Exhibit 10.6


 





 



 


SMARTFINANCIAL,
INC. 

2010 INCENTIVE PLAN


 





 



 




     


     

    

 





 



 


SMARTFTNANC1AL, INC. 

2010 INCENTIVE PLAN


 





 



 




     


     

    

 


SMARTFINANCIAL, INC.2010 INCENTIVE PLAN


 


	ARTICLE 1 PURPOSE	4
	 	 
	1.1	General	4
	 	 	 
	ARTICLE 2 DEFINITIONS	4
	 	 
	2.1	Definitions	4
	 	 	 
	ARTICLE 3 EFFECTIVE TERM OF PLAN	10
	 	 
	3.1	Effective Date	10
	 	 	 
	3.2	Term of Plan	11
	 	 	 
	ARTICLE 4 ADMINISTRATION	11
	 	 
	4.1	Committee	11
	 	 	 
	4.2	Actions and Interpretations by the Committee	11
	 	 	 
	4.3	Authority of Committee	11
	 	 	 
	4.4	Delegation	12
	 	 	 
	4.5	Indemnification	13
	 	 	 
	ARTICLE 5 SHARES SUBJECT TO THE PLAN	13
	 	 
	5.1	Number of Shares	13
	 	 	 
	5.2	Share Counting	13
	 	 	 
	5.3	Stock Distributed	14
	 	 	 
	ARTICLE 6 ELIGIBILITY	14
	 	 
	6.1	General	14
	 	 	 
	ARTICLE 7 STOCK OPTIONS	14
	 	 
	7.1	General	14
	 	 	 
	7.2	Incentive Stock Options	15
	 	 	 
	ARTICLE 8 STOCK APPRECIATION RIGHTS	16
	 	 
	8.1	Grant of Stock Appreciation Rights	16
	 	 	 
	ARTICLE 9 RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS	17
	 	 
	9.1 	Grant of Restricted Stock, Restricted Stock Units and Deferred Stock Units	17
	 	 	 
	9.2	Issuance and Restrictions	17
	 	 	 
	9.3	Dividends on Restricted Stock	17
	 	 	 
	9.4	Forfeiture 	17


 




     


     

    

 


	9.5	Delivery of Restricted Stock	18
	 	 	 
	ARTICLE 10 PERFORMANCE AWARDS	18
	 	 
	10.1 	Grant of Performance Awards	18
	 	 	 
	10.2 	Performance Goals	18
	 	 	 
	ARTICLE 11 DIVIDEND EQUIVALENTS	19
	 	 
	11.1 	Grant of Dividend Equivalents	19
	 	 	 
	ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS	19
	 	 
	12.1 	Grant of Stock or Other Stock-Based Awards	19
	 	 	 
	ARTICLE 13 PROVISIONS APPLICABLE TO AWARDS	19
	 	 
	13.1 	Award Certificates	19
	 	 	 
	13.2 	Form of Payment of Awards	20
	 	 	 
	13.3 	Limits on Transfer	20
	 	 	 
	13.4 	Beneficiaries	20
	 	 	 
	13.5 	Stock Trading Restrictions	20
	 	 	 
	13.6 	Acceleration upon Death or Disability	20
	 	 	 
	13.7 	Effect of a Change in Control	21
	 	 	 
	13.8 	Acceleration for Any Other Reason	23
	 	 	 
	13.9 	Forfeiture Events	23
	 	 	 
	13.10 	Substitute Awards	23
	 	 	 
	ARTICLE 14 CHANGES IN CAPITAL STRUCTURE	23
	 	 
	14.1 	Mandatory Adjustments	23
	 	 	 
	14.2 	Discretionary Adjustments	24
	 	 	 
	14.3 	General	24
	 	 	 
	ARTICLE 15 AMENDMENT, MODIFICATION AND TERMINATION	25
	 	 
	15.1 	Amendment, Modification and Termination	25
	 	 	 
	15.2 	Awards Previously Granted	25
	 	 	 
	15.3 	Compliance Amendments	25
	 	 	 
	ARTICLE 16 GENERAL PROVISIONS	26
	 	 
	16.1	Rights of Participants	26
	 	 	 
	16.2 	Withholding	26
	 	 	 
	16.3 	Special Provisions Related to Section 409A of the Code	27


 




     


     

    

 


	16.4	Unfunded Status of Awards	28
	 	 	 
	16.5	Relationship to Other Benefits	28
	 	 	 
	16.6	Expenses	28
	 	 	 
	16.7	Titles and Headings	28
	 	 	 
	16.8	Gender and Number	28
	 	 	 
	16.9	Fractional Shares	28
	 	 	 
	16.10	Government and Other Regulations	28
	 	 	 
	16.11	Governing Law	29
	 	 	 
	16.12	Severability	29
	 	 	 
	16.13	No Limitations on Rights of Company	29
	 	 	 
	16.14	Indemnification	30


 




     


     

    

  


SMARTFINANCIAL, INC.

2010 INCENTIVE PLAN


 


ARTICLE 1


PURPOSE


 


1.1. GENERAL.
The purpose of the SmartFinancial, Inc. 2010 Incentive Plan (the "Plan") is to promote the success, and enhance the value,
of SmartFinancial, Inc. (the "Company"), by linking the personal interests of employees, officers, directors and consultants
of the Company or any Affiliate (as defined below) to those of Company shareholders and by providing such persons with an incentive
for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract,
and retain the services of employees, officers, directors and consultants upon whose judgment, interest, and special effort the
successful conduct of the Company's operation is largely dependent. Accordingly, the Plan permits the grant of incentive awards
from time to time to selected employees, officers, directors and consultants of the Company and its Affiliates.


 


ARTICLE 2

DEFINITIONS


 


2.1. DEFINITIONS.
When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different
meaning is required by the context. The following words and phrases shall have the following meanings:


 


(a)          "Affiliate"
means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more intermediaries controls, is controlled
by or is under common control with, the Company, as determined by the Committee.


 


(b)          "Award"
means an award of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance
Awards, Dividend Equivalents, Other Stock-Based Awards, or any other right or interest relating to Stock or cash, granted to a
Participant under the Plan.


 


(c)          "Award
Certificate" means a written document, in such form as the Committee prescribes from time to time, setting forth the terms
and conditions of an Award. Award Certificates may be in the form of individual award agreements or certificates or a program document
describing the terms and provisions of an Award or series of Awards under the Plan. The Committee may provide for the use of electronic,
internet or other non-paper Award Certificates, and the use of electronic, internet or other non-paper means for the acceptance
thereof and actions thereunder by a Participant.


 




     


     

    

 


(d)          "Beneficial
Owner" shall have the meaning given such term in Rule 13d-3 of the General Rules and Regulations under the 1934 Act.


 


(e)          "Board"
means the Board of Directors of the Company.


