Exhibit 10.2


 


 


 


 


 


 


 


 


 


 


THE LOVESAC
COMPANY


 


2017 EQUITY
INCENTIVE PLAN


 


 


 


 


 


 


 


 


 


 


 






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Table
of Contents


 





	 	 	Page
	1.	Establishment, Purpose and Term of Plan	1
	 	1.1	Establishment	1
	 	1.2	Purpose	1
	 	1.3	Term of Plan	1
	2.	Definitions and Construction	1
	 	2.1	Definitions	1
	 	2.2	Construction	8
	3.	Administration	8
	 	3.1	Administration by the Committee	8
	 	3.2	Authority of Officers	9
	 	3.3	Administration with Respect to Insiders	9
	 	3.4	Committee Complying with Section 162(m)	9
	 	3.5	Powers of the Committee	9
	 	3.6	Option or SAR Repricing	10
	 	3.7	Indemnification	11
	4.	Shares Subject to Plan	11
	 	4.1	Maximum Number of Shares Issuable	11
	 	4.2	Share Counting	11
	 	4.3	Adjustments for Changes in Capital Structure	12
	 	4.4	Assumption or Substitution of Awards	12
	5.	Eligibility, Participation and Award Limitations	12
	 	5.1	Persons Eligible for Awards	12
	 	5.2	Participation in the Plan	12
	 	5.3	Incentive Stock Option Limitations	13
	 	5.4	Nonemployee Director Award Limit	13
	6.	Stock Options	14
	 	6.1	Exercise Price	14
	 	6.2	Exercisability and Term of Options	14
	 	6.3	Payment of Exercise Price	14
	 	6.4	Effect of Termination of Service	15
	 	6.5	Transferability of Options	16



  



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Table
of Contents


(continued)


 


	 	 	Page
	7.	Stock Appreciation Rights	17
	 	7.1	Types of SARs Authorized	17
	 	7.2	Exercise Price	17
	 	7.3	Exercisability and Term of SARs	17
	 	7.4	Exercise of SARs	18
	 	7.5	Deemed Exercise of SARs	18
	 	7.6	Effect of Termination of Service	18
	 	7.7	Transferability of SARs	18
	8.	Restricted Stock Awards	19
	 	8.1	Types of Restricted Stock Awards Authorized	19
	 	8.2	Purchase Price	19
	 	8.3	Purchase Period	19
	 	8.4	Payment of Purchase Price	19
	 	8.5	Vesting and Restrictions on Transfer	19
	 	8.6	Voting Rights; Dividends and Distributions	20
	 	8.7	Effect of Termination of Service	20
	 	8.8	Nontransferability of Restricted Stock Award Rights	20
	9.	Restricted Stock Units	21
	 	9.1	Grant of Restricted Stock Unit Awards	21
	 	9.2	Purchase Price	21
	 	9.3	Vesting	21
	 	9.4	Voting Rights, Dividend Equivalent Rights and Distributions	21
	 	9.5	Effect of Termination of Service	22
	 	9.6	Settlement of Restricted Stock Unit Awards	22
	 	9.7	Nontransferability of Restricted Stock Unit Awards	22
	10.	Performance Awards	23
	 	10.1	Types of Performance Awards Authorized	23
	 	10.2	Initial Value of Performance Shares and Performance Units	23
	 	10.3	Establishment of Performance Period, Performance Goals and Performance Award Formula	23



 






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Table
of Contents


(continued)


 



	 	 	 	Page
	 	10.4	Measurement of Performance Goals	24
	 	10.5	Settlement of Performance Awards	25
	 	10.6	Voting Rights; Dividend Equivalent Rights and Distributions	27
	 	10.7	Effect of Termination of Service	27
	 	10.8	Nontransferability of Performance Awards	27
	11.	Cash-Based Awards and Other Stock-Based Awards	28
	 	11.1	Grant of Cash-Based Awards	28
	 	11.2	Grant of Other Stock-Based Awards	28
	 	11.3	Value of Cash-Based and Other Stock-Based Awards	28
	 	11.4	Payment or Settlement of Cash-Based Awards and Other Stock-Based Awards	29
	 	11.5	Voting Rights; Dividend Equivalent Rights and Distributions	29
	 	11.6	Effect of Termination of Service	29
	 	11.7	Nontransferability of Cash-Based Awards and Other Stock-Based Awards	29
	12.	Standard Forms of Award Agreement	30
	 	12.1	Award Agreements	30
	 	12.2	Authority to Vary Terms	30
	13.	Change in Control	30
	 	13.1	Effect of Change in Control on Awards	30
	 	13.2	Effect of Change in Control on Nonemployee Director Awards	31
	 	13.3	Federal Excise Tax Under Section 4999 of the Code	31
	14.	Compliance with Securities Law	32
	15.	Compliance with Section 409A	32
	 	15.1	Awards Subject to Section 409A	32
	 	15.2	Deferral and/or Distribution Elections	33
	 	15.3	Subsequent Elections	33
	 	15.4	Payment of Section 409A Deferred Compensation	34
	16.	Tax Withholding	36
	 	16.1	Tax Withholding in General	36
	 	16.2	Withholding in or Directed Sale of Shares	36
	17.	Amendment, Suspension or Termination of Plan	36



 






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Table
of Contents


(continued)


 


	 	 	Page
	18.	Miscellaneous Provisions	37
	 	18.1	Repurchase Rights	37
	 	18.2	Forfeiture Events	37
	 	18.3	Provision of Information	38
	 	18.4	Rights as Employee, Consultant or Director	38
	 	18.5	Rights as a Stockholder	38
	 	18.6	Delivery of Title to Shares	38
	 	18.7	Fractional Shares	38
	 	18.8	Retirement and Welfare Plans	38
	 	18.9	Beneficiary Designation	38
	 	18.10	Severability	39
	 	18.11	No Constraint on Corporate Action	39
	 	18.12	Unfunded Obligation	39
	 	18.13	Choice of Law	39




 






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The Lovesac
Company


2017 Equity
Incentive Plan


 


1. Establishment, Purpose
and Term of Plan.


 


1.1 Establishment. The Lovesac
Company 2017 Equity Incentive Plan (the “Plan”) is hereby established effective as of October 26,
2017, the date of its approval by the stockholders of the Company (the “Effective Date”).


 


1.2 Purpose. The purpose of
the Plan is to advance the interests of the Participating Company Group and its stockholders by providing an incentive to attract,
retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute
to the growth and profitability of the Participating Company Group. The Plan seeks to achieve this purpose by providing for Awards
in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance
Units, Cash-Based Awards and Other Stock-Based Awards.


 


1.3 Term of Plan. The Plan shall continue
in effect until its termination by the Committee; provided, however, that all Awards shall be granted, if at all, within ten (10)
years from the Effective Date.


 


2. Definitions and Construction.


 


2.1 Definitions.  Whenever used herein,
the following terms shall have their respective meanings set forth below:


 


(a) “Affiliate”
means (i) a parent entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary
entities, controls the Company or (ii) a subsidiary entity, other than a Subsidiary Corporation, that is controlled by the
Company directly or indirectly through one or more intermediary entities. For this purpose, the terms “parent,” “subsidiary,”
“control” and “controlled by” shall have the meanings assigned such terms for the purposes of registration
of securities on Form S-8 under the Securities Act.


 


(b) “Award” means
any Option, Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock Bonus, Restricted Stock Unit, Performance
Share, Performance Unit, Cash-Based Award or Other Stock-Based Award granted under the Plan.


 


(c) “Award Agreement”
means a written or electronic agreement between the Company and a Participant setting forth the terms, conditions and restrictions
applicable to an Award.


 


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


 


(e) “Cash-Based Award”
means an Award denominated in cash and granted pursuant to Section 11.


 






    


     


    

 


(f) “Cashless Exercise”
means a Cashless Exercise as defined in Section 6.3(b)(i).


 


(g) “Cause” means,
unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between
a Participant and a Participating Company applicable to an Award, any of the following: (i) the Participant’s theft,
dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents
or records; (ii) the Participant’s material failure to abide by a Participating Company’s code of conduct or other
policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the
Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate
opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a
Participating Company’s confidential or proprietary information); (iv) any intentional act by the Participant which
has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated
failure to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity
to cure, such failure; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition,
non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant
to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere)
of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s
ability to perform his or her duties with a Participating Company.


 


(h) “Change in Control”
means the occurrence of any one or a combination of the following:


 


(i) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent
(50%) of the total Fair Market Value or total combined voting power of the Company’s then-outstanding securities entitled
to vote generally in the election of Directors; provided, however, that a Change in Control shall not be deemed to have occurred
if such degree of beneficial ownership results from any of the following: (A) an acquisition by any person who on the Effective
Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition directly from the
Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any acquisition
by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating Company
or (E) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the voting securities of the Company; or


 


(ii) an Ownership Change Event or series of
related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more
than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election
of Directors or, in the case of an Ownership Change Event described in Section 2.1(ee)(iii), the entity to which the assets
of the Company were transferred (the “Transferee”), as the case may be; or


 






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(iii) a date specified by the Committee following
approval by the stockholders of a plan of complete liquidation or dissolution of the Company;


 


provided, however, that a Change in Control
shall be deemed not to include a transaction described in subsections (i) or (ii) of this Section 2.1(h) in which a majority
of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after
such transaction is comprised of Incumbent Directors.


 


For purposes of the
preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the
voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may
be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall determine whether
multiple events described in subsections (i), (ii) and (iii) of this Section 2.1(h) are related and to be treated in the aggregate
as a single Change in Control, and its determination shall be final, binding and conclusive.


 


(i) “Code” means
the Internal Revenue Code of 1986, as amended, and any applicable regulations and administrative guidelines promulgated thereunder.


 


(j) “Committee”
means the Compensation Committee and such other committee or subcommittee of the Board, if any, duly appointed to administer the
Plan and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the
Board then authorized or properly constituted to administer the Plan, the Board shall exercise all of the powers of the Committee
granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.


 


(k) “Company”
means The Lovesac Company, a Delaware corporation, and any successor corporation thereto.


 


(l) “Consultant”
means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating
Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided
would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration
on Form S-8 under the Securities Act.


