Blueprint






EXHIBIT 4.6







SANARA MEDTECH
INC.



2014 OMNIBUS LONG TERM INCENTIVE PLAN

 



As Amended February 10, 2020


 



ARTICLE 1



General Purpose of Plan; Definitions

 


1.1 Name
and Purposes. The name of this
plan is the Sanara MedTech Inc. 2014 Omnibus Long Term Incentive
Plan. The purpose of this Plan is to enable Sanara MedTech Inc. and
its Affiliates to: (i) attract and retain skilled and qualified
officers, employees and Directors who are expected to contribute to
the Company’s success by providing long-term incentive
compensation opportunities competitive with those made available by
other companies; (ii) motivate participants to achieve the
long-term success and growth of the Company; (iii) facilitate
ownership of shares of the Company; and (iv) align the interests of
the participants with those of the Company’s
Shareholders.

 


1.2 Certain
Definitions. Unless the context
otherwise indicates, the following words shall have the following
meanings whenever used in this Plan:

 


“Affiliate”
means any corporation, partnership,
joint venture or other entity, directly or indirectly, through one
or more intermediaries, controlling, controlled by, or under common
control with the Company within the meaning of Section 414(b) or
(c) of the Code.

 


“Award”
means any Common Share, Stock Option,
Stock Appreciation Right, Restricted Share, Restricted Share Unit
or Performance Share granted pursuant to this
Plan.

 


“Base Value”
is defined in Section
7.3.

 


“Beneficial
Owner” means a
“beneficial
owner,” as such term is
defined in Rule 13d-3 under the Exchange Act (or any successor rule
thereto).

 


“Board”
means the Board of Directors of the
Company.

 


“Change in
Control” is defined in
Section 12.1.

 


“Code”
means the Internal Revenue Code of
1986, as amended from time to time, and lawful regulations and
guidance promulgated thereunder. Whenever reference is made to a
specific Internal Revenue Code section, such reference shall be
deemed to be a reference to any successor Internal Revenue Code
section or sections with the same or similar
purpose.

 


“Committee”
means the entity administering this
Plan as provided in Section 2.1.

 


“Common
Shares” means shares of
common stock of the Company, par value $0.001 per
share.

 


“Company”
means Sanara MedTech Inc., a
corporation organized under the laws of the State of Texas and,
except for purposes of determining whether a Change in Control has
occurred, any corporation or entity that is a successor to Sanara
MedTech Inc. or substantially all of the assets of Sanara MedTech
Inc. and that assumes the obligations of Sanara MedTech Inc. under
this Plan by operation of law or otherwise.

 


“Date of
Grant” means the date on
which the Committee grants an Award.

 


“Director”
means a member of the
Board.

 


“Disability”
shall be defined in the Award
agreements, as necessary.

 



 







 





 


“Employment”
as used herein shall be deemed to
refer to (i) a participant’s employment if the participant is
an employee of the Company or any of its Affiliates, (ii) a
participant’s services as a consultant, if the participant is
a consultant to the Company or its Affiliates and (iii) a
participant’s services as a non-employee director, if the
participant is a non-employee member of the Board; provided that,
for any Award that is or becomes subject to Section 409A of the
Code, termination of Employment means a “separation from service” under
Section 409A of the Code.

 


“Exchange
Act” means the Securities
Exchange Act of 1934, as amended from time to time, and any lawful
regulations and guidance promulgated thereunder. Whenever reference
is made to a specific Securities Exchange Act of 1934 section, such
reference shall be deemed to be a reference to any successor
section or sections with the same or similar
purpose.

 


“Exercise
Price” means the purchase
price of a Share pursuant to a Stock Option.

 


“Fair Market
Value” means: (i) if the
Common Shares are listed on a national securities exchange or
quoted in an interdealer quotation system, the last sales price or,
if unavailable, the average of the closing bid and asked prices per
Share on such date (or, if there was no trading or quotation of the
Common Shares on such date, on the next preceding date on which
there was trading or quotation); or (ii) if the Common Shares are
not listed on a national securities exchange or quoted in an
interdealer quotation system, the “Fair Market
Value” of Common Shares
shall be determined by the Committee in a reasonable manner
pursuant to a reasonable valuation method. Notwithstanding anything
to the contrary in the foregoing, as of any date, the
“Fair Market
Value” of Common Shares
shall be determined in a manner consistent with avoiding adverse
tax consequences under Code Section 409A. In addition,
“Fair Market
Value” with respect to
ISOs and related SARs shall be determined in accordance with
Section 6.2(f).

 


“Full-Value
Awards” means Restricted
Share Awards, Restricted Share Unit Awards, Performance Share
Awards and Common Share Awards.

 


“Incentive Stock
Option” and
“ISO”
mean a Stock Option which meets the
requirements of Section 422 of the Code.

 


“Non-Qualified Stock
Option” and
“NQSO”
mean a Stock Option that does not meet
the requirements of Section 422 of the Code.

 


“Outside
Director” means a
Director who meets the definitions of the terms “independent
director” set forth in
The Nasdaq Stock Market, Inc. rules, and “non-employee
director” set forth in
Rule 16b-3, or any successor definitions adopted by The Nasdaq
Stock Market, Inc. and Securities and Exchange Commission,
respectively, and similar requirements under any other applicable
laws, rules and regulations.

 


“participant”
is defined in Section
4.1.

 


“Parent”
means any corporation which qualifies
as a “parent
corporation” of the
Company under Section 424(e) of the Code.

 


“Performance
Period” is defined in
Section 8.4(g).

 


“Performance
Shares” means any Shares
issued pursuant to an Award granted under Article
9.

 


“person”
means a “person” as such term is used for purposes of Section 13(d)
or 14(d) of the Exchange Act.

 


“Plan”
means this Sanara MedTech Inc. 2014
Omnibus Long Term Incentive Plan, as amended from time to
time.

 


“Plan Year”
means the calendar
year.

 



 

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“Restricted Share
Units” means Shares
issued by the Company pursuant to an Award granted under Article 8
that will be issued to a participant at a future time or times at
no cost or at a purchase price determined by the Committee, which
may be below their Fair Market Value, if continued Employment
and/or other terms and conditions specified by the Committee are
satisfied.

 


“Restricted
Shares” means Shares
which are issued by the Company pursuant to an Award granted under
Article 8 to a participant at no cost or at a purchase price
determined by the Committee which may be below their Fair Market
Value but which are subject to forfeiture and restrictions on their
sale or other transfer by the participant.

 


“Retirement”
shall be defined in the Award
agreements, as necessary.

 


“Rule 16b-3”
is defined in Article
17.

 


 “Share”
or “Shares”
mean one or more of the Common
Shares.

 


“Shareholder”
means an individual or entity that
owns one or more shares of stock of the Company, including Common
Shares.

 


“Stock Appreciation
Rights” and
“SARs”
mean any right pursuant to an Award
granted under Article 7.

