Exhibit 10.2 


 


THE JOINT CORP.


 


2012 STOCK PLAN


(Amended 5/15/2014)


 


1.          Purposes
of the Plan. The purposes of this Plan are:


 


		·	to attract and retain the best available personnel for
positions of substantial responsibility,



 


		·	to provide additional incentive to Employees, Directors
and Consultants



 


		·	to provide additional ownership opportunities for individuals who have made important contributions to the Company’s
success, and



 


		·	to generally promote the success of the Company’s
business.



 


The Plan permits the grant of Incentive
Stock Options, Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units and Performance Shares.


 


2.          Definitions.
As used herein, the following definitions will apply:


 


(a)          “Administrator”
means a Committee of the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the
Plan.


 


(b)          “Applicable
Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted
and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.


 


(c)          “Award”
means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Performance Units or Performance
Shares.


 


(d)          “Award
Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award
granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.


 


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


 


(f)          “Change
in Control” means the occurrence of any of the following events:


 


i.            Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or


 




    	- 1 -



    	 



    

 


ii.         The
consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;


 


iii.         A
change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors
are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective date
of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or


 


iv.         The
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately
after such merger or consolidation.


 


(g)          “Code”
means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor
or amended section of the Code.


 


(h)          “Committee”
means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section
4 hereof.


 


(i)          “Common
Stock” means the common stock of the Company.


 


(j)          “Company”
means The Joint Corp., a Delaware corporation, or any successor thereto.


 


(k)          “Consultant”
means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.


 


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


 


(m)          “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance
with uniform and non-discriminatory standards adopted by the Administrator from time to time.


 


(n)          “Employee”
means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment”
by the Company.


 




    	- 2 -



    	 



    

 


(o)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(p)          “Exchange
Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the
same type (which may have lower exercise prices and different terms), Awards of a different type, and/or cash, and/or (ii) the
exercise price of an outstanding Award is reduced. The Administrator will determine the terms and conditions of any Exchange Program
in its sole discretion.


 


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


 


i.            If
the Common Stock is listed on any established stock exchange or a national market system, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination,
as reported in such source as the Administrator deems reliable;


 


ii.         If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported
in such source as the Administrator deems reliable;


 


iii.         For
purposes of any Awards granted on the Registration Date, the Fair Market Value will be the initial price to the public as set forth
in the final prospectus included within the registration statement in Form S-1 filed with the Securities and Exchange Commission
for the initial public offering of the Company’s Common Stock; or


 


iv.         In
the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.


 


(r)          “Fiscal
Year” means the fiscal year of the Company.


 


(s)          “Incentive
Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.


 


(t)          “Inside
Director” means a Director who is an Employee.


 


(u)          “Nonstatutory
Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock
Option.


 


(v)         “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.


 


(w)          “Option”
means a stock option granted pursuant to the Plan.


 


(x)          “Optioned
Stock” means the Common Stock subject to an Award.


 




    	- 3 -



    	 



    

 


(y)          “Outside
Director” means a Director who is not an Employee.


 


(z)          “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.


 


(aa)         “Participant”
means the holder of an outstanding Award.


 


(bb)         “Performance
Share” means an Award granted to a Participant pursuant to Section 9.


 


(cc)         “Performance
Unit” means an Award granted to a Participant pursuant to Section 9.


 


(dd)         “Period
of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time,
the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.


 


(ee)         “Plan”
means this 2012 Stock Plan.


 


(ff)         “Registration
Date” means the effective date of the first registration statement that is filed by the Company and declared effective
pursuant to Section 12(g) of the Exchange Act, with respect to any class of the Company’s securities.


 


(gg)         “Restricted
Stock” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or issued pursuant to the
early exercise of an Option.


 


(hh)         “Rule
16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.


 


(ii)         “Section
16(b)” means Section 16(b) of the Exchange Act.


 


(jj)         “Service
Provider” means an Employee, Director, Consultant or Shareholder.


 


(kk)         “Share”
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.


 


(ll)         “Stock
Appreciation Right” or “SAR” means an Award, granted alone or in connection with an Option, that pursuant
to Section 8 is designated as a SAR.


 


(mm)         “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.


