Blueprint





  Exhibit 10.1






 





 

 

 

 

 

 

 



HF ENTERPRISES INC.


 


 


 


2018 INCENTIVE
COMPENSATION PLAN

 

 

 


 

 

 


 

 


 





 









 








 










 



HF ENTERPRISES INC.


2018 INCENTIVE
COMPENSATION PLAN

 


1.           Purpose.
HF Enterprises Inc., a Delaware corporation (the
“Company”), hereby establishes the HF ENTERPRISES INC.
2018 INCENTIVE COMPENSATION PLAN (the “Plan”). The
purpose of the Plan is to assist the Company and its Related
Entities (as hereinafter defined) in attracting, motivating,
retaining and rewarding high-quality executives and other
employees, officers, directors, consultants and other persons who
provide services to the Company or its Related Entities by enabling
such persons to acquire or increase a proprietary interest in the
Company in order to strengthen the mutuality of interests between
such persons and the Company’s shareholders, and providing
such persons with performance incentives to expend their maximum
efforts in the creation of shareholder value.

 


2.           Definitions.
For purposes of the Plan, the following terms shall be defined as
set forth below, in addition to such terms defined in Section 1
hereof.

 


(a)           “Award”
means any Option, Stock Appreciation Right, Restricted Stock Award,
Restricted Stock Unit Award, Deferred Stock Award, Share granted as
a bonus or in lieu of another award, Dividend Equivalent, Other
Stock-Based Award or Performance Award, together with any other
right or interest, granted to a Participant under the
Plan.

 


(b)           “Award
Agreement” means any written agreement, contract or
other instrument or document evidencing any Award granted by the
Committee hereunder.

 


(c)           “Beneficiary”
means the person, persons, trust or trusts that have been
designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the
benefits specified under the Plan upon such Participant’s
death or to which Awards or other rights are transferred if and to
the extent permitted under Section 10(b) hereof. If, upon a
Participant’s death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means
the person, persons, trust or trusts entitled by will or the laws
of descent and distribution to receive such benefits.

 


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

 


(e)           “Board”
means the Company’s Board of Directors.

 


(f)           “Cause”
shall, with respect to any Participant have the meaning specified
in the Award Agreement. In the absence of any definition in the
Award Agreement, “Cause” shall have the equivalent
meaning or the same meaning as “cause” or “for
cause” set forth in any employment, consulting, or other
agreement for the performance of services between the Participant
and the Company or a Related Entity or, in the absence of any such
agreement or any such definition in such agreement, such term shall
mean (i) the failure by the Participant to perform, in a reasonable
manner, his or her duties as assigned by the Company or a Related
Entity, (ii) any violation or breach by the Participant of his or
her employment, consulting or other similar agreement with the
Company or a Related Entity, if any, (iii) any violation or breach
by the Participant of any non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a
Related Entity, (iv) any act by the Participant of dishonesty or
bad faith with respect to the Company or a Related Entity, (v) use
of alcohol, drugs or other similar substances in a manner that
adversely affects the Participant’s work performance, or (vi)
the commission by the Participant of any act, misdemeanor, or crime
reflecting unfavorably upon the Participant or the Company or any
Related Entity. The good faith determination by the Committee of
whether the Participant’s Continuous Service was terminated
by the Company for “Cause” shall be final and binding
for all purposes hereunder.

 




 

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(g)         
“Change in
Control” means a Change in Control as defined with
related terms in Section 9(b) of the Plan.

 


(h)         
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and
regulations thereto.

 


(i)           “Committee”
means a committee designated by the Board to administer the Plan;
provided,
however, that if
the Board fails to designate a committee or if there are no longer
any members on the committee so designated by the Board, then the
Board shall serve as the Committee. The Committee shall consist of
at least two directors, and each member of the Committee shall be
(i) a “non-employee director” within the meaning
of Rule 16b-3 (or any successor rule) under the Exchange Act,
unless administration of the Plan by “non-employee
directors” is not then required in order for exemptions under
Rule 16b-3 to apply to transactions under the Plan and (ii) an
“independent director” under theNASDAQ listing
requirements, or any similar rule or listing requirement that may
be applicable to the Company from time to time.

 


(j)           “Consultant”
means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a
director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such
Related Entity.

 


(k)         
“Continuous
Service” means the uninterrupted provision of services
to the Company or any Related Entity in any capacity of Employee,
Director, Consultant or other service provider. Continuous Service
shall not be considered to be interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any
Related Entities, or any successor entities, in any capacity of
Employee, Director, Consultant or other service provider, or (iii)
any change in status as long as the individual remains in the
service of the Company or a Related Entity in any capacity of
Employee, Director, Consultant or other service provider (except as
otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other
authorized personal leave. For purposes of each Incentive Stock
Option granted under the Plan, if such leave exceeds three (3)
months, and reemployment upon expiration of such leave is not
guaranteed by statute or contract, then the Incentive Stock Option
shall be treated as a Non-Qualified Stock Option on the day three
(3) months and one (1) day following the expiration of such three
(3) month period.

 


(l)           “Deferred
Stock” means a right to receive Shares, including
Restricted Stock, cash or a combination thereof, at the end of a
specified deferral period.

 




 

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(m)         
“Deferred Stock
Award” means an Award of Deferred Stock granted to a
Participant under Section 6(e) hereof.

 


(n)           “Director”
means a member of the Board or the board of directors of any
Related Entity.

 


(o)           “Disability”
means a permanent and total disability (within the meaning of
Section 22(e) of the Code), as determined by a medical doctor
satisfactory to the Committee. Notwithstanding the foregoing, for
Awards subject to Section 409A of the Code, Disability shall mean
that a Participant is disabled under Section 409A(a)(2)(C)(i) or
(ii) of the Code.

 


(p)           “Dividend
Equivalent” means a right, granted to a Participant
under Section 6(g) hereof, to receive cash, Shares, other Awards or
other property equal in value to dividends paid with respect to a
specified number of Shares, or other periodic
payments.

 


(q)           “Effective
Date” has the meaning set forth in Section
10(s).

 


(r)           
“Eligible
Person” means each officer, Director, Employee,
Consultant and other person who provides services to the Company or
any Related Entity. The foregoing notwithstanding, only Employees
of the Company, or any parent corporation or subsidiary corporation
of the Company (as those terms are defined in Sections 424(e) and
(f) of the Code, respectively), shall be Eligible Persons for
purposes of receiving any Incentive Stock Options. An Employee on
leave of absence may be considered as still in the employ of the
Company or a Related Entity for purposes of eligibility for
participation in the Plan.

 


(s)     
    “Employee” means any
person, including an officer or Director, who is an employee of the
Company or any Related Entity. The payment of a director’s
fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.

 


(t)           “Exchange
Act” means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor
provisions and rules thereto.

