Exhibit 10.1


 


DERMA SCIENCES, INC.

2012 EQUITY INCENTIVE PLAN


1.  Establishment,
Purpose, Duration.


a.   Establishment
..  Derma Sciences, Inc. (the “Company”), hereby establishes an equity compensation plan to be known as the
Derma Sciences, Inc. 2012 Equity Incentive Plan (the “Plan”). The Plan is effective as of May 30, 2012 (the “Effective
Date”), subject to the approval of the Plan by the stockholders of the Company (the date of such stockholder approval being
the “Approval Date”). Definitions of capitalized terms used in the Plan are contained in Section 2 of the Plan.


b.   Purpose
..  The purpose of the Plan is to attract and retain Directors, officers and other key Employees of, and Consultants to,
the Company and its Subsidiaries and to provide to such persons incentives and rewards for their performance.


c.   Duration
..  No Award may be granted under the Plan after the day immediately preceding the tenth (10th) anniversary of the Effective
Date, or such earlier date as the Board shall determine. The Plan will remain in effect with respect to outstanding Awards until
no Awards remain outstanding.


d.   Prior Plans
..  If the Company’s stockholders approve the Plan, the Derma Sciences, Inc. Amended and Restated Stock Option Plan
and the Derma Sciences, Inc. Restricted Stock Plan (the “Prior Plans”) each will terminate in its entirety effective
on the Approval Date; provided that all outstanding awards under the Prior Plans as of the Approval Date shall remain outstanding
and shall be administered and settled in accordance with the provisions of the applicable Prior Plan.


 


2.   Definitions.  As
used in the Plan, the following definitions shall apply.


“Applicable Laws”
means the applicable requirements relating to the administration of equity-based compensation plans under U.S. state corporate
laws, U.S. federal and state securities laws, the Code, the rules of any stock exchange or quotation system on which the Shares
are listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan.


“Approval Date”
has the meaning given such term in Section 1(a).


“Award” means
a Nonqualified Stock Option, Incentive Stock Option, Stock Appreciation Right, Restricted Shares Award, Restricted Share Unit,
Other Share-Based Award, or Cash-Based Award granted pursuant to the terms and conditions of the Plan.


“Award Agreement”
means either: (a) an agreement, either in written or electronic format, entered into by the Company and a Participant setting forth
the terms and provisions applicable to an Award granted under the Plan; or (b) a statement, either in written or electronic format,
issued by the Company to a Participant describing the terms and provisions of such Award, which need not be signed by the Participant.


“Board” means
the Board of Directors of the Company.


“Cash-Based Award”
shall mean a cash Award granted pursuant to Section 11 of the Plan.


“Cause” as a
reason for a Participant’s termination of employment shall have the meaning assigned such term in the employment or consulting
agreement, if any, between the Participant and the Company or Subsidiary. If the Participant is not a party to an employment or
consulting agreement with the Company or a Subsidiary in which such term is defined, then unless otherwise defined in the applicable
Award Agreement, “Cause” shall mean any of the following, as reasonably determined by the Committee: (i) the Participant’s
material failure to perform his or her responsibilities to the Company, (ii) the Participant’s material failure to follow
directives or policies established by or at the direction of the Board, or (iii) the Participant conducting himself or herself
in a manner materially detrimental to the interests of the Company.


 


 



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“Change in Control”
means the occurrence of any of the following events:


(a)  The acquisition
by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%)
of 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”); or


(b)  Individuals
who, as of the date of this Plan, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided , however , that any individual becoming a Director subsequent to the date
of this Plan whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least
two-thirds (2/3) of the Directors then comprising the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the election or removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board; or


(c)  Consummation
of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company
or the acquisition of assets of another entity (a “Corporate Transaction”), in each case, unless, following such Corporate
Transaction, all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company
Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than fifty percent
(50%) of 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 corporation resulting from such Corporate Transaction (including, without limitation, a corporation
which 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 Corporate
Transaction of the Outstanding Company Voting Securities; or


(d)   Approval
by the stockholders of the Company of a complete liquidation or dissolution of the Company.


“Code” means
the Internal Revenue Code of 1986, as amended.


“Committee” means
the Compensation Committee of the Board or such other committee or subcommittee of the Board as may be duly appointed to administer
the Plan and having such powers in each instance as shall be specified by the Board. To the extent required by Applicable Laws,
the Committee shall consist of two or more members of the Board, each of whom is a “non-employee director” within the
meaning of Rule 16b-3 promulgated under the Exchange Act, an “outside director” within the meaning of regulations promulgated
under Section 162(m) of the Code, and an “independent director” within the meaning of applicable rules of any securities
exchange upon which Shares are listed.


“Company” has
the meaning given such term in Section 1(a) and any successor thereto.


“Consultant”
means an independent contractor that (i) performs services for the Company or a Subsidiary in a capacity other than as an Employee
or Director and (ii) qualifies as a consultant under the applicable rules of the SEC for registration of shares on a Form S-8 Registration
Statement.


“Date of Grant”
means the date as of which an Award is determined to be effective and designated in a resolution by the Committee and is granted
pursuant to the Plan. The Date of Grant shall not be earlier than the date of the resolution and action therein by the Committee.
In no event shall the Date of Grant be earlier than the Effective Date.


