Exhibit 10.1


 

B.
RILEY FINANCIAL, INC.


Amended
and Restated 2009 Stock Incentive Plan


 


(formerly
Great American Group, Inc.


Amended
and Restated 2009 Stock Incentive Plan)


 


(formerly
Alternative Asset Management Acquisition Corp.


2009
Stock Incentive Plan)


  





 



Plan
Document 


 









  


1.           Establishment,
Purpose, and Types of Awards. B. Riley Financial, Inc. (the “Company”) hereby establishes this equity-based
incentive compensation plan (originally established by Alternative Asset Management Acquisition Corp.) to be known as the “B.
Riley Financial, Inc. Amended and Restated 2009 Stock Incentive Plan” (hereinafter referred to as the “Plan”),
for the following purposes: (a) to enhance the Company’s ability to attract highly qualified personnel; (b) to
strengthen its retention capabilities; (c) to enhance the long-term performance and competitiveness of the Company; and (d) to
align the interests of Participants with those of the Company’s shareholders.


 


(a)          Effective
Date. This Plan shall become effective upon the date adopted by the Board of Directors of the Company; provided that no Awards
shall be granted hereunder until the Plan has been approved by a vote of a majority of the votes cast at a duly held meeting of
the Company’s shareholders (or by such other shareholder vote that the Committee determines to be sufficient for the issuance
of Shares and Awards according to the Company’s governing documents and Applicable Law).


 


(b)          Awards.
The Plan permits the granting of the following types of Awards according to the Sections of the Plan listed here:


 


Section
5          Stock Options


Section
6          Share Appreciation Rights (SARs)


Section
7          Restricted Shares, Restricted Share Units (RSUs), and


                         Unrestricted
Shares


Section
8          Deferred Share Units (DSUs)


Section
9          Performance Awards


 


(c)          Appendices.
Incorporated by reference and thereby part of the Plan are the terms set forth in Appendix I.


 


(d)          Effect
on Other Plans, Awards, and Arrangements. This Plan is not intended to affect and shall not affect any stock options, equity-based
compensation, or other benefits that the Company or its Affiliates may have provided, or may separately provide in the future,
pursuant to any agreement, plan, or program that is independent of this Plan. Notwithstanding the foregoing, effective upon shareholder
approval of this Plan, no further awards shall be granted under the Pride Capital Group, LLC Phantom Stock Plan.


 


2.           Defined
Terms. Terms in the Plan and any Appendix that begin with an initial capital letter have the defined meaning set forth
in Appendix I, unless the context indicates a different meaning.


 






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3.          Shares
Subject to the Plan. Subject to adjustment pursuant to Section 13 below, a total of 3,210,133 Shares shall be available
for issuance under the Plan. The Shares deliverable pursuant to Awards shall be authorized, but unissued Shares, or Shares that
the Company otherwise holds in treasury or in trust. Any Shares subject to an Award that is settled in cash rather than in Shares,
or subject to an Award that expires or is forfeited, cancelled or otherwise terminated without the issuance of some or all of
the Shares subject to the Award will again be available for future Awards to the extent of such cash settlement, or non-issuance
due to expiration, forfeiture, cancellation or termination. In addition, previously issued Shares that are not related to a particular
Award (e.g., Shares already owned by a Participant) and Shares subject to an Award that are tendered or withheld by the Company
in payment of all or part of the exercise price of such Award or in satisfaction of applicable Withholding Taxes shall be added
to the number of Shares available for issuance under the Plan. Further, and to the extent permitted under Applicable Laws: (i)
the maximum number of Shares available for delivery under the Plan shall not be reduced by any Shares issued under the Plan through
the settlement, assumption, or substitution of outstanding awards or obligations to grant future awards in connection with the
acquisition by the Company (or an Affiliate of the Company) of another entity; and (ii) the maximum number of Shares available
for delivery under the Plan shall be increased by the number of shares available for issuance under any shareholder approved plan
of an entity acquired by the Company or an Affiliate of the Company (as such number has been equitably adjusted by the Committee
to give effect to the acquisition).


 


4.            Eligibility.


 


(a)          General
Rule. Awards may only be made to Eligible Persons (as determined for each Award on its Grant Date). Each Award shall be evidenced
by an Award Agreement that sets forth its Grant Date and all other terms and conditions of the Award, that is signed on behalf
of the Company (or delivered by an authorized agent through an electronic medium), and that, if required by the Committee, is
signed by the Eligible Person as an acceptance of the Award. The grant of an Award shall not obligate the Company or any Affiliate
to continue the employment or service of any Eligible Person, or to provide any future Awards or other remuneration at any time
thereafter.


 


(b)          Limits
on Individual Awards. The maximum number of Shares with respect to which Options, SARs, and Performance Awards may be granted
to any Participant in any calendar year shall be 1,000,000 Shares. The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company’s capitalization pursuant to Section 13(a), below. To the extent required by
Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a Participant,
if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number of Shares with
respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option or SAR shall be
treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.


 


(c)          Replacement
Awards. Subject to Applicable Laws (including any associated shareholder approval requirements), the Committee may, in its
sole discretion and upon such terms as it deems appropriate, require as a condition for granting an Award that an Eligible Person
surrender for cancellation some or all Awards that have previously been granted under this Plan or otherwise. An Award conditioned
upon such surrender may or may not be the same type of Award, may cover the same (or a lesser or greater) number of Shares as
such surrendered Award, may have other terms that are determined without regard to the terms or conditions of such surrendered
Award, and may contain any other terms that the Committee deems appropriate. Except in connection with a Change in Control, Options
or SARs with a per Share exercise price (as adjusted pursuant to Section 13 below) higher than Fair Market Value may not
be cancelled under this Section 4(c) without the approval of the Company’s shareholders.


 


5.            Stock
Options.


 


(a)          Grants.
The Committee may grant Options to Eligible Persons pursuant to Award Agreements setting forth terms and conditions that are not
inconsistent with the Plan, and that may include vesting or other requirements for the right to exercise the Option; provided
that –


 


(i)          the
exercise price for Shares subject to purchase through exercise of an Option shall not be less than 100% of the Fair Market Value
of the underlying Shares on the Grant Date; and


 


(ii)          no
Option shall be exercisable for a term ending more than ten years after its Grant Date.


 






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(b)          Method
of Exercise. Subject to Section 14 below, Options may be exercised by the Participant (or his guardian or personal representative)
giving notice to the Company pursuant to procedures established by the Company for the exercise of Options. Such notice shall
state the number of Shares the Participant has elected to purchase under the Option and the method by which the exercise price
and any applicable Withholding Taxes will be paid. The exercise price and Withholding Taxes may be paid in cash or check payable
to the Company (in U.S. dollars), or to the extent that the Committee or the terms of an Award Agreement expressly permit, all
or any part of the exercise price or Withholding Taxes may be satisfied –


 


(i)          by
delivery or attestation of Shares (valued at their Fair Market Value) that are subject to the Option being exercised or that the
Participant already owns;


 


(ii)          by
delivery of a properly executed exercise notice with irrevocable instructions to a broker to deliver to the Company the amount
necessary to pay the exercise price or Withholding Taxes from the sale or proceeds of a loan from the broker with respect to the
sale of Shares or a broker loan secured by Shares; or


 


(iii)          by
a combination of (i) and (ii).


 


An Award
Agreement for an Option may provide that, if, on the date upon which such Option or any portion thereof is to expire, Fair Market
Value exceeds the per Share exercise price of such Option and if such Option or portion thereof that will expire is otherwise
exercisable, the Option shall be automatically exercised by delivery or attestation of Shares that are subject to such Option
in satisfaction of the exercise price and any applicable Withholding Taxes.


 


(c)          Exercise
of an Unvested Option. The Committee in its sole discretion may allow a Participant to exercise an unvested Option, in which
case the Shares then issued shall be Restricted Shares having analogous vesting restrictions to the unvested Option.