 




    	- 4 -



    	 



    

 


3.          Stock
Subject to the Plan.


 


(a)          Stock
Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be
optioned and sold under the Plan is 200,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. Shares
will not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. Upon
payment in Shares pursuant to the exercise of an SAR, only the number of Shares actually issued in such payment will reduce the
number of Shares available for issuance under the Plan. If the exercise price of an Option is paid by tender to the Company, or
attestation to the ownership, of Shares owned by the Participant, the number of Shares available for issuance under the Plan will
be reduced by the gross number of Shares for which the Option is exercised.


 


(b)          Lapsed
Awards. If an Award expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an
Exchange Program, the unpurchased Shares which were subject thereto will become available for future grant or sale under the Plan
(unless the Plan has terminated); provided, however, that Shares that have actually been issued under the Plan, whether
upon exercise of an Award, will not be returned to the Plan and will not become available for future distribution under the Plan,
except that if unvested Shares are forfeited or repurchased by the Company, such Shares will become available for future grant
under the Plan.


 


(c)          Share
Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will
be sufficient to satisfy the requirements of the Plan.


 


4.          Administration
of the Plan.


 


(a)          Procedure.


 


i.            Multiple
Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.


 


ii.         Section
162(m). To the extent that the Administrator determines it to be desirable to qualify Options granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.


 


iii.         Rule
16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.


 


iv.         Other
Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee
will be constituted to satisfy Applicable Laws.


 


(b)          Powers
of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:


 




    	- 5 -



    	 



    

 


i.            to
determine the Fair Market Value;


 


ii.         to
select the Service Providers to whom Awards may be granted hereunder;


 


iii.         to
determine the number of Shares to be covered by each Award granted hereunder;


 


iv.         to
approve forms of agreement for use under the Plan;


 


v.           to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding
any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;


 


vi.         to
institute an Exchange Program;


 


vii.         to
construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;


 


viii.         to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws;


 


ix.         to
modify or amend each Award (subject to Section 18(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Awards longer than is otherwise provided for in the Plan;


 


x.         to
allow Participants to satisfy withholding tax obligations in such manner as prescribed in Section 14;


 


xi.            to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Administrator;


 


xii.         to
allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant
under an Award; and


 


xiii.         to
make all other determinations deemed necessary or advisable for administering the Plan.


 


(c)          Effect
of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and
binding on all Participants and any other holders of Awards.


 




    	- 6 -



    	 



    

 


5.          Eligibility.
Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units and Performance Shares may be granted
to Service Providers. Incentive Stock Options may be granted only to Employees.


 


6.          Stock
Options.


 


(a)          Limitations.


 


i.            Each
Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or
Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive
Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted.


 


ii.         The
following limitations will apply to grants of Options and Stock Appreciation Rights:


 


1.          No
Service Provider will be granted in any Fiscal Year Options and/or Stock Appreciation Rights to purchase more than 100,000 Shares.


 


2.          The
foregoing limitation will be adjusted proportionately in connection with any change in the Company’s capitalization as described
in Section 13.


 


3.          If
an Option and/or Stock Appreciation Right, as applicable, is cancelled in the same Fiscal Year in which it was granted (other than
in connection with a transaction described in Section 13), the cancelled Option and/or Stock Appreciation Right, as applicable,
will be counted against the limit set forth in subsection (1). For this purpose, if the exercise price of an Option and/or Stock
Appreciation Right, as applicable, is reduced, the transaction will be treated as a cancellation of the Option and/or Stock Appreciation
Right and the grant of a new Option and/or Stock Appreciation Right, as applicable.


 


(b)          Term
of Option. The term of each Option will be stated in the Award Agreement. In the case of an Incentive Stock Option, the term
will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the
case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in
the Award Agreement. 


 




    	- 7 -



    	 



    

 


(c)          Option
Exercise Price and Consideration.


 


i.            Exercise
Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the
Administrator, subject to the following:


 


1.          In
the case of an Incentive Stock Option


 


a.           granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than
110% of the Fair Market Value per Share on the date of grant.


 


b.           granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no less
than 100% of the Fair Market Value per Share on the date of grant.


 


Notwithstanding the foregoing, Incentive Stock Options may be
granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a
transaction described in, and in a manner consistent with, Section 424(a) of the Code.


 


2.          In
the case of a Nonstatutory Stock Option, the per Share exercise price will be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m)
of the Code, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.


 


ii.         Waiting
Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option
may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.