“Director” means
any individual who is a member of the Board who is not an Employee.


“Effective Date”
has the meaning given such term in Section 1(a).


 



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“Employee” means
any employee of the Company or a Subsidiary; provided , however , that for purposes of determining whether any person
may be a Participant for purposes of any grant of Incentive Stock Options, the term “Employee” has the meaning given
to such term in Section 3401(c) of the Code, as interpreted by the regulations thereunder and Applicable Law.


“Exchange Act”
means the Securities Exchange Act of 1934 and the rules and regulations thereunder, as such law, rules and regulations may be amended
from time to time.


“Fair Market Value”
means the value of one Share on any relevant date, determined under the following rules: (a) the closing sale price per Share on
that date as reported on the principal exchange on which Shares are then trading, if any, or if applicable the NASDAQ Capital Market,
or if there are no sales on that date, on the next preceding trading day during which a sale occurred; (b) if the Shares are not
reported on a principal exchange or national market system, the average of the closing bid and asked prices last quoted on that
date by an established quotation service for over-the-counter securities; or (c) if neither (a) nor (b) applies, (i) with respect
to Stock Options, Stock Appreciation Rights and any Award of stock rights that is subject to Section 409A of the Code, the value
as determined by the Committee through the reasonable application of a reasonable valuation method, taking into account all information
material to the value of the Company, within the meaning of Section 409A of the Code, and (ii) with respect to all other Awards,
the fair market value as determined by the Committee in good faith.


“Incentive Stock Option”
or “ISO” means a Stock Option that is designated as an Incentive Stock Option and that is intended to meet the requirements
of Section 422 of the Code.


“Nonqualified Stock
Option” means a Stock Option that is not intended to meet the requirements of Section 422 of the Code or otherwise does not
meet such requirements.


“Other Share-Based
Award” means an equity-based or equity-related Award not otherwise described by the terms of the Plan, granted in accordance
with the terms and conditions set forth in Section 10.


“Participant”
means any eligible individual as set forth in Section 5 who holds one or more outstanding Awards.


“Performance-Based
Exception” means the performance-based exception from the tax deductibility limitations of Section 162(m) of the Code.


“Performance Objectives”
means the performance objective or objectives established by the Committee pursuant to the Plan. Any Performance Objectives may
relate to the performance of the Company or one or more of its Subsidiaries, divisions, departments, units, functions, partnerships,
joint ventures or minority investments, product lines or products, or the performance of the individual Participant, and may include,
without limitation, the Performance Objectives set forth in Section 13(b). The Performance Objectives may be made relative to the
performance of a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems
appropriate, or the Company may select Performance Objectives as compared to various stock market indices. Performance Objectives
may be stated as a combination of the listed factors.


“Plan” means
this Derma Sciences, Inc. 2012 Equity Incentive Plan, as amended from time to time.


“Prior Plans”
has the meaning given such term in Section 1(d).


“Restricted Shares”
means Shares granted or sold pursuant to Section 8 as to which neither the substantial risk of forfeiture nor the prohibition on
transfers referred to in such Section 8 has expired.


“Restricted Share Unit”
means a grant or sale of the right to receive Shares or cash at the end of a specified restricted period made pursuant to Section
9.


“SEC” means the
United States Securities and Exchange Commission.


“Share” means
a share of common stock of the Company, $0.01 par value per share, or any security into which such Share may be changed by reason
of any transaction or event of the type referred to in Section 15.


 



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“Stock Appreciation
Right” means a right granted pursuant to Section 7.


“Stock Option”
means a right to purchase a Share granted to a Participant under the Plan in accordance with the terms and conditions set forth
in Section 6. Stock Options may be either Incentive Stock Options or Nonqualified Stock Options.


“Subsidiary”
means: (a) with respect to an Incentive Stock Option, a “subsidiary corporation” as defined under Section 424(f) of
the Code; and (b) for all other purposes under the Plan, any corporation or other entity in which the Company owns, directly or
indirectly, a proprietary interest of more than fifty (50%) by reason of stock ownership or otherwise.


“Ten Percent Stockholder”
shall mean any Participant who owns more than 10% of the combined voting power of all classes of stock of the Company, within the
meaning of Section 422 of the Code.


 


3.  Shares Available
Under the Plan.


a.   Shares
Available for Awards.  The maximum number of Shares that may be issued or delivered pursuant to Awards under the
Plan shall be the number of Shares that, on the Approval Date, are available to be granted under the Prior Plans but which are
not then subject to outstanding awards under the Prior Plans, all of which may be granted with respect to Incentive Stock Options.
Shares issued or delivered pursuant to an Award may be authorized but unissued Shares, treasury Shares, including Shares purchased
in the open market, or a combination of the foregoing. The aggregate number of Shares available for issuance or delivery under
the Plan shall be subject to adjustment as provided in Section 15.


