Exhibit 10.1

 

Select bancorp, Inc.

 

2018 omnibus STOCK INCENTIVE PLAN

 

 

1.       Purposes of the Plan. The purposes of this Plan are to attract and
retain the best available personnel; to provide additional incentives to
Employees, Directors and Consultants to contribute to the successful performance
of the Company and any Related Entity; to promote the growth of the market value
of the Company’s Common Stock; to align the interests of Grantees with those of
the Company’s shareholders; and to promote the success of the Company’s
business.

 

2.       Definitions. The following definitions shall apply as used herein and
in all individual Award Agreements except as a term may be otherwise defined in
an individual Award Agreement. In the event a term is separately defined in an
individual Award Agreement, such definition shall supersede the definition
contained in this Section 2.

 

(a)       “Administrator” means the Plan Administrator as described in Section
4.

 

(b)       “Applicable Laws” means the legal requirements relating to the Plan
and the Awards under applicable provisions of federal and state securities laws,
the corporate laws of North Carolina, and, to the extent other than North
Carolina, the corporate law of the state of the Company’s incorporation, the
Code, the rules of any applicable stock exchange or national market system, and
the rules of any non-U.S. jurisdiction applicable to Awards granted to residents
therein.

 

(c)       “Assumed” means, with respect to an Award, that pursuant to a
Corporate Transaction either (i) the Award is expressly affirmed by the Company
or (ii) the contractual obligations represented by the Award are expressly
assumed (and not simply by operation of law) by the successor entity or its
Parent in connection with the Corporate Transaction with appropriate adjustments
to the number and type of securities of the successor entity or its Parent
subject to the Award and the exercise or purchase price thereof which at least
preserves the compensation element of the Award existing at the time of the
Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Award.

 

(d)       “Award” means the grant of an Option, SAR, Dividend Equivalent Right,
Restricted Stock, Restricted Stock Unit, or other right or benefit under the
Plan.

 

(e)       “Award Agreement” means the written agreement evidencing the grant of
an Award executed by the Company and the Grantee, including any amendments
thereto.

 

(f)       “Board” means the Board of Directors of the Company.

 

(g)       “Cause” means, with respect to the termination by the Company or a
Related Entity of a Grantee’s Continuous Service:

 

(i)       that such termination is for “Cause” as such term (or word of like
import) is expressly defined in a then-effective written employment agreement,
consulting agreement, service agreement or other similar agreement between the
Grantee and the Company or such Related Entity, provided, however, that with
regard to any agreement that defines “Cause” on the occurrence of or in
connection with a change in control (as defined in such agreement), such
definition of “Cause” shall not apply until a change in control actually occurs;
or

 

 

 

  

(ii)       in the absence of such then-effective written agreement and
definition, is based on, in the determination of the Administrator: (A) the
Grantee’s performance of any act, or failure to perform any act, in bad faith
and to the detriment of the Company or a Related Entity; (B) the Grantee’s
dishonesty, intentional misconduct or material breach of any agreement with the
Company or a Related Entity; (C) the removal of the Grantee from office or
permanent prohibition of the Grantee from participating in the affairs of the
Company or any Related Entity by an order issued under section 8(e)(4) or (g)(1)
of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or any
other Applicable Law; (D) the occurrence of any event that results in the
Grantee being excluded from coverage, or having coverage limited for the
Grantee, under the Company’s or any Subsidiary’s blanket bond or other fidelity
or insurance policy covering its directors, officers, or employees; (E) the
Grantee’s material breach of any noncompetition, confidentiality or similar
agreement with the Company or a Related Entity, as determined under such
agreement; (F) the Grantee’s commission of a crime involving dishonesty, breach
of trust, or physical or emotional harm to any person; of (G) the Grantee’s
engaging in acts or omissions constituting gross negligence, misconduct or a
willful violation of a Company or a Related Entity policy which is or is
reasonably expected to be materially injurious to the Company and/or a Related
Entity; or (H) if the Grantee is an Employee, the grantee’s failure to follow
the reasonable instructions of the Board or such grantee’s direct supervisor,
which failure, if curable, is not cured within ten (10) days after notice to
such grantee or, if cured, recurs within one hundred eighty (180) days.

 

(h)       “Code” means the Internal Revenue Code of 1986, as amended, or any
successor statute.

 

(i)       “Committee” means any committee composed of members of the Board
appointed by the Board to administer the Plan.

 

(j)       “Common Stock” means the Company’s common stock, par value $1.00 per
share.

 

(k)       “Company” means Select Bancorp, Inc., a North Carolina corporation, or
any successor entity that adopts the Plan in connection with a Corporate
Transaction.

 

(l)       “Consultant” means any person (other than an Employee or a Director,
solely with respect to rendering services in such person’s capacity as a
Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

 

(m)       “Continuous Service” means that the provision of services to the
Company or a Related Entity in any capacity of Employee, Director or Consultant
is not interrupted or terminated. In jurisdictions requiring notice in advance
of an effective termination as an Employee, Director or Consultant, Continuous
Service shall be deemed terminated upon the actual cessation of providing
services to the Company or a Related Entity notwithstanding any required notice
period that must be fulfilled before a termination as an Employee, Director or
Consultant can be effective under Applicable Laws. A Grantee’s Continuous
Service shall be deemed to have terminated either upon an actual termination of
Continuous Service or upon the entity for which the Grantee provides services
ceasing to be a Related Entity. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entity, or any successor in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant (except as otherwise provided in
the Award Agreement). An approved leave of absence for purposes of this Plan
shall include sick leave, military leave, or any other authorized personal
leave, so long as the Company or Related Entity has a reasonable expectation
that the individual will return to provide services for the Company or Related
Entity, and provided further that the leave does not exceed six (6) months,
unless the individual has a statutory or contractual right to re-employment
following a longer leave. For purposes of each Incentive Stock Option granted
under the Plan, if such leave exceeds three (3) months, and reemployment upon
expiration of such leave is not guaranteed by statute or contract, then the
Incentive Stock Option shall be treated as a Non-Qualified Stock Option
beginning on the day three (3) months and one (1) day following the expiration
of such three (3) month period.