 


(f)          "Cause"
as a reason for a Participant's termination of employment shall have the meaning assigned such term in the employment, severance
or similar agreement, if any, between such Participant and the Company or an Affiliate, provided, however that if there is no such
employment, severance or similar agreement in which such term is defined, and unless otherwise defined in the applicable Award
Certificate, "Cause" shall mean any of the following acts by the Participant, as determined by the Committee: gross neglect
of duty, prolonged absence from duty without the consent of the Company, material breach by the Participant of any published Company
code of conduct or code of ethics; or willful misconduct, misfeasance or malfeasance of duty which is reasonably determined to
be detrimental to the Company. With respect to a Participant's termination of directorship, "Cause" means an act or failure
to act that constitutes cause for removal of a director under applicable Tennessee law. The determination of the Committee as to
the existence of "Cause" shall be conclusive on the Participant and the Company.


 


(g)          "Change
in Control" means and includes the occurrence of any one of the following events but shall specifically exclude a Public Offering:


 


(i)          during
any consecutive 12-month period, individuals who, at the beginning of such period, constitute the Board of Directors of the Company
(the "Incumbent Directors") cease for any reason to constitute at least a majority of such Board, provided that any person
becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors then on the Board shall be an Incumbent Director provided, however,
that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election
contest with respect to the election or removal of directors ("Election Contest") or other actual or threatened solicitation
of proxies or consents by or on behalf of any Person other than the Board ("Proxy Contest"), including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or


 


(ii)         any
person becomes a Beneficial Owner, directly or indirectly, of either (A) 50% or more of the then-outstanding shares of common stock
of the Company ("Company Common Stock") or (B) securities of the Company representing 50% or more of the combined voting
power of the Company's then outstanding securities eligible to vote for the election of directors (the "Company Voting Securities");
provided, however, that for purposes of this subsection (ii), the following acquisitions of Company Common Stock or Company
Voting Securities shall not constitute a Change in Control: (w) an acquisition directly from the Company, (x) an acquisition by
the Company or a Subsidiary, (y) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, or (z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below);
or


 




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(iii)
the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate
transaction involving the Company or a Subsidiary (a "Reorganization"), or the sale or other disposition of all or
substantially all of the Company's assets (a "Sale") or the acquisition of assets or stock of another corporation
or other entity (an "Acquisition"), unless immediately following such Reorganization, Sale or Acquisition: (A) all
or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company
Common Stock and outstanding Company Voting Securities immediately prior to such Reorganization, Sale or Acquisition
beneficially own, directly or indirectly, more than 35% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as
the case may be, of the entity resulting from such Reorganization, Sale or Acquisition (including, without limitation, an
entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets or stock
either directly or through one or more subsidiaries, the "Surviving Entity") in substantially the same proportions
as their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding Company Common Stock
and the outstanding Company Voting Securities, as the case may be, and (B) no person (other than (x) the Company or any
Subsidiary, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust)
sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total
common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the
Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent
Directors at the time of the Board's approval of the execution of the initial agreement providing for such Reorganization,
Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria specified in (A), (B) and
(C) above shall be deemed to be a "Non-Qualifying Transaction"); or


 




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(iv) approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company.


 


(h)          "Code"
means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the
Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.


 


(i)          "Committee"
means the committee of the Board described in Article 4.


 


(j)          "Company"
means SmartFinancial, Inc., a Tennessee corporation, or any successor corporation.


 


(k)          "Continuous
Service" means the absence of any interruption or termination of service as an employee, officer, consultant or director of
the Company or any Affiliate, as applicable; provided, however, that for purposes of an Incentive Stock Option "Continuous
Service" means the absence of any interruption or termination of service as an employee of the Company or any Parent or Subsidiary,
as applicable, pursuant to applicable tax regulations. Continuous Service shall not be considered interrupted in the following
cases: (i) a Participant transfers employment between the Company and an Affiliate or between Affiliates, or (ii) in the discretion
of the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale or disposition of the Participant's
employer from the Company or any Affiliate, or (iii) any leave of absence authorized in writing by the Company prior to its commencement;
provided, however, that for purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration
of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company
is not so guaranteed. on the 91st day of such leave any Incentive Stock Option held by the Participant shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Whether military, government
or other service or other leave of absence shall constitute a termination of Continuous Service shall be determined in each case
by the Committee at its discretion, and any determination by the Committee shall be final and conclusive; provided, however, that
for purposes of any Award that is subject to Code Section 409A, the determination of a leave of absence must comply with the requirements
of a "bona fide leave of absence" as provided in Treas. Reg. Section 1.409A-1(h).


 


(l)          "Deferred
Stock Unit" means a right granted to a Participant under Article 9 to receive Shares (or the equivalent value in cash or other
property if the Committee so provides) at a future time as determined by the Committee, or as determined by the Participant within
guidelines established by the Committee in the case of voluntary deferral elections.


 




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(m)          "Disability"
of a Participant means that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant's
employer. If the determination of Disability relates to an Incentive Stock Option, Disability means Permanent and Total Disability
as defined in Section 22(e)(3) of the Code. In the event of a dispute, the determination of whether a Participant is Disabled will
be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.


 


(n)          "Dividend
Equivalent" means a right granted to a Participant under Article 11.


 


(o)          "Effective
Date" has the meaning assigned such term in Section 3.1.


 


(p)          "Eligible
Participant" means an employee (including a leased employee), officer, consultant or director of the Company or any Affiliate.


 


(q)          "Fair
Market Value," on any date, means (i) if the Stock is listed on a securities exchange, the closing sales price on the principal
such exchange on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding
date on which sales were reported, or (ii) if the Stock is not listed on a securities exchange, the mean between the bid and offered
prices as quoted by the applicable interdealer quotation system for such date, provided that if the Stock is not quoted on an interdealer
quotation system or it is determined that the fair market value is not properly reflected by such quotations, Fair Market Value
will be determined by such other method as the Committee determines in good faith to be reasonable and in compliance with Code
Section 409A.


 


(r)          "Full-Value
Award" means an Award other than in the form of an Option or SAR, and which is settled by the issuance of Stock (or at the
discretion of the Committee, settled in cash valued by reference to Stock value).


 


(s)          "Good
Reason" (or a similar term denoting constructive termination) has the meaning, if any, assigned such term in the employment,
consulting, severance or similar agreement, if any, between a Participant and the Company or an Affiliate, provided, however that
if there is no such employment, consulting, severance or similar agreement in which such term is defined, "Good Reason"
shall have the meaning, if any, given such term in the applicable Award Certificate. If not defined in either such document, the
term "Good Reason" as used herein shall not apply to a particular Award.


 




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(t)          "Grant
Date" of an Award means the rust date on which all necessary corporate action has been taken to approve the grant of the Award
as provided in the Plan, or such later date as is determined and specified as part of that authorization process. Notice of the
grant shall be a provided to the grantee within a reasonable time after the Grant Date.


 


(u)          "Incentive
Stock Option" means an Option that is intended to be an incentive stock option and meets the requirements of Section 422 of
the Code or any successor provision thereto.


 


(v)         "Nonstatutory
Stock Option" means an Option that is not an Incentive Stock Option.


 


(w)          "Option"
means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.


 


(x)          "Other
Stock-Based Award" means a right, granted to a Participant under Article 12, that relates to or is valued by reference to
Stock or other Awards relating to Stock.


 


(y)          "Parent"
means a corporation, limited liability company, partnership or other entity which owns or beneficially owns a majority of the outstanding
voting stock or voting power of the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Parent shall
have the meaning set forth in Section 424(e) of the Code.


