1997 Stock Plan



 Exhibit 10.1 
  
 WASTE INDUSTRIES USA, INC. 
  
 1997 STOCK PLAN 
  
 Adopted: April 21, 1997 
 Amended: August 4, 2003 
  







 WASTE INDUSTRIES USA, INC. 
  
 1997 STOCK PLAN 
  
 1. Purposes of the Plan. The purposes of this 1997 Stock Plan are to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of the Company and its Subsidiaries, and to promote the success of the Company’s business. Options granted under the Plan may be incentive stock options (as defined
under Section 422 of the Code) or non-statutory stock options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code, as amended, and the regulations promulgated
thereunder. Stock purchase rights may also be granted under the Plan. 
  
 2. Definitions. As used herein, the following definitions shall apply: 
  
 (a) “Administrator” means the Board or any of its Committees appointed pursuant to Section 4 of the Plan. 
  
 (b) “Board” means the Board of Directors of
the Company. 
  
 (c) “Code”
means the Internal Revenue Code of 1986, as amended. 
  
 (d) “Committee” means the Committee appointed by the Board of Directors in accordance with Section 4(a) of the Plan. 
  
 (e) “Common Stock” means the Common Stock of the Company, consisting of both voting Common Stock and non-voting Common
Stock. 
  
 (f) “Company” means
Waste Industries USA, Inc., a North Carolina corporation. 
  
 (g) “Consultant” means any person, including an advisor, who is engaged by the Company or any Parent or Subsidiary of the Company to render services and is compensated for such services, and any
director of the Company whether compensated for such services or not. 
  
 (h) “Continuous Status as an Employee or Consultant” means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Status as an Employee or Consultant shall
not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) transfers between locations of the Company or between the Company, its Subsidiaries or
their respective successors. For purposes 







 
of this Plan, a change in status from an Employee to a consultant or from a consultant to an Employee will not constitute a termination of employment or
consulting relationship; provided that a change from an Employee to a consultant may cause an Incentive Stock Option to become a Nonstatutory Stock Option under the Code. 
  
 (i) “Employee” means any person, including officers and directors, employed by the Company
or any Parent or Subsidiary of the Company, with the status of employment determined based upon such minimum number of hours or periods worked as shall be determined by the Administrator in its discretion, subject to any requirements of the Code.
The payment of a director’s fee by the Company shall not be sufficient to constitute “employment” by the Company. 
  
 (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (k) “Fair Market Value” means, as of any
date, the fair market value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including, without limitation, the National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation (“NASDAQ”) System, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported), as quoted on such system or exchange, or the exchange with the greatest volume of
trading in Common Stock for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii) If the Common Stock is quoted on the NASDAQ System (but
not on the National Market System thereof) or regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock for the last
market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
  
 (iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be
determined in good faith by the Administrator. 
  
 (l) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, or any successor provision. 
  
 (m) “Nonstatutory Stock Option” means an
Option not intended to qualify as an Incentive Stock Option. 
  
 (n) “Option” means a stock option granted pursuant to the Plan. 
  
  

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 (o) “Optioned Stock” means the Common Stock subject to an Option or a
Stock Purchase Right. 
  
 (p)
“Optionee” means an Employee or Consultant who receives an Option or a Stock Purchase Right. 
  
 (q) “Parent” means a “parent corporation”, whether now or hereafter existing, as defined in Section 424(e) of
the Code, or any successor provision. 
  
 (r)
“Plan” means this 1997 Stock Plan. 
  
 (s) “Reporting Person” means an officer, director, or greater than ten percent shareholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under
the Exchange Act, or any successor provision. 
  
 (t) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 10 below. 
  
 (u) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as the same may be amended from time to time, or
any successor provision. 
  
 (v)
“Share” means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan. 
  
 (w) “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common
Stock are quoted at any given time. 
  
 (x)
“Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 10 below. 
  
 (y) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section
424(f) of the Code, or any successor provision. 
  
 3. Stock
Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of shares that may be optioned and sold under the Plan is 1,800,000 shares of Common Stock. The shares may be authorized, but unissued, or
reacquired Common Stock. If an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available
for future grant under the Plan. If the Company shall repurchase unvested shares of Restricted Stock, such repurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the
Plan. In addition, any shares of Common Stock which are retained by the Company upon exercise of an Option or Stock Purchase Right in order to satisfy the exercise or purchase price 
  

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 for such Option or Stock Purchase Right or any withholding taxes due with respect to such exercise shall be treated as
not issued and shall continue to be available under the Plan. 
  