 


(d)          Termination
of Continuous Service. The Committee may establish and set forth in the applicable Award Agreement the terms and conditions
on which an Option shall remain exercisable following termination of a Participant’s Continuous Service. Except to the extent
an Award Agreement specifically provides otherwise, an Option shall be exercisable, only to the extent the Participant was entitled
to exercise such Option at the date of terminating Continuous Service, only until the “Option Termination Date” determined
pursuant to the following table:





 


	Reason
    for terminating Continuous Service	 	Option
    Termination Date
	(i)
    By the Company for Cause, or what would have been Cause if the Company had known all of the relevant facts.	 	Termination
    of the Participant’s Continuous Service, or when Cause first existed if earlier.
	(ii)
    Disability of the Participant.	 	Within
    one year after termination of the Participant’s Continuous Service.
	(iii)
    Retirement of the Participant after age 60 with 5 years or more of Continuous Service.	 	Within
    six months after termination of the Participant’s Continuous Service.
	(iv)
    Death of the Participant during Continuous Service or within 90 days thereafter.	 	Within
    one year after termination of the Participant’s Continuous Service.
	(v)
    Other than due to Cause or the Participant’s Disability, Retirement, or Death.	 	Within
    90 days after termination of the Participant’s Continuous Service.


 


Notwithstanding
the foregoing, in no event may any Option be exercised after the expiration of the Option term as set forth in the Award Agreement.
To the extent that a Participant is not entitled to exercise an Option at the date of his or her termination of Continuous Service,
or if the Participant (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled
within the time specified in the Award Agreement or above (as applicable), the Option shall terminate and the Shares underlying
the unexercised portion of the Option shall revert to the Plan and become available for future Awards.


 






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(e)          Buyout.
If a Participant so elects, the Committee may cancel an Option in exchange for a payment to a Participant in cash, cash equivalents,
new Awards, or Shares, at such time and on such terms and conditions as the Committee shall have established and communicated
to the Participant; provided, however, that, except in connection with a Change in Control, the per Share exercise price of any
Option cancelled pursuant to this Section 5(e) (as adjusted pursuant to Section 13 below) shall not be greater than
the Fair Market Value of a Share on such date unless the terms of the cancellation of such Option are approved by the shareholders
of the Company. In addition, but subject to Section 4(c) above and to any shareholder approval requirement of Applicable
Law, if the Fair Market Value for Shares subject to an Option is more than 33% below their exercise price for more than 30 consecutive
business days, the Committee may unilaterally terminate and cancel the Option by providing each affected Participant with either
cash or a new Award that has (i) a value equal to that of the vested portion of the Option being cancelled (with value being
uniformly determined as of the buyout date in accordance with the methodology that the Company generally uses for financial accounting
purposes for its Awards), (ii) vesting terms not less favorable to the Participant than the Option being cancelled, and (iii) any
other terms and conditions that the Committee may set forth in the Award Agreement for the new Award; subject, except in connection
with a Change in Control, to shareholder approval of any Awards or program involving the cancellation of Options in exchange for
Option grants having a lower exercise price.


 


(f)          Special
ISO Provisions. The following provisions shall control any grants of Options that are denominated as ISOs.


 


(i)          Grants
of ISOs. The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company or an Affiliate
that is a “parent corporation” or “subsidiary corporation” within the meaning of Section 424 of the
Code. Each Option that is intended to be an ISO must be designated in the Award Agreement as an ISO, provided that any Option
designated as an ISO will be a Non-ISO to the extent the Option fails to meet the requirements of Code Section 422. In the
case of an ISO, the Committee shall determine the acceptable methods of payment on the Date of Grant and it shall be included
in the applicable Award Agreement.


 


(ii)          Maximum
Limit. The number of Shares that are available for ISO Awards shall not exceed 3,210,133 Shares (as adjusted pursuant to Section
13 of the Plan), and shall be determined, to the extent required under the Code, by reducing the number of Shares designated in
Section 3 of the Plan by the number of Shares issued pursuant to Awards, provided that any Shares that are subject to Awards issued
under the Plan and forfeited back to the Plan before an issuance of Shares shall be available for issuance pursuant to future
ISO Awards.


 


(iii)          $100,000
Limit. To the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as ISOs first
become exercisable by a Participant in any calendar year (under this Plan and any other plan of the Company or any Affiliate)
exceeds U.S. $100,000, such excess Options shall be treated as Non-ISOs. For purposes of determining whether the U.S. $100,000
limit is exceeded, the Fair Market Value of the Shares subject to an ISO shall be determined as of the Grant Date. In reducing
the number of Options treated as ISOs to meet the U.S. $100,000 limit, the most recently granted Options shall be reduced first.
In the event that Section 422 of the Code is amended to alter the limitation set forth therein, the limitation of this paragraph
shall be automatically adjusted accordingly.


 


(iv)          Grants
to 10% Holders. In the case of an Incentive Stock Option granted to an Employee who is a Ten Percent Holder on the Grant Date,
the term of the Incentive Stock Option shall not exceed five years from the Grant Date, and the exercise price shall be at least
110% of the Fair Market Value of the underlying Shares on the Grant Date. In the event that Section 422 of the Code is amended
to alter the limitations set forth therein, the limitation of this paragraph shall be automatically adjusted accordingly.


 


(v)          Substitution
of Options. Notwithstanding any other provisions of the Plan, in the event the Company or an Affiliate acquires (whether by
purchase, merger or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or in the
event of any reorganization or other transaction qualifying under Code Section 424, the Committee may, in accordance with
the provisions of that Section, substitute ISOs for ISOs under the plan of the acquired company provided (i) the excess of
the aggregate Fair Market Value of the Shares subject to an ISO immediately after the substitution over the aggregate exercise
price of such shares is not more than the similar excess immediately before such substitution, and (ii) the new ISO does
not give additional benefits to the Participant, including any extension of the exercise period.


 






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(vi)          Notice
of Disqualifying Dispositions. By executing an ISO Award Agreement, each Participant agrees to notify the Company in writing
immediately after the Participant sells, transfers or otherwise disposes of any Shares acquired through exercise of the ISO, if
such disposition occurs within the earlier of (i) two years of the Grant Date, or (ii) one year after the exercise of
the ISO being exercised. Each Participant further agrees to provide any information about a disposition of Shares as may be requested
by the Company to assist it in complying with any applicable tax laws.


 


6.            SARs.


 


(a)          Grants.
The Committee may grant SARs to Eligible Persons pursuant to Award Agreements setting forth terms and conditions that are not
inconsistent with the Plan; provided that:


 


(i)            the
exercise price for the Shares subject to each SAR shall not be less than 100% of the Fair Market Value of the underlying Shares
on the Grant Date;


 


(ii)           no
SAR shall be exercisable for a term ending more than ten years after its Grant Date; and


 


(iii)          each
SAR shall, except to the extent a SAR Award Agreement provides otherwise, be subject to the provisions of Section 5(d) relating
to the effect of a termination of Participant’s Continuous Service and Section 5(e) relating to buyouts, in each case
with “SAR” being substituted for “Option.”


 


(b)          Settlement.
Subject to Section 14 below, a SAR shall entitle the Participant, upon exercise of the SAR, to receive Shares having a Fair
Market Value on the date of exercise equal to the product of the number of Shares as to which the SAR is being exercised, and
the excess of (i) the Fair Market Value, on such date, of the Shares covered by the exercised SAR, over (ii) an exercise
price designated in the SAR Award Agreement. Notwithstanding the foregoing, a SAR Award Agreement may limit the total settlement
value that the Participant will be entitled to receive upon the SAR’s exercise, and may provide for settlement either in
cash or in any combination of cash or Shares that the Committee may authorize pursuant to an Award Agreement. An Award Agreement
for a SAR may provide that, if, on the date upon which such SAR or any portion thereof is to expire, the Fair Market Value exceeds
the per Share exercise price of such SAR and if such SAR or portion thereof that will expire is otherwise exercisable, the SAR
shall be automatically exercised and settled pursuant to this Section 6(b).


 


(c)          SARs
related to Options. The Committee may grant SARs either concurrently with the grant of an Option or with respect to an outstanding
Option, in which case the SAR shall extend to all or a portion of the Shares covered by the related Option and have an exercise
price not less than the exercise price of the related Option. A SAR related to an Option shall entitle the Participant who holds
the related Option, upon exercise of the SAR and surrender of the related Option, or portion thereof, to the extent the SAR and
related Option each were previously unexercised, to receive payment of an amount determined pursuant to Section 6(b) above.
Any SAR granted in tandem with an ISO will contain such terms as may be required to comply with the provisions of Code Section 422.