 


(z)          "Participant"
means an Eligible Participant who has been granted an Award under the Plan; provided that in the case of the death of a Participant,
the term "Participant" refers to a beneficiary designated pursuant to Section 13.4 or the legal guardian or other legal
representative acting in a fiduciary capacity on behalf of the Participant under applicable state law and court supervision.


 


(aa) "Performance
Award" means any award granted under the Plan pursuant to Article 10.


 


(bb) "Person"
means any individual, entity or group, within the meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or
14(d)(2) of the 1934 Act.


 


(cc) "Plan"
means the SmartFinancial, Inc. 2010 Incentive Plan, as amended from time to time.


 




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(dd) "Public Offering"
means a public offering of any class or series of the Company's equity securities pursuant to a registration statement filed by
the Company under the 1933 Act.


 


(ee) "Restricted Stock"
means Stock granted to a Participant under Article 9 that is subject to certain restrictions and to risk of forfeiture.


 


(ff) "Restricted Stock Unit"
means the right granted to a Participant under Article 9 to receive shares of Stock (or the equivalent value in cash or other property
if the Committee so provides) in the future, which right is subject to certain restrictions and to risk of forfeiture.


 


(gg)
"Shares" means shares of the Company's Stock. If there has been an adjustment or substitution pursuant to Article
14, the term "Shares" shall also include any shares of stock or other securities that are substituted for Shares or
into which Shares are adjusted pursuant to Article 14.


 


(hh)
"Stock" means the $1.00 par value common stock of the Company and such other securities of the Company as may be
substituted for Stock pursuant to Article 14.


 


(ii)  
"Stock Appreciation Right" or "SAR" means a right granted to a Participant under Article 8 to receive a
payment equal to the difference between the Fair Market Value of a Share as of the date of exercise of the SAR over the base
price of the SAR, all as determined pursuant to Article 8.


 


(jj)   "Subsidiary"
means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Company. Notwithstanding the above, with respect to an Incentive
Stock Option, Subsidiary shall have the meaning set forth in Section 424(f) of the Code.


 


(kk) "1933
Act" means the Securities Act of 1933, as amended from time to time.


 


(ll) "1934
Act" means the Securities Exchange Act of 1934, as amended from time to time.


 


ARTICLE 3


EFFECTIVE TERM OF PLAN


 


3.1. EFFECTIVE
DATE. Subject to the approval of the Plan by the Company's shareholders within 12 months after the Plan's adoption by the Board,
the Plan will become effective on the date that it is adopted by the Board (the "Effective Date").


 




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3.2. TERMINATION
OF PLAN. Unless earlier terminated as provided herein, the Plan shall continue in effect until the tenth anniversary of the
Effective Date or, if the shareholders approve an amendment to the Plan that increases the number of Shares subject to the Plan,
the tenth anniversary of the date of such approval. The termination of the Plan on such date shall not affect the validity of any
Award outstanding on the date of termination, which shall continue to be governed by the applicable terms and conditions of the
Plan.


 


ARTICLE 4


ADMINISTRATION


 


4.1. COMMITTEE.
The Plan shall be administered by a Committee appointed by the Board (which Committee shall consist of at least two directors)
or, at the discretion of the Board from time to time, the Plan may be administered by the Board. The members of the Committee shall
be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. The Board may reserve to
itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for
any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time that the Board is
acting as administrator of the Plan, it shall have all the powers and protections of the Committee hereunder, and any reference
herein to the Committee (other than in this Section 4.1) shall include the Board. To the extent any action of the Board under the
Plan conflicts with actions taken by the Committee, the actions of the Board shall control.


 


4.2. ACTION
AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations,
not inconsistent with the Plan, as the Committee may deem appropriate. The Committee may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it deems necessary to carry out the
intent of the Plan. The Committee's interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. Each
member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member
by any officer or other employee of the Company or any Affiliate, the Company's or an Affiliate's independent certified public
accountants, Company counsel or any executive compensation consultant or other professional retained by the Company to assist in
the administration of the Plan. No member of the Committee will be liable for any good faith determination, act or omission in
connection with the Plan or any Award.


 


4.3. AUTHORITY
OF COMMITTEE. Except as provided in Section 4.1 hereof, the Committee has the exclusive power, authority and discretion to:


 


(a)          Grant
Awards;


 




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(b)          Designate
Participants;


 


(c)          Determine
the type or types of Awards to be granted to each Participant;


 


(d)          Determine
the number of Awards to be granted and the number of Shares or dollar amount to which an Award will relate;


 


(e)          Determine
the terms and conditions of any Award granted under the Plan;


 


(f)          Prescribe
the form of each Award Certificate, which need not be identical for each Participant;


 


(g)          Decide
all other matters that must be determined in connection with an Award;


 


(h)          Establish,
adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer the Plan;


 


(i)          Make
all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable to
administer the Plan;


 


(j)          Amend
the Plan or any Award Certificate as provided herein; and


 


(k)          Adopt
such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of the United
States or any non-U.S. jurisdictions in which the Company or any Affiliate may operate, in order to assure the viability of the
benefits of Awards granted to participants located in the United States or such other jurisdictions and to further the objectives
of the Plan.


 


4.4. DELEGATION.
The Board may, by resolution, expressly delegate to a special committee, consisting of one or more directors who may but need not
be officers of the Company, the authority, within specified parameters as to the number and terms of Awards, to (i) designate officers
and/or employees of the Company or any of its Affiliates to be recipients of Awards under the Plan, and (ii) to determine the number
of such Awards to be received by any such Participants. The acts of such delegates shall be treated hereunder as acts of the Board
and such delegates shall report regularly to the Board and the Compensation Committee regarding the delegated duties and responsibilities
and any Awards so granted.


 




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4.5. INDEMNIFICATION. Each
person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom
authority was delegated in accordance with this Article 4 shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with
or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him
or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss,
cost, liability, or expense is a result of his or her own willful misconduct or except as expressly provided by statute. The
foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's charter or bylaws, as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.


 


ARTICLE 5


SHARES SUBJECT TO THE PLAN


 


5.1. NUMBER OF SHARES. Subject to
adjustment as provided in Sections 5.2 and Section 14.1, the aggregate number of Shares reserved and available for issuance pursuant
to Awards granted under the Plan shall be 500,000. The maximum number of Shares that may be issued upon exercise of Incentive Stock
Options granted under the Plan shall be 500,000.


 


5.2. SHARE COUNTING. Shares covered
by an Award shall be subtracted from the Plan share reserve as of the Grant Date, but shall be added back to the Plan share reserve
in accordance with this Section 5.2


 


(a)     To
the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued or forfeited Shares
originally subject to the Award will be added back to the Plan share reserve and again be available for issuance pursuant to Awards
granted under the Plan.


 


(b)     Shares
subject to Awards settled in cash will be added back to the Plan share reserve and again be available for issuance pursuant to
Awards granted under the Plan.


 


(c)     Shares
withheld or repurchased from an Award or delivered by a Participant to satisfy minimum tax withholding requirements will be added
back to the Plan share reserve and again be available for issuance pursuant to Awards granted under the Plan.


