Exhibit 10.1


 


HURCO COMPANIES, INC.
2016 EQUITY INCENTIVE PLAN


 


1.    Purpose.
The purpose of the Hurco Companies, Inc. 2016 Equity Incentive Plan (the “Plan”) is to attract and retain the best
available personnel for positions of responsibility with the Company, to provide additional incentives to them and align their
interests with those of the Company’s shareholders, and to thereby promote the Company’s long-term business success.


 


2.    Definitions.
In this Plan, the following definitions will apply.


 


		(a)	“Affiliate” means any entity that is a Subsidiary
or Parent of the Company.



 


(b)         “Agreement”
means the written or electronic agreement or notice containing the terms and conditions applicable to each Award granted under
the Plan. An Agreement is subject to the terms and conditions of the Plan.


 


(c)          “Award”
means a grant made under the Plan in the form of Options, Stock Appreciation Rights, Restricted Stock, Stock Units or an Other
Stock-Based Award.


 


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


 


(e)         “Cause”
means what the term is expressly defined to mean in a then-effective written agreement (including an Agreement) between a Participant
and the Company or any Affiliate, or in the absence of any such then-effective agreement or definition means a Participant’s
(i) ongoing failure to perform satisfactorily the duties reasonably required of the Participant by the Company (other than by reason
of Disability); (ii) material violation of any law, rule, regulation, court order or regulatory directive (other than traffic violations,
misdemeanors or other minor offenses); (iii) material breach of the Company's business conduct or ethics code or of any fiduciary
duty or nondisclosure, non-solicitation, non-competition or similar obligation owed to the Company or any Affiliate; or (iv) engaging
in dishonorable or disruptive behavior, practices or acts which demonstrate a willful and continuing disregard for the best interests
of the Company and its Affiliates or which would be reasonably expected to harm or bring disrepute to the Company or any of its
Affiliates, their business or any of their customers, employees or vendors.


 


(f)         “Change
in Control” means one of the following:


 


(1)     An
Exchange Act Person becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company representing 30% or more of the combined voting power of the Company’s then outstanding Voting Securities, except
that the following will not constitute a Change in Control:


 


(A)   any
acquisition of securities of the Company by an Exchange Act Person directly or indirectly from the Company for the purpose of providing
financing to the Company;


 


(B)   any
formation of a Group consisting solely of beneficial owners of the Company's Voting Securities as of the effective date of this
Plan; or


 


(C)   any
repurchase or other acquisition by the Company of its Voting Securities that causes any Exchange Act Person to become the beneficial
owner of 30% or more of the Company’s Voting Securities.


 




     


     


    

 


If, however, an Exchange Act Person or
Group referenced in clause (A), (B) or (C) above acquires beneficial ownership of additional Company Voting Securities after initially
becoming the beneficial owner of 30% or more of the combined voting power of the Company’s Voting Securities by one of the
means described in those clauses, then a Change in Control will be deemed to have occurred.


 


(2)   Individuals
who are Continuing Directors cease for any reason to constitute a majority of the members of the Board.


 


(3)   A
Corporate Transaction is consummated, unless, immediately following such Corporate Transaction, (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Company's Voting Securities immediately prior to such Corporate
Transaction beneficially own, directly or indirectly, 60% or more of the combined voting power of the then outstanding Voting Securities
of the surviving or acquiring entity resulting from such Corporate Transaction (including beneficial ownership through the ultimate
Parent of such entity) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction,
of the Company's Voting Securities; (ii) no Exchange Act Person beneficially owns, directly or indirectly, 30% or more of the Voting
Securities of the entity resulting from such Corporate Transaction; and (iii) at least a majority of the members of the board of
directors (or comparable governors) of the entity resulting from such Corporate Transaction were Continuing Directors at the time
of the initial agreement, or the action of the Board, providing for such Corporate Transaction.


 


Notwithstanding the foregoing, to the extent
that any Award constitutes a deferral of compensation subject to Code Section 409A, and if that Award provides for a change in
the time or form of payment upon a Change in Control, then no Change in Control shall be deemed to have occurred upon an event
described in this Section 2(f) unless the event would also constitute a change in ownership or effective control of, or a change
in the ownership of a substantial portion of the assets of, the Company under Code Section 409A.


 


(g)         “Code”
means the Internal Revenue Code of 1986, as amended and in effect from time to time. For purposes of the Plan, references to sections
of the Code shall be deemed to include any applicable regulations thereunder and any successor or similar statutory provisions.


 


(h)         “Committee”
means two or more Non-Employee Directors designated by the Board to administer the Plan under Section 3, each member of which shall
be (i) an independent director within the meaning of the rules and regulations of the Nasdaq Stock Market, (ii) a non-employee
director within the meaning of Exchange Act Rule 16b-3, and (iii) an outside director for purposes of Code Section 162(m).


 


(i)          “Company”
means Hurco Companies, Inc., an Indiana corporation, or any successor thereto.


 


(j)           “Continuing
Director” means an individual (i) who is, as of the effective date of the Plan, a director of the Company, or (ii) who becomes
a director of the Company after the effective date hereof and whose initial election, or nomination for election by the Company’s
shareholders, was approved by at least a majority of the then Continuing Directors, but excluding, for purposes of this clause
(ii), an individual whose initial assumption of office occurs as a result of an actual or threatened proxy contest relating to
the election of directors.


 


(k)          “Corporate
Transaction” means (i) a sale or other disposition of all or substantially all of the assets of the Company, or (ii) a merger,
consolidation, share exchange or similar transaction involving the Company, regardless of whether the Company is the surviving
corporation.


 




     


     


    

 


(l)          “Disability”
means (A) any permanent and total disability under any long-term disability plan or policy of the Company or its Affiliates that
covers the Participant, or (B) if there is no such long-term disability plan or policy, “total and permanent disability”
within the meaning of Code Section 22(e)(3).


 


(m)        “Employee”
means an employee of the Company or an Affiliate.


 


(n)         “Exchange
Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time.


 


(o)         “Exchange
Act Person” means any natural person, entity or Group other than (i) the Company or any Affiliate; (ii) any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Affiliate; (iii) an underwriter temporarily holding securities
in connection with a registered public offering of such securities; or (iv) an entity whose Voting Securities are beneficially
owned by the beneficial owners of the Company’s Voting Securities in substantially the same proportions as their beneficial
ownership of the Company’s Voting Securities.


 


(p)         “Fair
Market Value” of a Share means the fair market value of a Share determined as follows:


 


(1)     If
the Shares are readily tradable on an established securities market (as determined under Code Section 409A), then Fair Market Value
will be the closing sales price for a Share on the principal securities market on which it trades on the date for which it is being
determined, or if no sale of Shares occurred on that date, on the next preceding date on which a sale of Shares occurred, as reported
in The Wall Street Journal or such other source as the Committee deems reliable; or


 


(2)     If
the Shares are not then readily tradable on an established securities market (as determined under Code Section 409A), then Fair
Market Value will be determined by the Committee as the result of a reasonable application of a reasonable valuation method that
satisfies the requirements of Code Section 409A.