 


(u)         
“Fair Market
Value” or “FMV” means, as of any
date, the value of a Share determined as follows:

 


(i)           If
the Share is listed on one or more established stock exchanges or
national market systems, including without limitation, The NASDAQ
Global Select Market, The NASDAQ Global Market or The NASDAQ
Capital Market of The NASDAQ Stock Market LLC, its Fair Market
Value shall be the closing sales price for such Share (or the
closing bid, if no sales were reported) as quoted on the principal
exchange or system on which the Share is listed (as determined by
the Committee) on the date of determination (or, if no closing
sales price or closing bid was reported on that date, as
applicable, on the last immediately preceding trading date such
closing sales price or closing bid was reported), as reported in
The Wall Street Journal or
such other source as the Committee deems reliable;

 




 

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(ii)           If
the Share is regularly quoted on an automated quotation system
(including a marketplace operated by the OTC Markets Group, Inc.)
or by a recognized securities dealer, its Fair Market Value shall
be the closing sales price for such Share as quoted on such system
or by such securities dealer on the date of determination, but if
selling prices are not reported, the Fair Market Value of a Share
shall be the mean between the high bid and low asked prices for the
Share on the date of determination (or, if no such prices were
reported on that date, on the last date such prices were reported),
as reported in The Wall Street
Journal or such other source as the Committee deems
reliable; or

 


(iii)         
In the absence of an established market for the Share of the type
described in (i) and (ii), above, the Fair Market Value thereof
shall be determined by the Committee in good faith using any
reasonable method of valuation, which method may be set forth with
greater specificity in the Award Agreement, (and, to the extent
necessary or advisable, in a manner consistent with Section 409A of
the Code and Section 422 of the Code for Incentive Stock Options),
which determination shall be conclusive and binding on all
interested parties. Such reasonable method may be determined by
reference to (i) the placing price of the latest private placement
of the Shares and the development of the Company’s business
operations and the general economic and market conditions since
such latest private placement; (ii) other third party transactions
involving the Shares and the development of the Company’s
business operation and the general economic and market conditions
since such sale; (iii) an independent valuation of the Shares (by a
qualified valuation expert) or (iv) such other methodologies or
information as the Committee determines to be indicative of Fair
Market Value.

 


(v)           “Good
Reason” shall, with respect to any Participant, have
the meaning specified in the Award Agreement. In the absence of any
definition in the Award Agreement, “Good Reason” shall
have the equivalent meaning or the same meaning as “good
reason” or “for good reason” set forth in any
employment, consulting or other agreement for the performance of
services between the Participant and the Company or a Related
Entity or, in the absence of any such agreement or any such
definition in such agreement, such term shall mean (i) the
assignment to the Participant of any duties inconsistent in any
material respect with the Participant’s position, authority,
duties or responsibilities as assigned by the Company or a Related
Entity, or any other action by the Company or a Related Entity
which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose any action
not taken in bad faith and which is remedied by the Company or a
Related Entity promptly after receipt of notice thereof given by
the Participant, or any action taken with the consent of the
Participant; or (ii) any material failure by the Company or a
Related Entity to comply with its obligations to the Participant as
agreed upon, other than any failure not occurring in bad faith and
which is remedied by the Company or a Related Entity promptly after
receipt of notice thereof given by the Participant.

 


(w)           “Incentive
Stock Option” means any Option intended to be
designated as an “incentive stock option” within the
meaning of Section 422 of the Code or any successor provision
thereto and that meets the requirements set out in the
Plan.

 


(x)           “Independent,”
when referring to either the Board or members of the Committee,
shall have the same meaning as used in the rules of NASDAQ or any
national securities exchange on which any securities of the Company
are listed for trading and, if not quoted or listed for trading, by
the rules of NASDAQ.

 




 

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(y)           “Incumbent
Board” means the Incumbent Board as defined in Section
9(b)(ii) of the Plan.

 


(z)           “Non-Qualified
Stock Option” means an Option that, by its terms, does
not qualify or is not intended to qualify as an Incentive Stock
Option.

 


(aa)        
“Option” means a right
granted to a Participant under Section 6(b) hereof, to purchase
Shares or other Awards at a specified price during specified time
periods.

 


(bb)        
“Optionee” means a person
to whom an Option is granted under this Plan or any person who
succeeds to the rights of such person under this Plan.

 


(cc)         
“Other Stock-Based
Awards” means Awards granted to a Participant under
Section 6(i) hereof.

 


(dd)         
“Outside
Director” means a member of the Board who is not an
Employee.

 


(ee)           “Participant”
means a person who has been granted an Award under the Plan which
remains outstanding, including a person who is no longer an
Eligible Person.

 


(ff)        
   “Performance Award” shall
mean any Award of Performance Shares or Performance Units granted
pursuant to Section 6(h).

 


(gg)         
“Performance
Period” means that period established by the Committee
at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the
Committee with respect to such Award are to be
measured.

 


(hh)         
“Performance
Share” means any grant pursuant to Section 6(h) of a
unit valued by reference to a designated number of Shares, which
value may be paid to the Participant by delivery of such property
as the Committee shall determine, including cash, Shares, other
property, or any combination thereof, upon achievement of such
performance goals during the Performance Period as the Committee
shall establish at the time of such grant or
thereafter.

 


(ii)    
       “Performance Unit” means
any grant pursuant to Section 6(h) of a unit valued by reference to
a designated amount of property (including cash) other than Shares,
which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including cash, Shares,
other property, or any combination thereof, upon achievement of
such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or
thereafter.

 


(jj)      
      “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.

 


(kk)         
“Related
Entity” means any Subsidiary, and any business,
corporation, partnership, limited liability company or other entity
designated by Board in which the Company or a Subsidiary holds a
substantial ownership interest, directly or
indirectly.

 


 




 

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(ll)           “Restricted
Stock” means any Share issued with the restriction
that the holder may not sell, transfer, pledge or assign such Share
and with such risks of forfeiture and other restrictions as the
Committee, in its sole discretion, may impose (including any
restriction on the right to vote such Share and the right to
receive any dividends), which restrictions may lapse separately or
in combination at such time or times, in installments or otherwise,
as the Committee may deem appropriate.

 


(mm)       
“Restricted Stock
Award” means an Award granted to a Participant under
Section 6(d) hereof.

 


(nn)         
“Restricted Stock
Unit” means an Award granted to a Participant under
Section 6(d) hereof.

 


(oo)         
“Rule
16b-3” means Rule 16b-3, as from time to time in
effect and applicable to the Plan and Participants, promulgated by
the Securities and Exchange Commission under Section 16 of the
Exchange Act.

 


(pp)         
“Shares” means the shares
of common stock of the Company, par value $.001 per share, and such
other securities as may be substituted (or resubstituted) for
Shares pursuant to Section 10(c) hereof.

 


(qq)         
“Stock Appreciation
Right” means a right granted to a Participant under
Section 6(c) hereof.

 


(rr)      
    “Subsidiary” means any
corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities or interests of
such corporation or other entity entitled to vote generally in the
election of directors or in which the Company has the right to
receive 50% or more of the distribution of profits or 50% or more
of the assets on liquidation or dissolution.

 


(ss)           “Substitute
Awards” shall mean Awards granted or Shares issued by
the Company in assumption of, or in substitution or exchange for,
awards previously granted, or the right or obligation to make
future awards, by a company acquired by the Company or any Related
Entity or with which the Company or any Related Entity
combines.

 


3.           Administration.

 


(a)           Authority
of the Committee. The Plan shall be administered by the
Committee, except to the extent the Board elects to administer the
Plan, in which case the Plan shall be administered by only those
directors who are Independent Directors, in which case references
herein to the “Committee” shall be deemed to include
references to the Independent members of the Board. The Committee
shall have full and final authority, subject to and consistent with
the provisions of the Plan, to select Eligible Persons to become
Participants, grant Awards, determine the type, number and other
terms and conditions of, and all other matters relating to, Awards,
prescribe Award Agreements (which need not be identical for each
Participant) and rules and regulations for the administration of
the Plan, construe and interpret the Plan and Award Agreements and
correct defects, supply omissions or reconcile inconsistencies
therein, and to make all other decisions and determinations as the
Committee may deem necessary or advisable for the administration of
the Plan. In exercising any discretion granted to the Committee
under the Plan or pursuant to any Award, the Committee shall not be
required to follow past practices, act in a manner consistent with
past practices, or treat any Eligible Person or Participant in a
manner consistent with the treatment of other Eligible Persons or
Participants.

