Exhibit 10.2

INDEPENDENCE BANCSHARES, INC.

 

2013 EQUITY INCENTIVE PLAN

 

Section 1.               General Purpose of Plan; Definitions.

 

The name of this plan is the Independence Bancshares, Inc. 2013 Equity Incentive
Plan (the “Plan”). The Plan was approved by the Board of Directors on February
27, 2013 (the “Effective Date”) and subsequently adopted by the shareholders of
the Company on _________, 2013. The purpose of the Plan is to enable the Company
and its Subsidiaries to attract and retain highly qualified personnel who will
contribute to the Company’s success and to provide incentives to Participants to
increase shareholder value and therefore further align the interests of the
Participants with those of the shareholders to benefit all shareholders of the
Company.

 

For purposes of the Plan, the following terms shall be defined as set forth
below:

 

(a)                “Affiliate” means the Company and any corporation, trade or
business if it and the Company are members of a controlled group of
corporations, or are under common control or are members of an affiliated
service group or are otherwise aggregated, within the meanings of Sections
414(b), 414(m) and 414(o) of the Code.

(b)               “Administrator” means the Board and/or the Committee, as the
case may be, to the extent that it administers the Plan, as set forth in Section
2 below.

(c)                “Award” means any award granted under the Plan as further
described in Sections 6, 7, and 8 below.

(d)               “Award Agreement” means, with respect to each Award, the
signed written agreement between the Company and the Participant setting forth
the terms and conditions applicable to the Award.

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

(f)                 “Cause” shall mean with respect to the Company or any
Subsidiary which employs the Participant or for which such Participant primarily
performs services, (i) the commission by the Participant of an act of fraud,
embezzlement, theft or proven dishonesty, or any other illegal act or practice
(whether or not resulting in criminal prosecution or conviction), or any act or
practice which the Administrator shall, in good faith, deem to have resulted in
the Participant becoming unbondable under the Company’s or the Subsidiary’s
fidelity bond; (ii) the willful engaging by the Participant in misconduct which
is deemed by the Administrator, in good faith, to be materially injurious to the
Company or any Subsidiary, monetarily or otherwise, including, but not limited
to, improperly disclosing trade secrets or other confidential or sensitive
business information and data about the Company or any Subsidiary and competing
with the Company or its Subsidiaries, or soliciting employees, consultants or
customers of the Company

 
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of any Subsidiary in violation of law or any employment or other agreement to
which the Participant is a party; or (iii) the willful and continued failure or
habitual neglect by the Participant to perform his or her duties with the
Company or the Subsidiary substantially in accordance with the operating and
personnel policies and procedures of the Company or the Subsidiary generally
applicable to all their employees. For purposes of this Plan, no act or failure
to act by the Participant shall be deemed be “willful” unless done or omitted to
be done by Participant not in good faith and without reasonable belief that the
Participant’s action or omission was in the best interest of the Company and/or
the Subsidiary. Notwithstanding the foregoing, if the Participant has entered
into an employment agreement or change in control severance agreement that is
binding as of the date of employment termination, and if such agreement defines
“Cause,” then the definition of “Cause” in such agreement shall apply to the
Participant in this Plan. “Cause” under either (i), (ii) or (iii) shall be
determined by the Administrator. The determination of "Cause" may be made by the
Administrator solely for purposes of this Plan and without regard to any other
purpose of the Company.

(g)                “Change in Control” means the first to occur of any one of
the events:

                                                                 
(i)                        any Person (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
beneficial owner (as such term is defined in Rule 13d (3) under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the "Company Voting
Securities"); provided, however, that the event described in this paragraph (i)
shall not be deemed to be a Change in Control by virtue of any of the following
acquisitions: (1) by the Company or any Subsidiary; (2) by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
Subsidiary; (3) by any underwriter temporarily holding securities pursuant to an
offering of such securities; (4) pursuant to a Non-Control Transaction (as
defined in (v) below); or (5) pursuant to any acquisition by the Participant or
any group of persons including the Participant (or any entity controlled by the
Participant or any group of persons including the Participant);

                                                               
(ii)                        any plan or proposal for the dissolution or
liquidation of the Company is adopted by the shareholders of the Company;

                                                              
(iii)                        individuals who, as of the Effective Date,
constituted the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least two-thirds of the directors then comprising the Incumbent Board (either
by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without objection to such
nomination) shall be considered as though such individual were a member of the
Incumbent Board, but excluding for this purpose any such individual whose
initial assumption of office

 
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occurs as a result of either an actual or threatened election contest or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

                                                             
(iv)                        all or substantially all of the assets of the
Company are sold, transferred or distributed to an entity that is not an
Affiliate of the Company; or

                                                               
(v)                        there occurs a merger, consolidation, share exchange
or other corporate transaction involving the Company that requires the approval
of the Company's stockholders (whether for such transaction or the issuance of
securities in the transaction or otherwise (a “Reorganization”)), unless
immediately following such Reorganization (1) more than 50% of the total voting
power of (A) the corporation resulting from such Reorganization (the "Surviving
Company"), or (B) if applicable, the ultimate parent corporation that directly
or indirectly has beneficial ownership of 95% of the voting securities eligible
to elect directors of the Surviving Company (the "Parent Company"), is
represented by the Company Voting Securities that were outstanding immediately
prior to such Reorganization (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such
Reorganization), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among holders thereof immediately prior to the Reorganization; (2) no
person (other than any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Company or the Parent Company) is or becomes the
beneficial owner, directly or indirectly, of 25% or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
Parent Company (or, if there is no Parent Company, the Surviving Company); and
(3) at least a majority of the members of the board of directors of the Parent
Company (or, if there is no Parent Company, the Surviving Company) following the
consummation of the Reorganization were members of the Incumbent Board at the
time of the Board's approval of the execution of the initial agreement providing
for such Reorganization (any Reorganization which satisfies all of the criteria
specified in (1), (2) and (3) above will be deemed to be a "Non-Control
Transaction").

Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred solely because any Person acquires beneficial ownership of 25% or more
of the Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which reduces the number of Company Voting
Securities outstanding; provided, that, if after such acquisition by the Company
such person becomes the beneficial owner of additional Company Voting Securities
that increases the percentage of outstanding Company Voting Securities
beneficially owned by such Person, a Change in Control shall then occur. In
addition, for any Award that constitutes deferred compensation under Section
409A of the Code, a Change of Control shall be deemed to have occurred under the
Plan with respect to such Award only if a change in the ownership or effective
control of the Company or a change in ownership of a substantial portion of the
assets of the Company shall also be deemed to have occurred under Section 409A
of the Code.

 
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(h)                “Code” means the Internal Revenue Code of 1986 or any
successor thereto.

(i)                  “Committee” means the Compensation/Nominating Committee of
the Board or, if applicable, any other committee the Board may appoint to
administer the Plan. If at any time or to any extent the Board shall not
administer the Plan, then the functions of the Board specified in the Plan may
be exercised by the Committee. The Committee shall be comprised of three or more
“outside” directors, within the meaning of section 162(m) of the Internal
Revenue Code, who are also “non-employee directors” as defined in Rule 16b-3
under the Securities Exchange Act of 1934 and “independent directors” as defined
by NASDAQ Listing Rule 5605(a)(2).

(j)                 “Common Stock” or “Stock” means the common stock, par value
$0.01 per share, of the Company.

(k)               “Company” means Independence Bancshares, Inc. a South Carolina
corporation (or any successor corporation that assumes this Plan, either
contractually or by operation of law).

(l)                  "Dividend Equivalent" means a right, granted to an Eligible
Recipient to receive cash, Stock, other Awards or other property equal in value
to dividends paid with respect to a specified number of shares of Stock, or
other periodic payments.

(m)              “Eligible Recipient” means an officer, director, employee,
consultant, or advisor of the Company or any Subsidiary.

(n)                “Exercise Price” means the per Share price at which a
Participant holding an Award of Options may purchase Shares issuable with
respect to such Award of Options, if any.

(o)               "Fair Market Value" on any date shall mean

                                                                  (i) if the
Common Stock is readily tradable on an established securities market (as defined
in Treasury Regulation §1.897-1(m)), the closing sales price of the Common Stock
on such date on the securities exchange having the greatest volume of trading in
the Common Stock during the 30-day period preceding the day the value is to be
determined or, if there is no reported closing sales price on such date, the
next preceding date on which there was a reported closing price; or

                                                               
(ii)                        if the Common Stock also is not traded on an
established securities market (as defined in Treasury Regulation §1.897-1(m)),
the fair market value as determined in good faith by the Board or the
Administrator by application of a reasonable valuation method consistently
applied and taking into consideration all available information material to the
value of the Company; factors to be considered may include, as applicable,
independent third party valuations of the Common Stock, trading activity of the
Common Stock known by the Board or Administrator, whether on the
over-the-counter market or through private transactions, the value of the
tangible and intangible assets of the

 
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Company, the present value of future cash-flows of the Company, the market value
of stock or equity interests in similar corporations which can be readily
determined through objective means (such as through trading prices on an
established securities market or an amount paid in an arm's length private
transaction), and other relevant factors such as control premiums or discounts
for lack of marketability. For purposes of the foregoing, a valuation prepared
in accordance with any of the methods set forth in Treasury Regulation Section
1.409A-1(b)(5)(iv)(B)(2), consistently used, shall be rebuttably presumed to
result in a reasonable valuation. This paragraph is intended to comply with the
definition of "fair market value" contained in Treasury Regulation Section
1.409A-1(b)(5)(iv) and should be interpreted consistently therewith.

(p)               “Grant Date” means the later of (a) the date on which the
Administrator completes the corporate action authorizing the grant of an Award
or such later date specified by the Administrator or (b) the date on which all
conditions precedent to an Award have been satisfied, provided that conditions
to the exercisability or vesting of Awards shall not defer the Grant Date.

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

(r)                 “Nonqualified Stock Option” or “NQSO” means any Option that
is not an Incentive Stock Option, including any Option that provides (as of the
time such Option is granted) that it will not be treated as an Incentive Stock
Option.

(s)                “Option” means an option to purchase Shares granted pursuant
to Section 6 of the Plan.

(t)                 “Participant” means any Eligible Recipient selected by the
Administrator, pursuant to the Administrator’s authority in Section 2 of the
Plan, to receive an Award.

(u)                "Performance Goals" means the restrictions, based upon the
achievement of performance goals, established by the Administrator. Such
performance goals may include: earnings and earnings per share (before or after
taxes and whether or not excluding specific items, including but not limited to
stock or other compensation expense); net income and net income per share
(before or after taxes and whether or not excluding specific items, including
but not limited to stock or other compensation expense); pre-tax, pre-provision
earnings and pre-tax, pre-provision earnings per share; core pre-tax,
pre-provision earnings and core pre-tax, pre-provision earnings per share;
pre-tax, pre-provision earnings or core pre-tax, pre-provision earnings to
risk-weighted assets; revenues; profits (net profit, gross profit, operating
profit, economic profit, profit margins or other corporate profit measures, in
total or with respect to specific categories or business units); operating or
cash earnings and operating or cash earnings per share; cash (cash flow, cash
generation or other cash measures); return measures (including, but not limited
to, total stockholder return, return on average assets, return on average
stockholders’ equity, return on investment and cash return on tangible equity);
net interest income; net interest income on a tax equivalent basis; net interest
margin; net interest margin on a tax equivalent basis; net non-interest expense
to average assets; interest-sensitivity gap levels;

 
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expense targets, efficiency ratio or other expense measures; assets under
management; levels of assets, loans (in total or with respect to specific
categories of loans) and/or deposits (in total or with respect to specific
categories of deposit accounts, and with respect to number of account
relationships or account balance amounts); market share; growth in target market
relationships; investments; value of assets; asset quality levels; charge-offs;
loan-loss reserves; non-performing assets; business expansion or consolidation
(acquisitions and divestitures); strategic plan development and implementation;
internal rate of return; share price; regulatory compliance; satisfactory
internal or external audits; book value and book value per share; tangible
stockholders’ equity and tangible book value per share; tangible common equity
and tangible common equity per share; tangible common equity to tangible assets;
tangible common equity to risk-weighted assets; improvement of financial
ratings; and achievement of balance sheet or income statement objectives, or
other financial accounting or quantitative objectives established by the
Administrator. Any performance goal(s) may be used to measure the performance of
the Company as a whole or any subsidiary or business unit of the Company or any
combination thereof, as the Administrator may deem appropriate. Performance for
any goal can be measured on an absolute basis (i.e., versus the Company's budget
or prior year result) or relative to a peer group or industry index, as well as
over a 1-year or multi-year period. In any event, the Administrator shall have
the authority to adjust any Performance Goal for unusual or non-recurring events
in any manner permitted under Section 162(m) of the Code.