 


“Stock
Option” means a right to
purchase a specified number of Shares at a specified price which is
granted pursuant to Article 5; such right may be an Incentive Stock
Option or a Non-Qualified Stock Option.

 


“Stock
Power” means a power of
attorney executed by a participant and delivered to the Company
which authorizes the Company to transfer ownership of Restricted
Shares, Performance Shares or Common Shares from the participant to
the Company or a third party.

 


“Subsidiary”
means any corporation which qualifies
as a “subsidiary corporation” of the Company under
Section 424(f) of the Code.

 


“Vested”
means, with respect to a Common Share,
when the Common Share has been awarded; with respect to a Stock
Option, when the Stock Option first becomes exercisable; with
respect to a Stock Appreciation Right, when the Stock Appreciation
Right first becomes exercisable; with respect to Restricted Shares,
when the Shares are no longer subject to forfeiture and
restrictions on transferability; with respect to Restricted Share
Units and Performance Shares, when the Restricted Share Units or
Performance Shares are no longer subject to restrictions and
forfeiture and are convertible to, or replaceable with,
Shares. “Vest”
and “Vesting”
shall have correlative
meanings.

 



ARTICLE 2



Administration


 



2.1 Authority
and Duties of the Committee.

 


(a) The
Plan shall be administered by a Committee of at least two Directors
who are appointed by the Board. Unless otherwise determined by the
Board, the Compensation Committee of the Company shall serve as the
Committee that will administer the Plan, and all of the members of
the Committee shall be Outside Directors. Notwithstanding this
requirement that the Committee consist exclusively of Outside
Directors, no action or determination by the Committee or an
individual then considered to be an Outside Director shall be
deemed void because it is discovered that a member of the Committee
or such individual fails to satisfy the requirements for being an
Outside Director, except to the extent required by applicable law.
In the event that the Committee shall not have been appointed by
the Board, the Plan shall be administered by the Board, which shall
exercise all rights, powers and authority granted to the Committee
under this Plan.

 


(b) The
Committee has the power and authority to grant Awards pursuant to
the terms of this Plan to officers, employees, consultants and
Outside Directors.

 



 

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(c) The
Committee has the sole and exclusive authority, subject to any
limitations specifically set forth in this Plan, to:

 




(i)

select
the officers, employees, consultants and Outside Directors to whom
Awards are granted;





 




(ii)

determine
the types of Awards granted and the timing of such
Awards;





 




(iii)

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





 




(iv)

determine
the other terms and conditions, not inconsistent with specific
requirements of this Plan, of any Award granted hereunder; such
terms and conditions include, but are not limited to, the Exercise
Price, the time or times when Stock Options or Stock Appreciation
Rights may be exercised (which may be based on performance
objectives), any Vesting, acceleration or waiver of forfeiture
restrictions, any performance criteria applicable to an Award, and
any restriction or limitation regarding any Option or Stock
Appreciation Right or the Common Shares relating thereto, based in
each case on such factors as the Committee, in its sole discretion,
shall determine;





 




(v)

determine
whether any conditions or objectives related to Awards have been
met;





 




(vi)

subsequently
modify or waive any terms and conditions of Awards, not
inconsistent with the terms of this Plan;





 




(vii)

adopt,
alter and repeal such administrative rules, guidelines and
practices governing this Plan as it deems advisable from time to
time;





 




(viii)

promulgate
such administrative forms as they from time to time deem necessary
or appropriate for administration of the Plan;





 




(ix)

construe,
interpret, administer and implement the terms and provisions of
this Plan, any Award and any related agreements;





 




(x)

correct
any defect, supply any omission and reconcile any inconsistency in
or between the Plan, any Award and any related
agreements;





 




(xi)

prescribe
any legends to be affixed to certificates representing Shares or
other interests granted or issued under the Plan; and





 




(xii)

otherwise
supervise the administration of this Plan.





 


(d) All
decisions made by the Committee pursuant to the provisions of this
Plan are final and binding on all persons, including the Company,
its Shareholders and participants, but may be made by their terms
subject to ratification or approval by, the Board, another
committee of the Board or Shareholders.

 


(e) The
Company shall furnish the Committee and its delegates with such
clerical and other assistance as is necessary for the performance
of the Committee’s duties under the Plan.

 


2.2 Delegation
of Duties. The Committee may
delegate ministerial duties to any other person or persons, and it
may employ attorneys, consultants, accountants or other
professional advisers for purposes relating to plan administration
at the expense of the Company.

 


2.3 Limitation
of Liability. Members of the
Board, members of the Committee and Company employees who are their
designees acting under this Plan shall be fully protected in
relying in good faith upon the advice of counsel and shall incur no
liability except for grossly negligent or willful misconduct in the
performance of their duties hereunder.

 



 

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ARTICLE 3



 Stock Subject to Plan

 


3.1 Total
Shares Limitation. Subject to
the provisions of this Article, the maximum number of Shares that
may be issued pursuant to Awards granted under this Plan is
2,000,000, which may be treasury Shares or unissued
Shares.

 



3.2 Other
Limitations.

 


(a) Stock Option
Limitations. The maximum number
of Shares available with respect to all Stock Options granted under
this Plan is 2,000,000 Shares. The maximum number of Shares
available with respect to ISOs granted under this Plan is 1,000,000
Shares.

 


(b) Full-Value Limitations.
The maximum number of Shares available
with respect to Full- Value Awards granted under this Plan is
2,000,000 Shares.

 


(c) Participant Limitation.
The aggregate number of Shares
underlying all Awards granted under this Plan to any participant in
any Plan Year (including but not limited to Awards of Options and
SARs), regardless of whether such Awards are thereafter canceled,
forfeited or terminated, shall not exceed 100,000
Shares.

 


3.3 Awards
Not Exercised; Effect of Receipt of Shares. If any outstanding Award, or portion thereof,
expires, or is terminated, canceled or forfeited, the Shares that
would otherwise be issuable with respect to the unexercised portion
of such expired, terminated, canceled or forfeited Award shall be
available for subsequent Awards under this Plan. If (i) the
Exercise Price of a Stock Option is paid in Shares, (ii) Shares
underlying the exercised portion of an SAR are not issued upon
exercise of the SAR, (iii) Shares are withheld to satisfy an
individual participant’s tax obligations or (iv) Shares are
repurchased by the Company on the open market with respect to
Awards under this Plan, the Shares received, not issued, withheld
or repurchased by the Company in connection therewith shall not be
added to the maximum aggregate number of Shares which may be issued
under Section 3.1.

