EXHIBIT 10.1


 


 


EL CAPITAN PRECIOUS METALS, INC.


 


2015 EQUITY INCENTIVE PLAN


 


(Effective October 8, 2015, pursuant to Section
11.8)


 


1.     General.


 


1.1     Purpose.
The purpose of the 2015 Equity Incentive Plan (the “Plan”) of El Capitan Precious Metals, Inc. (the “Company”)
is to increase stockholder value and to advance the interests of the Company by furnishing a variety of economic incentives (“Incentives”)
designed to attract, retain and motivate Employees, certain key consultants and directors of the Company. Incentives may consist
of opportunities to purchase or receive shares of Common Stock, $0.001 par value per share, of the Company (“Common Stock”)
on terms determined under this Plan.


 


1.2     Eligible
Participants. Employees, Directors and Consultants are eligible to receive Incentives. Participants may be designated individually
or by groups or categories (for example, by pay grade) as the Committee deems appropriate. Participation by officers of the Company
or its subsidiaries and any performance objectives relating to such officers must be approved by the Committee. Participation by
others and any performance objectives relating to others may be approved by groups or categories (for example, by pay grade) and
authority to designate participants who are not officers and to set or modify such targets may be delegated.


 


1.3     Types of
Incentives. Incentives under the Plan may be granted in any one or a combination of the following forms: (a) Incentive
Stock Options and non-statutory stock options (Section 4); (b) stock appreciation rights (“SARs”) (Section
5); (c) stock awards, restricted stock awards and restricted stock unit awards (Section 6); (d) performance awards (Section
7), and (e) other forms of Incentives valued in whole or in part by reference to, or otherwise based on, Common Stock, including
the appreciation in value thereof (with the Board having sole and complete authority to determine the persons to whom and the
time or times at which such other forms of Incentives will be granted, the number of shares of Common Stock (or the cash equivalent
thereof) to be granted and all other terms and conditions of such other Incentives. Subject to the specific limitations provided
in this Plan, payment of Incentives may also be in the form of cash, Common Stock or combinations thereof as the Board shall determine,
and with such other restrictions as it may impose.


 


2.     Administration.


 


2.1     Administration
by the Board. The Plan shall be administered by the board of directors of the Company (the “Board”). The
Board may delegate administration of the Plan to a stock option or compensation committee of the Board to whom authority has been
delegated by the Board, in accordance with Section 2.3 (a “Committee”).


 


2.2     Powers of
Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:


 


(a)     To
determine: (i) who will be granted Incentives; (ii) when and how each Incentive will be granted; (iii) what type of Incentive will
be granted; (iv) the provisions of each Incentive (which need not be identical), including when a person will be permitted to exercise
or otherwise receive cash or Common Stock under the Incentive; (v) the number of shares of Common Stock subject to, or the cash
value of, an Incentive; and (vi) the Fair Market Value applicable to an Incentive.


 


(b)     To
construe and interpret the Plan and Incentives granted under it, and to establish, amend and revoke rules and regulations for administration
of the Plan and Incentives. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the
Plan or in any written agreement (an “Incentive Agreement”) between the Company and a person to whom an Incentive
is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Incentive (a “Participant”),
in a manner and to the extent it will deem necessary or expedient to make the Plan or Incentive fully effective.


 









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(c)     To
settle all controversies regarding the Plan and Incentives granted under it.


 


(d)     To
accelerate, in whole or in part, the time at which an Incentive may be exercised or vest (or at which cash or shares of Common
Stock may be issued).


 


(e)     To
suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or an Incentive Agreement, suspension or termination
of the Plan will not materially impair a Participant’s rights under his or her then-outstanding Incentive without his or
her written consent except as provided in subsection (viii) below.


 


(f)     To
submit the Plan and any amendment to the Plan for shareholder approval, including, but not limited to, amendments to the Plan intended
to satisfy the requirements of (A) Section 162(m) of the Internal Revenue Code of 1986, as amended (including the regulations promulgated
thereunder, the “Code”) regarding the exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to “covered employees” (within the meaning of Section 162(m)(3) under the Code),
(B) Section 422 of the Code regarding incentive stock options, or (C) Rule 16b-3 of the Securities Exchange Act of 1934 (including
the regulations promulgated thereunder, the “Exchange Act”) (“Rule 16b-3”).


 


(g)     To
approve forms of Incentive Agreements for use under the Plan and to amend the terms of any one or more Incentives, including, but
not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Incentive Agreement,
subject to any specified limits in the Plan that are not subject to Board discretion; provided, however, that a Participant’s
rights under any Incentive will not be impaired by any such amendment unless (i) the Company requests the consent of the affected
Participant, and (ii) such Participant consents in writing. Notwithstanding the foregoing, (A) a Participant’s rights will
not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment,
taken as a whole, does not materially impair the Participant’s rights, and (B) subject to the limitations of applicable law,
if any, the Board may amend the terms of any one or more Incentives without the affected Participant’s consent: (1) to maintain
the qualified status of the Incentive as an Incentive Stock Option under Section 422 of the Code; (2) to change the terms of an
Incentive Stock Option, if such change results in impairment of the Incentive solely because it impairs the qualified status of
the Incentive as an Incentive Stock Option under Section 422 of the Code; (3) to clarify the manner of exemption from, or to bring
the Incentive into compliance with, Section 409A; or (4) to comply with other applicable laws or securities exchange rule or listing
requirements.