 


(m) “Covered Employee”
means, at any time the Plan is subject to Section 162(m), any Employee who is or may reasonably be expected to become a “covered
employee” as defined in Section 162(m), or any successor statute, and who, with respect to a Performance Award, is designated,
either as an individual Employee or a member of a class of Employees, by the Committee no later than the earlier of (i) the
date that is ninety (90) days after the beginning of the Performance Period, or (ii) the date on which twenty-five percent (25%)
of the Performance Period has elapsed, as a “Covered Employee” under this Plan for such applicable Performance Period.


 


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


 






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(o) “Disability”
means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement
between the Participant and a Participating Company applicable to an Award, the permanent and total disability of the Participant,
within the meaning of Section 22(e)(3) of the Code.


 


(p) “Dividend Equivalent Right”
means the right of a Participant, granted at the discretion of the Committee or as otherwise provided by the Plan, to receive a
credit for the account of such Participant in an amount equal to the cash dividends paid on one share of Stock for each share of
Stock represented by an Award held by such Participant.


 


(q) “Employee”
means any person treated as an employee (including an Officer or a Director who is also treated as an employee) in the records
of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes
of Section 422 of the Code; provided, however, that neither service as a Director nor payment of a Director’s fee shall
be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise
of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s
employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the terms
of the Plan as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations
by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court
of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.


 


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


 


(s) “Fair Market Value”
means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by
the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:


 


(i) Except as otherwise determined by the
Committee, if, on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system, the
Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the national or regional securities
exchange or quotation system constituting the primary market for the Stock, as reported in The Wall Street Journal or such
other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities
exchange or quotation system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock
was so traded or quoted prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its
discretion.


 






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(ii) Notwithstanding the foregoing, the Committee
may, in its discretion, determine the Fair Market Value of a share of Stock on the basis of the opening, closing, or average of
the high and low sale prices of a share of Stock on such date or the preceding trading day, the actual sale price of a share of
Stock received by a Participant, any other reasonable basis using actual transactions in the Stock as reported on a national or
regional securities exchange or quotation system, or on any other basis consistent with the requirements of Section 409A. The Committee
may vary its method of determination of the Fair Market Value as provided in this Section for different purposes under the Plan
to the extent consistent with the requirements of Section 409A.


 


(iii) If, on such date, the Stock is not listed
or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be
as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will
never lapse, and in a manner consistent with the requirements of Section 409A.


 


(t) “Full Value Award”
means any Award settled in Stock, other than (i) an Option, (ii) a Stock Appreciation Right, or (iii) a Restricted
Stock Purchase Right or an Other Stock-Based Award under which the Company will receive monetary consideration equal to the Fair
Market Value (determined on the effective date of grant) of the shares subject to such Award.


 


(u) “Incentive Stock Option”
means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an incentive stock option within the
meaning of Section 422(b) of the Code.


 


(v) “Incumbent Director”
means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination
(but excluding a director who was elected or nominated in connection with an actual or threatened proxy contest relating to the
election of directors of the Company).


 


(w) “Insider”
means an Officer, a Director or other person whose transactions in Stock are subject to Section 16 of the Exchange Act.


 


(x) “Net Exercise”
means a Net Exercise as defined in Section 6.3(b)(iii).


 


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


 


(z) “Nonemployee Director Award”
means any Award granted to a Nonemployee Director.


 


(aa) “Nonstatutory Stock Option”
means an Option not intended to be (as set forth in the Award Agreement) or which does not qualify as an incentive stock option
within the meaning of Section 422(b) of the Code.


 


(bb) “Officer”
means any person designated by the Board as an officer of the Company.


 






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(cc) “Option”
means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.


 


(dd) “Other Stock-Based Award”
means an Award denominated in shares of Stock and granted pursuant to Section 11.


 


(ee) “Ownership Change Event”
means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single
or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty
percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote generally
in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer
of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of
the Company).


 


(ff) “Parent Corporation”
means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.


 


(gg) “Participant”
means any eligible person who has been granted one or more Awards.


 


(hh) “Participating Company”
means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.


 


(ii) “Participating Company
Group” means, at any point in time, the Company and all other entities collectively which are then Participating
Companies.


 


(jj) “Performance Award”
means an Award of Performance Shares or Performance Units.


 


(kk) “Performance Award Formula”
means, for any Performance Award, a formula or table established by the Committee pursuant to Section 10.3 which provides
the basis for computing the value of a Performance Award at one or more levels of attainment of the applicable Performance Goal(s)
measured as of the end of the applicable Performance Period.


 


(ll) “Performance-Based Compensation”
means compensation under an Award that satisfies the requirements of Section 162(m) for certain performance-based compensation
paid to Covered Employees.


 


(mm) “Performance Goal”
means a performance goal established by the Committee pursuant to Section 10.3.


 


(nn) “Performance Period”
means a period established by the Committee pursuant to Section 10.3 at the end of which one or more Performance Goals are
to be measured.


 






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(oo) “Performance Share”
means a right granted to a Participant pursuant to Section 10 to receive a payment equal to the value of a Performance Share,
as determined by the Committee, based upon attainment of applicable Performance Goal(s).


 


(pp) “Performance Unit”
means a right granted to a Participant pursuant to Section 10 to receive a payment equal to the value of a Performance Unit,
as determined by the Committee, based upon attainment of applicable Performance Goal(s).


 


(qq) “Restricted Stock Award”
means an Award of a Restricted Stock Bonus or a Restricted Stock Purchase Right.


 


(rr) “Restricted Stock Bonus”
means Stock granted to a Participant pursuant to Section 8.


 


(ss) “Restricted Stock Purchase
Right” means a right to purchase Stock granted to a Participant pursuant to Section 8.


 


(tt) “Restricted Stock Unit”
means a right granted to a Participant pursuant to Section 9 to receive on a future date or occurrence of a future event a
share of Stock or cash in lieu thereof, as determined by the Committee.


 


(uu) “Rule 16b-3”
means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.


 


(vv) “SAR” or
“Stock Appreciation Right” means a right granted to a Participant pursuant to Section 7 to receive
payment, for each share of Stock subject to such Award, of an amount equal to the excess, if any, of the Fair Market Value of a
share of Stock on the date of exercise of the Award over the exercise price thereof.


 


(ww) “Section 162(m)”
means Section 162(m) of the Code.


 


(xx) “Section 409A”
means Section 409A of the Code.


 


(yy) “Section 409A Deferred
Compensation” means compensation provided pursuant to an Award that constitutes nonqualified deferred compensation
within the meaning of Section 409A.


 


(zz) “Securities Act”
means the Securities Act of 1933, as amended.


 


(aaa) “Service”
means a Participant’s employment or service with the Participating Company Group, whether as an Employee, a Director or a
Consultant. Unless otherwise provided by the Committee, a Participant’s Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders Service or a change in the Participating Company for which
the Participant renders Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore,
a Participant’s Service shall not be deemed to have been interrupted or terminated if the Participant takes any military
leave, sick leave, or other bona fide leave of absence approved by the Company. However, unless otherwise provided by the Committee,
if any such leave taken by a Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement
of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return
to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required
by law, an unpaid leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s
Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service
or upon the business entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing,
the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of
and reason for such termination.


 






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(bbb) “Stock”
means the common stock of the Company, as adjusted from time to time in accordance with Section 4.3.


 


(ccc) “Stock Tender Exercise”
means a Stock Tender Exercise as defined in Section 6.3(b)(ii).


 


(ddd) “Subsidiary Corporation”
means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.


 


(eee) “Ten Percent Owner”
means a Participant who, at the time an Option is granted to the Participant, owns stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of a Participating Company (other than an Affiliate) within the meaning
of Section 422(b)(6) of the Code.


 


(fff) “Trading Compliance Policy”
means the written policy of the Company pertaining to the purchase, sale, transfer or other disposition of the Company’s
equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information
regarding the Company or its securities.


 


(ggg) “Vesting Conditions”
mean those conditions established in accordance with the Plan prior to the satisfaction of which an Award or shares subject to
an Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s monetary
purchase price, if any, for such shares upon the Participant’s termination of Service or failure of a performance condition
to be satisfied.


 


2.2 Construction. Captions and titles
contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except
when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of
the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.


 


3. Administration.


 


3.1 Administration by the Committee.
The Plan shall be administered by the Committee. All questions of interpretation of the Plan, of any Award Agreement or of any
other form of agreement or other document employed by the Company in the administration of the Plan or of any Award shall be determined
by the Committee, and such determinations shall be final, binding and conclusive upon all persons having an interest in the Plan
or such Award, unless fraudulent or made in bad faith. Any and all actions, decisions and determinations taken or made by the Committee
in the exercise of its discretion pursuant to the Plan or Award Agreement or other agreement thereunder (other than determining
questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having
an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company.


 






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3.2 Authority of Officers. Any Officer
shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election
that is the responsibility of or that is allocated to the Company herein, provided that the Officer has apparent authority with
respect to such matter, right, obligation, determination or election. To the extent permitted by applicable law, the Committee
may, in its discretion, delegate to a committee comprised of one or more Officers the authority to grant one or more Awards, without
further approval of the Committee, to any Employee, other than a person who, at the time of such grant, is an Insider or a Covered
Employee, and to exercise such other powers under the Plan as the Committee may determine; provided, however, that (a) the Committee
shall fix the maximum number of shares subject to Awards that may be granted by such Officers, (b) each such Award shall be subject
to the terms and conditions of the appropriate standard form of Award Agreement approved by the Board or the Committee and shall
conform to the provisions of the Plan, and (c) each such Award shall conform to such other limits and guidelines as may be established
from time to time by the Committee.


 


3.3 Administration with Respect to Insiders.
With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of
Rule 16b-3.


 


3.4 Committee Complying with Section 162(m).
If the Company is a “publicly held corporation” within the meaning of Section 162(m), the Board may establish
a Committee of “outside directors” within the meaning of Section 162(m) to approve the grant of any Award intended
to result in the payment of Performance-Based Compensation.


