Exhibit 4.2


 


SPARK NETWORKS, INC.


 


2007 OMNIBUS INCENTIVE PLAN


 


Effective July 9, 2007


 


 






 


SPARK NETWORKS, INC.


2007 OMNIBUS INCENTIVE PLAN


 


ARTICLE I


 


PURPOSE AND ADOPTION OF THE PLAN


 


1.01. Purpose. The purpose of the Spark
Networks, Inc. 2007 Incentive Plan (as amended from time to time, the “Plan”) is to assist in attracting and retaining
highly competent employees, directors and consultants to act as an incentive in motivating selected employees, directors and consultants
of the Company and its Subsidiaries to achieve long-term corporate objectives and to enable stock-based and cash-based incentive
awards to qualify as performance-based compensation for purposes of the tax deduction limitations under Section 162(m) of
the Code.


 


1.02. Adoption and Term. The Plan has
been approved by the Board to be effective as of July 9, 2007, subject to the approval of the stockholders of the Company.
The Plan shall remain in effect until terminated by action of the Board; provided, however, that no Awards may be granted hereunder
after the tenth anniversary of its initial effective date.


 


ARTICLE II


 


DEFINITIONS


 


For the purpose of this Plan, capitalized terms
shall have the following meanings:


 


2.01. Award means any one or a combination
of Non-Qualified Stock Options or Incentive Stock Options described in Article VI, Stock Appreciation Rights described in Article
VI, Restricted Shares and Restricted Stock Units described in Article VII, Performance Awards described in Article VIII, other
stock-based Awards described in Article IX, short-term cash incentive Awards described in Article X or any other Award made under
the terms of the Plan.


 


2.02. Award Agreement means a written
agreement between the Company and a Participant or a written acknowledgment from the Company to a Participant specifically setting
forth the terms and conditions of an Award granted under the Plan.


 


2.03. Award Period means, with respect
to an Award, the period of time, if any, set forth in the Award Agreement during which specified target performance goals must
be achieved or other conditions set forth in the Award Agreement must be satisfied.


 


2.04. Beneficiary means an individual,
trust or estate who or which, by a written designation of the Participant filed with the Company, or if no such written designation
is filed, by operation of law, succeeds to the rights and obligations of the Participant under the Plan and the Award Agreement
upon the Participant’s death.


 


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


 




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2.06. Change in Control means,
and shall be deemed to have occurred upon the occurrence of, any one of the following events:


 


(a) The acquisition in one or more transactions,
other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), other than the Company, a Subsidiary or any employee benefit plan (or related trust) sponsored or maintained by
the Company or a Subsidiary, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
number of Company Voting Securities in excess of 25% of the Company Voting Securities unless such acquisition has been approved
by the Board;


 


(b) Any election has occurred of persons to
the Board that causes two-thirds of the Board to consist of persons other than (i) persons who were members of the Board on
the effective date of the Plan and (ii) persons who were nominated for elections as members of the Board at a time when two-thirds
of the Board consisted of persons who were members of the Board on the effective date of the Plan, provided, however, that any
person nominated for election by a Board at least two-thirds of whom constituted persons described in clauses (i) and/or (ii) or
by persons who were themselves nominated by such Board shall, for this purpose, be deemed to have been nominated by a Board composed
of persons described in clause (i);


 


(c) The consummation (i.e. closing)
of a reorganization, merger or consolidation involving the Company, unless, following such reorganization, merger or consolidation,
all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Common Stock
and Company Voting Securities immediately prior to such reorganization, merger or consolidation, following such reorganization,
merger or consolidation beneficially own, directly or indirectly, more than seventy five percent (75%) of, respectively, the
then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors or trustees, as the case may be, of the entity resulting from such reorganization, merger
or consolidation in substantially the same proportion as their ownership of the Outstanding Common Stock and Company Voting Securities
immediately prior to such reorganization, merger or consolidation, as the case may be;


 


(d) The consummation (i.e. closing)
of a sale or other disposition of all or substantially all the assets of the Company, unless, following such sale or disposition,
all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Common Stock
and Company Voting Securities immediately prior to such reorganization, merger or consolidation, following such reorganization,
merger or consolidation beneficially own, directly or indirectly, more than seventy five percent (75%) of, respectively, the
then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors or trustees, as the case may be, of the entity purchasing such assets in substantially the
same proportion as their ownership of the Outstanding Common Stock and Company Voting Securities immediately prior to such sale
or disposition, as the case may be; or


 


(e) a complete liquidation or dissolution of
the Company.


 




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2.07. Code means the Internal
Revenue Code of 1986, as amended. References to a section of the Code shall include that section and any comparable section or
sections of any future legislation that amends, supplements or supersedes said section.


 


2.08. Committee means the Compensation
Committee of the Board.


 


2.09. Company means Spark Networks,
Inc. and its successors.


 


2.10. Common Stock means the common
stock of the Company, par value $.001 per share.


 


2.11. Company Voting Securities means
the combined voting power of all outstanding voting securities of the Company entitled to vote generally in the election of directors
to the Board.


 


2.12. Date of Grant means the date designated
by the Committee as the date as of which it grants an Award, which shall not be earlier than the date on which the Committee approves
the granting of such Award.


 


2.13. Dividend Equivalent Account means
a bookkeeping account in accordance with under Section 11.17 and related to an Award that is credited with the amount of any
cash dividends or stock distributions that would be payable with respect to the shares of Common Stock subject to such Awards had
such shares been outstanding shares of Common Stock.


 


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


 


2.15. Exercise Price means, with respect
to a Stock Appreciation Right, the amount established by the Committee in the Award Agreement which is to be subtracted from the
Fair Market Value on the date of exercise in order to determine the amount of the payment to be made to the Participant, as further
described in Section 6.02(b).


 


2.16. Fair Market Value means, on any
date, (i) the closing sale price of a share of Common Stock, as reported on the American Stock Exchange (or other established
stock exchange on which the Common Stock is regularly traded) on such date or, if there were no sales on such date, on the last
date preceding such date on which a sale was reported; or (ii) if shares of Common Stock are not listed for trading on an
established stock exchange, Fair Market Value shall be determined by the Committee in good faith.


 


2.17. Incentive Stock Option means a
stock option within the meaning of Section 422 of the Code.


 


2.18. Merger means any merger, reorganization,
consolidation, exchange, transfer of assets or other transaction having similar effect involving the Company.


 


2.19. Non-Qualified Stock Option means
a stock option which is not an Incentive Stock Option.


 




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2.20. Options means all Non-Qualified
Stock Options and Incentive Stock Options granted at any time under the Plan.


 


2.21. Outstanding Common Stock means,
at any time, the issued and outstanding shares of Common Stock.


 


2.22. Participant means a person designated
to receive an Award under the Plan in accordance with Section 5.01.


 


2.23. Performance Awards means Awards
granted in accordance with Article VIII.


 


2.24. Performance Goals means revenue,
earnings before interest, depreciation, amortization and share-based compensation (“ebitdas”), earnings before interest,
depreciation, amortization and share-based compensation and impairment charges (“adjusted ebitda”), contribution margin
, operating profit, earnings per share, operating margins, return on total equity or total capital, cash flow from operating
activities and total shareholder return, operating income, operating profit (earnings from continuing operations before interest
and taxes), earnings per share, return on investment or working capital, return on stockholders’ equity, economic value added
(the amount, if any, by which net operating profit after tax exceeds a reference cost of capital), any one of which may be
measured with respect to the Company or any one or more of its Subsidiaries and divisions and either in absolute terms or as compared
to another company or companies, and quantifiable, objective measures of individual performance relevant to the particular individual’s
job responsibilities.


 


2.25. Plan has the meaning given to
such term in Section 1.01.


 


2.26. Purchase Price, with respect to
Options, shall have the meaning set forth in Section 6.01(b).


 


2.27. Restricted Shares means Common
Stock subject to restrictions imposed in connection with Awards granted under Article VII.


 


2.28. Restricted Stock Unit means a
unit representing the right to receive Common Stock or the value thereof in the future subject to restrictions imposed in connection
with Awards granted under Article VII.


 


2.28. Rule 16b-3 means Rule 16b-3 promulgated
by the Securities and Exchange Commission under Section 16 of the Exchange Act, as the same may be amended from time to time,
and any successor rule.


 


2.29. Stock Appreciation Rights means
awards granted in accordance with Article VI.


 


2.30 Subsidiary means a subsidiary of
the Company within the meaning of Section 424(f) of the Code.


 


2.31. Termination of Service means the
voluntary or involuntary termination of a Participant’s service as an employee, director or consultant with the Company or
a Subsidiary for any reason, including death, disability, retirement or as the result of the divestiture of the Participant’s
employer or any similar transaction in which the Participant’s employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute Termination of Service, or whether and when a Termination
of Service shall occur as a result of disability, shall be determined in each case by the Committee in its sole discretion.


 




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ARTICLE III


 


ADMINISTRATION


 


3.01. Committee.


 


(a) Duties and Authority. The Plan shall
be administered by the Committee and the Committee shall have exclusive and final authority in each determination, interpretation
or other action affecting the Plan and its Participants. The Committee shall have the sole discretionary authority to interpret
the Plan, to establish and modify administrative rules for the Plan, to impose such conditions and restrictions on Awards as it
determines appropriate, and to make all factual determinations with respect to and take such steps in connection with the Plan
and Awards granted hereunder as it may deem necessary or advisable. The Committee shall not, however, have or exercise any discretion
that would disqualify amounts payable under Article X as performance-based compensation for purposes of Section 162(m) of
the Code. The Committee may delegate such of its powers and authority under the Plan as it deems appropriate to a subcommittee
of the Committee or designated officers or employees of the Company. In addition, the full Board may exercise any of the powers
and authority of the Committee under the Plan. In the event of such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer, as appropriate, to the delegate of the Committee or the Board.
Actions taken by the Committee or any subcommittee thereof, and any delegation by the Committee to designated officers or employees,
under this Section 3.01 shall comply with Section 16(b) of the Exchange Act, and to the extent deemed desirable, the
performance-based provisions of Section 162(m) of the Code, and the regulations promulgated under each of such statutory provisions,
or the respective successors to such statutory provisions or regulations, as in effect from time to time, to the extent applicable.
To the extent it is desirable to qualify Awards granted hereunder as “performance based compensation” within the meaning
of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors”
within the meaning of Section 162(m) of the Code.


 


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


 




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ARTICLE IV


 


SHARES


 


4.01. Number of Shares Issuable. The
total number of shares initially authorized to be issued under the Plan shall be 2,500,000 shares of Common Stock; provided, however,
that on January 1 of each year, beginning on January 1, 2009, such maximum aggregate number of shares of Common Stock
shall be increased by an amount equal to the lesser of (i) 2,000,000 shares, (ii) four percent (4%) of the number
of outstanding shares of Common Stock on the last day of the immediately preceding fiscal year or (iii) an amount determined
by the Board. No more than 500,000 shares of Common Stock may be issued under the Plan as Awards under Articles VII, VIII and IX.
The foregoing share limits shall be subject to adjustment in accordance with Section 11.07. The shares to be offered under
the Plan shall be authorized and unissued Common Stock, or issued Common Stock that shall have been reacquired by the Company.


