guidance issued thereunder.  Restricted Stock Units shall be subject to such
restrictions as the Committee determines, including, without limitation, (x) a
prohibition against sale, assignment, transfer, pledge, hypothecation or other
encumbrance for a specified period; or (y) a requirement that the holder forfeit
(or in the case of shares of Common Stock or units sold to the Participant,
resell to the Company at cost) such shares or units in the event of Termination
of Service during the period of restriction.

6.7Performance Awards.

(a)The Committee may grant Performance Awards to one or more Participants.  The
terms and conditions of Performance Awards shall be specified at the time of the
grant and may include provisions establishing the performance period, the
Performance Goals to be achieved during a performance period, and the maximum or
minimum settlement values, provided that such terms and conditions are (i) not
inconsistent with the Plan and (ii) to the extent a Performance Award issued
under the Plan is subject to Section 409A of the Code, in compliance with the
applicable requirements of Section 409A of the Code and the regulations or other
guidance issued thereunder.  If the Performance Award is to be in shares of
Common Stock, the Performance Awards may provide for the issuance of the shares
of Common Stock at the time of the grant of the Performance Award or at the time
of the certification by the Committee that the Performance Goals for the
performance period have been met; provided, however, if shares of Common Stock
are issued at the time of the grant of the Performance Award and if, at the end
of the performance period, the Performance Goals are not certified by the
Committee to have been fully satisfied, then, notwithstanding any other
provisions of this Plan to the contrary, the Common Stock shall be forfeited in
accordance with the terms of the grant to the extent the Committee determines
that the

 

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Performance Goals were not met.  The forfeiture of shares of Common Stock issued
at the time of the grant of the Performance Award due to failure to achieve the
established Performance Goals shall be separate from and in addition to any
other restrictions provided for in this Plan that may be applicable to such
shares of Common Stock.  Each Performance Award granted to one or more
Participants shall have its own terms and conditions.

If the Committee determines, in its sole discretion, that the established
performance measures or objectives are no longer suitable because of a change in
the Company’s business, operations, corporate structure, or for other reasons
that the Committee deemed satisfactory, the Committee may modify the performance
measures or objectives and/or the performance period.

(b)Performance Awards may be valued by reference to the Fair Market Value of a
share of Common Stock or according to any formula or method deemed appropriate
by the Committee, in its sole discretion, including, but not limited to,
achievement of Performance Goals or other specific financial, production, sales
or cost performance objectives that the Committee believes to be relevant to the
Company’s business and/or remaining in the employ of the Company or a Subsidiary
for a specified period of time.  Performance Awards may be paid in cash, shares
of Common Stock, or other consideration, or any combination thereof.  If payable
in shares of Common Stock, the consideration for the issuance of such shares may
be the achievement of the performance objective established at the time of the
grant of the Performance Award.  Performance Awards may be payable in a single
payment or in installments and may be payable at a specified date or dates or
upon attaining the performance objective.  The extent to which any applicable
performance objective has been achieved shall be conclusively determined by the
Committee.

6.8Dividend Equivalent Rights.  The Committee may grant a Dividend Equivalent
Right to any Participant, either as a component of another Award or as a
separate Award. The terms and conditions of the Dividend Equivalent Right shall
be specified by the grant.  Dividend equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Common Stock (which may thereafter accrue
additional dividend equivalents).  Any such reinvestment shall be at the Fair
Market Value at the time thereof.  Dividend Equivalent Rights may be settled in
cash or shares of Common Stock, or a combination thereof, in a single payment or
in installments.  A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
Award, and that such Dividend Equivalent Right granted as a component of another
Award may also contain terms and conditions different from such other Award;
provided that (a) any Dividend Equivalent Rights with respect to such Award may
be withheld by the Company for the Participant’s account until such Award is
vested, subject to such terms as determined by the Committee; and (b) such
Dividend Equivalent Rights so withheld by the Company and attributable to any
particular Award shall be distributed to such Participant in cash or, at the
discretion of the Committee, in shares of Common Stock having a Fair Market
Value equal to the amount of such Dividend Equivalent Rights, if applicable,
upon vesting of the Award and if such Award is forfeited, the Participant shall
have no right to such Dividend Equivalent Rights.  No Dividend Equivalent Rights
may be paid or granted with respect to any Stock Option or SAR.

6.9Other Awards.  The Committee may grant to any Participant other forms of
Awards, based upon, payable in, or otherwise related to, in whole or in part,
shares of Common Stock, if the Committee determines that such other form of
Award is consistent with the purpose and restrictions of this Plan.  The terms
and conditions of such other form of Award shall be specified by the
grant.  Such Other Awards may be granted for no cash consideration, for such
minimum consideration as may be required by Applicable Law, or for such other
consideration as may be specified by the grant.