b.   Share Usage.  In
addition to the number of Shares provided for in Section 3(a), the following Shares shall be available for Awards under the Plan:
(i) Shares covered by an Award that expires or is forfeited, canceled, surrendered or otherwise terminated without the issuance
of such Shares; (ii) Shares covered by an Award that is settled only in cash; (iii) Shares granted through the assumption of, or
in substitution for, outstanding awards granted by a company to individuals who become Employees, Directors or Consultants as the
result of a merger, consolidation, acquisition or other corporate transaction involving such company and the Company or any of
its Affiliates (except as may be required by reason of Section 422 of the Code or the rules and regulations of any stock exchange
or other trading market on which the Shares are listed); (iv) any Shares subject to outstanding awards under the Prior Plan as
of the Approval Date that on or after the Approval Date are forfeited, canceled, surrendered or otherwise terminated without the
issuance of such Shares; and (v) any Shares from awards exercised for or settled in vested and nonforfeitable Shares that are later
returned to the Company pursuant to any compensation recoupment policy, provision or agreement. Notwithstanding the foregoing,
the following Shares issued or delivered under this Plan shall not again be available for grant as described above: Shares tendered
in payment of the exercise price of a Stock Option, Shares withheld by the Company or any Subsidiary to satisfy a tax withholding
obligation, and Shares that are repurchased by the Company with Stock Option proceeds. Without limiting the foregoing, with respect
to any Stock Appreciation Right that is settled in Shares, the full number of Shares subject to the Award shall count against the
number of Shares available for Awards under the Plan regardless of the number of Shares used to settle the Stock Appreciation Right
upon exercise. This Section 3(b) shall apply to the number of Shares reserved and available for Incentive Stock Options only to
the extent consistent with applicable Treasury regulations relating to Incentive Stock Options under the Code.


 



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c.   Per Participant
Limits.  Subject to adjustment as provided in Section 15 of the Plan, the following limits shall apply with respect
to Awards that are intended to qualify for the Performance-Based Exception: (i) the maximum aggregate number of Shares that may
be subject to Stock Options or Stock Appreciation Rights granted in any calendar year to any one Participant shall be 100,000 Shares;
(ii) the maximum aggregate number of Restricted Shares and Shares issuable or deliverable under Restricted Share Units and Other
Share-Based Awards granted in any calendar year to any one Participant shall be 50,000 Shares; (iii) the maximum aggregate compensation
that can be paid pursuant to Cash-Based Awards or Other Share-Based Awards granted in any calendar year to any one Participant
shall be $500,000 or a number of Shares having an aggregate Fair Market Value not in excess of such amount; and (iv) the maximum
dividend equivalents that may be paid in any calendar year to any one Participant shall be $5,000 or a number of Shares having
an aggregate Fair Market Value not in excess of such amount.


 


4.  Administration
of the Plan.


a.   In General.  The
Plan shall be administered by the Committee. Except as otherwise provided by the Board, the Committee shall have full and final
authority in its discretion to take all actions determined by the Committee to be necessary in the administration of the Plan,
including, without limitation, discretion to: select Award recipients; determine the sizes and types of Awards; determine the terms
and conditions of Awards in a manner consistent with the Plan; grant waivers of terms, conditions, restrictions and limitations
applicable to any Award, or accelerate the vesting or exercisability of any Award, in a manner consistent with the Plan; construe
and interpret the Plan and any Award Agreement or other agreement or instrument entered into under the Plan; establish, amend,
or waive rules and regulations for the Plan’s administration; and take such other action, not inconsistent with the terms
of the Plan, as the Committee deems appropriate. To the extent permitted by Applicable Laws, the Committee may, in its discretion,
delegate to one or more Directors or Employees any of the Committee’s authority under the Plan. The acts of any such delegates
shall be treated hereunder as acts of the Committee with respect to any matters so delegated.


b.   Determinations.  The
Committee shall have no obligation to treat Participants or eligible Participants uniformly, and the Committee may make determinations
under the Plan selectively among Participants who receive, or Employees, Directors or Consultants who are eligible to receive,
Awards (whether or not such Participants or eligible Employees, Directors or Consultants are similarly situated). All determinations
and decisions made by the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Committee
shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries, its stockholders, Employees, Directors,
Consultants, Participants and their estates and beneficiaries.


c.   Authority
of the Board.  The Board may reserve to itself any or all of the authority or responsibility of the Committee under
the Plan or may act as the administrator of the Plan for any and all purposes. To the extent the Board has reserved any such authority
or responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee (other than in this Section 4(c)) shall include the Board. To the
extent that any action of the Board under the Plan conflicts with any action taken by the Committee, the action of the Board shall
control.


 


5.  Eligibility
and Participation.  Each Employee, Director and Consultant is eligible to participate in the Plan. Subject to the
provisions of the Plan, the Committee may, from time to time, select from all eligible Employees, Directors and Consultants those
to whom Awards shall be granted and shall determine, in its sole discretion, the nature of any and all terms permissible by Applicable
Law and the amount of each Award.


 


6.  Stock Options.  Subject
to the terms and conditions of the Plan, Stock Options may be granted to Participants in such number, and upon such terms and conditions,
as shall be determined by the Committee in its sole discretion.