 


(q)         “Full
Value Award” means an Award other than an Option Award or Stock Appreciation Right Award, and, for purposes of Section 4,
includes an award under the Prior Plan that is neither an option award nor a stock appreciation right award.


 


(r)          “Grant
Date” means the date on which the Committee approves the grant of an Award under the Plan, or such later date as may be specified
by the Committee on the date the Committee approves the Award.


 


(s)         “Group”
means two or more persons who act, or agree to act together, as a partnership, limited partnership, syndicate or other group for
the purpose of acquiring, holding, voting or disposing of securities of the Company.


 


(t)          “Non-Employee
Director” means a member of the Board who is not an Employee.


 


(u)         “Option”
means a right granted under the Plan to purchase a specified number of Shares at a specified price. An “Incentive Stock Option”
or “ISO” means any Option designated as such and granted in accordance with the requirements of Code Section 422. A
“Non-Statutory Stock Option” means an Option other than an Incentive Stock Option.


 


(v)         “Other
Stock-Based Award” means an Award described in Section 11 of this Plan.


 


(w)        “Parent”
means a “parent corporation,” as defined in Code Section 424(e).


 




     


     


    

 


(x)          “Participant”
means a person to whom a then-outstanding Award has been granted under the Plan.


 


(y)         “Performance-Based
Compensation” means an Award to a person who is, or is determined by the Committee to likely become, a “covered employee”
(as defined in Section 162(m)(3) of the Code) and that is intended to constitute “performance-based compensation” within
the meaning of Section 162(m)(4)(C) of the Code.


 


(z)          “Plan”
means this Hurco Companies, Inc. 2016 Equity Incentive Plan, as amended and in effect from time to time.


 


(aa)        “Prior
Plan” means the Hurco Companies, Inc. 2008 Equity Incentive Plan.


 


(bb)        “Restricted
Stock” means Shares issued to a Participant that are subject to such restrictions on transfer, vesting conditions and other
restrictions or limitations as may be set forth in this Plan and the applicable Agreement.


 


(cc)        “Service”
means the provision of services by a Participant to the Company or any Affiliate in any Service Provider capacity. A Service Provider’s
Service shall be deemed to have terminated either upon an actual cessation of providing services to the Company or any Affiliate
or upon the entity to which the Service Provider provides services ceasing to be an Affiliate. Except as otherwise provided in
this Plan or any Agreement, Service shall not be deemed terminated in the case of (i) any approved leave of absence; (ii) transfers
among the Company and any Affiliates in any Service Provider capacity; or (iii) any change in status so long as the individual
remains in the service of the Company or any Affiliate in any Service Provider capacity.


 


(dd)       “Service
Provider” means an Employee, a Non-Employee Director, or any consultant or advisor who is a natural person and who provides
services (other than in connection with (i) a capital-raising transaction or (ii) promoting or maintaining a market in Company
securities) to the Company or any Affiliate.


 


(ee)        “Share”
means a share of Stock.


 


(ff)         “Stock”
means the common stock, no par value, of the Company.


 


(gg)       “Stock
Appreciation Right” or “SAR” means the right to receive, in cash and/or Shares as determined by the Committee,
an amount equal to the appreciation in value of a specified number of Shares between the Grant Date of the SAR and its exercise
date.


 


(hh)       “Stock
Unit” means a right to receive, in cash and/or Shares as determined by the Committee, the Fair Market Value of one or more
Shares, subject to such restrictions on transfer, vesting conditions and other restrictions or limitations as may be set forth
in this Plan and the applicable Agreement.


 


(ii)         “Subsidiary”
means a “subsidiary corporation,” as defined in Code Section 424(f), of the Company.


 


(jj)         “Substitute
Award” means an Award granted upon the assumption of, or in substitution or exchange for, outstanding awards granted by a
company or other entity acquired by the Company or any Affiliate or with which the Company or any Affiliate combines. The terms
and conditions of a Substitute Award may vary from the terms and conditions set forth in the Plan to the extent that the Committee
at the time of the grant may deem appropriate to conform, in whole or in part, to the provisions of the award in substitution for
which it has been granted.


 




     


     


    




 


(kk)       “Voting
Securities” of an entity means the outstanding equity securities entitled to vote generally in the election of directors
of such entity.


 


3.    Administration
of the Plan.


 


(a)         Administration.
The authority to control and manage the operations and administration of the Plan shall be vested in the Committee in accordance
with this Section 3.


 


(b)         Scope
of Authority. Subject to the terms of the Plan, the Committee shall have the authority, in its discretion, to take such actions
as it deems necessary or advisable to administer the Plan, including:


 


(1)     determining
the Service Providers to whom Awards will be granted, the timing of each such Award, the types of Awards and the number of Shares
covered by each Award, the terms, conditions, performance criteria, restrictions and other provisions of Awards, and the manner
in which Awards are paid or settled;


 


(2)   cancelling
or suspending an Award, accelerating the vesting or extending the exercise period of an Award, or otherwise amending the terms
and conditions of any outstanding Award, subject to the requirements of Sections 6(b), 15(d) and 15(e);


 


(3)   adopting
sub-plans or special provisions applicable to Awards, establishing, amending or rescinding rules to administer the Plan, interpreting
the Plan and any Award or Agreement, reconciling any inconsistency, correcting any defect or supplying an omission in the Plan
or any Agreement, and making all other determinations necessary or desirable for the administration of the Plan;


 


(4)   granting
Substitute Awards under the Plan; and


 


(5)   taking
such actions as are provided in Section 3(c) with respect to Awards to foreign Service Providers.


 


(c)          Awards
to Foreign Service Providers. The Committee may grant Awards to Service Providers who are foreign nationals, who are located
outside of the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject
to (or could cause the Company to be subject to) legal or regulatory requirements of countries outside of the United States, on
such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or
desirable to comply with applicable foreign laws and regulatory requirements and to promote achievement of the purposes of the
Plan. In connection therewith, the Committee may establish such subplans and modify exercise procedures and other Plan rules and
procedures to the extent such actions are deemed necessary or desirable, and may take any other action that it deems advisable
to obtain local regulatory approvals or to comply with any necessary local governmental regulatory exemptions.


 




     


     


    

 


(d)         Acts
of the Committee; Delegation. A majority of the members of the Committee shall constitute a quorum for any meeting of the Committee,
and any act of a majority of the members present at any meeting at which a quorum is present or any act unanimously approved in
writing or electronically by all members of the Committee shall be the act of the Committee. Any such action of the Committee shall
be valid and effective even if the members of the Committee at the time of such action are later determined not to have satisfied
all of the criteria for membership in clauses (i), (ii) and (iii) of Section 2(h). To the extent not inconsistent with applicable
law or stock exchange rules, the Committee may delegate all or any portion of its authority under the Plan to any one or more of
its members or, as to Awards to Participants who are not subject to Section 16 of the Exchange Act, to one or more directors or
executive officers of the Company or to a committee of the Board comprised of one or more directors of the Company. The Committee
may also delegate non-discretionary administrative responsibilities in connection with the Plan to such other persons as it deems
advisable.


