Exhibit 10.1


 


 


TILE SHOP HOLDINGS,
INC.

2021 OMNIBUS EQUITY COMPENSATION PLAN


 


1.                  
Establishment, Purpose, Duration.


 


a.                   
Establishment. Tile Shop Holdings, Inc. (the “Company”) hereby establishes an equity compensation plan to be
known as the Tile Shop Holdings, Inc. 2021 Omnibus Equity Compensation Plan (the “Plan”). The Plan is effective as of April
20, 2021 (the “Effective Date”), subject to approval of the Plan by the stockholders of the Company at the 2021 Annual Meeting
of Stockholders (the “Approval Date”). Definitions of certain capitalized terms used in the Plan are contained in Section 2
of the Plan.


 


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


 


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


 


d.                  
Prior Plan. If the Company’s stockholders approve the Plan at the 2021 Annual Meeting of Stockholders, the Company’s
2012 Omnibus Award Plan (the “Prior Plan”) will terminate in its entirety effective on the day immediately following the Approval
Date, provided that all outstanding awards under the Prior Plan as of the Approval Date shall remain outstanding and shall be administered
and settled in accordance with their terms and the provisions of the Prior Plan.


 


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


 


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


 


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


 


c.                   
“Award” means the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Shares, Restricted Share Units, Other Share-Based Awards or Performance Awards pursuant to the terms and conditions of the Plan.


 


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


 


e.                   
“Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor
to such Rule.


 


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


 


g.                   “Cause”
means, except as otherwise determined by the Committee and set forth in an Award Agreement, such act or omission by a Participant as
is determined by the Committee to constitute cause for termination, including but not limited to any of the following: (i) a
material violation of any Company policy, including but not limited to any policy contained in the Company’s Code of Business
Conduct and Ethics; (ii) embezzlement from, or theft of property belonging to, the Company or any Subsidiary; (iii) willful failure
to perform, or gross negligence in the performance of, assigned duties; or (iv) other intentional misconduct, whether related to
employment or otherwise, which has, or has the potential to have, a material adverse effect on the business conducted by the
Company or its Subsidiaries.


 






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h.                  
“Change of Control” means (unless otherwise expressly provided in a particular Award Agreement, employment agreement,
and/or severance agreement) any of the following:


 


(i)                 
a transaction or series of transactions (other than an offering of Shares to the general public through a registration statement filed
with the SEC) whereby any “person” or related “group” of “persons” (as such terms are used in Sections
13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company
or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by,
or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition; or


 


(ii)               
during any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction
described in Section 2(h)(i) or Section 2(h)(iii)) whose election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority
thereof; or


 


(iii)             
the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries)
of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all
of the Company’s assets in any single transaction or series of related transactions, in each case other than a transaction:


 


(A)       that
results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise
succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least
a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction,
and


 


(B)       after
which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of this Section 2(h)(iii)(B) as beneficially owning
50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation
of the transaction; or


 


(iv)              
the Company’s stockholders approve a liquidation or dissolution of the Company.


 


Notwithstanding
the foregoing, with respect to an Award that is considered deferred compensation subject to Section 409A of the Code, the definition of
 “Change of Control” shall be amended and interpreted in a manner that allows the definition to satisfy the requirements of
a change of control under Code Section 409A solely for purposes of determining the timing of payment of such Award.


 


The Committee
shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of
Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change of Control and
any incidental matters relating thereto.


 






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


 


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


 


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


 


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


 


m.                
 “Date of Grant” means the date specified by the Committee on which the grant of an Award is to be effective. The Date
of Grant shall not be earlier than the date of the resolution and action therein by the Committee. In no event shall the Date of Grant
be earlier than the Effective Date.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 






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w.                 
 “Performance Award” means an Award pursuant to Section 11 hereof, the value of which, if any, shall be paid to
a Participant by delivery of cash upon achievement of such Performance Objectives during the Performance Period as the Committee shall
establish at the time of such grant or thereafter.


 


x.                  
“Performance Award Agreement” has the meaning given such term in Section 11.


