Exhibit 10.1
 
SIGNAL GENETICS, INC.
 
2014 STOCK INCENTIVE PLAN
 
1.
Establishment, Purpose and Types of Awards

 
Signal Genetics, Inc., a Delaware corporation (the “Company”), hereby
establishes the Signal Genetics, Inc. 2014 Stock Incentive Plan (the
“Plan”).  The purpose of the Plan is to promote the long-term growth and
profitability of the Company by (i) providing key people with incentives to
improve stockholder value and to contribute to the growth and financial success
of the Company through their future services, and (ii) enabling the Company to
attract, retain and reward the best-available personnel.
 
The Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 and nonstatutory stock options), stock
appreciation rights, restricted or unrestricted stock awards, restricted stock
units, performance awards, other stock-based awards, or any combination of the
foregoing.
 
2.
Definitions

 
Under this Plan, except where the context otherwise indicates, the following
definitions apply:
 
(a) “Administrator” means the Board or the committee(s) or officer(s) appointed
by the Board that have authority to administer the Plan as provided in Section 3
hereof.
 
(b) “Affiliate” means any entity, whether now or hereafter existing, which
controls, is controlled by, or is under common control with, the Company
(including, but not limited to, joint ventures, limited liability companies, and
partnerships). For this purpose, “control” shall mean ownership of 50% or more
of the total combined voting power or value of all classes of stock or interests
of the entity, or the power to direct the management and policies of the entity,
by contract or otherwise.
 
(c) “Award” means any stock option, stock appreciation right, stock award,
restricted stock unit award, performance award, or other stock-based award.
 
(d) “Board” means the Board of Directors of the Company.
 
(e) “Change in Control” means: a (i) Change in Ownership of the Company, (ii)
Change in Effective Control of the Company, or (iii) Change in the Ownership of
Assets of the Company, as described herein and construed in accordance with Code
section 409A.
 
(i) A Change in Ownership of the Company shall occur on the date that any one
Person acquires, or Persons Acting as a Group acquire, ownership of the capital
stock of the Company that, together with the stock held by such Person or Group,
constitutes more than 50% of the total fair market value or total voting power
of the capital stock of the Company. However, if any one Person is, or Persons
Acting as a Group are, considered to own more than 50% of the total fair market
value or total voting power of the capital stock of the Company, the acquisition
of additional stock by the same Person or Persons Acting as a Group is not
considered to cause a Change in Ownership of the Company or to cause a Change in
Effective Control of the Company (as described below). An increase in the
percentage of capital stock owned by any one Person, or Persons Acting as a
Group, as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock.
 
 
 

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(ii) A Change in Effective Control of the Company shall occur on the date a
majority of members of the Company’s Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board before the date of the appointment or
election.
 
(iii) A Change in the Ownership of Assets of the Company shall occur on the date
that any one Person acquires, or Persons Acting as a Group acquire (or has or
have acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons), assets from the Company that have a
total gross fair market value of more than 50% of the total gross fair market
value of all of the assets of the Company immediately before such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.
 
The following rules of construction apply in interpreting the definition of
Change in Control:
 
(A) A Person means any individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than employee benefit plans sponsored or maintained by
the Company and by entities controlled by the Company or an underwriter of the
capital stock of the Company in a registered public offering.
 
(B) Persons will be considered to be Persons Acting as a Group (or Group) if
they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the
corporation.  If a Person owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a Group with other shareholders
only with respect to the ownership in that corporation before the transaction
giving rise to the change and not with respect to the ownership interest in the
other corporation. Persons will not be considered to be acting as a Group solely
because they purchase assets of the same corporation at the same time or
purchase or own stock of the same corporation at the same time, or as a result
of the same public offering.
 
(C) For purposes of this Section 2(e), fair market value shall be determined by
the Administrator.
 
(D) A Change in Control shall not include a transfer to a related person as
described in Code section 409A or a public offering of capital stock of the
Company.
 
(E) For purposes of this Section 2(e), Code section 318(a) applies to determine
stock ownership. Stock underlying a vested option is considered owned by the
individual who holds the vested option (and the stock underlying an unvested
option is not considered owned by the individual who holds the unvested option).
For purposes of the preceding sentence, however, if a vested option is
exercisable for stock that is not substantially vested (as defined by Treasury
Regulation §1.83­3(b) and (j)), the stock underlying the option is not treated
as owned by the individual who holds the option.
 