 

 

 

  

(n)       “Corporate Transaction” means any of the following transactions,
provided, however, that the Administrator shall determine under parts (iv) and
(v) whether multiple transactions are related, and its determination shall be
final, binding and conclusive:

 

(i)        a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;

 

(ii)       the sale, transfer or other disposition of all or substantially all
of the assets of the Company;

 

(iii)      the complete liquidation or dissolution of the Company;

 

(iv)      any reverse merger or series of related transactions culminating in a
reverse merger (including, but not limited to, a tender offer followed by a
reverse merger) in which the Company is the surviving entity but (A) the Shares
outstanding immediately prior to such merger are converted or exchanged by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger; or

 

(v)       acquisition in a single or series of related transactions by any
person or related group of persons (other than the Company or by a
Company-sponsored employee benefit plan) of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities.

 

 

 

  

(o)       “Data” has the meaning set forth in Section 22 of this Plan.

 

(p)       “Director” means a member of the Board or the board of directors of
any Related Entity.

 

(q)       “Disability” means a “disability” (or word of like import) as defined
under the long-term disability policy of the Company or the Related Entity to
which the Grantee provides services regardless of whether the Grantee is covered
by such policy. If the Company or the Related Entity to which the Grantee
provides service does not have a long-term disability plan in place,
“Disability” means that a Grantee is unable to carry out the responsibilities
and functions of the position held by the Grantee by reason of any medically
determinable physical or mental impairment for a period of not less than ninety
(90) consecutive days. A Grantee will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment sufficient to
satisfy the Administrator.

 

(r)        “Disqualifying Disposition” means any disposition (including any
sale) of Common Stock received upon exercise of an Incentive Stock Option before
either (i) two years after the date the Employee was granted the Incentive Stock
Option, or (ii) one year after the date the Employee acquired Common Stock by
exercising the Incentive Stock Option. If the Employee has died before such
stock is sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.

 

(s)       “Dividend Equivalent Right” means a right entitling the Grantee to
compensation measured by dividends paid with respect to Common Stock.

 

(t)       “Employee” means any person, including an Officer or Director, who is
in the employ of the Company or any Related Entity, subject to the control and
direction of the Company or any Related Entity as to both the work to be
performed and the manner and method of performance. The payment of a director’s
fee by the Company or a Related Entity shall not be sufficient to make such
person an “Employee” of the Company or a Related Entity.

 

(u)       “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(v)       “Fair Market Value” means, as of any date, the value of the Common
Stock determined as follows.

 

(i)       If the Common Stock is listed on one or more established stock
exchanges or national market systems, including without limitation The NASDAQ
Global Select Market, The NASDAQ Global Market, or The NASDAQ Capital Market of
The NASDAQ Stock Market LLC, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on the principal exchange or system on which the Common Stock is listed (as
determined by the Administrator) on the date of determination (or, if no closing
sales price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported
in the Wall Street Journal or such other source as the Administrator deems
reliable;

 

 

 

  

(ii)       If the Common Stock is regularly quoted on an automated quotation
system (including the OTC Bulletin Board and the systems maintained by OTC
Markets Group Inc.) or by a recognized securities dealer, its Fair Market Value
shall be the closing sales price for such stock as quoted on such system or by
such securities dealer on the date of determination, but if selling prices are
not reported, the Fair Market Value of a Share shall be the mean between the
high bid and low asked prices for the Common Stock on the date of determination
(or, if no such prices were reported on that date, on the last date such prices
were reported), as reported in the Wall Street Journal or such other source as
the Administrator deems reliable; or

 

(iii)       In the absence of an established market for the Common Stock of the
type described in (i) and (ii), above, the Fair Market Value thereof shall be
determined by the Administrator in good faith by application of a reasonable
valuation method consistently applied and taking into consideration all
available information material to the value of the Company in a manner in
compliance with Section 409A of the Code, or in the case of an Incentive Stock
Option, in a manner in compliance with Section 422 of the Code.

 

(w)       “Grantee” means an Employee, Director or Consultant who receives an
Award under the Plan.

 

(x)       “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

 

(y)       “Non-Qualified Stock Option” means an Option not intended to qualify
as an Incentive Stock Option.

 

(z)       “Officer” means a person who is an officer of the Company or a Related
Entity within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

(aa)       “Option” means an option to purchase one or more Shares pursuant to
an Award Agreement granted under the Plan.

 

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

 

(cc)        “Performance Period” means the time period during which specified
performance criteria must be met in connection with the vesting of an Award as
determined by the Administrator.

 

(dd)       “Plan” means this Select Bancorp, Inc. 2018 Omnibus Stock Incentive
Plan, as amended.

 

(ee)       “Post-Termination Exercise Period” means the period specified in the
Award Agreement of not less than thirty (30) days commencing on the date of
termination (other than termination by the Company or any Related Entity for
Cause) of the Grantee’s Continuous Service, or such longer period as may be
applicable upon death or Disability.

 

 

 

  

(ff)       “Related Entity” means any Parent or Subsidiary of the Company.

 

(gg)       “Restricted Stock” means Shares issued under the Plan to the Grantee
for such consideration, if any, and subject to such restrictions on transfer,
rights of first refusal, repurchase provisions, forfeiture provisions, and other
terms and conditions as established by the Administrator.

 

(hh)       “Restricted Stock Units” means an Award which may be earned in whole
or in part upon the passage of time or the attainment of performance criteria
established by the Administrator and which may be settled for cash, Shares or
other securities or a combination of cash, Shares or other securities as
established by the Administrator.

 

(ii)       “Rule 16b-3” means Rule 16b-3 promulgated by the Securities and
Exchange Commission pursuant to the Exchange Act, as such rule may be amended,
and includes any successor provisions thereto.