 


4.02. Shares Subject to Terminated Awards.
Common Stock covered by any unexercised portions of terminated or forfeited Options (including canceled Options) granted under
Article VI, Common Stock forfeited as provided in Section 7.02(a), Stock Units and other stock-based Awards terminated or
forfeited as provided in Article IX, and Common Stock subject to any Awards that are otherwise surrendered by the Participant may
again be subject to new Awards under the Plan. Shares of Common Stock surrendered to or withheld by the Company in payment or satisfaction
of the Purchase Price of an Option or tax withholding obligation with respect to an Award shall be available for the grant of new
Awards under the Plan. In the event of the exercise of Stock Appreciation Rights, whether or not granted in tandem with Options,
only the number of shares of Common Stock actually issued in payment of such Stock Appreciation Rights shall be charged against
the number of shares of Common Stock available for the grant of Awards hereunder.


 




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ARTICLE V


 


PARTICIPATION


 


5.01. Eligible Participants. Participants
in the Plan shall be such employees, directors and consultants of the Company and its Subsidiaries as the Committee, in its sole
discretion, may designate from time to time. The Committee’s designation of a Participant in any year shall not require the
Committee to designate such person to receive Awards or grants in any other year. The designation of a Participant to receive Awards
or grants under one portion of the Plan does not require the Committee to include such Participant under other portions of the
Plan. The Committee shall consider such factors as it deems pertinent in selecting Participants and in determining the type and
amount of their respective Awards. Incentive Stock Options may only be granted to employees of the Company and its Subsidiaries.
Subject to adjustment in accordance with Section 11.07, in any calendar year, no Participant shall be granted Awards in respect
of more than 1,500,000 shares of Common Stock (whether through grants of Options or Stock Appreciation Rights or other Awards of
Common Stock or rights with respect thereto) or cash-based Awards for more than $1.0 million.


 


ARTICLE VI


 


STOCK OPTIONS AND STOCK APPRECIATION RIGHTS


 


6.01. Option Awards.


 


(a) Grant of Options. The Committee
may grant, to such Participants as the Committee may select, Options entitling the Participant to purchase shares of Common Stock
from the Company in such number, at such price, and on such terms and subject to such conditions, not inconsistent with the terms
of this Plan, as may be established by the Committee. The terms of any Option granted under this Plan shall be set forth in an
Award Agreement.


 


(b) Purchase Price of Options. The Purchase
Price of each share of Common Stock which may be purchased upon exercise of any Option granted under the Plan shall be determined
by the Committee; provided, however, that in no event shall the Purchase Price be less than the Fair Market Value on the Date of
Grant. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the Date of Grant, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company or any Subsidiary, the Purchase Price
of each share of Common Stock which may be purchased upon the exercise of the Incentive Stock Option shall be no less than 110%
of the Fair Market value per shares on the Date of Grant.


 


(c) Designation of Options. The Committee
shall designate, at the time of the grant of each Option, the Option as an Incentive Stock Option or a Non-Qualified Stock Option.


 


(d) Incentive Stock Option Share Limitation.
No Participant may be granted Incentive Stock Options under the Plan (or any other plans of the Company and its Subsidiaries) that
would result in shares with an aggregate Fair Market Value (measured on the Date of Grant) of more than $100,000 first becoming
exercisable in any one calendar year.


 


(e) Rights As a Stockholder. A Participant
or a transferee of an Option pursuant to Section 11.04 shall have no rights as a stockholder with respect to Common Stock
covered by an Option until the Participant or transferee shall have become the holder of record of any such shares, and no adjustment
shall be made for dividends in cash or other property or distributions or other rights with respect to any such Common Stock for
which the record date is prior to the date on which the Participant or a transferee of the Option shall have become the holder
of record of any such shares covered by the Option; provided, however, that Participants are entitled to share adjustments to reflect
capital changes under Section 11.07.


 




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6.02. Stock Appreciation Rights.


 


(a) Stock Appreciation Right Awards.
The Committee is authorized to grant to any Participant one or more Stock Appreciation Rights. Such Stock Appreciation Rights may
be granted either independent of or in tandem with Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of Non-Qualified Stock Options, subsequent to, the grant
to such Participant of the related Option; provided however, that: (i) any Option covering any share of Common Stock shall
expire and not be exercisable upon the exercise of any Stock Appreciation Right with respect to the same share, (ii) any Stock
Appreciation Right covering any share of Common Stock shall expire and not be exercisable upon the exercise of any related Option
with respect to the same share, and (iii) an Option and Stock Appreciation Right covering the same share of Common Stock may
not be exercised simultaneously. Upon exercise of a Stock Appreciation Right with respect to a share of Common Stock, the Participant
shall be entitled to receive an amount equal to the excess, if any, of (A) the Fair Market Value of a share of Common Stock
on the date of exercise over (B) the Exercise Price of such Stock Appreciation Right established in the Award Agreement, which
amount shall be payable as provided in Section 6.02(c).


 


(b) Exercise Price. The Exercise Price
established under any Stock Appreciation Right granted under this Plan shall be determined by the Committee, but in the case of
Stock Appreciation Rights granted in tandem with Options shall not be less than the Purchase Price of the related Option; provided,
however, that in no event shall the Exercise Price be less than the Fair Market Value on the Date of Grant. Upon exercise of Stock
Appreciation Rights granted in tandem with options, the number of shares subject to exercise under any related Option shall automatically
be reduced by the number of shares of Common Stock represented by the Option or portion thereof which are surrendered as a result
of the exercise of such Stock Appreciation Rights.


 


(c) Payment of Incremental Value. Any
payment which may become due from the Company by reason of a Participant’s exercise of a Stock Appreciation Right may be
paid to the Participant as determined by the Committee (i) all in cash, (ii) all in Common Stock, or (iii) in any
combination of cash and Common Stock. In the event that all or a portion of the payment is made in Common Stock, the number of
shares of Common Stock delivered in satisfaction of such payment shall be determined by dividing the amount of such payment or
portion thereof by the Fair Market Value on the Exercise Date. No fractional share of Common Stock shall be issued to make any
payment in respect of Stock Appreciation Rights; if any fractional share would be issuable, the combination of cash and Common
Stock payable to the Participant shall be adjusted as directed by the Committee to avoid the issuance of any fractional share.


 


6.03. Terms of Stock Options and Stock Appreciation
Rights.


 


(a) Conditions on Exercise. An Award
Agreement with respect to Options or Stock Appreciation Rights may contain such waiting periods, exercise dates and restrictions
on exercise (including, but not limited to, periodic installments) as may be determined by the Committee at the time of grant.


 




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(b) Duration of Options and Stock
Appreciation Rights. Options and Stock Appreciation Rights shall terminate upon the first to occur of the following events:


 


(i) Expiration of the Option or Stock
Appreciation Right as provided in the Award Agreement; or


 


(ii) Termination of the Award in
the event of a Participant’s disability, Retirement, death or other Termination of Service as provided in the Award Agreement;
or,


 


(iii) In the case of an Incentive
Stock Option, ten years from the Date of Grant; provided, however, that if at the Date of Grant of an Incentive Stock Option the
Participant owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the Date of Grant or such shorter term
as may be provided in the Award Agreement; or


 


(iv) Solely in the case of a Stock
Appreciation Right granted in tandem with an Option, upon the expiration of the related Option.


 


(c) Acceleration or Extension of Exercise
Time. The Committee, in its sole discretion, shall have the right (but shall not be obligated), exercisable on or at any time
after the Date of Grant, to permit the exercise of an Option or Stock Appreciation Right (i) prior to the time such Option
or Stock Appreciation Right would become exercisable under the terms of the Award Agreement, (ii) after the termination of
the Option or Stock Appreciation Right under the terms of the Award Agreement, or (iii) after the expiration of the Option
or Stock Appreciation Right.


 


6.04. Exercise Procedures. Each Option
and Stock Appreciation Right granted under the Plan shall be exercised prior to the close of business on the expiration date of
the Option or Stock Appreciation Right by notice to the Company or by such other method as provided in the Award Agreement or as
the Committee may establish or approve from time to time. The Purchase Price of shares purchased upon exercise of an Option granted
under the Plan shall be paid in full in cash by the Participant pursuant to the Award Agreement; provided, however, that the Committee
may (but shall not be required to) permit payment to be made by delivery to the Company of either (a) Common Stock (which
may include Restricted Shares or shares otherwise issuable in connection with the exercise of the Option, subject to such rules
as the Committee deems appropriate) or (b) any combination of cash and Common Stock, or (c) such other consideration
as the Committee deems appropriate and in compliance with applicable law (including payment under an arrangement constituting a
brokerage transaction as permitted under the provisions of Regulation T applicable to cashless exercises promulgated by the Federal
Reserve Board, unless prohibited by Section 402 of the Sarbanes-Oxley Act of 2002). In the event that any Common Stock shall
be transferred to the Company to satisfy all or any part of the Purchase Price, the part of the Purchase Price deemed to have been
satisfied by such transfer of Common Stock shall be equal to the product derived by multiplying the Fair Market Value as of the
date of exercise times the number of shares of Common Stock transferred to the Company. The Participant may not transfer to the
Company in satisfaction of the Purchase Price any fractional share of Common Stock. Any part of the Purchase Price paid in cash
upon the exercise of any Option shall be added to the general funds of the Company and may be used for any proper corporate purpose.
Unless the Committee shall otherwise determine, any Common Stock transferred to the Company as payment of all or part of the Purchase
Price upon the exercise of any Option shall be held as treasury shares.


 




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6.05. Change in Control. Unless otherwise
provided by the Committee in the applicable Award Agreement or any other agreement with the Company, or unless the Options are
assumed or substituted by the successor corporation or a Parent or Subsidiary of the successor corporation and subject to Section 11.07(b)
herein, in the event of a Change in Control, all Options outstanding on the date of such Change in Control, and all Stock Appreciation
Rights shall become immediately and fully exercisable. The provisions of this Section 6.05 shall not be applicable to any
Options or Stock Appreciation Rights granted to a Participant if any Change in Control results from such Participant’s beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock or Company Voting Securities. Notwithstanding
the foregoing, the Administrator may, in its sole and absolute discretion, in the event of a Change of Control take any other action
its deems appropriate with respect to Options and Stock Appreciation Rights outstanding on the date of a Change in Control.


 


ARTICLE VII


 


RESTRICTED SHARES AND RESTRICTED STOCK UNITS


 


7.01. Award of Restricted Stock and Restricted
Stock Units. The Committee may grant to any Participant an Award of Restricted Shares consisting of a specified number of shares
of Common Stock issued to the Participant subject to such terms, conditions and forfeiture and transfer restrictions, whether based
on performance standards, periods of service, retention by the Participant of ownership of specified shares of Common Stock or
other criteria, as the Committee shall establish. The Committee may also grant Restricted Stock Units representing the right to
receive shares of Common Stock in the future subject to such terms, conditions and restrictions, whether based on performance standards,
periods of service, retention by the Participant of ownership of specified shares of Common Stock or other criteria, as the Committee
shall establish. With respect to performance-based Awards of Restricted Shares or Restricted Stock Units intended to qualify as
“performance-based” compensation for purposes of Section 162(m) of the Code, performance targets will consist
of specified levels of one or more of the Performance Goals. The terms of any Restricted Share and Restricted Stock Unit Awards
granted under this Plan shall be set forth in an Award Agreement which shall contain provisions determined by the Committee and
not inconsistent with this Plan.