 


(e)          Finality
of Decisions. The Committee’s interpretation of the Plan and of any Award or Agreement made under the Plan and all related
decisions or resolutions of the Board or Committee shall be final and binding on all parties with an interest therein.


 


(f)         Indemnification.
Each person who is or has been a member of the Committee or of the Board, and any other person to whom the Committee delegates
authority under the Plan, shall be indemnified by the Company, to the maximum extent permitted by law, against liabilities and
expenses imposed upon or reasonably incurred by such person in connection with or resulting from any claims against such person
by reason of the performance of the individual's duties under the Plan. This right to indemnification is conditioned upon such
person providing the Company an opportunity, at the Company’s expense, to handle and defend the claims before such person
undertakes to handle and defend them on such person’s own behalf. The Company will not be required to indemnify any person
for any amount paid in settlement of a claim unless the Company has first consented in writing to the settlement. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to which such person or persons may be entitled
under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise.


 


		4.	Shares Available Under the Plan.



 


(a)         Maximum
Shares Available. Subject to Section 4(b) and to adjustment as provided in Section 12(a), the number of Shares that may be
the subject of Awards and issued under the Plan shall be 470,000, plus any Shares remaining available for future grants under the
Prior Plan on the effective date of this Plan. Shares issued under the Plan may come from authorized and unissued shares or treasury
shares. In determining the number of Shares to be counted against this share reserve in connection with any Award, the following
rules shall apply:


 


(1)   Shares
that are subject to Awards of Options or Stock Appreciation Rights shall be counted against the share reserve as one Share for
every one Share granted.


 


(2)   Shares
that are subject to Full Value Awards shall be counted against the share reserve as two Shares for every one Share granted.


 


(3)   Where
the number of Shares subject to an Award is variable on the Grant Date, the number of Shares to be counted against the share reserve
shall be the maximum number of Shares that could be received under that particular Award, until such time as it can be determined
that only a lesser number of shares could be received.


 


(4)   Where
two or more types of Awards are granted to a Participant in tandem with each other, such that the exercise of one type of Award
with respect to a number of Shares cancels at least an equal number of Shares of the other, the number of Shares to be counted
against the share reserve shall be the largest number of Shares that would be counted against the share reserve under either of
the Awards.


 




     


     


    

 


(5)   Shares
subject to Substitute Awards shall not be counted against the share reserve, nor shall they reduce the Shares authorized for grant
to a Participant in any calendar year.


 


(6)   Awards
that will be settled solely in cash shall not be counted against the share reserve, nor shall they reduce the Shares authorized
for grant to a Participant in any calendar year.


 


(b)         Effect
of Forfeitures and Other Actions. Any Shares subject to an Award, or to an award granted under the Prior Plan that is outstanding
on the effective date of this Plan (a “Prior Plan Award”), that expires, is cancelled or forfeited or is settled for
cash, shall, to the extent of such cancellation, forfeiture, expiration or cash settlement, again become available for Awards under
this Plan, and the share reserve under Section 4(a) shall be correspondingly replenished as provided in Section 4(c) below. The
following Shares shall not, however, again become available for Awards or replenish the share reserve under Section 4(a): (i) Shares
tendered (either actually or by attestation) by the Participant or withheld by the Company in payment of the purchase price of
a stock option issued under this Plan or the Prior Plan, (ii) Shares tendered (either actually or by attestation) by the Participant
or withheld by the Company to satisfy any tax withholding obligation with respect to any Award or Prior Plan Award, (iii) Shares
repurchased by the Company with proceeds received from the exercise of a stock option issued under this Plan or the Prior Plan,
and (iv) Shares subject to a stock appreciation right award issued under this Plan or the Prior Plan that are not issued in connection
with the stock settlement of that award upon its exercise.


 


(c)         Counting
Shares Again Available. Each Share that again becomes available for Awards as provided in Section 4(b) shall correspondingly
increase the share reserve under Section 4(a), with such increase based on the same share ratio by which the applicable share reserve
was decreased upon the grant of the applicable award.


 


(d)          Effect
of Plans Operated by Acquired Companies. If a company acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation
of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted,
to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan. Awards
using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing
plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Non-Employee Directors
prior to such acquisition or combination.


 


(e)         No
Fractional Shares. Unless otherwise determined by the Committee, the number of Shares subject to an Award shall always be a
whole number. No fractional Shares may be issued under the Plan, but the Committee may, in its discretion, pay cash in lieu of
any fractional Share in settlement of an Award.


 


(f)          Individual
Option and SAR Limit. The aggregate number of Shares subject to Options and/or Stock Appreciation Rights granted during any
calendar year to any one Participant other than a Non-Employee Director shall not exceed 175,000 Shares (subject to adjustment
as provided in Section 12(a)).


 


(g)          Performance-Based
Compensation Limit. With respect to Awards of Performance-Based Compensation, the maximum number of Shares that may be the
subject of Full Value Awards that are granted to any Participant during any calendar year shall not exceed 125,000 Shares (subject
to adjustment as provided in Section 12(a)).


 




     


     


    

 


(h)         Limits
on Awards to Non-Employee Directors. The aggregate grant date fair value (as determined in accordance with FASB ASC Topic 718
or any successor provision) of all Awards granted during any calendar year to any Non-Employee Director shall not exceed $200,000.


 


5.    Eligibility.
Participation in the Plan is limited to Service Providers. Incentive Stock Options may only be granted to Employees.


 


6.    General
Terms of Awards. 


 


(a)         Award
Agreement. Except for any Award that involves only the immediate issuance of unrestricted Shares, each Award shall be evidenced
by an Agreement setting forth the amount of the Award together with such other terms and conditions applicable to the Award (and
not inconsistent with the Plan) as determined by the Committee. An Award to a Participant may be made singly or in combination
with any form of Award. Two types of Awards may be made in tandem with each other such that the exercise of one type of Award with
respect to a number of Shares reduces the number of Shares subject to the related Award by at least an equal amount.