 


7.            Restricted
Shares, RSUs, and Unrestricted Share Awards.


 


(a)          Grant.
The Committee may grant Restricted Share, RSU, or Unrestricted Share Awards to Eligible Persons, in all cases pursuant to Award
Agreements setting forth terms and conditions that are not inconsistent with the Plan. The Committee shall establish as to each
Restricted Share or RSU Award the number of Shares deliverable or subject to the Award (which number may be determined by a written
formula), and the period or periods of time (the “Restriction Period”) at the end of which all or some restrictions
specified in the Award Agreement shall lapse and the Participant shall receive unrestricted Shares (or cash to the extent provided
in the Award Agreement) in settlement of the Award. Such restrictions may include, without limitation, restrictions concerning
voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such
circumstances or based on such criteria as selected by the Committee, including, without limitation, criteria based on the Participant’s
duration of employment, directorship or consultancy with the Company, individual, group, or divisional performance criteria, Company
performance, or other criteria selection by the Committee. The Committee may make Restricted Share and RSU Awards with or without
the requirement for payment of cash or other consideration. In addition, the Committee may grant Awards hereunder in the form
of Unrestricted Shares which shall vest in full upon the Grant Date or such other date as the Committee may determine or which
the Committee may issue pursuant to any program under which one or more Eligible Persons (selected by the Committee in its sole
discretion) elect to pay for such Shares or to receive Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.


 






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(b)          Vesting
and Forfeiture. The Committee shall set forth in an Award Agreement granting Restricted Shares or RSUs, the terms and conditions
under which the Participant’s interest in the Restricted Shares or the Shares subject to RSUs will become vested and non-forfeitable.
Except as set forth in the applicable Award Agreement or the Committee otherwise determines, upon termination of a Participant’s
Continuous Service for any reason, the Participant shall forfeit his or her Restricted Shares and RSUs to the extent the Participant’s
interest therein has not vested on or before such termination date; provided that if a Participant purchases Restricted Shares
and forfeits them for any reason, the Company shall return the purchase price to the Participant to the extent either set forth
in an Award Agreement or required by Applicable Laws.


 


(c)          Certificates
for Restricted Shares. Unless otherwise provided in an Award Agreement, the Company shall hold certificates representing Restricted
Shares and, if applicable, dividends (whether in Shares or cash) that accrue with respect to them until the restrictions lapse,
and the Participant shall provide the Company with appropriate stock powers endorsed in blank. The Participant’s failure
to provide such stock powers within ten days after a written request from the Company shall entitle the Committee to unilaterally
declare a forfeiture of all or some of the Participant’s Restricted Shares.


 


(d)          Issuance
of Shares upon Vesting. As soon as practicable after vesting of a Participant’s Restricted Shares (or of the right to
receive Shares underlying RSUs), the Company shall deliver to the Participant, free from vesting restrictions, one Share for each
surrendered and vested Restricted Share (or deliver one Share free of the vesting restriction for each vested RSU), unless an
Award Agreement provides otherwise and subject to Section 10 below regarding Withholding Taxes. No fractional Shares shall
be distributed, and cash shall be paid in lieu thereof.


 


(e)          Dividends
Payable on Vesting. If provided in an Award Agreement, whenever Shares are deliverable to a Participant (or duly-authorized
transferee) pursuant to Section 7(d) above as a result of the vesting of a Restricted Share or RSU Award, the Participant
or his or her duly authorized transferee shall also be entitled to receive, with respect to each Share then vesting, a number
of Shares equal to the sum of –


 


(i)          any
per-Share dividends which were declared and paid in Shares to the Company’s shareholders of record between the Grant Date
and the date Shares are delivered to the Participant pursuant to the particular vesting event for the Award; and


 


(ii)          the
Shares that the Participant could have purchased at their Fair Market Value on the payment date of any cash dividends if the Participant
had received such cash dividends with respect to each Restricted Share, or Share subject to an RSU, between the Grant Date and
the date Shares are delivered to the Participant pursuant to the particular vesting event for the Award.


 


(f)          Deferral
Elections for RSUs. To the extent specifically provided in an Award Agreement, a Participant may irrevocably elect, in accordance
with Section 8 below, to defer the receipt of all or a percentage of the Shares that would otherwise be transferred to the
Participant upon the vesting of an RSU Award. If the Participant makes this election: (i) the Company shall credit the Shares
subject to the election, and, if applicable, any associated dividends, to a DSU account established pursuant to Section 8
below on the date such Shares and, if applicable, any associated dividends would otherwise have been delivered to the Participant
pursuant to Sections 7(d) and 7(e) above, and (ii) any vesting that would have occurred within the 12-month period following
the date of the Participant’s election shall occur on the 12-month anniversary of such election, provided that vesting may
occur immediately upon the Participant’s death or Disability if so provided in the Award Agreement.


 


(g)          Section
83(b) Elections. To the extent expressly permitted by an Award Agreement or the Committee, a Participant may make an election
under Code Section 83(b) (the “Section 83(b) Election”) with respect to Restricted Shares. A Participant
who has received RSUs may, within ten days after receiving the RSU Award, provide the Committee with a written notice of his or
her desire to make Section 83(b) Election with respect to the Shares subject to such RSUs. The Committee may in its discretion
convert the Participant’s RSUs into Restricted Shares, on a one-for-one basis, in full satisfaction of the Participant’s
RSU Award. The Participant may then make a Section 83(b) Election with respect to those Restricted Shares; provided that
the Participant’s Section 83(b) Election will be invalid if not filed with the Company and the appropriate U.S. tax
authorities within 30 days after the Grant Date of the RSUs replaced by the Restricted Shares.


 






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8.            DSUs.


 


(a)          Grants
of DSUs. The Committee may make DSU awards to any Eligible Persons pursuant to Award Agreements, regardless of whether or
not there is a deferral of compensation, and may permit select Eligible Persons to irrevocably elect, on a form provided by and
acceptable to the Committee (the “Election Form”), to forego the receipt of cash or other compensation (including
the Shares deliverable pursuant to any RSU Award) and in lieu thereof to have the Company credit to an internal Plan account a
number of DSUs having a Fair Market Value equal to the Shares and other compensation deferred. These credits will be made at the
end of each calendar quarter (or other period determined by the Committee) during which compensation is deferred. Unless the Company
sends an Eligible Person a written notice rejecting an Election Form within five business days after the Company receives it,
an Election Form shall take effect on the first day of the next calendar year (or on the first day of the next calendar month
in the case of an initial election within 30 days after a Participant becomes first eligible to defer hereunder) after its delivery
to the Company. Notwithstanding the foregoing sentence, a Participant’s Election Form will be ineffective with respect to
any compensation that the Participant earns before the date on which the Election Form takes effect. For any Participant who is
subject to U.S. income taxation, the Committee shall only authorize deferral elections pursuant to Section 8: (i) under
written procedures, and using written election forms, that satisfy the requirements of Code Section 409A, and (ii) shall
only be made by Eligible Persons who are Directors, Consultants, or members of a select group of management or highly compensated
Employees (within the meaning of the Code).


 


(b)          Vesting.
Unless an Award Agreement expressly provides otherwise, each Participant shall be 100% vested at all times in any Shares subject
to DSUs.


 


(c)          Issuances
of Shares. Unless an Award Agreement or the Committee expressly provides otherwise, the Company shall settle a Participant’s
DSU Award, by delivering one Share for each DSU, in five substantially equal annual installments that are issued before the last
day of each of the five calendar years that end after the date on which the Participant’s Continuous Service ends for any
reason, subject to –


 


(i)          the
Participant’s right to elect a different form of distribution, only on a form provided by and acceptable to the Committee,
that permits the Participant to select any combination of a lump sum and annual installments that are triggered by, and completed
within ten years following, the last day of the Participant’s Continuous Service; and


 


(ii)          the
Company’s acceptance of the Participant’s distribution election form executed at the time the Participant elects to
defer the receipt of Shares or other compensation pursuant to Section 8(a), provided that the Participant may change a distribution
election through any subsequent election that (I) the Participant delivers to the Company at least one year before the date
on which distributions are otherwise scheduled to commence pursuant to the Participant’s initial distribution election,
and (II) defers the commencement of distributions by at least five years from the originally scheduled distribution commencement
date.


 


Fractional
shares shall not be issued, and instead shall be paid out in cash.