 



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a.   Award Agreement.  Each
Stock Option shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock Option, the
number of Shares covered by the Stock Option, the conditions upon which the Stock Option shall become vested and exercisable and
such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of
the Plan. The Award Agreement also shall specify whether the Stock Option is intended to be an Incentive Stock Option or a Nonqualified
Stock Option.


b.   Exercise
Price.  The exercise price per Share of a Stock Option shall be determined by the Committee at the time the Stock
Option is granted and shall be specified in the related Award Agreement; provided, however , that in no event shall the
exercise price per Share of any Stock Option be less than one hundred percent (100%) of the Fair Market Value of a Share on the
Date of Grant.


c.   Term.  The
term of a Stock Option shall be determined by the Committee and set forth in the related Award Agreement; provided, however
, that in no event shall the term of any Stock Option exceed ten (10) years from its Date of Grant.


d.   Exercisability.  Stock
Options shall become vested and exercisable at such times and upon such terms and conditions as shall be determined by the Committee
and set forth in the related Award Agreement. Such terms and conditions may include, without limitation, the satisfaction of (a)
performance goals based on one or more Performance Objectives, and (b) time-based vesting requirements.


e.   Exercise
of Stock Options.  Except as otherwise provided in the Plan or in a related Award Agreement, a Stock Option may be
exercised for all or any portion of the Shares for which it is then exercisable. A Stock Option shall be exercised by the delivery
of a notice of exercise to the Company or its designee in a form specified by the Company which sets forth the number of Shares
with respect to which the Stock Option is to be exercised and full payment of the exercise price for such Shares. The exercise
price of a Stock Option may be paid, in the discretion of the Committee and as set forth in the applicable Award Agreement: (i)
in cash or its equivalent; (ii) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate
Fair Market Value at the time of exercise equal to the aggregate exercise price; (iii) by a cashless exercise (including by withholding
Shares deliverable upon exercise and through a broker-assisted arrangement to the extent permitted by Applicable Laws); (iv) by
a combination of the methods described in clauses (i), (ii) and/or (iii); or (v) through any other method approved by the Committee
in its sole discretion. As soon as practicable after receipt of the notification of exercise and full payment of the exercise price,
the Company shall cause the appropriate number of Shares to be issued to the Participant.


f.   Special
Rules Applicable to Incentive Stock Options.  Notwithstanding any other provision in the Plan to the contrary:


(i)  Incentive
Stock Options may be granted only to Employees of the Company and its Subsidiaries. The terms and conditions of Incentive Stock
Options shall be subject to and comply with the requirements of Section 422 of the Code.


(ii)  To the extent
that the aggregate Fair Market Value of the Shares (determined as of the Date of Grant) with respect to which an Incentive Stock
Option is exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Subsidiaries)
is greater than $100,000 (or such other amount specified in Section 422 of the Code), as calculated under Section 422 of the Code,
then the Stock Option shall be treated as a Nonqualified Stock Option.


(iii)  No Incentive
Stock Option shall be granted to any Participant who, on the Date of Grant, is a Ten Percent Stockholder, unless (x) the exercise
price per Share of such Incentive Stock Option is at least one hundred and ten percent (110%) of the Fair Market Value of a Share
on the Date of Grant, and (y) the term of such Incentive Stock Option shall not exceed five (5) years from the Date of Grant.


 



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7.  Stock Appreciation
Rights.  Subject to the terms and conditions of the Plan, Stock Appreciation Rights may be granted to Participants
in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.


a.   Award Agreement.  Each
Stock Appreciation Right shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock
Appreciation Right, the number of Shares covered by the Stock Appreciation Right, the conditions upon which the Stock Appreciation
Right shall become vested and exercisable and such other terms and conditions as the Committee shall determine and which are not
inconsistent with the terms and conditions of the Plan.


b.   Exercise
Price.  The exercise price per Share of a Stock Appreciation Right shall be determined by the Committee at the time
the Stock Appreciation Right is granted and shall be specified in the related Award Agreement; provided, however, that
in no event shall the exercise price per Share of any Stock Appreciation Right be less than one hundred percent (100%) of the
Fair Market Value of a Share on the Date of Grant.


c.   Term.  The
term of a Stock Appreciation Right shall be determined by the Committee and set forth in the related Award Agreement; provided,
however , that in no event shall the term of any Stock Appreciation Right exceed ten (10) years from its Date of Grant.


d.   Exercisability
of Stock Appreciation Rights.  A Stock Appreciation Right shall become vested and exercisable at such times and upon
such terms and conditions as may be determined by the Committee and set forth in the related Award Agreement. Such terms and conditions
may include, without limitation, the satisfaction of (i) performance goals based on one or more Performance Objectives, and (ii)
time-based vesting requirements.


e.   Exercise
of Stock Appreciation Rights.  Except as otherwise provided in the Plan or in a related Award Agreement, a Stock
Appreciation Right may be exercised for all or any portion of the Shares for which it is then exercisable. A Stock Appreciation
Right shall be exercised by the delivery of a notice of exercise to the Company or its designee in a form specified by the Company
which sets forth the number of Shares with respect to which the Stock Appreciation Right is to be exercised. Upon exercise, a Stock
Appreciation Right shall entitle a Participant to an amount equal to (a) the excess of (i) the Fair Market Value of a Share on
the exercise date over (ii) the exercise price per Share, multiplied by (b) the number of Shares with respect to which the Stock
Appreciation Right is exercised. A Stock Appreciation Right may be settled in whole Shares, cash or a combination thereof, as specified
by the Committee in the related Award Agreement.


