NANOPHASE TECHNOLOGIES CORPORATION 8-K 


 


Exhibit
10.1


 


NANOPHASE
TECHNOLOGIES CORPORATION


 


2019
EQUITY COMPENSATION PLAN


 





 



 


The
purpose of the 2019 Nanophase Technologies Corporation Equity Compensation Plan (the “Plan”) is to provide designated
employees of Nanophase Technologies Corporation (the “Company”) and its subsidiaries, and certain advisors, including
non-employee members of the Board of Directors of the Company (the “Board”) who perform services for the Company or
its subsidiaries, with the opportunity to receive grants of incentive stock options, non-qualified options, restricted shares,
performance shares and stock appreciation rights. The Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefiting the Company’s shareholders, and will align the economic interests
of the participants with those of the shareholders.


 


ARTICLE
I 


 


ADMINISTRATION
OF THE PLAN 


 


Section
1.1 Administration. 


 


(a)            Committee.
The Plan shall be administered and interpreted by the Compensation and Governance Committee of the Board (the “Committee”).
The Committee shall consist of three or more persons appointed by the Board, all of whom shall be “outside directors”
as defined under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) and related Treasury
regulations, shall be “non-employee directors” as defined under Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).


 


(b)            Committee
Authority. The Committee shall have the sole authority to (i) determine the individuals to whom grants shall be made under
the Plan, (ii) determine the type, size and terms of the grants to be made to each such individual, (iii) determine the time when
the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability
and the acceleration of exercisability, and (iv) make all determinations with respect to any other matters arising under the Plan.
The Committee may delegate the authority to make grants during the periods between regularly scheduled meetings of the Committee;
however, grants in excess of 5,000 shares or grants with non-standard terms shall be made subject to Committee approval. Any grant
made pursuant to the Committee’s delegated authority shall be reported to the Board at the next meeting following the grant.


 


(c)            Committee
Determinations. The Committee shall have power and authority to interpret the Plan, make factual determinations, and to adopt
or amend such rules, regulations, agreements and instruments for implementing the Plan as it deems necessary or advisable, in
its sole discretion. The Committee’s interpretations and determinations shall be conclusive and binding on all persons having
any interest in the Plan. Determinations made by the Committee under the Plan need not be uniform as to similarly situated individuals.


 


Section
1.2 Grants. Awards under the Plan may consist of grants of (i) incentive stock options as described in Section 2.1
(“Incentive Stock Options”) and (ii) non-qualified options as described in Section 2.1 (“Non-qualified Options”)
(Incentive Stock Options and Non-qualified Options are collectively referred to as “Options”).


 






     


     


    

 


All
Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions specified in the individual
in a grant instrument (the “Grant Instrument”). The Committee shall approve the form and provisions of each Grant
Instrument.


 


Section
1.3 Shares Subject to the Plan. 


 


(a)          Shares
Authorized. 


 


(i)
For purposes of the Plan, a “Share” means one share of common stock of the Company, par value $0.01 per share. Subject
to adjustments as provided in Section 1.3(b) below, the aggregate number of Shares available for Grants under the Plan shall be
3,000,000 Shares.


 


(ii)
For each calendar year, Grants under the Plan shall also be subject to the following limitations:


 


(A)
Subject to adjustments as provided in Section 1.3(b) below, and for other than newly hired employees receiving grants as part
of their initial compensation, the maximum aggregate number of Shares that shall be subject to Grants made under this Plan during
any calendar year shall be 600,000 Shares. This limit shall not apply to Grants made to a person as an inducement material to
the individual’s entering into employment with the Company (“New Hire Grants”).


 


(B)
No grant recipient (“Grantee”) shall receive more than twenty (20) percent of the aggregate number of any class of
Grants, excluding any New Hire Grants, made during any calendar year. This will make the absolute limit that any Grantee can receive
in any given calendar year equal to 120,000 (20% of 600,000 shares, as referenced above), excluding any New Hire Grants that Grantee
may have received in that same calendar year.  