 

(jj)       “SAR” means a stock appreciation right entitling the Grantee to
Shares or cash compensation, as established by the Administrator, measured by
appreciation in the value of Common Stock.

 

(kk)       “Share” means a share of the Common Stock.

 

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

 

(mm)     “Tax Obligations” means all income tax, social insurance, payroll tax,
fringe benefits tax, or other tax-related liabilities related to a Grantee’s
participation in the Plan and the receipt of any benefits hereunder, as
determined under the Applicable Laws.

 

3.       Stock Subject to the Plan.

 

(a)         Subject to adjustment as described in Section 13 below, the maximum
aggregate number of Shares which may be issued pursuant to all Awards (including
Incentive Stock Options) is Six Hundred Thousand (600,000) Shares. The Shares
may be authorized, but unissued, or reacquired Common Stock.

 

(b)        Any Shares covered by an Award (or portion of an Award) which is
forfeited, canceled or expires (whether voluntarily or involuntarily) shall be
deemed not to have been issued for purposes of determining the maximum aggregate
number of Shares that may be issued under the Plan, except that the maximum
aggregate number of Shares that may be issued pursuant to the exercise of
Incentive Stock Options shall not exceed the number specified in Section 3(a).
Shares that actually have been issued under the Plan pursuant to an Award shall
not be returned to the Plan and shall not become available for future issuance
under the Plan, except that if unvested Shares are forfeited or repurchased by
the Company, such Shares shall become available for future grant under the Plan.
In the event any Option or other Award granted under the Plan is exercised
through the tendering of Shares (either actually or through attestation), or in
the event tax withholding obligations are satisfied by tendering or withholding
Shares, any Shares so tendered or withheld shall not again be available for
awards under the Plan. To the extent that cash in lieu of Shares is delivered
upon the exercise of a SAR pursuant to Section 6(m), the Company shall be
deemed, for purposes of applying the limitation on the number of shares, to have
issued the number of Shares that it was entitled to issue upon such exercise or
on the exercise of any related Option, notwithstanding that cash was issued in
lieu of such Shares. Shares reacquired by the Company on the open market or
otherwise using cash proceeds from the exercise of Options shall not be
available for awards under the Plan.

 

 

 

  

4.       Administration of the Plan.

 

(a)       Plan Administrator.

 

(i)       Administration with Respect to Directors and Officers. With respect to
grants of Awards to Directors or Employees who are also Officers or Directors of
the Company, the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be constituted in such a manner
as to satisfy the Applicable Laws and to permit such grants and related
transactions under the Plan to be exempt from Section 16(b) of the Exchange Act
in accordance with Rule 16b-3. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board.

 

(ii)       Administration With Respect to Consultants and Other Employees. With
respect to grants of Awards to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board.

 

(b)       Multiple Administrative Bodies. The Plan may be administered by
different bodies with respect to Directors, Officers, Consultants, and Employees
who are neither Directors nor Officers.

 

(c)       Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:

 

(i)       to select the Employees, Directors and Consultants to whom Awards may
be granted from time to time hereunder;

 

(ii)       to determine whether and to what extent Awards are granted hereunder;

 

(iii)      to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

 

(iv)      to approve forms of Award Agreements for use under the Plan;

 

(v)      to determine the type, terms and conditions of any Award granted
hereunder;

 

 

 

  

(vi)      to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable non-U.S. jurisdictions and to afford
Grantees favorable treatment under such rules or laws; provided, however, that
no Award shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions that are inconsistent with the provisions of
the Plan;

 

(vii)     to amend the terms of any outstanding Award granted under the Plan,
provided that any amendment that would adversely affect the Grantee’s rights
under an outstanding Award shall not be made without the Grantee’s written
consent; provided, however, that an amendment or modification that may cause an
Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee;

 

(viii)    to construe and interpret the terms of the Plan and Awards, including
without limitation, any notice of award or Award Agreement, granted pursuant to
the Plan;

 

(ix)      to institute an option exchange program;

 

(x)       to make other determinations as provided in this Plan; and

 

(xi)      to take such other action, not inconsistent with the terms of the
Plan, as the Administrator deems appropriate.

 

The express grant in the Plan of any specific power to the Administrator shall
not be construed as limiting any power or authority of the Administrator;
provided that the Administrator may not exercise any right or power reserved to
the Board. Any decision made, or action taken, by the Administrator or in
connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan.

 

(d)       Indemnification. In addition to such other rights of indemnification
as they may have as members of the Board or as Officers or Employees of the
Company or a Related Entity, members of the Board and any Officers or Employees
of the Company or a Related Entity to whom authority to act for the Board, the
Administrator or the Company is delegated shall be defended and indemnified by
the Company to the extent permitted by law on an after-tax basis against all
reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any claim, investigation, action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan, or any Award granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by the Company) or paid by them in satisfaction of a judgment in any such claim,
investigation, action, suit or proceeding, except in relation to such
liabilities, costs, and expenses as may arise out of, or result from, the bad
faith, gross negligence, willful misconduct, or criminal acts of such persons;
provided, however, that within thirty (30) days after the institution of such
claim, investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the
same.

 

5.       Eligibility. Awards other than Incentive Stock Options may be granted
to Employees, Directors, and Consultants of the Company and any Related Entity.
Incentive Stock Options may be granted only to Employees of the Company or a
Related Entity. An Employee, Director, or Consultant who has been granted an
Award may, if otherwise eligible, be granted additional Awards. Awards may be
granted to such Employees, Directors, or Consultants who are residing in
non-U.S. jurisdictions as the Administrator may determine from time to time.

 

 

 

  

6.       Terms and Conditions of Awards.

 

(a)       Types of Awards. The Administrator is authorized under the Plan to
award any type of arrangement to an Employee, Director or Consultant that is not
inconsistent with the provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) cash or (iii) an Option, a SAR,
or similar right with a fixed or variable price related to the Fair Market Value
of the Shares and with an exercise or conversion privilege related to the
passage of time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions. Such awards include, without
limitation, Options, SARs, sales or bonuses of Restricted Stock, Restricted
Stock Units, and Dividend Equivalent Rights. An Award may consist of one such
security or benefit, or two or more of them in any combination or alternative.