(f) “Code” means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
 
 
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(g) “Common Stock” means shares of common stock of the Company, par value of
$0.01 per share.
 
(h) “Fair Market Value” means, with respect to the Common Stock, as of any date:
 
(i) if the principal market for the Common Stock (as determined by the
Administrator if the Common Stock is listed or admitted to trading on more than
one exchange or market) is a national securities exchange or an established
securities market, the official closing price per share of Common Stock for the
regular market session on that date on the principal exchange or market on which
the Common Stock is then listed or admitted to trading or, if no sale is
reported for that date, on the last preceding day on which a sale was reported;
 
(ii) if the principal market for the Common Stock is not a national securities
exchange or an established securities market, the average of the highest bid and
lowest asked prices for the Common Stock on that date as reported on a national
quotation system or, if no prices are reported for that date, on the last
preceding day on which prices were reported; or
 
(iii) if the Common Stock is neither listed nor admitted to trading on a
national securities exchange or an established securities market, nor quoted by
a national quotation system, the value determined by the Administrator in good
faith.
 
With respect to property other than Common Stock, Fair Market Value means the
value of the property determined by such methods or procedures to be established
from time to time by the Board in accordance with Code section 409A.
 
(i) “Full-Value Award” means any Award other than (i) a stock option, (ii) a
stock appreciation right or (iii) any other Award for which the Holder pays the
intrinsic value existing as of the date of grant (whether directly or by
forgoing a right to receive a payment from the Company or any subsidiary).
 
(j) “Grant Agreement” means a written document, including an electronic writing
acceptable to the Administrator, memorializing the terms and conditions of an
Award granted pursuant to the Plan and which shall incorporate the terms of the
Plan.
 
(k) “Performance Measures” mean criteria established by the Administrator
relating to any of the following, as it may apply to an individual, one or more
business units, divisions or subsidiaries, or on a Company-wide basis, and in
either absolute terms or relative to the performance of one or more comparable
companies or an index covering multiple companies:
 
(i) Earnings or Profitability Metrics: including, but not limited to,
earnings/loss (gross, operating, net, or adjusted); earnings/loss before
interest and taxes (“EBIT”);  earnings/loss before interest, taxes, depreciation
and amortization (“EBITDA”);  profit margins; expense levels or ratios; in each
case adjusted to eliminate the effect of any one or more of the following:
interest expense, asset impairments, early extinguishment of debt, stock-based
compensation expense, changes in generally accepted accounting principles or
critical accounting policies, or other extraordinary or non-recurring items, as
specified by the plan administrator when establishing the performance goals;
 
(ii) Return Metrics: including, but not limited to, return on investment,
assets, equity or capital (total or invested);
 
 
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(iii) Cash Flow Metrics: including, but not limited to, operating cash flow;
cash flow sufficient to achieve financial ratios or a specified cash balance;
free cash flow; cash flow return on capital; net cash provided by operating
activities; cash flow per share; working capital;
 
(iv) Liquidity Metrics: including, but not limited to, capital raising; debt
reduction; extension of maturity dates of outstanding debt; debt leverage (debt
to capital, net debt-to-capital, debt-to-EBITDA or other liquidity ratios) or
access to capital; debt ratings; total or net debt; other similar measures
approved by the plan administrator;
 
(v) Stock Price and Equity Metrics: including, but not limited to, return on
stockholders’ equity; total stockholder return; revenue (gross, operating or
net); revenues from sales; revenues from search model; revenue growth; stock
price; stock price appreciation; market capitalization; earnings/loss per share
(basic or diluted) (before or after taxes); price-to-earnings ratio;
 
(vi) Strategic Metrics: including, but not limited to, number of users, site
traffic, conversion ratios, product research and development; regulatory filings
or approvals; patent application or issuance; manufacturing or process
development; sales or net sales; geographic coverage; market share; market
penetration; inventory control; growth in assets; key hires; business expansion;
acquisitions, divestitures, affiliate agreements, collaborations, licensing or
joint ventures; financing; resolution of significant litigation; legal
compliance or risk reduction.
 