 

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6.10Performance Goals.  Awards of Restricted Stock, Restricted Stock Units,
Performance Award and Other Awards (whether relating to cash or shares of Common
Stock) under the Plan may be made subject to the attainment of Performance Goals
relating to one or more business criteria which may consist of one or more or
any combination of the following criteria:  cash flow; cost; revenues; sales;
ratio of debt to debt plus equity; net borrowing, credit quality or debt
ratings; profit before tax; economic profit; earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization; gross margin;
earnings per share (whether on a pre-tax, after-tax, operational or other
basis); operating earnings; capital expenditures; expenses or expense levels;
economic value added; ratio of operating earnings to capital spending or any
other operating ratios; free cash flow; net profit; net sales; net asset value
per share; the accomplishment of mergers, acquisitions, dispositions, public
offerings or similar extraordinary business transactions; sales growth; price of
the Company’s Common Stock; return on assets, equity or stockholders’ equity;
market share; inventory management, inventory turn or shrinkage; employee
retention; safety standards; service or product delivery or quality; or total
return to stockholders (“Performance Criteria”).  Any Performance Criteria may
be used to measure the performance of the Company as a whole or any business
unit of the Company and may be measured relative to a peer group or index.  Any
Performance Criteria may include or exclude (a) events that are of an unusual
nature or indicate infrequency of occurrence, (b) gains or losses on the
disposition of a business, (c) changes in tax or accounting regulations or laws,
(d) the effect of a merger or acquisition, as identified in the Company’s
quarterly and annual earnings releases, or (e) other similar occurrences.  In
all other respects, Performance Criteria shall be calculated in accordance with
the Company’s financial statements, under generally accepted accounting
principles, or under a methodology established by the Committee prior to the
issuance of an Award which is consistently applied and identified in the audited
financial statements, including footnotes, or the Compensation Discussion and
Analysis section of the Company’s annual report.

6.11Tandem Awards.  The Committee may grant two or more Incentives in one Award
in the form of a “tandem Award,” so that the right of the Participant to
exercise one Incentive shall be canceled if, and to the extent, the other
Incentive is exercised.  For example, if a Stock Option and a SAR are issued in
a tandem Award, and the Participant exercises the SAR with respect to one
hundred (100) shares of Common Stock, the right of the Participant to exercise
the related Stock Option shall be canceled to the extent of one hundred (100)
shares of Common Stock.

6.12Repricing of Stock Options or SARs. The Committee may “reprice” any Stock
Option or SAR.  For purposes of this Section 6.12, “reprice” means any of the
following or any other action that has the same effect: (a) amending a Stock
Option or SAR to reduce its exercise price or base price, (b) canceling a Stock
Option or SAR at a time when its exercise price or base price exceeds the Fair
Market Value of a share of Common Stock in exchange for cash or a Stock Option,
SAR, award of Restricted Stock or other equity award, or (c) taking any other
action that is treated as a repricing under generally accepted accounting
principles; provided, however, that repricing of any Stock Option or SAR shall
not be permitted without stockholder approval to the extent stockholder approval
is required either by (x) any securities exchange or inter-dealer quotation
system on which the Common Stock is listed or traded or (y) Applicable Law,
unless such repricing is approved by the requisite vote of the stockholders of
the Company entitled to vote thereon.  Notwithstanding the foregoing, nothing in
this Section 6.12 shall prevent the Committee from making adjustments pursuant
to Article 11, from exchanging or cancelling Incentives pursuant to Article 12,
or substituting Incentives in accordance with Article 14.

6.13Recoupment for Restatements.  Notwithstanding any other language in this
Plan to the contrary, the Company may recoup all or any portion of any shares or
cash paid to a Participant in connection with an Award, in the event of a
restatement of the Company’s financial statements as set forth in the Company’s
clawback policy, if any, approved by the Company’s Board from time to time.