 


(d)          Dividends.
If provided in an Award Agreement, whenever Shares are issued to a Participant pursuant to Section 9(c) above, the Participant
shall also be entitled to receive, with respect to each Share issued, a number of Shares determined in a manner consistent with
Section 7(e) above (but by reference to the period from the Grant Date of the DSU to its settlement through the issuance
of Shares to the Participant).


 






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(e)          Emergency
Withdrawals. In the event that a Participant suffers an unforeseeable emergency within the contemplation of this Section,
the Participant may apply to the Committee for an immediate distribution of all or a portion of the Participant’s DSUs.
The unforeseeable emergency must result from a sudden and unexpected illness or accident of the Participant, the Participant’s
spouse, or a dependent of the Participant, casualty loss of the Participant’s property, or other similar extraordinary and
unforeseeable conditions beyond the control of the Participant. The Committee shall, in its sole and absolute discretion, determine
whether a Participant has a qualifying unforeseeable emergency, may require independent verification of the emergency, and may
determine whether or not to provide the Participant with cash or Shares. The amount of any distribution hereunder shall be limited
to the amount necessary to relieve the Participant’s unforeseeable emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution. The number of Shares subject to the Participant’s DSU Award shall be reduced
by any Shares distributed to the Participant and by a number of Shares having a Fair Market Value on the date of the distribution
equal to any cash paid to the Participant pursuant to this Section. For all DSUs granted to Participants who are U.S. taxpayers,
the term “unforeseeable emergency” shall be interpreted in accordance with Section 409A of the Code, and the
term “dependent” shall be interpreted in accordance with Section 152(a) of the Code.


 


(f)          Unsecured
Rights to Deferred Compensation. A Participant’s right to DSUs shall at all times constitute an unsecured promise of
the Company to pay benefits as they come due. The right of the Participant (or the Participant’s duly-authorized transferee)
to receive benefits hereunder shall be solely an unsecured claim against the general assets of the Company. Neither the Participant
nor the Participant’s duly-authorized transferee shall have any claim against or rights in any specific assets, Shares,
or other funds of the Company.


 


(g)          Termination
of Service. For purposes of Section 8 of the Plan, a Participant’s “Continuous Service” shall only
end when the Participant incurs a “separation from service” within the meaning of Treasury Regulations §1.409A-1(h).
A Participant shall be considered to have experienced a termination of Continuous Service when the facts and circumstances indicate
that either (i) no further services will be performed for the Company or any Affiliate after a certain date, or (ii) that
the level of bona fide services the Participant will perform after such date (whether as an Employee, Director, or Consultant)
are reasonably expected to permanently decrease to no more than 25% of the average level of bona fide services performed by such
Participant (whether as an Employee, Director, or Consultant) over the immediately preceding 36-month period (or full period of
services to the Company and its Affiliates if the Participant has been providing such services for less than 36 months).


 


9.            Performance
Awards.


 


(a)          Performance
Awards. Subject to the limitations set forth in paragraph (b) hereof, the Committee may in its discretion grant Performance
Awards, including Performance Units, to any Eligible Person that (i) have substantially the same financial benefits and other
terms and conditions as Options, SARs, RSUs, or DSUs, and/or (ii) are settled only in cash. A Performance Award is an Award
which is based on the achievement of specific goals with respect to the Company or any Affiliate or the individual performance
of the Participant, or any combination thereof, over a specified period of time. All Performance Awards shall be made pursuant
to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan.


 


(b)          Deferral
Elections. At any time prior to the date that is both at least six months before the close of a Performance Period (or shorter
or longer period that the Committee selects) with respect to a Performance Award and at which time vesting or payment is substantially
uncertain to occur, the Committee may permit a Participant who is a member of a select group of management or highly compensated
employees to irrevocably elect, on a form provided by and acceptable to the Committee, to defer the receipt of all or a percentage
of the cash or Shares that would otherwise be transferred to the Participant upon the vesting of such Award. If the Participant
makes this election, the cash or Shares subject to the election, and, if applicable, any associated interest and dividends, shall
be credited to an account established pursuant to Section 8 hereof on the date such cash or Shares would otherwise have been
released or issued to the Participant pursuant to this Section.


 






    	8



    	 



    

 


(c)          Performance
Compensation Awards. Subject to the limitations set forth in Section 9 and in this Appendix II.F., the Committee may,
at the time of grant of a Performance Unit, designate such Award as a “Performance Compensation Award” (payable
in cash or Shares) in order that such Award constitutes “qualified performance-based compensation” under Code Section 162(m),
in which event the Committee shall have the power to grant such Performance Compensation Award upon terms and conditions that
qualify it as “qualified performance-based compensation” within the meaning of U.S. Code Section 162(m). With
respect to each such Performance Compensation Award, the Committee shall establish, in writing within the time required under
Code Section 162(m), a “Performance Period ,” “Performance Measure(s)”, and “Performance
Formula(e)” (each such term being defined below). A Participant shall be eligible to receive payment in respect of a
Performance Compensation Award only to the extent that the Performance Measure(s) for such Award is achieved and the Performance
Formula(e) as applied against such Performance Measure(s) determines that all or some portion of such Participant’s Award
has been earned for the Performance Period. As soon as practicable after the close of each Performance Period, the Committee shall
review and certify in writing whether, and to what extent, the Performance Measure(s) for the Performance Period have been achieved
and, if so, determine and certify in writing the amount of the Performance Compensation Award to be paid to the Participant and,
in so doing, may use negative discretion to decrease, but not increase, the amount of the Award otherwise payable to the Participant
based upon such performance.


 


(d)          Limitations
on Awards. The maximum Performance Award and the maximum Performance Compensation Award that any one Participant may earn
in any one Performance Period shall not together exceed the limitation set forth in Section 4(b) of the Plan for Shares subject
to Awards (or, for Performance Units to be settled in cash, U.S. $6,000,000).


 


(e)          Definitions.


 


(i)          “Performance
Formula” means, for a Performance Period, one or more objective formulas or standards established by the Committee for purposes
of determining whether or the extent to which an Award has been earned based on the level of performance attained or to be attained
with respect to one or more Performance Measure(s). Performance Formulae may vary from Performance Period to Performance Period
and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.


 


(ii)          “Performance
Measure” means one or more of the following selected by the Committee to measure Company, Affiliate, and/or business unit
performance for a Performance Period, whether in absolute or relative terms (including, without limitation, terms relative to
a peer group or index):


 


	cash
    flow (before or after dividends)	 	earnings
    per share (including, without limitation, earnings before interest, taxes, depreciation and amortization)
	stock
    price	 	return
    on equity
	stockholder
    return or total stockholder return	 	return
    on capital (including without limitation return on total capital or return on invested capital)
	return
    on investment	 	return
    on assets or net assets
	market
    capitalization	 	economic
    value added
	debt
    leverage (debt to capital)          	 	Revenue
	sales
    or net sales	 	Backlog
	income,
    pre-tax income or net income	 	operating
    income or pre-tax profit
	operating
    profit, net operating profit or economic profit	 	gross
    margin, operating margin or profit margin
	return
    on operating revenue or return on operating assets	 	cash
    from operations
	operating
    ratio	 	operating
    revenue
	market
    share improvement	 	general
    and administrative expenses
	customer
    service	 	new
    production introductions
	product
    line enhancements	 	strategic
    mergers or acquisitions
	working
    capital	 	Research
	licensing	 	Litigation
	human
    resources	 	information
    services
	sales
    of assets of Affiliates or business units	 	 


 






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Each
such measure shall be, to the extent applicable, determined in accordance with generally accepted accounting principles as consistently
applied by the Company (or such other standard applied by the Committee) and, if so determined by the Committee, and in the case
of a Performance Compensation Award, to the extent permitted under Code Section 162(m), adjusted to omit the effects of extraordinary
items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative
effects of changes in accounting principles. Performance Measures may vary from Performance Period to Performance Period and from
Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative.


 


(iii)          “Performance
Period” means one or more periods of time (of not less than one fiscal year of the Company), as the Committee may designate,
over which the attainment of one or more Performance Measure(s) will be measured for the purpose of determining a Participant’s
rights in respect of an Award.