3.
Administration

 
(a) Administration of the Plan.  The Plan shall be administered by the Board or
by such committee or committees as may be appointed by the Board from time to
time. To the extent allowed by applicable state law, the Board by resolution may
authorize an officer or officers to grant Awards (other than Stock Awards) to
other officers and employees of the Company and its Affiliates, and, to the
extent of such authorization, such officer or officers shall be the
Administrator.
 
(b) Powers of the Administrator.  The Administrator shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
 
The Administrator shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to: (i) determine the eligible persons to whom, and
the time or times at which Awards shall be granted; (ii) determine the types of
Awards to be granted; (iii) determine the number of shares to be covered by or
used for reference purposes for each Award; (iv) impose such terms, limitations,
restrictions and conditions upon any such Award as the Administrator shall deem
appropriate; (v) modify, amend, extend or renew outstanding Awards, or accept
the surrender of outstanding Awards and substitute new Awards (provided,
however, that, except as provided in Section 6 or 7(e) of the Plan, any
modification that would materially adversely affect any outstanding Award shall
not be made without the consent of the holder and no such modification,
amendment or substitution that results in repricing the Award, within the
meaning of the Nasdaq Marketplace Rule 5635(c) and IM-5635-1, or any successor
provision, shall be made without prior stockholder approval); (vi) accelerate or
otherwise change the time in which an Award may be exercised or becomes payable
and to waive or accelerate the lapse, in whole or in part, of any restriction or
condition with respect to such Award, including, but not limited to, any
restriction or condition with respect to the vesting or exercisability of an
Award following termination of any grantee’s employment or other relationship
with the Company;  provided, however, that no such waiver or acceleration of
lapse restrictions shall be made with respect to a performance-based stock award
granted to an executive officer of the Company if such waiver or acceleration is
inconsistent with Code section 162(m); (vii) establish objectives and
conditions, if any, for earning Awards and determining whether Awards will be
paid with respect to a performance period; (viii) for any purpose, including but
not limited to, qualifying for preferred tax treatment under foreign tax laws or
otherwise complying with the regulatory requirements of local or foreign
jurisdictions, to establish, amend, modify, administer or terminate sub-plans,
and prescribe, amend and rescind rules and regulations relating to such
sub-plans; (ix) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under the Plan; (x) correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any Award
in the manner and to the extent it shall deem expedient to carry the Plan into
effect; and (xi) make any other determination and take any other action that the
Administrator deems necessary or desirable for the administration of the
Plan.  All decisions and determinations of the Administrator shall be final,
conclusive and binding on the Company, the participants in the Plan and any and
all interested parties.
 
 
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The Administrator shall have full power and authority, in its sole and absolute
discretion, to administer, construe and interpret the Plan, Grant Agreements and
all other documents relevant to the Plan and Awards issued thereunder, to
establish, amend, rescind and interpret such rules, regulations, agreements,
guidelines and instruments for the administration of the Plan and for the
conduct of its business as the Administrator deems necessary or advisable, and
to correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Award in the manner and to the extent the Administrator shall
deem it desirable to carry it into effect.
 
(c) Non-Uniform Determinations.  The Administrator’s determinations under the
Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Grant Agreements evidencing such Awards) need not be uniform
and may be made by the Administrator selectively among persons who receive, or
are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.
 
(d) Limited Liability.  To the maximum extent permitted by law, no member of the
Administrator shall be liable for any action taken or decision made in good
faith relating to the Plan or any Award thereunder.
 
(e) Indemnification.  To the maximum extent permitted by law and by the
Company’s charter and by­laws, the members of the Administrator shall be
indemnified by the Company in respect of all their activities under the Plan.
 
(f) Effect of Administrator’s Decision.  All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator’s
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the Plan
and any other employee, consultant, or director of the Company, and their
respective successors in interest.
 