 

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Article 7.
AWARD PERIOD; VESTING

7.1Award Period.  Subject to the other provisions of this Plan, the Committee
may, in its discretion, provide that an Incentive may not be exercised in whole
or in part for any period or periods of time or beyond any date specified in the
Award Agreement.  Except as provided in the Award Agreement, an Incentive may be
exercised in whole or in part at any time during its term.  The Award Period for
an Incentive shall be reduced or terminated upon Termination of Service.  No
Incentive granted under the Plan may be exercised at any time after the end of
its Award Period.  No portion of any Incentive may be exercised after the
expiration of ten (10) years from its Date of Grant.  However, if an Employee
owns or is deemed to own (by reason of the attribution rules of Section 424(d)
of the Code) more than ten percent (10%) of the combined voting power of all
classes of stock of the Company (or any parent or Subsidiary) and an Incentive
Stock Option is granted to such Employee, the term of such Incentive Stock
Option (to the extent required by the Code at the time of grant) shall be no
more than five (5) years from the Date of Grant.

7.2Vesting.  The Committee, in its sole discretion, may determine that an
Incentive will be immediately vested in whole or in part, or that all or any
portion may not be vested until a date, or dates, subsequent to its Date of
Grant, or until the occurrence of one or more specified events, subject in any
case to the terms of the Plan.  If the Committee imposes conditions upon
vesting, then, subsequent to the Date of Grant, the Committee may, in its sole
discretion, accelerate the date on which all or any portion of the Incentive may
be vested.

Article 8.
EXERCISE OR CONVERSION OF INCENTIVE

8.1In General.  A vested Incentive may be exercised or converted, during its
Award Period, subject to limitations and restrictions set forth in the Award
Agreement.

8.2Securities Law and Exchange Restrictions.  In no event may an Incentive be
exercised or shares of Common Stock issued pursuant to an Award if a necessary
listing or quotation of the shares of Common Stock on a stock exchange or
inter-dealer quotation system or any registration under state or federal
securities laws required under the circumstances has not been accomplished.

8.3Exercise of Stock Option.

(a)In General.  If a Stock Option is exercisable prior to the time it is vested,
the Common Stock obtained on the exercise of the Stock Option shall be
Restricted Stock which is subject to the applicable provisions of the Plan and
the Award Agreement.  If the Committee imposes conditions upon exercise, then
subsequent to the Date of Grant, the Committee may, in its sole discretion,
accelerate the date on which all or any portion of the Stock Option may be
exercised.  No Stock Option may be exercised for a fractional share of Common
Stock.  The granting of a Stock Option shall impose no obligation upon the
Participant to exercise that Stock Option.

(b)Notice and Payment.  Subject to such administrative regulations as the
Committee may from time to time adopt, a Stock Option may be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Common Stock with respect to which the Stock Option is to be exercised (the
“Exercise Notice”) and the date of exercise thereof (the “Exercise Date”) with
respect to any Stock Option shall be the date that the Participant has delivered
both the

 

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Exercise Notice and consideration to the Company with a value equal to the total
Option Price of the shares to be purchased (plus any employment tax withholding
or other tax payment due with respect to such Award), payable as provided in the
Award Agreement, which may provide for payment in any one or more of the
following ways:  (i) cash or check, bank draft, or money order payable to the
order of the Company, (ii) Common Stock owned by the Participant on the Exercise
Date, valued at its Fair Market Value on the Exercise Date, and which the
Participant has not acquired from the Company within six (6) months prior to the
Exercise Date, (iii) by delivery (including by FAX or electronic transmission)
to the Company or its designated agent of an executed irrevocable option
exercise form (or, to the extent permitted by the Company, exercise
instructions, which may be communicated in writing, telephonically, or
electronically) together with irrevocable instructions from the Participant to a
broker or dealer, reasonably acceptable to the Company, to sell certain of the
shares of Common Stock purchased upon exercise of the Stock Option or to pledge
such shares as collateral for a loan and promptly deliver to the Company the
amount of sale or loan proceeds necessary to pay such purchase price, (iv) by
requesting the Company to withhold the number of shares otherwise deliverable
upon exercise of the Stock Option by the number of shares of Common Stock having
an aggregate Fair Market Value equal to the aggregate Option Price at the time
of exercise (i.e., a cashless net exercise), and/or (v) in any other form of
valid consideration that is acceptable to the Committee in its sole
discretion.  If the Participant fails to deliver the consideration described in
this Section 8.3(b) within three (3) business days of the date of the Exercise
Notice, then the Exercise Notice shall be null and void and the Company will
have no obligation to deliver any shares of Common Stock to the Participant in
connection with such Exercise Notice.  