 


y.                  
“Performance Objectives” means the performance objective or objectives established by the Committee with respect to
an Award granted pursuant to the Plan. Any Performance Objectives may relate to the performance of the Company or one or more of its Subsidiaries,
divisions, departments, units, functions, partnerships, joint ventures or minority investments, product lines or products, or the performance
of the individual Participant, and may include, without limitation, the Performance Objectives listed in Section 14(a). The Performance
Objectives may be made relative to the performance of a group of comparable companies, or a published or special index that the Committee,
in its sole discretion, deems appropriate, or the Company may select Performance Objectives as compared to various stock market indices.
Performance Objectives may be stated as a combination of the listed factors. Any Performance Objectives that are financial metrics may
be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), if applicable, or may be
adjusted when established to include or exclude any items otherwise includable or excludable under GAAP.


 


z.                   
“Performance Period” has the meaning given such term in Section 11(b)(iii).


 


aa.                
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, and shall include a “group” as defined in Section 13(d) thereof.


 


bb.               
“Plan” means this Tile Shop Holdings, Inc. 2021 Omnibus Equity Compensation Plan, as amended from time to time.


 


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


 


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


 


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


 


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


 


gg.               
“Share” means a share of the Company’s common stock, par value $0.0001 per share, or any security into which
such Share may be changed by reason of any transaction or event of the type referred to in Section 16.


 


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


 


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


 


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


 


kk.               
“Substitute Award” means an Award that is granted in assumption of, or in substitution or exchange for, an outstanding
award previously granted by an entity acquired directly or indirectly by the Company or with which the Company directly or indirectly
combines.


 


ll.                  
“Successor Entity” has the meaning given such term in Section 1(h)(iii)(A). 


 





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


 






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3.                  
Shares Available Under the Plan.


 


a.                   
Shares Available for Awards. The maximum number of Shares that may be granted pursuant to Awards under the Plan shall be
3,500,000 Shares, all of which may be issued pursuant to Incentive Stock Options. Shares issued or delivered pursuant to an Award may
be authorized but unissued Shares, treasury Shares, including Shares purchased in the open market, or a combination of the foregoing.
The aggregate number of Shares available for issuance or delivery under the Plan shall be subject to adjustment as provided in Section
16.


 


b.                  
Share Counting. Except as provided in Section 3(c), the following Shares shall not count against, or shall be added back
to, the Share limit in Section 3(a): (i) Shares covered by an Award that expires or is forfeited, canceled, surrendered, or otherwise
terminated without the issuance of such Shares; (ii) Shares covered by an Award that is settled only in cash; (iii) Shares subject to
outstanding awards under the Prior Plan immediately prior to the day immediately following the Approval Date that on or after such date
are forfeited, canceled, surrendered or otherwise terminated without the issuance of such Shares; and (iv) Substitute Awards (except as
may be required by reason of the rules and regulations of any stock exchange or other trading market on which the Shares may then be listed).
This Section 3(b) shall apply to the number of Shares reserved and available for Incentive Stock Options only to the extent consistent
with applicable Treasury regulations relating to Incentive Stock Options under the Code.


 


c.                   
Prohibition of Share Recycling. Notwithstanding the foregoing, the following Shares subject to an Award (or an award under
the Prior Plan) shall not again be available for grant as described above, regardless of whether those Shares are actually issued or delivered
to the Participant: (i) Shares tendered in payment of the exercise price of a Stock Option; (ii) Shares withheld by the Company or any
Subsidiary to satisfy a tax withholding obligation with respect to an Award; and (iii) Shares that are repurchased by the Company with
Stock Option proceeds. Without limiting the foregoing, with respect to any Stock Appreciation Right that is settled in Shares, the full
number of Shares subject to the Award shall count against the number of Shares available for Awards under the Plan regardless of the number
of Shares used to settle the Stock Appreciation Right upon exercise.


 


4.                  
Administration of the Plan.


 


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


 


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


 


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


 






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d.                  
Indemnification. The Company will indemnify and hold harmless each member of the Board and the Committee, and each employee
and director to whom a delegation under Section 4(a) has been made, as to any acts or omissions with respect to the Plan or any Award
to the maximum extent that the law and the Company’s By-Laws permit.


 


5.                  
Eligibility and Participation. Each Employee, Director and Consultant is eligible to participate
in the Plan, upon selection by the Committee. Subject to the provisions of the Plan, the Committee may, from time to time, select from
all eligible Employees, Directors and Consultants those to whom Awards shall be granted and shall determine, in its sole discretion, the
nature of any and all terms permissible by Applicable Laws and the amount of each Award. No Employee, Director or Consultant shall have
the right to be selected to receive an Award under the Plan, or, having been so selected, to be selected to receive future Awards. 