4.
Shares Available for the Plan; Maximum Awards

 
(a) Subject to adjustments as provided in Section 7(e) of the Plan, the
aggregate number of shares of Common Stock that may be issued with respect to
Awards granted under the Plan is 1,245,399; provided, however, that no more than
1,000,000 shares of Common Stock may be issued in the form of Full-Value Awards,
and no more than 600,000 shares of Common Stock may be issued pursuant to
incentive stock options intended to qualify under Code section 422. If any
Award, or portion of an Award, under the Plan expires or terminates unexercised,
becomes unexercisable, is settled in cash without delivery of shares of Common
Stock, or is forfeited or otherwise terminated, surrendered or canceled as to
any shares, or if any shares of Common Stock are repurchased by or surrendered
to the Company in connection with any Award (whether or not such surrendered
shares were acquired pursuant to any Award), or if any shares are withheld by
the Company, the shares subject to such Award and the repurchased, surrendered
and withheld shares shall thereafter be available for further Awards under the
Plan; provided, however, that any such shares that are surrendered to or
repurchased or withheld by the Company in connection with any Award or that are
otherwise forfeited after issuance shall not be available for purchase pursuant
to incentive stock options intended to qualify under Code section 422.
 
 
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(b) Subject to adjustments as provided in Section 7(e) of the Plan, the maximum
number of shares of Common Stock subject to Awards of any combination that may
be granted during any one fiscal year of the Company to any one individual under
this Plan shall be limited to 750,000 shares. Such per-individual limit shall
not be adjusted to effect a restoration of shares of Common Stock with respect
to which the related Award is terminated, surrendered or canceled.
 
5.
Participation

 
Participation in the Plan shall be open to all employees, officers, and
directors of, and other individuals providing bona fide services to or for, the
Company, or of any Affiliate of the Company, as may be selected by the
Administrator from time to time. The Administrator may also grant Awards to
individuals in connection with hiring, retention or otherwise, prior to the date
the individual first performs services for the Company or an Affiliate, provided
that such Awards shall not become vested or exercisable, and no shares shall be
issued to such individual, prior to the date the individual first commences
performance of such services.
 
6.
Awards

 
The Administrator, in its sole discretion, establishes the terms of all Awards
granted under the Plan.  Awards may be granted individually or in tandem with
other types of Awards, concurrently with or with respect to outstanding
Awards.  All Awards are subject to the terms and conditions provided in the
Grant Agreement.
 
(a) Stock Options.  The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in Code
section 422 or nonstatutory stock options; provided, however, that Awards of
incentive stock options shall be limited to employees of the Company or of any
current or hereafter existing “parent corporation” or “subsidiary corporation,”
as defined in Code sections 424(e) and (f), respectively, of the Company and any
other individuals who are eligible to receive incentive stock options under the
provisions of Code section 422. Options must have an exercise price at least
equal to Fair Market Value (110% of Fair Market Value for incentive stock
options if the grantee is a 10% stockholder within the meaning of Code section
422) as of the date of grant and may not have a term in excess of ten years’
duration (five years’ duration for incentive stock options if the grantee is a
10% stockholder within the meaning of Code section 422). The Administrator shall
not reduce the exercise price of an outstanding stock option, whether through
amendment, cancellation or replacement of such stock option, unless such
reduction is consistent with Code section 409A and other applicable law and is
approved by the stockholders of the Company.  No stock option shall be an
incentive stock option unless so designated by the Administrator at the time of
grant or in the Grant Agreement evidencing such stock option.
 
 
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(b) Stock Appreciation Rights.  The Administrator may from time to time grant to
eligible participants Awards of Stock Appreciation Rights (“SAR”). An SAR
entitles the grantee to receive, subject to the provisions of the Plan and the
Grant Agreement, a payment having an aggregate value equal to the product of (i)
the excess of (A) the Fair Market Value on the exercise date of one share of
Common Stock over (B) the base price per share specified in the Grant Agreement,
times (ii) the number of shares specified by the SAR, or portion thereof, which
is exercised. The base price per share specified in the Grant Agreement shall
not be less than the lower of the Fair Market Value on the grant date or the
exercise price of any tandem stock option Award to which the SAR is
related.  The Administrator shall not reduce the exercise price of an
outstanding SAR, whether through amendment, cancellation or replacement of such
SAR, unless such reduction consistent with Code section 409A and other
applicable law and is approved by the stockholders of the Company.  No SAR shall
have a term longer than ten years’ duration. Payment by the Company of the
amount receivable upon any exercise of an SAR may be made by the delivery of
Common Stock or cash, or any combination of Common Stock and cash, as determined
in the sole discretion of the Administrator. If upon settlement of the exercise
of an SAR a grantee is to receive a portion of such payment in shares of Common
Stock, the number of shares shall be determined by dividing such portion by the
Fair Market Value of a share of Common Stock on the exercise date. No fractional
shares shall be used for such payment and the Administrator shall determine
whether cash shall be given in lieu of such fractional shares or whether such
fractional shares shall be eliminated.
 