(c)Issuance of Certificate.  Except as otherwise provided in Section 6.4 hereof
(with respect to shares of Restricted Stock) or in the applicable Award
Agreement, upon payment of all amounts due from the Participant, the Company
shall cause the Common Stock then being purchased to be registered in the
Participant’s name (or the person exercising the Participant’s Stock Option in
the event of his or her death), but shall not issue certificates for the Common
Stock unless the Participant or such other person requests delivery of the
certificates for the Common Stock, in writing in accordance with the procedures
established by the Committee.  The Company shall deliver certificates to the
Participant (or the person exercising the Participant’s Stock Option in the
event of his or her death) as soon as administratively practicable following the
Company’s receipt of a written request from the Participant or such other person
for delivery of the certificates.  Notwithstanding the forgoing, if the
Participant has exercised an Incentive Stock Option, the Company may at its
option retain physical possession of the certificate evidencing the shares
acquired upon exercise until the expiration of the holding periods described in
Section 422(a)(1) of the Code.  Any obligation of the Company to deliver shares
of Common Stock shall, however, be subject to the condition that, if at any time
the Committee shall determine in its discretion that the listing, registration,
or qualification of the Stock Option or the Common Stock upon any securities
exchange or inter-dealer quotation system or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary as a
condition of, or in connection with, the Stock Option or the issuance or
purchase of shares of Common Stock thereunder, the Stock Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not reasonably acceptable to the Committee.

(d)Failure to Pay.  Except as may otherwise be provided in an Award Agreement,
if the Participant fails to pay for any of the Common Stock specified in such
notice or fails to accept delivery thereof, that portion of the Participant’s
Stock Option and right to purchase such Common Stock may be forfeited by the
Participant.

 

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8.4SARs.  Subject to the conditions of this Section 8.4 and such administrative
regulations as the Committee may from time to time adopt, a SAR may be exercised
by the delivery (including by FAX) of written notice to the Committee setting
forth the number of shares of Common Stock with respect to which the SAR is to
be exercised and the date of exercise thereof (the “Exercise Date”) which shall
be at least three (3) days after giving such notice unless an earlier time shall
have been mutually agreed upon.  Subject to the terms of the Award Agreement and
only if permissible under Section 409A of the Code and the regulations or other
guidance issued thereunder (or, if not so permissible, at such time as permitted
by Section 409A of the Code and the regulations or other guidance issued
thereunder), the Participant shall receive from the Company in exchange therefor
in the discretion of the Committee, and subject to the terms of the Award
Agreement:

(a)cash in an amount equal to the excess (if any) of the Fair Market Value (as
of the Exercise Date, or if provided in the Award Agreement, conversion, of the
SAR) per share of Common Stock over the SAR Price per share specified in such
SAR, multiplied by the total number of shares of Common Stock of the SAR being
surrendered;

(b)that number of shares of Common Stock having an aggregate Fair Market Value
(as of the Exercise Date, or if provided in the Award Agreement, conversion, of
the SAR) equal to the amount of cash otherwise payable to the Participant, with
a cash settlement to be made for any fractional share interests; or

(c)the Company may settle such obligation in part with shares of Common Stock
and in part with cash.

The distribution of any cash or Common Stock pursuant to the foregoing sentence
shall be made at such time as set forth in the Award Agreement.

8.5Disqualifying Disposition of Incentive Stock Option.  If shares of Common
Stock acquired upon exercise of an Incentive Stock Option are disposed of by a
Participant prior to the expiration of either two (2) years from the Date of
Grant of such Stock Option or one (1) year from the transfer of shares of Common
Stock to the Participant pursuant to the exercise of such Stock Option, or in
any other disqualifying disposition within the meaning of Section 422 of the
Code, such Participant shall notify the Company in writing of the date and terms
of such disposition.  A disqualifying disposition by a Participant shall not
affect the status of any other Stock Option granted under the Plan as an
Incentive Stock Option within the meaning of Section 422 of the Code.

Article 9.
AMENDMENT OR DISCONTINUANCE

Subject to the limitations set forth in this Article 9, the Board may at any
time and from time to time, without the consent of the Participants, alter,
amend, revise, suspend, or discontinue the Plan in whole or in part; provided,
however, that no amendment for which stockholder approval is required either (a)
by any securities exchange or inter-dealer quotation system on which the Common
Stock is listed or traded or (b) in order for the Plan and Incentives awarded
under the Plan to continue to comply with Sections 421 and 422 of the Code,
including any successors to such Sections, or other Applicable Law, shall be
effective unless such amendment shall be approved by the requisite vote of the
stockholders of the Company entitled to vote thereon.  Any such amendment shall,
to the extent deemed necessary or advisable by the Committee, be applicable to
any outstanding Incentives theretofore granted under the Plan, notwithstanding
any contrary provisions contained in any Award Agreement.  In the event of any
such amendment to the Plan, the holder of any Incentive outstanding under the
Plan shall, upon request of the Committee and as a

 

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condition to the exercisability thereof, execute a conforming amendment in the
form prescribed by the Committee to any Award Agreement relating
thereto.  Notwithstanding anything contained in this Plan to the contrary,
unless required by law, no action contemplated or permitted by this Article 9
shall adversely affect any rights of Participants or obligations of the Company
to Participants with respect to any Incentive theretofore granted under the Plan
without the consent of the affected Participant.