 




 

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(b)           Manner
of Exercise of Committee Authority. The Committee, and not
the Board, shall exercise sole and exclusive discretion on any
matter relating to a Participant then subject to Section 16 of
the Exchange Act with respect to the Company to the extent
necessary in order that transactions by such Participant shall be
exempt under Rule 16b-3 under the Exchange Act. Any action of the
Committee shall be final, conclusive and binding on all persons,
including the Company, its Related Entities, Participants,
Beneficiaries, transferees under Section 10(b) hereof or other
persons claiming rights from or through a Participant, and
shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not
be construed as limiting any power or authority of the Committee.
The Committee may delegate to officers or managers of the Company
or any Related Entity, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform
such functions, including administrative functions as the Committee
may determine to the extent that such delegation will not result in
the loss of an exemption under Rule 16b-3(d)(1) for Awards granted
to Participants subject to Section 16 of the Exchange Act in
respect of the Company. The Committee may appoint agents to assist
it in administering the Plan.

 


(c)           Limitation
of Liability. The Committee and the Board, and each member
thereof, shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him or her by any officer
or Employee, the Company’s independent auditors, Consultants
or any other agents assisting in the administration of the Plan.
Members of the Committee and the Board, and any officer or Employee
acting at the direction or on behalf of the Committee or the Board,
shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to
the extent permitted by law, be fully indemnified and protected by
the Company with respect to any such action or
determination.

 


4.           Shares
Subject to Plan.

 


(a)           Limitation
on Overall Number of Shares Available for Delivery Under
Plan. Subject to adjustment as provided in Section 10(c)
hereof, the total number of Shares reserved and available for
delivery under the Plan shall be Five Hundred Thousand (500,000),
all of which may be Incentive Stock Options. Any Shares delivered
under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares.

 


(b)           Application
of Limitation to Grants of Award. No Award may be granted if
the number of Shares to be delivered in connection with such an
Award or, in the case of an Award relating to Shares but settled
only in cash (such as cash-only Stock Appreciation Rights), the
number of Shares to which such Award relates, exceeds the number of
Shares remaining available for delivery under the Plan, minus the
number of Shares deliverable in settlement of or relating to then
outstanding Awards. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting
(as, for example, in the case of tandem or substitute awards) and
make adjustments if the number of Shares actually delivered differs
from the number of Shares previously counted in connection with an
Award.

 




 

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(c)           Share
Accounting. Without limiting the discretion of the Committee
under this section, the following rules will apply for purposes of
the determination of the number of Shares available for grant under
the Plan or compliance with the foregoing limits:

 


(i)           If
an outstanding Award for any reason expires or is terminated or
canceled without having been exercised or settled in full, or if
Shares acquired pursuant to an Award subject to forfeiture are
forfeited under the terms of the Plan or the relevant Award, the
Shares allocable to the terminated portion of such Award or such
forfeited Shares shall again be available for issuance under the
Plan.

 


(ii)         
Shares shall not be deemed to have been issued pursuant to the Plan
with respect to any portion of an Award that is settled in cash,
other than an Option.

 


(iii)        
If the exercise price of an Option is paid by tender to the
Company, or attestation to the ownership, of Shares owned by the
Participant, or an Option is settled without the payment of the
exercise price, or the payment of taxes with respect to any Award
is settled by a net exercise, the number of shares available for
issuance under the Plan shall be reduced by the gross number of
shares for which the Option is exercised or other Awards that have
vested.

 


(iv)        
Substitute Awards shall not reduce the Shares authorized for grant
under the Plan or authorized for grant to a Participant in any
period. Additionally, in the event that a company acquired by the
Company or any Related Entity or with which the Company or any
Related Entity combines has shares available under a pre-existing
plan approved by shareholders and not adopted in contemplation of
such acquisition or combination, the shares available for delivery
pursuant to the terms of such pre-existing plan (as adjusted, to
the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not
reduce the Shares authorized for delivery under the Plan; provided
that Awards using such available shares shall not be made after the
date awards or grants could have been made under the terms of the
pre-existing plan, absent the acquisition or combination, and shall
only be made to individuals who were not Employees or Directors
prior to such acquisition or combination.

 


(v)         
Any Shares that again become available for delivery pursuant to
this Section 4(c) shall be added back as one (1)
Share.

 


(vi)        
Notwithstanding anything in this Section 4(c) to the contrary and
solely for purposes of determining whether Shares are available for
the delivery of Incentive Stock Options, the maximum aggregate
number of shares that may be granted under this Plan shall be
determined without regard to any Shares restored pursuant to this
Section 4(c) that, if taken into account, would cause the Plan to
fail the requirement under Code Section 422 that the Plan designate
a maximum aggregate number of shares that may be
issued.

 




 

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(d)           Limitation
on Number of Shares Granted to Outside Directors.
Notwithstanding any provision in the Plan to the contrary, the sum
of the grant date Fair Market Value of equity-based Awards and the
amount of any cash-based Awards granted to an Outside Director
during any calendar year shall not exceed Five Hundred Thousand
dollars ($500,000).

 


5.           Eligibility
and Participation. Individuals eligible to participate in
the Plan include all Employees, Directors, and all Consultants and
advisers to the Company and Related Entities, as determined by the
Committee. Subject to the provisions of the Plan, the Committee
may, from time to time, select from all Eligible Persons, those to
whom Awards shall be granted and shall determine, in its sole
discretion, the nature of, any and all terms permissible by law,
and the amount of each Award. In making this determination, the
Committee may consider any factors it deems relevant, including
without limitation, the office or position held by a Participant or
the Participant’s relationship to the Company, the
Participant’s degree of responsibility for and contribution
to the growth and success of the Company or any Related Entity, the
Participant’s length of service, promotions and
potential.

 


6.           Specific
Terms of Awards.

 


(a)           General.
Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject
to Section 10(e)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee
shall determine, including terms requiring forfeiture of Awards in
the event of termination of the Participant’s Continuous
Service and terms permitting a Participant to make elections
relating to his or her Award. The Committee shall retain full power
and discretion to accelerate, waive or modify, at any time, any
term or condition of an Award that is not mandatory under the Plan.
Except in cases in which the Committee is authorized to require
other forms of consideration under the Plan, or to the extent other
forms of consideration must be paid to satisfy the requirements of
applicable law, no consideration other than services may be
required for the grant (but not the exercise) of any
Award.

 


(b)           Options.
The Committee is authorized to grant Options to any Eligible Person
on the following terms and conditions:

 


(i)           Exercise
Price. Other than in connection with Substitute Awards, the
exercise price per Share purchasable under an Option shall be
determined by the Committee, provided that such exercise price
shall not be less than 100% of the Fair Market Value of a Share on
the date of grant of the Option and shall not, in any event, be
less than the par value of a Share on the date of grant of the
Option. If an Employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of
the Company (or any parent corporation or subsidiary corporation of
the Company, as those terms are defined in Sections 424(e) and (f)
of the Code, respectively) and an Incentive Stock Option is granted
to such employee, the exercise price of such Incentive Stock Option
(to the extent required by the Code at the time of grant) shall be
no less than 110% of the Fair Market Value a Share on the date such
Incentive Stock Option is granted.

 




 

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(ii)           Time
and Method of Exercise. The Committee shall determine the
time or times at which or the circumstances under which an Option
may be exercised in whole or in part (including based on
achievement of performance goals and/or future service
requirements), the time or times at which Options shall cease to be
or become exercisable following termination of Continuous Service
or upon other conditions, the methods by which the exercise price
may be paid or deemed to be paid (including in the discretion of
the Committee a cashless exercise procedure), the form of such
payment, including, without limitation, cash, Shares, other Awards
or awards granted under other plans of the Company or a Related
Entity, or other property (including notes or other contractual
obligations of Participants to make payment on a deferred basis
provided that such deferred payments are not in violation of
Section 409A of the Code, or any rule or regulation adopted
thereunder or any other applicable law), and the methods by or
forms in which Shares will be delivered or deemed to be delivered
to Participants.