(c) Stock Awards.
 
(i) The Administrator may from time to time grant stock awards to eligible
participants in such amounts, on such terms and conditions, and for such
consideration, including no consideration or such minimum consideration as may
be required by law, as it shall determine. A stock award may be denominated in
Common Stock or other securities, stock-equivalent units or restricted stock
units, securities or debentures convertible into Common Stock, or any
combination of the foregoing and may be paid in Common Stock or other
securities, in cash, or in a combination of Common Stock or other securities and
cash, all as determined in the sole discretion of the Administrator.
 
(ii) The Administrator may grant stock awards in a manner constituting
“qualified performance­-based compensation” within the meaning of Code section
162(m). The grant of, or lapse of restrictions with respect to, such
performance-based stock awards shall be based upon one or more Performance
Measures and objective performance targets to be attained relative to those
Performance Measures, all as determined by the Administrator.  Performance
targets may include minimum, maximum, intermediate and target levels of
performance, with the size of the performance-based stock award or the lapse of
restrictions with respect thereto based on the level attained. A performance
target may be stated as an absolute value or as a value determined relative to
prior performance, one or more indices, budget, one or more peer group
companies, any other standard selected by the Administrator, or any combination
thereof.  The Administrator shall be authorized to make adjustments in the
method of calculating attainment of Performance Measures and performance targets
in recognition of: (A) extraordinary or non-recurring items; (B) changes in tax
laws; (C) changes in generally accepted accounting principles or changes in
accounting policies; (D) charges related to restructured or discontinued
operations; (E) restatement of prior period financial results; and (F) any other
unusual, non­recurring gain or loss that is separately identified and quantified
in the Company’s financial statements; provided that the Administrator’s
decision as to whether such adjustments will be made with respect to
any  “covered employee”, within the meaning of Code section 162(m), is
determined when the performance targets are established for the applicable
performance period. Notwithstanding the foregoing, the Administrator may, at its
sole discretion, modify the performance results upon which Awards are based
under the Plan to offset any unintended results arising from events not
anticipated when the Performance Measures and performance targets were
established; provided, that such modifications may be made with respect to an
Award granted to any covered employee, within the meaning of Code section
162(m), only to the extent permitted by Code section 162(m) if the Award was
intended to constitute “qualified performance­based compensation” within the
meaning of Code section 162(m). Notwithstanding anything in the Plan to the
contrary, the Administrator is not authorized to waive or accelerate the lapse
of restrictions on a performance-based stock award granted to any covered
employee, within the meaning of Code section 162(m), except upon death,
disability or a change of ownership or control of the Company. In the event that
a Change in Control occurs after a performance-based stock award has been
granted but before completion of the applicable performance period, a pro rata
portion of such Award shall become payable (or a pro rata portion of the lapse
restrictions shall lapse, as applicable) as of the date of the Change in Control
to the extent otherwise earned on the basis of achievement of the pro rata
portion of the Performance Measures and performance targets relating to the
portion of the performance period completed as of the date of the Change in
Control.
 