 


3.4 Dilution
and Other Adjustments. If the
Committee determines 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, redesignation, reclassification, merger,
consolidation, liquidation, split-up, reverse split, spin-off,
combination, repurchase or exchange of Shares or other securities
of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company or other similar
corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under this Plan,
then the Committee may, in such manner as it deems equitable,
adjust any or all of (i) the number and type of Shares (or other
securities or other property) which thereafter may be made the
subject of Awards, (ii) the number and type of Shares (or other
securities or other property) subject to outstanding Awards, (iii)
the limitations set forth above and (iv) the purchase or Exercise
Price or any performance objective with respect to any
Award; provided, however,
that the number of Shares or other
securities covered by any Award or to which such Award relates is
always a whole number. Notwithstanding the foregoing, unless
otherwise determined by the Committee, the foregoing adjustments
shall be made in conformity with: (I) Sections 422 and 424 of the
Code with respect to ISOs; (II) Treasury Department Regulation
Section 1.424-1 (and any successor thereto) with respect to NQSOs,
applied as if the NQSOs were ISOs; and (III) Section 409A of the
Code, to the extent necessary to avoid its application or avoid
adverse tax consequences thereunder.

 



ARTICLE 4



Participants; Award Agreements

 


4.1 Eligibility.
Officers, all other active common law
employees of the Company or any of its Affiliates, consultants and
Outside Directors who are selected by the Committee in its sole
discretion are eligible to participate in this Plan (individually,
a “participant”).

 


4.2 Award
Agreements. Each Award granted
under this Plan will be evidenced by minutes of a meeting, or by a
unanimous written consent without a meeting, of the Committee, and
by a written agreement dated as of the Date of Grant and executed
by the Company and by the appropriate participant. Each Award is
conditioned upon the participant’s execution of a written
agreement in the form prescribed by the Committee. Execution of an
Award agreement shall constitute (i) the participant’s
irrevocable agreement to, and acceptance of, the terms and
conditions of the Award set forth in such agreement and of the
terms and conditions of the Plan applicable to such Award and (ii)
the participant’s agreement to pay to the Company when due
the amount of any required tax withholding as provided in Article
16. Award agreements may differ from time to time and from
participant to participant.

 



 

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ARTICLE 5



Stock Option Awards


 


5.1 Option
Grants. Each Stock Option may
be granted under this Plan as a Non-Qualified Stock Option or an
Incentive Stock Option and, if a Non-Qualified Stock Option, either
independently or in conjunction with the grant of an
SAR.

 


5.2 Terms
and Conditions of Grants. Stock
Options granted under this Plan are subject to the following terms
and conditions and may contain such additional terms, conditions,
restrictions and contingencies with respect to exercisability and
with respect to the Shares acquired upon exercise as may be
provided in the relevant agreement evidencing the Stock Options, as
the Committee deems desirable, so long as such terms and conditions
are not inconsistent with the terms of this
Plan:

 


(a)    Exercise Price.
Subject to Section 3.4, the Exercise
Price will never be less than 100% of the Fair Market Value of the
Shares on the Date of Grant. Except as otherwise provided in
Section 3.4, no subsequent amendment of an outstanding Stock Option
may reduce the Exercise Price to less than 100% of the Fair Market
Value of the Shares on the Date of Grant.


 


(b) Option Term.
Any unexercised portion of a Stock
Option granted hereunder shall expire at the end of the stated term
of the Stock Option. The Committee shall determine the term of each
Stock Option at the time of grant, which term shall not exceed ten
years from the Date of Grant. The Committee may extend the term of
a Stock Option, in its discretion, but not beyond the date
immediately prior to the tenth anniversary of the original Date of
Grant. If a definite term is not specified by the Committee at the
time of grant, then the term is deemed to be ten years. Unless
provided otherwise in an agreement evidencing the Stock Option or
determined by the Committee, each Stock Option shall terminate upon
the participant's termination of
Employment.


 


(c) Vesting. Stock Options, or portions thereof, are
exercisable at such time or times and on such conditions as
determined by the Committee in its discretion at or after grant. If
the Committee provides that any Stock Option becomes Vested over a
period of time or on conditions, in its entirety or in
installments, the Committee may waive or accelerate those Vesting
provisions at any time.

 


(d) Method of Exercise.
Vested portions of any Stock Option
may be exercised in whole or in part at any time during the option
term by giving written notice of exercise to the Company specifying
the number of Shares to be purchased. The notice must be given by
or on behalf of a person entitled to exercise the Stock Option,
accompanied by payment in full of the Exercise Price, along with
the amount of any tax withholding. Subject to the approval of the
Committee, the Exercise Price may be paid:

 




(i)

in
cash in any manner satisfactory to the Committee;





 




(ii)

by tendering (by either actual delivery of
Shares or by attestation) unrestricted Shares that are owned on the
date of exercise by the person entitled to exercise the
Stock Option having an aggregate Fair
Market Value on the date of exercise equal to the applicable
Exercise Price;





 




(iii)

by
a combination of cash and unrestricted Shares that are owned on the
date of exercise by the person entitled to exercise the Stock
Option;





 




(iv)

by
delivery of irrevocable instructions to a broker to sell Shares
obtained upon exercise of the Stock Option and to deliver promptly
to the Company an amount out of the proceeds of such sale equal to
the Exercise Price for the Shares being purchased; and





 




(v)

by
another method permitted by law and affirmatively approved by the
Committee which assures full and immediate payment or satisfaction
of the Exercise Price.





 



 

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The Committee may withhold its approval for any method of payment
for any reason, in its sole discretion, including but not limited
to concerns that the proposed method of payment will result in
adverse financial accounting treatment, adverse tax treatment for
the Company or a participant or a violation of the Sarbanes-Oxley
Act of 2002, as amended from time to time, and lawful regulations
and guidance promulgated thereunder.

 


(e) Issuance of Shares.
The Company will issue or cause to be
issued Shares as soon as practicable after exercise of a Stock
Option and receipt of full payment of the Exercise Price. Until the
issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of
the Shares, in certificated or uncertificated form, no right to
vote or receive dividends or any other rights as a Shareholder will
exist with respect to the Shares, notwithstanding the exercise of
the Stock Option.

 


(f) Form. Unless the grant of a Stock Option is designated
at the time of grant as an ISO, it is deemed to be an NQSO. ISOs
are subject to the additional terms and conditions in Article
6.

 


(g) Special Limitations on Stock
Option Awards. Unless an Award
agreement approved by the Committee expressly provides otherwise,
Stock Options awarded under this Plan are intended to meet the
requirements for exclusion from coverage under Section 409A of the
Code and all Stock Option Awards shall be construed and
administered accordingly.

 



ARTICLE 6



Special Rules Applicable to Incentive Stock Options

 


6.1 Eligibility.
Notwithstanding any other provision of
this Plan to the contrary, an ISO may only be granted to employees
(including officers and Directors who are also employees) of the
Company or an Affiliate which is also a Parent or
Subsidiary.

 



6.2 Special
ISO Rules.

 


(a) Term. No ISO may be exercisable on or after the tenth
anniversary of the Date of Grant, and no ISO may be granted under
this Plan on or after the tenth anniversary of the effective date
of this Plan.