 


3.5 Powers of the Committee.
In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee shall have the full
and final power and authority, in its discretion:


 


(a) to determine the persons to whom, and
the time or times at which, Awards shall be granted and the number of shares of Stock, units or monetary value to be subject to
each Award;


 


(b) to determine the type of Award granted;


 


(c) to determine whether an Award granted
to a Covered Employee shall be intended to result in Performance-Based Compensation;


 


(d) to determine the Fair Market Value of
shares of Stock or other property;


 






    	 	9	 



     


    

 


(e) to determine the terms, conditions and
restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without
limitation, (i) the exercise or purchase price of shares pursuant to any Award, (ii) the method of payment for shares
purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding obligation arising in connection
with any Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the
exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the Performance Measures, Performance
Period, Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals
have been attained, (vi) the time of expiration of any Award, (vii) the effect of any Participant’s termination
of Service on any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares
acquired pursuant thereto not inconsistent with the terms of the Plan;


 


(f) to determine whether an Award will be
settled in shares of Stock, cash, other property or in any combination thereof;


 


(g) to approve one or more forms of Award
Agreement;


 


(h) to amend, modify, extend, cancel or
renew any Award or to waive any restrictions or conditions applicable to any Award or any shares acquired pursuant thereto, provided
that no such amendment or waiver shall accelerate the vesting of any Award unless the power of the Committee to accelerate the
vesting of such Award is expressly provided by another provision of the Plan;


 


(i) to accelerate, continue, extend or defer
the exercisability or vesting of any Award or any shares acquired pursuant thereto, including with respect to the period following
a Participant’s termination of Service;


 


(j) to prescribe, amend or rescind rules,
guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or alternative versions of, the Plan, including,
without limitation, as the Committee deems necessary or desirable to comply with the laws of, or to accommodate the tax policy,
accounting principles or custom of, foreign jurisdictions whose residents may be granted Awards; and


 


(k) to correct any defect, supply any omission
or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions
with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of
the Plan or applicable law.


 


3.6 Option or SAR Repricing. The Committee
shall have the authority, without additional approval by the stockholders of the Company, to approve a program providing for either
(a) the cancellation of outstanding Options or SARs having exercise prices per share greater than the then Fair Market Value
of a share of Stock (“Underwater Awards”) and the grant in substitution therefor of new Options or SARs
covering the same or a different number of shares but with an exercise price per share equal to the Fair Market Value per share
on the new grant date, Full Value Awards, or payments in cash, or (b) the amendment of outstanding Underwater Awards to reduce
the exercise price thereof to the Fair Market Value per share on the date of amendment.


 






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3.7 Indemnification. In addition to
such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the
Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers
or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated
shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except
in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution
of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.


 


4. Shares Subject to Plan.


 


4.1 Maximum Number of Shares Issuable.
Subject to adjustment as provided in Sections 4.1 and 4.2, the maximum aggregate number of shares of Stock that may be issued
under the Plan shall be equal to 1,511,530 shares and shall consist of authorized but unissued or reacquired shares of Stock or
any combination thereof.


 


4.2 Share Counting. If an outstanding
Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if shares of Stock
acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company for an amount not
greater than the Participant’s purchase price, the shares of Stock allocable to the terminated portion of such Award or such
forfeited or repurchased shares of Stock shall again be available for issuance under the Plan. Shares of Stock shall not be deemed
to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash or to the extent that
shares are withheld or reacquired by the Company in satisfaction of tax withholding obligations pursuant to Section 16.2.
Upon payment in shares of Stock pursuant to the exercise of an SAR, the number of shares available for issuance under the Plan
shall be reduced only by the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender
to the Company, or attestation to the ownership, of shares of Stock owned by the Participant, or by means of a Net Exercise, the
number of shares available for issuance under the Plan shall be reduced by the net number of shares for which the Option is exercised.


 






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4.3 Adjustments for Changes in Capital
Structure. Subject to any required action by the stockholders of the Company and the requirements of Sections 409A and
424 of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by
the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar
change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of
the Company in a form other than Stock (excepting regular, periodic cash dividends) that has a material effect on the Fair Market
Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number and kind of shares subject to the
Plan and to any outstanding Awards, the Award limits set forth in Section 5.3 and Section 5.4, and in the exercise or purchase
price per share under any outstanding Award in order to prevent dilution or enlargement of Participants’ rights under the
Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected
without receipt of consideration by the Company.” If a majority of the shares which are of the same class as the shares that
are subject to outstanding Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership
Change Event) shares of another corporation (the “New Shares”), the Committee may unilaterally amend
the outstanding Awards to provide that such Awards are for New Shares. In the event of any such amendment, the number of shares
subject to, and the exercise or purchase price per share of, the outstanding Awards shall be adjusted in a fair and equitable manner
as determined by the Committee, in its discretion. Any fractional share resulting from an adjustment pursuant to this Section shall
be rounded down to the nearest whole number and the exercise or purchase price per share shall be rounded up to the nearest whole
cent. In no event may the exercise or purchase price, if any, under any Award be decreased to an amount less than the par value,
if any, of the stock subject to such Award. The Committee in its discretion, may also make such adjustments in the terms of any
Award to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate,
including modification of Performance Goals, Performance Award Formulas and Performance Periods. The adjustments determined by
the Committee pursuant to this Section shall be final, binding and conclusive.


 


4.4 Assumption or Substitution of Awards.
The Committee may, without affecting the number of shares of Stock reserved or available hereunder, authorize the issuance or assumption
of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon
such terms and conditions as it may deem appropriate, subject to compliance with Section 409A and any other applicable provisions
of the Code.


 


5. Eligibility, Participation
and Award Limitations.


 


5.1 Persons Eligible for Awards. Awards
may be granted only to Employees, Consultants and Directors.


 


5.2 Participation in the Plan. Awards
are granted solely at the discretion of the Committee. Eligible persons may be granted more than one Award. However, eligibility
in accordance with this Section shall not entitle any person to be granted an Award, or, having been granted an Award, to be granted
an additional Award.


 






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5.3 Incentive Stock Option Limitations.


 


(a) Maximum Number of Shares Issuable
Pursuant to Incentive Stock Options. Subject to adjustment as provided in Section 4.3, the maximum aggregate number
of shares of Stock that may be issued under the Plan pursuant to the exercise of Incentive Stock Options shall not exceed 1,511,530
shares. The maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to all Awards other than Incentive
Stock Options shall be the number of shares determined in accordance with Section 4.1, subject to adjustment as provided in
Sections 4.1 and 4.2.


 


(b) Persons Eligible. An Incentive
Stock Option may be granted only to a person who, on the effective date of grant, is an Employee of the Company, a Parent Corporation
or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation”). Any person who is not an Employee
of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person may be granted only a Nonstatutory
Stock Option.


 


(c) Fair Market Value Limitation.
To the extent that options designated as Incentive Stock Options (granted under all stock plans of the Participating Company Group,
including the Plan) become exercisable by a Participant for the first time during any calendar year for stock having a Fair Market
Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount shall be treated
as Nonstatutory Stock Options. For purposes of this Section, options designated as Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option
with respect to such stock is granted. If the Code is amended to provide for a limitation different from that set forth in this
Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options
as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory
Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such
Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the
Incentive Stock Option portion of the Option first. Upon exercise of the Option, shares issued pursuant to each such portion shall
be separately identified.


 


5.4 Nonemployee Director Award Limit.
Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value (computed as of the date of
grant in accordance with generally accepted accounting principles in the United States) of all Awards granted to any Nonemployee
Director during any fiscal year of the Company, taken together with any cash compensation paid to such Nonemployee Director during
such fiscal year, shall not exceed $200,000.


 






    	 	13	 



     


    

 


6. Stock Options.


 


Options shall be evidenced by Award Agreements
specifying the number of shares of Stock covered thereby, in such form as the Committee shall establish. Such Award Agreements
may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and
conditions:


 


6.1 Exercise Price. The exercise price
for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share
shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the Option and (b) no Incentive
Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of
the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option
(whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price less than the minimum
exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner
that would qualify under the provisions of Section 409A or Section 424(a) of the Code.


 


6.2 Exercisability and Term of Options.
Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance
criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option;
provided, however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant
of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of five
(5) years after the effective date of grant of such Option and (c) no Option granted to an Employee who is a non-exempt employee
for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable until at least six (6) months following
the date of grant of such Option (except in the event of such Employee’s death, disability or retirement, upon a Change in
Control, or as otherwise permitted by the Worker Economic Opportunity Act). Subject to the foregoing, unless otherwise specified
by the Committee in the grant of an Option, each Option shall terminate ten (10) years after the effective date of grant of the
Option, unless earlier terminated in accordance with its provisions.


 


6.3 Payment of Exercise Price.


 


(a) Forms of Consideration Authorized.
Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to
any Option shall be made (i) in cash, by check or in cash equivalent; (ii) if permitted by the Committee and subject
to the limitations contained in Section 6.3(b), by means of (1) a Cashless Exercise, (2) a Stock Tender Exercise
or (3) a Net Exercise; (iii) by such other consideration as may be approved by the Committee from time to time to the
extent permitted by applicable law, or (iv) by any combination thereof. The Committee may at any time or from time to time
grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which
otherwise restrict one or more forms of consideration.


 


(b) Limitations on Forms of Consideration.


 


(i) Cashless Exercise. A “Cashless
Exercise” means the delivery of a properly executed notice of exercise together with irrevocable instructions to
a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares
being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions
of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves,
at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate
any program or procedures for the exercise of Options by means of a Cashless Exercise, including with respect to one or more Participants
specified by the Company notwithstanding that such program or procedures may be available to other Participants.


 






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(ii) Stock Tender Exercise. A “Stock
Tender Exercise” means the delivery of a properly executed exercise notice accompanied by a Participant’s tender
to the Company, or attestation to the ownership, in a form acceptable to the Company of whole shares of Stock owned by the Participant
having a Fair Market Value that does not exceed the aggregate exercise price for the shares with respect to which the Option is
exercised. A Stock Tender Exercise shall not be permitted if it would constitute a violation of the provisions of any law, regulation
or agreement restricting the redemption of the Company’s stock. If required by the Company, an Option may not be exercised
by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the
Participant for a period of time required by the Company (and not used for another option exercise by attestation during such period)
or were not acquired, directly or indirectly, from the Company.


