EXHIBIT 10.1


 





SUCAMPO PHARMACEUTICALS, INC.


 





2016 EQUITY INCENTIVE PLAN


 





ADOPTED BY THE BOARD OF DIRECTORS: APRIL 18, 2016 


APPROVED BY THE STOCKHOLDERS: JUNE 2, 2016 


TERMINATION DATE: APRIL 18, 2026


 





1. GENERAL.


 





(a) Successor to and Continuation of Prior Plan. The Plan is intended as the successor
to and continuation of the Sucampo Pharmaceuticals, Inc. 2006 Stock Incentive Plan, as amended (the “Prior Plan”).
Following the Effective Date, no additional stock awards shall be granted under the Prior Plan. All Awards granted on or after
the Effective Date will be granted under this Plan. All stock awards granted under the Prior Plan will remain subject to the terms
of the Prior Plan.


 


(i) Any shares that would otherwise remain available for future grants under the
Prior Plan on the Effective Date (the “Prior Plan’s Available Reserve”) will cease to be available
under the Prior Plan at such time. Instead, that number of shares of Common Stock equal to the Prior Plan’s Available Reserve
will be added to the Share Reserve (as further described in Section 3(a) below) and will be immediately available for grants and
issuance pursuant to Stock Awards hereunder, up to the maximum number set forth in Section 3(a) below.


 


(ii) In addition, from and after the Effective Date, any shares subject, at such
time, to outstanding stock awards granted under the Prior Plan that (i) expire or terminate for any reason prior to exercise or
settlement; (ii) are not issued because such stock award or any portion thereof is settled in cash or (iii) are forfeited because
of the failure to meet a contingency or condition required to vest such shares or otherwise return to the Company (such shares
the “Returning Shares”) will immediately be added to the Share Reserve (as further described in Section
3(a) below) as and when such shares become Returning Shares, up to the maximum number set forth in Section 3(a) below.


 


(b) Eligible Award Recipients. Employees, Directors and Consultants are eligible
to receive Awards.


 


(c) Available Awards. The Plan provides for the grant of the following Awards:
(i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v)
Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards.


 


(d) Purpose. The Plan, through the grant of Awards, is intended to help the Company
secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the
success of the Company and any Affiliate, and provide a means by which the eligible recipients may benefit from increases in value
of the Common Stock.


 









    	1.



     

    




2. ADMINISTRATION.


 





(a) Administration by Board. The Board will administer the Plan. The Board may
delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).


 


(b) Powers of Board. The Board will have the power, subject to, and within the
limitations of, the express provisions of the Plan:


 


(i) To determine: (A) who will be granted Awards; (B) when and how each Award
will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including
when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares
of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.


 


(ii) To construe and interpret the Plan and Awards granted under it, and to establish,
amend and revoke rules and regulations for administration of the Plan and Awards. The Board, in the exercise of these powers, may
correct any defect, omission or inconsistency in the Plan or in any Award Agreement or in the written terms of a Performance Cash
Award, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective.


 


(iii) To settle all controversies regarding the Plan and Awards granted under
it.


 


(iv) To accelerate, in whole or in part, the time at which an Award may be exercised
or vest (or the time at which cash or shares of Common Stock may be issued in settlement thereof).


 


(v) To suspend or terminate the Plan at any time. Except as otherwise provided
in the Plan or an Award Agreement, suspension or termination of the Plan will not materially impair a


Participant’s rights
under the Participant’s then-outstanding Award without the Participant’s written consent, except as provided in subsection
(viii) below.


 


(vi) To amend the Plan in any respect the Board deems necessary or
advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified
deferred compensation under Section 409A of the Code and/or bringing the Plan or Awards granted under the Plan into
compliance with the requirements for Incentive Stock Options or ensuring that they are exempt from, or compliant with, the
requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of
applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to
Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially
increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of
individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under
the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E)
materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan.
Except as otherwise provided in the Plan or an Award Agreement, no amendment of the Plan will materially impair a
Participant’s rights under an outstanding Award without the Participant’s written consent.


 






    	2.



     

    

(vii) To submit any amendment to the Plan for stockholder approval, including,
but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the
exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees,
(B) Section 422 of the Code regarding “incentive stock options” or (C) Rule 16b-3.


 


(viii) To approve forms of Award Agreements for use under the Plan and to amend
the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant
than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion;
provided, however, that a Participant’s rights under any Award will not be impaired by any such amendment unless (A)
the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the
foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its
sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights, and
(2) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected
Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of
the Code; (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because
it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner
of exemption from, or to bring the Award into compliance with, Section 409A of the Code; or (D) to comply with other applicable
laws or listing requirements.


 


(ix) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the
Plan or Awards.


 


(x) To adopt such procedures and sub-plans as are necessary or appropriate to
permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United
States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement that
are required for compliance with the laws of the relevant foreign jurisdiction).


