NovaMed, Inc. 2005 Restricted Stock Plan



 Exhibit 4.2 
  

NOVAMED, INC. 
 2005 RESTRICTED
STOCK PLAN 







 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page


	 ARTICLE I
	 	ESTABLISHMENT	  	1
			
	 ARTICLE II
	 	DEFINITIONS	  	1
			
	 ARTICLE III
	 	ADMINISTRATION	  	5
	       3.1
	 	Committee Structure and Authority	  	5
			
	 ARTICLE IV
	 	SHARES SUBJECT TO PLAN	  	7
	       4.1
	 	Number of Shares	  	7
	       4.2
	 	Release of Shares	  	7
	       4.3
	 	Restrictions on Shares	  	7
	       4.4
	 	Stockholder Rights	  	 
	       4.5
	 	Anti-Dilution	  	7
			
	 ARTICLE V
	 	ELIGIBILITY	  	8
	       5.1
	 	Eligibility	  	8
			
	 ARTICLE VI
	 	[reserved]	  	8
			
	 ARTICLE VII
	 	STOCK AWARDS	  	8
	       7.1
	 	General	  	8
	       7.2
	 	Grant	  	8
	       7.3
	 	Terms and Conditions	  	9
			
	 ARTICLE VIII
	 	PERFORMANCE AWARDS	  	9
	       8.1
	 	Performance Conditions	  	9
	       8.2
	 	Performance Awards Granted to Designated Covered Employees	  	9
	       8.3
	 	Written Determinations	  	10
			
	 ARTICLE IX
	 	CHANGE IN CONTROL PROVISIONS	  	10
	       9.1
	 	Impact of Event	  	10
	       9.2
	 	Definition of Change in Control	  	11
	       9.3
	 	Change in Control Price	  	11
			
	 ARTICLE X
	 	MISCELLANEOUS	  	12
	       10.1
	 	Amendments and Termination	  	12
	       10.2
	 	Unfunded Status of Plan	  	12
	       10.3
	 	Limits on Transferability	  	12
	       10.4
	 	General Provisions.	  	12
	       10.5
	 	Mitigation of Excise Tax	  	14
	       10.6
	 	Awards in Substitution for Awards Granted by Other Entities	  	14
	       10.7
	 	Procedure for Adoption	  	14
	       10.8
	 	Procedure for Withdrawal	  	14

  

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	       10.9
	 	Delay	  	15
	       10.10
	 	Headings	  	15
	       10.11
	 	Severability	  	15
	       10.12
	 	Successors and Assigns	  	15
	       10.13
	 	Entire Agreement	  	15

  

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 NOVAMED, INC. 
 2005 RESTRICTED STOCK PLAN 
  
 ARTICLE I 
  
 ESTABLISHMENT

  
 NovaMed, Inc. (the “Company”), a Delaware
corporation, hereby establishes the NovaMed, Inc. 2005 Restricted Stock Plan (the “Plan”). The purpose of the Plan is to promote the overall financial objectives of the Company, its stockholders and its Affiliates by motivating
those persons selected to participate in the Plan to achieve long-term growth in the stockholder equity in the Company and by retaining the association of those individuals who are instrumental in achieving this growth. The Plan is adopted as of
October 27, 2005 (the “Effective Date”). 
  
 ARTICLE II 
  
 DEFINITIONS

  
 For purposes of the Plan, the following terms are defined
as set forth below: 
  
 “Affiliate” means any
individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the Company, including, without limitation, any stockholder of an affiliated group of which the Company is a common parent corporation as provided in Section 1504 of the Code. 
  
 “Agreement” or “Award Agreement” means,
individually or collectively, any agreement entered into pursuant to the Plan pursuant to which an Award is granted to a Participant. 
  
 “Award” means a Stock Award. 
  
 “Beneficiary” means the person, persons, trust or trusts which 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 are transferred if and to the extent permitted hereunder. If, upon a Participant’s death,
there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means person, persons, trust or trust entitled by will or the laws of descent and distribution to receive such benefits. 
  
 “Board of Directors” or “Board” means the
Board of Directors of the Company. 
  