 


(b)          Vesting
and Term. Each Agreement shall set forth the period until the applicable Award is scheduled to expire (which shall not
be more than ten years from the Grant Date), and any applicable performance period. Awards that vest based solely on
the satisfaction by the Participant of service-based vesting conditions shall be subject to a vesting period of not less than
one year from the applicable Grant Date, and Awards whose grant or vesting is subject to the satisfaction of performance
goals over a performance period shall be subject to a performance period of not less than one year. The foregoing minimum
vesting and performance periods will not apply, however, in the following circumstances: (i) upon a Change in Control, (ii)
termination of Service due to death or Disability, (iii) to a Substitute Award that does not reduce the vesting period of the
award being replaced, and (iv) Awards involving an aggregate number of Shares not in excess of 5% of the Plan’s share
reserve specified in Section 4(a). For purposes of Awards to Non-Employee Directors, a vesting period will be deemed to be
one year if it runs from the date of one annual meeting of the Company’s shareholders to the next annual meeting of the
Company’s shareholders.


 


(c)          Transferability.
Except as provided in this Section 6(c), (i) during the lifetime of a Participant, only the Participant or the
Participant’s guardian or legal representative may exercise an Option or SAR, or receive payment with respect to any
other Award; and (ii) no Award may be sold, assigned, transferred, exchanged or encumbered, voluntarily or involuntarily,
other than by will or the laws of descent and distribution. Any attempted transfer in violation of this Section 6(c) shall be
of no effect. The Committee may, however, provide in an Agreement or otherwise that an Award (other than an Incentive Stock
Option) may be transferred pursuant to a domestic relations order or may be transferable by gift to any “family
member” (as defined in General Instruction A(5) to Form S-8 under the Securities Act of 1933) of the Participant. Any
Award held by a transferee shall continue to be subject to the same terms and conditions that were applicable to that Award
immediately before the transfer thereof. For purposes of any provision of the Plan relating to notice to a Participant or to
acceleration or termination of an Award upon the death or termination of Service of a Participant, the references to
“Participant” shall mean the original grantee of an Award and not any transferee.


 


(d)         Designation
of Beneficiary. A Participant may designate a beneficiary or beneficiaries to exercise any Award or receive a payment under
any Award that is exercisable or payable on or after the Participant’s death. Any such designation shall be on a form approved
by the Company and shall be effective upon its receipt by the Company.


 




     


     


    

 


(e)         Termination
of Service. Unless otherwise provided in an applicable Agreement or another then-effective written agreement between a Participant
and the Company, and subject to Section 12 of this Plan, if a Participant’s Service with the Company and all of its Affiliates
terminates, the following provisions shall apply (in all cases subject to the scheduled expiration of an Option or SAR Award, as
applicable):


 


(1)   Upon
termination of Service for Cause, all unexercised Option and SAR Awards and all unvested portions of any other outstanding Awards
shall be immediately forfeited without consideration.


 


(2)   Upon
termination of Service for any other reason, all unvested and unexercisable portions of any outstanding Awards shall be immediately
forfeited without consideration.


 


(3)   Upon
termination of Service for any reason other than Cause, death or Disability, the currently vested and exercisable portions of Option
and SAR Awards may be exercised for a period of three months after the date of such termination. However, if a Participant thereafter
dies during such three-month period, the vested and exercisable portions of the Option and SAR Awards may be exercised for a period
of one year after the date of such termination.


 


(4)   Upon
termination of Service due to death or Disability, the currently vested and exercisable portions of Option and SAR Awards may be
exercised for a period of one year after the date of such termination.


 


(f)         Rights
as Shareholder. No Participant shall have any rights as a shareholder with respect to any Shares covered by an Award unless
and until the date the Participant becomes the holder of record of the Shares, if any, to which the Award relates.


 


(g)         Performance-Based
Awards. Any Award may be granted as a performance-based Award if the Committee establishes one or more measures of corporate,
business unit or individual performance which must be attained, and the performance period over which the specified performance
is to be attained, as a condition to the grant, vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares
of such Award. In connection with any such Award, the Committee shall determine the extent to which performance measures have been
attained and other applicable terms and conditions have been satisfied, and the degree to which vesting, exercisability, lapse
of restrictions and/or settlement in cash or Shares of such Award has been earned. Any performance-based Award that is intended
by the Committee to qualify as Performance-Based Compensation shall additionally be subject to the requirements of Section 16 of
this Plan. Except as provided in Section 16 with respect to Performance-Based Compensation, the Committee shall also have the authority
to provide, in an Agreement or otherwise, for the modification of a performance period and/or an adjustment or waiver of the achievement
of performance measures upon the occurrence of certain events, which may include a Change of Control, a Corporate Transaction,
a recapitalization, a change in the accounting practices of the Company, or the Participant’s death or Disability.


 


7.    Stock
Option Awards.


 


(a)         Type
and Exercise Price. The Agreement pursuant to which an Option Award is granted shall specify whether the Option is an Incentive
Stock Option or a Non-Statutory Stock Option. The exercise price at which each Share subject to an Option Award may be purchased
shall be determined by the Committee and set forth in the Agreement, and shall not be less than the Fair Market Value of a Share
on the Grant Date, except in the case of Substitute Awards (to the extent consistent with Code Section 409A and, in the case of
Incentive Stock Options, Code Section 424).


 




     


     


    

 


(b)         Payment
of Exercise Price. The purchase price of the Shares with respect to which an Option Award is exercised shall be payable in
full at the time of exercise. The purchase price may be paid in cash or in such other manner as the Committee may permit, including
by payment under a broker-assisted sale and remittance program, by withholding Shares otherwise issuable to the Participant upon
exercise of the Option or by delivery to the Company of Shares (by actual delivery or attestation) already owned by the Participant
(in each case, such Shares having a Fair Market Value as of the date the Option is exercised equal to the purchase price of the
Shares being purchased).


 


(c)         Exercisability
and Expiration. Each Option Award shall be exercisable in whole or in part on the terms provided in the Agreement, including
without limitation the restrictions provided in Section 6(b). No Option Award shall be exercisable at any time after its scheduled
expiration. When an Option Award is no longer exercisable, it shall be deemed to have expired and terminated.


 


(d)         Incentive
Stock Options.


 


(1)   An
Option Award will constitute an Incentive Stock Option Award only if the Participant receiving the Option Award is an Employee,
and only to the extent that (i) it is so designated in the applicable Agreement and (ii) the aggregate Fair Market Value (determined
as of the Option Award’s Grant Date) of the Shares with respect to which Incentive Stock Options held by the Participant
first become exercisable in any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed
$100,000 or such other amount specified by the Code. To the extent an Option granted to a Participant exceeds this limit, the Option
shall be treated as a Non-Statutory Stock Option. The maximum number of Shares that may be issued upon the exercise of Incentive
Stock Options shall be 470,000, subject to adjustment as provided in Section 12(a).


 


(2)   No
Participant may receive an Incentive Stock Option Award under the Plan if, immediately after the grant of such Award, the Participant
would own (after application of the rules contained in Code Section 424(d)) Shares possessing more than 10% of the total combined
voting power of all classes of stock of the Company or an Affiliate, unless (i) the per share exercise price for such Award is
at least 110% of the Fair Market Value of a Share on the Grant Date and (ii) that Option Award will expire no later than five years
after its Grant Date.