 


10.          Taxes;
Withholding.


 


(a)          General.
As a condition to the issuance or distribution of Shares pursuant to the Plan, the Participant (or in the case of the Participant’s
death, the person who succeeds to the Participant’s rights) shall make such arrangements as the Company may require for
the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with
the Award and the issuance of Shares. The Company shall not be required to issue any Shares until such obligations are satisfied.
If the Committee allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations, the
Committee shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for applicable
tax purposes, including payroll taxes.


 


(b)          Surrender
of Shares. If permitted by the terms of an Award Agreement or the Committee, in its discretion, a Participant may satisfy
the minimum statutory tax withholding and employment tax obligations associated with an Award by surrendering Shares to the Company
(including Shares that would otherwise be issued pursuant to the Award) that have a Fair Market Value determined as of the date
that the amount of tax to be withheld is to be determined under Applicable Law.


 


(c)          Income
Taxes and Deferred Compensation. Participants are solely responsible and liable for the satisfaction of any federal state,
province, or local taxes that may arise in connection with Awards (including, for Participants subject to taxation in the United
States, any taxes arising under Section 409A of the Code, except to the extent otherwise specifically provided in a written
agreement with the Company). Neither the Company nor any of its employees, officers, directors, or service providers shall have
any obligation whatsoever to pay such taxes, to prevent Participants from incurring them, or to mitigate or protect Participants
from any such tax liabilities. In the absence of any other arrangement, an Employee shall be deemed to have directed the Company
to withhold or collect from his or her cash compensation an amount sufficient to satisfy such tax obligations from the next payroll
payment or payments otherwise payable after the date of the exercise of an Award.


 


To the
extent that the committee determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award
Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent
applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department
of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the
event that following the effective date of the committee determines that any Award may be subject to Section 409A of the
Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective
Date), the Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines
are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of
the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.


 


The
Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Affiliate of the Company.


 






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11.          Non-Transferability
of Awards.


 


(a)          General.
Except as set forth in this Section 11, Awards 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. The designation of a death beneficiary by a Participant
will not constitute a transfer. An Award may be exercised, during the lifetime of the holder of an Award, only by such holder,
the duly-authorized legal representative of a Participant who is Disabled, or a transferee permitted by this Section 11.


 


(b)          Limited
Transferability Rights. Notwithstanding anything else in this Section 11, the Committee may in its discretion provide
that an Award may be transferred, on such terms and conditions as the Committee deems appropriate, either (i) by instrument
to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary
trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by
gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to all of the terms
of this Award Agreement and the Plan. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law, and shall include adoptive relationships.


 


(c)          Death.
In the event of the death of a Participant, any outstanding Awards issued to the Participant shall automatically be transferred
to the Participant’s Beneficiary (or, if no Beneficiary is designated or surviving, to the person or persons to whom the
Participant’s rights under the Award pass by will or the laws of descent and distribution).


 


12.          Modification
of Awards and Substitution of Options. Within the limitations of the Plan, the Committee may modify an Award to accelerate
the rate at which an Option or SAR may be exercised (including without limitation permitting an Option or SAR to be exercised
in full without regard to the installment or vesting provisions of the applicable Award Agreement or whether the Option or SAR
is at the time exercisable, to the extent it has not previously been exercised), to accelerate the vesting of any Award, to extend
or renew outstanding Awards, to accept the cancellation of outstanding Awards to the extent not previously exercised, or to make
any other changes that would be allowed under the Plan for a new Award. However, except in connection with a Change in Control
or as approved by the shareholders of the Company, the Committee may not cancel an outstanding Option or SAR whose exercise price
per Share is greater than Fair Market Value at the time of cancellation for the purpose of reissuing the Option or SAR to the
Participant at a lower exercise price, granting a replacement award of a different type, or exchanging the Award for a cash payment,
or otherwise allow for a “repricing” of Options or SARs within the meaning of federal securities laws applicable to
proxy statement disclosures. Notwithstanding the foregoing provision, no modification of an outstanding Award shall materially
and adversely affect a Participant’s rights thereunder unless either (i) the Participant provides written consent,
or (ii) before a Change in Control, the Committee determines in good faith that the modification is not materially adverse
to the Participant.


 


13.          Change
in Capital Structure; Change in Control; Etc.


 


(a)          Changes
in Capitalization. In the event of a Share dividend, Share split, or combination of Shares, Share exchange, recapitalization,
merger in which the Company is the surviving corporation, spin-off or split-off of an Affiliate, extraordinary cash dividend or
other change in the Company’s capital stock (including, but not limited to, the creation or issuance to shareholders generally
of rights, options or warrants for the purchase of capital stock of the Company), the number and kind of Shares or securities
of the Company to be subject to the Plan and to Awards then outstanding or to be granted, any and all maximum limits on the number
of Shares that may be delivered under the Plan, any exercise price for Awards, and other relevant provisions shall be equitably
adjusted by the Committee.


 






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(b)          Change
in Control. In the event of a Change in Control but subject to the terms of any Award Agreements or any employment or other
similar agreement between the Company or any of its Affiliates and a Participant then in effect, each outstanding Award shall
be assumed or a substantially equivalent award shall be substituted by the surviving or successor corporation or a parent or subsidiary
of such surviving or successor corporation (the “Successor Corporation”) upon the consummation of the transaction;
provided, however, that to the extent outstanding Awards are neither being assumed nor replaced with substantially equivalent
Awards by the Successor Corporation, the Committee may in its sole and absolute discretion and authority, without obtaining the
approval or consent of the Company’s shareholders or any Participant with respect to his or her outstanding Awards, take
one or more of the following actions (with respect to any or all of the Awards, and with discretion to differentiate between individual
Participants and Awards for any reason):


 


(i)           accelerate
the vesting of Awards so that Awards shall vest (and, to the extent applicable, become exercisable) as to the Shares that otherwise
would have been unvested and provide that repurchase rights of the Company with respect to Shares issued pursuant to an Award
shall lapse as to the Shares subject to such repurchase right;


 


(ii)           arrange
or otherwise provide for the payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation
of outstanding Awards (with the Committee determining the amount payable to each Participant based on the Fair Market Value, on
the date of the Change in Control, of the Award being cancelled, based on any reasonable valuation method selected by the Committee);
or


 


(iii)          terminate
all or some Awards upon the consummation of the transaction, provided that the Committee shall provide for vesting of such Awards
in full as of a date immediately prior to consummation of the Change in Control. To the extent that an Award is not exercised
prior to consummation of a transaction in which the Award is not being assumed or substituted, such Award shall terminate upon
such consummation.


Notwithstanding
the above and unless otherwise provided in an Award Agreement or in any employment or other similar agreement between the Company
or any of its Affiliates and a Participant then in effect, in the event a Participant is Involuntarily Terminated on or within
12 months (or other period either set forth in an Award Agreement) following a Change in Control, then any Award that is assumed
or substituted pursuant to this Section 13(b) shall accelerate and become fully vested (and become exercisable in full in
the case of Options and SARs), and any repurchase right applicable to any Shares shall lapse in full, unless an Award Agreement
provides for a more restrictive acceleration or vesting schedule or more restrictive limitations on the lapse of repurchase rights
or otherwise places additional restrictions, limitations and conditions on an Award. The acceleration of vesting and lapse of
repurchase rights provided for in the previous sentence shall occur immediately prior to the effective date of the Participant’s
Involuntary Termination, unless an Award Agreement provides otherwise.


 


(c)          Dissolution
or Liquidation. In the event of the dissolution or liquidation of the Company other than as part of a Change in Control, each
Award will terminate immediately prior to the consummation of such action, subject to the ability of the Committee to exercise
any discretion authorized in the case of a Change in Control.


 


14.          Laws
and Regulations.


 


(a)          General
Rules. This Plan, the grant of Awards, the exercise of Options and SARs, and the obligations of the Company hereunder (including
those to pay cash or to deliver, sell or accept the surrender of any of its Shares or other securities) shall be subject to all
Applicable Laws. In the event that any Shares are not registered under any Applicable Law prior to the required delivery of them
pursuant to Awards, the Company may require, as a condition to their issuance or delivery, that the persons to whom the Shares
are to be issued or delivered make any written representations and warranties (such as that such Shares are being acquired by
the Participant for investment for the Participant’s own account and not with a view to, for resale in connection with,
or with an intent of participating directly or indirectly in, any distribution of such Shares) that the Committee may reasonably
require, and the Committee may in its sole discretion include a legend to such effect on the certificates representing any Shares
issued or delivered pursuant to the Plan.