 




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7.02 Restricted Shares.


 


(a) Issuance of Restricted Shares. As
soon as practicable after the Date of Grant of a Restricted Share Award by the Committee, the Company shall cause to be transferred
on the books of the Company, or its agent, Common Stock, registered on behalf of the Participant, evidencing the Restricted Shares
covered by the Award, but subject to forfeiture to the Company as of the Date of Grant if an Award Agreement with respect to the
Restricted Shares covered by the Award is not duly executed by the Participant and timely returned to the Company. All Common Stock
covered by Awards under this Article VII shall be subject to the restrictions, terms and conditions contained in the Plan and the
Award Agreement entered into by the Participant. Until the lapse or release of all restrictions applicable to an Award of Restricted
Shares, the share certificates representing such Restricted Shares may be held in custody by the Company, its designee, or, if
the certificates bear a restrictive legend, by the Participant. Upon the lapse or release of all restrictions with respect to an
Award as described in Section 7.02(d), one or more share certificates, registered in the name of the Participant, for an appropriate
number of shares as provided in Section 7.02(d), free of any restrictions set forth in the Plan and the Award Agreement shall
be delivered to the Participant.


 


(b) Stockholder Rights. Beginning on
the Date of Grant of the Restricted Share Award and subject to execution of the Award Agreement as provided in Section 7.02(a),
the Participant shall become a stockholder of the Company with respect to all shares subject to the Award Agreement and shall have
all of the rights of a stockholder, including, but not limited to, the right to vote such shares and the right to receive dividends;
provided, however, that any Common Stock distributed as a dividend or otherwise with respect to any Restricted Shares as to which
the restrictions have not yet lapsed, shall be subject to the same restrictions as such Restricted Shares and held or restricted
as provided in Section 7.02(a).


 


(c) Restriction on Transferability.
None of the Restricted Shares may be assigned or transferred (other than by will or the laws of descent and distribution, or to
an inter vivos trust with respect to which the Participant is treated as the owner under Sections 671 through 677 of the Code,
except to the extent that Section 16 of the Exchange Act limits a Participant’s right to make such transfers), pledged
or sold prior to lapse of the restrictions applicable thereto.


 


(d) Delivery of Shares Upon Vesting.
Upon expiration or earlier termination of the forfeiture period without a forfeiture and the satisfaction of or release from any
other conditions prescribed by the Committee, or at such earlier time as provided under the provisions of Section 7.04, the
restrictions applicable to the Restricted Shares shall lapse. As promptly as administratively feasible thereafter, subject to the
requirements of Section 11.05, the Company shall deliver to the Participant or, in case of the Participant’s death,
to the Participant’s Beneficiary, one or more share certificates for the appropriate number of shares of Common Stock, free
of all such restrictions, except for any restrictions that may be imposed by law.


 


(e) Forfeiture of Restricted Shares.
Subject to Sections 7.02(f) and 7.04, all Restricted Shares shall be forfeited and returned to the Company and all rights of the
Participant with respect to such Restricted Shares shall terminate unless the Participant continues in the service of the Company
or a Subsidiary as an employee until the expiration of the forfeiture period for such Restricted Shares and satisfies any and all
other conditions set forth in the Award Agreement. The Committee shall determine the forfeiture period (which may, but need not,
lapse in installments) and any other terms and conditions applicable with respect to any Restricted Share Award.


 




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(f) Waiver of Forfeiture Period.
Notwithstanding anything contained in this Article VII to the contrary, the Committee may, in its sole discretion, waive the forfeiture
period and any other conditions set forth in any Award Agreement under appropriate circumstances (including the death, disability
or Retirement of the Participant or a material change in circumstances arising after the date of an Award) and subject to such
terms and conditions (including forfeiture of a proportionate number of the Restricted Shares) as the Committee shall deem appropriate.


 


7.03. Restricted Stock Units.


 


(a) Settlement of Restricted Stock Units.
Payments shall be made to Participants with respect to their Restricted Stock Units as soon as practicable after the Committee
has determined that the terms and conditions applicable to such Award have been satisfied or at a later date if distribution has
been deferred. Payments to Participants with respect to Restricted Stock Units shall be made in the form of Common Stock, or cash
or a combination of both, as the Committee may determine. The amount of any cash to be paid in lieu of Common Stock shall be determined
on the basis of the Fair Market Value of the Common Stock on the date any such payment is processed. As to shares of Common Stock
which constitute all or any part of such payment, the Committee may impose such restrictions concerning their transferability and/or
their forfeiture as may be provided in the applicable Award Agreement or as the Committee may otherwise determine, provided such
determination is made on or before the date certificates for such shares are first delivered to the applicable Participant.


 


(b) Shareholder Rights. Until the lapse
or release of all restrictions applicable to an Award of Restricted Stock Units, no shares of Common Stock shall be issued in respect
of such Awards and no Participant shall have any rights as a shareholder of the Company with respect to the shares of Common Stock
covered by such Award of Restricted Stock Units.


 


(c) Waiver of Forfeiture Period. Notwithstanding
anything contained in this Section 7.03 to the contrary, the Committee may, in its sole discretion, waive the forfeiture period
and any other conditions set forth in any Award Agreement under appropriate circumstances (including the death, disability or retirement
of the Participant or a material change in circumstances arising after the date of an Award) and subject to such terms and conditions
(including forfeiture of a proportionate number of shares issuable upon settlement of the Restricted Stock Units constituting an
Award) as the Committee shall deem appropriate.


 


(d) Deferral of Payment. If approved
by the Committee and set forth in the applicable Award Agreement, a Participant may elect to defer the amount payable with respect
to the Participant’s Restricted Stock Units in accordance with such terms as may be established by the Committee.


 




    	 	12	 



     


    

 


7.04 Change in Control. Unless otherwise
provided by the Committee in the applicable Award Agreement or any other agreement with the Company, or unless the Awards are assumed
or substituted by the successor corporation or a Parent or Subsidiary of the successor corporation and subject to Section 11.07(b)
herein, in the event of a Change in Control, all restrictions applicable to Restricted Shares and Restricted Stock Unit Awards
shall terminate fully and the Participant shall immediately have the right to the delivery in accordance with Section 7.02(d)
of a share certificate or certificates evidencing a number of shares of Common Stock equal to the full number of shares subject
to each such Award (in the case of Restricted Stock) or payment in accordance with Section 7.03(a) of a number of shares of
Common Stock determined by the Committee, in its discretion, but, in the case of a performance-based or other contingent Award,
in no event less than the number of shares payable at the “target” level for each such Award (in the case of Restricted
Stock Units). The provisions of this Section 7.04 shall not be applicable to any Restricted Share Award granted to a Participant
if any Change in Control results from such Participant’s beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities. Notwithstanding the foregoing, the Administrator may, in its sole and
absolute discretion, in the event of a Change of Control take any other action its deems appropriate with respect to Restricted
Shares and Restricted Stock Unit Awards outstanding on the date of a Change in Control.


 


ARTICLE VIII


 


PERFORMANCE AWARDS


 


8.01. Performance Awards.


 


(a) Award Periods and Calculations of Potential
Incentive Amounts. The Committee may grant Performance Awards to Participants. A Performance Award shall consist of the right
to receive a payment (measured by the Fair Market Value of a specified number of shares of Common Stock, increases in such Fair
Market Value during the Award Period and/or a fixed cash amount) contingent upon the extent to which certain predetermined performance
targets have been met during an Award Period. The Award Period shall be two or more fiscal or calendar years as determined by the
Committee. The Committee, in its discretion and under such terms as it deems appropriate, may permit newly eligible Participants,
such as those who are promoted or newly hired, to receive Performance Awards after an Award Period has commenced.


 


(b) Performance Targets. Subject to
Section 11.18, the performance targets applicable to a Performance Award may include such goals related to the performance
of the Company or, where relevant, any one or more of its Subsidiaries or divisions and/or the performance of a Participant as
may be established by the Committee in its discretion. In the case of Performance Awards to “covered employees” (as
defined in Section 162(m) of the Code), the targets will be limited to specified levels of one or more of the Performance
Goals. The performance targets established by the Committee may vary for different Award Periods and need not be the same for each
Participant receiving a Performance Award in an Award Period.


 


(c) Earning Performance Awards. The
Committee, at or as soon as practicable after the Date of Grant, shall prescribe a formula to determine the percentage of the Performance
Award to be earned based upon the degree of attainment of the applicable performance targets.


 


(d) Payment of Earned Performance Awards.
Subject to the requirements of Section 11.05, payments of earned Performance Awards shall be made in cash or Common Stock,
or a combination of cash and Common Stock, in the discretion of the Committee. The Committee, in its sole discretion, may define,
and set forth in the applicable Award Agreement, such terms and conditions with respect to the payment of earned Performance Awards
as it may deem desirable.


 




    	 	13	 



     


    

 


8.02. Termination of Service.
In the event of a Participant’s Termination of Service during an Award Period, the Participant’s Performance Awards
shall be forfeited except as may otherwise be provided in the applicable Award Agreement.


 


8.03. Change in Control. Unless otherwise
provided by the Committee in the applicable Award Agreement or any other agreement with the Company, or unless the Awards are assumed
or substituted by the successor corporation or a Parent or Subsidiary of the successor corporation and subject to Section 11.07(b)
herein, in the event of a Change in Control, all Performance Awards for all Award Periods shall immediately become fully vested
and payable to all Participants and shall be paid to Participants in accordance with Section 8.01(d), within 30 days after
such Change in Control. The provisions of this Section 8.03 shall not be applicable to any Performance Award granted to a
Participant if any Change in Control results from such Participant’s beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of Common Stock or Company Voting Securities. Notwithstanding the foregoing, the Administrator may, in
its sole and absolute discretion, in the event of a Change of Control take any other action its deems appropriate with respect
to Performance Awards outstanding on the date of a Change in Control.


 


ARTICLE IX


 


OTHER STOCK-BASED AWARDS


 


9.01. Grant of Other Stock-Based Awards.
Other stock-based awards, consisting of stock purchase rights (with or without loans to Participants by the Company containing
such terms as the Committee shall determine), Awards of Common Stock, or Awards valued in whole or in part by reference to, or
otherwise based on, Common Stock, may be granted either alone or in addition to or in conjunction with other Awards under the Plan.
Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the persons to whom and
the time or times at which such Awards shall be made, the number of shares of Common Stock to be granted pursuant to such Awards,
and all other conditions of the Awards. Any such Award shall be confirmed by an Award Agreement executed by the Committee and the
Participant, which Award Agreement shall contain such provisions as the Committee determines to be necessary or appropriate to
carry out the intent of this Plan with respect to such Award.