 


(3)   For
purposes of continued Service by a Participant who has been granted an Incentive Stock Option Award, no approved leave of absence
may exceed three months unless reemployment upon expiration of such leave is provided by statute or contract. If reemployment is
not so provided, then on the date six months following the first day of such leave, any Incentive Stock Option held by the Participant
shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Statutory Stock Option.


 


(4)   If
an Incentive Stock Option Award is exercised after the expiration of the exercise periods that apply for purposes of Code Section
422, such Option shall thereafter be treated as a Non-Statutory Stock Option.


 


(5)   The
Agreement covering an Incentive Stock Option Award shall contain such other terms and provisions that the Committee determines
necessary to qualify the Option Award as an Incentive Stock Option Award.


 




     


     


    

 


8.    Stock
Appreciation Rights. 


 


(a)         Nature
of Award. An Award of Stock Appreciation Rights shall be subject to such terms and conditions as are determined by the Committee,
and shall provide a Participant the right to receive upon exercise of the SAR Award all or a portion of the excess of (i) the Fair
Market Value as of the date of exercise of the SAR Award of the number of Shares as to which the SAR Award is being exercised,
over (ii) the aggregate exercise price for such number of Shares. The per Share exercise price for any SAR Award shall be determined
by the Committee and set forth in the applicable Agreement, and shall not be less than the Fair Market Value of a Share on the
Grant Date, except in the case of Substitute Awards (to the extent consistent with Code Section 409A).


 


(b)         Exercise
of SAR. Each SAR Award may be exercisable in whole or in part at the times, on the terms and in the manner provided in the
Agreement, including without limitation the restrictions provided in Section 6(b). No SAR Award shall be exercisable at any time
after its scheduled expiration. When a SAR Award is no longer exercisable, it shall be deemed to have expired and terminated. Upon
exercise of a SAR Award, payment to the Participant shall be made at such time or times as shall be provided in the Agreement in
the form of cash, Shares or a combination of cash and Shares as determined by the Committee. The Agreement may provide for a limitation
upon the amount or percentage of the total appreciation on which payment (whether in cash and/or Shares) may be made in the event
of the exercise of a SAR Award.


 


9.    Restricted
Stock Awards.


 


(a)         Vesting
and Consideration. Shares subject to a Restricted Stock Award shall be subject to vesting and the lapse of applicable restrictions
based on such conditions or factors and occurring over such period of time as the Committee may determine in its discretion, subject
to the limitations provided in Section 6(b). The Committee may provide whether any consideration other than Services must be received
by the Company or any Affiliate as a condition precedent to the grant of a Restricted Stock Award, and may correspondingly provide
for Company reacquisition or repurchase rights if such additional consideration has been required and some or all of a Restricted
Stock Award does not vest.


 


(b)         Shares
Subject to Restricted Stock Awards. Unvested Shares subject to a Restricted Stock Award shall be evidenced by a book-entry
in the name of the Participant with the Company’s transfer agent or by one or more Stock certificates issued in the name
of the Participant. Any such Stock certificate shall be deposited with the Company or its designee, together with an assignment
separate from the certificate, in blank, signed by the Participant, and bear an appropriate legend referring to the restricted
nature of the Restricted Stock evidenced thereby. Any book-entry shall be subject to comparable restrictions and corresponding
stop transfer instructions. Upon the vesting of Shares of Restricted Stock, and the Company’s determination that any necessary
conditions precedent to the release of vested Shares (such as satisfaction of tax withholding obligations and compliance with applicable
legal requirements) have been satisfied, such vested Shares shall be made available to the Participant in such manner as may be
prescribed or permitted by the Committee. Except as otherwise provided in the Plan or an applicable Agreement, a Participant with
a Restricted Stock Award shall have all the rights of a shareholder, including the right to vote the Shares of Restricted Stock.
Any dividends or distributions paid with respect to Shares that are subject to the unvested portion of a Restricted Stock Award
will be subject to the same restrictions as the Shares to which such dividends or distributions relate, except for regular cash
dividends on Shares subject to the unvested portion of a Restricted Stock Award that is subject only to service-based vesting conditions,
which regular cash dividends the Committee may determine are unrestricted or subject to the same restrictions as the underlying
shares.


 




     


     


    

 


10.    Stock
Unit Awards. 


 


(a)         Vesting
and Consideration. A Stock Unit Award shall be subject to vesting and the lapse of applicable restrictions based on such conditions
or factors and occurring over such period of time as the Committee may determine in its discretion, subject to the limitations
provided in Section 6(b). If vesting of a Stock Unit Award is conditioned on the achievement of specified performance goals, the
extent to which they are achieved over the specified performance period shall determine the number of Stock Units that will be
earned and eligible to vest, which may be greater or less than the target number of Stock Units stated in the Agreement. The Committee
may provide whether any consideration other than Services must be received by the Company or any Affiliate as a condition precedent
to the settlement of a Stock Unit Award.


 


(b)         Payment
of Award. Following the vesting of a Stock Unit Award, and the Company’s determination that any necessary conditions
precedent to the settlement of the Award (such as satisfaction of tax withholding obligations and compliance with applicable legal
requirements) have been satisfied, settlement of the Award and payment to the Participant shall be made at such time or times in
the form of cash, Shares (which may themselves be considered Restricted Stock under the Plan) or a combination of cash and Shares
as determined by the Committee.


 


11.   Other
Stock-Based Awards. The Committee may from time to time grant Shares and other Awards that are valued by reference to and/or
payable in whole or in part in Shares under the Plan. The Committee shall determine the terms and conditions of such Awards, which
shall be consistent with the terms and purposes of the Plan. The Committee may direct the Company to issue Shares subject to restrictive
legends and/or stop transfer instructions that are consistent with the terms and conditions of the Award to which the Shares relate.


 


12.   Changes
in Capitalization, Corporate Transactions, Change in Control. 


 


(a)         Adjustments
for Changes in Capitalization. In the event of any equity restructuring (within the meaning of FASB ASC Topic 718) that
causes the per share value of Shares to change, such as a stock dividend, stock split, spinoff, rights offering or
recapitalization through an extraordinary dividend, the Committee shall make such adjustments as it deems equitable and
appropriate to (i) the aggregate number and kind of Shares or other securities issued or reserved for issuance under the
Plan, (ii) the number and kind of Shares or other securities subject to outstanding Awards, (iii) the exercise price of
outstanding Options and SARs, and (iv) any maximum limitations prescribed by the Plan with respect to certain types of Awards
or the grants to individuals of certain types of Awards. In the event of any other change in corporate capitalization,
including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable
adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to
prevent dilution or enlargement of rights of Participants. In either case, any such adjustment shall be conclusive and
binding for all purposes of the Plan. No adjustment shall be made pursuant to this Section 12(a) in connection with the
conversion of any convertible securities of the Company, or in a manner that would cause Incentive Stock Options to violate
Section 422(b) of the Code or cause an Award to be subject to adverse tax consequences under Section 409A of the Code.