 


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


 


a.                   
Award Agreement. Each Stock Option shall be evidenced by an Award Agreement that shall specify the exercise price, the term
of the Stock Option, the number of Shares covered by the Stock Option, the conditions upon which the Stock Option shall become vested
and exercisable and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and
conditions of the Plan. The Award Agreement also shall specify whether the Stock Option is intended to be an Incentive Stock Option or
a Nonqualified Stock Option. No dividend equivalents may be granted with respect to the Shares underlying a Stock Option.


 


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


 


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


 


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


 


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


  






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


 





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


 


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


 


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


 


(iv)       If
a Participant shall dispose of Shares acquired through exercise of an Incentive Stock Option within either (A) two (2) years after the
date the Stock Option is granted or (B) one (1) year after the date the Stock Option is exercised (i.e., in a disqualifying disposition),
such Participant shall notify the Company within seven (7) days of the date of such disqualifying disposition.


 


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


 


a.                   
Award Agreement. Each Stock Appreciation Right shall be evidenced by an Award Agreement that shall specify the exercise
price, the term of the Stock Appreciation Right, the number of Shares covered by the Stock Appreciation Right, the conditions upon which
the Stock Appreciation Right shall become vested and exercisable and such other terms and conditions as the Committee shall determine
and which are not inconsistent with the terms and conditions of the Plan. No dividend equivalents may be granted with respect to the Shares
underlying a Stock Appreciation Right.


 


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


 


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


 


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


 


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


 






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


 


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


 


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


 


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


 


d.                  
Rights Associated with Restricted Shares during Restricted Period. During any restricted period applicable to Restricted
Shares: (i) the Restricted Shares may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated; (ii) unless
otherwise provided in the related Award Agreement, the Participant shall be entitled to exercise full voting rights associated with such
Restricted Shares; and (iii) the Participant shall be entitled to all dividends and other distributions paid with respect to such Restricted
Shares during the restricted period; provided, however, that any dividends with respect to unvested Restricted Shares shall be accumulated
or deemed reinvested in additional Restricted Shares (as determined by the Committee in its sole discretion and set forth in the applicable
Award Agreement), subject to the same terms and conditions as the original Award (including service-based vesting conditions and any Performance
Objectives) until such Award is earned and vested.


 


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


 


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


 


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


 


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


 


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


 






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


 


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


 


11.               
Performance Awards. Each Performance Award granted pursuant to this Section 11 shall be
evidenced by a written performance award agreement (the “Performance Award Agreement”). The Performance Award Agreement shall
be in such form as may be approved from time to time by the Committee and may vary from Participant to Participant; provided, however,
that each Participant and each Performance Award Agreement shall comply with and be subject to the following terms and conditions:


 


a.       Awards.
Performance Awards may be granted to any Participant in the Plan. Performance Awards shall consist of monetary awards which may be earned
or become vested in whole or in part if the Company or the Participant achieves certain Performance Objectives established by the Committee
over a specified Performance Period.


 


b.       Performance
Objectives, Performance Period and Payment. The Performance Award Agreement shall set forth the following, and such other provisions
as the Committee shall deem advisable:


 


(i)       The
dollar value of each Performance Award;


 


(ii)       One
or more Performance Objectives established by the Committee;


 


(iii)       The
period (the “Performance Period”) over which Performance Award may be earned or may become vested;


 


(iv)       The
extent to which partial achievement of the Performance Objectives may result in a payment of the Performance Award, as determined by the
Committee; and


 


(v)       The
date upon which payment of Performance Award will be made and the extent to which such payment may be deferred.


 


12.               
Dividend Equivalents. Awards other than Stock Options and Stock Appreciation Rights may provide
the Participant with dividend equivalents, payable on a contingent basis and either in cash or in additional Shares, as determined by
the Committee in its sole discretion and set forth in the related Award Agreement; provided, however, that any dividend equivalents with
respect to any such unvested Award shall be accumulated or deemed reinvested in additional Restricted Share Units, subject to the same
terms and conditions as the original Award (including service-based vesting conditions and the achievement of any Performance Objectives)
until such Award is earned and vested. No dividend equivalents may be granted under the Plan with respect to the Shares underlying any
Stock Option or Stock Appreciation Right.