 


iii.         Form
of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including
the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration
at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note; (4) other Shares, provided
Shares acquired directly or indirectly from the Company, (A) have been owned by the Participant and not subject to substantial
risk of forfeiture for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option will be exercised; (5) consideration received by the
Company under a cashless exercise program implemented by the Company in connection with the Plan; (6) a reduction in the amount
of any Company liability to the Participant, including any liability attributable to the Participant’s participation in any
Company-sponsored deferred compensation program or arrangement; (7) any combination of the foregoing methods of payment; or (8)
such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.


 




    	- 8 -



    	 



    

 


(d)          Exercise
of Option.


 


i.            Procedure
for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option
may not be exercised for a fraction of a Share. An Option will be deemed exercised when the Company receives: (i) notice of exercise
(in such form as the Administrator specify from time to time) from the person entitled to exercise the Option, and (ii) full payment
for the Shares with respect to which the Option is exercised (together with an applicable withholding taxes). Full payment may
consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant,
in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend
or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.
Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is exercised.


 


ii.         Termination
of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s
death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement
to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such
Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator,
if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within
the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.


 


iii.         Disability
of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant
may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).
In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following
the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant
is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan.
If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate,
and the Shares covered by such Option will revert to the Plan.


 




    	- 9 -



    	 



    

 


iv.         Death
of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s
death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of
death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award
Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s
death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option
may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred
pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified
time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless
otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within
the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.


 


7.          Restricted
Stock.


 


(a)          Grant
of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time,
may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.


 


(b)          Restricted
Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions
on such Shares have lapsed.


 


(c)          Transferability.
Except as provided in this Section 7, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction.


 


(d)          Other
Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as
it may deem advisable or appropriate.


 


(e)          Removal
of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction.
The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.


 


(f)          Voting
Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares, unless the Administrator determines otherwise.


 




    	- 10 -



    	 



    

 


(g)          Dividends
and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled
to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement.
If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability
and forfeitability as the Shares of Restricted Stock with respect to which they were paid.


 


(h)          Return
of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have
not lapsed will revert to the Company and again will become available for grant under the Plan.


 


8.          Stock
Appreciation Rights.


 


(a)          Grant
of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted to Service Providers at any time and from time
to time as will be determined by the Administrator, in its sole discretion. The Administrator may grant Affiliated SARs, Freestanding
SARs, Tandem SARs, or any combination thereof.


 


(b)          Number
of Shares. The Administrator will have complete discretion to determine the number of SARs granted to any Service Provider,
subject to the limits set forth in Section 6(a)(ii).


 


(c)          Exercise
Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine
the terms and conditions of SARs granted under the Plan. However, the exercise price of Tandem or Affiliated SARs will equal the
exercise price of the related Option.


 


(d)          SAR
Agreement. Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the SAR,
the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.


 


(e)          Expiration
of SARs. An SAR granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and
set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) also will apply to SARs.


 


(f)          Payment
of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:


 


		i.	The difference between the Fair Market Value of a Share
on the date of exercise over the exercise price; times



 


		ii.	The number of Shares with respect to which the SAR is exercised.



 


At the discretion of the Administrator, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, or in some combination thereof.


 




    	- 11 -



    	 



    

 


9.          Performance
Units and Performance Shares.


 


(a)          Grant
of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from
time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion
in determining the number of Performance Units and Performance Shares granted to each Participant.


 


(b)          Value
of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or
before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date
of grant.


 


(c)          Performance
Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without
limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units/Shares that will be paid out to the Service Providers. The time period during
which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each
Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other
terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives
based upon the achievement of Company-wide, divisional, or individual goals, applicable federal or state securities laws, or any
other basis determined by the Administrator in its discretion.


 


(d)          Earning
of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will
be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period,
to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have
been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any
performance objectives or other vesting provisions for such Performance Unit/Share.


 


(e)          Form
and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable
after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close of the applicable Performance Period) or in a combination thereof.


 


(f)          Cancellation
of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares
will be forfeited to the Company, and again will be available for grant under the Plan.


 


10.         Formula
Option Grants to Outside Directors.


 


All grants of Options to Outside Directors
pursuant to this Section will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance
with the following provisions:


 




    	- 12 -



    	 



    

 


(a)          Type
of Option. All Options granted pursuant to this Section will be Nonstatutory Stock Options and, except as otherwise provided
herein, will be subject to the other terms and conditions of the Plan.