 


(iii) Net Exercise. A “Net
Exercise” means the delivery of a properly executed exercise notice followed by a procedure pursuant to which (1) the
Company will reduce the number of shares otherwise issuable to a Participant upon the exercise of an Option by the largest whole
number of shares having a Fair Market Value that does not exceed the aggregate exercise price for the shares with respect to which
the Option is exercised, and (2) the Participant shall pay to the Company in cash the remaining balance of such aggregate
exercise price not satisfied by such reduction in the number of whole shares to be issued.


 


6.4 Effect of Termination of Service.


 


(a) Option Exercisability.
Subject to earlier termination of the Option as otherwise provided by this Plan and unless otherwise provided by the Committee,
an Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested
and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable
time period determined in accordance with this Section and thereafter shall terminate.


 


(i) Disability. If the Participant’s
Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for vested
shares on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s
guardian or legal representative) at any time prior to the expiration of twelve (12) months (or such longer or shorter period provided
by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the
date of expiration of the Option’s term as set forth in the Award Agreement evidencing such Option (the “Option
Expiration Date”).


 






    	 	15	 



     


    

 


(ii) Death. If the Participant’s
Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for vested shares
on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative
or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the
expiration of twelve (12) months (or such longer or shorter period provided by the Award Agreement) after the date on which the
Participant’s Service terminated, but in any event no later than the Option Expiration Date. The Participant’s Service
shall be deemed to have terminated on account of death if the Participant dies within three (3) months (or such longer or shorter
period provided by the Award Agreement) after the Participant’s termination of Service.


 


(iii) Termination for Cause. Notwithstanding
any other provision of the Plan to the contrary, if the Participant’s Service is terminated for Cause or if, following the
Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant
engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately
upon such termination of Service or act.


 


(iv) Other Termination of Service.
If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised
and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant
at any time prior to the expiration of three (3) months (or such longer or shorter period provided by the Award Agreement) after
the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.


 


(b) Extension if Exercise Prevented
by Law. Notwithstanding the foregoing, other than termination of Service for Cause, if the exercise of an Option within
the applicable time periods set forth in Section 6.4(a) is prevented by the provisions of Section 14 below, the Option
shall remain exercisable until the later of (i) thirty (30) days after the date such exercise first would no longer be prevented
by such provisions or (ii) the end of the applicable time period under Section 6.4(a), but in any event no later than
the Option Expiration Date.


 


6.5 Transferability of Options. During
the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s guardian or
legal representative. An Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by
will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its
discretion, and set forth in the Award Agreement evidencing such Option, an Option shall be assignable or transferable subject
to the applicable limitations, if any, described in the General Instructions to Form S-8 under the Securities Act or, in the
case of an Incentive Stock Option, only as permitted by applicable regulations under Section 421 of the Code in a manner that
does not disqualify such Option as an Incentive Stock Option.


 






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7. Stock Appreciation Rights.


 


Stock Appreciation Rights shall be evidenced
by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as the Committee shall establish.
Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions:


 


7.1 Types of SARs Authorized. SARs
may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”) or may be granted
independently of any Option (a “Freestanding SAR”). A Tandem SAR may only be granted concurrently with
the grant of the related Option.


 


7.2 Exercise Price. The exercise price
for each SAR shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share
subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the exercise price per share
subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of
the SAR. Notwithstanding the foregoing, an SAR may be granted with an exercise price lower than the minimum exercise price set
forth above if such SAR is granted pursuant to an assumption or substitution for another stock appreciation right in a manner that
would qualify under the provisions of Section 409A of the Code.


 


7.3 Exercisability and Term of SARs.


 


(a) Tandem SARs. Tandem SARs
shall be exercisable only at the time and to the extent, and only to the extent, that the related Option is exercisable, subject
to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than the full number of shares
of Stock subject to the related Option. The Committee may, in its discretion, provide in any Award Agreement evidencing a Tandem
SAR that such SAR may not be exercised without the advance approval of the Company and, if such approval is not given, then the
Option shall nevertheless remain exercisable in accordance with its terms. A Tandem SAR shall terminate and cease to be exercisable
no later than the date on which the related Option expires or is terminated or canceled. Upon the exercise of a Tandem SAR with
respect to some or all of the shares subject to such SAR, the related Option shall be canceled automatically as to the number of
shares with respect to which the Tandem SAR was exercised. Upon the exercise of an Option related to a Tandem SAR as to some or
all of the shares subject to such Option, the related Tandem SAR shall be canceled automatically as to the number of shares with
respect to which the related Option was exercised.


 


(b) Freestanding SARs. Freestanding
SARs shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance
criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such SAR; provided,
however, that (i) no Freestanding SAR shall be exercisable after the expiration of ten (10) years after the effective date
of grant of such SAR and (ii) no Freestanding SAR granted to an Employee who is a non-exempt employee for purposes of the
Fair Labor Standards Act of 1938, as amended, shall be first exercisable until at least six (6) months following the date of grant
of such SAR (except in the event of such Employee’s death, disability or retirement, upon a Change in Control, or as otherwise
permitted by the Worker Economic Opportunity Act). Subject to the foregoing, unless otherwise specified by the Committee in the
grant of a Freestanding SAR, each Freestanding SAR shall terminate ten (10) years after the effective date of grant of the SAR,
unless earlier terminated in accordance with its provisions.


 






    	 	17	 



     


    

 


7.4 Exercise of SARs. Upon the exercise
(or deemed exercise pursuant to Section 7.5) of an SAR, the Participant (or the Participant’s legal representative or
other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be entitled to receive
payment of an amount for each share with respect to which the SAR is exercised equal to the excess, if any, of the Fair Market
Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of such amount shall be made (a) in
the case of a Tandem SAR, solely in shares of Stock in a lump sum upon the date of exercise of the SAR and (b) in the case
of a Freestanding SAR, in cash, shares of Stock, or any combination thereof as determined by the Committee, in a lump sum upon
the date of exercise of the SAR. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined
on the basis of the Fair Market Value of a share of Stock on the date of exercise of the SAR. For purposes of Section 7, an
SAR shall be deemed exercised on the date on which the Company receives notice of exercise from the Participant or as otherwise
provided in Section 7.5.


 


7.5 Deemed Exercise of SARs. If, on
the date on which an SAR would otherwise terminate or expire, the SAR by its terms remains exercisable immediately prior to such
termination or expiration and, if so exercised, would result in a payment to the holder of such SAR, then any portion of such SAR
which has not previously been exercised shall automatically be deemed to be exercised as of such date with respect to such portion.


 


7.6 Effect of Termination of Service.
Subject to earlier termination of the SAR as otherwise provided herein and unless otherwise provided by the Committee, an SAR shall
be exercisable after a Participant’s termination of Service only to the extent and during the applicable time period determined
in accordance with Section 6.4 (treating the SAR as if it were an Option) and thereafter shall terminate.


 


7.7 Transferability of SARs. During
the lifetime of the Participant, an SAR shall be exercisable only by the Participant or the Participant’s guardian or legal
representative. An SAR shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion,
and set forth in the Award Agreement evidencing such Award, a Tandem SAR related to a Nonstatutory Stock Option or a Freestanding
SAR shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to
Form S-8 under the Securities Act.


 






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8. Restricted Stock Awards.


 


Restricted Stock Awards shall be evidenced
by Award Agreements specifying whether the Award is a Restricted Stock Bonus or a Restricted Stock Purchase Right and the number
of shares of Stock subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all
or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:


 


8.1 Types of Restricted Stock Awards Authorized.
Restricted Stock Awards may be granted in the form of either a Restricted Stock Bonus or a Restricted Stock Purchase Right. Restricted
Stock Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment
of one or more Performance Goals described in Section 10.4. If either the grant of or satisfaction of Vesting Conditions applicable
to a Restricted Stock Award is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow
procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a).


 


8.2 Purchase Price. The purchase price
for shares of Stock issuable under each Restricted Stock Purchase Right shall be established by the Committee in its discretion.
No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving shares of Stock pursuant
to a Restricted Stock Bonus, the consideration for which shall be services actually rendered to a Participating Company or for
its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration
in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par
value of the shares of Stock subject to a Restricted Stock Award.


 


8.3 Purchase Period. A Restricted Stock
Purchase Right shall be exercisable within a period established by the Committee, which shall in no event exceed thirty (30) days
from the effective date of the grant of the Restricted Stock Purchase Right.


 


8.4 Payment of Purchase Price. Except
as otherwise provided below, payment of the purchase price for the number of shares of Stock being purchased pursuant to any Restricted
Stock Purchase Right shall be made (a) in cash, by check or in cash equivalent, (b) by such other consideration as may
be approved by the Committee from time to time to the extent permitted by applicable law, or (c) by any combination thereof.


 


8.5 Vesting and Restrictions on Transfer.
Shares issued pursuant to any Restricted Stock Award may (but need not) be made subject to Vesting Conditions based upon the satisfaction
of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals
as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such
Award. During any period in which shares acquired pursuant to a Restricted Stock Award remain subject to Vesting Conditions, such
shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than pursuant to an Ownership
Change Event or as provided in Section 8.8. The Committee, in its discretion, may provide in any Award Agreement evidencing
a Restricted Stock Award that, if the satisfaction of Vesting Conditions with respect to any shares subject to such Restricted
Stock Award would otherwise occur on a day on which the sale of such shares would violate the provisions of the Trading Compliance
Policy, then satisfaction of the Vesting Conditions automatically shall be determined on the next trading day on which the sale
of such shares would not violate the Trading Compliance Policy. Upon request by the Company, each Participant shall execute any
agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to
the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.


 






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8.6 Voting Rights; Dividends and Distributions.
Except as provided in this Section, Section 8.5 and any Award Agreement, during any period in which shares acquired pursuant
to a Restricted Stock Award remain subject to Vesting Conditions, the Participant shall have all of the rights of a stockholder
of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions
paid with respect to such shares; provided, however, that if so determined by the Committee and provided by the Award Agreement,
such dividends and distributions shall be subject to the same Vesting Conditions as the shares subject to the Restricted Stock
Award with respect to which such dividends or distributions were paid, and otherwise shall be paid no later than the end of the
calendar year in which such dividends or distributions are paid to stockholders (or, if later, the 15th day of the third month
following the date such dividends or distributions are paid to stockholders). In the event of a dividend or distribution paid in
shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described
in Section 4.3, any and all new, substituted or additional securities or other property (other than regular, periodic cash
dividends) to which the Participant is entitled by reason of the Participant’s Restricted Stock Award shall be immediately
subject to the same Vesting Conditions as the shares subject to the Restricted Stock Award with respect to which such dividends
or distributions were paid or adjustments were made.