 


(b)         Corporate
Transactions. Unless otherwise provided in an applicable Agreement, the following provisions shall apply to outstanding Awards
in the event of a Change in Control that involves a Corporate Transaction.


 




     


     


    

 


(1)   Continuation,
Assumption or Replacement of Awards. In the event of a Corporate Transaction, then the surviving or successor entity (or
its Parent) may continue, assume or replace Awards outstanding as of the date of the Corporate Transaction (with such adjustments
as may be required or permitted by Section 12(a)), and such Awards or replacements therefor shall remain outstanding and be governed
by their respective terms, subject to Section 12(b)(4) below. A surviving or successor entity may elect to continue, assume or
replace only some Awards or portions of Awards. For purposes of this Section 12(b)(1), an Award shall be considered assumed or
replaced if, in connection with the Corporate Transaction and in a manner consistent with Code Sections 409A and 424, either (i)
the contractual obligations represented by the Award are expressly assumed by the surviving or successor entity (or its Parent)
with appropriate adjustments to the number and type of securities subject to the Award and the exercise price thereof that preserves
the intrinsic value of the Award existing at the time of the Corporate Transaction, or (ii) the Participant has received a comparable
equity-based award that preserves the intrinsic value of the Award existing at the time of the Corporate Transaction and contains
terms and conditions that are substantially similar to those of the Award.


 


(2)   Acceleration.
If and to the extent that outstanding Awards under the Plan are not continued, assumed or replaced in connection with a Corporate
Transaction, then (i) all outstanding Options and SARs shall become fully vested and exercisable for such period of time prior
to the effective time of the Corporate Transaction as is deemed fair and equitable by the Committee, and shall terminate at the
effective time of the Corporate Transaction, (ii) all outstanding Full Value Awards shall fully vest immediately prior to the effective
time of the Corporate Transaction, and (iii) to the extent vesting of any Award is subject to satisfaction of specified performance
goals, such Award shall be deemed “fully vested” for purposes of this Section 12(b)(2) if the performance goals are
deemed to have been satisfied at the target level of performance and the vested portion of the Award at that level of performance
is proportionate to the portion of the performance period that has elapsed as of the effective time of the Corporate Transaction.
The Committee shall provide written notice of the period of accelerated exercisability of Options and SARs to all affected Participants.
The exercise of any Option or SAR whose exercisability is accelerated as provided in this Section 12(b)(2) shall be conditioned
upon the consummation of the Corporate Transaction and shall be effective only immediately before such consummation.


 


(3)   Payment
for Awards. If and to the extent that outstanding Awards under the Plan are not continued, assumed or replaced in connection
with a Corporate Transaction, then the Committee may provide that some or all of such outstanding Awards shall be canceled at or
immediately prior to the effective time of the Corporate Transaction in exchange for payments to the holders as provided in this
Section 12(b)(3). The Committee will not be required to treat all Awards similarly for purposes of this Section 12(b)(3). The payment
for any Award surrendered shall be in an amount equal to the difference, if any, between (i) the fair market value (as determined
in good faith by the Committee) of the consideration that would otherwise be received in the Corporate Transaction for the number
of Shares subject to the Award, and (ii) the aggregate exercise price (if any) for the Shares subject to such Award. With respect
to an Award whose vesting is subject to the satisfaction of specified performance goals, the number of Shares subject to such an
Award for purposes of this Section 12(b)(3) shall be the number of shares that have been earned or deemed earned in the manner
specified in Section 12(b)(2). If the amount determined pursuant to clause (i) of this subsection (3) is less than or equal to
the amount determined pursuant to clause (ii) of this subsection (3) with respect to any Award, such Award may be canceled pursuant
to this Section 12(b)(3) without payment of any kind to the affected Participant. Payment of any amount under this Section 12(b)(3)
shall be made in such form, on such terms and subject to such conditions as the Committee determines in its discretion, which may
or may not be the same as the form, terms and conditions applicable to payments to the Company’s shareholders in connection
with the Corporate Transaction, and may, in the Committee’s discretion, include subjecting such payments to vesting conditions
comparable to those of the Award surrendered, subjecting such payments to escrow or holdback terms comparable to those imposed
upon the Company’s shareholders under the Corporate Transaction, or calculating and paying the present value of payments
that would otherwise be subject to escrow or holdback terms.


 




     


     


    

 


(4)   Termination
After a Corporate Transaction. If and to the extent that Awards are continued, assumed or replaced under the circumstances
described in Section 12(b)(1), and if within 18 months after the Corporate Transaction a Participant experiences an involuntary
termination of Service for reasons other than Cause, then (i) outstanding Option and SAR Awards issued to the Participant that
are not yet fully exercisable shall immediately become fully vested and shall remain exercisable for one year following the Participant’s
termination of Service, (ii) any Full Value Awards that are not yet fully vested shall immediately fully vest and become non-forfeitable,
and (iii) to the extent vesting of any Award is subject to satisfaction of specified performance goals, such Award shall be deemed
“fully vested” for purposes of this Section 12(b)(4) if the performance goals are deemed to have been satisfied at
the target level of performance and the vested portion of the Award at that level of performance is proportionate to the portion
of the performance period that has elapsed as of the effective time of the Corporate Transaction.


 


(c)         Other
Change in Control. In the event of a Change in Control that does not involve a Corporate Transaction, the Committee
may, in its discretion, take such action as it deems appropriate with respect to outstanding Awards, which may include:
(i) providing for the cancellation of any Award in exchange for payments in a manner similar to that provided in Section
12(b)(3) or (ii) making such adjustments to the Awards then outstanding as the Committee deems appropriate to reflect such
Change in Control, which may include the acceleration of vesting in full or in part. The Committee will not be required to
treat all Awards similarly in such circumstances, and may include such further provisions and limitations in any Award
Agreement as it may deem equitable and in the best interests of the Company.


 


(d)         Dissolution
or Liquidation. Unless otherwise provided in an applicable Agreement, in the event of a proposed dissolution or liquidation
of the Company, the Committee will notify each Participant as soon as practicable prior to the effective date of such proposed
transaction. An Award will terminate immediately prior to the consummation of such proposed action.


 


13.   Plan
Participation and Service Provider Status. Status as a Service Provider shall not be construed as a commitment that any
Award will be made under the Plan to that Service Provider or to eligible Service Providers generally. Nothing in the Plan or in
any Agreement or related documents shall confer upon any Service Provider or Participant any right to continued Service with the
Company or any Affiliate, nor shall it interfere with or limit in any way any right of the Company or any Affiliate to terminate
the person’s Service at any time with or without Cause or change such person’s compensation, other benefits, job responsibilities
or title.