 


(b)          Black-out
Periods. Notwithstanding any contrary terms within the Plan or any Award Agreement, the Committee shall have the absolute
discretion to impose a “blackout” period on the exercise of any Option or SAR, as well as the settlement of any Award,
with respect to any or all Participants (including those whose Continuous Service has ended) to the extent that the Committee
determines that doing so is either desirable or required in order to comply with applicable securities laws, provided that, if
any blackout period occurs, the term of any Option or SAR shall not expire until the earlier of (i) 30 days after the blackout
period ends or (ii) the Option’s or SAR’s expiration date but only if within 30 days thereafter the Company makes
a cash payment to each affected Participant in an amount equal to the value of the Option or SAR (as determined by the Committee)
immediately before its expiration to the extent then vested and exercisable.


 






    	12



    	 



    

 


(c)          No
Shareholder Rights. Neither a Participant nor any transferee of a Participant shall have any rights as a shareholder of the
Company with respect to any Shares underlying any Award until the date of issuance of a share certificate to a Participant or
a transferee of a Participant for such Shares in accordance with the Company’s governing instruments and Applicable Law.
Unless otherwise provided in an Award Agreement, prior to the issuance of Shares pursuant to an Award, a Participant shall not
have the right to vote or to receive dividends or any other rights as a shareholder with respect to the Shares underlying the
Award, notwithstanding its exercise in the case of Options and SARs. No adjustment will be made for a dividend or other right
that is determined based on a record date prior to the date the stock certificate is issued, except as otherwise specifically
provided for in this Plan.


 


(d)          Local
Law Adjustments and Sub-plans. To facilitate the making of any grant of an Award under this Plan, the Committee may adopt
rules and provide for such special terms for Awards to Participants who are located within the United States, foreign nationals,
or who are employed by the Company or any Affiliate outside of the United States of America as the Committee may consider necessary
or appropriate to accommodate differences in local law, tax policy or custom. Without limiting the foregoing, the Company is specifically
authorized to adopt rules and procedures regarding the conversion of local currency, taxes, withholding procedures and handling
of stock certificates which vary with the customs and requirements of particular countries. The Company may adopt sub-plans and
establish escrow accounts and trusts, and settle Awards in cash in lieu of shares, as may be appropriate, required or applicable
to particular locations and countries.


 


15.          Termination,
Rescission and Recapture of Awards.


 


(a)          Each
Award under the Plan is intended to align the Participant’s long-term interests with those of the Company. Accordingly,
to the extent expressly provided in an Award Agreement, the Company may terminate any outstanding, unexercised, unexpired, unpaid,
or deferred Awards (“Termination”), rescind any exercise, payment or delivery pursuant to the Award (“Rescission”),
or recapture any Shares (whether restricted or unrestricted) or proceeds from the Participant’s sale of Shares issued pursuant
to an Award (“Recapture”), if the Participant, during his or her Continuous Service or within one year after
the termination of his or her Continuous Service, engages in activity which: (i) constitutes a material breach of the terms
of any applicable patent, proprietary information, confidentiality, non-disclosure, intellectual property, secrecy or other similar
agreement between the Participant and the Company or any of its Affiliates; (ii) constitutes the breach of the terms of any
non-solicitation, non-competition or similar agreement between the Participant and the Company or any of its Affiliates; or (iii) is
materially prejudicial to the interests of the Company and constitutes a breach of a fiduciary duty to the Company or its Affiliates.


 


(b)          Within
ten days after receiving notice from the Company of any such activity described in subclauses (i), (ii) or (iii) in Section 15(a)
above, the Participant shall deliver to the Company the Shares acquired pursuant to the Award, or, if Participant has sold the
Shares, the gain realized, or payment received as a result of the rescinded exercise, payment, or delivery; provided, that if
the Participant returns Shares that the Participant purchased pursuant to the exercise of an Option (or the gains realized from
the sale of such Shares), the Company shall promptly refund the exercise price, without interest, that the Participant paid for
the Shares. Any payment by the Participant to the Company pursuant to this Section shall be made either in cash or by returning
to the Company the number of Shares that the Participant received in connection with the rescinded exercise, payment, or delivery.


 


(c)          Notwithstanding
the foregoing provisions of this Section 15, the Company has sole and absolute discretion not to require Termination, Rescission
and/or Recapture, and its determination not to require Termination, Rescission and/or Recapture with respect to any particular
act by a particular Participant or particular Award shall not in any way reduce or eliminate the Company’s authority to
require Termination, Rescission and/or Recapture with respect to any other act or Participant or Award. Nothing in this Section
shall be construed to impose obligations on the Participant to refrain from engaging in lawful competition with the Company after
the termination of employment that does not violate subclauses (i), (ii) or (iii) of Section 15(a) above.


 






    	13



    	 



    

 


(d)          All
administrative and discretionary authority given to the Company under this Section shall be exercised by such person or committee
(including without limitation the Committee) as the Committee may designate from time to time.


 


(e)          If
any provision within this Section 15 is determined to be unenforceable or invalid under any Applicable Law, such provision
will be applied to the maximum extent permitted by Applicable Law, and shall automatically be deemed amended in a manner consistent
with its objectives and any limitations required under Applicable Law. Notwithstanding the foregoing, but subject to any contrary
terms expressly set forth in any Award Agreement, this Section 15 shall not be applicable to any Participant from and after
his or her termination of Continuous Service after a Change in Control.


 


16.          Recoupment
of Awards. To the extent expressly provided in an Award Agreement, and to the extent permitted by Applicable Law, the
Committee may in its sole and absolute discretion, without obtaining the approval or consent of the Company’s shareholders
or of any Participant, require that a Participant reimburse the Company for all or any portion of any Awards granted to him or
her under this Plan (“Reimbursement”), or the Committee may require the Termination or Rescission of, or the Recapture
associated with, any Award, if and to the extent—


 


(a)          the
granting, vesting, or payment of such Award (or portion thereof) was predicated upon the achievement of certain financial results;


 


(b)          in
the Committee’s view the Participant engaged in fraud or misconduct that caused a calculation that later proves to be materially
inaccurate or partially caused the need for a material financial restatement by the Company or any Affiliate; and


 


(c)          a
lower granting, vesting, or payment of such Award would have occurred based upon the conduct described in clause (b) of this Section.


 


In each
instance, the Committee may, to the extent practicable and allowable under Applicable Laws, require Reimbursement, Termination
or Rescission of, or Recapture relating to, any such Award granted to a Participant.


 


17.          Administration
of the Plan. The Committee shall administer the Plan in accordance with its terms, provided that the Board may act in
lieu of the Committee on any matter. The Committee shall hold meetings at such times and places as it may determine and shall
make such rules and regulations for the conduct of its business as it deems advisable. In the absence of a duly appointed Committee,
the Board shall function as the Committee for all purposes of the Plan.


 


(a)          Committee
Composition. The Board shall appoint the members of the Committee. If and to the extent permitted by Applicable Law, the Committee
may authorize one or more executive officers to make Awards to Eligible Persons other than themselves. The Board may at any time
appoint additional members to the Committee, remove and replace members of the Committee with or without Cause, and fill vacancies
on the Committee however caused.


 


(b)          Powers
of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its sole discretion:


 


(i)            to
grant Awards and to determine Eligible Persons to whom Awards shall be granted from time to time, and the number of Shares, units,
or dollars to be covered by each Award;


 


(ii)           to
determine, from time to time, the Fair Market Value of Shares;


 


(iii)          to
determine, and to set forth in Award Agreements, the terms and conditions of all Awards, including any applicable exercise or
purchase price, the installments and conditions under which an Award shall become vested (which may be based on performance),
terminated, expired, cancelled, or replaced, and the circumstances for vesting acceleration or waiver of forfeiture restrictions,
and other restrictions and limitations;


 






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(iv)          to
approve the forms of Award Agreements and all other documents, notices and certificates in connection therewith which need not
be identical either as to type of Award or among Participants;


 


(v)           to
construe and interpret the terms of the Plan and any Award Agreement, to determine the meaning of their terms, and to prescribe,
amend, and rescind rules and procedures relating to the Plan and its administration;


 


(vi)          to
the extent consistent with the purposes of the Plan and without amending the Plan, to modify, to cancel, or to waive the Company’s
rights with respect to any Awards, to adjust or to modify Award Agreements for changes in Applicable Law, and to recognize differences
in foreign law, tax policies, or customs;


 


(vii)         in
the event that the Company establishes for itself, or uses the services of a third party to establish, an automated system for
the documentation, granting, settlement, or exercise of Award, such as a system using an internet website or interactive voice
response, to implement paperless documentation, granting, settlement, or exercise of Awards by a Participant may be permitted
through the use of such an automated system; and


 


(viii)        to
make all interpretations and to take all other actions that the Committee may consider necessary or advisable to administer the
Plan or to effectuate its purposes.


