Exhibit 10.1


 


 


FORM HOLDINGS CORP.

 

2012 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN

(as amended on November 28, 2016)


 


1. DEFINITIONS.


 


Unless otherwise specified
or unless the context otherwise requires, the following terms, as used in this FORM Holdings Corp. 2012 Employee, Director and
Consultant Equity Incentive Plan, have the following meanings:


 


Administrator
means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator
means the Committee.


 


Affiliate means
a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.


 


Agreement means
an agreement between the Company and a Participant delivered pursuant to the Plan and pertaining to a Stock Right, in such form
as the Administrator shall approve.


 


Board of Directors
means the Board of Directors of the Company.


 


Cause means,
with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance
or non-feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by a Participant of any provision
of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company
or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however,
that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition
of Cause for termination and which is in effect at the time of such termination, shall supersede this definition with respect to
that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and
the Company.


 


Change of Control
means the occurrence of any of the following events:


 


	 	(i)	Ownership.  Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its Affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board of Directors does not approve; or 


 


	 	(ii)	Merger/Sale of Assets.  (A) A merger or consolidation of the Company whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction requiring stockholder approval; or 


 


	 	(iii)	Change in Board Composition.  A change in the composition of the Board of Directors, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the effective date of the Plan, which is the date of its approval by the shareholders of the Company, or (B) are elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company).
	 	 	 
	 	(iv)	“Change of Control” shall be interpreted, if applicable, in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences under Section 409A. 


 






     


     


    

 


Code means the
United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance thereto.


 


Committee means
the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions
of the Plan.1


 


Common Stock
means shares of the Company’s common stock, $0.01 par value per share.


 


Company means
FORM Holdings Corp., a Delaware corporation.


 


Consultant means
any natural person who is an advisor or consultant that provides bona fide services to the Company or its Affiliates, provided
that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly
or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.


 


Disability or
Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.


 


Employee means
any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or
director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights
under the Plan.


 


Exchange Act
means the Securities Exchange Act of 1934, as amended.


 


Fair Market Value
of a Share of Common Stock means:


 


(1) If the Common Stock
is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for
the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable
reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading
day prior to such date;


 


(2) If the Common Stock
is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly
reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are
regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter
market for the trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading
day, the last market trading day prior to such date; and


 


(3) If the Common Stock
is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator,
in good faith, shall determine. This value will be based on an external valuation in compliance with the applicable laws of the
taxing jurisdiction.


 


 





 






1 The Committee
should be comprised of “disinterested persons” as defined under Rule 16b-3 of the Exchange Act and “outside
directors” as defined in Section 162(m) of the Code


 






     


     


    

 


ISO means an
option intended to qualify as an incentive stock option under Section 422 of the Code.


 


Non-Qualified Option
means an option which is not intended to qualify as an ISO.


 


Option means
an ISO or Non-Qualified Option granted under the Plan.


 


Participant means
an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan.
As used herein, “Participant” shall include “Participant’s Survivors” where the context requires.


 


Plan means this
FORM Holdings Corp. 2012 Employee, Director and Consultant Equity Incentive Plan.


 


Securities Act
means the Securities Act of 1933, as amended.


 


Shares means
shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into
which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued
under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.


 


Stock-Based Award
means a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a Stock Grant.


 


Stock Grant means
a grant by the Company of Shares under the Plan.


 


Stock Right means
a right to Shares or the value of Shares of the Company granted pursuant to the Plan — an ISO, a Non-Qualified
Option, a Stock Grant or a Stock-Based Award.


 


Survivor means
a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to
a Stock Right by will or by the laws of descent and distribution.


 


2. PURPOSES OF THE
PLAN.


 


The Plan is intended
to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order
to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional
incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified
Options, Stock Grants and Stock-Based Awards.


 


3. SHARES SUBJECT
TO THE PLAN.


 


 (a) The number of Shares which may be issued from time to time pursuant to this Plan shall be 7,573,568.