 


(b) Ten Percent
Shareholder. If a grantee owns
(at the time of the Award and after application of the rules
contained in Section 424(d) of the Code) equity securities
possessing more than 10% of the total combined voting power of all
classes of equity securities of the Company, its Parent or any
Subsidiary, the Exercise Price of the ISO will be at least 110% of
the Fair Market Value of the Shares as of the Date of Grant and
such ISO shall not be exercisable on or after the fifth anniversary
of the Date of Grant.

 


(c) Limitation on Grants.
The aggregate Fair Market Value
(determined with respect to each ISO at the time of grant) of the
Shares with respect to which ISOs are exercisable for the first
time by an optionee during any calendar year (under this Plan or
any other plan adopted by the Company or a Parent or a Subsidiary)
shall not exceed $100,000. If such aggregate Fair Market Value
shall exceed $100,000, such number of ISOs as shall have an
aggregate Fair Market Value equal to the amount in excess of
$100,000 shall be treated as NQSOs.

 


(d) Non-Transferability.
Notwithstanding any other provision
herein to the contrary, no ISO (and, if applicable, related Stock
Appreciation Right) may be transferred except by will or by the
laws of descent and distribution, nor may an ISO (or related Stock
Appreciation Right) be exercisable during an optionee’s
lifetime other than by him or her (or his or her guardian or legal
representative to the extent permitted by applicable
law).

 


(e) Termination of
Employment. No ISO may be
exercised more than three months following termination of
Employment for any reason (including Retirement) other than death
or Disability, nor more than one year following termination of
Employment due to death or Disability (as defined in Section 422 of
the Code), or such option will no longer qualify as an ISO and
shall thereafter be, and receive the tax treatment applicable to,
an NQSO. For this purpose, a termination of Employment is cessation
of Employment such that no Employment relationship exists between
the participant and the Company, a Parent or a
Subsidiary.

 


(f) Fair Market Value.
For purposes of any ISO granted
hereunder (or, if applicable, related Stock Appreciation Right),
the Fair Market Value of Shares shall be determined in the manner
required by Section 422 of the Code.

 



 

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6.3 Subject
to Code Amendments. The
foregoing limitations are designed to comply with the requirements
of Section 422 of the Code and shall be automatically amended or
modified to comply with changes to Section 422 of the Code. Any ISO
which fails to meet the requirements of Section 422 of the Code is
automatically treated as an NQSO appropriately granted under this
Plan provided that it otherwise meets the Plan’s requirements
for being an NQSO.


 



ARTICLE 7



Stock Appreciation Rights

 


7.1 SAR
Grants. A Stock Appreciation
Right may be granted under this Plan, either independently or in
conjunction with the grant of a Stock Option.

 


7.2 SARs
Granted in
Conjunction with Option. Stock
Appreciation Rights may be granted in conjunction with all or part
of Stock Options granted under this Plan, at the same time as the
grant of the Stock Options, and will be subject to the following
terms and conditions:

 


(a) Term. Each Stock Appreciation Right, or applicable
portion thereof, granted with respect to a given Stock Option or
portion thereof terminates and is no longer exercisable upon the
termination or exercise of the related Stock Option, or applicable
portion thereof.

 


(b) Exercisability.
A Stock Appreciation Right is exercisable only at
such time or times and to the extent that the Stock Option to which
it relates is Vested and exercisable in accordance with the
provisions of Article 5 or otherwise as the Committee may
determine.

 


(c) Method of Exercise.
A Stock Appreciation Right may be exercised by the
surrender of the applicable portion of the related Stock Option.
Stock Options which have been so surrendered, in whole or in part,
are no longer exercisable to the extent the related Stock
Appreciation Rights have been exercised and are deemed to have been
exercised for the purpose of the limitation set forth in Article 3
on the number of Shares to be issued under this Plan. Upon the
exercise of a Stock Appreciation Right, subject to satisfaction of
tax withholding requirements, the holder of the Stock Appreciation
Right is entitled to receive cash or Shares equal in value to the
excess of the Fair Market Value of a Share on the exercise date
over the Exercise Price per Share specified in the related Stock
Option, multiplied by the number of Shares in respect of which the
Stock Appreciation Right is exercised. Any fractional Shares shall
be paid in cash or, if the Committee determines, rounded downward
to the next whole Share. At any time the Exercise Price per Share
of the related Stock Option exceeds the Fair Market Value of one
Share, the holder of the Stock Appreciation Right shall not be
permitted to exercise such right.

 


7.3 Independent
SARs. Stock Appreciation Rights
may be granted without related Stock Options, and independent Stock
Appreciation Rights will be subject to the following terms and
conditions:

 


(a) Term. Any unexercised portion of an independent Stock
Appreciation Right granted hereunder shall expire at the end of the
stated term of the Stock Appreciation Right. The Committee shall
determine the term of each Stock Appreciation Right at the time of
grant, which term shall not exceed ten years from the Date of
Grant. The Committee may extend the term of a Stock Appreciation
Right, in its discretion, but not beyond the date immediately prior
to the tenth anniversary of the original Date of Grant. If a
definite term is not specified by the Committee at the time of
grant, then the term is deemed to be ten years.

 


(b) Exercisability.
A Stock Appreciation Right is exercisable, in whole
or in part, at such time or times as determined by the Committee at
or after the time of grant.

 


(c) Method of
Exercise. A Stock Appreciation
Right may be exercised in whole or in part during the term by
giving written notice of exercise to the Company specifying the
number of Shares in respect of which the Stock Appreciation Right
is being exercised. The notice must be given by or on behalf of a
person entitled to exercise the Stock Appreciation Right. Upon the
exercise of a Stock Appreciation Right, subject to satisfaction of
tax withholding requirements, the holder of the Stock Appreciation
Right is entitled to receive cash or Shares equal in value to the
excess of the Fair Market Value of a Share on the exercise date
over the Fair Market Value of a Share on the Date of Grant
(the “Base
Value”) multiplied by the
number of Stock Appreciation Rights being exercised. Any fractional
Shares shall be paid in cash or, if the Committee determines,
rounded downward to the next whole Share. At any time the Fair
Market Value of a Share on a proposed exercise date does not exceed
the Base Value, the holder of the Stock Appreciation Right shall
not be permitted to exercise such right.

 



 

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7.4 Other
Terms and Conditions of SAR Grants. Stock Appreciation Rights are subject to such
other terms and conditions, not inconsistent with the provisions of
this Plan, as are determined from time to time by the
Committee.

 


7.5 Special
Limitations on SAR Awards. Unless an Award agreement approved by the
Committee expressly provides otherwise, Stock Appreciation Rights
awarded under this Plan are intended to meet the requirements for
exclusion from coverage under Section 409A of the Code and all
Stock Appreciation Rights Awards shall be construed and
administered accordingly.