 

(b)       Designation of Award. Each Award shall be evidenced by an Award
Agreement in form and substance satisfactory to the Administrator. The type of
each Award shall be designated in the Award Agreement. In the case of an Option,
the Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such designation, an Option
will qualify as an Incentive Stock Option under the Code only to the extent the
$100,000 limitation of Section 422(d) of the Code is not exceeded. The $100,000
limitation of Section 422(d) of the Code is calculated based on the aggregate
Fair Market Value of the Shares subject to Options designated as Incentive Stock
Options that become exercisable for the first time by a Grantee during any
calendar year (under all plans of the Company or any Related Entity). For
purposes of this calculation, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the grant date of the relevant Option. Any
Option granted that fails to satisfy the requirements of the Applicable Laws for
treatment as an Incentive Stock Option shall be a Non-Qualified Stock Option.

 

(c)       Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria that may be
established by the Administrator.

 

(d)       Performance-Based Awards. The Administrator may include in an Award
provisions such that the vesting or other realization of an Award by a Grantee
will be subject to the achievement of certain performance criteria as the
Administrator may determine over the course of a Performance Period determined
by the Administrator.

 

 

 

  

(i)       The performance criteria will be established by the Administrator and
may include any one of, or combination of, the following criteria:

 

(A)Net earnings or net income (before or after taxes);

 

(B)Earnings per share;

 

(C)Asset growth;

 

(D)Net operating profit;

 

(E)Return measures (including, but not limited to, return on assets, capital,
equity, or sales);

 

(F)Cash flow (including, but not limited to, operating cash flow, free cash
flow, and cash flow return on capital);

 

(G)Cash flow per share;

 

(H)Earnings before or after taxes, interest, depreciation, and/or amortization;

 

(I)Gross or operating margins;

 

(J)Productivity ratios;

 

(K)Share price (including, but not limited to, growth measures and total
shareholder return);

 

(L)Expense targets or ratios;

 

(M)Charge-off levels and asset quality;

 

(N)Improvement in or attainment of revenue levels;

 

(O)Deposit growth;

 

(P)Margins;

 

(Q)Operating efficiency;

 

(R)Operating expenses;

 

(S)Economic value added;

 

(T)Improvement in or attainment of expense levels;

 

(U)Improvement in or attainment of working capital levels;

 

(V)Debt reduction;

 

(W)Capital targets; and

 

(X)Consummation of acquisitions, dispositions, projects or other specific events
or transactions.

 

 

 

 

(ii)       The Administrator may provide in any grant of an Award that any
evaluation of performance may include or exclude any of the following events
that occurs during a Performance Period: (a) asset write-downs, (b) litigation
or claim judgments or settlements, (c) the effect of changes in tax laws,
accounting principles or regulations, or other laws or provisions affecting
reported results, (d) any reorganization and restructuring programs, (e)
Extraordinary Items (as defined below) for the applicable Performance Period,
(f) mergers, acquisitions or divestitures, and (g) foreign exchange gains and
losses. For this purpose, “Extraordinary Items” means extraordinary, unusual,
and/or nonrecurring items of gain or loss as defined under United States
generally accepted accounting principles.

 

(iii)       Before the 90th day of the applicable Performance Period (or, if the
Performance Period is less than one year, no later than the number of days which
is equal to 25% of such Performance Period), the Administrator will determine
the duration of the Performance Period, the performance criteria on which
performance will be measured, and the amount and terms of payment/vesting upon
achievement of the such criteria.

 

(iv)       Following the completion of each Performance Period, the
Administrator will certify in writing whether the applicable performance
criteria have been achieved for the Awards for such Performance Period. A
Grantee will be eligible to receive payment pursuant to an Award for a
Performance Period only if the performance criteria for such Performance Period
are achieved. In determining the amounts earned by a Grantee pursuant to an
Award issued pursuant to this Section 6(d), the Administrator will have the
right to (A) reduce or eliminate (but not to increase) the amount payable at a
given level of performance to take into account additional factors that the
Administrator may deem relevant to the assessment of individual or corporate
performance for the Performance Period, (B) determine what actual Award, if any,
will be paid in the event of a Corporate Transaction or in the event of a
termination of employment following a Corporate Transaction prior to the end of
the Performance Period, and (C) determine what actual Award, if any, will be
paid in the event of a termination of employment other than as the result of a
Grantee’s death or Disability prior to a Corporate Transaction and prior to the
end of the Performance Period to the extent an actual Award would have otherwise
been achieved had the Grantee remained employed through the end of the
Performance Period.

 

(v)       Payment of the Award to a Grantee shall be paid following the end of
the Performance Period, or if later, the date on which any applicable
contingency or restriction has ended.

 

(e)       Acquisitions and Other Transactions. The Administrator may issue
Awards under the Plan in settlement, assumption or substitution for, outstanding
awards or obligations to grant future awards in connection with the Company or a
Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.

 

 

 

  

(f)       Deferral of Award Payment. The Administrator may establish one or more
programs under the Plan to permit selected Grantees the opportunity to elect to
defer receipt of consideration upon exercise of an Award, satisfaction of
performance criteria, or other event that absent the election would entitle the
Grantee to payment or receipt of Shares or other consideration under an Award.
The Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.

 

(g)       Separate Programs. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing particular forms of
Awards to one or more classes of Grantees on such terms and conditions as
determined by the Administrator from time to time.

 

(h)       Individual Award Limit. No Grantee may be granted an Award of Options
or SARs in any calendar year with respect to more than One Hundred Twenty
Thousand (120,000) Shares, or an Award of Restricted Stock, Restricted Stock
Units, Dividend Equivalent Rights, or other Awards that are valued with
reference to shares covering more than Forty-Eight Thousand (48,000) Shares. The
foregoing limitations shall be adjusted proportionately in connection with any
change in the Company’s capitalization pursuant to Section 13 below.