 


8.7 Effect of Termination of Service.
Unless otherwise provided by the Committee in the Award Agreement evidencing a Restricted Stock Award, if a Participant’s
Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then
(a) the Company shall have the option to repurchase for the purchase price paid by the Participant any shares acquired by
the Participant pursuant to a Restricted Stock Purchase Right which remain subject to Vesting Conditions as of the date of the
Participant’s termination of Service and (b) the Participant shall forfeit to the Company any shares acquired by the
Participant pursuant to a Restricted Stock Bonus which remain subject to Vesting Conditions as of the date of the Participant’s
termination of Service. The Company shall have the right to assign at any time any repurchase right it may have, whether or not
such right is then exercisable, to one or more persons as may be selected by the Company.


 


8.8 Nontransferability of Restricted Stock
Award Rights. Rights to acquire shares of Stock pursuant to a Restricted Stock Award shall not be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance or garnishment by creditors of the Participant
or the Participant’s beneficiary, except transfer by will or the laws of descent and distribution. All rights with respect
to a Restricted Stock Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant
or the Participant’s guardian or legal representative.


 






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9. Restricted Stock Units.


 


Restricted Stock Unit Awards shall be evidenced
by Award Agreements specifying the number of Restricted Stock Units subject to the Award, in such form as the Committee shall establish.
Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions:


 


9.1 Grant of Restricted Stock Unit Awards.
Restricted Stock Unit Awards may be granted upon such conditions as the Committee shall determine, including, without limitation,
upon the attainment of one or more Performance Goals described in Section 10.4. If either the grant of a Restricted Stock
Unit Award or the Vesting Conditions with respect to such Award is to be contingent upon the attainment of one or more Performance
Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a).


 


9.2 Purchase Price. No monetary payment
(other than applicable tax withholding, if any) shall be required as a condition of receiving a Restricted Stock Unit Award, the
consideration for which shall be services actually rendered to a Participating Company or for its benefit. Notwithstanding the
foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past
services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock
issued upon settlement of the Restricted Stock Unit Award.


 


9.3 Vesting. Restricted Stock Unit
Awards may (but need not) be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions,
restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall
be established by the Committee and set forth in the Award Agreement evidencing such Award.


 


9.4 Voting Rights, Dividend Equivalent
Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Restricted
Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the Award Agreement
evidencing any Restricted Stock Unit Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to
the payment of cash dividends on Stock during the period beginning on the date such Award is granted and ending, with respect to
each share subject to the Award, on the earlier of the date the Award is settled or the date on which it is terminated. Dividend
Equivalent Rights, if any, shall be paid by crediting the Participant with a cash amount or with additional whole Restricted Stock
Units as of the date of payment of such cash dividends on Stock, as determined by the Committee. The number of additional Restricted
Stock Units (rounded to the nearest whole number), if any, to be credited shall be determined by dividing (a) the amount of
cash dividends paid on the dividend payment date with respect to the number of shares of Stock represented by the Restricted Stock
Units previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. If so determined
by the Committee and provided by the Award Agreement, such cash amount or additional Restricted Stock Units shall be subject to
the same terms and conditions and shall be settled in the same manner and at the same time as the Restricted Stock Units originally
subject to the Restricted Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or other property
or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.3, appropriate
adjustments shall be made in the Participant’s Restricted Stock Unit Award so that it represents the right to receive upon
settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends)
to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of the Award, and all such
new, substituted or additional securities or other property shall be immediately subject to the same Vesting Conditions as are
applicable to the Award.


 






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9.5 Effect of Termination of Service.
Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Restricted Stock Unit Award, if a
Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death
or disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant to the Award which remain
subject to Vesting Conditions as of the date of the Participant’s termination of Service.


 


9.6 Settlement of Restricted Stock Unit
Awards. The Company shall issue to a Participant on the date on which Restricted Stock Units subject to the Participant’s
Restricted Stock Unit Award vest or on such other date determined by the Committee in compliance with Section 409A, if applicable,
and set forth in the Award Agreement one (1) share of Stock (and/or any other new, substituted or additional securities or other
property pursuant to an adjustment described in Section 9.4) for each Restricted Stock Unit then becoming vested or otherwise
to be settled on such date, subject to the withholding of applicable taxes, if any. The Committee, in its discretion, may provide
in any Award Agreement evidencing a Restricted Stock Unit Award that if the settlement date with respect to any shares issuable
upon vesting of Restricted Stock Units would otherwise occur on a day on which the sale of such shares would violate the provisions
of the Trading Compliance Policy, then the settlement date shall be deferred until the next trading day on which the sale of such
shares would not violate the Trading Compliance Policy but in any event no later than the 15th day of the third calendar
month following the year in which such Restricted Stock Units vest. If permitted by the Committee, the Participant may elect, consistent
with the requirements of Section 409A, to defer receipt of all or any portion of the shares of Stock or other property otherwise
issuable to the Participant pursuant to this Section, and such deferred issuance date(s) and amount(s) elected by the Participant
shall be set forth in the Award Agreement. Notwithstanding the foregoing, the Committee, in its discretion, may provide for settlement
of any Restricted Stock Unit Award by payment to the Participant in cash of an amount equal to the Fair Market Value on the payment
date of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section.


 


9.7 Nontransferability of Restricted Stock
Unit Awards. The right to receive shares pursuant to a Restricted Stock Unit Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to a Restricted Stock
Unit Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s
guardian or legal representative.


 






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10. Performance Awards.


 


Performance Awards shall be evidenced by Award
Agreements in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the
Plan by reference and shall comply with and be subject to the following terms and conditions:


 


10.1 Types of Performance Awards Authorized.
Performance Awards may be granted in the form of either Performance Shares or Performance Units. Each Award Agreement evidencing
a Performance Award shall specify the number of Performance Shares or Performance Units subject thereto, the Performance Award
Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other terms, conditions and restrictions
of the Award.


 


10.2 Initial Value of Performance Shares
and Performance Units. Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall
have an initial monetary value equal to the Fair Market Value of one (1) share of Stock, subject to adjustment as provided in Section 4.3,
on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial monetary value established
by the Committee at the time of grant. The final value payable to the Participant in settlement of a Performance Award determined
on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the
Committee are attained within the applicable Performance Period established by the Committee.


 


10.3 Establishment of Performance Period,
Performance Goals and Performance Award Formula. In granting each Performance Award, the Committee shall establish in writing
the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, when measured at the end
of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of the Performance Award
to be paid to the Participant. Unless otherwise permitted in compliance with the requirements under Section 162(m) with respect
to each Performance Award intended to result in the payment of Performance-Based Compensation, the Committee shall establish the
Performance Goal(s) and Performance Award Formula applicable to each Performance Award no later than the earlier of (a) the
date ninety (90) days after the commencement of the applicable Performance Period or (b) the date on which 25% of the Performance
Period has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once
established, the Performance Goals and Performance Award Formula applicable to a Performance Award intended to result in the payment
of Performance-Based Compensation to a Covered Employee shall not be changed during the Performance Period. The Company shall notify
each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s)
and Performance Award Formula.


 






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10.4 Measurement of Performance Goals.
Performance Goals shall be established by the Committee on the basis of targets to be attained (“Performance Targets”)
with respect to one or more measures of business or financial performance (each, a “Performance Measure”),
subject to the following:


 


(a) Performance Measures. Performance
Measures shall be calculated in accordance with the Company’s financial statements, or, if such measures are not reported
in the Company’s financial statements, they shall be calculated in accordance with generally accepted accounting principles,
a method used generally in the Company’s industry, or in accordance with a methodology established by the Committee prior
to the grant of the Performance Award. As specified by the Committee, Performance Measures may be calculated with respect to the
Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes, one or more Subsidiary Corporations
or such division or other business unit of any of them selected by the Committee. Unless otherwise determined by the Committee
prior to the grant of the Performance Award, the Performance Measures applicable to the Performance Award shall be calculated prior
to the accrual of expense for any Performance Award for the same Performance Period and excluding the effect (whether positive
or negative) on the Performance Measures of any change in accounting standards or any unusual or infrequently occurring event or
transaction, as determined by the Committee, occurring after the establishment of the Performance Goals applicable to the Performance
Award. Each such adjustment, if any, shall be made solely for the purpose of providing a consistent basis from period to period
for the calculation of Performance Measures in order to prevent the dilution or enlargement of the Participant’s rights with
respect to a Performance Award. Performance Measures may be based upon one or more of the following, as determined by the Committee:


 


(i) revenue;


 


(ii) sales;


 


(iii) expenses;


 


(iv) operating income;


 


(v) gross margin;


 


(vi) operating margin;


 


(vii) earnings before any one or more of:
stock-based compensation expense, interest, taxes, depreciation and amortization;


 


(viii) pre-tax profit;


 


(ix) net operating income;


 


(x) net income;


 


(xi) economic value added;


 


(xii) free cash flow;


 


(xiii) operating cash flow;


 


(xiv) balance of cash, cash equivalents
and marketable securities;


 


(xv) stock price;


 


(xvi) earnings per share;


 


(xvii) return on stockholder equity;


 


(xviii) return on capital;


 






    	 	24	 



     


    

 


(xix) return on assets;


 


(xx) return on investment;


 


(xxi) total stockholder return;


 


(xxii) employee satisfaction;


 


(xxiii) employee retention;


 


(xxiv) market share;


 


(xxv) customer satisfaction;


 


(xxvi) product development;


 


(xxvii) research and development expenses;


 


(xxviii) completion of an identified special
project; and


 


(xxix) completion of a joint venture or
other corporate transaction.