 



ARTICLE 8



Restricted Share and Restricted Share Unit Awards

 


8.1 Restricted
Share Grants. Restricted Share
Awards consist of Shares which are issued by the Company to a
participant at no cost or at a purchase price determined by the
Committee which may be below their Fair Market Value, but which are
subject to forfeiture and restrictions on their sale or other
transfer by the participant. The timing of Restricted Share Awards
and the number of Shares to be issued (subject to Section 3.4) are
determined by the Committee in its discretion.

 


8.2 Terms
and Conditions of Restricted Share Grants. Restricted Shares granted under this Plan are
subject to the following terms and conditions, which, except as
otherwise provided herein, need not be the same for each
participant, and may contain such additional terms, conditions,
restrictions and contingencies not inconsistent with the terms of
this Plan, as the Committee deems desirable:

 


(a) Purchase Price.
The Committee shall determine the
prices, if any, at which Restricted Shares are to be issued to a
participant, which may vary from time to time and from participant
to participant and which may be below the Fair Market Value of such
Restricted Shares at the Date of Grant.

 


(b) Restrictions.
All Restricted Shares issued under
this Plan will be subject to such restrictions as the Committee may
determine, which may include, without limitation, the
following:

 




(i)

a
prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Shares, such prohibition to lapse at such time or
times as the Committee determines (whether in installments, at the
time of the death, Disability or Retirement of the holder of such
shares, or otherwise, but subject to the Change in Control
provisions in Article 12 and the applicable Award
agreements);





 




(ii)

a
requirement that the participant forfeit such Restricted Shares in
the event of termination of the participant’s Employment with
the Company or its Affiliates prior to Vesting;





 




(iii)

the
elimination of any voting rights and rights to receive dividends
for such Restricted Shares prior to Vesting;





 




(iv)

a
prohibition against Employment or retention of the participant by
any competitor of the Company or its Affiliates, or against
dissemination by the participant of any secret or confidential
information belonging to the Company or an Affiliate;





 




(v)

any
applicable requirements arising under the Securities Act of 1933,
as amended, other securities laws, the rules and regulations of The
Nasdaq Stock Market or any other stock exchange or transaction
reporting system upon which such Restricted Shares are then listed
or quoted and any state laws, rules and regulations, including
“blue sky” laws; and





 




(vi)

such
additional restrictions as are required to avoid adverse tax
consequences under Section 409A of the Code.





 



 

9







 





 



The Committee may at any time waive such restrictions or accelerate
the date or dates on which the restrictions will
lapse.

 


(c)
    Performance-Based
Restrictions. The Committee
may, in its sole discretion, provide restrictions that lapse upon
the attainment of specified performance objectives. In such case,
the provisions of Sections 9.2, 9.3 and 9.4(b) will
apply.

 


(d) Delivery of Shares.
Restricted Shares will be certificated
and registered in the name of the participant and deposited,
together with a Stock Power, with the Company. Each such
certificate will bear a legend in substantially the following
form:

 


“The
transferability of this certificate and the Common Shares
represented by it are subject to the terms and conditions
(including conditions of forfeiture) contained in the Sanara
MedTech Inc. 2014 Omnibus Long Term Incentive Plan and an agreement
entered into between the registered owner and the Company. A copy
of this Plan and agreement are on file in the office of the
Secretary of the Company.”

 



At the end of any time period during which the Restricted Shares
are subject to forfeiture and restrictions on transfer, and after
the satisfaction by the participant of tax withholding
requirements, such Shares will be delivered free of all
restrictions (except as provided in Section 15.2) to the
participant or other appropriate person and with the foregoing
legend removed.

 


(e) Forfeiture of Shares.
If a participant who holds Restricted
Shares fails to satisfy the restrictions, Vesting requirements and
other conditions relating to the Restricted Shares prior to the
lapse, satisfaction or waiver of such restrictions and conditions,
except as may otherwise be determined by the Committee, the
participant shall forfeit the Shares and transfer them back to the
Company in exchange for a refund of any consideration paid by the
participant or such other amount which may be specifically set
forth in the Award agreement. A participant shall execute and
deliver to the Company one or more Stock Powers with respect to
Restricted Shares granted to such participant.

 


(f) Voting and Other
Rights. Except as otherwise
provided in the applicable Restricted Share Agreement, during any
period in which Restricted Shares are subject to forfeiture and
restrictions on transfer, the participant holding such Restricted
Shares shall have the other rights of a Shareholder with respect to
such Shares, including, without limitation, the right to vote such
Shares and the right to receive any dividends paid with respect to
such Shares; provided that if restrictions lapse upon the
attainment of specified performance objectives, then the
participant will receive any dividends only to the extent
performance objectives were achieved.

 


8.3 Restricted
Share Unit Awards. Restricted
Share Unit Awards consist of Shares that will be issued to a
participant at a future time or times at no cost or at a purchase
price determined by the Committee, which may be below their Fair
Market Value, subject to satisfaction of continued Employment
and/or other terms and conditions specified by the Committee. The
timing of Restricted Share Unit Awards and the number of Restricted
Share Units to be awarded (subject to Section 3.2) are determined
by the Committee in its sole discretion.

 


8.4 Terms
and Conditions of Restricted Share Unit Awards. Restricted Share Unit Awards are subject to the
following terms and conditions, which, except as otherwise provided
herein, need not be the same for each participant, and may contain
such additional terms, conditions, restrictions and contingencies
not inconsistent with the terms of this Plan, as the Committee
deems desirable:

 


(a) Purchase Price.
The Committee shall determine the
prices, if any, at which Shares are to be issued to a participant
after Vesting of Restricted Share Units, which may vary from time
to time and among participants and which may be below the Fair
Market Value of Shares at the Date of Grant.

 


(b) Restrictions.
All Restricted Share Units awarded under this Plan will be subject
to such restrictions as the Committee may determine, which may
include, without limitation, the following:

 




(i)

a
prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Share Unit;





 




(ii)

a
requirement that the participant forfeit such Restricted Share Unit
in the event of termination of the participant’s Employment
with the Company or its Affiliates prior to Vesting;





 



 

10







 





 




(iii)

a
prohibition against Employment of the participant by, or provision
of services by the participant to, any competitor of the Company or
its Affiliates, or against dissemination by the participant of any
secret or confidential information belonging to the Company or an
Affiliate;





 




(iv)

any
applicable requirements arising under the Securities Act of 1933,
as amended, other securities laws, the rules and regulations of The
Nasdaq Stock Market or any other stock exchange or transaction
reporting system upon which the Common Shares are then listed or
quoted and any state laws, rules and interpretations, including
“blue sky” laws; and





 




(v)

such
additional restrictions as are required to avoid adverse tax
consequences under Section 409A of the Code.





 



The Committee may at any time waive such restrictions or accelerate
the date or dates on which the restrictions will
lapse.