(v)                "Performance Period" is a period not less than one calendar
year, beginning not earlier than the year in which such Performance Award is
granted, which may be referred to herein and by the Administrator by use of the
calendar year in which a particular Performance Period commences; provided
however that the Administrator shall have the authority to adjust a Performance
Period for unusual or non-recurring events to a period of not less than six
months.

(w)              “Permanent and Total Disability” shall have the same meaning as
given to that term by Treasury Regulation Section 1.409A-3(i)(4) and any
regulations or rulings promulgated thereunder.

(x)                “Qualified Domestic Relations Order” shall have the meaning
set forth in the Code or in the Employee Retirement Income Security Act of 1974,
or the rules and regulations promulgated under the Code or such Act.

(y)                “Restricted Stock” means Shares subject to certain
restrictions granted pursuant to Section 7 of the Plan.

(z)                "Restricted Stock Unit" means a right, granted to an Eligible
Recipient under Section 8 hereof, to receive Stock, cash or a combination
thereof at the end of a specified vesting period.

(aa)            “Shares” means shares of Common Stock reserved for issuance
under the Plan, as adjusted pursuant to Sections 3 or 4 of the Plan, and any
successor security.

(bb)           “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations (other

 
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than the last corporation) in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.

(cc)            “Substitute Awards” means Awards granted or shares of Common
Stock issued by the Company in substitution or exchange for awards previously
granted by an Acquired Entity.

(dd)           “Treasury Regulations” means regulations promulgated by the
United States Department of Treasury pursuant to the Code, including proposed or
temporary regulations as applicable.

Section 2.               Administration.

The Plan shall be administered by the Board or by the Committee (unless and to
the extent that the Board directs the Committee not to administer the Plan).
Pursuant to the terms of the Plan, the Board or the Committee, as the case may
be from time to time, shall serve as the Administrator and shall have the power
and authority:

 

(a)                to select those Eligible Recipients who shall be
Participants;

(b)               to determine whether and the extent to which Awards are to be
granted to Participants under the Plan;

(c)                to determine the number of Shares to be covered by or subject
to each Award granted under the Plan;

(d)               to determine the terms and conditions, not inconsistent with
the terms of the Plan, of each Award granted under the Plan; and

(e)                to determine the terms and conditions, not inconsistent with
the terms of the Plan, that shall govern all written instruments evidencing
Awards granted under the Plan, including Award Agreements.

The Administrator shall have the authority, in its sole discretion, to: adopt,
alter, and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; correct any defect,
supply any omission, reconcile any inconsistency, and resolve any ambiguity in,
and otherwise interpret, the terms and provisions of the Plan and any Award
issued under the Plan (and any Award Agreement relating thereto); and otherwise
supervise the administration of the Plan. All decisions made by the
Administrator pursuant to the provisions of the Plan shall be final, conclusive
and binding on all persons, including the Company and the Participants.

Notwithstanding the above, and subject to Sections 3, 4, 6, 9, 10, and 13,
outstanding Options granted under the Plan shall not be repriced without
approval by the Company’s shareholders. In particular, neither the Board nor the
Administrator may take any action: (1) to amend the terms of an outstanding
Option to reduce the Exercise Price thereof, cancel an Option and replace it
with a new Option with a lower Exercise Price, or that has an economic effect
that is the same as any such reduction or cancellation or (2) to cancel an

 
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outstanding Option having an Exercise Price above the then-current Fair Market
Value of the Stock in exchange for the grant of another type of Award, without,
in each such case, first obtaining approval of the shareholders of the Company
of such action.

Section 3.               Shares Subject to the Plan.

The maximum number of Shares that may be issued under the Plan shall initially
be 2,466,720 and thereafter shall automatically be increased each time the
Company issues additional Shares so that the total number of shares issuable
hereunder, plus 2,466,760 shares reserved under the Company’s 2005 Stock
Incentive Plan, shall at all times equal 20% of the then outstanding shares of
Stock, unless in any case the Board of Directors adopts a resolution providing
that the number of shares issuable under this Plan shall not be so increased.

 

Such Shares may consist, in whole or in part, of authorized and unissued shares
or treasury shares. At all times the Company shall reserve and keep available a
sufficient number of Shares as shall be required to satisfy the requirements of
all outstanding Options under the Plan. No fractional Shares shall be issued or
delivered pursuant to the Plan. The Administrator shall determine whether cash,
additional Awards or other securities or property shall be issued or paid in
lieu of fractional Shares or whether any fractional Shares should be rounded,
forfeited or otherwise eliminated.

 

(a)                Options: The maximum aggregated number of shares of Stock
that may be subject to Options granted in any calendar year to any one
Participant shall be 2,000,000 shares. In addition, the maximum aggregate number
of ISOs that may be issued under the Plan is 2,000,000.

(b)               Restricted Stock or Restricted Stock Units: The maximum
aggregate number of shares of Stock that may be subject to Awards of Restricted
Stock or Restricted Stock Units granted in any calendar year to any one
Participant shall be 2,000,000 shares.

(c)                Compliance with Section 162(m) of the Code. To the extent
required by Section 162(m) of the Code, shares subject to Options which are
canceled shall continue to be counted against the limits set forth in paragraphs
(a) and (b) immediately preceding.