 


(iii)           Incentive
Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code. If an Option is intended to
be an Incentive Stock Option, and if, for any reason, such Option
(or any portion thereof) shall not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, such Option
(or portion thereof) shall be regarded as a Non-Qualified Stock
Option appropriately granted under the Plan; provided that such
Option (or portion thereof) otherwise complies with the
Plan’s requirements relating to Non-Qualified Stock Options.
Anything in the Plan to the contrary notwithstanding, no term of
the Plan relating to Incentive Stock Options (including any Stock
Appreciation Right issued in tandem therewith) shall be
interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be exercised, so as to disqualify
either the Plan or any Incentive Stock Option under Section 422 of
the Code, unless the Participant has first requested, or consents
to, the change that will result in such disqualification. Thus, if
and to the extent required to comply with Section 422 of the Code,
Options granted as Incentive Stock Options shall be subject to the
following special terms and conditions:

 


(A)           an
Incentive Stock Option shall not be exercisable more than ten years
after the date such Incentive Stock Option is granted; provided, however, that if a Participant
owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company (or any parent
corporation or subsidiary corporation of the Company, as those
terms are defined in Sections 424(e) and (f) of the Code,
respectively) and the Incentive Stock Option is granted to such
Participant, the term of the Incentive Stock Option shall be (to
the extent required by the Code at the time of the grant) for no
more than five years from the date of grant; and

 


(B)           The
aggregate Fair Market Value (determined as of the date the
Incentive Stock Option is granted) of the Shares with respect to
which Incentive Stock Options granted under the Plan and all other
option plans of the Company (and any parent corporation or
subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f) of the Code, respectively) during any
calendar year exercisable for the first time by the Participant
during any calendar year shall not (to the extent required by the
Code at the time of the grant) exceed $100,000. To the extent that
Incentive Stock Options are first exercisable by a Participant in
excess of such limitation, the excess shall be considered
Non-Qualified Stock Options.

 




 

11








 






 


(C)           Each
person exercising any Incentive Stock Option granted under the Plan
shall be deemed to have covenanted with the Company to report to
the Company any disposition of such Shares prior to the expiration
of the holding periods specified by Section 422(a)(1) of the Code
and, if and to the extent that the realization of income in such a
disposition imposes upon the Company federal, state, local or other
withholding tax requirements, or any such withholding is required
to secure for the Company an otherwise available tax deduction, to
remit to the Company an amount in cash sufficient to satisfy those
requirements.

 


(c)           Stock
Appreciation Rights. The Committee may grant Stock
Appreciation Rights to any Eligible Person in conjunction with all
or part of any Option granted under the Plan or at any subsequent
time during the term of such Option (a “Tandem Stock
Appreciation Right”), or without regard to any Option (a
“Freestanding Stock Appreciation Right”), in each case
upon such terms and conditions as the Committee may establish in
its sole discretion, not inconsistent with the provisions of the
Plan, including the following:

 


(i)           Right
to Payment. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one Share on
the date of exercise over (B) the grant price of the Stock
Appreciation Right as determined by the Committee. The grant price
of a Stock Appreciation Right shall not be less than 100% of the
Fair Market Value of a Share on the date of grant, in the case of a
Freestanding Stock Appreciation Right, or less than the associated
Option exercise price, in the case of a Tandem Stock Appreciation
Right.

 


(ii)         
Other Terms. The Committee
shall determine at the date of grant or thereafter, the time or
times at which and the circumstances under which a Stock
Appreciation Right may be exercised in whole or in part (including
based on achievement of performance goals and/or future service
requirements), the time or times at which Stock Appreciation Rights
shall cease to be or become exercisable following termination of
Continuous Service or upon other conditions, the method of
exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Shares will be delivered or
deemed to be delivered to Participants, whether or not a Stock
Appreciation Right shall be in tandem or in combination with any
other Award, and any other terms and conditions of any Stock
Appreciation Right.

 


(iii)        
Tandem Stock Appreciation
Rights. Any Tandem Stock Appreciation Right may be granted
at the same time as the related Option is granted or, for Options
that are not Incentive Stock Options, at any time thereafter before
exercise or expiration of such Option. Any Tandem Stock
Appreciation Right related to an Option may be exercised only when
the related Option would be exercisable and the Fair Market Value
of the Shares subject to the related Option exceeds the exercise
price at which Shares can be acquired pursuant to the Option. In
addition, if a Tandem Stock Appreciation Right exists with respect
to less than the full number of Shares covered by a related Option,
then an exercise or termination of such Option shall not reduce the
number of Shares to which the Tandem Stock Appreciation Right
applies until the number of Shares then exercisable under such
Option equals the number of Shares to which the Tandem Stock
Appreciation Right applies. Any Option related to a Tandem Stock
Appreciation Right shall no longer be exercisable to the extent the
Tandem Stock Appreciation Right has been exercised, and any Tandem
Stock Appreciation Right shall no longer be exercisable to the
extent the related Option has been exercised.

 




 

12








 






 


(d)           Restricted
Stock Awards. The Committee is authorized to grant
Restricted Stock Awards to any Eligible Person on the following
terms and conditions:

 


(i)           Grant
and Restrictions. Restricted Stock Awards shall be subject
to such restrictions on transferability, risk of forfeiture and
other restrictions, if any, as the Committee may impose, or as
otherwise provided in this Plan, covering a period of time
specified by the Committee (the “Restriction Period”).
The terms of any Restricted Stock Award granted under the Plan
shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with
the Plan. The restrictions may lapse separately or in combination
at such times, under such circumstances (including based on
achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Committee
may determine at the date of grant or thereafter. Except to the
extent restricted under the terms of the Plan and any Award
Agreement relating to a Restricted Stock Award, a Participant
granted Restricted Stock shall have all of the rights of a
shareholder, including the right to vote the Restricted Stock and
the right to receive dividends thereon (subject to any mandatory
reinvestment or other requirement imposed by the Committee). During
the Restriction Period, subject to Section 10(b) below, the
Restricted Stock may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the
Participant.

 


(ii)           Forfeiture.
Except as otherwise determined by the Committee, upon termination
of a Participant’s Continuous Service during the applicable
Restriction Period, the Participant’s Restricted Stock that
is at that time subject to a risk of forfeiture that has not lapsed
or otherwise been satisfied shall be forfeited and reacquired by
the Company; provided that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any
individual case, that forfeiture conditions relating to Restricted
Stock Awards shall be waived in whole or in part in the event of
terminations resulting from specified causes.

 


(iii)         
Certificates for Stock.
Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear
an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock, that the Company
retain physical possession of the certificates, and that the
Participant deliver a stock power to the Company, endorsed in
blank, relating to the Restricted Stock.

 


(iv)         
Dividends and Splits. As a
condition to the grant of a Restricted Stock Award, the Committee
may require or permit a Participant to elect that any cash
dividends paid on a Share of Restricted Stock be automatically
reinvested in additional Shares of Restricted Stock or applied to
the purchase of additional Awards under the Plan. Unless otherwise
determined by the Committee, Shares distributed in connection with
a stock split or stock dividend, and other property distributed as
a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with respect
to which such Shares or other property have been
distributed.