 


8.  Restricted
Shares.  Subject to the terms and conditions of the Plan, Restricted Shares may be granted or sold to Participants
in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.


a.   Award Agreement.  Each
Restricted Shares Award shall be evidenced by an Award Agreement that shall specify the number of Restricted Shares, the restricted
period(s) applicable to the Restricted Shares, the conditions upon which the restrictions on the Restricted Shares will lapse and
such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of
the Plan.


b.   Terms,
Conditions and Restrictions.  The Committee shall impose such other terms, conditions and/or restrictions on any
Restricted Shares as it may deem advisable, including, without limitation, a requirement that the Participant pay a purchase price
for each Restricted Share, restrictions based on the achievement of specific Performance Objectives, time-based restrictions or
holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Shares. Unless otherwise
provided in the related Award Agreement or required by applicable law, the restrictions imposed on Restricted Shares shall lapse
upon the expiration or termination of the applicable restricted period and the satisfaction of any other applicable terms and conditions.


 



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c.   Custody
of Certificates.  To the extent deemed appropriate by the Committee, the Company may retain the certificates representing
Restricted Shares in the Company’s possession until such time as all terms, conditions and/or restrictions applicable to
such Shares have been satisfied or lapse.


d.   Rights
Associated with Restricted Shares during Restricted Period.  During any restricted period applicable to Restricted
Shares: (i) the Restricted Shares may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated; (ii)
unless otherwise provided in the related Award Agreement, the Participant shall be entitled to exercise full voting rights associated
with such Restricted Shares; and (iii) the Participant shall be entitled to all dividends and other distributions paid with respect
to such Restricted Shares during the restricted period. The Award Agreement may require that receipt of any dividends or other
distributions with respect to the Restricted Shares shall be subject to the same terms and conditions as the Restricted Shares
with respect to which they are paid. Notwithstanding the preceding sentence, dividends or other distributions with respect to Restricted
Shares that vest based on the achievement of Performance Objectives shall be accumulated until such Award is earned, and the dividends
or other distributions shall not be paid if the Performance Objectives are not satisfied.


 


9.  Restricted
Share Units.  Subject to the terms and conditions of the Plan, Restricted Share Units may be granted or sold to Participants
in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.


a.   Award Agreement.  Each
Restricted Share Unit Award shall be evidenced by an Award Agreement that shall specify the number of units, the restricted period(s)
applicable to the Restricted Share Units, the conditions upon which the restrictions on the Restricted Share Units will lapse,
the time and method of payment of the Restricted Share Units, and such other terms and conditions as the Committee shall determine
and which are not inconsistent with the terms and conditions of the Plan.


b.   Terms,
Conditions and Restrictions.  The Committee shall impose such other terms, conditions and/or restrictions on any
Restricted Share Units as it may deem advisable, including, without limitation, a requirement that the Participant pay a purchase
price for each Restricted Share Unit, restrictions based on the achievement of specific Performance Objectives or time-based restrictions
or holding requirements.


c.   Form of
Settlement.  Restricted Share Units may be settled in whole Shares, cash or a combination thereof, as specified by
the Committee in the related Award Agreement.


d.   Dividend
Equivalents.  Restricted Share Units may provide the Participant with dividend equivalents, on either a current or
deferred or contingent basis, and either in cash or in additional Shares, as determined by the Committee in its sole discretion
and set forth in the related Award Agreement; provided that dividend equivalents with respect to Restricted Share Units
that vest based on the achievement of Performance Objectives shall be accumulated until such Award is earned, and the dividend
equivalents shall not be paid if the Performance Objectives are not satisfied.


 


10.  Other Share-Based
Awards.  Subject to the terms and conditions of the Plan, Other Share-Based Awards may be granted to Participants
in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion. Other Share-Based
Awards are Awards that are valued in whole or in part by reference to, or otherwise based on the Fair Market Value of, Shares,
and shall be in such form as the Committee shall determine, including without limitation, unrestricted Shares or time-based or
performance-based units that are settled in Shares and/or cash.


a.   Award Agreement.  Each
Other Share-Based Award shall be evidenced by an Award Agreement that shall specify the terms and conditions upon which the Other
Share-Based Award shall become vested, if applicable, the time and method of settlement, the form of settlement and such other
terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan.


b.   Form of
Settlement.  An Other Share-Based Award may be settled in whole Shares, cash or a combination thereof, as specified
by the Committee in the related Award Agreement.


 



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c.   Dividend
Equivalents.  Other Share-Based Awards may provide the Participant with dividend equivalents, on either a current
or deferred or contingent basis, and either in cash or in additional Shares, as determined by the Committee in its sole discretion
and set forth in the related Award Agreement; provided that dividend equivalents with respect to Other Share-Based Awards
that vest based on the achievement of Performance Objectives shall be accumulated until such Award is earned, and the dividend
equivalents shall not be paid if the Performance Objectives are not satisfied.