 


(b) Performance Targets. Performance
Targets may include a minimum, maximum, target level and intermediate levels of performance, with the final value of a Performance
Award determined under the applicable Performance Award Formula by the Performance Target level attained during the applicable
Performance Period. A Performance Target may be stated as an absolute value, an increase or decrease in a value, or as a value
determined relative to an index, budget or other standard selected by the Committee.


 


10.5 Settlement of Performance Awards.


 


(a) Determination of Final Value.
As soon as practicable following the completion of the Performance Period applicable to a Performance Award, the Committee shall
certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the
Award earned by the Participant and to be paid upon its settlement in accordance with the applicable Performance Award Formula.


 


(b) Discretionary Adjustment of Award
Formula. In its discretion, the Committee may, either at the time it grants a Performance Award or at any time thereafter,
provide for the positive or negative adjustment of the Performance Award Formula applicable to a Performance Award granted to any
Participant who is not a Covered Employee to reflect such Participant’s individual performance in his or her position with
the Company or such other factors as the Committee may determine. If permitted under a Covered Employee’s Award Agreement,
the Committee shall have the discretion, on the basis of such criteria as may be established by the Committee, to reduce some or
all of the value of the Performance Award that would otherwise be paid to the Covered Employee upon its settlement notwithstanding
the attainment of any Performance Goal and the resulting value of the Performance Award determined in accordance with the Performance
Award Formula. No such reduction may result in an increase in the amount payable upon settlement of another Participant’s
Performance Award that is intended to result in Performance-Based Compensation.


 






    	 	25	 



     


    

 


(c) Effect of Leaves of Absence.
Unless otherwise required by law or a Participant’s Award Agreement, payment of the final value, if any, of a Performance
Award held by a Participant who has taken in excess of thirty (30) days in unpaid leaves of absence during a Performance Period
shall be prorated on the basis of the number of days of the Participant’s Service during the Performance Period during which
the Participant was not on an unpaid leave of absence.


 


(d) Notice to Participants.
As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a)
and (b), the Company shall notify each Participant of the determination of the Committee.


 


(e) Payment in Settlement of Performance
Awards. As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a)
and (b), but in any event within the Short-Term Deferral Period described in Section 15.1 (except as otherwise provided below
or consistent with the requirements of Section 409A), payment shall be made to each eligible Participant (or such Participant’s
legal representative or other person who acquired the right to receive such payment by reason of the Participant’s death)
of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock,
or a combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing a Performance
Award, payment shall be made in a lump sum. If permitted by the Committee, the Participant may elect, consistent with the requirements
of Section 409A, to defer receipt of all or any portion of the payment to be made to the Participant pursuant to this Section,
and such deferred payment date(s) elected by the Participant shall be set forth in the Award Agreement. If any payment is to be
made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period
of Dividend Equivalent Rights or interest.


 


(f) Provisions Applicable to Payment
in Shares. If payment is to be made in shares of Stock, the number of such shares shall be determined by dividing the final
value of the Performance Award by the Fair Market Value of a share of Stock determined by the method specified in the Award Agreement.
Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or may be shares
of Stock subject to Vesting Conditions as provided in Section 8.5. Any shares subject to Vesting Conditions shall be evidenced
by an appropriate Award Agreement and shall be subject to the provisions of Sections 8.5 through 8.8 above.


 






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10.6 Voting Rights; Dividend Equivalent
Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Performance
Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the Award Agreement
evidencing any Performance Share Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the
payment of cash dividends on Stock during the period beginning on the date the Award is granted and ending, with respect to each
share subject to the Award, on the earlier of the date on which the Performance Shares are settled or the date on which they are
forfeited. Such Dividend Equivalent Rights, if any, shall be credited to the Participant either in cash or in the form of additional
whole Performance Shares as of the date of payment of such cash dividends on Stock, as determined by the Committee. The number
of additional Performance Shares (rounded to the nearest whole number), if any, to be so credited shall be determined by dividing
(a) the amount of cash dividends paid on the dividend payment date with respect to the number of shares of Stock represented
by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date.
Dividend Equivalent Rights, if any, shall be accumulated and paid to the extent that the related Performance Shares become nonforfeitable.
Settlement of Dividend Equivalent Rights may be made in cash, shares of Stock, or a combination thereof as determined by the Committee,
and may be paid on the same basis as settlement of the related Performance Share as provided in Section 10.5. Dividend Equivalent
Rights shall not be paid with respect to Performance Units. In the event of a dividend or distribution paid in shares of Stock
or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.3,
appropriate adjustments shall be made in the Participant’s Performance Share Award so that it represents the right to receive
upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends)
to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of the Performance Share Award,
and all such new, substituted or additional securities or other property shall be immediately subject to the same Performance Goals
as are applicable to the Award.


 


10.7 Effect of Termination of Service.
Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Performance Award, the effect of a
Participant’s termination of Service on the Performance Award shall be as follows:


 


(a) Death or Disability. If
the Participant’s Service terminates because of the death or Disability of the Participant before the completion of the Performance
Period applicable to the Performance Award, the final value of the Participant’s Performance Award shall be determined by
the extent to which the applicable Performance Goals have been attained with respect to the entire Performance Period and shall
be prorated based on the number of months of the Participant’s Service during the Performance Period. Payment shall be made
following the end of the Performance Period in any manner permitted by Section 10.5.


 


(b) Other Termination of Service.
If the Participant’s Service terminates for any reason except death or Disability before the completion of the Performance
Period applicable to the Performance Award, such Award shall be forfeited in its entirety; provided, however, that in the event
of an involuntary termination of the Participant’s Service, the Committee, in its discretion, may waive the automatic forfeiture
of all or any portion of any such Award and determine the final value of the Performance Award in the manner provided by Section 10.7(a).
Payment of any amount pursuant to this Section shall be made following the end of the Performance Period in any manner permitted
by Section 10.5.


 


10.8 Nontransferability of Performance
Awards. Prior to settlement in accordance with the provisions of the Plan, no Performance Award shall be subject in any manner
to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant
or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect
to a Performance Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant
or the Participant’s guardian or legal representative.


 






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11. Cash-Based Awards and
Other Stock-Based Awards.


 


Cash-Based Awards and Other Stock-Based Awards
shall be evidenced by Award Agreements in such form as the Committee shall establish. Such Award Agreements may incorporate all
or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:


 


11.1 Grant of Cash-Based Awards. Subject
to the provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in
such amounts and upon such terms and conditions, including the achievement of performance criteria, as the Committee may determine.


 


11.2 Grant of Other Stock-Based Awards.
The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan
(including the grant or offer for sale of unrestricted securities, stock-equivalent units, stock appreciation units, securities
or debentures convertible into common stock or other forms determined by the Committee) in such amounts and subject to such terms
and conditions as the Committee shall determine. Other Stock-Based Awards may be made available as a form of payment in the settlement
of other Awards or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may
involve the transfer of actual shares of Stock to Participants, or payment in cash or otherwise of amounts based on the value of
Stock and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions
other than the United States.


 


11.3 Value of Cash-Based and Other Stock-Based
Awards. Each Cash-Based Award shall specify a monetary payment amount or payment range as determined by the Committee. Each
Other Stock-Based Award shall be expressed in terms of shares of Stock or units based on such shares of Stock, as determined by
the Committee. The Committee may require the satisfaction of such Service requirements, conditions, restrictions or performance
criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee
and set forth in the Award Agreement evidencing such Award. If the Committee exercises its discretion to establish performance
criteria, the final value of Cash-Based Awards or Other Stock-Based Awards that will be paid to the Participant will depend on
the extent to which the performance criteria are met. The establishment of performance criteria with respect to the grant or vesting
of any Cash-Based Award or Other Stock-Based Award intended to result in Performance-Based Compensation shall follow procedures
substantially equivalent to those applicable to Performance Awards set forth in Section 10.


 






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11.4 Payment or Settlement of Cash-Based
Awards and Other Stock-Based Awards. Payment or settlement, if any, with respect to a Cash-Based Award or an Other Stock-Based
Award shall be made in accordance with the terms of the Award, in cash, shares of Stock or other securities or any combination
thereof as the Committee determines. The determination and certification of the final value with respect to any Cash-Based Award
or Other Stock-Based Award intended to result in Performance-Based Compensation shall comply with the requirements applicable to
Performance Awards set forth in Section 10. To the extent applicable, payment or settlement with respect to each Cash-Based
Award and Other Stock-Based Award shall be made in compliance with the requirements of Section 409A.


 


11.5 Voting Rights; Dividend Equivalent
Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Other Stock-Based
Awards until the date of the issuance of such shares of Stock (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), if any, in settlement of such Award. However, the Committee, in its discretion,
may provide in the Award Agreement evidencing any Other Stock-Based Award that the Participant shall be entitled to Dividend Equivalent
Rights with respect to the payment of cash dividends on Stock during the period beginning on the date such Award is granted and
ending, with respect to each share subject to the Award, on the earlier of the date the Award is settled or the date on which it
is terminated. Such Dividend Equivalent Rights, if any, shall be paid in accordance with the provisions set forth in Section 9.4.
Dividend Equivalent Rights shall not be granted with respect to Cash-Based Awards. In the event of a dividend or distribution paid
in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described
in Section 4.3, appropriate adjustments shall be made in the Participant’s Other Stock-Based Award so that it represents
the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular,
periodic cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of
such Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Vesting
Conditions and performance criteria, if any, as are applicable to the Award.


 


11.6 Effect of Termination of Service.
Each Award Agreement evidencing a Cash-Based Award or Other Stock-Based Award shall set forth the extent to which the Participant
shall have the right to retain such Award following termination of the Participant’s Service. Such provisions shall be determined
in the discretion of the Committee, need not be uniform among all Cash-Based Awards or Other Stock-Based Awards, and may reflect
distinctions based on the reasons for termination, subject to the requirements of Section 409A, if applicable.


 


11.7 Nontransferability of Cash-Based Awards
and Other Stock-Based Awards. Prior to the payment or settlement of a Cash-Based Award or Other Stock-Based Award, the Award
shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment
by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.
The Committee may impose such additional restrictions on any shares of Stock issued in settlement of Cash-Based Awards and Other
Stock-Based Awards as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares of Stock are
then listed and/or traded, or under any state securities laws or foreign law applicable to such shares of Stock.