 “Cause”
means, for purposes of whether and when a Participant has incurred a Termination of Employment for Cause, any act or omission which permits the Company or an Affiliate to terminate the Participant’s employment with the Company or an Affiliate
for “cause” as defined in such agreement or arrangement, or in the event there is no such agreement or 








 
arrangement or the agreement or arrangement does not define the term “cause” or a substantially equivalent term, then Cause means, unless otherwise
defined in the Award Agreement with respect to the corresponding Award: 
  
 (a) any act or failure to act deemed to constitute cause under the Company’s or an Affiliate’s established practices, policies or guidelines applicable to the Participant; 
  
 (b) breach of a covenant made by the Participant in conjunction with the
grant of an Award or the transfer of Shares hereunder; 
  
 (c) the
Participant’s gross negligence in the performance of his duties or material failure or willful refusal to perform his duties; 
  
 (d) the determination by the Committee in the exercise of its reasonable judgment that Participant has committed an act that (i) negatively affects
the Company’s or Affiliate’s business or reputation or (ii) indicates alcohol or drug abuse by Participant that adversely affects his performance hereunder; or 
  
 (e) the determination by the Committee in the exercise of its reasonable judgment that Participant has committed an act or
acts constituting a felony or other act involving dishonesty, disloyalty or fraud against the Company or an Affiliate. 
  
 “Change in Control” and “Change in Control Price” have the meanings set forth in Sections 9.2 and 9.3, respectively.

  
 “Code” or “Internal Revenue
Code” means the Internal Revenue Code of 1986, as amended, any Treasury Regulations (including proposed regulations) thereunder and any subsequent Internal Revenue Code. 
  
 “Commission” means the Securities and Exchange Commission or any successor agency. 
  
 “Committee” means the person or persons appointed to
administer the Plan, as further described herein. 
  
 “Common Stock” means the regular voting common stock, $0.01 par value per share, of the Company, whether presently or hereafter issued, and any other stock or security resulting from adjustment thereof as described
hereinafter or the equity of any successor to the Company which is designated for the purposes of this Plan. 
  
 “Company” means NovaMed, Inc., a Delaware corporation, and includes any successor or assignee entity or entities into which the Company
may be merged, changed or consolidated; any entity for whose securities the securities of the Company shall be exchanged; and any assignee of or successor to substantially all of the assets of the Company. 
  
 “Covered Employee” means a Participant who is a
“covered employee” within the meaning of Section 162(m) of the Code. 
  

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 “Disability” means a mental or physical illness that entitles the Participant to receive
benefits under the long term disability plan of the Company or an Affiliate, or if the Participant is not covered by such a plan or the Participant is not an employee of the Company or an Affiliate, a mental or physical illness that renders a
Participant totally and permanently incapable of performing the Participant’s duties for the Company or an Affiliate. Notwithstanding the foregoing, a Disability will not qualify under this Plan if it is the result of (i) a willfully
self-inflicted injury or willfully self-induced sickness; or (ii) an injury or disease contracted, suffered, or incurred, while participating in a criminal offense. The determination of Disability will be made by the Committee. The
determination of Disability for purposes of this Plan will not be construed to be an admission of disability for any other purpose. 
  
 “Effective Date” means October 27, 2005. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 

 
 “Fair Market Value” means, unless otherwise determined by
the Committee, the closing sale price per share reported on a consolidated basis for stock listed on the principal stock exchange or market on which Common Stock is traded on the date as of which such value is being determined or, if there is no
sale on that date, then on the last previous day on which a sale was reported. 
  
 “Grant Date” means the date as of which an Award is granted pursuant to the Plan. 
  
 “NASDAQ” means the Nasdaq Stock Market, including the Nasdaq National Market. 
  
 “Participant” means a person who satisfies the eligibility
conditions of Article V and to whom an Award has been granted by the Committee under this Plan, and in the event a Representative is appointed for a Participant or another person becomes a Representative, then the term “Participant” shall
mean such Representative. The term shall also include a trust for the benefit of the Participant, a partnership the interest of which is held by or for the benefit of the Participant, the Participant’s parents, spouse or descendants, or a
custodian under a uniform gifts to minors act or similar statute for the benefit of the Participant’s descendants, to the extent permitted by the Committee and not inconsistent with the Rule 16b-3. Notwithstanding the foregoing, the term
“Termination of Employment” shall mean the Termination of Employment of the person to whom the Award was originally granted. 
  
 “Performance Award” means a right, granted to a Participant under Article VIII, to receive an Award based upon performance criteria
specified by the Committee. 
  
 “Plan” means the
NovaMed, Inc. 2005 Restricted Stock Plan, as herein set forth and as may be amended from time to time. 
  