 


11.  Cash-Based
Awards.  Subject to the terms and conditions of the Plan, Cash-Based Awards may be granted to Participants in such
amounts and upon such other terms and conditions as shall be determined by the Committee in its sole discretion. Each Cash-Based
Award shall be evidenced by an Award Agreement that shall specify the payment amount or payment range, the time and method of settlement
and the other terms and conditions, as applicable, of such Award which may include, without limitation, restrictions based on the
achievement of specific Performance Objectives.


 


12.  Compliance
with Section 409A.  Awards granted under the Plan shall be designed and administered in such a manner that they are
either exempt from the application of, or comply with, the requirements of Section 409A of the Code. To the extent that the Committee
determines that any award granted under the Plan is subject to Section 409A of the Code, the Award Agreement shall incorporate
the terms and conditions necessary to avoid the imposition of an additional tax under Section 409A of the Code upon a Participant.
Notwithstanding any other provision of the Plan or any Award Agreement (unless the Award Agreement provides otherwise with specific
reference to this Section): (i) an Award shall not be granted, deferred, accelerated, extended, paid out, settled, substituted
or modified under the Plan in a manner that would result in the imposition of an additional tax under Section 409A of the Code
upon a Participant; and (ii) if an Award is subject to Section 409A of the Code, and if the Participant holding the award is a
“specified employee” (as defined in Section 409A of the Code, with such classification to be determined in accordance
with the methodology established by the Company), then, to the extent required to avoid the imposition of an additional tax under
Section 409A of the Code upon a Participant, no distribution or payment of any amount shall be made before the date that is six
(6) months following the date of such Participant’s “separation from service” (as defined in Section 409A of
the Code) or, if earlier, the date of the Participant’s death. Although the Company intends to administer the Plan so that
Awards will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that
any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal,
state, local, or non-United States law. The Company shall not be liable to any Participant for any tax, interest, or penalties
the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.


 


13.  Compliance
with Section 162(m).


a.   In General
..  Notwithstanding anything in the Plan to the contrary, Awards may be granted in a manner that is intended to qualify
for the Performance-Based Exception. As determined by the Committee in its sole discretion, the grant, vesting, exercisability
and/or settlement of any Restricted Shares, Restricted Share Units, Other Share-Based Awards and Cash-Based Awards intended to
qualify for the Performance-Based Exception shall be conditioned on the attainment of one or more Performance Objectives during
a performance period established by the Committee and must satisfy the requirements of this Section 13.



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b.   Performance
Objectives.  If an Award is intended to qualify for the Performance-Based Exception, then the Performance Objectives
shall be based on specified levels of or growth in one or more of the following criteria: revenues, weighted average revenue per
unit, earnings from operations, operating income, earnings before or after interest and taxes, operating income before or after
interest and taxes, net income, cash flow, earnings per share, debt to capital ratio, economic value added, return on total capital,
return on invested capital, return on equity, return on assets, total return to stockholders, earnings before or after interest,
taxes, depreciation, amortization or extraordinary or special items, operating income before or after interest, taxes, depreciation,
amortization or extraordinary or special items, return on investment, free cash flow, cash flow return on investment (discounted
or otherwise), net cash provided by operations, cash flow in excess of cost of capital, operating margin, profit margin, contribution
margin, stock price and/or strategic business criteria consisting of one or more objectives based on meeting specified product
development, strategic partnering, research and development, market penetration, geographic business expansion goals, cost targets,
customer satisfaction, gross or net additional customers, average customer life, employee satisfaction, management of employment
practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures
of subsidiaries, affiliates and joint ventures.


c.   Establishment
of Performance Goals.  With respect to Awards intended to qualify for the Performance-Based Exception, the Committee
shall establish: (i) the applicable Performance Objectives and performance period, and (ii) the formula for computing the payout.
Such terms and conditions shall be established in writing while the outcome of the applicable performance period is substantially
uncertain, but in no event later than the earlier of: (x) ninety days after the beginning of the applicable performance period;
or (y) the expiration of twenty-five percent (25%) of the applicable performance period.


d.   Certification
of Performance.  With respect to any Award intended to qualify for the Performance-Based Exception, the Committee
shall certify in writing whether the applicable Performance Objectives and other material terms imposed on such Award have been
satisfied, and, if they have, ascertain the amount of the payout or vesting of the Award. Notwithstanding any other provision of
the Plan, payment or vesting of any such Award shall not be made until the Committee certifies in writing that the applicable Performance
Objectives and any other material terms of such Award were in fact satisfied in a manner conforming to applicable regulations under
Section 162(m) of the Code.


e.   Negative
Discretion.  With respect to any Award intended to qualify for the Performance-Based Exception, after the date that
the Performance Objectives are required to be established in writing pursuant to Section 13(c), the Committee shall not have discretion
to increase the amount of compensation that is payable upon achievement of the designated Performance Objectives. However, the
Committee may, in its sole discretion, reduce the amount of compensation that is payable upon achievement of the designated Performance
Objectives.


 


14.  Transferability.  Except
as otherwise determined by the Committee, no Award or dividend equivalents paid with respect to any Award shall be transferable
by the Participant except by will or the laws of descent and distribution; provided , that if so determined by the Committee,
each Participant may, in a manner established by the Board or the Committee, designate a beneficiary to exercise the rights of
the Participant with respect to any Award upon the death of the Participant and to receive Shares or other property issued or delivered
under such Award. Except as otherwise determined by the Committee, Stock Options and Stock Appreciation Rights will be exercisable
during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity to do
so, by the Participant’s guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under
state law and/or court supervision.