 


9.02. Terms of Other Stock-Based Awards.
In addition to the terms and conditions specified in the Award Agreement, Awards made pursuant to this Article IX shall be subject
to the following:


 


(a) Any Common Stock subject to Awards made
under this Article IX may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares
are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses; and


 




    	 	14	 



     


    

 


(b) If specified by the Committee in the Award
Agreement, the recipient of an Award under this Article IX shall be entitled to receive, currently or on a deferred basis, interest
or dividends or dividend equivalents with respect to the Common Stock or other securities covered by the Award; and


 


(c) The Award Agreement with respect to any
Award shall contain provisions dealing with the disposition of such Award in the event of a Termination of Service prior to the
exercise, payment or other settlement of such Award, whether such termination occurs because of Retirement, disability, death or
other reason, with such provisions to take account of the specific nature and purpose of the Award.


 


ARTICLE X


 


SHORT-TERM CASH INCENTIVE AWARDS


 


10.01. Eligibility. Executive officers
of the Company who are from time to time determined by the Committee to be “covered employees” for purposes of Section 162(m)
of the Code will be eligible to receive short-term cash incentive awards under this Article X.


 


10.02. Awards.


 


(a) Performance Targets. The Committee
shall establish objective performance targets based on specified levels of one or more of the Performance Goals. Such performance
targets shall be established by the Committee on a timely basis to ensure that the targets are considered “preestablished”
for purposes of Section 162(m) of the Code.


 


(b) Amounts of Awards. In conjunction
with the establishment of performance targets for a fiscal year, the Committee shall adopt an objective formula (on the basis of
percentages of Participants’ salaries, shares in a bonus pool or otherwise) for computing the respective amounts payable
under the Plan to Participants if and to the extent that the performance targets are attained. Such formula shall comply with the
requirements applicable to performance-based compensation plans under Section 162(m) of the Code and, to the extent based
on percentages of a bonus pool, such percentages shall not exceed 100% in the aggregate.


 


(c) Payment of Awards. Awards will be
payable to Participants in cash each year upon prior written certification by the Committee of attainment of the specified performance
targets for the preceding fiscal year.


 


(d) Negative Discretion. Notwithstanding
the attainment by the Company of the specified performance targets, the Committee shall have the discretion, which need not be
exercised uniformly among the Participants, to reduce or eliminate the award that would be otherwise paid.


 


(e) Guidelines. The Committee shall
adopt from time to time written policies for its implementation of this Article X. Such guidelines shall reflect the intention
of the Company that all payments hereunder qualify as performance-based compensation under Section 162(m) of the Code.


 




    	 	15	 



     


    

 


(f) Non-Exclusive Arrangement. The adoption
and operation of this Article X shall not preclude the Board or the Committee from approving other short-term incentive compensation
arrangements for the benefit of individuals who are Participants hereunder as the Board or Committee, as the case may be, deems
appropriate and in the best of the Company.


 


ARTICLE XI


 


TERMS APPLICABLE GENERALLY TO AWARDS


GRANTED UNDER THE PLAN


 


11.01. Plan Provisions Control Award Terms.
Except as provided in Section 11.16, the terms of the Plan shall govern all Awards granted under the Plan, and in no event
shall the Committee have the power to grant any Award under the Plan which is contrary to any of the provisions of the Plan. In
the event any provision of any Award granted under the Plan shall conflict with any term in the Plan as constituted on the Date
of Grant of such Award, the term in the Plan as constituted on the Date of Grant of such Award shall control. Except as provided
in Section 11.03 and Section 11.07, the terms of any Award granted under the Plan may not be changed after the Date of
Grant of such Award so as to materially decrease the value of the Award without the express written approval of the holder.


 


11.02. Award Agreement. No person shall
have any rights under any Award granted under the Plan unless and until the Company and the Participant to whom such Award shall
have been granted shall have executed and delivered an Award Agreement or received any other Award acknowledgment authorized by
the Committee expressly granting the Award to such person and containing provisions setting forth the terms of the Award.


 


11.03. Modification of Award After Grant.
No Award granted under the Plan to a Participant may be modified (unless such modification does not materially decrease the value
of the Award) after the Date of Grant except by express written agreement between the Company and the Participant, provided that
any such change (a) shall not be inconsistent with the terms of the Plan, and (b) shall be approved by the Committee.


 


11.04. Limitation on Transfer. Except
as provided in Section 7.01(c) in the case of Restricted Shares, a Participant’s rights and interest under the Plan
may not be assigned or transferred other than by will or the laws of descent and distribution, and during the lifetime of a Participant,
only the Participant personally (or the Participant’s personal representative) may exercise rights under the Plan. The Participant’s
Beneficiary may exercise the Participant’s rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, to the extent permitted under Section 16(b) of the Exchange Act with respect
to Participants subject to such Section, the Committee may grant Non-Qualified Stock Options that are transferable, without payment
of consideration, to immediate family members of the Participant or to trusts or partnerships for such family members, and the
Committee may also amend outstanding Non-Qualified Stock Options to provide for such transferability.


 




    	 	16	 



     


    

 


11.05. Taxes. The Company shall be entitled,
if the Committee deems it necessary or desirable, to withhold (or secure payment from the Participant in lieu of withholding) the
amount of any withholding or other tax required by law to be withheld or paid by the Company with respect to any amount payable
and/or shares issuable under such Participant’s Award, or with respect to any income recognized upon a disqualifying disposition
of shares received pursuant to the exercise of an Incentive Stock Option, and the Company may defer payment or issuance of the
cash or shares upon exercise or vesting of an Award unless indemnified to its satisfaction against any liability for any such tax.
The amount of such withholding or tax payment shall be determined by the Committee and shall be payable by the Participant at such
time as the Committee determines in accordance with the following rules:


 


(a) The Participant shall have the right to
elect to meet his or her withholding requirement (i) by having withheld from such Award at the appropriate time that number
of shares of Common Stock, rounded up to the next whole share, whose Fair Market Value is equal to the amount of withholding taxes
due, (ii) by direct payment to the Company in cash of the amount of any taxes required to be withheld with respect to such
Award or (iii) by a combination of shares and cash.


 


(b) In the case of Participants who are subject
to Section 16 of the Exchange Act, the Committee may impose such limitations and restrictions as it deems necessary or appropriate
with respect to the delivery or withholding of shares of Common Stock to meet tax withholding obligations.


 


11.06. Surrender of Awards. Any Award
granted under the Plan may be surrendered to the Company for cancellation on such terms as the Committee and the holder approve.
With the consent of the Participant, the Committee may substitute a new Award under this Plan in connection with the surrender
by the Participant of an equity compensation award previously granted under this Plan or any other plan sponsored by the Company;
provided, however, that no such substitution shall be permitted without the approval of the Company’s stockholders if such
approval is required by the rules of any applicable stock exchange.


 


11.07. Adjustments to Reflect Capital Changes.


 


(a) Recapitalization. In the event of
any corporate event or transaction (including, but not limited to, a change in the Common Stock or the capitalization of the Company)
such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend,
stock split, reverse stock split, split up, spin-off, or other distribution of stock or property of the Company, a combination
or exchange of Common Stock, dividend in kind, or other like change in capital structure, number of outstanding shares of Common
Stock, distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction,
the Committee, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall make equitable
and appropriate adjustments and substitutions, as applicable, to or of the number and kind of shares subject to outstanding Awards,
the Purchase Price or Exercise Price for such shares, the number and kind of shares available for future issuance under the Plan
and the maximum number of shares in respect of which Awards can be made to any Participant in any calendar year, and other determinations
applicable to outstanding Awards. The Committee shall have the power and sole discretion to determine the amount of the adjustment
to be made in each case.


 




    	 	17	 



     


    

 


(b) Merger. After any Merger
in which the Company is the surviving corporation, each Participant shall, at no additional cost, be entitled upon any exercise
of all Options or receipt of other Award to receive (subject to any required action by stockholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award, the number and class of shares or other securities to
which such Participant would have been entitled pursuant to the terms of the Merger if, at the time of the Merger, such Participant
had been the holder of record of a number of shares equal to the number of shares receivable or exercisable pursuant to such Award.
Comparable rights shall accrue to each Participant in the event of successive Mergers of the character described above. Notwithstanding
Section 11.15, in the event of a Merger in which the Company is not the surviving corporation, outstanding Awards shall be
subject to the agreement governing the Merger, which may provide, without limitation, for the assumption of Awards by the surviving
corporation or its parent or subsidiary, for the substitution by the surviving corporation or its parent or subsidiary of its own
awards for such Awards, for accelerated vesting and accelerated expiration, or for settlement in cash or cash equivalents. In any
event, the exercise and/or vesting of any Award that was permissible solely by reason of this Section 11.07(b) shall
be conditioned upon the consummation of the Merger.


 


(c) Options to Purchase Shares or Stock
of Acquired Companies. After any Merger in which the Company or a Subsidiary shall be a surviving corporation, the Committee
may grant substituted options under the provisions of the Plan, pursuant to Section 424 of the Code, replacing old options
granted under a plan of another party to the Merger whose shares or stock subject to the old options may no longer be issued following
the Merger. The foregoing adjustments and manner of application of the foregoing provisions shall be determined by the Committee
in its sole discretion. Any such adjustments may provide for the elimination of any fractional shares which might otherwise become
subject to any Options.


 


11.08. No Right to Continued Service.
No person shall have any claim of right to be granted an Award under this Plan. Neither the Plan nor any action taken hereunder
shall be construed as giving any Participant any right to be retained in the service of the Company or any of its Subsidiaries.


 


11.09. Awards Not Includable for Benefit
Purposes. Payments received by a Participant pursuant to the provisions of the Plan shall not be included in the determination
of benefits under any pension, group insurance or other benefit plan applicable to the Participant which is maintained by the Company
or any of its Subsidiaries, except as may be provided under the terms of such plans or determined by the Board.


 


11.10. Governing Law. All determinations
made and actions taken pursuant to the Plan shall be governed by the laws of Delaware and construed in accordance therewith.


 


11.11. No Strict Construction. No rule
of strict construction shall be implied against the Company, the Committee, or any other person in the interpretation of any of
the terms of the Plan, any Award granted under the Plan or any rule or procedure established by the Committee.


 




    	 	18	 



     


    

 


11.12. Compliance with Rule 16b-3.
It is intended that, unless the Committee determines otherwise, Awards under the Plan be eligible for exemption under Rule 16b-3.
The Board is authorized to amend the Plan and to make any such modifications to Award Agreements to comply with Rule 16b-3, as
it may be amended from time to time, and to make any other such amendments or modifications as it deems necessary or appropriate
to better accomplish the purposes of the Plan in light of any amendments made to Rule 16b-3.


 


11.13. Captions. The captions (i.e.,
all Section headings) used in the Plan are for convenience only, do not constitute a part of the Plan, and shall not be deemed
to limit, characterize or affect in any way any provisions of the Plan, and all provisions of the Plan shall be construed as if
no captions have been used in the Plan.


