Exhibit 10.5

 

 

 

 

 

 

 

 

 

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CEN Biotech, Inc.

 

2017 Equity Compensation Plan

 

  

 

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CEN BIOTECH, INC.

 

2017 Equity Compensation Plan

 

1.

Purpose

 

CEN Biotech, Inc., a corporation organized under the laws of Ontario, Canada
(the “Company”), hereby adopts this CEN Biotech, Inc. 2017 Equity Compensation
Plan effective as of November 29, 2017. This Plan is intended to encourage
equity ownership of the Company by persons providing services to the Company
and/or its subsidiaries, including directors, officers, employees, advisers and
consultants of the Company and/or its subsidiaries, and to provide additional
incentives for them to promote the success of the business of the Company.

 

2.

Definitions

 

As used in this Plan, the following terms shall have the following meanings:

 

2.1     Accelerate, when used with respect to an Award (other than in respect of
Restricted Stock), means that as of the time of reference the Award will vest
and, if applicable, will become exercisable with respect to some or all of the
Common Stock, units or cash equivalent for which such Award was not then
otherwise exercisable by its terms, and, when used with respect to Restricted
Stock, means that the Risk of Forfeiture otherwise applicable to the Restricted
Stock shall expire with respect to some or all of the Common Stock then
otherwise subject to the Risk of Forfeiture.

 

2.2     Affiliate means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with the Person in question. As used
herein, “control” means the possession, direct or indirect, of the power to
direct or cause the direction of management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

 

2.3     Award means any grant or sale pursuant to the Plan of Options,
Restricted Stock, or other Stock-Based Awards.

 

2.4     Award Agreement means an agreement, instrument or other document between
the Company and the recipient of an Award, setting forth the terms and
conditions of the Award.

 

2.5     Beneficial Owner shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.

 

2.6     Board means the Board of Directors of the Company.

 

2.7     Cause means, unless otherwise provided in an applicable Award Agreement,
a termination of employment or service, based on a finding by the Committee,
that the Participant engaged in conduct (a) which involves fraud, moral
turpitude, willful misconduct, bad faith or commission of a crime that is
classified as a felony under New York law and in the reasonable opinion of the
Board is injurious to the Company or its Affiliates, or (b) that constitutes
grounds for termination for cause under the Participant’s employment, consulting
or service agreement with the Company or its Affiliates, to the extent
applicable, or under any policies in effect applicable to the Participant and
relating to his or her employment by, or association with, the Company or its
Affiliates.

 

2.8     Change in Control shall have the meaning set forth in Section 8.2
hereof.

 

2.9     Code means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto, and any regulations issued from time to
time thereunder. To the extent that reference is made to any particular section
of the Code, such reference shall be, where the context so admits, to any
corresponding provisions of any succeeding law.

 

 

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2.10     Common Stock means common stock of the Company.

 

2.11     Committee means any committee of the Board that is delegated
responsibility for the administration of the Plan, as provided in Section 4.

 

2.12     Company means CEN Biotech, Inc., a corporation organized under the laws
of Ontario, Canada

 

2.13     Covered Employee shall have the meaning set forth in Section 162(m)(3)
of the Code.

 

2.14     Disability means the inability of a Participant to perform the
Participant's usual duties, after reasonable accommodation to the extent
required by applicable law, for a period of sixty (60) consecutive days or any
period of ninety (90) days in any 180 day period, in each case, excluding
vacation leave and personal days and any public holidays

 

2.15     Effective Date means the date this Plan is adopted by the Board, on
behalf of the Company.

 

2.16     Exchange Act means the Securities Exchange Act of 1934, as amended from
time to time, and as now or hereafter construed, interpreted and applied by
regulations, rulings and cases.

 

2.17     Exercise Price means the price per share of Common Stock at which a
holder of an Award granted hereunder may purchase the Common Stock issuable upon
exercise of such Award.

 

2.18     Fair Market Value of a share of Common Stock on any given date means:
(i) if the Common Stock is listed for trading on the New York Stock Exchange,
the closing sale price per share of Common Stock on the New York Stock Exchange
on that date (or, if no closing sale price is reported, the last reported sale
price), (ii) if the Common Stock is not listed for trading on the New York Stock
Exchange, the closing sale price (or, if no closing sale price is reported, the
last reported sale price) as reported on that date in composite transactions for
the principal national securities exchange registered pursuant to Section 6(g)
of the Exchange Act on which the Common Stock is listed, (iii) if the Common
Stock is not so listed on a national securities exchange, the last quoted bid
price for the Common Stock on that date in the over-the-counter market as
reported by Pink Sheets LLC or a similar organization, or (iv) if the Common
Stock is not so quoted by Pink Sheets LLC or a similar organization such value
as the Committee, in its sole discretion, shall determine in good faith.