 


(h)     Generally,
to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan or Incentives.


 


(i)     To
adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors
or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary
for immaterial modifications to the Plan or any Incentive Agreement that are required for compliance with the laws of the relevant
foreign jurisdiction).


 






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2.3     Delegation
to Committee.


 


(a)     General.
The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan
is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee
any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter
be to the Committee or subcommittee). Any delegation of administrative powers will be reflected in resolutions, not inconsistent
with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Committee may, at any
time, abolish the subcommittee and/or re-vest in the Committee any powers delegated to the subcommittee. The Board may retain the
authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers
previously delegated.


 


(b)     Section
162(m) and Rule 16b-3 Compliance. The Committee shall consist of not less than two (2) Directors. During any time period in
which the Company has a class of equity securities registered under Section 12 of the Exchange Act, each such Committee member
or, if applicable, each member of a subcommittee to which power to administer the Company’s equity incentive plans and compensation
under Section 162(m) under the Code, has been delegated, shall be an “outside director” within the meaning of Section
162(m) under the Code and a “non-employee director” within the meaning of Rule 16b-3.


 


2.4     Delegation
to an Officer. The Board may delegate to one (1) or more Directors or officers of the Company (within the meaning of Section
16 of the Exchange Act, “Officers”), subject to such terms, conditions and limitation as the Board may establish
in its discretion, the authority to grant Incentives; provided, however, that the Board shall not delegate such
authority (i) with respect to grants of Incentives to be made to Officers or (ii) in such a manner as would cause the Plan not
to comply with the requirements of Section 162(m) under the Code, applicable exchange rules or applicable corporate law.


 


2.5     Effect of
Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject
to review by any person and will be final, binding and conclusive on all persons.


 


3.     Shares
Subject to the Plan.


 


3.1     Number
of Shares. Subject to adjustment in connection with a Capitalization Adjustment, the number of shares of Common Stock which
may be issued under the Plan shall not exceed 15,000,000 shares of Common Stock. Shares of Common Stock that are issued under
the Plan or are subject to outstanding Incentives will be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. For purposes of clarification, the award of any Incentives payable only in cash will not
reduce the number of shares of Common Stock remaining and available to be issued under the Plan. Shares may be issued in connection
with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section
303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available
for issuance under the Plan.


 


3.2     Share Counting.


 


(a)     To
the extent that cash in lieu of shares of Common Stock is delivered upon the exercise of a SAR pursuant to Section 5.4, the
Company shall be deemed, for purposes of applying the limitation on the number of shares, to have issued the greater of the number
of shares of Common Stock which it was entitled to issue upon such exercise or on the exercise of any related option.


 






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(b)     In
the event that a stock option or SAR granted hereunder expires or is terminated or canceled unexercised as to any shares of Common
Stock, such shares shall be added back to the Plan share reserve and shall be available again for issuance pursuant to Incentives
granted under the Plan.


 


(c)     To
the extent that the full number of shares subject to a performance share award other performance based-stock award (other than
a stock option or SAR) is not issued by reason of failure to achieve maximum performance goals, the number of shares not issued
shall be added back to the Plan share reserve and shall be available again for issuance pursuant to Incentives granted under the
Plan.


 


(d)     In
the event that shares of Common Stock are issued as performance shares, restricted stock or pursuant to another stock award and
thereafter are forfeited or reacquired by the Company because of the failure to meet a contingency or condition required to vest
such shares in the Participant, then the shares that are forfeited or repurchased shall be added back to the Plan share reserve
and shall be available again for issuance pursuant to Incentives granted under the Plan.


 


(e)     Shares
withheld or deducted from an Incentive in satisfaction of tax withholding obligations on an Incentive or as consideration for the
exercise or purchase price of an Incentive shall not be added back to the Plan share reserve and shall not again become available
for issuance under the Plan. 


 


3.3     Incentive
Stock Option Limit. Subject to Section 9.1 relating to Capitalization Adjustments, the aggregate maximum number of shares of
Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be 15,000,000 shares of Common Stock.


 


3.4     Section
162(m) Limitations. Subject to Section 9.1 relating to Capitalization Adjustments, at such time as the Company may be subject
to the applicable provisions of Section 162(m) of the Code, the following limitations shall apply:


 


(a)      A
maximum of 15,000,000 shares of Common Stock subject to stock options, SARs and Other Stock Awards whose value is determined by
reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the
date any such Incentive is granted may be granted to any Participant during any calendar year. Notwithstanding the foregoing, if
any additional options, SARs or Other Stock Awards whose value is determined by reference to an increase over an exercise or strike
price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock Award are granted to any Participant
during any calendar year, compensation attributable to the exercise of such additional Incentive will not satisfy the requirements
to be considered “qualified performance-based compensation” under Section 162(m) of the Code unless such additional
Incentive is approved by the Company’s shareholders.