 


(d)     If
the exercise price of an Option is satisfied in whole or in part by delivering Shares to the Company (by either actual delivery
or attestation), the number of Shares so tendered (by delivery or attestation) shall be added to the Plan share reserve and will be
available for issuance pursuant to Awards granted under the Plan.


 




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(e)     To
the extent that the full number of Shares subject to an Option or SAR is not issued upon exercise of the Option or SAR for any
reason, including by reason of net-settlement of the Award, the unissued Shares originally subject to the Award will be added back
to the Plan share reserve and again be available for issuance pursuant to other Awards granted under the Plan.


 


(f)     To
the extent that the full number of Shares subject to an Award other than an Option or SAR is not issued for any reason, including
by reason of failure to achieve maximum performance goals, the unissued Shares originally subject to the Award will be added back
to the Plan share reserve and again be available for issuance pursuant to Awards granted under the Plan.


 


(g)     Substitute
Awards granted pursuant to Section 13.10 of the Plan shall not count against the Shares otherwise available for issuance under
the Plan under Section 5.1.


 


5.3. STOCK DISTRIBUTED.
Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or
Stock purchased on the open market.


 


ARTICLE 6 

ELIGIBILITY


 


6.1. GENERAL.
Awards may be granted only to Eligible Participants. Incentive Stock Options may be granted only to Eligible Participants who are
employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code. Eligible Participants who
are service providers to an Affiliate may be granted Options or SARs under this Plan only if the Affiliate qualifies as an "eligible
issuer of service recipient stock" within the meaning of §1.409A-1(b)(5)(iii)(E) of the final regulations under Code
Section 409A.


 


ARTICLE 7


STOCK OPTIONS


 


7.1. GENERAL.
The Committee is authorized to grant Options to Participants on the following terms and conditions:


 


(a)     EXERCISE
PRICE. The exercise price per Share under an Option shall be determined by the Committee, provided that the exercise price
for any Option (other than an Option issued as a substitute Award pursuant to Section 13.10) shall not be less than the Fair Market
Value as of the Grant Date.


 




    	 	- 14 -	 



     

    

 


(b)     TIME
AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which an Option may be exercised in whole or
in part, subject to Section 7.1(d), including a provision that an Option that is otherwise exercisable and has an exercise price
that is less than the Fair Market Value of the Stock on the last day of its term will be automatically exercised on such final
date of the term by means of a "net exercise," thus entitling the optionee to Shares equal to the intrinsic value of
the Option on such exercise date, less the number of Shares required for tax withholding. The Committee shall also determine the
performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised or vested.


 


(c)     PAYMENT.
The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, and the
methods by which Shares shall be delivered or deemed to be delivered to Participants. As determined by the Committee at or after
the Grant Date, payment of the exercise price of an Option may be made in, in whole or in part, in the form of (i) cash or cash
equivalents, (ii) delivery (by either actual delivery or attestation) of previously-acquired Shares based on the Fair Market Value
of the Shares on the date the Option is exercised, (iii) withholding of Shares from the Option based on the Fair Market Value
of the Shares on the date the Option is exercised, (iv) broker-assisted market sales, or (iv) any other "cashless exercise"
arrangement.


 


(d)     EXERCISE
TERM. Except for Nonstatutory Options granted to Participants outside the United States, no Option granted under the Plan
shall be exercisable for more than ten years from the Grant Date.


 


(e)     NO
DEFERRAL FEATURE. No Option shall provide for any feature for the deferral of compensation other than the deferral of recognition
of income until the exercise or disposition of the Option.


 


(f)     NO
DIVIDEND EQUIVALENTS. No Option shall provide for Dividend Equivalents.


 


7.2. INCENTIVE STOCK
OPTIONS. The terms of any Incentive Stock Options granted under the Plan must comply with the requirements of Section 422 of
the Code. Without limiting the foregoing, any Incentive Stock Option granted to a Participant who at the Grant Date owns more than
10% of the voting power of all classes of shares of the Company must have an exercise price per Share of not less than 110% of
the Fair Market Value per Share on the Grant Date and an Option term of not more than five years. If all of the requirements of
Section 422 of the Code (including the above) are not met, the Option shall automatically become a Nonstatutory Stock Option.


 




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ARTICLE 8


STOCK APPRECIATION RIGHTS


 


8.1. GRANT OF STOCK
APPRECIATION RIGHTS. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms
and conditions:


 


(a)     RIGHT
TO PAYMENT. Upon the exercise of a SAR, the Participant has the right to receive, for each Share with respect to which the
SAR is being exercised, the excess, if any, of:


 


(1)     The Fair Market
Value of one Share on the date of exercise; over


 


(2)     The
base price of the SAR as determined by the Committee and set forth in the Award Certificate, which shall not be less than the Fair
Market Value of one Share on the Grant Date.


 


(b)     TIME
AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which a SAR may be exercised in whole or in
part, including a provision that a SAR that is otherwise exercisable and has a base price that is less than the Fair Market Value
of the Stock on the last day of its term will be automatically exercised on such final date of the term, thus entitling the holder
to cash or Shares equal to the intrinsic value of the SAR on such exercise date, less the cash or number of Shares required for
tax withholding. Except for SARs granted to Participants outside the United States, no SAR shall be exercisable for more than ten
years from the Grant Date.


 


(c)    NO
DEFERRAL FEATURE. No SAR shall provide for any feature for the deferral of compensation other than the deferral of recognition
of income until the exercise or disposition of the SAR.


 


(d)    NO
DIVIDEND EQUIVALENTS. No SAR shall provide for Dividend Equivalents.


 


(e)     OTHER
TERMS. All SARs shall be evidenced by an Award Certificate. Subject to the limitations of this Article 8, the terms, methods
of exercise, methods of settlement, form of consideration payable in settlement (e.g., cash, Shares or other property), and any
other terms and conditions of the SAR shall be determined by the Committee at the time of the grant and shall be reflected in the
Award Certificate.


 




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ARTICLE 9


RESTRICTED STOCK, RESTRICTED STOCK UNITS


AND DEFERRED STOCK UNITS


 


9.1. GRANT OF RESTRICTED
STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS. The Committee is authorized to make Awards of Restricted Stock, Restricted
Stock Units or Deferred Stock Units to Participants in such amounts and subject to such terms and conditions as may be selected
by the Committee. An Award of Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be evidenced by an Award Certificate
setting forth the terms, conditions, and restrictions applicable to the Award.


 


9.2. ISSUANCE AND
RESTRICTIONS. Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be subject to such restrictions on transferability
and other restrictions as the Committee may impose (including, for example, limitations on the right to vote Restricted Stock or
the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times,
under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines
at the time of the grant of the Award or thereafter. Except as otherwise provided in an Award Certificate or any special Plan document
governing an Award, a Participant shall have none of the rights of a stockholder with respect to Restricted Stock Units or Deferred
Stock Units until such time as Shares of Stock are paid in settlement of such Awards.