 

2.19     Grant Date means the date as of which an Award is granted.

 

2.20     ISO means any Option to acquire Common Stock intended to be and
designated as an incentive stock option within the meaning of Section 422 of the
Code.

 

2.21     NQSO means any Option that is designated as a nonqualified stock
option.

 

2.22     Option means an option to purchase Common Stock, in the form of an ISO
or a NQSO, or an option to purchase units.

 

2.23     Optionee means a Participant to whom an Option shall have been granted
under the Plan.

 

2.24     Participant means any holder of an outstanding Award under the Plan.

 

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2.25     Performance Goals means performance goals based on one or more of the
following criteria: (i) earnings including operating income, economic income,
economic net income, earnings before or after taxes, earnings before or after
interest, depreciation, amortization, or extraordinary or special items or book
value per share (which may exclude nonrecurring items); (ii) pre-tax income or
after-tax income; (iii) earnings per common share (basic or diluted);
(iv) operating profit; (v) revenue, revenue growth or rate of revenue growth;
(vi) return on assets (gross or net), return on investment, return on capital,
or return on equity; (vii) returns on sales or revenues; (viii) operating
expenses; (ix) stock price appreciation; (x) cash flow, free cash flow, cash
flow return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital; (xi) implementation or
completion of critical projects or processes; (xii) economic value created;
(xiii) cumulative earnings per share growth; (xiv) operating margin or profit
margin; (xv) common stock price or total stockholder return; (xvi) cost targets,
reductions and savings, productivity and efficiencies; (xvii) strategic business
criteria, consisting of one or more objectives based on meeting specified market
penetration, geographic business expansion, customer satisfaction, employee
satisfaction, human resources management, supervision of litigation, information
technology, and goals relating to acquisitions, divestitures, joint ventures and
similar transactions, and budget comparisons; (xviii) personal professional
objectives, including any of the foregoing performance goals, the implementation
of policies and plans, the negotiation of transactions, the development of
long-term business goals, formation of joint ventures, research or development
collaborations, and the completion of other corporate transactions; and
(xix) any combination of any of the foregoing. Each of the foregoing Performance
Goals shall, as selected by the Committee, be determined in accordance with
generally accepted accounting principles or non-GAAP financial measures, and
shall be subject to certification by the Committee; provided that, to the extent
an Award is intended to satisfy the performance-based compensation exception to
the limits of Section 162(m) of the Code and then to the extent consistent with
such exception, the Committee shall have the authority to make equitable
adjustments to the Performance Goals in recognition of unusual or non-recurring
events affecting the Company or the financial statements of the Company, in
response to changes in applicable laws or regulations, or to account for items
of gain, loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of a business
or related to a change in accounting principles.

 

2.26     Person means any individual, corporation, firm, partnership, joint
venture, limited liability company, estate, trust, business association,
organization, or other entity.

 

2.27     Plan means this CEN Biotech, Inc. 2017 Equity Compensation Plan, as
amended from time to time, and including any attachments or addenda hereto.

 

2.28     Restricted Stock means shares of Common Stock awarded to a Participant
under Section 6.2 that may be subject to certain restrictions and to a Risk of
Forfeiture.

 

2.29     Restriction Period means the period of time, established by the
Committee in connection with an Award of Restricted Stock, during which such
Restricted Stock are subject to a Risk of Forfeiture described in the applicable
Award Agreement.

 

2.30     Risk of Forfeiture means a limitation on the right of the Participant
to retain Restricted Stock, including a right in the Company to reacquire the
Restricted Stock at less than their then Fair Market Value or for no
consideration, arising because of the occurrence or non-occurrence of specified
events or conditions.

 

2.31     Securities Act means the Securities Act of 1933, as amended from time
to time.

 

2.32     Stock Appreciation Right or SAR means the right pursuant to an Award
granted under Section 6.4 below to receive an amount equal to the excess, if
any, of (i) the aggregate Fair Market Value, as of the date of such SAR or
portion thereof is surrendered, of the Common Stock or unit covered by such
right or such portion thereof, over (ii) the aggregate Exercise Price of such
right or portion thereof.

 

2.33     Stock-Based Award means an Award granted to a Participant pursuant to
Section 6.4 hereof, that may be denominated or payable in, valued in whole or in
part by reference to, or otherwise based on, or related to, Common Stock
including but not limited to performance units and Stock Appreciation Rights,
and which may be subject to the attainment of performance goals or a period of
continued employment or other terms and conditions as permitted under the Plan.

