Exhibit 10.4


 





 


 


 


 


 


EDGE THERAPEUTICS, INC. 


2014 EQUITY INCENTIVE PLAN


 


 


 


 


 


 


 


Adopted by the Board of Directors __________,
2014


 


Approved by the Shareholders _______, 2014


 


 


 






    	 



    	 



    

 


 


EDGE THERAPEUTICS, INC.


 


2014 EQUITY INCENTIVE PLAN


 


Section 1.               
Purpose of the Plan. The purpose of the Edge Therapeutics, Inc. 2014 Equity Incentive Plan (the “Plan”)
is to assist the Company and its Subsidiaries in attracting and retaining valued Employees, Consultants and Non-Employee Directors
by offering them a greater stake in the Company’s success and a closer identity with it, and to encourage ownership of the
Company’s stock by such Employees, Consultants and Non-Employee Directors.


 


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


 


2.1.           
“Award” means the grant of Restricted Stock, Options, SARs, Restricted Stock Units or Other Awards under
the Plan.


 


2.2.           
“Award Agreement” means the written agreement, instrument or document evidencing an Award.


 


2.3.           
“Board” means the Board of Directors of the Company.


 


2.4.           
“Cause” means,


 


(a)               
if the applicable Participant is party to an effective employment, consulting, severance or similar agreement with the Company
or a Subsidiary, and such term is defined therein, “Cause” shall have the meaning provided in such agreement;


 


(b)              
if the applicable Participant is not a party to an effective employment, consulting, severance or similar agreement or if
no definition of “Cause” is set forth in the applicable employment, consulting, severance or similar agreement, “Cause”
shall have the meaning provided in the applicable Award Agreement;


 


(c)               
if neither (a) nor (b) applies, then “Cause” shall mean, as determined by the Committee in its sole discretion,
(i) the Participant’s willful misconduct or gross negligence in connection with the performance of the Participant’s
duties for the Company or its Subsidiaries; (ii) the Participant’s conviction of, or a plea of guilty or nolo contendere
to, a felony or a crime involving fraud or moral turpitude; (iii) the Participant’s engaging in any business that directly
or indirectly competes with the Company or its Subsidiaries; or (iv) disclosure of trade secrets, customer lists or confidential
information of the Company or its Subsidiaries to a competitor or an unauthorized person.


 


2.5.           
“Change in Control” means, unless otherwise provided in an Award Agreement:


 


(a)               
the acquisition in one or more transactions (whether by purchase, merger or otherwise) by any “Person” (as such
term is used for purposes of Section 13(d) or Section 14(d) of the Exchange Act, but excluding, for this purpose, (i) the Company
or its Subsidiaries, (ii) any employee benefit plan of the Company or its Subsidiaries, (iii) an entity owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) of “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding voting securities (the “Voting Securities”);


 


(b)              
a change in the composition of the Board such that the individuals who as of any date constitute the Board (the “Incumbent
Board”) cease to constitute a majority of the Board at any time during the 24-month period immediately following such
date; provided, however, that if the election, or nomination for election by the Company’s shareholders, of any new director
was approved by a vote of at least a majority of the Incumbent Board, such new director shall be considered as a member of the
Incumbent Board, and provided further that any reductions in the size of the Board that are instituted voluntarily by the Incumbent
Board shall not constitute a Change in Control, and after any such reduction the “Incumbent Board” shall mean the Board
as so reduced;


 


(c)               
a complete liquidation or dissolution of the Company; or


 


(d)              
the sale of all or substantially all of the Company’s and its Subsidiaries’ assets (determined on a consolidated
basis), other than to a Person described in clauses (i), (ii) or (iii) of Section 2.5(a) above.



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2.6.           
 “Code” means the Internal Revenue Code of 1986, as amended.


 


2.7.           
“Common Stock” means the common stock of the Company, par value $0.01 per share.


 


2.8.           
“Company” means Edge Therapeutics, Inc., a Delaware corporation, or any successor corporation.


 


2.9.           
“Committee” means the Compensation Committee of the Board, provided that the Committee shall at all times
have at least two members, each of whom shall be a “non-employee director” as defined in Rule 16b-3 under the Exchange
Act, an “outside director” as defined in Section 162(m) of the Code and the regulations issued thereunder and an “independent
director” under the rules of any applicable stock exchange.


 


2.10.       
“Consultant” means a natural person who provides bona fide services to the Company or its Subsidiaries
other than in connection with the offer or sale of securities in a capital-raising transaction and is not engaged in activities
that directly or indirectly promote or maintain a market for the Company’s securities.


 


2.11.       
 “Disability” means, unless otherwise provided in an Award Agreement, that the Participant 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 which has lasted or can be expected to last for a continuous period of not less than 12 months.


 


2.12.       
“Effective Date” means the date that the Plan is approved by the shareholders of the Company.


 


2.13.       
“Employee” means an officer or other employee of the Company or a Subsidiary, including a director who
is such an employee.


 


2.14.       
“Exchange Act” means the Securities Exchange Act of 1934, as amended.