 


(C)
During each calendar year, Employees shall be granted under the Plan no more than two (2) percent of the Company’s outstanding
Shares and Non-Employee Directors shall be granted no more than one-half (1/2) percent of the Company’s outstanding Shares.
The number of outstanding Shares for purpose of this subsection will be determined as of the first business day of each applicable
calendar year on a fully-diluted basis.


 


(iii)
The limitations set forth in subsection (ii) above shall not apply to New Hire Grants made to a person as an inducement material
to the individual’s entering into employment with the Company, except for the overall limit of the New Hire Grant being
120,000 Options, as described in subsection (ii)(B) per person as it applies to this type of grant only. In addition, New Hire
Grants shall not count against the aggregate maximum amounts set forth above in subsection (ii)(A) above.


 


(iv)
The Shares may be authorized but unissued Shares or reacquired Shares, including Shares purchased by the Company on the open market
for purposes of the Plan. If and to the extent Options granted under the Plan terminate, expire, or are canceled, forfeited, exchanged
or surrendered without having been exercised, the Shares subject to such Grants shall no longer be available for future Grants
for purposes of the Plan. Once the cumulative Options granted within the life of the Plan reach 3,000,000, there will be no further
shares available for Grants without an amendment to the Plan to authorize additional shares being added to the Plan.


 






     


     


    

 


(b)               Adjustments
for Significant Events. If the number or kind of outstanding Shares change by reason of (i) a dividend, spin-off, recapitalization,
split or combination or exchange of Shares, (ii) a merger, reorganization or consolidation in which the Company is the surviving
corporation, (iii) a reclassification or change in par value, or (iv) any other extraordinary or unusual event affecting the outstanding
Shares of the Company as a class without the Company’s receipt of consideration, or if the value of outstanding Shares is
substantially reduced as a result of a spin-off or the Company’s payment of an extraordinary dividend or distribution the
maximum number of Shares available for Grants, the maximum number of Shares that any individual participating in the Plan may
be granted in any year, the number of Shares covered by outstanding Grants, the kind of Shares issued under the Plan, and the
price per Share or the applicable market value of such Grants may be appropriately adjusted by the Committee to reflect any increase
or decrease in the number of, or change in the kind or value of, issued Shares to preclude, to the extent practicable, the enlargement
or dilution of rights and benefits under such Grants. Any fractional Shares resulting from such adjustment shall be eliminated.
Any adjustments determined by the Committee shall be final, binding and conclusive.





 


Section
1.4 Eligibility for Participation. 


 


(a)          Eligible
Persons. All employees of the Company, its parents and its subsidiaries (“Employees”), including Employees who
are officers or members of the Board, and members of the Board who are not Employees (“Non-Employee Directors”) shall
be eligible to participate in the Plan. Advisors who perform services to the Company or any of its parents or its subsidiaries
(“Key Advisors”) shall be eligible to participate in the Plan if the Key Advisors render bona fide services and such
services are not in connection with the offer or sale of securities in a capital-raising transaction.


 


(b)          Selection
of Grantees. The Committee shall select the Employees, Non-Employee Directors and Key Advisors to receive Grants.


 


ARTICLE
II 


 


EQUITY
INCENTIVE GRANTS 


 


Section
2.1 Options. 


 


(a)          Number
of Shares. The Committee shall determine the number of Shares that will be subject to each Grant of Options, subject to the
limitations in Section 1.3 above.


 


(b)          Type
of Option and Price. 


 


(i)
The Committee may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the
meaning of Section 422 of the Code or Non-qualified Options that are not intended so to qualify or any combination of Incentive
Stock Options and Non-qualified Options.


 


(ii)
The purchase price (the “Exercise Price”) of Shares subject to an Option shall be equal to, or greater than, the Fair
Market Value (as defined below) of a Share on the date the Option is granted. The Exercise Price of an Incentive Stock Option
shall be equal to, or greater than, the Fair Market Value of a Share on the date the Incentive Stock Option is granted and may
not be granted to an Employee who, at the time of grant, owns Shares possessing more than 10 percent of the total combined voting
power of all Shares and other classes of stock of the Company or any parent or subsidiary of the Company, unless the Exercise
Price per Share is not less than 110% of the Fair Market Value of a Share on the date of grant.