 

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The definition of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. Unless the context requires otherwise (i) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, restated, supplemented or otherwise modified
(subject to any restrictions on such amendments, restatements, supplements or
modifications set forth therein or herein), (ii) references to any law,
constitution, statute, treaty, regulation, rule or ordinance, including any
section or other part thereof shall refer to it as amended from time to time and
shall include any successor law, (iii) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Plan in its entirety and not to any particular provision hereof and (iv) all
references herein to Sections shall be construed to refer to Sections to this
Plan.

 

3.

Term of the Plan

 

Unless the Plan shall have been earlier terminated by the Company, Awards may be
granted under this Plan at any time in the period commencing on the date of
approval of the Plan by the Company and ending immediately prior to the tenth
anniversary of such date. Awards granted pursuant to the Plan within that period
shall not expire solely by reason of the termination of the Plan.

 

4.

Administration

 

The Plan shall be administered by the Committee; provided, however, that the
Committee may delegate to one or more “executive officers” (as defined under
applicable rules promulgated under the Exchange Act) the authority to grant
Awards hereunder to employees who are not executive officers, and to consultants
and advisers, in accordance with such guidelines as the Committee shall set
forth at any time or from time to time. Subject to the provisions of the Plan,
the Committee shall have complete authority, in its discretion, to make or to
select the manner of making all determinations with respect to each Award to be
granted by the Company under the Plan including the director, employee, adviser
or consultant to receive the Award and the form of Award. In making such
determinations, the Committee may take into account the nature of the services
rendered by such directors, employees, advisers and consultants, their present
and potential contributions to the success of the Company, and such other
factors as the Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective Award
Agreements (which need not be identical), and to make all other determinations
necessary or advisable for the administration of the Plan. The Committee’s
determinations made in good faith on matters referred to in the Plan shall be
final, binding and conclusive on all persons having or claiming any interest
under the Plan or an Award made pursuant hereto.

 

5.

Authorization of Grants

 

5.1     Eligibility. The Committee may grant from time to time and at any time
prior to the termination of the Plan one or more Awards, either alone or in
combination with any other Awards, to any service provider to the Company or any
of its Affiliates, including directors, officers, employees, advisers and
consultants of the Company and/or its Affiliates.

 

5.2     General Terms of Awards. Each grant of an Award shall, except to the
extent specifically excepted or replaced in a Recipient’s employment agreement,
be subject to all applicable terms and conditions of the Plan (including but not
limited to any specific terms and conditions applicable to that type of Award
set out in Section 6 or in the Award Agreement), and such other terms and
conditions, not inconsistent with the terms of the Plan, as the Committee may
prescribe.

 

5.3     Non-Transferability of Awards. Awards shall not be transferable, and no
Awards or interest therein may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, and all of a Participant’s rights in any Award may be
exercised during the life of the Participant only by the Participant or the
Participant’s legal representative.

 

5.4     Conditions to Receipt of Awards. Unless otherwise waived by the
Committee, no prospective Participant shall have any rights with respect to an
Award unless and until such Participant has executed an Award Agreement
evidencing the Award, delivered a fully executed copy thereof to the Company,
and otherwise complied with the applicable terms and conditions of such Award.

 

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5.5     Equity Subject to Plan. The maximum number of shares of Common Stock
reserved for the grant or settlement of Awards under the Plan shall be equal to
20,000,000 common shares and shall be subject to adjustment as provided herein.
If any shares of Common Stock subject to an Award are forfeited, canceled,
exchanged or surrendered or if an Award otherwise terminates or expires without
a distribution of Common Stock to the Participant, the Common Stock with respect
to such Award shall, to the extent of any such forfeiture, cancellation,
exchange, surrender, termination or expiration, again be available for Awards
under the Plan. Notwithstanding the foregoing, Common Stock that is exchanged by
a Participant or withheld by the Company as full or partial payment in
connection with any Award under the Plan, as well as any Common Stock exchanged
by a Participant or withheld by the Company to satisfy the tax withholding
obligations related to any Award under the Plan, shall not be available for
subsequent Awards under the Plan.

 

5.6     Covered Employees. From and after the date that the grant of an Award to
a Covered Employee is subject to Section 162(m) of the Code, the aggregate
Awards granted during any fiscal year to any single individual who is likely to
be a Covered Employee shall not exceed 9,000,000 shares of Common Stock.
Determinations made in respect of the limitation set forth in the preceding
sentence shall be made in a manner consistent with Section 162(m) of the Code.