 


2.15.       
“Fair Market Value” means, on any given date (i) if the shares of Common Stock are then listed on a national
securities exchange, including the Nasdaq Global Select Market (“NASDAQ”), the closing sales price per share of Common
Stock on the exchange for such date, or if no sale was made on such date on the exchange, on the last preceding day on which a
sale occurred; (ii) if shares of Common Stock are not then listed on a national securities exchange but are then quoted on another
stock quotation system, the closing price for the shares of Common Stock as quoted on such quotation system on such date, or if
no sale was made on such date on such quotation system, on the last preceding day on which a sale was made; or (iii) if (i) and
(ii) do not apply, such value as the Committee in its discretion may in good faith determine in accordance with Section 409A of
the Code and the regulations thereunder (and, with respect to Incentive Stock Options, in accordance with Section 422 of the Code
and the regulations thereunder).


 


2.16.       
“Incentive Stock Option” means an Option or portion thereof intended to meet the requirements of an incentive
stock option as defined in Section 422 of the Code and designated as an Incentive Stock Option.


 


2.17.       
“Non-Employee Director” means a member of the Board who is not an Employee.


 


2.18.       
“Non-Qualified Option” means an Option or portion thereof not intended to be an Incentive Stock Option.


 


2.19.       
“Option” means a right granted under Section 6.1 of the Plan to purchase a specified number of shares
of Common Stock at a specified price. An Option may be an Incentive Stock Option or a Non-Qualified Option; provided, however,
that unless otherwise explicitly stated in an Award Agreement, each Option shall be a Non-Qualified Stock Option.


 


2.20.       
“Participant” means any Employee, Non-Employee Director or Consultant who receives an Award.



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2.21.       
“Performance Goals” means any goals established by the Committee in its sole discretion, the attainment
of which is substantially uncertain at the time such goals are established. Performance Goals may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, division, department
or function within the Company or Subsidiary in which the Participant is employed. Performance Goals may be measured on an absolute
or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. To the extent
that the Award is intended to constitute “qualified performance-based compensation” within the meaning of Code Section
162(m), then such Award shall be based on the achievement of one or more of the following performance goals: specified levels of
or increases in return on capital, equity or assets; earnings measures/ratios (on a gross, net, pre-tax or post-tax basis), including
diluted earnings per share, total earnings, operating earnings, earnings growth, earnings before interest and taxes (EBIT) and
earnings before interest, taxes, depreciation and amortization (EBITDA); net economic profit (which is operating earnings minus
a charge to capital); net income; operating income; sales; sales growth; gross margin; direct margin; share price (including but
not limited to growth measures and total shareholder return); operating profit; per period or cumulative cash flow (including but
not limited to operating cash flow and free cash flow) or cash flow return on investment (which equals net cash flow divided by
total capital); inventory turns; financial return ratios; market share; balance sheet measurements such as receivable turnover;
improvement in or attainment of expense levels; improvement in or attainment of working capital levels; debt reduction; strategic
innovation, including but not limited to entering into, substantially completing, or receiving payments under, relating to, or
deriving from a joint development agreement, licensing agreement, or similar agreement; customer or employee satisfaction; individual
objectives; operating efficiency; regulatory body approvals for commercialization of products; implementation or completion of
critical projects or related milestones (including, without limitation, milestones such as clinical trial enrollment targets, commencement
of phases of clinical trials and completion of phases of clinical trials); partnering or similar transactions; and any combination
of any of the foregoing criteria. If the Committee determines that a change in the business, operations, corporate structure or
capital structure of the Company or its Subsidiaries, or the manner in which it conducts its business, or other events or circumstances
render the Performance Goals unsuitable, the Committee may modify such Performance Goals or the related minimum acceptable level
of achievement, in whole or in part, as the Committee deems appropriate and equitable (but, with respect to any Award that is intended
to constitute “qualifying performance-based compensation” (within the meaning of Code Section 162(m)),only to the extent
permitted by Code Section 162(m)).


 


2.22.       
“Performance Period” means the period selected by the Committee during which the performance of the Company,
any Subsidiary, any department of the Company or any Subsidiary, or any individual is measured for the purpose of determining the
extent to which a Performance Goal has been achieved.


 


2.23.       
“Restricted Stock” means Common Stock awarded by the Committee under Section 6.3 of the Plan.


 


2.24.       
“Restricted Stock Unit” means the right granted under Section 6.4 of the Plan to receive, on the date of settlement,
an amount equal to the Fair Market Value of one share of Common Stock. An Award of Restricted Stock Units may be settled in cash,
shares of Common Stock or any combination of the foregoing.


 


2.25.       
“Restriction Period” means the period during which Restricted Stock and Restricted Stock Units are subject
to forfeiture.


 


2.26.       
“SAR” means a stock appreciation right awarded by the Committee under Section 6.2 of the Plan.


 


2.27.       
“Securities Act” means the Securities Act of 1933, as amended.


 


2.28.       
“Subsidiary” means any corporation, partnership, joint venture or other business entity of which 50%
or more of the outstanding voting power is beneficially owned, directly or indirectly, by the Company.


 


2.29.       
“Ten Percent Shareholder” means a person who on any given date owns, either directly or indirectly (taking
into account the attribution rules contained in Section 424(d) of the Code), stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Subsidiary.