 


(c) Delegation to Committee. 


 


(i) General. The Board may delegate some or all of the administration of
the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in
connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the
Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee
is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as
applicable). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions
of the Plan, adopted from time to time by the Board or Committee (as applicable). The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers
previously delegated.


 






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(ii) Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely
of two or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more Non-Employee Directors,
in accordance with Rule 16b-3.


 


(d) Delegation to an Officer. The Board may delegate to one (1) or more Officers
the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs
(and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms
of such Awards, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees;
provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common
Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself
or herself. Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee
or the Board, unless otherwise provided in the resolutions approving the delegation authority. The Board may not delegate authority
to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value
pursuant to Section 13(y)(iii) below.


 


(e) Effect of Board’s Decision. All determinations, interpretations and
constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive
on all persons.


 


(f) Cancellation and Re-Grant of Stock Awards. Neither the Board nor any Committee
will have the authority to (i) reduce the exercise or strike price of any outstanding Option or SAR under the Plan or (ii) cancel
any outstanding Option or SAR that has an exercise or strike price greater than the then-current Fair Market Value of the Common
Stock in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the Company have approved such an action
within twelve (12) months prior to such an event.


 


3. SHARES SUBJECT TO THE PLAN. 


 


(a) Share Reserve. 


 


(i) Subject to Section 3(a)(iii) and Section 9(a) relating to Capitalization Adjustments,
the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards will not exceed 10,740,125 shares (the
“Share Reserve”), which number is the sum of (i) 2,050,000 new shares, plus (ii) the number of
shares subject to the Prior Plan’s Available Reserve (which is a total of 3,174,319 shares), plus (iii) the number
of shares that are Returning Shares (which is a maximum amount of 5,515,806 shares), as such shares become available from time
to time.


 


(ii) Subject to Section 3(b), the number of shares of Common Stock available
for issuance under the Plan will be reduced by: (A) one (1) share for each share of Common Stock issued pursuant to an Appreciation
Award granted under the Plan; and (B) one and forty-four hundredths (1.44) shares for each share of Common Stock issued pursuant
to a Full Value Award granted under the Plan. The number of shares of Common Stock available for issuance under the Plan after
the application of this Section 3(a)(ii) will be rounded up to the nearest whole share of Common Stock.


 






    	4.



     

    

(iii) Subject to Section 3(b), the number of shares of Common Stock available
for issuance under the Plan will be increased by: (A) one (1) share for each Prior Plans’ Returning Share or 2016 Plan Returning
Share (as defined in Section 3(b)(i)) subject to an Appreciation Award; and (B) one and forty-four hundredths (1.44) shares for
each Prior Plans’ Returning Share or 2016 Plan Returning Share subject to a Full Value Award. The number of shares of Common
Stock available for issuance under the Plan after the application of this Section 3(a)(iii) will be rounded down to the nearest
whole share of Common Stock.


 







(iv) For clarity, the Share Reserve in this Section 3(a) is a limitation on the
number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting
of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted
by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or
other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.


 


(b) Reversion of Shares to the Share Reserve. 


 


(i) Shares Available for Subsequent Issuance. The following shares of Common Stock
(collectively, the “2016 Plan Returning Shares”) will become available again for issuance under the Plan:
(A) any shares subject to a Stock Award that are not issued because such Stock Award or any portion thereof expires or otherwise
terminates without all of the shares covered by such Stock Award having been issued; (B) any shares subject to a Stock Award that
are not issued because such Stock Award or any portion thereof is settled in cash; and (C) any shares issued pursuant to a Stock
Award that are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required
for the vesting of such shares.


 


(ii) Shares Not Available for Subsequent Issuance. The following shares of Common
Stock will not become available again for issuance under the Plan: (A) any shares that are reacquired or withheld (or not issued)
by the Company to satisfy the exercise or purchase price of a Stock Award granted under the Plan (including any shares subject
to such award that are not delivered because such award is exercised through a reduction of shares subject to such award (i.e.,
“net exercised”)); and (B) any shares that are reacquired or withheld (or not issued) by the Company to satisfy a tax
withholding obligation in connection with a Stock Award granted under the Plan.


 


(c) Incentive Stock Option Limit. Subject to the provisions of Section 9(a) relating
to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise
of Incentive Stock Options will be 10,740,125 shares of Common Stock.


 






    	5.



     

    




(d) Section 162(m) Limitations. Subject to the provisions of Section 9(a) relating
to Capitalization Adjustments, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the
Code, the following limitations shall apply.