 


Subject
to Applicable Law and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals
who are Directors or Employees.


 


(c)          Action
by Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information
furnished to that member by an officer or other employee of the Company or any Affiliate, the Company’s independent certified
public accounts, or any executive compensation consultant or other professional retained by the Company to assist in the administration
of the Plan.


 


(d)          Deference
to Committee Determinations. The Committee shall have the discretion to interpret or construe ambiguous, unclear, or implied
(but omitted) terms in any fashion it deems to be appropriate in its sole discretion, and to make any findings of fact needed
in the administration of the Plan or Award Agreements. The Committee’s prior exercise of its discretionary authority shall
not obligate it to exercise its authority in a like fashion thereafter. The Committee’s interpretation and construction
of any provision of the Plan, or of any Award or Award Agreement, and all determination the Committee makes pursuant to the Plan
shall be final, binding, and conclusive. The validity of any such interpretation, construction, decision or finding of fact shall
not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly
made in bad faith or materially affected by fraud.


 


(e)          No
Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board
or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with
respect to administering or interpreting the Plan, any Award or any Award Agreement on behalf of the Company. The Company and
its Affiliates shall pay or reimburse any member of the Committee, as well as any Director, Employee, or Consultant who in good
faith takes action on behalf of the Plan, for all expenses incurred with respect to the Plan, and to the full extent allowable
under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s
fees) arising out of their good faith performance of duties on behalf of the Plan. The Company and its Affiliates may, but shall
not be required to, obtain liability insurance for this purpose.


 


18.          Governing
Law. The terms of this Plan shall be governed by the laws of the State of Delaware, without regard to its conflicts of
law rules.


 






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19.          Plan
Termination or Amendment.


 


If not
sooner terminated by the Board, this Plan shall terminate at the close of business on the date ten years after its effective date
as determined under Section 1(a) above. No Awards shall be made under the Plan after its termination. The Board may amend
or terminate the Plan as it shall deem advisable; provided that no change shall be made that increases the total number of Shares
reserved for issuance pursuant to Awards granted under the Plan (except pursuant to Section 13 above) unless such change
is authorized by the shareholders of the Company. A termination or amendment of the Plan shall not, without the consent of the
Participant, adversely and materially affect a Participant’s rights under an Award previously granted to him or her. Notwithstanding
the foregoing, the Committee may amend the Plan to comply with changes in tax or securities laws or regulations, or in the interpretation
thereof. Furthermore, the Board may not amend the Plan without shareholder approval to allow for either (i) a “repricing”
within the meaning of federal securities laws applicable to proxy statement disclosures, except a repricing in connection with
a Change in Control or which is otherwise approved by the shareholders, or (ii) the cancellation of an outstanding Option
or SAR whose exercise price is greater than Fair Market Value at the time of cancellation for the purpose of reissuing the Option
or SAR to the Participant at a lower exercise price, granting a replacement award of a different type or in exchange for a cash
payment, except a cancellation and reissuance, grant of a replacement award or cash payment in connection with a Change in Control.


 


20.          Relationship
to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to
the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.


 


21.          Expenses.
The expenses of administering the Plan shall be borne by the Company and its Affiliates.


 






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B.
RILEY FINANCIAL, INC.


Amended
and Restated 2009 Stock Incentive Plan


 


(formerly
Great American Group, Inc.


Amended
and Restated 2009 Stock Incentive Plan)


 


(formerly
Alternative Asset Management Acquisition Corp.


2009
Stock Incentive Plan)


 





 



Appendix
I: Definitions


 


 



 


As used
in the Plan, the following terms have the meanings indicated when they begin with initial capital letters within the Plan:


 


“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition, “control,” when used with respect to any Person, means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person or
the power to elect directors, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,”
“controlling” and “controlled” have meanings correlative to the foregoing.


 


“Applicable
Law” means the legal requirements relating to the administration of options and share-based plans under any applicable
laws of the United States, any other country, and any provincial, state, or local subdivision, any applicable stock exchange or
automated quotation system rules or regulations, as such laws, rules, regulations and requirements shall be in place from time
to time.


 


“Award”
means any award made pursuant to the Plan, including awards made in the form of an Option, a SAR, a Restricted Share, a RSU, an
Unrestricted Share, a DSU, or a Performance Award, or any combination thereof, whether alternative or cumulative.


 


“Award
Agreement” means any document, whether in writing or through an electronic medium, setting forth the terms of an
Award that has been authorized by the Committee. The Committee shall determine the form or forms of documents to be used, and
may change them from time to time for any reason, including different documents as may be appropriate or applicable for particular
locations and countries.


 


“Beneficiary”
means the person or entity designated by the Participant, in a form approved by the Company, to exercise the Participant’s
rights with respect to an Award or receive payment or settlement under an Award after the Participant’s death.


 


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


 


“Cause”
will have the meaning set forth in any employment agreement between the Company or any of its Affiliate and the Participant then
in effect. In the absence of such an agreement, “Cause” will exist if the Participant is terminated from employment
or other service with the Company or an Affiliate for any of the following reasons: (i) the Participant’s willful failure
to substantially perform his or her duties and responsibilities to the Company or deliberate violation of a material Company policy;
(ii) the Participant’s commission of any material act or acts of fraud, embezzlement, dishonesty, or other willful
misconduct; (iii) the Participant’s material unauthorized use or disclosure of any proprietary information or trade
secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her
relationship with the Company; or (iv) Participant’s willful and material breach of any of his or her obligations under
any written agreement or covenant with the Company. The foregoing definition does not in any way limit the Company’s ability
to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will
be interpreted herein to include any Affiliate or successor thereto, if appropriate.


 






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“Change
in Control” shall be deemed to have occurred if:


 


(i)          a
sale, transfer, or other disposition of all or substantially all of the assets and properties of the Company is closed or consummated;


 


(ii)          any
“person,” “entity” or “group” (within the meaning of Section 13(d)(3) and 14(d)(2)) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the Company or any majority owned
subsidiary of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s
then outstanding securities that have the right to vote in the election of directors generally; provided, however, that the following
shall not constitute a “Change in Control” for purposes of this subclause (ii):


 


(A)          any
acquisition directly from the Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege
in respect of outstanding convertible or exchangeable securities); or


 


(B)          any
acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by
the Company;


 


(iii)          during
any period of two consecutive years during the term of the Plan, individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to constitute at least a majority thereof, unless the election of each
director who was not a director at the beginning of such period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning of the period but excluding any director whose
initial assumption of office occurred as a result of an actual or threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board of Directors of the Company; or


 


(iv)          the
shareholders of the Company approve a plan or proposal of liquidation of the Company, or a merger, reorganization, or consolidation
involving the Company is closed or consummated, other than a merger, reorganization, or consolidation in which holders of the
combined voting power of the Company’s then outstanding securities that have the right to vote in the election of directors
generally immediately prior to such transaction own, either directly or indirectly, fifty percent (50%) or more of the combined
voting power of the securities entitled to vote in the election of directors generally of the merged, reorganized or consolidated
entity (or its parent company) immediately following such transaction in substantially the same proportions among such holders
as immediately prior to such transaction.


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Committee”
means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 17
above. With respect to any decision involving an Award intended to satisfy the requirements of Section 162(m) of the Code,
the Committee shall consist of two or more Directors of the Company who are “outside directors” within the meaning
of Section 162(m) of the Code. With respect to any decision relating to a Reporting Person, the Committee shall consist of
two or more directors who are “non-employee directors” within the meaning of Rule 16b-3. Unless otherwise determined
by the Board, the Committee shall be the Compensation Committee of the Board or its successor.


 


“Company”
means B. Riley Financial, Inc., a Delaware corporation; provided, however, that in the event the Company reincorporates to another
jurisdiction, all references to the term “Company” shall refer to the Company in such new jurisdiction.