 


Section 3.               
Eligibility. Any Employee, Non-Employee Director or Consultant shall be eligible to be selected to receive an Award
under the Plan; provided, however, that only persons who are Employees may be granted Options which are intended to qualify as
Incentive Stock Options.



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Section 4.               
Administration and Implementation of the Plan.


 


4.1.           
The Plan and all Award Agreements shall be administered by the Committee. Any action of the Committee in administering the
Plan and an Award Agreement shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries, Participants,
persons claiming rights from or through Participants and shareholders of the Company.
No member of the Committee (or any person to whom the Committee has delegated authority to act under the Plan) shall be
personally liable for any action, determination, or interpretation taken or made in good faith by the Committee (or such person)
with respect to the Plan or any Awards granted hereunder, and all members of the Committee (and such persons) shall be fully indemnified
and protected by the Company in respect of any such action, determination or interpretation to the fullest extent permitted by
law.


 


4.2.           
Subject to the provisions of the Plan, the Committee shall have full and final authority in its discretion to (i) select
the Employees, Non-Employee Directors and Consultants who will receive Awards pursuant to the Plan; (ii) determine the type or
types of Awards to be granted to each Participant; (iii) determine the number of shares of Common Stock to which an Award will
relate, the terms and conditions of any Award granted under the Plan (including, but not limited to, restrictions as to vesting,
transferability or forfeiture, exercisability or settlement of an Award and waivers or accelerations thereof, and waivers of or
modifications to Performance Goals relating to an Award, based in each case on such considerations as the Committee shall determine)
and all other matters to be determined in connection with an Award; (iv) determine the exercise price or purchase price (if any)
of an Award; (v) determine whether, to what extent, and under what circumstances an Award may be cancelled, forfeited, or surrendered;
(vi) determine whether, and to certify that, Performance Goals to which an Award is subject are satisfied; (vii) correct any defect
or supply any omission or reconcile any inconsistency in the Plan, and adopt, amend and rescind such rules, regulations, guidelines,
forms of agreements and instruments relating to the Plan as it may deem necessary or advisable; (viii) construe and interpret the
Plan; and (ix) make all other determinations as it may deem necessary or advisable for the administration of the Plan; provided,
however, that the Committee shall be prohibited from effecting a repricing of any outstanding Award without shareholder approval.


 


4.3.           
To the extent permitted by applicable law, the Committee may delegate some or all of its authority with respect to the Plan
and Awards to any executive officer of the Company or any other person or persons designated by the Committee, in each case, acting
individually or as a committee, provided that the Committee may not delegate its authority hereunder to any person to make Awards
to (a) Employees who are (i) “officers” as defined in Rule 16a-1(f) under the Exchange Act, (ii) “covered employees”
within the meaning of Section 162(m) of the Code or (iii) officers or other Employees who are delegated authority by the Committee
pursuant to this Section or (b) members of the Board. Any delegation hereunder shall be subject to the restrictions and limits
that the Committee specifies at the time of such delegation or thereafter. The Committee may at any time rescind the authority
delegated to any person pursuant to this Section. Any action undertaken by any such person or persons in accordance with the Committee’s
delegation of authority pursuant to this Section shall have the same force and effect as if undertaken directly by the Committee.


 


Section 5.               
Shares of Common Stock Subject to the Plan.


 


5.1.           
Subject to adjustment as provided in Section 8 hereof, the total number of shares of Common Stock available for Awards under
the Plan as of the Effective Date shall be 2,500,000 (the “Plan Limit”); provided, however, that on January 1, 2015
and each January 1st thereafter prior to the termination of the Plan, the Plan Limit shall be increased by the lesser
of (x) 4% of the number of shares of Common Stock outstanding as of the immediately preceding December 31st and (y)
such lesser number as the Board may determine in its discretion. Up to 2,000,000 shares available for Awards under the Plan may
be issued pursuant to Incentive Stock Options, and no more than 1,250,000 shares may be awarded to any Participant in any one calendar
year. For purposes of determining the number of shares available for Awards under the Plan, each stock-settled SAR shall count
against the Plan Limit based on the number of shares underlying the exercised portion of such SAR rather than the number of shares
issued in settlement of such SAR. Any shares tendered, with the Committee’s approval, by a Participant in payment of an exercise
price for an Award or the tax liability with respect to an Award, including shares withheld from any such Award, shall not be available
for future Awards hereunder. Common Stock awarded under the Plan may be reserved or made available from the Company’s authorized
and unissued Common Stock or from Common Stock reacquired and held in the Company’s treasury. Any shares of Common Stock
issued by the Company through the assumption or substitution of outstanding grants from an acquired company shall not reduce the
shares of Common Stock available for Awards under the Plan.


 


5.2.           
If any shares subject to an Award under the Plan are forfeited or such Award otherwise terminates or is settled for any
reason whatsoever without an actual distribution of shares to the Participant, any shares counted against the number of shares
available for issuance pursuant to the Plan with respect to such Award shall, to the extent of any such forfeiture, settlement,
or termination, again be available for Awards under the Plan; provided, however, that the Committee may adopt procedures for the
counting of shares relating to any Award to ensure appropriate counting, avoid double counting, provide for adjustments in any
case in which the number of shares actually distributed differs from the number of shares previously counted in connection with
such Award, and if necessary, to comply with applicable law or regulations.