 “Representative” means (a) the person or entity acting as the executor or administrator of a Participant’s estate pursuant to
the last will and testament of a Participant or pursuant to the laws of the jurisdiction in which the Participant had the Participant’s primary residence at the date of the Participant’s death; (b) the person or entity acting as the
guardian or temporary guardian of a Participant; (c) the person or entity which is the Beneficiary of the Participant upon 

  

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or following the Participant’s death; or (d) any person to whom an Award has been transferred with the permission of the Committee or by operation
of law; provided that only one of the foregoing shall be the Representative at any point in time as determined under applicable law and recognized by the Committee. Any Representative shall be subject to all terms and conditions applicable to the
Participant. 
  
 “Retirement” means the
Participant’s Termination of Employment after attaining either the normal retirement age or the early retirement age as defined in the principal (as determined by the Committee) tax-qualified plan of the Company or an Affiliate, if the
Participant is covered by such plan, and if the Participant is not covered by such a plan, then age 65, or age 55 with the accrual of 10 years of service. 
  
 “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. 
  
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 
  
 “Shares” means shares of Common Stock. 
  
 “Stock Award” means an Award denominated in Shares. 
  
 “Termination of Employment” means the occurrence of any act or event, whether pursuant to an employment
agreement or otherwise, that actually or effectively causes or results in the person’s ceasing, for whatever reason, to be an officer, independent contractor, board member, consultant, director or employee of the Company or of any Affiliate, or
to be an officer, independent contractor, board member, consultant, director or employee of any entity that provides services to the Company or an Affiliate, including, without limitation, death, Disability, dismissal, severance at the election of
the Participant, Retirement, or severance as a result of the discontinuance, liquidation, sale or transfer by the Company or its Affiliates of all businesses owned or operated by the Company or its Affiliates. With respect to any person who is not
an employee with respect to the Company or an Affiliate, the Agreement will establish what act or event shall constitute a Termination of Employment for purposes of the Plan. A transfer of employment from the Company to an Affiliate, or from an
Affiliate to the Company, shall not be a Termination of Employment, unless expressly determined by the Committee. A Termination of Employment shall occur for an employee who is employed by an Affiliate if the Affiliate shall cease to be an Affiliate
and the Participant does not immediately thereafter become an employee of the Company or an Affiliate. 
  
 “Voluntary Termination of Employment” means a Termination of Employment at the election of the Participant, including, with limitation,
resignation by the Participant, but excluding Retirement. 
  
 In
addition, certain other terms used herein have definitions given to them in the first place in which they are used. 
  

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 ARTICLE III 
  
 ADMINISTRATION 
  
 3.1 Committee Structure and Authority. The Plan shall be administered by the Committee, which shall be composed of two or more members of the Board
of Directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act and an “outside director” for purposes of the deduction of compensation under Section 162(m) of the Code. The
Committee shall be the Compensation Committee of the Board of Directors, unless such committee does not exist or the Board establishes a committee whose purpose is the administration of this Plan. A majority of the Committee shall constitute a
quorum at any meeting thereof (including by telephone conference) and the acts of a majority of the members present, or acts approved in writing by a majority of the entire Committee without a meeting, shall be the acts of the Committee for purposes
of this Plan. The Committee may authorize any one or more of its stockholders or an officer of the Company to execute and deliver documents on behalf of the Committee. A member of the Committee shall not exercise any discretion respecting himself or
herself under the Plan. In the event that the Compensation Committee of the Board no longer is the Committee, the Board shall have the authority to remove, replace or fill any vacancy of any member of the Committee upon notice to the Committee and
the affected member. Any member of the Committee may resign upon notice to the Board. The Committee may allocate among one or more of its members, or may delegate to one or more of its agents, such duties and responsibilities as it determines.