 


11.14. Severability. Whenever possible,
each provision in the Plan and every Award at any time granted under the Plan shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan or any Award at any time granted under the Plan shall be held
to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended to accomplish the objectives
of the provision as originally written to the fullest extent permitted by law and (b) all other provisions of the Plan and
every other Award at any time granted under the Plan shall remain in full force and effect.


 


11.15. Amendment and Termination.


 


(a) Amendment. The Board shall have
complete power and authority to amend the Plan at any time; provided, however, that the Board shall not, without the requisite
affirmative approval of stockholders of the Company, make any amendment which requires stockholder approval under the Code or under
any other applicable law or rule of any stock exchange which lists Common Stock or Company Voting Securities. No termination or
amendment of the Plan may, without the consent of the Participant to whom any Award shall theretofore have been granted under the
Plan, adversely affect the right of such individual under such Award.


 


(b) Termination. The Board shall have
the right and the power to terminate the Plan at any time. No Award shall be granted under the Plan after the termination of the
Plan, but the termination of the Plan shall not have any other effect and any Award outstanding at the time of the termination
of the Plan may be exercised after termination of the Plan at any time prior to the expiration date of such Award to the same extent
such Award would have been exercisable had the Plan not terminated.


 


11.16. Foreign Qualified Awards. Awards
under the Plan may be granted to such employees of the Company and its Subsidiaries who are residing in foreign jurisdictions as
the Committee in its sole discretion may determine from time to time. The Committee may adopt such supplements to the Plan as may
be necessary or appropriate to comply with the applicable laws of such foreign jurisdictions and to afford Participants favorable
treatment under such laws; provided, however, that no Award shall be granted under any such supplement with terms or conditions
inconsistent with the provision set forth in the Plan.


 




    	 	19	 



     


    

 


11.17. Dividend Equivalents.
For any Award granted under the Plan, the Committee shall have the discretion, upon the Date of Grant or thereafter, to establish
a Dividend Equivalent Account with respect to the Award, and the applicable Award Agreement or an amendment thereto shall confirm
such establishment. If a Dividend Equivalent Account is established, the following terms shall apply:


 


(a) Terms and Conditions. Dividend Equivalent
Accounts shall be subject to such terms and conditions as the Committee shall determine and as shall be set forth in the applicable
Award Agreement. Such terms and conditions may include, without limitation, for the Participant’s Account to be credited
as of the record date of each cash dividend on the Common Stock with an amount equal to the cash dividends which would be paid
with respect to the number of shares of Common Stock then covered by the related Award if such shares of Common Stock had been
owned of record by the Participant on such record date.


 


(b) Unfunded Obligation. Dividend Equivalent
Accounts shall be established and maintained only on the books and records of the Company and no assets or funds of the Company
shall be set aside, placed in trust, removed from the claims of the Company’s general creditors, or otherwise made available
until such amounts are actually payable as provided hereunder.


 


11.18 Adjustment of Performance Goals and
Targets. Notwithstanding any provision of the Plan to the contrary, the Committee shall have the authority to adjust any Performance
Goal, performance target or other performance-based criteria established with respect to any Award under the Plan if circumstances
occur (including, but not limited to, unusual or nonrecurring events, changes in tax laws or accounting principles or practices
or changed business or economic conditions) that cause any such Performance Goal, performance target or performance-based criteria
to be inappropriate in the judgment of the Committee; provided, that with respect to any Award that is intended to qualify for
the “performance-based compensation” exception under Section 162(m) of the Code and the regulations thereunder,
any adjustment by the Committee shall be consistent with the requirements of Section 162(m) and the regulations thereunder.


 


11.19 Legality of Issuance. Notwithstanding
any provision of this Plan or any applicable Award Agreement to the contrary, the Committee shall have the sole discretion to impose
such conditions, restrictions and limitations (including suspending exercises of Options or Stock Appreciation Rights and the tolling
of any applicable exercise period during such suspension) on the issuance of Common Stock with respect to any Award unless and
until the Committee determines that such issuance complies with (i) any applicable registration requirements under the Securities
Act of 1933 or the Committee has determined that an exemption therefrom is available, (ii) any applicable listing requirement
of any stock exchange on which the Common Stock is listed, and (iii) any other applicable provision of state, federal or foreign
law, including foreign securities laws where applicable.


 


11.20 Restrictions on Transfer. Regardless
of whether the offering and sale of Common Stock under the Plan have been registered under the Securities Act of 1933 or have been
registered or qualified under the securities laws of any state, the Company may impose restrictions upon the sale, pledge, or other
transfer of such Common Stock (including the placement of appropriate legends on stock certificates) if, in the judgment of the
Company and its counsel, such restrictions are necessary or desirable to achieve compliance with the provisions of the Securities
Act of 1933, the securities laws of any state, the United States or any other applicable foreign law.


 


11.21 Further Assurances. As a condition
to receipt of any Award under the Plan, a Participant shall agree, upon demand of the Company, to do all acts and execute, deliver
and perform all additional documents, instruments and agreements which may be reasonably required by the Company, to implement
the provisions and purposes of the Plan.


 




    	 	20	 



     


    



 


AMENDMENT NO. 1


SPARK NETWORKS, INC.


2007 OMNIBUS INCENTIVE PLAN


 


The following constitutes Amendment No. 1 to the 2007 Omnibus
Incentive Plan (the “Plan”) of Spark Networks, Inc. (the “Company”), which originally became effective
as of July 9, 2007. This amendment increases the total number of initially authorized shares of Common Stock reserved and
available for issuance under the Plan from 2,500,000 shares by 250,000 shares so that the Plan authorizes a total of 2,750,000
shares, which amount does not include the annual increase of reserved shares as provided in Article IV Section 4.01 of the
Plan.


 


Pursuant to the resolutions of the board of directors dated November
5, 2008 and the approval of the Company’s stockholders at the Special Meeting of Stockholders held on January 5, 2009,
Article IV Section 4.01 of the Plan shall be deleted in its entirety and replaced with the following:


 


“4.01 Number of Shares Issuable. The total number of
shares initially authorized to be issued under the Plan shall be 2,750,000 shares of Common Stock; provided, however, that on January 1
of each year, beginning on January 1, 2009, such maximum aggregate number of shares of Common Stock shall be increased by
an amount equal to the lesser of (i) 2,000,000 shares, (ii) four percent (4%) of the number of outstanding shares
of Common Stock on the last day of the immediately preceding fiscal year or (iii) an amount determined by the Board. No more
than 500,000 shares of Common Stock may be issued under the Plan as Awards under Articles VII, VIII and IX. The foregoing share
limits shall be subject to adjustment in accordance with Section 11.07. The shares to be offered under the Plan shall be authorized
and unissued Common Stock, or issued Common Stock that shall have been reacquired by the Company.”


 


IN WITNESS WHEREOF, pursuant to the due authorization and adoption
of this amendment to the Plan by the board of directors and stockholders on the day and year set forth below, the Company has caused
this amendment to the Plan to be duly executed by its duly authorized officer.


 


Dated: January 5, 2009 


 


	SPARK NETWORKS, INC.,	 
	a Delaware corporation	 
	 	 	 
	By:	/s/ Joshua A. Kreinberg	 
	 	Name:	Joshua A. Kreinberg	 
	 	Title:	General Counsel and Corporate Secretary	 



 



    	 	 	 



     


    

 


NOTICE OF GRANT OF STOCK OPTION AWARD


 


SPARK NETWORKS, INC.


2007 OMNIBUS INCENTIVE PLAN


 


FOR GOOD AND VALUABLE CONSIDERATION, Spark
Networks, Inc. (the “Company”) hereby grants, pursuant to the provisions of the Company’s 2007 Omnibus Incentive
Plan (the “Plan”), to the Participant designated in this Notice of Grant of [Incentive/Non-Qualified] Stock
Option Award (the “Notice”) an option to purchase the number of shares of the common stock of the Company set forth
in the Notice (the “Shares”), subject to certain restrictions as outlined below in this Notice and the additional provisions
set forth in the attached Terms and Conditions of Stock Option Award (collectively, the “Agreement”). Also enclosed
is a copy of the information statement describing important provisions of the Plan.


 


Optionee: [                    ]


 


	 	 	 	 	 	 	 
	Date of Grant:	 	                    	 	Type of Option: [Incentive/Non-Qualified] Stock Option
	 	 	 	 
	Exercise Price per Share:	 	$            	 	Expiration Date:	 	                    
	 	 	 	 
	
        Total Number of

        Shares Granted:
	 	                	 	Total Exercise Price:	 	$            


 


Vesting Schedule: [1/4 vesting on each of the first, second,
third and fourth anniversaries of the date of the grant]


 


Vesting is accelerated in full upon a Change in Control under
Section 2(c).


 


Exercise After Termination of Service:


 


Termination of Service for any
reason: any non-vested portion of the Option expires immediately;


 


Termination of Service due to death or Disability: vested
portion of the Option is exercisable by the Optionee (or, in the event of the Optionee’s death, the Optionee’s Beneficiary)
for one year after the Optionee’s Termination;


 


Termination of Service for any reason other than death or Disability:
vested portion of the Option is exercisable for a period of ninety days following the Optionee’s Termination.


 


In no event may this Option be exercised after the Expiration
Date as provided above.


 


Stockholder Approval: Notwithstanding the vesting schedule
above, this Award is subject to stockholder approval of the Plan and, unless and until stockholder approval is obtained, this Award
shall not be deemed vested in whole or in part and no Common Stock shall be issued or issuable with respect to this Award. If stockholder
approval of the Plan is not obtained within one year after the Grant Date, this Award will terminate ab initio and be of
no further force and effect.


 




    	 	1	 



     


    


 


By signing below, the Optionee agrees that this Stock Option Award
is granted under and governed by the terms and conditions of the Company’s 2007 Omnibus Incentive Plan and the attached Terms
and Conditions.


 


	Participant	 	Spark Networks, Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Title:	 
	Date:	 	 	Date:	 


 




    	 	2	 



     


    


 


 


TERMS AND CONDITIONS OF STOCK OPTION AWARD


 


I. AGREEMENT


 


1. Grant of Option. The Option granted
to the Optionee and described in the Notice of Grant is subject to the terms and conditions of the Plan, which is incorporated
by reference in its entirety into these Terms and Conditions of Stock Option Award.


 


The Board of Directors of the Company has authorized
and approved the 2007 Omnibus Incentive Plan (the “Plan”), which has been approved by the stockholders of the Company.
The Committee has approved an award to the Optionee of a number of shares of the Company’s common stock, conditioned upon
the Participant’s acceptance of the provisions set forth in the Notice and these Terms and Conditions within 60 days after
the Notice and these Terms and Conditions are presented to the Optionee for review. For purposes of the Notice and these Terms
and Conditions, any reference to the Company shall include a reference to any Subsidiary.


 


If designated in the Notice of Grant as an
Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code. Nevertheless, to the extent that the Option fails to meet the requirements of an ISO under Section 422 of the
Code, this Option shall be treated as a Non-Qualified Stock Option (“NSO”).


 


The Company intends that this Option not be
considered to provide for the deferral of compensation under Section 409A of the Code and that this Agreement shall be so
administered and construed. Further, the Company may modify the Plan and this Award to the extent necessary to fulfill this intent.