 4. Administration of the Plan. 
  
 (a) Procedure. The Plan shall be administered by (A) the Board or (B) a committee designated by the Board, which committee shall be constituted in such a manner as to satisfy the legal requirements relating to the administration of
incentive stock option plans, if any, of applicable state and federal corporate and securities laws, of the Code and of any applicable Stock Exchange (collectively, the “Applicable Laws”). Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to the
provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any Stock Exchange, the
Administrator shall have the authority, in its discretion: 
  
 (i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(k) of the Plan; 
  
 (ii) to select the Consultants and Employees to whom Options and Stock Purchase Rights may from time to time be granted hereunder;

  
 (iii) to determine whether and to what extent
Options and Stock Purchase Rights or any combination thereof are granted hereunder; 
  
 (iv) to determine the number and class of shares of Common Stock to be covered by each such award granted hereunder; 
  
 (v) to approve forms of agreement for use under the Plan;

  
 (vi) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any award granted hereunder; 
  
 (vii) to determine whether and under what circumstances an Option may be settled in cash under Section 9(f) instead of Common Stock; 
  
 (viii) to accelerate the exercisability of any Option or Stock Purchase Right; 
  

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 (ix) to determine the terms and restrictions applicable to Stock Purchase Rights and the
Restricted Stock purchased by exercising such Stock Purchase Rights; 
  
 (x) in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options or Stock Purchase Rights to participants who are foreign nationals or employed outside of the United States
in order to recognize differences in local law, tax policies or customs; 
  
 (xi) to accelerate the vesting of any Option or Stock Purchase Right or waive forfeiture restrictions with respect thereto; and 
  

(xii) to make all other determinations, not inconsistent with the terms of the Plan, deemed necessary or advisable for administering
the Plan. 
  
 (c) Effect of
Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all holders of Options or Stock Purchase Rights. 
  
 5. Eligibility. 
  
 (a) Nonstatutory Stock Options and Stock Purchase Rights may be granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has been granted an Option or Stock Purchase Right may, if he or she is otherwise eligible, be granted additional Options or Stock Purchase Rights. 
  
 (b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designations, to the extent that the aggregate Fair Market Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options. 
  
 (c) For purposes of Section 5(b), Incentive Stock Options
shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such Option. 
  
 (d) The Plan shall not confer upon any Optionee any right
with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere in any way with such Optionee’s right or the Company’s right to terminate his or her employment or consulting relationship at
any time, with or without cause. 
  
 6. Term of Plan. The
Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company as described in Section 19 of the Plan. It shall continue in effect for a term of ten (10) years from
the date of its adoption, unless sooner terminated under Section 15 of the Plan. 
  
  

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 7. Term of Option. The term of each Option shall be the term stated in the Option Agreement;
provided, however, that the term shall be no more than ten (10) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement. However, in the case of an Incentive Stock Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement. 
  
 8. Option Exercise Price and Consideration. 
  
 (a) The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following in the case of an Incentive Stock Option that is: 
  
 (i) granted to an Employee who, at the time of the grant of such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 
  
 (ii) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 
  
 (b) The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares that (x) in the case of Shares acquired
upon exercise of an Option, have been owned by the Optionee for more than six months on the date of surrender or such other period as may be required to avoid a charge to the Company’s earnings, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) authorization for the Company to retain from the total number of Shares as to which the Option is exercised that number of Shares having a
Fair Market Value on the date of exercise equal to the exercise price for the total number of Shares as to which the Option is exercised, (6) delivery of a properly executed exercise notice together with such other documentation as the Administrator
and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price and any applicable income or employment taxes, (7) delivery of an
irrevocable subscription agreement for the Shares that irrevocably obligates the option holder to take and pay for the Shares not more than twelve months after the date of delivery of the subscription agreement, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment for the issuance of Shares to the extent permitted under Applicable Laws. In making its determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to benefit the Company. 
  
  

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 9. Exercise of Option. 
  
 (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the Administrator, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the Plan. An Option may not be
exercised for a fraction of a Share. An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the
Company has received full payment for the Shares with respect to which the Option is exercised. Full payment may, as authorized by the Board, consist of any consideration and method of payment allowable under Section 8(b) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 12 of the Plan. 
  
 Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b) Termination of Employment or Consulting Relationship. Subject to Section 9(c), in the event of termination of an
Optionee’s consulting relationship or Continuous Status as an Employee with the Company, such Optionee may, but only within three (3) months (or such other period of time not less than the remaining option term, as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option being made at the time of grant of the Option and not exceeding three (3) months) after the date of such termination (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent that the Optionee was entitled to exercise it at the date of such termination. To the extent that Optionee was not entitled to exercise the
Option at the date of such termination, or if Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate. No termination shall be deemed to occur and this Section 9(b) shall not
apply if (i) the Optionee is a Consultant who becomes an Employee within the time specified herein; or (ii) the Optionee is an Employee who becomes a Consultant within the time specified herein. 
  
 (c) Disability of Optionee. Notwithstanding the
provisions of Section 9(b) above, in the event of termination of an Optionee’s consulting relationship or Continuous Status as an Employee as a result of his or her total and permanent disability (as defined in Section 22(e)(3) of the Code, or
any successor provision), the Optionee may, but only within six (6) months (or such other period of time not exceeding twelve (12) months as is determined by the Board, with such determination in the case of an Incentive Stock Option being made at
the 

  

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time of the grant of the option) from the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in
the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination. To the extent that Optionee was not entitled to exercise the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate. 
  
 (d) Death of Optionee. In the event of the death of an Optionee (i) during the period of Continuous Status as an Employee or any
consulting relationship or (ii) within thirty (30) days following the termination of the Optionee’s Continuous Status as an Employee or consulting relationship, the Option may be exercised, at any time within six (6) months (or such other
period of time not exceeding twelve (12) months as is determined by the Board, with such determination in the case of an Incentive Stock Option being made at the time of the grant of the option) following the date of death (but in no event later
than the expiration date of the term of such Option as set forth in the Option Agreement), by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent the Optionee was
entitled to exercise the Option at the date of death or, if earlier, the date of termination of the consulting relationship or Continuous Status as an Employee. To the extent that Optionee was not entitled to exercise the Option at the date of death
or termination, as the case may be, or if Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate. 
  
 (e) Rule 16b-3. Options granted to Reporting Persons shall comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption for Plan transactions. 
  
 (f) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 
  
 10. Stock Purchase Rights. 
  
 (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer, which shall in no event exceed thirty (30) days from the date upon which the
Administrator made the determination to grant the Stock Purchase Right. The offer shall be accepted by execution of a Restricted Stock purchase agreement in the form determined by the Administrator. 
  
 (b) Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock purchase agreement shall grant the Company a repurchase option exercisable 

  

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upon the voluntary or involuntary termination of the purchaser’s employment or consulting relationship with the Company for any reason (including death
or disability). The purchase price for Shares repurchased pursuant to the Restricted Stock purchase agreement shall be the original purchase price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the
Company. 
  
 (c) Other Provisions. The
Restricted Stock purchase agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock purchase
agreements need not be the same with respect to each purchaser. 
  
 (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a shareholder, and shall be a shareholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan. 
  
 11. Stock Withholding to Satisfy Withholding Tax
Obligations. At the discretion of the Administrator, Optionees may satisfy withholding obligations as provided in this paragraph. When an Optionee incurs tax liability in connection with an Option or Stock Purchase Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is obligated to pay the Company an amount required to be withheld under applicable tax laws, the Optionee may satisfy the withholding tax obligation by one or some combination of
the following methods: (a) by cash payment, or (b) out of Optionee’s current compensation, (c) if permitted by the Administrator, in its discretion, by surrendering to the Company Shares that (i) in the case of Shares previously acquired from
the Company, have been owned by the Optionee for more than six months on the date of surrender, and (ii) have a fair market value on the date of surrender equal to or greater than Optionee’s marginal tax rate times the ordinary income
recognized, or (d) by electing to have the Company withhold from the Shares to be issued upon exercise of the Option, or the Shares to be issued in connection with the Stock Purchase Right, if any, that number of Shares having a fair market value
equal to the amount required to be withheld. For this purpose, the fair market value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined (the “Tax Date”).

  
 Any surrender by a Reporting Person of previously owned Shares
to satisfy tax withholding obligations arising upon exercise of this Option must comply with the applicable provisions of Rule 16b-3 and shall be subject to such additional conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions. 
  