 


(i) A maximum of 1,000,000 shares of Common Stock subject to Options, SARs and
Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the
Fair Market Value on the date the Stock Award is granted may be granted to any one Participant during any one calendar year. Notwithstanding
the foregoing, if any additional Options, SARs or Other Stock Awards whose value is determined by reference to an increase over
an exercise or strike price of at least 100% of the Fair Market Value on the date the Stock Award are granted to any Participant
during any calendar year, compensation attributable to the exercise of such additional Stock Awards will not satisfy the requirements
to be considered “qualified performance-based compensation” under Section 162(m) of the Code unless such additional
Stock Award is approved by the Company’s stockholders.


 


(ii) A maximum of 500,000 shares of Common Stock subject to Performance Stock
Awards may be granted to any one Participant during any one calendar year (whether the grant, vesting or exercise is contingent
upon the attainment during the Performance Period of the Performance Goals).


 


(iii) A maximum of $1,500,000 may be granted as a Performance Cash Award to any
one Participant during any one calendar year.


 


(e) Limitation on Grants to Non-Employee Directors. The maximum number of shares
of Common Stock subject to Stock Awards granted under the Plan or otherwise during any one calendar year to any Non-Employee Director,
taken together with any cash fees paid by the Company to such Non-Employee Director during such calendar year for service on the
Board, will not exceed $1,500,000 in total value (calculating the value of any such Stock Awards based on the grant date fair value
of such Stock Awards for financial reporting purposes), or, with respect to the calendar year in which a Non-Employee Director
is first appointed or elected to the Board, $2,000,000. The Board may make exceptions to the applicable limit in this Section 3(e)
for individual Non-Employee Directors in extraordinary circumstances (for example, to compensate such individual for interim service
in the capacity of an officer of the Company), as the Board may determine in its discretion, provided that the Non-Employee Director
receiving such additional compensation may not participate in the decision to award such compensation.


 


(f) Source of Shares. The stock issuable under the Plan will be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.


 


4. ELIGIBILITY. 


 


(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be
granted only to employees of the Company or a “parent corporation” or “subsidiary corporation”
thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be
granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the
Company, as such term is defined in Rule 405 of the Securities Act, unless (i) the stock underlying such Stock Awards is
treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are
granted pursuant to a corporate transaction such as a spin off transaction), (ii) the Company, in consultation with its legal
counsel, has determined that such Stock Awards are otherwise exempt from Section 409A of the Code, or (iii) the Company, in
consultation with its legal counsel, has determined that such Stock Awards comply with the distribution requirements of
Section 409A of the Code.


 






    	6.



     

    

(b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an
Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant
and the Option is not exercisable after the expiration of five years from the date of grant.


 


5. PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS. 


 


Each Option or SAR will be in such form and will contain such terms and conditions as
the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common
Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or
if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive
Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions
of separate Options or SARs need not be identical; provided, however, that each Award Agreement will conform to (through
incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following
provisions:


 


(a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders,
no Option or SAR will be exercisable after the expiration of ten years from the date of its grant or such shorter period specified
in the Award Agreement.


 


(b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent
Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common
Stock subject to the Option or SAR on the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted
with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award
is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate
Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the
Code. Each SAR will be denominated in shares of Common Stock equivalents.


 


(c) Purchase Price for Options. The purchase price of Common Stock acquired
pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board
in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to
grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain
methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted
methods of payment are as follows:


 






    	7.



     

    

(i) by cash, check, bank draft or money order payable to the Company;


 


(ii) pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales
proceeds;


 


(iii) by delivery to the Company (either by actual delivery or attestation) of
shares of Common Stock;


 


(iv) if an Option is a Nonstatutory Stock Option, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest
whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that
the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise
price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject
to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise
price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and
(C) shares are withheld to satisfy tax withholding obligations; or


 


(v) in any other form of legal consideration that may be acceptable to the Board
and specified in the applicable Award Agreement.


 


(d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant
must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement
evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to
the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock
equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the
Participant is exercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with
respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock,
in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award
Agreement evidencing such SAR.


 


(e) Transferability of Options and SARs. The Board may, in its sole discretion,
impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination
by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:


 


(i) Restrictions on Transfer. An Option or SAR will not be transferable
except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be
exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or
SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan,
neither an Option nor a SAR may be transferred for consideration.


 






    	8.



     

    

(ii) Domestic Relations Orders. Subject to the approval of the Board or a duly
authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement
agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2). If an Option is
an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.


 


(iii) Beneficiary Designation. Subject to the approval of the Board or a duly
authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated
broker), designate a third party who, on the death of the Participant, will thereafter be entitled to exercise the Option or SAR
and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the
death of the Participant, the executor or administrator of the Participant’s estate will be entitled to exercise the Option
or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation
of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the
provisions of applicable laws.


 


(f) Vesting Generally. The total number of shares of Common Stock subject to an
Option or SAR may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject
to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction
of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs
may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares
of Common Stock as to which an Option or SAR may be exercised.