 


(b) If
an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company shall reacquire
(at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock
Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired
Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding
the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company’s or an Affiliate’s
tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for
purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right
or portion thereof, and not the net number of Shares actually issued. However, in the case of ISOs, the foregoing provisions shall
be subject to any limitations under the Code.


 






     


     


    

 


4. ADMINISTRATION
OF THE PLAN.


 


The Administrator of
the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee,
in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized
to:


 


(a) Interpret the provisions
of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable for the administration
of the Plan;


 


(b) Determine which
Employees, directors and Consultants shall be granted Stock Rights;


 


(c) Determine the number
of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that in no event shall Stock Rights with
respect to more than 1.0 mm Shares be granted to any Participant in any fiscal year;


 


(d) Specify the terms
and conditions upon which a Stock Right or Stock Rights may be granted;


 


(e) Amend any term or
condition of any outstanding Stock Right, including, without limitation, to accelerate the vesting schedule or extend the expiration
date up to eighteen months from termination date, provided that (i) such term or condition as amended is permitted by the Plan;
(ii) any such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant’s
consent or in the event of death of the Participant the Participant’s Survivors; and (iii) any such amendment shall be made
only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including,
but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below
with respect to ISOs and pursuant to Section 409A of the Code; and


 


(f) Adopt any appendices
applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage
of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate the administration
of the Plan, which appendices may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant
to a Stock Right;


provided, however, that all such interpretations,
rules, determinations, terms and conditions shall be made and prescribed in the context of not causing any adverse tax consequences
under Section 409A of the Code and preserving the tax status under Section 422 of the Code of those Options which are designated
as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of
any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is
the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that
would otherwise be the responsibility of the Committee.


 


To the extent permitted
under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers
to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected
by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing,
only the Board of Directors or the Committee shall be authorized to grant a Stock Right to any director of the Company or to any
“officer” of the Company as defined by Rule 16a-1 under the Exchange Act.


 


5. ELIGIBILITY FOR
PARTICIPATION.


 


The Administrator will,
in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee, director
or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator
may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate;
provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become
a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to
Employees who are deemed to be residents of the United States for tax purposes. Non-Qualified Options, Stock Grants and Stock-Based
Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate. The granting of any Stock Right to
any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock
Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.


 






     


     


    

 


6. TERMS AND CONDITIONS
OF OPTIONS.


 


Each Option shall be
set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent
with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without
limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements
shall be subject to at least the following terms and conditions:


 


(a) Non-Qualified
Options:  Each Option intended to be a Non-Qualified Option shall be subject to the terms and conditions which the
Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards
for any such Non-Qualified Option:


 


		(i)	Exercise
Price:  Each Option Agreement shall state the exercise price (per share) of the Shares covered by each Option, which
exercise price shall be determined by the Administrator and shall be at least equal to the Fair Market Value per share of Common
Stock on the date of grant of the Option provided, that if the exercise price is less than Fair Market Value, the terms of such
Option must comply with the requirements of Section 409A of the Code unless granted to a Consultant or to a non U.S. person as
to whom Section 409A of the Code does not apply.




 


	 	(ii)	Number
    of Shares:  Each Option Agreement shall state the number of Shares to which it pertains. 


 


	 	(iii)	Option
    Periods:  Each Option Agreement shall state the date or dates on which it first is exercisable and the date
    after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments
    over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events.
    


 


	 	(iv)	Option
    Conditions:  Exercise of any Option may be conditioned upon the Participant’s execution of a Share purchase
    agreement in form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders,
    including requirements that: 


 


	 	A.	The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and 


 


	 	B.	The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions. 


 


	 	(v)	Term
    of Option:  Each Option shall terminate not more than ten years from the date of the grant or at such earlier
    time as the Option Agreement may provide. 


 


(b) ISOs:  Each
Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident of the United States for tax purposes,
and shall be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines
are appropriate but not in conflict with Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:


 


	 	(i)	Minimum
    standards:  The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph
    6(a) above, except clause (i) and (v) thereunder. 