 
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7.
Miscellaneous

 
(a) Payment.  The Administrator shall determine the methods by which payments by
any participant with respect to any Awards granted under the Plan shall be made,
including, without limitation: (a) cash or check, (b)  shares of Common Stock
(including, in the case of payment of the exercise price of an Award,  shares
issuable pursuant to the exercise of the Award) or shares of Common Stock held
for such period of time as may be required by the Administrator in order to
avoid adverse accounting consequences, in each case, having a Fair Market Value
on the date of delivery equal to the aggregate payments required, (c) delivery
of a written or electronic notice that the participant has placed a market sell
order with a broker with respect to shares then issuable upon exercise or
vesting of an Award, and that the broker has been directed to pay a sufficient
portion of the net proceeds of the sale to the Company in satisfaction of the
aggregate payments required; provided, that payment of such proceeds is then
made to the Company upon settlement of such sale, or (d) other form of legal
consideration acceptable to the Administrator.  The Administrator shall also
determine the methods by which shares shall be delivered or deemed to be
delivered to participants.  Notwithstanding any other provision of the Plan to
the contrary, no participant who is a director or an “executive officer” of the
Company within the meaning of Section 13(k) of the Exchange Act shall be
permitted to make payment with respect to any Awards granted under the Plan, or
continue any extension of credit with respect to such payment with a loan from
the Company or a loan arranged by the Company in violation of Section 13(k) of
the Exchange Act.
 
(b) Withholding of Taxes.  Grantees and holders of Awards shall pay to the
Company or its Affiliate, or make provision satisfactory to the Administrator
for payment of, any taxes required to be withheld in respect of Awards under the
Plan no later than the date of the event creating the tax liability. The Company
or its Affiliate may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the grantee or holder
of an Award. In the event that payment to the Company or its Affiliate of such
tax obligations is made in shares of Common Stock, such shares shall be valued
at Fair Market Value on the applicable date for such purposes and shall not
exceed in amount the minimum statutory tax withholding obligation.
 
(c) Loans.  To the extent otherwise permitted by law, the Company or its
Affiliate may make or guarantee loans to grantees to assist grantees in
exercising Awards and satisfying any withholding tax obligations.
 
(d) Transferability.  Except as otherwise determined by the Administrator, no
Award granted under the Plan may be assigned or transferred, hypothecated or
encumbered, in whole or in part, either directly or by operation of law or
otherwise, including, but not limited to, by execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, except transfer by will
or by the laws of descent and distribution.  All rights with respect to Awards
granted under the Plan shall be exercisable during the participant’s lifetime
only by the participant or the participant’s guardian or legal representative.
 
 
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(e) Adjustments for Corporate Transactions and Other Events.
 
(i) Stock Dividend, Stock Split and Reverse Stock Split. In the event of a stock
dividend of, or stock split or reverse stock split affecting, the Common Stock,
(A) the maximum number of shares of such Common Stock as to which Awards may be
granted under this Plan and the maximum number of shares with respect to which
Awards may be granted during any one fiscal year of the Company to any
individual, as provided in Section 4 of the Plan, and (B) the number of shares
covered by and the exercise price and other terms of outstanding Awards, shall,
without further action of the Board, be adjusted to reflect such event. The
Administrator may make adjustments, in its discretion, to address the treatment
of fractional shares and fractional cents that arise with respect to outstanding
Awards as a result of the stock dividend, stock split or reverse stock split.
 
(ii) Non-Change in Control Transactions.  Except with respect to the
transactions set forth in Section 7(e)(i), in the event of any change affecting
the Common Stock, the Company or its capitalization, by reason of a spin-off,
split-up, dividend, recapitalization, merger, consolidation or share exchange,
other than any such change that is part of a transaction resulting in a Change
in Control of the Company, the Administrator, in its discretion and without the
consent of the holders of the Awards, shall make (A) appropriate adjustments to
the maximum number and kind of shares reserved for issuance or with respect to
which Awards may be granted under the Plan, in the aggregate and with respect to
any individual during any one fiscal year of the Company, as provided in Section
4 of the Plan; and (B) any adjustments in outstanding Awards, including but not
limited to modifying the number, kind and price of securities subject to Awards.
 
(iii) Change in Control Transactions. In the event of any transaction resulting
in a Change in Control of the Company, outstanding stock options and other
Awards that are payable in or convertible into Common Stock under this Plan will
terminate upon the effective time of such Change in Control unless provision is
made in connection with the transaction for the continuation or assumption of
such Awards by, or for the substitution of the equivalent awards, as determined
in the sole discretion of the Administrator, of, the surviving or successor
entity or a parent thereof. In the event of such termination, the holders of
stock options and other Awards under the Plan will be permitted, immediately
before the Change in Control, to exercise or convert all portions of such stock
options or other Awards under the Plan that are then exercisable or convertible
or which become exercisable or convertible upon or prior to the effective time
of the Change in Control.
 