 






     


     


    

 


(iii)
If the Shares are publicly traded, then the Fair Market Value per Share shall be determined as follows: (x) if the principal trading
market for the Shares is a national securities exchange or the Nasdaq National Market, the last reported sale price thereof on
the date of grant or, if there were no trades on that date, the earliest subsequent date upon which a sale was reported, or (y)
if the Shares are not principally traded on such exchange or market, the mean between the last reported “bid” and
“asked” prices of a Share on the following date, as reported on Nasdaq or, if not so reported, as reported by the
National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Committee
determines. If the Shares are not publicly traded or, if publicly traded, are not subject to reported transactions or “bid”
or “asked” quotations as set forth above, the Fair Market Value per Share shall be as determined in good faith by
the Committee; provided that, if the Shares are publicly traded, the Committee may make such discretionary determinations where
the Shares have not been traded for 10 trading days.





 


(c)          Option
Term. The Committee shall determine the term of each Option. The term of any Option shall not exceed seven years from the
date of grant. For Incentive Stock Options granted to an Employee who, at the time of grant, owns Shares possessing more than
10 percent of the total combined voting power of all Shares and other classes of stock of the Company, or any parent or subsidiary
of the Company, the term shall not exceed five years from the date of grant.


 


(d)          Vesting
of Options. Options shall vest in accord with the terms and conditions specified in the Grant Instrument. The Committee may
accelerate the vesting of any or all outstanding Options at any time for any reason.


 


(e)          Termination
of Employment, Disability or Death. 


 


(i)
Except as provided below, an Option may only be exercised while the Grantee is an Employee, Key Advisor or member of the Board.
In the event that a Grantee has a Termination of Service (as defined below) for any reason other than Disability (as defined below),
death or Cause (as defined below), any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within
90 days after the date of such termination, but in any event no later than the date of expiration of the Option term. Any Options
that the Grantee cannot exercise at the time of a Termination of Service shall terminate as of such date.


 


(ii)
In the event a Grantee is terminated for Cause, unless otherwise determined by the Committee (x) any Option held by the Grantee
shall terminate as of the date of such Termination of Service and (y) the Grantee shall automatically forfeit all Shares underlying
any exercised portion of an Option for which the Company has not yet delivered the certificates, upon refund by the Company of
the Exercise Price paid by the Grantee for such Shares.


 


(iii)
In the event a Grantee has a Termination of Service on account of Disability, any Option which is otherwise exercisable by the
Grantee shall terminate unless exercised within one year after the date of such Termination of Service, but in any event no later
than the date of expiration of the Option term. Unless provided otherwise in the applicable Grant Instrument, any of the Grantee’s
Options which are not otherwise exercisable as of the date of such Termination of Service shall terminate as of such date.


 


(iv)
If the Grantee dies while an Employee, Key Advisor or member of the Board or within 90 days after the date on which the Grantee
has a Termination of Service, any Option that is otherwise exercisable by the Grantee shall terminate unless exercised within
one year after the date of such death or Termination of Service, but in any event no later than the date of expiration of the
Option term. Unless provided otherwise in the applicable Grant Instrument, any of the Grantee’s Options that are not otherwise
exercisable as of the date shall terminate as of such date.


 






     


     


    

 


(v)
For purposes of the Plan:


 


(A)
“Cause” shall mean a finding by the Committee that (1) the Grantee has breached his or her employment, service, noncompetition,
nonsolicitation or other similar contract with the Company or its parent and subsidiary corporations, (2) has been engaged in
disloyalty to the Company or its parent and subsidiary corporations, including, without limitation, fraud, embezzlement, theft,
commission of a felony or dishonesty in the course of his or her employment or service, (3) has disclosed trade secrets or confidential
information of the Company or its parents and subsidiary corporations to persons not entitled to receive such information or (4)
has entered into competition with the Company or its parent or Subsidiary Corporations. Notwithstanding the foregoing, if the
Grantee has an employment agreement with the Company defining “Cause,” then such definition shall supersede the foregoing
definition.