Article 10.
TERM

The Plan shall be effective from the date that this Plan is adopted by the
Board.  Unless sooner terminated by action of the Board, the Plan will terminate
on the tenth anniversary of the Effective Date, but Incentives granted before
that date will continue to be effective in accordance with their terms and
conditions.

Article 11.
CAPITAL ADJUSTMENTS

In the event that any dividend or other distribution (whether in the form of
cash, Common Stock, other securities, or other property), recapitalization,
stock split, reverse stock split, rights offering, reorganization, merger,
consolidation, split-up, spin-off, split-off, combination, subdivision,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
affects the fair value of an Award, then the Committee shall adjust any or all
of the following so that the fair value of the Award immediately after the
transaction or event is equal to the fair value of the Award immediately prior
to the transaction or event (a) the number of shares and type of Common Stock
(or the securities or property) which thereafter may be made the subject of
Awards, (b) the number of shares and type of Common Stock (or other securities
or property) subject to outstanding Awards, (c) the Option Price of each
outstanding Award, (d) the amount, if any, the Company pays for forfeited shares
of Common Stock in accordance with Section 6.4, and (e) the number of or SAR
Price of shares of Common Stock then subject to outstanding SARs previously
granted and unexercised under the Plan, to the end that the same proportion of
the Company’s issued and outstanding shares of Common Stock in each instance
shall remain subject to exercise at the same aggregate SAR Price; provided,
however, that the number of shares of Common Stock (or other securities or
property) subject to any Award shall always be a whole number.  Notwithstanding
the foregoing, no such adjustment shall be made or authorized to the extent that
such adjustment would cause the Plan or any Stock Option to violate Section 422
of the Code or Section 409A of the Code.  Such adjustments shall be made in
accordance with the rules of any securities exchange, stock market, or stock
quotation system to which the Company is subject.

Upon the occurrence of any such adjustment, the Company shall provide notice to
each affected Participant of its computation of such adjustment which shall be
conclusive and shall be binding upon each such Participant.

Article 12.
RECAPITALIZATION, MERGER AND CONSOLIDATION

12.1No Effect on Company’s Authority.  The existence of this Plan and Incentives
granted hereunder shall not affect in any way the right or power of the Company
or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company’s

 

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capital structure and its business, or any Change in Control, or any merger or
consolidation of the Company, or any issuance of bonds, debentures, preferred or
preference stocks ranking prior to or otherwise affecting the Common Stock or
the rights thereof (or any rights, options, or warrants to purchase same), or
the dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

12.2Conversion of Incentives Where Company Survives.  Subject to any required
action by the stockholders and except as otherwise provided by Section 12.4
hereof or as may be required to comply with Section 409A of the Code and the
regulations or other guidance issued thereunder, if the Company shall be the
surviving or resulting corporation in any merger, consolidation or share
exchange, any Incentive granted hereunder shall pertain to and apply to the
securities or rights (including cash, property, or assets) to which a holder of
the number of shares of Common Stock subject to the Incentive would have been
entitled.

12.3Exchange or Cancellation of Incentives Where Company Does Not
Survive.  Except as otherwise provided by Section 12.4 hereof or as may be
required to comply with Section 409A of the Code and the regulations or other
guidance issued thereunder, in the event of any merger, consolidation or share
exchange pursuant to which the Company is not the surviving or resulting
corporation, there shall be substituted for each share of Common Stock subject
to the unexercised portions of outstanding Incentives, that number of shares of
each class of stock or other securities or that amount of cash, property, or
assets of the surviving, resulting or consolidated company which were
distributed or distributable to the stockholders of the Company in respect to
each share of Common Stock held by them, such outstanding Incentives to be
thereafter exercisable for such stock, securities, cash, or property in
accordance with their terms.