 


	 	(ii)	Exercise
    Price:  Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable
    attribution rules in Section 424(d) of the Code: 


 


	 	A.	10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Common Stock on the date of grant of the Option; or 


 






     


     


    

 


	 	B.	More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value per share of the Common Stock on the date of grant of the Option. 


 


	 	(iii)	Term of Option:  For Participants who own: 


 


	 	A.	10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or 


 


	 	B.	More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five years from the date of the grant or at such earlier time as the Option Agreement may provide. 


 


		(iv)	Limitation
on Yearly Exercise:  The Option Agreements shall restrict the amount of ISOs which may become exercisable in any
calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined
on the date each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant
in any calendar year does not exceed $100,000.




 


7. TERMS AND CONDITIONS
OF STOCK GRANTS.


 


Each Stock Grant to
a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain
terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the
following minimum standards:


 


(a) Each Agreement shall
state the purchase price per share, if any, of the Shares covered by each Stock Grant, which purchase price shall be determined
by the Administrator but shall not be less than the minimum consideration required by the Delaware General Corporation Law, if
any, on the date of the grant of the Stock Grant;


 


(b) Each Agreement shall
state the number of Shares to which the Stock Grant pertains; and


 


(c) Each Agreement shall
include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time
and events upon which such rights shall accrue and the purchase price therefor, if any.


 


8. TERMS AND CONDITIONS
OF OTHER STOCK-BASED AWARDS.


 


The Administrator shall
have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator
may determine, including, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and
the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall
be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the
Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator
determines to be appropriate and in the best interest of the Company.


 


The Company intends
that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the
requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated
in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings)
shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to affect the intent
as described in this Paragraph 8.


 






     


     


    

 


9. EXERCISE OF OPTIONS
AND ISSUE OF SHARES.


 


An Option (or any part
or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the
Administrator, which may include electronic notice), together with provision for payment of the aggregate exercise price in accordance
with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such notice shall be signed by the person exercising the Option (which signature may be provided
electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price
for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b)
at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to
avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate cash exercise
price for the number of Shares as to which the Option is being exercised, or (c) at the discretion of the Administrator, by having
the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market Value
equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option is being exercised,
or (d) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage
firm, and approved by the Administrator, or (e) at the discretion of the Administrator, by any combination of (a), (b), (c), and
(d) above or (f) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may
determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted
by Section 422 of the Code.


 


The Company shall then
reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s
Survivors, as the case may be). In determining what constitutes “reasonably promptly,” it is expressly understood that
the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect
to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.


 


10. PAYMENT IN CONNECTION
WITH THE ISSUANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.


 


Any Stock Grant or Stock-Based
Award requiring payment of a purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being granted shall
be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares
of Common Stock held for at least six months (if required to avoid negative accounting treatment) and2 having a Fair
Market Value equal as of the date of payment to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion
of the Administrator, by any combination of (a) and (b) above; or (d) at the discretion of the Administrator, by payment of such
other lawful consideration as the Administrator may determine.


 


The Company shall when
required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award
was made to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow provision set
forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly understood
that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect
to the Shares prior to their issuance.


 


11. RIGHTS AS A SHAREHOLDER.


 


No Participant to whom
a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right except
after due exercise of an Option or issuance of Shares as set forth in any Agreement, tender of the aggregate exercise or purchase
price, if any, for the Shares being purchased and registration of the Shares in the Company’s share register in the name
of the Participant.


 


 





 



2 If an
employee uses previously owned shares to pay for a stock purchase and those shares have not been held by the employee for at least
six months, the company will incur a variable accounting charge


 


 






     


     


    

 


12. ASSIGNABILITY
AND TRANSFERABILITY OF STOCK RIGHTS.


 


By its terms, a Stock
Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement provided that
no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance
with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with
the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited
by this Paragraph. Except as provided above during the Participant’s lifetime a Stock Right shall only be exercisable by
or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted
transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary
to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.