 

(i)       Early Exercise. An Award Agreement may, but need not, include a
provision whereby the Grantee may elect at any time while an Employee, Director
or Consultant to exercise any part or all of the Award prior to full vesting of
the Award. Any unvested Shares received pursuant to such exercise may be subject
to a repurchase right in favor of the Company or a Related Entity or to any
other restriction the Administrator determines to be appropriate.

 

(j)       Term of Award. The term of each Award shall be the term stated in the
Award Agreement, provided, however, that the term shall be no more than ten (10)
years from the date of grant thereof. However, in the case of an Incentive Stock
Option granted to a Grantee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Related Entity, the term of the Incentive Stock
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Award Agreement. Notwithstanding the foregoing,
the specified term of any Award shall not include any period for which the
Grantee has elected to defer the receipt of the Shares or cash issuable pursuant
to the Award.

 

(k)       Transferability of Awards. Unless the Administrator provides
otherwise, no award may be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Grantee, only by
the Grantee. Notwithstanding the foregoing, the Grantee may designate one or
more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on
a beneficiary designation form provided by the Administrator.

 

 

 

  

(l)       Time of Granting Awards. The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to grant
such Award, or such other later date as is determined by the Administrator.

 

(m)       Stock Appreciation Rights. A SAR may be granted (i) with respect to
any Option granted under this Plan, either concurrently with the grant of such
Option or at such later time as determined by the Administrator (as to all or
any portion of the Shares subject to the Option), or (ii) alone, without
reference to any related Option. Each SAR granted by the Administrator under
this Plan shall be subject to the following terms and conditions. Each SAR
granted to any participant shall relate to such number of Shares as shall be
determined by the Administrator, subject to adjustment as provided in Section
13. In the case of a SAR granted with respect to an Option, the number of Shares
to which the SAR pertains shall be reduced in the same proportion that the
holder of the Option exercises the related Option. The exercise price of a SAR
will be determined by the Administrator at the date of grant but may not be less
than 100% of the Fair Market Value of the Shares subject thereto on the date of
grant. Subject to the right of the Administrator to deliver cash in lieu of
Shares (which, as it pertains to Officers and Directors of the Company, shall
comply with all requirements of the Exchange Act), the number of Shares which
shall be issuable upon the exercise of a SAR shall be determined by dividing:

 

(i)       the number of Shares as to which the SAR is exercised multiplied by
the amount of the appreciation in such Shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the Shares
subject to the SAR on the exercise date exceeds (1) in the case of a SAR related
to an Option, the exercise price of the Shares under the Option or (2) in the
case of a SAR granted alone, without reference to a related Option, an amount
which shall be determined by the Administrator at the time of grant, subject to
adjustment under Section 13); by

 

(ii)       the Fair Market Value of a Share on the exercise date.

 

In lieu of issuing Shares upon the exercise of a SAR, the Administrator may
elect to pay the holder of the SAR cash equal to the Fair Market Value on the
exercise date of any or all of the Shares which would otherwise be issuable. No
fractional Shares shall be issued upon the exercise of a SAR; instead, the
holder of the SAR shall be entitled to receive a cash adjustment equal to the
same fraction of the Fair Market Value of a Share on the exercise date or to
purchase the portion necessary to make a whole share at its Fair Market Value on
the date of exercise. The exercise of a SAR related to an Option shall be
permitted only to the extent that the Option is exercisable under Section 11 on
the date of surrender. Any Incentive Stock Option surrendered pursuant to the
provisions of this Section 6(m) shall be deemed to have been converted into a
Non-Qualified Stock Option immediately prior to such surrender.

 

7.       Award Exercise or Purchase Price, Consideration and Taxes.

 

(a)       Exercise or Purchase Price. The exercise or purchase price, if any,
for an Award shall be as follows.

 

 

 

  

(i)       In the case of an Incentive Stock Option:

 

(1)       granted to an Employee who, at the time of the grant of such Incentive
Stock Option owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Related Entity, the per
Share exercise price shall be not less than one hundred ten percent (110%) of
the Fair Market Value per Share on the date of grant; or

 

(2)       granted to any Employee other than an Employee described in the
preceding paragraph, the per Share exercise price shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(ii)       In the case of a Non-Qualified Stock Option, the per Share exercise
price shall be not less than one-hundred percent (100%) of the Fair Market Value
per Share on the date of grant.

 

(iii)      In the case of other Awards, such price as is determined by the
Administrator.

 

(iv)      Notwithstanding the foregoing provisions of this Section 7(a), in the
case of an Award issued pursuant to Section 6(e), above, the exercise or
purchase price for the Award shall be determined in accordance with the
provisions of the relevant instrument evidencing the agreement to issue such
Award.

 

(b)       Consideration. Subject to Applicable Laws, the consideration to be
paid for the Shares to be issued upon exercise or purchase of an Award,
including the method of payment, shall be determined by the Administrator. In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued
under the Plan the following:

 

(i)       cash;

 

(ii)       check;

 

(iii)      delivery of Grantee’s promissory note with such recourse, interest,
security, and redemption provisions as the Administrator determines as
appropriate (but only to the extent that the acceptance or terms of the
promissory note would not violate an Applicable Law); provided, however, that
interest shall compound at least annually and shall be charged at the minimum
rate of interest necessary to avoid (A) the imputation of interest income to the
Company and compensation income to the Grantee under any applicable provisions
of the Code, and (B) the classification of the Award as a liability for
financial accounting purposes;

 

(iv)      surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require which have a
Fair Market Value on the date of surrender or attestation equal to the aggregate
exercise price of the Shares as to which said Award shall be exercised;

 

 

 

  