 


(b)      A
maximum of 15,000,000 performance shares may be granted to any one Participant during any one calendar year (whether the grant,
vesting or exercise is contingent upon the attainment during the Performance Period of the Performance Goals).


 


(c)      A
maximum of $500,000 may be granted as a performance cash awards to any one Participant during any one calendar year.


 


3.5     Source of
Shares. The stock issuable under the Plan will be shares of authorized but unissued Common Stock.


 


4.     Stock
Options. A stock option is a right to purchase shares of Common Stock from the Company. Each stock option granted under this
Plan shall be subject to the following terms and conditions:


 






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4.1     Price.
The option price per share shall be determined by the Board, subject to adjustment under Section 9.1; provided that option
price shall be not less than the Fair Market Value of the Common Stock subject to the option on the date of grant.


 


4.2     Number. The number of shares of Common Stock subject to the option shall be determined by the Board, subject to adjustment
in connection with a Capitalization Adjustment. The number of shares of Common Stock subject to a stock option shall be reduced
in the same proportion that the holder thereof exercises a SAR if any SAR is granted in conjunction with or related to the stock
option.


 


4.3     Duration and Time for Exercise. Subject to earlier termination as provided in Section 10.2, the term of each stock
option shall be determined by the Committee but shall not exceed ten years and one day from the date of grant. Each stock option
shall become exercisable at such time or times during its term as shall be determined by the Board at the time of grant.


 


4.4     Manner of Exercise. A stock option may be exercised, in whole or in part, by giving written notice to the Company, specifying
the number of shares of Common Stock to be purchased and accompanied by the full purchase price for such shares. The option price
shall be payable (a) in United States dollars upon exercise of the option and may be paid by cash, uncertified or certified
check or bank draft; (b) at the discretion of the Board, by delivery of shares of Common Stock in payment of all or any part
of the option price, which shares shall be valued for this purpose at the Fair Market Value on the date such option is exercised;
(c) at the discretion of the Committee, by instructing the Company to withhold from the shares of Common Stock issuable upon
exercise of the stock option shares of Common Stock in payment of all or any part of the exercise price and/or any related withholding
tax obligations, which shares shall be valued for this purpose at the Fair Market Value or in such other manner as may be authorized
from time to time by the Board, or (d) in any other form of legal consideration that may be acceptable to the Board or is specified
in the applicable Incentive Agreement. The shares of Common Stock delivered by the participant pursuant to Section 4.4(b)
must have been held by the participant for a period of not less than six months prior to the exercise of the option, unless otherwise
determined by the Board. Prior to the issuance of shares of Common Stock upon the exercise of a stock option, a participant shall
have no rights as a shareholder.


 


4.5     Incentive
Stock Options. Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the
grant Incentive Stock Options:


 


(a)     To
the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and
any Affiliates) exceeds one hundred thousand dollars ($100,000) (or such other limit established in the Code) or otherwise does
not comply with the rules governing Incentive Stock Options, the options or portions thereof that exceed such limit (according
to the order in which they were granted) or otherwise do not comply with such rules will be treated as non-statutory stock options,
notwithstanding any contrary provision of the applicable Incentive Agreement(s).


 


(b)     Any
Incentive Stock Option authorized under the Plan shall contain such other provisions as the Board shall deem advisable, but shall
in all events be consistent with and contain all provisions required in order to qualify the options as Incentive Stock Options.


 


(c)     All
Incentive Stock Options must be granted within ten years from the earlier of the date on which this Plan was adopted by Board of
Directors or the date this Plan was approved by the shareholders.


 


(d)     Unless
sooner exercised, all Incentive Stock Options shall expire no later than 10 years after the date of grant.


 






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(e)     The
option price for Incentive Stock Options shall be not less than the Fair Market Value of the Common Stock subject to the option
on the date of grant.


 


(f)     If
Incentive Stock Options are granted to any participant who, at the time such option is granted, would own (within the meaning of
Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the
employer corporation or of its parent or subsidiary corporation, (i) the option price for such Incentive Stock Options shall be
not less than 110% of the Fair Market Value of the Common Stock subject to the option on the date of grant and (ii) such Incentive
Stock Options shall expire no later than five years after the date of grant.


 


5.     Stock
Appreciation Rights. A SAR is a right to receive, without payment to the Company, a number of shares of Common Stock, cash
or any combination thereof, the amount of which is determined pursuant to the formula set forth in Section 5.4. A SAR may
be granted (a) with respect to any stock option granted under this Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Board (as to all or any portion of the shares of Common Stock subject to the
stock option), or (b) alone, without reference to any related stock option. Each SAR under this Plan shall be subject to the
following terms and conditions:


 


5.1     Number.
Each SAR granted to any participant shall relate to such number of shares of Common Stock as shall be determined by the Board,
subject to adjustment in connection with a Capitalization Adjustment. In the case of a SAR granted with respect to a stock option,
the number of shares of Common Stock to which the SAR pertains shall be reduced in the same proportion that the holder of the option
exercises the related stock option.