 


2. Exercise of Option.


 


(a) Right to Exercise. This Option shall
be exercisable, in whole or in part, during its term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement. No Shares shall be issued pursuant to the exercise of an
Option unless the issuance and exercise comply with applicable laws. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares. The Committee
may, in its discretion, (i) accelerate vesting of the Option, or (ii) extend the applicable exercise period to the extent
permitted under Section 6.03 of the Plan.


 


(b) Method of Exercise. The Optionee
may exercise the Option by delivering an exercise notice in a form approved by the Company (the “Exercise Notice”)
which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised,
and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Shares exercised. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise Price.


 


(c) Acceleration of Vesting on Change in
Control. Subject to the exceptions contained in Section 6.05 of the Plan, in the event of a Change in Control, all Options
outstanding on the date of the Change in Control that have not previously vested or terminated under the terms of this Agreement
shall be immediately and fully vested and exercisable.


 






    	 	3	 



     


    




 


3. Method of Payment. If the Optionee
elects to exercise the Option by submitting an Exercise Notice under Section 2(b) of this Agreement, the aggregate Exercise
Price (as well as any applicable withholding or other taxes) shall be paid by cash or check; provided, however , that the
Committee may consent, in its discretion, to payment in any of the following forms, or a combination of them:


 


(a) cash or check;


 


(b) consideration received by the Company under
a formal cashless exercise program adopted by the Company in connection with the Plan;


 


(c) surrender of other Shares owned by the
Optionee which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares
and any applicable withholding; or


 


(d) any other consideration that the Committee
deems appropriate and in compliance with applicable law.


 


4. Restrictions on Exercise. This Option
may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of the
Shares upon exercise or the method of payment of consideration for those shares would constitute a violation of any applicable
law or regulation.


 


5. Non-Transferability of Option. This
Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised
during the lifetime of the Optionee only by the Optionee [IF THE OPTION IS A NSO, THE FOLLOWING LANGUAGE MAY BE INCLUDED PERMITTING
LIMITED TRANSFER OF THE OPTION] [; provided, however, that the Optionee may transfer the Options to any member of the Optionee’s
Immediate Family or to a trust, limited liability company, family limited partnership or other equivalent vehicle, established
for the exclusive benefit of one or more members of his Immediate Family by delivering to the Company a Notice of Assignment in
a form acceptable to the Company. No transfer or assignment of the Option to or on behalf of an Immediate Family member under this
Section 5 shall be effective until the Company has acknowledged such transfer or assignment in writing. “Immediate Family”
means the Optionee’s parents, spouse, children, siblings, and grandchildren. Following transfer, the Options shall continue
to be subject to the same terms and conditions as were applicable immediately prior to transfer. In the event an Option is transferred
as contemplated in this Section 5, such Option may not be subsequently transferred by the transferee except by will or the
laws of descent and distribution.] The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.


 


6. Term of Option. This Option may be
exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the
Plan and the terms of this Option Agreement.


 






    	 	4	 



     


    




 


7. Withholding.


 


(a) The Committee shall determine the amount
of any withholding or other tax required by law to be withheld or paid by the Company with respect to any income recognized by
the Optionee with respect to the Option Award.


 


(b) The Optionee shall be required to meet
any applicable tax withholding obligation in accordance with the provisions of Section 11.05 of the Plan.


 


(c) Subject to any rules prescribed by the
Committee, the Optionee shall have the right to elect to meet any withholding requirement (i) by having withheld from this
Award at the appropriate time that number of whole shares of common stock whose fair market value is equal to the amount of any
taxes required to be withheld with respect to such Award, (ii) by direct payment to the Company in cash of the amount of any
taxes required to be withheld with respect to such Award or (iii) by a combination of shares and cash.


 


8. Defined Terms. Capitalized terms
used but not defined in the Notice and these Terms and Conditions shall have the meanings set forth in the Plan, unless such term
is defined in the Optionee’s Employment Agreement. Any terms used in the Notice and these Terms and Conditions, but defined
in the Optionee’s Employment Agreement are incorporated herein by reference and shall be effective for purposes of the Notice
and these Terms and Conditions without regard to the continued effectiveness of the Employment Agreement.


 


9. Nonassignability. The Award may not
be sold, assigned, transferred (other than by will or the laws of descent and distribution, or to an inter vivos trust with respect
to which the Optionee is treated as the owner under Sections 671 through 677 of the Code), pledged, hypothecated, or otherwise
encumbered or disposed of until the restrictions on such Shares, as set forth in the Notice and Agreement, have lapsed or been
removed.


 


10 Optionee Representations. The Optionee
hereby represents to the Company that the Optionee has read and fully understands the provisions of the Notice, these Terms and
Conditions and the Plan and the Optionee’s decision to participate in the Plan is completely voluntary. Further, the Optionee
acknowledges that the Optionee is relying solely on his or her own advisors with respect to the tax consequences of this stock
option award.


 


11. Regulatory Limitations on Exercises.
Notwithstanding the other provisions of this Option Agreement, no option exercise or issuance of shares of Common Stock pursuant
to this Option Agreement shall be effective if (i) the shares reserved under the Plan are not subject to an effective registration
statement at the time of such exercise or issuance, or otherwise eligible for an exemption from registration, or (ii) the
Company determines in good faith that such exercise or issuance would violate any applicable securities or other law or regulation.


 


12. Miscellaneous.


 


(a) Notices. All notices, requests,
deliveries, payments, demands and other communications which are required or permitted to be given under these Terms and Conditions
shall be in writing and shall be either delivered personally or sent by registered or certified mail, or by private courier, return
receipt requested, postage prepaid to the parties at their respective addresses set forth herein, or to such other address as either
shall have specified by notice in writing to the other. Notice shall be deemed duly given hereunder when delivered or mailed as
provided herein.


 




    	 	5	 



     


    


 


(b) Waiver. The waiver by any party
hereto of a breach of any provision of the Notice or these Terms and Conditions shall not operate or be construed as a waiver of
any other or subsequent breach.


 


(c) Entire Agreement. These Terms and
Conditions, the Notice and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof.


 


(d) Binding Effect; Successors. These
Terms and Conditions shall inure to the benefit of and be binding upon the parties hereto and to the extent not prohibited herein,
their respective heirs, successors, assigns and representatives. Nothing in these Terms and Conditions, express or implied, is
intended to confer on any person other than the parties hereto and as provided above, their respective heirs, successors, assigns
and representatives any rights, remedies, obligations or liabilities.


 


(e) Governing Law. The Notice and these
Terms and Conditions shall be governed by and construed in accordance with the laws of the State of Delaware.


 


(f) Headings. The headings contained
herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation
of any of the terms or provisions of these Terms and Conditions.


 


(g) Conflicts; Amendment. The provisions
of the Plan are incorporated in these Terms and Conditions in their entirety. In the event of any conflict between the provisions
of these Terms and Conditions and the Plan, the provisions of the Plan shall control. The Agreement may be amended at any time
by written agreement of the parties hereto.


 


(h) No Right to Continued Employment.
Nothing in the Notice or these Terms and Conditions shall confer upon the Optionee any right to continue in the employ or service
of the Company or affect the right of the Company to terminate the Optionee’s employment or service at any time.


 


(i) Further Assurances. The Optionee
agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver and perform all additional documents,
instruments and agreements which may be reasonably required by the Company or the Committee, as the case may be, to implement the
provisions and purposes of the Notice and these Terms and Conditions and the Plan.


 




    	 	6	 



     


    


 


NOTICE OF GRANT OF RESTRICTED STOCK AWARD


 


SPARK NETWORKS, INC.


2007 OMNIBUS INCENTIVE PLAN


 


FOR GOOD AND VALUABLE CONSIDERATION, Spark Networks, Inc. (the “Company”)
hereby grants, pursuant to the provisions of the Company’s 2007 Omnibus Incentive Plan (the “Plan”), to the Participant
designated in this Notice of Grant of Restricted Stock Award (the “Notice”) the number of shares of the common stock
of the Company set forth in the Notice, subject to certain restrictions as outlined below in this Notice and the additional provisions
set forth in the attached Terms and Conditions of Restricted Stock Award (the “Agreement”). Also enclosed is a copy
of the information statement describing important provisions of the Plan.


 


Participant: [                    ]


 


Grant Date: [                    ]


 


# of Shares of Restricted Stock: [                    ]


 


Purchase Price: Subject to the withholding provisions of
Paragraph 5 of the Terms and Conditions, this Restricted Stock Award does not require the Participant to pay any purchase price
or other cash consideration in connection with the issuance or delivery of the Restricted Stock.


 


Vesting Schedule: Subject to the provisions contained in
Paragraphs 4, 5 and 6 of the Terms and Conditions, this Restricted Stock Award shall vest, and the applicable Restrictions set
forth in the Terms and Conditions shall lapse in accordance with the following schedule, in the event the Participant does not
have a Termination of Service prior to the applicable vesting date:


 


	Date of Vesting	 	Cumulative Amount Vested	 
	[First Anniversary of Grant Date	 	 	25	%]
	[Second Anniversary of Grant Date	 	 	50	%]
	[Third Anniversary of Grant Date	 	 	75	%]
	[Fourth Anniversary of Grant Date	 	 	100	%]



 


Change in Control: Notwithstanding the foregoing vesting
schedule, the Restricted Stock Award will be deemed fully vested and no longer subject to forfeiture in the event of a Change in
Control of the Company (as defined in and subject to the provisions of the Plan).


 


Forfeiture: The Participant’s rights in the Restricted
Stock Award on which the Restrictions have not lapsed pursuant to the vesting schedule provisions above shall be forfeited in full
in the event of the Participant’s Termination of Service for any reason.


 


By signing below, the Participant agrees that this Restricted Stock
Award is granted under and governed by the terms and conditions of the Company’s 2007 Omnibus Incentive Plan and the attached
Terms and Conditions.


 


	Participant	 	Spark Networks, Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Title:	 
	Date:	 	 	Date:	 


 






    	 	 	 



     


    


 


TERMS AND CONDITIONS OF RESTRICTED STOCK
AWARD


 


These Terms and Conditions of Restricted Stock Award relates to
the Notice of Grant of Restricted Stock Award (the “Notice”) attached hereto, by and between Spark Networks, Inc. (the
“Company”), and the person identified in the Notice (the “Participant”).


 


The Board of Directors of the Company has authorized and approved
the 2007 Omnibus Incentive Plan (the “Plan”), which has been approved by the stockholders of the Company. The Committee
has approved an award to the Participant of a number of shares of the Company’s common stock, conditioned upon the Participant’s
acceptance of the provisions set forth in the Notice and these Terms and Conditions within 60 days after the Notice and these Terms
and Conditions are presented to the Participant for review. For purposes of the Notice and these Terms and Conditions, any reference
to the Company shall include a reference to any Subsidiary.