(v)       with respect to Options, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall provide written
instructions to a broker-dealer acceptable to the Company to effect the
immediate sale of some or all of the purchased Shares and remit to the Company
sufficient funds to cover the aggregate exercise price payable for the purchased
Shares and (B) shall provide written directives to the Company to deliver the
certificates (or other evidence satisfactory to the Company to the extent that
the Shares are uncertificated) for the purchased Shares directly to such
broker-dealer in order to complete the sale transaction;

 

(vi)      with respect to Options, payment through a “net exercise” such that,
without the payment of any funds, the Grantee may exercise the Option and
receive the net number of Shares equal to (i) the number of Shares as to which
the Option is being exercised, multiplied by (ii) a fraction, the numerator of
which is the Fair Market Value per Share (on such date as is determined by the
Administrator) less the Exercise Price per Share, and the denominator of which
is such Fair Market Value per Share;

 

(vii)     past or future services actually or to be rendered to the Company or a
Related Entity;

 

(viii)   any combination of the foregoing methods of payment; or

 

(ix)      any other method approved by the Administrator.

 

The Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in
Section 4(c)(iv), or by other means, grant Awards that do not permit all of the
foregoing forms of consideration to be used in payment for the Shares or that
otherwise restrict one or more forms of consideration.

 

8.       Notice to Company of Disqualifying Disposition. Each Employee who
receives an Incentive Stock Option must agree to notify the Company in writing
immediately after the Employee makes a Disqualifying Disposition of any Common
Stock acquired pursuant to the exercise of an Incentive Stock Option.

 

9.       Tax Withholding.

 

(a)       Prior to the delivery of any Shares or cash pursuant to an Award (or
the exercise thereof), or at such other time as the Tax Obligations are due, the
Company, in accordance with the Code and any Applicable Laws, shall have the
power and the right to deduct or withhold, or require a Grantee to remit to the
Company, an amount sufficient to satisfy all Tax Obligations. The Administrator
may condition such delivery, payment, or other event pursuant to an Award on the
payment by the Grantee of any such Tax Obligations.

 

(b)       The Administrator, pursuant to such procedures as it may specify from
time to time, may designate the method or methods by which a Grantee may satisfy
the Tax Obligations. As determined by the Administrator from time to time, these
methods may include one or more of the following:

 

 

 

 

(i)       paying cash;

 

(ii)       electing to have the Company withhold cash or Shares deliverable to
the Grantee having a Fair Market Value equal to the amount required to be
withheld;

 

(iii)     delivering to the Company already-owned Shares having a Fair Market
Value equal to the minimum amount required to be withheld or remitted, provided
the delivery of such Shares will not result in any adverse accounting
consequences as the Administrator determines;

 

(iv)     selling a sufficient number of Shares otherwise deliverable to the
Grantee through such means as the Administrator may determine (whether through a
broker or otherwise) equal to the Tax Obligations required to be withheld;

 

(v)       retaining from salary or other amounts payable to the Grantee cash
having a sufficient value to satisfy the Tax Obligations; or

 

(vi)      any other means which the Administrator determines to both comply with
Applicable Laws, and to be consistent with the purposes of the Plan.

 

The amount of Tax Obligations will be deemed to include any amount that the
Administrator determines may be withheld at the time the election is made, not
to exceed the amount determined by using the maximum federal, state, local and
foreign marginal income tax rates applicable to the Grantee or the Company, as
applicable, with respect to the Award on the date that the amount of tax or
social insurance liability to be withheld or remitted is to be determined. The
Fair Market Value of the Shares to be withheld or delivered shall be determined
as of the date that the Tax Obligations are required to be withheld.

 

10.       Rights As a Shareholder.

 

(a)       Restricted Stock. Except as otherwise provided in any Award Agreement,
a Grantee will not have any rights of a shareholder with respect to any of the
Shares granted to the Grantee under an Award of Restricted Stock (including the
right to vote or receive dividends and other distributions paid or made with
respect thereto) nor shall cash dividends or dividend equivalents accrue or be
paid in respect of any unvested Award of Restricted Stock, unless and until such
Shares vest.

 

(b)       Other Awards. In the case of Awards other than Restricted Stock,
except as otherwise provided in any Award Agreement, a Grantee will not have any
rights of a shareholder, nor will dividends or dividend equivalents accrue or be
paid, with respect to any of the Shares granted pursuant to such Award until the
Award is exercised or settled and the Shares are delivered (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company).

 

 

 

  

11.       Exercise of Award.

 

(a)       Procedure for Exercise.

 

(i)       Any Award granted hereunder shall be exercisable at such times and
under such conditions as determined by the Administrator under the terms of the
Plan and as specified in the Award Agreement.

 

(ii)       An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised has been made, including, to the
extent selected, use of the broker-dealer sale and remittance procedure to pay
the purchase price as provided in Section 7(b)(v).

 

(b)       Exercise of Award Following Termination of Continuous Service. In the
event of termination of a Grantee’s Continuous Service for any reason other than
Disability or death, such Grantee may, but only during the Post-Termination
Exercise Period (but in no event later than the expiration date of the term of
such Award as set forth in the Award Agreement), exercise the portion of the
Grantee’s Award that was vested at the date of such termination or such other
portion of the Grantee’s Award as may be determined by the Administrator. The
Grantee’s Award Agreement may provide that upon the termination of the Grantee’s
Continuous Service for Cause, the Grantee’s right to exercise the Award shall
terminate concurrently with the termination of Grantee’s Continuous Service. In
the event of a Grantee’s change of status from Employee to Consultant, an
Employee’s Incentive Stock Option shall convert automatically to a Non-Qualified
Stock Option on the day three (3) months and one day following such change of
status. To the extent that the Grantee’s Award was unvested at the date of
termination, or if the Grantee does not exercise the vested portion of the
Grantee’s Award within the Post-Termination Exercise Period, the Award shall
terminate.