 


13. EFFECT ON OPTIONS
OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.


 


Except as otherwise
provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee, director
or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:


 


(a) A Participant who
ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason other than termination for Cause,
Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively), may exercise any Option
granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within
such term as the Administrator has designated in a Participant’s Option Agreement and in no event later than eighteen months
after the Participant’s termination of employment. In addition, the Administrator may extend the period in which the Participant
is eligible to exercise any vested Options but in no event may an Option be exercised later than eighteen months after the Participant’s
termination of employment,


 


(b) Except as provided
in Subparagraph (c) below, or Paragraph 15 or 16, in no event may an Option intended to be an ISO, be exercised later than three
months after the Participant’s termination of employment.


 


(c) The provisions of
this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who subsequently becomes Disabled or
dies after the termination of employment, director status or consultancy; provided, however, in the case of a Participant’s
Disability or death within three months after the termination of employment, director status or consultancy, the Participant or
the Participant’s Survivors may exercise the Option within eighteen months after the date of the Participant’s termination
of service or twelve months in the case of an ISO, but in no event after the date of expiration of the term of the Option.


 


(d) Notwithstanding
anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director status
or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either prior or subsequent
to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then such Participant
shall forthwith cease to have any right to exercise any Option.


 


(e) A Participant to
whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any
disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not,
during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s
employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly
provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater than ninety days, unless
pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option
on the 181st day following such leave of absence.


 






     


     


    

 


(f) Except as required
by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by any change
of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an Employee,
director or Consultant of the Company or any Affiliate.


 


14. EFFECT ON OPTIONS
OF TERMINATION OF SERVICE FOR CAUSE.


 


Except as otherwise
provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an
Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that all his or her
outstanding Options have been exercised:


 


(a) All outstanding
and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause will immediately
be forfeited.


 


(b) Cause is not limited
to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s
finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of
service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination the Participant
engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited.


 


15. EFFECT ON OPTIONS
OF TERMINATION OF SERVICE FOR DISABILITY.


 


Except as otherwise
provided in a Participant’s Option Agreement:


 


(a) A Participant who
ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability may exercise any Option
granted to such Participant:


 


(i) To the
extent that the Option has become exercisable but has not been exercised on the date of the Participant’s termination of
service due to Disability; and


 


(ii) In the
event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s
termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date had
the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period
prior to the date of the Participant’s termination of service due to Disability.


 


(b) A Disabled Participant
may exercise the Option only within the period ending one year after the date of the Participant’s termination of service
due to Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares
on a later date if the Participant had not been terminated due to Disability and had continued to be an Employee, director or Consultant
or, if earlier, within the originally prescribed term of the Option.


 


(c) The Administrator
shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be
used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator,
the cost of which examination shall be paid for by the Company.


 






     


     


    

 


16. EFFECT ON OPTIONS
OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.


 


Except as otherwise
provided in a Participant’s Option Agreement:


 


(a) In the event of
the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate, such
Option may be exercised by the Participant’s Survivors:


 


	 	(i)	To the extent that the Option has become exercisable but has not been exercised on the date of death; and 


 


	 	(ii) 	In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death. 


 


(b) If the Participant’s
Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date
of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of
the Shares on a later date if he or she had not died and had continued to be an Employee, director or Consultant or, if earlier,
within the originally prescribed term of the Option.


 


17. EFFECT OF TERMINATION
OF SERVICE ON STOCK GRANTS AND STOCK-BASED AWARDS.


 


In the event of a termination
of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant
has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required, such grant shall terminate.


 


For purposes of this
Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant has been issued under the Plan who is absent from work
with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph
1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue
of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company
or with an Affiliate, except as the Administrator may otherwise expressly provide.


 


In addition, for purposes
of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among the Company and any Affiliates
shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be
an Employee, director or Consultant of the Company or any Affiliate.


 


18. EFFECT ON STOCK
GRANTS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.


 


Except as otherwise
provided in a Participant’s Stock Grant Agreement, in the event of a termination of service (whether as an Employee, director
or Consultant), other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 19,
20, and 21, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company
shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant as to which the Company’s forfeiture
or repurchase rights have not lapsed.