 


5.2     Duration.
Subject to earlier termination as provided in Section 10.2, the term of each SAR shall be determined by the Board but shall
not exceed ten years and one day from the date of grant. Unless otherwise provided by the Board, each SAR shall become exercisable
at such time or times, to such extent and upon such conditions as the stock option, if any, to which it relates is exercisable.


 


5.3     Exercise.
A SAR may be exercised, in whole or in part, by giving written notice to the Company, specifying the number of SARs which the holder
wishes to exercise. Upon receipt of such written notice, the Company shall, within 90 days thereafter, deliver to the exercising
holder certificates for the shares of Common Stock or cash or both, as determined by the Committee, to which the holder is entitled
pursuant to Section 5.4.


 


5.4     Payment.
Subject to the right of the Board to deliver cash in lieu of shares of Common Stock (which, as it pertains to Officers and Directors,
shall comply with all requirements of the Exchange Act), the number of shares of Common Stock which shall be issuable upon the
exercise of a SAR shall be determined by dividing:


 


(a)      the
number of shares of Common Stock as to which the SAR is exercised multiplied by the amount of the appreciation in such shares (for
this purpose, the “appreciation” shall be the amount by which the Fair Market Value of the shares of Common Stock subject
to the SAR on the exercise date exceeds (1) in the case of a SAR related to a stock option, the purchase price of the shares
of Common Stock under the stock option or (2) in the case of a SAR granted alone, without reference to a related stock option,
an amount which shall be determined by the Board at the time of grant, subject to adjustment under Section 10.6); by


 


(b)      the
Fair Market Value of a share of Common Stock on the exercise date.


 


In lieu of issuing shares of
Common Stock upon the exercise of a SAR, the Board may elect to pay the holder of the SAR cash equal to the Fair Market Value on
the exercise date of any or all of the shares which would otherwise be issuable. No fractional shares of Common Stock shall be
issued upon the exercise of a SAR; instead, the holder of the SAR shall be entitled to receive a cash adjustment equal to the same
fraction of the Fair Market Value of a share of Common Stock on the exercise date or to purchase the portion necessary to make
a whole share at its Fair Market Value on the date of exercise.


 









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6.     Stock Awards,
Restricted Stock and Restricted Stock Units. A stock award consists of the transfer by the Company to a participant of shares
of Common Stock, without other payment therefor, as additional compensation for services to the Company. Restricted stock consists
of shares of Common Stock which are sold or transferred by the Company to a participant at a price determined by the Committee
(which price shall be at least equal to the minimum price required by applicable law for the issuance of a share of Common Stock)
and subject to restrictions on their sale or other transfer by the participant. Restricted stock units evidence the right to receive
shares of Common Stock at a future date. The transfer of Common Stock pursuant to stock awards and the transfer and sale of restricted
stock shall be subject to the following terms and conditions:


 


6.1     Number
of Shares. The number of shares to be transferred or sold by the Company to a participant pursuant to a stock award or as restricted
stock, or the number of shares that may be issued pursuant to a restricted stock unit, shall be determined by the Board.


 


6.2     Sale
Price. The Board shall determine the price, if any, at which shares of restricted stock shall be sold to a participant, which
may vary from time to time and among Participants and which may be below the Fair Market Value of such shares of Common Stock at
the date of sale.


 


6.3     Restrictions.
All shares of restricted stock transferred or sold hereunder, and all restricted stock units granted hereunder, shall be subject
to such restrictions as the Board may determine, including, without limitation any or all of the following:


 


(a)      a
prohibition against either the sale, transfer, pledge or other encumbrance of the shares of restricted stock, or the delivery of
shares pursuant to restricted stock units, such prohibition to lapse at such time or times as the Committee shall determine (whether
in annual or more frequent installments, at the time of the death, disability or retirement of the holder of such shares, or otherwise);


 


(b)      a
requirement that the holder of shares of restricted stock or restricted stock units forfeit, or (in the case of shares sold to
a participant) resell back to the Company at his or her cost, any right to all or a part of such shares or units in the event of
termination of his or her employment or consulting engagement during any period in which such shares or units are subject to restrictions;
and


 


(c)      such
other conditions or restrictions as the Board may deem advisable.


 


6.4     Escrow.
In order to enforce the restrictions imposed by the Board pursuant to Section 6.3, the Participant receiving restricted stock
or restricted stock units, as applicable, shall enter into an Incentive Agreement with the Company setting forth the conditions
of the grant. Shares of restricted stock shall be registered in the name of the Participant and deposited, together with a stock
power endorsed in blank, with the Company. Each such certificate shall bear a legend in substantially the following form:


 


The transferability of this certificate
and the shares of Common Stock represented by it are subject to the terms and conditions (including conditions of forfeiture) contained
in the 2015 Equity Incentive Plan of El Capitan Precious Metals, Inc. (the “Company”), and an agreement entered into
between the registered owner and the Company. A copy of the Plan and the agreement is on file in the office of the Company.