 


 9.3 DIVIDENDS
ON RESTRICTED STOCK. In the case of Restricted Stock, the Committee may provide that ordinary cash dividends declared on
the Shares before they are vested (i) will be forfeited, (ii) will be deemed to have been reinvested in additional Shares or
otherwise reinvested (subject to Share availability under Section 5.1 hereof), or (iii) in the case of Restricted Stock that
is not subject to performance-based vesting, will be paid or distributed to the Participant as accrued (in which case, such
dividends must be paid or distributed no later than the 15th day of the 3rd month following the later of (A) the
calendar year in which the corresponding dividends were paid to shareholders, or (B) the first calendar year in which the
Participant's right to such dividends is no longer subject to a substantial risk of forfeiture). Unless otherwise provided by
the Committee, dividends accrued on Shares of Restricted Stock before they are vested shall, as provided in the Award
Certificate, either (i) be reinvested in the form of additional Shares, which shall be subject to the same vesting provisions
as provided for the host Award, or (ii) be credited by the Company to an account for the Participant and accumulated without
interest until the date upon which the host Award becomes vested, and any dividends accrued with respect to forfeited
Restricted Stock will be reconveyed to the Company without further consideration or any act or action by the Participant.


 


9.4. FORFEITURE. Subject to the
terms of the Award Certificate and except as otherwise determined by the Committee at the time of the grant of the Award or thereafter,
upon termination of Continuous Service during the applicable restriction period or upon failure to satisfy a performance goal during
the applicable restriction period, Restricted Stock or Restricted Stock Units that are at that time subject to restrictions shall
be forfeited.


 




    	 	- 17 -	 



     

    

 


9.5. DELIVERY OF
RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to the Participant at the Grant Date either by book-entry registration
or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or one or more
of its employees) designated by the Committee, a stock certificate or certificates registered in the name of the Participant. If
physical certificates representing shares of Restricted Stock are registered in the name of the Participant, such certificates
must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.


 


ARTICLE 10


PERFORMANCE AWARDS


 


10.1. GRANT
OF PERFORMANCE AWARDS. The Committee is authorized to grant any Award under this Plan, including cash-based Awards, with performance-based
vesting criteria, on such terms and conditions as may be selected by the Committee. Any such Awards with performance-based vesting
criteria are referred to herein as Performance Awards. The Committee shall have the complete discretion to determine the number
of Performance Awards granted to each Participant and to designate the provisions of such Performance Awards as provided in Section
4.3. All Performance Awards shall be evidenced by an Award Certificate or a written program established by the Committee, pursuant
to which Performance Awards are awarded under the Plan under uniform terms, conditions and restrictions set forth in such written
program.


 


10.2. PERFORMANCE
GOALS. The Committee may establish performance goals for Performance Awards which may be based on any criteria selected by
the Committee. Such performance goals may be described in terms of Company-wide objectives or in terms of objectives that relate
to the performance of the Participant, an Affiliate or a division, region, department or function within the Company or an Affiliate.
If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company
or the manner in which the Company or an Affiliate conducts its business, or other events or circumstances render performance goals
to be unsuitable, the Committee may modify such performance goals in whole or in part, as the Committee deems appropriate. If a
Participant is promoted, demoted or transferred to a different business unit or function during a performance period, the Committee
may determine that the performance goals or performance period are no longer appropriate and may (i) adjust, change or eliminate
the performance goals or the applicable performance period as it deems appropriate to make such goals and period comparable to
the initial goals and period, or (ii) make a cash payment to the participant in an amount determined by the Committee.


 




    	 	- 18 -	 



     

    

  


ARTICLE 11


DIVIDEND EQUIVALENTS


 


11.1. GRANT
OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend Equivalents with respect to Full-Value
Awards granted hereunder, subject to such terms and conditions as may be selected by the Committee. Dividend Equivalents
shall entitle the Participant to receive payments equal to ordinary cash dividends or distributions with respect to all or a
portion of the number of Shares subject to a Full-Value Award, as determined by the Committee. The Committee may provide that
Dividend Equivalents (i) will be deemed to have been reinvested in additional Shares or otherwise reinvested, or (ii) except
in the case of Performance Awards, will be paid or distributed to the Participant as accrued (in which case, such Dividend
Equivalents must be paid or distributed no later than the 15th day of the 3rd month following the later
of (A) the calendar year in which the corresponding dividends were paid to shareholders, or (B) the first calendar year in
which the Participant's right to such Dividends Equivalents is no longer subject to a substantial risk of forfeiture). Unless
otherwise provided by the Committee, Dividend Equivalents accruing on unvested Full-Value Awards shall, as provided in the
Award Certificate, either (i) be reinvested in the form of additional Shares, which shall be subject to the same vesting
provisions as provided for the host Award, or (ii) be credited by the Company to an account for the Participant and
accumulated without interest until the date upon which the host Award becomes vested, and any Dividend Equivalents accrued
with respect to forfeited Awards will be reconveyed to the Company without further consideration or any act or action by the
Participant.


 


ARTICLE 12


STOCK OR OTHER STOCK-BASED AWARDS


 


12.1. GRANT OF
STOCK OR OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to limitations under applicable law, to grant to Participants
such other Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares,
as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation Shares awarded purely as
a "bonus" and not subject to any restrictions or conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Shares, and Awards valued by reference to book value of Shares or the value of securities of or
the performance of specified Parents or Subsidiaries. The Committee shall determine the terms and conditions of such Awards.


 


ARTICLE 13


PROVISIONS APPLICABLE TO AWARDS


 


13.1. AWARD CERTIFICATES.
Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such provisions, not inconsistent with
the Plan, as may be specified by the Committee.


 




    	 	- 19 -	 



     

    

  


13.2. FORM
OF PAYMENT FOR AWARDS. At the discretion of the Committee, payment of Awards may be made in cash, Stock, a combination of cash
and Stock, or any other form of property as the Committee shall determine. In addition, payment of Awards may include such terms,
conditions, restrictions and/or limitations, if any, as the Committee deems appropriate, including, in the case of Awards paid
in the form of Stock, restrictions on transfer and forfeiture provisions. Further, payment of Awards may be made in the form of
a lump sum, or in installments, as determined by the Committee.


 


13.3. LIMITS
ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged, encumbered, or hypothecated
to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of
such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted Award shall be assignable
or transferable by a Participant other than by will or the laws of descent and distribution; provided, however, that the Committee
may (but need not) permit other transfers (other than transfers for value) where the Committee concludes that such transferability
(i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to
be described in Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant,
including without limitation, state or federal tax or securities laws applicable to transferable Awards.


 


13.4. BENEFICIARIES.
Notwithstanding Section 13.3, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise
the rights of the Participant and to receive any distribution with respect to any Award upon the Participant's death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions
of the Plan and any Award Certificate applicable to the Participant, except to the extent the Plan and Award Certificate otherwise
provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated
or survives the Participant, any payment due to the Participant shall be made to the Participant's estate. Subject to the foregoing,
a beneficiary designation may be changed or revoked by a Participant, in the manner provided by the Company, at any time provided
the change or revocation is filed with the Committee.


 


13.5. STOCK
TRADING RESTRICTIONS. All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions as the
Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of
any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may
place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the
Stock.