 


“Consultant”
means any person (other than an Employee or Director), including an advisor, who is engaged by the Company or any Affiliate to
render services and is compensated for such services.


 






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“Continuous
Service” means a Participant’s period of service in the absence of any interruption or termination, as an
Employee, Director, or Consultant. Continuous Service shall not be considered interrupted in the case of: (i) sick leave;
(ii) military leave; (iii) any other leave of absence approved by the Committee, provided that such leave is for a period
of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; (iv) changes in status from Director to advisory
director or emeritus status; or (v) transfers between locations of the Company or between the Company and its Affiliates.
Changes in status between service as an Employee, Director, and a Consultant will not constitute an interruption of Continuous
Service if the individual continues to perform bona fide services for the Company. The Committee shall have the discretion to
determine whether and to what extent the vesting of any Awards shall be tolled during any paid or unpaid leave of absence; provided,
however, that in the absence of such determination, vesting for all Awards shall be tolled during any such unpaid leave (but not
for a paid leave).


 


“Deferred
Share Units” or “DSUs” mean Awards pursuant to Section 8 of the Plan.


 


“Director”
means a member of the Board, or a member of the board of directors of an Affiliate.


 


“Disabled”
shall have the meaning set forth in any employment agreement between the Company or any of its Affiliates and the Participant
then in effect (and shall include the term “Disability” if that term is so defined in such employment agreement).
In the absence of such an agreement, “Disabled” shall mean a condition under which a Participant —


 


(i)           is
unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or


 


(ii)          is,
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, received income replacement benefits for a period of not less than
3 months under an accident or health plan covering employees of the Company or an Affiliate of the Company.


 


“Eligible
Person” means any Consultant, Director, or Employee and includes non-Employees to whom an offer of employment has
been or is being extended.


 


“Employee”
means any person whom the Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes,
whether or not that classification is correct. The payment by the Company of a director’s fee to a Director shall not be
sufficient to constitute “employment” of such Director by the Company.


 


“Employer”
means the Company and each Affiliate that employs one or more Participants.


 


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


 


“Fair
Market Value” as of any date (the “Determination Date”) means: (i) the closing price of a Share
on the New York Stock Exchange, the American Stock Exchange or the NASDAQ Global Select Market (collectively, the “Exchange”)
on the Determination Date, or, if shares were not traded on the Determination Date, then on the nearest preceding trading day
during which a sale occurred; or (ii) if such stock is not traded on the Exchange but is otherwise traded in the over-the-counter
market, the mean between the representative bid and asked prices for a Share on the Determination Date; or (iii) if subsections
(i) or (ii) do not apply, the fair market value of a Share established in good faith by the Board or the Committee based on relevant
facts and circumstances.


 


“Grant
Date” means the later of (i) the date designated as the “Grant Date” within an Award Agreement,
and (ii) date on which the Committee determines the key terms of an Award, provided that as soon as reasonably practical
thereafter the Committee both notifies the Eligible Person of the Award and enters into an Award Agreement with the Eligible Person.


 






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“Incentive
Stock Option” or “ISO” means, an Option that qualifies for favorable income tax treatment
under Code Section 422.


 


“Involuntary
Termination” shall mean, to the extent there is an employment agreement between the Company or any of its Affiliates
and a Participant then in effect and subject to the terms of such employment agreement, a termination of a Participant’s
employment on or after a Change in Control (i) by the Participant for “Good Reason” (as defined in any such employment
agreement), or (ii) by the Company or its Affiliates without cause or other than upon death or disability which termination
entitles such Participant to accelerated or extended severance benefits pursuant to his or her employment agreement. In the absence
of such an agreement, “Involuntary Termination” means a termination of a Participant’s Continuous Service under
the following circumstances occurring on or after a Change in Control: (i) termination without Cause by the Company or an
Affiliate or successor thereto, as appropriate; or (ii) voluntary termination by the Participant, if: (1) the Participant
voluntarily terminates Continuous Service within 60 days of one of the following conditions arising without the Participant’s
consent: (A) a material reduction in the Participant’s job responsibilities, provided that neither a mere change in
title alone nor reassignment to a substantially similar position shall constitute a material reduction in job responsibilities;
(B) an involuntary relocation of the Participant’s work site to a facility or location more than 25 miles from the
Participant’s principal work site at the time of the Change in Control; or (C) a material reduction in Participant’s
total compensation other than as part of an reduction by the same percentage amount in the compensation of all other similarly-situated
Employees or Directors; (2) the Participant gives the Company or an Affiliate written notice of the existence of one or more
of the conditions listed in (A) through (C) within ten days of the initial existence of the condition; and (3) the Company
or Affiliate fails to cure such condition within 30 days following receipt of such written notice by the Participant.


 


“Non-ISO”
means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Award Agreement.


 


“Option”
means a right to purchase Shares granted under the Plan, at a price determined in accordance with the Plan.


 


“Participant”
means any Eligible Person who holds an outstanding Award.


 


“Performance
Awards” mean Awards granted pursuant to Section 9.


 


“Performance
Unit” means an Award granted pursuant to Section 9(a) of the Plan which may be paid in cash, in Shares, or
such combination of cash and Shares as the Committee in its sole discretion shall determine.


 


“Person”
means any natural person, association, trust, business trust, cooperative, corporation, general partnership, joint venture, joint-stock
company, limited partnership, limited liability company, real estate investment trust, regulatory body, governmental agency or
instrumentality, unincorporated organization or organizational entity.


 


“Plan”
means this B. Riley Financial, Inc. Amended and Restated 2009 Stock Incentive Plan (including the Appendices hereto).


 


“Recapture”
and “Rescission” have the meaning set forth in Section 15 of the Plan.


 


“Reimbursement”
has the meaning set forth in Section 16 of the Plan.


 


“Reporting
Person” means an Employee, Director, or Consultant who is subject to the reporting requirements set forth under
Rule 16b-3.


 


“Restricted
Share” means a Share awarded with restrictions imposed under Section 7.


 


“Restricted
Share Unit” or “RSU” means a right granted to a Participant to receive Shares or cash
upon the lapse of restrictions imposed under Section 7.


 






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“Retirement” means a Participant’s termination
of employment after age 65.


 


“Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.


 


“Share”
means an ordinary share, no par value, of the Company, as adjusted in accordance with Section 13 of the Plan.


 


“SAR”
or “Share Appreciation Right” means a right to receive amounts awarded under Section 6.


 


“Ten
Percent Holder” means a person who owns (within the meaning of Code Section 422) stock representing more than
ten percent (10%) of the combined voting power of all classes of stock of the Company.


 


“Unrestricted
Shares” mean Shares awarded without restrictions pursuant to Section 7 of the Plan.


 


“Withholding
Taxes” means the aggregate minimum amount of federal, state, local and foreign income, payroll and other taxes that
the Company and any Affiliates are required to withhold in connection with any Award.


 






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b.
riley financial, Inc.


Amended
and Restated 2009 Stock Incentive Plan


 


(formerly
Great American Group, Inc.


Amended
and Restated 2009 Stock Incentive Plan)


 


(formerly
Alternative Asset Management Acquisition Corp.


2009
Stock Incentive Plan)


 


The
2009 Stock Incentive Plan was approved by the Board of Directors of Alternative Asset Management Acquisition Corp. (“AAMAC”)
on May 12, 2009 and by the shareholders of Alternative Asset Management Acquisition Corp. (“AAMAC”) on July 31, 2009,
and assumed by Great American Group, Inc. on July 31, 2009 (the “2009 Plan”). The 2009 Plan was amended and restated
by the Board of Directors of Great American Group, Inc. on August 19, 2009 (the “August 2009 Plan”). The August 2009
Plan was amended and restated by the Board of Directors and stockholders of Great American Group, Inc. on October 7, 2014 (the
“2014 Plan”). The 2014 Plan was amended by the Board of Directors of B. Riley Financial, Inc. on February 11, 2015
to reflect the change of the Company’s name from Great American Group, Inc. to B. Riley Financial, Inc. The 2014 Plan was
amended by the Board of Directors of B. Riley Financial, Inc. on May 4, 2015 to provide the Committee with discretion to make
payments in respect of dividends associated with Shares underlying certain Awards.


 





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