 


(g) Termination of Continuous Service. Except as otherwise provided in the applicable
Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates
(other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her
Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous
Service) within the period of time ending on the earlier of (i) the date three months following the termination of the Participant’s
Continuous Service (or such longer or shorter period specified in the applicable Award Agreement), and (ii) the expiration of the
term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does
not exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.


 


(h) Extension of Termination Date. If the exercise of an Option or SAR
following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the
Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common
Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the
earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post
termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of
the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the
Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s
Award Agreement, if the sale of any Common Stock received on exercise of an Option or SAR following the termination of the
Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then
the Option or SAR will terminate on the earlier of (i) the expiration of a period of months (that need not be consecutive)
equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service
during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of
the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Award Agreement.


 






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(i) Disability of Participant. Except as otherwise provided in the applicable
Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates
as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the
Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such
period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service (or such longer
or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the
Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within
the applicable time frame, the Option or SAR (as applicable) will terminate.


 


(j) Death of Participant. Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates
as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award Agreement
for exercisability after the termination of the Participant’s Continuous Service for a reason other than death, then the
Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death)
by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or
by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the
earlier of (i) the date 18 months following the date of death (or such longer or shorter period specified in the Award Agreement),
and (ii) the expiration of the term of such Option or SAR as set forth in the Award Agreement. If, after the Participant’s
death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.


 


(k) Termination for Cause. Except as explicitly provided otherwise in a Participant’s
Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s
Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination
of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR from and after the time
of such termination of Continuous Service.





 






    	10.



     

    

(l) Non-Exempt Employees. If an Option or SAR is granted to an Employee who is
a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable
for any shares of Common Stock until at least six months following the date of grant of the Option or SAR (although the Award may
vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee
dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted,
(iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s
Award Agreement in another agreement between the Participant and the Company, or, if no such definition, in accordance with the
Company's then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier
than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt
employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To
the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that any income derived
by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be
exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are
hereby incorporated by reference into such Stock Award Agreements.


 


6. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS. 


 


(a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in
such form and will contain such terms and conditions as the Board will deem appropriate. To the extent consistent with the Company’s
bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s
instructions until any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate
will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements
may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical.
Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement
or otherwise) the substance of each of the following provisions:


 


(i) Consideration. A Restricted Stock Award may be awarded in consideration for
(A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any
other form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable
law.


 


(ii) Vesting. Shares of Common Stock awarded under the Restricted Stock Award
Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.


 


(iii) Termination of Participant’s Continuous Service. If a Participant’s
Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares
of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms
of the Restricted Stock Award Agreement.


 






    	11.



     

    




(iv) Transferability. Rights to acquire shares of Common Stock under the Restricted
Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted
Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted
Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.


 


(v) Dividends. A Restricted Stock Award Agreement may provide that any dividends
paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the
Restricted Stock Award to which they relate.


 


(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will
be in such form and will contain such terms and conditions as the Board will deem appropriate. The terms and conditions of Restricted
Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award
Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions
hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:


 


(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the
Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject
to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject
to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole
discretion, and permissible under applicable law.


 


(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board
may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion,
deems appropriate.


 


(iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of
shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by
the Board and contained in the Restricted Stock Unit Award Agreement.


 


(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit
Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of
Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted
Stock Unit Award.


 


(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares
of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit
Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common
Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the
Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions
of the underlying Restricted Stock Unit Award Agreement to which they relate.


 






    	12.



     

    




(vi) Termination of Participant’s Continuous Service. Except as otherwise
provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not
vested will be forfeited upon the Participant’s termination of Continuous Service.


 


(c) Performance Awards.


 


(i) Performance Stock Awards. A Performance Stock Award is a Stock Award (covering
a number of shares not in excess of that set forth in Section 3(d) above) that is payable (including that may be granted, may vest
or may be exercised) contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock
Award may, but need not, require the Participant’s completion of a specified period of Continuous Service. The length of
any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what
degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance
with Section 162(m) of the Code, the Board), in its sole discretion. In addition, to the extent permitted by applicable law and
the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.


 


(ii) Performance Cash Awards. A Performance Cash Award is a cash award (for a
dollar value not in excess of that set forth in Section 3(d) above) that is payable contingent upon the attainment during a Performance
Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous
Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be
conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its
sole discretion. The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or
may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may
specify, to be paid in whole or in part in cash or other property.


 


(iii) Board Discretion. The Board retains the discretion to reduce or eliminate
the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance
Criteria it selects to use for a Performance Period. Partial achievement of the specified criteria may result in the payment or
vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance
Cash Award.