 


(B)
“Disability” shall mean a Grantee’s becoming disabled within the meaning of Section 22(e)(3) of the Code. Notwithstanding
the foregoing, if the Grantee has an employment agreement with the Company defining “Disability,” then such definition
shall supersede the foregoing definition.


 


(C)
“Termination of Service” shall mean a Grantee’s termination of employment or service as an Employee, Key Advisor
or member of the Board unless the Grantee continues without interruption to serve thereafter in another such capacities.


 


(f)           Exercise
of Options. A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise
to the Company with payment of the Exercise Price. The Grantee shall pay the Exercise Price (x) in cash, (y) by delivering Shares
owned by the Grantee for the period necessary to avoid a charge to the Company’s earnings for financial reporting purposes
and to avoid adverse accounting consequences to the Company (including Shares acquired in connection with the exercise of an Option,
subject to such restrictions as the Committee deems appropriate) and having a Fair Market Value on the date of exercise equal
to the Exercise Price, or (z) by such other method as the Committee may approve, including payment through a broker in accord
with procedures permitted by Regulation T of the Federal Reserve Board; provided, that, for purposes of assisting a Grantee (other
than a Grantee who is a director or an executive officer of the Company) to exercise an Option, the Company may make loans to
such Grantee or guarantee loans made by third parties to such Grantee, on such terms and conditions as the Committee may authorize.
Such Grantee shall pay the Exercise Price at the time of exercise and shall satisfy the withholding tax requirements of Section
3.1.


 


(g)          Limits
on Incentive Stock Options. Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the Shares
on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during
any calendar year, under the Plan and any other equity compensation plan of the Company or a parent or subsidiary, exceeds $100,000,
then the option, as to the excess, shall be treated as a Non-qualified Option. No Incentive Stock Option shall be granted to any
person who is not an Employee of the Company or a parent or subsidiary of the Company (within the meaning of Section 424(f) of
the Code).


 






     


     


    

 


ARTICLE
III 


 


GENERAL
MATTERS 


 


Section
3.1 Withholding of Taxes. 


 


(a)          Required
Withholdings. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding
(including all federal, state and local taxes) determined by the Committee to be required by law. Without limiting the generality
of the foregoing, the Committee may, in its discretion, require the Grantee to pay the amount that the Committee deems necessary
to satisfy the Company’s obligation to withhold federal, state or local income or other taxes incurred by reason of the
exercise of any Option, or (ii) any other applicable income recognition event. Notwithstanding anything contained in the Plan
to the contrary, the Grantee’s satisfaction of any tax- withholding requirements imposed by the Committee shall be a condition
precedent to the Company’s obligation as may otherwise be provided hereunder to provide Shares to the Grantee and to the
release of any restrictions as may otherwise be provided hereunder, as applicable; and the applicable options shall be forfeited
upon the failure of the Grantee to satisfy such requirements with respect to, as applicable, (i) the exercise of the Option or
(ii) any other applicable income recognition event.


 


(b)          Election
to Withhold Shares. If the Committee so permits, a Grantee may make a written election to satisfy the Company’s income
tax withholding obligation with respect to an Option, Restricted Shares or Performance Shares by having Shares withheld by the
Company from the Shares otherwise to be received, or to deliver previously owned Shares (not subject to restrictions hereunder).
The number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of exercise sufficient to
satisfy the applicable withholding taxes. Where the exercise of an Incentive Stock Option does not give rise to an obligation
by the Company to withhold federal, state or local income or other taxes on the date of exercise, but may give rise to such an
obligation in the future, the Committee may, in its discretion, make such arrangements and impose such restrictions as it deems
necessary or appropriate. The election must be in a form and manner prescribed by the Committee and shall be subject to the prior
approval of the Committee.


 


Section
3.2 Transferability of Grants. 


 


(a)          In
General. Except as provided in Section 3.2(b), only the Grantee may exercise rights under a Grant during the Grantee’s
lifetime. A Grantee may not transfer those rights except by will or by the laws of descent and distribution. When a Grantee dies,
the personal representative or other person entitled to succeed to the rights of the Grantee (“Successor Grantee”)
may exercise such rights in accordance with the terms of the Plan. A Successor Grantee must furnish proof satisfactory to the
Company of his or her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and distribution.