 

(c)       Disability of Grantee. In the event of termination of a Grantee’s
Continuous Service as a result of his or her Disability, such Grantee may, but
only within twelve (12) months from the date of such termination (or such longer
period as specified in the Award Agreement but in no event later than the
expiration date of the term of such Award as set forth in the Award Agreement),
exercise the portion of the Grantee’s Award that was vested at the date of such
termination; provided, however, that if such Disability is not a “disability” as
such term is defined in Section 22(e)(3) of the Code, in the case of an
Incentive Stock Option such Incentive Stock Option shall automatically convert
to a Non-Qualified Stock Option on the day three (3) months and one day
following such termination. To the extent that the Grantee’s Award was unvested
at the date of termination, or if Grantee does not exercise the vested portion
of the Grantee’s Award within the time specified herein, the Award shall
terminate.

 

(d)       Death of Grantee. In the event of a termination of the Grantee’s
Continuous Service as a result of his or her death, or in the event of the death
of the Grantee during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee’s termination of Continuous Service as a
result of his or her Disability, the Grantee’s estate or a person who acquired
the right to exercise the Award by bequest or inheritance may exercise the
portion of the Grantee’s Award that was vested as of the date of termination,
within twelve (12) months from the date of death (or such longer period as
specified in the Award Agreement but in no event later than the expiration of
the term of such Award as set forth in the Award Agreement). To the extent that,
at the time of death, the Grantee’s Award was unvested, or if the Grantee’s
estate or a person who acquired the right to exercise the Award by bequest or
inheritance does not exercise the vested portion of the Grantee’s Award within
the time specified herein, the Award shall terminate.

 

 

 

  

(e)       Extension if Exercise Prevented by Law. Notwithstanding the foregoing,
if the exercise of an Award within the applicable time periods set forth in this
Section 11 is prevented by the provisions of Section 12 below, the Award shall
remain exercisable until one (1) month after the date the Grantee is notified by
the Company that the Award is exercisable, but in any event no later than the
expiration of the term of such Award as set forth in the Award Agreement.

 

12.       Conditions Upon Issuance of Shares; Manner of Issuance of Shares.

 

(a)       If at any time the Administrator determines that the delivery of
Shares pursuant to the exercise, vesting or any other provision of an Award is
or may be unlawful under Applicable Laws, the vesting or right to exercise an
Award or to otherwise receive Shares pursuant to the terms of an Award shall be
suspended until the Administrator determines that such delivery is lawful and
shall be further subject to the approval of counsel for the Company with respect
to such compliance. The Company shall have no obligation to effect any
registration or qualification of the Shares under any Applicable Law.

 

(b)       As a condition to the exercise of an Award, the Company may require
the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
Applicable Laws.

 

(c)       Subject to Applicable Laws and any governing rules or regulations, the
Company shall issue or cause to be issued the Shares acquired pursuant to an
Award and shall deliver such Shares to or for the benefit of the Grantee by
means of one or more of the following as determined by the Administrator: (i) by
delivering to the Grantee evidence of book entry Shares credited to the account
of the Grantee, (ii) by depositing such Shares for the benefit of the Grantee
with any broker with which the Grantee has an account relationship, or (iii) by
delivering such Shares to the Grantee in certificate form.

 

(d)       No fractional Shares shall be issued pursuant to any Award under the
Plan; any Grantee who would otherwise be entitled to receive a fraction of a
Share upon exercise or vesting of an Award will receive from the Company cash in
lieu of such fractional Shares in an amount equal to the Fair Market Value of
such fractional Shares, as determined by the Administrator.

 

13.       Adjustments. Subject to any required action by the shareholders of the
Company, the number of Shares covered by each outstanding Award, and the number
of Shares that have been authorized for issuance under the Plan but as to which
no Awards have yet been granted or which have been returned to the Plan, the
exercise or purchase price of each such outstanding Award, as well as any other
terms that the Administrator determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued and outstanding Shares resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Shares, or similar
transaction affecting the Shares, (ii) any other increase or decrease in the
number of issued and outstanding Shares effected without receipt of
consideration by the Company, or (iii) any other transaction with respect to the
Company’s Common Stock including a corporate merger, consolidation, acquisition
of property or stock, separation (including a spin-off or other distribution of
stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without
receipt of consideration.” Such adjustment shall be made by the Administrator
and its determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award. No adjustments shall be made for
dividends paid in cash or in property other than Common Stock of the Company,
nor shall cash dividends or dividend equivalents accrue or be paid in respect of
unexercised Options or unvested Awards hereunder.

 

 

 

  

14.       Corporate Transactions.

 

(a)       Termination of Award to Extent Not Assumed in Corporate Transaction.
Effective upon the consummation of a Corporate Transaction, all outstanding
Awards under the Plan shall terminate. However, all such Awards shall not
terminate to the extent they are Assumed in connection with the Corporate
Transaction.

 

(b)       Acceleration of Award Upon Corporate Transaction. The Administrator
shall have the authority, exercisable either in advance of any actual or
anticipated Corporate Transaction or at the time of an actual Corporate
Transaction, and exercisable at the time of the grant of an Award under the Plan
or any time while an Award remains outstanding, to provide for the full or
partial automatic vesting and exercisability of one or more outstanding unvested
Awards under the Plan and the release from restrictions on transfer and
repurchase or forfeiture rights of such Awards in connection with a Corporate
Transaction on such terms and conditions as the Administrator may specify. The
Administrator also shall have the authority to condition any such Award vesting
and exercisability or release from such limitations upon the subsequent
termination of the Continuous Service of the Grantee within a specified period
following the effective date of the Corporate Transaction. The Administrator may
provide that any Awards so vested or released from such limitations in
connection with a Corporate Transaction shall remain fully exercisable until the
expiration or sooner termination of the Award.

 

(c)       Effect of Acceleration on Incentive Stock Options. Any Incentive Stock
Option accelerated under this Section 14 in connection with a Corporate
Transaction shall remain exercisable as an Incentive Stock Option under the Code
only to the extent the $100,000 limitation of Section 422(d) of the Code is not
exceeded.