 


13.               
Compliance with Section 409A. Awards granted under
the Plan shall be designed and administered in such a manner that they are either exempt from the application of, or comply with, the
requirements of Section 409A of the Code. To the extent that the Committee determines that any award granted under the Plan is subject
to Section 409A of the Code, the Award Agreement shall incorporate the terms and conditions necessary to avoid the imposition of an additional
tax under Section 409A of the Code upon a Participant. Notwithstanding any other provision of the Plan or any Award Agreement (unless
the Award Agreement provides otherwise with specific reference to this Section 13): (a) an Award shall not be granted, deferred, accelerated,
extended, paid out, settled, substituted, modified or adjusted under the Plan in a manner that would result in the imposition of an additional
tax under Section 409A of the Code upon a Participant; and (b) if an Award is subject to Section 409A of the Code, and if the Participant
holding the award is a “specified employee” (as defined in Section 409A of the Code, with such classification to be determined
in accordance with the methodology established by the Company), then, to the extent required to avoid the imposition of an additional
tax under Section 409A of the Code upon a Participant, no distribution or payment of any amount shall be made before the date that is
six (6) months following the date of such Participant’s “separation from service” (as defined in Section 409A of the
Code) or, if earlier, the date of the Participant’s death. Although the Company intends to administer the Plan so that Awards will
be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under
the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local, or
non-United States law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe
as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.


 






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14.               
Performance Objectives. 


 


a.                   
In General. As provided in the Plan, the vesting, exercisability and/or payment of any Award may be conditioned upon the
achievement of one or more Performance Objectives. Any Performance Objectives shall be based on the achievement of one or more criteria
selected by the Committee, in its discretion, which may include, but shall not be limited to, the following: net income; income from continuing
operations; stockholder return; stock price appreciation; earnings per share (including diluted earnings per share); net operating profit
(including after-tax); revenue growth; organic sales growth; return on equity; return on investment; return on invested capital (including
after-tax); earnings before interest, taxes, depreciation and amortization; profit margin; operating income; operating margin; market
share; return on sales; asset reduction; cost reduction; return on equity; cash flow (including free cash flow); bookings; and new product
releases. The Committee may, at the time of establishing the Performance Objective(s), exclude the effects of (i) extraordinary, unusual
and/or non-recurring items of gain or loss, (ii) gains or losses on the disposition of a business, (iii) changes in tax regulations or
laws, or (iv) the effect of a merger or acquisition. As determined by the Committee in its discretion, the calculation of any Performance
Objective established for purposes of an Award may be made without regard to changes in accounting methods used by the Company or in accounting
standards that may be required by the Financial Accounting Standards Board after a Performance Objective relative to an Award is established
and prior to the time the compensation earned by reason of the achievement of the relevant Performance Objective is paid to the Participant. 


 


b.                  
 Establishment of Performance Objectives. With respect to any Award subject to Performance Objectives, the Committee shall
establish in writing the Performance Objectives, the performance period, and any formula for computing the payout of the Award. Such terms
and conditions shall be established in writing during the first ninety days of the applicable performance period (or by such other date
as may be determined by the Committee, in its discretion). 


 


c.                   
 Certification of Performance. Prior to payment, exercise or vesting of any Award subject to Performance Objectives, the
Committee will certify in writing whether the applicable Performance Objectives and other material terms imposed on such Award have been
satisfied, and, if they have, ascertain the amount of the payout or vesting of the Award.


 


d.                  
Adjustments. If the Committee determines that a change in the Company’s business, operations, corporate structure
or capital structure, or in the manner in which it conducts its business, or other events or circumstances render the Performance Objectives
unsuitable, the Committee may, in its discretion and without the consent of any Participant, adjust such Performance Objectives or the
related level of achievement, in whole or in part, as the Committee deems appropriate and equitable, including, without limitation, to
exclude the effects of events that are unusual in nature or infrequent in occurrence (as determined in accordance with applicable financial
accounting standards), cumulative effects of tax or accounting changes, discontinued operations, acquisitions, divestitures and material
restructuring or asset impairment charges.


 


15.               
Transferability. Except as otherwise determined by the Committee, no Award or dividend equivalents
payable with respect to any Award shall be transferable by the Participant except by will or the laws of descent and distribution; provided,
that if so determined by the Committee, each Participant may, in a manner established by the Board or the Committee, designate a beneficiary
to exercise the rights of the Participant with respect to any Award upon the death of the Participant and to receive Shares or other property
issued or delivered under such Award. Except as otherwise determined by the Committee, Stock Options and Stock Appreciation Rights will
be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity
to do so, by the Participant’s guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under
state law and/or court supervision. 