(iv) Unusual or Non-recurring Events.  The Administrator is authorized to make,
in its discretion and without the consent of holders of Awards, adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or non-recurring events affecting the Company, or the financial
statements of the Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Administrator determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
 
(f) Substitution of Awards in Mergers and Acquisitions.  Awards may be granted
under the Plan from time to time in substitution for awards held by employees,
officers, consultants or directors of entities who become or are about to become
employees, officers, consultants or directors of the Company or an Affiliate as
the result of a merger or consolidation of the employing entity with the Company
or an Affiliate, or the acquisition by the Company or an Affiliate of the assets
or stock of the employing entity.  The terms and conditions of any substitute
Awards so granted may vary from the terms and conditions set forth herein to the
extent that the Administrator deems appropriate at the time of grant to conform
the substitute Awards to the provisions of the awards for which they are
substituted.
 
 
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(g) Termination, Amendment and Modification of the Plan.  The Board may
terminate, amend or modify the Plan or any portion thereof at any time. Except
as otherwise determined by the Board, termination of the Plan shall not affect
the Administrator’s ability to exercise the powers granted to it hereunder with
respect to Awards granted under the Plan prior to the date of such termination.
 
(h) No Stockholders Rights.  Except as otherwise provided herein, a participant
shall have none of the rights of a stockholder with respect to shares of Common
Stock covered by any Award until the participant becomes the record owner of
such shares of Common Stock.
 
(i) Issuance of Shares; Paperless Administration.  Notwithstanding any other
provision of the Plan, unless otherwise determined by the Administrator or
required by any applicable law, rule or regulation, the Company may choose to
not deliver to any participant certificates evidencing shares issued in
connection with any Award and instead record such shares in the books of the
Company (or, as applicable, its transfer agent or stock plan administrator).  In
the event that the Company establishes, for itself or using the services of a
third party, an automated system for the documentation, granting or exercise of
Awards, such as a system using an internet website or interactive voice
response, then the paperless documentation, granting or exercise of Awards by a
participant may be permitted through the use of such an automated system.
 
(j) Effect of Plan upon Other Compensation Plans.  The adoption of the Plan
shall not affect any other compensation or incentive plans in effect for the
Company or any subsidiary.  Nothing in the Plan shall be construed to limit the
right of the Company or any subsidiary:  (a) to establish any other forms of
incentives or compensation for employees, directors or other service providers
of the Company or any subsidiary, or (b) to grant or assume options or other
rights or awards otherwise than under the Plan in connection with any proper
corporate purpose including without limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.  No payment
pursuant to the Plan shall be taken into account in determining any benefits
under any pension, retirement, savings, profit sharing, group insurance, welfare
or other benefit plan of the Company or any subsidiary except to the extent
otherwise expressly provided in writing in such other plan or an agreement
thereunder.
 
(k) Non-Guarantee of Employment or Service.  Nothing in the Plan or in any Grant
Agreement thereunder shall confer any right on an individual to continue in the
service of the Company or shall interfere in any way with the right of the
Company to terminate such service at any time with or without cause or notice
and whether or not such termination results in (i) the failure of any Award to
vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or
(iii) any other adverse effect on the individual’s interests under the Plan.
 
(l) Compliance with Securities Laws; Listing and Registration.  If at any time
the Administrator determines that the delivery of Common Stock under the Plan is
or may be unlawful under the laws of any applicable jurisdiction, or Federal,
state or foreign securities laws, the right to exercise an Award or receive
shares of Common Stock pursuant to an Award shall be suspended until the
Administrator determines that such delivery is lawful. If at any time the
Administrator determines that the delivery of Common Stock under the Plan is or
may violate the rules of the national exchange on which the shares are then
listed for trade, the right to exercise an Award or receive shares of Common
Stock pursuant to an Award shall be suspended until the Administrator determines
that such delivery would not violate such rules. The Company shall have no
obligation to effect any registration or qualification of the Common Stock under
Federal, state or foreign laws.
 