 



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15.  Adjustments.  In
the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification
Topic 718, Compensation — Stock Compensation), such as a stock dividend, stock split, reverse stock split, spinoff,
rights offering, or recapitalization through a large, nonrecurring cash dividend, the Committee shall cause there to be an equitable
adjustment in the numbers of Shares specified in Section 3 of the Plan and, with respect to outstanding Awards, in the number and
kind of Shares subject to outstanding Awards and the exercise price or other price of Shares subject to outstanding Awards, in
each case to prevent dilution or enlargement of the rights of Participants. In the event of any other change in corporate capitalization,
or in the event of a merger, consolidation, liquidation, or similar transaction, the Committee may, in its sole discretion, cause
there to be an equitable adjustment as described in the foregoing sentence, to prevent dilution or enlargement of rights; provided
, however , that, unless otherwise determined by the Committee, the number of Shares subject to any Award shall always be
rounded down to a whole number. Notwithstanding the foregoing, the Committee shall not make any adjustment pursuant to this Section
15 that would (i) cause any Stock Option intended to qualify as an ISO to fail to so qualify, (ii) cause an Award that is otherwise
exempt from Section 409A of the Code to become subject to Section 409A, or (iii) cause an Award that is subject to Section 409A
of the Code to fail to satisfy the requirements of Section 409A. The determination of the Committee as to the foregoing adjustments,
if any, shall be conclusive and binding on all Participants and any other persons claiming under or through any Participant.


 


16.  Fractional
Shares.  The Company shall not be required to issue or deliver any fractional Shares pursuant to the Plan and, unless
otherwise provided by the Committee, fractional shares shall be settled in cash.


 


17.  Withholding
Taxes.  To the extent required by Applicable Law, a Participant shall be required to satisfy, in a manner satisfactory
to the Company or Subsidiary, as applicable, any withholding tax obligations that arise by reason of a Stock Option or Stock Appreciation
Right exercise, the vesting of or settlement of Shares under an Award, an election pursuant to Section 83(b) of the Code or otherwise
with respect to an Award. The Company and its Subsidiaries shall not be required to issue or deliver Shares, make any payment or
to recognize the transfer or disposition of Shares until such obligations are satisfied. The Committee may permit or require these
obligations to be satisfied by having the Company withhold a portion of the Shares that otherwise would be issued or delivered
to a Participant upon exercise of a Stock Option or Stock Appreciation Right or upon the vesting or settlement of an Award, or
by tendering Shares previously acquired, in each case having a Fair Market Value equal to the minimum amount required to be withheld
or paid. Any such elections are subject to such conditions or procedures as may be established by the Committee and may be subject
to disapproval by the Committee.


 


18.  Foreign
Employees.  Without amending the Plan, the Committee may grant Awards to Participants who are foreign nationals,
or who are subject to Applicable Laws of one or more non-United States jurisdictions, on such terms and conditions different from
those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement
of the purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures,
and the like as may be necessary or advisable to comply with provisions of Applicable Laws of other countries in which the Company
or its Subsidiaries operate or have employees.


 


19.  Termination
for Cause; Forfeiture of Awards.


a.   Termination
for Cause.  If a Participant’s employment or service is terminated by the Company or a Subsidiary for Cause,
then the Participant shall forfeit all Awards granted under the Plan to the extent held by the Participant immediately prior to
the Participant’s termination of employment or service.


b.   Compensation
Recovery Policy.  Any Award granted to a Participant shall be subject to forfeiture or repayment pursuant to the
terms of any applicable compensation recovery policy adopted by the Company, including any such policy that may be adopted to comply
with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities and Exchange
Commission rule or applicable securities exchange.


 



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c.   Set-Off
and Other Remedies.  To the extent that amounts are not immediately returned or paid to the Company as provided in
this Section 19, the Company may, to the extent permitted by Applicable Laws, seek other remedies, including a set off of the amounts
so payable to it against any amounts that may be owing from time to time by the Company or a Subsidiary to the Participant for
any reason, including, without limitation, wages, or vacation pay or other benefits; provided, however , that, except to
the extent permitted by Treasury Regulation Section 1.409A-3(j)(4), such offset shall not apply to amounts that are “deferred
compensation” within the meaning of Section 409A of the Code.


 


20.  Change
in Control.  In the event of a Change in Control, the Committee, in its sole discretion, may take such actions, if
any, as it deems necessary or desirable with respect to any Award that is outstanding as of the date of the consummation of the
Change in Control. Such actions may include, without limitation: (a) the acceleration of the vesting, settlement and/or exercisability
of an Award; (b) the payment of a cash amount in exchange for the cancellation of an Award; (c) the cancellation of Stock Options
and/or Stock Appreciation Rights without payment therefor if the Fair Market Value of a Share on the date of the Change in Control
does not exceed the exercise price per Share of the applicable Awards; and/or (d) the issuance of substitute Awards that substantially
preserve the value, rights and benefits of any affected Awards.