 






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12. Standard Forms of Award
Agreement.


 


12.1 Award Agreements. Each
Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreement approved
by the Committee and as amended from time to time. No Award or purported Award shall be a valid and binding obligation of the Company
unless evidenced by a fully executed Award Agreement, which execution may be evidenced by electronic means.


 


12.2 Authority to Vary Terms.
The Committee shall have the authority from time to time to vary the terms of any standard form of Award Agreement either in connection
with the grant or amendment of an individual Award or in connection with the authorization of a new standard form or forms; provided,
however, that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent
with the terms of the Plan.


 


13. Change in Control.


 


13.1 Effect of Change in Control on Awards.
In the event of a Change in Control, outstanding Awards shall be subject to the definitive agreement entered into by the Company
in connection with the Change in Control. Subject to the requirements and limitations of Section 409A, if applicable, the Committee
may provide for any one or more of the following:


 


(a) Accelerated Vesting. In
its discretion, the Committee may provide in the grant of any Award or at any other time may take such action as it deems appropriate
to provide for acceleration of the exercisability, vesting and/or settlement in connection with a Change in Control of each or
any outstanding Award or portion thereof and shares acquired pursuant thereto upon such conditions, including termination of the
Participant’s Service prior to, upon, or following the Change in Control, and to such extent as the Committee determines.


 


(b) Assumption, Continuation or Substitution.
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or
parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, assume
or continue the Company’s rights and obligations under each or any Award or portion thereof outstanding immediately prior
to the Change in Control or substitute for each or any such outstanding Award or portion thereof a substantially equivalent award
with respect to the Acquiror’s stock, as applicable. For purposes of this Section, if so determined by the Committee in its
discretion, an Award denominated in shares of Stock shall be deemed assumed if, following the Change in Control, the Award confers
the right to receive, subject to the terms and conditions of the Plan and the applicable Award Agreement, for each share of Stock
subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property
or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled (and
if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Stock); provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may,
with the consent of the Acquiror, provide for the consideration to be received upon the exercise or settlement of the Award, for
each share of Stock subject to the Award, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per
share consideration received by holders of Stock pursuant to the Change in Control. Any Award or portion thereof which is neither
assumed or continued by the Acquiror in connection with the Change in Control nor exercised or settled as of the time of consummation
of the Change in Control shall terminate and cease to be outstanding effective as of the time of consummation of the Change in
Control.


 






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(c) Cash-Out of Outstanding Stock-Based
Awards. The Committee may, in its discretion and without the consent of any Participant, determine that, upon the occurrence
of a Change in Control, each or any Award denominated in shares of Stock or portion thereof outstanding immediately prior to the
Change in Control and not previously exercised or settled shall be canceled in exchange for a payment with respect to each vested
share (and each unvested share, if so determined by the Committee) of Stock subject to such canceled Award in (i) cash, (ii) stock
of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other property which,
in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid
per share of Stock in the Change in Control, reduced (but not below zero) by the exercise or purchase price per share, if any,
under such Award. In the event such determination is made by the Committee, an Award having an exercise or purchase price per share
equal to or greater than the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control may
be canceled without payment of consideration to the holder thereof. Payment pursuant to this Section (reduced by applicable withholding
taxes, if any) shall be made to Participants in respect of the vested portions of their canceled Awards as soon as practicable
following the date of the Change in Control and in respect of the unvested portions of their canceled Awards in accordance with
the vesting schedules applicable to such Awards.


 


13.2 Effect of Change in Control on Nonemployee
Director Awards. Subject to the requirements and limitations of Section 409A, if applicable, including as provided by Section 15.4(f),
in the event of a Change in Control, each outstanding Nonemployee Director Award shall become immediately exercisable and vested
in full and, except to the extent assumed, continued or substituted for pursuant to Section 13.1(b), shall be settled effective
immediately prior to the time of consummation of the Change in Control.


 


13.3 Federal Excise Tax Under Section 4999
of the Code.


 


(a) Excess Parachute Payment.
If any acceleration of vesting pursuant to an Award and any other payment or benefit received or to be received by a Participant
would subject the Participant to any excise tax pursuant to Section 4999 of the Code due to the characterization of such acceleration
of vesting, payment or benefit as an “excess parachute payment” under Section 280G of the Code, then, provided such
election would not subject the Participant to taxation under Section 409A, the Participant may elect to reduce the amount of any
acceleration of vesting called for under the Award in order to avoid such characterization.


 






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(b) Determination by Tax Firm.
To aid the Participant in making any election called for under Section 13.3(a), no later than the date of the occurrence of
any event that might reasonably be anticipated to result in an “excess parachute payment” to the Participant as described
in Section 13.3(a), the Company shall request a determination in writing by the professional firm engaged by the Company for
general tax purposes, or, if the tax firm so engaged by the Company is serving as accountant or auditor for the Acquiror, the Company
will appoint a nationally recognized tax firm to make the determinations required by this Section (the “Tax Firm”).
As soon as practicable thereafter, the Tax Firm shall determine and report to the Company and the Participant the amount of such
acceleration of vesting, payments and benefits which would produce the greatest after-tax benefit to the Participant. For the purposes
of such determination, the Tax Firm may rely on reasonable, good faith interpretations concerning the application of Sections 280G
and 4999 of the Code. The Company and the Participant shall furnish to the Tax Firm such information and documents as the Tax Firm
may reasonably request in order to make its required determination. The Company shall bear all fees and expenses the Tax Firm charges
in connection with its services contemplated by this Section.


 


14. Compliance with Securities
Law.


 


The grant of Awards and the issuance of shares
of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law
with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed.
In addition, no Award may be exercised or shares issued pursuant to an Award unless (a) a registration statement under the
Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the
Award, or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance
with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company
to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of
the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance
of any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested
by the Company.


 


15. Compliance with Section
409A.


 


15.1 Awards Subject to Section 409A.
The Company intends that Awards granted pursuant to the Plan shall either be exempt from or comply with Section 409A,
and the Plan shall be so construed. The provisions of this Section 15 shall apply to any Award or portion thereof that constitutes
or provides for payment of Section 409A Deferred Compensation. Such Awards may include, without limitation:


 


(a) A Nonstatutory Stock Option or SAR that
includes any feature for the deferral of compensation other than the deferral of recognition of income until the later of (i) the
exercise or disposition of the Award or (ii) the time the stock acquired pursuant to the exercise of the Award first becomes
substantially vested.


 


(b) Any Restricted Stock Unit Award, Performance
Award, Cash-Based Award or Other Stock-Based Award that either (i) provides by its terms for settlement of all or any portion
of the Award at a time or upon an event that will or may occur later than the end of the Short-Term Deferral Period (as defined
below) or (ii) permits the Participant granted the Award to elect one or more dates or events upon which the Award will be
settled after the end of the Short-Term Deferral Period.


 






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Subject to the provisions of Section 409A,
the term “Short-Term Deferral Period” means the 21⁄2 month period ending on the later of
(i) the 15th day of the third month following the end of the Participant’s taxable year in which the right to payment
under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture or (ii) the 15th day of
the third month following the end of the Company’s taxable year in which the right to payment under the applicable portion
of the Award is no longer subject to a substantial risk of forfeiture. For this purpose, the term “substantial risk of forfeiture”
shall have the meaning provided by Section 409A.


 


15.2 Deferral and/or Distribution Elections.
Except as otherwise permitted or required by Section 409A, the following rules shall apply to any compensation deferral and/or
payment elections (each, an “Election”) that may be permitted or required by the Committee pursuant to
an Award providing Section 409A Deferred Compensation:


 


(a) Elections must be in writing and specify
the amount of the payment in settlement of an Award being deferred, as well as the time and form of payment as permitted by this
Plan.


 


(b) Elections shall be made by the end of
the Participant’s taxable year prior to the year in which services commence for which an Award may be granted to the Participant.


 


(c) Elections shall continue in effect until
a written revocation or change in Election is received by the Company, except that a written revocation or change in Election must
be received by the Company prior to the last day for making the Election determined in accordance with paragraph (b) above
or as permitted by Section 15.3.


 


15.3 Subsequent Elections. Except
as otherwise permitted or required by Section 409A, any Award providing Section 409A Deferred Compensation which permits a
subsequent Election to delay the payment or change the form of payment in settlement of such Award shall comply with the following
requirements:


 


(a) No subsequent Election may take effect
until at least twelve (12) months after the date on which the subsequent Election is made.


 


(b) Each subsequent Election related to
a payment in settlement of an Award not described in Section 15.4(a)(ii), 15.4(a)(iii) or 15.4(a)(vi) must result in a delay
of the payment for a period of not less than five (5) years from the date on which such payment would otherwise have been made.


 


(c) No subsequent Election related to a
payment pursuant to Section 15.4(a)(iv) shall be made less than twelve (12) months before the date on which such payment would
otherwise have been made.


 






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(d) Subsequent Elections shall continue
in effect until a written revocation or change in the subsequent Election is received by the Company, except that a written revocation
or change in a subsequent Election must be received by the Company prior to the last day for making the subsequent Election determined
in accordance the preceding paragraphs of this Section 15.3.


 


15.4 Payment of Section 409A Deferred Compensation.


 


(a) Permissible Payments.
Except as otherwise permitted or required by Section 409A, an Award providing Section 409A Deferred Compensation must provide
for payment in settlement of the Award only upon one or more of the following:


 


(i) The Participant’s “separation
from service” (as defined by Section 409A);


 


(ii) The Participant’s becoming “disabled”
(as defined by Section 409A);


 


(iii) The Participant’s death;


 


(iv) A time or fixed schedule that is either
(i) specified by the Committee upon the grant of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified
by the Participant in an Election complying with the requirements of Section 15.2 or 15.3, as applicable;


 


(v) A change in the ownership or effective
control or the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with
Section 409A; or


 


(vi) The occurrence of an “unforeseeable
emergency” (as defined by Section 409A).


 


(b) Installment Payments.
It is the intent of this Plan that any right of a Participant to receive installment payments (within the meaning of Section 409A)
shall, for all purposes of Section 409A, be treated as a right to a series of separate payments.