 




 

13








 






 


(v)           Restricted
Stock Units. In lieu of or in addition to Restricted Stock,
the Committee is authorized to grant Restricted Stock Units to any
Eligible Person. Restricted Stock Units shall be subject to the
same terms and conditions under this Plan as Restricted Stock
except as otherwise provided in this Plan or as otherwise provided
by the Committee. Except as otherwise provided by the Committee,
the award shall be settled and paid out promptly upon vesting (to
the extent permitted by Section 409A of the Code), and the
Participant holding such Restricted Stock Units shall receive, as
determined by the Committee, Shares (or cash equal to the Fair
Market Value of the number of Shares as of the date the Award
becomes payable) equal to the number of such Restricted Stock
Units. Restricted Stock Units shall not be transferable, shall have
no voting rights, and, unless otherwise determined by the
Committee, shall not receive dividends or Dividend Equivalents
(which in any event shall only be paid out to the extent that the
Restricted Stock Units vest).

 


(e)           Deferred
Stock Award. The Committee is authorized to grant Deferred
Stock Awards to any Eligible Person on the following terms and
conditions:

 


(i)           Award
and Restrictions. Satisfaction of a Deferred Stock Award
shall occur upon expiration of the deferral period specified for
such Deferred Stock Award by the Committee (or, if permitted by the
Committee, as elected by the Participant). In addition, a Deferred
Stock Award shall be subject to such restrictions (which may
include a risk of forfeiture) as the Committee may impose, if any,
which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on
achievement of performance goals and/or future service
requirements), separately or in combination, in installments or
otherwise, as the Committee may determine. A Deferred Stock Award
may be satisfied by delivery of Shares, cash equal to the Fair
Market Value of the specified number of Shares covered by the
Deferred Stock, or a combination thereof, as determined by the
Committee at the date of grant or thereafter. Prior to satisfaction
of a Deferred Stock Award, a Deferred Stock Award carries no voting
or dividend or other rights associated with Share
ownership.

 


(ii)         
Forfeiture. Except as
otherwise determined by the Committee, upon termination of a
Participant’s Continuous Service during the applicable
deferral period or portion thereof to which forfeiture conditions
apply (as provided in the Award Agreement evidencing the Deferred
Stock Award), the Participant’s Deferred Stock Award that is
at that time subject to a risk of forfeiture that has not lapsed or
otherwise been satisfied shall be forfeited; provided that the
Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that forfeiture
conditions relating to a Deferred Stock Award shall be waived in
whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in
whole or in part the forfeiture of any Deferred Stock
Award.

 




 

14








 






 


(f)           Bonus
Stock and Awards in Lieu of Obligations. The Committee is
authorized to grant Shares to any Eligible Persons as a bonus, or
to grant Shares or other Awards in lieu of obligations to pay cash
or deliver other property under the Plan or under other plans or
compensatory arrangements, provided that, in the case of Eligible
Persons subject to Section 16 of the Exchange Act, the amount of
such grants remains within the discretion of the Committee to the
extent necessary to ensure that acquisitions of Shares or other
Awards are exempt from liability under Section 16(b) of the
Exchange Act. Shares or Awards granted hereunder shall be subject
to such other terms as shall be determined by the
Committee.

 


(g)           Dividend
Equivalents. The Committee is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to
receive cash, Shares, other Awards, or other property equal in
value to the dividends paid with respect to a specified number of
Shares, or other periodic payments. Dividend Equivalents may be
awarded on a free-standing basis or in connection with another
Award. The Committee may provide that Dividend Equivalents shall be
paid or distributed when accrued or shall be deemed to have been
reinvested in additional Shares, Awards, or other investment
vehicles, and subject to such restrictions on transferability and
risks of forfeiture, as the Committee may specify. Unless otherwise
determined by the Committee at date of grant, any Dividend
Equivalents that are granted with respect to any Deferred Stock
Award shall be either (A) paid with respect to such Deferred Stock
Award at the dividend payment date in cash or in Shares of
unrestricted stock having a Fair Market Value equal to the amount
of such dividends, or (B) deferred with respect to such Deferred
Stock Award and the amount or value thereof automatically deemed
reinvested in additional Deferred Stock, other Awards or other
investment vehicles, as the Committee shall determine or permit the
Participant to elect.

 


(h)           Performance
Awards. The Committee is authorized to grant Performance
Awards to any Eligible Person payable in cash, Shares, or other
Awards, on terms and conditions established by the Committee. The
performance criteria to be achieved during any Performance Period
and the length of the Performance Period shall be determined by the
Committee upon the grant of each Performance Award. Except as
provided in Section 9 or as may be provided in an Award Agreement,
Performance Awards will be distributed only after the end of the
relevant Performance Period. The performance goals to be achieved
for each Performance Period shall be conclusively determined by the
Committee and may be based on any criteria that the Committee, in
its sole discretion, shall determine should be used for that
purpose. The amount of the Award to be distributed shall be
conclusively determined by the Committee. Performance Awards may be
paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by
the Committee, on a deferred basis.

 


(i)           Other
Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to any Eligible Person
such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related
to, Shares, as deemed by the Committee to be consistent with the
purposes of the Plan. Other Stock-Based Awards may be granted to
Participants either alone or in addition to other Awards granted
under the Plan, and such Other Stock-Based Awards shall also be
available as a form of payment in the settlement of other Awards
granted under the Plan. The Committee shall determine the terms and
conditions of such Awards. Payment pursuant to an Award granted
under this Section 6(i) shall be made at such times, by such
methods and in such forms, including, without limitation, cash,
Shares, other Awards or other property, as the Committee shall
determine.

 




 

15








 






 


7.           Certain
Provisions Applicable to Awards.

 


(a)           Stand-Alone,
Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution
or exchange for, any other Award or any award granted under another
plan of the Company, any Related Entity, or any business entity to
be acquired by the Company or a Related Entity, or any other right
of a Participant to receive payment from the Company or any Related
Entity. Such additional, tandem, and substitute or exchange Awards
may be granted at any time. If an Award is granted in substitution
or exchange for another Award or award, the Committee shall require
the surrender of such other Award or award in consideration for the
grant of the new Award. In addition, Awards may be granted in lieu
of cash compensation, including in lieu of cash amounts payable
under other plans of the Company or any Related Entity, in which
the value of Shares subject to the Award is equivalent in value to
the cash compensation, or in which the exercise price, grant price
or purchase price of the Award in the nature of a right that may be
exercised is equal to the Fair Market Value of the underlying
Shares minus the value of the cash compensation surrendered. Awards
granted pursuant to the preceding sentence shall be designed,
awarded and settled in a manner that does not result in additional
taxes under Section 409A of the Code.

 


(b)           Term
of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided that in no event
shall the term of any Option or Stock Appreciation Right exceed a
period of ten years (or in the case of an Incentive Stock Option
such shorter term as may be required under Section 422 of the
Code).

 


(c)           Form
and Timing of Payment Under Awards; Deferrals. Subject to
the terms of the Plan and any applicable Award Agreement, payments
to be made by the Company or a Related Entity upon the exercise of
an Option or other Award or settlement of an Award may be made in
such forms as the Committee shall determine, including, without
limitation, cash, Shares, other Awards or other property, and may
be made in a single payment or transfer, in installments, or on a
deferred basis. Any installment or deferral provided for in the
preceding sentence shall, however, be subject to the
Company’s compliance with the provisions of Section 409A of
the Code and other applicable law, rules and regulations adopted by
the Securities and Exchange Commission, and all applicable rules of
any national securities exchange on which the Company’s
securities are listed for trading and, if not listed for trading on
a national securities exchange, then the rules of the NASDAQ Stock
Market. The settlement of any Award may be accelerated, and cash
paid in lieu of Shares in connection with such settlement, in the
discretion of the Committee or upon occurrence of one or more
specified events (in addition to a Change in Control), subject to
compliance with the provisions of Section 409A of the Code.
Installment or deferred payments may be required by the Committee
(subject to Section 10(e) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding
Award not provided for in the original Award Agreement) or
permitted at the election of the Participant on terms and
conditions established by the Committee. Payments may include,
without limitation, provisions for the payment or crediting of a
reasonable interest rate on installment or deferred payments or the
grant or crediting of Dividend Equivalents or other amounts in
respect of installment or deferred payments denominated in
Shares.