 


6.5     Issuance
and Delivery of Shares. Subject to Section 10.6, at the end of any time period during which the shares of restricted stock
are subject to forfeiture and restrictions on transfer, such shares will be delivered free of all restrictions to the participant
or to the participant’s legal representative, beneficiary or heir. In the case of restricted stock units, no shares shall
be issued at the time such restricted stock units are granted. Subject to Section 10.6, upon the lapse or waiver of restrictions
applicable to restricted stock units, or at a later time specified in the agreement governing the grant of restricted stock units,
any shares derived from the restricted stock units shall be issued and delivered to the holder of the restricted stock units.


 









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6.6     Shareholder.
Subject to the terms and conditions of the Plan, each Participant receiving restricted stock shall have all the rights of a shareholder
with respect to shares of stock during any period in which such shares are subject to forfeiture and restrictions on transfer,
including without limitation, the right to vote such shares. Dividends paid in cash or property other than Common Stock with respect
to shares of restricted stock shall be paid to the participant currently. Any holder of restricted stock units shall not be, and
shall not have rights and privileges of, a shareholder with respect to any shares that may be derived from the restricted stock
units unless and until such shares have been issued.


 


7.     Performance
Awards.


 


7.1     Performance
Shares. A performance share is an Incentive (covering a number of shares not in excess of that set forth in Section 3.4(b)
above) that is payable contingent upon the attainment during a Performance Period of certain Performance Goals. The length of any
Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what
degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance
with Section 162(m) of the Code, the Board), in its sole discretion. The grant of performance shares to a Participant shall
not create any rights in such Participant as a shareholder of the Company, until the payment of shares of Common Stock with respect
to an Incentive. No adjustment shall be made in performance shares granted on account of cash dividends which may be paid or other
rights which may be issued to the holders of Common Stock prior to the end of any period for which performance objectives were
established. In addition, to the extent permitted by applicable law and the applicable Incentive Agreement, the Board may determine
that cash may be used in payment of performance shares.


 


7.2     Performance
Cash Awards. A performance cash award is a cash award (for a dollar value not in excess of that set forth in Section 3.4(c)
above) that is payable contingent upon the attainment during a Performance Period of certain Performance Goals. At the time of
grant of a performance cash award, the length of any Performance Period, the Performance Goals to be achieved during the Performance
Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined
by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion. The
Board may specify the form of payment of performance cash awards, which may be cash or other property, or may provide for a Participant
to have the option for his or her performance cash award, or such portion thereof as the Board may specify, to be paid in whole
or in part in cash or other property.


 


7.3     Board
Discretion. The Board retains the discretion to at any time reduce or eliminate the compensation or economic benefit due upon
attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance
Period.


 


7.4     Section
162(m) Compliance. Unless otherwise permitted in compliance with the requirements of Section 162(m) of the Code with respect
to an Incentive intended to qualify as “performance-based compensation” thereunder, the Committee will establish the
Performance Goals applicable to, and the formula for calculating the amount payable under, the Incentive no later than the earlier
of (A) the date ninety (90) days after the commencement of the applicable Performance Period, and (B) the date on which twenty-five
percent (25%) of the Performance Period has elapsed, and in any event at a time when the achievement of the applicable Performance
Goals remains substantially uncertain. Prior to the payment of any compensation under an Incentive intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee will certify the extent to which any Performance Goals and
any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in
the value of the Common Stock). Notwithstanding satisfaction of any completion of any Performance Goals, options, cash or other
benefits granted, issued, retainable and/or vested under an Incentive on account of satisfaction of such Performance Goals may
be reduced by the Committee on the basis of such further considerations as the Committee, in its sole discretion, will determine.


 









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8.     Covenants
of the Company.


 


8.1     Availability
of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy
then-outstanding Incentives.


 


8.2     Securities
Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan
such authority as may be required to grant Incentives and to issue and sell shares of Common Stock upon exercise of the Incentives;
provided, however, that this undertaking will not require the Company to register under the Securities Act of 1933
(including the regulations promulgated thereunder, the “Securities Act”) the Plan, any Incentive or any Common
Stock issued or issuable pursuant to any such Incentive. If, after reasonable efforts and at a reasonable cost, the Company is
unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and
sell Common Stock upon exercise of such Incentives unless and until such authority is obtained. A Participant will not be eligible
for the grant of an Incentive or the subsequent issuance of cash or Common Stock pursuant to the Incentive if such grant or issuance
would be in violation of any applicable securities law.


 


8.3     No Obligation
to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the
time or manner of exercising any Incentive. Furthermore, the Company will have no duty or obligation to warn or otherwise advise
such holder of a pending termination or expiration of an Incentive or a possible period in which the Incentive may not be exercised.
The Company has no duty or obligation to minimize the tax consequences of an Incentive to the holder of such Incentive.


 


9.     Adjustments
upon Changes in Common Stock; Other Corporate Events.


 


9.1     Capitalization
Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the
class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a) and the shares of Common Stock issuable
pursuant to any Incentive, the exercise price of any stock option or SAR, the performance goals for any Incentive, and other provisions
of this Plan and outstanding Incentives, in order to reflect the change in the Common Stock and to provide Plan participants with
the same relative rights before and after such adjustment. The Board will make such adjustments, and its determination will be
final, binding and conclusive.