 


(iv) Section 162(m) Compliance. Unless otherwise
permitted in compliance with the requirements of Section 162(m) of the Code with respect to an Award intended to qualify as
“performance-based compensation” thereunder, the Committee will establish the Performance Goals applicable to,
and the formula for calculating the amount payable under, the Award no later than the earlier of (a) the date 90 days after
the commencement of the applicable Performance Period, and (b) the date on which 25% of the Performance Period has elapsed,
and in any event at a time when the achievement of the applicable Performance Goals remains substantially uncertain. Prior to
the payment of any compensation under an Award intended to qualify as “performance-based compensation” under
Section 162(m) of the Code, the Committee will certify the extent to which any Performance Goals and any other material terms
under such Award have been satisfied (other than in cases where such Performance Goals relate solely to the increase in the
value of the Common Stock). Notwithstanding satisfaction of, or completion of any Performance Goals, the number of shares of
Common Stock, Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account of
satisfaction of such Performance Goals may be reduced by the Committee on the basis of such further considerations as the
Committee, in its sole discretion, will determine.


 






    	13.



     

    

(d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part
by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights
with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be
granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6.
Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the
time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof)
to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.


 


7. COVENANTS OF THE COMPANY. 


 


(a) Availability of Shares. The Company will keep available at all times the number
of shares of Common Stock reasonably required to satisfy then-outstanding Awards.


 


(b) Securities Law Compliance. The Company will seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and
sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require
the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such
Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or the subsequent
issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities
law.


 


(c) No Obligation to Notify or Minimize Taxes. The Company will have no duty or
obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company
will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a
possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of an Award to the holder of such Award.


 






    	14.



     

    




8. MISCELLANEOUS. 


 


(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares
of Common Stock pursuant to Awards will constitute general funds of the Company.


 


(b) Corporate Action Constituting Grant of Awards. Corporate action constituting
a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless
otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated
to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions
or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number
of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in
the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have
no legally binding right to the incorrect term in the Award Agreement or related grant documents.


 


(c) Stockholder Rights. No Participant will be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until (i) such
Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Award pursuant
to its terms, and (ii) the issuance of the Common Stock subject to such Award has been entered into the books and records of the
Company.


 


(d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement
or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant
any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will
affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with
or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions
of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.


 


(e) Change in Time Commitment. In the event a Participant’s regular level
of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without
limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee
to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board
has the right in its sole discretion to (x) make a corresponding reduction in the number of shares or cash amount subject to any
portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in
lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event
of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.


 






    	15.



     

    




(f) Incentive Stock Option Limitations. To the extent that the aggregate Fair
Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000
(or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the
Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply
with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option
Agreement(s).


 


(g) Investment Assurances. The Company may require a Participant, as a condition
of exercising or acquiring Common Stock under any Award, (i) to give written assurances satisfactory to the Company as to the Participant’s
knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in financial and business matters and that such Participant is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of exercising the Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s
own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements,
and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise
or acquisition of Common Stock under the Award has been registered under a then currently effective registration statement under
the Securities Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement
need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.


 


(h) Withholding Obligations. Unless prohibited by the terms of an Award Agreement,
the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to an Award by
any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award;
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required
to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as a liability for
financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts
otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.


 


(i) Electronic Delivery. Any reference herein to a “written” agreement
or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website
thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant
has access).


 






    	16.



     

    




(j) Deferrals. To the extent permitted by applicable law, the Board, in its sole
discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of
all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants.
Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The
Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments,
including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms
and conditions consistent with the provisions of the Plan and in accordance with applicable law.


 


(k) Compliance with Section 409A of the Code. Unless otherwise expressly provided
for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes
the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance
with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject
to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid
the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary
for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary
in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded,
and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a
“specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due
because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions
thereunder) will be issued or paid before the date that is six months following the date of such Participant’s “separation
from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier,
the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section
409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the
balance paid thereafter on the original schedule.


 


(l) Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment
in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national
securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank
Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback,
recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited
to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence
of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right
to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the
Company.


 






    	17.



     

    




9. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS. 


 


(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the
Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant
to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock
Options pursuant to Section 3(c), (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant
to Sections 3(d), and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards.
The Board will make such adjustments, and its determination will be final, binding and conclusive.


 


(b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award
Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting
of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase)
will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to
the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding
the fact that the holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in
its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase
or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation
is completed but contingent on its completion.


 


(c) Corporate Transaction. The following provisions shall apply to Stock Awards
in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written
agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time
of grant of a Stock Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the
Board shall take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of
the Corporate Transaction:


 


(i) arrange for the surviving corporation or acquiring corporation (or the surviving
or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for
the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company
pursuant to the Corporate Transaction);


 


(ii) arrange for the assignment of any reacquisition or repurchase rights held
by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation
(or the surviving or acquiring corporation’s parent company);


 


(iii) accelerate the vesting, in whole or in part, of the Stock Award (and,
if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate
Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five days
prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable)
at or prior to the effective time of the Corporate Transaction;


 






    	18.