 
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The Company may require that a grantee, as a condition to exercise of an Award,
and as a condition to the delivery of any share certificate, make such written
representations (including representations to the effect that such person will
not dispose of the Common Stock so acquired in violation of Federal, state or
foreign securities laws) and furnish such information as may, in the opinion of
counsel for the Company, be appropriate to permit the Company to issue the
Common Stock in compliance with applicable Federal, state or foreign securities
laws. The stock certificates for any shares of Common Stock issued pursuant to
this Plan may bear a legend restricting transferability of the shares of Common
Stock unless such shares are registered or an exemption from registration is
available under the Securities Act of 1933, as amended, and applicable state or
foreign securities laws.
 
(m) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a grantee or any other person. To the
extent that any grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
 
(n) Governing Law.  The validity, construction and effect of the Plan, of Grant
Agreements entered into pursuant to the Plan, and of any rules, regulations,
determinations or decisions made by the Administrator relating to the Plan or
such Grant Agreements, and the rights of any and all persons having or claiming
to have any interest therein or thereunder, shall be determined exclusively in
accordance with applicable federal laws and the laws of the State of Delaware,
without regard to its conflict of laws principles.
 
(o) 409A Savings Clause.  The Plan and all Awards granted hereunder are intended
to comply with, or otherwise be exempt from, Code section 409A. The Plan and all
Awards granted under the Plan shall be administered, interpreted, and construed
in a manner consistent with Code section 409A to the extent necessary to avoid
the imposition of additional taxes under Code section 409A(a)(1)(B). Should any
provision of the Plan, any Award Agreement, or any other agreement or
arrangement contemplated by the Plan be found not to comply with, or otherwise
be exempt from, the provisions of Code section 409A, such provision shall be
modified and given effect (retroactively if necessary), in the sole discretion
of the Administrator, and without the consent of the holder of the Award, in
such manner as the Administrator determines to be necessary or appropriate to
comply with, or to effectuate an exemption from, Code section 409A.
Notwithstanding anything to the contrary in the Plan, to the extent required to
avoid accelerated taxation and tax penalties under section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to the Plan during the six (6) month period immediately
following the participant’s separation from service shall instead be paid on the
first payroll date after the six-month anniversary of the participant’s
separation from service (or the participant’s death, if
earlier).  Notwithstanding anything in the Plan to the contrary, in no event
shall the Administrator exercise its discretion to accelerate the payment or
settlement of an Award where such payment or settlement constitutes deferred
compensation within the meaning of Code section 409A unless, and solely to the
extent that, such accelerated payment or settlement is permissible under
Treasury Regulation section 1.409A-3(j)(4) or any successor provision.
 
 
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(p) Participants Subject to Taxation Outside the United States.  With respect to
participants who are believed by the Administrator to be subject to taxation in
countries other than the United States, the Administrator may make grants on
such terms and conditions, consistent with the Plan, as the Administrator deems
appropriate to comply with the laws of the applicable countries, and the
Administrator may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws. The
Board may amend the Plan in such manner as may be necessary to enable the Plan
to achieve its stated purposes in any jurisdiction outside the United States in
a tax-efficient manner and in compliance with local rules and regulations.
Furthermore, if any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Administrator, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or deemed
amended without, in the determination of the Administrator, materially altering
the intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.
 
(q) Effective Date; Termination Date.  The Plan is effective as of the date on
which the Plan is adopted by the Board, subject to approval of the stockholders
within twelve months before or after such date. No Award shall be granted under
the Plan after the close of business on the day immediately preceding the tenth
anniversary of the effective date of the Plan, or if earlier, the tenth
anniversary of the date this Plan is approved by the stockholders. Subject to
other applicable provisions of the Plan, all Awards made under the Plan prior to
such termination of the Plan shall remain in effect until such Awards have been
satisfied or terminated in accordance with the Plan and the terms of such
Awards.
 
PLAN APPROVAL
 
 

Date Approved by the Board:   June 17, 2014           Date Approved by the
Stockholders:   June 17, 2014  

                                                                                                                                                                                
 
 
 
 
 
 
 
 
 
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