 

15.       Effective Date and Term of Plan. The Plan shall become effective at
such time as it has been (a) approved by the Company’s shareholders and (b)
adopted by the Board. Shareholder approval shall be obtained in the degree and
manner required under Applicable Laws. The Plan shall continue in effect for a
term of ten (10) years unless sooner terminated. Subject to the preceding
sentence and the Applicable Laws, Awards may be granted under the Plan upon its
becoming effective.

 

 

 

  

16.       Amendment, Suspension or Termination of the Plan.

 

(a)       The Board may at any time amend, suspend or terminate the Plan in any
respect, except that it may not, without the approval of the shareholders
obtained within twelve (12) months before or after the Board adopts a resolution
authorizing any of the following actions, do any of the following:

 

(i)       increase the total number of shares that may be issued under the Plan
(except by adjustment pursuant to Section 13);

 

(ii)       modify the provisions of Section 6 regarding eligibility for grants
of Incentive Stock Options;

 

(iii)      modify the provisions of Section 7(a) regarding the exercise price at
which shares may be offered pursuant to Options (except by adjustment pursuant
to Section 13);

 

(iv)      extend the expiration date of the Plan; and

 

(v)       except as provided in Section 13 (including, without limitation, any
stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the Company may not amend an Award granted under the Plan
to reduce its exercise price per share, cancel and regrant new Awards with lower
prices per share than the original prices per share of the cancelled Awards, or
cancel any Awards in exchange for cash or the grant of replacement Awards with
an exercise price that is less than the exercise price of the original Awards,
essentially having the effect of a repricing, without approval by the Company’s
shareholders.

 

(b)       No Award may be granted during any suspension of the Plan or after
termination of the Plan.

 

(c)       No suspension or termination of the Plan shall adversely affect any
rights under Awards already granted to a Grantee without his or her consent.

 

17.       Reservation of Shares.

 

(a)       The Company, during the term of the Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

 

 

 

  

(b)       The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

 

18.       No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee’s
Continuous Service, nor shall it interfere in any way with his or her right or
the right of the Company or a Related Entity to terminate the Grantee’s
Continuous Service at any time, with or without Cause, and with or without
notice. The ability of the Company or any Related Entity to terminate the
employment of a Grantee who is employed at will is in no way affected by its
determination that the Grantee’s Continuous Service has been terminated for
Cause for the purposes of this Plan.

 

19.       No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement
Income Security Act of 1974, as amended.

 

20.       Information to Grantees. The Company shall provide to each Grantee,
during the period for which such Grantee has one or more Awards outstanding,
such information as required by Applicable Laws.

 

21.       Electronic Delivery. The Administrator may decide to deliver any
documents related to any Award granted under the Plan through an online or
electronic system established and maintained by the Company or another third
party designated by the Company or to request a Grantee’s consent to participate
in the Plan by electronic means. By accepting an Award, each Grantee consents to
receive such documents by electronic delivery and agrees to participate in the
Plan through an online or electronic system established and maintained by the
Company or another third party designated by the Company, and such consent shall
remain in effect throughout Grantee’s Continuous Service with the Company and
any Related Entity and thereafter until withdrawn in writing by Grantee.

 

22.       Data Privacy. The Administrator may decide to collect, use and
transfer, in electronic or other form, personal data as described in this Plan
or any Award for the exclusive purpose of implementing, administering and
managing participation in the Plan. By accepting an Award, each Grantee
acknowledges that the Company holds certain personal information about Grantee,
including, but not limited to, name, home address and telephone number, date of
birth, social security number or other identification number, salary,
nationality, job title, details of all Awards awarded, cancelled, exercised,
vested or unvested, for the purpose of implementing, administering and managing
the Plan (the “Data”). Each Grantee further acknowledges that Data may be
transferred to any third parties assisting in the implementation, administration
and management of the Plan and that these third parties may be located in
jurisdictions that may have different data privacy laws and protections, and
Grantee authorizes such third parties to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Plan, including any requisite
transfer of such Data as may be required to a broker or other third party with
whom the recipient or the Company may elect to deposit any Shares acquired upon
any Award.

 

 

 

  

23.       Compliance with Section 409A of the Code. Notwithstanding anything to
the contrary set forth herein, the Award Agreement evidencing any Award that is
not exempt from the requirements of Section 409A of the Code shall contain
provisions such that the Award will comply with the requirements of Section 409A
of the Code and avoid the consequences specified in Section 409A(a)(1) of the
Code. To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code and Department of the
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued or amended after the effective date of the Plan. Notwithstanding any
provision of the Plan to the contrary, in the event that following the effective
date of the Plan the Administrator determines that any Award may be subject to
Section 409A of the Code and related Department of Treasury guidance (including
such Department of Treasury guidance as may be issued after the effective date
of the Plan), the Administrator may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Administrator determines are necessary or appropriate to (1)
exempt the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (2) comply with
the requirements of Section 409A of the Code and related Department of Treasury
guidance.

 

24.       Unfunded Obligation. Grantees shall have the status of general
unsecured creditors of the Company. Any amounts payable to Grantees pursuant to
the Plan shall be unfunded and unsecured obligations for all purposes,
including, without limitation, Title I of the Employee Retirement Income
Security Act of 1974, as amended. Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create
any trusts, or establish any special accounts with respect to such obligations.
The Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any
trust or any Grantee account shall not create or constitute a trust or fiduciary
relationship between the Administrator, the Company or any Related Entity and a
Grantee, or otherwise create any vested or beneficial interest in any Grantee or
the Grantee’s creditors in any assets of the Company or a Related Entity. The
Grantees shall have no claim against the Company or any Related Entity for any
changes in the value of any assets that may be invested or reinvested by the
Company with respect to the Plan.

 

25.       Construction. Captions and titles contained herein are for convenience
only and shall not affect the meaning or interpretation of any provision of the
Plan. Except when otherwise indicated by the context, the singular shall include
the plural and the plural shall include the singular. Use of the term “or” is
not intended to be exclusive, unless the context clearly requires otherwise.