 


(d)           Exemptions
from Section 16(b) Liability. It is the intent of the
Company that the grant of any Awards to or other transaction by a
Participant who is subject to Section 16 of the Exchange Act shall
be exempt from Section 16 pursuant to an applicable exemption
(except for transactions acknowledged in writing to be non-exempt
by such Participant). Accordingly, if any provision of this Plan or
any Award Agreement does not comply with the requirements of Rule
16b-3 then applicable to any such transaction, such provision shall
be construed or deemed amended to the extent necessary to conform
to the applicable requirements of Rule 16b-3 so that such
Participant shall avoid liability under Section 16(b).

 




 

16








 






 



8.           Successors.
All obligations of the Company under the Plan, 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 otherwise,
of all or substantially all of the business and/or assets of the
Company.

 


9.           Change
in Control.

 


(a)           Effect
of “Change in Control.” Subject to Section
9(a)(iv), and if and only to the extent provided in the Award
Agreement, or to the extent otherwise determined by the Committee,
upon the occurrence of a “Change in Control,” as
defined in Section 9(b):

 


(i)           Any
Option or Stock Appreciation Right that was not previously vested
and exercisable as of the time of the Change in Control, shall
become immediately vested and exercisable, subject to applicable
restrictions set forth in Section 10(a) hereof.

 


(ii)         
Any restrictions, deferral of settlement, and forfeiture conditions
applicable to a Restricted Stock Award, Restricted Stock Unit
Award, Deferred Stock Award or an Other Stock-Based Award subject
only to future service requirements granted under the Plan shall
lapse and such Awards shall be deemed fully vested as of the time
of the Change in Control, except to the extent of any waiver by the
Participant and subject to applicable restrictions set forth in
Section 10(a) hereof.

 


(iii)        
With respect to any outstanding Award subject to achievement of
performance goals and conditions under the Plan, the Committee may,
in its discretion, deem such performance goals and conditions as
having been met as of the date of the Change in
Control.

 


(iv)        
Notwithstanding the foregoing, if in the event of a Change in
Control the successor company assumes or substitutes for an Option,
Stock Appreciation Right, Restricted Stock Award, Restricted Stock
Unit Award, Deferred Stock Award or Other Stock-Based Award, then
each outstanding Option, Stock Appreciation Right, Restricted Stock
Award, Deferred Stock Award or Other Stock-Based Award shall not be
accelerated as described in Sections 9(a)(i), (ii) and (iii). For
the purposes of this Section 9(a)(iv), an Option, Stock
Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award, Deferred Stock Award or Other Stock-Based Award shall be
considered assumed or substituted for if following the Change in
Control the award confers the right to purchase or receive, for
each Share subject to the Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award, Deferred Stock
Award or Other Stock-Based Award immediately prior to the Change in
Control, the consideration (whether stock, cash or other securities
or property) received in the transaction constituting a Change in
Control by holders of Shares for each Share held on the effective
date of such transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares); provided, however, that if such
consideration received in the transaction constituting a Change in
Control is not solely common stock of the successor company or its
parent or subsidiary, the Committee may, with the consent of the
successor company or its parent or subsidiary, provide that the
consideration to be received upon the exercise or vesting of an
Option, Stock Appreciation Right, Restricted Stock Award,
Restricted Stock Unit Award, Deferred Stock Award or Other
Stock-Based Award, for each Share subject thereto, will be solely
common stock of the successor company or its parent or subsidiary
substantially equal in fair market value to the per share
consideration received by holders of Shares in the transaction
constituting a Change in Control. The determination of such
substantial equality of value of consideration shall be made by the
Committee in its sole discretion and its determination shall be
conclusive and binding.

 




 

17








 






 


(b)           Definition
of “Change in Control.” Unless otherwise
specified in an Award Agreement, a “Change in Control”
shall mean the occurrence of any of the following:

 


(i)           The
acquisition by any Person of Beneficial Ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than fifty percent (50%) of either the then outstanding shares of
common stock of the Company (the “Outstanding Company Common
Stock”) or the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”) (the foregoing Beneficial Ownership hereinafter
being referred to as a “Controlling Interest”);
provided,
however, that for
purposes of this Section 9(b), the following acquisitions shall not
constitute or result in a Change of Control: (v) any acquisition
directly from the Company; (w) any acquisition by the Company; (x)
any acquisition by any Person that as of the Effective Date owns
Beneficial Ownership of a Controlling Interest; (y) any acquisition
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary; or (z) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) below; or

 


(ii)         
During any period of two (2) consecutive years (not including any
period prior to the Effective Date) individuals who constitute the
Board on the Effective Date (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided,
however, that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or

 


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

 




 

18








 






 


(iv)           Approval
by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of
the Company’s assets.

 


Notwithstanding the
foregoing, if a Change in Control constitutes a payment event with
respect to any Award (or any portion of an Award) that provides for
the deferral of compensation that is subject to Section 409A of the
Code, to the extent required to avoid the imposition of additional
taxes under Section 409A of the Code, the transaction or event
described in subsection (i) (ii), (iii) or (iv) with respect to
such Award (or portion thereof) shall only constitute a Change in
Control for purposes of the payment timing of such Award if such
transaction also constitutes a “change in control
event,” as defined in Treasury Regulation Section
1.409A-3(i)(5).

 


10.           General
Provisions.

 


(a)           Compliance
With Legal and Other Requirements. The Company may, to the
extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of Shares or payment of other benefits under
any Award until completion of such registration or qualification of
such Shares or other required action under any federal or state
law, rule or regulation, listing or other required action with
respect to any stock exchange or automated quotation system upon
which the Shares or other Company securities are listed or quoted,
or compliance with any other obligation of the Company, as the
Committee, may consider appropriate, and may require any
Participant to make such representations, furnish such information
and comply with or be subject to such other conditions as it may
consider appropriate in connection with the issuance or delivery of
Shares or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other
obligations.

 


(b)           Limits
on Transferability; Beneficiaries. No Award or other right
or interest granted under the Plan shall be pledged, hypothecated
or otherwise encumbered or subject to any lien, obligation or
liability of such Participant to any party, or assigned or
transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary upon the death of a
Participant, and such Awards or rights that may be exercisable
shall be exercised during the lifetime of the Participant only by
the Participant or his or her guardian or legal representative,
except that Awards and other rights (other than Incentive Stock
Options and Stock Appreciation Rights in tandem therewith) may be
transferred to one or more Beneficiaries or other transferees
during the lifetime of the Participant, and may be exercised by
such transferees in accordance with the terms of such Award, but
only if and to the extent such transfers are permitted by the
Committee pursuant to the express terms of an Award Agreement
(subject to any terms and conditions which the Committee may impose
thereon). A Beneficiary, transferee, or other person claiming any
rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award
Agreement applicable to such Participant, except as otherwise
determined by the Committee, and to any additional terms and
conditions deemed necessary or appropriate by the
Committee.

 


(c)           Adjustments.