 

5.7     Authorized Shares. Shares of Common Stock issued under the Plan may, in
whole or in part, be authorized but unissued shares of Common Stock or shares
that have been or may be reacquired by the Company in the open market, in
private transactions or otherwise.

 

6.

Specific Terms of Awards

 

6.1     Options.

 

(a)     Date of Grant. The granting of an Option shall take place at the time
specified in the Award Agreement.

 

(b)     Exercise Price. The price at which a share of Common Stock may be
acquired under each Option shall be no less than 100% of the Fair Market Value
of such Common Stock on the Grant Date.

 

(c)     Option Period. The exercise period with respect to each Option shall be
determined in the sole discretion of the Committee and specified in each Award
Agreement; provided, however, that no Option may be exercised on or after the
tenth anniversary of the Grant Date.

 

(d)     Exercisability. An Option may be immediately exercisable or become
exercisable in such installments, cumulative or non-cumulative, as the Committee
may determine and as set forth in each Award Agreement. In the case of an Option
not otherwise immediately exercisable in full, the Committee may Accelerate such
Option in whole or in part at any time.

 

(e)     ISOs. No ISO shall be granted to any employee of the Company, if such
employee owns, or is deemed to own, immediately prior to the grant of the ISO,
stock representing more than 10% of the total combined voting power of the
Company or its Affiliates, or more than 10% of the value of all classes of stock
of the Company or its Affiliates, unless the purchase price for the stock under
such ISO shall be at least 110% of its Fair Market Value at the time such ISO is
granted and the ISO, by its terms, shall not be exercisable more than five years
from the date it is granted. In determining the stock ownership under this
paragraph, the provisions of Section 424(d) of the Code shall be controlling.

 

(f)     Termination of Association with the Company — Generally. Unless the
Committee shall provide otherwise for any Award with respect to any Option as
set forth in the Award Agreement for such Option, if the Optionee’s employment
or other association with the Company ends for any reason, any outstanding
Option of the Optionee shall cease to be exercisable in any respect and shall
terminate not later than 90 days following the last day of the Optionee’s active
employment or involvement, as applicable, with the Company and, for the period
it remains exercisable following that event, shall be exercisable only to the
extent exercisable at the date of that event (and to the extent not then
exercisable, shall terminate as of the date of such event). For purposes of
clarity, regardless of the reason(s) for termination of the Optionee’s
employment or involvement, as the case may be, with the Company, in determining
the period during which the Optionee’s options remain exercisable, no
consideration will be given to any options which might have vested during any
statutory or any reasonable notice of termination. Military or sick leave or
other bona fide leave shall not be deemed a termination of employment or other
association, provided that it does not exceed the longer of ninety (90) days or
the period during which the absent Optionee’s reemployment rights, if any, are
guaranteed by statute or by contract.

 

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(g)     Method of Exercise. An Option may be exercised by the Optionee giving
written notice, in the manner provided in Section 15 or as otherwise set forth
in an Award Agreement, specifying the number of shares of Common Stock or units
with respect to which the Option is then being exercised. Where the exercise of
an Option is to be accompanied by payment, the Committee may determine the
required or permitted forms of payment, subject to the following: (a) all
payments will be by cash or check acceptable to the Committee; or (b) if so
permitted by the Committee, (i) through the delivery of Common Stock that has a
Fair Market Value equal to the exercise price, except where payment by delivery
of Common Stock would adversely affect the Company’s results of operations under
U.S. generally accepted accounting principles or where payment by delivery of
Common Stock outstanding for less than six months would require application of
securities laws relating to profit realized on such Common Stock, (ii) by other
means acceptable to the Committee, or (iii) by means of withholding of Common
Stock with an aggregate Fair Market Value equal to (A) the aggregate exercise
price and (B) unless the Company is precluded or restricted from doing so under
debt covenants, minimum statutory withholding taxes with respect to such
exercise, or (iv) by any combination of the foregoing permissible forms of
payment. The delivery of Common Stock in payment of the exercise price under
clause (g)(i) above may be accomplished either by actual delivery or by
constructive delivery through attestation of ownership, subject to such rules as
the Committee may prescribe.

 

(h)     Rights Pending Exercise. No Participant holding an Option shall be
deemed for any purpose to be a stockholder of the Company with respect to any
shares of Common Stock, except to the extent that the Option shall have been
exercised with respect thereto.

 

6.2     Restricted Stock.

 

(a)     Purchase Price. Common Stock or Restricted Stock may be issued under the
Plan for such consideration, in cash, other property or services, or any
combination thereof, as is determined by the Committee.