12.4Cancellation of Incentives.  Notwithstanding the provisions of Sections 12.2
and 12.3 hereof, and except as may be required to comply with Section 409A of
the Code and the regulations or other guidance issued thereunder, all Incentives
granted hereunder may be canceled by the Company, in its sole discretion, as of
the effective date of any Change in Control, merger, consolidation or share
exchange, or any issuance of bonds, debentures, preferred or preference stocks
ranking prior to or otherwise affecting the Common Stock or the rights thereof
(or any rights, options, or warrants to purchase same), or of any proposed sale
of all or substantially all of the assets of the Company, or of any dissolution
or liquidation of the Company, by either:

(a)giving notice to each holder thereof or his personal representative of its
intention to cancel those Incentives for which the issuance of shares of Common
Stock involved payment by the Participant for such shares, and permitting the
purchase during the thirty (30) day period next preceding such effective date of
any or all of the shares of Common Stock subject to such outstanding Incentives,
including in the Board’s discretion some or all of the shares as to which such
Incentives would not otherwise be vested and exercisable; or

(b)in the case of Incentives that are either (i) settled only in shares of
Common Stock, or (ii) at the election of the Participant, settled in shares of
Common Stock, paying the holder thereof an amount equal to a reasonable estimate
of the difference between the net amount per share payable in such transaction
or as a result of such transaction, and the price per share of such Incentive to
be paid by the Participant (hereinafter the “Spread”), multiplied by the number
of shares subject to the Incentive.  In cases where the shares constitute, or
would after exercise, constitute Restricted Stock, the Company, in its
discretion, may include some or all of those shares in the calculation of the
amount payable hereunder.  In estimating the Spread, appropriate adjustments to
give effect to the existence of the Incentives shall be made, such as deeming
the Incentives to have been exercised, with the Company receiving the exercise
price payable

 

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thereunder, and treating the shares receivable upon exercise of the Incentives
as being outstanding in determining the net amount per share.  In cases where
the proposed transaction consists of the acquisition of assets of the Company,
the net amount per share shall be calculated on the basis of the net amount
receivable with respect to shares of Common Stock upon a distribution and
liquidation by the Company after giving effect to expenses and charges,
including but not limited to taxes, payable by the Company before such
liquidation could be completed.

An Award that by its terms would be fully vested or exercisable upon a Change in
Control will be considered vested or exercisable for purposes of Section 12.4(a)
hereof.

Article 13.
LIQUIDATION OR DISSOLUTION

Subject to Section 12.4 hereof, in case the Company shall, at any time while any
Incentive under this Plan shall be in force and remain unexpired, (a) sell all
or substantially all of its property, or (b) dissolve, liquidate, or wind up its
affairs, then each Participant shall be entitled to receive, in lieu of each
share of Common Stock of the Company which such Participant would have been
entitled to receive under the Incentive, the same kind and amount of any
securities or assets as may be issuable, distributable, or payable upon any such
sale, dissolution, liquidation, or winding up with respect to each share of
Common Stock of the Company.  If the Company shall, at any time prior to the
expiration of any Incentive, make any partial distribution of its assets, in the
nature of a partial liquidation, whether payable in cash or in kind (but
excluding the distribution of a cash dividend payable out of earned surplus and
designated as such) and an adjustment is determined by the Committee to be
appropriate to prevent the dilution of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, make such adjustment in accordance with the
provisions of Article 11 hereof.

Article 14.
INCENTIVES IN SUBSTITUTION FOR
INCENTIVES GRANTED BY OTHER ENTITIES

Incentives may be granted under the Plan from time to time in substitution for
similar instruments held by employees, independent contractors or directors of a
corporation, partnership, or limited liability company who become or are about
to become Employees, Contractors or Outside Directors of the Company or any
Subsidiary as a result of a merger or consolidation of the employing corporation
with the Company, the acquisition by the Company of equity of the employing
entity, or any other similar transaction pursuant to which the Company becomes
the successor employer.  The terms and conditions of the substitute Incentives
so granted may vary from the terms and conditions set forth in this Plan to such
extent as the Committee at the time of grant may deem appropriate to conform, in
whole or in part, to the provisions of the incentives in substitution for which
they are granted.

Article 15.
MISCELLANEOUS PROVISIONS

15.1Investment Intent.  The Company may require that there be presented to and
filed with it by any Participant under the Plan, such evidence as it may deem
necessary to establish that the Incentives granted or the shares of Common Stock
to be purchased or transferred are being acquired for investment and not with a
view to their distribution.

 

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15.2No Right to Continued Employment.  Neither the Plan nor any Incentive
granted under the Plan shall confer upon any Participant any right with respect
to continuance of employment by the Company or any Subsidiary.