(d)               Reissuance of Shares. Shares of Common Stock covered by an
Award shall not be counted as used unless and until they are actually issued and
delivered to a Participant. If any Award lapses, expires, terminates or is
canceled prior to the issuance of shares thereunder or if shares of Common Stock
are issued under the Plan to a Participant and thereafter are forfeited to or
otherwise reacquired by the Company, the shares subject to such Awards and the
forfeited or reacquired shares shall again be available for issuance under the
Plan. Any shares of Common Stock (i) tendered by a Participant or retained by
the Company as full or partial payment to the Company for the purchase price of
the Award, or (ii) covered by an Award that is settled in cash or in a manner
that some or all of the shares covered by the Award are not issued, shall among
other actions, result in such shares being available for Awards under the Plan.
The number of shares of Common Stock available for issuance under the Plan shall
not be reduced to reflect any dividends or dividend equivalents that are
reinvested into additional shares of Common Stock or credited as additional
shares of Common stock subject or paid with

 
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respect to an Award.

 

(e)                Performance Goals. The Administrator, in its discretion, may
set restrictions based upon the achievement of Performance Goals, including, but
not limited to, the purpose of qualifying Awards as "performance-based
compensation" under Section 162(m) of the Code. When granting any Award other
than an Option or SAR, the Administrator may designate such Award as a Qualified
Performance-Based Award, based upon a determination that (i) the recipient is or
may be a "covered employee" (within the meaning of Section 162(m)(3) of the
Code) with respect to such Award, and (ii) the Administrator wishes such Award
to qualify for exemption under Section 162(m) of the Code, and the terms of any
such Award (and of the grant thereof) shall be consistent with such designation
(including, without limitation, that all such Awards be granted by a committee
composed solely of "outside directors"). To the extent required to comply with
Section 162(m) of the Code, no later than 90 days following the commencement of
a Performance Period or, if earlier, by the expiration of 25% of a Performance
Period, the Administrator will designate one or more Performance Periods,
determine the Participants for the Performance Periods and establish the
Performance Goals for the Performance Periods. The Administrator also has the
authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goals pursuant to the performance criteria specified
for such Award. In the event that applicable tax and/or securities laws change
to permit the Administrator discretion to alter the governing performance
criteria without obtaining shareholder approval of such changes, the
Administrator shall have sole discretion to make such changes without obtaining
shareholder approval. In granting Awards which are intended to qualify under
Section 162(m) of the Code, the Administrator may follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the Award under Section 162(m) of the Code. Notwithstanding any
other provision of the Plan, payment or vesting of any Performance Award shall
not be made until the applicable Performance Goals have been satisfied and any
other material terms of such Award were in fact satisfied. The Administrator
shall certify in writing the attainment of each Performance Goal.
Notwithstanding any provision of the Plan to the contrary, with respect to any
Performance Award, (a) the Administrator may not adjust, downwards or upwards,
any amount payable, or other benefits granted, issued, retained and/or vested
pursuant to such an Award on account of satisfaction of the applicable
Performance Goals; provided that the Administrator may reduce or eliminate the
performance compensation or other economic benefit that was due upon attainment
of the Performance Goal (exercise of "negative discretion") but such decrease
does not increase the amount payable to any other employee, and (b) the
Administrator may not waive the achievement of the applicable Performance Goals,
except in the case of the Participant's death or disability, or a Change in
Control.

 

(f)                 Substitute Awards. Notwithstanding any other provision of
the Plan to the contrary, the Administrator may grant Substitute Awards under
the Plan. In the event that a written agreement between the Company and an
Acquired Entity pursuant to which a merger or consolidation is completed and
approved by the Board and that agreement sets forth the terms and conditions of
the substitution for or assumption of outstanding awards of the Acquired Entity,
those terms and conditions shall be deemed to be the action of the Administrator
without any further action by the Administrator, and the persons holding such
awards shall be deemed to be the Participants.

 
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(g)                Administrator’s Discretion to Accelerate Vesting of Awards.
Except upon the occurrence of a Change in Control (which is governed by the
provisions of Section 10 hereof), the Administrator may, in its discretion and
as of a date determined by the Administrator, fully vest any or all Awards
awarded to a Participant pursuant to an Award and, upon such vesting, all
restrictions applicable to such Award shall terminate as of such date. Any
action by the Administrator pursuant to this section may vary among individual
Participants and may vary among the Awards held by any individual Participant.
Notwithstanding the preceding provisions of this section, the Administrator may
not take any action described in this section (i) with respect to an Award that
has been granted to a "covered Employee" (within the meaning of Treasury
Regulation Section 1.162-27(c)(2)) if such Award is intended to meet the
exception for performance-based compensation under Section 162(m) of the code,
or (ii) if such action shall cause any Award hereunder which is or becomes
subject to Section 409A of the Code to fail to comply with the requirements of
Section 409A of the Code.

 

(h)                Forfeiture by Order of Regulatory Agency. If the Company's or
any of its financial institution subsidiaries' capital falls below the minimum
requirements contained in 12 CFR Section 3 or below a higher requirement as
determined by the Company's or such subsidiary's primary bank regulatory agency,
such agency may direct the Company to require Participants to exercise or
forfeit some or all of their Awards. All Awards granted under this Plan are
subject to the terms of any such directive.

 

Section 4.               Corporate Transactions.

Subject to the provisions of Section 10 hereof relating to a Change in Control,
in the event of any merger, consolidation, combination, reorganization,
recapitalization, reclassification, extraordinary cash dividend, stock dividend,
stock split, reverse stock split, or other change in corporate structure, the
Administrator shall make an equitable substitution or proportionate adjustment
in (i) the aggregate number of Shares reserved for issuance under the Plan, and
(ii) the kind, number, and Exercise Price of Shares (or other cash or property)
issuable with respect to outstanding Options granted under the Plan (which may
become, without limitation, shares of an acquiring entity or other successor
corporation that assumes this Plan), and (iii) the kind and number of Shares
subject to any outstanding Awards of Restricted Stock granted under the Plan
(which may become, without limitation, shares of an acquiring entity or other
successor corporation that assumes this Plan), in each case as may be determined
by the Administrator, in its sole discretion; provided, that with respect to
ISOs, any adjustment shall be made in accordance with the provisions of Section
424(h) of the Code and any regulations or guidance promulgated thereunder; and
provided, further, that no such adjustment shall cause any Award hereunder which
is or becomes subject to Section 409A of the Code to fail to comply with the
requirements of Section 409A of the Code.