 


(i)           Adjustments
to Awards. In the event that any extraordinary dividend or
other distribution (whether in the form of cash, Shares, or other
property), recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the Shares and/or
such other securities of the Company or any other issuer such that
a substitution, exchange, or adjustment is determined by the
Committee to be appropriate, then the Committee shall, in such
manner as it may deem equitable, substitute, exchange or adjust any
or all of (A) the number and kind of Shares which may be
delivered in connection with Awards granted thereafter, (B) the
number and kind of Shares subject to or deliverable in respect of
outstanding Awards, (C) the exercise price, grant price or
purchase price relating to any Award and/or make provision for
payment of cash or other property in respect of any outstanding
Award, and (D) any other aspect of any Award that the Committee
determines to be appropriate.

 




 

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(ii)           Adjustments
in Case of Certain Corporate Transactions. In the event of
any merger, consolidation or other reorganization in which the
Company does not survive, or in the event of any Change in Control,
any outstanding Awards may be dealt with in accordance with any of
the following approaches, as determined by the agreement
effectuating the transaction or, if and to the extent not so
determined, as determined by the Committee: (a) the continuation of
the outstanding Awards by the Company, if the Company is a
surviving corporation, (b) the assumption or substitution for, as
those terms are defined in Section 9(b)(iv) hereof, the outstanding
Awards by the surviving corporation or its parent or subsidiary,
(c) full exercisability or vesting and accelerated expiration of
the outstanding Awards, or (d) settlement of the value of the
outstanding Awards in cash or cash equivalents or other property
followed by cancellation of such Awards (which value, in the case
of Options or Stock Appreciation Rights, shall be measured by the
amount, if any, by which the Fair Market Value of a Share exceeds
the exercise or grant price of the Option or Stock Appreciation
Right as of the effective date of the transaction). The Committee
shall give written notice of any proposed transaction referred to
in this Section 10(c)(ii) a reasonable period of time prior to the
closing date for such transaction (which notice may be given either
before or after the approval of such transaction), in order that
Participants may have a reasonable period of time prior to the
closing date of such transaction within which to exercise any
Awards that are then exercisable (including any Awards that may
become exercisable upon the closing date of such transaction). A
Participant may condition his exercise of any Awards upon the
consummation of the transaction.

 


(iii)         
Other Adjustments. The
Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including
Performance Awards, or performance goals relating thereto) in
recognition of unusual or nonrecurring events (including, without
limitation, acquisitions and dispositions of businesses and assets)
affecting the Company, any Related Entity or any business unit, or
the financial statements of the Company or any Related Entity, or
in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in
view of the Committee’s assessment of the business strategy
of the Company, any Related Entity or business unit thereof,
performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other
circumstances deemed relevant.

 


(d)         
Taxes. The Company and any
Related Entity are authorized to withhold from any Award granted
any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an
Award, and to take such other action as the Committee may deem
advisable to enable the Company or any Related Entity and
Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This
authority shall include authority to withhold or receive Shares or
other property and to make cash payments in respect thereof in
satisfaction of a Participant’s tax obligations, either on a
mandatory or elective basis in the discretion of the Committee. The
withholding of taxes is intended to comply with the requirements of
Rule 10b5-1(c)(1)(i)(B) of the Exchange Act to the extent permitted
by law.

 


(e)           Changes
to the Plan and Awards. The Board may amend, alter, suspend,
discontinue or terminate the Plan, or the Committee’s
authority to grant Awards under the Plan, without the consent of
shareholders or Participants, except that any amendment or
alteration to the Plan shall be subject to the approval of the
Company’s shareholders not later than the annual meeting next
following such Board action if such shareholder approval is
required by any federal or state law or regulation (including,
without limitation, Rule 16b-3 or Section 422 of the Code) or the
rules of any stock exchange or automated quotation system on which
the Shares may then be listed or quoted), and the Board may
otherwise, in its discretion, determine to submit other such
changes to the Plan to shareholders for approval; provided that,
without the consent of an affected Participant, no such Board
action may materially and adversely affect the rights of such
Participant under any previously granted and outstanding Award. The
Committee may waive any conditions or rights under, or amend,
alter, suspend, discontinue or terminate any Award theretofore
granted and any Award Agreement relating thereto, except as
otherwise provided in the Plan; provided that, without the consent
of an affected Participant, no such Committee or the Board action
may materially and adversely affect the rights of such Participant
under such Award.

 




 

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(f)           Limitation
on Rights Conferred Under Plan. Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any
Eligible Person or Participant the right to continue as an Eligible
Person or Participant or in the employ or service of the Company or
a Related Entity; (ii) interfering in any way with the right
of the Company or a Related Entity to terminate any Eligible
Person’s or Participant’s Continuous Service at any
time, (iii) giving an Eligible Person or Participant any claim
to be granted any Award under the Plan or to be treated uniformly
with other Participants and Employees, or (iv) conferring on a
Participant any of the rights of a shareholder of the Company
unless and until the Participant is duly issued or transferred
Shares in accordance with the terms of an Award.

 


(g)           Unfunded
Status of Awards; Creation of Trusts. The Plan is intended
to constitute an “unfunded” plan for incentive and
deferred compensation. With respect to any payments not yet made to
a Participant or obligation to deliver Shares pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize
the creation of trusts and deposit therein cash, Shares, other
Awards or other property, or make other arrangements to meet the
Company’s obligations under the Plan. Such trusts or other
arrangements shall be consistent with the “unfunded”
status of the Plan unless the Committee otherwise determines with
the consent of each affected Participant. The trustee of such
trusts may be authorized to dispose of trust assets and reinvest
the proceeds in alternative investments, subject to such terms and
conditions as the Committee may specify and in accordance with
applicable law.

 


(h)           Code
Section 409A. It is intended that all Awards issued under
the Plan be in a form and administered in a manner that will comply
with the requirements of Section 409A of the Code, or the
requirements of an exception to Section 409A of the Code, and the
Award Agreement and this Plan will be construed and administered in
a manner that is consistent with and gives effect to such intent.
The Committee is authorized to adopt rules or regulations deemed
necessary or appropriate to qualify for an exception from or to
comply with the requirements of Section 409A of the Code. With
respect to an Award that constitutes a deferral of compensation
subject to Section 409A of the Code: (i) if any amount is payable
under such Award upon a termination of service, a termination of
service will be treated as having occurred only at such time the
Participant has experienced a “separation from service”
as such term is defined for purposes of Section 409A of the Code;
(ii) if any amount is payable under such Award upon a disability, a
disability will be treated as having occurred only at such time the
Participant has experienced a “disability” as such term
is defined for purposes of Section 409A of the Code; (iii) if any
amount is payable under such Award on account of the occurrence of
a Change in Control, a Change in Control will be treated as having
occurred only at such time a “change in the ownership or
effective control of the corporation or in the ownership of a
substantial portion of the assets of the corporation” has
occurred as such terms are defined for purposes of Section 409A of
the Code, (iv) if any amount becomes payable under such Award on
account of a Participant’s separation from service at such
time as the Participant is a “specified employee”
within the meaning of Section 409A of the Code, then no payment
shall be made, except as permitted under Section 409A of the Code,
prior to the first business day after the earlier of (y) the date
that is six months after the date of the Participant’s
separation from service or (z) the Participant’s death, (v)
any right to receive any installment payments under this Plan shall
be treated as a right to receive a series of separate payments and,
accordingly, each installment payment hereunder shall at all times
be considered a separate and distinct payment, and (vi) no
amendment to or payment under such Award will be made except and
only to the extent permitted under Section 409A of the
Code.

 


Notwithstanding the
foregoing, the tax treatment of the benefits provided under the
Plan or any Award Agreement is not warranted or guaranteed, and in
no event shall the Company be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred
by the Participant on account of non-compliance with Section 409A
of the Code.