     

    

(iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase
rights held by the Company with respect to the Stock Award;


 


(v) cancel or arrange for the cancellation of the Stock Award, to the extent not
vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any,
as the Board, in its sole discretion, may consider appropriate; and


 


(vi) make a payment, in such form as may be determined by the Board equal to the
excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately
prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with
such exercise. For clarity, this payment may be zero ($0) if the value of the property is equal to or less than the exercise price.
Payments under this provision may be delayed to the same extent that payment of consideration to the holders of Common Stock in
connection with the Corporate Transaction is delayed as a result of escrows, earn outs, holdbacks or other contingencies.


The Board need not take the same action or actions with respect to all Stock Awards or
portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested
portions of a Stock Award.


 


(d) Change in Control. A Stock Award may be subject to additional acceleration
of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock
Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the
absence of such provision, no such acceleration will occur.


 


10. PLAN TERM; EARLIER TERMINATION OR SUSPENSION OF THE PLAN. 


 


The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may
be granted after the tenth anniversary of the earlier of (i) the date the Plan is adopted by the Board (the “Adoption
Date”), or (ii) the date the Plan is approved by the stockholders of the Company. No Awards may be granted under
the Plan while the Plan is suspended or after it is terminated. Suspension or termination of the Plan will not impair rights and
obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant or
as otherwise permitted in the Plan.


 


11. EFFECTIVE DATE OF PLAN. 


 


The Plan will become effective on the Effective Date.


 


12. CHOICE OF LAW. 


 


The law of the State of Delaware will govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.


 






    	19.



     

    




13. DEFINITIONS. As used in the Plan, the following definitions will apply to
the capitalized terms indicated below:


 


(a) “Affiliate” means, at the time of determination,
any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act.
The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status
is determined within the foregoing definition.


 


(b) “Appreciation Award” means (i) a stock option or
stock appreciation right granted under the Prior Plans or (ii) an Option or Stock Appreciation Right, in each case with respect
to which the exercise or strike price is at least one hundred percent (100%) of the Fair Market Value of the Common Stock subject
to the stock option or stock appreciation right, or Option or Stock Appreciation Right, as applicable, on the date of grant.


 


(c) “Award” means a Stock Award or a Performance Cash
Award.


 


(d) “Award Agreement” means a written agreement between
the Company and a Participant evidencing the terms and conditions of an Award.


 


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


 


(f) “Capital Stock” means each and every class of common
stock of the Company, regardless of the number of votes per share.


 


(g) “Capitalization Adjustment” means any change that
is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after
the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock
split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring
transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic
718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will
not be treated as a Capitalization Adjustment.


 


(h) “Cause” shall have the meaning ascribed to
such term in any written agreement between the Participant and the Company defining such term and, in the absence of such
agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such
Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of
the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud
or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract or
agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s
unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such
Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is
either for Cause or without Cause shall be made by the Company, in its sole discretion. Any determination by the Company that
the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by
such Participant shall have no effect upon any determination of the rights or obligations of the Company or such Participant
for any other purpose.


 






    	20.



     

    

(i) “Change in Control” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the following events:


 


(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities
of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other
than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be
deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the
acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the
Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing
for the Company through the issuance of equity securities, (C) on account of the acquisition of securities of the Company by any
individual who is, on the Adoption Date, either an executive officer or a Director (either, a “Legacy Investor”)
and/or any entity in which a Legacy Investor has a direct or indirect interest (whether in the form of voting rights or participation
in profits or capital contributions) of more than 50% (collectively, the “Legacy Entities”) or on account
of the Legacy Entities continuing to hold shares that come to represent more than 50% of the combined voting power of the Company’s
then outstanding securities as a result of the conversion of any class of the Company’s securities into another class of
the Company’s securities having a different number of votes per share pursuant to the conversion provisions set forth in
the Company’s Amended and Restated Certificate of Incorporation; or (D) solely because the level of Ownership held by any
Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares
outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition
of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding
voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed
to occur;


 


(ii) there is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction,
the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities
representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar
transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger,
consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding
voting securities of the Company immediately prior to such transaction; provided, however, that a merger, consolidation
or similar transaction will not constitute a Change in Control under this prong of the definition if the outstanding voting securities
representing more than 50% of the combined voting power of the surviving Entity or its parent are owned by the Legacy Entities;


 






    	21.



     

    




(iii) there is consummated a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more
than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease,
license or other disposition; provided, however, that a sale, the Company and its Subsidiaries will not constitute a Change
in Control under this prong of the definition if the outstanding voting securities representing more than 50% of the combined voting
power of the acquiring Entity or its parent are owned by the Legacy Entities;


 


(iv) the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, except
for a liquidation into a parent corporation; or


 


(v) individuals who, on the date the Plan is adopted by the Board, are members
of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members
of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member
was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will,
for purposes of this Plan, be considered as a member of the Incumbent Board.