 


(c) Performance-Based
Restrictions. The Committee
may, in its sole discretion, provide restrictions that lapse upon
the attainment of specified performance objectives. In such case,
the provisions of Sections 9.2, 9.3 and 9.4(b) will
apply.

 


(d) Voting and Other
Rights. A participant holding
Restricted Share Units shall not be deemed to be a Shareholder
solely because of such units. Such participant shall have no rights
of a Shareholder with respect to such units; provided, however,
that an Award agreement may provide
for payment of an amount of money (or Shares with a Fair Market
Value equivalent to such amount) equal to the dividends paid from
time to time on the number of Common Shares that would become
payable upon vesting of a Restricted Share Unit Award but if
restrictions lapse upon the attainment of specified performance
objectives, then such dividend equivalents shall be paid only to
the extent performance objectives are achieved.

 


(e) Lapse of Restrictions.
If a participant who holds Restricted
Share Units satisfies the restrictions and other conditions
relating to the Restricted Share Units prior to the lapse or waiver
of such restrictions and conditions, after the satisfaction by the
participant of tax withholding requirements the Restricted Share
Units shall be converted to, or replaced with, Shares which are
free of all restrictions (except as provided in Section
15.2).


 


(f) Forfeiture of Restricted Share
Units. If a participant who
holds Restricted Share Units fails to satisfy the restrictions,
Vesting requirements and other conditions relating to the
Restricted Share Units prior to the lapse, satisfaction or waiver
of such restrictions and conditions, except as may otherwise be
determined by the Committee, the participant shall forfeit the
Restricted Share Units.

 


(g) Special Limitations on
Restricted Share Unit Awards. Restricted Share Units awarded under this Plan are
intended to be compliant with, or exempt from, Section 409A of the
Code and all Restricted Share Unit Awards shall be construed and
administered accordingly.

 




 

11







 





 



ARTICLE 9



Performance Share Awards

 

9.1. Performance
Share Awards. A Performance
Share Award is a right to receive Shares in the future conditioned
upon the attainment of specified performance objectives and such
other conditions, restrictions and contingencies as the Committee
may determine. The timing of Performance Share Awards and the
number of Shares covered by each Award (subject to Section 3.2) are
determined by the Committee in its discretion.

 

9.2. Performance
Objectives. At the time of grant of a Performance Share Award,
the Committee will specify the performance objectives which,
depending on the extent to which they are met, will determine the
number of Shares that will be distributed to the participant. The
Committee will also specify the period or periods during which any
performance objective must be met (the “Performance
Period”). The Committee
may designate a single goal criterion or multiple goal criteria for
performance measurement purposes. Performance measurement may be
based on absolute Company, business unit or divisional performance
and/or on relative performance as compared with that of other
publicly traded companies. The performance objectives and periods
need not be the same for each participant nor for each
Award.

 

9.3. Adjustment
of Performance Objective and Evaluations. The Committee may modify, amend or otherwise
adjust the performance objectives specified for outstanding
Performance Share Awards if it determines that an adjustment would
be consistent with the objectives of this Plan and taking into
account the interests of the participants and the public
Shareholders of the Company. The types of events which could cause
an adjustment in the performance objectives include, without
limitation, accounting changes which substantially affect the
determination of performance objectives, changes in applicable laws
or regulations which affect the performance objectives, and
divisive corporate reorganizations, including spin-offs and other
distributions of property or stock. The Committee may also
appropriately adjust any performance evaluation under a performance
objective or objectives to reflect any of the following events that
may occur during the Performance Period: (1) asset gains or losses;
(2) litigation, claims, judgments or settlements; (3) the effect of
changes in tax law, accounting principles or other such laws or
provisions affecting reported results; (4) accruals for
reorganization and restructuring programs; and (5) any
extraordinary, unusual, non-recurring or non-cash
items.

 

9.4. Other
Terms and Conditions. Performance Share Awards may contain such other
terms, conditions, restrictions and contingencies not inconsistent
with the terms of this Plan as the Committee deems desirable and
are subject to the following terms and
conditions:

 

(a) Delivery of Shares.
As soon as practicable after the
applicable Performance Period has ended, and the fulfillment of
time Vesting requirements, if any, and after the satisfaction by
the participant of tax withholding requirements, the participant
will receive a distribution of the number of Shares earned during
the Performance Period, depending upon the extent to which the
applicable performance objectives were achieved. Such Shares will
be registered in the name of the participant and will be free of
all restrictions except for any restrictions pursuant to Section
15.2.

 

(b) Termination; Time
Vesting. A Performance Share
Award or unearned portion thereof will terminate without the
issuance of Shares on the termination date specified at the time of
grant or, whether or not earned, upon the termination of Employment
of the participant during the time period or periods required for
Vesting as specified by the Committee. If a participant’s
Employment with the Company or its Affiliates terminates by reason
of his or her death, Disability or Retirement, the Committee in its
discretion may determine at or after the time of grant,
notwithstanding any Vesting requirements under Section 9.4(a), that
the participant (or the heir, legatee or legal representative of
the participant’s estate) will receive a distribution of
Shares representing a portion of the participant’s
then-outstanding Performance Share Awards in an amount which is not
more than the number of shares which would have been earned by the
participant if 100% of the performance objectives for the current
Performance Period had been achieved prorated based on the ratio of
the number of months of active Employment in the Performance Period
to the total number of months in the Performance
Period.

 

(c) Voting and Other
Rights. Awards of Performance
Shares do not provide the participant with voting rights or rights
to dividends prior to the participant becoming the holder of record
of Shares issued pursuant to an Award; provided, however, that an
Award agreement may provide for payment of an amount of money (or
Shares with a Fair Market Value equivalent to such amount) equal to
the dividends paid from time to time on the number of Common Shares
that would become payable upon vesting of a Performance Share Award
but such dividend equivalents shall be paid only to the extent
performance objectives are achieved. Prior to the issuance of
Shares, Performance Share Awards may not be sold, transferred,
pledged, assigned or otherwise encumbered.

 

 



 

12







 





 

9.5. Special
Limitations on Performance Share Awards. Unless an Award agreement provides otherwise,
Performance Shares Awarded under this Plan are intended to meet the
requirements for exclusion from coverage under Section 409A of the
Code and all Performance Share Awards shall be construed and
administered accordingly.

 



ARTICLE 10



Common Share Awards

 

10.1 Eligibility.
Notwithstanding any other provision of
this Plan to the contrary, a Common Share may only be granted to an
employee or Outside Director.

 


10.2 Terms
and Conditions of Common Share Awards.

 


(a) Purpose. Common Shares may be granted in consideration of
services rendered to the Company by employees or Outside Directors
in their capacity as Directors.

 


(b) Vesting. Common Shares shall be
fully-Vested.

 


(c) Delivery of
Shares. The Shares will be
delivered to the participant after the satisfaction by the
participant of tax withholding requirements.