 

Section 5.               Eligibility.

The Participants under the Plan shall be selected from time to time by the
Administrator, in its sole discretion, from among the Eligible Recipients. The
Administrator shall have the authority to grant Awards under the Plan to the
Eligible Recipients; provided, however, that only current employees may be
granted ISOs.

 
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Section 6.               Options.

Options may be granted alone or in addition to other Awards granted under the
Plan. Any Option granted under the Plan shall be substantially in the form as
the Administrator may from time to time approve, and the provisions of each
Option need not be the same with respect to each Participant. Participants who
are granted Options shall enter into an Award Agreement with the Company in such
form as the Administrator shall determine, which Award Agreement shall set
forth, among other things, the Exercise Price of the Option, the term of the
Option and provisions regarding exercisability of the Option granted in
connection with such Award Agreement.

 

Options granted under the Plan may be of two types: (i) Incentive Stock Options
and (ii) Nonqualified Stock Options. If and to the extent any Option granted
under the Plan intended to qualify as an ISO does not qualify as an ISO, such
Option shall constitute a separate NQSO. A grant of an ISO can only be made to
an Eligible Recipient who is also an employee within the meaning of Section
422(a)(2) of the Code.

 

Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

 

(a)                Option Exercise Price. The Exercise Price of Shares issuable
with respect to an Option shall be determined by the Administrator in its sole
discretion, provided, however, that such Exercise Price shall not be less than
100% of the Fair Market Value on the date of grant, except in the case of
Substitute Awards. If a Participant owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or any
Subsidiary and an ISO is granted to such Participant, the Exercise Price of such
ISO shall be no less than 110% of the Fair Market Value on the date such Option
is granted.

(b)               Option Term. The term of each Option shall be fixed by the
Administrator, but no Option shall be exercisable more than 10 years after the
date such Option is granted; provided, however, that if an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary and an ISO is granted to such employee, the term of
such ISO (to the extent required by the Code at the time of grant) shall be no
more than five years from the date of grant.

(c)                Exercisability. Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at the time of grant. Specifically such terms and conditions may
include (1) the attainment of one or more Performance Goals established by the
Administrator, (2) the Participant's continued employment with the Company or
any subsidiary, or continued service as a director, consultant or advisor of the
Company or any subsidiary, for a specified period of time, (3) the occurrence of
any other event or the satisfaction of any other condition specified by the
Administrator in its sole discretion, or (4) a combination of any of the
foregoing. The Administrator may provide that any

 
16

 
 

Option shall be exercisable only in installments, and the Administrator may
waive such installment exercise provisions at any time, in whole or in part,
based on such factors as the Administrator may determine, all in its sole
discretion. An Option designated as an Incentive Stock Option shall cease to
qualify for favorable tax treatment as an Incentive Stock Option to the extent
it is exercised (if permitted by the terms of the Option) (i) more than three
months after the date of a Participant's termination of employment if
termination was for reasons other than death or disability, (ii) more than one
year after the date of a Participant's termination of employment if termination
was by reason of disability, or (iii) more than six months following the first
day of a Participant's leave of absence that exceeds three months, unless the
Participant's reemployment rights are guaranteed by statute or contract.

(d)               Method of Exercise. Subject to Sections 6(c) and 9 of the
Plan, vested Options may be exercised in whole or in part at any time during the
Option term, by giving notice as described in the applicable Award Agreement. As
determined by the Administrator in its sole discretion, payment in whole or in
part may also be made: (i) in cash (ii) to the extent permitted by applicable
law, by means of any cashless exercise procedure approved by the Administrator,
including by means of a net exercise whereby the Company issues net Shares and
the remaining balance of the Shares to satisfy the Participant's tax withholding
obligations; (iii) in the form of unrestricted shares of Common Stock already
owned by the Participant (based on the Fair Market Value on the date the Option
is exercised); provided, however, that in the case of an ISO, the right to make
payment in the form of already owned shares of Common Stock may be authorized
only at the time of grant; (iv) any other form of consideration approved by the
Administrator and permitted by applicable law; or (v) any combination of the
foregoing.

A Participant shall generally have the rights to dividends and any other rights
of a shareholder with respect to the Shares subject to the Option only after the
Participant has given written notice of exercise, has paid in full for such
Shares, and, if requested, has given the representation described in paragraph
(b) of Section 13 of the Plan.

 

(e)                Non-Transferability of Options. Except as otherwise provided
in the Award Agreement and subject to Section 9 of the Plan, Options may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will, or by the laws of descent and distribution, except that
NQSOs may be transferred if and to the extent set forth in an Award Agreement.

(f)                 Annual Limit on Incentive Stock Options. To the extent that
the aggregate Fair Market Value (determined as of the date the ISO is granted)
of Shares with respect to which ISOs granted to a Participant under this Plan
and all other equity compensation plans of the Company or any Subsidiary become
exercisable for the first time by the Participant during any calendar year
exceeds $100,000 (as determined in accordance with Section 422(d) of the Code),
the number of Shares attributable to the amount of such Fair Market Value
exceeding $100,000 shall be treated as issuable with respect to NQSOs. The
maximum aggregate number of ISOs that may be issued under the Plan is 2,000,000.

(g)                Taxation of Incentive Stock Options.

                                                                 
(i)                        In order to obtain certain tax benefits afforded to
Incentive Stock

 
17

 
 

Options under Section 422 of the Code, the Participant must hold the shares
acquired upon the exercise of an Incentive Stock Option for two years after the
Grant Date and one year after the date of exercise.