 

(b)     Restrictions and Restriction Period. During the Restriction Period
applicable to Restricted Stock, such Restricted Stock shall be subject to
limitations on transferability and a Risk of Forfeiture arising on the basis of
such conditions related to the performance of services, Company performance or
otherwise as the Committee may determine and provide for in the applicable Award
Agreement. Any such Risk of Forfeiture may be waived or terminated, or the
Restriction Period shortened, at any time by the Committee on such basis as it
deems appropriate. Certificates for shares issued pursuant to Restricted Stock
Awards shall bear an appropriate legend referring to such restrictions, and any
attempt to dispose of any such shares in contravention of such restrictions
shall be null and void and without effect. Such certificates may, if so
determined by the Committee, be held in escrow by an escrow agent (which may be
the Company) appointed by the Committee, to be held for the benefit of the
Participant for such period in the discretion of the Committee until the
applicable Restriction Period lapses.

 

(c)     Rights Pending Lapse of Risk of Forfeiture or Forfeiture of Award.
Except as otherwise provided in the Plan or the applicable Award Agreement, at
all times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture
of, an Award of Restricted Stock, the Participant shall have all of the rights
of a holder of Common Stock, including, but not limited to, the right to vote
and the right to receive any dividends or distributions with respect to the
Restricted Stock.

 

(d)     Termination of Association with the Company. Unless the Committee shall
provide otherwise in the applicable Award Agreement for any Award of Restricted
Stock, upon termination of a Participant’s employment or other association with
the Company and its Affiliates for any reason during the Restriction Period, all
Restricted Stock still subject to Risk of Forfeiture shall be forfeited or
otherwise subject to return to or repurchase by the Company on the terms
specified in the Award Agreement; provided, however, that military or sick leave
or other bona fide leave shall not be deemed a termination of employment or
other association if it does not exceed the longer of ninety (90) days or the
period during which the absent Participant’s reemployment rights, if any, are
guaranteed by statute or by contract. For purposes of clarity, regardless of the
reason(s) for termination of the Optionee’s employment or involvement, as the
case may be, with the Company, in determining the period during which the
Optionee’s options remain exercisable, no consideration will be given to any
options which might have vested during any statutory or any reasonable notice of
termination.

 

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6.3     Common Stock Grants. Common Stock Grants may be awarded solely in
recognition of significant contributions to the success of the Company or its
Affiliates in lieu of compensation otherwise already due and in such other
limited circumstances as the Committee deems appropriate. Common Stock Grants
shall be made without forfeiture conditions of any kind.

 

6.4     Stock-Based Awards. The Committee, in its sole discretion, may grant
Awards of phantom shares of Common Stock, SARs and other Awards that are valued
in whole or in part by reference to, or are otherwise based on the Fair Market
Value of a share of Common Stock. Such Stock-Based Awards shall be in such form,
and dependent on such conditions, as the Committee shall determine, including,
without limitation, the right to receive shares of Common Stock (or the
equivalent cash value of such Common Stock) upon the completion of a specified
period of service, the occurrence of an event and/or the attainment of
Performance Goals. Stock-Based Awards may be granted alone or in addition to any
other Awards granted under the Plan. Subject to the provisions of the Plan, the
Committee shall determine: (a) the number of shares of Common Stock to be
awarded under (or otherwise related to) such Stock-Based Awards; (b) whether
such Stock-Based Awards shall be settled in cash, shares of Common Stock or a
combination of cash and Common Stock; and (c) all other terms and conditions of
such Stock-Based Awards (including, without limitation, the vesting provisions
thereof).

 

6.5     Awards to Participants Outside the United States. The Committee may
modify the terms of any Award under the Plan granted to a Participant who is, at
the time of grant or during the term of the Award, resident or primarily
employed outside of the United States in any manner deemed by the Committee to
be necessary or appropriate in order that the Award shall conform to laws,
regulations, and customs of the country in which the Participant is then
resident or primarily employed, or so that the value and other benefits of the
Award to the Participant, as affected by foreign tax laws and other restrictions
applicable as a result of the Participant’s residence or employment abroad,
shall be comparable to the value of such an Award to a Participant who is
resident or primarily employed in the United States. The Committee may establish
supplements to, or amendments, restatements, or alternative versions of the Plan
for the purpose of granting and administrating any such modified Award, none of
which shall require prior approval of the stockholders of the Company except for
stockholder approval as may be necessary for the Plan or Award to comply with
applicable law.

 

7.