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Section 6.               
Awards. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee
may impose on any Award or the settlement or exercise thereof, at the date of grant or thereafter, such additional terms and conditions,
not inconsistent with the provisions of the Plan, as the Committee shall determine, including without limitation terms requiring
forfeiture of Awards in the event of the termination of employment or other relationship with the Company or any Subsidiary by
the Participant; provided, however, that the Committee shall retain full power to accelerate or waive any such additional term
or condition as it may have previously imposed (provided that, in any case, any such action is permitted under Code Section 409A).
The right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to
such Performance Goals as may be determined by the Committee. Each Award, and the terms and conditions applicable thereto, shall
be evidenced by an Award Agreement.


 


6.1.           
Options. Options give a Participant the right to purchase a specified number of shares of Common Stock from the Company
for a specified time period at a fixed exercise price, as provided in the applicable Award Agreement. Options may be either Incentive
Stock Options or Non-Qualified Stock Options; provided that Incentive Stock Options may not be granted to Non-Employee Directors
or Consultants. The grant of Options shall be subject to the following terms and conditions:


 


(a)               
Exercise Price. The price per share at which Common Stock may be purchased upon exercise of an Option shall be determined
by the Committee and specified in the Award Agreement, but shall be not less than the Fair Market Value of a share of Common Stock
on the date of grant (or 110% of the Fair Market Value of a share of Common Stock on the date of grant in the case of an Incentive
Stock Option granted to a Ten Percent Shareholder).


 


(b)              
Term of Options. The term of an Option shall be specified in the Award Agreement, but shall in no event be greater
than ten years from the grant date (or five years from the grant date in the case of an Incentive Stock Option granted to a Ten
Percent Shareholder).


 


(c)               
Exercise of Option. Each Award Agreement with respect to an Option shall specify the time or times at which an Option
may be exercised in whole or in part and the terms and conditions applicable thereto, including (i) a vesting schedule which may
be based upon the passage of time, attainment of Performance Goals or a combination thereof, (ii) whether the exercise price for
an Option shall be paid in cash, with shares of Common Stock, with any combination of cash and shares of Common Stock, or with
other legal consideration that the Committee may deem appropriate, (iii) the methods of payment, which may include payment through
cashless and net exercise arrangements, to the extent permitted by applicable law and (iv) the methods by which, or the time or
times at which, Common Stock will be delivered or deemed to be delivered to Participants upon the exercise of such Option. Payment
of the exercise price shall in all events be made within three days after the date of exercise of an Option. With respect to any
Participant who is subject to Section 16 of the Exchange Act, such Participant may direct the Company to reduce the number of Shares
that would otherwise be deliverable upon the exercise of his or her Option having a Fair Market Value on the date of exercise equal
to the exercise price of the portion of the Option then being exercised.


 


(d)              
Termination of Employment or Other Service. Unless otherwise provided in an Award Agreement, upon a Participant’s
termination of employment or other service with the Company and its Subsidiaries, the unvested portion of such Participant’s
Options shall cease to vest and shall be forfeited and the vested portion of such Participant’s Options shall remain exercisable
by the Participant or the Participant’s beneficiary or legal representative, as the case may be, for a period of (i) 30 days
in the event of a termination by the Company or a Subsidiary without Cause, (ii) 180 days in the event of a termination due to
death or Disability and (iii) 30 days in the event of the Participant’s voluntary termination; provided, however, that in
no event shall any Option be exercisable after its stated term has expired. All of a Participant’s Options, whether or not
vested, shall be forfeited immediately upon such Participant’s termination by the Company or a Subsidiary for Cause.


 


(e)               
Incentive Stock Options. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company
in writing immediately after the date he or she makes a “disqualifying disposition” (as defined in Section 421(b) of
the Code) of any shares of Common Stock acquired pursuant to the exercise of such Incentive Stock Option. The Company may, if determined
by the Committee and in accordance with procedures established by it, retain possession of any shares acquired pursuant to the
exercise of an Incentive Stock Option as agent for the applicable Participant until the end of any period during which a disqualifying
disposition could occur, subject to complying with any instructions from such Participant as to the sale of such shares. The aggregate
Fair Market Value, determined as of the date of grant, for Awards granted under the Plan (or any other stock option plan required
to be taken into account under Section 422(d) of the Code) that are intended to be Incentive Stock Options which are first exercisable
by the Participant during any calendar year shall not exceed $100,000. To the extent an Award purporting to be an Incentive Stock
Option exceeds the limitation in the previous sentence, the portion of the Award in excess of such limit shall be a Non-Qualified
Option.  