 


13.6. ACCELERATION
UPON DEATH OR DISABILITY. Except as otherwise provided in the Award Certificate or any special Plan document governing an
Award, upon the termination of a person's Continuous Service by reason of death or Disability:


 




    	 	- 20 -	 



     

    

  


(i)     all of that Participant's
outstanding Options and SARs shall become fully exercisable;


 


(ii)     all time-based
vesting restrictions on that Participant's outstanding Awards shall lapse as of the date of termination; and


 


(iii)     the
payout opportunities attainable under all of that Participant's outstanding performance-based Awards shall be deemed to have been
fully earned as of the date of termination as follows:


 


(A)     if
the date of termination occurs during the first half of the applicable performance period, all relevant performance goals will
be deemed to have been achieved at the "target" level, and


 


(B)     if the date of
termination occurs during the second half of the applicable performance period, the actual level of achievement of all relevant
performance goals against target will be measured as of the end of the calendar quarter immediately preceding the date of termination,
and


 


(C)     in
either such case, there shall be a prorata payout to the Participant or his or her estate within sixty (60) days following the
date of termination (unless a later date is required by Section 16.3 hereof), based upon the length of time within the performance
period that has elapsed prior to the date of termination.


 


To the extent that
this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options
shall be deemed to be Nonstatutory Stock Options.


 


13.7. EFFECT OF A CHANGE IN CONTROL. The provisions of
this Section 13.7 shall apply in the case of a Change in Control, unless otherwise provided in the Award Certificate or any special
Plan document or separate agreement with a Participant governing an Award.


 





 




    	 	- 21 -	 



     

    

 


(a)     Awards not Assumed or
Substituted by Surviving Entity. Upon the occurrence of a Change in Control, and except with respect to any Awards
assumed by the Surviving Entity or otherwise equitably converted or substituted in connection with the Change in Control in a
manner approved by the Committee or the Board: (i) outstanding Options, SARs, and other Awards in the nature of rights that
may be exercised shall become fully exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse, and
(iii) the target payout opportunities attainable under outstanding performance-based Awards shall be deemed to have been
fully earned as of the effective date of the Change in Control based upon (A) an assumed achievement of all relevant
performance goals at the "target" level if the Change in Control occurs during the first half of the applicable
performance period, or (B) the actual level of achievement of all relevant performance goals against target measured as of
the date of the Change in Control, if the Change in Control occurs during the second half of the applicable performance
period, and, in either such case, subject to Section 16.3, there shall be a prorata payout to Participants within sixty (60)
days following the Change in Control (unless a later date is required by Section 16.3 hereof), based upon the length of time
within the performance period that has elapsed prior to the Change in Control. Any Awards shall thereafter continue or lapse
in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes
Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed
to be Nonstatutory Stock Options.


 


(b)     Awards
Assumed or Substituted by Surviving Entity. With respect to Awards assumed by the Surviving Entity or otherwise equitably
converted or substituted in connection with a Change in Control: if within two (2) years after the effective date of the
Change in Control, a Participant's employment is terminated without Cause or the Participant resigns for Good Reason, then
(i) all of that Participant's outstanding Options, SARs and other Awards in the nature of rights that may be exercised shall
become fully exercisable, (ii) all time-based vesting restrictions on the his or her outstanding Awards shall lapse, and
(iii) the payout level under all of that Participant's performance-based Awards that were outstanding immediately prior to
effective time of the Change in Control shall be determined and deemed to have been earned as of the date of termination
based upon (A) an assumed achievement of all relevant performance goals at the "target'. level if the date of
termination occurs during the first half of the applicable performance period, or (B) the actual level of achievement of all
relevant performance goals against target (measured as of the end of the calendar quarter immediately preceding the date of
termination), if the date of termination occurs during the second half of the applicable performance period, and, in either
such case, there shall be a prorata payout to such Participant within sixty (60) days following the date of termination of
employment (unless a later date is required by Section 16.3 hereof), based upon the length of time within the performance
period that has elapsed prior to the date of termination of employment. With regard to each Award, a Participant shall not be
considered to have resigned for Good Reason unless either (i) the Award Certificate includes such provision or (ii) the
Participant is party to an employment, severance or similar agreement with the Company or an Affiliate that includes
provisions in which the Participant is permitted to resign for Good Reason. Any Awards shall thereafter continue or lapse in
accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes
Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be
deemed to be Nonstatutory Stock Options.


 




    	 	- 22 -	 



     

    

   


13.8. ACCELERATION
FOR ANY OTHER REASON. Regardless of whether an event has occurred as described in Section 13.6 or 13.7 above, the Committee
may in its sole discretion at any time determine that all or a portion of a Participant's Options, SARs, and other Awards in the
nature of rights that may be exercised shall become fully or partially exercisable, that all or a part of the time-based vesting
restrictions on all or a portion of the outstanding Awards shall lapse, and/or that any performance-based criteria with respect
to any Awards shall be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole
discretion, declare. The Committee may discriminate among Participants and among Awards granted to a Participant in exercising
its discretion pursuant to this Section 13.8. Notwithstanding anything in the Plan, including this Section 13.8, the Committee
may not accelerate the payment of any Award if such acceleration would violate Section 409A(a)(3) of the Code.


 


13.9. FORFEITURE
EVENTS. The Committee may specify in an Award Certificate that the Participant's rights, payments and benefits with respect
to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events,
in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be
limited to, (i) termination of employment for cause, (ii) violation of material Company or Affiliate policies, (iii) breach of
noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, (iv) other conduct by the Participant
that is detrimental to the business or reputation of the Company or any Affiliate, or (v) a later determination that the vesting
of, or amount realized from, a Performance Award was based on materially inaccurate financial statements or any other materially
inaccurate performance metric criteria, whether or not the Participant caused or contributed to such material inaccuracy.


 


13.10. SUBSTITUTE
AWARDS. The Committee may grant Awards under the Plan in substitution for stock and stock-based awards held by employees of
another entity who become employees of the Company or an Affiliate as a result of a merger or consolidation of the former employing
entity with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the former employing
corporation. The Committee may direct that the substitute awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.


 


ARTICLE 14


CHANGES IN CAPITAL STRUCTURE


 


14.1. MANDATORY
ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its stockholders that causes the per-share
value of the Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large
nonrecurring cash dividend), the authorization limits under Section 5.1 shall be adjusted proportionately, and the Committee shall
make such adjustments to the Plan and Awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement
of rights immediately resulting from such transaction.


 




    	 	- 23 -	 



     

    

  


Action by the Committee may include: (i)
adjustment of the number and kind of shares that may be delivered under the Plan; (ii) adjustment of the number and kind of shares
subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to be used to determine
the amount of the benefit payable on an Award; and (iv) any other adjustments that the Committee determines to be equitable. Notwithstanding
the foregoing, the Committee shall not make any adjustments to outstanding Options or SARs that would constitute a modification
or substitution of the stock right under Treas. Reg. Sections 1.409A-1(b)(5)(v) that would be treated as the grant of a new stock
right or change in the form of payment for purposes of Code Section 409A. Without limiting the foregoing, in the event of a subdivision
of the outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination or consolidation of the
outstanding Stock into a lesser number of Shares, the authorization limits under Section 5.1 shall automatically be adjusted proportionately,
and the Shares then subject to each Award shall automatically, without the necessity for any additional action by the Committee,
be adjusted proportionately without any change in the aggregate purchase price therefor.