                                                               
(ii)                        A Participant may be subject to the alternative
minimum tax at the time of exercise of an Incentive Stock Option. The
Participant shall give the Company prompt notice of any disposition of shares
acquired on the exercise of an Incentive Stock Option prior to the expiration of
such holding periods.

(h)                Certain Successor Options. To the extent not inconsistent
with the terms, limitations and conditions of Section 422 of the Code and any
regulations promulgated with respect thereto, an Option issued in respect of an
option held by an employee to acquire stock of any entity acquired, by merger or
otherwise, by the Company (or any Subsidiary of the Company) may contain terms
that differ from those stated in this Section 6, but solely to the extent
necessary to preserve for any such employee the rights and benefits contained in
such predecessor option, or to satisfy the requirements of Section 424(a) of the
Code.

(i)                  Code Definitions. For purposes of this Section 6,
"disability," "parent corporation" and "subsidiary corporation" shall have the
meanings attributed to those terms for purposes of Section 422 of the Code.

Section 7.               Restricted Stock.

Awards of Restricted Stock may be granted either alone or in addition to other
Awards granted under the Plan. The Administrator shall determine the Eligible
Recipients to whom, and the time or times at which, awards of Restricted Stock
shall be made; the number of Shares to be awarded with respect to an Award of
Restricted Stock; and the Restricted Period (as defined in Section 7(b) of this
Plan) applicable to an Award of Restricted Stock. Award Agreements with respect
to Restricted Stock shall be in such form as the Administrator may from time to
time approve, and the provisions of Awards of Restricted Stock need not be the
same with respect to each Participant. An Award of Restricted Stock shall be
subject to such terms and conditions not inconsistent with the Plan as the
Administrator shall impose and shall be evidenced by an Award Agreement.

 

(a)                Stock Certificates. Subject to Section 7(c) below, with
respect to each Participant who is granted an Award of Restricted Stock, the
Company shall either (i) issue a stock certificate in respect of such Award of
Restricted Stock, which certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to any such Award of Restricted Stock;
or (ii) enter such Award of Restricted Stock in book entry form (with
appropriate restrictions noted with respect thereto), such method to be
determined by the Administrator in its sole discretion. The Company may require
that any stock certificates evidencing Restricted Stock granted under the Plan
be held in the custody of the Company until the restrictions thereon shall have
lapsed, and that, as a condition of any Award of Restricted Stock, the
Participant shall have delivered a stock power, endorsed in blank, relating to
the Shares covered by such Award of Restricted Stock.

(b)               Restrictions and Conditions Applicable to Restricted Stock. An
Award of

 
18

 
 

Restricted Stock granted pursuant to this Section 7 shall be subject to the
following restrictions and conditions:

                                                                 
(i)                        Subject to the provisions of the Plan and the Award
Agreement governing any such Award of Restricted Stock, during such period as
may be set by the Administrator commencing on the date of grant of the Award,
the Participant shall not be permitted to sell, transfer, pledge, or assign such
Shares of Restricted Stock (such period, the “Restricted Period”); provided,
however, that the Administrator may, in its sole discretion, provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on such factors and such circumstances as
the Administrator may determine, in its sole discretion. Notwithstanding the
preceding provision of this section, the Administrator may not take any action
described in this section (i) with respect to an Award that has been granted to
a "covered Employee" (within the meaning of Treasury Regulation Section
1.162-27(c)(2)) if such Award is intended to meet the exception for
performance-based compensation under Section 162(m) of the Code, or (ii) if such
action shall cause any Award hereunder which is or becomes subject to Section
409A of the Code to fail to comply with the requirements of Section 409A of the
Code. Such restrictions shall be determined by the Administrator in its sole
discretion, and the Administrator may provide that such restrictions lapse upon
(1) the attainment of one or more performance goals established by the
Administrator, (2) the Participant’s continued employment with the Company or
any Subsidiary, or continued service as a director, consultant or advisor of the
Company or any Subsidiary, for a specified period of time, (3) the occurrence of
any other event or the satisfaction of any other condition specified by the
Administrator in its sole discretion, or (4) a combination of any of the
foregoing.

                                                               
(ii)                        Subject to paragraph (b) of Section 13 of the Plan
and/or unless otherwise provided in an Award Agreement, a Participant awarded
Restricted Stock under the Plan generally shall have the rights of a shareholder
of the Company with respect to such Restricted Stock during the Restricted
Period (including, without limitation, the right to vote the Restricted Stock
and to receive dividends thereon).

Section 8.               Other Cash and Equity Awards.

Awards of restricted stock units, stock appreciation rights, performance awards,
cash awards, performance units, phantom stock, dividend equivalents, or similar
rights to purchase or acquire Shares may be granted either alone or in addition
to other Awards granted under the Plan. Such Awards shall be subject to such
terms, conditions, and restrictions (which may include a risk of forfeiture) as
the Administrator may impose, if any, which restrictions may lapse at the
expiration of the vesting or deferral period, as the case may be, at earlier
specified times (including based on achievement of Performance Goals and/or
future service requirements), separately or in combination, in installments or
otherwise, as the Administrator may determine in its sole discretion, which
terms, conditions and restrictions shall be set forth in

 
19

 
 

the instrument evidencing the Award. The maximum value of cash awards that may
be paid or payable in any calendar year to any one Participant shall be
$500,000.

Section 9.               Termination of Employment or Service.

Unless otherwise set forth in Section 14 of the Plan or as may otherwise be set
forth in an Award Agreement, if a Participant’s employment with or service as an
officer, director, employee, consultant, or advisor of the Company or of any
Subsidiary: (a) terminates for any reason and on the date of termination of
employment or service the Participant is not vested as to his or her entire
Award, the Shares issuable with respect to the unvested portion of such Award
shall be forfeited; and (b) terminates for the reasons described below and on
the date of termination of employment or service the Participant is vested as to
any Options, then if such termination is (i) by reason of his or her death or
Permanent and Total Disability, any vested Option may thereafter be exercised
for a period of twelve months following termination of employment or service;
(ii) for Cause, then any vested Option shall cease to be exercisable and shall
terminate; or (iii) for any other reason than listed in subsections (b)(i) and
(b)(ii) above, then any vested Option may thereafter be exercised for a period
of 90 days following termination of employment or service. If, and to the extent
that, after termination of employment or service, the Participant does not
exercise his or her Option within the applicable time stated above, the
unexercised Option shall terminate.