  
 Among other things, the Committee shall have the authority,
subject to the terms of the Plan: 
  
 (a) to
select those persons to whom Awards may be granted from time to time; 
  
 (b) to determine whether and to what extent Awards are to be granted hereunder; 
  
 (c) to determine the number of Shares to be covered by each Award granted hereunder; 
  
 (d) to determine the terms and conditions of any Award
granted hereunder (including, but not limited to, any restriction, limitation, acceleration, forfeiture or waiver regarding any Award and the Shares relating thereto); 
  
 (e) to adjust the terms and conditions, at any time or from time to time, of any Award, subject to the
limitations of Section 10.1; 
  
 (f) to
determine under what circumstances an Award may be settled in cash or Shares; 
  
 (g) to provide for the forms of Agreement to be utilized in connection with the Plan; 
  

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 (h) to determine whether a Participant has a Disability or a Retirement; 
  
 (i) to determine whether and with what effect an individual
has incurred a Termination of Employment; 
  
 (j)
to determine what securities law requirements are applicable to the Plan, Awards, and the issuance of Shares and to require of a Participant that appropriate action be taken with respect to such requirements; 
  
 (k) to cancel, with the consent of the Participant or as
otherwise provided in the Plan or an Agreement, outstanding Awards; 
  
 (l) to interpret and make final determinations with respect to the remaining number of Shares available under this Plan; 
  
 (m) to require as a condition of the issuance or transfer of a certificate for Shares, the withholding from a Participant of the amount of
any federal, state or local taxes as may be required by law; 
  
 (n) to determine whether the Company or any other person has a right or obligation to purchase Shares from a Participant and, if so, the terms and conditions on which such Shares are to be purchased; 
  
 (o) to determine the restrictions or limitations on the
transfer of Shares; 
  
 (p) to determine whether
an Award is to be adjusted, modified or purchased under the Plan or the terms of an Agreement; 
  
 (q) [reserved]; 
  
 (r) to adopt, amend and rescind such rules and regulations as, in its opinion, may be advisable in the administration of the Plan; and

  
 (s) to appoint and compensate agents,
counsel, auditors or other specialists to aid it in the discharge of its duties. 
  
 The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and
provisions of the Plan and any Award issued under the Plan (and any Agreement) and to otherwise supervise the administration of the Plan. The Committee’s policies and procedures may differ with respect to Awards granted at different times or to
different Participants. 
  
 Any determination made by the
Committee pursuant to the provisions of the Plan shall be made in its sole discretion, and in the case of any determination relating to an Award, may be made at the time of the grant of the Award or, unless in contravention of any express term of
the Plan or an Agreement, at any time thereafter. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Participants. No determination shall be subject to de
novo review if challenged in court. 
  

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 ARTICLE IV 
  
 SHARES SUBJECT TO PLAN 
  

4.1 Number of Shares. Subject to adjustment under Section 4.5, the total number of Shares reserved and available for distribution pursuant
to Awards under the Plan shall be 250,000 Shares, as authorized for issuance on the Effective Date and thereafter from time to time. Such Shares may consist, in whole or in part, of authorized and unissued Shares or shares of treasury stock. Subject
to adjustment under Section 4.5, the maximum number of Shares that may be covered by Awards, in the aggregate, granted to any one Participant during any calendar year shall be 250,000 Shares. 
  
 4.2 Release of Shares. If any Shares that are subject to any Award are
forfeited, if any Award otherwise terminates without issuance of Shares being made to the Participant, or if any Shares are received by the Company in connection with the satisfaction of a tax withholding obligation, such Shares, will not again be
available for distribution in connection with Awards under the Plan. 
  
 4.3 Restrictions on Shares. Shares issued under the Plan shall be subject to the terms and conditions specified herein and to such other terms, conditions and restrictions as the Committee in its discretion may determine or provide
in an Award Agreement. The Company shall not be required to issue or deliver any certificates for Shares, cash or other property prior to: (i) the Participant executing any agreement that the Committee has required the Participant to execute as
a condition for the grant of Shares; (ii) the listing of such shares on any stock exchange or NASDAQ (or other public market) on which the Shares may then be listed (or regularly traded), (iii) the completion of any registration or
qualification of such Shares under federal or state law, or any ruling or regulation of any government body which the Committee determines to be necessary or advisable, and (iv) the satisfaction of any applicable withholding obligation. The
Company may cause any certificate for any Shares to be delivered to be properly marked with a legend or other notation reflecting the limitations on transfer of such Shares as provided in this Plan or as the Committee may otherwise require. The
Committee may require a Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with applicable law or otherwise. Fractional shares
shall not be delivered, but shall be rounded to the next lower whole number of shares. 
  