 



ARTICLE 11



Transfers and Leaves of Absence

 

11.1 Transfer
of Participant. For purposes of
this Plan, the transfer of a participant among the Company and its
Affiliates is deemed not to be a termination of
Employment.

 

11.2 Effect
of Leaves of Absence. For
purposes of this Plan, the following leaves of absence are deemed
not to be a termination of Employment:

 


(a) a
leave of absence, approved in writing by the Company, for military
service, sickness or any other purpose approved by the Company, if
the period of such leave does not exceed 90 days;

 


(b) a
leave of absence in excess of 90 days, approved in writing by the
Company, but only if the employee’s right to reemployment is
guaranteed either by a statute or by contract, and provided that,
in the case of any such leave of absence, the employee returns to
work within 30 days after the end of such leave; and

 


(c) any
other absence determined by the Committee in its discretion not to
constitute a termination of Employment.

 



ARTICLE 12



Effect of Change in Control

 


12.1   
Change in
Control Defined. “Change in
Control” means (i) a sale
of all or substantially all of the assets of the Company to any
person or entity that is not a wholly owned subsidiary of the
Company; (ii) a merger or consolidation to which the Company is a
party if all persons who were shareholders of the Company
immediately prior to the effective date of the merger or
consolidation become beneficial owners (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of
securities having less than 50% of the total combined voting power
for election of directors (or comparable governing body) of the
surviving corporation or other entity following the effective date
of such merger or consolidation; or (iii) the approval by
shareholders of the Company of any plan or proposal for the
liquidation of the Company or its subsidiaries (other than into the
Company).


 



 

13







 






 


12.2   
Acceleration
of Award. Except as otherwise
provided in this Plan or an Award agreement, immediately upon the
occurrence of a Change in Control:

 


(a) all
outstanding Stock Options automatically become fully
exercisable;

 


(b) all
Restricted Share Awards automatically become fully
Vested;

 


(c) subject
to Section 409A of the Code, all Restricted Share Unit Awards
automatically become fully Vested (or, if such Restricted Share
Unit Awards are subject to performance-based restrictions, they
shall become Vested on a pro-rated basis as described in Section
12.2(d)) and, to the extent Vested, converted to, or replaced with,
Shares at the election of the holder;

 



(d) all
participants holding Performance Share Awards become entitled to
receive a partial payout in an amount which is the number of Shares
which would have been earned by the participant if 100% of the
performance objectives for the current Performance Period had been
achieved pro-rated based on the ratio of the number of months of
active Employment in the Performance Period to the total number of
months in the Performance Period; and

 


(e) Stock
Appreciation Rights automatically become fully Vested and fully
exercisable.

 


12.3   
Treatment
of Awards. If the Committee
determines that it would not trigger adverse taxation under Section
409A of the Code, upon the occurrence of a Change in Control, the
Committee may, but shall not be obligated to, (A) cancel Awards for
fair value, which, in the case of Stock Options and Stock
Appreciation Rights, shall equal the excess, if any, of the value
of the consideration to be paid in the Change in Control
transaction to holders of the same number of Shares subject to such
Stock Options or Stock Appreciation Rights (or, if no consideration
is paid in any such transaction, the Fair Market Value of the
Shares subject to such Stock Options or Stock Appreciation Rights
as of the date of the Change in Control) over the aggregate
Exercise Price or Base Value (as applicable) of such Stock Options
or Stock Appreciation Rights or (B) provide for the issuance of
substitute Awards that will substantially preserve the otherwise
applicable terms and value of any affected Awards previously
granted hereunder as determined by the Committee or (C) provide
that for a period of at least 15 days prior to the Change in
Control, such Awards shall be exercisable, to the extent
applicable, as to all Shares subject thereto and the Committee may
further provide that upon the occurrence of the Change in Control,
such Awards shall terminate and be of no further force and
effect.

 



ARTICLE 13



Transferability of Awards

 



13.1 Awards Are
Non-Transferable. Except as
provided in Sections 13.2 and 13.3, Awards are non- transferable
and any attempts to assign, pledge, hypothecate or otherwise
alienate or encumber (whether by operation of law or otherwise) any
Award shall be null and void.

 


13.2 Inter-Vivos
Exercise of Awards. During a
participant’s lifetime, Awards are exercisable only by the
participant or, as permitted by applicable law and notwithstanding
Section 13.1 to the contrary, the participant’s guardian or
other legal representative.

 


13.3 Limited
Transferability of Certain Awards. Notwithstanding Section 13.1 to the contrary,
Awards may be transferred by will and by the laws of descent and
distribution. Moreover, the Committee, in its discretion, may allow
at or after the time of grant the transferability of Awards which
are Vested, provided that the permitted transfer is made (a) if the
Award is an Incentive Stock Option, consistent with Section 422 of
the Code; (b) to the Company (for example in the case of forfeiture
of Restricted Shares), an Affiliate or a person acting as the agent
of the foregoing, or as otherwise determined by the Committee to be
in the interests of the Company; or (c) by a participant for no
consideration to Immediate Family Members or to a bona fide trust,
partnership or other entity controlled by and for the benefit of
one or more Immediate Family Members. “Immediate Family
Members” means the
participant’s spouse, children, stepchildren, parents,
stepparents, siblings (including half brothers and sisters),
in-laws and other individuals who have a relationship to the
participant arising because of a legal adoption. No transfer may be
made to the extent that transferability would cause Form S-8 or any
successor form thereto not to be available to register Shares
related to an Award. The Committee in its discretion may impose
additional terms and conditions upon
transferability.

 



 

14







 





 



ARTICLE 14



Amendment and Discontinuation

 


14.1 Amendment
or Discontinuation of this Plan. The Board may amend, alter, or discontinue this
Plan at any time, provided that no amendment, alteration, or
discontinuance may be made:

 


(a) which
would materially and adversely affect the rights of a participant
under any Award granted prior to the date such action is adopted by
the Board without the participant’s written consent thereto;
and

 


(b) without
Shareholder approval if Shareholder approval is required under
applicable laws, regulations or exchange requirements (including
Section 422 of the Code with respect to ISOs).

 



Notwithstanding the foregoing, this Plan may be amended without
obtaining the affected participants’ consent in order to: (i)
comply with any law; (ii) preserve any intended favorable tax
effects for the Company or participants; or (iii) avoid any
unintended unfavorable tax effects for the Company or
participants.

 


14.2 Amendment
of Grants. The Committee may
amend, prospectively or retroactively, the terms of any outstanding
Award, provided that no such amendment may be inconsistent with the
terms of this Plan (specifically including the prohibition on
granting Stock Options with an Exercise Price less than 100% of the
Fair Market Value of the Common Shares on the Date of Grant) or
would materially and adversely affect the rights of any holder
without his or her written consent.