Notwithstanding the foregoing definition or any other provision of the Plan, the term
Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing
the domicile of the Company and the definition of Change in Control (or any analogous term) in an individual written agreement
between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject
to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such
an individual written agreement, the foregoing definition will apply.


 


(j) “Code” means the Internal Revenue Code of 1986,
as amended, including any applicable regulations and guidance thereunder.


 


(k) “Committee” means a committee of one or more Directors
to whom authority has been delegated by the Board in accordance with Section 2(c).


 


(l) “Common Stock” means the common stock of the Company,
having one vote per share.


 


(m) “Company” means Sucampo Pharmaceuticals, Inc., a
Delaware corporation.


 


(n) “Consultant” means any person, including an
advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for
such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services.
However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a
“Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under
this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the
sale of the Company’s securities to such person.


 






    	22.



     

    

(o) “Continuous Service” means that the Participant’s
service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change
in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director
or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination
of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service;
provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as
determined by the Board, in its sole discretion, such Participant’s Continuous Service will be considered to have terminated
on the date such Entity ceases to qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer
of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted
in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave
or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing,
a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided
in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to
the Participant, or as otherwise required by law.


 


(p) “Corporate Transaction” means the consummation,
in a single transaction or in a series of related transactions, of any one or more of the following events:


 


(i) a sale or other disposition of all or substantially all, as determined by
the Board, in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;


 


(ii) a sale or other disposition of at least 50% of the outstanding securities
of the Company;


 


(iii) a merger, consolidation or similar transaction following which the Company
is not the surviving corporation; or


 


(iv) a merger, consolidation or similar transaction following which the Company
is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether
in the form of securities, cash or otherwise.


 


(q) “Covered Employee” will have the meaning provided
in Section 162(m)(3) of the Code.


 


(r) “Director” means a member of the Board.


 


(s) “Disability” means, with respect to a
Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to
last for a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code,
and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the
circumstances.


 






    	23.



     

    

(t) “Effective Date” means the effective date of this
Plan, which is the earlier of (i) the date that this Plan is first approved by the Company’s stockholders, and (ii) the date
this Plan is adopted by the Board.


 


(u) “Employee” means any person employed by the Company
or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be
considered an “Employee” for purposes of the Plan.


 


(v) “Entity” means a corporation, partnership, limited
liability company or other entity.


 


(w) “Exchange Act” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.


 


(x) “Exchange Act Person” means any natural person,
Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act
Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company
or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company
or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering
of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities
of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.


 


(y) “Fair Market Value” means, as of any date, the value
of the Common Stock determined as follows:


 


(i) If the Common Stock is listed on any established stock exchange or traded
on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board,
the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume
of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.


 


(ii) Unless otherwise provided by the Board, if there is no closing sales price
for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding
date for which such quotation exists.


 


(iii) In the absence of such markets for the Common Stock, the Fair Market Value
will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.


 






    	24.



     

    




(z) “Full Value Award” means (i) a stock award granted
under the Prior Plans or (ii) a Stock Award, in each case that is not an Appreciation Award.


 


(aa) “Incentive Stock Option” means an option granted
pursuant to Section 5 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the
meaning of Section 422 of the Code.


 


(bb) “Non-Employee Director” means a Director who either
(i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly,
from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for
an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities
Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would
be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of
Rule 16b-3.


 


(cc) “Nonstatutory Stock Option” means any Option granted
pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.


 


(dd) “Officer” means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act.


 


(ee) “Option” means an Incentive Stock Option or a Nonstatutory
Stock Option to purchase shares of Common Stock granted pursuant to the Plan.


 


(ff) “Option Agreement” means a written agreement between
the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to
the terms and conditions of the Plan.


 


(gg) “Optionholder” means a person to whom an Option
is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.


 


(hh) “Other Stock Award” means an award based in whole
or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d).


 


(ii) “Other Stock Award Agreement” means a written agreement
between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each
Other Stock Award Agreement will be subject to the terms and conditions of the Plan.


 


(jj) “Outside Director” means a Director who
either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an
“affiliated corporation” who receives compensation for prior services (other than benefits under a tax-qualified
retirement plan) during the taxable year, has not been an officer of the Company or an “affiliated corporation,”
and does not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly,
in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of
Section 162(m) of the Code.


 






    	25.



     

    

(kk) “Own,” “Owned,” “Owner,”
“Ownership” means a person or Entity will be deemed to “Own,” to have “Owned,”
to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly
or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes
the power to vote or to direct the voting, with respect to such securities.


 


(ll) “Participant” means a person to whom an Award is
granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.


 


(mm) “Performance Cash Award” means an award of cash
granted pursuant to the terms and conditions of Section 6(c)(ii).