 4.4 [Reserved] 
  
 4.5
Anti-Dilution. In the event of any Company stock dividend, stock split, reverse stock split, combination or exchange of shares, recapitalization or other change in the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or distribution to Company stockholders other than a normal cash than dividend), sale by the Company of all or a substantial portion of its assets (measured either on a
stand-alone or consolidated basis), reorganization, rights offering, a partial 

  

 7 








 
or complete liquidation, or any other corporate transaction or event involving the Company and having an effect similar to any of the foregoing, then the
Committee may adjust or substitute, as the case may be, the number of Shares available for Awards under the Plan, the number of Shares covered by outstanding Awards, and any other characteristics or terms of the Awards as the Committee shall deem
necessary or appropriate to reflect equitably the effects of such changes to the Participants; provided, however, that the Committee may limit any such adjustment so as to maintain the deductibility of the Awards under Section 162(m) of the
Code, and that any fractional shares resulting from such adjustment shall be eliminated by rounding to the next lower whole number of shares with appropriate payment for such fractional share as shall reasonably be determined by the Committee.

  
 ARTICLE V 
  
 ELIGIBILITY 
  
 5.1 Eligibility. Only Thomas S. Hall shall be eligible to participate
in the Plan and be granted Awards thereunder. 
  
 ARTICLE
VI 
  
 [reserved] 
  
 ARTICLE VII 
  
 STOCK AWARDS 
  
 7.1 General. The Committee shall have authority to grant Stock Awards
under the Plan at any time or from time to time. Stock Awards may be directly issued under the Plan subject to such terms, conditions, performance requirements, restrictions, forfeiture provisions, contingencies and limitations as the Committee
shall determine. Stock Awards may be issued that are fully and immediately vested upon issuance or that vest in one or more installments over the Participant’s period of employment or other service to the Company or upon the attainment of
specified performance objectives, or the Company may issue Stock Awards that entitle the Participant to receive a specified number of vested Shares upon the attainment of one or more performance goals or service requirements established by the
Committee. 
  
 7.2 Grant. The grant of a Stock Award shall
occur as of the date the Committee determines. Each Stock Award granted under the Plan shall be evidenced by an Agreement, in a form approved by the Committee, which shall embody the terms and conditions of such Stock Award and which shall be
subject to the express terms and conditions set forth in the Plan. Such Agreement shall become effective upon execution by the Company and the Participant. Shares representing a Stock Award shall be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration on issuance of one or more certificates (which may bear appropriate legends referring to the terms, conditions and restrictions applicable to such Award). The Committee may require that any such
certificates be held in custody by the Company until any restrictions thereon shall have lapsed and that the Participant deliver a stock power, endorsed in blank, relating to the Shares covered by such Award. 
  

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 7.3 Terms and Conditions. A Stock Award may be issued in exchange for any consideration which the
Committee may deem appropriate in each individual instance, including, without limitation: (i) cash or cash equivalents; (ii) past services rendered to the Company or any Affiliate; or (iii) future services to be rendered to the
Company or any Affiliate. A Stock Award that is subject to restrictions on transfer and/or forfeiture provisions may be referred to as an award of “Restricted Stock.” 
  
 ARTICLE VIII 
  
 PERFORMANCE AWARDS 
  
 8.1 Performance Conditions. The right of a Participant to exercise or receive a grant or settlement of any Award, and its timing, may be subject to
performance conditions specified by the Committee. The Committee may use business criteria and other measures of performance it deems appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase
amounts payable under any Award subject to performance conditions, except as limited under Sections 8.2 and 8.3 hereof in the case of a Performance Award intended to qualify under Section 162(m) of the Code. 
  
 8.2 Performance Awards Granted to Designated Covered Employees. If the
Committee determines that a Performance Award to be granted to a person the Committee regards as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the grant
and/or settlement of such Performance Award shall be contingent upon achievement of pre-established performance goals and other terms set forth in this Section 8.2. 
  
 (a) Performance Goals Generally. The performance goals for such Performance Awards shall consist of
one or more business criteria and a targeted level or levels of performance with respect to such criteria, as specified by the Committee consistent with this Section 8.2. Performance goals shall be objective and shall otherwise meet the
requirements of Section 162(m) of the Code, including the requirement that the level or levels of performance targeted by the Committee result in the performance goals being “substantially uncertain.” At the time the performance goals
are established, the Committee may determine that more than one performance goal must be achieved as a condition to settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to
different Participants. 
  