 


(c) Required Delay in Payment to Specified
Employee Pursuant to Separation from Service. Notwithstanding any provision of the Plan or an Award Agreement to the contrary,
except as otherwise permitted by Section 409A, no payment pursuant to Section 15.4(a)(i) in settlement of an Award providing
for Section 409A Deferred Compensation may be made to a Participant who is a “specified employee” (as defined
by Section 409A) as of the date of the Participant’s separation from service before the date (the “Delayed
Payment Date”) that is six (6) months after the date of such Participant’s separation from service, or,
if earlier, the date of the Participant’s death. All such amounts that would, but for this paragraph, become payable prior
to the Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.


 






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(d) Payment Upon Disability.
All distributions of Section 409A Deferred Compensation payable pursuant to Section 15.4(a)(ii) by reason of a Participant
becoming disabled shall be paid in a lump sum or in periodic installments as established by the Participant’s Election. If
the Participant has made no Election with respect to distributions of Section 409A Deferred Compensation upon becoming disabled,
all such distributions shall be paid in a lump sum upon the determination that the Participant has become disabled.


 


(e) Payment Upon Death. If
a Participant dies before complete distribution of amounts payable upon settlement of an Award subject to Section 409A, such
undistributed amounts shall be distributed to his or her beneficiary under the distribution method for death established by the
Participant’s Election upon receipt by the Committee of satisfactory notice and confirmation of the Participant’s death.
If the Participant has made no Election with respect to distributions of Section 409A Deferred Compensation upon death, all
such distributions shall be paid in a lump sum upon receipt by the Committee of satisfactory notice and confirmation of the Participant’s
death.


 


(f) Payment Upon Change in Control.
Notwithstanding any provision of the Plan or an Award Agreement to the contrary, to the extent that any amount constituting
Section 409A Deferred Compensation would become payable under this Plan by reason of a Change in Control, such amount shall become
payable only if the event constituting a Change in Control would also constitute a change in ownership or effective control of
the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A.
Any Award which constitutes Section 409A Deferred Compensation and which would vest and otherwise become payable upon a Change
in Control as a result of the failure of the Acquiror to assume, continue or substitute for such Award in accordance with Section 13.1(b)
shall vest to the extent provided by such Award but shall be converted automatically at the effective time of such Change in Control
into a right to receive, in cash on the date or dates such award would have been settled in accordance with its then existing settlement
schedule (or as required by Section 15.4(c)), an amount or amounts equal in the aggregate to the intrinsic value of the Award
at the time of the Change in Control.


 


(g) Payment Upon Unforeseeable Emergency.
The Committee shall have the authority to provide in the Award Agreement evidencing any Award providing for Section 409A Deferred
Compensation for payment pursuant to Section 15.4(a)(vi) in settlement of all or a portion of such Award in the event that
a Participant establishes, to the satisfaction of the Committee, the occurrence of an unforeseeable emergency. In such event, the
amount(s) distributed with respect to such unforeseeable emergency cannot exceed the amounts reasonably necessary to satisfy the
emergency need plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution(s), after taking into
account the extent to which such emergency need is or may be relieved through reimbursement or compensation by insurance or otherwise,
by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial
hardship) or by cessation of deferrals under the Award. All distributions with respect to an unforeseeable emergency shall be made
in a lump sum upon the Committee’s determination that an unforeseeable emergency has occurred. The Committee’s decision
with respect to whether an unforeseeable emergency has occurred and the manner in which, if at all, the payment in settlement of
an Award shall be altered or modified, shall be final, conclusive, and not subject to approval or appeal.


 






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(h) Prohibition of Acceleration of
Payments. Notwithstanding any provision of the Plan or an Award Agreement to the contrary, this Plan does not permit the
acceleration of the time or schedule of any payment under an Award providing Section 409A Deferred Compensation, except as
permitted by Section 409A.


 


(i) No Representation Regarding Section
409A Compliance. Notwithstanding any other provision of the Plan, the Company makes no representation that Awards shall
be exempt from or comply with Section 409A. No Participating Company shall be liable for any tax, penalty or interest imposed on
a Participant by Section 409A.


 


16. Tax Withholding.


 


16.1 Tax Withholding in General. The
Company shall have the right to deduct from any and all payments made under the Plan, or to require the Participant, through payroll
withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes (including
social insurance), if any, required by law to be withheld by any Participating Company with respect to an Award or the shares acquired
pursuant thereto. The Company shall have no obligation to deliver shares of Stock, to release shares of Stock from an escrow established
pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax
withholding obligations have been satisfied by the Participant.


 


16.2 Withholding in or Directed Sale of
Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant
upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole shares of Stock
having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of any Participating
Company. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall
not exceed the amount determined by the applicable minimum statutory withholding rates. The Company may require a Participant to
direct a broker, upon the vesting, exercise or settlement of an Award, to sell a portion of the shares subject to the Award determined
by the Company in its discretion to be sufficient to cover the tax withholding obligations of any Participating Company and to
remit an amount equal to such tax withholding obligations to such Participating Company in cash.


 


17. Amendment,
Suspension or Termination of Plan.


 


The Committee may amend, suspend or terminate
the Plan at any time. However, without the approval of the Company’s stockholders, there shall be (a) no increase in
the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Sections Error!
Reference source not found. and 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options,
and (c) no other amendment of the Plan that would require approval of the Company’s stockholders under any applicable
law, regulation or rule, including the rules of any stock exchange or quotation system upon which the Stock may then be listed
or quoted. No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expressly provided
by the Committee. Except as provided by the next sentence, no amendment, suspension or termination of the Plan may have a materially
adverse effect on any then outstanding Award without the consent of the Participant. Notwithstanding any other provision of the
Plan or any Award Agreement to the contrary, the Committee may, in its sole and absolute discretion and without the consent of
any Participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable
for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the
Plan, including, but not limited to, Section 409A.


 






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18. Miscellaneous Provisions.


 


18.1 Repurchase Rights. Shares
issued under the Plan may be subject to one or more repurchase options, or other conditions and restrictions as determined by the
Committee in its discretion at the time the Award is granted. The Company shall have the right to assign at any time any repurchase
right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. Upon
request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt
of shares of Stock hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired
hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.


 


18.2 Forfeiture Events.


 


(a) The Committee may specify in an Award
Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation,
forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance
conditions of an Award. Such events may include, but shall not be limited to, termination of Service for Cause or any act by a
Participant, whether before or after termination of Service, that would constitute Cause for termination of Service, or any accounting
restatement due to material noncompliance of the Company with any financial reporting requirements of securities laws as a result
of which, and to the extent that, such reduction, cancellation, forfeiture, or recoupment is required by applicable securities
laws.


 


(b) If the Company is required to prepare
an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting
requirement under the securities laws, any Participant who knowingly or through gross negligence engaged in the misconduct, or
who knowingly or through gross negligence failed to prevent the misconduct, and any Participant who is one of the individuals subject
to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, shall reimburse the Company for (i) the amount
of any payment in settlement of an Award received by such Participant during the twelve- (12-) month period following the first
public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial
document embodying such financial reporting requirement, and (ii) any profits realized by such Participant from the sale of
securities of the Company during such twelve- (12-) month period.


 






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18.3 Provision of Information. Each
Participant shall be given access to information concerning the Company equivalent to that information generally made available
to the Company’s common stockholders.


 


18.4 Rights as Employee, Consultant or
Director. No person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or,
having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall confer
on any Participant a right to remain an Employee, Consultant or Director or interfere with or limit in any way any right of a Participating
Company to terminate the Participant’s Service at any time. To the extent that an Employee of a Participating Company other
than the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that the Company
is the Employee’s employer or that the Employee has an employment relationship with the Company.


 


18.5 Rights as a Stockholder. A Participant
shall have no rights as a stockholder with respect to any shares covered by an Award until the date of the issuance of such shares
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued,
except as provided in Section 4.3 or another provision of the Plan.


 


18.6 Delivery of Title to Shares. Subject
to any governing rules or regulations, the Company shall issue or cause to be issued the shares of Stock acquired pursuant to an
Award and shall deliver such shares to or for the benefit of the Participant by means of one or more of the following: (a) by
delivering to the Participant evidence of book entry shares of Stock credited to the account of the Participant, (b) by depositing
such shares of Stock for the benefit of the Participant with any broker with which the Participant has an account relationship,
or (c) by delivering such shares of Stock to the Participant in certificate form.


 


18.7 Fractional Shares. The Company
shall not be required to issue fractional shares upon the exercise or settlement of any Award.


 


18.8 Retirement and Welfare Plans.
Neither Awards made under this Plan nor shares of Stock or cash paid pursuant to such Awards may be included as “compensation”
for purposes of computing the benefits payable to any Participant under any Participating Company’s retirement plans (both
qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be
taken into account in computing a Participant’s benefit.


 


18.9 Beneficiary Designation. Subject
to local laws and procedures, each Participant may file with the Company a written designation of a beneficiary who is to receive
any benefit under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she
receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a
form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the
Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s spouse, the
effectiveness of such designation may be subject to the consent of the Participant’s spouse. If a Participant dies without
an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any
remaining unpaid benefits to the Participant’s legal representative.


 






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18.10 Severability. If any one or more
of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision
shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining
provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.


 


18.11 No Constraint on Corporate Action.
Nothing in this Plan shall be construed to: (a) limit, impair, or otherwise affect the Company’s or another Participating
Company’s right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure,
or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or (b) limit
the right or power of the Company or another Participating Company to take any action which such entity deems to be necessary or
appropriate.


 


18.12 Unfunded Obligation. Participants
shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall
be considered unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds,
or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times
beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations
hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute
a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any
vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company.
The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be
invested or reinvested by the Company with respect to the Plan.


 


18.13 Choice of Law. Except to the
extent governed by applicable federal law, the validity, interpretation, construction and performance of the Plan and each Award
Agreement shall be governed by the laws of the State of Delaware, without regard to its conflict of law rules.


 


IN WITNESS WHEREOF, the undersigned
Secretary of the Company certifies that the foregoing sets forth The Lovesac Company 2017 Equity Incentive Plan as duly adopted
by the Board on October 26, 2017.


 


	 	/s/
    Donna Dellomo 
	 	Donna
    Dellomo, Secretary


 





  


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