 


9.2     Dissolution
or Liquidation. Except as otherwise provided in the Incentive Agreement, in the event of a dissolution or liquidation of the
Company, all outstanding Incentives (other than Incentives consisting of vested and outstanding shares of Common Stock not subject
to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such
dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture
condition may be repurchased or reacquired by the Company; provided, however, that the Board may, in its sole discretion,
cause some or all Incentives to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent
such Incentives have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on
its completion.


 


9.3     Corporate
Transaction. The following provisions will apply to Incentives in the event of a Corporate Transaction unless otherwise provided
in the instrument evidencing the Incentive or any other written agreement between the Company or any Affiliate and the Participant
or unless otherwise expressly provided by the Board at the time of grant of an Incentive. In the event of a Corporate Transaction,
then, notwithstanding any other provision of the Plan, the Board may take one or more of the following actions with respect to
Incentives, contingent upon the closing or consummation of the Corporate Transaction:


 









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(a)     arrange
for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume
or continue the Incentive or to substitute a similar stock award for the Incentive (including, but not limited to, an award to
acquire the same consideration paid to the shareholders of the Company pursuant to the Corporate Transaction);


 


(b)     arrange
for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to
the Incentives to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent
company);


 


(c)     accelerate
the vesting, in whole or in part, of the Incentive (and, if applicable, the time at which the Incentive may be exercised) to a
date prior to the effective time of such Corporate Transaction as the Board determines (or, if the Board does not determine such
a date, to the date that is five (5) days prior to the effective date of the Corporate Transaction), with such Incentive terminating
if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction; provided, however,
that the Board may require Participants to complete and deliver to the Company a notice of exercise before the effective date of
a Corporate Transaction, which exercise is contingent upon the effectiveness of such Corporate Transaction;


 


(d)     arrange
for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Incentive;


 


(e)     cancel
or arrange for the cancellation of the Incentive, to the extent not vested or not exercised prior to the effective time of the
Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate;
and


 


(f)     make
a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant
would have received upon the exercise of the Incentive immediately prior to the effective time of the Corporate Transaction, over
(B) any exercise price payable by such holder in connection with such exercise. For clarity, this payment may be zero ($0) if the
value of the property is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent
that payment of consideration to the holders of the Company’s Common Stock in connection with the Corporate Transaction is
delayed as a result of escrows, earn outs, holdbacks or any other contingencies.


 


The Board need
not take the same action or actions with respect to all Incentives or portions thereof or with respect to all Participants. The
Board may take different actions with respect to the vested and unvested portions of an Incentive prior to the earlier of (i) the
effective time of the Corporate Transaction and (ii) the effectiveness of such action(s) with respect to the Incentives.


 


9.4     Change
in Control. Incentives may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control
as may be provided in the Incentive Agreement for such Incentive, as may be provided in any other written agreement between the
Company or any Affiliate and the Participant, or as may be determined by the Board in its sole discretion, but in the absence of
such provision or determination, no such acceleration will occur.


 


10.     General.


 


10.1     Effective
Date. The Plan will become effective the Effective Date.


 


10.2     Duration.



 


(a)     The
Board may suspend or terminate the Plan at any time. No Incentive Stock Option will be granted after the tenth (10th) anniversary
of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the shareholders of the
Company. No Incentives may be granted under the Plan while the Plan is suspended or after it is terminated.


 









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(b)      Suspension
or termination of the Plan will not impair rights and obligations under any Incentive granted while the Plan is in effect except
with the written consent of the affected Participant or as otherwise permitted in the Plan.


 


10.3     Corporate
Action Constituting Grant of Incentives. Corporate action constituting a grant by the Company of an Incentive to any Participant
will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when
the Incentive Agreement, instrument, certificate, or letter evidencing the Incentive is communicated to, or actually received or
accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting
the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are
inconsistent with those in the Incentive Agreement as a result of a clerical error in the papering of the Incentive Agreement,
the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Incentive
Agreement.


 


10.4     Non-transferability
of Incentives. No stock option, SAR, restricted stock, restricted stock unit or performance award may be transferred, pledged
or assigned by the holder thereof (except, in the event of the holder’s death, by will or the laws of descent and distribution
to the limited extent provided in the Plan or the Incentive, or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder), and the Company shall not be required
to recognize any attempted assignment of such rights by any participant. Notwithstanding the preceding sentence, stock options
may be transferred by the holder thereof to Employee’s spouse, children, grandchildren or parents (collectively, the “Family
Members”), to trusts for the benefit of Family Members, to partnerships or limited liability companies in which Family Members
are the only partners or shareholders, or to entities exempt from federal income taxation pursuant to Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended. During a participant’s lifetime, a stock option may be exercised only by him
or her, by his or her guardian or legal representative or by the transferees permitted by the preceding sentence.


 


10.5     Effect
of Termination or Death. In the event that a Participant ceases to be an Employee Director, or Consultant for any reason, including
death or disability, any Incentives may be exercised (or payments or shares may be delivered thereunder) or shall expire at such
times as may be determined by the Board and, if applicable, set forth in the Incentive Agreement.