 All elections by an Optionee to have Shares withheld to satisfy tax withholding obligations shall be made in writing in a form acceptable to the Administrator and shall be subject to the following restrictions:

  

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 (a) the election must be made on or prior to the applicable Tax Date; 
  
 (b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Stock Purchase Right as to which the election is made; 
  
 (c) all elections shall be subject to the consent or disapproval of the Administrator; and 
  
 (d) if the Optionee is a Reporting Person, the election must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions. 
  
 In the event the election to
have Shares withheld is made by an Optionee and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Optionee shall receive the full number of Shares with respect to which the Option
or Stock Purchase Right is exercised but such Optionee shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date. 
  
 12. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions. 
  
 (a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option or Stock Purchase Right, and the number of shares of Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well as the price per share of Common Stock covered by each such
outstanding Option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Option or Stock Purchase Right. 
  
 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Board shall notify the
Optionee at least fifteen (15) days prior to 

  

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such proposed action. To the extent it has not been previously exercised, the Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action. 
  
 (c)
Merger or Sale of Assets. In the event of a proposed sale of all or substantially all of the Company’s assets or a merger of the Company with or into another corporation where the successor corporation issues its securities to the
Company’s shareholders (excluding any transaction with a majority-owned or wholly-owned subsidiary), each outstanding Option or Stock Purchase Right shall be assumed or an equivalent option or right shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation (and such assumed or substituted Option or Stock Purchase Right shall provide that such Option or Stock Purchase Right shall vest in its entirety in the event that the Consultant or
Employee holding such Option or Stock Purchase Right is terminated without cause within the twelve (12) month period following the consummation of the merger or sale of assets). If the successor corporation does not agree to so assume an Option or
Stock Purchase Right or to so substitute an equivalent option or right, such Option or Stock Purchase Right shall vest in its entirety and become exercisable prior to the consummation of the merger or sale of assets. If an Option becomes fully
exercisable in lieu of assumption or substitution in the event of a merger or sale of assets as provided in the preceding two sentences, the Board shall notify the Optionee within a reasonable time prior to the consummation of such transaction, and
the Option shall be fully exercisable for a period of ten (10) days from the date of such notice, and will terminate upon the expiration of such period. 
  
 (d) Certain Distributions. In the event of any distribution to the Company’s shareholders of securities of any other entity or
other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such distribution. 
  
 13. Non-Transferability of Options, Stock Purchase Rights and Restricted Stock. To the extent required by any Applicable Law, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised or purchased during the lifetime of the Optionee only by the Optionee. 
  
 14. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Board. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant. 
  
 15. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or discontinue the
Plan, but no amendment, alteration, suspension or discontinuation 

  

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shall be made that would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to the extent necessary
and desirable to comply with Rule 16b-3 or with Section 422 of the Code, or any successor provision (or any other applicable law or regulation, including the requirements of any Stock Exchange), the Company shall obtain shareholder approval of any
Plan amendment in such a manner and to such a degree as required. 
  
 (b) Effect of Amendment or Termination. No amendment or termination of the Plan shall adversely affect Options or Stock Purchase Rights already granted, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the Company. 
  
 16. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock Exchange. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by law. 
  
 17. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the Plan. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 
  
 18. Agreements. Options and Stock Purchase Rights shall be evidenced
by written agreements in such form as the Administrator shall approve from time to time. 
  
 19. Shareholder Approval. Continuance of the Plan shall be subject to approval by the shareholders of the Company within twelve (12) months before or after the date the Plan is approved by the Board. Such
shareholder approval shall be obtained in the degree and manner required under applicable state and federal law and the rules of any Stock Exchange. All Options and Stock Purchase Rights issued under the Plan shall become void in the event such
approval is not obtained. 
  
 20. Lock-up Agreement. Each
recipient of securities hereunder agrees, in connection with the first registration with the United States Securities and Exchange Commission under the Securities Act of 1933, as amended, of the public sale of the Company’s Common Stock, upon
request of the Company or any underwriters managing such offering, not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any securities of the 
  

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Company (other than those included in the registration, if any) without the prior written consent of the Company or such underwriters, as the case may be,
for such period of time not to exceed one year from the effective date of such registration as the Company or the underwriters, as the case may be, shall specify. Each such recipient agrees that the Company may instruct its transfer agent to place
stop-transfer notations in its records to enforce this Section 20. 
  

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