 


19. EFFECT ON STOCK
GRANTS OF TERMINATION OF SERVICE FOR CAUSE.


 


Except as otherwise
provided in a Participant’s Stock Grant Agreement, the following rules apply if the Participant’s service (whether
as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:


 


(a) All Shares subject
to any Stock Grant whether or not then subject to forfeiture or repurchase shall be immediately subject to repurchase by the Company
at par value.


 






     


     


    

 


(b) Cause is not limited
to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s
finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of
service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would
constitute Cause, then all Shares subject to any Stock Grant that remained subject to forfeiture provisions or as to which the
Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.


 


20. EFFECT ON STOCK
GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.


 


Except as otherwise
provided in a Participant’s Stock Grant Agreement, the following rules apply if a Participant ceases to be an Employee, director
or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s
rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event
such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a
pro rata portion of the Shares subject to such Stock Grant through the date of Disability as would have lapsed had the Participant
not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.


 


The Administrator shall
make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination
is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost
of which examination shall be paid for by the Company.


 


21. EFFECT ON STOCK
GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.


 


Except as otherwise
provided in a Participant’s Stock Grant Agreement, the following rules apply in the event of the death of a Participant while
the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions
or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however,
that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse
to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as would have lapsed had
the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s date of
death.


 


22. PURCHASE FOR
INVESTMENT.


Unless the offering
and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under no obligation
to issue Shares under the Plan unless and until the following conditions have been fulfilled:


 


(a) The person who receives
a Stock Right shall warrant to the Company, prior to the receipt of Shares, that such person is acquiring such Shares for his or
her own account, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in
which event the person acquiring such Shares shall be bound by the provisions of the following legend (or a legend in substantially
similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to such exercise or such grant:


 


“The shares represented
by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act
of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration
under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”


 


(b) At the discretion
of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued in compliance with
the Securities Act without registration thereunder.


 






     


     


    

 


23. DISSOLUTION OR
LIQUIDATION OF THE COMPANY.


 


Upon the dissolution
or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all
Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate
and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise
terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution
or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance
as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding
Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the
applicable Agreement.


 


24. ADJUSTMENTS.


 


Upon the occurrence
of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall
be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement:


 


(a) Stock Dividends
and Stock Splits.  If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number
of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii)
additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect
to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be made including, in the exercise or purchase price
per share, to reflect such events. The number of Shares subject to the limitations in Paragraph 3(a) and 4(c) shall also be proportionately
adjusted upon the occurrence of such events.


 


(b) Corporate Transactions.  If
the Company is to be consolidated with or acquired by another entity in a merger, consolidation, or sale of all or substantially
all of the Company’s assets other than a transaction to merely change the state of incorporation (a “Corporate Transaction”),
the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor
Board”), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A) to the extent
then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for
purposes of this Subparagraph), within a specified number of days of the date of such notice, at the end of which period such vested
Options which have not been exercised shall terminate; or (iii) terminate such Options in exchange for payment of an amount equal
to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock
into which such Option would have been exercisable (either (A) to the extent then exercisable or, (B) at the discretion of the
Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph) less the aggregate
exercise price thereof. For purposes of determining the payments to be made pursuant to Subclause (iii) above, in the case of a
Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall
be valued at the fair value thereof as determined in good faith by the Board of Directors.


 


Notwithstanding the
foregoing, in the event the Corporate Transaction also constitutes a Change of Control, then all Options outstanding on the date
of the Corporate Transaction shall have vesting acceleration until the next vesting date, unless otherwise agreed upon with the
Administrator.


 


With respect to outstanding
Stock Grants, the Administrator or the Successor Board, shall make appropriate provision for the continuation of such Stock Grants
on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either
the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or
securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator
may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated in exchange
for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the
number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer subject to any forfeiture
or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived
upon such Corporate Transaction).


 






     


     


    

 


In taking any of the
actions permitted under this Paragraph 24(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all
Stock Rights held by a Participant, or all Stock Rights of the same type, identically.


 


(c) Recapitalization
or Reorganization.  In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction
pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common
Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be
entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement securities which would
have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.