 (b) Business
Criteria. One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or business units of the Company (except with respect to the total stockholder return and earnings per share
criteria), shall be used exclusively by the Committee in establishing performance goals for such Performance Awards: (1) total stockholder return; (2) such total stockholder return as compared to total return (on a comparable basis) of a
publicly available index; (3) net income; (4) pre-tax earnings; (5) EBITDA; (6) pre-tax operating earnings after 

  

 9 








 
interest expense and before business and extraordinary or special items; (7) operating margin; (8) earnings per share; (9) return on equity;
(10) return on capital; (11) return on investment; (12) operating income; (13) earnings per share; (14) working capital; and (15) total revenues. 
  
 (c) Performance Period; Timing for Established Performance Goals. Achievement of performance goals in
respect of such Performance Awards shall be measured over such periods as may be specified by the Committee. Performance goals shall be established on or before the dates that are required or permitted for “performance-based compensation”
under Section 162(m) of the Code. 
  
 (d)
Settlement of Performance Awards; Other Terms. Settlement of Performance Awards may be in cash or Shares, or other Awards, or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable in respect of a Performance Award subject to this Section 8.2. The Committee shall specify the
circumstances in which such Performance Awards shall be forfeited or paid in the event of a termination of employment or a Change in Control prior to the end of a performance period or settlement of Performance Awards, and other terms relating to
such Performance Awards. 
  
 8.3 Written Determinations.
All determinations by the Committee as to the establishment of performance goals and the potential Performance Awards related to such performance goal and as to the achievement of performance goals relating to such Awards, shall be made in writing
in the case of any Award intended to qualify under Section 162(m) of the Code. The Committee may not delegate any responsibility relating to such Performance Awards. 
  
 ARTICLE IX 
  
 CHANGE IN CONTROL PROVISIONS 
  
 9.1 Impact of Event. An Agreement may provide that in the event of a Change in Control (as defined in Section 9.2): 
  
 (a) [reserved]. 
  
 (b) All restrictions applicable to any outstanding Stock
Awards shall be removed, the effect of which shall be that the Shares relating to such Awards shall become fully vested and transferable. 
  
 (c) Outstanding Awards shall be subject to any agreement of merger or reorganization that effects such Change in Control, which agreement
shall provide for: 
  
 (i) The continuation of
outstanding Awards by the Company, if the Company is a surviving corporation; 
  

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 (ii) The assumption of outstanding Awards by the surviving corporation or its parent or
subsidiary; 
  
 (iii) The substitution by the
surviving corporation or its parent or subsidiary of equivalent awards for the outstanding Awards; or 
  
 (iv) Settlement of each Share subject to an outstanding Award for the Change in Control Price (less, to the extent applicable, the per
share exercise price), or, if the per share exercise price equals or exceeds the Change in Control Price, the outstanding Award shall terminate and be canceled. 
  
 (d) In the absence of any agreement of merger or reorganization effecting such Change in Control, each Share
subject to an outstanding Award shall be settled for the Change in Control Price (less, to the extent applicable, the per share exercise price), or, if the per share exercise price equals or exceeds the Change in Control Price, the outstanding Award
shall terminate and be canceled. 
  
 9.2 Definition of Change
in Control. For purposes of this Plan, unless otherwise specified in the Agreement with respect to the corresponding Award, a “Change in Control” shall be deemed to have occurred if (a) any corporation, person or other
entity (other than the Company, a majority-owned subsidiary of the Company or any of its subsidiaries, or an employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate), including a “group” as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the beneficial owner of Shares representing more than fifty percent of the combined voting power of the Company’s then outstanding securities; (b)(i) the
Company approves, in any transaction or series of related transactions, a definitive agreement to merge or consolidate the Company with or into another entity other than a majority-owned subsidiary of the Company, or to sell or otherwise dispose of
all or substantially all of the Company’s assets, and (ii) the persons who were the members of the Board of Directors prior to such approval do not represent a majority of the Board of Directors of the surviving, resulting or acquiring
entity or the parent thereof; or (c) the stockholders of the Company approve a plan of liquidation of the Company. 
  
 9.3 Change in Control Price. For purposes of the Plan, unless otherwise specified in the Agreement with respect to the corresponding Award,
“Change in Control Price” means the higher of (a) the highest reported sales price of a Share in any transaction reported on the principal exchange on which such Shares are listed or on NASDAQ during the sixty (60)-day period
prior to and including the date of a Change in Control or (b) if the Change in Control is the result of a tender or exchange offer, merger, consolidation, liquidation or sale of all or substantially all of the assets of the Company (in each
case a “Transaction”), the highest price per Share paid in such Transaction. To the extent that the consideration paid in any Transaction consists all or in part of securities or other non-cash consideration, the value of such
securities or other non-cash consideration shall be determined in the sole discretion of the Committee. 
  