 


(b)          No
Discretion. No person will have any discretion to select which Outside Directors will be granted Options under this Section
or to determine the number of Shares to be covered by such Options (except as provided in Sections 10(f) and 13).


 


(c)          Quarterly
Option. Each Outside Director will be automatically granted an Option to purchase an amount determined by the Administrator
but in no event more than 2,500 Shares (a “Quarterly Option”) on the first day of March, June, September and December,
if as of such date, he or she will have served on the Board for at least the preceding six (6) months.


 


(d)          Terms.
The terms of each Option granted pursuant to this Section will be as follows:


 


i.            The
term of the Option will be ten (10) years.


 


ii.         The
exercise price per Share will be 100% of the Fair Market Value per Share on the date of grant of the Option.


 


iii.         Subject
to Section 13, the Quarterly Option will vest and become exercisable as to one-twelfth (1/12th) of the Shares each month
following the vesting commencement date, provided that the Participant continues to serve as a Director through such date.


 


(e)          Amendment.
The Administrator in its discretion may change the number of Shares subject to the First Options and Subsequent Options.


 


11.         Leaves
of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid
leave of absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company
or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive
Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3)
months following the 91st day of such leave any Incentive Stock Option held by the Participant will cease to be treated
as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.


 


12.         Transferability
of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime
of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional
terms and conditions as the Administrator deems appropriate.


 




    	- 13 -



    	 



    

 


13.         Adjustments;
Dissolution or Liquidation; Merger or Change in Control.


 


(a)          Adjustments.
In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the
Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under
the Plan and/or the number, class, and price of Shares covered by each outstanding Award, the numerical Share limits in Sections
3 and 6 of the Plan and the number of Shares issuable pursuant to Options to be granted under Section 10.


 


(b)          Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each
Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.


 


(c)          Change
in Control. In the event of a Change in Control, each outstanding Award will be assumed or an equivalent option or right substituted
by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation
refuses to assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or
her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or
exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Performance Shares and Performance Units, all
performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In
addition, if an Option or Stock Appreciation Right becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or
Stock Appreciation Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole
discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.


 


For the purposes of this subsection (c),
an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for
each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities
or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash
or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration
received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration
to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Performance Share or Performance
Unit, for each Share subject to such Award (or in the case of Performance Units, the number of implied shares determined by dividing
the value of the Performance Units by the per share consideration received by holders of Common Stock in the Change in Control),
to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the Change in Control.


 




    	- 14 -



    	 



    

 


Notwithstanding anything in this Section
13(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not
be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent;
provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control
corporate structure will not be deemed to invalidate an otherwise valid Award assumption.


 


(d)          Termination
Following Change of Control. With respect to Awards granted to an Outside Director that are assumed or substituted for, if
on the date of or following such assumption or substitution the Participant’s status as a Director or a director of the successor
corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant, then the Participant will
fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Optioned Stock, including
Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and,
with respect to Performance Shares and Performance Units, all performance goals or other vesting criteria will be deemed achieved
at target levels and all other terms and conditions met.


 


14.         Tax
Withholding.


 


(a)          Withholding
Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have
the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).


 


(b)          Withholding
Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time,
may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) paying cash, (b) electing to have
the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum amount required to be
withheld, or (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum amount required
to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may
be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local
marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld
is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the
taxes are required to be withheld.


 




    	- 15 -



    	 



    

 


15.         No
Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing
the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s
right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by
Applicable Laws.


 


16.         Date
of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination
granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided
to each Participant within a reasonable time after the date of such grant.


 


17.         Term
of Plan. Subject to Section 21 of the Plan, the Plan will become effective upon its adoption by the Board. It will continue
in effect for a term of ten (10) years unless terminated earlier under Section 18 of the Plan.


 


18.         Amendment
and Termination of the Plan.


 


(a)          Amendment
and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.


 


(b)          Stockholder
Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.


 


(c)          Effect
of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing
and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise
the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.


 


19.         Conditions
Upon Issuance of Shares.


 


(a)          Legal
Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company
with respect to such compliance.


 


(b)          Investment
Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent
and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.


 




    	- 16 -



    	 



    

 


20.         Inability
to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve
the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not
have been obtained.


 




    	- 17 -