 


(b)          Transfer
of Non-qualified Options. Notwithstanding the foregoing, the Committee may provide in a Grant Instrument that a Grantee may
transfer Non-qualified Options to family members or other persons or entities according to such terms as the Committee may determine
where the Committee determines that such transferability does not result in accelerated federal income taxation; provided that
the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to
the same terms and conditions as were applicable to the Option immediately before the transfer.


 


Section
3.3 Reorganization or Change in Control of the Company. 


 


(a)          Definitions.


 


(i)
As used herein, a “Reorganization” shall be deemed to have occurred if the shareholders of the Company approve (or,
if shareholder approval is not required, the Board approves) an agreement providing for (i) the merger or consolidation of the
Company with another corporation where the shareholders of the Company, immediately prior to the merger or consolidation, will
not beneficially own, immediately after the merger or consolidation, Shares entitling such shareholders to more than 50% of all
votes to which all shareholders of the surviving corporation would be entitled in the election of directors (without consideration
of the rights of any class of stock to elect directors by a separate class vote), (ii) the sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation or dissolution of the Company.


 






     


     


    

 


(ii)
As used herein, a “Change of Control” shall be deemed to have occurred if any “person” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) or any of its subsidiaries or affiliates becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing a majority
of the voting power of the then outstanding securities of the Company except where the acquisition is approved by the Board.


 


(b)          Assumption
of Grants. Upon a Reorganization where the Company is not the surviving corporation (or survives only as a subsidiary of another
corporation), all outstanding Options that are not exercised shall be assumed by, or replaced with comparable options or rights
by, the surviving corporation.


 


(c)          Notice
and Acceleration. Upon a Reorganization or a Change of Control, (i) the Company shall provide each Grantee with outstanding
Grants written notice of such event and (ii) all outstanding Options shall automatically accelerate and become fully exercisable.


 


Section
3.4 Requirements for Issuance or Transfer of Shares. 


 


(a)          Shareholder’s
Agreement. The Committee may require that a Grantee execute a shareholder’s agreement with respect to any Shares distributed
pursuant to the Plan.


 


(b)          Limitations
on Issuance or Transfer of Shares. No Shares shall be issued or transferred in connection with any Grant hereunder unless
and until all legal requirements applicable to the issuance or transfer of such Shares have been complied with to the satisfaction
of the Committee. The Committee shall have the right to condition any Grant made to any Grantee hereunder on such Grantee’s
undertaking in writing to comply with such restrictions on his or her subsequent disposition of such Shares as the Committee shall
deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and certificates
representing such Shares may be legended to reflect any such restrictions. Certificates representing Shares issued or transferred
under the Plan will be subject to such stop-transfer orders, registration and other restrictions as may be required by applicable
laws, regulations and interpretations, including any requirement that a legend be placed thereon.


 


Section
3.5 Amendment and Termination of the Plan. 


 


(a)          Amendment.
If shareholder approval for any amendment to the Plan is required by any applicable law or regulation, the Board may not make
such amendment to the Plan without the approval of the shareholders. Otherwise, the Board may amend or terminate the Plan at any
time.


 


(b)          Termination
of Plan. The Plan shall terminate on the day immediately preceding the tenth anniversary of the Effective Date (as defined
below), unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the shareholders.


 


(c)          Termination
and Amendment of Outstanding Grants. A termination or amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the amendment is required in order to comply with applicable
law. The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant.
Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended in accord with the Plan or may be amended
by agreement of the Company and the Grantee consistent with the Plan.


 






     


     


    

 


(d)          Governing
Document. The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples,
oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its
successors and assigns.


 


Section
3.6 Miscellaneous. 


 


(a)          Programs.
The Committee may adopt one or more programs not inconsistent with this Plan pursuant to which Grants may be made under this
Plan. Such programs shall be deemed merely programs of implementation of this Plan and shall not be deemed new plans.


 


(b)          Funding
of the Plan. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the payment of any Grants under the Plan. In no event shall interest be paid or
accrued on any Grant, including unpaid installments of Grants.