 


		1.	Grant of Restricted Stock.



 


(a) Subject to the terms and conditions of
the Plan, as of the Grant Date, the Company grants to the Participant the number of shares of Common Stock set forth in the Notice
(the “Restricted Shares”), subject to the restrictions set forth in Paragraph 2 of these Terms and Conditions, the
provisions of the Plan and the other provisions contained in these Terms and Conditions. If and when the restrictions set forth
in Paragraph 2 expire in accordance with these Terms and Conditions without forfeiture of the Restricted Shares, and upon the satisfaction
of all other applicable conditions as to the Restricted Shares, such shares shall no longer be considered Restricted Shares for
purposes of these Terms and Conditions.


 


(b) As soon as practicable after the Grant
Date, the Company shall direct that a stock certificate or certificates representing the applicable Restricted Shares be registered
in the name of and issued to the Participant. Such certificate or certificates shall be held in the custody of the Company or its
designee until the expiration of the applicable Restricted Period (as defined in Paragraph 3). On or before the date of execution
of the Notice, the Participant has delivered to the Company one or more stock powers endorsed in blank relating to the Restricted
Shares.


 


(c) Except as provided in Section 1(d),
in the event that a certificate for the Restricted Shares is delivered to the Participant, such certificate shall bear the following
legend (the “Legend”):


 


The ownership and transferability of this certificate and the shares
of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Spark Networks, Inc. 2007 Omnibus
Incentive Plan and a Restricted Stock Award Notice entered into between the registered owner and Spark Networks, Inc. Copies of
such Plan and Notice are on file in the executive offices of Spark Networks, Inc.




 






    	 	 	 



     


    


 


In addition, the stock certificate or certificates for
the Restricted Shares shall be subject to such stop-transfer orders and other restrictions as the Company may deem advisable under
the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed, and any applicable federal or state securities law, and the Company may cause a legend or legends to be placed
on such certificate or certificates to make appropriate reference to such restrictions.


 


(d) As soon as administratively practicable
following the expiration of the Restricted Period without a forfeiture of the Restricted Shares, and upon the satisfaction of all
other applicable conditions as to the Restricted Shares, including, but not limited to, the payment by the Participant of all applicable
withholding taxes, the Company shall deliver or cause to be delivered to the Participant a certificate or certificates for the
applicable Restricted Shares which shall not bear the Legend.


 


		2.	Restrictions.



 


(a) The Participant shall have all rights and
privileges of a stockholder as to the Restricted Shares, including the right to vote and receive dividends or other distributions
with respect to the Restricted Shares, except that the following restrictions shall apply:


 


(i) the Participant shall not be entitled to
delivery of the certificate or certificates for the Restricted Shares until the expiration of the Restricted Period without a forfeiture
of the Restricted Shares and upon the satisfaction of all other applicable conditions;


 


(ii) none of the Restricted Shares may
be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period applicable to such
shares, except as provided in Section 7.02(c) of the Plan or as otherwise permitted by the Committee in its sole discretion
or pursuant to rules adopted by the Committee in accordance with the Plan; and


 


(iii) all of the Restricted Shares shall be
forfeited and returned to the Company and all rights of the Participant with respect to the Restricted Shares shall terminate in
their entirety on the terms and conditions set forth in Paragraph 4.


 


(b) Any attempt to dispose of Restricted Shares
or any interest in the Restricted Shares in a manner contrary to the restrictions set forth in these Terms and Conditions shall
be void and of no effect.


 


		3.	Restricted Period and Vesting. The “Restricted Period” is the period beginning on the Grant Date and ending
on the date the Restricted Shares, or such applicable portion of the Restricted Shares, are deemed vested under the schedule set
forth in the Notice. The Restricted Shares shall be deemed vested and no longer subject to forfeiture under Paragraph 4 in accordance
with the vesting schedule set forth in the Notice or earlier in the event of a Change in Control.



 




    	 	 	 



     


    

 


		4.	Forfeiture.



 


(a) Subject to Paragraph 6 below, if during
the Restricted Period (i) the Participant incurs a Termination of Service, (ii) there occurs a material breach of the
Notice or these Terms and Conditions by the Participant or (iii) the Participant fails to meet the tax withholding obligations
described in Paragraph 5(b), all rights of the Participant to the Restricted Shares that have not vested in accordance with Paragraph
3 as of the date of such termination shall terminate immediately and be forfeited in their entirety.


 


(b) In the event of any forfeiture under this
Paragraph 4, the certificate or certificates representing the forfeited Restricted Shares shall be canceled to the extent of any
Restricted Shares that were forfeited.


 


		5.	Withholding.


 


(a) The Committee shall determine the amount
of any withholding or other tax required by law to be withheld or paid by the Company with respect to any income recognized by
the Participant with respect to the Restricted Shares.


 


(b) The Participant shall be required to meet
any applicable tax withholding obligation in accordance with the provisions of Section 11.05 of the Plan.


 


(c) Subject to any rules prescribed by the
Committee, the Participant shall have the right to elect to meet any withholding requirement (i) by having withheld from this
Award at the appropriate time that number of whole shares of common stock whose fair market value is equal to the amount of any
taxes required to be withheld with respect to such Award, (ii) by direct payment to the Company in cash of the amount of any
taxes required to be withheld with respect to such Award or (iii) by a combination of shares and cash.


 


		6.	Committee Discretion.
Notwithstanding any provision of the Notice or these Terms and Conditions to the contrary, the Committee shall have discretion
under the Plan to waive any forfeiture of the Restricted Shares as set forth in Paragraph 4, the Restricted Period and any other
conditions set forth in the Notice or these Terms and Conditions.


 


		7.	Defined Terms. Capitalized
terms used but not defined in the Notice and Agreement shall have the meanings set forth in the Plan, unless such term is defined
in the Participant’s Employment Agreement. Any terms used in the Notice and Agreement, but defined in the Participant’s
Employment Agreement are incorporated herein by reference and shall be effective for purposes of the Notice and these Terms and
Conditions without regard to the continued effectiveness of the Employment Agreement.


 


		8.	Nonassignability.
The Restricted Shares may not be sold, assigned, transferred (other than by will or the laws of descent and distribution, or to
an inter vivos trust with respect to which the Participant is treated as the owner under Sections 671 through 677 of the Code),
pledged, hypothecated, or otherwise encumbered or disposed of until the restrictions on such Shares, as set forth in the Notice
and Agreement, have lapsed or been removed.



 



    	 	 	 



     


    

 


		9.	Participant Representations.
The Participant hereby represents to the Company that the Participant has read and fully understands the provisions of the Notice,
these Terms and Conditions and the Plan and the Participant’s decision to participate in the Plan is completely voluntary.
Further, the Participant acknowledges that the Participant is relying solely on his or her own advisors with respect to the tax
consequences of this restricted stock award.


 


		10.	Regulatory Restrictions
on the Restricted Shares. Notwithstanding any other provision of the Plan, the obligation of the Company to issue Restricted
Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body
as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of the Restricted Shares pursuant
to these Terms and Conditions prior to the satisfaction of all legal requirements relating to the issuance of such shares, to
their registration, qualification or listing or to an exemption from registration, qualification or listing.


 


		11.	Miscellaneous.


 


		11.1	Notices. All notices,
requests, deliveries, payments, demands and other communications which are required or permitted to be given under these Terms
and Conditions shall be in writing and shall be either delivered personally or sent by registered or certified mail, or by private
courier, return receipt requested, postage prepaid to the parties at their respective addresses set forth herein, or to such other
address as either shall have specified by notice in writing to the other. Notice shall be deemed duly given hereunder when delivered
or mailed as provided herein.


 


		11.2	Waiver. The waiver
by any party hereto of a breach of any provision of the Notice or these Terms and Conditions shall not operate or be construed
as a waiver of any other or subsequent breach.


 


		11.3	Entire Agreement.
These Terms and Conditions, the Notice and the Plan constitute the entire agreement between the parties with respect to the subject
matter hereof.


 


		11.4	Binding Effect; Successors.
These Terms and Conditions shall inure to the benefit of and be binding upon the parties hereto and to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing in these Terms and Conditions, express or implied,
is intended to confer on any person other than the parties hereto and as provided above, their respective heirs, successors, assigns
and representatives any rights, remedies, obligations or liabilities.


 


		11.5	Governing Law. The
Notice and these Terms and Conditions shall be governed by and construed in accordance with the laws of the State of Delaware.



 



    	 	 	 



     


    

 


		11.6	Headings. The headings
contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of these Terms and Conditions.


 


		11.7	Conflicts; Amendment.
The provisions of the Plan are incorporated in these Terms and Conditions in their entirety. In the event of any conflict between
the provisions of these Terms and Conditions and the Plan, the provisions of the Plan shall control. The Agreement may be amended
at any time by written agreement of the parties hereto.


 


		11.8	No Right to Continued
Employment. Nothing in the Notice or these Terms and Conditions shall confer upon the Participant any right to continue in
the employ or service of the Company or affect the right of the Company to terminate the Participant’s employment or service
at any time.


 


		11.9	Further Assurances.
The Participant agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver and perform all additional
documents, instruments and agreements which may be reasonably required by the Company or the Committee, as the case may be, to
implement the provisions and purposes of the Notice and these Terms and Conditions and the Plan.



 



    	 	 	 



     


    

 


NOTICE OF GRANT OF RESTRICTED STOCK UNIT
AWARD


 


SPARK NETWORKS, INC.


2007 OMNIBUS INCENTIVE PLAN


 


FOR GOOD AND VALUABLE CONSIDERATION, Spark Networks, Inc. (the “Company”)
hereby grants, pursuant to the provisions of the Company’s 2007 Omnibus Incentive Plan (the “Plan”), to the Participant
designated in this Notice of Grant of Restricted Stock Unit Award (the “Notice”) the number of shares of the common
stock of the Company set forth in the Notice, subject to certain restrictions as outlined below in this Notice and the additional
provisions set forth in the attached Terms and Conditions of Restricted Stock Unit Award (the “Agreement”). Also enclosed
is a copy of the information statement describing important provisions of the Plan.


 


Participant: [                    ]


 


Grant Date: [                    ]


 


# of Restricted Stock Units: [                    ]


 


Purchase Price: Subject to the withholding provisions of
Paragraph 5 of the Terms and Conditions, this Restricted Stock Unit Award does not require the Participant to pay any purchase
price or other cash consideration in connection with this Award, including the issuance or delivery of Common Stock upon vesting
of the Award.


 


Vesting Schedule: Subject to the provisions contained in
Paragraphs 4, 5 and 6 of the Terms and Conditions, this Restricted Stock Unit Award shall vest, and the applicable Restrictions
set forth in the Terms and Conditions shall lapse in accordance with the following schedule, in the event the Participant does
not have a Termination of Service prior to the applicable vesting date:


 


	Date of Vesting	 	Cumulative Amount Vested	 
	[Sample Vesting Schedule]	 	 	 	 
	First Anniversary of Grant Date	 	 	25	%
	Second Anniversary of Grant Date	 	 	50	%
	Third Anniversary of Grant Date	 	 	75	%
	Fourth Anniversary of Grant Date	 	 	100	%



 


Change in Control: Notwithstanding the foregoing vesting
schedule, the Restricted Stock Unit Award will be deemed fully vested and no longer subject to forfeiture in the event of a Change
in Control of the Company (as defined in and subject to the provisions of the Plan).