 


10.6     Investment
Assurances; Additional Condition. Notwithstanding anything in this Plan to the contrary, the Company may require a Participant,
as a condition of exercising or acquiring Common Stock under any Incentive, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she
is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Incentive;
and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject
to the Incentive for the Participant’s own account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A)
the issuance of the shares upon the exercise or acquisition of Common Stock under the Incentive has been registered under a then
currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities
laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock. If at any time the Company further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such document) of any Incentive or the shares of Common Stock issuable pursuant
thereto is necessary on any securities exchange or under any federal or state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with the award of any
Incentive, the issuance of shares of Common Stock pursuant thereto, or the removal of any restrictions imposed on such shares,
such Incentive shall not be awarded or such shares of Common Stock shall not be issued or such restrictions shall not be removed,
as the case may be, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.


 









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10.7     Incentive
Plans and Agreements. Except in the case of stock awards, the terms of each Incentive shall be stated in a plan or agreement
approved by the Board. The Board may also determine to enter into agreements with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as Incentive Stock Options or as non-statutory stock options and in order to
eliminate SARs with respect to all or part of such options and any other previously issued options.


 


10.8     Withholding.
Unless prohibited by the terms of an Incentive Agreement, the Company may, in its sole discretion, satisfy any federal, state or
local tax withholding obligation relating to an Incentive by any of the following means (in addition to the Company’s right
to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) causing the Participant
to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable
to the Participant in connection with the Incentive; provided, however, that no shares of Common Stock are withheld
with a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid
classification of the Incentive as a liability for financial accounting purposes); (iii) withholding cash from an Incentive settled
in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be
set forth in the Incentive Agreement. If a Participant desires and the Board permits, Participant the Participant may satisfy its
obligation to pay to the Company the amount required to be withheld by electing (the “Election”) to have the
Company withhold from the distribution shares of Common Stock having a value up to the minimum amount of withholding taxes required
to be collected on the transaction. The value of the shares to be withheld shall be based on the Fair Market Value of the Common
Stock on the date that the amount of tax to be withheld shall be determined (“Tax Date”). Each Election must
be made prior to the Tax Date. The Board may disapprove of any Election, may suspend or terminate the right to make Elections,
or may provide with respect to any Incentive that the right to make Elections shall not apply to such Incentive. An Election is
irrevocable.


 


10.9     No
Continued Employment, Engagement or Right to Corporate Assets. Nothing in the Plan, any Incentive Agreement or any other instrument
executed thereunder or in connection with any Incentive granted pursuant thereto will confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the time the Incentive was granted or will affect the
right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without
cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate,
or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. Nothing contained in the
Plan shall be construed as giving an Employee, a consultant, such persons’ beneficiaries or any other person any equity or
interests of any kind in the assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between
the Company and any such person.


 


10.10     Change
in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services
for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company
and the Employee has a change in status from a full-time Employee to a part-time Employee) after the date of grant of any Incentive
to the Participant, the Board has the right in its sole discretion to (i) make a corresponding reduction in the number of shares
or cash amount subject to any portion of such Incentive that is scheduled to vest or become payable after the date of such change
in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable
to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Incentive
that is so reduced or extended.


 









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10.11     Electronic
Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered
electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or
other shared electronic medium controlled by the Company to which the Participant has access).


 


10.12     Deferral
Permitted. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of
Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Incentive may be deferred
and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A.


 


10.13     Amendment
of the Plan. The Board may amend, modify, suspend, discontinue or terminate the Plan or any portion of the Plan at any time
as it deems necessary or advisable; provided, however, any amendment or modification that requires the approval of
the Company’s shareholders pursuant to any applicable law, regulation or securities exchange rule or listing requirement,
shall be subject to approval by the Company’s shareholders. Except as provided in the Plan (including Section 2.2(g)) or
an Incentive Agreement, no amendment, modification, suspension, discontinuance or termination of the Plan shall impair a Participant’s
rights under an outstanding Incentive without his or her written consent, provided that such consent shall not be required with
respect to any Plan amendment, modification or other such action if the Board determines in its sole discretion that such amendment,
modification or other such action is not reasonably likely to significantly reduce or diminish the benefits provided to the Participant
under such Incentive.


 


10.14     Code Section 409A Provisions. Unless otherwise expressly provided for in an Incentive Agreement, the Plan and Incentive
Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Incentives granted hereunder
exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board
determines that any Incentive granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Incentive
Agreement evidencing such Incentive will incorporate the terms and conditions necessary to avoid the consequences specified in
Section 409A(a)(1) of the Code and to the extent an Incentive Agreement is silent on terms necessary for compliance, such terms
are hereby incorporated by reference into the Incentive Agreement. Notwithstanding anything to the contrary in this Plan (and unless
the Incentive Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant
holding an Incentive that constitutes “deferred compensation” under Section 409A of the Code is a “specified
employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation
from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued
or paid before the date that is six (6) months following the date of such Participant’s “separation from service”
or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies
with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period
elapses, with the balance paid thereafter on the original schedule.