 


(c)          Rights
of Participants. Nothing in the Plan shall entitle any Employee, Non-Employee Director, Key Advisor or other person to any
claim or right to be granted a Grant under the Plan. Neither the Plan nor any action taken under it shall be construed as giving
any individual any rights to be retained by or in the employ of the Company or any other employment rights.


 


(d)          No
Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Grant. The Committee shall
determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional Shares or whether such
fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.


 


(e)          Section
Headings. Section headings are for reference only. In the event of a conflict between a title and the content of a Section,
the content of the Section shall control.


 


(f)           Effective
Date of the Plan. Provided the Plan has been approved by the Company’s Board of Directors, the Plan shall be effective
on the first business day immediately following the Plan’s approval by the Shareholders of the Company (the “Effective
Date”).


 


(g)          Deferred
Compensation. No deferral of compensation (as defined under Code Section 409A or guidance thereto) is intended under this
Plan. The Committee may permit deferrals of compensation pursuant to the terms of the Grant Agreement, a separate plan or a subplan
which meets the requirements of Code Section 409A and any related guidance. Participants shall only be granted Awards under this
Plan that meet the requirements of Code Section 409A or qualify for an exemption under Code Section 409A or any related guidance.
If any participant receives an Award that does not comply with Code Section 409A or qualify for an exemption thereto, such Award
shall be null and void and shall be deemed to have never been granted. Additionally, to the extent any Award is subject to Code
Section 409A, notwithstanding any provision herein to the contrary, the Plan does not permit the acceleration of the time or schedule
of any distribution related to such Award, except as permitted by Code Section 409A, the regulations thereunder, and/or the Secretary
of the United States Treasury.


 


(h)          Grants
in Connection with Corporate Transactions and Otherwise. Nothing contained in the Plan shall be construed to (i) limit the
right of the Committee to make Grants under the Plan in connection with the acquisition, by purchase, lease, merger, consolidation
or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become
Employees or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other
awards outside of the Plan. Without limiting the foregoing, the Committee may make a Grant to an employee of another corporation
who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock option grant made to such employee by such corporation.
The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of
the substituted stock incentives. The Committee shall prescribe the provisions of the substitute grants.


 






     


     


    

 


(i)          Compliance
with Law. The Plan, the exercise of Options and the obligations of the Company to issue or transfer Shares under Grants shall
be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. With respect to
persons subject to Section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the
Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. The Committee may revoke any
Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation.
The Committee may, in its sole discretion, agree to limit its authority under this Section.


 


(j)          Successors.
All obligations of the Company under the Plan with respect to awards granted under it 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
otherwise, of all or substantially all of the business or assets of the Company.


 


(k)         Governing
Law. The validity, construction, interpretation and effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of Delaware.


 


(l)          Transition
Provisions Relating to the Prior Plans. Upon the Effective Date of the Plan, the Company’s 2010 Equity Compensation
Plan (the “2010 Plan”) shall be terminated subject to the provisions of Section 3.5 of the 2010 Plan, which will relate
to the post-termination effectiveness of grants under the 2010 Plan. The Plan shall not be deemed an amendment or restatement
of the 2010 Plan. Nothing in the Plan shall be deemed to impair the rights of or give any new or additional rights to any person
who received grants under the 2010 Plan.


 


Upon
the Effective Date of the 2010 Plan, the Company’s 2004 Equity Compensation Plan (as amended, the “2004 Plan”),
2005 Non-Employee Director Restricted Stock Plan (as amended, the “2005 Plan”), and the Amended and Restated 2006
Stock Appreciation Rights Plan (the “2006 Plan was terminated subject to the provisions of Section 3.5(c) of the 2004 Plan,
Section 3.2 of the 2005 Plan, and Section 3.1 of the 2006 Plan, each relating to the post-termination effectiveness of grants
under the 2004 Plan, the 2005 Plan, and the 2006 Plan, respectively. Nothing in the Plan shall be deemed to impair the rights
of or give any new or additional rights to any person who received grants under the 2004 Plan, the 2005 Plan, or the 2006 Plan.