 


14.   Tax
Withholding. The Company or any Affiliate, as applicable, shall have the right to (i) withhold from any cash payment under
the Plan or any other compensation owed to a Participant an amount sufficient to cover any required withholding taxes related to
the grant, vesting, exercise or settlement of an Award, and (ii) require a Participant or other person receiving Shares under the
Plan to pay a cash amount sufficient to cover any required withholding taxes before actual receipt of those Shares. In lieu of
all or any part of a cash payment from a person receiving Shares under the Plan, the Committee may permit the individual to cover
all or any part of the required tax withholdings (but not to exceed the minimum statutory amount required to be withheld if such
limitation is necessary to avoid an adverse accounting impact) by authorizing the Company to withhold a number of the Shares that
would otherwise be delivered to the Participant, or by delivering to the Company Shares already owned by the Participant, with
the Shares so withheld or delivered having a Fair Market Value on the date the taxes are required to be withheld equal to the amount
of taxes to be withheld.


 


15.   Effective
Date, Duration, Amendment and Termination of the Plan.


 


(a)         Effective
Date. The Plan shall become effective on the date it is approved by the Company’s shareholders, which shall be considered
the date of its adoption for purposes of Treasury Regulation §1.422-2(b)(2)(i). No Awards shall be made under the Plan prior
to its effective date.


 




     


     


    

 


(b)         Duration
of the Plan. The Plan shall remain in effect until all Shares subject to it are distributed, all Awards have expired or terminated,
the Plan is terminated pursuant to Section 15(c), or the tenth anniversary of the effective date of the Plan, whichever occurs
first (the “Termination Date”). Awards made before the Termination Date shall continue to be outstanding in accordance
with their terms and the terms of the Plan unless otherwise provided in the applicable Agreements.


 


(c)         Amendment
and Termination of the Plan. The Board may at any time terminate, suspend or amend the Plan. The Company shall submit any amendment
of the Plan to its shareholders for approval only to the extent required by applicable laws or regulations or the rules of any
securities exchange on which the Shares may then be listed. No termination, suspension, or amendment of the Plan may materially
impair the rights of any Participant under a previously granted Award without the Participant's consent, unless such action is
necessary to comply with applicable law or stock exchange rules.


 


(d)         Amendment
of Awards. Subject to Section 15(e), the Committee may unilaterally amend the terms of any Agreement evidencing an Award previously
granted, except that no such amendment may materially impair the rights of any Participant under the applicable Award without the
Participant's consent, unless such amendment is necessary to comply with applicable law or stock exchange rules or any compensation
recovery policy as provided in Section 17(i).


 


(e)         No
Option or SAR Repricing. Except as provided in Section 12(a), no Option or Stock Appreciation Right Award granted under the
Plan may be (i) amended to decrease the exercise price thereof, (ii) cancelled in conjunction with the grant of any new Option
or Stock Appreciation Right Award with a lower exercise price, (iii) cancelled in exchange for cash, other property or the grant
of any Full Value Award at a time when the per share exercise price of the Option or Stock Appreciation Right Award is greater
than the current Fair Market Value of a Share, or (iv) otherwise subject to any action that would be treated under accounting rules
as a “repricing” of such Option or Stock Appreciation Right Award, unless such action is first approved by the Company’s
shareholders.


 


16.   Performance-Based
Compensation. 


 


(a)         Designation
of Awards. If the Committee determines at the time a Full Value Award is granted to a Participant that such Participant is,
or is likely to be, a “covered employee” for purposes of Code Section 162(m) as of the end of the tax year in which
the Company would ordinarily claim a tax deduction in connection with such Award, then the Committee may provide that this Section
16 will be applicable to such Award, which shall be considered Performance-Based Compensation.


 


(b)         Compliance
with Code Section 162(m). If an Award is subject to this Section 16, then the grant of the Award, the vesting and lapse of
restrictions thereon and/or the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject
to the achievement over the applicable performance period of one or more performance goals based on one or more of the performance
measures specified in Section 16(c). The Committee will select the applicable performance measure(s) and specify the performance
goal(s) based on those performance measures for any performance period, specify in terms of an objective formula or standard the
method for calculating the amount payable to a Participant if the performance goal(s) are satisfied, and certify the degree to
which applicable performance goals have been satisfied and any amount that vests and is payable in connection with an Award subject
to this Section 16, all within the time periods prescribed by and consistent with the other requirements of Code Section 162(m).
In specifying the performance goals applicable to any performance period, the Committee may provide that one or more objectively
determinable adjustments shall be made to the performance measures on which the performance goals are based, which may include
adjustments that would cause such measures to be considered “non-GAAP financial measures” within the meaning of Rule
101 under Regulation G promulgated by the Securities and Exchange Commission, such as excluding the impact of specified unusual
or nonrecurring events such as acquisitions, divestitures, restructuring activities, asset write-downs, litigation judgments or
settlements or changes in tax laws or accounting principles. The Committee may also adjust performance measures for a performance
period to the extent permitted by Code Section 162(m) in connection with an event described in Section 12(a) to prevent the dilution
or enlargement of a Participant’s rights with respect to Performance-Based Compensation. The Committee may adjust downward,
but not upward, any amount determined to be otherwise payable in connection with an Award subject to this Section 16. The Committee
may also provide, in an Agreement or otherwise, that the achievement of specified performance goals in connection with an Award
subject to this Section 16 may be waived upon the death or Disability of the Participant or under any other circumstance with respect
to which the existence of such possible waiver will not cause the Award to fail to qualify as “performance-based compensation”
under Code Section 162(m).


 




     


     


    

 


(c)         Performance
Measures. For purposes of any Full Value Award considered Performance-Based Compensation subject to this Section 16, the performance
measures to be utilized shall be limited to one or a combination of two or more of the following performance measures: (i) net
earnings or net income; (ii) earnings before one or more of interest, taxes, depreciation, amortization and share-based compensation
expense; (iii) earnings per share (basic or diluted); (iv) revenue; (v) gross profit; (vi) operating income; (vii) profitability
as measured by return ratios (including, but not limited to, return on assets, return on equity, return on invested capital and
return on revenue) or by the degree to which any of the foregoing earnings measures exceed a percentage of revenue or gross profit;
(viii) cash flow (including, but not limited to, operating cash flow, free cash flow and cash flow return on capital or on tangible
equity); (ix) book value; (x) market share; (xi) margins (including, but not limited to, one or more of gross, operating and net
earnings margins); (xii) stock price; (xiii) total shareholder return; (xiv) asset quality; (xv) non-performing assets; (xvi) operating
assets; (xvii) balance of cash, cash equivalents and marketable securities; (xviii) cost and expense management; (xix) economic
value added or similar value added measurements; (xx) improvement in or attainment of working capital levels; (xxi) productivity
ratios; (xxii) employee retention or satisfaction measures; (xxiii) safety record; (xxiv) customer satisfaction; (xxv) debt, credit
or other leverage measures or ratios; and (xxvi) implementation or completion of critical projects. Any performance goal based
on one or more of the foregoing performance measures may be expressed in absolute amounts, on a per share basis (basic or diluted),
relative to one or more other performance measures, as a growth rate or change from preceding periods, or as a comparison to the
performance of specified companies, indices or other external measures, and may relate to one or any combination of Company, Affiliate,
division, business unit, operational unit or individual performance.