 


(nn) “Performance Criteria” means the one or more
criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The
Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the
following as determined by the Board: (i) earnings (including earnings per share and net earnings); (ii) earnings before
interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) earnings before
interest, taxes, depreciation, amortization and legal settlements; (v) earnings before interest, taxes, depreciation,
amortization, legal settlements and other income (expense); (vi) earnings before interest, taxes, depreciation, amortization,
legal settlements, other income (expense) and stock-based compensation; (vii) earnings before interest, taxes, depreciation,
amortization, legal settlements, other income (expense), stock-based compensation and changes in deferred revenue; (viii)
earnings before interest, taxes, depreciation, amortization, legal settlements, other income (expense), stock-based
compensation, other non-cash expenses and changes in deferred revenue; (ix) total stockholder return; (x) return on equity or
average stockholder’s equity; (xi) return on assets, investment, or capital employed; (xii) stock price; (xiii) margin
(including gross margin); (xiv) income (before or after taxes); (xv) operating income; (xvi) operating income after taxes;
(xvii) pre-tax profit; (xviii) operating cash flow; (xix) sales or revenue targets; (xx) increases in revenue or product
revenue; (xxi) expenses and cost reduction goals; (xxii) improvement in or attainment of working capital levels;
(xxiii) economic value added (or an equivalent metric); (xxiv) market share; (xxv) cash flow; (xxvi) cash flow per share;
(xxvii) cash balance; (xxviii) cash burn; (xxix) cash collections; (xxx) share price performance; (xxxi) debt reduction;
(xxxii) implementation or completion of projects or processes (including, without limitation, clinical trial initiation,
clinical trial enrollment and dates, clinical trial results, regulatory filing submissions, regulatory filing acceptances,
regulatory or advisory committee interactions, regulatory approvals, and product supply); (xxxiii) stockholders’
equity; (xxxiv) capital expenditures; (xxxv) debt levels; (xxxvi) operating profit or net operating profit; (xxxvii)
workforce diversity; (xxxviii) growth of net income or operating income; (xxxix) billings; (xl) bookings; (xli) employee
retention; (xlii) initiation of studies by specific dates; (xliii) budget management; (xliv) submission to, or approval by, a
regulatory body (including, but not limited to the U.S. Food and Drug Administration) of an applicable filing or a product;
(xlv) regulatory milestones; (xlvi) progress of internal research or development programs; (xlvii) acquisition of new
customers; (xlviii) customer retention and/or repeat order rate; (xlix) improvements in sample and test processing times; (l)
progress of partnered programs; (li) partner satisfaction; (lii) timely completion of clinical trials; (liii) submission of
510(k)s or pre-market approvals and other regulatory achievements; (liv) milestones related to samples received and/or tests
or panels run; (lv) expansion of sales in additional geographies or markets; (lvi) research progress, including the
development of programs; (lvii) strategic partnerships or transactions (including in-licensing and out-licensing of
intellectual property; and (lviii) and to the extent that an Award is not intended to comply with Section 162(m) of the Code,
other measures of performance selected by the Board.


 






    	26.



     

    

(oo) “Performance Goals” means, for a Performance Period,
the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals
may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments,
and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more
relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in
such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately
make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude
restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to
generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to
exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles; (6)
to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved
performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude
the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock
repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar
corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of
stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection
with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; (11)
to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting
principles; (12) to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item; and (13) to
exclude the effects of the timing of acceptance for review and/or approval of submissions to the U.S. Food and Drug Administration
or any other regulatory body. In addition, the Board retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to
use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding
to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award.


 


(pp) “Performance Period” means the period of
time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award. Performance Periods
may be of varying and overlapping duration, at the sole discretion of the Board.


 






    	27.



     

    

(qq) “Performance Stock Award” means a Stock Award granted
under the terms and conditions of Section 6(c)(i).


 


(rr) “Plan” means this Sucampo Pharmaceuticals, Inc.
2016 Equity Incentive Plan.


 


(ss) “Restricted Stock Award” means an award of shares
of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).


 


(tt) “Restricted Stock Award Agreement” means a written
agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock
Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.


 


(uu) “Restricted Stock Unit Award” means a right to
receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).


 


(vv) “Restricted Stock Unit Award Agreement” means a
written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted
Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.


 


(ww) “Rule 16b-3” means Rule 16b-3 promulgated under
the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.


 


(xx) “Securities Act” means the Securities Act of 1933,
as amended.


 


(yy) “Stock Appreciation Right” or “SAR”
means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.


 


(zz) “Stock Appreciation Right Agreement” means a written
agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.


 


(aaa) “Stock Award” means any right to receive Common
Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted
Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.


 


(bbb) “Stock Award Agreement” means a written agreement
between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will
be subject to the terms and conditions of the Plan.


 






    	28.



     

    

(ccc) “Subsidiary” means, with
respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any
other class or classes of such corporation will have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability
company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than 50%.


 







(ddd) “Ten Percent Stockholder” means a person who Owns
(or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any Affiliate.




 


 


 


 


 


 


 


 


 


 


 


29.