 


10.15     Clawback/Recovery.
All Incentives granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is
required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s
securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Incentive Agreement as the
Board determines necessary or appropriate. No recovery of compensation under such a clawback policy will be an event giving rise
to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement
with the Company.


 









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11.     Additional
Definitions.


 


11.1     Affiliate. “Affiliate”
means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined
in Rule 405. The Board will have the authority to determine the time or times at which “parent” or “subsidiary”
status is determined within the foregoing definition.


 


11.2     Capitalization
Adjustment. A “Capitalization Adjustment” means any change that is made in, or other events that occur with
respect to, the Common Stock subject to the Plan or subject to any Incentive after the Effective Date without the receipt of consideration
by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, stock split, reverse
stock split, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction,
as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor
thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization
Adjustment.


 


11.3    Change
in Control. A “Change in Control” means any of the following:


 


(a)     Any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)
becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either
(A) the then-outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or (B)
the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes
of this Section 11.3, the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliated company or (iv) any acquisition pursuant to a transaction that complies with Sections
11.3(b)(1), 11.3(b)(2) and 11.3(b)(3);


 


(b)     Consummation
of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each
case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate
entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally
in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company
or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock
of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities
of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority
of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action
of the Board providing for such Business Combination; or


 









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(c)     Approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company.


 


Notwithstanding
the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets,
merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition
of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant
will supersede the foregoing definition with respect to Incentives subject to such agreement; provided, however,
that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing
definition will apply; provided, further, that no Change in Control shall be deemed to occur upon announcement or
commencement of a tender offer or upon a potential takeover or upon shareholder approval of a merger or other transaction, in each
case without a requirement that the Change in Control actually occur. If required for compliance with Section 409A of the Code,
in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership
or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of”
the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control”
to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.


 


11.4     Corporate
Transaction. “Corporate Transaction” means the consummation, in a single transaction or in a series of related
transactions, of any one or more of the following events:


 


(a)     a
sale or other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated
assets of the Company and its Subsidiaries;


 


(b)     a
sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company;


 


(c)     a
merger, consolidation or similar transaction following which the Company is not the surviving corporation; or


 


(d)     a
merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common
Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.


 


To the extent
required for compliance with Section 409A of the Code, in no event will an event be deemed a Corporate Transaction if such transaction
is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of
a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without
regard to any alternative definition thereunder).


 









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11.5     Employee.
“Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director,
or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the
Plan.


 


11.6     Consultant.
“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render
consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of
an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service,
will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing,
a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act of 1933
is available to register either the offer or the sale of the Company’s securities to such person.


 


11.7     Director.
“Director” means a member of the Board.


 


11.8     Effective
Date. “Effective Date” means the effective date of this Plan document, which is the date on which this Plan
is approved by the Board.


 


11.9     Fair
Market Value. “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:


 


(a)      If
the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share
of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange
or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as
reported in a source the Board deems reliable.


 


(b)     Unless
otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the
Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.


 


(c)     In
the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a
manner that complies with Sections 409A and 422 of the Code.


 


11.10     Incentive
Stock Option. “Incentive Stock Option” means a stock option that is intended to be, and qualifies as, an
“incentive stock option” within the meaning of Section 422 of the Code.


 


11.11     Performance
Criteria. “Performance Criteria” means the one or more criteria that the Board will select for purposes
of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance
Goals may be based on any one of, or combination of, the following as determined by the Board: (i) earnings (including earnings
per share and net earnings); (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation
and amortization; (iv) total stockholder return; (v) return on equity or average stockholder’s equity; (vi) return on assets,
investment, or capital employed; (vii) stock price; (viii) margin (including gross margin); (ix) income (before or after taxes);
(x) operating income; (xi) operating income after taxes; (xii) pre-tax profit; (xiii) operating cash flow; (xiv) sales or revenue
targets; (xv) increases in revenue or product revenue; (xvi) expenses and cost reduction goals; (xvii) improvement in or attainment
of working capital levels; (xiii) economic value added (or an equivalent metric); (xix) market share; (xx) cash flow; (xxi) cash
flow per share; (xxii) share price performance; (xxiii) debt reduction; (xxiv) implementation or completion of projects or processes;
(xxv) customer satisfaction; (xxvi) stockholders’ equity; (xxvii) capital expenditures; (xxiii) debt levels; (xxix) operating
profit or net operating profit; (xxx) workforce diversity; (xxxi) growth of net income or operating income; (xxxii) billings; and
(xxxiii) to the extent that an Incentive is not intended to comply with Section 162(m) of the Code, other measures of performance
selected by the Board.


 









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11.12     Performance
Goals. “Performance Goals” means, for a Performance Period, the one or more goals established by the Board
for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect
to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance
of one or more comparable companies or the performance of one or more relevant indices.


 


11.13     Performance
Period. “Performance Period” means the period of time selected by the Board over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of
an Incentive. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.


 


11.14     Transaction
Proceeds Per Share. “Transaction Proceeds Per Share” in connection with a Change in Control shall mean the
cash plus the Fair Market Value of the non-cash consideration to be received per share by the shareholders of the Company upon
the occurrence of the transaction.


 









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