Adjustment Provisions

 

7.1     Adjustment for Company Actions. If subsequent to the adoption of the
Plan by the Company the outstanding Common Stock are increased, decreased, or
exchanged for a different number or kind of stock or other securities, or if
additional shares, or new or different shares, or other securities are
distributed with respect to Common stock through merger, consolidation, sale of
all or substantially all the property of the Company, reorganization,
recapitalization, reclassification, dividend, stock or unit split, reverse stock
or unit split, or other similar distribution with respect to such Common Stock,
the Committee shall make an adjustment, to the extent appropriate and
proportionate, in (i) the numbers and kinds of Common Stock or other securities
subject to the then outstanding Awards, and (ii) the exercise price for each
Common Stock or other securities subject to then outstanding Options (without
change in the aggregate purchase price as to which such Options remain
exercisable).

 

7.2     Related Matters. Any adjustment in Awards made pursuant to this
Section 7 shall be determined and made, if at all, by the Committee and shall
include any correlative modification of terms, including of Exercise Prices,
rates of vesting or exercisability, Risks of Forfeiture and applicable
repurchase prices for Restricted Stock and Stock-Based Awards, which the
Committee may deem necessary or appropriate so as to ensure the rights of the
Participants in their respective Awards are not substantially diminished nor
enlarged as a result of the adjustment and Company action other than as
expressly contemplated in this Section 7. No fractional shares of Common Stock
shall be issued or purchasable or deliverable upon exercise, but in the event
any adjustment hereunder of the number of shares of Common Stock covered by an
Award shall cause such number to include a fraction, such number of shares of
Common Stock shall be adjusted to the nearest smaller whole number of shares of
Common Stock.

 

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8.

Change in Control Provisions

 

8.1     Unless otherwise determined by the Committee or evidenced in an
applicable Award Agreement or employment or other agreement, in the event of a
Change in Control, the Committee shall have the discretion, exercisable either
in advance of such Change in Control or at the time thereof, to provide for one
or more of the following:

 

(a)     the continuation of outstanding Awards after the Change in Control
without change;

 

(b)     the cash-out of outstanding Options as of the time of the transaction as
part of the transaction for an amount equal to the difference between the price
that would have been paid for the shares of Common Stock subject to such
outstanding Options if such Options were exercised upon the closing of such
transaction and the exercise price of such outstanding Options; provided that if
the exercise price of the Options exceeds the price that would have been paid
for the shares of Common Stock subject to the outstanding Options if such
Options were exercised upon the closing of the transaction, then such Options
may be cancelled without making a payment to the Optionees;

 

(c)     a requirement that the buyer in the transaction assume outstanding
Awards;

 

(d)     a requirement that the buyer in the transaction substitute outstanding
Options with comparable options to purchase the equity interests of the buyer or
its parent and/or substitute outstanding Restricted Stock, and/or, Restricted
units, LTIP units Stock-Based Awards, and/or unit-based awards with comparable
restricted stock or units of the buyer or its parent; and

 

(e)     the Acceleration of outstanding Options, Restricted Stock, and
Stock-Based Awards.

 

Notwithstanding any other provision of the Plan, in the event of a Change in
Control in which the consideration paid to the holders of shares of Common Stock
is solely cash, the Committee may, in its discretion, provide that each Award
shall, upon the occurrence of a Change in Control, be canceled in exchange for a
payment, in cash or Common Stock, in an amount equal to (i) the excess of the
consideration paid per share of Common Stock and units in the Change in Control
over the exercise or purchase price (if any) per share of Common Stock or unit
subject to the Award multiplied by (ii) the number of shares of Common Stock
granted under the Award.

 

8.2     A “Change in Control” shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred

 

(a)     any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
Affiliates) representing 50% or more of the combined voting power of the
Company’s then outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clause (I) of
paragraph (c) below;

 

(b)     during any period of twelve (12) month period, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
election by the Board or nomination for election by the Company’s shareholders
was approved by a majority vote of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election was previously approved, cease for any reason to constitute at
least a majority of the Board;

 

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(c)     there is consummated a merger or consolidation of the Company with any
other corporation or other entity, other than (I) a merger or consolidation
which results in (A) the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 50% of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation and (B) the individuals who
comprise the Board immediately prior thereto constituting immediately thereafter
at least a majority of the board of directors of the Company, the entity
surviving such merger or consolidation or, if the Company or the entity
surviving such merger is then a subsidiary, the ultimate parent thereof, or
(II) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including in
the securities Beneficially Owned by such Person any securities acquired
directly from the Company or its Affiliates) representing 50% or more of the
combined voting power of the Company’s then outstanding securities; or

 

(d)     the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement for the sale
or disposition by the Company of all or substantially all of the assets of the
Company (it being conclusively presumed that any sale or disposition is a sale
or disposition by the Company of all or substantially all of its assets if the
consummation of the sale or disposition is contingent upon approval by the
Company’s stockholders unless the Board expressly determines in writing that
such approval is required solely by reason of any relationship between the
Company and any other Person or an Affiliate of the Company and any other
Person), other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity (i) at least 50% of the combined voting
power of the voting securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale or disposition and (ii) the majority of whose
board of directors immediately following such sale or disposition consists of
individuals who comprise the Board immediately prior thereto.