 



ARTICLE 15



Share Certificates

 


15.1 Delivery
of Share Certificates. The
Company is not required to issue or deliver any Shares issuable
with respect to Awards under this Plan prior to the fulfillment of
all of the following conditions:

 


(a) payment
in full for the Shares and for any tax withholding;

 


(b) completion
of any registration or other qualification of such Shares under any
federal or state laws or under the rulings or regulations of the
Securities and Exchange Commission or any other regulating body
which the Committee in its discretion deems necessary or
advisable;


 


(c) admission
of such Shares to listing on The Nasdaq Stock Market or any stock
exchange on which the Shares are listed;

 


(d) in
the event the Shares are not registered under the Securities Act of
1933, as amended, qualification as a private placement under said
act;

 


(e) obtaining
of any approval or other clearance from any federal or state
governmental agency which the Committee in its discretion
determines to be necessary or advisable; and

 


(f) full
satisfaction of the Committee that the issuance and delivery of
Shares under this Plan is in compliance with applicable federal,
state or local law, rule, regulation or ordinance or any rule or
regulation of any other regulating body, for which the Committee
may seek approval of counsel for the Company.

 


Notwithstanding
the foregoing, with respect to any Award that is or becomes subject
to Section 409A of the Code, a payment may only be delayed where
the Company or any Affiliate reasonably anticipates that the making
of the payment will violate federal securities laws or other
applicable law and provided that the payment is made at the
earliest date at which the Company or Affiliate reasonably
anticipates that the making of the payment will not cause such
violation.

 



 

15







 





 


15.2 Applicable
Restrictions on Shares. Shares
issued with respect to Awards may be subject to such stock transfer
orders and other restrictions as the Committee may determine
necessary or advisable under any applicable federal or state
securities law rules, regulations and other requirements, the
rules, regulations and other requirements of The Nasdaq Stock
Market or other stock exchange upon which the Shares are
then-listed, and any other applicable federal or state law and will
include any restrictive legends the Committee may deem appropriate
to include.

 


15.3 Book
Entry. In lieu of the issuance
of stock certificates evidencing Shares, the Company or its
transfer agent may use a “book entry”
system in which a computerized or
manual entry is made in the records of the Company or the transfer
agent to evidence the issuance of such Shares. Such Company records
are, absent manifest error, binding on all
parties.

 



ARTICLE 16



Tax Withholding

 


16.1 General.
The Committee shall cause the Company
or its Affiliates to withhold any taxes which it determines it is
required by law or required by the terms of this Plan to withhold
in connection with any payments incident to this Plan. The
participant or other recipient shall provide the Committee with
such Stock Powers and additional information or documentation as
may be necessary for the Committee to discharge its obligations
under this Section.

 


16.2 Method
of Payment by Participant. The Company will specify the amount of tax
withholding payable by a participant in connection with the Vesting
of the participant’s Award. The participant shall pay such
amount of tax withholding in cash or if provided in the Award
Agreement by such other manner permitted in the Award agreement,
which may include, subject to Committee
approval:

 




(i)

tendering (by either actual delivery of
Shares or by attestation) unrestricted Shares that are owned by the
participant prior to the date of Vesting having an aggregate Fair
Market Value on the date of Vesting equal to the amount of such
withholding tax;





 




(ii)

the withholding of Shares otherwise issuable
pursuant to the Award on the date of Vesting having an
aggregate Fair Market Value on the date of Vesting equal to the
amount of such withholding tax;





 




(iii)

by
a combination of cash and either of the foregoing enumerated
methods;





 




(iv)

another method
approved by the Committee.





 


16.3 Delivery
of Withholding Proceeds. The
Company or its Affiliates shall deliver withholding proceeds to the
Internal Revenue Service and/or other taxing
authority.

 



ARTICLE 17



General Provisions

 


17.1 No Implied
Rights to Awards, Employment or Directorship. No potential participant has any claim or right to
be granted an Award under this Plan, and there is no obligation of
uniformity of treatment of participants under this Plan. Neither
this Plan nor any Award hereunder shall be construed as giving any
individual any right to continued Employment with the Company or
any Affiliate. The Plan does not constitute a contract of
Employment or for services, and the Company and each Affiliate
expressly reserve the right at any time to terminate employees or
service providers free from liability, or any claim, under this
Plan, except as may be specifically provided in this Plan or in an
Award agreement.

 


 

17.2 Other
Compensation Plans. Nothing
contained in this Plan prevents the Board from adopting other or
additional compensation arrangements, subject to Shareholder
approval if such approval is required, and such arrangements may be
either generally applicable or applicable only in specific
cases.

 

17.3 Rule
16b-3 Compliance. The Plan is
intended to comply with all applicable conditions of Rule 16b-3
under the Exchange Act, as such rule may be amended from time to
time (“Rule
16b-3”). All transactions
involving any participant subject to Section 16(b) of the Exchange
Act shall be subject to the conditions set forth in Rule 16b-3,
regardless of whether such conditions are expressly set forth in
this Plan. Any provision of this Plan that is contrary to Rule
16b-3 does not apply to such participants.

 



 

16







 





 

17.4 Compliance
with Section 409A. The parties
intend that this Plan and Awards be, at all relevant times, in
compliance with (or exempt from) Section 409A of the Code and all
other applicable laws, and this Plan shall be so interpreted and
administered. In addition to the general amendment rights of the
Company with respect to the Plan, the Company specifically retains
the unilateral right (but not the obligation) to make,
prospectively or retroactively, any amendment to this Plan or any
related document as it deems necessary or desirable to more fully
address issues in connection with compliance with (or exemption
from) Section 409A of the Code and other laws. In no event,
however, shall this section or any other provisions of this Plan be
construed to require the Company to provide any gross-up for the
tax consequences of any provisions of, or payments under, this
Plan. The Company and its Affiliates shall have no responsibility
for tax or legal consequences to any Participant (or beneficiary)
resulting from the terms or operation of this
Plan.

 

17.5 Successors.
All obligations of the Company with
respect to Awards granted under this Plan are binding on any
successor to the Company, whether as a result of a direct or
indirect purchase, merger, consolidation or otherwise of all or
substantially all of the business and/or assets of the
Company.

 

17.6 Severability.
In the event any provision of this
Plan, or the application thereof to any person or circumstances, is
held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of this Plan, or
other applications, and this Plan is to be construed and enforced
as if the illegal or invalid provision had not been
included.

 

17.7 Governing
Law. This Plan and all Award
agreements pursuant thereto are construed in accordance with and
governed by the internal laws of the State of Texas. This Plan is
not intended to be governed by the Employee Retirement Income
Security Act of 1974 and shall be so construed and
administered.

 



ARTICLE 18



Effective Date; Expiration

 


18.1   
Effective
Date. The effective date of
this Plan is the date on which the Shareholders of the Company
approve it at a duly held Shareholders’ meeting. No Awards
may be granted under this Plan after the tenth anniversary of such
date, but Awards granted before such tenth anniversary may remain
outstanding under this Plan until they expire according to their
terms and the other terms of this Plan.

 




 

17