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6.2.           
Stock Appreciation Rights. An SAR shall confer on the Participant a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one share of Common Stock on the date of exercise over (ii) the grant price of the SAR as
determined by the Committee, but which may never be less than the Fair Market Value of one share of Common Stock on the date of
grant. The grant of SARs shall be subject to the following terms and conditions:


 


(a)               
General. Each Award Agreement with respect to an SAR shall specify the number of SARs granted, the grant price of
the SAR, the time or times at which an SAR may be exercised in whole or in part (including vesting upon the passage of time, the
attainment of Performance Goals, or a combination thereof), the method of exercise, method of settlement (in cash, Common Stock
or a combination thereof), method by which Common Stock will be delivered or deemed to be delivered to Participants (if applicable)
and any other terms and conditions of any SAR.


 


(b)              
Termination of Employment or Other Service. Unless otherwise provided in an Award Agreement, upon a
Participant’s termination of employment or other service with the Company and its Subsidiaries, the unvested portion of such
Participant’s SARs shall cease to vest and shall be forfeited and the vested portion of such Participant’s SARs shall
remain exercisable by the Participant or the Participant’s beneficiary or legal representative, as the case may be, for a
period of (i) 30 days in the event of a termination by the Company or a Subsidiary without Cause, (ii) 180 days in the event of
a termination due to death or Disability and (iii) 30 days in the event of the Participant’s voluntary termination; provided,
however, that in no event shall any SAR be exercisable after its stated term has expired. All of a Participant’s SARs, whether
or not vested, shall be forfeited immediately upon such Participant’s termination by the Company or a Subsidiary for Cause.


 


(c)               
Term. The term of an SAR shall be specified in the Award Agreement, but shall in no event be greater than ten years.


 


6.3.           
Restricted Stock. An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common
Stock to the Participant, which shares are subject to forfeiture upon the happening of specified events during the Restriction
Period. Such an Award shall be subject to the following terms and conditions:


 


(a)               
General. Each Award Agreement with respect to Restricted Stock shall specify the duration of the Restriction Period
and/or each installment thereof, the conditions under which the Restricted Stock may be forfeited to the Company, and the amount,
if any, the Participant must pay to receive the Restricted Stock. Such restrictions may include a vesting schedule based upon the
passage of time, the attainment of Performance Goals or a combination thereof.


 


(b)              
Transferability. During the Restriction Period, the transferability of Restricted Stock shall be prohibited or restricted
in the manner and to the extent prescribed in the applicable Award Agreement. Such restrictions may include, without limitation,
rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Stock to a continuing substantial
risk of forfeiture in the hands of any transferee.


 


(c)               
Shareholder Rights. Unless otherwise provided in the applicable Award Agreement, during the Restriction Period the
Participant shall have all the rights of a shareholder with respect to Restricted Stock, including, without limitation, the right
to receive dividends thereon (whether in cash or shares of Common Stock) and to vote such shares of Restricted Stock; provided,
however, that dividends shall be subject to the same restrictions as the underlying Restricted Stock (unless otherwise provided
by the Committee in the Award Agreement) and cash dividends shall be held by the Company in its general assets and released to
the Participant only upon the vesting of the underlying Restricted Stock (unless otherwise provided by the Committee in the Award
Agreement).


 


(d)              
Termination of Employment or Other Service. Unless otherwise provided in the applicable Award Agreement,
upon a Participant’s termination of employment or other service with the Company and its Subsidiaries for any reason, the
unvested portion of each Award of Restricted Stock held by such Participant shall be forfeited with no compensation due the Participant.


 


(e)               
Additional Matters. Upon the Award of Restricted Stock, the Committee may direct the number of shares of Common Stock
subject to such Award be issued to the Participant or placed in a restricted stock account (including an electronic account) with
the transfer agent and in either case designating the Participant as the registered owner. The certificate(s), if any, representing
such shares shall be physically or electronically legended, as applicable, as to sale, transfer, assignment, pledge or other encumbrances
during the Restriction Period and, if issued to the Participant, returned to the Company to be held in escrow during the Restriction
Period. In all cases, the Participant shall sign a stock power endorsed in blank to the Company to be held in escrow during the
Restriction Period.



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6.4.           
Restricted Stock Units. Restricted Stock Units are solely a device for the measurement and determination of the amounts
to be paid to a Participant under the Plan. Restricted Stock Units do not constitute Common Stock and shall not be treated as (or
as giving rise to) property or as a trust fund of any kind; provided, however, that the Company may establish a bookkeeping reserve
to meet its obligations hereunder or a trust or other funding vehicle that would not cause the Plan to be deemed to be funded for
tax purposes or for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. The right of any Participant
in respect of an Award of Restricted Stock Units shall be no greater than the right of any unsecured general creditor of the Company.
 The grant of Restricted Stock Units shall be subject to the following terms and conditions:


 


(a)               
Restriction Period. Each Award Agreement with respect to Restricted Stock Units shall specify the duration of the
Restriction Period, if any, and/or each installment thereof and the conditions under which such Award may be forfeited to the Company.
Such restrictions may include a vesting schedule based upon the passage of time, the attainment of Performance Goals or a combination
thereof.


 


(b)              
Termination of Employment or Other Service. Unless otherwise provided in the applicable Award Agreement, upon
a Participant’s termination of employment or other service with the Company and its Subsidiaries for any reason, the unvested
portion of each Award of Restricted Stock Units credited to such Participant shall be forfeited with no compensation due the Participant.