15.3Indemnification of Board and Committee.  No member of the Board or the
Committee, nor any officer or Employee of the Company acting on behalf of the
Board or the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board and the Committee, each officer of the
Company, and each Employee of the Company acting on behalf of the Board or the
Committee shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination, or
interpretation to the fullest extent provided by law.  Except to the extent
required by any unwaiveable requirement under applicable law, no member of the
Board or the Committee (and no Subsidiary of the Company) shall have any duties
or liabilities, including without limitation any fiduciary duties, to any
Participant (or any Person claiming by and through any Participant) as a result
of this Plan, any Award Agreement or any Claim arising hereunder and, to the
fullest extent permitted under applicable law, each Participant (as
consideration for receiving and accepting an Award Agreement) irrevocably waives
and releases any right or opportunity such Participant might have to assert (or
participate or cooperate in) any Claim against any member of the Board or the
Committee and any Subsidiary of the Company arising out of this Plan.

15.4Effect of the Plan.  Neither the adoption of this Plan nor any action of the
Board or the Committee shall be deemed to give any person any right to be
granted an Award or any other rights except as may be evidenced by an Award
Agreement, or any amendment thereto, duly authorized by the Committee and
executed on behalf of the Company, and then only to the extent and upon the
terms and conditions expressly set forth therein.

15.5Compliance with Other Laws and Regulations.  Notwithstanding anything
contained herein to the contrary, the Company shall not be required to sell or
issue shares of Common Stock under any Incentive if the issuance thereof would
constitute a violation by the Participant or the Company of any provisions of
any law or regulation of any governmental authority or any national securities
exchange or inter-dealer quotation system or other forum in which shares of
Common Stock are quoted or traded (including without limitation Section 16 of
the Exchange Act); and, as a condition of any sale or issuance of shares of
Common Stock under an Incentive, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation.  The Plan, the grant and exercise of
Incentives hereunder, and the obligation of the Company to sell and deliver
shares of Common Stock, shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required.

15.6Foreign Participation.  To assure the viability of Awards granted to
Participants employed in foreign countries, the Committee may provide for such
special terms as it may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom.  Moreover, the Committee may
approve such supplements to, or amendments, restatements or alternative versions
of, this Plan as it determines is necessary or appropriate for such
purposes.  Any such amendment, restatement or alternative versions that the
Committee approves for purposes of using this Plan in a foreign country will not
affect the terms of this Plan for any other country.

15.7Tax Requirements.  The Company or, if applicable, any Subsidiary (for
purposes of this Section 15.7, the term “Company” shall be deemed to include any
applicable Subsidiary), shall have the right to deduct from all amounts paid in
cash or other form in connection with the Plan, any federal, state, local, or
other taxes required by law to be withheld in connection with an Award granted
under this Plan.  

 

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The Company may, in its sole discretion, also require the Participant receiving
shares of Common Stock issued under the Plan to pay the Company the amount of
any taxes that the Company is required to withhold in connection with the
Participant’s income arising with respect to the Award.  Such payments shall be
required to be made when requested by the Company and may be required to be made
prior to the delivery of any certificate representing shares of Common
Stock.  Such payment may be made by (a) the delivery of cash to the Company in
an amount that equals or exceeds (to avoid the issuance of fractional shares
under (c) below) the required tax withholding obligations of the Company; (b) if
the Company, in its sole discretion, so consents in writing, the actual delivery
by the exercising Participant to the Company of shares of Common Stock that the
Participant has not acquired from the Company within six (6) months prior to the
date of exercise, which shares so delivered have an aggregate Fair Market Value
that equals or exceeds (to avoid the issuance of fractional shares under (c)
below) the required tax withholding payment; (c) if the Company, in its sole
discretion, so consents in writing, the Company’s withholding of a number of
shares to be delivered upon the exercise of the Stock Option, which shares so
withheld have an aggregate fair market value that equals (but does not exceed)
the required tax withholding payment; or (d) any combination of (a), (b), or
(c).  The Company may, in its sole discretion, withhold any such taxes from any
other cash remuneration otherwise paid by the Company to the Participant.  The
Committee may in the Award Agreement impose any additional tax requirements or
provisions that the Committee deems necessary or desirable.

15.8Assignability.  Incentive Stock Options may not be transferred, assigned,
pledged, hypothecated or otherwise conveyed or encumbered other than by will or
the laws of descent and distribution and may be exercised during the lifetime of
the Participant only by the Participant or the Participant’s legally authorized
representative, and each Award Agreement in respect of an Incentive Stock Option
shall so provide.  The designation by a Participant of a beneficiary will not
constitute a transfer of the Stock Option.  The Committee may waive or modify
any limitation contained in the preceding sentences of this Section 15.8 that is
not required for compliance with Section 422 of the Code.