 


21.  Amendment,
Modification and Termination.


a.   In General.  The
Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part; provided ,
however , that no alteration or amendment that requires stockholder approval in order for the Plan to comply with any rule
promulgated by the SEC or any securities exchange on which Shares are listed or any other Applicable Laws shall be effective unless
such amendment shall be approved by the requisite vote of stockholders of the Company entitled to vote thereon within the time
period required under such applicable listing standard or rule.


b.   Adjustments
to Outstanding Awards.  The Committee may in its sole discretion at any time (i) provide that all or a portion of
a Participant’s Stock Options, Stock Appreciation Rights and other Awards in the nature of rights that may be exercised shall
become fully or partially exercisable; (ii) provide 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 Objectives or other performance-based criteria with respect
to any Awards shall be deemed to be wholly or partially satisfied; or (iii) waive any other limitation or requirement under any
such Award, in each case, as of such date as the Committee may, in its sole discretion, declare. Unless otherwise determined by
the Committee, any such adjustment that is made with respect to an Award that is intended to qualify for the Performance-Based
Exception shall be made at such times and in such manner as will not cause such Awards to fail to qualify under the Performance-Based
Exception. Additionally, the Committee shall not make any adjustment pursuant to this Section 21(b) that would cause an Award that
is otherwise exempt from Section 409A of the Code to become subject to Section 409A, or that would cause an Award that is subject
to Section 409A of the Code to fail to satisfy the requirements of Section 409A.


c.   Prohibition
on Repricing.  Except for adjustments made pursuant to Sections 15 or 20, the Board or the Committee will not, without
the further approval of the stockholders of the Company, authorize the amendment of any outstanding Stock Option or Stock Appreciation
Right to reduce the exercise price. No Stock Option or Stock Appreciation Right will be cancelled and replaced with an Award having
a lower exercise price, or for another Award, or for cash without further approval of the stockholders of the Company, except as
provided in Sections 15 or 20. Furthermore, no Stock Option or Stock Appreciation Right will provide for the payment, at the time
of exercise, of a cash bonus or grant or sale of another Award without further approval of the stockholders of the Company. This
Section 21(c) is intended to prohibit the repricing of “underwater” Stock Options or Stock Appreciation Rights without
stockholder approval and will not be construed to prohibit the adjustments provided for in Sections 15 or 20.


 



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d.   Effect
on Outstanding Awards.  Notwithstanding any other provision of the Plan to the contrary (other than Sections 15,
20, 21(b) and 23(d)), no termination, amendment, suspension, or modification of the Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding
such Award; provided that the Committee may modify an ISO held by a Participant to disqualify such Stock Option from treatment
as an “incentive stock option” under Section 422 of the Code without the Participant’s consent.


 


22.  Applicable
Laws.  The obligations of the Company with respect to Awards under the Plan shall be subject to all Applicable Laws
and such approvals by any governmental agencies as the Committee determines may be required. The Plan and each Award Agreement
shall be governed by the laws of the State of New Jersey, excluding any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.


 


23.  Miscellaneous.


a.   Deferral
of Awards.  Except with respect to Stock Options, Stock Appreciation Rights and Restricted Shares, the Committee
may permit Participants to elect to defer the issuance or delivery of Shares or the settlement of Awards in cash under the Plan
pursuant to such rules, procedures or programs as it may establish for purposes of the Plan. The Committee also may provide that
deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts.
All elections and deferrals permitted under this provision shall comply with Section 409A of the Code, including setting forth
the time and manner of the election (including a compliant time and form of payment), the date on which the election is irrevocable,
and whether the election can be changed until the date it is irrevocable.


b.   No Right
of Continued Employment.  The Plan shall not confer upon any Participant any right with respect to continuance of
employment or other service with the Company or any Subsidiary, nor shall it interfere in any way with any right the Company or
any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time. No Employee,
Director or Consultant shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to
be selected to receive future Awards.


c.   Unfunded,
Unsecured Plan.  Neither a Participant nor any other person shall, by reason of participation in the Plan, acquire
any right or title to any assets, funds or property of the Company or any Subsidiary, including without limitation, any specific
funds, assets or other property which the Company or any Subsidiary may set aside in anticipation of any liability under the Plan.
A Participant shall have only a contractual right to an Award or the amounts, if any, payable under the Plan, unsecured by any
assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the
Company or any Subsidiary shall be sufficient to pay any benefits to any person.


d.   Severability.  If
any provision of the Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended or limited in scope
to conform to Applicable Laws or, in the discretion of the Committee, it shall be stricken and the remainder of the Plan shall
remain in full force and effect.


e.   Acceptance
of Plan.  By accepting any benefit under the Plan, each Participant and each person claiming under or through any
such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the
terms and conditions of the Plan and any action taken under the Plan by the Committee, the Board or the Company, in any case in
accordance with the terms and conditions of the Plan.


f.   Successors.  All
obligations of the Company under the Plan and with respect to Awards shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or other event, or a sale
or disposition of all or substantially all of the business and/or assets of the Company and references to the “Company”
herein and in any Award agreements shall be deemed to refer to such successors.


 


[END OF DOCUMENT]


 


 



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