 






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16.               
 Adjustments. In the event of any equity restructuring (within the meaning of Financial Accounting
Standards Board Accounting Standards Codification Topic 718, or any successor thereto), such as a stock dividend, stock split, reverse
stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend, the Committee shall cause there
to be an equitable adjustment in the number and kind of Shares specified in Section 3 of the Plan and, with respect to outstanding Awards,
in the number and kind of Shares subject to outstanding Awards and the exercise price or other price of Shares subject to outstanding
Awards, in each case to prevent dilution or enlargement of the rights of Participants. In the event of any other change in corporate capitalization,
or in the event of a merger, consolidation, liquidation, or similar transaction, the Committee may, in its sole discretion, cause there
to be an equitable adjustment as described in the foregoing sentence, to prevent dilution or enlargement of rights; provided, however,
that, unless otherwise determined by the Committee, the number of Shares subject to any Award shall always be rounded down to a whole
number. Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any
or all outstanding Awards such alternative consideration (including cash) as it, in good faith, may determine to be equitable in the circumstances,
and may require in connection therewith the surrender of all Awards so replaced. Notwithstanding the foregoing, the Committee shall not
make any adjustment pursuant to this Section 16 that would (i) cause any Stock Option intended to qualify as an ISO to fail to so qualify,
(ii) cause an Award that is otherwise exempt from Section 409A of the Code to become subject to Section 409A, or (iii) cause an Award
that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A. The determination of the Committee as
to the foregoing adjustments, if any, shall be conclusive and binding on all Participants and any other persons claiming under or through
any Participant.


 


17.               
Fractional Shares. The Company shall not be required to issue or deliver any fractional Shares
pursuant to the Plan and, unless otherwise provided by the Committee, fractional shares shall be settled in cash.


 


18.               
Withholding Taxes. To the extent required by Applicable Laws, a Participant shall be required
to satisfy, in a manner satisfactory to the Company or Subsidiary, as applicable, any withholding tax obligations that arise by reason
of the exercise of a Stock Option or Stock Appreciation Right, the vesting of or settlement of Shares under an Award, an election pursuant
to Section 83(b) of the Code or otherwise with respect to an Award. The Company and its Subsidiaries shall not be required to issue
or deliver Shares, make any payment, or recognize the transfer or disposition of any Shares, until such withholding tax obligations are
satisfied. The Committee may permit or require these obligations to be satisfied by having the Company withhold a portion of the Shares
that otherwise would be issued or delivered to a Participant upon exercise of a Stock Option or Stock Appreciation Right or upon the vesting
or settlement of an Award, or by tendering Shares previously acquired, in each case having a value (as determined by the Company) equal
to the amount required to be withheld. Any such elections are subject to such conditions or procedures as may be established by the Committee
and may be subject to disapproval by the Committee. In no event will the value of the Shares to be withheld or tendered pursuant to this
Section 18 to satisfy applicable withholding taxes exceed the amount of taxes required to be withheld based on the maximum statutory tax
rates in the applicable taxing jurisdictions.


 


19.               
Non-U.S. Participants. Without amending the Plan, the Committee may grant Awards to Participants
who are foreign nationals, or who are subject to Applicable Laws of one or more non-United States jurisdictions, on such terms and conditions
different from those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement
of the purposes of the Plan, and, in furtherance of such purposes, the Committee may approve such sub-plans, supplements to or amendments,
modifications, restatements or alternative versions of this Plan as may be necessary or advisable to comply with provisions of Applicable
Laws of other countries in which the Company or its Subsidiaries operate or have Employees or Consultants.


 


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





 






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21.       Change
of Control.


 


a.       If
the Participant has in effect an employment, retention, change of control, severance or similar agreement with the Company or any Subsidiary
that discusses the effect of a Change of Control on the Participant’s Awards, then such agreement shall control in the event of
a Change of Control. In all other cases, in the event of a Change of Control, the Committee may, in its sole discretion and without the
consent of any Participant: (i) elect to accelerate, in whole or in part, the vesting of any Award, (ii) elect to make cash payments payable
as a result of the acceleration of vesting of any Award, or (iii) elect to cancel any Options or Stock Appreciation Rights as of the date
of the Change of Control in exchange for a cash payment equal to the excess (if any) of the Change of Control price of the Shares covered
by the Award that is so cancelled over the purchase or grant price of such Shares under the Award, which amount may be zero if the Change
of Control price of a Share on the date of the Change of Control does not exceed the exercise price per Share of the applicable Award.