 

8.3     Notwithstanding Section 8.2 to the contrary, a “Change in Control” shall
not be deemed to have occurred by virtue of the consummation of any transaction
or series of integrated transactions immediately following which the record
holders of the capital stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.

 

9.

Settlement of Awards

 

9.1     Violation of Law. Notwithstanding any other provision of the Plan or the
relevant Award Agreement, if, at any time, in the reasonable opinion of the
Committee, the issuance of Common Stock covered by an Award may constitute a
violation of law, then the Company may delay such issuance and the delivery of
such Common Stock until approval shall have been obtained from such governmental
agencies as may be required under any applicable law, rule, or regulation, and
the Company shall take all reasonable efforts to obtain such approval.

 

9.2     Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company.

 

9.3     No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

 

9.4     Investment Representations. The Company shall not be under any
obligation to issue Common Stock covered by any Award unless the intended
recipient has made such written representations to the Company (upon which the
Company believes it may reasonably rely) as the Company may deem necessary or
appropriate for purposes of confirming that the issuance of such Common Stock
will be exempt from the registration requirements of the Securities Act and any
applicable state securities laws and otherwise in compliance with all applicable
laws, rules and regulations, including but not limited to that the Participant
is acquiring the Common Stock for his or her own account for the purpose of
investment and not with a view to, or for sale in connection with, the
distribution of any such Common Stock.

 

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9.5     Registration. In the event that the disposition of Common Stock acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act, and is not otherwise exempt from such registration,
such Common Stock shall be restricted against transfer to the extent required by
the Securities Act or regulations thereunder, and the Committee may require a
Participant receiving Common Stock pursuant to the Plan, as a condition
precedent to receipt of such Common Stock, to represent to the Company in
writing that the Common Stock acquired by such Participant is acquired for
investment only and not with a view to distribution.

 

9.6     Tax Withholding. Whenever Common Stock is issued or to be issued
pursuant to Awards granted under the Plan, the Company shall (i) have the right
to require the recipient to remit to the Company in cash an amount sufficient to
satisfy federal, state, local or other withholding tax requirements if, when,
and to the extent required by law (whether so required to secure for the Company
an otherwise available tax deduction or otherwise) coincident with the
recipient’s exercise of such Option or receipt of Common Stock; or (ii) to the
extent permitted by applicable law, withhold a number of Common Stock having an
aggregate Fair Market Value equal to an amount sufficient to satisfy any
federal, state, local or other withholding requirements. The obligations of the
Company under the Plan shall be conditional on satisfaction of all such
withholding obligations and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the recipient of an Award.

 

10.

No Special Employment or Other Rights

 

Nothing contained in the Plan or in any Award Agreement shall confer upon any
recipient of an Award any right with respect to the continuation of his or her
employment or other association with the Company or any of its Affiliates, or
interfere in any way with the right of the Company or any of its Affiliates,
subject to the terms of any separate employment or consulting agreement, any
provision of law, at any time to terminate such employment or consulting
agreement or to increase or decrease, or otherwise adjust, the other terms and
conditions of the recipient’s employment or other association with the Company
or any Affiliate.

 

11.

Nonexclusivity of the Plan

 

The adoption of the Plan by the Company shall not be construed as creating any
limitations on the power of the Company to adopt such other incentive
arrangements as it may deem desirable, including without limitation, the
granting of options and restricted units other than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

 

12.

No Corporate Action Restriction

 

The existence of the Plan, the Award Agreements and the Awards granted hereunder
shall not limit, affect or restrict in any way the right or power of the Board
or shareholders of the Company to make or authorize: (i) any adjustment,
recapitalization, reorganization or other change in the capital structure or
business of the Company or any subsidiary, (ii) any merger, amalgamation,
consolidation or change in the ownership of the Company or any subsidiary, (iii)
any issue of bonds, debentures, capital, preferred or prior preference stock
ahead of affecting the capital stock (or rights thereof) of the Company or any
subsidiary, (iv) any dissolution or liquidation of the Company or any
subsidiary, (v) any sale or transfer of all or any part of the assets or
business of the Company or any subsidiary, or (vi) any other corporate act or
proceeding by the Company or any subsidiary. No Participant, beneficiary or any
other Person shall have any claim under any Award or Award Agreement against any
member of the Board or the Committee, or the Company or any employee, officer or
agent of the Company or any subsidiary, as a result of such action.