 




 

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(i)           Nonexclusivity
of the Plan. Neither the adoption of the Plan by the Board
nor its submission to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the
Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable including incentive
arrangements and awards which do not qualify under Section 162(m)
of the Code.

 


(j)           Payments
in the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture
of an Award with respect to which a Participant paid cash or other
consideration, the Participant shall be repaid the amount of such
cash or other consideration. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award. 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.

 


(k)         
Investment Representations.
The Company shall be under no obligation to issue any Shares
covered by any Award unless the Shares to be issued pursuant to
Awards granted under the Plan have been effectively registered
under the Securities Act of 1933, as amended, or the Participant
shall have made such written representations to the Company (upon
which the Company believes it may reasonably rely) as the Company
may deem necessary or appropriate for purposes of confirming that
the issuance of such Shares will be exempt from the registration
requirements of that Act and any applicable state securities laws
and otherwise in compliance with all applicable laws, rules and
regulations, including but not limited to that the Participant is
acquiring the Shares for his or her own account for the purpose of
investment and not with a view to, or for sale in connection with,
the distribution of any such Shares.

 


(l)           Registration.
If the Company shall deem it necessary or desirable to register
under the Securities Act of 1933, as amended, or other applicable
statutes any Shares issued or to be issued pursuant to Awards
granted under the Plan, or to qualify any such Shares for exemption
from the Securities Act of 1933, as amended, or other applicable
statutes, then the Company shall take such action at its own
expense. The Company may require from each recipient of an Award,
or each holder of Shares acquired pursuant to the Plan, such
information in writing for use in any registration statement,
prospectus, preliminary prospectus or offering circular as is
reasonably necessary for that purpose and may require reasonable
indemnity to the Company and its officers and directors from that
holder against all losses, claims, damage and liabilities arising
from use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made. In addition, the Company
may require of any such person that he or she agree that, without
the prior written consent of the Company or the managing
underwriter in any public offering of Shares, he or she will not
sell, make any short sale of, loan, grant any option for the
purchase of, pledge or otherwise encumber, or otherwise dispose of,
any Shares during the 180 day period commencing on the effective
date of the registration statement relating to the underwritten
public offering of securities. Without limiting the generality of
the foregoing provisions of this Section 10(l), if in connection
with any underwritten public offering of securities of the Company
the managing underwriter of such offering requires that the
Company’s directors and officers enter into a lock-up
agreement containing provisions that are more restrictive than the
provisions set forth in the preceding sentence, then (a) each
holder of Shares acquired pursuant to the Plan (regardless of
whether such person has complied or complies with the provisions of
clause (b) below) shall be bound by, and shall be deemed to have
agreed to, the same lock-up terms as those to which the
Company’s directors and officers are required to adhere; and
(b) at the request of the Company or such managing underwriter,
each such person shall execute and deliver a lock-up agreement in
form and substance equivalent to that which is required to be
executed by the Company’s directors and
officers.

 




 

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(m)         
Placement of Legends; Stop Orders;
etc. Each Share to be issued pursuant to Awards granted
under the Plan may bear a reference to the investment
representation made in accordance with Section 10(k) in addition to
any other applicable restriction under the Plan, the terms of the
Award and to the fact that no registration statement has been filed
with the Securities and Exchange Commission in respect to such
Share. All Shares or other securities delivered under the Plan
shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of any stock exchange upon
which the Share is then listed, and any applicable federal or state
securities law, and the Committee may cause a legend or legends to
be put on any certificates or recorded in connection with
book-entry accounts representing the shares to make appropriate
reference to such restrictions.

 


(n)           Uncertificated
Shares. To the extent that the Plan provides for issuance of
certificates to reflect the transfer of Shares, the transfer of
such Shares may be effected on a noncertificated basis, to the
extent not prohibited by applicable law.

 


(o)          
Governing Law. The
validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware
without giving effect to principles of conflict of laws, and
applicable federal law.

 


(p)           Elections
and Notices. Notwithstanding anything to the contrary
contained in this Plan, all elections and notices of every kind
shall be made on forms prepared by the Company or the General
Counsel, Secretary or Assistant Secretary, or their respective
delegates or shall be made in such other manner as permitted or
required by the Company or the General Counsel, Secretary or
Assistant Secretary, or their respective delegates, including but
not limited to elections or notices through electronic means, over
the Internet or otherwise. An election shall be deemed made when
received by the Company (or its designated agent, but only in cases
where the designated agent has been appointed for the purpose of
receiving such election), which may waive any defects in form. The
Company may limit the time an election may be made in advance of
any deadline.

 


Where
any notice or filing required or permitted to be given to the
Company under the Plan, it shall be delivered to the principal
office of the Company, directed to the attention of the General
Counsel of the Company or his or her successor. Such notice shall
be deemed given on the date of delivery.

 


Notice
to the Participant shall be deemed given when mailed (or sent by
telecopy) to the Participant’s work or home address as shown
on the records of the Company or, at the option of the Company, to
the Participant’s e-mail address as shown on the records of
the Company.

 




 

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It is
the Participant’s responsibility to ensure that the
Participant’s addresses are kept up to date on the records of
the Company. In the case of notices affecting multiple
Participants, the notices may be given by general distribution at
the Participants’ work locations.

 


(q)         
Non-U.S. Laws. The
Committee shall have the authority to adopt such modifications,
procedures, and subplans as may be necessary or desirable to comply
with provisions of the laws of foreign countries in which the
Company or its Subsidiaries may operate to assure the viability of
the benefits from Awards granted to Participants performing
services in such countries and to meet the objectives of the
Plan.

 


(r)           Venue.
The Company and the Participant to whom an award under this Plan is
granted, for themselves and their successors and assigns,
irrevocably submit to the exclusive and sole jurisdiction and venue
of the state or federal courts of Delaware with respect to any and
all disputes arising out of or relating to this Plan, the subject
matter of this Plan or any awards under this Plan, including but
not limited to any disputes arising out of or relating to the
interpretation and enforceability of any awards or the terms and
conditions of this Plan. To achieve certainty regarding the
appropriate forum in which to prosecute and defend actions arising
out of or relating to this Plan, and to ensure consistency in
application and interpretation of the Governing Law to the Plan,
the parties agree that (a) sole and exclusive appropriate venue for
any such action shall be an appropriate federal or state court in
Delaware, and no other, (b) all claims with respect to any such
action shall be heard and determined exclusively in such Delaware
court, and no other, (c) such Delaware court shall have sole and
exclusive jurisdiction over the person of such parties and over the
subject matter of any dispute relating hereto and (d) that the
parties waive any and all objections and defenses to bringing any
such action before such Delaware court, including but not limited
to those relating to lack of personal jurisdiction, improper venue
or forum non conveniens.

 


(s)           Plan
Effective Date and Shareholder Approval; Termination of
Plan. The Plan shall become effective on September 25, 2018
(“Effective Date”), subject to subsequent approval,
within 12 months of its adoption by the Board, by shareholders of
the Company eligible to vote in the election of directors, by a
vote sufficient to meet the requirements of Section 422 of the
Code, Rule 16b-3 under the Exchange Act (if applicable), applicable
requirements under the rules of any stock exchange or automated
quotation system on which the Shares may be listed or quoted, and
other laws, regulations, and obligations of the Company applicable
to the Plan. Awards may be granted subject to shareholder approval,
but may not be exercised or otherwise settled in the event the
shareholder approval is not obtained. The Plan shall terminate at
the earliest of (a) such time as no Shares remain available for
issuance under the Plan, (b) termination of this Plan by the Board,
or (c) the tenth anniversary of the Effective Date. Awards
outstanding upon expiration of the Plan shall remain in effect
until they have been exercised or terminated, or have
expired.

 


Adopted
September 2018

 


 




 

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