 


(c)               
Settlement. Unless otherwise provided in an Award Agreement (i) an Award of Restricted Stock Units shall be settled
in shares of Common Stock, provided that any fractional Restricted Stock Units shall be settled in cash and (ii) subject to the
Participant’s continued employment or other service with the Company or a Subsidiary from the date of grant through the expiration
of the Restriction Period (or applicable portion thereof), the vested portion of an Award of Restricted Stock Units shall be settled
within 30 days after the expiration of the Restriction Period (or applicable portion thereof).


 


(d)              
Shareholder Rights. Nothing contained in the Plan shall be construed to give any Participant rights as a shareholder
with respect to an Award of Restricted Stock Units (including, without limitation, any voting, dividend or derivative or other
similar rights). Notwithstanding the foregoing, the Committee may provide in an Award Agreement that amounts equal to any dividends
declared during the Restriction Period on the shares of Common Stock represented by an Award of Restricted Stock Units will be
credited to the Participant’s account and deemed to be reinvested in additional Restricted Stock Units, such additional Restricted
Stock Units to be subject to the same forfeiture restrictions and settlement date as the Restricted Stock Units to which they relate.


 


6.5.           
Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants
any type of Award (in addition to those Awards provided in Sections 6.1, 6.2, 6.3 or 6.4 hereof) that is payable in, or valued
in whole or in part by reference to, shares of Common Stock, and that is deemed by the Committee to be consistent with the purposes
of the Plan, including, without limitation, dividend equivalents, performance shares and performance units (“Other Awards”).


 


Section 7.               
Change in Control.


 


7.1.           
General. Notwithstanding any provision in the Plan to the contrary, upon the occurrence of a Change in Control, the
Committee, in its discretion, may accelerate the vesting and, if applicable, exercisability of all outstanding Awards such that
all outstanding Awards are fully vested and, if applicable, exercisable (effective immediately prior to such Change in Control)
and may determine whether all applicable Performance Goals have been achieved and the applicable level of performance.



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7.2.           
Options and SARs. Notwithstanding any provision in the Plan to the contrary, upon the occurrence of a Change in Control,
the Committee, in its discretion, may take one or more of the following actions with respect to Options and SARs that are outstanding
as of such Change in Control: (a) cancel any outstanding Options or SARs in exchange for a cash payment in an amount equal to the
excess, if any, of the Fair Market Value of the Common Stock underlying the unexercised portion of the Option or SAR as of the
date of the Change in Control over the exercise price or grant price, as the case may be, of such portion, provided that any Option
or SAR with an exercise price or grant price, as the case may be, that equals or exceeds the Fair Market Value of the Common Stock
on the date of such Change in Control shall be cancelled with no payment due the Participant; (b) terminate any Option or SAR,
effectively immediately prior to the Change in Control, provided that the Company provides the Participant an opportunity to exercise
such Award within a specified period following the Participant’s receipt of a written notice of such Change in Control and
the Company’s intention to terminate such Awards, effective immediately prior to such Change in Control; (c) terminate any
Options or SARs, the Performance Goals of which have not been satisfied as of the Change in Control, (d) require the successor
or acquiring company (or its parents or subsidiaries), following a Change in Control, to assume any outstanding Option or SAR and
to substitute such Option or SAR with awards involving the common equity securities of such company on terms and conditions necessary
to preserve the rights of Participants with respect to such Options or SARs or (e) take such other actions as the Committee believes
may be appropriate.


 


7.3.           
Restricted Stock, Restricted Stock Units and Other Awards. With respect to Restricted Stock, Restricted Stock Units
or Other Awards, the Committee generally may (a) provide in an Award that, upon the occurrence of a Change in Control, any vested
Restricted Stock, Restricted Stock Units and Other Awards shall become immediately vested and/or payable, provided that if such
Awards constitute “non-qualified deferred compensation” (within the meaning of Code Section 409A) such Change in Control
satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(v), (vi) or (vii); (b) with respect to any Restricted
Stock, Restricted Stock Units or Other Awards that do not constitute “non-qualified deferred compensation,” elect to
settle such Restricted Stock, Restricted Stock Units and Other Awards upon a Change in Control, (c) terminate any Restricted Stock,
Restricted Stock Units or Other Awards if the applicable Performance Goals were not satisfied as of the Change in Control, (d)
require the successor or acquiring company (or its parents or subsidiaries), following a Change in Control, to assume such Restricted
Stock, Restricted Stock Units and Other Awards or to substitute such Awards with awards involving the equity securities of the
acquiring or successor company on terms and conditions so as to preserve the rights of participants, or (e) to the extent permitted
by Code Section 409A, take such other actions as the Committee believes may be appropriate (including terminating such Awards for
a cash payment equal to the fair market value of the underlying shares).


 


The judgment of the Committee with respect
to any matter referred to in this Section 7 shall be conclusive and binding upon each Participant without the need for any amendment
to the Plan.


 


Section 8.               
Adjustments upon Changes in Capitalization.