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 ARTICLE X 
  
 MISCELLANEOUS 
  
 10.1 Amendments and Termination. The Board may amend, alter or discontinue the Plan at any time, but no amendment, alteration or discontinuation
shall be made which would impair the rights of a Participant under an Award theretofore granted without the Participant’s consent, except such an amendment (a) made to avoid an expense charge to the Company or an Affiliate, (b) made
to cause the Plan to qualify for the exemption provided by Rule 16b-3 or (c) made to permit the Company or an Affiliate a deduction under the Code. In addition, no such amendment shall be made without the approval of the Company’s
stockholders to the extent such approval is required by law or agreement. 
  
 The Committee may amend, alter or discontinue the Plan or an Award at any time on the same conditions and limitations (and exceptions to limitations) as apply to the Board’s authority to amend the Plan and
further subject to any approval or limitations the Board may impose. 
  
 10.2 Unfunded Status of Plan. It is intended that the Plan be an “unfunded” plan for incentive and deferred compensation. The Committee may authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Shares or make payments; provided, however, that, unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Plan.

  
 10.3 Limits on Transferability. Unless otherwise
provided in this Plan or in an Agreement, no Award shall be subject to the claims of Participant’s creditors and no Award may be sold, transferred, assigned, alienated, encumbered, hypothecated, gifted, conveyed, pledged or disposed of in any
way other than by will or the laws of descent and distribution or to a Representative upon the death of the Participant. 
  
 10.4 General Provisions. 
  
 (a) Representation. The Committee may require each person purchasing or receiving Shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the Shares without a view to the distribution thereof. The certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on
transfer. 
  
 (b) No Additional
Obligation. Nothing contained in the Plan shall prevent the Company or an Affiliate from adopting other or additional compensation arrangements for its employees. 
  
 (c) Withholding. No later than the date as of which an amount first becomes includable in the gross
income of the Participant for income tax purposes with respect to any Award, the Participant shall pay to the Company (or other entity identified by the Committee), or make arrangements satisfactory to the Company or other entity identified by the
Committee regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount required in order for the Company or an Affiliate to obtain a current deduction. Unless otherwise
determined 

  

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by the Committee, withholding obligations may be settled with Shares, including Shares that are part of the Award that gives rise to the withholding
requirement, provided that any applicable requirements under Section 16 of the Exchange Act are satisfied. The obligations of the Company under the Plan will be conditional on such payment or arrangements, and the Company and its Affiliates
will, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and
its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. 
  
 (d) Representative. The Committee shall establish such procedures as it deems appropriate for a Participant to designate a
Representative to whom any amounts payable in the event of the Participant’s death are to be paid. 
  
 (e) Controlling Law. The Plan and all Awards made and actions taken thereunder will be governed by and construed in accordance with
the laws of the State of Delaware (other than its law respecting choice of law). The Plan shall be construed to comply with all applicable law and to avoid liability to the Company, an Affiliate or a Participant or loss of a deduction, including,
without limitation, liability under Section 16(b) of the Exchange Act. 
  
 (f) Offset. Any amounts owed to the Company or an Affiliate by the Participant of whatever nature may be offset by the Company from the value of any Shares, cash or other thing of value under this Plan or an
Agreement to be transferred to the Participant, and no Shares, cash or other thing of value under this Plan or an Agreement shall be transferred unless and until all disputes between the Company and the Participant have been fully and finally
resolved and the Participant has waived all claims to such against the Company or an Affiliate. 
  
 (g) No Rights with Respect to Continuance of Employment. Nothing contained herein shall be deemed to alter the relationship between
the Company or an Affiliate and a Participant, or the contractual relationship between a Participant and the Company or an Affiliate if there is a written contract regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment between the Company or an Affiliate and a Participant. The Company or an Affiliate and each of the Participants continue to have the right to terminate the employment or service relationship at any time for any
reason, except as provided in a written contract. The Company or an Affiliate shall have no obligation to retain the Participant in its employ or service as a result of this Plan. There shall be no inference as to the length of employment or service
hereby, and the Company or an Affiliate reserves the same rights to terminate the Participant’s employment or service as existed prior to the individual’s becoming a Participant in this Plan. 
  