 

13.

Section 409A of the Code

 

This Plan is intended to comply and shall be administered in a manner that is
intended to comply with Section 409A of the Code and shall be construed and
interpreted in accordance with such intent. To the extent that an Award,
issuance and/or payment is subject to Section 409A of the Code, it shall be
awarded and/or issued or paid in a manner that will comply with Section 409A of
the Code, including proposed, temporary or final regulations or any other
guidance issued by the Secretary of the Treasury and the Internal Revenue
Service with respect thereto. Any provision of this Plan that would cause an
Award, issuance and/or payment to fail to satisfy Section 409A of the Code shall
have no force and effect until amended to comply with Code Section 409A (which
amendment may be retroactive to the extent permitted by applicable law).

 

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14.

Termination and Amendment of the Plan and Awards

 

The Company may at any time terminate the Plan or make such modifications of the
Plan as it shall deem advisable. Unless the Company otherwise expressly provide,
or may deem necessary or appropriate to comply with applicable law, including
without limitation the provisions of Section 409A of the Code, no termination or
amendment of the Plan may adversely affect the rights of the recipient of an
Award previously granted hereunder without the consent of the recipient of such
Award.

 

The Plan shall take effect on the Effective Date but the Plan (and any grants of
Awards made prior to the stockholder approval mentioned herein) shall be subject
to the requisite approval of the stockholders of the Company, which approval
must occur within twelve (12) months of the date that the Plan is adopted by the
Board. In the event that the stockholders of the Company do not ratify the Plan
at a meeting of the stockholders at which such issue is considered and voted
upon, then upon such event the Plan and all rights hereunder shall immediately
terminate and no Participant (or any permitted transferee thereof) shall have
any remaining rights under the Plan or any Award Agreement entered into in
connection herewith. The Board may amend, alter or discontinue the Plan, but no
amendment, alteration, or discontinuation shall be made that would impair the
rights of a Participant under any Award theretofore granted without such
Participant’s consent, or that without the approval of the stockholders of the
Company would, except as provided in Section 7, increase the total number of
Awards reserved for the purpose of the Plan. In addition, approval by the
stockholders of the Company shall be required with respect to any amendment that
materially increases benefits provided under the Plan or materially alters the
eligibility provisions of the Plan or with respect to which stockholder approval
is required under the rules of any stock exchange on which the Common Stock is
then listed. Unless sooner terminated by the Board, the Plan shall terminate on
the tenth anniversary of the Effective Date. The Board reserves the right to
terminate the Plan at any time. No Awards shall be granted under the Plan after
such termination date. The Plan shall remain in effect with respect to Awards
made under the Plan prior to the termination of the Plan until such Awards have
been satisfied or terminated in accordance with the terms of the Plan and the
applicable Award Agreements.

 

The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, provided that the Award as amended is consistent
with the terms of the Plan, and further provided that, other than as the
Committee may deem necessary or appropriate to comply with applicable law,
including without limitation the provisions of Section 409A of the Code, no
amendment or modification of an outstanding Award may adversely affect the
rights of the recipient of such Award without his or her consent. An amendment
or modification to an Award that is necessary or appropriate to comply with
applicable law or that does not adversely affect the rights of the recipient of
such Award may be made without the consent of such recipient.

 

15.

Notices and Other Communications

 

Any notice, demand, request or other communication hereunder to any party shall
be deemed to be sufficient if contained in a written instrument delivered in
person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or by facsimile with a confirmation copy by regular, certified
or overnight mail, addressed or sent by facsimile, as the case may be, (i) if to
the recipient of an Award, at his or her residence address last filed with the
Company, and (ii) if to the Company, at its principal place of business or to
such other address or facsimile number, as the addressee may have designated by
notice to the addressor. All such notices, requests, demands and other
communications shall be deemed to have been received: (x) in the case of
personal delivery, on the date of such delivery, (y) in the case of mailing,
when received by the addressee, and (z) in the case of facsimile transmission,
when confirmed by facsimile machine report.

 

16.

Governing Law

 

The Plan and all Award Agreements and actions taken thereunder shall be
governed, interpreted and enforced in accordance with the laws of the State of
New York without regard to the conflict of laws principles thereof.

 

Adopted by resolution of the Board of Directors of the Company as of November
29, 2017.

 

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