 


8.1.           
In order to prevent dilution or enlargement of the rights of Participants under the Plan as a result of any stock dividend,
recapitalization, forward stock split or reverse stock split, reorganization, division, merger, consolidation, spin-off, combination,
repurchase or share exchange, extraordinary or unusual cash distribution or other similar corporate transaction or event that affects
the Common Stock, the Committee shall adjust (i) the number and kind of shares of Common Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Common Stock issuable in respect of outstanding Awards, (iii) the
aggregate number and kind of shares of Common Stock available under the Plan (including any of the specific limitations under Section
5 hereof), and (iv) the exercise or grant price relating to any Award. Any such adjustment shall be made in an equitable manner
which reflects the effect of such transaction or event. It is provided, however, that in the case of any such transaction or event,
the Committee may make any additional adjustments to the items in (i) through (iv) above which it deems appropriate in the circumstances,
or make provision for a cash payment with respect to any outstanding Award; and it is provided, further, that no adjustment shall
be made under this Section that would cause the Plan to violate Section 422 of the Code with respect to Incentive Stock Options
or that would adversely affect the status of any Award that is “performance-based compensation” under Section 162(m)
of the Code.



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8.2.           
In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in,
Awards, including any Performance Goals, in recognition of unusual or nonrecurring events (including, without limitation, events
described in Section 8.1) affecting the Company or any Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles. Notwithstanding the foregoing, all adjustments shall be made in accordance with Section 409A of the Code
and the regulations thereunder to the extent applicable, and with respect to any Award that is “performance-based compensation”
under Section 162(m) of the Code, in accordance with Section 162(m) of the Code.


 


Section 9.               
Termination and Amendment.


 


9.1.           
Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue, or terminate the Plan without the
consent of the Company’s shareholders or Participants, except that any such amendment, alteration, suspension, discontinuation,
or termination shall be subject to the approval of the Company’s shareholders if (i) such action would increase the number
of shares subject to the Plan, (ii) such action would decrease the price at which Awards may be granted, or (iii) such shareholder
approval is required by any applicable federal, state or foreign law or regulation or the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine
to submit such other changes to the Plan to the Company’s shareholders for approval; provided, however, that except as provided
in Section 18, without the consent of an affected Participant, no amendment, alteration, suspension, discontinuation, or termination
of the Plan may materially and adversely affect the rights of such Participant under any outstanding Award unless such modification
is necessary to ensure a deduction under Section 162(m) of the Code or to avoid the additional tax described in Section 409A of
the Code.


 


9.2.           
The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award theretofore
granted and any Award Agreement relating thereto; provided, however, that except as provided in Section 18, without the consent
of an affected Participant, no such amendment, alteration, suspension, discontinuation, or termination of any Award may materially
and adversely affect the rights of such Participant under such Award unless such modification is necessary to ensure a deduction
under Section 162(m) of the Code or to avoid the additional tax described in Section 409A of the Code.


 


9.3.           
Notwithstanding anything in this Section 9 to the contrary, any Performance Goal applicable to an Award shall not be deemed
a fixed contractual term, but shall remain subject to adjustment by the Committee, in its discretion at any time in view of the
Committee’s assessment of the Company’s strategy, performance of comparable companies, and other circumstances, except
to the extent that any such adjustment to a performance condition would adversely affect the status of an Award intended to satisfy
the “qualified performance-based compensation” exception under Section 162(m) of the Code and the regulations thereunder.


 


9.4.           
Notwithstanding anything in the Plan or an Award Agreement to the contrary, no Award may be repriced, replaced or regranted
through cancellation without the approval of the shareholders of the Company, provided that nothing herein shall prevent the Committee
from taking any action provided for in Section 8.


 


Section 10.           
No Right to Award, Employment or Service. No Participant shall have any claim to be granted any Award under the Plan,
and there is no obligation that the terms of Awards be uniform or consistent among Participants. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or
any Subsidiary. For purposes of this Plan, a transfer of employment or service between the Company and its Subsidiaries shall not
be deemed a termination of employment or service; provided, however, that individuals employed by, or otherwise providing services
to, an entity that ceases to be a Subsidiary shall be deemed to have incurred a termination of employment or service, as the case
may be, as of the date such entity ceases to be a Subsidiary unless such individual becomes an employee of, or service provider
to, the Company or another Subsidiary as of the date of such cessation.


 


Section 11.           
Taxes. Each Participant must make appropriate arrangement for the payment of any taxes relating to an Award granted
hereunder. The Company or any Subsidiary is authorized to withhold from any payment relating to an Award under the Plan, including
from a distribution of Common Stock or any payroll or other payment to a Participant, amounts of withholding and other taxes due
in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable
the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to
any Award. This authority shall include the ability to withhold or receive Common Stock or other property and to make cash payments
in respect thereof in satisfaction of a Participant’s tax obligations. Withholding of taxes in the form of shares of Common
Stock with respect to an Award shall not occur at a rate that exceeds the minimum required statutory federal and state withholding
rates.