 

Section 10.           Change in Control.

Unless otherwise determined in an Award Agreement, in the event of a Change in
Control:

(a)                Effective immediately prior to the occurrence of the Change
in Control, (i) each outstanding Award shall become fully vested and, if
applicable, exercisable, (ii) the restrictions and forfeiture conditions
applicable to any such Award granted shall lapse, and (iii) any performance
conditions imposed with respect to Awards shall be deemed to be fully achieved.

(b)               The Administrator may notify all Participants that all
outstanding Awards shall be assumed by the acquiring entity or substituted on an
equitable basis with awards issued by the acquiring entity.

(c)                For purposes of this Section 10, an Award shall be considered
assumed or substituted for if, following the Change in Control, the Award
remains subject to the same terms and conditions that were applicable to the
Award immediately prior to the Change in Control except that, if the Award
related to Shares, the Award instead confers the right to receive common stock
or other securities of the acquiring entity.

(d)               Notwithstanding any other provision of the Plan, in the event
of a Change in Control, except as would otherwise result in adverse tax
consequences under Section 409A of the Code, the Board may, in its sole
discretion, provide that each Award shall, immediately upon the occurrence of a
Change in Control, be cancelled in exchange for a payment in cash or securities
in an amount equal to (i) the excess (if any) of the consideration paid per
Share in the

 
20

 
 

Change in Control (as determined by the Administrator in its sole discretion)
over the exercise or purchase price (if any) per Share subject to the Award
multiplied by (ii) the number of Shares subject to the Award (if the
consideration paid per share in the Change in Control is deemed by the
Administrator to be less than the Exercise Price or purchase price (if any) per
Share subject to an Award, then such Awards may be deemed to have been paid in
full and canceled by the Administrator).

Section 11.           Amendment and Termination.

The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation that would materially impair the rights of a
Participant under any Award granted or Award Agreement in effect under the Plan
shall be made without such Participant’s consent. The Administrator may accept
surrender of outstanding Awards and grant new Awards in substitution for them;
provided, that the Administrator will not, without prior shareholder approval,
exchange underwater Options or otherwise modify the exercise price or purchase
price of any Option or Award that has the effect of being a repricing. To the
extent necessary and desirable, approval of the Company’s shareholders shall be
obtained for any amendment that would:

 

(a)                except as set forth in Section 3 of the Plan, increase the
total number of Shares reserved for issuance under the Plan; or

(b)               change the class of officers, directors, employees,
consultants, and advisors eligible to participate in the Plan.

The Administrator may amend the terms of any Award granted under the Plan,
prospectively or retroactively, but, subject to Section 4 of the Plan, no such
amendment shall impair the rights of any Participant without his or her consent.
Notwithstanding the previous sentence, the Administrator reserves the right to
amend the terms of any Award or Award Agreement as may be necessary or
appropriate to avoid adverse tax consequences under Section 409A of the Code or
to comply with any requirements under the Company’s “clawback” policy regarding
incentive compensation, or such “clawback” requirements under the Sarbanes–Oxley
Act of 2002 or the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

Section 12.           Unfunded Status of Plan.

The Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general unsecured creditor of the Company.

 

Section 13.           General Provisions.

(a)                Shares shall not be issued pursuant to the exercise or
settlement of any Award granted under the Plan unless the exercise or settlement
of such Award and the issuance and delivery of such Shares pursuant to such
Award shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, the Securities Exchange Act of

 
21

 
 

1934, withholding tax requirements and the requirements of any stock exchange
upon which the Common Stock may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance. The
Company may rely on an opinion of its counsel as to such compliance. Any share
certificate issued to evidence Common Stock for which an Award is exercised or
issued may bear such legends and statements as the Administrator may deem
advisable to assure compliance with Federal and state laws and regulations.

(b)               The Administrator may require each person acquiring Shares
granted under the Plan to represent to and agree with the Company in writing
that such person is acquiring the Shares without a view to distribution thereof.
All certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Administrator may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable Federal or state securities law. The certificates for
such Shares may include the legend set forth below, or any other legend that the
Administrator deems appropriate to reflect any restrictions on transfer for such
Shares.

“THE ISSUANCE OF THE SHARES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER
AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF
1933 OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.”

(c)                Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements. The adoption of the Plan
or granting of an Award shall not confer upon any Eligible Recipient any right
to continued employment with or service to the Company or any Subsidiary, as the
case may be, nor shall it interfere in any way with the right of the Company or
any Subsidiary to terminate the employment or service of any Eligible Recipient
at any time.

(d)               Unless otherwise set forth in an applicable Award Agreement, a
Participant may elect, no later than the date as of which the value of an Award
becomes includible in the gross income of the Participant for Federal income tax
purposes (the “withholding date”), to have the Company withhold vested whole
shares of Common Stock deliverable upon the exercise of an Option or the vesting
of the Restricted Stock to satisfy (in whole or in part) the amount, if any,
that the Company or any Subsidiary is required to withhold for taxes; provided,
however, that the amount of shares of Common Stock so withheld shall have a Fair
Market Value (as of the withholding date) that is not in excess of the amount
determined by the Company to be equal to the applicable minimum statutorily
required withholding tax payments. Any such election shall be irrevocable.