 


17.   Other
Provisions.


 


(a)         Unfunded
Plan. The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented
by Awards under the Plan. Neither the Company, its Affiliates, the Committee, nor the Board shall be deemed to be a trustee of
any amounts to be paid under the Plan nor shall anything contained in the Plan or any action taken pursuant to its provisions create
or be construed to create a fiduciary relationship between the Company and/or its Affiliates, and a Participant. To the extent
any person has or acquires a right to receive a payment in connection with an Award under the Plan, this right shall be no greater
than the right of an unsecured general creditor of the Company.


 


(b)         Limits
of Liability. Except as may be required by law, neither the Company nor any member of the Board or of the Committee, nor any
other person participating (including participation pursuant to a delegation of authority under Section 3(d) of the Plan) in any
determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any
liability to any party for any action taken, or not taken, in good faith under the Plan.


 




     


     


    

 


(c)         Compliance
with Applicable Legal Requirements and Company Policies. No Shares distributable pursuant to the Plan shall be issued and
delivered unless the issuance of the Shares complies with all applicable legal requirements, including compliance with the
provisions of applicable state and federal securities laws, and the requirements of any securities exchanges on which the
Company’s Shares may, at the time, be listed. During any period in which the offering and issuance of Shares under the
Plan is not registered under federal or state securities laws, Participants shall acknowledge that they are acquiring Shares
under the Plan for investment purposes and not for resale, and that Shares may not be transferred except pursuant to an
effective registration statement under, or an exemption from the registration requirements of, such securities laws. Any
stock certificate or book-entry evidencing Shares issued under the Plan that are subject to securities law restrictions shall
bear or be accompanied by an appropriate restrictive legend or stop transfer instruction. Notwithstanding any other provision
of this Plan, the acquisition, holding or disposition of Shares acquired pursuant to the Plan shall in all events be subject
to compliance with all applicable Company policies as they exist from time to time, including without limitation those
relating to insider trading, pledging or hedging transactions, minimum holding periods and stock ownership guidelines.


 


(d)         Other
Benefit and Compensation Programs. Payments and other benefits received by a Participant under an Award made pursuant to the
Plan shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of the termination, indemnity
or severance pay laws of any country and shall not be included in, nor have any effect on, the determination of benefits under
any other employee benefit plan, contract or similar arrangement provided by the Company or an Affiliate unless expressly so provided
by such other plan, contract or arrangement, or unless the Committee expressly determines that an Award or portion of an Award
should be included to accurately reflect competitive compensation practices or to recognize that an Award has been made in lieu
of a portion of competitive cash compensation.


 


(e)         Governing
Law. To the extent that federal laws do not otherwise control, the Plan and all determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Indiana without regard to its conflicts-of-law principles and shall be
construed accordingly.


 


(f)         Severability.
If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.


 


(g)         Code
Section 409A. It is intended that (i) all Awards of Options, SARs and Restricted Stock under the Plan will not provide for
the deferral of compensation within the meaning of Code Section 409A and thereby be exempt from Code Section 409A, and (ii) all
other Awards under the Plan will either not provide for the deferral of compensation within the meaning of Code Section 409A, or
will comply with the requirements of Code Section 409A, and Awards shall be structured and the Plan administered and interpreted
in accordance with this intent. The Plan and any Agreement may be unilaterally amended by the Company in any manner deemed necessary
or advisable by the Committee or Board in order to maintain such exemption from or compliance with Code Section 409A, and any such
amendment shall conclusively be presumed to be necessary to comply with applicable law. Notwithstanding anything to the contrary
in the Plan or any Agreement, with respect to any Award that constitutes a deferral of compensation subject to Code Section 409A:


 


(1)   If
any amount is payable under such Award upon a termination of Service, a termination of Service will be deemed to have occurred
only at such time as the Participant has experienced a “separation from service” as such term is defined for purposes
of Code Section 409A;


 




     


     


    

 


(2)   If
any amount shall be payable with respect to any such Award as a result of a Participant’s “separation from
service” at such time as the Participant is a “specified employee” within the meaning of Code Section 409A,
then no payment shall be made, except as permitted under Code Section 409A, prior to the first business day after the earlier
of (i) the date that is six months after the Participant’s separation from service or (ii) the Participant’s
death. Unless the Committee has adopted a specified employee identification policy as contemplated by Code Section 409A,
specified employees will be identified in accordance with the default provisions specified under Code Section 409A.


 


None of the Company, the Board, the Committee
nor any other person involved with the administration of this Plan shall (i) in any way be responsible for ensuring the exemption
of any Award from, or compliance by any Award with, the requirements of Code Section 409A, (ii) have any obligation to design or
administer the Plan or Awards granted thereunder in a manner that minimizes a Participant’s tax liabilities, including the
avoidance of any additional tax liabilities under Code Section 409A, and (iii) shall have any liability to any Participant for
any such tax liabilities.


 


(h)         Rule
16b-3. It is intended that the Plan and all Awards granted pursuant to it shall be administered by the Committee so as to permit
the Plan and Awards to comply with Exchange Act Rule 16b-3. If any provision of the Plan or of any Award would otherwise frustrate
or conflict with the intent expressed in this Section 17(h), that provision to the extent possible shall be interpreted and deemed
amended in the manner determined by the Committee so as to avoid the conflict. To the extent of any remaining irreconcilable conflict
with this intent, the provision shall be deemed void as applied to Participants subject to Section 16 of the Exchange Act to the
extent permitted by law and in the manner deemed advisable by the Committee.


 


(i)          Forfeiture
and Compensation Recovery.


 


(1)   The
Committee may specify in an Agreement that the Participant’s rights, payments, and benefits with respect to an Award will
be subject to reduction, cancellation, forfeiture or recovery by the Company upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include termination of Service
for Cause; violation of any material Company or Affiliate policy; breach of noncompetition, non-solicitation or confidentiality
provisions that apply to the Participant; a determination that the payment of the Award was based on an incorrect determination
that financial or other criteria were met; or other conduct by the Participant that is detrimental to the business or reputation
of the Company or its Affiliates.


 


(2)   Awards
and any compensation associated therewith may be made subject to forfeiture, recovery by the Company or other action pursuant to
any compensation recovery policy adopted by the Board or the Committee at any time, including in response to the requirements of
Section 10D of the Exchange Act and any implementing rules and regulations thereunder, or as otherwise required by law. Any Agreement
may be unilaterally amended by the Committee to comply with any such compensation recovery policy.