 


(d) Adjustments to
Stock-Based Awards.  Upon the happening of any of the events described in Subparagraphs (a), (b) or (c) above, any
outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator
or the Successor Board shall determine the specific adjustments to be made under this Paragraph 24, including, but not limited
to the effect of any, Corporate Transaction and Change of Control and, subject to Paragraph 4, its determination shall be conclusive.


 


(e) Modification
of Options.  Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a), (b) or (c) above with
respect to Options shall be made only after the Administrator determines whether such adjustments would (i) constitute a “modification”
of any ISOs (as that term is defined in Section 424(h) of the Code) or (ii) cause any adverse tax consequences for the holders
of Options, including, but not limited to, pursuant to Section 409A of the Code. If the Administrator determines that such adjustments
made with respect to Options would constitute a modification or other adverse tax consequence, it may refrain from making such
adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates
that the holder has full knowledge of the consequences of such “modification” on his or her income tax treatment with
respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion
of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).


 


25. ISSUANCES OF
SECURITIES.


 


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 subject
to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including
without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.


 


26. FRACTIONAL SHARES.


 


No fractional shares
shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional
shares equal to the Fair Market Value thereof.


 


27. CONVERSION OF
ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.


 


The Administrator, at
the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant’s
ISOs (or any portions thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the Participant is an Employee of the Company or an Affiliate at the time
of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant) may impose such conditions
on the exercise of the resulting Non-Qualified Options as the Administrator in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right to have
such Participant’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Administrator
takes appropriate action. The Administrator, with the consent of the Participant, may also terminate any portion of any ISO that
has not been exercised at the time of such conversion.


 






     


     


    

 


28. WITHHOLDING.


 


In the event that any
federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act (“F.I.C.A.”) withholdings
or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary,
wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other reason required
by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance
in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount
of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock
or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of
the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair
Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market
Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance
the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition the exercise
of an Option for less than the then Fair Market Value on the Participant’s payment of such additional withholding.


 


29. NOTICE TO COMPANY
OF DISQUALIFYING DISPOSITION.


 


Each Employee who receives
an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes
any disposition (including any sale or gift) of such Shares before the later of (a) two years after the date the Employee was granted
the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section
424(c) of the Code. If the Employee has died before such Shares are sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.


 


30. TERMINATION OF
THE PLAN.


 


The Plan will terminate
on the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date of its
approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board
of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior
to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.


 


31. AMENDMENT OF
THE PLAN AND AGREEMENTS.


 


The Plan may be amended
by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent
necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for
favorable federal income tax treatment as may be afforded incentive stock options under Section 422 of the Code (including deferral
of taxation upon exercise), and to the extent necessary to qualify the Shares issuable under the Plan for listing on any national
securities exchange or quotation in any national automated quotation system of securities dealers. In addition, if NYSE Amex amends
its corporate governance rules so that such rules no longer require stockholder approval of “material amendments” of
equity compensation plans, then, from and after the effective date of such an amendment to such rules, no amendment of the Plan
which (i) materially increases the number of shares to be issued under the Plan (other than to reflect a reorganization, stock
split, merger, spin-off or similar transaction); (ii) materially increases the benefits to Participants, including any material
change to: (a) permit a repricing (or decrease in exercise price) of outstanding Options, (b) reduce the price at which Shares
or Options may be offered, or (c) extend the duration of the Plan; (iii) materially expands the class of Participants eligible
to participate in the Plan; or (iv) expands the types of awards provided under the Plan shall become effective unless stockholder
approval is obtained. Any amendment approved by the Administrator which the Administrator determines is of a scope that requires
shareholder approval shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her.
With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse
to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements
may be amended by the Administrator in a manner which is not adverse to the Participant.


 






     


     


    

 


32. EMPLOYMENT OR
OTHER RELATIONSHIP.


 


Nothing in this Plan
or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status
or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period
of time.


 


33. GOVERNING LAW.


 


This Plan shall be construed
and enforced in accordance with the law of the State of Delaware.