Except as otherwise provided herein, Awards may not be transferred, assigned,
pledged, hypothecated or otherwise conveyed or encumbered other than by will or
the laws of descent and distribution.  Notwithstanding the foregoing, the
Committee may, in its discretion, authorize all or a portion of a Nonqualified
Stock Option or SAR to be granted to a Participant on terms which permit
transfer by such Participant to (a) the spouse (or former spouse), children or
grandchildren of the Participant (“Immediate Family Members”), (b) a trust or
trusts for the exclusive benefit of such Immediate Family Members, (c) a
partnership in which the only partners are (1) such Immediate Family Members
and/or (2) entities which are controlled by the Participant and/or Immediate
Family Members, (d) an entity exempt from federal income tax pursuant to Section
501(c)(3) of the Code or any successor provision, or (e) a split interest trust
or pooled income fund described in Section 2522(c)(2) of the Code or any
successor provision, provided that (x) there shall be no consideration for any
such transfer, (y) the Award Agreement pursuant to which such Nonqualified Stock
Option or SAR is granted must be approved by the Committee and must expressly
provide for transferability in a manner consistent with this Section, and (z)
subsequent transfers of transferred Nonqualified Stock Options or SARs shall be
prohibited except those by will or the laws of descent and distribution.

Following any transfer, any such Nonqualified Stock Option and SAR shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of Articles 8, 9, 11,
13 and 15 hereof the term “Participant” shall be deemed to include the
transferee.  The events of Termination of Service shall continue to be applied
with respect to the original Participant, following which the Nonqualified Stock
Options and SARs shall be exercisable or convertible by the transferee only to
the extent and for the periods specified in the Award Agreement.  The Committee
and the Company shall have no obligation to inform any transferee of a
Nonqualified Stock Option or SAR of any expiration, termination, lapse or
acceleration of such Stock Option or SAR.  The Company shall

 

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have no obligation to register with any federal or state securities commission
or agency any Common Stock issuable or issued under a Nonqualified Stock Option
or SAR that has been transferred by a Participant under this Section 15.8.

15.9Use of Proceeds.  Proceeds from the sale of shares of Common Stock pursuant
to Incentives granted under this Plan shall constitute general funds of the
Company.

15.10Legend.  Each certificate representing shares of Restricted Stock issued to
a Participant shall bear the following legend, or a similar legend deemed by the
Company to constitute an appropriate notice of the provisions hereof (any such
certificate not having such legend shall be surrendered upon demand by the
Company and so endorsed):

On the face of the certificate:

“Transfer of this stock is restricted in accordance with conditions printed on
the reverse of this certificate.”

On the reverse:

“The shares of stock evidenced by this certificate are subject to and
transferable only in accordance with that certain Staffing 360 Solutions, Inc.
2020 Omnibus Incentive Plan, a copy of which is on file at the principal office
of the Company in New York City, New York.  No transfer or pledge of the shares
evidenced hereby may be made except in accordance with and subject to the
provisions of said Plan.  By acceptance of this certificate, any holder,
transferee or pledgee hereof agrees to be bound by all of the provisions of said
Plan.”

The following legend shall be inserted on a certificate evidencing Common Stock
issued under the Plan if the shares were not issued in a transaction registered
under the applicable federal and state securities laws:

“Shares of stock represented by this certificate have been acquired by the
holder for investment and not for resale, transfer or distribution, have been
issued pursuant to exemptions from the registration requirements of applicable
state and federal securities laws, and may not be offered for sale, sold or
transferred other than pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to the Company.”

15.11Governing Law.  The Plan shall be governed by, construed, and enforced in
accordance with the laws of the State of Delaware (excluding any conflict of
laws, rule or principle of Delaware law that might refer the governance,
construction, or interpretation of this Plan to the laws of another state).  A
Participant’s sole remedy for any Claim shall be against the Company, and no
Participant shall have any claim or right of any nature against any Subsidiary
of the Company or any stockholder or existing or former director, officer or
Employee of the Company or any Subsidiary of the Company.  The individuals and

 

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entities described above in this Section 15.11 (other than the Company) shall be
third-party beneficiaries of this Plan for purposes of enforcing the terms of
this Section 15.11.

A copy of this Plan shall be kept on file in the principal office of the Company
in New York City, New York.

***************

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of
September 30, 2020, by its Chief Executive Officer pursuant to prior action
taken by the Board.

STAFFING 360 SOLUTIONS, INC.

By:/s/Brendan Flood

Name:Brendan Flood

Title:Chairman and Chief Executive Officer