 


b.       Except
as otherwise expressly provided in any agreement between a Participant and the Company or a Subsidiary, if the receipt of any payment
by a Participant under the circumstances described above would result in the payment by the Participant of any excise tax provided for
in Section 280G and Section 4999 of the Code, then the amount of such payment shall be reduced to the extent required to prevent the imposition
of such excise tax.


 


22.       Amendment,
Modification and Termination.


 


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


 


b.                  
Adjustments to Outstanding Awards. The Committee may, in its sole discretion and without the consent of any Participant,
at any time (i) provide that all or a portion of a Participant’s Stock Options, Stock Appreciation Rights and other Awards in the
nature of rights that may be exercised shall become fully or partially exercisable; (ii) provide that all or a part of the time-based
vesting restrictions on all or a portion of the outstanding Awards shall lapse, and/or that any Performance Objectives or other performance-based
criteria with respect to any Awards shall be deemed to be wholly or partially satisfied; or (iii) waive any other limitation or requirement
under any such Award, in each case, as of such date as the Committee may, in its sole discretion, declare.


 


c.                   
Prohibition on Repricing. Except for adjustments made pursuant to Sections 16 or 21, the Board or the Committee will not,
without the further approval of the stockholders of the Company, authorize the amendment of any outstanding Stock Option or Stock Appreciation
Right to reduce the exercise price. No Stock Option or Stock Appreciation Right will be cancelled and replaced with an Award having a
lower exercise price, or for another Award, or for cash without further approval of the stockholders of the Company, except as provided
in Sections 16 or 21. Furthermore, no Stock Option or Stock Appreciation Right will provide for the payment, at the time of exercise,
of a cash bonus or grant or sale of another Award without further approval of the stockholders of the Company. This Section 22(c) is intended
to prohibit the repricing of “underwater” Stock Options or Stock Appreciation Rights without stockholder approval and will
not be construed to prohibit the adjustments provided for in Sections 16 or 21.


 


d.                  
Effect on Outstanding Awards. Notwithstanding any other provision of the Plan to the contrary (other than Sections 14(d),
16, 21, 22(b) and 24(e), which specifically do not require the consent of Participants), no termination, amendment, suspension, or modification
of the Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under the Plan, without the
written consent of the Participant holding such Award; provided that the Committee may modify an ISO held by a Participant to disqualify
such Stock Option from treatment as an “incentive stock option” under Section 422 of the Code without the Participant’s
consent. 


 






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


 


24.       Miscellaneous.


 


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


 


b.       No
Right of Continued Service. The Plan shall not confer upon any Participant any right with respect to continuance of employment or
other service with the Company or any Subsidiary, nor shall it interfere in any way with any right the Company or any Subsidiary would
otherwise have to terminate such Participant’s employment or other service at any time. Awards granted under the Plan shall not
be considered a part of any Participant’s normal or expected compensation or salary for any purposes, including, but not limited
to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards,
pension or retirement or welfare benefits or similar payments, and in no event shall any Award be considered as compensation for, or relating
in any way to, past services for the Company or any Subsidiary or affiliate.


 


c.       Certain
Rules Regarding Employment and Service. Unless determined otherwise by the Committee, for purposes of the Plan and all Awards, the
following rules shall apply:


 


(i)       A
Participant who transfers employment between the Company and its Subsidiaries, or between Subsidiaries, will not be considered to have
terminated employment;


 


(ii)       A
Participant who ceases to be a Director because he or she becomes an employee of the Company or a Subsidiary shall not be considered to
have ceased service as a Director with respect to any Award until such Participant’s termination of employment with the Company
and its Subsidiaries;


 


(iii)       A
Participant who ceases to be employed by the Company or a Subsidiary and immediately thereafter becomes a Director, a non-employee director
of a Subsidiary, or a Consultant to the Company or any Subsidiary shall not be considered to have terminated employment until such Participant’s
service as a director of, or consultant to, the Company and its Subsidiaries has ceased; and


 


(iv)       a
Participant employed by a Subsidiary will be considered to have terminated employment when such entity ceases to be a Subsidiary.


 


Notwithstanding
the foregoing, for purposes of an Award that is subject to Section 409A of the Code, if a Participant’s termination of employment
or service triggers the payment of compensation under such Award, then the Participant will be deemed to have terminated employment or
service upon his or her “separation from service” within the meaning of Section 409A of the Code.


 


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


 






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


 


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


 


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


 


[END OF DOCUMENT]


 






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