 


Stockholder Approval and Forfeiture: Notwithstanding the
vesting schedule above, this Award is subject to stockholder approval of the Plan and, unless and until stockholder approval is
obtained, this Award shall not be deemed vested in whole or in part and no Common Stock shall be issued or issuable with respect
to this Award. If stockholder approval of the Plan is not obtained within one year after the Grant Date, this Award will terminate
ab initio and be of no further force and effect. The Participant’s rights in the Restricted Stock Unit Award on which
the Restrictions have not lapsed pursuant to the vesting schedule provisions above shall be forfeited in full in the event of the
Participant’s Termination of Service for any reason.


 




    	 	 	 



     


    

 


By signing below, the Participant agrees that this Restricted Stock
Unit Award is granted under and governed by the terms and conditions of the Company’s 2007 Omnibus Incentive Plan and the
attached Terms and Conditions.


 


	Participant	 	Spark Networks, Inc.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Title:	 
	Date:	 	 	Date:	 


 




    	 	- 2 -	 



     


    


 


TERMS AND CONDITIONS OF RESTRICTED STOCK
UNIT AWARD


 


These Terms and Conditions of Restricted Stock Unit Award relates
to the Notice of Grant of Restricted Stock Unit Award (the “Notice”) attached hereto, by and between Spark Networks,
Inc. (the “Company”), and the person identified in the Notice (the “Participant”).


 


The Board of Directors of the Company has authorized and approved
the 2007 Omnibus Incentive Plan (the “Plan”), subject to approval by the Company’s stockholders. The Committee
has approved an award to the Participant of a number of shares of the Company’s common stock, conditioned upon the Participant’s
acceptance of the provisions set forth in the Notice and these Terms and Conditions within 60 days after the Notice and these Terms
and Conditions are presented to the Participant for review. For purposes of the Notice and these Terms and Conditions, any reference
to the Company shall include a reference to any Subsidiary.


 


1. Grant of Restricted Stock Units.


 


(a) As of the Grant Date set forth in the Notice
of Grant, the Company grants to the Participant the number of Restricted Stock Units set forth in the Notice of Grant (the “Units”),
which represent shares of the Company’s Common Stock. The Units are subject to the restrictions set forth in Section 2
of this Agreement, these Terms and Conditions, the provisions of the Plan and the other provisions contained in these Terms and
Conditions.


 


(b) The Units granted under this Agreement
shall be reflected in a bookkeeping account maintained by the Company during the Restricted Period. If and when the restrictions
set forth in Section 2 expire in accordance with the terms of this Agreement, and upon the satisfaction of all other applicable
conditions as to the Units, such Units (and any related Dividend Units described in Section 1(c) below) not forfeited pursuant
to Section 4 hereof shall be settled in cash or shares of Common Stock as provided in Section 1(e) of this Agreement
and otherwise in accordance with the Plan.


 


(c) With respect to each Unit, whether or not
vested, that has not been forfeited (but only to the extent such award of Units has not been settled for cash or Common Stock),
the Company shall, with respect to any cash dividends paid on the Common Stock, accrue and credit to the Participant’s bookkeeping
account a number of Units having a Fair Market Value as of the date such dividend is paid equal to the cash dividends that would
have been paid with respect to such Unit if it were an outstanding share of Common Stock (the “Dividend Units”). These
Dividend Units thereafter shall (i) be treated as Units for purposes of future dividend accruals pursuant to this Section 1(c);
and (ii) vest in such amounts (rounded to the nearest whole Unit) at the same time as the Units with respect to which such
Dividend Units were received. Any dividends or distributions on Common Stock paid other than in cash shall accrue in the Participant’s
bookkeeping account and shall vest at the same time as the Units in respect of which they are made (in each case in the same form,
based on the same record date and at the same time, as such dividend or other distribution is paid on such Common Stock).


 


(d) The Company’s obligations under this
Agreement (with respect to both the Units and the Dividend Units, if any) shall be unfunded and unsecured, and no special or separate
fund shall be established and no other segregation of assets shall be made. The rights of Participant under this Agreement shall
be no greater than those of a general unsecured creditor of the Company. In addition, the Units shall be subject to such restrictions
as the Company may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which Common Stock is then listed, any Company policy and any applicable federal or state securities law.


 






    	 	 	 



     


    

 


(e) Except as otherwise provided in this Agreement,
settlement of the Units in accordance with the provisions of this Section 1(e) shall be delivered as soon as practicable after
the end of the Restricted Period, and upon the satisfaction of all other applicable conditions as to the Units (including the payment
by the Participant of all applicable withholding taxes). The Units so payable to the Participant shall be paid solely in shares
of Common Stock, solely in cash based on the Fair Market Value of the Common Stock (determined as of the first business day next
following the last day of the Restricted Period), or in a combination of the two, as determined by the Committee in its sole discretion.


 


2. Restrictions.


 


(a) The Participant shall have no rights as
a stockholder of the Company by virtue of any Unit unless and until such Unit vests and resulting shares of Common Stock are issued
to the Participant:


 


(b) None of the Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the Restricted Period, except as may be permitted by the Plan or
as otherwise permitted by the Committee in its sole discretion or pursuant to rules adopted by the Committee in accordance with
the Plan.


 


(c) Any attempt to dispose of the Units or
any interest in the Units in a manner contrary to the restrictions set forth in this Agreement shall be void and of no effect.


 


3. Restricted Period and Vesting. The “Restricted
Period” is the period beginning on the Grant Date and ending on the date the Units, or such applicable portion of the Units,
are deemed vested under the schedule set forth in the Notice Subject to the provisions contained in Section 4, 5 and 6, the
Units shall be deemed vested and no longer subject to forfeiture under Paragraph 4 upon expiration of the Restricted Period, and
the satisfaction of all other applicable conditions as to the Units (including the payment by the Participant of all applicable
withholding taxes).


 


4. Forfeiture.


 


Subject to Section 6 hereof, if during
the Restricted Period (i) the Participant incurs a Termination of Service, (ii) there occurs a material breach of the
Notice or these Terms and Conditions by the Participant, or (iii) the Participant fails to meet the tax withholding obligations
described in Section 5(b) hereof, all rights of the Participant to the Units that have not vested in accordance with Section 3
as of the date of such event shall terminate immediately and be forfeited in their entirety.


 


5. Withholding.


 


(a) The Committee shall determine the amount
of any withholding or other tax required by law to be withheld or paid by the Company with respect to any income recognized by
the Participant with respect to the Units.


 




    	 	- 2 -	 



     


    


  


(b) The Participant shall be required to meet
any applicable tax withholding obligation in accordance with the provisions of the Plan.


 


(c) Subject to any rules prescribed by the
Committee, the Participant shall have the right to elect to meet any withholding requirement (i) by having withheld from this
Award at the appropriate time that number of whole shares of Common Stock whose Fair Market Value is equal to the amount of any
taxes required to be withheld with respect to such Award, (ii) by direct payment to the Company in cash of the amount of any
taxes required to be withheld with respect to such Award or (iii) by a combination of shares and cash.


 


6. Committee’s Discretion. Notwithstanding any
provision of this Agreement to the contrary, the Committee shall have discretion under Section 7.02(b) of the Plan to waive
any forfeiture of the Units as set forth in Section 4 hereof, the Restricted Period and any other conditions set forth in
this Agreement.


 


7. Defined Terms. Capitalized terms used but not defined
in the Notice and Agreement shall have the meanings set forth in the Plan, unless such term is defined in the Participant’s
Employment Agreement. Any terms used in the Notice and Agreement, but defined in the Participant’s Employment Agreement are
incorporated herein by reference and shall be effective for purposes of the Notice and these Terms and Conditions without regard
to the continued effectiveness of the Employment Agreement.


 


8. Nonassignability. The Units may not be sold, assigned,
transferred (other than by will or the laws of descent and distribution, or to an inter vivos trust with respect to which the Participant
is treated as the owner under Sections 671 through 677 of the Code), pledged, hypothecated, or otherwise encumbered or disposed
of until the restrictions on such Units, as set forth in the Notice and Agreement, have lapsed or been removed.


 


9. Participant Representations. The Participant hereby
represents to the Company that the Participant has read and fully understands the provisions of the Notice, these Terms and Conditions
and the Plan and the Participant’s decision to participate in the Plan is completely voluntary. Further, the Participant
acknowledges that the Participant is relying solely on his or her own advisors with respect to the tax consequences of this restricted
stock award.


 


10. Regulatory Restrictions on the Units. Notwithstanding
any other provision of the Plan, the obligation of the Company to issue Common Stock in connection with this Award under the Plan
shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The
Company reserves the right to restrict, in whole or in part, the delivery of Common Stock pursuant to these Terms and Conditions
prior to the satisfaction of all legal requirements relating to the issuance of such shares, to their registration, qualification
or listing or to an exemption from registration, qualification or listing.


 


11. Miscellaneous.


 


		11.1	Notices. All notices, requests, deliveries, payments,
demands and other communications which are required or permitted to be given under these Terms and Conditions shall be in writing
and shall be either delivered personally or sent by registered or certified mail, or by private courier, return receipt requested,
postage prepaid to the parties at their respective addresses set forth herein, or to such other address as either shall have specified
by notice in writing to the other. Notice shall be deemed duly given hereunder when delivered or mailed as provided herein.



 




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		11.2	Waiver. The waiver by any party hereto of a breach of any provision of the Notice or these Terms and Conditions shall
not operate or be construed as a waiver of any other or subsequent breach.



 


		11.3	Entire Agreement. These Terms and Conditions, the Notice and the Plan constitute the entire agreement between the parties
with respect to the subject matter hereof.



 


		11.4	Binding Effect; Successors. These Terms and Conditions shall inure to the benefit of and be binding upon the parties
hereto and to the extent not prohibited herein, their respective heirs, successors, assigns and representatives. Nothing in these
Terms and Conditions, express or implied, is intended to confer on any person other than the parties hereto and as provided above,
their respective heirs, successors, assigns and representatives any rights, remedies, obligations or liabilities.



 


		11.5	Governing Law. The Notice and these Terms and Conditions shall be governed by and construed in accordance with the laws
of the State of Delaware.



 


		11.6	Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms or provisions of these Terms and Conditions.



 


		11.7	Conflicts; Amendment. The provisions of the Plan are incorporated in these Terms and Conditions in their entirety. In
the event of any conflict between the provisions of these Terms and Conditions and the Notice or the Plan, the provisions of the
Notice or the Plan, as the case may be, shall control. The Agreement may be amended at any time by written agreement of the parties
hereto.



 


		11.8	No Right to Continued Employment. Nothing in the Notice or these Terms and Conditions shall confer upon the Participant
any right to continue in the employ or service of the Company or affect the right of the Company to terminate the Participant’s
employment or service at any time.



 


		11.9	Further Assurances. The Participant agrees, upon demand of the Company or the Committee, to do all acts and execute,
deliver and perform all additional documents, instruments and agreements which may be reasonably required by the Company or the
Committee, as the case may be, to implement the provisions and purposes of the Notice and these Terms and Conditions and the Plan.



 




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