 


14.2 DISCRETIONARY
ADJUSTMENTS. Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including,
without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or any transaction described
in Section 14.1), the Committee may, in its sole discretion, provide (i) that Awards will be settled in cash rather than Stock,
(ii) that Awards will become immediately vested and non-forfeitable and exercisable (in whole or in part) and will expire after
a designated period of time to the extent not then exercised, (iii) that Awards will be assumed by another party to a transaction
or otherwise be equitably converted or substituted in connection with such transaction, (iv) that outstanding Awards may be settled
by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Stock, as of a specified
date associated with the transaction, over the exercise or base price of the Award, (v) that performance targets and performance
periods for Performance Awards will be modified, or (vi) any combination of the foregoing. The Committee's determination need not
be uniform and may be different for different Participants whether or not such Participants are similarly situated.


 


14.3 GENERAL.
Any discretionary adjustments made pursuant to this Article 14 shall be subject to the provisions of Section 15.2. To the extent
that any adjustments made pursuant to this Article 14 cause Incentive Stock Options to cease to qualify as Incentive Stock Options,
such Options shall be deemed to be Nonstatutory Stock Options.


 




    	 	- 24 -	 



     

    

  


ARTICLE 15


AMENDMENT, MODIFICATION AND TERMINATION


 


15.1. AMENDMENT.
MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend, modify or terminate
the Plan without stockholder approval; provided, however, that if an amendment to the Plan would, in the reasonable opinion of
the Board or the Committee, either (i) materially increase the number of Shares available under the Plan, (ii) expand the types
of awards under the Plan, (iii) materially expand the class of participants eligible to participate in the Plan, (iv) materially
extend the term of the Plan, or (v) otherwise constitute a material change requiring stockholder approval under applicable laws,
policies or regulations, then such amendment shall be subject to stockholder approval; and provided, further, that the Board or
Committee may condition any other amendment or modification on the approval of stockholders of the Company for any reason, including
by reason of such approval being necessary or deemed advisable to satisfy any other tax, securities or other applicable laws, policies
or regulations.


 


15.2. AWARDS
PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Award without
approval of the Participant; provided, however:


 


(a)          Subject
to the terms of the applicable Award Certificate, such amendment, modification or termination shall not, without the Participant's
consent, reduce or diminish the value of such Award determined as if the Award had been exercised, vested, cashed in or otherwise
settled on the date of such amendment or termination (with the per-share value of an Option or SAR for this purpose being calculated
as the excess, if any, of the Fair Market Value as of the date of such amendment or termination over the exercise or base price
of such Award);


 


(b)          The
original term of an Option or SAR may not be extended;


 


(c)          No
termination, amendment, or modification of the Plan shall adversely affect any Award previously granted under the Plan, without
the written consent of the Participant affected thereby. An outstanding Award shall not be deemed to be "adversely affected"
by a Plan amendment if such amendment would not reduce or diminish the value of such Award determined as if the Award had been
exercised, vested, cashed in or otherwise settled on the date of such amendment (with the per-share value of an Option or SAR for
this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment over the exercise
or base price of such Award).


 


15.3. COMPLIANCE
AMENDMENTS. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, the Board may amend the Plan
or an Award Certificate, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming
the Plan or Award Certificate to any present or future law relating to plans of this or similar nature (including, but not limited
to, Section 409A of the Code), and to the administrative regulations and rulings promulgated thereunder. By accepting an Award
under this Plan, a Participant agrees to any amendment made pursuant to this Section 15.3 to any Award granted under the Plan without
further consideration or action.


 




    	 	- 25 -	 



     

    

  


ARTICLE 16


GENERAL PROVISIONS


 


16.1. RIGHTS OF PARTICIPANTS.


 


(a)          No
Participant or any Eligible Participant shall have any claim to be granted any Award under the Plan. Neither the Company, its Affiliates
nor the Committee is obligated to treat Participants or Eligible Participants uniformly, and determinations made under the Plan
may be made by the Committee selectively among Eligible Participants who receive, or are eligible to receive, Awards (whether or
not such Eligible Participants are similarly situated).


 


(b)          Nothing
in the Plan, any Award Certificate or any other document or statement made with respect to the Plan, shall interfere with or limit
in any way the right of the Company or any Affiliate to terminate any Participant's employment or status as an officer, or any
Participant's service as a director, at any time, nor confer upon any Participant any right to continue as an employee, officer,
or director of the Company or any Affiliate, whether for the duration of a Participant's Award or otherwise.


 


(c)          Neither
an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or any Affiliate and,
accordingly, subject to Article 15, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive
discretion of the Committee without giving rise to any liability on the part of the Company or an of its Affiliates.


 


(d)          No
Award gives a Participant any of the rights of a shareholder of the Company unless and until Shares are in fact issued to such
person in connection with such Award.


 


16.2. WITHHOLDING.
The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to
the Company or such Affiliate, an amount sufficient to satisfy federal, state, and local taxes (including the Participant's FICA
obligation) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as
a result of the Plan. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and the
Company or such Affiliate will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any
kind otherwise due to the Participant. Unless otherwise determined by the Committee at the time the Award is granted or thereafter,
any such withholding requirement may be satisfied, in whole or in part, by withholding from the Award Shares having a Fair Market
Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes,
all in accordance with such procedures as the Committee establishes. All such elections shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.




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16.3. SPECIAL PROVISIONS RELATED
TO SECTION 409A OF THE CODE.


 


(a)          General.
It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the application
of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award Certificates shall be construed in a
manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not warranted
or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers (other than
in his or her capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed
by any Participant or other taxpayer as a result of the Plan or any Award.


 


(b)          Definitional
Restrictions. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, to the extent that any amount
or benefit that would constitute non-exempt "deferred compensation" for purposes of Section 409A of the Code would otherwise
be payable or distributable, or a different form of payment (e.g., lump sum or installment) would be effected, under the Plan
or any Award Certificate by reason of the occurrence of a Change in Control, or the Participant's Disability or separation from
service, such amount or benefit will not be payable or distributable to the Participant, and/or such different form of payment
will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability
or separation from service meet any description or definition of "change in control event," "disability" or
"separation from service," as the case may be, in Section 409A of the Code and applicable regulations (without giving
effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting
of any Award upon a Change in Control, Disability or separation from service, however defined. If this provision prevents
the payment or distribution of any amount or benefit, or the application of a different form of payment of any amount or benefit,
such payment or distribution shall be made at the time and in the form that would have applied absent the Change in Control, Disability
or separation from service, as applicable, as applicable.


 


(c)          Allocation
among Possible Exemptions. If any one or more Awards granted under the Plan to a Participant could qualify for any separation
pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar limit permitted
for the separation pay exemptions, the Company (acting through the Committee) shall determine which Awards or portions thereof
will be subject to such exemptions.


 


(d)          Installment
Payments. If, pursuant to an Award, a Participant is entitled to a series of installment payments, such Participant's right
to the series of installment payments shall be treated as a right to a series of separate payments and not to a single payment.
For purposes of the preceding sentence, the term "series of installment payments" has the meaning provided in Treas.
Reg. Section 1.409A-2(b)(2)(iii) (or any successor thereto).