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Section 12.           
Limits on Transferability; Beneficiaries. No Award or other right or interest of a Participant under the Plan shall
be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien, obligation, or liability of such Participant
to, any party, other than the Company or any Subsidiary, or assigned or transferred by such Participant otherwise than by will
or the laws of descent and distribution, and such Awards and rights shall be exercisable during the lifetime of the Participant
only by the Participant or his or her guardian or legal representative. Notwithstanding the foregoing, the Committee may, in its
discretion, provide that Options, SARs and Restricted Stock be transferable, without consideration, to immediate family members
(i.e., children, grandchildren or spouse), to trusts for the benefit of such immediate family members and to partnerships in which
such family members are the only partners (any vesting conditions shall be unaffected by such transfer). The Committee may attach
to such transferability feature such terms and conditions as it deems advisable. In addition, a Participant may, in the manner
established by the Committee, designate a beneficiary (which may be a person or a trust) to exercise the rights of the Participant,
and to receive any distribution, with respect to any Award upon the death of the Participant. A beneficiary, guardian, legal representative
or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions
of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any
additional restrictions deemed necessary or appropriate by the Committee.


 


Section 13.           
Foreign Nationals. Without amending the Plan, Awards may be granted to Employees, Consultants and Non-Employee Directors
who are foreign nationals or are employed or providing services outside the United States or both, on such terms and conditions
different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to further the purpose
of the Plan. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, the
Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect
for any other purpose, provided that no such supplements, amendments, restatements or alternative versions shall include any provisions
that are inconsistent with the terms of the Plan, as then in effect, unless the Plan could have been amended to eliminate such
inconsistency without further approval by the stockholders of the Company.


 


Section 14.           
Securities Law Requirements.


 


14.1.       
No shares of Common Stock may be issued hereunder if the Company shall at any time determine that to do so would (i) violate
the listing requirements of an applicable securities exchange, or adversely affect the registration or qualification of the Company’s
Common Stock under any state or federal law, or (ii) require the consent or approval of any regulatory body or the satisfaction
of withholding tax or other withholding liabilities. In any of the events referred to in clause (i) or clause (ii) above, the issuance
of such shares shall be suspended and shall not be effective unless and until such withholding, listing, registration, qualifications
or approval shall have been effected or obtained free of any conditions not acceptable to the Company in its sole discretion, notwithstanding
any termination of any Award or any portion of any Award during the period when issuance has been suspended.


 


14.2.       
The Committee may require, as a condition to the issuance of shares hereunder, representations, warranties and agreements
to the effect that such shares are being purchased or acquired by the Participant for investment only and without any present intention
to sell or otherwise distribute such shares and that the Participant will not dispose of such shares in transactions which, in
the opinion of counsel to the Company, would violate the registration provisions of the Securities Act, and the rules and regulations
thereunder.


 


Section 15.           
Termination. Unless earlier terminated, the Plan shall terminate on the earlier of the 10-year anniversary of the
Effective Date or the 10-year anniversary of the date the Plan was approved by the Board, and no Awards under the Plan shall thereafter
be granted.


 


Section 16.           
Fractional Shares. The Company will not be required to issue any fractional shares of Common Stock pursuant to the
Plan. The Committee may provide for the elimination of fractions and settlement of such fractional shares of Common Stock in cash.



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Section 17.           
Discretion. In exercising, or declining to exercise, any grant of authority or discretion hereunder, the Committee
may consider or ignore such factors or circumstances and may accord such weight to such factors and circumstances as the Committee
alone and in its sole judgment deems appropriate and without regard to the effect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any other Participant, any Employee, the Company,
any Subsidiary, any affiliate, any shareholder or any other person.


 


Section 18.           
Code Section 409A. The Plan and all Awards are intended to comply with, or be exempt from, Code Section 409A and
all regulations, guidance, compliance programs and other interpretative authority thereunder, and shall be interpreted in a manner
consistent therewith. Notwithstanding anything contained herein to the contrary, in the event any Award is subject to Code Section 409A,
the Committee may, in its sole discretion and without a Participant’s prior consent, amend the Plan and/or Award, adopt policies
and procedures, or take any other actions as deemed appropriate by the Committee to (i) exempt the Plan and/or any Award from
the application of Code Section 409A, (ii) preserve the intended tax treatment of any such Award or (iii) comply
with the requirements of Code Section 409A. Notwithstanding anything contained in the Plan or in an Award Agreement to the
contrary, neither the Company, any member of the Committee nor any Subsidiary shall have any liability or obligation to any Participant
or any other person for taxes, interest, penalties or fines (including any of the foregoing resulting from the failure of any Award
granted hereunder to comply with, or be exempt from, Code Section 409A).


 


Section 19.           
Governing Law. The validity and construction of the Plan and any Award Agreements entered into thereunder shall be
construed and enforced in accordance with the laws of the State of Delaware, but without giving effect to the conflict of laws
principles thereof.


 


Section 20.           
Recoupment. Any Award granted pursuant to the Plan shall be subject to mandatory repayment by the Participant to
the Company pursuant to the terms of any Company “clawback” or recoupment policy directly applicable to the Plan and
(i) set forth in the Participant’s Award Agreement or (ii) required by law to be applicable to the Participant.


 


Section 21.           
Effective Date. The Plan shall become effective upon the Effective Date, and no Award shall become exercisable, realizable
or vested prior to the Effective Date.


 




 



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