 (h) Fail-Safe. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3, as applicable. To the extent any provision of the Plan or action by the 

  

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Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. Moreover, in the event
the Plan does not include a provision required by Rule 16b-3 to be stated herein, such provision shall be deemed to be incorporated by reference into the Plan with respect to Participants subject to Section 16. 
  
 (i) Right to Capitalize. The grant of an Award shall
in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidation, dissolve, liquidate or sell or transfer all or any part of its business or assets.

  
 10.5 Mitigation of Excise Tax. Subject to any agreement
with a Participant, if any payment or right accruing to a Participant under this Plan (without the application of this Section 10.5), either alone or together with other payments or rights accruing to the Participant from the Company or an
Affiliate (“Total Payments”), would constitute a “parachute payment” (as defined in Section 280G of the Code and regulations thereunder), such payment or right shall be reduced to the largest amount or greatest right
that will result in no portion of the amount payable or right accruing under the Plan being subject to an excise tax under Section 4999 of the Code or being disallowed as a deduction under Section 280G of the Code. The determination of
whether any reduction in the rights or payments under this Plan is to apply shall be made by the Committee in good faith after consultation with the Participant, and such determination will be conclusive and binding on the Participant. The
Participant shall cooperate in good faith with the Committee in making such determination and providing the necessary information for this purpose. The provisions of this Section 10.5 shall apply with respect to any Participant only if, after
reduction for any applicable federal excise tax imposed by Section 4999 of the Code and other federal income tax imposed by the Code, the Total Payments accruing to such Participant would be less than the amount of the Total Payments as reduced
(i) if applicable, pursuant to the provisions of this Section 10.5 and any similar provisions under any other plan of the Company or any Affiliate to mitigate the applicable federal excise tax, and (ii) by federal income taxes (other
than such excise tax). 
  
 10.6 Awards in Substitution for
Awards Granted by Other Entities. Awards may be granted under the Plan from time to time in substitution for awards held by employees, directors or service providers of other entities who are about to become officers, directors, stockholders or
employees of the Company or an Affiliate. The terms and conditions of the Awards so granted may vary from the terms and conditions set forth in this Plan at the time of such grant as the majority of the stockholders of the Committee may deem
appropriate to conform, in whole or in part, to the provisions of the Awards in substitution for which they are granted. 
  
 10.7 Procedure for Adoption. Any Affiliate of the Company may by resolution of such Affiliate’s board of directors with the consent of the
Board of Directors and subject to such conditions as may be imposed by the Board of Directors, adopt the Plan for the benefit of its employees as of the date specified in the resolution. 
  
 10.8 Procedure for Withdrawal. Any Affiliate which has adopted the Plan may, by resolution of the board of directors
of such Affiliate, with the consent of the Board of Directors and subject to such conditions as may be imposed by the Board of Directors, terminate its adoption of the Plan. 
  

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 10.9 Delay. If at the time a Participant incurs a Termination of Employment (other than due to
Cause) or if at the time of a Change in Control, the Participant is subject to “short-swing” liability under Section 16 of the Exchange Act, any time period provided for under the Plan or an Agreement to the extent necessary to avoid
the imposition of liability will be suspended and delayed during the period the Participant would be subject to such liability, but not more than six months and one day. The Company shall have the right to suspend or delay any time period described
in the Plan or an Agreement if the Committee shall determine that the action may constitute a violation of any law or result in liability under any law to the Company, an Affiliate or a shareholder in the Company until such time as the action
required or permitted will not constitute a violation of law or result in liability to the Company, an Affiliate or a shareholder of the Company. The Committee shall have the discretion to suspend the application of the provisions of the Plan
required solely to comply with Rule 16b-3 if the Committee determines that Rule 16b-3 does not apply to the Plan. 
  
 10.10 Headings. The headings contained in this Plan are for reference purposes only and shall not affect the meaning or interpretation of this
Plan. 
  
 10.11 Severability. If any provision of this Plan
is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Plan, and this Plan will be construed as if such invalid or unenforceable provision were omitted. 
  
 10.12 Successors and Assigns. This Plan shall inure to the benefit of
and be binding upon each successor and assign of the Company. All obligations imposed upon a Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors.

  
 10.13 Entire Agreement. This Plan and the Agreement
constitute the entire agreement with respect to the subject matter hereof and thereof, provided that in the event of any inconsistency between the Plan and the Agreement, the terms and conditions of this Plan shall control. 
  
 *      *      *      *      * 
  

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