 




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16.4. UNFUNDED
STATUS OF AWARDS. The Plan is intended to be an "unfunded" plan for incentive and deferred compensation. With respect
to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Certificate shall
give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. In its sole
discretion, the Committee may authorize the creation of grantor trusts or other arrangements to meet the obligations created under
the Plan to deliver Shares or payments in lieu of Shares or with respect to Awards. This Plan is not intended to be subject to
ERISA.


 


16.5. RELATIONSHIP
TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate unless provided otherwise in
such other plan. Nothing contained in the Plan will prevent the Company from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable
only in specific cases.


 


16.6. EXPENSES.
The expenses of administering the Plan shall be borne by the Company and its Affiliates.


 


16.7. TITLES
AND HEADINGS. The tides and headings of the Sections in the Plan are for convenience of reference only, and in the event of
any conflict, the text of the Plan, rather than such titles or headings, shall control.


 


16.8. GENDER
AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the plural.


 


16.9. FRACTIONAL
SHARES. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given
in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.


 


16.10. GOVERNMENT AND OTHER REGULATIONS.


  


(a)          Notwithstanding
any other provision of the Plan, no Participant who acquires Shares pursuant to the Plan may, during any period of time that
such Participant is an affiliate of the Company (within the meaning of the rules and regulations of the Securities and
Exchange Commission under the 1933 Act), sell such Shares, unless such offer and sale is made (i) pursuant to an effective
registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant to an
appropriate exemption from the registration requirement of the 1933 Act, such as that set forth in Rule 144 promulgated under
the 1933 Act.


 




    	 	- 28 -	 



     

    

  


(b)          Notwithstanding
any other provision of the Plan, if at any time the Committee shall determine that the registration, listing or qualification
of the Shares covered by an Award upon any exchange or under any foreign, federal, state or local law or practice, or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with,
the granting of such Award or the purchase or receipt of Shares thereunder, no Shares may be purchased, delivered or received
pursuant to such Award unless and until such registration, listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Committee. Any Participant receiving or purchasing Shares
pursuant to an Award shall make such representations and agreements and furnish such information as the Committee may request
to assure compliance with the foregoing or any other applicable legal requirements. The Company shall not be required to
issue or deliver any certificate or certificates for Shares under the Plan prior to the Committee's determination that all
related requirements have been fulfilled. The Company shall in no event be obligated to register any securities pursuant to
the 1933 Act or applicable state or foreign law or to take any other action in order to cause the issuance and delivery of
such certificates to comply with any such law, regulation or requirement.


 


16.11. GOVERNING
LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed in accordance with and
governed by the laws of the State of Tennessee.


 


16.12. SEVERABILITY.
In the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability will not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all
such other provisions will be given full force and effect to the same extent as though the invalid or unenforceable provision was
not contained herein.


 


16.13. NO LIMITATIONS
ON RIGHTS OF COMPANY. The grant of any Award shall not in any way affect the right or power of the Company to make adjustments,
reclassification or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer
all or any part of its business or assets. The Plan shall not restrict the authority of the Company, for proper corporate purposes,
to draft or assume awards, other than under the Plan, to or with respect to any person. If the Committee so directs, the Company
may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify, upon the condition or
understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms of an Award granted to
such Participant and specified by the Committee pursuant to the provisions of the Plan.


 




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16.14. INDEMNIFICATION.
Each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority
was delegated in accordance with Article 4 shall be indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim,
action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company's
approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of his or her own willful
misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the Company's chatter or bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.


 


The foregoing is hereby acknowledged as
being the SmartFinancial, Inc. 2010 Incentive Plan as adopted by the Board on March 10, 2010 and by the shareholders on March 10,
2010.


 





	 	SMARTFINANCIAL, INC.
	 	 
	 	By:	 
	 	 	 
	 	Its:	President & CEO




  




    	 	- 30 -	 



     

    

  


SUMMARY OF THE


SMARTFINANCIAL, INC. 2010 INCENTIVE PLAN


 


Purpose. The
purpose of the 2010 Incentive Plan is to promote the Company's success by linking the personal interests of its employees, officers,
directors and consultants to those of its shareholders, and by providing participants with an incentive for outstanding performance.


 


Authorized Shares.
The aggregate number of shares of the Company's common stock reserved and available for issuance pursuant to awards granted
under the 2010 Incentive Plan is 500,000.


 


Awards Available.
The 2010 Incentive Plan authorizes the granting of awards in any of the following forms:


 


		·	options to purchase shares of common stock, which may be non-qualified stock options or incentive
stock options under the U.S. tax code;



 


		·	stock appreciation rights, which give the holder the right to receive the difference between the
fair market value per share of common stock on the date of exercise over the grant price;



 


		·	restricted stock, which is subject to restrictions on transferability and subject to forfeiture
on terms set by the Board;



 


		·	restricted or deferred stock units, which represent the right to receive shares of common stock (or an equivalent value in
cash or other property) at a designated time in the future, based upon the attainment of stated vesting or performance criteria
in the case of restricted stock units;



 


		·	performance awards, which are payable in cash or stock upon the attainment of specified performance
goals;



 


		·	dividend equivalents, which entitle the participant to payments (or an equivalent value payable
in stock or other property) equal to any dividends paid on the shares of stock underlying an award;



 


		·	other stock-based awards in the discretion of the Board, including unrestricted stock grants; and



 


		·	purely cash-based awards.



 


Administration.
The 2010 Incentive Plan will be administered by the Board, or a committee thereof. The details of awards, such as vesting terms
and post-termination exercise periods, would be addressed in the individual award agreements, which would not have to be the same
for all participants, although some degree of uniformity is


 




     


     


    

  


		·	the payout opportunities attainable under all outstanding performance-based awards will vest based
on target or actual performance (depending on the time during the performance period in which the change in control occurs) and
the awards will payout on a pro rata basis. based on the time elapsed prior to the change in control, and



 


(B) with
respect to awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with a change in
control, if within two years after the effective date of the change in control, a participant's employment is terminated without
Cause or the participant resigns for Good Reason (as such terms are defined), then:


 


		·	all of that participant's outstanding options and SARs will become fully vested and exercisable;



 


		·	all time-based vesting restrictions on that participant's outstanding awards will lapse as of the
date of termination; and



 


		·	the payout opportunities attainable under all of that participant's outstanding performance-based awards will vest based on
target or actual performance (depending on the time during the performance period in which the date of termination occurs) and
the awards will payout on a pro rata basis, based on the time elapsed prior to the date of termination.



 


Discretionary Acceleration.
The Board also may in its discretion at any time declare any or all awards to be fully vested. The Board may discriminate among
participants or among awards in exercising such discretion.


 


Termination
or Amendment. The Board would be able to terminate, amend or modify the 2010 Incentive Plan, but certain types of amendments
would require shareholder approval. No termination or amendment of the 2010 Incentive Plan may adversely affect any award previously
granted under the plan without the written consent of the participant. The Board may amend or terminate outstanding awards, but
such amendments may require the consent of the participant.


 




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