Exhibit 4.2


 


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.


 


(c)                                       
“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.


 


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


 


(e)                                       
“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.


 


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


 


(g)                                      
“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


 






     

     


    

 


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.


 


(h)                                      
“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.


 


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


 


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


 


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


 


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


 


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


 


(n)                                      
“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.


 


(o)                                      
“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.


 






     

     


    

 


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


 


(q)                                      
“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.


 


(r)                                        
“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.


 


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


 


(t)                                        
“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.


 


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


 


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


 


(w)                                    
“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.


 






     

     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(ee)                                   
“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.


 


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


 


(gg)                                  
“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.


 


(hh)                                  
“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.


 


(ii)                                      
“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.


 


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


 


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


 


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


 


(mm)                              
“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.


 






     

     


    

 


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


 


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 550,000 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:


 


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.


 


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. 


 






     

     


    

 


(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.


 






     

     


    

 


(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.


 






     

     


    

 


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.


 


(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.


 


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:


 


(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, August, 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.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.


 






     

     


    

 


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.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.


 






     

     


    

 


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.