To the extent that a Participant does not make such an election, or such
election does not fully satisfy such minimum statutorily required withholding
tax payments, then (x) the Company may require that the Participant pay to the
Company, or make arrangements

 
22

 
 

satisfactory to the Company regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such Award, as
a condition of the exercise of any Option, (y) the Company may withhold vested
whole shares of Common Stock deliverable upon exercise of an Option or vesting
of the Restricted Stock to satisfy (in whole or in part) the amount, if any,
that the Company or any Subsidiary is required to withhold for taxes; provided,
however, that the amount of shares of Common Stock so withheld shall have a Fair
Market Value (as of the withholding date) that is not in excess of the amount
determined by the Company to be equal to the applicable minimum statutorily
required withholding tax payments, and (z) the Company shall have the right to
deduct from any payment of any kind otherwise due to a Participant up to an
amount equal to any federal, state or local taxes of any kind required by law to
be withheld in connection with the granting, vesting or exercise of an Award
(not to exceed the amount determined by the Company to be the applicable minimum
statutorily required withholding tax payments). Upon request, the Participant
shall reimburse the Company for any taxes that the Company withholds that are
not otherwise reimbursed as contemplated above in this Section 13(d).

(e)                No member of the Board or the Administrator, nor any officer
or employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination, or interpretation. Except to the extent prohibited by applicable
law, the Administrator may delegate to one or more individuals the day-to-day
administration of the Plan and any of the functions assigned to it in this Plan.
Such delegation may be revoked at any time.

(f)                 If a Participant is an officer or director of the Company
within the meaning of Section 16, Awards granted hereunder shall be subject to
all conditions required under Rule 16b-3, or any successor rule(s) promulgated
under the Securities Exchange Act of 1934, to qualify the Award for any
exemption from the provisions of Section 16 available under such Rule. Such
conditions are hereby incorporated herein by reference and shall be set forth in
the agreement with the Participant, which describes the Award.

(g)                The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of 1933 of any shares of Stock to be
issued hereunder or to effect similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to cause to be issued or delivered any shares of Stock pursuant to the
Plan unless and until the Company is advised by its counsel that the issuance
and delivery of such shares is in compliance with all applicable laws,
regulations or governmental authority and the requirements of any securities
exchange on which shares of Stock are traded. The Administrator may require, as
a condition of the issuance and delivery of shares of Stock pursuant to the
terms hereof, that the recipient of such shares make such covenants, agreements
and representations, and that such shares, if certificated, bear such legends,
and if dematerialized, be so restricted, in each case, as the Administrator, in
its sole discretion, deems necessary or desirable.

Section 14.           Section 409A of the Code.

 
23

 
 

Notwithstanding any provision in the Plan to the contrary, no payment or
distribution under this Plan that constitutes an item of deferred compensation
under Section 409A of the Code and becomes payable by reason of a Participant’s
termination of employment or service with the Company will be made to such
Participant unless such Participant’s termination of employment or service
constitutes a “separation from service” (as defined in Section 409A of the
Code). For purposes of this Plan, each amount to be paid or benefit to be
provided shall be construed as a separate identified payment for purposes of
Section 409A of the Code. If a participant is a “specified employee” (as defined
in Section 409A of the Code), then to the extent necessary to avoid the
imposition of taxes under Section 409A of the Code, such Participant shall not
be entitled to any payments upon a termination of his or her employment or
service until the earlier of: (i) the expiration of the six-month period
measured from the date of such Participant’s “separation from service” or (ii)
the date of such Participant’s death. Upon the expiration of the applicable
waiting period set forth in the preceding sentence, all payments and benefits
deferred pursuant to this Section 14 (whether they would have otherwise been
payable in a single lump sum or in installments in the absence of such deferral)
shall be paid to such Participant in a lump sum as soon as practicable, but in
no event later than 60 calendar days, following such expired period, and any
remaining payments due under this Plan will be paid in accordance with the
normal payment dates specified for them herein.

Section 15.           Notice.

All notices, requests, waivers, and other communications required or permitted
hereunder shall in writing and shall be either personally delivered, sent by
reputable overnight courier service or mailed by first class mail, return
receipt requested, to the recipient at the address below:

 

Independence Bancshares, Inc.

500 East Washington Street

Greenville, SC 29601

Attn: Martha L. Long, Chief Financial Officer

 

or such other address or the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party, or sent
by other electronic means. All such notices, requests, waivers and other
communications shall be deemed to have been effectively given: (a) when
personally delivered to the party to be notified; (b) when sent by confirmed
facsimile to the party to be notified; (c) five (5) business days after deposit
in the United States Mail postage prepared by certified or registered mail with
return receipt requested at any time other than during a general discontinuance
of postal service due to strike, lockout, or otherwise (in which case such
notice, request, waiver or other communication shall be effectively given upon
receipt) and addressed to the party to be notified as set forth above; or (d)
two (2) business days after deposit with a national overnight delivery service,
postage prepaid, addressed to the party to be notified as set forth above with
next-business-day delivery guaranteed. A party may change its or his notice
address given above by giving the other party ten (10) days' written notice of
the new address in the manner set forth above.

 
24

 

 
 

Section 16.           Governing Law and Interpretation.

The Plan and all Awards made and actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of South Carolina,
without reference to principles of conflict of laws.

 

Section 17.           Severability.

If, for any reason, any provision of this Plan is held invalid, such invalidity
shall not

affect any other provision of this Plan not held so invalid, and each such other
provision shall to the full extent consistent with law continue in full force
and effect. If any provision of this Plan shall be held invalid in part, such
invalidity shall in no way affect the rest of such provision not held so
invalid, and the rest of such provision, together with all other provisions of
this Plan, shall to the full extent consistent with law continue in full force
and effect.

 

Section 18.           Term of Plan.

The Plan shall be effective as of the Effective Date. No Award shall be granted
pursuant to the Plan on or after the tenth anniversary of the Effective Date,
but Awards granted under the Plan prior to the tenth anniversary of the
Effective Date may extend beyond the tenth anniversary of the Effective Date
pursuant to the terms of the Award as provided for under the Plan and the terms
of the applicable Award Agreement.

 

 

*    *    *    *    *

 

 

IN WITNESS WHEREOF, the Board of Directors of the Company has adopted this
Independence Bancshares, Inc. 2013 Equity Incentive Plan, to be executed on
behalf of the Company by a duly designated officer of the Company, as of the day
and year first above written as the Effective Date.

 

INDEPENDENCE BANCSHARES, INC.

 

By: __/s/ Gordon A. Baird _____

 

Name: Gordon A. Baird

 

Title: CEO

 

 
25